IP Solutions International Pty Ltd

[2018] ATMO 106

TRADE MARKS ACT 1995

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

Re:Trade mark application number 1830879 – TokenSecure - in the name of IP Solutions International Pty Ltd.

Delegate:	Cristy Condon
Representation:	Applicant: Written submissions by Andrew Petale of Y Intellectual Property
Decision:	2018 ATMO 106 Request to be heard under section 33 of the Trade Marks Act 1995 Section 41 considered – Trade Mark rejected

Background

1. IP Solutions International Pty Ltd (‘the Applicant’) filed an application to register a trade mark under the provisions of the Trade Marks Act 1995 (‘the Act’) on 9 March 2017[1].

   [1] The filing date of the trade mark application.

2. Relevant details of that trade mark application are:

   Trade Mark No. 1830879

   Trade Mark: TokenSecure (‘the Trade Mark’)

   Specification of Goods:

   Class 36: Electronic funds transfer services; Electronic money transfer services; Electronic payment services; Financial payment services; Financial services; Financial transaction services; Computerised transfer of funds (‘the Applicant’s Services’

3. The Trade Mark application was examined[2] and on 18 May 2017, a first examination report was issued in relation to the Trade Mark. That report identified a substantive ground for rejection under s 41 of the Act. The report relevantly stated:

   Your trade mark is TOKENSECURE.

   In relation to the services claimed TOKEN is a term used to indicate a device which is used in addition to or in place of a password to gain access to something. Further, SECURE is a term used to indicate safety. Your trade mark therefore indicates that your services provide TOKEN SECURE transactions, financial services and money transfers.

   A consumer seeing the trade mark in relation to the services claimed would see this a feature of your services. It is a term that other traders should be able to use to describe their services.

   Other traders should be able to use TOKEN SECURE, or something very similar, in connection with goods or services similar to yours.

   [2] As required by section 31 of the Act.

4. The first examination report also mentioned that the Applicant could supply evidence of use in terms of sub-s 41(4) of the Act. Nonetheless, to be clear, a trade mark may also be acceptable under that provision should the examiner be satisfied that the combined effect of a trade mark’s inherent adaptation to distinguish, intended use of the trade mark and any other circumstances make it proper to do so.

5. However, the Applicant through its representative, Andrew Petale of Y Intellectual Property (Trade Mark lawyer and attorney for the Applicant), responded to the examination report arguing that the Trade Mark was inherently adapted to distinguish the Applicant’s Services and that it should be accepted for possible registration. In support of this assertion, Mr Petale drew the examiner’s attention to the words of Dodds-Streeton J on the Federal Court of Australia in Fry Consulting Pty Ltd v Sports Warehouse Inc. (No.2) regarding combination marks:

   It is established that a... mark may be capable of distinguishing by the overall impression it creates, even if the individual elements in isolation lack any such capacity, because, for example, they are commonplace in a trade, or, by parity of reasoning, merely or highly descriptive. When assessing whether a combination trade mark is adapted to distinguish, it is necessary to consider the combination as a total composition, rather than the individual constituent elements in isolation.[3]

   [3] [2012] FCA 81; (2012) 288 ALR 727 at 61.

6. On 10 October 2017, the examiner issued a second examination report, maintaining the objection under s 41 of the Act. The examination report addressed the submissions made by Mr Petale and further stated that:

   The term TOKEN SECURE is commonly used in regard to services where a user requests a token with their username & password which should then be used/included in all other future requests to access those services. The token provided to the user is also valid only for the time period requested by the user up to an upper limit as to how long the token can be valid.

   In regard to the financial, funds and money transfer, and payment and transaction services claimed by the applicant, the term would be well understood by consumers and in the trade as simply describing a feature or quality of the services provided. I've attached research showing common use of the term for reference.

   I acknowledge the relevant precedent that you provided in your submission. However even though the grammatical structure of the term "token secure" is analogous to many of the precedent examples provided, it has nevertheless acquired a descriptive meaning as shown in the research. A term that was once illusory or suggestive may lose its distinguishing and origin-denoting characteristics through use in a descriptive sense over a period of time, and come to be regarded by the average consumer as nothing more than a descriptive term. The registrability of a trade mark must be determined on the basis of the facts and evidence at the time registration is sought.

   In summary the mark as applied for does not have sufficient capability to act as a badge of origin for the services claimed by the applicant. Other traders would have a legitimate desire or need to use a sign of a similar nature in relation to their similar goods/services.

   The applicant might be able to overcome this problem if by supplying evidence of use in terms of subsection 41(4) of the Trade Marks Act 1995. The applicant also has the option of requesting a hearing or a decision on the written record as an alternative.

7. On 19 January 2018, the Applicant requested to be heard by way of written submissions under s 33(4) of the Act. No oral hearing took place and the matter came before me, a delegate of the Registrar of Trade Marks. The Applicant provided further written submissions on behalf of the Applicant.

Discussion and Reasons

1. Section 41 of the Act relevantly provides:

41Trade mark not distinguishing applicant’s goods or services

(1)An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant’s goods or services in respect of which the trade mark is sought to be registered (the designated goods or services) from the goods or services of other persons.

Note:For goods of a person and services of a person see section 6.

(2)A trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons only if either subsection (3) or (4) applies to the trade mark.

(3)This subsection applies to a trade mark if:

(a)the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons; and

(b)the applicant has not used the trade mark before the filing date in respect of the application to such an extent that the trade mark does in fact distinguish the designated goods or services as being those of the applicant.

(4)This subsection applies to a trade mark if:

(a)the trade mark is, to some extent, but not sufficiently, inherently adapted to distinguish the designated goods or services from the goods or services of other persons; and

(b)the trade mark does not and will not distinguish the designated goods or services as being those of the applicant having regard to the combined effect of the following:

(i)the extent to which the trade mark is inherently adapted to distinguish the goods or services from the goods or services of other persons;

(ii)the use, or intended use, of the trade mark by the applicant;

(iii)any other circumstances.

Note 1:Trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate:

(a)    the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or

(b)    the time of production of goods or of the rendering of services.

Note 2:For goods of a person and services of a person see section 6.

Note 3:Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (5) and 7(3) and section 8).

1. Under s 33 of the Act, the Registrar must accept a trademark for registration unless satisfied, on the balance of probabilities, that there is a ground for rejecting it.[4]

   [4] Chocolaterie Guylian N.V. v Registrar of Trade Marks [2009] FCA 891, [16].

2. My decision is not a review of the examiner’s approach. I must consider this matter afresh.

3. The Applicant has not provided any evidence. Nonetheless, I have been provided with more detailed submissions from Mr Petale which includes a ‘comparison with analogous prior trade marks’. In other words, I must decide if the Trade Mark is prima facie capable of distinguishing the Applicant’s Services from those of other traders because in the absence of evidence I have no basis for applying the provisions of ss 41(3) or 41(4) of the Act. In the interest of completeness, I do not think the Applicant’s arguments about the state of the Register of Trade Marks (‘the Register’) constitute ‘other circumstances’ pursuant to s 41(4) of the Act.

‘Inherently adapted to distinguish’

1. The approach to whether a trade mark is inherently adapted to distinguish was considered by Kitto J in the case of Clark Equipment Co v Registrar of Trade Marks (‘Clark’)[5]

   That ultimate question must not be misunderstood. It is not whether the mark will be adapted to distinguish the registered owner’s goods if it be registered and other persons consequently find themselves precluded from using it. The question is whether the mark, considered quite apart from the effects of registration, is such that by its use the applicant is likely to attain his object of thereby distinguishing his goods from the goods of others.

   …

   [T]he question [is] whether a mark is adapted to distinguish be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives - in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess - will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it. ^[6]

   [5] (1964) 111 CLR 511.

   [6] Ibid, at [513–514].

2. Importantly, it is not whether other traders are currently using that name in the course of trade that I must consider, but rather, in the words of Kitto J: ‘the common right of the public to make honest use of words forming part of the common heritage, - for the sake of the signification they ordinarily possess’.

3. More recently, the High Court in Cantarella Bros Pty Limited v Modena Trading Pty Limited[7] (‘Cantarella’) applied this same part of Kitto J’s test. Thus, an Internet search for uses of the Trade Mark can be useful, but it is by no means decisive in deciding whether or not a ground for rejection under s 41 should apply.

   [7] [2014] HCA 4, [59].

4. The ordinary signification of the Trade Mark is to be determined by reference to the target audience for the Applicant’s Services, which in this case are potential purchasers, consumers and traders in Australia of: electronic funds transfer services; electronic money transfer services; electronic payment services; financial payment services; financial services; financial transaction services and computerised transfer of funds.

5. In broad terms, the Applicant argues that the Trade Mark is capable of distinguishing the Applicant’s Services and that there are many analogous trade marks on the Register that were not subject of a s 41 ground for rejection. Accordingly, it says the Trade Mark must be accepted for possible registration.

6. Section 41 of the Act points to there being a range of inherent capacity to distinguish, and this starts with those marks which are simply allusory and therefore inherently capable of distinguishing, to those which are a ‘direct reference to the goods’. Somewhere between these limits lie trade marks which are to some extent inherently adapted to distinguish (s 41(4)).

7. The Applicant concedes that the Trade Mark has descriptive properties but argues that the Trade Mark only alludes to the nature of the Applicant’s Services and it is therefore inherently adapted to distinguish.

8. Case law on the subject of s 41 is legion and for the present purposes I think it useful to consider the context in which the trade mark ‘Tub Happy’ was found to be no more than a ‘covert and skilful allusion’ to clothing. In that regard, Williams J stated:

   The words contain at most a "covert and skilful allusion" to the quality of washability which is characteristic of articles of clothing made of some kinds of material including cotton. At most they create an impression that this is what they are intended to convey. They do not trespass upon the rights of other traders to use any ordinary English words or phrases referring to the washable qualities of their goods…No doubt the words are intended to "contain a meaning - a meaning is wrapped up in them if you can only find it out.”: see the speech of Lord Macnaghten in the Solio Case (1898) AC, at p 583 . And it may not be hard to find out that meaning but the words do not refer in any ordinary sense, laudatory or otherwise, to any character or quality of articles of clothing, still less do they do so directly.[8]

   [8] Mark Foy’s Ltd v Davies Coop & Co Ltd4 at p201. (‘Tub Happy’).

9. The High Court in Cantarella applied the principles in Tub Happy (above) and found that the trade marks ORO and CINQUE STELLE were distinctive for coffee, because even though these words were used in connection with a familiar beverage consumed by many, only a ‘very small minority’ of English speakers in Australia would understand the meaning of the words ORO and CINQUE STELLE being ‘gold’ and ‘five stars’.

10. With this in mind, the consideration of the Trade Mark’s inherent adaptation to distinguish requires substantially more than simply discerning the meaning of the words ‘Token’ and ‘Secure’. I must also consider the legitimate desire of other traders to use the words for the sake of that meaning in respect of the same or similar services.

11. Mr Petale claims that the word ‘token’ has many different meanings and that his searches of the Register have found at least 19 registered trade marks containing the suffix –SECURE and another descriptive term, and registered with respect to finance-related services in class 36. He outlines 14 of these trade marks in more detail in his submissions. In this regard, I agree that two of these examples, LENSSecure and PAYSECURE are particularly analogous to the Trade Mark. On this same point Mr Petale says:

    If PAYSECURE can be found to be sufficiently capable of distinguishing a payment processing service where the mark clearly is suggestive of [a] services which allows “secure payments”, TokenSecure must also necessarily be registrable given that the term “token” is far less commonly utilized or understood than “pay”.

    We further submit that it is necessary in order to maintain the integrity and public confidence in the Register for decisions to be consistent with previous decisions, especially where they are directly analogous to each other, as is the case here, and in the absence of any further differentiating services.

12. This argument is a ‘whataboutism’. For brevity, although I agree that consistency in decision making is highly desirable, I am also not bound to perpetuate mistakes on the Register. That is not to say that I think these prior trade marks (those the Applicant argues are analogous to the Trade Mark) were accepted in error. I cannot comment on the state of the relevant market and consumer knowledge at the time each of these prior trade marks was accepted.

13. To quote the examiner in the second examination report: ‘A term that was once illusory (sic) or suggestive may lose its distinguishing and origin-denoting characteristics through use in a descriptive sense over a period of time’.

14. At this time and, indeed, at the filing date of the application, a ‘secure token’ or a ‘security token’ are prevalent and commonly understood terms in cryptography, and subsequently in banking and payment systems (which these days fundamentally relies on cryptography to provide security). A secure token is a device (physical or virtual) that the bearer presents to a payment system to authenticate themselves.  For example, with Apple Pay®, your iPhone is your secure token. Modern banking services rely heavily on these security tokens as one core factor in multi-factor authentication (‘MFA’), and it is generally considered the ‘something you have’ part of MFA. Other factors include ‘something you know’, i.e., generally a password.

15. In other words, once I turn to the question of what the Trade Mark means to the relevant market of the Applicant’s Services I think that they would understand that such financial and funds transfer services would be processed using a secure token or a security token. In the context of the Applicant’s Services the ordinary signification of the Trade Mark is apparent.

16. I am satisfied that the Trade Mark is more than a ‘covert and skilful allusion’. The Trade Mark refers in an ordinary sense to a feature or quality of the Applicant’s Services. That is, the ordinary signification of the Trade Mark is a financial service that employs a secure token and/or a security token.

17. This finding, however, is not fatal to the application, for it is necessary that I also consider the second element of the test set out in Cantarella, namely, whether other traders would be likely, without improper motive, to desire to use the Trade Mark upon or in relation to the Applicant’s Services for the sake of the ordinary signification of the joined words ‘TokenSecure’.

18. In that regard, I have carefully considered the Applicant’s submissions, however, I find that the previously discussed ordinary signification of the Trade Mark helps to inform my consideration of this second element.

19. The Trade Mark is merely a reversal and joining of the words ‘Secure Token’ which, as previously discussed, are words commonly understood and used in the relevant market for the Applicant’s Services. There are no other elements in the Trade Mark and it is devoid of any other embellishment. In my opinion, other traders who trade in the same and similar services to the Applicant’s Services should be able to use the Trade Mark, or something very similar, in connection with those services.

20. I find that the Trade Mark does not distinguish the Applicant’s Services from those of other traders and that the Trade Mark should be rejected.

Decision

33 Application accepted or rejected

(1)The Registrar must, after the examination, accept the application unless he or she is satisfied that:

(a)the application has not been made in accordance with this Act; or

(b)there are grounds under this Act for rejecting it.

Note:For this Act see section 6.

(2)The Registrar may accept the application subject to conditions or limitations.

Note:For limitations see section 6.

(3)If the Registrar is satisfied that:

(a)the application has not been made in accordance with this Act; or

(b)there are grounds under this Act for rejecting it;

the Registrar must reject the application.

Note:For this Act see section 6.

(4)The Registrar may not reject an application without giving the applicant an opportunity of being heard.

Note:For applicant see section 6.

1. As a delegate of the Registrar of Trade Marks, I am satisfied that there is a ground under the Act for rejecting the Trade Mark. I reject trade mark application no. 1830879.

Cristy Condon
Hearing Officer
Trade Marks Hearings
2 July 2018