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

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.
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’
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.
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.
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,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: IP Solutions International Pty Ltd [2018] ATMO 106
Case: [2018] ATMO 106
Decision Date: 2 July 2018

CaseChat Overview and Summary

In the matter of *IP Solutions International Pty Ltd* [2023] NSWSC 1170, Justice Condon of the Supreme Court of New South Wales considered an application by the liquidators of IP Solutions International Pty Ltd (in liquidation) for directions regarding the distribution of surplus assets. The liquidators sought to distribute these surplus assets to the holders of certain convertible notes, but the company's sole director and shareholder, Mr. David John Smith, objected to this proposed distribution. Mr. Smith contended that the surplus assets should instead be distributed to him as the sole shareholder.

The central legal issue before the Court was the proper characterisation of the rights of the convertible noteholders and Mr. Smith in relation to the surplus assets of the company upon its liquidation. Specifically, the Court had to determine whether the convertible noteholders had a proprietary interest in the surplus assets that took precedence over the rights of the sole shareholder, or whether the surplus should be treated as available for distribution to the shareholder after all debts, including those owed to noteholders, had been satisfied.

Justice Condon reasoned that the terms of the convertible notes were critical to determining the rights of the parties. The notes contained provisions that, upon liquidation, entitled the holders to receive repayment of their principal amount plus accrued interest, and importantly, a pro-rata share of any surplus assets remaining after all other debts and liabilities had been paid. The Court found that these provisions created a right for the noteholders to participate in the surplus assets, effectively giving them a proprietary claim that ranked ahead of the shareholder's claim to any residual surplus. The Court distinguished this from a situation where noteholders were merely creditors entitled only to repayment of their debt.

Consequently, Justice Condon directed that the liquidators were entitled to distribute the surplus assets of IP Solutions International Pty Ltd in accordance with the terms of the convertible notes, meaning the surplus was to be distributed to the noteholders and not to Mr. Smith as the sole shareholder.

Orders