Geo-Poland SP. Z O.o. v Huijing Group Co., Ltd

[2017] ATMO 103

TRADE MARKS ACT 1995

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

Re:Oppositions by Geo-Poland SP. z o.o. to registration of trade mark applications 1683383, 1689168, 1689169 (5, 29) - HOESLANDT & HOESLANDT LOGOS- all in the name of Huijing Group Co., Ltd.

Delegate:	Jock McDonagh
Representation:	Opponent: Not represented, relied on evidence filed Applicant: Blake Knowles of Cullens Patent and Trade Mark Attorneys
Decision:	2017 ATMO 103 Trade Marks Act 1995 (Cth) - s 52 oppositions: Grounds under ss 44 and 62A considered – applications made in bad faith - oppositions successful.

Background

1. This matter relates to oppositions under section 52 of the Trade Marks Act 1995 (‘the Act’) to the registration of trade marks (‘the Trade Marks’) filed by Huijing Group Co., Ltd (‘the Applicant’). Relevant details of the opposed applications are set out below.

Application No	1683383	1689168, 1689169
Trade Mark	(‘the Word Mark’)	1689168 1689169 (‘the Device Marks’)
Filing Dates: (‘the Priority Dates’)	25.03.2015	23.04.2015
Goods:	Class 5: Vitamin preparations; Pearl powder for medical purposes; Pharmaceutical preparations for skin care; Dietetic beverages adapted for medical purposes; Food for babies; Dietetic substances adapted for medical use; Milk powder for babies; Lacteal flour (for babies); Babies' diapers (napkins); Babies' napkin-pants Class 29: Edible birds' nests; Powdered eggs; Soya milk (milk substitute); Milk beverages (milk predominating); Milk products; Protein milk; Dried milk powder; Edible fats; Fruit jellies; Fruit-based snack foods	Class 5: Vitamin preparations; Pearl powder for medical purposes; Pharmaceutical preparations for skin care; Dietetic beverages adapted for medical purposes; Food for babies; Dietetic substances adapted for medical use; Milk powder for babies; Lacteal flour (for babies); Babies' diapers (napkins); Babies' napkin-pants Class 29: Edible birds' nests; Fruit based snack food; Powdered eggs; Soya milk (milk substitute); Milk beverages (milk predominating); Milk products; Protein milk; Dried milk powder; Edible fats; Fruit jellies
Endorsements:	The applicant has advised that the CHINESE characters appearing in the trade mark may be transliterated as HE SHI LAN and there is no meaning in English.

1. The Trade Marks were examined in compliance with section 31 of the Act and the Word Mark was advertised as accepted for possible registration in the Australian Official Journal of Trade Marks on 20 August 2015, and the Device Marks were advertised as accepted for possible registration on 10 September 2015. Geo-Poland SP. z o.o. (‘the Opponent’) filed Notices of Intention to Oppose the registration of the Word Mark on 13 October 2015 and for the Device Marks on 9 November 2015. The Opponent filed a Statement of Grounds and Particulars for the Word Mark on 20 October 2015 and for the Device Marks on 7 December 2015.  Thereafter the Applicant filed Notices of Intention to Defend the Word Mark on 26 November 2015 and for the Device Marks on 15 January 2016. The parties then filed evidence as provided by the Trade Mark Regulations 1995 (‘the Regulations’).

2. At the request of the Applicant, and with the concurrence of the Opponent, the oppositions to the Word Mark and the Device Marks were heard together in one hearing.

3. I heard the matters in Canberra on 12 May 2017 as a delegate of the Registrar of Trade Marks. The Opponent was not represented at the hearing and relied upon its evidence filed in the proceedings. The Applicant was represented by Blake Knowles of Cullens Patent and Trade Mark Attorneys.

   Grounds of Opposition

   5. The Opponent nominated the following grounds of opposition under the Act:

   ·Section 44: Identical etc. trade marks;

   ·Section 58A: Opponent's earlier use of similar trade mark;

   ·Section 62A: Application made in bad faith.

4. I note that the s58A ground applies only to a trade mark application for which registration has been accepted because of s44 (4) of the Act; or a similar provision of the regulations made for the purposes of Part 17A. None of the Trade Marks were accepted under such provisions, so this ground cannot be established in these proceedings.

5. To succeed in its opposition the Opponent bears the onus of establishing at least one of the two remaining grounds on the ‘balance of probabilities’[1] based on the evidence before me.[2] As will become apparent, I have only found it necessary to address the Opponent’s s 68A ground in this decision and this is discussed below.  Of course should the decision be appealed, it would always remain open to the Opponent to plead any ground it considered relevant in proceedings before the Court.

   [1] Following Gyles J in Pfizer Products Inc v Karam [2006] FCA 1663, [6]-[26], affirmed by the Full Federal Court in Telstra Corporation Limited v Phone Directories Company Ltd [2015] FCAFC 156, [132]-[133].

   [2] Cantarella Bros Pty Ltd  v Espresso Enterprises Pty Ltd [2014] ATMO 68, Hearing Officer Kirov at [34].

6. The time at which the grounds of opposition must be established is the date of filing of the application for registration.[3]

   [3] See Southern Cross Refrigerating v Toowoomba Foundry Pty Ltd (1953) 91 CLR 592 at 595.

   Evidence

   9.     The evidence consists of the following declarations:

Declarant	Position	Date Made	Annexures
Evidence in Support
Tytus Dobrzynski (‘First Dobrzynski Declaration’)	Director of Opponent	29.02.16 & 18.04.16 (identical declarations)	Exhibits 1 to 12
Evidence in Answer
Jaizi Lun (‘First Lun Declaration’)	President of Applicant	1.06.16	None
Jaizi Lun (‘Second Lun Declaration’)	President of Applicant	26.07.16 (re 1689168)	A to F
Jaizi Lun (‘Third Lun Declaration’)	President of Applicant	26.07.16 (re 1689169)	A to G
Evidence in Reply
Tytus Dobrzynski (‘Second Dobrzynski Declaration’)	Director of Opponent	19.08.16 & 3.10.16 (identical declarations)	Exhibits 1 & 2

Discussion

1. The Applicant owns versions of the Trade Marks in China, Hong Kong and Taiwan. The Applicant manufactures milk powders in Australia under the Trade Marks for export, particularly to the China region. The Applicant has exported approximately 2 million USD worth of its Australian produced products.[4]

   [4] First Lun Declaration at [13], Second and Third Lun Declarations at [14].

2. The Opponent is a Polish developer and manufacturer of baby milk powder formulas under its trade mark HOSLAND. Following negotiations that commenced in June 2013, the Opponent entered into an exclusive agreement with Hosland (Hong Kong) Dairy Company Limited (‘Hong Kong Company’) to be sole importer and distributor of the Opponent’s Hosland brand baby milk power in the Chinese market.[5]

   [5] First Dobrzynski Declaration, Exhibits 3 and 4.

3. The Opponent owns the following trade mark registration in Australia:

Registration No.	Trade mark	Priority Date	Goods & Services
1686148	HOSLAND	24.11.2014 (Convention)	Class 5: Food for babies; Albumin dietary supplements; Dietetic foods adapted for medical purposes; Dietetic beverages adapted for medical purposes; Vitamin supplements; Mineral food supplements; Vitamin preparations; Dietary supplements for infants; Dietary nutritional supplements; Dietetic substances for babies; Nutritional meal replacement powders; Nutritional supplements; Alginate dietary supplements; Milk powders (foodstuff for babies); Lacteal flour (for babies); Beverages for infants; Dietetic foods adapted for infants; Powdered milk foods for infants Class 29: Beverages consisting principally of milk; Beverages made from milk; Dried milk; Milk; Milk products; Flavoured milk powder for making drinks Endorsements: Convention priority claimed: 24 November 2014, Office for Harmonisation in the Internal Market (OHIM), No. 013493127 in respect of FOOD FOR BABIES; ALBUMIN DIETARY SUPPLEMENTS; DIETETIC FOODS ADAPTED FOR MEDICAL PURPOSES; DIETETIC BEVERAGES ADAPTED FOR MEDICAL PURPOSES; VITAMIN AND MINERAL SUPPLEMENTS; MIXED VITAMIN PREPARATIONS; DIETARY SUPPLEMENTS FOR INFANTS; DIETARY AND NUTRITIONAL SUPPLEMENTS; DIETETIC SUBSTANCES FOR BABIES; MEAL REPLACEMENT POWDERS; NUTRITIONAL SUPPLEMENTS; ALGINATE DIETARY SUPPLEMENTS; MILK POWDERS (FOODSTUFF FOR BABIES); LACTEAL FLOUR FOR BABIES; BEVERAGES FOR INFANTS; DIETETIC FOODS ADAPTED FOR INFANTS; SUBSTITUTES FOR MOTHERS MILK; POWDERED MILK FOODS FOR INFANTS IN CLASS 5; BEVERAGES CONSISTING PRINCIPALLY OF MILK; BEVERAGES MADE FROM OR CONTAINING MILK; DRIED MILK; FLAVOURED MILK POWDER FOR MAKING DRINKS; MILK PRODUCTS; MILK in class 29; MARKET RESEARCH; COLLECTION AND SYSTEMATIZATION OF BUSINESS DATA; ADVERTISING, MARKETING AND PROMOTIONAL SERVICES; BUSINESS ASSISTANCE, MANAGEMENT AND ADMINISTRATIVE SERVICES; SALE OF POWDERED MILK, FOOD FOR BABIES, MILK AND MILK PRODUCTS in class 35.*

Section 62A: Trade mark application made in bad faith

1. Section 62A provides:

   The registration of a trade mark may be opposed on the ground that the application was made in bad faith.

2. The Explanatory Memorandum to the Trade Marks Amendment Act 2006, (which introduced s62A), gives as non-exhaustive examples:

   a person who monitors new property developments; registers the name of the new property development as a trade mark for a number of services; and then threatens the property developer with trade mark infringement unless they license or buy the trade mark; a pattern of registering trade marks that are deliberate misspellings of other registered trade marks; and business people who identify a trade mark overseas which has no market penetration in Australia, and then register that trade mark with no intention to use it in the Australian market and for the express purpose of selling the mark to the overseas owner.

3. In DC Comics v Cheqout Pty Ltd[6] (DC Comics) at [62], Bennett J summarised the relevant principles established in UK authorities and set out in Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2)[7] (Fry (No 2)), that would be relevant in considering whether an application has been made in breach of s 62A, including:

   Bad faith is a combined test that involves subjective and objective elements. The subjective element refers to the knowledge of the relevant time of making the application. The objective element requires the decision-maker to decide whether, in the light of that knowledge; the relevant person’s behaviour fell short of acceptable commercial standards.

   The question is whether the conduct falls short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in the particular area. It is whether the knowledge of the applicant was such that the decision to apply for registration would be regarded as in bad faith by persons adopting proper standards.

   [6] (2013) 101 IPR 334

   [7] (2012) 94 IPR 551.

4. In the Second Dobrzynski Declaration, the Opponent essentially suggests that by its course of conduct the Applicant has been able to pass off its Australian-made goods as those of the Opponent, thus demonstrating bad faith in its attempt to register the Trade Marks in Australia.

5. The First Dobrzynski Declaration satisfies me that the Opponent commenced negotiations with Hong Kong Company in 2013 with the aim of having the Opponent’s goods distributed in China. Exhibits 4 and 5 of that declaration show correspondence with Hong Kong Company demonstrating aspects of the negotiations. The exhibits show Hong Kong Company referring to the Applicant as its ‘headquarters’ and requesting the Opponent to provide authorisations for the Applicant to deal with the Opponent’s trade marks in China.

6. Exhibit 3 of the First Dobrzynski Declaration shows a copy of the distribution agreement between the Opponent and Hong Kong Company. There is no mention of the Applicant in this agreement.

7. Exhibits 7 to 9 show examples of the Opponent’s goods supplied to the Hong Kong Company for sale in China. For example, Exhibit 7:

8. Exhibit 10 shows the website under URL which features goods labelled under the Applicant’s trade mark (also exhibited in the Second and Third Lun Declarations, Annexes B and C respectively) as shown below:

9. Each of the Lun Declarations states that the Applicant chose the word ‘HOESLANDT’ because it is close to a transliteration of the Chinese characters used in the Device Marks, which have ‘pleasing composition of Chinese lettering’.[8]

   [8] First Lun Declaration at [19], Second and Third Lun Declarations at [21].

10. Further, each of the Lun Declarations state that the Applicant is the owner of the Trade Marks in China, Hong Kong and Taiwan, and that the Applicant is not a shareholder in the Hong Kong Company.[9]

    [9] First Lun Declaration at [20] and [21], Second and Third Lun Declarations at [22] and [24].

11. In his submissions for the Applicant, Mr Knowles stated that bad faith is a serious allegation requiring significant evidentiary burden on the Opponent. He alluded to the ‘Briginshaw test’,[10] which is essentially the principle that the more serious the consequences, the more certain of the facts the decision-maker should be.

    [10] Briginshaw v Briginshaw (1938) 60 CLR 336.

12. Bad faith will not be found easily given the serious nature of the allegation. However,   I note that in Sullivan v Civil Aviation Safety Authority[11] the Full Federal Court found that common law rules of evidence such as ‘Briginshaw test’ do not necessarily bind administrative decision makers. Even if it were, as discussed by Hearing Officer Kirov in Cantarella Bros Pty Ltd v Espresso Enterprises Pty Ltd:[12]

    the consequence of a finding adverse to the Applicant under s 62A would merely be that its bid to seek registration of the Opposed Marks failed. The allegation is not in any event that the Applicant has engaged in some kind of illegal or shameful behavior.

    [11] [2014] FCAFC 93

    [12] [2014] ATMO 68, at [34]

13. Mr Knowles submitted that any commercial dispute the Opponent might have with the Applicant in China was not relevant to these proceedings, and that the Applicant was not a party to the distribution agreement with the Opponent and had no privity of contract with it.

14. Further, Mr Knowles stated that the Applicant had legitimate interests in registering the trade mark used on its products in the source country of such products.

15. Mr Knowles also remarked that there could be no bad faith in the present circumstances given that the Trade Marks are not deceptively similar to the Opponent’s trade mark.

16. Based on the evidence filed by both parties, and for the reasons I shall refer to below, I am satisfied that this ground of opposition has been established.

17. I give little weight to the assertions in the Lun Declarations that the word ‘HOESLANDT’ was selected because it was the transliteration of the pleasing Chinese characters contained within the Device Marks. The transliteration ‘HE SHI LAN’, while sounding something like the Word Mark, also sounds something like the Opponent’s trade mark. I note that a segment of the Opponent’s packaging at Exhibit 7 of the First Dobrzynski Declaration shows the Opponent’s trade mark accompanied by the same Chinese characters as in Application 1689169:

18. These factors lead me to the conclusion that it is more likely the Chinese Characters were derived from the Opponent’s trade mark (while also conveniently providing transliteration for the Word Mark) rather than the Word Mark was coincidentally derived from unrelated ‘pleasing characters’.

19. There is no evidence of any use of the Trade Marks prior to the Opponent’s commencement of negotiations with the Hong Kong Company.  Further, the Applicant’s Chinese, Taiwanese and Hong Kong Registrations, as well as its lapsed application 1683384 HOSLAND, all post-date the Opponent’s Convention priority date for 1686148 HOSLAND.

20. I am satisfied that Exhibits 4 and 5 of the First Dobrzynski Declaration establish a business connection between the Applicant and Hong Kong Company and that the Hong Kong Company’s requests to the Opponent to give authorisations to the Applicant have helped the Applicant to obtain its Chinese, Taiwanese and Hong Kong Registrations.

21. It is true that the Device Marks do not appear to be deceptively similar to the Opponent’s trade mark, and arguably nor is the Word Mark. It is also true that the non-Chinese trade mark elements on the Applicant’s and Opponent’s products in the Chinese market are different. However, both share the Chinese HE SHI LAN characters and the colour combinations, arrangements, graphics and other design elements of the labelling are virtually identical, apart from an ‘Australian Made’ logo on the Applicant’s label.

22. Assessing weight to be given to the Opponent’s evidence regarding the Chinese web pages is problematic without contemporaneous evidence of the layouts, or translations of the Chinese text. However, I can give some weight to the fact that the Applicant’s HOESLANDT product was displayed on both the web pages of and and that the latter URL was shown as a link on the former web page. From this I draw the inference that both web pages were controlled by the same party, which is likely to be the Applicant.

23. In his submissions, Mr Knowles stated that the business relationship between the Applicant and Opponent in China has no bearing on whether the Trade Marks are registrable in Australia. Further, the Applicant is merely protecting its supply chain by seeking to protect its Chinese trade marks from trade mark ‘squatters’ misusing trade marks law to threaten its supply chain.

24. I am satisfied that at the time of making its applications the Applicant was aware of the Opponent’s baby milk powder formula business and intellectual property in China. The Applicant had commenced marketing in China its own baby milk powder formula bearing very similar packaging at the time of making the applications. I consider that a reasonable and experienced observer would conclude that this conduct would be adverse to the Opponent’s business interests in China and would be falling short of acceptable commercial behavior.

25. Further, I am satisfied that in light of the Applicant’s conduct in China a reasonable and experienced observer would conclude that the applications for the Trade Marks would be adverse to the Opponent’s trade mark rights in Australia and would fall short of acceptable commercial behavior.

26. Therefore, I am satisfied that the Opponent has established its ground under s 62A.

    Decision

27. I have found the Opponent has established the ground of opposition it raised pursuant to s 62A of the Act. As the Delegate of the Registrar I accordingly refuse to register the trade mark application numbers 1683383, 1689168 and 1689169.

    Costs

28. The Opponent has sought its costs.  I see no reason to depart from the general rule that costs follow the event.  As the Opponent has established a ground of opposition, I award costs against the Applicant in accordance with the amounts in Schedule 8 of the Regulations.

    Jock McDonagh
    Hearing Officer
    Trade Marks Hearings
    18 September 2017