Italservices SpA v Soulcycle Inc

[2015] ATMO 110

TRADE MARKS ACT 1995

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

Re:Opposition by Italservices SpA to registration of trade mark application 1576291(25) - SOULCYCLE - filed in the name of Soulcycle Inc.

Delegate:	Iain Campbell Thompson
Representation:	Opponent: Did not attend or file submissions Applicant: Georgina Hey, Special Counsel, Norton Rose Fulbright
Decision:	2015 ATMO 110 S52 opposition; grounds under section 44, 60, 42 and 59 not established

Background

1. In this matter Soulcycle Inc, (‘the Applicant’) has applied under the Trade Marks Act 1995 (‘the Act’) to register the trade mark appearing below:

Application No:  1576291
Priority Date:  22 August 2013

Goods/Services:  Class 25: Clothing, footwear, headgear; pants, drawstring pants, sweat pants, shorts, exercise tights, shirts, tops, sleeveless tops, thermal shirts, long-sleeve tops, sweaters, t-shirts, tank tops, sports bras, jackets, hooded pullovers, socks, bandanas, wristbands; shoes, flip flops, bathing suits, scarves

(‘the Goods’)

Trade Mark:  SOULCYCLE

(‘the Trade Mark’)

1. The Trade Mark was examined as is mandated by section 31 of the Act and advertised as accepted for possible registration on 20 February 2014 in the Australian Official Journal of Trade Marks.

2. On 17 April 2014 Italservices SpA filed Notice of Intention to Oppose, followed on 19 May 2014 by its Statement of Grounds and Particulars.  On 27 June 2014 the Applicant filed a Notice of Intention to Defend.

3. Both parties have filed evidence (which I further discuss, below) as allowed by the Trade Mark Regulations 1995 (‘the Regulations’).

4. The Applicant has requested to be heard and appeared before me at a hearing in Sydney on 15 October 2015 represented by Georgina Hey, Special Counsel, of Norton Rose Fulbright Australia.  The Opponent did not appear or put in written submissions.

Onus & Relevant Date

1. The Opponent bears the onus of establishing one or more grounds of opposition on the balance of probabilities.[1]

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

2. The relevant date at which the grounds must be considered is the filing date of the Trade Mar.[2] which is here the same as the priority date.

   [2] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592; The Seven Up Company v O.T. Limited (1947) 75 CLR 203 at 211; Rael Marcus v Sabra International Pty Ltd (1995) 30 IPR 261 at 266.

Evidence

1. The evidence filed in relation to the matter is comprised of:

   Evidence in Support

   Philip James Macken, registered Patent Attorney, made on 13 October 2014 with Exhibits PJM-1 to PJM-5

   Evidence in Answer

   Frances McNeil Drummond, Partner of Norton Rose Fulbright Australia, made on 20 January 2015 with Exhibits FMD-1 to FMD-2.

   Elizabeth Cutler, Co-Founder of the Applicant, made on 19 January 2015 with Exhibits 1 to 61.

2. Mr Macken’s declaration establishes that the declarant is a registered patent attorney who has the carriage of this matter for the Opponent.

3. Mr Macken states:

   I understand that the Opponent is the worldwide licensee of the trade mark, CYCLE (logo) (shown below), which is the subject of Australian trade mark registration no. 946697 (IR 796767):

   Annexed hereto and marked ‘Annexure PJM-1’ is a bundle of extracts from the Australian Trade Marks Office On-line Search System (‘ATMOSS’) database records showing details of several Australian trade mark registrations and an application for marks including the word, CYCLE, covering class 25 goods. The trade mark registrations and application of Annexure PJM-1 all have priority dates earlier than the priority date of the Application, being 22 August 2013.

4. I note that all of the trades marks relied upon by the Opponent have third-party owners.  Details of the prior trade marks on which the Opponent relies are:

Registration No:  946697
Filing Date:  18 November 2002
Goods:  Class 25: Clothing, footwear, headgear
Trade Mark:  

(‘the Cycle trade mark’)

Registration No:  1069456
Filing Date:  11 August 2005
Goods:  Class 9: Bicycle computers and related software 

Class 12: Bicycle components and accessories, namely bicycle wheels, bicycle wheel hubs

Class 25: Clothing, namely shirts, shorts and jerseys

Trade Mark:  CYCLE OPS

Registration No:  1389428
Filing Date:  19 October 2010
Goods/Services:  Class 25: Clothing, footwear and headgear

Class 35: Retailing and wholesaling services including retailing and wholesaling of clothing, footwear and headgear

Trade Mark:  Lovecycle

Registration No:  1500024
Filing Date:  3 July 2012
Goods:  Class 12: Bicycles

Class 25: Apparel (clothing, footwear, headgear)

Trade Mark:  Cycles Galleria

Registration No:  1527121
Filing Date:  3 October 2012

Goods/Services:  Class 12: Bicycles; sports bicycles; all-terrain bicycles (mountain bikes); forks (parts of bicycles); seat posts (parts of bicycles); cranks (parts of bicycles); handlebars (parts of bicycles); stems (parts of bicycles); wheels (parts of bicycles); saddles (parts of bicycles); derailleur gears (parts of bicycles); brakes (parts of bicycles); pedals (parts of bicycles); tires (parts of bicycles); gear controls (parts of bicycles); aerodynamic handlebars (parts of bicycles); frames (parts of bicycles); special baskets for bicycles (parts of bicycles); luggage racks (parts of bicycles); steering wheels (parts of bicycles); wheel rims (parts of bicycles); spokes (parts of bicycles); inner tubes (parts of bicycles); valves (parts of bicycles); bands for wheel hubs (parts of bicycles); chains (parts of bicycles); nets (parts of bicycles); bells (parts of bicycles); stands (parts of bicycles); direction indicators  (parts of bicycles); gears (parts of bicycles); parts for all the aforesaid

Class 25: Clothing, footwear, headgear; all the aforesaid goods used for cycling, and excluding jeans and all other clothing not intended for cycling
Class 35: Bringing together for the benefit of others of various goods (excluding the transportation thereof) enabling the consumer to view and purchase them conveniently in the field of bicycles as well as parts and accessories thereof, sports bicycles as well as parts and accessories thereof, mountain bikes as well as parts and accessories thereof, clothing, footwear and headgear; retail sale via global computer networks (Internet) in the field of bicycles as well as parts and accessories thereof, sports bicycles as well as parts and accessories thereof, mountain bikes as well as parts and accessories thereof, clothing, footwear and headgear; retail sale in the field of bicycles as well as parts and accessories thereof, sports bicycles as well as parts and accessories thereof, mountain bikes as well as parts and accessories thereof, clothing, footwear and headgear; import-export agency services in the field of  bicycles as well as parts and accessories thereof, sports bicycles as well as parts and accessories thereof, mountain bikes as well as parts and accessories thereof, clothing, footwear and headgear

Trade Mark:  OPEN CYCLE

Registration No:  1606934
Priority Date:  11 January 2013 (Convention Claim via 302013011239.3/18
  Germany)

Goods:Class 18: Leather and imitations of leather and goods made of leather or of leather imitations, included in this class; bags (included in this class) and other cases not adapted to the product they are intended to contain as well as small articles of leather, included in this class; purses, pocket wallets, key cases; carrying bags, travelling bags, sports bags and sports pouches, included in this class, duffel bags, rucksacks, school bags, hip bags, toilet bags; trunks and travelling cases; umbrellas, parasols and walking sticks

Class 25: Clothing, footwear, headgear

Class 28: Games and playthings; gymnastic and sporting apparatus; gymnastic and sporting articles (included in this class); balls for games, golf balls; shin guards, knee, elbow and ankle pads for sports purposes; sporting gloves (included in this class); tennis rackets, cricket bats, golf clubs, hockey sticks, table tennis bats, badminton and squash rackets; bags for sporting articles adapted to the product they are intended to contain; adapted bags and coverings for tennis, badminton and squash rackets, table tennis and cricket bats; golf clubs and hockey sticks; roller skates, ice skates and in-line skates, tables and nets for table tennis

Trade Mark:  Incycle

1. Mr Macken in his declaration in support continues:

   Annexed hereto and marked ‘Confidential Annexure PJM-2’ is a bundle of copies of invoices issued by the Opponent to Pattini P/L [sic] in Melbourne showing use of the word mark, CYCLE, and the CYCLE logo. Each of these invoices predates the priority date of the Application, being 22 August 2013. As shown in the various invoices, these invoices are in relation to the sale of various clothing items including shirts, t-shirts, jackets, pants, leather accessories, knitwear and fabric accessories.

2. The invoices mention the trade mark ‘CYCLE’ (in plain lettering) upon them but the trade mark appearing at the head of the invoices is that appearing below on which the word ‘cycle’ can just be discerned:

(‘the Y Cycle trade mark’)

1. Subsection 7(1) of the Act provides:

   7Use of trade mark

   (1)If the Registrar or a prescribed court, having regard to the circumstances of a particular case, thinks fit, the Registrar or the court may decide that a person has used a trade mark if it is established that the person has used the trade mark with additions or alterations that do not substantially affect the identity of the trade mark.

   Note:For prescribed court see section 190.

2. The expression ‘substantially affect the identity’ within subsection 7(1) closely equates to the expression ‘substantially identical’ which has been considered by the Courts in, for example, Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd[3]:

   In considering whether marks are substantially identical they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison. “The identification of an essential feature depends”, it has been said, “partly on the Court’s own judgment and partly on the burden of the evidence that is placed before it”: de Cordova v. Vick Chemical Co. (1951) 68 RPC 103, at p 106. Whether there is substantial identity is a question of fact: see Fraser Henleins Pty Ltd v. Cody [1945] HCA 49; (1945) 70 CLR 100, per Latham C.J. (1945) 70 CLR, at pp 114, 115, and Ex parte O’Sullivan; Re Craig [1944] NSWStRp 28; (1944) 44 SR (NSW) 291, per Jordan C.J. (1944) 44 SR (NSW), at p 298, where the meaning of the expression was considered.

   [3] [1963] HCA 66; (1963) 109 CLR 407 per Windeyer J at [12].

3. The features of the Y Cycle trade mark appearing on the Opponent’s invoices are indistinct but it is apparent on a side by side comparison that the Y Cycle trade mark bears scant resemblance to the Cycle trade mark. In terms of subsection 7(1) of the Act this is not a use of the Cycle trade mark with alterations or additions which do not substantially affect its identity.

4. Mr Macken states:

   I understand from the Opponent’s Italian instructing attorneys that the Opponent is also using the CYCLE logo, in Australia, in relation to hats and shoes. Annexed hereto and marked ‘Annexure PJM-3’ is a bundle of printouts from the website ‘ which show use of the CYCLE logo in relation to various goods including beanies and sneakers. I note that reference is made to this website on each of the invoices the subject of ‘Confidential Annexure PJM-2’.

5. Again I note that the trade mark which is used on this website is that immediately below and that, in terms of the provisions of subsection 7(1) of the Act, this is not a use of the Cycle Trade Mark with alterations or additions which do not affect its identity.

6. It is apparent when viewing the above trade mark (again ‘the Y Cycle trade mark’) that the Cycle trade mark appears on the downwards ‘leg’ of the highly stylized alphabetical letter ‘Y’ which corresponds to the alphabetical letter ‘Y’ within the Cycle trade mark.  The impact of this stylized letter is substantial and cannot be disregarded; indeed, the word ‘Cycle’ appearing on the downwards leg of the alphabetical letter ‘Y’ is arguably inferior or subservient to the alphabetical letter.

7. Finally, Mr Macken states:

   Annexed hereto and marked ‘Annexure PJM-4’ is a bundle of printouts (being screen shots) from the website ‘ showing use of the trade mark, Cycles Galleria, in relation to clothing, footwear and hats.

   Annexed hereto and marked ‘Annexure PJM-5’ is a printout from the website ‘ being screen shots from the website.

8. The screen shots that Mr Macken refers to are very small and illegible.  The most obvious use of the trade mark CYCLES GALLERIA, the subject of Australian trade mark registration 1500024, above, is in a script resembling handwriting at the top of each page which also show various cycling clothing available for purchase.

9. There is no need, at this juncture, to discuss the Applicant’s evidence.

Section 44

1. Section 44 of the Act relevantly provides:

   44Identical etc. trade marks

   (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:For deceptively similar see section 10.

   Note 2:For similar goods see subsection 14(1).

   Note 3:For priority date see 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. The registrations upon which the Opponent relies have earlier priority dates (or filing dates) than that of the Trade Mark and are in respect of similar goods.  Those goods either expressly or implicitly include cycle or bicycle clothing and the similarity of the trade marks in question must be assessed in the light of the lack of inherent adaptation of the word ‘cycle’, solus, in relation to the Goods.

3. I am minded of the words of Stephen J in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd[4] (‘Hornsby’)

   There is a price to be paid for the advantages flowing from the possession of an eloquently descriptive trade name. Because it is descriptive it is equally applicable to any business of a like kind, its very descriptiveness ensures that it is not distinctive of any particular business and hence its application to other like businesses will not ordinarily mislead the public. In cases of passing off, where it is the wrongful appropriation of the reputation of another or that of his goods that is in question, a plaintiff which uses descriptive words in its trade name will find that quite small differences in a competitor’s trade name will render the latter immune from action (Office Cleaning Services Ltd. v. Westminster Window and General Cleaners Ltd. (1946) 63 RPC 39, at p 42, per Lord Simonds). As his Lordship said (1946) 63 RPC, at p 43, the possibility of blunders by members of the public will always be present when names consist of descriptive words - “So long as descriptive words are used by two traders as part of their respective trade names, it is possible that some members of the public will be confused whatever the differentiating words may be.” The risk of confusion must be accepted, to do otherwise is to give to one who appropriates to himself descriptive words an unfair monopoly in those words and might even deter others from pursuing the occupation which the words describe.

   [4] [1978] HCA 11; (1978) 140 CLR 216; (1978) 18 ALR 639; [1978] ATPR 40-067; (1978) 52 ALJR 392; [1978] ASC 55-010; (1978) 3 TPC 244; (1978) 1B IPR 818; 18 A Crim R 639 at [22]

4. So it is with the word ‘cycle’ in the trade marks upon which the Opponent relies where the word ‘cycle’ must be wholly discounted in respect of goods in Class 25 which either expressly or implicitly include clothing for cyclists.  In the case of the Cycle trade mark rights would appear to exist only in the particular manner that the word ‘Cycle’ is represented whilst the Goods include clothing for cyclists.

5. I also note that each of the trade marks on which the Opponent relies under section 44 contains the word ‘cycle’, is in respect of similar goods, and co-exists on the register of trade marks.

6. It follows that the allegedly conflicting trade marks under consideration are not deceptively similar to the Trade Mark and the Opponent has not established its opposition under section 44.

Sections 60 and 42(b)

1. Section 60 of the Act provides:

   60Trade 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.

   Note:For priority date see section 12.

2. And subparagraph 42(b) of the Act provides:

   42Trade mark scandalous or its use contrary to law

   An application for the registration of a trade mark must be rejected if:

   (a)the trade mark contains or consists of scandalous matter; or

   (b)its use would be contrary to law.

3. Here the Opponent alleges that the use of the Trade Mark by the Applicant would be contrary to the Australian Consumer Law (‘the ACL’), which is contained in Schedule 2 to the Competition and Consumer Act 2010, relying upon subsection 18(1) and subsections (g) and (h) of s 29, which subsections correspond to section 52 and subparagraphs 53(c) and (d) of the now repealed Trade Practices Act 1974 (‘the TPA’). Schedule 2 relevantly provides:

   Section 18: Misleading or deceptive conduct

   (1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

   Section 29: False or misleading representations about goods or services

   (1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:

   …

   (g) make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits; or

   (h) make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation;

   …

4. Moreover, these provisions of the ACL are to be considered at a higher standard (mislead or deceive) than similar considerations under section 60 of the Act which are at the lower standard of ‘confuse or deceive’. It thus usually follows that if an opponent cannot establish its opposition under section 60 of the Act then neither will it establish its opposition under paragraph 42(b) when arguing that use of the Trade Mark is contrary to the ACL. In Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd[5] Gibbs CJ said with respect to s 52 of the TPA:

   In McWilliam’s Wines Pty Ltd v McDonald’s System of Australia Pty Ltd (1980) 33 ALR 394 it was rightly held by Smithers J and by Fisher J that to prove a breach of s 52 it is not enough to establish that the conduct complained of was confusing or caused people to wonder whether two products may have come from the same source, and that Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592; 1A IPR 465, a decision on the Trade Marks Act 1905 (Cth) as amended, is distinguishable.

   [5] (1982) 1A IPR 684 at 688,

1. That said, both section 60 of the Act and the relevant sections of the TPA require the Opponent to establish that the trade mark upon which it relies has a reputation.

2. Concerning ‘reputation’ in McCormick & Co Inc v McCormick[6] (‘McCormick’) Kenny J said at [81]:

   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”.

and Heerey J in Le Cordon Bleu B.V. v Cordon Bleu International Ltee[7] said (albeit in relation to subparagraph 28(a) of the Trade Marks Act 1955) that the reputation required to be demonstrated was:

one of which a significant number of persons were aware…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.

[6] [2000] FCA 1335; (2000) 51 IPR 102; [2000] AIPC 38-192

[7] [2000] FCA 1587; (2000) 50 IPR 1.

1. The Opponent has not established that it (or the person from whom it licenses the Cycle trade mark) has used the Cycle trade mark in Australia; further, the trade mark which does appear in the Opponent’s evidence, the Y Cycle trade mark, has had very modest dissemination on goods through one distributor in Melbourne.

2. Neither the Y Cycle trade mark nor the Cycle trade mark has a reputation in Australia and, further, if either did have a reputation, the principle in Hornsby at [25] above is at play and any confusion is likely to stem from the nature of the trade marks rather than the reputation of either of the trade marks.

3. Regarding the reputation of the trade mark CYCLES GALLERIA, (of which the Opponent has shown some use on the Internet) in McCormick, Kenny J said at [86]:

   In practice, it is commonplace to infer reputation from a high volume of sales, together with substantial advertising expenditures and other promotions, without any direct evidence of consumer appreciation of the mark, as opposed to the product: see, e.g., Isuzu-General Motors Australia Ltd v Jackeroo World Pty Ltd (1999) 47 IPR 198; Marks & Spencer plc v Effem Foods Pty Ltd (2000) AIPC 91-560; Photo Disc Inc v Gibson (1998) 42 IPR 473; and RS Components Ltd v Holophane Corp (1999) 46 IPR 451. This Court has followed this approach as well, acknowledging that public awareness of and regard for a mark tends to correlate with appreciation of the products with which that mark is associated, as evidenced by sales volume, amongst other things. Thus, in Toddler Kindy Gymbaroo Pty Ltd v Gymboree Pty Ltd [2000] FCA 618 (“Gymboree”), Moore J accepted at [94] that the applicant had established a reputation for the purposes of s 60 solely on the basis of use and promotion of the relevant mark. Another example of this approach is Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd (1997) 38 IPR 495 (“Nettlefold”), in which Heerey J relied upon the public visibility of the applicant’s marks over approximately two decades as well as a $100,000 promotional campaign in finding that a reputation for the purposes of s 28 of the 1955 Act existed.

4. Evidence of mere use does not establish reputation.  There is no evidence before me of the type discussed by Kenny J, above, in order to assess the reputation of the trade mark CYCLES GALLERIA.

5. The Opponent has not established its grounds under section 60 and subparagraph 42(b) of the Act.

Section 59

1. Section 59 of the Act provides:

   59Applicant not intending to use trade mark

   The registration of a trade mark may be opposed on the ground that the applicant does not intend:

   (a)to use, or authorise the use of, the trade mark in Australia; or

   (b)to assign the trade mark to a body corporate for use by the body corporate in Australia;

   in relation to the goods and/or services specified in the application.

   Note:For applicant see section 6.

2. The Opponent has not led any evidence in relation to this ground and I find that it has not been established.

Decision

1. Section 55 of the Act relevantly provides:

   55Decision

   (1)Unless subsection (3) applies to the proceedings, 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. The Opponent has not established any of the grounds upon which it relied.

3. The trade mark application may then proceed to registration one month from the date of this decision.  If the Registrar has been served with a notice of appeal before that time, I direct that registration shall not occur until the appeal has been decided or discontinued and that the disposition of the application should be in accordance with the Court’s order or direction.

Costs

1. Having been successful, the Applicant is entitled to its costs which I award against the Opponent at the Official Scale set out at Schedule 8 to the Regulations.

Iain Campbell Thompson
Hearing Officer
Trade Marks Hearings
19 November 2015