Interactive Engineering Pty Ltd v Orchestral Developments Limited

[2018] ATMO 22

TRADE MARKS ACT 1995

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

Re:Opposition by Interactive Engineering Pty Ltd to extension of protection to International Registration 1175551 (9, 16, 38, 42) (Australian Trade Mark Application No. 1582600) - ORION HEALTH - in the name of Orchestral Developments Limited.

Delegate:	Katrina Brown
Representation:	Opponent -  Peter Hallett of Spruson & Ferguson Applicant - Sonia Stewart of counsel, instructed by Brett Doyle of    Clayton Utz
Decision:	2018 ATMO 22 Trade Marks Regulations 1995 - reg 17A.29 – grounds pursued under ss 58, 44 and 60 - s 44 established – evidence not sufficient for honest concurrent use – IRDA refused.

Background

1. This decision is in respect of an opposition under reg 17A.32 of the Trade Marks Regulations 1995 (‘the Regulations’) by Interactive Engineering Pty Ltd (‘the Opponent’) to the extension of protection to the following International Registration Designating Australia (IRDA).

IR No:

1175551

IRDA No:

1582600

Trade Mark:

ORION HEALTH (‘the Trade Mark’)

Holder:

Orchestral Developments Limited

Priority Date:

13 June 2013

Specification:

Class 9: Magnetic discs and tapes with or without programs thereon; software for use in the healthcare and health informatics sector, computer programs for use in the healthcare and health informatics sector; programmed chips and equipment for use with the aforementioned goods; none of the aforementioned including home electric appliances, home electronic appliances, home audio appliances, home visual appliances or parts, fittings or software for these goods

Class 16: Printed matter, instructional and teaching material in the field of computers and computer software, printed programs, computer software in this class, instructional and/or reference materials and manuals for computer software operation, all being goods in this class; all the use in in the healthcare and health informatics sector

Class 38: Telecommunications services, namely the receipt and delivery of messages and other data by electronic transmission

Class 42: Computer programming, computer consulting and technical support services in the fields of design, development and use of computer programmes, computer hardware and computer systems, computer related books and publications and other computer software related products and promotional products; all being services in this class and for use within healthcare and health informatics sector and excluding design services for databases, graphics, logos and websites

(‘the Holder’s Goods and Services’)

Endorsement:

Provisions of paragraph s 44(3)(a) and/or Reg 4.15A(3)(a) applied.

1. The Trade Mark was examined as required by reg 17A.12 and acceptance of the Trade Mark was advertised in the Official Journal of Trade Marks on 31 March 2016.

2. The Opponent filed a Notice of Intention to Oppose on 22 April 2016 followed by a Statement of Grounds and Particulars (‘SGP’) on 16 May 2016.

3. The Holder filed a Notice of Intention to Defend on 1 July 2016.

4. In due course, the parties filed evidence in support of the opposition and evidence in answer. Evidence in reply was not filed.

5. The matter came before me, a delegate of the Registrar of Trade Marks, on 21 September 2017. Peter Hallett of Spruson & Ferguson made submissions on behalf of the Opponent. Jim Brander, the Managing Director of the Opponent, also made submissions (‘Brander Submissions’) at the hearing.  Sonia Stewart of Counsel instructed by Brett Doyle of Clayton Utz made submissions on behalf of the Holder.

Grounds of opposition and onus

1. Regulation 17A.34 provides that the extension of protection may be opposed on any of the grounds on which an IRDA may be rejected and also on the grounds set out in ss 58 to 61 and 62A of the Trade Marks Act 1995 (‘the Act’).

2. In the SGP, the Opponent nominated grounds of opposition under ss 42(b), 44, 58 and 60 of the Act. The ground under s 42(b) was not pressed in the written submissions and was not pursued by the Opponent at the hearing.

3. The Opponent bears the onus of establishing at least one of the grounds of opposition.[1] The standard of proof is the ordinary civil standard of the balance of probabilities.[2]

   [1] Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58 [32].

   [2] Telstra Corporation Ltd v Phone Directories Co Pty Ltd [2015] FCAFC 156 [132].

4. In the event that the Opponent establishes one of the grounds of opposition in relation to all of the Holder’s Goods and Services, there is no requirement for me to consider the other grounds of opposition.

5. The relevant date at which the rights of the parties are to be determined is 13 June 2013 (‘the Relevant Date’) being the priority date of the Trade Mark.[3]

   [3] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1954] HCA 82.

Evidence

1. For their evidence, the parties rely on the following declarations:

Evidence in support

• Declaration of Jim Brander (Director of the Opponent) made on 5 October 2016 with Exhibits JB-1 to JB-6 (‘Brander Declaration’).

Evidence in answer

• Declaration of Richard McCrae (Chief Executive Officer of Orion Health Group Limited) made on 22 February 2016 with Annexures A to J (‘McCrae 1’);

• Declaration of Richard McCrae made on 25 November 2016 with Annexures IRMc-1 to IRMc-6 (‘McCrae 2’).

Brander Submissions

1. As mentioned above, the Managing Director of the Opponent, Jim Brander, made submissions at the hearing in addition to the submissions made by the Opponent’s legal representative. The day before the hearing, the Holder and I, were provided with a copy of a PowerPoint presentation that Mr Brander spoke to at the hearing.

2. At the hearing, the Holder’s representative informed me that they believed parts of the Brander Submissions were more appropriately characterised as new evidence. Both parties were given, and availed themselves of, the opportunity to make representations in this regard after the hearing. 

3. Nothing in the Brander Submissions is determinative in this matter. As you read this decision, it will become clear that it is the Holder’s evidence, not the Opponent’s that this matter turns on. As such I do not find it necessary to dissect the Brander Submissions.

The Opponent

1. The Opponent is a software company that specialises in the development and marketing of technology based on the idea of active semantic structures. At [4] of the Brander Declaration, the Opponent’s philosophy is described as:

   Interactive Engineering’s mission is to develop the active structure paradigm, demonstrate its superiority over other paradigms, and in doing so, provide tools for the capture, control and deployment of active knowledge in dynamic environments. The underlying philosophy that guides us is that machine analysis should have the same speed, flexibility and power as the best human analysis, exemplified by the self-modifying fluidity of human problem solving.

2. The Opponent markets and promotes this technology under the trade mark ORION and it is declared in the Brander Declaration, that it has been doing so in Australia since 1983. In Exhibit JB-6 to the Brander Declaration, the Opponent’s ORION technology is described as:

3. The Opponent is the owner of the following Australian trade mark registrations.

Trade Mark No:	460594	539355
Trade Mark:	ORION	ORION
Priority Date:	25 February 1987	2 August 1990
Specification:	Class 9: General numerical computer software being goods included in class 9, but excluding numerical computer software for computerised lighting controls	Class 9: Computers; computer programs; computer related goods in this class

1. At [8] of the Brander Declaration, Mr Brander declares that the Opponent chose the trade mark ORION due to its symbolic significance. Exhibit JB-3 to the Brander Declaration consists of an article from the Sydney Morning Herald dated 21 May 1984. The article is titled ‘A hunter with the intelligence of a human’ and provides the following insight into the Opponent’s technology and the symbolic significance of ORION.

The Holder

1. The McCrae Declarations are made by Richard McCrae, the founder and Chief Executive Officer of Orion Health Group Limited, which is referred to as Orion Health in the McCrae declarations. Mr McCrae describes Orion Health as the ultimate holding company of the Holder and goes on to describe the Holder as ‘the intellectual property holding company for the Orion Health group of companies’.[4]

   [4] McCrae 1 [1]; McCrae 2 [1].

2. Mr McCrae declares that he founded the Orion Health business in 1993 in Auckland, New Zealand. Initially the business operated under the brand ORION before rebranding to ORION HEALTH in 2006.

3. At [4] of McCrae 1 it is declared that ORION was chosen because of the well-known constellation which is prominent in the New Zealand night sky. HEALTH was added to identify the Holder’s specialisation as an IT healthcare business.

4. The software promoted and sold under the Trade Mark is:

   designed for a new model of healthcare, centered on the patient and aimed at delivering positive outcomes, irrespective of where the treatment occurs. ORION HEALTH products and services deliver a significant range of solutions across a range of health specific market segments.[5]

   [5] McCrae 1 [7].

5. Orion Health has a suite of software solutions under the ORION HEALTH umbrella including:

• ORION HEALTH RHAPSODY

• ORION HEALTH AMADEUS

• ORION HEALTH COORDINATE

• ORION HEALTH ENGAGE

• ORION HEALTH COMMUNICATE

• ORION HEALTH ENTERPRISE

• ORION HEALTH CONSULT

• ORION HEALTH MEDICINES

• ORION HEALTH SERVICES

1. At [24] of McCrae 1 it is declared that goods and services under the Trade Mark were first offered and provided in Australia in 2006.

Section 44

1. Section 44 of the Act relevantly provides:

   (1) Subject to subsections (3) and (4), an application for the registration of a         trade mark (applicant’s trade mark) in respect of goods (applicant’s goods)    must be rejected if:

   (a)  the applicant’s trade mark is substantially identical with, or deceptively similar to:

   (i)  a trade mark registered by another person in respect of similar goods or closely related services; or

   (ii)  a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; and

   (b)  the priority date for the registration of the applicant’s trade mark in respect of the applicant’s goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.

   Note 1:       Fordeceptively similarsee section 10.

   Note 2:       Forsimilar goodssee subsection 14(1).

   Note 3:       Forpriority datesee section 12.

   Note 4:       The regulations may provide that an application must also be rejected if the trade mark is substantially identical with, or deceptively similar to, a protected international trade mark or a trade mark for which there is a request to extend international registration to Australia: see Part 17A.

   (2)    Subject to subsections (3) and (4), an application for the registration of a

   trade mark (applicant’s trade mark) in respect of services (applicant’s services) must be rejected if:

   (a)    it is substantially identical with, or deceptively similar to:

   (i)    a trade mark registered by another person in respect of   similar services or closely related goods; or

   (ii)     a trade mark whose registration in respect of similar services or closely related goods is being sought by another person; and

   (b)     the priority date for the registration of the applicant’s trade mark in respect of the applicant’s services is not earlier than the priority date for the registration of the other trade mark in respect of the similar services or closely related goods.

   …

   (3) If the Registrar in either case is satisfied:

   (a) that there has been honest concurrent use of the 2 trade marks; or
     (b) that, because of other circumstances, it is proper to do so;

   the Registrar may accept the application for the registration of the applicant’s trade mark subject to any conditions or limitations that the Registrar thinks fit to impose….

1. In support of this ground the Opponent nominated the following trade marks in the SGP:

TM  No.	Trade Mark	Priority Date	Goods / Services
460594	ORION	25 February 1987	Class 9: General numerical computer software being goods included in class 9, but excluding numerical computer software for computerised lighting controls
539355	ORION	2 August 1990	Class 9: Computers; computer programs; computer related goods in this class
1001729	ORION	12 May 2004	Class 16: Paper, cardboard and goods made from these materials, not included in other classes; printed matter; bookbinding material; photographs; stationery; adhesives for stationery or household purposes; artists' materials; paint brushes; typewriters and office requisites (except furniture); instructional and teaching material (except apparatus); plastic materials for packaging (not included in other classes); printers' type; printing blocks Class 35: Office management; business administration, management and advertising services supplied to retailers in shopping environment and/or to owners of shopping environments; business research and data analysis; services rendered by business management and organisation consultants; organisation of exhibitions and trade fairs for commercial and advertising purposes; rental of advertising space Class 36: Financial and monetary affairs in relation to the management and leasing of real estate and property; real estate affairs in relation to the management and leasing of real estate and property Class 39: Transport; packaging and storage of goods; travel arrangements; car parking services
1553244	ORIONVM	23 April 2013	Class 42: Computer systems design and computer network design, including support services; computer security services being the design or development of secure computer hardware, systems and networks; information, advisory and consultancy services in relation to the aforementioned services; application service provider services, including application hosting services and application managed services; hosting, managing, supporting and delivering applications; cloud computing infrastructure service provider services, including cloud computing infrastructure hosting services and cloud computing managed services; hosting, managing, supporting and delivering infrastructure relating to cloud computing

1. The Holder states that the only substantive issue under s 44 of the Act is whether the Trade Mark should have been accepted on the basis of honest concurrent use under s 44(3)(a). I take this to mean that the Holder concedes that the Trade Mark is substantially identical with or deceptively similar to the trade marks set out at [27] of this decision and that the goods and services are similar and or closely related. I agree, and for the sake of clarity add, that in my opinion the s 44 ground of opposition applies to all of the Holder’s Goods and Services.

2. Section 44(3)(a) of the Act gives the Registrar the discretion to accept a trade mark, that would otherwise be rejected under s 44(1) or s 44(2), on the basis of honest concurrent use. In McCormick & Co v McCormick Kenny J summarised the principal criteria for determining honest concurrent use as:

   a) the honesty of the concurrent use;

   b) the extent of the use in terms of time, geographic area and volume of sales;

   c) the degree of confusion likely to ensue between the trade marks in         questions;

   d) whether any instances of confusion have occurred; and

   e) the relative inconvenience that would ensue to the parties if registration were to be permitted.[6]

   [6] [2000] FCA 1335 [30].

3. As pointed out by the authors of Shanahan’s Australian Law of Trade Marks and Passing Off:

   An opponent may establish a ground of opposition under s 44(1) or 44(2) by demonstrating weakness or insufficiency in the case made for acceptance under s 44(3)(a) or 44(3)(b). The onus will then move to the applicant to rebut the alleged weakness or insufficiency.[7]

   [7] Mark Davison and Ian Horak, Shanahan’s Australian Law of Trade Marks and Passing Off (Lawbook Co., 6^th ed, 2016) [40.1505].

4. In this matter, the Opponent points to the following weaknesses and insufficiencies in the Holder’s evidence with respect to s 44(3)(a):

• there is no evidence that the Holder has itself ever used the Trade Mark in Australia and the Holder has not established that the use shown in the evidence is by an authorised user pursuant to s 8 of the Act; and

• the Holder has not established that it adopted the Trade Mark honestly as it has not provided any evidence in relation to what enquiries or searches it undertook prior to adopting the Trade Mark in Australia, or whether it was aware of the Opponent’s use of ORION in Australia.

Evidence of use by Holder or authorised user

1. The evidence in this matter does not show use of the Trade Mark by the Holder. The McCrae Declarations state that the Holder is the ‘intellectual property holding company for the Orion Health group of companies’. The Declarations go on to detail use of the Trade Mark, much of which refers to use by Orion Health. For example: Orion Health operates a website; Australian clients of Orion Health. The declarant states that ‘Orion Health Group Limited (Orion Health), which is the ultimate holding company of Orchestral Developments Limited’ and as such the references in the declarations to Orion Health are references to the entity Orion Health Group Limited.

2. As there is no evidence of the Holder using the Trade Mark, the Holder’s claim to honest concurrent use must rely on authorised use of the Trade Mark. Section 7(3) of the Act specifies that:

   An authorised use of a trade mark by a person (see section 8) is taken, for the purposes of this Act, to be a use of the trade mark by the owner of the trade mark.

3. Section 8 of the Act relevantly provides:

   (1) A person is an authorised user of a trade mark if the person uses the trade mark in relation to goods or services under the control of the owner of the trade mark.

   (2) The use of a trade mark by an authorised user of the trade mark is an authorised useof the trade mark to the extent only that the user uses the trade mark under the control of the owner of the trade mark.

   (3) If the owner of a trade mark exercises quality control over goods or services:

   (a)  dealt with or provided in the course of trade by another person; and

   (b)  in relation to which the trade mark is used

   the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.

   (4)  If:

   (a)  a person deals with or provides, in the course of trade, goods or  services in relation to which a trade mark is used; and

   (b)  the owner of the trade mark exercises financial control over the other person’s relevant trading activities;

   the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.

   (5) Subsections (3) and (4) do not limit the meaning of the expression under the control of in subsections (1) and (2).

4. In Lodestar Anstalt v Campari America LLC Basenko J summarised the law as follows:

   Section 8(1) of the Act defines a person who is an authorised user of a trade mark and the key concept in the subsection is that the trade mark is used in relation to goods or services under the control of the owner of the trade mark. Section 8(2) makes it clear that an authorised use only applies to the extent that the trade mark is used under the control of the owner of the trade mark. By reason of s 7(3) an authorised use is taken to be use of the trade mark by the owner of the trade mark. Subsections 8(3) and (4) provide for two cases where the use of a trade mark is taken to be use under the control of the owner of the trade mark: the owner of the trade mark exercises quality control over the relevant goods or services or the owner exercises financial control over the other person’s relevant trading activities. Section 8(5) makes it clear that the meaning of the expression under the control of is not limited to the two cases identified in s 8(3) and (4) of the Act.[8]

   [8] [2016] FCAFC 92 [63].

1. The Opponent submits that the Holder’s evidence describes use of the Trade Mark by Orion Health Group Limited and that:

   there is no evidence in relation to whether the Applicant [Holder] has licensed the mark ORION HEALTH to Orion Health Group Limited, or (if so) whether the Applicant [Holder] has exercised control over use of the mark by Orion Health Group Limited. The onus is on the Applicant [Holder] to establish these matters.

   …

   In the absence of any details of the relationship to Orion Health Group Limited and the Applicant [Holder], and in particular whether the Applicant [Holder] has exercised control as a matter of substance over that entity’s use of the Mark, the Applicant [Holder] has not established that Orion Health Group Limited’s use of ORION HEALTH constitutes “authorised use’.

2. The Holder submits that the Opponent has misconstrued the relationship between the Holder and Orion Health Group Limited:

   Orion Health Group Limited is the parent company and the Applicant [Holder] is the intellectual property holding company for the parent.

   …

   The range of goods and services provided by Orion Health have been provided under its house mark Orion Health since 2006 and this is borne out by the voluminous public documentation examples of use supplied by Mr McCrae.

   The control exercised by the parent company (and by Mr McCrae himself in his capacity as Founder and CEO) has plainly extended to Australia.

3. Section 8(3) makes it clear that it is the trade mark owner that must exercise control over the use of the trade mark by the authorised user. In the matter before me, it is the Holder that must exercise control over the use of the Trade Mark by Orion Health Group Limited. However, the Holder has indicated that it is the parent company, Orion Health Group Limited that is exercising control over use of the Trade Mark in Australia. This says nothing as to the control exercised by the Holder.

4. The Holder points me to the words of Aickin J in Pioneer Kabushiki Kaisha v Registrar of Trade Marks:

   the essential requirement for maintenance of the validity of a trade mark  is that it must indicate a connection in the course of trade with the registered proprietor, even though that connection may be slight, such as…control of the user in the sense in which a parent company controls a subsidiary.[9] 

   [9] [1977] HCA 56 [31].

5. In the matter before me, Orion Health Group Limited is the parent and the Holder is the subsidiary. The fact that the Holder is the subsidiary, rather than the parent, does not of itself preclude the Holder from being able to exercise the type of control contemplated by s 8 of the Act. In TGI Friday’s of Minnesota Inc v TGI Friday’s Australia Pty Ltd, whilst reflecting on Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd,[10] Whitlam J stated:

   There is, of course, no reason why the company in the group controlling the group’s trade marks should be the parent company and the users should be the subsidiaries.[11]

   [10] [1993] FCA 203.

   [11] (1999) 48 IPR 65 [27].

6. However the authorities make it clear that ‘regardless of the form control might take – it is the exercise of control that matters not merely the right to do so’.[12] In this matter the Holder’s submissions go little further than asserting that the Holder is the intellectual property holding company for Orion Health Group Limited. I appreciate that it is not uncommon for a company within a corporate group to hold the intellectual property portfolio for that corporate group. However, the Holder has not explained how it controls Orion Health Group Limited’s use of the Trade Mark.

   [12] Lodestar Anstalt v Campari America LLC [2016] FCAFC 92 [169].

7. There is simply not enough information before me to conclude that the Holder has exercised actual control over Orion Health Group Limited’s use of the Trade Mark, particularly in the face of an affirmative statement that Orion Health Group Limited exercises control over use of the Trade Mark in Australia.

8. For the reasons above I am not satisfied that the Holder has established that Orion Health Group Limited is an authorised user of the Trade Mark. I also note that McCrae 1 refers to Orion Health Pty Limited, an Australian subsidiary of Orion Health Group Limited. On the evidence before me, any use of the Trade Mark by Orion Health Pty Limited suffers the same fate as the use of the Trade Mark by Orion Health Group Limited.

9. As such, use of the Trade Mark by Orion Health Group Limited or Orion Health Pty Limited cannot be relied upon for the purposes of honest concurrent use. The ground of opposition under s 44 of the Act is established.

Decision

1. Regulation 17A.34N relevantly provides:

   (1)  Unless the opposition proceedings are discontinued or dismissed, the Registrar must decide:

   (a)  to refuse protection in respect of all of the goods or services                listed in the IRDA; or

   (b)  to extend protection in respect of some or all of the goods or     services listed in the IRDA (with or without conditions or          limitations);

   having regard to the extent (if any) to which the grounds on which the IRDA was opposed have been established.

2. The Opponent has established the ground of opposition under s 44 of the Act. The Holder’s evidence is not sufficient to apply the provisions of honest concurrent use. Accordingly I refuse to extend protection in Australia to IRDA No. 1582600.

3. As I have found that a ground of opposition has been established in relation to all of the goods and services claimed by the IRDA, it is unnecessary for me to consider the remaining grounds that were argued. Those grounds, and any others under the Act, will be available to the Opponent to pursue in the event that this decision is appealed.

Costs

1. The Opponent sought costs. Costs generally follow the event, and I see no reason to depart from that general principle. Accordingly, I award costs against the Holder in accordance with the amounts set out in Schedule 8 to the Regulations.

Katrina Brown
Hearing Officer
Trade Mark Hearings & Oppositions
16 February 2018