Kingsgate Hotel Group Ltd v Millennium & Copthorne International Limited

[2011] ATMO 74

TRADE MARKS ACT 1995

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

Re:Opposition by Kingsgate Hotel Group Ltd to registration of trade mark application 1114029 (35 and 43) - KINGSGATE AND DEVICE - filed in the name of Millennium & Copthorne International Limited.

Delegate:	Bianca Irgang
Representation:	Opponent: Sam Ricketson of Counsel, instructed by Fetter Gdanski Applicant: Hamish Bevan of Counsel, instructed by DLA Phillips Fox
Decision:	2011 ATMO 74 Section 52 opposition: sections 41, 43, 58, 58A and 60 pressed at the hearing – s58A ground of opposition established for all goods and services – Opponent has demonstrated absolute first use of its trade mark in Australia - no requirement to consider other grounds - Costs awarded against the applicant.

Background

1. Millennium & Copthorne International Limited (‘the applicant’), filed trade mark application number 1114029 on 11 May 2006 in classes 35 and 43 of the International Classification of Goods and Services (‘Nice’ classification). Current details of the application are set out below.

   Trade mark:  

   Trade mark application:      1114029

   Filing Date:  11 May 2006

   Specification:  Class 35: Business management of hotels and motels and other temporary accommodation including serviced apartments and apartment hotels; public relations services in relation to temporary accommodation, including hotels and motels, serviced apartments and apartment hotels; marketing of temporary accommodation including hotels and motels, serviced apartments and apartment hotels including the advertising of the aforementioned services via the Internet and other global computer networks

   
   Class 43: Temporary accommodation services, accommodation (rental of temporary), catering (food and drink), rental of meeting rooms, restaurants, cafes, reservations of temporary accommodation; providing temporary housing accommodation; providing serviced apartments; hotel services

   Endorsements:  Provisions of subsection 44(4) applied.

2. The application was accepted for possible registration and advertised for opposition in the Official Journal dated 14 February 2008. Subsequently Kingsgate Hotel Group Ltd (‘the opponent’) filed a Notice of Opposition (‘the Notice’) dated 16 April 2008 to registration of the application. Thereafter the parties served and filed evidence in accord with the provisions of the Trade Mark Regulations 1995 (‘the Regulations’).

3. I heard the matter in Canberra as a delegate of the Registrar of Trade Marks on 9 August 2010. The opponent was represented by Mr Sam Ricketson of counsel, instructed by Fetter Gdanski. The applicant was represented by Mr Hamish Bevan of counsel, instructed by DLA Phillips Fox.

   Grounds of Opposition

4. The onus is upon the opponent to establish one or more of its grounds of opposition. Gyles J has referred to the standard of proof required in terms of a ‘balance of probabilities’[1]. His Honour’s findings upon that issue, arrived at after a consideration of the relevant authorities, have been discussed with approval by Sundberg J in Chocolaterie Guylian NV v Registrar of Trade Marks[2] and by Kenny J in Sports Warehouse, Inc v Fry Consulting Pty Ltd[3] .

   [1] Pfizer Products Inc v Karam [2006] FCA 1663; (2006) 70 IPR 599; (2006) AIPC 92-146

   [2] [2009] FCA 891, (2009) AIPC 92-355; (2009) 82 IPR 13, para 22-27

   [3] [2010] FCA 664 (25 June 2010) at [26] to [40].

5. The Notice nominated the grounds of opposition based on sections 41, 43, 58, 58A and 60 of the Act.  At the hearing the opponent advised that it would provide submissions on all of these grounds of opposition.

   Evidence

6. The evidence of the parties consists of the following declarations:

Declarant	Position	Date Made	Exhibits
Evidence in Support
Geoff Simmons[4]	Director of Kingsgate Hotel Group Pty Ltd	8 July 2008	GS-1 to GS-8
Evidence in Answer
Sheila Murugasu[5]	Group Legal Counsel for Hong Leong Management Service Pte Ltd	9 January 2009	SMS1, SMS2, A to I
Evidence in Reply
Geoff Simmons[6]	Director of Kingsgate Hotel Group Pty Ltd	4 August 2009	GS-1 to GS-11
Applicant’s Further Evidence
Sheila Murugasu[7]	Group Legal Counsel for Hong Leong Management Service Pte Ltd	28 July 2010	SMS1, A to D

[4] For ease of reference throughout this decision this statutory declaration will be called the Simmons #1 declaration.

[5] This statutory declaration will be called the Murugasu #1 declaration.

[6] This statutory declaration will be called the Simmons #2 declaration.

[7] This statutory declaration will be called the Murugasu #2 declaration.

1. Ten days before the hearing was due to take place, the applicant applied for permission to serve further evidence. This further evidence application being made at such a late stage resulted in considerable consternation for the opponent and had the potential to seriously disrupt proceedings. In order to proceed with the hearing at the scheduled time the opponent withdrew its objection to the further evidence application. However, the opponent reserved the right to respond to the further evidence after the hearing.

2. Shortly after the hearing, the opponent provided written submissions in response to the applicant’s further evidence. These submissions were then provided to the applicant for comment in order to ensure procedural fairness. No additional comments were received from either party.

   Opponent’s Evidence

3. In his first statutory declaration (‘the Simmons #1 declaration’) Geoff Simmons states that he is the director of a number of related companies dealing with hotel ownership and management. He says that in September 2000 the opponent purchased a hotel located on King Street in Melbourne. The name of the hotel was ‘Kingsgate Hotel Melbourne’ and it had operated under that name since 1978 (Exhibit GS-2). Mr Simmons believes that prior to being called Kingsgate Hotel Melbourne the hotel was known as ‘The People’s Palace’. However, the hotel has not operated under that name since 1978.

4. Up until the opponent’s purchase of the property, Mr Simmons states the brand profile of the hotel was poor as it primarily provided hostel and two star budget accommodation. Once the opponent purchased the hotel, Mr Simmons avers that it invested a moderate sum of money into a capital works program to improve the public areas and guest rooms.

5. Mr Simmons goes on to state that the opponent has also spent some hundreds of thousands of dollars on marketing the Kingsgate brand across Australia and throughout the world since 2000. However, the opponent has only provided a single figure to encompass those financial years. This figure has not been broken down to show expenditure on marketing during each individual year, nor what proportion of the spending might relate to Australia.

6. In April 2001 the opponent was successful in negotiating with Qantas to accept its hotel as the price leader in Qantas’ Australian and international programs (Simmons #1 Exhibit GS-3). Although not critical to my decision I do note in passing that the applicant is correct in pointing out that the date of issue for the Qantas brochure in exhibit GS-3 is 5 February 2002. Mr Simmons asserts the opponent has also marketed the hotel since 2001 through various New Zealand Programs, Gullivers, Travel Plan, Go Holidays, Air New Zealand, Go Koala (Mainstay) and Warwick Beatson Travel. 

7. Mr Simmons avers that the opponent has also been advertising the hotel to inbound tourists from Asia and Europe with various travel companies including AOT, Kintetsu, Tourico Holidays and Pan Pacific Travel. The opponent has also advertised domestically through Virgin Blue Holidays, Great Aussie Holidays, Creative, Travelpoint, Qantas and GTA (Simmons #1 Exhibit GS-4). 

8. The evidence indicates the opponent advertises via the internet where it is the owner of the websites: and (Simmons #1 Exhibit GS-5). The opponent also has active websites on a number of industry related sites including and Mr Simmons also provided website statistics including website referrals and top search keywords/phrases and nationality in regards to visitors to the opponent’s website since September 2007 (Simmons #1 Exhibit GS-6). That said, given these figures are from a time period commencing after the priority date of the opposed application they are not directly relevant to this decision.

9. The opponent is also the owner of Australian trade mark registration no. 994620. Details of the registration are as follows:

   Trade mark:  

   Trade mark registration:     994620

   Filing Date:  24 March 2004

   Specification:  Class 43: Hotel and restaurant services in the class, being the operation of hotels and restaurants, accommodation services, hotel management and reservation services, including cafe's, cafeterias and catering services

10. Although the examiner of the opposed application originally cited the opponent’s registration, the applicant was able to overcome the objection by relying on evidence of ‘prior continuous use’ pursuant to s 44(4) of the Act. However, the opponent claims still earlier use of its registered trade mark and thus now relies on s 58A of the Act in this regard.

    Applicant’s Evidence

11. The first statutory declaration of Ms Sheila Murugasu (‘The Murugasu #1 declaration’) outlines a number of Australian trade mark registrations owned by the applicant. In particular, the Murugasu #1 declaration provides details of trade mark registration no. 771218 which are as follows: 

    Trade mark:  KINGSGATE

    Trade mark registration:     771218

    Filing Date:  24 August 1998

    Specification:  Class 35: Wholesaling, retailing and distribution wholesaling of clothing, clothing accessories, jewellery, cosmetics and toiletries, footwear, headgear, fabrics, pharmacy goods, food and drink including alcoholic drinks, wine, confectionery including iced confections, electrical and electronic goods, household goods including domestic utensils and soft furnishings, hardware, toys, sporting goods, musical instruments, printed matter, stationery and souvenirs but excluding wholesaling, retailing and distribution wholesaling of tobacco whether manufactured or unmanufactured; shopping centre services in this class, advisory services and consultancy services all relating to the aforesaid

    The applicant relies on this registration and 12 other registrations to support its claim to ownership of the opposed trade mark for relevant services[8]. However, I note that the services covered by the above registration are significantly different from the services claimed by the opposed application. Moreover, the other 12 registrations relied upon are irrelevant to the applicant’s claim to ownership of the opposed trade mark (for any goods or services) because, inter alia, none of the registered trade marks contains the word “KINGSGATE”.

    [8] Annexure 1 to this decision

12. That said, the Murugasu #1 declaration further claims that the applicant (through its predecessor in title and related bodies corporate) has been using the name KINGSGATE as a trade mark in Australia since at least 10 July 1973. Exhibit D accompanying Murugasu #1 consists of six business documents dated from 10 July 1973 through to May 1986 on which can be seen the expressions ‘HYATT KINGSGATE SYDNEY’ and ‘HYATT KINGSGATE HOTEL’ as part of the letterhead, as an apparent business name, or in the address block.

13. Murugasu #1 states that there are a number of companies around the world which collectively trade under the name ‘Kingsgate Hotels and Resorts Group’ (‘The Kingsgate companies’) and that these companies have used the opposed trade mark continuously and extensively outside Australia for hotel services. The applicant is associated with the Kingsgate companies which is itself part of a larger group of companies trading under the name ‘Millennium & Copthorne Hotels plc Group’ (‘Millennium Group’). Further statements are made in Murugasu #2 to the same effect.

14. There was considerable argument put forward by the opponent at the hearing that there was no evidence to demonstrate that the applicant is indeed related to any of the Kingsgate companies, (that is to those companies which may have used the KINGSGATE trade mark outside Australia for hotel services). The opponent has accordingly suggested that any use or reputation that may have been acquired in the KINGSGATE trade mark by any of the Kingsgate companies could not be seen to have been in any way associated with the present applicant and trade mark application. However, I am satisfied the applicant is a part of the Kingsgate Hotels and Resorts Group. The Murugasu #1 declaration states this is so and the opponent’s arguments have not persuaded me otherwise.

15. Ms Murugasu states that from 1993 until 2004 Kingsgate Investments Pty Ltd[9] owned a shopping centre located on Darlinghurst Road, Potts Point trading under the name ‘Kingsgate Shopping Centre’ which was part of a commercial/hotel complex. However, there is no evidence before me to indicate Kingsgate Shopping Centre enjoyed any relevant relationship with a hotel. Ms Murugasu states that since 1994 a sales office has been operated by the Millenium Group at the Kingsgate Shopping Centre.

    [9] Ms Murugasu states this is a subsidiary of Millennium & Copthorne Hotels New Zealand which in turn is a wholly owned subsidiary of the Millennium Group and an affiliate of the applicant which I accept. However, I agree with the opponent that the connections between all of these entities is not clear.

16. At paragraphs 31 and 32 of Murugasu #1, Ms Murugasu states that the Millennium Group operates a total of 16 Kingsgate branded hotels in New Zealand and one Kingsgate branded hotel in the United Arab Emirates. In this regard I accept the evidence before me suggests the Millennium Group has an established reputation in its hotels in (at least) New Zealand.

17. Ms Murugasu asserts that Australian residents are able to make reservations at the Kingsgate branded hotels in New Zealand and Abu Dhabi in the United Arab Emirates through the Australian sales office in the Kingsgate Shopping Complex and through the Millennium Group’s website[10]. She also states that it is through these two points of contact that the applicant promotes its New Zealand and KINGSGATE hotels within Australia.

    [10] >

    The Millennium Group also promotes its Kingsgate branded hotels through the Qantas Frequent Flyer Program, the Qantas website and through advertising brochures produced by Qantas. Exhibit H accompanying the Murugasu #1 declaration contains copies of the various advertising brochures produced by Qantas in which the Millennium Group’s New Zealand KINGSGATE hotels are advertised. However, I note that all of these brochures are dated after the priority date of the opposed application. 

18. Exhibit F of Simmons #1 contains the look up result from WHOIS for a total of four domain names which are either owned by the applicant or one of its business affiliates. These domain names incorporate the term KINGSGATE and the earliest registered domain name, was registered from 3 April 2003. However, it is clear that this website is not directed at the Australian public.

19. Although the applicant has asserted that it has always intended to use its KINGSGATE trade mark in Australia and has actively promoted the Millennium Group KINGSGATE branded hotels within Australia there is limited evidence before the priority date of the opposed application which supports this. Even the applicant’s further evidence contains copies of advertisements which are dated after the priority date of the opposed application. Moreover, these advertisements are for hotel services which are provided in New Zealand by another of the Kingsgate companies, not Australia.

20. In addition, the evidence the applicant has put before me in order to suggest that the reputation from the overseas market has flowed over into the Australian market is simply insufficient for the purpose. The hotel accommodation referred to is located in New Zealand and not in Australia. There is also no evidence provided by the applicant which proves that Australian residents have purchased this New Zealand accommodation through Kingsgate Investments Pty Ltd Australian sales office.

    Section 58A – Opponent’s earlier use of similar trade mark

21. Section 58A relevantly provides the following:

    (1) This section applies to a trade mark (section 44 trade mark) the application for registration of which has been accepted because of:

    (a)  subsection 44(4);

    …

    (2) The registration of the section 44 trade mark may be opposed on the ground that the owner of the substantially identical or deceptively similar trade mark (similar trade mark) or the predecessor in title:

    (a)  first used the similar trade mark in respect of:

    (i)  similar goods or closely related services; or

    (ii)  similar services or closely related goods;

    before the owner of the section 44 trade mark or the predecessor in title in relation to the section 44 trade mark first used the section 44 trade mark; and

    (b)  has continuously used the similar trade mark in respect of those goods or services since that first use.

22. Section 58A was added to the legislation in 2006 and, according to the Explanatory Memorandum which accompanied its inclusion, it was needed to allow for the owner of a deceptively similar trade mark to oppose registration on the basis of absolute first use.[11]  The Memorandum said:

    As it stands the owner of the earlier registered trade mark has no basis on which to oppose registration of a trade mark accepted under subsection 44(4), even where their use pre-dates that of the accepted application.

    [11] Section 58 (Applicant not owner of trade mark), by contrast, requires that the trade marks be at least substantially identical before its provisions can be applied.

23. This intended purpose was described by the Hearing Officer in the STEPS[12] decision as follows:

    The new ground of opposition undersection 58Awas intended by the drafters to complement the ground available to common law owners under section 58. It attempts to address an apparent anomaly which previously existed within the opposition framework. This allowed a party to achieve acceptance of their deceptively similar trade mark in the face of an earlier trade mark, based onprior use, which then became immune to an opponent’s claim to ownership in terms of section 58, because it did not fall into that provision’s strict parameters of substantial identity…

    [12] Southern Training Employment & Placement Solutions Inc v STEPS Disability QLD Inc [2009] ATMO 6 (at 31).

24. The application of section 58A is narrow, in the sense that it is only available as a ground of opposition if the opposed trade mark has been accepted under the provisions of subsection 44(4) - as has occurred here – following the raising of a citation raised pursuant to ss 44(1) or (2). The opponent’s registration 994620 KINGSGATE HOTEL was in this case raised as a citation pursuant to s 44(2) at the examination stage, and the opponent must now establish that it has used its registered trade mark prior to the first use of the opposed trade mark. The applicant has not demonstrated definitive proof of having used the opposed trade mark before its priority date being 11 May 2006. The Act thus requires both (a) consideration of the similarities between the conflicting trade marks and (b) consideration of whether the opponent’s claimed prior use of the KINGSGATE HOTEL trade mark was in relations to “similar services”[13] as those covered by the opposed application.

    [13] As defined in s 14(2) of the Act, that is for the same services or for services ‘of the same description’.

    Deceptively Similar

25. Deceptive similarity is defined by section 10 of the Act, which says ‘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 confusuion’. The determination of deceptive similarity requires a comparison of the impression which persons of ordinary intelligence and memory would have recalling the opponent’s mark with the impression which they would get from the opposed trade mark.[14] The probability of deception or confusion must be finite and non-trivial.[15]

    [14] The Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1961) 109 CLR 407; Ib IPR 523, per Windeyer J at 415 (IPR 529)

    [15] Registrar of Trade Marks v Woolworths Limited (1999) 45 IPR 411, per French J at [43]

1. A consideration of the applicant’s trade mark shows that it consists of a five bar graphic device above the sole word KINGSGATE. The opponent’s trade mark essentially consists of the words ‘KINGSGATE HOTEL’. Mr Bevan argued that it is not credible to dismiss the word HOTEL in the opponent’s trade mark and that the five bar device in the applicant’s trade mark is ‘highly distinctive and is in a position of prominence in the trade mark’. He claimed that these features sufficiently differentiate the trade marks from each other and that there could be no possibility of deception or confusion arising from the applicant’s use of the opposed  trade mark. I disagree.

2. The word “HOTEL” in the opponent’s trade mark does not sufficiently differentiate the two marks as it would still be viewed by the consumer as a descriptive term in relation to the ‘operation of hotels and restaurants, accommodation services, hotel management and reservation services’ for which the opponent’s trade mark is registered. The presence of the device in the applicant’s trade mark does add some differentiation, but it is more than likely that the marks will be referred to by their word elements.[16] There is accordingly a ‘finite and non-trivial probability’, in my view, that the average consumer would see these trade marks as being related to each other, or at the very least “be caused to wonder if this might not be the case”. The overall impression is one of similarity and as a result, I find that the trade marks are deceptively similar.

   [16] E.g. Sizzler Restaurants International Inc v Sabra International Pty Ltd (1990) 20 IPR 331 (Reg).

   Prior Use on Conflicting Services

3. The opponent  relies on its purchase in 2000 of the hotel in Melbourne which, as discussed in paragraphs 9 to 11 above, it claims had been trading under the name ‘Kingsgate Hotel Melbourne’ since 1978 and which has apparently continued to trade  under this name up to the present day. Exhibit GS-2 accompanying the Simmons #1 declaration is a true copy of a Victorian business name extract showing that the business name KINGSGATE HOTEL has been registered since 30 October 1978. However, this exhibit does not demonstrate that the opponent or its predecessor in title was using KINGSGATE HOTEL as a trade mark for its hotel. While the opponent has asserted this is the case, its evidence is not sufficient to prove that the opponent has been using its KINGSGATE trade mark since 1978. 

4. The earliest example of the opponent using its KINGSGATE trade mark in relation to hotel services is found in a publicity brochure (dated 26 December 2001) produced by a business called “House of Travel” and a brochure (dated 14 January 2002) produced by Qantas, copies of which are contained in exhibit GS-4 accompanying Simmons #1. I am satisfied that the opponent has used its KINGSGATE HOTEL trade mark for hotel services since at least 26 December 2001.

5. The applicant claims that it has used the KINGSGATE trade mark since before 26 December 2001. While Murugasu #1 has demonstrated that the applicant has used the word ‘KINGSGATE’ in Australia in business names and as a portion of the domain names for some of its websites which may potentially be accessed by Australian consumers, these actions do not constitute use of the opposed trade mark. While the applicant does have registrations with priority dates earlier than 26 December 2001 for trade marks which include the five bar device contained within its KINGSGATE trade mark (as detailed in Appendix 1), as previously mentioned these are irrelevant to the current opposition since none of these registered marks contains the word ‘KINGSGATE’. Nor do I do not consider that any use of the five bar device solus (or with additional elements other than the word ‘KINGSGATE’) constitutes use of the opposed trade mark.

6. Ms Murugasu has pointed to the applicant’s use of the word ‘KINGSGATE’ as a trade mark in Australia since at least 10 July 1973. As discussed earlier, exhibit D accompanying Murugasu #1 contains six business documents dated from July 1973 through to May 1986 which use the words ‘HYATT KINGSGATE SYDNEY’ and ‘HYATT KINGSGATE HOTEL’ as part of the letterhead, business name or in the address block. Counsel for the applicant, Mr Hamish Bevan, points out that this use of the KINGSGATE trade mark is before the priority date of the opposed application and before the priority date of the opponent’s trade mark registration. While 1973 is clearly before the first established use of the KINGSGATE trade mark by the opponent, I am not satisfied that there was relevant use as from 1973.

7. While it is clear that the applicant has used the term KINGSGATE in the above circumstances, I believe that Mr Bevan is drawing a long bow in suggesting that the term KINGSGATE has been used as a trade mark by the applicant. Even if I should be satisfied (and I am not) that the above circumstances do amount to trade mark use, I believe that the term KINGSGATE is not the most striking and memorable feature of the expressions HYATT KINGSGATE HOTEL or HYATT KINGSGATE SYDNEY. It is my opinion that the most striking and memorable feature is the term HYATT as it is the first word in the expression and that it is by this term that customers would have recalled and referred to the hotel. This is further supported by the applicant’s evidence that the name of the hotel was ultimately changed to exclude the term KINGSGATE.

8. I note that the Kingsgate companies used the term KINGSGATE in relation to a shopping centre in Australia. However, there is very limited evidence to demonstrate use of the trade mark and these shopping centre services are neither the same as, nor of the same description as, the services the applicant is claiming in the present application. Therefore, I am satisfied that the applicant has not demonstrated use of the opposed trade mark for relevant services in Australia before 11 May 2006, the priority date of the opposed application.

9. The opponent’s evidence clearly shows continuous use from December 2001 until at least the filing date of the applicant’s trade mark.  I have previously decided that the two trade marks under consideration are deceptively similar, therefore fitting the requirement that they be “similar trade marks”.  The information I have before me satisfies me that the provisions of section 58A are met and that the opponent has established this ground of opposition.

10. Having found in favour of the opponent in terms of section 58A there is no need for me to discuss the other grounds set out in the notice, although those grounds (or any others in the Act) may also be relied on in the event of an appeal from this decision.

    Decision

11. Section 55 of the Act provides:

    Decision

    Unless the proceedings are discontinued or dismissed, 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.

12. I find that the opponent has met the onus upon it in terms of the ground of opposition under section 58A argued at the hearing. Accordingly, I refuse to register trade mark application 1114029.

    Costs

13. It is usual for costs to follow the event and I see no reason to depart from that principle here. I award costs, according to the official scale set out in Schedule 8 of the Trade Marks Regulations 1995, against the unsuccessful trade mark applicant Millennium & Copthorne International Limited.

Bianca Irgang
Hearing Officer
Trade Marks Hearings
1 August 2011

APPENDIX 1