Grant Bloodstock Pty Ltd

[2022] ATMO 127

TRADE MARKS ACT 1995

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

Re:Trade mark application number 2018804 (Classes 31, 35, 41, 43, 44) – Horse & foal device – in the name of Grant Bloodstock Pty Limited.

Delegate:	Blake Knowles
Representation:	Applicant: Grant Bloodstock Pty Limited.
Decision:	2022 ATMO 127 Request to be heard under section 33(4) of the Trade Marks Act 1995 (Cth) in relation to ground for rejection under s 41 of the Act – s 41 considered – trade mark accepted under s 41(4).

Background

1.     This is a decision on examination of trade mark application number 2018804 (‘Application’) filed by Grant Bloodstock Pty Limited (‘Applicant’). The Application was filed on 26 June 2019 (‘Relevant Date’), for the following trade mark and goods and services:

(‘Trade Mark’)

Class 31: Live animals being horses; cattle

Class 35: Buying and selling of horses; horse sales services; buying and selling of cattle; information, consultancy and advisory services in relation to all of the aforementioned services

Class 41: Training of horses; horse training; provision of facilities for training of horses; information, consultancy and advisory services in relation to all of the aforementioned services

Class 43: Agistment services for animals; boarding for horses; stables (horse accommodation services); information, consultancy and advisory services in relation to all of the aforementioned services

Class 44: Care of horses; hygienic and beauty care for horses; grooming of horses; foaling services; horse breeding services; horse stud services; information, consultancy and advisory services in relation to all of the aforementioned services

(‘G&S’)

2.     The Trade Mark was examined as required by the Trade Marks Act 1995 (Cth).[1] The examiner raised a ground for rejection under s 41 on the basis that the Trade Mark was only to some extent inherently adapted to distinguish horse related goods and services and therefore fell for consideration under s 41(4).  The Applicant subsequently filed submissions and evidence in response to the examiner’s report. The examiner maintained the ground for rejection.

[1] Unless otherwise stated, each reference to a section or regulation is a reference to a section of the Trade Marks Act 1995 (Cth) (the ‘Act’) or regulation of the Trade Marks Regulations 1995 (Cth) (the ‘Regulations’).

3.     The Applicant requested a hearing by videoconference. The matter was heard before me, as a delegate of the Registrar, on 1 June 2022. Shauna Ross of counsel appeared on behalf of the Applicant, instructed by Sparke Helmore lawyers.

Evidence

4.     The Applicant at the hearing relied on the following declarations supporting the Application:

(i)declaration by Stephen Grant, Chairman of the Applicant, made on 8 November 2021, with annexures A to J.

(ii)declaration of Shannon Platt, lawyer at Sparke Helmore Lawyers, made on 30 May 2022, with annexures A to G.

5.     At the hearing, I queried the Applicant regarding some aspects of the revenue figures provided by Mr Grant. The Applicant indicated they were able to provide additional evidence on this point and subsequently filed a third declaration made by Richard de Carvalho, General Counsel of the Applicant, made on 21 July 2022, with Exhibits 1 to 3.

Grant declaration

6.     Mr Grant declares that the Applicant commenced trading under its name as a breeder and seller of thoroughbred racehorses in 1999.

7.     The Trade Mark was developed from a sketch commissioned by the Applicant in late 2017. Annexed to the declaration are emails which detail the evolution of the Trade Mark from the initial sketch.

8.     The Applicant commenced use of the Trade Mark in Australia in April 2018, and the Trade Mark has been used since that date in relation to:

-     Horse breeding and foaling;

-     The provision of horse training, and the provision and maintenance facilities for horse training; and

-     Horse agistment and spelling services, including transport, feeding, grooming, health, and hygiene services.

9.     The Applicant maintains a property named Silverdale Farm in New South Wales which contains paddocks and facilities for the provision of the abovementioned goods and services.

10.     Mr Grant annexes examples of use of the Trade Mark, namely:

(i)use on signage at the Silverdale Farm and on transport vehicles. The following examples illustrate how the Trade Mark is used, either by itself or in combination with, or close proximity to, word elements SILVERDALE or GRANT BLOODSTOCK:

(ii)use on the Applicant’s websites and in addition to the Young Professionals in Racing website and online directory including:

(iii)use on the Applicant’s newsletters, business cards, print advertisements, business contracts (together with the words GRANT BLOODSTOCK or SILVERDALE FARM as illustrated above).

(iv)use on Facebook and Instagram, predominantly in the following format as the profile picture for the accounts:

(v)use on uniforms and merchandise (clothing, fold out chairs, and stubby holders), including:

11.     Mr Grant provides revenue figures from 2016-2021. However, this information is somewhat inconsistent with the information subsequently provided by Mr de Carvalho. As such, I have only taken into account the later more specific figures provided by Mr de Carvalho.

12.     Mr Grant provides marketing and uniform expenditure figures for 2019 to 2021, which are reasonable but not significant.

Platt declaration

13.     Ms Platt declares that his research indicates that the thoroughbred racing and breeding industry is highly regulated by Racing New South Wales and Racing Australia. Annexed to the declaration are extracts from the website the Australian Rules of Racing, and the Rules of the Australian Studbook.  

14.     Ms Platt also annexes a list of stud farms in Australia, and a bundle of photographs taken in 2022 showing the branding used by breeders registered with the Australian Stud Book.

15.     Ms Platt provides further background to the creation of the Trade Mark, and states that the Trade Mark has been used without objection or confusion arising for at least four years. Annexed are photographs showing use of the Trade Mark in 2021 and 2022, and an extract from the Intellectual Property Office of New Zealand indicating that the trade mark has been registered in New Zealand in respect of goods and services that are similar to the G&S.

de Carvalho declaration

16.     Mr de Carvalho explains the revenue streams associated with goods and services under the Trade Mark. In summary, the Applicant generates revenue from agistment fees (which encompasses the boarding, feeding, grooming, and veterinary care of horses), prize money from shareholdings in race horses, preparation and training of yearlings for sale, sales of yearlings, service fees, sales commissions and presentation fees, truck, and transportation fees.

17.     Mr de Carvalho does not provide a breakdown of revenue based on each of the income streams. The aggregated revenue from prior to the Relevant Date is somewhat modest, although revenue did increase significantly after the Relevant Date, particularly in FYE 2021. Mr de Carvalho attributes this increase to a substantial expansion of operations and facilities at the Applicant’s Silverdale Farm property.

Discussion

18.     Section 41 requires that the Trade Mark be rejected if I am satisfied that it is not capable of distinguishing the G&S of the Applicant from those of other traders. The Trade Mark is to be first assessed under s 41 having regard to its level of ‘inherent adaptation’ to distinguish. If the Trade Mark has sufficient inherent adaptation to distinguish the G&S, there will be no grounds for rejecting it under s 41. If I am satisfied that the Trade Mark does not have sufficient inherent adaptation to distinguish the G&S, I must then determine whether it has any inherent adaptation to distinguish. If the Trade Mark has no inherent adaptation, it must be rejected only if I am satisfied that it did not in fact distinguish the G&S based on the extent of its use at the Relevant Date (s 41(3)). If the Trade Mark has some inherent adaptation to distinguish, it must be rejected only if I am satisfied that due to the combined effect of the level of inherent adaptation of the Trade Mark, the extent of use of the Trade Mark at the Relevant Date and/or intended use thereafter, and/or other relevant circumstances, the Trade Mark did not or would not distinguish the G&S (s 41(4)).

19.     The test to determine whether a trade mark is inherently adapted to distinguish was set out by Kitto J in Clark Equipment Co v Registrar of Trade Marks:

His Lordship said: “The applicant's chance of success in this respect (i.e. in distinguishing his goods by means of the mark, apart from the effects of registration) must, I think, largely depend upon whether other traders are likely, in the ordinary course of their businesses and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connexion with their own goods. It is apparent from the history of trade marks in this country that both the Legislature and the Courts have always shown a natural disinclination to allow any person to obtain by registration under the Trade Marks Acts a monopoly in what others may legitimately desire to use." The interests of strangers and of the public are thus bound up with the whole question, as Hamilton L.J. pointed out in the case of R.J. Lea, Ltd. (1913) 1 Ch 446, at p 463; (1913) 30 RPC 216, at p 227; but to say this is not to treat the question as depending upon some vague notion of public policy: it is to insist that the question whether a mark is adapted to distinguish be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives - in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess - will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it.[2]

[2] (1964) 111 CLR 511, 514.

20.     In Cantarella Bros Pty Ltd v Modena Trading Pty Ltd (‘Cantarella’), the High Court recognised that the assessment of inherent adaptation involves a two-step process, first (i) determining the ordinary signification of the sign to those who would purchase, consume or trade in the goods or services, and (ii) then having determined the ordinary signification, the likelihood of the sign being desired for use by others.[3] The High Court also confirmed that the test in Cantarella does not encompass desire by other traders to use a sign which in relation to the goods is allusive or metaphorical.[4]

[3] [2014] HCA 48, [71] (French CJ, Hayne, Crennan and Kiefel JJ).

[4] Ibid, [59].

21.     In Aldi Foods Pty Ltd v Moroccanoil Israel Ltd, Perram J (with whom Allsop CJ and Markovic J agreed), said:

Further, it is not just the desire of traders to use the word which is relevant; it is also their potential desire to use words nearly resembling that word. So here one must examine not just the inherent adaptability to distinguish the Respondent’s goods of MOROCCANOIL but also of MOROCCAN OIL, MOROCCAN-OIL and perhaps, without deciding, OIL OF MOROCCO. The necessity so to reason was referred to by Kitto J in Clark (at 513) and reflects the reality that once registration of a mark is achieved, it will be infringed not only by persons using it without its owner’s permission but also by those using ‘a sign that is substantially identical with, or deceptively similar to, the trade mark’: s 120(1) of the Act. Furthermore, account must be taken of the fact that no attempt has been made in this case to limit the mark by stylistic or device elements; it is purely a word. As Yates J explained in Apple at 517 [18] that matters because it means that if the word proceeds to registration it will give the Respondent a monopoly on the use of the word (or words) in whatever form they may be ultimately rendered. [5]

[5] [2018] FCAFC 93, [125].

22.     In Chocolaterie Guylian NV v Registrar of Trade Marks, Sundberg J considered a sign comprising a seahorse shape for confectionary. His Honour ultimately determined that the trade mark had some inherent adaptation to distinguish, but not sufficient inherent adaptation to be prima facie registrable. In reaching that conclusion, his Honour said:

The ultimate question on the issue of inherent adaptation is whether a sign – in this case, a shape – possesses any ordinary significations and, if it does, whether or not other traders might think of the shape and want to use it for those ordinary significations in a manner which would infringe a registered mark in respect of the sign. In cases where a shape depicts a known object or concept (cf. wholly concocted or ambiguous shapes), and is therefore likely to signify the same to most if not all consumers, then a subsidiary question is whether the shape is nevertheless sufficiently distinctive or unique so that other traders wishing to represent the same or a similar concept will remain free to do so without infringing the mark, that is, without requiring use of the same shape or one substantially identical or deceptively similar. An important consideration in all of this is the nature of the goods for which the shape mark is to be used.

…

Putting the tail to one side, I agree that there will be ways to depict a seahorse other than that chosen by Guylian. However, the ultimate question I must consider is whether there is a likelihood that other traders, acting with proper motives, will think of the shape and wish to use the same shape or one substantially identical or deceptively similar.[6] 

[6] [2009] FCA 891, [75]-[77].

23.     The Applicant referred to various other decisions[7] and submitted that the question to be resolved in relation to device marks is whether they ‘are ordinary representations of a subject which is common to the trade, or whether they are sufficiently stylised or otherwise distinctive and that these are questions of degree and that the number of meaningfully different variations available to other traders will be an important factor’. However, while these cases provide some guidance on how the registrability of a device mark should be assessed, the present assessment must be made on its own merits.

[7] Dexter’s Trade Mark (1893) 10 RPC 269, Beecham Group PLC v Colgate-Palmolive Co (2001) 58 IPR 161, Boccaccio Pty Ltd v Hardy Wine [2008] ATMO 16, and Specialty Fashion Group Ltd v Alpargatas SA (2015) 117 IPR 581.

24.     The basis for the examiner’s objection was that the Trade Mark consists of a realistic depiction of a horse and foal, and that the Trade Mark is therefore essentially analogous to the words HORSE and FOAL. The examiner did not consider that the particular presentation of the Trade Mark nullified its reference to the G&S, stating that the depiction is readily achieved through increasing the contrast in a photo using a graphics application. The examiner subsequently maintained the objection in the face of legal arguments by the Applicant.

25.     The examiner also did not consider the evidence filed by the Applicant to be persuasive, as it indicated the Trade Mark was often used with the words GRANT BLOODSTOCK and SILVERDALE FARM, and that some examples of use were not strictly use in the course of trade. The examiner said “It is yet to be established whether the subject device is capable, in its own right, of distinguishing the relevant goods and services, or whether the device is at best a “limping trade mark” [as referred to by Justice Jacob in Phillips Electronics NV v Remington Consumer Products (1997) 40 IPR 279], something viewed as merely implying that the Applicant’s horse-related goods and services are concerned with animals of all ages. It is therefore arguable that turnover is directly attributable to use of the subject device rather than the obvious identifiers of GRANT Bloodstock or SILVERDALE Farm”.   

26.     The examiner’s assessment of the evidence was thorough and the maintenance of the objection in the face of cogent legal submissions was supported with logical reasoning. However, I respectfully differ on two of the conclusions reached by the examiner.

27.     First, the examiner appears to place the onus on the Applicant to establish that the device is capable of distinguishing. While this approach may have been correct in assessing registrability under s 41 in its previous form,[8] it is clear that in its current form, s 41 requires that the Registrar be positively satisfied (on the balance of probabilities) that a trade mark is not capable of distinguishing. The onus on the Registrar continues to apply even where the Registrar is positively satisfied that a trade mark lacks sufficient inherent adaptation to distinguish, and therefore falls to be considered under either the provisions of s 41(3) or (4).

[8] Section 41 was amended by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth), which became effective on 15 April 2013.

28.     Second, the examiner in considering evidence of the Applicant’ use of the Trade Mark states that the Applicant’s turnover may be attributable to other identifiers, GRANT BLOODSTOCK and SILVERDALE FARM. Where multiple trade marks are used by a trader, it is not realistic to apportion revenue figures to each of those marks individually, particular where the use of the respective marks is relatively co-extensive. Consumers are often exposed to multiple brands being used concurrently, and revenue figures should not be given diminished weight simply on the basis that one mark is often used in proximity to another.

29.     The examiner also placed emphasis on the relative ease with which the Trade Mark could be created. The Applicant has responded by providing evidence of the incremental process through which the Trade Mark was arrived at. However, I do not consider the ease of creation of a trade mark to be particularly relevant in determining its ordinary signification or its desirability for use by other traders.

30.     The Applicant pointed to the state of the Register, including various horse devices registered without an objection being raised under s 41. My research indicates that the precedent is somewhat mixed. The most analogous recent acceptance is trade mark number 1834009, registered under s 41(4), for the following device:

31.     I agree with the examiner that the Trade Mark is not sufficiently inherently adapted to distinguish the G&S to be prima facie registrable. While the Trade Mark is obviously a stylised depiction, the horses shown are realistic in their proportions and perceptible features, and are not so unusual as to be considered as abstract.  The ordinary signification that emerges from the Trade Mark is that the G&S relate to horses. As such, other traders may legitimately desire to use the Trade Mark, or one that is deceptively similar, to refer to the G&S.  

32.     However, I consider that the Trade Mark is not such a direct reference to the G&S so as to be entirely lacking in inherent adaptation to distinguish. The representation clearly has artistic qualities and conveys more than a plain photograph or drawing of a horse. The two horses represented are clearly intended to be a dam nurturing a foal, which bestows additional depth and distinctiveness to the Trade Mark. On the continuum of inherent distinctiveness, I consider that the Trade Mark is reasonably close to being prima facie registrable. The Trade Mark therefore falls for consideration under s 41(4).

33.     In order to conclude that the Trade Mark should be rejected, I must now be satisfied the Trade Mark is not capable of distinguishing taking into account its level of inherent adaptation to distinguish, its use and/or intended use, and or any other circumstances.

34.     As mentioned above, I consider that the Trade Mark has an appreciable level of inherent adaptation to distinguish. Further, I note that there is an abundance of possible representations of stylised horses available for use by other traders. While this is not a reason in itself to conclude that the Trade Mark is sufficiently inherently adapted to distinguish, it is a circumstance I may consider in determining registrability under s 41(4).

35.     The Trade Mark is at times used by itself independently in various ways (such as on vehicles and at the Applicant’s property). However, it is more often used with the words GRANT BLOODSTOCK or SILVERDALE FARM. The Applicant referred to Sports Warehouse, Inc v Fry Consulting Pty Ltd, where Kenny J held:

I accept, as Sports Warehouse contended, that a sign may be registrable as a trade mark even though it is used together with another trade mark, and that there can still be use of a mark where it is a component of a larger composite mark: see Chocolaterie Guylian at 93 [97]; also E & J Gallo Winery at 662 [68]-[69]; also E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2008) 77 IPR 69 at 108 [186] (Flick J). Colorado Group Ltd v Strandbags Group Pty Ltd (2007) 74 IPR 246 (‘Colorado’) is not authority for the contrary proposition. Each case turns on its own facts and the trade mark in question viewed in the context of those facts.[9]

[9] [2010] FCA 664, [133].

36.     Under s 7(1), I may consider that the Trade Mark has been used where such use is with additions or alterations that do not substantially affect its identity. The addition of the terms GRANT BLOODSTOCK and SILVERDALE FARM to the Trade Mark is one that I consider substantially affects the identity of the Trade Mark, assuming that one takes the various combinations of word and device elements as forming composite wholes. However, there are cogent arguments that when the words GRANT BLOODSTOCK and SILVERDALE FARM are used underneath the device element, that this is use of words and device as independent trade marks. Further, as the Applicant submits, the device element is more prominent in terms of size and visual impact than the word elements. This further blurs the line between what constitutes a composite mark, and what constitutes one trade mark being used in close proximity to another.

37.     Even where the device is used as a part of a composite that cannot be considered strictly use of the Trade Mark pursuant to s 7(1), I consider that weight can still be given to use of the composite as an ‘other circumstance’ that is relevant under s 41(4). This is particularly the case where the device is a dominant element of the composite. Devices are very often not the only brand used to distinguish the goods or services of a trader, and are commonly used in proximity to a word trade mark that is a trader’s primary brand. To entirely and arbitrarily discount use of a device as part of a composite in every case is to ignore commercial reality, given that the use of the composite still exposes consumers to the device and it still performs a function of distinguishing the goods and services of that trader from those of others. Of course there will also be cases where use of a device is so inconsequential or descriptive, or it so bound up in the composite whole, that the use in question would do little to advance the case for registration of the device solus.

38.     Turning to the quantum of use, I note that the period of use before the Relevant Date was relatively short, and that the Applicant has only provided aggregated figures covering all of the G&S. This is not ideal and had the Trade Mark fallen for consideration under s 41(3), I would have no hesitation finding that the evidence is insufficient. However, under s 41(4), I may take into account intended use of the Trade Mark. In doing so, I may be informed and make inferences based on the Applicant’s actual use after the Relevant Date. In this case, the extent of use after the Relevant Date is trending upwards, as demonstrated by the significant growth in revenue in FYE 2021. It is reasonable to infer that the revenue will remain at this level given the Applicant’s statement that the increase was due to expansion of the Applicant’s property and facilities.  

39.     I also give weight to the specialised nature of the G&S. I accept that the thoroughbred industry is highly regulated and there are significant barriers to entry. As such, there are a relatively limited number of participants (compared to other industries) and there is also a small and knowledgeable consumer base for the G&S. These factors are more conducive to a trade mark becoming capable of distinguishing through use over a period of time.

40.     On balance, taking into account the matters specified under s 41(4), I am not satisfied that the Trade Mark is not capable of distinguishing.              

Decision

1. Under s 33(1), if I am not satisfied that there are grounds for rejection, I must accept the Application.

2. Therefore, I accept the Application, subject to an endorsement indicating that the provisions of s 41(4) have been applied.

   Blake Knowles

   Hearing Officer
   Delegate of the Registrar of Trade Marks
   29 July 2022