Hangzhou Mainto Photography Co., Ltd v Capogreco Salvatore

[2023] ATMO 191

TRADE MARKS ACT 1995

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

Re:Opposition by Hangzhou Mainto Photography Co., Ltd. to registration of trade mark application number 2250592 (41) – Himo Hippocampus – in the name of Capogreco Salvatore

Delegate:

Louise Tuohy

Representation:

Opponent: Spruson & Ferguson

Applicant: Precise Pleasure Pty Ltd

Decision:

2023 ATMO 191

Trade Marks Act 1995 (Cth) – opposition under section 52 – grounds of opposition under ss 42, 44, 58, 60 and 62A – s 62A considered – application made in bad faith – registration refused

Background

1. This matter concerns an opposition by Hangzhou Mainto Photography Co., Ltd. (‘Opponent’) under s 52 of the Trade Marks Act 1995 (Cth)[1] (‘Act’) to the registration of the following trade mark application (‘Application’) in the name of Capogreco Salvatore[2] (‘Applicant’):

   Trade Mark Number:  2250592

   Trade Mark:  Himo Hippocampus (‘Trade Mark’)

   Filing Date:  19 February 2022

   Specification:  Class 41: Distribution (other than transportation) of videos; Editing of video-tapes; Hire of video recording apparatus; Hire of video tapes; Hire of videos; Movie studio services; Movie studios; Organising of entertainment and social events (entertainment, sporting and cultural services); Social club services (entertainment, sporting and cultural services); Photography; Portrait painting; Face painting (‘Applicant’s Services’)

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

   [2] The Trade Mark was initially filed in the name of Precise Pleasure Pty Ltd. On 13 October 2022 the full assignment of the Trade Mark from Precise Pleasure Pty Ltd to the Opponent was recorded.

2. The Application was examined as required by s 31 and advertised as accepted for possible registration on 20 July 2022.

3. On 19 September 2022 the Opponent filed a Notice of Intention to Oppose, followed by its Statement of Grounds and Particulars (‘SGP’) 19 October 2022. On 30 November 2022 the Applicant filed a Notice of Intention to Defend.

4. Thereafter the parties filed evidence in accordance with the provisions of the Regulations.

5. The Opponent filed the following evidence in support:

   • Declaration of Kathryn Ruth Mytton, Registered Trade Mark Attorney of Spruson & Ferguson for the Opponent, made on 9 March 2023, with Exhibits KRM-1 to KRM-21 (‘Mytton’).

6. The Applicant filed the following evidence in answer:

   • Declaration of Capogreco Salvatore, Chief Executive Officer of the Applicant, made on 19 June 2023 (‘Salvatore’).

7. The Opponent did not file any evidence in reply.

8. Once time for filing evidence had ended, the parties were given an opportunity to request a hearing. The Applicant requested a decision without a hearing. This matter has been allocated to me as a delegate of the Registrar of Trade Marks and I make my decision based on the material filed during the proceeding as outlined above. 

   Grounds of Opposition, Relevant Date and Onus

9. In the SGP the Opponent nominated grounds of opposition under ss 42, 44, 59, 60 and 62A.

10. The date at which the rights of the parties are to be determined is the filing date 19 February 2022 (‘Relevant Date’) which is also the priority date for the purposes of ss 44 and 60.

11. The Opponent bears the onus of establishing at least one of the grounds of opposition.[3] The standard of proof is the ordinary civil standard of the balance of probabilities.[4]

    Discussion

    [3] Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58, [32] (Keane CJ, Stone and Jagot JJ).

    [4] Telstra Corporation Ltd v Phone Directories Co Pty Ltd [2015] FCAFC 156, [132] (Besanko, Jagot and Edelman JJ).

    Section 62A

12. Section 62A provides:

    62A  Application made in bad faith

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

13. In the SGP the Opponent particularises the ground of opposition under s 62A as follows:

    The Director of the Applicant’s predecessor in title is Chun Shou, a Chinese person. Having regard to the Opponent’s reputation and goodwill in the HIMO trade marks in China, the Applicant’s predecessor in title would likely have been aware of the potential for confusion when it adopted the Opposed trade mark in Australia. The Applicant’s predecessor in title was seeking to wrongly appropriate the Opponent’s HIMO trade marks and trade off the Opponent’s reputation in those marks. Such conduct falls short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in the photographic/imaging industry.

    On 1 April 2021, the Applicant’s predecessor in title applied to register the trade mark  in class 41 under Australian Application No. 2168270, which mark comprised of a combination of elements of the Opponent’s well known HIMO trade marks. The Opponent successfully opposed that application which subsequently lapsed.

    Subsequently, on 19 February 2022, the Applicant’s predecessor in title applied to register the trade mark “Himo Hippocampus” in class 41 under Australian Application No. 2250592 (the mark the subject of the current proceedings). Again the trade mark comprises of 10 elements of the Opponent’s well known HIMO marks. On 13 October 2022, the application was assigned to Capogreco Salvatore.

    The Applicant’s predecessor in title also previously sought and obtained registration in Australia, on 8 February 2021, of the trade mark  under Registration No. 2146506. The “Naive Blue” trade mark is the brand of one of the Opponent’s industry competitors in China. These cumulative acts demonstrate a pattern of conduct by the Applicant’s predecessor in title which falls short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in the photographic/imaging industry and which amounts to bad faith.

14. The Explanatory Memorandum to the Trade Marks Amendment Bill 2006 (Cth) provided some illustrations of applications made in bad faith:

    ·     persons who monitor new property developments, register the name of new developments as trade marks for a number of services and then threaten the property developers with trade mark infringement proceedings unless the developers licence or buy the trade marks;

    ·     persons who have a history of applying for trade marks that are deliberate misspellings of other registered trade marks; and

    ·     persons who identify trade marks used overseas but with no Australian use as yet who then apply to register the trade marks in Australia for the express purpose of selling them to the overseas owners.

15. These illustrations are not exhaustive. In DC Comics v Cheqout Pty Ltd (‘DC Comics’) Bennett J observed that all of the circumstances surrounding the application to register a trade mark are relevant.[5] Moreover, conduct after the priority date can be used to shed light on the Applicant’s subjective intent at the filing date.[6]

    [5] [2013] FCA 478, [62].

    [6] Ibid, [71].

16. The test for bad faith incorporates subjective and objective elements. That is, I must consider what the Applicant actually knew at the filing date, and then consider whether, armed with that knowledge its decision to file the Trade Mark would be considered to be in bad faith by persons who adopt proper standards of behaviour in business. In Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) (‘Fry’)[7] Dodds-Streeton J made the following comments, quoting from Harrisons’s Trade Mark Application:

    Clearly the court, when considering bad faith, cannot apply a purely subjective test, called by Lord Hutton “the Robin Hood test”. The dishonest person or one with low standards cannot be permitted to obtain trade mark registrations in circumstances where a person abiding by a reasonable standard would not. The registration of a trade mark is designed to enable bona fide proprietors to protect their proprietary rights without having to prove unfair trading. Registration is not provided to help those with low moral standards.

    … The words “bad faith” suggest a mental state. Clearly when considering the question of whether an application to register is made in bad faith all the circumstances will be relevant. However the court must decide whether the knowledge of the applicant was such that his decision to apply for registration would be regarded as in bad faith by persons adopting proper standards.[8]

    […]

    [7] [2012] FCA 81.

    [8] Harrison’s Trade Mark Application [2004] EWCA Civ 1028.

17. Her Honour continued later in the same decision:

    The formulation in 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.

    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.[9]

    [9] Fry (n 7) [2012] FCA 81, [147], [165]-[166].

18. In Mytton, Ms Mytton declares that the Opponent is a Chinese company established in 2011. The Opponent’s core business activities are focused on photography and imaging services along with advertising design services.  Exhibit KRM-7 to Mytton comprises a list of 547 stores in 86 cities in China operated by the Opponent, or under franchise arrangements. Exhibit KRM-7 to Mytton comprises photographs of the Opponent’s stores using one or more of the following elements as the store name (‘Opponent’s trade marks’):

1. Exhibit KRM-12 to Mytton comprises screenshots from the Opponent’s WeChat account dated 2015 to 2016 and promotional brochures from 2017 to 2021. These samples show use of the Opponent’s trade marks on its products, as its store name, and as its brand and image.  

2. Ms Mytton states that the Opponent has registered its trade marks in many different countries globally as well as in Australian for its word trade mark HIMO in class 35. Exhibit KRM-9 to Mytton comprises examples of the Opponent’s trade mark registration certificates from jurisdictions including China, New Zealand, Norway, Russia, Switzerland and the United States in respect of inter alia photographic services, imaging services, video services, and advertising/advertising design services and movie studio services in classes 35 and/or 41 (‘Opponent’s services’).

3. In Salvatore, Mr Salvatore, the current Applicant, states that he operates a boutique photography studio based in Melbourne, specialising in photography, video and drone photography and videography for architectural, real estate and commercial needs. The Applicant’s predecessor in title is Precise Pleasure Pty Ltd (‘Precise’) a business development consulting company. Exhibit KRM-21 to Mytton comprises a company extract from the Australian Securities and Investment Commission’s database for Precise. The extract shows that Precise was registered on 6 November 2020 and the current director of the company is Chun Shou.

4. For the purposes of considering the s 62A ground of opposition it is necessary to look at the circumstances surrounding the filing of the Application as emphasised in DC Comics.

5. Ms Mytton states that on 8 February 2021 Precise applied to register the following trade mark in classes 40 and 41:

Trade mark application number 2146506 (‘506’)

Specification

Class 40: photo printing; photographic printing; photographic film printing; printing of photographic transparencies; printing of photographic film; printing; enlarging of photographic prints; digital printing; reproduction of photographic prints; photographic image processing; rental of photographic printing apparatus; silkscreen printing; lithographic printing; 3d printing services; textile printing

Class 41: photography

1. Exhibit KRM-19 to Mytton comprises an extract from an Australian Trade Mark Search which shows that 506 was entered on the Australian Trade Mark Register (‘Register’) on 16 September 2021 and then assigned to Kevin Smith on 25 October 2022. Ms Mytton submits that 506 is the trade mark of the Opponent’s well known industry competitor, Shanghai Naive blue Image & Creation Co. Ltd (‘Naive’). Exhibit KRM-20 to Mytton comprises screenshots of pages from Naive’s website naiveblue.com dated 8 March 2023. I have reproduced the heading of a webpage featuring Naive’s trade mark below:

2. Ms Mytton states that on 1 April 2021 Precise then applied for the registration of the following trade mark in class 41:[10]

   [10] Mytton [29].

Trade mark application number 2168270 (‘270’)

Specification

Class 41: Photographic film editing; Photographic library services; Photographic reporting; Photography; Producing of motion pictures, plays and videos; Production of audio and/or video recordings, other than advertising; Production of entertainment videos; Production of video recordings, other than advertising; Providing films, not downloadable, via video-on-demand services; Providing films, not downloadable, via video-on-demand transmission services; Providing online videos, not downloadable; Rental of video cameras; Video editing; Video editing services for events; Video entertainment services; Videotape editing; Videotaping; Providing information, including online, about entertainment, sporting and cultural activities; Publishing of printed matter; Publication of posters; Movie rental services; Movie studio services; Movie studios; Movie theatre presentations; Editing of cine-films; Film directing, other than advertising films; Film distribution; Film production, other than advertising films; Production of animated films and cartoons; Production of films, other than advertising films; Provision of film studio facilities; Videotape film production, other than for advertising films; cultural or entertainment services provided by art galleries; Production of webcasts, other than advertising; Weblog (blog) services (online publication of journals or diaries); Portrait painting

1. This application was examined as required by s 31 and advertised as accepted for possible registration on 2 September 2021. On 28 October 2021 the Opponent filed a Notice of Intention to Oppose regarding 270, followed by its SGP on 29 November 2021. In the SGP the Opponent nominated grounds of opposition under ss 42, 43, 59, 60 and 62A. Precise did not defend the opposition and the application for 270 lapsed on 28 February 2022.[11] Then nine days before 270 lapsed, Precise filed the Application and on 13 October 2022 Precise assigned the Trade Mark to the Applicant.[12]

   [11] Mytton [29], Exhibit KRM-18.

   [12] Mytton [3] to [7] Exhibits KRM-1 and 2.

2. The Opponent’s evidence satisfies me that before the Relevant Date it had established a substantial business presence in China in relation to the Opponent’s services. One year before the Relevant Date, Precise the predecessor in title of the Trade Mark had applied for trade marks 506 and 270 in relation to inter alia photography services and both these trade marks consist of elements taken from the trade mark portfolios of the Opponent and its industry competitor Naive. It is also apparent that at the Relevant Date, Precise was on notice of the Opponent and its trade marks as it failed to defend the filing of trade mark 270. At the Relevant Date, Precise would have been aware of the Opponent and its trade marks given that it had access to the Notice of Opposition and SGP for trade mark 270 which detailed the Opponent’s trade marks under s 60 of the SGP.

3. I note that Mr Salvatore states that he engaged Precise to provide him with business development consulting services, and that Precise applied for the Trade Mark on his behalf as part of its business consulting service, and that the Application is now under his name and any business activity of Precise in the past or in the future has no connection with him. This does not assist Mr Salvatore. A finding of bad faith is based on the circumstances and awareness as at the Relevant Date, and Precise was the then owner of the Trade Mark. The ultimate test for this ground is that in applying to register the Trade Mark, the applicant has acted in a manner which is unscrupulous, underhand or unconscientious in character.

4. Importantly, Mr Salvatore provides no evidence regarding his instructions to Precise or an explanation as to how Precise arrived at the Trade Mark and/or why it chose to apply to register the Trade Mark given that it was aware of the Opponent and its trade marks due to the information provided in the opposition commenced against 270 which Precise failed to defend. Nor has Mr Salvatore offered any explanation why Precise applied for 506 which is a trade mark of Opponent’s industry competitor Naive and subsequently assigned that trade mark to Kevin Smith. Taking the totality of the evidence and the actions by Precise into account, it is my view that the application to register the Trade Mark demonstrates a pattern of behavior in applying to register prominent overseas trade marks. These trade marks are then subsequently assigned to new owners which appears, the balance of probabilities, to fall directly within the outlined illustration of behaviour in the Explanatory Memorandum to the Trade Marks Amendment Bill 2006 (Cth). I am satisfied that in all the circumstances surrounding this matter, the application to register the Trade Mark was made in bad faith.

5. The Opponent has established the s 62A ground of opposition.

   Decision

6. Section 55 provides:

   55  Decision

   (1)  Unless subsection (3) applies to the proceedings, 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.

7. The Opponent has established a ground of opposition under s 62A. Accordingly, I refuse to register trade mark number 2250592. If the Registrar is served with a notice of appeal within one month from the date of this decision, I direct that the disposition of the Application should be in accordance with the Court’s order or direction.

   Costs

8. Both parties sought an award of costs. It is usual for costs to follow the event, and I see no reason to depart from that principle here. I award costs against the Applicant under s 221 in line with Schedule 8 of the Regulations.

   Louise Tuohy

   Hearing Officer

   Delegate of the Registrar of Trade Marks

   27 November 2023