Gervasi Nominees Pty Ltd & Santo Gervasi v Winmart Pty Ltd
[2015] ATMO 6
•29 January 2015
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by Gervasi Nominees Pty Ltd and by Santo Gervasi to registration of trade mark application 1532209 - GERVASI - in the name of Winmart Pty Ltd.
Delegate: Bianca Irgang Representation: Opponents: Melissa Marcus of counsel instructed by Churchill Attorneys
Applicant: Nicholas Burmeister of counsel instructed by Anthony Raso & AssociatesDecision: 2015 ATMO 6
Section 52 opposition: sections 42(b), 43, 58, 60 and 62A pressed – no ground of opposition established.Background
1. Vicmart (Australia) Pty Ltd (‘the original applicant’), filed trade mark application number 1532209 on 19 December 2012 in class 35 of the International Classification of Goods and Services. Current details of the application are set out below.
Trade mark: GERVASI
Trade mark application no: 1532209
Filing Date: 19 December 2012
Specification: Class 35: Supermarket retailing services; delicatessen services in this class; greengrocer services; retailing and wholesaling services including retailing and wholesaling services in the nature of supermarkets, grocery and convenience stores; wholesaling and retailing of products, including the wholesaling and retailing of fresh food, pre-packaged food, tinned and frozen products, snack food, bakery products, produce, meat, poultry, seafood (fresh and frozen), grocery and supermarket other products; online wholesaling and retailing of the aforesaid products
2. Hereafter I will refer to the opposed trade mark as “the GERVASI trade mark” in order to distinguish it, as necessary, from the surname “Gervasi” (“the Surname”) and the business name “GERVASI” (“the Business Name”). For convenience I will refer to the services covered by the application as “the supermarket services”.
3. On or about 5 March 2014 the original applicant assigned the application to Winmart Pty Ltd (“the applicant”) and this assignment was recorded by IP Australia later that month. I note that as at 5 March 2014 the applicant and the original applicant had the same two directors and shared a common address.
4. Acceptance of the application for possible registration and was published in the Official Journal dated 18 April 2013. Subsequently Gervasi Nominees Pty Ltd (‘the co-opponent’) and Santo Gervasi (‘Mr Gervasi’) (collectively ‘the opponents’) each filed separate, but essentially identical, Notices of Intention to Oppose registration followed by essentially identical Statements of Grounds and Particulars. I note that Mr Gervasi is, along with his wife, one of two directors of the co-opponent.
5. The original application then filed Notices of Intention to Defend. Thereafter the opponents and predecessor in tile filed evidence in accord with the provisions of the Trade Mark Regulations 1995 (‘the Regulations’). On 7 March 2014 the trade mark application was assigned to Winmart Pty Ltd (‘the applicant’) and the assignment was advertised in the Official Journal later that month.
6. I heard both oppositions in Melbourne as a delegate of the Registrar of Trade Marks on 10 November 2014. The opponents were represented by Ms Melissa Marcus of counsel instructed by Churchill Attorneys. The applicant was represented by Mr Nicholas Burmeister of counsel instructed by Anthony Raso & Associates. Other representatives of the applicant and the opponent were also present as observers. Both parties’ counsel made oral and written submissions.
Grounds of Opposition
7. The Notice nominated five grounds of opposition under the Trade Marks Act 1995 (‘the Act’). All of those grounds being under sections 42(b), 43, 58, 60 and 62A were pursued at the hearing. The onus is upon the opponents to establish one or more of their grounds of opposition. Gyles J has referred to the standard of proof required in these matters in terms of a ‘balance of probabilities’.[1] His findings upon that issue, arrived at after a consideration of the relevant authorities, have been discussed with approval by Sundberg J in Chocolaterie Guylian NV v Registrar of Trade Marks[2]. Should the opponents establish one ground of opposition in relation to all of the applicant’s supermarket services, there is no requirement for me to consider the other grounds of opposition.
[1] Pfizer Products Inc v Karam [2006] FCA 1663; (2006) 70 IPR 599
[2] [2009] FCA 891, para 22-27 (2009) 82 IPR 13. See also Sports Warehouse Inc v Fry Consulting [2010] FCA 664; (2010) 87 IPR 300 at [36] to [39]; NV Sumatra Tobacco Trading Company v British American Tobacco Services Limited [2011] FCA 1051 (9 September 2011) at [16] to [32])
Evidence
8. The evidence consists of a total of ten declarations. The opponents both filed the same declarations as evidence so there is essentially only one set of evidence to be considered in both oppositions. This evidence consists of the following statutory declarations:
Declarant
Position
Date Made
Exhibits
Evidence in Support
Santo Gervasi[3]
Managing Director of Gervasi Nominees Pty Ltd
1.11.13
SG-1 to SG-8
Bruno Cultrera
Managing Director of Bruno Fine Foods and Distribution
22.10.13
-
Sam Piedimonte
General Manager of Pedimonte’s Supermarkets
23.10.13
-
David Abdo
Customer at Gervasi supermarket
24.10.13
-
Paul Failla
Licensed Real Estate Agent and Director of Hume Moreland Pty Ltd
24.10.13
-
Sergio Conti
Previously Managing Director of Genoa Foods
22.10.13
-
Anthony Helou
Freelance Journalist and Chairman of the Australian Lebanese Council Inc.
26.10.13
-
Steven Borovec
Principal of Churchill Attorneys
24.10.13
SB-1 to SB-5
Evidence in Answer
Ernest Shu-Yi Ho
Business Operator
6.3.14
ES-1 to ES-10
Evidence in Reply
Santo Gervasi[4]
Managing Director of Gervasi Nominees Pty Ltd
4.8.14
SG-9 to SG-17
[3] For ease of reference throughout the decision this declaration will be referred to as ‘Gervasi 1’
[4] For ease of reference throughout the decision this declaration will be referred to as ‘Gervasi 2’
The opponents’ evidence
9. Gervasi 1 states that the opponents first used the Surname in connection with the Services in 1979 when the co-opponent purchased a property at 870 Sydney Road, Brunswick, Victoria (“Sydney Road premises”) and the opponents commenced trading there as a supermarket under the business name GERVASI RITEWAY SUPERMARKET. Mr Gervasi explains that this business was part of the Riteway buying group because as a smaller independent supermarket operator it was necessary to join a buying group so that competitive wholesale prices for supermarket lines could be obtained. A condition of joining the group was that the trade mark RITEWAY[5] be used on the store signage.
[5] I note that Metcash Trading Limited is currently the owner of trade mark registrations 528433 and 596796 for RITE-WAY (stylised) covering relevant services in Classes 35 and 42 and which date from 1990 and 1993 respectively.
10. Over the years the opponents changed buying groups, joining Self-Service Wholesalers (“SSW”) after Riteway and Foodworks Group after SSW. Exhibit SG-2 is a copy of a photograph taken inside a supermarket and is purported to be the grand opening of the SSW co-venture at the Sydney Road premises in September 1985 or 1986. The photograph is undated and there does not appear to be any use of the Surname but there are banners in the photograph which state “SSW Supermarkets”. Exhibit SG-3 is a copy of a photograph of the outside of the storefront and does show the words “GERVASI SUPERMAKET” prominently displayed across the top of the property. This photograph is also undated although Mr Gervasi states it demonstrates the frontage of the business from 1986 to 1988. Mr Gervasi states that the supermarket business traded at the Sydney Road premises continuously under his direction as a Director of the co-opponent for around 9 years.
11. In 1988 the opponents sold the supermarket business (but not the premises themselves) and leased those premises to the purchasers where they traded for a short time. Mr Gervasi states that to the best of his knowledge the purchasers never used the Gervasi surname in relation to the store. The evidence is silent on what the purchases called the supermarket during their time running it. In 1992, Mr Gervasi incorporated Gervasi Continental Grocery Pty Ltd, with Mr Gervasi and his wife as directors and shareholders. They then rented premises in Preston, Melbourne and commenced operating a supermarket business trading under the name GERVASI CONTINENTAL GROCERY.
12. In 1993 the purchasers of the supermarket business ceased trading at the Sydney Road premises. Mr Gervasi states that he talked to the customers and determined that the store had not been well run and had stocked the wrong type of goods. As a result, Mr Gervasi states that he predicted customers would return if he resumed management of the business so he returned to reopen the Sydney Road premises in 1993 under the name GERVASI. It is unclear whether Mr Gervasi bought the business back from the purchases or reopened a business at his Sydney Road premises after the purchases closed down. Mr Gervasi also continued to run Gervasi Continental Groceries in Preston for a year after the reopening of the Sydney Road premises, following which the Preston business was closed.
13. The opponents’ re-joined the Foodworks buying group when resuming business at the Sydney Road premises and once again, given an agreement with Foodworks, the opponents were obliged to place a Foodworks logo[6] on the Sydney Road premises. Exhibit SG-6 is a copy of a photograph of the Sydney Road premises which is purportedly from 1993/1994 and shows the name/trade mark FOODWORKS in very prominent position on the store frontage. The name/trade mark GERVASI is also present in smaller script and less prominent position in a few different places on the store frontage separately from the Foodworks logo.
[6] I note that Australian United Retailers Limited is the owner of several registrations covering relevant services for trade marks containing or consisting of the element FOODWORKS dating from 1997.
14. Gervasi 1 states that the opponents advertised the supermarket business under the GERVASI name in the Melbourne Il Globo newspaper which had a broad circulation amongst the Italian community in Melbourne. Mr Gervasi states that upon considering the records of the Gervasi Family Trust that advertising and promotion for the supermarket business came to a modest total amount for the financial year ending 30 June 2003. It is not clear if this amount relates to a single financial year ending in 2003 or the total the opponents spent over the course of a number of years up until 2003.
15. In 2003 Mr Gervasi decided to sell the Sydney Road business and talked to his solicitor, Mr Loris Sartori, who is now deceased. Mr Gervasi states that he “was careful to go through with Mr Sartori which assets would be sold with the business, and which assets were not to be sold.” Mr Gervasi states that he “was prepared to allow (Winmart Pty Ltd) to register the business name “Gervasi Foodworks” for use with the business operating from the Sydney Road premises only. He states that he “did not wish to sell [his] family name ‘Gervasi’ for use in connection with any food retail business that Winmart Pty Ltd may have wished to commence at any location and at any time in the future. Winmart Pty Ltd “were buying my supermarket business and not my name.” The declaration of Mr Failla supports Mr Gervasi’s statements about wanting to retain the right to trade under the Surname. However, I note that this evidence refers to business names and to the Surname itself, rather than to use or registration of the GERVASI trade mark per se and it is necessary at this point to clarify what the significance of the distinction may be in this particular case.
16. There are distinctions between use of “Gervasi” as a family name, a business name and as a trade mark for the supermarket services. One relevant distinction is that GERVASI and GERVASI CONTINUENTAL DELI are obviously different business names (and are not tied to particular services as such), they are nevertheless substantially identical trade marks as far as delicatessen services are concerned. Similarly with GERVASI and GERVASI SUPERMARKET for supermarket services. Another distinction is that a registered business name (although not a company name) is restricted to the State or Territory jurisdiction(s) in which it is registered, whereas a registered trade mark (although, arguably, a common law trade mark for, in particular, particularly located services, might not make this claim) is valid throughout all of Australia. Another distinction is that, in principle, there is no such thing as a “common law business name”, since it is illegal for a party to trade in a particular State or Territory under a name other than his/her/its own unless that name is registered as a business name in the relevant jurisdiction.
17. In considering these distinctions I turn to Wizard Automotive Systems Pty Ltd v Smart Repair Australia Pty Ltd [2013] ATMO 33 at [31] to [35]. In that case the applicant relied on advertisments for his car dent repair business placed in the Yellow Pages as evidence that he had used his registered business name Dent Wizard as a trade mark for dent repair services. Relevantly, Hearing Officer Kirov stated:
However, whether either Yellow Pages® listing, (particularly the 1995 listing), constitutes use of the “Dent Wizard” business name as a trade mark might well be questioned. Indeed it is unclear from his evidence whether Mr Cross makes any distinction between use as a business name and use as a trade mark, although curiously, as can be seen in the passage quoted at paragraph 26 above, he does say that he “used the Trade Mark as a brand and trade mark” without indicating what he understands to be the significance of this distinction. Mr Cross’ subjective intention is in any event not determinative. As Hill and Lindgren JJ said (in separate judgments) in Aldi Stores Ltd Partnership v Frito-Lay Trading Co GmbH (2001) 54 IPR 344 at [30] and [78] respectively:
[30] … In most, if not all cases, the question whether there has been use as a trade mark will be determined by an objective examination of the use in the context in which it appears.
…
[78] … A subjective intention to use a sign as a trade mark is not probative of the objective fact of use of it as a trade mark use (compare Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 49 FCR 89 at 129; 28 IPR 193 at 231 per Gummow J), just as a subjective intention not to use a sign as a trade mark is not probative of the objective fact of non-use of it as a trade mark (compare Sports Break Travel Pty Ltd v P & O Holidays Ltd (2000) 50 IPR 51 per Burchett J at [14])
In similar vein the Full Federal Court (Heerey, Allsop and Young JJ) said in their joint judgment in Woolworths Ltd v BP plc (No 2) (2006) 70 IPR 25 at [77]:
[77] Whether or not there has been use as a trade mark involves an understanding from an objective viewpoint of the purpose and nature of the use, considered in its context in the relevant trade. How the mark has been used may not involve a single or clear idea or message. The mark may be used for a number of purposes, or to a number of ends, but there will be use as a trade mark if one aspect of the use is to distinguish the goods or services provided by a person in the course of trade from the goods or services provided by any other persons, that is to say it must distinguish them in the sense of indicating origin…
Beyond Mr Cross’ own statements there is virtually no evidence before me in the present matter as to how the words “Dent Wizard” may have actually been used, apart from their use in the abovementioned Yellow Pages® listings.[7] Nor is the significance of the distinction between use as a business name and use as a trade mark necessarily moot. As Shanahan notes:[8]
In Colorado Group Ltd v Strandbags Group Pty Ltd (No 2),[9] Finkelstein J rejected the view that use of the word “Colorado” on the front of a Colorado theme store amounted to trade mark use. Similarly, in Shahin Enterprises Pty Ltd v ExxonMobil Oil Corp [2005] FCA 1278 Lander J found that Shahin’s use of the words “On the Run Coming Soon” on flyers and an A-frame sign were not use of the phrase “On the Run” as a trade mark.
Indeed, in Shahin Lander J explicitly said at [73]:
There is a clear distinction, in my opinion, between conducting a business under a particular name and using a mark in respect of goods or services. The intention which the applicant needed to establish was an intention to use a mark to distinguish goods or services in the course of the applicant’s trade from goods or services provided by any other person. Because it has established that it intended to use the name to brand its businesses, that does not mean, however, it has established that it has used a mark or a sign to distinguish goods or services in the course of trade
[7] What other evidence is before me is explicitly discussed below.
[8] Shanahan’s Australian Law of Trade Marks and Passing Off (4th ed) Lawbook Co. 2008 at [5.2010].
[9] (2006) 69 IPR 281 at [12], (overturned on appeal to the Full Federal Court but not on this issue).
18. The evidence does establish that the word GERVASI was being used as a trade mark on the supermarket signage and the advertisements in Il Globo. As mentioned, when the opponents sold the business to Winmart Pty Ltd, Mr Gervasi states that he agreed the applicant could register a business name or a company name which incorporated the name GERVASI. The Business Sale Agreement, which I note is made between Gervasi Nominees Pty Ltd and Winmart Pty Ltd is contained within exhibit SG-7.
19. Following the sale Mr Gervasi commenced working for the applicant at the Sydney Road supermarket business up until the 15 May 2011. Mr Gervasi states that during the eight years he was working for the applicant he was also looking for premises to rent or buy in locations that he thought were promising for a new supermarket that he might open on his own account. During all this time the Sydney Road business, now owned by the applicant, continued to trade under the trade mark GERVASI. I also note that the applicant continued to use the GERVASI trade mark on the store signage and advertise the supermarket services in Il Globo under the prominent GERVASI trade mark.
20. In November 2012 Mr Gervasi states that he started to hear about a store called Gervasi Deli which had opened at the Barkly Square Shopping Centre (like the Sydney Road premises also in the Melbourne suburb of Brunswick). The opponents have provided declarations from a number of people who believed that this new Gervasi Deli was Mr Gervasi’s new business. There is no evidence before me as to whether either of the opponent objected to this.
21. On 18 December 2012 Mr Gervasi registered the business name GERVASI CONTINENTAL DELI with the Australian Securities and Investment Commission. Mr Gervasi says “he” subsequently purchased an existing supermarket business in Lalor, another Melbourne suburd, and that “we” have been trading from those premises as Gervasi Continental Grocery since 14 October 2013.
The applicant’s evidence
22. The declaration of Ernest Shu-Yi Ho (‘the Ho declaration’) states that Winmart Pty Ltd purchased the GERVASI supermarket business in 2003. Mr Ho states that the GERVASI business was an attractive business to them for a number of reasons including:
· Mr Ho was familiar with the Brunswick area, having spent a lot of time there during his university days;
· The target market was largely Italian, a cultural community Mr Ho was familiar with as a result of his three years living with a local Italian family.
· The name GERVASI seemed distinctive and appeared to have a strong reputation locally.
23. Mr Ho states that he contacted Mr Kevin Lee, the business broker who was trying to sell the Supermaket Business[10] for sale by Mr Gervasi. Mr Lee arranged for Mr Ho and his wife to meet with Mr Gervasi to inspect the Gervasi Business. Prior to the sale of the business Mr Ho states that he wanted to know about the business’ finances and whether the price being asked was reasonable. Mr Ho states that he asked Mr Lee if the sale of the Gervasi Business included the GERVASI name as the supermarket was branded as Gervasi Supermarket, Gervasi Continental Supermarket, Gervasi Licensed Supermarket, Gervasi Continental Licensed Supermarket and Gervasi Foodworks. Mr Ho declares that he believed that the brand name was very important to a business and that the name GERVASI was a key aspect of his purchase of the business.
[10] Hereafter referred to as the ‘Gervasi Business’
24. The Ho declaration states that in or about May 2003 Mr Lee sent Mr Ho and his wife a draft contract of sale of the Gervasi Business. Mr Ho attests that before he signed the sale agreement he ensured that it had the following features:
·The applicant was purchasing all the assets of the business.
·The assets were defined to mean “the assets of the business on the completion date including the lease, the plant, the stock, the contracts and the goodwill of the business”.
·The “goodwill” was defined to include “without limitation the right, title and interest of the vendor in the business, the business name and …any right, title and interest of the vendor in the business name”.
25. Settlement of the sale/purchase of the supermarket business took place on 28 July 2003 and the price paid for the business was apportioned so that the vast majority of the money paid for the business was attributed to the purchase of the goodwill of the Gervasi Business. Since that time Mr Ho and his wife have run the business and continued to advertise extensively in the Il Globo newspaper spending approximately $150,000 per year on advertising the GERVASI supermarket under the GERVASI name. Exhibit ES-8 accompanying the Ho declaration contains a number of copies of these advertisements over the years and each bear the name GERVASI in very prominent position.
26. The Ho declaration goes on to state that in 2012 Mr Ho decided to expand the GERVASI business and did so by opening the GERVASI DELI which is branded in a similar manner to the Gervasi Supermarket. Mr Ho continues to run both businesses under the GERVASI trade mark.
Ownership – section 58
27. Section 58 of the Act provides:
Applicant not the owner of the trade mark
The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.
28. Ownership of a trade mark may arise in two different ways – at statute by the filing of an application to register that trade mark[11] on particular goods or services[12], or at common-law by the use of that trade mark on the particular goods or services or goods and services which are the same kind of thing. The owner of the trade mark is the person who first uses it, or first files the application, whichever is the earlier. For the purposes of demonstrating ownership the first use need only be a small amount[13].
[11] Identical or substantially identical trade marks: Settef SpA v Riv-Oland Marble Co (Vic) Pty Ltd 10 IPR 402 at 413
[12] ‘the same kind of thing’ Re Hicks’ Trade Mark (1897) 22 VLR 636, 3 ALR 75 at 639-40
[13] Thunderbird Products Corporation v Thunderbird Marine Products Pty Ltd (1974) 131 CLR 592, 600 ( per Jacobs J).
29. The opponents have argued that the applicant is not the owner of the GERVASI trade mark as the opponents did not sell the GERVASI name to the applicant when they sold the supermarket business. Ms Melissa Marcus, counsel for the opponents, submits that the opponents are the owners of the GERVASI trade mark as they commenced using it in 1979, did not sell the trade mark and did not abandon it. The main thrust of the opponents arguments are:
Pursuant to the Business Sale Agreement, [the applicant] purchased the business. The “business” was defined as “the supermarket business conducted by the vendor at the premises including without limitation the assets”.
The “premises” was defined as “the premises situated and known as 870 Sydney Road Brunswick being the whole of the land contained in Certificate of Title Volume 9620 Folio 306”.
The assets included the “goodwill” of the business, which included the business name. The “business name” in turn was defined as “Gervasi Foodworks”.
Clause 4(2) of the Business Sale Agreement provided that:
The purchaser acknowledges that the vendor is not the registered proprietor of the trade name “Gervasi Foodworks” and that the vendor makes no representation on the entitlement of the purchaser to register any business name or company name bearing the word “Foodworks”; the vendor will not oppose or object to the purchaser registering a business name or company name incorporating the word “GERVASI” so long as such registration is in association with the conduct of the business.
30. Ms Marcus argues that this clause in the Business Sale Agreement demonstrates that the opponents did not assign rights in the Gervasi name solus to the applicant, and the co-opponent did not assign any rights in the Surname per se to the applicant. She states that any rights granted by the co-opponent were only for use of the Gervasi name in combination with another name, and for use of that combined name at the Sydney Road premises. Ms Marcus states that each of the opponents own rights in the Gervasi name and are owners of the Gervasi trade mark for the purposes of section 58.
31. Mr Nicholas Burmeister, counsel for the applicant, argued that the key to this entire opposition is understanding what was (and what was not) sold by the co-opponent to the applicant. He states that the answer is contained in the Business Sale Agreement contract clause 2.1 where the co-opponent agreed to sell the applicant:
“…the business (including all the right, title and interest of the vendor in the business) free from any security or third party interest…”
32. Mr Burmeister states that this provision places no limitation on what part of the Sydney Road business was being sold. He stated that the same can be said for the word “business” and “assets” in the Business Sale Agreement. In the Business Sale Agreement the word “business” is defined to mean:
“…the supermarket business conducted by the [co-opponent] at the premises including without limitation the assets.”
In the Business Sale Agreement the word “assets” is defined to mean:
“…the assets of the business on completion date including the lease, the plant, the stock, the contracts and the goodwill of the business.”
33. The arguments put forth by both parties focus on this Business Sale Agreement and whether or not the common law trade mark GERVASI formed part of the “goodwill” of the Sydney Road business that was sold to the applicant in 2003. There has been much discussion about the wording of the Business Sale Agreement and the connotations which can be drawn from emails between the parties’ legal representatives during the sale of the business. I believe that common law principles apply when considering if the right and interest in the common law GERVASI trade mark passed to the applicant with the co-opponent’s sale of the business in 2003.
34. The Business Sale Agreement defined “goodwill” as follows:
“”goodwill” includes without limitation the right, title and interest of Gervasi Nominees Pty Ltd in the business, the business name and in the Packaged Liquor Licence and any right, title and interest of Gervasi Nominees Pty Ltd in the business name.”
35. I do note that the Business Sale Agreement does have a provision to treat the business name incorporating the word FOODWORKS in a manner different to the other goodwill of the business. I note that this provision confirms that the Foodworks name is not part of the sale. However, I do not believe that this provision extends to exclude any other intellectual property including the use of the name GERVASI.
36. From the above mentioned definition of goodwill there is no ambiguity regarding how the goodwill of the Sydney Road business is to be treated under the Agreement. Simply put, the Agreement states that Gervasi Nominees Pty Ltd sold all goodwill, with the exception of any goodwill in the Foodworks name, to the applicant. In return the applicant agreed to pay a considerable sum for the goodwill which exceeded the total cost of the value of the plant by a factor of ten. I need to determine if the common law GERVASI trade mark is considered to be included in this ‘goodwill’ considering that there are no specific provisions in the Business Sale Agreement which deal with either the inclusion or exclusion of the GERVASI trade mark from the sale.
37. The opponents argued that the reasoning of Hearing Officer Nancarrow in Hard Coffee Pty Ltd v Hard Coffee Main Beach Pty Ltd[14] (‘Hard Coffee’) should apply. However, the applicant rightly pointed out that the present case is not analogous to the Hard Coffee case as in that case the relevant contract for the sale of business contained provisions where it was clearly stated that the purchaser was not purchasing any right, title or interest in the business names and that the vendor would retain all right, title and interest in the business names and all intellectual property relation to such names. Further to this, the parties in Hard Coffee entered into a separate agreement whereby the purchaser of the relevant business acknowledged that nothing in the sale contract gave it any title or proprietary interest in the Hard Coffee signage or any associated intellectual property. On the acts as presented, Hard Coffee is a vastly different situation to the one before me.
[14] [2009] ATMO 26 (1 April 2009)
38. In the current situation it is clear that there are no provisions dealing with the GERVASI trade mark per se. All that is said is that Gervasi Nominees Pty Ltd will not oppose or object to the purchaser registering a business name or company name incorporating the word “GERVASI” so long as such registration is in association with the conduct of the business. The opponents have argued that this provision indicates that the opponents were keeping the trade mark GERVASI and not selling it. However, I am not convinced by this argument.
39. The evidence of both parties demonstrates that the Sydney Road business sold in 2003 was then trading under the prominent common law trade mark GERVASI. It is clear that a considerable amount of the reputation of the business was directly tied up with the unregistered GERVASI trade mark and it is also clear that this reputation forms a significant part of the goodwill which was sold to the applicant in 2003. I turn to the decision of Hearing Officer Wilson in Pritchard Pacific Pty Ltd v Brendon McCarrison and Breezewater Pty Ltd[15] (‘Pritchard Pacific’) where he cited the following passage from Shanahan’s Australian Law of Trade Marks and Passing Off :
[U]nless agreed otherwise, a transfer of goodwill carried with it the trade marks and trade name of the business and this is still the case.
…
An unregistered trade mark may be assigned with the business in which is it used and, in the absence of an agreement to the contrary, will pass by implication on the transfer of the goodwill of the business.
[15] [2011] ATMO 46 (31 May 2011)
40. I believe that the situation before me is analogous to that in Pritchard Pacific. There is nothing in the evidence, or in the Business Sale Agreement itself, which shows that the common law GERVASI trade mark was not included in the Business Sale Agreement. I note in paragraph 9 of Gervasi 2 that Mr Gervasi states that the GERVASI name was included as part of the sale of the Sydney Road premises but that it was the GERVASI name in combination with the word “Foodworks”. However, it is clear from the Business Sale Agreement (exhibit ES-7) and the emails contained in exhibits SG-11 and AG-15 that the opponents’ did not have any right in the FOODWORKS trade mark as the FOODWORKS trade mark was clearly owned by another trader. The opponents informed the applicant of this fact.
41. I note that there are no provisions for restrictions on the use of the GERVASI trade mark in the Business Sale Agreement despite the fact that it was acknowledged that Gervasi Nominees Pty Ltd was not selling the FOODWORKS trade mark. Given the presence of a clause to specifically exclude a different trade mark was placed in the Business Sale Agreement but the agreements otherwise remains silent on the exclusion of the GERVASI trade mark solus, I believe that the agreement encompasses the GERVASI trade mark along with the goodwill of the business. Indeed, it is my opinion that it is unlikely that the applicant would have paid the considerable sum it did to acquire the Gervasi Supermarket and the associated goodwill if it did not believe it was also acquiring the GERVASI trade mark. I also believe that the applicant would not have continued to trade under the GERVASI trade mark if it did not intend to maintain and protect the considerable reputation vested in it.
42. I note that Mr Gervasi worked for the applicant for a period of eight years while the applicant broadly advertised its supermarket under the GERVASI trade mark and grew the reputation of the GERVASI trade mark and its supermarket. During this time Mr Gervasi did not object to the use or advertisements or inform the applicant that he still retained ownership of the GERVASI trade mark. This is despite the considerable investment the applicant was making in growing the reputation of the GERVASI trade mark and its supermarket business.
43. The evidence satisfies me that the GERVASI trade mark passed to the applicant when Gervasi Nominees Pty Ltd sold the supermarket business in 2003. Section 6 of the Act states:
6 Definitions
(1) In this Act, unless the contrary intention appears:
predecessor in title, in relation to a person who claims to be the owner of a trade mark, means:
(a) if the trade mark was assigned or transmitted to one or more than one other person before it was assigned or transmitted to the first‑mentioned person—that other person or any one of those other persons; or
(b) if paragraph (a) does not apply—the person who assigned the trade mark, or from whom the trade mark was transmitted, to the first‑mentioned person.
Note: In the case of a trade mark that is neither registered nor the subject of an application for registration, the trade mark may be assigned or transmitted in Australia only in conjunction with the goodwill of a business concerned with the trade mark. If the trade mark is registered or the subject of an application for registration, section 106 provides that the trade mark may be assigned or transmitted with or without the goodwill of the business.
44. I am satisfied that the opponents were the predecessors in title of the GERVASI trade mark but upon the sale of the business that use became use by the applicant. Even if I were not so satisfied, there is still not enough evidence before me to establish that the applicant is not the owner of the trade mark.
45. Therefore the opponents’ have not established the ground of opposition under section 58.
Section 60 - Reputation in Australia
46. Section 60 of the Act provides:
60 Trade mark similar to trade mark that has acquired a reputation in Australia
The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:
(a)another trade mark had, before the priority date for the registration of the first‑mentioned trade mark in respect of those goods or services, 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.
47. To establish the ground of opposition under section 60, the opponent must demonstrate:
·That, at the priority date of the opposed application, another trade mark had acquired a reputation in Australia; and
·That because of the reputation of the second trade mark, use of the opposed application would be likely to deceive or cause confusion.
48. My conclusions in the preceding paragraphs that the opponents’ assigned the GERVASI trade mark to the applicant in 2003 and such assignment obviously included any reputation the trade mark then had, it would therefore follow that the opponents would have difficulty in establishing the ground of opposition under section 60. Nevertheless, the opponents’ section 60 argument proceeds on the premise that the reputation in the GERVASI trade mark for the supermarket ervices is associated by the relevant public with them and that use by the applicant would therefore be likely to deceive or cause confusion. In this regard the opponents have provided numerous examples in their evidence of other traders becoming confused when the applicant opened up its new GERVASI branded deli in Barkly Square, believing that Mr Gervasi had opened up the new business.
49. The opponents’ evidence contains a number of declarations from traders which state that they knew Mr Gervasi intended to eventually open a new supermarket business under the GERVASI trade mark. These declarants have generally been associated with Mr Gervasi for over 20 years and appear to be very familiar with Mr Gervasi and his family. The declaration of Mr Paul Failla states that he had discussions with Mr Gervasi around the time of the sale of the Gervasi Supermarket in 2003. Mr Failla states that Mr Gervasi or his family would look to starting another food retail business under the GERVASI name. He goes on to state that when he became aware of the new Barkly Square deli operating under the name GERVASI DELI that he believed it was the new business of Mr Gervasi given the strong reputation that Mr Gervasi has in food retail. This strong reputation in the supermarket retail business is not supported by any actual evidence before me. Indeed, the instances of confusion demonstrated by the opponents are all from long-term associates of the Gervasi family who are not, I believe, representative of the average Australian supermarket consumer.
50. I do have some doubt that Mr Gervasi had established a ‘strong reputation’ for the GERVASI trade mark with the supermarket business he commenced in 1970 as there is very limited evidence before me to support this assertion. In any event it is clear that any reputation the opponents had in the GERVASI trade mark was sold to the applicant as part of the goodwill of the business in 2003. Therefore, the arguments of the opponents that they retain the GERVASI trade mark and its associated reputation ring hollow. For a number of years the only supermarket operating under the GERVASI trade mark has been that of the applicant. The applicant expanded its GERVASI business to a second location in 2012. It was only in late 2013 that the opponents once again commenced running a supermarket under the GERVASI trade mark which is after the priority date of the opposed trade mark application.
51. While those people who actually know Mr Gervasi personally may be caused to wonder, I am not satisfied that the applicant’s use of the Trade Mark will result in confusion or deception amongst a significant number of the Australian public at large. The opponent has not established the section 60 ground of opposition.
Section 42(b) - Contrary to Law
52. Section 42 of the Act provides:
An application for the registration of a trade mark must be rejected if:
(a) the trade mark contains or consists of scandalous matter; or
(b) its use would be contrary to law.53. Ms Marcus submitted that the use of the applicant’s trade mark for the supermakret services would breach sections18 and 29 of the Australian Consumer Law (being Schedule 2 to the Competition and Consumer Act 2010) which proscribe misleading or deceptive conduct or the making of false or misleading representations.
54. As I have found that the use of the opposed trade mark is not, at a minimum, likely to “deceive or confuse” under section 60, it follows that the use is not, on the stricter test posited by the Australian Consumer Law, likely to mislead or deceive, nor do I believe use would amount to a false representation in terms of section 29. I thus find that the opponents have not established the ground of opposition under section 42(b).
Section 43 – Trade mark likely to deceive or cause confusion
55. Section 43 of the Act states:
Trade mark likely to deceive or cause confusion
43. An application for the registration of a trade mark in respect of particular goods or services must be rejected if, because of some connotation that the trade mark or a sign contained in the trade mark has, the use of the trade mark in relation to those goods or services would be likely to deceive or cause confusion.
56. It is well established that to make out this ground of opposition there would need to be some connotation inherent in the opposed application such that its use was likely to deceive or cause confusion. In Winton Shire Council v Lomas,[16] for example, Spender J said:
Section 43 is directed to the mark itself. It is not concerned with any deception or confusion caused by the reputation in Australia of some other trade mark. That aspect of the matter is dealt with under s 60.
[16] (2002) 56 IPR 72 (at [19])
57. In Pfizer Products Inc v Karam[17], to take a further example, Gyles J put it this way:
‘Connotation’ is a secondary meaning implied by the mark. The likelihood of deception or confusion must flow from the secondary meaning inherent in the mark itself. It is apparent that the underlying purpose of s 43 is a similar purpose to that lying behind ss 52, 53 and 55 of the Trade Practices Act 1974 (Cth). It is to prevent the public being deceived or confused as to the nature of the goods offered by reason of a secondary meaning connoted by the mark in question, rather than, for example, deception by reason of some similarity with other marks…
[17] (2006) 70 IPR 599 (at [53])
58. Ms Marcus’s submission was that:
The opponents’ significant reputation in the Gervasi mark is also enhanced by the significant years’ of use of the mark, both by the opponents’ use at the Sydney Road premises and also by Mr Gervasi at the Preston premises. By 2003 the Sydney Road business was very profitable.
The Gervasi mark is based upon a name that, as shown in evidence, is a rare name in Australia and also in Italy…Mr Gervasi has and continues to be a prominent person in the supermarket retail business and it could not be said that the distinctiveness of his name is diluted by others having the name Gervasi.
59. In these submissions it is clear that the opponents are suggesting that they and their use of the GERVASI trade mark on supermarket services are so well known in the Australian marketplace that any use of the GERVASI name on supermarket services would necessarily imply “an implication of sponsorship or association”[18] with Mr Gervasi. I do not believe this is so. I accept that Mr Gervasi commenced a supermarket business under the GERVASI trade mark and that he built up a reputation in that business before he sold it to the applicant in 2003. What I do not accept is the opponents’ claim that they have such a reputation in the GERVASI trade mark was such that the word GERVASI had acquired a secondary meaning implying that services with which it is used must have the sponsorship of, or an association with, the opponents.
[18] Durkan v Twentieth Century Fox Film Corp (2000) 47 IPR 651 (BRAVEHEART THE MUSICAL), Amalgamated Television Services Pty Ltd v Pickard (1999) 48 IPR 133 (SUMMER BAY), Amalgamated Television Services Pty Ltd v Clissold (2000) 52 IPR 207 (HOME & AWAY), McCorquodale v Masterson (2004) 63 IPR 582 (DIANA’S LEGACY & Device) and Marc Chagall Committee v Elite Wines & Spirits (2007) 73 IPR 552 (MARC CHAGALL).
60. Indeed, for the same reasons discussed earlier in the decision, I do not believe that the connotation alleged by the opponents is likely to arise at all as far as most members of the Australian public are concerned. I do not in any event think that the average customer in a supermarket is likely to be deceived or confused or be caused to wonder about the existence of any formal or commercial relationship between the applicant and the opponents due to the use of the trade mark. The opposition ground based on section 43 of the Act is therefore not established.
Section 62A – Application made in bad faith
61. Section 62A of the Act provides:
The registration of a trade mark may be opposed on the ground that the application was made in bad faith.
62. Bennett J in DC Comics v Cheqout Pty Ltd[19] considered bad faith and endorsed the approach taken by Dodds-Streeton J in Fry Consulting Pty Ltd v Sports Warehouse (No 2) [20], wherein her Honour commented:
Bad faith, in the context of s62A, does not, in my opinion, require, although it includes, dishonesty or fraud. It is a wider notion, potentially applicable to diverse species of conduct.
The formulation in the United Kingdom authority of bad faith as falling short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in a particular area is, in my view, an apt touchstone. An overly literal application may, however, tend to negate the relevance attributed to the applicant’s mental state in the combined test preferred in Harrison [Harrison’s Trade Mark Application [2005] FSR 10, in which the “combined test” of bad faith was said to involve both subjective and objective elements].
Further, in my view, mere negligence, incompetence or a lack of prudence to reasonable and experienced standards would not, in themselves, suffice, as the concept of bad faith imports conduct which, irrespective of the form it takes, is of an unscrupulous, underhand or unconscientious character…
The question is whether, in all the particular circumstances, the applicant’s knowledge was such that his decision to apply for registration at the relevant date would be regarded as in bad faith by persons adopting proper standards.
[19] [2013] FCA 478; (2013) 101 IPR 334.
[20] [2012] FCA 81; (2012) 94 IPR 551, at [164].
63. I am not persuaded that the opponents have discharged the onus of establishing that the applicant, as at the priority date, applied for the GERVASI trade mark in bad faith, in the sense that in all the circumstances, persons adopting proper standards would regard the decision to register as in bad faith, or that reasonable and experienced persons in the field would view such conduct as falling short of acceptable commercial behaviour.
64. The applicant had purchased the goodwill of the Sydney Road business in 2003 and had been trading under the GERVASI trade mark since that time. Pursuant to the reasoning outlined in the discussion regarding section 58, I do not believe that the applicant made the application in bad faith. The opponents have not established the section 62A ground of opposition.
Decision
65. Section 55 of the Act provides:
Decision
55 (1). Unless the proceedings are discontinued or dismissed, the Registrar must, at the end, decide:
(a) to refuse to register the trade mark; or
(b) to register the trade mark (with or without conditions or limitations) in respect of the goods and/or services then specified in the application;
having regard to the extent (if any) to which any ground on which the application was opposed has been established.
Note: For limitations see section 6.
66. The opponents have not established any of the grounds of opposition pressed. The trade mark application may accordingly proceed to registration one month from the date of this decision. If the Registrar has been served with notice of appeal before that time, I direct that registration of the trade mark shall not occur until the appeal has been decided or discontinued.
Costs
67. It is usual for costs to follow the event, and I see no reason to depart from that principle here. I award costs, according to the official scale set out in Schedule 8 of the Regulations, against the unsuccessful opponents Gervasi Nominees Pty Ltd and Santo Gervasi.
Bianca Irgang
Hearing Officer
Trade Marks Hearings
29 January 2015
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