Lucas Finance Pty Ltd v Dig This Enterprises Pty Ltd

[2007] ATMO 35

TRADE MARKS ACT 1995

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

Re:Opposition by Lucas Finance Pty Ltd to registration of trade mark application 965521(31,35,44) – WOMBAT GULLY - filed in the name of Dig This Enterprises Pty Ltd.

Delegate:

Debrett Lyons

Representation:

Opponent: Siobhan Ryan, of counsel, instructed by Davies Collison Cave, Patent and Trade Mark Attorneys.

Applicant: Ben Fitzpatrick, of counsel, instructed by Griffith Hack, Patent and Trade Mark Attorneys.

Decision:

2007 ATMO 35

s. 52 opposition – s. 42 use not contrary to law; s. 58 applicant owner of the trade mark; s. 60 insufficient evidence of opponent’s reputation demonstrated; s. 41 trade mark ‘capable of distinguishing’.

Costs – opponent to pay the applicant’s costs.

Background

1. Dig This Enterprises Pty Ltd (‘the applicant’) filed trade mark application number 965521 (‘the application’) on 8 August, 2003.  Details of the application are set out below.

   Trade mark:  WOMBAT GULLY

   Priority Date:   8 August 2003

   Acceptance Advert.:         25 March 2004

   Goods / Services:   

   Class: 31

   Agricultural, horticultural, forestry and plant nursery products including; seeds, bulbs and live plants including: seedlings, flowers, herbs, shrubs, bushes, vines, grasses and trees.

   Class: 35

   Plant nursery services being retail and online selling services.

   Class: 44

   Agricultural, horticultural, forestry and plant nursery services; information and advisory services in  relation to agriculture, horticulture and forestry;  gardening; landscape gardening; landscape and garden design; growing, maintaining and installing agricultural, horticultural, forestry and plant nursery products which include seeds, bulbs and live plants.

2. Lucas Finance Pty Ltd (‘the opponent’) filed a Notice of Opposition to registration of the trade mark on 2 July 2004. Thereafter evidence in support, evidence in answer and evidence in reply were duly filed and served by the parties according to the provisions in the Trade Mark Regulations 1995 (‘the Regulations’).

3. Both parties made written submission and asked to be heard. The matter was heard by me, Debrett Lyons, a delegate of the Registrar of Trade Marks, on 8 March 2007 in Melbourne.

   Grounds of Opposition

4. The Notice of Opposition listed 18 grounds of opposition and at the hearing the opponent pressed grounds under sections 41, 42(b), 58 and 60 of the Trade Marks Act 1995 (‘the Act’).

   The Evidence

5. The evidence filed and served in accord with the Act and Regulations is set out below.

Declarant	Date Declared	Known As
Evidence in Support
C. F. Lowe	31 March 2005	Lowe 1
C. M. Lucas	28 June 2005	Lucas 1
Evidence in Answer
D. J. Biddle	19 October 2005	Biddle
L. S. Kenny	19 October 2005	Kenny
P. Kasso	12 October 2005	Kasso
T. Biegler	27 October 2005	Biegler
Evidence in Reply
C. M. Lucas	5 June 2006	Lucas 2
C. M. Lucas	24 July 2006	Lucas 3
C. F. Lowe	28 July 22006	Lowe 2

Submissions and Reasoning

1. The primary submissions of both parties addressed the ground of opposition under section 58 of the Act and I propose to start with it for that reason, but also because analysis of that ground helps clarify the tangled factual backdrop to the opposition.

Section 58

1. Section 58 of the Act states:

   Applicant not owner of trade mark

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

2. It is common ground that the applicant is not the first user of the trade mark.

3. It is the applicant’s submission that it derives its claim to ownership of the trade mark from its acquisition of the retail nursery business of Wombat Gully Plant Farm (Hoppers Crossing) Pty Ltd (“the Hoppers Crossing business”), pursuant to a sale of business agreement dated 31 May 2002 (“the Sale Agreement”).

4. It is the opponent’s submission that the Sale Agreement, when read with other dependent documents, is insufficient to transfer ownership of the trade mark to the applicant.

5. The parties go on to make secondary and tertiary submissions on the issue of ownership but it is useful at this point to examine the Sale Agreement and the antecedent documents to which it refers.

The Sale Agreement

1. Tom Biegler is a director of the applicant. At paragraph 5 of his declaration, he states that: “Pursuant to the Sale Agreement, the Applicant acquired rights in the trade mark WOMBAT GULLY, the registered Victorian business names, “Wombat Gully Plant Farm” and “Wombat Gully Nursery” and the goodwill of the Wombat Gully business.”

2. The Sale Agreement is exhibited to the Biegler declaration at “TB-1”.  It is between the Hoppers Crossing business and the applicant.  In the Operative Provisions, “the Assets” are defined as “the Business and each of the assets used in or forming part of the Business including those set out in Clause 3”. 

3. Clause 3 states:

   SALE OF ASSETS

The Vendor shall sell and assign to the Purchaser and the Purchaser shall purchase from the Vendor … the Assets free from all encumbrances and third party rights or     interests of any nature whatsoever including:-

3.1         The goodwill of the Business including the right for the Purchaser to represent   itself as the successor to the Vendor in the Business

…

1. Clause 11 of the Sale Agreement is concerned with intellectual property.

INTELLECTUAL PROPERTY

11.1       The Purchaser acknowledges having received and read a copy of the:

(a)         the Deed dated 27 April 2000 which appears as the Fifth Schedule to   this Agreement (“Deed”); and

(b)         the Licence Agreement dated 9 March 2001 which appears as the Sixth   Schedule to this Agreement (“Licence”).

11.2       With effect from the Possession Date:

A.           The Vendor assigns its rights to the Names and Marks specified in the   Deed and the Intellectual Property specified in the Licence to the   Purchaser.

…

11.3       The Vendor warrants it has the right to assign and transfer its rights under the   Deed and Licence in respect of the Names and Marks and Intellectual Property                    to the Purchaser and, following that assignment or transfer, the Purchaser may                  use and enjoy the rights associated with the Names and Marks and the   Intellectual Property to the same extent as did the Vendor immediately prior to   the Possession date.

…

11.5       On the Possession Date, the parties will execute a licence agreement in the   form of the Seventh Schedule with respect to use of the Names and Marks at   the Geelong Nursery.

…

11.8       The terms “Names and Marks”, “Intellectual Property”, “Licensee”, “Peeters’   Interests” and “Geelong Nursery” in this clause have the same meaning   ascribed to them in the Deed and Licence respectively.

1. It is worth noting here that the terms “Licensee” and “Peeters’ Interests” are not used in Clause 11 of the Sale Agreement.

2. There are eleven parties to the Deed, one being the Wombat Gully business. Paragraph F of the Recitals states: “The parties to this deed are desirous of restructuring their commercial relationship with one another on the terms set out in this deed.” Later, I will refer to the Deed in more detail.  For present purposes, I note that clause 2(s) of the Deed states: “The Names and Marks means the registered and un-registered trade marks, as set out in Schedule C to this deed or derivatives thereof.”

3. Schedule C to the Deed is shown below:

4. The Licence is between a company, Wombat Gully Plant Farm (Geelong) Pty Ltd as Licensor and Bee Four Pty Ltd as Licensee. Recital A states : “The Licensee is entitled to the use of the names listed in the schedule hereto (“the Intellectual Property”).  Clause 1 grants the Licensee a non-exclusive license to use the Intellectual Property at specific trading premises, being 201 Townsend Road, Moolap, Victoria.

5. The Intellectual Property is set out in the only schedule to the Licence and is shown below:

1. It is the opponent’s primary submission that the combined effect of these documents is insufficient to transfer ownership of the trade mark to the applicant because neither Schedule C to the Deed, nor the schedule to the Licence, refers to the trade mark per se. The opponent underscores its argument by reference to the definition of “names and marks” in clause 2(s) of the Deed which does not include the names listed under “register of names” (para.17 above) but only those under “register of trade marks” and “unregistered trade marks”.

2. By contrast, the applicant’s position is that Schedule C to the Deed provides for a transfer of rights in the names –Wombat Gully Wholesale; Wombat Gully Nursery; and Wombat Gully Plant Farm.  The definition of names and marks includes, “derivatives thereof”, and so the opponent submits that since the words ‘wholesale’, ‘nursery’ and ‘plant farm’ are descriptive, the Deed provided for a transfer of rights to the Wombat Gully name simpliciter.

3. The applicant submits that to construe the Sale Agreement to the effect that there was no transfer of rights in the Wombat Gully name would be to deprive the agreement of any practical effect. In its submission, the very purpose of the Deed was to separate the respective businesses but allow them to individually continue to use the trade mark and other names.  Moreover, to the extent that the opponent asserts that the definition of “names and marks” in clause 2(s) does not include the names under “register of names” but only those under “register of trade marks” and “unregistered trade marks”, such a construction would be contrary to the intentions of the parties to the Deed.  The applicant observes that Schedule C is only referred to in the Deed by reference to the definition of “names and marks” and by deduction the definition of names and marks should include all those names listed in Schedule C.

4. The opponent presented a second argument based on an alternative reading of the Deed, being that the Hoppers Crossing business had no capacity to assign the trade mark to the applicant.

5. Laid out more fully, the second argument is that the intellectual property rights transferred by the Sale Agreement are as specified in the Deed and the Licence (clause 11.2), which the applicant acknowledges having read (clause 11.1).  The Hoppers Crossing business warrants that it has the right to assign and transfer its rights under the Deed and the Licence in respect of the names and marks and Intellectual Property and that following that assignment or transfer, the applicant may use and enjoy the rights associated with the names and marks and intellectual property to the same extent as did the Hoppers Crossing business immediately prior to the sale of its business (clause 11.3).

6. The rights of the Hoppers Crossing business in respect of the names and marks are in turn dealt with by clause 11 of the Deed under which “the parties acknowledge that the Names and Marks are and remain the joint property of The Peeters’ Group and The Lucas’ Group” (clause 11(a)).  Synoptically, part of the process of the parties to the Deed “restructuring their commercial relationship with one another” entailed the establishment of a separate special purpose company, controlled equally by The Peeters’ Group and The Lucas’ Group, to which the names and marks would be transferred (clause 11(b)). It is common ground that for reasons  not made clear to me the special purpose company was never established and so it is argued that ownership of the names and marks remained as acknowledged in sub-clause 11(a) of the Deed - the joint property of The Peeters’ Group and The Lucas’ Group.

7. The thrust of the opponent’s secondary submission regarding ownership of the trade mark is that at the date of the Sale Agreement, the Hoppers Crossing business’s rights in the trade mark (if any) were limited to the enjoyment of a licence to use the trade mark. The Sale Agreement was therefore not competent to transfer ownership rights in the trade mark to the Applicant.

8. In answer, the applicant submits that if it was unable to acquire any rights in the trade mark because the special purpose company was never established, as a matter of logic and contractual symmetry, the opponent (and its related interests) also lost any rights in the WOMBAT GULLY trade mark as a result of the failure to set up the special purpose company. Accordingly, on the opponent’s construction, all rights to the mark ended when the special purpose company was not set up. This must, therefore, constitute abandonment (or extinguishment) of rights to the mark. The applicant goes on to posit that the rights to ownership in a mark must then be determined by reference to subsequent use of the mark as a trade mark in the course of trade. 

9. I do not believe that the premises on which that argument rests accurately restate the opponent’s submission. I think it is useful to examine the Deed in better detail.

The Deed in detail

1. Recital A to the Deed states:

   The Wandin Gully Tree Farm Partnership owns and operates the Emerald           Nursery and is compromised of W & J P Peeters as trustee for The Peeters              Family Trust as to 50%, and Pirita Woods Pty Ltd as trustee for The Lucas   Family Trust as to 50%.

   Recital B to the Deed states in part:

   Wombat Gully Plant Farm (Hoppers Crossing) Pty Ltd as trustee for The               Wilsdan Trust owns and operates  the Hoppers Crossing Nursery. …

   Recital C to the Deed states:

   Wombat Gully Plant Farm (Geelong) Pty Ltd operates the Geelong        Nursery, which it has purchased on a terms contract that has yet to be completed. The shares in the said company are held as to 50% by W & J P    Peeters Pty Ltd as trustee for The Peeters    Family Trust and as to 50% by      Pirita Woods Pty Ltd as trustee for The Lucas Family Trust.

2. Clause 2 of the Deed carries the definitions:

   (h)  the Emerald Nursery means the nursery conducted under the name and   style “Wombat Gully Plant Farm” from the premises situated at 351-  353 Belgrave-Gembrook Road, Emerald, in the State of Victoria

   (l)    the Geelong Nursery means the nursery conducted under the name and   style “Wombat Gully Plant Farm” from the premises situated at 201   Townsend Road, Moorlap,  in the State of Victoria

   (o)  the Hoppers Crossing Nursery means the nursery conducted under the   name and style “Wombat Gully Plant Farm” from the premises situated                    at 439 Old Geelong Road, Hoppers Crossing, in the State of Victoria

   (q)  the Lucas’ Interests means Christopher Lucas, Marie Lucas and all   companies and trusts … of which they or their successors or assigns   are in may in future be directors, shareholders …

   (t)   the Peeters’ Interests means William Peeters, Wendy Peeters and all   companies and trusts … of which they or their successors or assigns   are in may in future be directors, shareholders …

   (x)  Settlement Date means the date fourteen (14) business days after the   execution of this deed …

   (y)  the Wandin Gully Tree Farm Partnership means the partnership   identified in recital A to this Deed which owns and operates the   Emerald Nursery.             

3. The operative provisions include the following clauses:

   3(a) The Hoppers Crossing Nursery and the Emerald Nursery are to   be run as separate businesses from 1 February 2000.

   3(b) In order to give effect to clause 3(a) of this deed and subject to   the parties observing their respective obligations hereunder:    

   (i)           the Hoppers Crossing Nursery will remain under the   control of The Peeters’ Interests;

   (v)         the Emerald Nursery will remain under the control of   The Lucas’ Interests and The Wandin Gully Tree Farm   Partnership is hereby dissolved with effect from 1   February 2000;

   4(a) In consideration of the parties respective obligations hereunder,   the Geelong Land and the Geelong Nursery shall be transferred   to The Peeters’ Interests, with effect from 1 February 2000.

   11   Names and Marks

   (a)The parties acknowledge that the Names and Marks are and remain the joint property of The Peeters’ Group and The Lucas’ Group.

   (b)On the Settlement Date the parties shall transfer the ownership of the Names and Marks to a separate special purpose company of which a nominee of The Peeters’ Group will control 50% and a nominee of The Lucas’ Group will control 50% of the shares …

   (c)   Insofar as it is necessary, the parties acknowledge the right of :

   (i)the Peeters’ Interests to use the Names and Marks in connection with the operation of:

   (1) the Hoppers Crossing Nursery following execution of this deed; or

   (2)a nursery located at an alternative site to the Hoppers Crossing Nursery provided that such site is not less than 30 kilometres from the site at which the Lucas’ Interests are then conducting a nursery pursuant to the licence granted under this deed;

   (ii)  the Lucas’ Interests to use the Names and Marks in connection with the operation of:

   (1)  the Emerald Nursery following execution of this deed; or

   (2)a nursery located at an alternative site to the Emerald Nursery provided that such site is not less than 30 kilometres from the site at which the Peeters’ Interests are then conducting a nursery pursuant to the licence granted under this deed;

   (iii) Wombat Gully Plant Farm (Geelong) Pty Ltd to use the               Names and Marks in connection with the operation of the Geelong Nursery following the Settlement Date”.

   (d)The parties acknowledge that the use of the Names and Marks, as contemplated by Clause 11(c) of this deed, will be regulated by licences hereby granted on the following terms:

   (i)  the licences shall be irrevocable and are granted in perpetuity;

   (ii) the licences are granted in consideration for and subject to strict compliance, by the parties in whose favour it is granted, with the obligations imposed by this deed; and

   (iii) the licenses shall be assignable with the consent of the owner of the Names and Marks appointed pursuant to sub-clause 11(b) of this deed,

   …

   (h)Notwithstanding the provisions of clause 11 of the deed, upon execution of this deed The Peeters’ Group shall sign all necessary documentation to enable The Lucas’ Interests to register the name “Wombat Gully at Emerald”.

   21   Any provision of this deed which offends any law applicable to it, and as a consequence, is prohibited or unenforceable, then :

   (a)where the offending provision can be read down so as to give it a valid and enforceable operation of a partial nature, it must be so read down to the extent necessary to achieve the results; and

   (b)in any other case, the pending (sic.) provision may be severed from this deed without invalidating the remaining provisions of this deed and the deed shall operate as if the said provision had not been included.

   Preliminary Findings

4. The evidence shows that a nursery business using the name WOMBAT GULLY PLANT FARM has existed in Victoria since 1987 and had trading premises at three locations - Emerald, Hoppers Crossing and Geelong (Lucas 1 , para 6 ).

5. The words WOMBAT GULLY were used as a common law trade mark by that business (Lucas 1, para 8; Exhibits CML-4 ).

6. The principals of the business appear to have been two husband and wife teams, Christopher and Marie Lucas and William and Wendy Peeters, who together with their various companies, trusts and shareholdings, are respectively referred to in the legal documents as The Lucas’ Interests or The Lucas Group and The Peeters’ Interests or The Peeters Group (together, “the Interests”).

7. The ownership structure of the business is not fully clear from the evidence.  Mr Lucas describes it as a partnership (Lucas 1, paras 6, 9). The Deed also says that prior to 1 February 2000 the business was owned and operated by a partnership comprising trustees from the Interests holding the business in equal measure.

8. By 2000, the turnover of the business was approximately $7million per annum (Lucas 1, para. 7).

9. Mr Lucas states that “I adopted the name Wombat Gully Plant Farm with my partner in mid-1997” (Lucas 1, para. 9 ). Notwithstanding the lack of clear evidence of a partnership I accept that the trading name WOMBAT GULLY PLANT FARM, and the common law trade mark, were the joint property of the Interests.  In the absence of evidence to the contrary I also decide that the name and trade mark were owned in equal shares by the Interests.

1. The Deed came into existence for the express purpose of separating The Lucas’ Interests from The Peeters’ Interests.

2. The Deed contemplated that after 1 February 2000, the Hoppers Crossing nursery would be owned and operated by The Peeters’ Interests and the Emerald nursery would be owned and operated by The Lucas’ Interests.  In addition, the Geelong nursery would be transferred to The Peeters’ Interests.

3. The Deed contemplated that a new, special purpose company would own the name and marks (clause 11(b)). This new company would be owned 50:50 by the Interests and the transfer of the names and marks would occur on the settlement date (clause 11(b)), being 14 days after the date of the Deed (clause 2(x)).

4. The special purpose company was never formed (Lucas 2, para. 5).

5. Based on these preliminary findings, I return to the parties’ submissions regarding the efficacy of the Sale Agreement to transfer rights in the trade mark to the applicant on 31 May 2002.

6. I note that the Sale Agreement transferred the goodwill of the Hoppers Crossing business to the applicant, together with “each of the assets used in or forming part of the business” (clauses 1, 3). This included a right for the applicant to represent itself as the successor in business to the Hoppers Crossing business.  The trade mark was an essential part of the business and I have no hesitation in finding that it was the spirit and intention of the Sale Agreement to transfer rights in the trade mark to the applicant, notwithstanding some less than elegant draftsmanship.  The critical question concerns the nature of those rights. Summarising the opponent’s submissions, there is a question as to whether the right transferred was that of an owner or a licensee, and whether there might, in either case, be a geographical limitation on the right transferred.

7. The answers lie in the construction of the Deed and in the consequences of the failure to establish the special purpose company and it is to those matters I now turn.  The Deed was appended to the Sale Agreement and the applicant acknowledged it (Sale Agreement, clause 11.1).

8. The Deed is structured to give effect to the clear desire of the Interests to continue using the WOMBAT GULLY PLANT FARM name and the trade mark after the separation of their respective holdings, effective 1 February 2000.  The Deed also recognised that The Lucas’ Interests would want to use the name WOMBAT GULLY AT EMERALD.

9. The special purpose company was to be a stakeholder of the names and marks, albeit  one controlled 50:50 by the Interests.  The Deed clearly states that use of the names and marks by the Interests will be by licence (clause 11(d)).

10. Mr Fitzpatrick, for the applicant, submitted that all rights to the trade mark ended when the special purpose company was not set up with the result that there was abandonment or extinguishment of the trade mark. Ms Ryan, for the opponent, relies on Clause 11(a) of the Deed in support of her argument that the failure to establish the special purpose company left the rights in exactly the place they were at the time of the Deed  -  the joint property of the Interests.

11. The Deed is a troubled document from several perspectives, leaving to one side for the moment the issues entailed by the failure to establish the special purpose company.  In the first place, its structure is more typical of separation arrangements where the parties own one or more registered marks and wish to continue using the mark after the restructuring.  In that scenario, property in the registration is frequently assigned to a stakeholder company which in turn licenses the right to use the mark back to the parties under agreed control provisions.  Detailed provisions are usually made for reversionary ownership of the mark if the agreement comes to an end.

12. In this case, transfer of the various business names listed in Schedule C to the Deed to a non-trading special purpose company seems misguided as a matter of law. Transfer of rights in the common law trade mark would involve the assignment of the goodwill in the trade mark to the special purpose company which may have had undesirable consequences in terms of trade mark law (see Commissioners of Inland Revenue v Muller & Co.’s Margarine Ltd [1901] AC 217).

13. In addition, the intended operation of the Deed is made unclear by the fact that it is to make immediate grants of the licenses. Clause 11(d) states : The parties acknowledge that the use of the Names and Marks, as contemplated by Clause 11(c) of this deed, will be regulated by licences hereby granted, but the other hand, it states that, 14 days later, ownership of the names and marks will be transferred to the special purpose company.  In short, had the special purpose company been formed, it is quite uncertain as to how the complete structure would have operated.

14. Clause 21 of the Deed contains severance provisions in the event that part of the Deed is contrary to law.  I am therefore persuaded that the parties intended, generally, that the Deed be given a coherent construction in the event of partial frustration of its intentions. I believe that the Deed can continue to have meaning and coherency notwithstanding the failure to establish the special purpose company.

15. The fact that the special purpose company was not set up has no impact of the great bulk of the matters regulated by the Deed.  The terms governing the separation of shareholdings is unaffected and presumably the transfers went ahead.  The sale of the Geelong nursery went ahead and the Interests took their agreed proceeds.

16. My finding is that the ownership of the trade mark remained as it was prior to the Deed subject only to the question of what impact was created by the grant of licenses. Ignoring the position of the Geelong nursery, it can be said that the licenses did nothing more than allow the Interests to continue doing what they had done previously as co-owners of the goodwill in the common law trade mark – each use the mark without the need for the consent of the other.  Absent any other complicating factors, the Deed went on to have the effect of partitioning those permissions according to the structure of clause 11(c).

17. Returning to the Sale Agreement, I find therefore that the Hoppers Crossing business, being one of The Peeters’ Interests, was able to transfer its share of the goodwill in the trade mark to the applicant.  This finding is consistent with a third scenario described by the opponent.  Ms Ryan submitted that it was open to me “to find that the Sale Agreement was competent to assign ownership rights to the common law Wombat Gully trade mark by implication of the assignment of the goodwill of the business at 439 Old Geelong Road, Hoppers Crossing”.

18. I am in agreement with that conclusion and I reject the applicant’s submission that all rights to the trade mark ended when the special purpose company was not set up with the result that there was abandonment or extinguishment of the trade mark.

19. With these findings, it is possible to return to the question of ownership within the meaning of section 58 of the Act.

20. Although the opponent conceded that at the priority date of the application, the applicant might have had a claim to common law ownership of the trade mark at Hoppers Crossing, the opponent argues that it simultaneously enjoyed ownership rights at the Emerald location and so the applicant is unable to meet the requirement of sub-section 27(1)(a) of the Act because it did not enjoy exclusive ownership of the trade mark.

21. The opponent relies on what was said in Re: Hicks’ Trade Mark (1897) 22 VLR 636 at 640:

    “In order to substantiate his application to be placed on the Register for this word he must have claimed to be the proprietor, and the word “proprietor” must be taken to mean the person entitled to the exclusive use of that name.  If there is anyone else who would be interfered with by the registration of the word “Empress” in the exercise of a right which such person has already acquired to use the same word in application to the same kind of thing, then Hicks ought not to have been put on the Register for that trade mark, and his name will properly be removed on the application of the person whose right of user was thereby disturbed”.

22. In short, the opponent argues that the applicant must have an unalloyed right to ownership of the mark for the purposes of section 58 of the Act and in this instance that can not be so since the opponent also had a right to the trade mark. The opponent argued that there was specific support for its position in the decision in Chowdhury v. Taste of India Restaurants Pty Ltd (1999) 47 IPR 413 at pages 421 – 422, a case similarly concerned with the competing rights of entities which had acquired interests in separate businesses from a common source and under a common trade mark. In that case Hearing Officer Williams concluded:

    “Even though the maximum extent of the opponents’ rights is less than clear, it is quite clear that the applicant was not the Australia-wide owner at the time it applied, and that registration of this application would interfere with the prior rights of the opponent.  The opponents have therefore made out a ground of opposition”.

23. The applicant, by contrast, alleges that even if the failure to establish the special purpose company did not extinguish all rights in the trade mark, the subsequent conduct of the opponent shows it to have abandoned the trade mark by at least the priority date of the application leaving the applicant, both by its own actions and through those of its predecessor in title, as the continuous user of the trade mark after 1 February 2000, and accordingly the sole owner of the trade mark.

    Abandonment

24. The issue of abandonment was the subject of lengthy submissions by both parties. It was common ground between the parties that mere non-use of a trade mark does not amount to abandonment; an intention to abandon is required (Malibu Boats West Inc. v. Catanese 180 ALR 119; Riv-Oland Marble Co (Vic) Pty Ltd v. Settef SpA ALR 860; Mouson & Co v Boehm (1884) 26 Ch D 398; Colorado Group Ltd v. Strand Banks Group Ltd, [2006] FCA 160).

25. The opponent’s evidence that it had not abandoned the trade mark comprises a declaratory statement to that effect by Mr Lucas. He states that “to an outsider or to an employee, it may seem that the trade mark is not being used but use has continued for example on the website on landscape design brochures, in telephone directories and on brochures (Lucas 2, para 6).

26. Even if I put aside the question of whether that usage would support a claim to non-abandonment of the trade mark in respect of all the goods and services of the application, I am left unimpressed by the quality or nature of the claimed use. Exhibit CML-15 to Lucas 1 shows a Google search for “wombat gully” and returns as the first listed result the opponent’s website at .  The search is dated 28 June 2005. Of itself, the search proves nothing more than the existence of a metatag driving web traffic to a site bearing a different name which happens to be operated by the opponent. It is not public use and it is not trade mark use and it does nothing to establish the state of mind of Mr Lucas at the priority date.  Moreover, Biegler Exhibit TB-12 carries (undated) screenshots from the website which show at one page the statement: “In the early days at Chris & Marie’s Plant Farm, back when it was called Wombat Gully, …”

27. The opponent’s evidence of non-abandonment refers to the maintenance of the Victorian registered business name “Wombat Gully in Emerald” (Lucas 1 para 4: CML-2;  Lowe 2 para 3 and CFL-10).  The opponent refers to references to the mark on gift vouchers, tax invoices and on bank statements. 

28. Mr Fitzpatrick was critical of each of these pieces of evidence.  He characterised much of the physical evidence as vestigial use and I agree with that assessment.

29. The evidence of Mr Biegler is that, during the course of the negotiations between the applicant and The Peeters’ Interests prior to the purchase of the Hoppers Crossing Business, the opponent had renamed the Emerald nursery as “Chris and Marie’s Plant Farm” and had similarly altered its advertising promotion to focus on this new trade mark. (Biegler, paras 20 and 21 ; Exhibit TB-11).

30. Moreover, the declarations of the former employees of the Emerald nursery are telling. Leah Kenny worked at the opponent’s Emerald nursery from between 1997 and 2004 as Assistant Manager (Kenny, paras. 2, 6).  She indicates in her declaration that there was a period of time after the split in 2000 when the opponent’s nursery traded as Wombat Gully in Emerald, including on the notepaper for the personal reference provided to her on her departure from the business on 10 May 2001. She says that “by that time the name Wombat Gully was being phased out. …  staff were being issued with uniforms with the Hello Hello slogan replacing the ones with Wombat Gully. As Assistant Manager, I had the use of a vehicle to drive home overnight. By April 2001, that vehicle carried the signage for Chris and Marie’s Plant Farm (Kenny, para. 6)… by the time of my return to that employment in 2002, the business was trading only as Chris and Marie’s Plant Farm.”  She goes on to state that the business had new signage to that effect and developed its promotional material, including television commercials, by reference to the CHRIS AND MARIE’S mark.

31. That evidence is corroborated by the declaration of Mr Patrick Kasso who indicates that, since about 2001, he associates the opponent’s business with the CHRIS AND MARIE’S Plant Farm, and the slogan HELLO HELLO, and not with the mark WOMBAT GULLY.

32. Daniel Biddle was employed as a nursery hand at the Emerald nursery from 1998 to June 2003.  He gives evidence that, during the period 2000 to 2001, the opponent’s nursery changed its trading name from ‘Wombat Gully Plant Farm’ or ‘Wombat Gully in Emerald’, to ‘Chris and Marie’s Plant Farm’ (Biddle, para. 5). Mr Biddle indicates that the main sign of the nursery was taken down and replaced with the sign ‘Chris and Marie’s Plant Farm’ (Biddle, para. 7).  This was also applied to the nursery vehicles and to labels attached to plants. Mr Biddle gives evidence that, if he received a delivery slip which showed that the goods were for Wombat Gully Plant Farm, he was instructed not to accept them.  To the best of his recollection, he stats that the words ‘WOMBAT GULLY’ were no longer being used by the opponent by the end of 2001(Biddle, para. 13). 

33. By contrast, the evidence shows that the Hoppers Crossing business continued to use the trade mark up until the Sale Agreement and since then the applicant has continued use of the trade mark (Biegler para 10 ; Exhibits TB-4 , TB-5).

34. The applicant has promoted the trade mark on radio, television, in newspapers (Biegler para 13, Exhibits TB-6, 7, 8, 9 and 10) and has spent approximately $320,000 on promotion since it acquired the business (Biegler , para 15).

35. In summary, the evidence from Mr Beigler and from three witnesses is that by the end of 2001 the opponent had ceased use of the trade mark. I accept that there is ample circumstantial evidence to support a finding that the cessation of use of the trade mark was the result of a decision on the part of the opponent to move to a new trade mark.  Mr Lucas has made nothing other than a bald declaratory assertion that he had not abandoned the mark.  There is nothing to suggest that the name “Chris and Marie’s Plant Farm” might be used in addition to the trade mark at issue and it is counter-intuitive to draw that conclusion as it would result in the opponent’s business having two competing names.  The isolated examples of the appearance of the trade mark somehow in relation to the opponent’s business after mid-2001 are vestigial and it is questionable whether they qualify as “use” in the active sense of that word. Certainly, the appearance of the name on bank accounts or its use as a metatag is not use as a trade mark in the course of trade.

36. Weighing the entirety of this difficult and conflicting evidence, I find that on balance the opponent has not discharged its onus of proof by showing that the applicant was not the owner of the trade mark at the priority date.  Integral to that finding is the determination that the opponent had abandoned its interest in the trade mark sometime after the Deed and before the priority date of the application, in all probability sometime between May and December 2001. In addition, there has been continuous and uninterrupted use of the trade mark by the applicant and its predecessor in business.

37. Accordingly, the opposition based on section 58 of the Act fails.

Section 60

Trade mark similar to trade mark that has acquired a reputation in Australia

60. The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:

(a) it is substantially identical with, or deceptively similar to, a trade mark that, before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, had 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.

1. The opponent must satisfy three requirements in order make out this ground:

   §     Is there a substantially identical or deceptively similar mark?

   §     Had that trade mark a reputation at the priority date?

   §Will use of the applied for trade mark result in deception or confusion because of the reputation of that other mark?

2. The relevant date for assessing reputation is the priority date of the application, in this case, 8 August 2003. The opponent bears the onus of establishing a sufficient reputation in order to found an objection pursuant to s. 60 (Nettlefold Advertising Pty Ltd. v. Nettlefold Signs Pty Ltd (1988) 45 IPR 393 at 395; Cordon Bleu B.V. v. Condon Bleu International Lte [2000] FCA 1587 (10 November 2000) ).

3. Kitto J, in an frequently quoted passage from Southern Cross Refrigerating Company v Toowoomba Foundry Proprietary Limited (1953) 91 CLR 592 at 594 said:

   While a mere possibility of confusion is not enough - for there must be a real, tangible danger of its occurring (Reckitt & Colman (Australia) Ltd. v. Boden (1945) 70 C.L.R. 84, at pp. 94, 95; Sym Choon & Co. Ltd. v. Gordon Choons Nuts Ltd. (1949) 80 C.L.R. 65, at p. 79) - it is sufficient if the result of the user of the mark will be that a number of persons will be caused to wonder whether it might not be the case that the two products come from the same source. It is enough if the ordinary person entertains a reasonable doubt.

4. My findings so far are that the opponent effectively ceased using the trade mark, certainly in a trade mark sense, by the end of 2001.  I found that it had abandoned the trade mark in favour of a new trade mark. Mr Lucas concedes in his evidence that there was no public use of the name as a trade mark. The issue is whether on 8 August 2003, essentially one year later, the opponent had the sort of reputation in the trade mark likely to cause deception or confusion amongst a substantial number of people.

5. The opponent sought to place emphasis on two matters. First, the opponent argued that the momentum of the business under the trade mark prior to the Deed was not maintained at anything like the same scale by the applicant after the Sale Agreement.  For example, the advertising expenditure between the period 31 May 2002 to 27 October 2005 is $320,000 (Biegler para 15).  The suggestion is that at the priority date, the weight of the reputation in the business under the trade mark still resided with the opponent.

6. Secondly, the opponent places store on the following statement on the applicant’s website at :

   “IT’S NOT US THAT’S CLOSING!  We still get asked if we are closing down.  No, it’s not us.  But why are customers still confused?  Wombat Gully Plant Farm is a completely independent business, owned by a garden-loving family.  It’s five years since the last connection with the present Chris and Maries operation, which has indeed announced nursery closures.  No need for confusion!  You can have complete confidence in Wombat Gully.”

(Lowe 1, Exhibit CFL-8).

1. I am mindful that the opponent’s abandonment of the trade mark is not to be confused with the enquiry for the purpose of section 60 as to whether there is a residual goodwill in the trade mark associated with the opponent at the priority date. That said, I am not convinced that there is any room for the application of section 60 in the present case. How can the applicant’s use of the trade mark be likely to deceive or cause confusion? It is using the same trade mark which enjoyed the reputation. It is using the trade mark in respect of the same goods and services, if not the same business. It has the same lineage. It was not being used at all by the opponent at the priority date. So far as the statement on the applicant’s website is concerned, it is evidence only of the fact that some of its customers were confused into thinking that the applicant’s business was closing down. In so far as the closure of nurseries then operated by the opponent might be concerned (a matter of which I have no other evidence), it can not be said that a trade mark is rendered confusing because a former co-owner of the same trade mark stops using it (or adopts a new mark ). There might be customer confusion, but it is not confusion resulting from the trade mark.

2. I decide that the section 60 ground of opposition fails.

   Section 42

   Trade mark scandalous or its use contrary to law

   42. An application for the registration of a trade mark must be rejected if:

   (a) ….
   (b) its use would be contrary to law.

3. The opponent has two arguments under section 42(b), one based on contractual considerations, the other on consumer protection legislation. The former argument falls away given my findings in relation to section 58 since the applicant’s proposed nationwide use of the trade mark implied by the application would not be contrary to law since the applicant is the owner of the trade mark. Moreover, in so far as the alleged contrariety to law is premised on a breach of contract, there is no privity of contract as between the applicant and the opponent.

4. The opponent submits that the use of the trade mark by the applicant would contravene Section 52 of the Trade Practices Act (Cth) 1974 and corresponding Section 9 of the Fair Trading Act (Vic) 1982.  Specifically, the use would be misleading or deceptive or likely to mislead or deceive, insofar as it suggests some association with the opponent or its goods and services.

5. The Fair Trading Act (Vic) 1982 has no impact on the applicant since the applicant is a company and the Victorian legislation only catches individuals.

6. Section 52 of the Trade Practices Act has no impact for the same reason that the section 60 ground failed, namely, there is no likelihood that the use of the trade mark by the applicant is likely to mislead or deceive.

7. The ground of opposition under section 42(b) also fails.

Section 41

Trade mark not distinguishing applicant's goods or services

41.(1) ….

(2) 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 (designated goods or services) from the goods or services of other persons.

Note 2:  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 (1) and 7(3) and section 8).

1. The name “Wombat Gully” has some geographic significance. A water course by the name “Wombat Gully” is located close to the town of Emerald.  It is also the name of water courses in Tasmania and New South Wales (Lowe 1, paras 3-5).  There is no evidence that WOMBAT GULLY is an inhabited placename.

2. The applicant submitted that in order to decide whether a geographical term is used descriptively one should make the following enquiries:

   i.is the mark the name of a place from which the goods come?

   ii.   is the geographic term likely to denote to a reasonable purchaser that the goods come from the place or region named?

   iii.   is the place or region noted for the particular goods/services in question?

   See, Colorado Group Ltd v. Strand Banks Group Ltd, [2006] FCA 160 at [35].

3. The applicant submitted that where a geographical reference is a fanciful designation, arbitrarily selected to designate the services of a particular person, that mark is inherently adapted to distinguish those services.  See Colorado Group Ltd v. Strand Banks Group Pty Ltd supra at [34]

4. Trade Marks Office Manual of Practice and Procedure at paragraph 15.8 states that in order to assess the inherent adaptation to distinguish goods or services of a geographical placename, some connection or potential connection between the designated goods and services and the geographical area must be established.  Names of rivers, seas, deserts, mountains and the like will be considered to be inherently adapted to distinguish without any need for evidence, provided that the claimed goods or services are not associated with the particular geographical feature. 

5. The geographical references here are so obscure that it is inherently unlikely that a significant section of the Australian public would recognise the name.  Moreover, there is no evidence to support an argument that the claimed nursery and agricultural services would have any obvious or potential connection with any place called WOMBAT GULLY.

6. The ground of opposition under section 41 also fails.

   Decision

7. Under section 55 of the Act, I decide that the opposition fails and so I direct that the application be registered one month from date of this decision, provided that the sealing fee has been paid. If the Registrar has been served with a notice of appeal before that time, I direct that registration shall not occur until the appeal has been discontinued, or in the event of a decision from the Court, that the application be subject to its orders.

   Costs

8. Both parties requested their costs in the matter. The opposition having failed, I direct that the opponent pay the applicant’s costs according to the official scale.

   Debrett Lyons

   Hearing Officer

   Trade Mark Hearings

   20 June 2007