Fronsac Investment Holding SA v Live Clothing Pty Ltd

[2003] ATMO 29

TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS

Re:Opposition by Fronsac Investment Holding SA to registration of trade mark application 832775(25) - KILLAH BABE - filed in the name of Live Clothing Pty Ltd.

DATE OF DECISION:

5 May 2003

DELEGATE:

Terry Williams, Hearing Officer.

REPRESENTATION:

Opponent:  Wayne Willis, of F.B. Rice, patent attorneys

Applicant: John King,  of Wray & Associates, patent attorneys

DECISION:

1. Section 52 Opposition:  Most grounds fail but first user established by opponent, for clothing.  Goods to be restricted to no broader than "boots, shoes and slippers".

2. Applicant to pay costs

Background:

1. Trade mark application 832775 was filed by Live Clothing Pty Ltd ("Live") on 20 April 2000.  The trade mark in question is the words KILLAH BABE, and the goods for which registration is sought are "Clothing, footwear, and headgear; and all accessories in this class associated with fashion clothing".

2. After examination, the Trade Marks Office advertised the application as having been accepted for registration.  Such registration is now opposed by Fronsac Investment Holding SA ("Fronsac").

3. The parties filed, respectively, evidence in support and evidence in answer to the opposition.  This was properly served as per the regulations, and consists of the following:

Fronsac's Evidence in support

Declaration by	Dated	Annexures
Giulio Sala	25 January 2002	1-5

Live's Evidence in answer

Declaration by	Dated	Annexures
Bradley Caswell	7 June 2002	BGC1-BGC8
Janet Stead[1]	18 June 2002

[1] This declaration merely details and corrects typographical errors in the Caswell declaration.

1. Following completion of the evidence stages, the matter was set down for a hearing, which I conducted by telephone.  I am now to decide the opposition, under delegation from the Registrar of Trade Marks.

2. At the hearing, only two grounds of opposition were argued by Fronsac.  These were ownership (s 58) and prior conflicting reputation (s 60).  I will deal with them in that order. 

Issues and Decision:

S 58 Ownership

1. At the outset, there is one point in common.  Mr King, for Live, conceded that Fronsac had established first use of the "same mark for the same kind of thing"[2].  See the general discussion of the issue at pp 157-159 of D.R. Shanahan's Australian Law of Trade Marks and Passing Off.  Similarly, see p 78 of Trade Mark Law in Australia, by Elkington, Hall and Kell.  He argued, however, that the rights secured by Fronsac from this were limited.  It had accrued rights only to the extent shown in exhibit 3 to the Sala declaration, an invoice for what were clearly, in the context of the rest of the evidence, trousers, jumpers and jackets for teenage females.  Therefore, he said, his client was entitled to registration for "not-same" goods as a matter of principle.  Secondly, he said that this principle became imperative in the present case because Fronsac's use was minor, stale and with little accompanying promotion.

   [2] Hicks’s Trade Mark, 22 VLR 636.

2. Mr Willis argued that the line of cases from Blackadder to 7-Up[3] should not be applied narrowly.  Those cases, he argued, stood for a broad principle to the effect that courts actively seized on the barest minimum of use in order to protect a foreign trader's rights. He argued that such cases as these, and he included the opponent's under this heading, involve a finding that a defect of ownership invites outright refusal.  At the very least, he argued that the opponent's rights should be decided by a broad and practical interpretation.  A narrow interpretation here would leave his client as owner of the trade mark for some "kinds" of clothing, with Live the owner for others.  His client, he said, would need to avail itself of subsections 44(3) or (4) simply to register its own trade mark, of which it was the owner in law.  That, he said, was not a desirable outcome.  Why should this be, he argued, when it will be the direct consequence of giving Live a registration for goods in which it may well not be interested?

   [3] Blackadder v Good Roads Machinery Co Inc (1926) 38 CLR 332 and Seven Up Co v O T Ltd (1947) 75 CLR 203, respectively.

3. In particular, he urged me to ignore the fact that the opponent, Fronsac, appeared to have traded only in a limited range of female clothing, using that term loosely to cover any female fashion items in class 25.  To give this matter undue weight would be, he said, to apportion rights in the wrong order.  His client, he argued, was the true owner overseas, and should not be accorded the inferior status of a late-comer.  Its position, correctly seen, was as one entitled to expect the present application to be refused in its entirety.

4. He referred me to the Thai Gypsum case, Thai Gypsum Products Co Ltd v Waring and Gillow Pty Ltd, (1994) 29 IPR 99. In that case, Spender J, having found that the applicant in the Federal Court was the first user of the trade mark in question in relation to gypsum board, ordered that trade mark application 624952 be withdrawn in its entirety. That trade mark application, Mr Willis noted, was filed for all goods included in class 19. Thus it included goods as different from gypsum board as are terracotta pipes, timber floorboards and pitch for roofing. From the report, Spender J accepted that a defect existed in the ownership of the trade mark rights for gypsum boards. However, there does not appear to have been any discussion about the extent of the defect. What was sought was an order that the application be withdrawn, and such an order was granted. However, in granting the order as requested, Spender J remarked, almost parenthetically:

   In reality, it seems to me the dispute is not so much about the entitlement in the first respondent to registration of the marks for which it applied but in truth the dispute between the first respondent and the applicant centres on what the first respondent claims to be the grant of the right of an exclusive distributorship by the applicant to the first respondent and which the first respondent claims, at least impliedly, has been breached.

Overall, those two factors rob Thai Gypsum of some force in matters where the issue is fully argued.  It is, however, of guidance.

1. Mr Willis urged me to ignore any suggestion that Live may have innocently misappropriated the trade mark used in Australia by Fronsac.  Firstly, he was critical of the applicant's evidence of its own motivation.  There is evidence of Live's filing the application "after searches conducted by our patent attorney showed that the trade mark was available in Australia".  This, said Mr Willis, was not the language of an innocent adopter.  He was equally critical of the statement that:

   the first time Live became aware of an interest in the trade mark KILLAH BABE by another party was upon receipt of the Notice of Opposition...

2. What, asked Mr Willis, did this statement mean, when the scope of the words "an interest" is unclear.  He noted that, despite this ambiguity, Live's evidence only disclaimed knowledge of one specific piece of (allegedly) Australian promotional material.  It had at no stage said, plainly and unambiguously, that it was unaware of the overseas use by Fronsac.

3. Mr Willis reminded me that the attitude of the courts to those who practice sharp business practice is clear.  The courts frown upon this, to the extent that, in order to defend the true owner, the court will "seize" on various activities that, he argued, might not ordinarily amount to the use of a trade mark in the actual selling of goods.

4. Mr King, for his part, reminded me that it is true that the courts frown on borrowings of trade marks from abroad and seize on a small amount of conflicting prior use to defeat an application for registration in such a case.  However, typically in such cases the successful opponent was, so he argued, the owner of a relatively well-known mark.  Mr King said also that that his client's case was not one of sharp business practice.  Fronsac's rights should be tightly construed, he said.  The usage upon which Fronsac relied was in a narrow segment of the clothing market and should not be broadly protected.

5. Mr King also argued that, following Olin Corp. v Pacemaker Pool Supplies (1984) 4 IPR 526), it would be open to me to register the applicant for all goods as an honest concurrent user.  Olin v Pacemaker was decided under the somewhat different terms of s 34 of the former legislation.  I will dispose of this issue now.  The restrictive drafting of s 44(3) simply does not allow an applicant to invoke it unless either s 44(1) or 44(2) is first triggered.

6. Mr Willis's ownership argument, however, is one of some difficulty.  As Mr King put it, nobody has ownership of a mark without attention to the goods or services involved.  Moreover, the right created by the making of an application must not be underestimated.  It is not some sort of inferior species that will simply fade away when a "true owner" comes into view.  To quote Dixon J in Shell Co. (Aust) Ltd v Rohm and Haas Co (1949) 78 CLR 601 at 627:

   The basis of a claim to proprietorship in a trade mark so far unused has been found in the combined effect of authorship of the mark, the intention to use it upon or in connection with the goods and the applying for registration.

7. When it is noted that the current Act allows for a single application to cover goods in more than one class, I cannot accept Mr Willis's argument that any extent of defect in ownership mandates outright refusal of the affected application.

8. Consistent with this, both Shanahan and Elkington et al, supra, have noted that ownership does not extend beyond goods the same as those on which the owner has used the mark. It does not extend, in my understanding, to "similar goods" which (section 14) are merely "of the same description", a broader concept entirely. I was confronted with a similar problem in regard to the trade mark FIREFOX [1998] ATMO 26. There I observed that the infringement provisions of the 1995 Act gave new power to a registered owner: "Given the new context of the 1995 Act, ... to read Re Hicks’s Trade Mark too literally is unjustified and will create more problems, in practice, than it has in the past."  I went on to draw a line between tyres and tubes on one hand, and wheels on the other, as being not "the same kind of thing".  Mr Willis's argument, now, shows that the sort of potential problems I referred to in FIREFOX can arise equally in examination.

9. On balance, I do not think that there is any basis for an outright refusal of the application.  Ownership is always confined to some sort of goods or other, as Mr King argued.  Even if it be shown that Live is guilty of sharp business practice - and this has not been shown - such a thing is not in itself unlawful.  Only where there are conflicting prior rights is there any impropriety in granting a registration, and the boundary of those prior rights must always be appraised. 

10. In this case, whatever precisely are the goods that Fronsac trades in, it is clear that it does not make footwear of the ordinary sort: footwear in the nature of boots, shoes and slippers.  Absent reputation, the trading of those goods is generally distinguishable from that of clothing.

11. Conversely, it seems fairly clear that both Fronsac and Live make or intend to make youth-oriented clothing.  It would be difficult to suggest that any line could be clearly drawn between clothing that is the same kind as Fronsac's and that which is not.  This might involve drawing a line between jeans for men, and for women, for instance.  Fronsac, having established a ground of opposition under s 58, which by its nature will sometimes produce unsatisfactory answers, is entitled to the benefit of the doubt when it comes to remedies appropriate under s 55.  I will deal with this issue again by way of a conclusion.

Section 60 Conflicting prior reputation

1. Section 60 reads:

Trade mark similar to trade mark that has acquired  a reputation in Australia

60. The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:

(a) it is substantially identical with, or deceptively similar to, a trade mark that, before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, had acquired a reputation in Australia; and
(b) because of the reputation of that other trade mark, the use of the first-mentioned trade mark would be likely to deceive or cause confusion.

1. Mr King argued there was no definite evidence that the material relied on by Fronsac was available in Australia at the time in question.  Mr Sala's claim that the magazine articles in Women's Wear Daily appended to his declaration "would be available in Australia", is unchallenged and I take it at face value.  However, it does not establish that the particular issues relied on, April 22, September 9, November and December 16 1999, were available to any significant number of people at any particular date.  Still less does it establish that the relatively minor mentions of the trade mark in question had attracted any significant attention in the trade.  Mr Caswell, for instance, has denied that he was aware of it before the opposition process commenced though, as I have said, he says little about what he did know of the activities of Fronsac.  Mr King is therefore correct, and this ground of opposition has not been established.

Conclusion:

1. A ground of opposition has been established.  I am required by s 55 to now decide on an appropriate action.  I hereby decide to refuse to register the application as it presently stands.My decision, furthermore, is that if, within 14 days from the date of this decision, the application is amended to specify no wider a range of goods than "boots, shoes and slippers", the trade mark application may proceed to registration one month from the date of this decision.  If the Registrar has been served with a notice of appeal before then, I direct that registration shall not occur until the appeal has been decided or discontinued.

1. As to costs, I think that, whatever may be said of the degree of the applicant's success, the opponent has been instrumental in forcing a significant restriction of the application.  I direct that Live pay the costs of Fronsac in accord with the scale.

Terry Williams

Hearing Officer

Trade Marks Hearings

5 May 2003.