Netra Holdings Pty Ltd v Fure Concept Technology Pty Ltd

TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by Netra Holdings Pty Ltd to registration of trade mark application 1038002(37) – ICS INTELLIGENT CONTROL SYSTEMS AND DEVICE - filed in the name of Future Concept Technology Pty Ltd
.

Delegate:

Debrett Lyons

Representation:

Opponent: David Kell of Counsel instructed by Toomey Pegg Drevikovsky, Solicitors

Applicant: No appearance

Decision:

2007 ATMO 63

1. s. 52 opposition – s. 58: applicant not owner of the trade mark; ground succeeds and opposition succeeds.

2. Costs: applicant to pay opponent’s costs.

Background

Future Concept Technology Pty Ltd (‘the applicant’) filed trade mark application number 1038002 (‘the application’) on 17 January 2005. Details of the application are set out below.
Priority Date:                17 January 2005
Services :      Class:37 Building construction; repair; installation   services
Acceptance Advert:       19 May 2005
Trade Mark :
(‘the trade mark’)
Netra Holdings Pty Ltd (‘the opponent’) filed a Notice of Opposition to registration of the trade mark on 9 June 2005. The parties thereafter served and filed evidence according to the provisions in the Trade Mark Regulations 1995 (‘the Regulations’).
The opponent requested to be heard and the matter was set down before me, Debrett Lyons, a delegate of the Registrar of Trade Marks, for Hearing on 15 May, 2007 in Sydney. The opponent was represented at the Hearing by David Kell of Counsel. There was no appearance by the applicant and it did not make written submissions.
Grounds of Opposition
The Notice of Opposition originally listed 3 grounds of opposition under the Trade Marks Act 1995 (‘the Act’), namely:
(i) section 43 (trade mark likely to deceive or cause confusion);
(ii) section 58 (ownership);
(iii) section 60 (deceptive similarity from reputation).
The Notice of Opposition was amended in October 2006 to add the ground of opposition under section 42(b) of the Act (use of the trade mark would be contrary to law). At the Hearing the opponent pressed all of those grounds of opposition.
The Evidence
The opponent’s evidence comprised:
(i)a statutory declaration of Ronald Thomas Hardwick dated 31 August 2005 (with annexures A to R);
(ii)a statutory declaration of Ronald Thomas Hardwick dated 7 March 2006; and
(iii)a statutory declaration of Kevin Arthur Hardwick dated 5 January 2007 (with exhibit KH-1).
The applicant’s evidence comprised a statutory declaration of Bradford Keith Bloodworth dated 9 December 2005 (with annexures A-C).
There is other, unsworn, material which will be referred to later where relevant.
Factual background
What follows is a synopsis of the undisputed claims of the parties.
The opponent was incorporated in June 1985. Since July 1997 a significant part of its business has been the installation of home automatic control systems. More specifically, that business involves the design, supply and installation of audio visual, communication and electrical services, together with project management of the delivery of those services. It is essentially a father (Ronald Hardwick) and son (Kevin Hardwick) business (‘the business’).
The opponent has used the name INTELLIGENT CONTOL SYSTEMS for that business since November 2001. That name was registered to the opponent as a NSW business name on 13 January 2003.
Mr Bloodworth is a director of the applicant company. After discussions in 2002 between Kevin Hardwick and Mr Bloodworth, the opponent engaged the applicant to undertake subcontract work for it. The applicant was to provide advice in respect of pricing and equipment selection in connection with the business.
After 1 July 2003, it was further agreed that the applicant would become an exclusive subcontractor to the opponent.
The genesis of the trade mark lay in further conversations between Kevin Hardwick and Mr Bloodworth during which Kevin Hardwick expressed an interest in creating a distinctive logo for the business. It was agreed that Mr Bloodworth would approach a graphic designer known to him, Michelle Sangster, to create some logo-style designs.
Michelle Sangster provided those designs to Mr Bloodworth, who in turn sent them to Kevin Hardwick.
The trade mark of the application is one of those designs and the central issue between the parties concerns the rightful proprietorship of the trade mark.
Submissions and Reasoning
Section 58
Section 58 of the Act provides that: “The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the mark.”
The principles governing a claim to ownership of a trade mark were established by Dixon J in Shell Co of Australia Ltd v Rohm & Haas Co (1949) 78 CLR 601, where his Honour stated at 627:
“The basis of a claim to proprietorship in a trade mark so far unused has been found in the combined effect of authorship of the mark, the intention to use it upon or in connection with the goods and the applying for registration.”
Authorship in that context means the origination or first adoption of the sign as and for a trade mark (Aston v Harlee Manufacturing Co (1960) 103 CLR 391 at 399). Accordingly, a person can be the author of a trade mark without necessary being its creator.
The law is also clear that a trade mark can be the joint property of two or more parties, either by agreement or in consequence of the circumstances under which it came into existence.
In this case, the parties give very different accounts of the nature of their relationship and of their claims to ownership of the trade mark.
For its part, the opponent claims that in mid 2003, Kevin Hardwick selected the trade mark from the designs created by Michelle Sangster. He describes that process in his sworn evidence:
“The choice of the logo mark was an important matter to me, particularly given that it would be including Netra Holdings’ ‘Intelligent Control Systems’ name and mark. I considered various logos and the designs of business cards and made suggestions for changes to be made to the designs provided. I insisted that the business card contain the words “A Division of Netra Holdings.” I rejected some samples as not having the dynamic appearance that I desired for Netra Holdings’ proposed logo. Together with my wife Annette, I opted for the Netra Holdings Logo Mark [ie the design of the opposed mark] as being suitable for Netra Holdings and being sufficiently dynamic in appearance. After I decided on the form of logo which I considered suitable I asked Brad Bloodworth to go ahead and have Michelle Sangster finalize the design and have business cards printed.”
Mr Bloodworth’s sworn evidence is that the applicant “is and has been at all relevant times the legal owner of all copyright/intellectual property developed in respect of ICS including the image artwork files” and that the opponent has “no legal right to claim ownership” in respect of the trade mark. Mr Bloodworth goes on to state that he “created the intellectual property prior to January 2004, being the date upon which Bloodworth and Hardwick commenced a full time working relationship. Bloodworth created the ICS intellectual property/copyright on the basis that the ICS business would be conducted as a partnership”.
The opponent denies the existence of any partnership between the parties and asserts authorship and ownership of the trade mark. To the extent to which the evidence shows use of the trade mark by the applicant, the opponent says that this constituted, at most, a limited licence for the applicant to use the trade mark during the currency of the subcontract arrangement. That arrangement, says the opponent, came to an end in December 2004. Other use of the trade mark was without the consent or knowledge of the opponent.
At the Hearing, Mr Kell was critical of the applicant’s declaration. He submitted that the references by Mr Bloodworth to “ICS” were ambiguous since there was no separate legal entity named ICS. In so far as those letters stood for “Intelligent Control Systems”, that was the name of the opponent’s business and had been so for several years before Mr Bloodworth had any dealings with the opponent. Mr Kell also highlighted certain statements by Mr Bloodworth which fail to make complete sense and pointed to the fact that almost nothing of the statutory declaration of Ronald Thomas Hardwick dated 31 August 2005 was squarely addressed by Mr Bloodworth.
Despite the validity of each of those criticisms, the attachments to Mr Bloodworth’s declaration require scrutiny. So-called Item C is a letter dated 30 June 2003 from Michelle Sangster and on ‘Sangster Designs’ notepaper, addressed to the applicant and stating that “As per our agreement from this day forward I/We agree to transfer ownership of all intellectual property and copyright for all Intelligent Control Systems and ICS artwork, logos, branding, advertising payouts and copy created by our studio to the directors of Future Concept Technology Pty Ltd”.
Mr Kell submitted that this letter is problematic in that it carries an address of 2/7 Victoria Street, Randwick, a different address from that on an invoice put into evidence and issued 18 June 2003 by the same business which states an address of 6/6 Hill Street, Coogee. Moreover, a much later invoice also in evidence from ‘Sangster Designs’ and dated 19 May 2004 again has the address of 6/6 Hill Street, Coogee. Mr Kell posited that it was unlikely that the Sangster Design business would have the same Hill Street Coogee address as at 18 June 2003 and also at May 2004, but have a different address in Randwick at 30 June 2003, between those other dates. Mr Kell also regarded the letter as problematic since it seems to refer to an antecedent agreement between Sangster and Bloodworth not in evidence.
Leaving to one side the question of what weight might be given to the 30 June 2003 letter, it is a matter of law that an assignment of copyright in a work does not of itself provide a basis for rights in a trade mark corresponding with that copyright work for the purposes of section 58 of the Act.
Put another way, whatever copyright or other rights Michelle Sangster may have had and potentially assigned to the applicant, they could not have included the right of proprietorship of the trade mark within the meaning described by Dixon J. in the Shell case, cited earlier.
In my decision, that brings to an end any argument that the applicant is the owner (or, for that matter, co-owner) of the trade mark by virtue of a purported transfer of rights from Michelle Sangster.
The question of whether the parties might somehow jointly own the trade mark through operation of partnership law is not a useful line of enquiry because Mr Bloodworth has in his declaration stated that the trade mark is his sole property because it was created prior to the date of the alleged partnering. Although there might be a residual question of whether the trade mark had somehow become partnership property by the priority date of the application, there is no evidence of a partnership having been formed between the parties and there is sworn evidence from Kevin Hardwick that there was no partnership, nor any intention to create one. I accept those statements and reject the claim of a partnership.
The parties might nevertheless still be joint owners of the trade mark if, as a matter of fact, they were its co-authors. There is no argument that the opponent crafted and first used the expression INTELLIGENT CONTOL SYSTEMS for the business in late 2001. There is no argument that Michelle Sangster was briefed to include that expression in the proposed logo-style designs. Nor is there disagreement that it was Mr Bloodworth who instructed Ms Sangster in that regard. There is detailed evidence from Kevin Hardwick that he and his wife considered and proposed final modifications to one of the Sangster designs. Taken in its whole, the evidence is that the design function was delegated to Ms Sangster and that the selection process was made by the opponent, Mr Bloodworth acting simply as a facilitator.
That leaves only the enquiry into whether the applicant was the author of the trade mark in the sense of being the first person to adopt the trade mark for use in connection with the business.
In the absence of proof of a partnership, the only business is the business of the opponent. The evidence includes, for example, a copy of a business card produced by Sangster Designs and incorporating the trade mark, which refers to “Intelligent Control Systems” being: “A Division of Netra Holdings Pty Ltd”.
The sworn evidence of Kevin Hardwick is that the applicant had a limited permission to use the trade mark only for the purpose of its subcontracting work for the opponent. In my decision, that permitted use can not go towards establishing the applicant as the rightful owner of the trade mark. There are isolated instances of use of the trade mark by the applicant, indeed some of these after the termination of the subcontracting contract, however in my assessment they are flawed from an evidentiary perspective and in some instances they are in unsworn form and inadmissible under the Regulations. In any case, the weight of the evidence favours the opponent.
For these reasons I decide that the applicant is not the owner of the trade mark and accordingly the ground of opposition under section 58 succeeds.
Decision
Under section 55 of the Act, I decide that since at least one ground of opposition has been established, the opposition is also established and so I refuse to register application 1038002.
Costs
The opponent requested its costs in the matter in the event that it was successful. The opposition having succeeded, I direct that the applicant pay the opponent’s costs according to the official scale.
Debrett Lyons
Hearing Officer
Trade Marks Hearings
4 October 2007

[2007] ATMO 63

4 October 2007

Key Legal Topics

Areas of Law

Commercial Law

Intellectual Property

Legal Concepts

Intention

Costs