LOCALFITNESS IP PTY LTD

[2016] ATMO 23

TRADE MARKS ACT 1995

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

Re:In the matter of Australian Trade Mark Application 1569451 for LOCALFITNESS in the name of LocalFitness IP Pty Ltd

Delegate:

Hearing Officer: Debrett Lyons

Representation:

Applicant: Robert Gregory, a partner with Maddocks, Solicitors

Decision:

2016 ATMO 23

Sec. 33: refusal to register; sec. 41: trade mark with low adaptation to distinguish; evidence of use lacking. Registration refused.

Background

1. In this matter LocalFitness IP Pty Ltd (“the Applicant”) has applied under the Trade Marks Act 1995 (“the Act”) to register the trade mark detailed below:

   Application No: 1569451

   Filing Date:  18 July 2013

   Goods / Services:            Class 9: Downloadable coupons; electronic publications

   Class 35: Advertising and promotional services; advertising, marketing and retail services relating to online business directory containing lists of fitness providers. Fitness services, health services and other fitness and health related information; provision of online advertising space for use by others to advertise products and services; advertising; online advertising and promotion on a computer network; dissemination of advertising matter; providing business information, namely, compilations, rankings, ratings, reviews, referrals and recommendations relating to business organisations and service providers including but not limited to fitness providers, health clubs, personal trainers, health services, beauty and spas using a global computer network; advertising, marketing and promotion services, namely, providing information regarding discounts, vouchers and coupons, links to retain websites of others, and special offers for the goods and services of others; promoting the goods and services of others via a global computer network; consultancy relating to sales promotions; providing information about, and making referrals in relation to, products and services of others, events, activities, attractions and facilities, including in particular geographical locations

   Class 36: Offering and arranging vouchers, issuing vouchers or tokens of value in relation to the supply of benefits for customer loyalty and frequent buyer schemes

   Class 38: Promoting the goods and services of others by providing a website featuring coupons, rebates, price-comparison information, product reviews and discount information and hyperlinks to the retail websites of others; providing an online interactive website obtaining users' comments concerning business organisations, and service providers including by not limited to restaurants, accommodation, travel, shopping, fitness clubs, health clubs, beauty and spas[1]

   [1] This is the class 38 services as filed. During examination the Applicant responded to an examiner’s report by requesting amendment to that services description.  It is the revised services proposed by the Applicant which are considered in closer detail later in this decision.

   Class 41: Provision of information about fitness, fitness service providers and fitness services on the Internet; provision of information about health, health club and beauty service providers and health services on the Internet; providing information in the field of fitness via a global communication information network site; electronic publication of fitness and health information on a wide range of topics, including online and over a global computer network; providing information via computer and digital networks in the fields of entertainment, education, music, arts, cultural events, nightlife and social events; blogging services; organisation of competitions and exhibitions and event planning

   Class 45: Personal and social services rendered by others to meet the needs of individuals; social networking services; providing information, including online, about online communities, geographic communities, social networking and other personal and social services meeting the needs of individuals

   Trade Mark:  LOCALFITNESS

   (“the Trade Mark”)

2. The application was examined as required by section 31 of the Act. A ground for rejecting the Trade Mark was raised under section 41 on the basis that the Trade Mark is to some extent, but not sufficiently, inherently adapted to distinguish the Specification from the goods or services of other persons.

3. Evidence (considered later) filed in response did not persuade the examiner to accept the application for registration and so the Applicant requested to be heard.

4. As a delegate of the Registrar of Trade Marks I heard this matter in Canberra on 18 February 2016.  The Applicant, represented by Mr Robert Gregory, a partner with Maddocks, Solicitors, made representations via video-conferencing facilities.

   Discussion

   Section 41

5. The application was made three months after the amendments to section 41 introduced by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 came into effect[2] and so it is section 41 as it is now found which regulates this matter.

   [2] which took effect from 15 April 2013. 

6. Section 41 provides:

   Trade mark not distinguishing applicant’s goods or services

   (1)  An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant’s goods or services in respect of which the trade mark is sought to be registered (the designated goods or services) from the goods or services of other persons.

   Note:          For goods of a person and services of a person see section 6.

   (2)  A trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons only if either subsection (3) or (4) applies to the trade mark.

   (3)  This subsection applies to a trade mark if:

   (a)  the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons; and

   (b)  the applicant has not used the trade mark before the filing date in respect of the application to such an extent that the trade mark does in fact distinguish the designated goods or services as being those of the applicant.

   (4)  This subsection applies to a trade mark if:

   (a)  the trade mark is, to some extent, but not sufficiently, inherently adapted to distinguish the designated goods or services from the goods or services of other persons; and

   (b)  the trade mark does not and will not distinguish the designated goods or services as being those of the applicant having regard to the combined effect of the following:

   (i)  the extent to which the trade mark is inherently adapted to distinguish the goods or services from the goods or services of other persons;

   (ii)  the use, or intended use, of the trade mark by the applicant;

   (iii)  any other circumstances.

   Note 1:       Trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate:

   (a)    the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or

   (b)    the time of production of goods or of the rendering of services.

   Note 2:       For goods of a personand services of a personsee section 6.

   Note 3:       Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (5) and 7(3) and section 8).

   (5)  For the purposes of this section, the use of a trade mark by a predecessor in title of an applicant for the registration of the trade mark is taken to be a use of the trade mark by the applicant.

   Note 1:       For applicant and predecessor in title see section 6.

   Note 2:       If a predecessor in title had authorised another person to use the trade mark, any authorised use of the trade mark by the other person is taken to be a use of the trade mark by the predecessor in title (see subsection 7(3) and section 8).

7. Section 33 of the Act provides that:

   (1) The Registrar must, after the examination, accept the application unless he or she is satisfied that:

   (a)the application has not been made in accordance with this Act; or

   (b)there are grounds under this Act for rejecting it.

   …

   (3) If the Registrar is satisfied that:

   (a)the application has not been made in accordance with this Act; or

   (b)there are grounds under this Act for rejecting it;

   the Registrar must reject the application.

8. Section 33 embodies a “presumption of registrability” under which the Registrar must accept an application for registration of a trade mark unless satisfied there are grounds for rejecting it. Prior to the amendments brought about by the Intellectual Property Laws Amendment (Raising the Bar) Act, if the Registrar was not satisfied that a trade mark was inherently adapted to distinguish, then rather than applying the presumption of registrability he or she was required to follow the decision making process under the former subsections 41(5) and/or 41(6)[3]. Those subsections effectively shifted the onus to an applicant. To address that inconsistency, section 41 was amended:

   to clarify that the presumption of registrability, as provided for in section 33, does apply to section 41…The intention is that, if the Registrar is equally unsure of whether the mark is or is not capable of distinguishing, that doubt should be resolved in the applicant’s favour.[4]

   [3] Per Blount Inc v Registrar of Trade Marks [1998] FCA 440; (1998) FCR 50.

   [4] Explanatory Memorandum to the Intellectual Property Laws Amendment (Raising the Bar) Bill 2011, p 146.

9. Accordingly, I am not entitled to reject the Trade Mark unless satisfied that the Trade Mark is not inherently adapted to distinguish and the use of it has not rendered, or will not render it, distinctive (whether that use is considered by itself, as is the case for trade marks under section 41(3), or considered in combination with a degree of inherent capacity to distinguish, as is the case for trade marks under section 41(4)).[5]

   [5] The amendments brought about by the Intellectual Property Laws Amendment (Raising the Bar) Act have not changed the relevant standard. As stated in the Explanatory Memorandum to the Bill, “…it is not intended to require that the trade mark should clearly not be registered. Rather, as with other grounds it is intended that the delegate need only be satisfied that a ground exists on the balance of probabilities”, p 146.

   Inherent distinctiveness

10. The Applicant’s submissions in this regard are that:

    … the sign "LOCALFITNESS" is inherently adapted to distinguish the Applicant's goods or services in respect of which the trade mark is sought to be registered from the goods or services of other persons.

    As Dufty and Lahore observe in Patents, Trade Marks and Related Rights:

    It is… important to distinguish between what another trader may legitimately need to use and what he or she may want to use.  A trade mark which proves to be an effective and valuable marketing tool may well be something which other traders would like to use but that does not make it part of the common heritage which anyone should be free to use. Similarly, the mere fact that a sign is widely used in a particular trade will not prevent it from having the requisite adaptability to distinguish, assuming of course that it is not descriptive of the relevant goods or services. Other traders may be annoyed that someone has been astute enough to adopt a well known term but that will not necessarily prevent the mark from being adapted to distinguish. [6] [emphasis from original]

    LocalFitness is the registered proprietor of the only business names currently registered in Australia that contain LOCALFITNESS.

    Therefore, another trader actuated only by proper motives may want to use the sign, but has no need to use the sign in respect of the goods and services for which registration is sought. 

    In fact, other traders have not sought to use the term to describe their goods or services.  Other traders may be annoyed that the Applicant has been astute enough to adopt the sign LOCALFITNESS, but that does not prevent the mark from being found to be inherently adapted to distinguish the Applicant's goods and services in respect of which registration is sought from those of other traders.

    [6] Ann Dufty and James Lahore, Patents, Trade Marks and Related Rights, LexisNexis, looseleaf (service 170) at para 49,790

11. With respect to the learned authors of Patents, Trade Marks and Related Rights, I prefer to approach this question from first principles. The notion of inherent adaptability is concerned only with the nature of the Trade Mark itself.  It is not something that can be acquired and is not affected by use.[7]  In Clark Equipment Co. v Registrar of Trade Marks[8] Kitto J stated that:

    That ultimate question must not be misunderstood. It is not whether the mark will be adapted to distinguish the registered owner's goods if it be registered and other persons consequently find themselves precluded from using it. The question is whether the mark, considered quite apart from the effects of registration, is such that by its use the applicant is likely to attain his object of thereby distinguishing his goods from the goods of others. In Registrar of Trade Marks v. W. & G. Du Cros Ltd. (1913) AC 624, at pp 634, 635 Lord Parker of Waddington, having remarked upon the difficulty of finding the right criterion by which to determine whether a proposed mark is or is not "adapted to distinguish" the applicant's goods, defined the crucial question practically as I have stated it, and added two sentences which have often been quoted but to which it is well to return for an understanding of the problem in a case such as the present. His Lordship said: "The applicant's chance of success in this respect (i.e. in distinguishing his goods by means of the mark, apart from the effects of registration) must, I think, largely depend upon whether other traders are likely, in the ordinary course of their businesses and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connexion with their own goods. It is apparent from the history of trade marks in this country that both the Legislature and the Courts have always shown a natural disinclination to allow any person to obtain by registration under the Trade Marks Acts a monopoly in what others may legitimately desire to use." The interests of strangers and of the public are thus bound up with the whole question, as Hamilton L.J. pointed out in the case of R.J. Lea, Ltd. (1913) 1 Ch 446, at p 463; (1913) 30 RPC 216, at p 227; but to say this is not to treat the question as depending upon some vague notion of public policy: it is to insist that the question whether a mark is adapted to distinguish be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives - in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess - will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it.

    [7] See, for example, Burger King Corporation v Registrar of Trade Marks (1973) 128 CLR 417 at 424; Apple Inc. v Registrar of Trade Marks [2014] FCA 1304 at [11].

    [8] [1964] HCA 55; (1964) 111 CLR 511 at [5].

12. A later (Full) High Court in Cantarella Bros Pty Limited v Modena Trading Pty Limited[9] highlighted the following part of Kitto J’s test:

    …in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess…

    [9] (2014) 109 IPR 154 at [26]-[30] per French CJ, Hayne, Crennan and Kiefel JJ.

13. As mentioned, the Applicant has offered to amend the description of the class 38 services.  The proposed amendment, made by letter dated 23 July 2015, stated:

14. In all other respects the application remains unchanged.  For the purposes of this discussion I will hereinafter refer collectively to the goods and services listed in the application with substitution of the class 38 services listed above for those originally filed as “the Specification”.

15. In Unilever Australia Ltd v Societe Des Produits Nestlé S.A. [2006] FCA 782, Bennett J. wrote [30,33]:

    The more apt the word or expression is to describe the goods, the less it is inherently apt to distinguish them as the goods of a particular manufacturer (Clark Equipmentat 515). The setting or context in which the use occurs is relevant in determining whether the use is descriptive or for the purpose of indicating a connection in the course of trade between the product and the trade mark applicant, as a badge of origin (Shell Co (Australia) Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 424–5; Johnson & Johnson Australia Pty Ltd v SterlingPharmaceuticals Pty Ltd (1991) 30 FCR 326 at 350–1).

    …  A word descriptive of one category of goods may not be descriptive of a different category and thereby have a capacity to distinguish with respect to that different category. 

16. The Specification is long, broadly worded and has areas of ambiguity[10].  For the moment in order to focus discussion I will make reference to the evidence in support of the application.  That evidence comprises the statutory declarations of Damian Kovacevic, a director of the Applicant and LocalFitness Pty Ltd, dated 23 July 2015 and 5 February 2016 (“the First Kovacevic Declaration” and “the Second Kovacevic Declaration”, respectively).  The First Kovacevic Declaration was made for the benefit of the examiner and the Second Kovacevic Declaration in expectation of this hearing.  The content of those declarations is discussed later as they relate to use or proposed of the Trade Mark, but for now I refer to the “2007 Business Plan”, exhibited at DK-7 to the Second Kovacevic Declaration.  It contains the following mission statement:

    To connect every Australian, regardless of age or fitness level, with the right facilities and fitness solution providers in their local area to help them achieve a healthy lifestyle.

    [10] For example, ‘advertising services’ (here, advertising and promotion services) generally is open to interpretation and so it can be challenging to decide whether a term actually describes the service.  So, in this case, is the use of the Trade Mark in connection with advertising services, or is it use in connection with the provision of information about local fitness services, or is it both?

17. From the same exhibit is the 2008 “Growth Plan” which states:

18. If I ignore the Specification and test the character of the Trade Mark by reference to the Applicant’s business as it has described it in these documents, I would think that the words “local fitness” are an apt way to describe the subject matter of the information provided by that business.  Accorded their ordinary signification[11], I would think that there is a likelihood of other traders legitimately wishing to use the same words to describe their similar services.

    [11] And bearing in mind Note 1 to section 41 set out above.

19. That said, I am careful to take account of the fact that “fitness” is a state of being, like health, and so, for example, the words “local health” may include reference to local surgeries or hospitals but may equally import a reference to local well-being centres or yoga classes.  So too, the words “local fitness” do not exclusively refer to local gymnasia, but in my observation over the past ten years or so, the expression “fitness centre” has become either synonymous with gymnasia or understood to include gymnasium facilities.

20. Nevertheless, and continuing for the moment to put the Specification to one side, I find that what prevents the Trade Mark from being utterly descriptive of the information provided by the Applicant’s business is the absence of further, descriptive terms.  So, for example, the expressions ‘local fitness facilities’, ‘local fitness centres’, ‘local fitness services’ or ‘local fitness advice’, would offer nothing distinctive at all.

1. By contrast, I find that the Trade Mark has a very small inherent capacity to distinguish what I have so far loosely referred to as the information provided by the Applicant’s business but which I can now identify as those parts of the Specification being “advertising, marketing and retail services relating to online business directory containing lists of fitness providers” (cl. 35); “fitness services” (cl. 35); “provision of information about fitness, fitness service providers and fitness services on the Internet” (cl. 41) and “electronic publication of fitness …information” (cl. 41).

2. I find, too, that the Trade Mark has a very small inherent capacity to distinguish services of the Specification such as “health services and … health related information” (cl. 35) and “provision of information about health, health club and … health services on the Internet” (cl. 41).

3. Further, I would say that much of what is entailed in classes 9, 36 and 38 by way of coupons, vouchers, or other tokens of value and their offer are goods and services incidental to the primary offerings under the Trade Mark and for those goods and services, once more the Trade Mark has a very small inherent capacity to distinguish.

4. In the result, I find that for much of the Specification the Trade Mark is to some extent, but not sufficiently, inherently adapted to distinguish and so the combined effect of the evidence of use and the inherent adaptation of the Trade Mark must be taken into account, per section 41(4) of the Act.

   Evidence of use

5. I note first of all that the Second Kovacevic Declaration states that:

   “[T]he Applicant is a related party of (sic) LocalFitness Pty Ltd and its only function is to hold the intellectual property rights of LocalFitness Pty Ltd.  The Applicant has licensed LocalFitness Pty Ltd to use the sign, "LOCALFITNESS" and all evidence of use provided in these submissions is use by LocalFitness Pty Ltd”.

6. I can see from the Australian trade marks register that a company, Local Fitness Pty Ltd (not, I note, LocalFitness Pty Ltd), is the owner of registration 1187533 for the trade mark shown below:

7. Registration 1187533 covers services in classes 35 and 41 set out hereunder which I would in general terms regard as the Applicant’s core business:

   Class 35: Advertising, publicity and retail services relating to online business directory containing lists of fitness providers, fitness services and other fitness related information; provision of online advertising space for use by others to advertise products and services.

   
   
   Class 41: Provision of information about fitness, fitness providers and fitness services on the Internet.

8. The application upon which registration 1187533 is based was made on 17 July 2007.  The registration was raised by the examiner as a further objection to registration of the Trade Mark but later waived after provision of a letter of consent.

9. Taking the First Kovacevic Declaration and the Second Kovacevic Declaration together, the evidence shows that the Applicant has operated an online fitness search engine which enables consumers to find a gym, a personal trainer, fitness classes, and other fitness related activities in their local area has operated since 2007.

10. On the evidence it is not clear when the Trade Mark itself was first used or to what degree use of the Trade Mark has competed with use of the trade mark of registration 1187533 or of other signs.  It is said, for example, that up until 31 May 2015 the website at had over 6 million visitors.  Evidence of that website from before the filing date of the application prominently shows use of the trademark of registration 1187533.  Moreover, If I visit that website now I find a third trade mark in use, shown below:

11. Further, whilst there is evidence such as invitations to the Applicant to join as a corporate partner with Women's Cancer Foundation, Arthritis Victoria, Conservation Volunteers and Monash University, the material exhibited shows use of the trade mark of registration 1187533.  Indeed, as a general observation, there is in the material before me abundant use of that trade mark for much of the time since 2007 and then, after the filing date, use of the sign shown above at paragraph 30.  None of this assists registration of the Trade Mark.

12. It is said that “LocalFitness has complied (sic) a database of gym and fitness interested customers consisting of 69,823 customers who have purchased vouchers or coupons and 445,119 customers who have enquired to fitness facilities or downloaded free passes.[12]  Once more, the trade mark of registration 1187533 appears on relevant material.  Additionally, these figures, once broken down into month by month website activity (since I hesitate for reasons just given to say, use of the Trade Mark) over almost a decade are not overwhelming.

    [12] Second Kovacevic declaration at [8], Exhibit DK-1 and Exhibit DK-2.

13. Otherwise, advertising spend has been in the order of $6000 per annum over the period of claimed use of the Trade Mark.

14. In other ways the First Kovacevic Declaration and Second Kovacevic Declarations suffer from material which postdates the filing date of the application[13], or from the inclusion of bald statements about public reputation, or from evidence which is to a degree ephemeral, such as the evidence of 8,711 Facebook “likes”.

    [13] For example, copies of online advertisements for job positions with the Applicant from October 2015, January 2016 and February 2016, Exhibit DK-4. 

15. The future use of the Trade Mark includes a claim that a smart phone application is under preliminary development.  Once more, evidence of intended use of the Trade Mark is not entirely clear as there are references to future use of the sign shown above at paragraph 30.

16. For these reasons, much of the evidence is troubled. In terms of section 41(4), when I weigh the evidence together with the very low inherent capacity of the Trade Mark to distinguish much of the Specification, I find that the combined influence is not enough to support a finding that the Trade Mark is adapted to distinguish the goods and services from the goods or services of other persons.

    Decision

17. Section 33 of the Act has been set out earlier. For the reasons given I have found that the Trade Mark does not distinguish much of the Specification from the similar goods and services of others.

18. Aside from the aforementioned request to amend the class 38 services (which has no ultimate influence on my decision for these reasons), there has been no other request to limit or amend the Specification and I note the words of Yates J in Apple Inc v Registrar of Trade Marks [2014] FCA 1304 at [232]:

    My finding that the application for registration of APP STORE for the designated services in Class 35 must be rejected determines the fate of the application as a whole. This is because there are no separate applications for registration of the mark for the designated services Classes 38 and 42. There is but one application covering registration of the mark for all the services that have been specified. If the application fails in one respect, it fails as a whole. In these circumstances, is not necessary for me to proceed to determine the registrability of APP STORE for the designated services in Class 38 or Class 42.

19. Under section 33, I must therefore refuse to register trade mark application number 1569451. If, however, the Registrar is served with a notice of appeal within one month from the date of this decision I direct that the disposition of the application be in accordance with the Court’s direction or order.

    Debrett Lyons

    Hearing Officer

    Trade Marks Hearings

    13 March 2016