Le Desire Pty Ltd v Candle Franchise Systems Pty Ltd

[2005] ATMO 79

TRADE MARKS ACT 1995

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

Re:Opposition by Le Desire Pty Ltd to registration of trade mark application 1022128(35) - LE DESIRE - filed in the name of Candle Franchise Systems Pty Ltd.

Delegate:

Deirdre O'Brien

Representation:

Opponent

James Catlin of counsel, instructed by Lai & Hamilton, barristers & solicitors

Applicant

Unrepresented

Decision:

Section 52 opposition

Grounds under ss58 and 59 made out. Registration refused. Costs awarded against applicant.

Background

Trade mark application 1022128 in the name of Candle Franchise Systems Pty Ltd (‘the applicant’) was accepted for registration in class 35 for the services retail stores and kiosks featuring candles, mood related products, body care and aromatherapy kits.  The trade mark is the words LE DESIRE as depicted below:

Registration was opposed by Le Desire Pty Ltd (‘the opponent’) who filed and served evidence in support. The applicant took no part in proceedings, filing no evidence and not making any submissions when given the opportunity to do so. The opponent elected to be heard and the matter came before me, as the Registrar’s delegate, in Canberra on 5 December 2005. Mr James Catlin of counsel, instructed by Lai & Hamilton, Barristers and Solicitors, appeared for the opponent. The grounds of opposition pressed by the opponent at the hearing were those pursuant to sections 58 and 59 of the Trade Marks Act 1995 (‘the Act’).

Evidence

DECLARANT	MADE	EXHIBITS	KNOWN AS
Evidence in support
Chi Hong Tsui	15 07 2005	ET1 to 6	ET
Isabella Tsui	15 07 2005	IT1 to 3	IT
Andrew Schmidt	15 07 2005	AS1 to 2	Schmidt
Cao	25 02 2005	Cao
William Billings	25 02 2005	Billings
Lainie Porter	25 02 2005	Porter

Mr Chi Hong Tsui is both the director and company secretary of the opponent.  Ms Isabella Tsui is his sister.  Ms Tsui holds no office in the opponent but she says she assisted her brother in setting up his business.  Her assistance included the design of the business logo depicted below in conjunction with her partner Andrew Schmidt. 

Ms Tsui and Mr Schmidt gifted the logo to the opponent.  Ms Tsui’s assistance also extended to acting as guarantor on the leases for the two retail stores operated by the opponent under the aforesaid logo.  Her partner, Mr Schmidt, who is a shopfitter and builder, managed the fit out of the stores and they commenced trading in mid-October 2004.  The evidence shows the logo is displayed prominently on the exterior and interior of those stores.

Section 58 ground

Put simply, the opponent will have made out this ground if it establishes that it was the first party to use the applied-for trade mark in relation to the same services as those of this application[1].  The opponent’s logo and the applied-for trade mark are identical.  The applicant applied for trade mark registration on 27 September 2004.  The opponent therefore needs to satisfy me it used its logo as a trade mark[2] before that date in order to succeed with this ground.

[1] Shell Co of Australia Ltd v Rohm and Haas Co (1949) 78 CLR 601 at 628

[2] Section 17 provides that a trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person..

The opponent’s stores sell candles and essential oils which are the same services as those of this application. The opponent’s logo is used as a trade mark in relation to those stores. However the stores did not open until three weeks after 27 September 2004. That need not be fatal to the opponent’s case as the preparatory steps taken by the opponent prior to the opening of the stores may constitute trade mark use in terms of section 58[3].

[3] Moorgate Tobacco Co Ltd v Philip Morris Ltd (1984) 156 CLR 414 at 433-4

I find the opponent’s explanation of how it came to adopt its logo to be credible and it is substantiated by the evidence (IT, Schmidt).  The principal declaration (ET) details the steps taken by the opponent prior to its shops commencing trading.  They include the printing of business cards and stationery bearing the logo in August 2004 (ET 2 and 3).  In September 2004 an advertisement for staff was displayed on the hoardings around each store while they were being fitted out (ET4).  That advertisement is reproduced in full below:

Although not clearly visible in the reproduction, the advertisement in evidence gives a contact email address and carries the footnote ‘dated as at 1^st September 2004’.  Supporting declarants (Cao, Billings, Porter) say they saw the advertisement on 21 September 2004 and that they applied for positions via the nominated email address.

I am satisfied these preparatory steps constitute public use by the opponent of its logo as a trade mark[4] before the filing date of this application. Accordingly I find the opponent was the first user of the applied-for trade mark and that ownership lies with it and not with the applicant. The section 58 ground succeeds.

[4]supra at 432

Section 59 ground

Section 59 provides that an application for registration may be opposed if, at the filing date, the applicant had no intention of using the trade mark in the ordinary course of business. The act of applying for registration is taken as indicating the requisite intention to use[5].  To make out this ground the opponent needs to establish that on 27 September 2004 the applicant had no such intention.  As this opposition is a matter before an administrative tribunal, the standard of proof as to the applicant’s intention is less than that required in criminal proceedings.  The latter requires a standard of proof that is ‘beyond reasonable doubt’, whereas in these proceedings the opponent only has to establish that ‘on the balance of probabilities’ the applicant did not have the requisite intention.

[5] Aston v Harlee Manufacturing Co (1960) 103 CLR 391 at 401

Mr Tsui says Mr Shane O’Dea is a director of the applicant although there is nothing in evidence to substantiate this.  Mr Tsui further says Mr O’Dea is seeking compensation from his sister, Isabella Tsui, subsequent to the failure of a franchise agreement.  Ms Tsui says she is a director of T-Concepts Pty Ltd (‘T-Concepts’).  According to Ms Tsui, T-Concepts operates a store in the Melbourne suburb of Chadstone.  That store also sells candles and essential oils.  It is currently trading under the name DESIGN BY DESIRE but until mid-October 2005 it traded under the name CANDLEMAN.

Ms Tsui says that in 2003 T-Concepts entered a franchise agreement with the applicant whereby T-Concepts was authorised to operate a store in the CANDLEMAN franchise.  Ms Tsui details the problems experienced by T-Concepts with the franchisor which culminated in T-Concepts repudiating the franchise by letter dated 29 October 2004 (IT1).  That letter is addressed jointly to Candle Franchise Systems Pty Ltd (the applicant), Candleman Retail Services Pty Ltd and Candle Franchise Systems Marketing Pty Ltd.  The first paragraph of that letter reads:

‘We act for T Concepts Pty Ltd, franchisee, pursuant to agreements executed with you Candleman Retail Services Pty Ltd (“CRS”) in 2003 and including disclosure documents dated November 2003.’

The letter further says:

‘Shane O’Dea is named as an “associate of the franchisor” in the disclosure document and was at all materials times the sole contact point for the franchisor.’

Subsequent to that letter, T-Concepts received a letter of demand dated 24 November 2004 (IT2) from the solicitors for Candle Retail Services Pty Ltd.  In that letter the franchisor is named as Candle Retail Services Pty Ltd[6].  The letter says Mr O’Dea is a director of the franchisor[7]. 

[6] Neither Candle Retail Services Pty Ltd nor Candleman Retail Services Pty Ltd is the applicant.

[7] Para 8.1 of ET6

In light of this conflicting information, I cannot be satisfied as to the name of the franchisor[8].  I am satisfied, however, that Mr O’Dea believed he had a case for compensation against Ms Tsui and that he made approaches to her on five occasions in September and October 2004.  Those approaches were by telephone and in person at the LE DESIRE stores of the opponent (IT).  According to Ms Tsui, Mr O’Dea said he wanted a share in the LE DESIRE stores and became abusive when this was refused.  Ms Tsui claims Mr O’Dea said words to the effect that she (Ms Tsui) did not own her trade mark. 

[8] The franchise agreement is not in evidence.

In its submissions the opponent says Mr O’Dea was under the misapprehension that the LE DESIRE stores were operated by Ms Tsui and/or T-Concepts.  It points to the coincidence between the filing date of this application and the public exposure of the opponent’s trade mark.  Taken together, the opponent argues, this indicates the applicant did not have a bona fide intention to use the trade mark.  Rather, by applying to register the trade mark, it was seeking to gain leverage in its claim for compensation against T-Concepts.

While the evidence does not establish beyond reasonable doubt that Mr O’Dea is associated with the applicant, I am satisfied that the opponent has made out a case with respect to this ground that the applicant needs to rebut[9].  It would have been easy for the applicant to do so by tendering evidence to show it had no association with Mr O’Dea or with the aforesaid franchisor.  Its failure to respond gives weight to the opponent’s case that Mr O’Dea is involved in some capacity with the applicant. 

[9] as was held in Beecham Group PLC v Colgate-Palmolive Co (2001) 58 IPR 161 at 173

That being the case, the question must be asked why the applicant would want to register a trade mark in respect of the applied-for services when it (or a company with which Mr O’Dea is also associated) is offering the same services under the trade mark CANDLEMAN.  Prima facie it appears its application to register LE DESIRE was made as part of an attempt to obtain compensation from Ms Tsui rather than being prompted by a fixed intention to use LE DESIRE as a trade mark[10]. In the absence of any response from the applicant, I am not satisfied that, at the filing date, it had the requisite intention to use. The section 59 ground therefore succeeds.

[10] Ducker’s Trade Mark (1928) 45 RPC 397 at 402

Decision

As both of the grounds of opposition pressed by the opponent have been made out, my decision is to refuse to register trade mark application 1022128.

Costs

I award costs against the applicant according to the official scale.

Deirdre O'Brien

Hearing Officer

Trade Marks Hearings

16 December 2005