Mr Car Keys Pty Ltd v Paul John Jones

[2018] ATMO 52

TRADE MARKS ACT 1995

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

ReOpposition by Mr Car Keys Pty Ltd to registration of trade mark application 1741621 (9, 40) – MR AUTO KEYS - in the name of Paul John Jones

Delegate:                 Robert Wilson

Representation:       Opponent: Michelle Calder of IP Wealth

Applicant: Peter Whitehead of Hazan Hollander

Decision:                   2018 ATMO 52

Trade Marks Act 1995 (Cth) - Section 52 opposition: s 62A considered – previous relationship between parties – adoption of deceptively similar trade mark found to amount to application in bad faith – registration refused

Background

1.     This decision concerns an opposition by Mr Car Keys Pty Ltd (‘the Opponent’) pursuant to s 52 of the Trade Marks Act 1995 (‘the Act’) to registration of the trade mark the subject of the application detailed below in the name of Paul John Jones (‘the Applicant’):

Application Number:	1741621
Filing Date:	18 December 2015
Goods and Services:	Class 9: Encoded keys; Encoded keys for central locking in vehicles; Encoded keys for starting vehicles Class 40: Cutting of replacement keys (‘the Applicant’s Goods and Services’)
Trade Mark:	MR AUTO KEYS	(‘the Applicant’s Trade Mark’)

2.     On 12 May 2016 the application’s acceptance for possible registration was advertised in the Australian Official Journal of Trade Marks. The Opponent filed a Notice of Intention to Oppose the registration on 21 June 2016 and a Statement of Grounds and Particulars (‘the SGP’) on 21 July 2016. The SGP particularised grounds of opposition under ss 42(b), 58, 59, 60, 62 and 62A of the Act. The Applicant filed a Notice of Intention to Defend on 13 September 2016.

Evidence

3.     The Opponent filed Evidence in Support of its opposition (‘EIS’) on 16 December 2016. This evidence consists of:

·Declaration made on 16 December 2016 by Bradley Staines, who describes himself as the owner and founder of the Opponent, with Exhibits BS-1 to  BS‑27 (‘the Staines declaration’).

4.     The Applicant filed Evidence in Answer (‘EIA’) on 23 March 2017. This evidence consists of:

·Declaration made on 23 March 2017 by Paul Jones, the Applicant, with Annexures PJ-1 to PJ-24 (‘the Jones declaration’).

5.     The Opponent did not file any Evidence in Reply.

6.     Once the time allowed for filing evidence had ended the parties requested to be heard. I heard the matter on 9 February 2018 as a delegate of the Registrar of Trade Marks. Michelle Calder of IP Wealth presented oral submissions on behalf of the Opponent. Peter Whitehead of Hazan Hollander did the same on behalf of the Applicant. In accordance with my earlier directions, both representatives’ oral submissions were supplemented by written submissions filed with IP Australia prior to the hearing.

The Opponent

7.     According to the Staines declaration, the Opponent is a specialised automotive locksmith operation that supplies, cuts and programs keys for almost all makes and models of automobile. The Opponent asserts it has been using the trade mark MR CAR KEYS (‘the Opponent’s Trade Mark’) since November 2009 in connection with the following goods and services:

·Class 6: Keys

·Class 9: Encoded key cards; Encoded keys; Encoded keys for central locking in vehicles; Encoded keys for starting vehicles

·Class 40: Cutting of replacement keys; Key cutting; Key duplicating

The Opponent applied to register its trade mark in respect of the above goods and services on 2 February 2016 (some 46 days after the filing date of the Applicant’s Trade Mark).

The Applicant

8.     According to the Jones declaration, since about December 2015, the Applicant has marketed, advertised, offered for sale and sold encoded automotive keys and automotive locksmith services including services related to the cutting of replacement encoded automatic automotive keys in Australia, under and by reference to the Applicant’s Trade Mark.

The Relationship between the Opponent and the Applicant

9.     Mr Staines asserted in his declaration that the Applicant ‘formally traded under the business name “AutoScan” and had been trading under that name for several years’. My assumption is that Mr Staines meant ‘formerly’ in the preceding quote. Mr Staines declared also:

An employee from Scanner Auto in Greenacre, New South Wales recommended the Opponent’s Goods and Services to the Applicant.

The Applicant first contacted the Opponent on 22 October 2015 to employ the Opponent’s Goods and Services. From October 2015 through to December 2015 the Applicant and I, on behalf of the Opponent, communicated through a series of text messages and phone calls in which the Applicant engaged the Opponent’s Goods and Services.

I refer you to EXHIBIT BS-20 attached to and forming part of this Declaration, containing images of the text messages and missed calls from the Applicant as well as invoices for the work provided to the Applicant.

The mobile number used by the Applicant during their phone calls and text messages is the same mobile number used by the Applicant on their new business under the Opposed Application.

I refer you to EXHIBIT BS-21 … containing a screenshot from the Applicant’s contact details located at (the ‘Applicants Domain’) and the AusRegistry extract showing the Applicant is the owner of the Applicant’s Domain.

At all times the Applicant identified their business as being called ‘AUTOSCAN’ and the Applicant was aware of the Opponent’s Mark.

I refer you to EXHIBIT BS-22 … containing:

(a)The first text message from the Applicant, dated 22 October 2015;

(b)Invoice 2457 dated 27 October 2015, was for Goods which the Applicant collected in person from the Opponent’s Physical Premises;

(c)Invoice 2593 dated 3 November 2015, which was for Goods posted to the Applicant’s home address;

(d)Invoice 2922, which was paid on 1 February 2016 was for a variety of Goods that were ordered separately through November and December and were invoiced together in February. The first four items on the invoice were delivered to the Applicant’s home address by the Opponent’s employee Peter Gee and received by his wife. The remaining two items were picked up by the Applicant from the Opponent’s Physical Premises.

On at least one occasion, a staff member from the Opponent was required to travel to the Applicant’s personal address to fulfil an order. The staff member drove one of the [Opponent’s] vehicles … and wore the [Opponent’s] uniform …

Between 22 October 2015 and 22 December 2015 I discussed with the Applicant the Opponent’s plans to expand into the area of the Central Coast, New South Wales. I discussed with the Applicant the possibility of him joining the Opponent as a franchise. The Applicant was very interested in this proposal and indicated that as long as he could convince his wife that it would be profitable he was prepared to work out an agreement. The Applicant indicated that during these conversations his intention to bring his wife to the Physical Premises to convince her of the legitimacy of our business and his plan to join us as a franchisee.

On 22 December 2015, the Applicant visited the Physical Premises with his wife to discuss the potential franchise. The Applicant advised me that he was ready to proceed with the franchise agreement and that after the Christmas/New Year period has passed he would contact me so he could get started.

On 22 December 2015, the Applicant’s closing remarks to me was [sic] that he would return to the Physical Premises to see me in the New Year so we could finalise the details of getting him started as ‘Mr Car Keys’ on the central coast.

10.     The Staines declaration provides images of the Opponent’s premises, vehicles and uniforms mentioned above. Examples of the trade marks appearing in those images are provided and discussed later in this decision.

Grounds of Opposition, Onus and Standard of Proof

11.     As indicated above, in the SGP the Opponent nominated grounds of opposition under ss 42(b), 58, 59, 60, 62 and 62A of the Act. Ms Calder confirmed during the hearing that the Opponent is pressing all grounds nominated in the SGP. Ms Calder provided oral submissions in respect of the grounds pursuant to ss 58 and 62A only and indicated that the Opponent would rely on the written submissions provided in respect of the remaining grounds.

12.     To successfully oppose the registration of the Applicant’s Trade Mark the Opponent need only establish one ground of opposition.  As will become apparent it is necessary that I consider only the ground pursuant to s 62A. Of course, should the decision be appealed, it would remain open to the Opponent to plead any ground available to it under the Act in proceedings before the appellate Court.

13.     The onus of proof in an opposition rests upon the Opponent.[1] The relevant standard of proof is the ordinary civil standard based on the balance of probabilities.[2] The date at which the rights of the parties are to be determined is 18 December 2015, being the filing date of the application (‘the Relevant Date’).[3]

[1] Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58, [32].

[2] Telstra Corporation Limited v Phone Directories Company Ltd [2015] FCAFC 156, [132]-[133].

[3] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1954] HCA 82, [2].

Discussion

Section 62A – Application made in bad faith

14.     Section 62A of the Act is reproduced below:

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.

15.     The Explanatory Memorandum to the Trade Marks Amendment Bill 2006 provided some non-exhaustive examples of applications made in 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.

16.     The case of Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) is a current leading Australian authority on this section of the Act. In that case, Dodds-Streeton J made the following comments:

Clearly the court, when considering bad faith, cannot apply a purely subjective test, called by Lord Hutton ‘the Robin Hood test’. The dishonest person or one with low standards cannot be permitted to obtain trade mark registrations in circumstances where a person abiding by a reasonable standard would not. The registration of a trade mark is designed to enable bona fide proprietors to protect their proprietary rights without having to prove unfair trading. Registration is not provided to help those with low moral standards. …

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 in bad faith by persons adopting proper standards.[4]

[4] Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) [2012] FCA 81, [24]-[26].

17.     Her Honour continued later in the same decision:

The formulation in United Kingdom authority of bad faith as falling short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in a particular area is, in my view, an apt touchstone. An overly literal application may, however, tend to negate the relevance attributed to the applicant’s mental state in the combined test preferred in Harrison.

Further, in my view, mere negligence, incompetence or a lack of prudence to reasonable and experienced standards would not, in themselves, suffice, as the concept of bad faith imports conduct which, irrespective of the form it takes, is of an unscrupulous, underhand or unconscientious character.[5]

[5] Ibid [165]-[166].

18.     In the SGP the ground under s 62A was particularised as follows: (The term ‘Prior Mark’ as used in the SGP is discussed in the following paragraph of this decision.)

(i)The Opponent has been using the Prior Mark since December 2009 in relation to the Goods and Services.

(ii)The Applicant contacted the Opponent on, or about, 22 October 2015 in order to purchase and utilise the Goods and Services provided by the Opponent under the Prior Mark.  

(iii)At this time, the Applicant was operating under the name ‘AUTOSCAN’, and had been operating as ‘AUTOSCAN’ for at least five years.

(iv)Between October 2015 and December 2015, the Applicant utilised the Opponent’s Goods and Services, purchased goods from the Opponent and visited the Opponent’s premises.

(v)Between October 2015 and December 2015 the Opponent advised the Applicant of their intention to expand and open new stores and franchisees [sic].

(vi)Between October 2015 and December 2015, the Applicant and Opponent entered into discussions whereby the Applicant was offered the opportunity to become a franchisee of the Opponent.

(vii)Between October 2015 and December 2015, the Applicant and Opponent communicated via phone calls, text messages, SMS messages and emails.

(viii)At all times, the Applicant actively discussed joining the Opponent as a franchisee and indicated a positive intention towards accepting the business proposal.

(ix)Between October 2015 and December 2015 the Opponent discussed the business and future plans of the Opponent, use of the Prior Mark and franchising opportunities with the Applicant in good faith.

(x)On, or about, 22 December 2016 [sic], the Applicant visited the Opponent with his wife to discuss the business proposal.

(xi)On, or about, December 2016, the Applicant advised the Opponent that they would consider the franchise agreement and would advise the Opponent of their decision in January 2016.

(xii)On, or about 18 December 2016, the Applicant filed the Opposed Application.

(xiii)At all times the Applicant was still trading as ‘AUTOSCAN’.

(xiv)At no time did the Applicant indicate an intention to rebrand their company except to adopt the Opponent’s Prior Mark under a franchising agreement.

19.     The term ‘Prior Mark’ used in the particulars was defined in the SGP in the following manner: ‘The Opponent has been trading as “MR CAR KEYS” or “MISTER CAR KEYS” since on or about December 2009 (the “Prior Mark”).’ The Staines declaration defines the words ‘MR CAR KEYS’ as the ‘Opponent’s Mark’. The SGP makes no reference to any logo trade marks and in referencing use of a trade mark the Staines declaration does not differentiate between the plain words and any composite trade marks which might include the words MR CAR KEYS. However, the vast majority of use of trade marks demonstrated by the Staines declaration is of composite trade marks such as those shown below:

20.      Mr Whitehead for the Applicant submitted that the above is relevant because:

[I]t is necessary to consider how the Opponent puts its case. …

The SGP and the Opponent’s submissions disclose that the Opponent is conducting this opposition on the basis that it has used and owns a word mark, ‘MR CAR KEYS’. Indeed, at page 11 of the Opponent’s submissions, the Opponent states that the only relevant comparison is between MR CAR KEYS (word) and MR AUTO KEYS (word). (emphasis added by Mr Whitehead).

The Opponent claims that:

(a)it has used the word mark since 2009;

(b)it has a reputation in the word mark;

(c)the work mark is substantially identical with or deceptively similar to [the Applicant’s Trade Mark].

The Opponent does not assert, or claim, that it has a reputation in [the first of the composite trade marks shown in para 25 at this decision (‘the Opponent’s logo’)].

Nor does it claim that the Opponent’s logo is substantially identical with or deceptively similar to [the Applicant’s Trade Mark].

Accordingly, for the Opponent to succeed in any of the grounds of opposition it must establish the elements of each ground having regard to the evidence it relies upon in relation to the word mark only, not the Opponent’s logo.

21.     There is considerable merit in Mr Whitehead’s submissions. In addition to simply stating the grounds upon which an opponent relies, the purpose of a Statement of Grounds and Particulars is to put an applicant on notice of the facts which an opponent considers support the nominated grounds of opposition. This includes any trade marks upon which an opponent may be relying. An adequate statement should give an applicant the opportunity to decide whether to defend the opposition. It should also provide the basis for appropriate evidence in answer once an opponent has filed its evidence in support, if any. Having made the decision to defend the opposition based on the statement an applicant is justified in insisting that the opposition be established on the nominated grounds and in consideration of the provided particulars. It is incumbent upon opponents to correctly identify the grounds of opposition upon which they rely and to particularise them correctly in the statement.

22.     If it were necessary, here, to consider a ground of opposition under, say, s 58 or s 60 where the requirement to demonstrate use of a nominated trade mark is pivotal, Mr Whitehead’s submissions would warrant further consideration and are likely to be of particular relevance. In respect of the s 62A ground, however, there are 14 numbered particulars. The ‘Prior Mark’ is mentioned in four only of those 14. It is necessary that all the particulars and the evidence which are associated with those particulars is considered. The explicit reference to the ‘Prior Mark’ in some of the particulars does not, in my view, prohibit the consideration of exposure to other trade marks which might have arisen should the particularised facts be supported by the evidence. There is no explicit statement in the particulars that the Opponent is relying only on the ‘Prior Mark’ to support this ground.

23.     A number of the particulars which do not refer to the ‘Prior Mark’ are supported by the Opponent’s evidence and give rise to a conclusion that the Applicant was exposed to a number of trade marks other than what the Opponent has defined as the ‘Prior Mark’. For example, the particulars in paragraph (iv) state: ‘Between October 2015 and December 2015, the Applicant utilised the Opponent’s Goods and Services, purchased goods from the Opponent and visited the Opponent’s premises’. Exhibit BS-20 to the Staines declaration is declared to be ‘images of text messages and missed calls from the Applicant as well as invoices for the work provided to the Applicant’. The exhibit includes three invoices to ‘Autoscan’ two of which are dated before the Relevant Date. They include items such as ‘TK-SIP16, Supply & Cut Transponder Key – Fiat / Alfa Romeo’. The invoices bear prominently the trade mark shown below.

(‘MR CAR KEYS logo trade mark’)

24.     Exhibit BS-3 is declared to be:

[P]ictures of the Opponent and the signage at the business which was installed between 1 and 31 August 2014 and has been continuously displayed since that date:

(a)On the outside of the Physical Premises;

(b)Inside the Physical Premises on the wall; and

(c)On a roadside sign.

The exhibit includes the following images:

25.     It is stated in the Staines declaration that ‘The Opponent also uses the Opponent’s Mark on staff uniforms since 6 May 2013. Staff wear the uniforms in the Physical Premises but also when in the vehicles and visiting customers.’ Exhibit BS-5 is declared to be ‘photographs of the uniforms clearly displaying the Opponent’s Mark’. The exhibit includes the following image:

26.     In visiting the Opponent’s premises and during interactions with the Opponent’s staff the Applicant is likely to have been exposed to the MR CAR KEYS logo trade mark. The Applicant is also likely to have been exposed to the similar trade mark which appears on the roadside signage shown above. Additionally, the Applicant is likely to have been exposed to the large signage above the door of the premises. That signage could be considered to be a single composite trade mark; however, it is also reasonable to consider there to be two separate trade marks sitting side-by-side: the first being the plain words ‘mr car keys’ the second being the key device.

27.     The reference to ‘the Prior Mark’ in some of the particulars for this ground, and the absence of any explicit reference to the trade marks just discussed, does not preclude me from taking the Applicant’s exposure to these other trade marks into account when considering this ground. The particulars as they stand, in conjunction with the EIS are sufficient to bring them into play.

28.     Ms Calder submitted on behalf of the Opponent:

At the Relevant Date, the Applicant not only knew of the Opponent and the Opponent’s Trade Mark, but they utilised the Opponent’s Goods and Services, had visited the Opponent’s Premises, and had engaged in commercial conversations with the Opponent regarding possible franchising agreement.

The Applicant has not disputed any of the above. Furthermore, the Applicant sent an email to the Opponent confirming their contact with the Opponent before and after the Relevant Date.

It is also relevant that the Opponent and the Applicant discussed possible franchising of the Opponent’s Mark as an option for the Applicant.

The Applicant advised in their Email that they seriously considered the franchising agreement. They also confirmed that they were aware that the Opponent was intending to expand their business into the region where the Applicant trades thereby directly competing with them.

This is very similar to the recent case of Critical Health Products Pty Ltd v Westcoast Surgical and Medical Supplies Pty Ltd[6] where the Applicant was aware of the Opponent’s earlier use of the Opponent’s Marks in connection with the Opponent’s Goods and even had a commercial arrangement with them, although not a written agreement. In that instance, it was held that the Applicant had filed the mark in bad faith. In the decision, the following was comment was made:

[6] [2017] ATMO 80.

I am satisfied that a person standing in the Applicant’s shoes should have known that it should not apply for the registration of a trade mark deceptively similar to that used by its former business partner and that the Applicant’s conduct falls short of the ‘standards of acceptable commercial behaviour observed by reasonable and experienced persons’.[7] [8]

[7] DC Comics v Cheqout Pty Ltd [2013] FCA 478, [77].

[8] Critical Health Products Pty Ltd v Westcoast Surgical and Medical Supplies Pty Ltd [2017] ATMO 80, [18].

We submit that case is the same as the current opposition. A person standing in the Applicant’s shoes should have known that they should not apply for the registration of a trade mark deceptively similar to that used by a company that they had used and had commercial discussions [sic].

29.     Mr Whitehead submitted with respect to the franchise discussions:

[T]he limited one-sided discussions about a franchise agreement are given too much weight by the Opponent and should be given no weight in determining this ground. For instance:

·the Applicant gives evidence that he only met with Mr Staines twice, and that he did not engage in any substantive discussion about becoming a franchisee;

·the evidence suggests that the discussions about a franchise were one‑sided, emanating from and being pressed by Mr Staines only;

·if the discussions about a franchise agreement were genuine, advanced or so serious the Opponent would have sent a franchise agreement (or required disclosure material) to the Applicant. It did not.

30.     Mr Whitehead also referred me to the decision in MySupply Store Pty Ltd v mySupply Pty Ltd.[9] In that decision the delegate stated:

[9] [2017] ATMO 26.

[T]he mere fact that the Applicant was aware of the Opponent’s distribution business and its trade marks is not of itself conduct that gives rise to a finding that the trade mark application was made in bad faith pursuant to s62A of the Act. In interpreting s 62A of the Act, courts have required more, such as a situation where an applicant previously recognised the trade mark as the property of another …[10]

[10] Ibid [64] (citations omitted).

31.     MR AUTO KEYS is deceptively similar to the MR CAR KEYS logo trade mark. Use of MR AUTO KEYS by the Applicant in connection with the Applicant’s Goods and Services is likely to give rise to deception or confusion as to the trade source for consumers familiar with the Opponent’s trade marks and its services. It is also deceptively similar to ‘mr car keys’ as it appeared on the outside of the Opponent’s premises. The deceptive similarity arises from a number of factors: the presence of the identical common elements ‘MR’ and ‘KEYS’ in both trade marks; the conceptual similarity of ‘AUTO’ and ‘CAR’; and the similar order of the words in trade marks. The consideration of these factors in the light of imperfect recollection only adds to the likelihood of deception or confusion.

32.     Mr Whitehead submitted that ‘there is no evidence that the Applicant recognised the word mark as the property of the Opponent’. If it is accepted that the words ‘mr car keys’ as they appear on the outside of the Opponent’s premises is a trade mark separate from the key device next to it—a view I am inclined to take—then it is very likely that the Applicant would have recognised those words as a trade mark owned by the Opponent. If the separate identity of those words is not accepted this does not assist the Applicant. The exposure of the Applicant to the Opponent’s trade marks as they appeared on the invoices and at the Opponent’s premises would, nevertheless, have left the Applicant in no doubt that the Opponent was the owner of those  trade marks.

33.     I am satisfied that at the Relevant Date the Applicant was aware of the Opponent’s trade marks as a result of its exposure to those trade marks on invoices and by attendance at the Opponent’s premises. I am satisfied, too, that the Applicant was aware that the Opponent was the owner of those trade marks. The application by the Applicant to register a trade mark which is deceptively similar to the Opponent’s trade marks for the Applicant’s Goods and Services, in the circumstances of this case, is likely to be seen as in bad faith by persons adopting proper standards. The Opponent has therefore established this ground of opposition.

Decision

34.     I have found the Opponent has established the ground of opposition it raised pursuant to s 62A of the Act. As the Delegate of the Registrar I accordingly refuse to register the Trade Mark.

Costs

35.     The Opponent has sought an award of costs in its favour. I see no reason to depart from the general rule that costs follow the event. As the Opponent has established a ground of opposition, I award costs against the Applicant under s 221 of the Act in line with the amounts in Schedule 8 of the Trade Mark Regulations 1995.

Robert Wilson
Hearing Officer
Hearings and Oppositions
16 April 2018