Network Consumer Finance Pty Ltd v Northern City Finance Pty Ltd

[2004] ATMO 67

TRADE MARKS ACT 1995

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

Re:Opposition by Network Consumer Finance Pty Ltd to registration of trade mark application 914915(36) - NCF - filed in the name of Northern City Finance Pty Ltd.

Delegate:

Terry Williams

Representation:

Opponent: Eric Ziehlke, solicitor, of Chrysiliou Law

Applicant: Damien O’Brien, instructed by Mullins Lawyers

Decision:

S 52 opposition, opponent has superior claim to ownership.  Registration refused.

Background

1. Northern City Finance Pty Ltd (Northern) applied, on 3 June 2002, to register the trade mark NCF in respect of services specified as “Insurance, financial affairs, monetary affairs”, in class 36.  The Trade Marks Office has advertised the application as accepted for possible registration.  Such registration of the trade mark has been opposed by Network Consumer Finance Pty Ltd (Network).

2. Both sides have served evidence, as per Part 5 of the Trade Mark Regulations, to support their positions.  I am now to decide the opposition, under delegation from the Registrar of Trade Marks as provided for under the Trade Marks Act 1995 (the Act).

3. In brief, Network, originally known as Harvey Norman Financial Services Pty Ltd, is a financier.  Since 1999 it has provided services to franchisees of the Harvey Norman and Domayne retail chains, and to customers of those businesses.  Network remains a wholly-owned subsidiary of Harvey Norman Holdings Ltd. 

4. While total amounts financed by Network are of the order of millions of dollars per year, the figures do not separate transactions with the franchisees from those with the general public.  In other words, it is not clear if the opponent is an “in-house” financier who supplies a lot of finance to a very small clique of franchisees, or who disperses its services across many thousands of customers.

5. Network is the owner of trade mark registrations 921425 and 921426 as follows:

6. These registrations are subsequent to the priority date of the now-opposed application.  In terms of s 44, therefore, despite being for similar services, they cannot impede the present application.  The reverse was the case, and Network’s applications, as they then were, were initially blocked by the present application.  Network’s applications were accepted in the face of the present one, and subsequently registered, under the provisions of s 44(4) of the Act.  In brief, this allows coexistence of similar marks on the register.  In the case of the present parties, this was done upon the basis of prior continuous use (by Network) earlier than the filing date of the current application. 

7. Network has also applied to register application 994864, for NCF in plain upper-case letters.  This was accepted under the same provision but registration has since been opposed by Northern.  Given the history of the matter, it was common ground that the competing NCF trade marks, when rendered in plain text, are at least deceptively similar.

8. Northern provides home, business and equipment loans.  This it has done under both the trade mark Northern City Finance and under the trade mark NCF.  The evidence is somewhat inconclusive about when first use of NCF as a trade mark actually began.  The applicant has produced ten declarations that suggest that, at least informally, the company has been known as NCF for some time.  On the other hand, the opponent’s evidence in reply strongly suggests that actual use of NCF as a trade mark started no earlier than 2003.  

Grounds and issues

1. At the hearing, Eric Ziehlke, solicitor, of Chrysiliou Law appeared for Network while Damien O’Brien of counsel, instructed by Mullins Legal, represented Northern.

Network’s notice of opposition nominated many of the grounds of opposition available under the Act.  However, at the hearing, Mr Ziehlke indicated that the grounds on which it principally relied were ownership (s 58) and prior conflicting reputation (s 60).  I will deal with those grounds in that order.  

Ownership

1. In essence, Network can defeat this application if it can show use of NCF as a trade mark prior to the filing date of Northern, or before any pre-filing use by Northern.  The requirements are simply that the use must be as a trade mark and be use of the same mark, for the same king of thing.  There was no dispute about the relevant principles, which are conveniently set out in Shanahan’s Australian Law of Trade Marks and Passing Off, chapter 11.70 – 11.90.

2. For Northern, Mr O’Brien sought to draw a distinction between the various Network marks.  However, I am satisfied that the matter can be disposed of by reference to ownership rights in the trade mark NCF rendered in plain text.

3. On Network’s behalf, Mr Zielke was strongly critical of evidence that was purported to show first use of the trade mark NCF by Northern as long ago as 1988.  Mr O’Brien described the evidence as “unchallenged” but having looked at the evidence in reply in the light of Mr Zielke’s criticisms, I do not think this is correct. 

4. Northern has relied on ten declarations in which employees of various financial organisations set out their opinion on this matter.  These are approaching a stereoptyped common form but despite the extent of their resemblance to each other I think that, from most of them, a common theme emerges with sufficient force to be given some weight.  The declarants, albeit most of them come from Queensland or have a business activity in that state, attest that they have known Northern as NCF for some considerable time, the majority for a period of more than ten years.

5. However, recognition of letters, perhaps as no more than an acronym, does not, in itself, show use of those letters as a trade mark.  Without more, recognition is insufficient to show why the letters are known.  Mr Zielke referred, on this issue, to decisions in Water Corporation v Water Corp Pty Ltd and Australian Feed Company Pty Ltd v Ricegrower’s Co-operative Ltd[1].  The recognition may be more of a testament to the reputation of Northern than anything else.  Or, as the hearing officer put it in the first of the cases on which Mr Ziehlke relied:

   Members of the public and the media may have adopted the nickname WATER CORP in referring to the opponent, as is also demonstrated by the evidence, but this does not represent commercial use of those words, as a trade mark, by the opponent.  The opponent's claim to ownership of the trade mark WATER CORP is therefore invalid, and fails to displace the applicant's claim to its trade mark.

   [1] 2003 ATMO 23 and 2002 ATMO 22 respectively

6. The evidence in reply, on the other hand, consists of a professionally-prepared search of White and Yellow Pages telephone directories over a period of years, and of the Factiva database[2], for use of NCF in relation to financial services.  The tendency of the evidence in reply is to show that Northern used the trade mark Northern City Finance until after the application was made.  At most, the later editions of some of the directories[3] show a highlighting of the letters NCF where they appear as part of the name in question.  

   [2] This database apparently reviews 8000 sources and provides, in the opinion of the researcher in question “the best access to Australian press articles”.

   [3] For example, Cairns District Yellow Pages with a copyright date of 2002

7. Some of Network’s evidence is open to the same criticism, though not to anything like the same degree.  I find that exhibit MM5 of the evidence in support does show use as a trade mark in the course of communicating with Harvey Norman franchisees in December 2000.  The memorandum, dated 19 December 2000, is clearly an offer to provide, to franchisees, access to the “NCF 24 Months Interest-Free Promotion”.  It goes beyond the use of NCF as the initials of a company and is, in my opinion, clearly used as a label or brand to identify a financial product.

8. Therefore, if Northern is to substantiate its claim to ownership, it would need to show use prior to December 2000.  Northern has failed to show a single document evidencing actual use of the trade mark NCF at anything like such a date, and therefore it cannot rely on anything better than its application, made in June 2002, to claim ownership.  Consistently, Network’s unanswered evidence in reply suggests a quite plausible reason why Northern has not better evidenced its claim to first use.

9. Accordingly, I find that the first user of the trade mark NCF prior to the date of application was Network, who thereby became the owner of the trade mark at common law.  The s 58 ground is established.

Prior and conflicting reputation

1. I will not set out in full the relevant provisions of s 60.  Suffice to say that I cannot tell if, at the priority date of the application, the trade mark NCF had any significant reputation outside the closed shop comprised of the franchisees of Harvey Norman.  This ground has not been established.

Conclusion and costs

1. In terms of s 55, I am required to decide whether to register the trade mark, having regard to the extent to which a ground of opposition has been established.  Given that I have found that Northern is not the owner of the trade mark, I refuse to register it.  I order Northern to pay the costs of Network to the extent set out in the scale.

Terry Williams

Hearing Officer

Trade Marks Hearings

19 November 2004