Hard Candy Fitness, LLC v Hard Candy (Australia) Pty Ltd

[2015] ATMO 61

TRADE MARKS ACT 1995

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

Re:Opposition by Hard Candy Fitness, LLC to registration of trade mark application 1391573 (41) - HARD CANDY - in the name of Hard Candy (Australia) Pty Ltd

Delegate:

Michael Kirov

Representation:

Opponent: Chris Round of K&L Gates

Applicant: Noor Dean of MLC Lawyers, assisted by Patricia Oman of the same firm and Patricia Dattilo of the Applicant

Decision:

2015 ATMO 61

s 52 opposition: Ground under s 62A considered – application made in bad faith - opposition successful.

Background

1. This is an opposition brought by Hard Candy Fitness, LLC (“the Opponent”) pursuant to s 52 of the Trade Marks Act 1995 (“the Act”) to registration of the trade mark subject of the application detailed below in the name of Hard Candy (Australia) Pty Ltd (“the Applicant”):

Application Number:  1391573

Trade Mark:  HARD CANDY          (“the Opposed Mark”)

Filing Date:  31 October 2010

Services:Class 41: Education; providing of training; sporting and cultural activities               (“the Claimed Services”)

1. Acceptance of the application for possible registration was advertised on 12 September 2013. The Opponent filed a Notice of Intention to Oppose on 11 November 2013, followed by a Statement of Grounds and Particulars (“SGP”) on 11 December 2013 raising opposition grounds corresponding to ss 42(b), 44, 58, 59, 60 and 62A of the Act. The Applicant filed a Notice of Intention to Defend on 13 January 2014.

2. I heard the matter as a delegate of the Registrar of Trade Marks on 26 May 2015 in Melbourne.  Noor Dean of MLC Lawyers, assisted by Patricia Oman of the same firm and accompanied by Patricia Dattilo of the Applicant, appeared for the Applicant.  Mr Dean’s oral submissions were supplemented by written submissions emailed to the Opponent’s attorney and me some 90 minutes before the hearing, which I note for the record was some seven days after the date indicated in the directions I sent to the parties on 4 May.

3. The Opponent was represented by Chris Round of K&L Gates.  Mr Round’s oral submissions were supplemented by written submissions emailed to Mr Dean and me on 12 May 2015 in accordance with my directions.

4. As evidence in support, the Opponent relies on a Statutory Declaration made on 16 May 2014 by its Chief Financial Officer, Eric Reiter, with Exhibits ER-1 to ER-32.  This is the sole evidence in the proceedings filed in accordance with the Trade Marks Regulations 1995 (“the Regulations”).

5. I mention that Mr Dean did seek to rely on what Mr Round (fairly in my view) characterized as “unsupported evidence” within, and “exhibited” with, the written submissions Mr Dean had emailed to us just prior to the hearing.  After hearing both attorneys on the issue, I confirmed that I would not take any of this apparent “evidence” into account in deciding the matter and we proceeded to the substantive hearing on that basis.  That said, I can now confirm that none of this material would have been relevant to my decision in any event and for the sake of completeness I have reproduced below some of what Mr Dean said.

Grounds of Opposition, Onus and Standard of Proof

1. As mentioned, the SGP lists grounds corresponding to ss 42(b), 44, 58, 59, 60 and 62A of the Act, although some weeks before the hearing Mr Round advised that the Opponent would not be pressing the ground based on s 44. To succeed in its opposition the Opponent bears the onus of establishing at least one of the five remaining grounds and I proceed on the basis that the relevant standard of proof required is the ordinary civil standard based on the balance of probabilities.[1] As will become apparent I have in fact only found it necessary to address the s 62A ground in reaching a decision and this ground is discussed below. Of course should the decision be appealed, it would always remain open to the Opponent to plead any ground it considered relevant in proceedings before the Court.

   [1] Following Gyles J in Pfizer Products Inc v Karam (2006) 70 IPR 599 at [6] to [26].

2. The date at which the rights of the parties are to be determined is the 31 October 2010 filing date of the opposed application (“the Priority Date”).[2]

   [2] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 595.

The Evidence

1. Before detailing the matters attested to by Mr Reiter in his declaration that are most relevant to my decision, I would observe as a general matter that I have found his evidence as a whole credible and to be well supported with compelling documentation.

2. That said, Mr Reiter explains the Opponent’s interest in the matter as follows:

   [9] The Opponent was incorporated on 23 December 2008 and opened its first fitness club in Mexico City in 2010.  …

   [10] The Opponent is a global luxury fitness brand and owner of a group of fitness, health and lifestyle centres around the world operating under the name HARD CANDY FITNESS.  The Opponent was founded by American musician, entertainer, actress, author, cultural icon and entrepreneur Madonna Louise Veronica Ciccone (Madonna)[3] in partnership with Madonna’s agent, Guy Oseary, and Mark Mastrov of New Evolution Ventures, LLC.  The Opponent is a joint venture between New Evolution Ventures , LLC and MGHCandy, LLC, which is an entity owned by Madonna and Mr Oseary.

   [11] The concept for the HARD CANDY FITNESS business venture was first discussed by Madonna, Mr Oseary and Mr Mastrov throughout 2006 to 2008.

   [12] The Opponent selected the HARD CANDY FITNESS trade mark in reference to Madonna’s 11th studio album Hard Candy, which was released on 19 April 2008.  Upon release, the album debuted at number one in 37 countries worldwide, including Australia, where it reached Platinum status.  The Hard Candy album has sold over 4 million copies worldwide to date.  In August 2008, Madonna embarked upon the Sticky & Sweet Tour to promote the Hard Candy album which concluded in September 2010 with US$408 million in ticket sales.

   [13] The Opponent’s headquarters are in the United States of America.  The Opponent operates fitness centres by reference to the HARD CANDY FITNESS trade mark in Berlin, Mexico City, Moscow, Rome, Santiago, St Petersburg, Sydney and Toronto.  The first fitness centre was opened in Mexico City in November 2010 which Madonna attended.

   [3] I will also refer to the celebrity in question hereafter simply as “Madonna.”

3. I note that Mr Reiter says the Opponent opened its premises in Sydney under the HARD CANDY FITNESS brand on 1 July 2012 and that it filed Australian trade mark applications 1396629 HARD CANDY FITNESS and 1396630 HARD CANDY FITNESS Logo (“the Opponent’s Trade Marks”) on 24 November 2010 covering, inter alia, specific “health club services” in Class 41 (“the Opponent’s Services”).  The Opponent also owns trade mark registrations 1515511 (9) Addicted To Sweat, 1515515 (41) Addicted To Sweat and 1515517 (41) NO SWEAT, NO CANDY, being trade marks Mr Reiter says are used in connection with the Opponent’s Services.

4. While the Opponent’s first fitness club apparently opened in Mexico City “in November 2010,” that is some days after the (31 October 2010) Priority Date, Mr Reiter says the following about the Opponent’s activities just prior to the filing of the opposed application:

   [17] The Opponent’s first incidence of use of the HARD CANDY FITNESS trade mark in relation to the [Opponent’s] Services was in Mexico City on 25 October 2010 when a press release was issued announcing the launch of the club.  Now produced and shown to me and marked ER-4 is a copy of the press release dated 25 October 2010, as well as articles published on the Fox and CBS News websites relating to the launch of the club.

   …

   [22(a)] On 25 October 2010 Madonna announced her intention to open a chain of fitness centres around the world by reference to the Opponent’s Trade Marks.  This announcement generated considerable media attention globally.  Now produced and shown to me and marked ER-5 is a bundle of media and articles published prior to the [Priority] Date relating to the launch of the Opponent’s fitness centres by reference to the Opponent’s Trade Marks.

   …

   [22(c)] Website: The Opponent registered the domain name hardcandyfitness.com (Domain Name) on 19 May 2008 and commenced operating a website from the Domain Name (Website) on 29 October 2010.  The Website averages approximately 60,000 to 70,000 page views per month.  Now produced and shown to me and marked ER-7 are print outs from the Website promoting the Opponent’s fitness centres, including [the centre in Sydney], by reference to the Opponent’s Trade Marks.

5. Mr Reiter then details the corporate make up of the Applicant and the history of the opposed application as follows:

   Stefanel Pty Ltd [“Stefanel”]

   [25] The [Opposed] Mark was filed in the name of [Stefanel].  Now produced and shown to me and marked ER-15 is a copy of an ASIC Current and Historical Extract for [Stefanel].  The extract shows that:

   (a) [Stefanel] was incorporated on 7 June 2007;

   (b) Antonio Dattilo was the sole director of [Stefanel] between 7 June 2007 to 13 March 2010 and again between 12 September 2011 to 14 October 2013;

   (c) Patricia Fato was the sole director of [Stefanel] between 13 March 2010 to 12 September 2011;

   (d) Madge [see below] is the sole shareholder of [Stefanel]; and

   (e) [Stefanel] was placed into external administration on 23 July 2012.

   Madge Enterprises Pty Ltd [“Madge”]

   [26] By letter of assignment dated 28 May 2012, [Stefanel] assigned the [Opposed] Mark to [Madge] as trustee for The Madonna Louise Veronica Ciccone Family Trust.  Now produced and shown to me and marked ER-16 is a copy of an ASIC Current and Historical Extract for [Madge].  The extract shows that:

   (a) [Madge] was incorporated on 13 January 2011;

   (b) Mr Dattilo was the sole director of [Madge] between 13 January 2011 to 31 May 2013;

   (c) Mr Dattilo was the sole director of [Stefanel] and [Madge] at the time that the [Opposed] Mark was assigned to [Madge] on 1 June 2012.

   The Applicant (Hard Candy (Australia) Pty Ltd)

   [27] By an assignment dated 30 May 2013, [Madge] assigned the [Opposed] Mark to the Applicant.  Now produced and shown to me and marked ER-17 is a copy of an ASIC Current and Historical Extract for the Applicant.  The extract shows that:

   (a) the Applicant was incorporated on 12 December 2012;

   (b) Mr Dattilo was the sole director of the Applicant between 12 December 2012 to 31 May 2013.  Mr Dattilo was the sole director of [Madge] and the Applicant at the time that the [Opposed] Mark was assigned to the Applicant on 30 May 2013; and

   (c) [Madge] is the sole shareholder of the Applicant.

6. In support of the Opponent’s allegation that the opposed application was filed in bad faith, Mr Reiter firstly notes that the Applicant also filed applications 1552196 (25) Hard Candy and 1599501 (25) Blonde Mafia on 17 April 2013 and 2 January 2014 respectively.  Both of these applications subsequently lapsed without achieving registration.  I note “Blonde Mafia” is apparently a name associated with Madonna.

7. He further notes that Madge is the registrant of trade mark registrations 1067523 (25) STEFANEL and was the applicant for now lapsed application 1508172 (25, 41) ADDICTED TO SWEAT.  He adds that Madge is the registrant for Australian business names HARD CANDY and HARD CANDY FITNESS, registered since 10 and 18 August 2012 respectively.

8. Finally Mr Reiter notes that since 10 March 2011 Madge has registered the domain names madonnaholdings.com, madgegroup.com, hardcandy-fitness.com and hardcandy-fitness.com.au [“the Madge Domain Names”].  With that as background, Mr Reiter continues:

   [33] There are no websites hosted from the [Madge] Domain Names.  The websites located at the [Madge] Domain Names madonnaholdings.com and madgegroup.com both contain the message: “This website will be coming soon...”.  The [Madge] Domain Name hardcandy­fitness.com is registered and parked with Crazy Domains and there is no website at all for hardcandy-fitness.com.au.  Now produced and shown to me and marked ER-23 are print outs from the websites located at the [Madge] Domain Names.

   [34] “Madge” is a commonly used nickname for Madonna.  Madonna Louise Veronica Ciccone is Madonna’s full name. Neither [Madge] nor The Madonna Louise Veronica Ciccone Family Trust are associated with Madonna in any way.

   [35] Mr Dattilo was the sole director of [Stefanel] and [Madge] at the time that the [Opposed] Mark was first assigned to [Madge] on 1 June 2012.  Mr Dattilo was the sole director of [Madge] and the Applicant at the time of the second assignment of the [Opposed] Mark to the Applicant on 30 May 2013.  Now produced and shown to me and marked ER-24 is an ASIC Personal Current and Historical Extract for individuals named Antonio Dattilo.  The extract shows that:

   (a) During the period 26 March 2010 to 14 October 2013, Mr Dattilo was a director of an Australian company named “G-Star Group Pty Ltd”.  G-Star is a well-known brand of clothing and fashion accessories.  G-Star Australia Pty Ltd is in fact the exclusive Australian distributor of G-Star branded products.  Now produced and shown to me and marked ER-25 is a print out from Mr Dattilo’s Linkedin profile which states that Mr Dattilo is a “Diretor [sic] at G-Star Group Pty Ltd” in the “Melbourne Area, Australia” in “Investment Management”;

   (b) During the period 27 April 2011 to 31 May 2013, Mr Dattilo was a director of an Australian company named “Isotta Fraschini Pty Ltd”.  Isotta Fraschini is an Italian automotive brand founded in Milan in 1900.  It currently has offices in Milan and Bari only.  Now produced and shown to me and marked ER-26 is a print out from the Isotta Fraschini website showing the distributors and agents for the company; and

   (c) During the period 31 May 2005 to 28 July 2013, Mr Dattilo was a director of an Australian company named “Stefanel (Retail) Pty Ltd”.  As set out in paragraph 25(b) above, during the period of 7 June 2007 to 13 March 2010 and between 12 September 2011 to 14 October 2013, Mr Dattilo was the sole director of [Stefanel].  Stefanel SpA is the manufacturer and distributor of the well-known Italian women’s fashion brand, Stefanel.  Stefanel SpA is the owner of a number of Australian trade marks for STEFANEL.  Now produced and shown to me and marked ER-27 are print outs for the Australian trade marks owned by Stefanel SpA from ATMOSS.  As set out [earlier in the declaration], [Madge] is the owner of a registered word mark for STEFANEL in class 25 for “Clothing, footwear, headgear”, the registration of which was not opposed.  Stefanel SpA does not ship to Australia.  Now produced and shown to me and marked ER-28 is a print out from the Stefanel SpA website showing a list of countries in which the brand is distributed.

   [36] A Twitter account in the name of Antonio Dattilo located at the Twitter handle @Antonio_Dattilo features the logo of Raising Malawi, a charity co-founded by Madonna to support vulnerable children and caregivers in Malawi.  Mr Dattilo has posted 2 tweets:

   18 April 2011: @LourdesLolaLeon Hi Lola, tell your mom I want to donate a couple of million to Raising Malawi but I don't know where they are based now.

   15 April 2011: Can we help Raising Malawi to fund the school?  I am in to donate a couple of Million but I can’t find the Directors of the New Board!!!

   Lourdes Leon is Madonna’s daughter.  Now produced and shown to me and marked ER-29 is a print out of Mr Dattilo’s Twitter account.

   [37] Raising Malawi, Inc. is the owner of copyright in the Raising Malawi logo.  At no time has Raising Malawi, Inc. licensed, authorised or consented to the use or reproduction of the Raising Malawi logo by Mr Dattilo.  Now produced and shown to me and marked ER-30 is a print out from the Raising Malawi website displaying the Raising Malawi logo.

   [38] One of the primary slogans associated with the Opponent’s fitness centres is the phrase “ADDICTED TO SWEAT”.  As set out [earlier in the declaration], [Madge] filed an Australian trade mark application for ADDICTED TO SWEAT in classes 25 and 41 on 14 August 2012.  This application was allowed to lapse by [Madge]. The lapsing of the application was advertised in the Australian Official Journal of Trade Marks on 6 February 2014.

   [39] The ASIC Personal Current and Historical  Extract for individuals named Antonio Dattilo exhibited at ER-24 shows that Mr Dattilo was a director of Calcorp (Australia) Pty Ltd (Calcorp) during the period 31 January 2003 to 5 March 2003 and between 20 December 2004 to 25 February 2008.  In 2009, the Australian Competition and Consumer Commission (ACCC) took action against Calcorp on the basis that between August 2007 and at least 14 May 2009, it had engaged in false, misleading and deceptive representations made on the labelling of olive oil products, claiming that the products were extra virgin olive oil when they were not.  Calcorp admitted making the representation and Mr Dattilo admitted that he authorised the making of the representations and was knowingly concerned in, or a party to the making of the representations.  Calcorp and Mr Dattilo were required to provide court enforceable undertakings to the ACCC to refrain from the conduct.  Now produced and shown to me and marked ER-31 are reports from the ACCC regarding the investigation.

   [40] Two articles have been published in The Age and the Sydney Morning Herald regarding legal action in which Mr Dattilo has been involved.  One of the articles indicates that there are at least 9 people who claim to have been the subject of Mr Dattilo’s conduct and who allege that he and his wife have committed perjury, extortion and fraudulent activity.  Now produced and shown to me and marked ER-32 are copies of the articles.  The articles note that Mr Dattilo’s wife is named Patricia.  As set out in paragraph 25(c) above, Patricia Fato was the director of [Stefanel] at the [Priority] Date.

Discussion

Section 62A

1. The ground based on s 62A is indicated in the SGP as follows:

   Application made in bad faith – Section 62A

2. The ground in question is particularised in the SGP as follows:

   The Opposed Mark was filed in the name of [Stefanel] & was assigned to [Madge] as trustee for The Madonna Louise Veronica Ciccone Family Trust on 28 May 2012.  The Opposed Mark was subsequently assigned to [the Applicant] on 30 May 2013. … [Madge] is the sole shareholder of [the Applicant].  [Madge] has a history of filing trade marks & registering business names & domain names related to Madonna without any authority to do so.

   Antonio Dattilo was the sole director of [Stefanel] at the date of the first assignment of the Opposed Mark.  Dattilo was also the sole director of [Madge] & [the Applicant] at the date of the second assignment of the Opposed Mark.  [Madge] is the registrant of the domain names madgegroup.com & madonnaholdings.com.  Dattilo's Twitter account (@Antonio_Dattilo) features the Raising Malawi logo.  No websites are operated from the domain names & [Stefanel], [Madge], [the Applicant] and Dattilo have never had any connection with Madonna or the HARD CANDY fitness club.  On this basis, the Opposed Mark was filed in bad faith.

3. Section 62A itself is reproduced below:

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.

1. Mr Round began his submissions by referring to the Explanatory Memorandum (“EM”) which accompanied the legislation which amended the Act in 2006 and introduced s 62A. In particular, as he explained, at [4.12] the EM:

   …sets out examples of conduct constituting bad faith, including where:

   •A person who monitors new property developments; registers the name of the new property development as a trade mark for a number of services; and then threatens the property developer with trade mark infringement unless they licence or buy the trade mark;

   •A pattern of registering trade marks that are deliberate misspellings of other registered trade marks; and

   •Business people who identify a trade mark overseas which has no market penetration in Australia, and then register that trade mark with no intention to use it in the Australian market and for the express purpose of selling the mark to the overseas owner.

1. He continued:

   The Opponent submits that the Applicant’s conduct and the conduct of its predecessors, including Antonio Dattilo, is akin to the third example provided in the [EM] in that the Applicant has adopted a well-known name used by an iconic performer in the knowledge that the Opponent had offered the [Claimed] Services … overseas and would likely do so in Australia, but had not yet filed any trade mark application to secure its rights in Australia.  Persons adopting proper standards would regard the Applicant’s decision to file the Trade Mark in that context in bad faith, and reasonable and experienced persons in the field would view such conduct as falling short of acceptable commercial behaviour.

2. Mr Round went on to detail, inter alia, the matters attested to by Mr Reiter set out earlier and referred me to several decisions by the Registrar or the Federal Court which have looked at s 62A.

3. Mr Dean’s submissions in response largely consisted of his denying that there was anything untoward in any of the Applicant’s actions raised by Mr Reiter.  As mentioned, most of what Mr Dean said in this regard was either unsupported, or purported to rely on copies of material attached to his written submissions.  That said, with particular relevance to the Opponent’s allegations concerning the Applicant’s bona fides at and around the Priority Date, Mr Dean submitted:

   9. The Opponent is claiming that the “Hard Candy” wording and idea dates back to 2008 when Madonna released her 11th studio album called Hard Candy.  The Opponent claims the idea of the Hard Candy Fitness was conceived at about the same time in 2008 together with Madonna.  It is understood that the Opponent therefore is claiming “ownership” of the words “Hard Candy” as a result of the worldwide release of Madonna’s album Hard Candy.  The Opponent is trying to lead us to believe that the Hard Candy album was an original and unique idea by Madonna and her team which includes the Opponent.

   10. The so called claims of exclusivity to the words Hard Candy that the Opponent claims to having, should be dismissed as the Hard Candy wording was first used by a United Kingdom band called “Counting Crows” back in 2002. …

   11. The Applicant’s idea for a gym and line of clothing named Hard Candy was conceived between 2004-2007, when Mr Antonio Dattilo was officially collaborating with an Italian Clothing Company called Stefanel S.p.a.  The Applicant’s idea for the name Hard Candy came from the Counting Crow’s album and not Madonna’s album as the Opponent is suggesting. …

   …

   15. In relation to Isotta Fraschini Pty Ltd, the relation between the Australian company and the Italian owners is a positive relationship and there has never been any opposition by the Italian owners in respect to using the name in Australia.  In fact, there have been talks about collaborations and further business ventures between the two parties in recent years. …

   16. In relation to G-Star Group Pty Ltd, there has never been any desire by the Applicant to conflict with the clothing company G-Star Australia, nor has there been any opposition to the use of the business name by anyone.

   17. In regards to Madge Enterprises Pty Ltd, the name derives from the Italian branch called Madge Group which was operational from 1997 - 2009.  The domain is registered and controlled by Madge Enterprises Pty Ltd. …

   18. In regards to the trust named “The Madonna Louise Veronica Ciccone Family Trust” of which Madge Enterprises Pty Ltd is the Trustee Company, the Applicant, confirms that it was set up in collaboration with other associates from around the world, who together have collected memorabilia of Madonna of which they plan to one day, after Ms Ciccone’s passing, sell off and use the proceeds towards a charity or foundation like the W.K Foundation.  Similar ventures have been established around the world for other collectable items.  We are also involved in collecting mechandise and memorabilia for other artists like Elvis, Elton John, and famous brands such as Isotta Fraschini, Ferrari, and AC Milan.  No authority was needed to establish either such a company or Trust.

   19. The domain name Madonna Holdings refers to the Italian version of the Madonna being the Virgin Mary referred to in the Catholic church and was established with the W.K Foundation for a project linked to charity work.

   20. As for the Opponent’s claims in regards to “Addicted to Sweat”, the Applicant’s decision to apply for the [Trade Mark] was commissioned by a 3rd party which did not eventuate into anything further.

   21. In regards to the Twitter account in the name of Mr Antonio Dattilo referred in point 36 of Eric Reiter’s Statutory Declaration, the Applicant confirms that the account does not belong to Mr Dattilo, the former Director of the Applicant.  The Applicant notes that only two tweets have been made in four years and are made after the application for registration of the Trade Mark.

4. Mr Dean concluded his submissions on the issue of good faith by saying:

   24. Since the [Priority Date], the Applicant has always acted in good faith unlike the Opponent’s claim.  Steps have been carefully planned and taken by the Applicant in developing the Hard Candy project.  The Applicant has set up a freestanding company being Hard Candy Australia Pty Ltd in December 2012 of which the Opponent was put on notice one month before the registration of the company.

   25. The Applicant has also set up a website since approximately December 2013.  The Applicant also registered the telephone line 1800 HARD CANDY.

   26. The Applicant is active in constantly searching the real estate market in Australia for appropriate locations or gyms for potential acquisitions, however such an acquisition would be unbusinesslike whilst the Trade Mark registration is not finalised.

5. I regret to say that taken in their totality I do not find the various coincidences and the string of plausible and not so plausible denials put forward on behalf of the Applicant a satisfactory answer to the matters alleged by Mr Reiter.  It is fanciful for the Applicant’s attorney to suggest its filing of an application to register the Opponent’s trade mark Addicted to Sweat, for example, should not reflect on the Applicant because it “was commissioned by a 3rd party [and] did not eventuate into anything further.” 

6. There is moreover no explanation as to why the Applicant filed the opposed application some six days following the Opponent’s press release announcing the Opponent was opening fitness centres in various cities in the world (including Sydney) under the name HARD CANDY FITNESS and just two days after the Opponent launched its website at <hardcandyfitness.com>.  The timing strikes me as particularly unusual in this case given Mr Dean’s claim that, “The Applicant’s idea for a gym and line of clothing named Hard Candy was conceived between 2004-2007.”

7. One wonders too about the Applicant’s claim (via Mr Dean’s submissions) that, “The Applicant is active in constantly searching the real estate market in Australia for appropriate locations or gyms for potential acquisitions, however such an acquisition would be unbusinesslike whist the Trade Mark registration is not finalised.”  The Notice of Intention to Oppose was not filed until 11 November 2013, but there is no explanation as to why the Applicant was apparently unable to secure premises or otherwise advance its claimed plans in the 10 years or so prior to that.

8. As Mr Round noted, there have been two relatively recent decisions of the Federal Court which have considered s 62A, Fry Consulting v Sports Warehouse Inc (No 2)[4] per Dodds-Streeton J (“Fry Consulting”) and DC Comics v Cheqout Pty Ltd[5] per Bennett J (“DC Comics”).  Relevantly to the present opposition the following propositions emerge from these decisions:

   (a)All of the circumstances surrounding the application to register the mark are relevant: DC Comics at [62].

   (b)The registration of a trade mark is designed to enable bona fide proprietors to protect their proprietary rights without having to prove unfair trading: DC Comics at [62].

   (c)While the seriousness of an allegation of bad faith that “impugns the character of an individual or collective character of a business” requires correspondingly cogent evidence, the standard of proof is the balance of probabilities, rather than that of beyond reasonable doubt: Fry Consulting at [145].

   (d)Conduct which falls “short of the standards of acceptable commercial behaviour observed by reasonable and experienced men in the particular area” is sufficient.  Dishonesty is not required.  Bad faith requires both subjective and objective elements; it is a combined test: Fry Consulting, at [147]-[148] and [165].

   (e)Circumstances where, following prolonged competition between the parties, there is a subsequent application to register a series of nearly identical trade marks can amount to conduct such that a reasonable person standing in the shoes of the applicant would have been aware that it ought not apply for trade mark registration: Fry Consulting at [152].

   (f)Subjective naivety does not exclude a determination of bad faith for the purposes of s 62A: Fry Consulting at [154]-[155].

   (g)A prior business connection with and knowledge of the opponent by the applicant such that a person standing in the shoes of the applicant should have known that he should not have applied for a trade mark deceptively similar to that used by the opponent is sufficient for a finding of bad faith: Fry Consulting at [156].

   (h)Use of a trade mark together with other indicia associated with the trade mark owner may lead to an inference of bad faith: DC Comics at [73].

   [4] (2012) 94 IPR 551.

   [5] (2013) 101 IPR 334.

9. Adopting the language used by Dodds-Streeton J in Fry Consulting, Bennett J confirmed in DC Comics at [62] that:

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

10. I believe the present matter has some parallels with DC Comics.  There the opponent was the producer and publisher of the famous Superman comics, books, films and games and the licensor of replicas of the Superman character and its associated indicia for a range of merchandise such as clothing.  The applicant, who was previously unknown to the opponent, applied to register the trade mark superman workout for “Conducting exercise classes; fitness and exercise clinics, clubs and salons; health club services (exercise)” in Class 41.  (I mention that, unlike the present case, the opponent in DC Comics had never provided or licensed such services in the past and it had no plans to do so in future.)  It was accepted that the word “superman” immediately conjured up thoughts of the opponent’s famous Superman character, albeit that in terms of the word’s actual dictionary meaning its use in the superman workout trade mark as a whole in the context of the claimed Class 41 services was otherwise quite apt.  Indeed, apart from the filing of the application itself, the sole evidence of any other behavior by the applicant which might shed light on whether, in June 2009, the applicant had done so in bad faith, was the uncontested fact that for at least two days in December 2009 the applicant had used an obvious copy or parody of the Superman character’s famous “S shield device” on its website. As she explains in the passages quoted below, Bennett J considered this alone was sufficient for the opponent successfully to invoke s 62A:

    [70] It is an agreed fact that Cheqout [the trade mark applicant] used the [opposed superman workout] trade mark together with the BG shield device in relation to its personal training and film and entertainment services and in titles to video clips appearing on its website. The triangular shape of the BG shield device is of a similar shape and style of lettering to the S shield device in DC Comics’ [the opponent’s] trade marks. This similarity can be observed through the side to side comparison of the devices:

[71] The evidence as to the use of the BG shield device as at the priority date of 2 June 2009 is not clear. What is clear is that Cheqout’s website displayed the BG shield device at the time the images in the statement of agreed facts were captured on 15 December 2009. It only removed the BG shield device after receipt of a “cease and desist” letter sent on behalf of DC Comics on 17 December 2009.

[72] The registrar’s decision sets out evidence adduced in the statutory declaration of Mr Gabrielle, the sole director and company secretary of Cheqout. Mr Gabrielle stated that the use of the words “superman workout” was designed to:

convey to potential users of my exercise program the potential of changing yourself into a muscularly powerful athletic superman … not to associate my exercise program with the Opponent’s comic book character.

[73] That assertion is, in my view, at odds with the use of the BG shield device, to which Mr Gabrielle’s evidence did not refer. It was Mr Gabrielle’s decision to use the words “superman workout” together with the BG shield device. As the sole director of Cheqout, that mental element is attributable to the company. In my view, the inference is clear, from the immediate use of the trade mark together with the BG shield device that, in making the application to register the trade mark, Mr Gabrielle (and therefore Cheqout) intended to use it in combination with the BG shield device in order to strengthen the allusion to Superman. The inference can also be drawn that this use was designed to gain a benefit by appropriating Superman indicia and the reputation of the DC Comics superhero, so as to further the viewer’s association between the trade mark and the Superman word mark.

[74] This is a “relevant circumstance” in a consideration of bad faith for the purposes of s 62A: Fry Consulting at [167].

[75] …

[76] …

[77] I am satisfied that DC Comics has established that Cheqout made the application for the trade mark in bad faith. This is evidenced by the use, soon after the application, of the word superman together with the BG shield device, in the context of male fitness and strength. I note also that the red, white and blue colours traditionally used in conjunction with the Superman character were used by Cheqout together with the BG shield device. The design of the BG shield device closely resembles the insignia closely associated with the DC Comics character and the DC Comics registered trade marks. I am satisfied that at the date of application for the trade mark, Cheqout’s conduct fell short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons.

1. I am satisfied in the present case, too, that the Applicant’s actions before and around the Priority Date as described earlier cast significant doubt on the bona fides of its intentions in filing the opposed application.  Moreover unlike the position in DC Comics, here the parties are, (or at least the Applicant claims to be), direct rivals in business and the evidence shows that the Applicant filed the opposed application just six days after the Opponent had released a worldwide press release announcing its plans to establish one of its fitness centres in Sydney and two days after the Opponent had launched its website at <hardcandyfitness.com>.

2. In all the circumstances I am satisfied that at the Priority Date the Applicant’s conduct in filing the opposed application, using the formulation which guided Bennett J in DC Comics, “fell short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons.”[6] I am accordingly satisfied that the Opponent has established its ground under s 62A.

   [6] This being the “apt touchstone” approved by Dodds-Streeton  J in Fry Consulting at [165].

Decision

1. Section 55(1) of the Act relevantly provides that, 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.

2. I have found the opposition to be successful on the ground raised pursuant to s 62A of the Act. I accordingly refuse to register trade mark application number 1391573.

Costs

1. In the event of success, Mr Round sought costs on the Opponent’s behalf. As the successful party, the Opponent is so entitled and I accordingly award costs against the Applicant as per Schedule 8 of the Regulations.

Michael Kirov

Hearing Officer

Trade Marks Hearings

30 June 2015