Mantra IP Pty Ltd v Carmeline Assey

[2011] ATMO 15

TRADE MARKS ACT 1995

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

Re:Opposition by Mantra IP Pty Ltd to registration of trade mark applications 1281317 and 1281318 (classes 36, 43) - CARMEN Q1 3504, CARMEN Q1 603 - filed in the name of Carmeline Assey.

Delegate:

T. E. Williams

Representation:

Opponent:  Andrew Musgrave of counsel, instructed by Carly Long, of Mallesons Stephen Jaques, solicitors

Applicant:  Ladislas Assey

Decision:

2011 ATMO 15

S 52 opposition: S 60 – both reputation and trade mark function established in opponent’s sign Q1 – registration refused

Background:

1. Carmeline Assey has applied to register two trade marks, CARMEN Q1 3504 and CARMEN Q1 603 (“the trade marks”).  Both applications, 1281317 and 1281318 respectively, were filed on 18 January 2009 (“the priority date”) and seek registration of the trade marks in respect of services which I will refer to as real estate management and leasing, and accommodation services.  The relevant specifications are as follows:

Class 36	Class 43:
Application 1281317: CARMEN Q1 3504	Agency services for the leasing of real estate property; provision of information relating to property (real estate); real estate management	Accommodation letting agency services (holiday apartments)
Application 1281318: CARMEN Q1 603	Management of real estate	As above

1. Registration of the trade marks has been opposed, as allowed under s 52 of the Trade Marks Act 1995 (“the Act”) by Mantra IP Pty Ltd (“Mantra IP”).  Mantra and its business associates operate various aspects of a leisure resort in a relatively well-known high-rise building on the Gold Coast in Queensland, known as the Q1.  In what follows, I will refer to that building as “the Q1 Building”.

2. Mantra IP has filed its evidence in support of the opposition, the Jamieson declaration, about which more will be said later, and served a copy of this on Ms Assey.  Ms Assey elected not to rely on evidence in answer to the opposition and the matter was ultimately listed for me to hear and decide under delegation from the Registrar of Trade Marks.  At that hearing, Ms Assey was represented by Ladislas Assey and Mantra IP was represented, in a video conference link, by Andrew Musgrave of counsel, instructed by Carly Long, of Mallesons Stephen Jaques, solicitors.

3. In the run-up to the hearing, I directed an exchange of written submissions, starting with those of Mantra IP.  I also satisfied myself that Ms Assey was fully aware of the process for obtaining permission to file, and serve a copy of, any further evidence on which she wished to rely.  She did not seek to do so but her written submissions are replete with allegations about the allegedly oppressive conduct of Mantra IP.  Mantra IP’s written submissions are also burdened with elements of unsworn evidence from the bar table.  I have told both parties that it is both procedurally unfair, and inappropriate in principle, to conduct an opposition in this manner or to use the trade mark opposition process to deal with other existing disputes.  In the circumstances, procedural fairness requires me to exclude from consideration the various assertions and pieces of correspondence proffered by both parties, in particular by Mr Assey, in the run-up to the hearing. 

4. At the heart of Mantra’s opposition is the fact that the on-site leasing of properties within the Q1 Building may be conducted only by an onsite letting agent.  That exclusive agent is, or was when the evidence was prepared, Sunleisure Hotels and Resorts Pty Ltd, (“Sunleisure”) a business associate of Mantra.  Sunleisure is licensed to use certain of Mantra IP’s trade marks, “the designated marks”.  Some aspects of these operations have already been considered by one of my colleagues, Hearing Officer Murray, in deciding the opposition by Daniel Spagnulo to registration of trade mark applications 1228706, 1228707 and 1228708 in the name of Mantra IP Pty Ltd [1] (“the earlier matter”).  As regards the Jamieson declaration, I adopt Ms Murray’s wording, with minor modification which I have italicized and shown in parentheses, though I note that, strictly speaking, the declaration which Ms Murray considered was made on a different date and is apparently not identical to the Jamieson declaration before me in the present matter:

   [1] 2010 ATMO 110. 

   Bryan Jamieson is the General Manager – Distribution of the Mantra Group (‘MG’, (formerly known as Stella Hospitality Group)), of which Mantra IP is a part. He declares that MG is one of Australia’s largest accommodation providers, and that it operates a leisure resort called ‘Q1 RESORT & SPA’ at the Q1 building, and promotes the resort under the trade marks ‘Q1’ and ‘Ql RESORT & SPA’. The building consists of several businesses and over 500 luxury self-contained apartments as well as sub-penthouses. MG offers guest facilities at the Q1 Resort & Spa, such as a 24 hour reception, daily mini service, concierge service, business centre, two lagoon swimming pools, an indoor lap pool, gymnasium, sauna and steam rooms and a day spa. Some of these facilities are only available to guests who book through MG.

   Mr Jamieson explains that the building was developed by Sunland Group Limited (‘the developer’) and built by Sunland Constructions on an area comprising 1.2 hectares. He declares that it is the usual practice today for large scale buildings and developments for the developer to file trade mark applications at the time of construction, and transfer the trade mark to the exclusive letting agent once the building is complete. In this case, the ‘Q1’ name was chosen by the developer, to represent ‘the tallest or number one building in Queensland.’ The developer filed trade mark applications several months before construction commenced and almost four years before the building was completed. Mantra IP now owns those device trade marks, relevant details of which are:

TM No.	Priority Date	Trade Mark	Goods/services classes
898834	14 Dec 01	4, 14, 16, 18, 20, 21, 24, 25, 28, 30, 35, 36, 41, 42
898835	14 Dec 01	4, 14, 16, 18, 20, 21, 24, 25, 28, 30, 35, 36, 41, 42

Mr Jamieson further elaborates that construction of the building commenced in around June 2002, and was completed in October 2005. The building is strata-titled, containing approximately 520 separate residential apartments. Each lot was originally purchased from the developer, and is owned individually. He observes that, as the world’s tallest residential building, the Q1 Building received a significant level of media attention and publicity.

Mr Jamieson then explains that the developer selected the name (Q1 CTS 34498) for the building’s Body Corporate, or ‘owners’ association’. This is a legal entity created when land is subdivided and registered to establish a community titles scheme. Every lot owner in a community titles scheme is automatically a member of the body corporate. In November 2004, the developer sold its management rights to an entity now known as Sunleisure Hotels & Resorts Pty Ltd (‘Sunleisure’) (which is part of MG) and the body corporate officially appointed that entity resident caretaker and on-site letting agent of (the Q1 Building) in September 2005.

Also of relevance from Mr Jamieson’s declaration is the information that the developer filed trade mark applications in relation to the various Q1 businesses subsequently owned and operated by Sunleisure. These are the Q1 Store, Q1 Skybar and Q1 Observation Deck, which are open to the general public and are popular Gold Coast tourist attractions. Details of these device trade mark (registrations, which I will refer to as the trade marks of the Q1 Businesses) are:

TM No.	Priority Date	Trade Mark	Goods/services classes
1031747	25.11.04	4, 14, 16, 18, 20, 21, 24, 25, 28, 30, 35, 36, 41, 43
1093076	3.1.06	41, 43
1093077	3.1.06	41, 43

The first of these registrations is currently owned by the applicant. However, in accord with Mr Jamieson’s explanation that Sunleisure has recently sold its interest in the Observation Deck and Skybar businesses, I note that ownership of the latter two registrations, having previously passed to the applicant, has since been assigned to an (apparently) unrelated company.

1. Mr Musgrave pressed grounds of opposition under sections 60, 44(2), 43, 58, 59, 42, 62A and 41 of the the Act. As I will explain, Mantra IP has been able to establish a ground under s 60, and it will not be necessary or appropriate to consider the remaining grounds.

Grounds considered

1. Section 60 provides that:

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

   (a)  another trade mark had, before the priority date for the registration of the first‑mentioned trade mark in respect of those goods or services, 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.

   Note:          For priority date see section 12.

2. The reference to the priority date simply ensures that “the rights of the parties are to be decided as at the date of the application”.[2]  Mr Assey argued that Mantra’s position and rights were not set in stone.  I accept this, but I must address the situation as at the priority date.  If the facts motivating this opposition were to change in the future, that would have little impact on the present proceedings.

   [2] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 594-5,

3. The Jamieson declaration outlines the use, either by Mantra IP or by Sunleisure, of the designated marks.  The designated marks are as follows: [3]

   [3] The designated marks, on which Mr Musgrave expressly relied, do not include the trade marks of the Q1 Businesses , even though one of these, as Hearing Officer Murray noted, has been assigned to Mantra IP.

Trade mark	Corresponding application/registration number
898834, 898835
Q1   *	1228706, 1228707, 1228708
Q1 RESORT & SPA   *	1248464 1248465, 1248468

*  rendered in plain characters

1. The designated marks, together, constitute a family of trade marks containing the letter and numeral Q1[4]. In what follows, it will generally be convenient to use the terminology of the Act and thus refer to that combination as “the sign Q1”.

   [4] Mr Musgrave’s written submission tends to suggests that this family arose by registration of the trade marks in question.  I do not think that this is correct.  Such rights arise from use of a trade mark, registered or otherwise but, in the present case, the distinction is of no consequence.

2. I accept that the Jamieson declaration shows that there was a considerable reputation in the designated marks at the priority date.  Mr Assey did not attempt to dispute the extent of that reputation.  For my own part, I note that there is some vagueness about the identity of the company or companies in whom the reputation of the trade marks has vested over time.  Mr Jamieson’s declaration suggests that the developer, Sunleisure, Mantra IP and MG are or have been related in one way or another.  Similarly, the trade marks of the Q1 Businesses, which have been registered as numbers 1031747, 1093076 and 1093077, were owned by Sunleisure at the priority date. 

3. Mr Jamieson gives a picture of the complexity of the links between the various companies that make up Mantra Group.  He declared, in December 2009, that:

   In or around June 2007, MFS Limited (the former parent entity of the Stella Hospitality Group) acquired control of Sunleisure.  Currently, Mantra MLR Group Pty Ltd (which is also part of the MG and a related entity of Mantra IP) owns all the shares in Sunleisure.

4. What the actual relationship might have been between the builder and developer of the Q1 Building (respectively identified by Mr Jamieson as Sunland Group Limited and Sunland Constructions) is neither here nor there because the trade marks for which applications were filed by the developer were assigned to Mantra IP in 2005, and the recordal entered on the Register of Trade Marks in 2006.

5. On the evidence before me, the only safe finding is that the reputation in the designated marks resides with a loosely defined clique of companies, a clique which has changed over time.  Despite this, the end result, to visiting tourists, is that the Q1 Resort and Spa retains all the appearance of a first-rate hotel.  It appears from the evidence that tourists making bookings for serviced apartments would be unaware that they were, strictly speaking, making bookings for serviced apartments that were owned by individuals, rather than by the resort proprietor.  I think it is very unlikely that those customers making bookings through Sunleisure, in its capacity as onsite letting agent, or collecting a key from the reception desk operated by Sunleisure, or partaking of any of the facilities made available by Sunleisure to those staying at the Q1 Resort and Spa, would have any grasp of this situation.  Nor need they do so.  The reputation in the designated marks resides in what most such customers would think of, broadly, if they needed to think of it at all, as “the managers of Q1”.  The fact that the registrations for the trade marks of two of the Q1 Businesses are now in the hands of a third party may or may not be widely known, but at the priority date the reputation of those businesses, too, belonged to Sunleisure.  Perhaps the picture before me has been distorted by the absence of any evidence in answer to the opposition but, imperfect reflection or not, the uncontroverted evidence of Mr Jamieson is that:

   These services are all performed under the “Q1” and “Q1 resort and spa” brands, trade marks and registered trade marks, so that guests and apartment owners identify “Q1” with Sunleisure (and have done so since 2005).

6. There is, even so, another aspect to this matter. The submissions of Mr Musgrave rely on the premise that what I have referred to as “the designated marks” are, in fact, trade marks; that is, identifiers of services as having a particular origin, as distinct from being provided in a particular place. This is an essential element of s 60. Mr Assey did not dispute the truth of that premise. Yet disputation there is. It arises from the earlier matter with which Hearing Officer Murray dealt, and in which Mantra IP was the applicant. In the present case, Mantra IP is the opponent and the trade marks merely include, rather than comprising, the sign Q1, so that different issues will arise, and common issues may arise differently. However, it is appropriate that I note some particular aspects of the earlier matter.

7. Ms Murray considered the case of MID Sydney Pty Ltd v Australian Tourism Company Ltd[5].  At [30] Ms Murray dealt with the argument that the sign Q1 was perhaps part of the common heritage and thus able to be legitimately used as an indicator of location.  She went on to conclude that the sign Q1 was within a borderline category, wherein the name of “a plaza or other public space adjoining a building” had, because of the manner of its usage, become part of the common heritage.  That category was referred to by Reeves J, in Mantra Group Pty Ltd v Tailly Pty Ltd[6] in obiter remarks.  Reeves J did so on the basis of further obiter comments, by the Full Court of the Federal Court, which referred, somewhat tentatively, to the possible function of the words “Chifley Plaza” as part of the common heritage.  Ms Murray reached a similar conclusion about the sign Q1, which Mantra IP had sought to register as a trade mark.  Given her finding on that question, the hearing officer ultimately refused to register Mantra’s applications, basing this on the potentially misleading connotation of the sign Q1.  That decision, however, has been appealed and Mantra’s applications are, until the court proceedings are resolved, still pending.

   [5] (1998) 42 IPR 561 (the Chifley Tower case)

   [6] (2010) 83 FCR 450 (the Circle on Cavill case)

8. The usage made by Mantra IP and by Sunleisure is quite consistent with the incontrovertible fact that the Q1 Building is a place.  There is no evidence on the point, but I will accept that Q1 is officially, as well as publicly, recognised as the name of that building.  None the less, the evidence of use by Mantra IP also shows a strong proprietorial flavour.  Ms Assey has not used the opposition process to serve evidence in answer, which could then be properly tested by any countering evidence that Mantra IP wished to introduce.  I am therefore not able to say with any confidence that the function of the sign Q1 is predominantly an indication of the location at which the services with which I am concerned would be provided.  I think that, for the purposes of the present matter, the Jamieson declaration shows that, whatever geographical connotation it may have, the sign Q1 has been used by Mantra IP and Sunleisure as a trade mark in respect of the services provided by Sunleisure through the Q1 Resort and Spa and thus developed a concomitant reputation.

9. Mr Musgrave has therefore established a key part of his argument, to wit, that a strong reputation has been developed in a family of trade marks of which Q1 is a critical element.

10. Mr Musgrave conceded that the relevant deception or confusion must be caused among a “substantial” or “significant” number of people.  He argued that such a level of confusion would arise simply because consumers, those seeking to book holiday accommodation at the Q1 Building, would confuse Ms Assey’s business, when conducted under the trade marks, with that of Mantra IP and its business associates.  His submissions at the hearing, and his written submissions, are predicated on a relatively simple assumption which might be put, at its plainest, into words something like: “Given the reputation in the designated marks, Q1 simply cannot form part of Ms Assey’s trade marks, for these services, without causing deception or at least confusion.” 

11. Mr Assey’s submission, however, took a different tack.  Ms Assey, he argued, was entitled to offer real estate management and leasing, and accommodation services, under the trade marks because the trade marks were sufficiently distinguishable from the designated marks as to negate any likely confusion.  His submissions concede that the numerals 603 and 3504 represent apartment numbers within the Q1 Building, however he argued that there would be no confusion in a context where the primary element of the trade marks was the word CARMEN.  This, he argued, combines with the apartment number to create a precise indication of the nature and origin of the services in question – “putting her signature on the apartments”, as he put it  He argued that doing so would negate any reasonable likelihood of confusion with the services offered by Mantra IP and/or Sunleisure.

12. That submission is underpinned by his claim that Ms Assey, along with the other owners of apartments in the Q1 Building who together make up the body corporate, is a joint owner of the common law trade mark rights in the name of the building.  I will deal with that issue, since I think it colours the views of both Mr and Ms Assey.  Mr Assey argues that Mantra IP cannot legitimately assert trade mark rights in the sign Q1 at the expense of corresponding usage by Ms Assey, who apparently owns two apartments within the Q1 Building and is thus a member of the body corporate.

13. However, to make a long story short, his argument as set out in the previous paragraph is both double-edged and of only marginal relevance.  It is double-edged in that, if there are common law rights in the trade mark Q1 arising from use by the body corporate of the sign Q1 as a trade mark[7], those rights are the rights of the body corporate.  They are not rights of which Ms Assey is the owner, albeit that Ms Assey may be, presently, a member of that body.  However, the question of ownership of possible trade mark rights with respect to the sign Q1 under common law is of very little relevance to the present matter, which concerns CARMEN Q1 3504 and CARMEN Q1 603 rather than Q1 simpliciter.  Even if the body corporate is the owner of the sign Q1 as a common law trade mark, conflicts of ownership at common law can arise only with respect to identical or substantially identical trade marks[8].

    [7] I do not suggest that the body corporate has conducted a trade – for such a body to do so would presumably be contrary to Queensland law.

    [8] Carnival Cruise Lines Inc v Sitmar Cruises Limited [1994] FCA 936; (1994) 120 ALR 495

1. Mr Assey argued, in addition, that the usage made by Ms Assey was entirely legitimate. He argued that her intention was not to indicate any common connection with Mantra and that the trade marks had therefore been constructed to make the distinction clear. It will be convenient to return to this aspect of the matter after I deal with the substance of Mantra’s ground of opposition under s 60.

2. On my reading of the evidence, having carefully considered Hearing Officer Murray’s decision, I find that Mantra IP had a significant reputation in respect of the sign Q1 when used as a trade mark.  That reputation was such that, at the priority date, Ms Assey’s use of the trade marks would reasonably be the cause of a significant level of confusion, despite the obvious visual and conceptual differences between the trade marks and the designated marks.  I will now explain why I consider that the element CARMEN and the numerals 3504 or 603, present in each of the trade marks, do not prevent such confusion.

3. Put simply, it is not unusual to find that two trade marks can share a common element without the slightest risk of deception or confusion, even when it is clear that the common element is intended to serve a trade mark function.  A simple example would be the trade marks PETER CHIP and CHIP OFF THE OLD BLOCK.  There is no reasonable basis for an inference that the common element CHIP denotes anything at all in common between either the services bearing the respective trade marks or the sources from which those services originate.  Some minds may speculate that the trade mark CHIP OFF THE OLD BLOCK alludes to a common element, somewhere – perhaps that the two proprietors are father and son – but such speculations do not rise to what has been recognised as the triggering level, a “reasonable doubt”[9]. 

   [9] Southern Cross, supra

4. The case law has long recognised that deception or confusion are less likely in proportion to the descriptive import of the element in common, and I think it is fair to say that this will depend on the facts of the case and particularly on just how the common element is presented within the later trade mark.  However, reliance on “descriptiveness” is not always sufficient.  The operators of a hire business, to indicate that they offered CATERPILLAR tractors for hire, adopted the trade mark WILLOUGHBY'S CATERPILLAR LOADER HIRE SERVICE[10].  Three judges of the Full Court of the Federal Court agreed with a single judge of the Supreme Court of South Australia that this usage, for all that it was apparently in good faith, was an infringing use.  The court’s decision on the question of infringement is a technical one and does not shed any direct light on the issues with which I have already dealt.  However, it is a striking example of how usage of a sign such as CATERPILLAR or Q1, while apparently made with only proper motives, can be inappropriate as part of another trade mark.

   [10] See Caterpillar Loader Hire (Holdings) Pty Ltd and others v Caterpillar Tractor Co (1983) 48 ALR 511

5. What makes the usage of the trade marks inappropriate in the present context, in terms of s 60 of the Act, is that I am satisfied that its adoption now by Ms Assey as part of the trade marks will be the cause of significant risk of confusion. It cannot help but do so, despite the fact that, as Mr Assey argued, there may be many who will realize that the trade marks indicate, not a connection with Mantra IP, but exactly the opposite.

6. Mr Assey stressed that each of the trade marks begins with the word CARMEN.  CARMEN is a distinctive element within the trade marks and I reject Mr Musgrave’s argument that its trade mark function is impaired by the fact that it is a well-known forename.  However, that element is alloyed with what Mr Assey agreed would be seen as an apartment number.  And, significantly, the trade marks are to be used in respect of exactly the services in which Mantra IP and Sunleisure trade. 

7. Ms Assey has, against that background, incorporated the sign Q1 within the trade marks.  I accept that her intention in doing so is that, within the trade marks, the word and numeral Q1 should not perform a trade mark function and should therefore be understood descriptively.  Even so, she has not done this in a way that would particularly stress the descriptive function.  Her trade marks are not of the form CARMEN’S APARTMENT 603 AT THE Q1, for example.  I have, moreover, accepted that the sign Q1, when used by Mantra IP, serves a trade mark function in relation to real estate management and leasing, and accommodation services, with respect to holiday and tourist accommodation.  Given the extent of Mantra IP’s reputation in the trade mark Q1, in precisely the same services as are offered by Ms Assey, the likelihood of confusion therefore exists and the ground of opposition has been established.

Conclusion and costs

1. I have found that the s 60 ground of opposition is established. I therefore refuse to register the trade marks. As usual, costs should follow the cause and I award costs, restricted as per the scale in the regulations, against Ms Assey.

T. E. Williams

Hearing Officer

Trade Marks Hearings

14 February 2011