KFC THC v Ltd v Grill'd IP Pty Ltd

*
TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
ReOpposition by KFC THC V Ltd to registration of the trade mark subject of application 2119899 (29, 30) – HFC – in the name of Grill'd IP Pty Ltd

Delegate: Robert Wilson
Representation: Opponent: Gabriella Rubagotti of Counsel, instructed by Baker McKenzie
Applicant: Ed Heerey KC, instructed by Davies Collison Cave Pty Ltd

Decision: 2023 ATMO 192
Trade Marks Act 1995 (Cth) - Section 52 opposition: ss 42(b), 44, 60 and 62A considered – none established – nexus between application and impugned behaviour of applicant considered – trade mark may proceed to registration

Background

This decision concerns an opposition to registration of the trade mark which is the subject of the application for registration detailed below. The application is in the name of Grill'd IP Pty Ltd (‘Applicant’). The opposition was brought by KFC THC V Ltd (‘Opponent’) pursuant to s 52 of the Trade Marks Act 1995 (Cth).[1]
[1] Unless otherwise indicated, any references to sections or regulations, below, are references to sections or regulations of the Trade Marks Act 1995 (Cth) or the Trade Marks Regulations 1995 (Cth), respectively.

Trade Mark:

HFC

(‘Applicant’s Trade Mark’)

Application Number:

2119899

Filing Date:

14 September 2020

Specification:

Class 29: (including) Foodstuffs and beverages in this class prepared for human consumption

Class 30: (including) Foodstuffs and beverages in this class prepared for human consumption

Full specification appears in the annexure to this decision.

(‘Applicant’s Goods’)

Following advertisement of the application’s acceptance in the Australian Official Journal of Trade Marks, the Opponent filed a Notice of Intention to Oppose registration of the Applicant’s Trade Mark, followed by a Statement of Grounds and Particulars (‘SGP’). The SGP nominated grounds of opposition under ss 42(b), 43, 44, 60 and 62A. The Applicant subsequently filed a Notice of Intention to Defend.
Evidence
The Opponent filed Evidence in Support of its opposition, being:
·Declaration made on 19 October 2021 by Sally Spriggs, the Marketing Director at Kentucky Fried Chicken Pty Ltd, with Annexures SS-01 to SS-42 (‘Spriggs declaration’).
The Applicant filed Evidence in Answer, being:
·Declaration made on 5 September 2022 by Aimee Pomogacs, the Group Legal Counsel of the Applicant, with Exhibits AP-1 to AP-30 (‘Pomogacs declaration’); and
·Declaration made on 6 September 2022 by Nicholas Butera, Registered Trade Mark Attorney and Senior Associate employed by Davies Collison Cave Pty Ltd, with Exhibits NPB-1 to NPB-18 (‘Butera declaration’).
The Opponent did not file Evidence in Reply.
Once the time allowed for filing evidence had ended both parties requested to be heard. I am a delegate of the Registrar of Trade Marks. In that capacity, I heard the matter on 1 September 2023. Gabriella Rubagotti of Counsel, instructed by Baker McKenzie, appeared for the Opponent. Ed Heerey KC, instructed by Davies Collison Cave Pty Ltd, appeared for the Applicant. Counsels’ oral submissions were supplemented by written submissions filed prior to the hearing.
The Opponent
According to the Spriggs declaration:
The Opponent is part of an international group of companies (‘Yum! Group’) which operates a network of wholly owned and franchised restaurants. The Yum! Group operates and franchises restaurants under a number of brands, including KFC, Pizza Hut and Taco Bell in Australia. The Yum! Group comprises over 1.5 million employees and franchise associates globally and it operates restaurants in more than 150 countries and territories.
KFC, originally known as ‘Kentucky Fried Chicken’, is a global quick service restaurant brand which it headquarters in Louisville, Kentucky, USA. It was founded by Colonel Harland Sanders … in Kentucky in 1930 …
By 1963, there were 600 ‘Kentucky Fried Chicken’ restaurants across the United States and Canada. …
Key elements of the KFC brand were developed in the 1950s and remain in use today. These include:
(a)red and white vertical stripes;
(b)‘It’s Finger Lickin’ Good’ slogan; and
(c)Colonel Sanders’ image.
The first ‘Kentucky Fried Chicken’ franchise opened in Guilford, NSW on 27 April 1968. …
The Yum!Group first adopted the name ‘KFC’ in 1991. The initials ‘KFC’ were already widely used by consumers in the marketplace to refer to ‘Kentucky Fried Chicken’ restaurants. …
[I]n the 1990s the number of KFC restaurants in Australia was expanded to 370 restaurants.
There are now over 25,000 KFC restaurants in more than 145 countries and territories around the world … In Australia, there are over 680 KFC restaurants and over 34,000 local employees.
The Opponent is the owner of a number of registered trade marks which are, variously, comprised solely of the letters ‘KFC’, the letters ‘KFC’ in combination with a drawn representation of Mr Sander’s face, and those two things in combination with vertical red and white stripes. The Opponent also owns a number of trade marks which are comprised solely of the words ‘It’s Finger Lickin’ Good’, solely of the words ‘Finger Lickin’ Good’ and solely of red and white vertical stripes.
The Applicant
According to the Pomogacs declaration:
The Applicant, its predecessors in title, related entities and franchises operated, and operate, a chain of restaurants throughout Australia under the name GRILL’D (‘Grill’d Business’), and have done so since as early as March 2004. …
There are currently more than 150 GRILL’D branded restaurants in Australia. …
One of the key aspects of the Grill’d Business’s brand positioning is and always has been a focus on selling ‘healthy’ and ‘natural’ products. Several of its trade mark registrations incorporate the word ‘healthy’, dating back to registration No. 1072303 filed on 29 August 2005. …
In 2020, the Grill’d Business decided to expand its range of chicken products, and, in particular, to include a range of healthier and more natural fried chicken products
Grounds of Opposition, Onus and Standard of Proof
As indicated above, in the SGP the Opponent nominated grounds of opposition under ss 42(b), 43, 44, 60 and 62A. At the hearing Counsel for the Opponent indicated that the s 43 ground was not pressed. The onus of proof in an opposition rests upon the Opponent.[2] The relevant standard of proof is the ordinary civil standard based on the balance of probabilities.[3] The date at which the rights of the parties are to be determined is 14 September 2020, being the filing date of the application (‘Relevant Date’).[4] The Relevant Date is also the priority date for the purposes of ss 44 and 60.
Discussion
[2] Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58, [32] (Keane CJ, Stone and Jagot JJ).
[3] Telstra Corporation Limited v Phone Directories Company Ltd [2015] FCAFC 156, [132]-[133] (Besanko, Jagot and Edelman JJ).
[4] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1954] HCA 82, [2] (Kitto J).
Section 44
In the SGP the Opponent indicated that it relied upon trade mark registrations it owns ‘for marks which consist of or incorporate KFC’. In its submissions the Opponent indicated that ‘the following three trade marks … warrant particular note’. The three trade mark numbers indicated were 559801, 1580067 and 1985454 (‘KFC Marks’). Those three registrations are all for the sign ‘KFC’ solus and cover a number of goods and services in a number of classes. Of particular relevance here are the goods included in Classes 29 and 30 of those registrations. Those goods include the following (it is noted that 1985454 does not include any Class 29 or 30 goods):

Trade Mark Number ‘Example Goods’

559801

Class 29: Chicken and poultry products, food products containing chicken or poultry as a major ingredient, potato chips, mashed potatoes, gravy and salads

Class 30: Sandwiches, bread, biscuits, muffins, prepared peppers, prepared corn, beans in this class, prepared green beans, desserts and confectionery

1580067

Class 29: Prepared meals in this class

Class 30: Sandwiches; sandwiches containing chicken; burgers contained in bread rolls; chicken burgers contained in bread rolls; wraps (sandwiches); wraps containing chicken; tortillas; pita bread; filled rolls; filled rolls containing chicken; pies; chicken pot pies

It is not controversial that the KFC Marks represent the high water mark for this ground of opposition and that if the Opponent can not establish this ground of opposition in respect of those trade marks the ground cannot succeed in reliance on any other trade mark(s) owned by the Opponent.
Relevant provisions of s 44 are reproduced below:
Section 44 - Identical 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.
Section 10 - Definition of deceptively similar
For the purposes of this Act, a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion.
To successfully oppose the applications pursuant to s 44 the Opponent must establish that at least one of the KFC Marks:
·     has a priority date which is earlier than the Relevant Date (‘the first requirement’);
·     is in respect of at least some goods which are similar to the Applicant’s Goods, or closely related to the services, (‘the second requirement’); and
·     is substantially identical with or deceptively similar to the Applicant’s Trade Mark (‘the third requirement’).
The first requirement
The KFC Marks all have a priority date which is earlier than the Relevant Date, thus satisfying the first requirement.
The second requirement
The Applicant’s Goods include broad claims for foodstuffs and beverages in each of Classes 29 and 30. Those goods are similar to the Example Goods. The second requirement is therefore satisfied in respect of at least the 559801 and 1580067 registrations.
The third requirement
Substantially identical?
When considering ‘substantial identity’ in Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd, Windeyer J said:
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.[5]
[5] [1963] HCA 66, [12].
The Opponent submitted that on a side by side comparison of the Applicant’s Trade Mark and the KFC Marks, ‘a total impression of similarity’ emerges. The Opponent elaborated:
(a)the marks look substantially, which is to say, to a great extent, identical;
(b)the marks sound substantially … identical;
(c)the marks are conceptually the same, insofar as ‘FC’ dominates the visual and aural domains, and [the Applicant’s Trade Mark] is a plain word mark and thus is bereft of any design flourishes capable of engendering a total impression of dissimilarity so as to distinguish it from [the KFC Marks];
(d)the sole difference that does exist, being that between the phonemes /k/ and /tʃ/ that form only a part of the sounds of the initial letters of the marks, is inconsequential, observing that ‘H’ and ‘K’ are otherwise phonetically similar, sharing as they do the diphthong /eɪ/, and the ‘FC’ component is indeed wholly identical; it follows then, that the Applicant’s use of ‘H’ in its trade mark, c.f. ‘K’, does little to distinguish it.
In contrast, it is the Applicant’s submission that:
HFC is readily distinguished, on a side-by-side comparison, from KFC. …
(a)the first letter of each mark, and therefore one third of the total mark, is different;
(b)the marks are initialisms rather than acronyms, the result being the marks cannot be pronounced as a word and each letter must be pronounced individually – ‘kay eff see’ and ‘aitch eff see’ or (controversially ‘haitch eff see’); and
(c)the only commonality between the marks resides in the use of the descriptive letters FC which, in the context of the sale of fried chicken, are an obvious contraction of ‘fried chicken’.
It cannot be said, as the Opponent does … that the letters FC ‘dominates the visual and aural domains’, where those letters are presented in plain font, are an obvious contraction of the common words FRIED CHICKEN and are common to the trade.
The Applicant’s view that the ‘FC’ in the trade marks is ‘an obvious contraction of the common words FRIED CHICKEN’ may be so in connection with certain goods; however, neither of the parties’ goods are confined to fried chicken. I do not accept that FC is an obvious contraction of ‘fried chicken’ when used in connection with, say, mashed potatoes or pies. Nevertheless, I am in general, inclined to the Applicant’s view and am not satisfied that the respective trade marks are substantially identical.
Deceptively Similar?
Guidance for determining whether trade marks are deceptively similar is generally found in the judgment of Windeyer J in Shell Company of Australia Ltd v Esso Standard Oil (Aust) Ltd:
On the question of deceptive similarity, a different comparison must be made from that which is necessary when substantial identity is in question. The marks are not now to be looked at side by side. The issue is not abstract similarity, but deceptive similarity. Therefore the comparison is the familiar one of trade mark law. It is between, on the one hand, the impression based on recollection of the plaintiff’s mark that persons of ordinary intelligence and memory would have; and, on the other hand, the impressions that such persons would get from the defendant’s [trade mark].[6]
[6] Ibid [13].
Further guidance is to be found in Millennium & Copthorne International Limited v Kingsgate Hotel Group Pty Ltd, wherein Jacobson J stated:
Without seeking to reformulate the various statements of principle stated in the Full Court authorities, it is sufficient for present purposes to identify the critical elements which seem to me to inform the issue of deceptive similarity in the present case. There are nine elements.
First, the judgment of likelihood of deception is a practical one. It requires an assessment of the effect of the challenged mark on the minds of potential customers.[7]
Second, the question of deceptive similarity is not to be decided by a side-by-side comparison. It is to be determined by a comparison of the impression based on recollection of the opponent’s mark that persons of ordinary intelligence and memory would have, and the impression that those persons would get from the opposed trade mark.[8]
Third, allowance must be made for imperfect recollection.[9]
Fourth, the effect of the spoken description must be considered.[10]
Fifth, it is necessary to show a real tangible danger of deception or confusion.[11]
Sixth, a trade mark is likely to ‘cause confusion’ if the result of its use will be that a number of persons are ‘caused to wonder’ whether the two products come from the same source.[12] …
Seventh, all surrounding circumstances must be taken into consideration. The circumstances include those in which the marks will be used, and in which the goods or services will be bought and sold, as well as the character of the probable acquirers of the goods and services.[13]
Eighth, the question of whether there is a likelihood of confusion is not to be answered by reference to the manner in which a party has used the mark, but by reference to what an applicant can do. That is to say, the use to which it can properly put the mark if registration is obtained.[14]
Ninth, if a registered trade mark includes words which can be regarded as an ‘essential feature’ of the mark, another mark that incorporates those words may cause a tangible danger of deception or confusion by reason of consumers retaining an imperfect recollection of those words.[15] However, care must be taken to not too readily characterise words in a composite trade mark as an ‘essential feature’ because to do so may effectively convert a composite mark into something different.[16] [17]
[7] Registrar of Trade Marks v Woolworths Ltd [1999] FCAFC 1020, [49] (French, Branson and Tamberlin JJ); Australian Woollen Mills Ltd v FS Walton & Co Ltd [1937] HCA 51, 658 (Dixon, Evatt and McTiernan JJ).
[8] Crazy Ron’s Communications Pty Ltd v Mobileworld Pty Ltd [2004] FCAFC 196, [73] (Moore, Sackville and Emmett JJ); Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd [1963] HCA 66, 415 (Dixon CJ, McTiernan, Kitto, Taylor and Owen JJ).
[9] Crazy Ron’s Communications Pty Ltd v Mobileworld Pty Ltd [2004] FCAFC 196, [74] (Moore, Sackville and Emmett JJ).
[10] Registrar of Trade Marks v Woolworths Ltd [1999] FCAFC 1020, [49] (French, Branson and Tamberlin JJ); Crazy Ron’s Communications Pty Ltd v Mobileworld Pty Ltd [2004] FCAFC 196, [75] (Moore, Sackville and Emmett JJ); Australian Woollen Mills Ltd v FS Walton & Co Ltd [1937] HCA 51, 658 (Dixon, Evatt and McTiernan JJ).
[11] Registrar of Trade Marks v Woolworths Ltd [1999] FCAFC 1020, [43], [50] (French, Branson and Tamberlin JJ); Crazy Ron’s Communications Pty Ltd v Mobileworld Pty Ltd [2004] FCAFC 196, [76] (Moore, Sackville and Emmett JJ); Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592, 594–5 (Dixon CJ, Kitto, McTiernan, Webb, Fullagar and Taylor JJ).
[12] Registrar of Trade Marks v Woolworths Ltd [1999] FCAFC 1020, [50] (French, Branson and Tamberlin JJ); Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592, 595 (Dixon CJ, Kitto, McTiernan, Webb, Fullagar and Taylor JJ).
[13] Registrar of Trade Marks v Woolworths Ltd [1999] FCAFC 1020, [50] (French, Branson and Tamberlin JJ); Crazy Ron’s Communications Pty Ltd v Mobileworld Pty Ltd [2004] FCAFC 196, [86]–[89] (Moore, Sackville and Emmett JJ); Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592, 595 (Dixon CJ, Kitto, McTiernan, Webb, Fullagar and Taylor JJ).
[14] Registrar of Trade Marks v Woolworths Ltd [1999] FCAFC 1020, [50] (French, Branson and Tamberlin JJ); Berlei Hestia Industries Ltd v The Bali Company Inc [1973] HCA 43, 632 (Mason J).
[15] Crazy Ron’s Communications Pty Ltd v Mobileworld Pty Ltd [2004] FCAFC 196, [79] (Moore, Sackville and Emmett JJ).
[16] Ibid [100].
[17] [2012] FCA 1022, [37]–[46].
The Opponent submitted that the respective trade marks ‘look alike, sound alike and are conceptually the same’ and that it follows that the Applicant’s Trade Mark and the KFC Marks are deceptively similar. The Opponent further submitted that this conclusion ‘is readily informed’ by its analysis in respect of substantial identity.

The Applicant submitted that in respect of deceptive similarity, in addition to the points it outlined in respect of substantial identity, ‘there are a further two key points’ being:
(a)the effect of each letter being pronounced individually is that each letter is emphasised and is therefore less likely to be imperfectly recalled; and
(b)the marks are conceptually different with the letter H being a contraction of HEALTHY, compared to the letter K being a contraction for KENTUCKY.
The Applicant drew my attention to Australian Meat Group Pty Ltd v JBS Australia Pty Ltd.[18] That case concerned a comparison of two word marks, AMG and AMH. The Court found that the word marks AMG and AMH were not deceptively similar, noting that the letters AM would be understood to consumers in the relevant market as a contraction of ‘Australian Meat’.
[18] [2018] FCAFC 207 (Allsop CJ, Besanko and Yates JJ).
I am, again, inclined to the Applicant’s view. There are sufficient visual and aural differences between the trade marks such that I am not satisfied that the KFC Marks are deceptively similar to the Applicant’s Trade Mark. The Opponent has, therefore, failed to establish this ground of opposition.
Section 60
The particulars in the SGP for the ground based on s 60 include the following:
The Opponent’s related entities (KFC) operate one of the world’s leading and most famous chicken restaurant chains with over 25,000 restaurants in over 160 countries around the world.
KFC has been operating in Australia since 1968, when it opened its first restaurant in Guilford, Sydney NSW under the name ‘Kentucky Fried Chicken’. In 1991, KFC began operating its business by reference to the name and mark KFC … Since that time, the name and mark KFC has been used by KFC extensively in Australia, and globally. …
The Opponent is the owner of a family of registered and unregistered trade marks incorporating KFC, including the Opponent’s Prior Registrations incorporating KFC … (the Opponent’s KFC Trade Marks). …
The KFC Trade Marks have been used in Australia by KFC since 1991, in relation to the provision and promotion of KFC’s goods and services including in relation to a broad range of foods (including chicken products) and beverages, retail services relating to the provision of food and beverages, restaurants and takeaway services.
As at the Priority Date, the Opponent’s KFC Trade Marks had acquired a significant reputation in Australia, and globally, in relation to these goods and services.
By reason of the reputation in the Opponent’s KFC Trade Marks, use of [the Applicant’s Trade Mark] in relation to [the Applicant’s Goods] is likely to deceive or cause confusion.
Section 60 is reproduced below:
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.
To establish a ground of opposition under s 60 an opponent must demonstrate that at the Relevant Date there was another trade mark which had acquired a reputation in Australia amongst a significant number of persons in the relevant market such that use of the Applicant’s Trade Mark would be likely to deceive or cause confusion. The Opponent has stated that its trade marks, both registered and unregistered, which incorporate KFC have acquired such a reputation.
The Applicant conceded that ‘the Opponent’s KFC trade mark has acquired a substantial reputation in Australia in relation to fried chicken products and takeaway restaurant services’. As with the consideration under s 44, the high water mark for this ground lies with the substantial reputation acquired by KFC solus; consequently, it is unnecessary that any other of the Opponent’s KFC Marks be considered.
It is not sufficient that the Opponent merely establish that its trade mark has a significant reputation, I must also be satisfied that because of that reputation use of the Applicant’s Trade Mark would be likely to deceive or cause confusion. Discussions and decisions on the subjects of deception and confusion are plentiful and a good number provide relevant comments in relation to a consideration of deception and confusion for the purposes of s 60. In a case concerning infringement and passing off, 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 observation of men considered in the mass affords the standard.[19]
[19] (1937) 58 CLR 641, 658.
The concepts of ‘deceive’ and ‘confuse’ were explained in the New Zealand case of Pioneer Hi-Bred Corn Co v Hyline Chicks Pty Ltd, where Richardson J said:
‘Deceived’ implies the creation of an incorrect belief or mental impression and ‘causing confusion’ may go no further than perplexing or mixing up the minds of the purchasing public. Where the deception or confusion alleged is as to the source of the goods, deceived is equivalent to being misled into thinking that the goods bearing the applicant's mark come from some other source and confused to being caused to wonder whether that might not be the case.^[20]
[20] [1979] RPC 410, 423 (citations omitted).
It is well established that the kind of confusion contemplated by s 60 need not lead to actual purchase of the goods or services covered by the impugned trade mark. As Heerey J put it in Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd:
A probability of confusion, if it is real, is sufficient even though the confusion may be unlikely to persist up to the point of, and be a factor in, inducing actual sales. There may be confusion or deception in the minds of persons to whom the mark is addressed, even if actual purchasers will not ultimately be deceived.[21]
[21] (1997) 38 IPR 495, 501 (Heerey J) (citations omitted). His Honour’s remarks were made in the context of s 28 of the Trade Marks Act 1955 but are no less applicable to s 60 of the current Act.
In Registrar of Trade Marks v Woolworths Ltd French J highlighted the following further matters concerning confusion:
A trade mark is likely to cause confusion if the result of its use will be that a number of persons are caused to wonder whether it might not be the case that the two products or closely related products and services come from the same source. It is enough if the ordinary person entertains a reasonable doubt.
It may be interpolated that this is another way of expressing the proposition that the trade mark is likely to cause confusion if there is a real likelihood that some people will wonder or be left in doubt about whether the two sets of products or the products and services in question come from the same source.
In considering whether there is a likelihood of deception or confusion all surrounding circumstances have to be taken into consideration. These include the circumstances in which the marks will be used, the circumstances in which the goods or services will be bought and sold and the character of the probable acquirers of the goods and services.[22]
[22] [1999] FCA 1020, [50] (French, Branson and Tamberlin JJ). These considerations by French J are a restatement of the principles set out by Kitto J in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592, 594-5 (Dixon CJ, Kitto, McTiernan, Webb, Fullagar and Taylor JJ).
The Opponent submitted that because of the
very substantial reputation [acquired by the KFC trade mark]—particularly when coupled with the substantial identicality or at least deceptive similarity of [HFC to KFC] and the closeness of [the Applicant’s Goods] to the goods and services offered and sold in Australia by [the Opponent]—the use of [the Applicant’s Trade Mark] would be likely to deceive and cause confusion.
The Applicant submitted that the strength of the reputation acquired by KFC, ‘is a “compelling reason” why a person would not be caused to wonder whether chicken products bearing [the Applicant’s Trade Mark] were from the same source as those bearing the KFC mark’. The Applicant referred to two decisions to support this proposition. The first was the recent decision of Markovic J in Taylor v Killer Queen LLC (No 5).[23] The second was Singtel Optus Pty Limited v Optum Inc.[24] In the second case Davies J found that the strong reputation acquired by the OPTUS trade mark was a factor which militated against confusion arising from use of OPTUM as a trade mark:
It was submitted that the reputation in the OPTUS mark cannot be divorced from its spelling and pronunciation. I agree. I have found already that the marks are not substantially identical or deceptively similar. The differences in the marks and the strong reputation attaching to the OPTUS mark in relation to telecommunications makes it unlikely that consumers would be likely to be confused or deceived by the use of the OPTUM marks.[25]
[23] [2023] FCA 364, [791].
[24] [2018] FCA 575 (Davies J).
[25] Ibid [205].
As in the case just discussed, I found, under the consideration of the s 44 ground of opposition, that the respective trade marks are neither substantially identical nor deceptively similar. The substantial reputation acquired by the KFC trade mark serves only to militate against deception or confusion. Consequently, I am not satisfied that because of the reputation acquired by the KFC trade mark that the use of the Applicant’s Trade Mark would be likely to deceive or cause confusion. This ground of opposition is not established.
Section 42(b)
Section 42 is reproduced below:
42 Trade mark scandalous or its use contrary to law
An application for the registration of a trade mark must be rejected if:
(a) …
(b) its use would be contrary to law.
The onus is on the Opponent to establish that use of the Applicant’s Trade Mark would be, rather than could be, contrary to law on the balance of probabilities.[26] The relevant time for assessing whether the use of the Applicant’s Trade Mark would be contrary to law is at the Relevant Date but ‘looking forward to prospective conduct after registration’.[27]
[26] Advantage Rent-a-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683, [28] (Madgwick J).
[27] Time Warner Entertainment Co LP v Stepsam Investments Pty Ltd [2003] FCA 1502 [47] (Wilcox J).
The ground of opposition pursuant to s 42 was particularised in the SGP as follows:
The Opponent repeats the particulars provided in connection with Section 60 (above).
Use by the Applicant of [the Applicant’s Trade Mark] in relation to [the Applicant’s Goods] would, in view of the reputation of the Opponent and KFC in relation to the Opponent’s KFC Trade Marks:
(a) constitute misleading or deceptive conduct, and/or the making of a false representation contrary to the Australian Consumer Law, and/or
(b) involve a misrepresentation that the goods are associated with the Opponent that would lead to deception of the public, which misrepresentation is likely to cause damage to the Opponent and would therefore amount to the common law tort of passing off.
In the present matter the Opponent has failed to establish a ground of opposition under s 60. As the test for misleading or deceptive conduct under s 18 of the Australian Consumer Law (‘the ACL’) is a more stringent test than that for deception or confusion under s 60,[28] I am satisfied that the Opponent has also failed to establish that the use of the Applicant’s Trade Mark would be contrary to s 18 of the ACL.
[28] See, eg: Ownit Homes Pty Ltd v Ownit Conveyyancing Pty Ltd [2005] ATMO 47, [36] (Williams); Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191, 198 (Gibbs CJ).
Where a trade mark does not run afoul of s 18 of the ACL, neither will it run afoul of s 29 of the ACL, nor the tort of passing off. In Pacific Publications Pty Ltd v IPC Media Pty Ltd, Beaumont J considered—in connection with the superseded Trade Practices Act1974 (Cth) (‘TPA’)—that ‘the Court’s conclusion on s 52 would necessarily carry with it a conclusion on s 53(c) and (d)’.[29] Sections 53(c) and 53(d) of the TPA are the equivalent provisions to ss 29(1)(g) and 29(1)(h) of the ACL. Justice Hill in Re Equity Access Pty Ltd v Westpac Banking Corporation also addressed the relationship between s 52 of the TPA and passing off. His Honour considered that:
The scope for the operation of s 52 will thus be broader than that involved in the tort of passing off so that in a case such as the present where the claim is for the protection of the reputation in a name against the use of that name by another, failure to succeed under s 52 or s 53 will invariably mean that proceedings for passing off would likewise fail.[30]
[29] [2003] FCA 104, [107].
[30] [1989] FCA 506, [40] (citations omitted).
For these reasons I am not satisfied that use of the Applicant’s Trade Mark would be contrary to law. Therefore, the Opponent has failed to establish this ground of opposition.
Section 62A – Application made in bad faith
In the SGP, the ground under s 62A was particularised as follows:
The Opponent repeats the particulars provided in connection with Section 60 (above).
The Opponent relies on:
(a)use by KFC and its predecessors-in-title of the Opponent’s KFC Trade Marks over many years and KFC’s associated reputation in the food and beverage industry, in particular, quick service restaurants;
(b)[the Applicant] operates a chain of quick service restaurants in Australia, and prior to adopting [the Applicant’s Trade Mark] was aware of the Opponent's KFC Trade Marks, KFC's business and KFC's products and services; and
(c)the Applicant has used [the Applicant’s Trade Mark] in various marketing and promotional campaigns which adopt other well-known elements of the Opponent's KFC Trade Marks.
It can be inferred that, by applying to register the Opposed Trade Mark, the Applicant clearly intended to trade off the substantial reputation enjoyed by the Opponent in the Opponent's KFC Trade Marks.
Due to the established and widespread reputation in the Opponent's KFC Trade Marks, a person adopting proper standards would regard the decision to apply to register the Opposed Trade Mark to be made in bad faith, or reasonable and experienced persons in the field would view such conduct as falling short of accepted commercial behaviour.
Section 62A is reproduced below:
62A Application made in bad faith
The registration of a trade mark may be opposed on the ground that the application was made in bad faith.
The Explanatory Memorandum to the Trade Marks Amendment Bill 2006 provided some non-exhaustive examples of applications made in bad faith:
- persons who monitor new property developments, register the names of new developments as trade marks for a number of services and then threaten the property developers with trade mark infringement proceedings unless the developers licence or buy the trade marks;
- persons who have a history of applying for trade marks that are deliberate misspellings of other registered trade marks;
- persons who identify trade marks used overseas but with no Australian use as yet who then apply to register the trade marks in Australia for the express purpose of selling them to the overseas owners.
The case of Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) (‘Fry’) is a current leading Australian authority on this section of the Act. In that case, Dodds-Streeton J made the following comments:
Clearly the court, when considering bad faith, cannot apply a purely subjective test, called by Lord Hutton ‘the Robin Hood test’. The dishonest person or one with low standards cannot be permitted to obtain trade mark registrations in circumstances where a person abiding by a reasonable standard would not. The registration of a trade mark is designed to enable bona fide proprietors to protect their proprietary rights without having to prove unfair trading. Registration is not provided to help those with low moral standards. …
The words ‘bad faith’ suggest a mental state. Clearly when considering the question of whether an application to register is made in bad faith all the circumstances will be relevant. However the court must decide whether the knowledge of the applicant was such that his decision to apply for registration would be regarded as in bad faith by persons adopting proper standards.[31]
[31] Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) [2012] FCA 81, [24]-[26].
Her Honour continued later in the same decision:
The formulation in United Kingdom authority of bad faith as falling short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in a particular area is, in my view, an apt touchstone. An overly literal application may, however, tend to negate the relevance attributed to the applicant’s mental state in the combined test preferred in Harrison.
Further, in my view, mere negligence, incompetence or a lack of prudence to reasonable and experienced standards would not, in themselves, suffice, as the concept of bad faith imports conduct which, irrespective of the form it takes, is of an unscrupulous, underhand or unconscientious character.[32]
[32] Ibid [165]-[166].
The Opponent submitted that the application to register the Applicant’s Trade Mark was made in bad faith because, ‘it was designed to acquire a springboard or advantage by exploiting the reputation of the KFC Trade Marks’. In its submissions in respect of this ground the Opponent referred to ‘the considerable business goodwill and a substantial reputation in the KFC Trade Marks in Australia in relation to, inter alia, fried chicken food products’.
In considering this ground I have been asked to take into account trade marks used by the Opponent which include elements beyond ‘KFC’. The Opponent owns and uses trade marks which include indicia such as the words ‘FINGER LICKIN’ GOOD’, the visage of Colonel Sanders, a red and white stripe device, and the representation of a ‘bucket’ in which the Opponent’s goods may be purchased (collectively ‘KFC Indicia’). Various trade marks registered by the Opponent include one or more of the aforementioned indicia—the trade marks shown below are useful representative examples.

1845149

1845156

1943432

The Opponent uses the trade marks and indicia in circumstances including on buildings and packaging—some representative examples are provided below.

None of the KFC Indicia appear in the Applicant’s Trade Mark; however, the evidence shows that the Applicant has used some of these indicia in connection with its goods, including fried chicken products. This use is sometimes alongside the Applicant’s Trade Mark, sometimes not. It is this use of the indicia by the Applicant that the Opponent relies upon to support this ground of opposition. That the Applicant has used the indicia in connection with its goods is not disputed by the Applicant; nor does the Applicant dispute that these indicia are closely associated in the minds of consumers with the Opponent. There are a number of examples of this use in evidence—the below are representative.

In its submission that the application to register the Applicant’s Trade Mark ‘was designed to acquire a springboard or advantage by exploiting the reputation of the KFC Trade Marks’ the Opponent referred to the case of DC Comics v Cheqout Pty Ltd (‘DC Comics’)[33] to support the view that such a motivation constitutes bad faith. This case law, is in my view, doubtful precedent for a proposition that such a motivation in and of itself amounts to bad faith. Reference to ‘a springboard or advantage’ in DC Comics occurs twice; both in quotations rather than in statements by Bennett J. It is convenient to consider the second occurrence, first. The second occurrence appears in the following quotation taken from Fry:
Mr Fry’s conduct was exploitative and designed to acquire a springboard or advantage for his fledgling business. While it is unnecessary to decide the question, given his knowledge as at September 2004, an attempt to register the words “TENNIS WAREHOUSE” at that time may well have been regarded as in bad faith according to proper or ordinary commercial standards.[34]
[33] [2013] FCA 478 (Bennett J).
[34] Ibid [66]; Fry (n 31) [170].
The first reference occurs in a quote of submissions made by the Registrar of Trade Marks in DC Comics. There the Registrar submitted that Fry should be viewed as deciding that ‘conduct designed to acquire a springboard or advantage is not for that reason alone of an unscrupulous, underhand or unconscientious character’.[35]
[35] DC Comics (n 33) [57] (emphasis added).
Her Honour, in DC Comics, stated that the finding in Fry ‘that the “exploitative” conduct was not sufficient to establish the requisite bad faith was grounded in the facts of that case’.[36] In moving on to find bad faith established in DC Comics, her Honour considered the facts in that case, but made no explicit finding that the ‘springboard or advantage’ could in and of itself constitute bad faith. It is noted that Fry referred to a ‘springboard or advantage’ for a ‘fledgling business’. To the extent it might be relevant, it is clear from the evidence that the Applicant’s business is far from ‘fledgling’.
[36] Ibid [67].
The Applicant’s submissions focussed on two main aspects. Firstly, that the use of the indicia by the Applicant was for the purpose of comparative advertising. Secondly, that the use of the KFC Indicia, occurred after the Relevant Date, and that it is necessary that the Opponent establish the relevant intention as at the Relevant Date. In respect of the first the Applicant submitted:
The post priority conduct relied on by the Opponent is comparative advertising. The Applicant’s advertising is a cheeky, parodic comparison between the Opponent’s fried chicken and the Applicant’s healthier alternative.
Contrary to [the Opponent’s submissions], comparative advertising, by its very name, does not ‘attempt to associate itself with [the trade mark owner]’. On the contrary, its purpose is to compare competing products and in doing so distinguish those products from each other based on certain attributes said to be desirable, such as being a healthier alternative.
As set out in [the Pomogacs declaration] a key part of the Applicant’s marketing approach was to emphasise the healthier nature of the Applicant’s products as compared to those of its competitors (including the Opponent). …
In these circumstances it is incongruous for the Opponent to claim the Applicant’s comparative advertising falls short of acceptable commercial behaviour. …
Comparative advertising is expressly allowed by s 122(1)(d) [of the Trade Marks Act 1995 (Cth)]. It is a stretch indeed to suggest that such conduct expressly allowed by Parliament falls short of ‘acceptable commercial behaviour’.
The Applicant further submitted that comparative advertising does not fall short of the standards of reasonable commercial behaviour, ‘as it is not dishonest, or even unusual, business practice—particularly in the Quick Service Restaurant industry—to engage in advertising that brings another trader to mind in an amusing way, even if that annoyed the other trader’. As an example, the Applicant referred to an adverting campaign run by KFC UK premised on ‘Which other brand’s slogan should we use?’. The evidence shows that the campaign included the use of McDonald’s trade mark I’M LOVIN’ IT on the side of a mobile billboard parked outside of a McDonald’s store. Images included in the Butera declaration are reproduced below.

I am of the view that the demonstrated use of the KFC Indicia by the Applicant is unlikely to be considered unscrupulous, underhand, or unconscientious. In any event, it is not the character of the impugned use which is determinative here. For this ground of opposition to be successful the Opponent must establish that the application to register the Applicant’s Trade Mark was made in bad faith. None of the KFC Indicia appear in the Applicant’s Trade Mark—compare this with DC Comics where the applicant’s trade mark included the opponent’s indicia.
In the circumstances of this case, the application to register the Applicant’s Trade Mark would, at least, have to facilitate the use of the KFC Indicia by the Applicant for bad faith to be established. There is nothing before me that suggests the registration of the Applicant’s Trade Mark would facilitate the use of the KFC Indicia by the Applicant—or that it not being registered would hinder such use. Accordingly, I am not satisfied that the application to register the Applicant’s Trade Mark was made in bad faith. This ground of opposition is, therefore, not established.
Decision
Section 55 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.
The Opponent has failed to establish any of the grounds of opposition it nominated in the SGP. Accordingly, trade mark 2119899 may proceed to registration after one month from the date of this decision. If the Registrar is served with a notice of appeal before that time, I direct that registration shall not occur until either the appeal is withdrawn or a court so orders.
Costs
The Applicant 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 failed to establish a ground of opposition, I award costs against the Opponent under s 221 in line with the amounts in Schedule 8 of the Trade Marks Regulations 1995 (Cth).
Robert Wilson
Hearing Officer
Delegate of the Registrar of Trade Marks
27 November 2023

Annexure
The Applicant’s Goods
Class 29: Foodstuffs and beverages in this class prepared for human consumption; snack food products; all of the aforementioned goods being predominantly made from chicken, meat, poultry, game, fish, eggs, dairy, nuts, fruits and/or vegetables; burgers; meat burgers; vegetable burgers; fish burgers; chicken burgers; poultry burgers; game burgers; meat, chicken, poultry, fish and game, including hamburger patties; meat extracts; sausages; meat products; chicken products; vegetable products; fish products; poultry products; game products; chicken nuggets; fried chicken; food packs consistency primarily of fried chicken; fried fish; grilled meat; grilled fish; grilled chicken; grilled poultry; grilled game; processed meat, fish, poultry and vegetable based foods; croquettes; sandwich fillings; preserved, frozen, dried, candied and cooked fruits and vegetables including potato chips; vegetable salads; salads in this class; coleslaw; potato salad; salads containing meat, chicken, poultry, fish or game; fruit chips; fruit salads; pickles prepared from fruits and vegetables; potato and onion products included in this class; vegetable patties; eggs, milk and milk products including milk shakes and malted milks; beverages consisting predominantly of milk; milk based beverages; yoghurt based beverages; aerated beverages (predominantly of milk); almond milk based beverages; coconut milk and coconut milk based beverages; kefir (milk beverage); preserves and pickles; desserts in this class; cream desserts; cream products; cream dessert toppings; creme fraiche; curds; custard style products; desserts made wholly or principally of dairy products; dairy desserts (except ice cream or frozen yoghurt); yoghurt; dairy products; dairy puddings; edible jellies made from milk, fruit and vegetable products; jellies; fruit desserts; soya desserts
Class 30: Foodstuffs and beverages in this class prepared for human consumption; all of the aforementioned goods being predominantly made from coffee, tea, cocoa, flour, grains, pasta, cereals and/or rice; hamburgers; sandwiches, buns, rolls or burger rolls containing fried chicken; sandwiches, buns, rolls or burger rolls containing chicken; steak sandwiches; sandwiches; preparations made from bread; sandwiches containing meat, meat products, poultry, game, fish, egg, vegetables, steak or hamburgers; steaks, meat, poultry, game, fish, egg, vegetables, steak, patties or burgers contained in bread rolls; steaks and hamburgers (sandwich with filling); bread buns; hamburgers in buns; burgers in buns; bread; biscuits; pastries; cakes; confectionery; prepared desserts (chocolate based); flavoured toppings for desserts; prepared desserts (confectionery); prepared desserts (pastries); dessert mousses (confectioner); frozen desserts; ice cream desserts; ice desserts; mousse desserts; muesli desserts; non-dairy frozen dessert products; souffles (desserts); salads in this class; pasta salads; rice salads; salad dressings; salts included in this class, pepper, mustard, sauces, spices, vinegar, sauces (condiments); relishes

Trade Mark:	HFC	(‘Applicant’s Trade Mark’)
Application Number:	2119899
Filing Date:	14 September 2020
Specification:	Class 29: (including) Foodstuffs and beverages in this class prepared for human consumption Class 30: (including) Foodstuffs and beverages in this class prepared for human consumption Full specification appears in the annexure to this decision. (‘Applicant’s Goods’)

[2023] ATMO 192

27 November 2023