Maxims Caterers Limited v Magnona Pty Ltd
[2009] ATMO 98
•2 December 2009
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by MAXIMS CATERERS LIMITED to registration of trade mark application 1126989 (30, 35, 43) - CHINESE CHARACTERS (“MEI-XIN”) - filed in the name of MAGNONA PTY LTD.
Delegate: Heath Wilson Representation: Opponent: Christian Dimitriadis of Counsel instructed by Blake Dawson.
Applicant: Sophie Goddard, Senior Counsel instructed by Mok & Associates.Decision: 2009 ATMO 98
Section 52 Opposition - Grounds under sections 42(b), 44, 60, and 62A - Prior use under s44(4) applied - Goods and services restricted – Reputation of opponent’s trade mark not sufficient -Trade mark not contrary to law - Application not in bad faith - Registration proceeding for restricted goods - No award of costs.Background
On 1 August 2006, Magnona Pty Ltd (“the applicant”) applied to register the following trade mark:
Trade mark application: 1126989
Trade mark:
Goods/Services:Class: 30 Coffee, tea, sugar, artificial coffee, bread, pastries, biscuits, buns, cakes, bread rolls, cookies, torts, waffles, confectionery, chocolates, ices, spices, syrup for food, honey, sauces, ice creams, Chinese style wedding cakes, Western style wedding cakes, mooncakes, Chinese mooncakes, Chinese mooncakes with nuts, ham and nuts mooncakes, sticky-rice dumplings, mini lotus seed paste mooncakes, mini red bean paste mooncakes, mini white lotus seed paste mooncakes, mooncakes with egg yolk
Class: 35 Retailing of mooncakes, Chinese style wedding cakes, Western style wedding cakes
Class: 43 Catering of food and drink, cafes, cafeterias, canteens, restaurants, self service restaurants, snack bars
Endorsement: The applicant has advised that the Chinese characters appearing in the trade mark may be translated into English as BEAUTIFUL HEART CAKE AND PASTRY SHOP.* Provisions of subsection 44(4) applied.*
The trade mark was advertised for possible registration in the Australian Official Journal of Trade Marks on 25 January 2007, On 26 April 2007, Maxim’s Caterers Limited (“the opponent”) filed a notice of opposition (“the notice”) to this trade mark application under section 52 of the Trade Marks Act 1995 (“the Act”).
During the examination stage for this application, the opponent’s trade mark no. 1038992 (see below) was raised as a citation under section 44 of the Act. The applicant provided evidence of prior continuous use which satisfied the examiner that the provisions of subsection 44(4) could be applied, and the application was accepted on that basis.
Evidence
The parties filed and served evidence as set out below:
Evidence in Support
· Statutory Declarations of Michael Wu, (Managing Director of Maxim’s Caterers Limited):
ØDated 2 May 2007 (Annexures A to I)
ØDated 24 October 2007.
Evidence in Answer
· Statutory Declarations of Ching Yuen Tse:
ØDated 11 May 2006 (Annexures A to B)
ØDated 30 November 2006 (Annexures A to B)
ØDated 26 February 2008 (Annexures A to E)
· Statutory Declaration of Jian Hui Zhong dated 2 May 2006.
· Statutory Declaration of Tat Chin Yeung dated 9 May 2006 (Annexures A to B)
· Statutory Declaration of Man Wai Ching dated 2 May 2006 (Annexures A to B)
· Statutory Declarations of Boshala Yaan Fong Chan:
ØDated 19 February 2008 (Annexures A to D)
ØDated 17 March 2008 (Annexures 1 to 29)
Evidence in Reply
· Statutory Declaration of Hang Yee Wong dated 8 December 2008 (Annexures A to T)
· Statutory Declarations of May Lee, Trang Tran Tiet, Lai Yin Chiu and Chun Ching Chan dated 29 January 2009
Grounds of Opposition
For an opposition to succeed, the opponent bears the onus of establishing at least one of the grounds cited in the notice, on the balance of probabilities (Pfizer Products Inc v Karam (2006) 70 IPR 599, per Gyles J at [6] to [26]; Chocolaterie Guylian N.V. v Registrar of Trade Marks [2009] FCA 891 (18 August 2009) per Sundberg J at [26]). The notice cites grounds of opposition under sections 41, 42(b), 43, 44, 58, 59, 60, 61 62(a) and 62(b) of the Act. At the hearing, the opponent pressed sections 44, 42(b) and predominately sections 60 and 62A, and I will address those particular grounds in detail in the following reasons. For the sake of completeness, I note that the remaining opposition grounds nominated in the notice have not been established.
I heard this matter on 9 September 2009 in Sydney as a delegate of the Registrar of Trade Marks. Christian Dimitriadis of Counsel appeared on behalf of the opponent and Sophie Goddard, Senior Counsel appeared on the applicant’s behalf.
Reasons
Section 44: Identical etc. trade marks
The relevant provisions of section 44 state:
(1) Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of goods (applicant’s goods) must be rejected if:
(a) the applicant’s trade mark is substantially identical with, or deceptively similar to:
(i) a trade mark registered by another person in respect of similar goods or closely related services; or
(ii) a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; and
(b) the priority date for the registration of the applicant’s trade mark in respect of the applicant’s goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.
(2) Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of services (applicant’s services) must be rejected if:
(a) it is substantially identical with, or deceptively similar to:
(i) a trade mark registered by another person in respect of similar services or closely related goods; or
(ii) a trade mark whose registration in respect of similar services or closely related goods is being sought by another person; and
(b) the priority date for the registration of the applicant’s trade mark in respect of the applicant’s services is not earlier than the priority date for the registration of the other trade mark in respect of the similar services or closely related goods.
The opponent has nominated its following registered trade marks (all filed on 24 January 2005) for the purposes of comparison under section 44:
TM No. Trade Mark Endorsements 1038982 The applicant advises that the transliteration of the Chinese characters appearing in the trade mark is MEI XIN which may be translated into English as PRETTY HEART. 1038992 The applicant has advised that the Chinese Characters in the trade mark may be transliterated as HONG KONG MEI-XIN YEUT BENG and may be translated into English as HONG KONG PRETTY HEART MOON CAKES. 1038994 The applicant has advised that the translation for the Chinese words MEI-XIN appearing in the trade mark is PRETTY HEART. 1038995 N/A. 1039002 MEI-XIN The applicant has advised that the translation of the Chinese words MEI-XIN is PRETTY HEART.
These trade marks are all registered in a number of classes, for goods and services of which the most relevant are as follows:
Class: 30 Coffee, artificial coffee, coffee substitutes; tea, tea leaves and tea products; cocoa, cocoa powder and cocoa products; soup stock; bread; biscuits; cakes; snacks; cookies; crackers; Chinese cakes and western style cakes; Chinese dumplings; almond flakes; chocolate; bread sticks; pancakes; desserts; puddings; pastry and confectionery; macaroni, spaghetti, noodles and pasta products; flour and preparation made from cereals; honey; treacle; yeast, baking-powder; salt; sugar; vinegar; mustard; pepper; spices; horseradish sauces; sauces (condiment); salad dressings; ketchup; curry; ice; rice; tapioca; sago; ice-cream
Class: 35Advertising; business management; business administration; office functions; advertising by mail order; business consultancy (professional); business information; business inquiries; business investigations; business management and organisation consultancy; business management assistance; business management consultancy; business organisation consultancy; business research; commercial or industrial management assistance; demonstration of goods; direct mail advertising; dissemination of advertising matter; distribution of samples; organisation of exhibitions for commercial or advertising purposes; import-export agencies; marketing research; marketing studies; organisation of trade fairs for commercial or advertising purposes; sales promotion (for others); updating of advertising material; the bringing together, for the benefit of others, of a variety of goods
Substantial Identity
In the interests of clarity and concision, I will primarily consider trade mark application no. 1038982 for the purposes of this comparison, being the closest in similarity to the opposed mark. The comments of Windeyer J in Shell Co (Aust) Ltd v Esso Standard Oil (Aust) Ltd (1961) 109 CLR 407 [at 414-415]) set out the relevant test for substantially identical trade marks:
[the trade marks] should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison
The applicant’s trade mark contains additional Chinese characters resulting in clear visual differences when compared with the opponent’s trade mark 1038982. The other trade marks owned by the opponent contain devices, additional Chinese characters and/or English transliterations. The abovementioned differences preclude a finding of substantial identity.
Deceptively Similar
The well established test for deceptive similarity was set out in Australian Woollen Mills Ltd v F. S. Walton and Company Ltd (1937) 58 CLR 641 per Dixon and McTiernan JJ (at 658):
the marks ought not … to be compared side by side. An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought. The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same … The usual manner in which ordinary people behave must be the test of what confusion or deception may be expected. Potential buyers of goods are not to be credited with any high perception or habitual caution. On the other hand, exceptional carelessness or stupidity may be disregarded.
For a comparison of the differences between Chinese characters in a trade mark, visual similarity would be the most important consideration, particularly for Australians unfamiliar with the meaning of those characters. In a comparison with trade mark no. 1038982, the visual difference of the last two characters of the applicant’s mark does add some capacity to differentiate between the trade marks; however the first two characters in the applicant’s mark and the opponent’s mark are identical.
Despite the fact that this comparison concerns Chinese characters (rather than English words), I find it relevant that:
… the first syllable of a word is, as a rule, far the most important for the purpose of distinction (London Lubricants (1920) Ltd’s Appn (1925) 42 RPC 264 at 279 (CA UK)).
The differences in style and layout do not override this visual similarity, as I believe the marks would still be imperfectly recalled as denoting the goods/services of the same trader.
Whether or not the trade marks have a similar meaning and/or sound would be important for consumers familiar with Chinese characters. The transliteration of the first two Chinese characters in both the opponent’s and the applicant’s trade marks, is “MEI-XIN” (which is phonetically similar to “MAXIM”- a name also used interchangeably by both parties for these goods). Allowing for the differences in pronunciation of Chinese dialects, it is likely that the initial two Chinese characters in the respective trade marks would be pronounced in the same fashion.
The meaning of the trade marks when applied to the goods and services is similar. The English translation of the first two Chinese characters in the applicant’s and opponent’s trade mark is the words “Beautiful/Pretty Heart” with the final two characters of the applicant’s trade mark being the equivalent of the English words “Cake Shop”. The opponent has, therefore, submitted that the “first two characters are the distinctive part of the opposed mark, or the “idea” or “essential feature of the mark.” The last two characters would not be adapted to distinguish certain goods/services claimed in the opposed application, and it is likely they would be accorded less weight by those target consumers familiar with the Chinese language.
The nature and extent of the goods and services claimed by both parties is particularly broad. While in practice the parties operate in the same specific area of business, the consideration for section 44 is “…not limited to whether a particular use will give rise to deception or confusion. It must be based upon what the applicant can do if registration is obtained”: Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365; 45 IPR 411; [1999] FCA 1020, at [50]. Both trade marks contain goods and services of the same description in classes 30 and 35. The class 35 services in the opponent’s registration, namely “the bringing together, for the benefit of others, of a variety of goods”, is a form of wording of the 9th Edition of the classification under the Nice Agreement effectively meaning the retail of goods (which encompass the class 35 services in the opposed application).
Further, this could arguably mean that the opponent’s services in class 35 are potentially similar to the Class 43 services contained in the opposed application. This issue was not pressed at the hearing, and based on the facts I am not convinced that the possible danger of confusion if the applicant’s trade mark is used on those services is real and tangible.
As a result, the opponent’s goods/services are either similar or closely related to certain goods and services in classes 30 and 35 of the opposed application. Taking into account all the above factors, I am satisfied that the marks are deceptively similar and that a prima facie ground of opposition has been established under section 44(1) and 44(2) has been established for some of the goods and services contained in the specification.
Prior Use under Section 44(4):
For the provisions of subsection 44(4) to apply, the Registrar must be satisfied that the applicant’s trade mark has been used continuously for a period prior to the filing date of the conflicting trade mark, and ending on the priority date for the applicant’s trade mark.
The evidence submitted by the applicant indicates that its trade mark has been used prior to 24 January 2005 in relation to specific bakery goods including mooncakes and for the sale of such goods. This use in Australia can be dated back to around 1987-1990[1]. The trade mark use has been continuous from that date on these particular goods and services, as the extensive evidence from the applicant demonstrates.
[1] Declaration of Ching Yuen Tse No.4 (Annexure 1-6).
Mr. Dimitriadis conceded during the hearing that the opponent’s evidence does not support use prior to that of the applicant in Australia in relation to the above trade marks. Consequently, the section 58A ground of opposition would not be applicable. However, of the goods in classes 30 and 35 of the applicant’s specification, the applicant has established prior use in relation to the following conflicting goods/services only:
Class: 30 Mooncakes, Chinese mooncakes, Chinese mooncakes with nuts, ham and nuts mooncakes, mini lotus seed paste mooncakes, mini red bean paste mooncakes, mini white lotus seed paste mooncakes, mooncakes with egg yolk
Class: 35 Retailing of mooncakes
While the applicant asserts that it has been using its trade mark in relation to other types of cakes and dumplings (rather than solely moon cakes), I am not satisfied that the evidence bears this out. In summary, the applicant’s and opponent’s trade mark are deceptively similar, and I find that the applicant has established prior use (s44(4)) to the opponent’s mark in relation to the above goods and services. On the balance of probabilities, the section 44 ground of opposition has been established in relation to the other goods and services in those classes.
Section 60: Trade mark similar to trade mark that has acquired a reputation in Australia
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.
The filing date of this application is 1 August 2006 and this date falls before the amendments to section 60 of the Act came into effect on 23 October of that year. Therefore, the above unamended provisions of section 60 apply, and a consideration of the substantial identity and deceptive similarity of the trade marks is necessary. It has been accepted and applied by the Trade Marks Office (see Apple Computer v TodayTech Group Pty Ltd [2007] ATMO 40 at [29]-[62]; Trade MarksAmendment Act 2006, Item 31), that the date for determining whether the unamended provisions of section 60 of the Act apply, is from the filing of the opposed application.
Substantial Identity and Deceptive Similarity
For the purposes of this ground, the opponent is relying on its common law reputation in trade marks consisting of the Chinese characters below, which I will conveniently describe as:
“the two character mark” (Trade mark registration no. 1038982),
and the “four character mark”.
I have already determined that the opponent’s two character mark is deceptively similar to the applicant’s trade mark under section 44 in relation to a broad range of goods. On a side-by-side comparison (see Shell Co (Aust) Ltd v Esso Standard Oil (Aust) Ltd (supra)), it is clear the opponent’s four character mark and the applicant’s trade mark are substantially identical to each other. The horizontal layout of the characters and the different style creates a minor variation between the respective trade marks, however (when considered in their entirety) they are substantially identical both visually and aurally. There are also instances demonstrated in the opponent’s evidence where its four character mark is presented in the same layout as that of the opposed application.
Reputation of the Opponent’s marks
On the balance of probabilities, the opponent must establish the existence of an Australian reputation in the above trade marks prior to 1 August 2006, such that use of the applicant’s trade mark on the claimed goods/services would be likely to deceive or cause confusion in the marketplace. Relevantly, in McCormick & Co Inc v McCormick (2000) 51 IPR 102 at 127, Kenny J said:
In practice, it is commonplace to infer reputation from a high volume of sales, together with substantial advertising expenditures and other promotions, without any direct evidence of consumer appreciation of the mark, as opposed to the product.
However, the sales and advertising figures provided by the opponent only relate to the two character and “Mei-Xin” (no. 1039002) trade marks. Evidence of use of the four character trade mark is minimal in quantity and shows use only in Hong Kong in the 1970s-1980s. For these reasons, I find that the opponent’s four character trade mark does not enjoy the requisite reputation sufficient to satisfy section 60 of the Act.
The opponent began using the “two character” and “Mei-Xin” trade marks in Australia in 2000. The sales figures for goods sold under the opponent’s “two character” mark have established significant growth in Australia from 2000 to 2005.[2] Michael Wu (Managing Director of the opponent)[3] highlights an order of moon cakes dated 29 June 2000, but does not indicate where in Australia those goods were delivered, or whether the delivery occurred. In addition, the advertising and related expenditure for the “two character” mark is not substantial, consisting solely of advertisements in Australian Chinese newspapers, such as Sing Tao Newspapers (September 2000) and the Australian Chinese Daily (September 2004). I also note that the applicant has used its own trade mark to advertise its goods via these publications.[4]
[2] Declaration of Michael Wu: No. 1, paragraph 14.
[3] Declaration of Michael Wu: No. 1 (Annexure E).
[4] Declaration of Ching Yuen Tse No.1, paragraph 18 (Annexure A).
The majority of the opponent’s trade mark use occurred in Hong Kong since 1956 (and in China and Singapore since the 1980s). There is substantial evidence supporting an overseas reputation, including Hong Kong advertisements and publications since 1974. The statutory declaration of Hang Yee Wong (the opponent’s legal counsel in Hong Kong) establishes that there were 35 cake shops using the four character mark at the end of 1979, 100 by 1990, and at the time of the declaration: 161 cake shops in Hong Kong and 23 in China. The trade mark use is prominent on the KCR (Kowloon-Canton Railway) and MTR (Mass Transit Railway) and was one of the top ten brand names in Hong Kong in 2003.[5]
[5] Declaration of Hang Yee Wong Annexure H.
Even a substantial reputation in Hong Kong does not carry the weight of an equivalent reputation in Australia. However, Justice Lockhart commented in Conagra Inc v McCain Foods (Australia) Pty Ltd (1992) 33 FCR 302; 23 IPR 193 (at 233-4):
It is no longer valid, if it ever was, to speak of a business having goodwill or reputation only where the business is carried on. Goods and services are often preceded by their reputation abroad. They may not be physically present in the market of a particular country, but are well known there because of the sophistication of communications which are increasingly less limited by national boundaries, and the frequent travel of residents of many countries for reasons of business, pleasure or study.
The production and sale of moon cakes, especially under a trade mark consisting entirely of Chinese characters, indicates a niche market. This factor may lessen the difficulty of establishing spillover reputation from overseas. The number of Chinese immigrants or Australian Chinese from Hong Kong[6] is particularly relevant in this consideration. The combination of Australian and overseas use (considering the target consumer for these particular goods) satisfies me that the opponent had a reputation in Australia at the priority date. The above factors should be accounted for, in determining whether confusion in Australia is likely as a result of this reputation.
[6] Declaration of Hang Yee Wong, paragraph 19.
Likelihood of Deception or Confusion
The opponent submits that the prior reputation in the applicant’s trade mark is not a relevant consideration for section 60 (referring to McCormick & Co Inc v McCormick supra at [90]-[96]). In that case, it was established that a consideration of section 60 is not subject to s44(3), and each of the opposition grounds should be considered in their own right. While section 60 does centre on the reputation of the opponents’ mark, it does not follow that the reputation of the applicant’s trade mark is irrelevant. On the current facts, the applicant’s reputation cannot be ignored in the assessment of whether its use would be likely to cause confusion.
Since 1983, the applicant has been using its trade mark to advertise its goods in Australia. The applicant’s trade mark is featured on cake boxes, banners, invoices, price lists, plastic bags and wrappings. The sales turnover for the applicant’s mark is substantial from 2000 to 2006 (especially at the time of the Chinese Moon Festival) and effectively overshadows the opponent’s sales in Australia for this time period. Apart from Sydney, the applicant’s advertising has reached Melbourne, Newcastle, Tasmania, Darwin, Adelaide and Brisbane. While the annual expenditure on advertising in Chinese language publications is similar to the opponent’s, the amount of exhibited newspaper advertisements in Australia is more extensive and extended over the longer time period (from 1986 to 2006). These factors affect any possible likelihood of confusion resulting from the use of the applicant’s mark.
In relation to the odds of confusion, the High Court considered that the “proximity of businesses does no more that demonstrate beyond question that such a possibility is real and not imaginary” (Sym Choon & Co Ltd v Gordon Choon Nuts Ltd (1949) 80 CLR 65 at 72). Despite both traders co-existing in Sydney from 2000-2006 and producing specific goods (Chinese mooncakes) for target consumers (being the Australian-Chinese community) using deceptively similar trade marks, the opponent has not produced any evidence of actual confusion in Australia. Given the above factors, this is a notable omission in the opponent’s evidence. Statutory declarations provided by the opponent indicate that certain Sydney residents are aware of the Hong Kong brand and would believe a cake shop bearing the four character mark to be owned by the opponent. In my view, were this confusion to occur, it would be difficult to determine whether it is the applicant’s Australian use or the opponent’s overseas use which had caused the confusion.
As this possible confusion could result from either party’s use of their trade mark, it would not necessarily be attributable to the opponent’s Australian reputation. The Hearing Officer in Bausch & Lomb Inc v Karl Storz & Co KG (2008) ATMO 71 addressed a similar issue, and decided:
Under these circumstances, it is, I think, impossible for me to point at the trade mark of either party and say that it is the reputation of that STORZ trade mark which is the source of deception and confusion. The source of the confusion or deception could be the reputation of either, or both.
In summary, the opponent is the owner of deceptively similar trade marks, which enjoyed an overseas reputation at 1 August 2006, the priority date of the applicant’s trade mark. However, the applicant also had a significant Australian reputation (from 1982 to 2006) predating the opponent’s use of its trade mark in Australia.
Consequently, even when I allow for spillover of the opponent’s reputation in Hong Kong into the niche market for mooncakes in Australia, the opponent’s reputation is not sufficient to establish that confusion in Australia would be likely as a result of the reputation in its trade marks. On the balance of probabilities, I find that the ground of opposition under section 60 has not been established.
Section 42(b): Use of a trade mark contrary to law
An application for the registration of a trade mark must be rejected if:
(b) its use would be contrary to law.For a successful opposition under this ground, the opponent bears the onus of establishing that the applicant’s use of its trade mark “would”, not “could”, be contrary to law (Advantage-Rent-A-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683 at [28]). The opponent has submitted that the use of the applicant’s trade mark is contrary to law in that it would contravene sections 52 or 53 of the Trade Practices Act 1974 (Cth) (“TPA”) and also constitute passing off under common law.
To establish section 52 of the TPA, Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 highlighted that it was not sufficient to establish that the conduct complained of was confusing or caused people to wonder whether two products may have come from the same source. In this particular matter, there are not a reasonably significant number of potential purchasers likely to be deceived by the applicant’s use of its trade mark, due to their awareness of the opponent’s product (as addressed under the section 60 ground of opposition). I am not satisfied that the applicant’s conduct would amount to breach of sections 52 or 53 of the TPA or satisfy the elements required for the tort of passing off. Therefore, the opponent has not discharged the onus of establishing the ground of opposition under section 42(b).
Section 62A: Application made in bad faith
The registration of a trade mark may be opposed on the ground that the application was made in bad faith.
There have been few opposition matters considered by the Trade Marks Office under this new section, and each has been decided on its own merits (see Hard Coffee Pty Limited v Hard Coffee Main Beach Pty Limited [2009] ATMO 26; Bombala Council v Peter Wilkshire [2009] ATMO 33). While I acknowledge the submissions of counsel for the applicant on the matter, I am not convinced that there is any reason to apply a higher standard of proof for bad faith than that of the balance of probabilities applied to the other opposition grounds. At the same time, an allegation of bad faith should not be taken lightly, and any evidence supporting a possible adverse inference would need to be significant and unambiguous.
The opponent’s counsel has provided reference to certain United Kingdom trade marks cases dealing with the notion of bad faith including Daawat Trade Mark [2003] RPC 11, Harrison’s Trade Mark Application [2005] FSR 10, and Jules Rimet Cup Ltd v Football Association Ltd [2008] FSR 10. These cases provide some guidance on how the issue of bad faith may be approached in Australia, and the test set out in Harrison’s Trade Mark (supra) [at 26] was (emphasis added):
The words “bad faith” suggest a mental state. Clearly when considering the question of whether an application to register is made in bad faith all the circumstances will be relevant. However the court must decide whether the knowledge of the applicant was such that his decision to apply for registration would be regarded as bad faith by persons adopting proper standards.
The Explanatory Memorandum to the Trade Marks Amendment Bill 2006 provided some (non-exhaustive) examples of instances of bad faith:
·persons who monitor new property developments, register the names of new developments as trade marks for a number of services and then threaten the property developers with trade mark infringement proceedings unless the developers licence or buy the trade marks;
·persons who have a history of applying for trade marks that are deliberate misspellings of other registered trade marks;
·persons who identify trade marks used overseas but with no Australian use as yet who then apply to register the trade marks in Australia for the express purpose of selling them to the overseas owners.[7]
[7] Explanatory Memorandum to the Trade Marks Amendment Bill 2006 (Cth) at [4.12.1]
It is worth noting that in this matter the opponent has not established that a previous business relationship or a course of dealing existed between the applicant and the opponent (as was the case in Hard Coffee supra), and there is clearly no intention on the part of the applicant to sell its trade mark to the opponent. However, the absence of these factors is not conclusive for this ground, and there are other issues specific to this opposition which need to be addressed.
The opponent submits that an “irresistible inference” can be drawn from the evidence that the original actions of the applicant in adopting the trade mark back in 1982 in Australia (and then applying to register this trade mark in August 2006) constituted bad faith. To support this argument, the opponent’s evidence mainly points to the similarity of its trade marks to that of the applicant, and the overseas reputation of its Hong Kong trade mark which existed prior to the applicant’s use in Australia.
Mr. Tse is one of the founders of the applicant having worked in a bakery since 1950, he currently owns Tai Tung Bakery in Hong Kong, and he set up his Australian business in 1982.[8] In 1982, Mr. Tse offered Mr. Tat Chin Yeung, who was a Hong Kong “Head Pastry Chef at a famous restaurant at the time…”[9] a job in his shop in Australia, which he accepted. At this time, the opponent’s trade mark was known in Hong Kong. The extent of the opponent’s use and the similarity of the trade marks used in relation to similar goods/services amounts to an inference that the applicant also had knowledge of the opponent’s trade mark. However, there is no evidence that the opponent intended to expand its business to Australia, and it did not do so until 2000 (approximately 18 years later).
[8] Declaration of Ching Yuen Tse No.1, Paragraphs 8 & 24.
[9] Declaration of Tat Chin Yeung, Paragraph 2.
The similarities between the Chinese characters in the applicant’s and the opponent’s trade marks are evident, and a comparison of the product packaging in the evidence reveals further similarities. Hang Yee Wong[10] provides examples of the trade marks indicating not only the use of the same four Chinese characters, but also use of the name “Maxim’s” by both parties in substantially the same font. The example of the opponent’s trade mark in use is from Hong Kong in 1973, which predates the applicant’s example from November 2006. This evidence has not been answered by the applicant.
[10] Declaration of Hang Yee Wong, Annexure S.
In these matters, silence on an applicant’s part as to the reasons for adopting a particular trade mark may strengthen an opponent’s case. While not specifically addressing the reasons for adopting this trade mark for these particular goods, Mr. Tse[11] does provide a reason as to why it was desirable for the applicant to adopt the trade mark given its Chinese meaning.
[11] Declaration of Ching Yuen Tse No.2, paragraph 7.
The above considerations may result in an inference that the applicant was intending to trade off the opponent’s reputation when the applicant’s trade mark was first adopted, but does this mean that act of applying for the trade mark on 1 August 2006 was bad faith? On the evidence before me, it does not. It may have been a form of “sharp business practice” at the time of the adoption of the trade mark, but this has been described in previous cases as “…not in itself fraudulent or a breach of the law” (Amalgamated Tobacco Corporation Ltd (1951) 1B IPR 504 per Williams J [at 506]). I am not convinced that the opponent’s trade mark was sufficiently known in Australia at the time of adoption of the mark to constitute an act of bad faith. In addition (and perhaps most significantly), the applicant had been using its trade mark for a long period of time in Australia prior to the opponent and amassed its own goodwill. Consequently, applying for the trade mark on 1 August 2006 is unlikely to have been an act of bad faith.
Given the level and extent of the applicant’s trade mark use in Australia, I am not satisfied that a reasonable person standing in the applicant’s shoes ought to have been aware that he/she ought not to have applied for the above trade mark on 1 August 2006. Accordingly, on the balance of probabilities, I find that the ground of opposition under section 62A of the Act has not been established.
Decision
Section 55: Decision
(1) Unless the proceedings are discontinued or dismissed, the Registrar must, at the end, decide:
(a) to refuse to register the trade mark; or
(b) to register the trade mark (with or without conditions or limitations) in respect of the goods and/or services then specified in the application;
having regard to the extent (if any) to which any ground on which the application was opposed has been established.
Note: For limitations see section 6.
A ground of opposition under section 44 of the Act has been established. I will allow the applicant one month from the date of this decision to request the following amendment to the specification of goods and services:
Class: 30 Mooncakes, Chinese mooncakes, Chinese mooncakes with nuts, ham and nuts mooncakes, mini lotus seed paste mooncakes, mini red bean paste mooncakes, mini white lotus seed paste mooncakes, mooncakes with egg yolk
Class: 35 Retailing of mooncakes
Class: 43 Catering of food and drink, cafes, cafeterias, canteens, restaurants, self service restaurants, snack bars
In which case, the application may proceed to registration. 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 withdrawn or discontinued, or a court so orders.
Costs
As both parties have been successful to a certain extent in this matter, I find it appropriate that each party bear their own costs of these proceedings.
Heath Wilson
Hearing Officer
Trade Marks Hearings
2 December 2009
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