L.T. Overseas Limited v Chemico Pty Ltd

[2008] ATMO 44

TRADE MARKS ACT 1995

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

Re:Opposition by L.T. Overseas Limited to registration of trade mark application 1079110(30) - DEVAAYA - filed in the name of Chemico Pty Ltd.

Delegate:	Michael Kirov
Representation:	Opponent: No appearance Applicant: Mr  Anish Mathur, Director of Chemico Pty Ltd
Decision:	2008 ATMO 44 Section 52 opposition–ground pursuant to s.58 established-application refused

Background

1. This is an opposition brought by L.T. Overseas Limited (“the Opponent”) pursuant to Section 52 Trade Marks Act 1995 (“the Act”) to registration of the trade mark DEVAAYA, subject of application number 1079110 in the name of Chemico Pty Ltd (“the Applicant”).

2. The Applicant, an Australian-based importer and distributor of food and grocery items, had imported and distributed DEVAAYA branded basmati rice produced by the Opponent, an Indian rice milling company, for several months starting in around May or June 2005.  Following apparent dissatisfaction with the arrangement the Applicant ceased purchasing rice from the Opponent as from around October 2005 but continued to source it from other Indian rice millers.  The Applicant continued to brand the rice obtained from these other suppliers with the DEVAAYA trade mark and applied to register the trade mark on 5 October 2005.

3. Details of the opposed application are as follows:

   Application Number:                1079110
   Priority Date:      5 October 2005

   Goods:  Class 30:  Rice

   Trade Mark:  DEVAAYA

1. The Opponent filed its Notice of Opposition (“the Notice”) on 9 May 2006.  It is a given that the Opponent bears the onus of establishing one or more grounds of opposition on the balance of probabilities[1].

   [1] Registrar of Trade Marks v Woolworths Limited (1999) 45 IPR 411

2. The parties lodged, Evidence in Support, Evidence in Answer and Evidence in Reply as set out below:

   Evidence in Support
   ·Statutory Declaration by Anu SHARMA sworn 19 March 2007, with Exhibits AS1 to AS-5 (“the Sharma Declaration”)

   Evidence in Answer
   ·Statutory Declaration by Anish MATHUR sworn 19 June 2007, with Exhibits CPL01 to CPL012 (“the Mathur Declaration”)

   Evidence in Reply
   ·Statutory Declaration by Brett LEWIS sworn 31 January 2008, with Exhibits BL-1 to BL-2 (“the Lewis Declaration”)

   ·Statutory Declaration by Anubha BAJAJ sworn 25 January 2008, with Exhibits BL-1 to BL-2 (“the Bajaj Declaration”)

3. The matter was heard before me as delegate of the Registrar of Trade Marks on 9 April 2008 in Sydney.  At the hearing, Mr Anish Mathur, a Director of the Applicant, appeared on behalf of the Applicant, assisted by Ms Sadhana Mathur, and also lodged written submissions.  Brett Lewis of Davies Collison Cave, Patent and Trade Mark Attorneys, which firm had been acting for the Opponent during the evidence stage, advised IP Australia by email on 7 April 2008 that the Opponent would not appear or be represented at the hearing.  In his email Mr Lewis stated:

   “You will appreciate that this [i.e. the fact that the Opponent would not be appearing] does not in any way reflect the Opponent’s lack of interest in the matter or its desire to have the application refused.

   “We request that the matter be decided in favour of the Opponent on the basis of the evidence with an award of costs in its favour.” 

   (original emphasis)

   Grounds of opposition

4. The Notice lists six specific grounds in addition to a general ground requesting exercise of the Registrar’s discretion in the Opponent’s favour. The six specific grounds are based on sections 42(b), 43, 58, 59, 60 and 62(b) of the Act. Having reviewed the evidence I note at the outset that there does not appear to be any, or any sufficient, evidence to support the grounds under sections 43, 59, 60 or 62(b) and I accordingly find these grounds are not established. The remaining specific grounds, those pursuant to sections 42(b) and 58, are discussed below.

   Discussion

   Section 42(b)

5. The ground based on section 42(b) is indicated in the Notice as follows:

   The use of the trade mark without the approval of the opponent would be contrary to law and registration of the trade mark by the applicant would be contrary to Subsection 42(b) of the Act

6. Subsection 42(b) of the Act is reproduced below:

   An application for the registration of a trade mark must be rejected if its use would be contrary to law.

7. There is no indication in the Notice as to which law or laws the Opponent alleges would be breached by the Applicant’s use of the DEVAAYA trade mark, although two possibilities arguably arise based upon the Opponent’s evidence.  The first of these concerns possible breach of the Copyright Act 1968.  In this regard the uncontested evidence of Ms Sharma is that the Opponent designed and arranged for production of the relevant packaging for the rice it sent to the Applicant between approximately May 2005, when I understand its first commercial shipment of DEVAAYA branded rice to the Applicant took place, and October 2005, when the Applicant ceased placing orders from the Opponent and commenced sourcing its rice elsewhere (Sharma Declaration, paragraphs 7, 9, 10 and 13 and Exhibit AS-2).  Indeed, in paragraph 13 Ms Sharma states, “The trade mark was chosen by my company and incorporated in its packaging featuring its registered trade mark DAAWAT and other elements devised by my company in respect of which copyright subsists in my company’s favour.”

8. A sample of the packaging produced by the Opponent and in which the Opponent’s rice was sent to the Applicant prior to October 2005 is shown in Exhibit AS-3.  A sample of the packaging apparently used by the Applicant after October 2005 (for rice supplied to it by parties other than the Opponent) is shown in Exhibit AS-4 and is also shown in Exhibit CPL06 to the Mathur Declaration.  While not identical, the later packaging does on the face of it substantially reproduce the principal features of the earlier packaging, such that a genuine issue of potential copyright infringement in respect of unauthorized use of the later packaging may well exist.  However, on the face of it such potential breach of the Copyright Act 1968 would relate to unauthorized use of the packaging as a whole and not to unauthorized use of the DEVAAYA trade mark as such.  It is extremely unlikely a court would consider the single word DEVAAYA fell within the definition of “literary work” in section 10(1) of the Copyright Act 1968[2] and I accordingly find the Opponent has not established that the Applicant’s use of the DEVAAYA trade mark per se would be contrary to the Copyright Act 1968.

   [2] See for example Exxon Corp v Exxon Insurance Consultants International Ltd [1981] 3 All ER 241

9. The second possible basis for the Opponent’s contrary to law ground indicated in its evidence concerns use by the Applicant of the QUALITY PRODUCE OF INDIA Logo (“the QPI Logo”) on the packaging of the rice it sold in Australia after October 2005 which had been sourced from suppliers other than the Opponent.  Ms Sharma states at paragraph 12 of her declaration that the QPI Logo is owned by the Agricultural and Processed Food Products Export Development Authority, an agency of the Indian government, and that the Opponent has met the standards set by this authority sufficient to obtain relevant certification and to use the QPI Logo on its rice products.  She says her “understanding is that Chemico Pty Ltd has not been authorized to use the aforesaid logo in relation to the product it has sold in Australia under the trade mark which has been sourced from companies other than my company”.  Exhibit AS-4 to the Sharma Declaration is said to be an example of the packaging used by the Applicant for rice sold in Australia after October 2005 and on which the QPI Logo is clearly displayed.

10. Mr Mathur responds in his declaration (at paragraph 5) that “The logo issue- is a matter with no bearing on trademark application.  We have dealt with that particular supplier in his shortcomings in a similar manner to L.T. Overseas Limited’s mislabeling and shortcomings by choosing to take our business elsewhere.” (sic).

11. I do not have sufficient evidence before me to decide whether or not the Applicant used the QPI Logo without authorization, but it is unnecessary for me to do so in any event.  I agree with Mr Mathur that the issue is of no direct relevance to the current opposition, since even if made out the Opponent would not have shown the Applicant’s use of the DEVAAYA trade mark per se would be contrary to any law.

12. The Opponent has accordingly not established the ground raised under section 42(b).

    Section58

13. The ground based on section 58 is indicated in the Notice as follows:

    The applicant is not the owner of the trade mark and registration would be contrary to Section 58 of the Act

14. Subsection 58 of the Act is reproduced below:

    The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.

15. The word “owner” is not defined in the Act, although there are numerous decisions where courts have considered its meaning. It is well established that in the absence of fraud the owner of a trade mark in Australia for particular goods is taken to be the first person to use it in the course of trade in Australia in relation to those goods.[3]  The question to be resolved in this case is thus whether the use the DEVAAYA trade mark enjoyed in Australia prior to 5 October 2005, (the essential details of which use are not in dispute), was use by the Applicant or use by the Opponent.  To answer this question it is convenient to firstly summarise the parties’ activities prior to 5 October 2005, as presented through their evidence.

    [3]  Seven Up Co v OT Ltd (1947) 75 CLR 203

16. It appears officers of the Opponent first met with representatives of the Applicant “in 2003” and “there was a general discussion in relation to the possibility of Chemico Pty Ltd entering into an arrangement with [the Opponent] for the purpose of distributing its products in Australia” (Sharma Declaration, paragraph 6).

17. In “subsequent discussions”, according to Ms Sharma, officers of the Opponent suggested that packaging be developed for the Australian market incorporating both the DEVAAYA trade mark and the Opponent’s DAAWAT trade mark subject of its Australian registration 847563, which registration dates from 24 August 2000.  Ms Sharma describes DAAWAT as the Opponent’s “primary” or “house” mark and claims it “is a well known trade mark in Australia in relation to rice products” (Sharma Declaration, paragraphs 7 and 9).

18. As mentioned earlier the evidence of Ms Sharma on behalf of the Opponent is that “The trade mark was chosen by my company”.  At paragraph 9 of her declaration Ms Sharma further states that:

    At no point in time did my company in any way indicate that Chemico Pty Ltd would have any rights to the trade mark.  My company’s rice is sold under the trade mark as part of a range of products sold under my company’s aforementioned house mark DAAWAT in combination with other indicia, namely DAAWAT SELECT BASMATI RICE, DAAWAT SUPER BASMATI RICE and DAAWAT DEVAAYA BASMATI RICE.  The trade mark DEVAAYA was developed by my company for use in connection with rice supplied by my company to Chemico Pty Ltd for wholesaling to Woolworths Limited and subsequently for retailing by Woolworths Limited.

19. The evidence shows that the Opponent also developed the proposed packaging.  Exhibit AS-2 to the Sharma Declaration includes copies of two emails dated 17 May 2005 from the Opponent’s Anubha Bajaj to Mr Mathur of the Applicant.  The first email has the Subject “Divaya Barcodes” (sic) and states:

    Please find attached herewith the new EAN and TUN [i.e. barcode labels] for Divaya brand.  Hope the jpeg format would be useful to you for the verification of EAN in Australia.  If you need any other format, please adv.

    Further, as discussed this morning we are incorporating “Dawaat –From the house of/from the makers of” in the design.  I am very hopeful to send you the design as well by this afternoon.  (sic)

    The second email that day has “Devaaya artwork” as its Subject and is in the following terms:

    Attached please find the art work for the front panel of the packaging.  The “Basmati Rice” and “From the house of Daawat” would be made more prominent.  We have sent the final artwork for production and I would be receiving the chromolyn proff by tomorrow evening.

    Please give your comments on the pack.  The grey area is all silver.  (sic)

20. Exhibit AS-3 to the Sharma Declaration is said to be “a copy of a one kilogram rice package representative of the packages of rice supplied by my company to Chemico Pty Ltd prior to 5 October 2005”.  Ms Sharma states “My company designed this packaging and in particular, officers of my company’s Marketing Department designed the graphics on the packaging, wrote the text on the packaging and designed the overall layout of the packaging.”  (Sharma Declaration, paragraph 10).  I highlight the fact that this packaging prominently features the following blocks of text:

    A Quality Product of:
    L.T. Overseas Ltd.
    Corporate Office:
    A-21, Green Park, Main Aurobindo Marg,
    New Delhi 110016, India.
    Fax: [phone].
    Mills in Haryana & Punjab

    An ISO 9001:2000 Company

    For enquiries and comments mail us at

    [email protected]
    For product info visit our website:
    align="center">[FOOD SAFETY MARK Logo]
    Pioneers in India to receive the
    Food Safety Certification for Rice

    Imported and Distributed by
    Chemico Pty. Limited
    Lot 75, 14 Bordeaux Place
    Orchard Hills, NSW 2748
    Australia

21. For its part the Applicant does not dispute that the Opponent chose the trade mark or that the Opponent developed the packaging for the DEVAAYA branded rice sent to Australia prior to 5 October 2005.  The Applicant does however strongly assert that it, not the Opponent, identified the commercial need for the fresh branding and packaging following market research and presentations in Australia over the preceding two years.  For reasons which will become apparent I do not believe it is necessary for me to take a view one way or the other on this issue.

22. According to paragraph 7 of the Sharma Declaration the Opponent “first commenced supplying rice to Chemico Pty Ltd around September 2004” and “During the first five or six months of the arrangements with Chemico Pty Ltd, my company supplied Chemico Pty Ltd with rice for sale under the trade mark in Australia to the value of approximately AU$60,000 per month.”.  I mention this “September 2004” date appears at odds with other evidence filed by the parties and may either be a reference to samples of DEVAAYA branded rice sent to Australia some time before commercial shipments began or be a reference to rice branded with the Opponent’s DAAWAT house trade mark only.  The latter possibility is supported by an email dated 11 May 2005 from Anish Mathur to the Opponent and forming part of Exhibit AS-2 which mentions “Feedback from our customers is that in past several years Daawat in Australia has had a history of weavels.  With our first consignment in Sep. we experienced this issue ourselves.” (sic).  Be that as it may, the documented evidence before me confirms commercial shipments of DEVAAYA branded rice were sent from India by the Opponent in May 2005 bound for Sydney, Melbourne and Brisbane and were paid for by the Applicant in June 2005 (Exhibit AS-1 to the Sharma Declaration).  It seems these particular shipments arrived in Australia in August 2005 and the rice was first sold in Australia by the Applicant to third parties such as Woolworths Limited in September 2005 (Mathur Declaration).  Nothing however turns on the precise dates of these early shipments as far as my decision is concerned since both parties agree the Opponent sent commercial shipments of DEVAAYA branded rice to the Applicant in Australia prior to the 5 October 2005 filing date of application 1079110.

23. I mention that the “Purchase Contracts” dated 17 May 2005 in evidence which make up part of Exhibit AS-1 referred to above prominently feature the Opponent’s name and the DEVAAYA trade mark in large print at the top of the documents.  They bear the Opponent’s name as consigner and the Applicant’s name as consignee and they contain the following “Special Instruction”:

    EACH CBB TO HAVE THE FOLLOWING MARKINGS:
    CHEMICOS IMPORTED BY STICKER ON EACH POUCH WITH STICKER
    ORP [?] TO BE BLOCKED IF APPEARING
    EACH PACK TO HAVE MFG/EXP DATE MARKED
    EACH CASE TO HAVE MFG/EXP DATE MARKED CLEARLY ON THE OUTSIDE

24. Ms Sharma’s evidence is that the parties’ relationship ended “around October 2005” when the Applicant ceased placing orders for the Opponent’s rice.  She continues, “…but, Chemico Pty Ltd has continued to sell rice in Australia from sources other than my company [under the DEVAAYA trade mark]”.  Apart from the Applicant’s claim, discussed in paragraph 27 below, that the Opponent was aware in September 2005 of the Applicant’s intention to apply to register the DEVAAYA trade mark there is however no suggestion in either parties’ evidence that the Opponent acquiesced in the Applicant’s apparent assumption of ownership of the trade mark.  The Bajaj Declaration touches on this issue.  Mr Bajaj states that to the best of his knowledge “any dealings between the applicant and rice suppliers other than the opponent in relation to distribution of rice in Australia under the DEVAAYA trade mark occurred only after the relationship between the applicant and the opponent broke down” and that “It was certainly not my expectation that the applicant would distribute rice in Australia marked with the DEVAAYA trade mark if the rice concerned had not been supplied by the opponent.”  (Bajaj Declaration, paragraphs 5 and 6).

25. The evidence indicates that there was no written agreement between the parties concerning their relationship or addressing the question of ownership of the DEVAAYA trade mark in Australia.  Mr Mathur states on page two of his declaration that the Opponent’s Anubha Bajaj “was aware in Sept. 2005 during conversations with [him] that Chemico Pty Ltd would be lodging an application to register ‘Devaaya’”.  Mr Bajaj expressly denies any recollection of the alleged conversations with Mr Mathur or with any other representatives of the Applicant.  Again, I do not believe it is necessary for me to dwell on this point since whether or not the Opponent knew in September 2005 of the Applicant’s intentions is not on the face of it relevant to the issue of ownership of the DEVAAYA trade mark.

26. Although not relevant to my decision, for the sake of completeness I also note the parties’ evidence discloses that the Applicant lodged an application to register the DEVAAYA trade mark in India in class 30 on 28 July 2006, while the Opponent lodged applications in the USA as early as 28 June 2005 and in Canada on 15 February 2006.  Additionally, the Opponent’s Australian attorney, Brett Lewis, attests that the Opponent instructed his firm by email dated 19 July 2005 to lodge an application in Australia, although due to issues concerning payment of an outstanding invoice the application was not in fact lodged until 9 May 2006.

    Decision

27. Given the course of dealings between the parties as disclosed in the evidence and summarised above and in the absence of any express agreement, written or otherwise, as to ownership of the DEVAAYA trade mark in Australia, the applicable law is well established.  An often cited authority in this regard is the High Court’s decisions both at first instance and on appeal in Estex Clothing Manufacturers Pty Ltd v Ellis and Goldstein Ltd (1967) 1a IPR 491, where the Full Court said (at 503):

    [W]e have no doubt that when an overseas manufacturer projects into the course of trade in this country, by means of sales to Australian retail houses, goods bearing his mark and the goods, bearing his mark, are displayed or offered for sale or sold in this country, the use of the mark is that of the manufacturer.

    The Full Court thus affirmed the decision of Windeyer, J at first instance, who had put it this way (at 500):

    But when it is said that a trade mark is used to distinguish the goods of one man from those of another, that abbreviated statement obviously does not refer to the goods of the owner of the mark in the sense of goods which he owns or possesses. After the goods have been sold by him his mark may still, using the definition of trade mark in the Act, be used in relation to those goods for the purpose of indicating a connection in the course of trade between them and him, the registered proprietor of the mark. The manufacturer who sells goods, marked with his mark, to a warehouseman, wholesaler or retailer does not, in my view, thereupon cease to use the mark in respect of those goods. The mark is his property although the goods are not; and the mark is being used by him so long as the goods are in the course of trade and it is indicative of their origin, that is as his products. Goods remain in the course of trade so long as they are upon a market for sale. Only when they are bought for consumption do they cease to be in the course of trade. The concepts upon which the case turns are economic, commercial, business concepts concerning the marking and marketing of goods, rather than the provisions of the Sale of Goods Act concerning the passing of property.

1. I accordingly find that the use of the DEVAAYA trade mark in respect of rice which took place in Australia before the 5 October 2005 filing date of application 1079110 was use by or on behalf of the Opponent rather than the Applicant. The Opponent and not the Applicant is thus the owner of the mark in Australia for relevant goods and the Opponent has established its ground of opposition under section 58.

2. Section 55 of the Act provides:

   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.
   Note: For limitations see section 6.

3. I have found the opposition to be successful on the ground raised pursuant to section 58 of the Act. Therefore, subject to any appeal from my decision, I refuse to register trade mark application number 1079110.

   Costs

4. In the letter quoted in paragraph 6 above the Opponent’s attorney requested an award of costs in the Opponent’s favour.  As the successful party, the Opponent is entitled to its costs and I accordingly award costs against the Applicant as per Schedule 8 of the Trade Marks Regulations 1995.

   Michael Kirov
   Hearing Officer
   Trade Marks Hearings
   5 June 2008