McDonald's Corp v Future Enterprise Pte Ltd

[2006] ATMO 80

TRADE MARKS ACT 1995

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

Re:Notice to produce documents in the matter of opposition by McDonald's Corporation to registration of trade mark applications 960885 & 961902(30) - MacCoffee - filed in the name of Future Enterprises Pte Ltd. 

Deciding Officer:	Terry Williams
Representation:	Opponent: Cynthia Cochrane of counsel, instructed by Spruson & Ferguson, patent attorneys Applicant: Carmen Champion of counsel, instructed by FB Rice, patent attorneys
Decision:	Notice to produce does not amount to fishing – arguable relevance established.  No reasonable excuse for non-compliance.

Background

1. McDonald’s Corporation (McDonald’s) requested that the Registrar of Trade Marks issue a notice under s 202 of the Trade Marks Act 1995 (the Act) requiring Future Enterprises Pte Ltd (Future) to produce a wide range of documents in a trade mark matter.  A deputy registrar in the Hearings and Legislation Section issued the notice and it was duly served on Future.

2. However, Future’s patent attorneys argued that their client is not obliged to comply with that notice.  Mr Willis, of FB Rice, the firm in question, wrote and pointed to various technical difficulties with the original notice, and a second notice was then issued in somewhat more restricted terms.  However, Mr Willis has argued, again in writing, that this is all for nought.  The documents sought, he argues, are not arguably relevant on a reasonable basis.  Mr Willis argued briefly that the entire notice was simply an attempt to trawl for documents that might, if they exist at all, be used for the opponent’s own purposes.  It was simply a speculative attempt to identify whether the documents might, ultimately, be of some evidential value.

3. Not surprisingly the attorneys for McDonald’s, Spruson & Ferguson, replied in writing that they rejected this claim outright.

4. It would clearly not have been efficient or fair to allow the hearing of the substantive matter to proceed before the parties had the benefit of my decision on the enforceability of the notice.  Therefore, following what I believe is appropriate practice[1], I proposed to direct the parties to attend a telephone conference at which this issue might be resolved.  That conference ultimately took place, with McDonald’s being represented by Cynthia Cochrane of counsel, and Future represented by Carmen Champion, also of counsel.

   [1] See para 3.4.2 of Part 54 of the Trade Marks Manual of Practice and Procedure, which is consistent with the equivalent Patents manual.

   The terms of the notice

5. It will be simplest if I set out (in summary form, at slight risk of oversimplification) the terms of the final, November 2005, form of the notice.  That notice requires production of all documents, in the possession or control of Future, that evidence:

   ·the adoption, the decision to adopt and the decision to apply for the registration of the MacCoffee trade marks[2]

   ·the forming of any intention to use in Australia either the trade marks, or any other trade mark that includes the words Mac or Mc, in relation to the goods the subject of the relevant trade mark applications

   ·knowledge by Future, on or prior to 10 April 2003 of the McCAFE trade mark used and registered by McDonald’s anywhere in the world.

   [2] There are two trade marks involved.  Both include the word MacCoffee, which Future seeks to register for a range of foodstuffs including coffee.  Trade mark 960885 also includes a device of an eagle.  Strictly, the trade marks are the subject of International Registrations Designating Australia, made under the Madrid Protocol, but I will use the familiar term “applications” for convenience.

   Arguments considered

6. At the hearing, Ms Cochrane correctly described the threshold as low[3].  Actual relevance, she stressed, need not be shown.  I agree with her that now is not the time to determine actual relevance of the documents being sought[4].  All that need be shown is that the documents are arguably relevant on a reasonable basis[5].  Or to put it another way, as Ms Champion did, it is a question of “apparent relevance”[6]:  “Whether they would be reasonably likely to add, in the end, in some way or other, to the relevant evidence in the case”. 

   [3] Taco Bill Mexican Restaurants v Taco Bell Corp (1999)  IPR 613

   [4] Gardenia Overseas Pte Ltd v. The Garden Company Ltd. (1994) AIPC 91-045 (1993) 47 FCR 220

   [5] GS Technology Pty Ltd v Commissioner of Patents (1998) 39 IPR 583 at 588

   [6] See Spencer Pty Ltd v LNC Industries Ltd (1982) 2 NSWLR 921, or Seven Network Ltd v News Ltd (no. 5) 2005 FCA 510.  From the latter, I note the caution of Sackville J “it is difficult to formulate more precise criteria and that each case must depend on its own circumstances.”

7. It is said by McDonald’s that there are two drivers for the issue of a notice, and Ms Cochrane put to me arguments ranged under two separate headings.  Ms Champion dealt with them similarly.  I will do the same, though for convenience I will leave one element of an argument that Ms Champion applied to both headings, for consideration under the latter only.

   Deceptive similarity – ground of opposition under s 44

8. At the core of this aspect is the unsupported assertion of Mr Tan Cheow, on behalf of Future, that the popular Macintosh computer, or Mac, provided the inspiration for the present trade mark.  It was, he declares, adopted to give an “impression of a sophisticated and western taste” in relation to the applicant’s original markets for coffee, in Russia and Vietnam.  It appears that the applicant is a subsidiary of a major Singaporean beverage and convenience food supplier but that, between 1982 and 1994, the applicant had been in the computer business.  It would be for a hearing officer to decide how much weight to put on this statement, taking it in conjunction with all of the surrounding circumstances and viewing it with the assistance of the arguments made by the parties.

9. McDonald’s, in my assessment, correctly characterises Mr Cheow as making an “unsupported assertion” about his motivation.  It now seeks the present notice, using it to search for all or any evidence that Mr Cheow is, to put it bluntly, lying.  Or, to put the matter more gently, to show that his assertion is not supported by any extant documents and that Future was aware of the MacCafe trade mark of McDonald’s.

10. Ms Cochrane reminded me that there is good authority to the effect that if a trade mark is adopted for the purpose of deceiving, evidence of this would be relevant to deciding if the trade mark was deceptively similar to that of an opponent.  She noted NEC v Punch Video(S) Pte Ltd [7], where Branson J was not convinced that NECVOX was coined to indicate New Entertainment for Cars.  Rather, her Honour found relevant evidence that it was coined and used to allude to the plaintiff’s NEC trade mark.  Consistently, argued Ms Cochrane, McDonald’s was entitled to test the existence or otherwise of evidence to support assertions made by the applicant about its own reasons for adopting MacCoffee in the present matter. 

    [7] (2005) 67 IPR 17

11. Ms Champion, for her part, urged me to take this line of reasoning cautiously.  Logically, she argued, evidence of intention is not directly relevant to, and would shed very little light on, the notional comparison of trade marks in terms of s 44.

12. Ms Cochrane cautioned me not to introduce a “disconnect” between motivation and deceptive similarity.  However, I accept that there is sufficient connection between the matters of motivation and deceptive similarity, and for my own part I think that such a finding could usefully illuminate the “notional” comparison under s 44, though the weight given to it would, as Ms Champion argued, depend on its context and all of the other circumstances.  That, I believe, is the heart of this question: once it is decided that documents sought are arguably relevant, even if it be conceded that their weighting is by no means certain, it is hard to see why they should not be produced if requested.

13. Ms Champion’s written submissions characterized this approach as “fishing”.  She provided a number of references that make the point clearly:

    In Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 575 Jordan CJ quoted Lord Esher MR in Hennessy v Wright [no. 2] (1890) 24 QBD 445 at 448 who referred to fishing as a means by which a party "may find our something of which he knows nothing now, which might enable him to make a case of which he has no knowledge at present". In Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd (1952) 72 WN(NSW) 250, at 254, Owen J (with whom Street CJ and Herron J agreed) noted: "It is true, as counsel for the appellant has argued, that a defendant in a libel action who has pleaded justification is not to be allowed to go on a mere ‘fishing expedition’ into the plaintiffs records in the hope of finding there something which may supply him with the evidence necessary to support this plea. But whether a particular expedition is a mere fishing expedition depends upon the meaning of that phrase. A ‘fishing expedition’ in the sense in which the phrase has been used in the law, means, as I understand it, that a person who has no evidence that fish of a particular kind are in a pool desires to be at liberty to drag it for the purpose of finding whether there are any there or not". In the language of Lord Wilberforce in Air Canada v Secretary for State for Trade [1983] 2 AC 394 at 439 there must be something beyond speculation, some common ground for belief that takes the case beyond a mere fishing expedition.

14. Here, the opponent has caused the notice to be issued in a legitimate endeavour to obtain evidence to support its case.  It aims to discover whether it has a case to argue, at the hearing of the opposition, that there was deliberate copying and therefore support for its claim of deceptive similarity.  To use the language of Associated Dominions, supra, by raising the issue of section 44, and seeking evidence that may be relevant to the concept of 'deceptive similarity', it is difficult to maintain that there are no fish of that particular kind.  Another helpful authority is found in the Federal Court decision of Trade Practices Commission v CC (NSW) Pty Ltd (1995) 58 FCR 426. In that case, Lindgren J reflected on the issue of 'fishing' and had this to say:

    What does the reference to a fishing expedition mean? After all, ex hypothesi, the giving of discovery will often, if not always, reveal documents of which the other party was not previously aware….What is meant is that discovery must not be used for the purpose of ascertaining whether a case exists, as distinct from the purpose of compelling the production of documents where there is already some evidence that a case exists.

15. His Honour also quoted his Brennan J in the case of W A Pines Pty Ltd v Bannerman (1980) 41 FLR 175 noting that "on the facts of particular cases, the application of the distinction between 'fishing' and 'non-fishing' may well be difficult". I have certainly found that, in the present case, it is unhelpful.

16. It might be said that the request of these documents in such a case is simply an attempt at discovery.  But again I would not agree.  Once it is accepted that the motives of the applicant in adopting the trade mark are arguably relevant, there is no issue of discovery.  Further, it is not clear that the lack of a discovery process is a fetter on the issue of a notice to produce.  The absence of such a procedure might just as well suggest that the registrar should take a more generous approach to such notices, rather than limiting their scope.  In R v Doogan, ex parte Lucas Smith & Ors [2004] ACTSC 91, Whitlam J examined procedural fairness in the context of a coronial inquiry. The case concerned the long-running inquiry into the 2003 ACT bushfires. Coroner Doogan had refused to require the production of background material relating to an expert report, citing a concern that it would be a 'fishing expedition without any real substance'. She also referred to the fact that she was not, in accordance with the relevant Act 'bound to observe rules of evidence and procedure'.

17. In overturning her decision, Justice Whitlam observed:

    Indeed, the fact that the Respondent is not bound to observe the rules of evidence is an important reason for a cross-examiner to be given generous access to any material available… (at page 9)

18. This echoed the sentiment expressed in the decision of President Curtis of the ACT Administrative Appeals Tribunal, in Perpetual Trustee Company (Canberra) Limited and Commissioner for ACT Revenue [1994] ACT AAT 92, where he noted (my emphasis)

    The Tribunal should not allow the summons procedure under section 41 of the Administrative Appeals Tribunal Act to be used for the purposes of a fishing expedition in the records of a stranger to the proceedings. In particular, the summons procedure ought not to be used for what would amount to seeking discovery against a stranger. The permissible ambit of a summons directed to a party to proceedings is perhaps not so clear.  The AAT Act does not permit an order for discovery to be made by the Tribunal.  In the absence of that power, there is a question whether the power to require the production of documents on summons is to be interpreted as extending to requiring a party to produce all relevant documents is not a matter which has to be decided in these proceedings.

19. This line of reasoning seems to suggest that there is judicial sympathy for the view that the very absence of a discovery procedure will require that a more generous approach be taken regarding notices under section 202. Particularly once the documents are suitably particularized and are both of arguable relevance and (potentially) within its own possession or control, I find that Future has very little scope for restricting what might otherwise seem a trawling exercise by McDonald’s.

20. Both parties also made reference to procedural fairness.  Ms Cochrane said that it was procedurally fair for McDonald’s to test for the existence of documents to support the assertion.  She said that, given the relevance of what I will call improper motivation to the question of deceptive similarity, it was in the public interest to see if there were any documents to support Mr Cheow’s assertion.  I do not agree with this, though it does not affect the outcome.  The assertion is simply that, and would be given no more and no less weight than is proper.  If Future found itself in the situation where the fate of the application hung on a lack of additional (documentary) support for the assertion of Mr Cheow, it would have nobody to blame but itself for failure to disclose this.  But in such a case the public interest will not have suffered.  Perhaps no good purpose is therefore served by compelling Future to make good an apparent lack of support[8].  However, McDonald’s wishes to leave no stone unturned here.  That is for it and its legal advisers to decide.

    [8] That, it seems to me, is the obvious problem with an unsupported assertion.  Any actual lack of support would be just as obvious at the end of the process as it appears to be, now. 

21. Ms Champion, for her part, argued that the entire process of extracting documents in this way was unfair to Future.  She pointed out that, in an infringement action or a claim for passing off, the claim that there was a dubious motivation would be put squarely[9] to the respondent.  Here, on the other hand, she argued that there was potential for unfairness to Future because the allegation was still somewhat tenuous.  I agree with the distinction that Ms Champion is drawing, but not with her conclusion.  Future can be under no doubt that its motives are in question.  If Mr Cheow has more to say, and Future considers it relevant, there is a procedure available under regulation 5.15 for seeking permission to serve and rely on further evidence.  As I said at the hearing, in such a case it is likely that permission to bring in relevant evidence would be granted. 

    [9] The puttage, as it is sometimes known.  In crude form: “I put it to you that you are not telling the truth”.

22. Likewise, Future would be aware of any documents to be produced in response to the notice.  The same procedure would be available if Future should then wish to bring in further evidence to counter any inference that Future may apprehend the hearing officer would draw from any documents produced.  Again, I think the registrar’s discretion to grant permission would be readily exercised in such a case.

23. Ms Champion also argued that the request for the notice was nothing more than an attack on the credibility of Mr Cheow.  I do not accept this.  Were it a mere attack out of malice her argument might have some force but I think the pedigree of the attack is somewhat better than this and there is clear linkage with the s 44 argument with which I have already dealt.

    Intention to use – ground of opposition under s 59

24. Here, Ms Cochrane argued strongly that there was no question of fishing.  All that was wanted was documents to support the prima facie intention to use that she accepted was manifested by Future in the making of an application for registration[10].

    [10] Aston v Harlee Manufacturing Co (1960) 103 CLR 391

25. While much of the foregoing comment is applicable here also, Ms Champion’s arguments had a second strand that it is convenient to now examine.  Ms Champion argued that the question of intention to use is not at all relevant where there is no onus on Future.  It is, as she noted, for the person opposing registration to bring in evidence of a lack of intention, or at least to point to circumstances from which a lack of intention to use might be inferred.  Until that point was reached, the applicant for registration did not need to produce anything at all on the topic: it was simply not enlivened as an issue.  Where the point is not in issue she argued that there is no basis to assert the arguable relevance of the evidence.

26. Ms Cochrane countered that, in a court matter, the opponent would be able to obtain discovery.  While she conceded that a notice should not be used as a substitute for discovery, any documents consistent with an intention to use might be, to the necessary degree, relevant and therefore properly the subject of a notice.  She argued that the notice to produce was “very directed”, so as to avoid any allegation that it was intended to obtain discovery.  However, I note that she also conceded that, without the documents, her client was “in the dark” and could not establish its ground.  She also noted that delegates of the registrar had before now been prepared to make an adverse inference.  She is correct in the latter, and perhaps it might be said that McDonald’s is simply seeking to put the trade mark applicant in a position where it will have no excuse for not bringing in all relevant evidence. 

27. Ordinarily, to quote Fullagar J, Aston v Harlee as previously footnoted:

    There is nothing in the Act or the regulations which requires (an applicant) to state such an intention at the time of application, and the making of the application itself is, I think, to be regarded as prima facie evidence of intention to use. I cannot think that the registrar is called upon to institute an inquiry as to the intention of any applicant, and I think that, on an opposition or on a motion to expunge, the burden must rest on the opponent, or the person aggrieved, of proving the absence of intention.  

28. Conversely, Future is aware, from the notice of opposition, of the issue that McDonald’s intends to put.  It is at liberty to request my permission, under reg 5.15, for further and select evidence to come in.  The registrar would ordinarily be reluctant to compel a trade mark applicant to table “all” such documents that might be “arguably” relevant.  However, McDonald’s has, somewhat heavy-handedly it seems to me, forced the issue here.

1. Ultimately, if the opposition fails and the trade mark is registered, it would be for McDonald’s to make an application under s 92 of the Act. Under that provision, of course, the onus would be on Future to rebut allegations of non-use or lack of intent. The history of s 92 and its predecessor under the Trade Marks Act 1955, the reversal of onus by s 100 of the present legislation, and the absence of such a provision from either s 55 or s 59 speak for themselves.  What McDonald’s seeks here and now, pre-registration, is a notice that would put the cart before the horse and throw out the ordinary onus under s 55.  If there is nothing suggesting that Future lacks the relevant intention to use then in such a vacuum the delegate could not come to an adverse inference[11] in the substantive matter.  McDonald’s would seek to overturn this, and both to set a Jones v Dunkel trap[12] and to oblige Future to either step into it or face a reversed onus under s 59. 

   [11] As to the drawing of an inference see two cases Ms Cochrane cited: Gambro Pty Ltd v Fresenius Medical Care South East Asia Pty Ltd (2004) 61 IPR 442, and Phillip Morris Products SA v Sean Ngu [2002] ATMO 96. I note that in the latter case, the opponent used a much more elegant procedure than is now in operation. There, it simply set up a procedure whereby the applicant was clearly aware of the weight to be put (by the opponent) on the lack of documentation. The opponent also established a mechanism whereby the applicant could easily remedy the lack. That procedure avoided heavy-handed compulsion to produce “all documents” while ensuring that an applicant could blame nobody but itself if the end result was adverse.

   [12] (1959) 101 CLR 298 at 312: to the effect that “The absence of the defendant … cannot be used to make up any deficiency of evidence; that evidence which might have been contradicted by the defendant can be accepted the more readily if the defendant fails to give evidence; that where an inference is open from facts proved by direct evidence and the question is whether it should be drawn, the circumstance that the defendant disputing it might have proved the contrary had he chosen to give evidence is properly to be taken into account as a circumstance in favour of drawing the inference”.

2. It would seem, even so, that McDonald’s is able to require the production of arguably relevant documents, and this test of arguable relevance is not filtered by asking upon whom the burden of proof falls.  The question of the onus may even assist McDonald's case because if Future does not have any such documents to produce it will be in no worse position and could argue vigorously against a Jones v Dunkel inference.  Conversely, if Future has material that both goes to this issue and suggests that it has no such intention then, given Justice Whitlam's comments in R v Doogan, supra, in the context of the bushfire inquiry, production is probably appropriate.  In this regard, the registrar, while exercising an administrative function, would be required to act judicially, adopting the 'generous approach' a court is likely to take.

   Conclusion

3. I am satisfied that the necessary preconditions that would allow a notice to be issued under s 202 were present. Accordingly, no “reasonable excuse” exists for Future not to comply with the notice. The hearing of the substantive matter will go ahead on that basis.

   Terry Williams
   Hearing Officer
   Trade Marks Hearings
   11 September 2006