Insomniac Holdings LLC v Stephen Enos

[2016] ATMO 118

TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS

Re:Opposition by Insomniac Holdings LLC to registration of trade mark application 1560998(41) - ELECTRIC DAISY CARNIVAL - filed in the name of Stephen Enos.

Delegate:	Cristy Condon
Representation:	Opponent: Chris Sgourakis of Griffith Hack, Patent and Trade Mark  Attorneys Applicant: Dr Harry Melkonian of Melkonian & Co
Decision:	2016 ATMO 118 Trade Marks Act 1995 (Cth) s52 opposition; s60 considered and established; Trade Mark refused registration; costs award

Background

1. This is an opposition brought by Insomniac Holdings LLC ( ‘Opponent’) pursuant to s 52 of the Trade Marks Act 1995 (Cth) (‘Act’) to registration of the trade mark subject of the application detailed below in the name of Stephen Enos (‘Applicant’):

Application Number:	1560998
Priority Date:	5 June 2013
Services:	Class 41: Arranging, organising, conducting, and hosting entertainment events; Entertainment in the nature of live music concerts, disc jockey concerts, dance parties, music tours, musical and artistic performances, and night clubs  (‘services’)
Trade Mark:	Electric Daisy Carnival	(‘Trade Mark’)

1. Following the advertisement of the Trade Mark’s acceptance for possible registration in the Australian Official Journal of Trade Marks on 31 October 2013, the Opponent filed a Notice of Intention to Oppose on 24 December 2014.  The Opponent then filed a Statement of Grounds and Particulars (‘SGP’) on 29 January 2014.  The Applicant filed a Notice of Intention to Defend on 27 February 2014. 

2. The SGP raised grounds of opposition under ss 42, 59, 60 and 62A of the Act.

Evidence

1. The Opponent filed Evidence in Support of its opposition (‘EIS’) on 2 June 2014.  This evidence consists of 3 declarations:

   ·    A declaration dated 30 May 2014 by Chris Sgourakis trade mark attorney and principal of Griffith Hack, Patent and Trade Mark Attorneys, with Annexures CS-1 to CS-26 (‘Sgourakis’).

   ·    A declaration dated 30 May 2014 by Neil Ackland, founder and CEO of ‘inthemix’ online magazine, with Annexures NA-1 to NA-4 (‘Ackland’). 

   ·    A declaration dated 4 June 2014 by Pasquale Rotella, founder of Insomniac, Inc and Insomniac Entertainment, Inc and Live Nation Worldwide, Inc, with Annexures PR-1 to PR-11 (‘Rotella’). 

2. On 25 September 2014 the Applicant sought a direction to suspend this opposition proceeding for the reason that court proceedings were taking place in the United States of America (‘U.S.’).  The Office denied the request presumably made (but not requested) under regulation (‘reg’) 5.19 of the Trade Mark Regulations 1995 (‘Regulations’).

3. The Applicant proceeded to file its Evidence in Answer (‘EIA’) on 12 October 2014.  This evidence consists of a declaration made on 10 October 2014 by Christopher L Rudd, attorney at law licensed to practice before the state and federal courts in California, United States of America with Exhibits 1-12 (‘Rudd’).

4. On 20 November 2014 the parties requested a Cooling-off Period as allowed by reg 5.16.  The Cooling-off Period was extended at the further request of the parties, a request which was received on 14 May 2015. 

5. The Cooling-off Period expired and the Opponent filed Evidence in Reply (‘EIR’) on 3 February 2016.  This evidence consists of a declaration made on 2 February 2016 by John Boyle, Chief Growth Officer and Interim Chief Financial Officer of Insomniac Holdings, LLC (‘Boyle’).

6. Once the time allowed for filing evidence had ended the parties were given an opportunity to request a hearing.  The parties chose to avail themselves of this opportunity.  The matter was set down for hearing in Canberra on 18 October 2016.  On 4 October 2016 the Opponent filed written submissions.  On 11 October 2016, the Applicant filed written submissions.  As a delegate of the Registrar of Trade Marks I heard the parties in Canberra on 18 October 2016.  The Opponent was represented by Chris Sgourakis, trade mark attorney from Griffith Hack, Patent and Trade Mark Attorneys, and the Applicant was represented by Dr. Harry Melkonian from Melkonian & Co. 

7. As delegate I am to decide the opposition as required by s 55 of the Act which 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.

Preliminary Matters – Late Evidence

1. In a letter dated 26 December 2015 the Applicant, although already having filed its EIA back on 12 October 2014, sought to introduce additional evidence into this proceeding.  By letter issuing from this Office on 4 February 2016 the Applicant was informed that it would need to establish a compelling case and the Opponent would be afforded the opportunity to make representations in the matter pursuant to reg 21.15(4), and further, that the decision about whether or not to allow the late evidence would be one made by the hearing officer at the time the substantive matters of the opposition are to be determined. 

2. The Applicant lodged this late evidence imminently before the oral hearing and in its written submissions dated 11 October 2016 the Applicant stated that the submissions therein constitute “additional evidence”.  This so called “additional evidence” was not in the approved form pursuant to reg 21.17 (i.e. not in the form of a declaration) and nor was in filed within the appropriate evidence stage.  The format of the “additional evidence” is rather confusing and repeats exhibit numbers and I note that the second course of exhibit numbering excludes Exhibit 5.  In summary, the “additional evidence” consists of the following:

   “Exhibit 1” is a copy of a letter to this Office dated 26 December 2015 and written by the Applicant requesting to file late evidence;  

   “Exhibit 2” is a copy of a letter from this Office dated 4 February 2016 replying to the Applicant’s request to file late evidence;  

   “Exhibit 3” is a copy of “State of Delaware Entity Details for Insomniac Holdings LLC”; 

   “Exhibit 4” is a copy of a Petition for Cancellation of a registration before the United States Patent and Trade Mark Office (‘USPTO’) Trade Mark Trial and Appeal Board (‘TTAB’);  

   “Exhibit 5” is a copy of court documents for the Superior Court for the State of California (a verified complaint made by the Applicant);  

   “Exhibit 1” (repeated) is a copy of some promotional material mentioning the DJ persona of the Applicant “Mr. Kool-Aid” (no mention of the Trade Mark);  

   “Exhibit 2” (repeated) is a copy of an advertisement claiming Mr. Kool-Aid to be one of the creators of “Mickeys Holy Wave Adventure presents the greatest show on earth Magical Mickeys Electric Daisy Carnival”;  

   “Exhibit 3” (repeated) is copies of more advertisements relating to Mr. Kool-Aid.  Many of them cannot be read due to the poor copy quality;  

   “Exhibit 4” (repeated) is a copy of documentation that is again poor quality but appears to contain the words “Insomniac” and “Electric Daisy Carnival”; 

   “Exhibit 6” is copy of an LA Times online article dated 4 August 2016 referring to the Opponent’s predecessor in title, Pasquale Rotella, and a corruption case;  

   “Exhibit 7” is a copy of a U.S. trademark assignment form dated 19/6/2013;  

   “Exhibit 8” is more poor quality copies of advertisements (that are undated and do not appear to mention the Trade Mark); and,

   The “Applicant’s Outline of Submissions to Be Relied Upon at the Hearing” document (‘Applicant’s Submissions’). 

3. I note that the Opponent has made both oral and written representations[1] that it objects to the consideration of the “additional evidence”.  To this end, during the oral hearing and in a letter dated 25 October 2016 the Applicant has requested the withdrawal of the following “additional evidentiary exhibits” from consideration.  These are Exhibits 1, 2, 3, 4, 7, 8 and Exhibits (repeated) 1,2,3,4.

   [1] Written representations objecting to this new information were received from the Opponent on 18 October 2016 and contained in a document titled “Reply submissions of the Opponent – 18 October 2016”.

4. There remain two exhibits that the Applicant requests me to consider:  Exhibit 5 and Exhibit 6.  

5. For brevity, I am not satisfied that this “additional evidence” should be included as part of the written record.  The changes to trade mark opposition proceedings brought about by the Intellectual Property Laws Amendment (Raising the Bar) Regulation 2013 (No.1) (Cth) (‘Raising the Bar’) are, according to the Explanatory Statement, intended to streamline the opposition process.  Although I am not bound by the rules of evidence,[2] it would not accord with the changes brought about by Raising the Bar if reg 21.19 were to be exercised for information that was not timely in its provision nor relevant to the current proceeding.  In terms of relevance and probative value of evidence submitted in any opposition proceeding, evidence may be relevant, but that alone is not sufficient for it to be allowed under reg 21.19[3].  Here, the “additional evidence” doesn’t even appear to be relevant. The late “additional evidence” will not be considered.  The Applicant’s Submissions are, however, allowed to the extent that they do not refer to the “additional evidence”.

   [2] Trade Marks Regulations 1995 (Cth) sub-reg 21.15(4).

   [3] Fed Square Pty Ltd v Federation IP Pty Ltd [2015] ATMO 42, approved in Reitmans (Canada) Ltd v Hachette Filipacchi Presse [2016] ATMO 54

The Opponent

1. A summary of the Opponent’s evidence (derived from Sgourakis, Ackland and Boyle) is as follows:

   ·    The Opponent is the owner of the trade mark Electric Daisy Carnival (‘Opponent’s trade mark’) registered in the U.S.  I note that the relevant trade mark number has not been filed in evidence.

   ·    A number of websites and on-line magazines are directed to Australians and contain articles about the North American Electric Daisy Carnival which link the origin of the festivals back to Pasquale Rotella (predecessor of the Opponent). (Sgourakis Annexures CS-1 to CS-26 and Ackland Exhibits NA-1-NA-4)

   ·    The Opponent’s trade mark was first used in 1997 in the U.S. by Pasquale Rotella and his company Insomniac, Inc.  The rights to the Opponents U.S. trade mark were assigned to the Opponent in May 2013. (Rotella [1]; Boyle [3])

   ·    Electric Daisy Carnival dance music festivals have been organised by the Opponent or its predecessor since 1997 and have become the largest music festival in North America.  These events have been attended by Australians and tickets to these events have been sold to Australian customers since 2007. (Rotella [1]; Boyle [3]; Rotella [13] confidential)

   ·    Revenue from U.S. based Electric Daisy Carnival festivals and events have been significant. (Rotella [13] confidential).

   ·    Many Australian DJ’s and Australian artists have travelled to perform at the Electric Daisy Carnivals. (Rotella [9]; Annexure PR-2).

   ·    Advertising of the Electric Daisy Carnival events is substantial (Rotella [16], confidential).

   ·    Electric Daisy Carnival events have received substantial press attention and publicity (Rotella [17]; Annexure PR-7, PR-8, PR-9)

The Applicant

1. According to the Applicant’s Submissions [1]:

   “The Applicant is an individual, Mr. Stephen Enos, also professionally
   known as (PIK/A) 'Steve Kool-Aid' and 'Mr. Kool-Aid' when performing
   as a 'DJ', creating and playing Electronic Dance Music ('EDM') at EDM
   concerts and events. He is an acknowledged pioneer in the EDM music
   scene. The record is very clear that Enos began Electric Daisy Carnival
   ('EDC') many years ago as part of Double Hit Mickey productions in Los
   Angeles. Mr. Enos is a man of many interests who is also highly regarded
   as a celebrity chef who has private food clients such as tennis stars Venus
   and Serena Williams - with whom he travels, actor Joseph Gordon Leavitt [sic]
   and others .. He continues to perform as an EDM DJ, with his next
   scheduled performance before a large audience set for January 2017 in a
   ship-board performance known as Holy-Ship organised by Hard Events,
   Inc. ('Hard'), an EDM production company wholly owned by Live
   Nation Inc., which is the publicly held entertainment conglomerate based
   in Los Angeles that also controls the Opponent, Insomniac Holdings, LLC.”

2. The Applicant has not clearly explained what the relevance of the information contained in its Evidence in Answer is nor is it obviously apparent from the nature of Rudd.  I note also that the majority of the exhibits attached to Rudd are copies of documents filed before the U.S. TTAB which appear to relate to an ownership dispute in the U.S. about the Opponent’s trade mark.

3. The Applicant’s position is not clear however, to the best of my abilities, I understand that the Applicant’s position in this Australian matter is as follows:  it is the first user of the Opponent’s trade mark in the United States and therefore argues that it is also the true owner of the Trade Mark in Australia.  The Applicant allegedly licensed the Opponent’s trade mark to the Opponent’s predecessor Mr. Pascale Rotella for use in connection with the provision of electronic dance music festivals in the United States.  No formal licensing arrangement was ever entered into and over the years the relationship between the parties deteriorated (according to the Applicant because of safety issues at the festivals).  I am satisfied that if such a relationship ever existed it ceased prior to the priority date of the Trade Mark.

Grounds of Opposition, Onus and Standard of Proof

1. Consistent with the SGP, the Opponent presses grounds of opposition under ss 42, 59, 60 and 62A. To successfully oppose the application the Opponent needs to establish at least one of those grounds. As will become apparent, the Opponent has successfully established a ground of opposition pursuant to s 60. Consequently, it is unnecessary that I consider the remaining grounds. Of course, should the decision be appealed, it would remain open to the Opponent to plead any ground available to it under the Act in proceedings before the Court.

2. The onus of proof in an opposition rests upon the Opponent.[4]  The relevant standard of proof is the ordinary civil standard based on the balance of probabilities.[5]  The date at which the rights of the parties are to be determined is 5 June 2013, being the filing date of the application (‘the Priority Date’).[6]

   [4] Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58, [32]

   [5] Following Gyles J in Pfizer Products Inc v Karam (2006) 70 IPR 599, [6]-[26], and Telstra Corporation Limited v Phone Directories Company Pty Ltd[ 2015] FCAFC 156, [133].

   [6] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592, 595

Discussion

1. Section 60 of the Act provides:

   Section 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.

2. To establish a ground of opposition under s 60 the Opponent must demonstrate that at 5 June 2013 its Electric Daisy Carnival trade mark which, if not identical, is substantially identical to the Trade Mark, had already acquired a reputation in Australia amongst a significant number of persons in the relevant market such that use of the Trade Mark upon or in relation to its services in class 41 would be likely to deceive or cause confusion.

3. In McCormick & Company Inc v McCormick, Kenny J considered what is intended by the word ‘reputation’, she said:

   What is intended by the word "reputation" in s 60? The word is defined in The Macquarie Dictionary as follows:

   reputation ... 1. the estimation in which a person or thing is held, esp. by the community or the public generally; repute ... 2. favourable repute; good name ... 3. A favourable and publicly recognised name or standing for merit, achievement, etc. ... 4. The estimation or name of being, having done, etc, something specified.

   Cf. The Oxford English Dictionary. In s 60, the word is, I think, apt to refer to "the recognition of the McCormick & Co marks by the public generally".

   Does the evidence establish that in Australia before 9 March 1992 the McCormick & Co marks were recognised by the public generally and, because of that, the use by Mary McCormick of her marks would be likely to cause the public confusion, as for example, by the public's mistakenly attributing a business connection between the two or attributing her product to the company? [7]

   [7] [2000] FCA 1335, [81].

4. Her Honour proceeded to quote with approval the reasoning of Lockhart J from Re ConAgra Inc v McCain Foods (Aust) Pty Ltd (‘ConAgra’):

   [R]eputation within the jurisdiction may be proved by a variety of means including advertisements on television or radio, or in magazines and newspapers within the forum. It may be established by showing constant travel of people between other countries and the forum and that people within the forum, (whether residents there or persons simply visiting there from other countries) are exposed to the goods of the overseas owner …[8]

   [8] [1992] FCA 159, [118].

5. Kenny J also referred to the Registrar’s delegate in the case of Hugo Boss:

   [I]t is true that the assessment of the reputation of a trade mark goes far beyond mere examination of sales or turnover of goods sold under that trade mark and contemplation of the advertising and promotional figures.

   As regards a trade mark, its reputation derives both from the quantum of sales under that mark and also its esteem, or image, projected by that trade mark. The quantum of sales, advertising and promotion contributes to the ‘recognition’ component of the trade mark’s reputation. The credit, image and values projected by a trade mark attaches to the ‘esteem’ component of the reputation as do the public events and other trader’s marks with which [the] owner of the trade marks in question chooses to associate the trade marks via sponsorships, cross-promotions, ‘contra deals’ and so forth.

   It follows that a trade mark used in relation to goods with comparatively low sales may have a high and strong reputation by virtue of the high credit or esteem in which it is held, or, conversely, that a trade mark which has very high sales may have a strong reputation notwithstanding the lack of esteem that attaches to it. The particular popular images, or sets of values, that attach to the trade mark are also, therefore, important parts of the reputation of the trade mark and may be as strong an associative force in the minds of the public as the association of the trade marks with the goods or services themselves.[9]

   [9] Hugo Boss AG v Jackson International Trading Co Kurt D Bruhl Gesellschaft MbH & Co KG (1999) 47 IPR 423, 426.

6. Another factor that must be considered in the assessment of the s 60 ground of opposition is what constitutes a significant number of persons in the relevant market. In Le Cordon Bleu BV v Cordon Bleu International Ltee[10] Heerey J stated:

   What is ‘significant’ or ‘substantial’ will depend on the nature of the goods or services in question. For some highly specialised products, awareness among a few thousand persons, or even less, might be sufficient … We are here concerned with foodstuffs sold in supermarkets, delicatessens, milk bars and other retail outlets. The relevant market is virtually the entire Australian population from early teenage years onwards.[11]

   [10] (2000) 50 IPR 1. Note that this case was decided under s28(a) of the Trade Marks Act 1955 (now repealed).

   [11] Ibid 8.. It is to be noted that Heerey J’s decision was overturned on appeal to the Full Federal Court, although not on the point quoted above. see Renaud Cointreau v Cordon Bleu International Ltee [2001] FCA 1170, [75]

1. Although there are circumstances where the reputation of a trade mark is limited to natural borders (for products or services that are not amenable to sales over the Internet) I am satisfied that it is now easier than ever before for a reputation in a trade mark to traverse oceans and spill over into other jurisdictions.  In this vein (although the case was decided before the Internet age) Kenny J in ConAgra stated:

   It is no longer valid, if it ever was, to speak of a business having goodwill or reputation only where the business is carried on. Modern mass advertising through television (which reaches by satellite every corner of the globe instantaneously), radio, newspapers and magazines, reaches people in many countries of the world. The international mobility of the world population increasingly brings human beings, and therefore potential consumers of goods and services, closer together and engenders an increasing and more instantaneous awareness of international commodities. This is an age of enormous commercial enterprises, some with budgets larger than sovereign states, who advertise their products by sophisticated means involving huge financial outlay. Goods and services are often preceded by their reputation abroad. They may not be physically present in the market of a particular country, but are well known there because of the sophistication of communications which are increasingly less limited by national boundaries, and the frequent travel of residents of many countries for reasons of business, pleasure or study.[12]

   But reputation within the jurisdiction may be proved by a variety of means including advertisements on television or radio, or in magazines and newspapers within the forum. It may be established by showing constant travel of people between other countries and the forum, and that people within the forum (whether residents there or persons simply visiting there from other countries) are exposed to the goods of the overseas owner.[13]

   [12] Ibid [115]

   [13] Ibid [118]

2. The Opponent’s evidence shows a substantial number of Australian (electronic dance music fans) access online information about the American based ‘Electric Daisy Carnival’ and that high profile Australian dance music artists have performed during the festival before the relevant date.  It also shows that Australians are travelling to North America to attend the festivals before the relevant date and many instances of commentary from Australians, or commentary on a website based in Australia have occurred prior to the relevant date.  Online sites like ‘ are attracting Australian traffic in the relevant electronic dance music market and the on-line site has featured a number of articles about the U.S. Electric Daisy Carnival music festival.  The Opponent has also provided persuasive confidential sales and advertising figures relating its use of the Opponent’s trade mark.

   [14] Sgourakis Annexure CS-2 to CS-26; Ackland Annexure NA-1 to NA-4

3. The evidence in Sgourakis, Ackland and Rotella satisfies me on the balance of probabilities that the Opponent’s trade mark has acquired a strong spillover reputation in Australia before 5 June 2013 amongst a substantial number of electronic dance music fans (the relevant market).

4. However, this is not sufficient to establish the s 60 ground of opposition. The Registrar must also be satisfied that because of that demonstrated reputation the use of the Trade Mark would be likely to deceive or cause confusion.

5. In Australian Woollen Mills Limited v F S Walton and Company Limited, Dixon and McTiernan JJ said the following:

   An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought. … The usual manner in which ordinary people behave must be the test of what confusion or deception may be expected.  Potential buyers of goods are not to be credited with any high perception or habitual caution.  On the other hand, exceptional carelessness or stupidity may be disregarded.  The course of business and the way in which the particular class of goods are sold gives, it may be said, the setting, and the habits and observations of men considered in the mass affords the standard.[15]

   [15] (1937) 58 CLR 641, 658.

6. The type of confusion intended by s 60 need not eventuate in the actual purchase of the goods or services covered by the Trade Mark the confusion need only to exist in their mind up to the point of inducing a sale[16]. 

   [16] These considerations are based on principles set out in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592, 594-5. (with reference to Reckitt & Colman (Australia) Ltd. v. Boden [1945] HCA 12; (1945) 70 CLR 84.

7. In the present case the Applicant’s class 41 services are the same as those services the Opponent promotes under its Electric Daisy Carnival trade mark and the Trade Mark is identical to the Opponent’s trade mark.

8. I am satisfied that as a result of the reputation acquired by the Opponent’s trade mark that the use of the Trade Mark in connection with the services would be likely to deceive or cause confusion in the relevant marketplace in Australia. Consequently, the Opponent has established the ground of opposition pursuant to s 60.

Decision

1. I have found the Opponent has established the ground of opposition it raised pursuant to s 60 of the Act. As the Delegate of the Registrar I accordingly refuse to register trade mark 1560998.

Costs

1. The Opponent has sought an award of costs in its favour. I see no reason to depart from the general rule that costs follow the event. As the Opponent has established a ground of opposition, I award costs against the Applicant under section 221 of the Act as per the amounts allowed under Schedule 8 of the Trade Marks Regulations 1995.

Cristy Condon
Hearing Officer
Trade Mark and Designs Oppositions and Hearings
15 December 2016