Neverfail Group Limited v Hong Qu

[2007] ATMO 11

TRADE MARKS ACT 1995

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

Re:Opposition by Neverfail Group Limited to registration of trade mark application 1016837(9) - NEVERFAIL + DEVICE - filed in the name of Hong Qu.

Delegate:

Alison Windsor

Representation:

Opponent:  Nimish Gupta and Christian Schieber of Watermark, Patent & Trade Mark Attorneys

Applicant:  not represented and did not appear

Decision:

Section 52 opposition – Grounds under sections 58 and 60 not established; application to proceed to registration

Background

1. Hong Qu (“the applicant”) filed an application to register a trade mark on 23 August 2004.  The application is for “computers” in class 9, and the trade mark is shown below:

2. The application was examined in the normal course of events, no grounds for rejection were identified, and it was advertised as accepted for possible registration on 6 January 2005. 

3. Neverfail Group Limited (“the opponent”) filed a notice of opposition on 6 July 2005, following an extension of time of three months for the purpose.  The opponent completed its evidence in support by 30 June 2006, again following extensions of time for the purpose.  The applicant did not serve and file any evidence in answer and, on 20 November 2006, the opponent requested a Hearing.  The hearing was held before me, as the Registrar’s delegate, in Sydney on 12 February 2007.  Nimish Gupta and Christian Schieber of Watermark Patent and Trade Mark Attorneys represented the opponent.  The applicant did not appear, was not represented, and did not provide any submissions.

Notice of opposition

1. The notice of opposition canvassed all possible grounds of opposition available under the Trade Marks Act 1995 (“the Act”).  At the hearing the opponent pursued two grounds only, those being grounds under sections 58 and 60.  For completeness, I note that no other grounds of opposition have been established.

Evidence and submissions

1. The evidence in support consists of a statutory declaration by Stephen Stobo, Sales Director of the opponent company, with exhibits SS-1 to SS-4.  The declaration gives a brief history of the development of the company, and its range of goods.  At paragraph 9, Mr Stobo says in 1994 the company began providing products and services relating to disaster recovery and the protection of data to customers in the United Kingdom and Belgium.  It began selling high availability solutions for computers and computer networks globally in 2001.  He says a global web based marketing strategy was conducted from the company website from early 2002, aimed at all English speaking businesses and potential resellers in commercial software markets around the world. Currently the products are sold in thirty countries around the world through operations subsidiaries in Austin, Texas and Cluj in Romania, as well as through a global network of over 850 resellers. 

2. Mr Stobo says in December 2003 he was approached by a number of Australian companies who had become aware of the products and services offered by the opponent and were interested in either reselling the product or using it themselves.  He understands that between December 2003 and July 2004 Australian-based resellers downloaded the opponent’s NEVERFAIL branded web demonstration software from its website.  During that time period he also had meetings with a number of Australian-based potential resellers, and organized the preparation of an Australian version of the International Partner Agreement the opponent company uses to structure and manage its relationships with its global reseller network.

3. Mr Stobo says the opponent’s own trade marks involving the word NEVERFAIL  have been continuously used throughout Australia in relation to the following goods and services:

   Computer software; software for transmitting and duplicating data, software for replicating computer operating systems and client server environments; disaster recovery software; computer apparatus and computer peripheral devices; apparatus for monitoring and transmitting data 

Design and customization of computer systems and computer software; computer consultancy services; recovery of computer data; duplication of computer programs, computer operating systems and computer server environments; services relating to the provision of back-up and mirrored computer servers; provision of computer disaster recovery and crisis management services; installation and maintenance of computer software; computer systems analysis; leasing of computer hardware, software and peripheral devices.

1. There are a number of versions of the opponent’s trade mark shown within the evidence provided.  There are versions using the word NEVERFAIL with specific references to third party software applications such as “NEVERFAIL for Exchange” or “NEVERFAIL for SQL”, both being references to particular Microsoft Corporation branded products.  A fairly recent software package referred to in the evidence is proceeding under the trade mark NEVERFAIL HEARTBEAT.  Prominent within  the examples is the trade mark shown below:

1. I will refer to the opponent’s submissions where appropriate during my discussion of the issues.

Discussion

1. The opponent chose to pursue grounds of opposition under sections 58 and 60.  I shall deal with these in turn.

Section 58 – applicant not owner of the trade mark

1. Section 58 reads:

   The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.

2. It is now well established law that, in order to succeed under this ground of opposition the opponent must establish three factors. These are:

• that the respective trade marks of applicant and opponent be either identical or substantially identical (Carnival Cruise Lines Inc. v Sitmar Cruises Limited (1994) 31 IPR 375, (1994) AIPC 91-049, (1994) 120 ALR 495)

• that the  respective goods or services of the parties be the `same kind of thing' (Re: Hicks's Trade Mark (1897) 22 VLR 636, 3 ALR 75), and

• that a person other than the applicant has the earlier claim to ownership based on use prior to both the present application to register and actual use of the trade mark by the applicant

1. On the first matter, I am satisfied these two trade marks are neither identical nor substantially identical.  The applicant’s trade mark includes a very prominent geometric device which can be seen as a lower case letter D made up of two geometric shapes – a semi-circle and a quadrilateral figure with one sharply slanted end.  This device is a distinctive element in its own right.  The word NEVERFAIL, however, also stands out within the trade mark.  The trade mark is likely to be identified, especially verbally, by the word rather than the device.  But on a side by side comparison[1] with the opponent’s trade marks there are distinct and obvious differences, such that they cannot be regarded as substantially identical.  The ground of opposition under section 58 thus fails at the threshold.

   [1] Per Windeyer J in Shell Co. (Aust) Ltd v Esso Standard Oil (Aust) Ltd ((1961) 109 CLR 407 at 414-415

Section 60 – prior reputation in Australia

1. Success in a ground of opposition under this provision of the Act requires the opponent to point to a substantially identical or deceptively similar trade mark which had established a reputation in the Australian market before the filing date of the applicant’s trade mark. The strength of this reputation should be such that use of the applicant’s trade mark would cause deception and confusion.

2. I have already discussed the matter of substantial identity of the two trade marks at issue here, and found they do not meet the requirement.  I am satisfied, however, that the two trade marks are deceptively similar.  As mentioned earlier, the portion of the applicant’s trade mark by which it is likely to be identified is the word NEVERFAIL.  Once the trade marks are no longer being compared side by side, there is a significant  likelihood of confusion within the mind of a person who knows one trade mark but not the other.  I am satisfied this is more than just a mere possibility of confusion.  I consider there is a real tangible chance of these two trade marks being confused once in use within the trade.  They are therefore deceptively similar.

3. The matter which remains to be determined is whether the opponent has, at the filing date of the opposed application, as it has claimed, such a reputation within the Australian market that use of the applicant’s trade mark on its claimed goods will cause significant deception and confusion.

4. As pointed out in the opponent’s submissions, the court discussed what was intended by the word “reputation” in ConAgra Inc v McCain Foods (Aust) Pty Ltd[2] per Lockhart J (at p234):

   Reputation within the jurisdiction may be proved by a variety of means including advertisements or television, or radio or in magazines and newspapers within the forum.  It may be established by showing constant travel of people between other countries and the forum and that people within the forum (whether residents there or persons simply visiting there from other countries) are exposed to the goods of the overseas owner. 

   [2](1992) 23 IPR 193

5. I note, however, that His Honour said in the previous paragraph:

   The requirement in some of the cases that a very slight form of business activity is sufficient is really a somewhat artificial concept.  The real question is whether the owner of the goods has established a sufficient reputation with respect to his goods within the particular country in order to acquire a sufficient level of consumer knowledge of the product and attraction for it to provide custom which, if lost, would likely result in damage to him. This is essentially a question of fact.

Later at 237 he also said:

The reason for the requirement of a substantial number of persons is, in my opinion, that the reputation of a plaintiff in the forum is the source of his potential business there; his goods are known to people there who are his potential customers. For him to have in a practical and business sense a sufficient reputation in the forum requires something more than a reputation among a small number of persons, although the size and extent of the class may vary according to the circumstances of the case. Also, the law seeks to promote local competition and innovation and does not extend its protection to persons whose goods are not sufficiently known in the forum.

1. More particularly, related to the Act, distinct from section 52 of the Trade Practices Act 1974, in McCormick & Company Inc v McCormick [2000] FCA 1335, Kenny J, having found that the trade marks in question were substantially identical or deceptively similar, posed the question this way at paragraph 81:

   What is intended by the word "reputation" in s 60? The word is defined in The Macquarie Dictionary as follows:

   reputation ... 1. the estimation in which a person or thing is held, esp. by the community or the public generally; repute ... 2. favourable repute; good name ... 3. A favourable and publicly recognised name or standing for merit, achievement, etc. ... 4. The estimation or name of being, having done, etc, something specified.

   Cf. The Oxford English Dictionary. In s 60, the word is, I think, apt to refer to "the recognition of the McCormick & Co marks by the public generally".

   Does the evidence establish that in Australia before 9 March 1992 the McCormick & Co marks were recognised by the public generally and, because of that, the use by Mary McCormick of her marks would be likely to cause the public confusion, as for example, by the public's mistakenly attributing a business connection between the two or attributing her product to the company?

2. The opponent submitted that it has global sales of its software dating from at least early 2001.  It says it has since expanded its business considerably to become “a leading global information technology company providing disaster recovery, computer system high availability and failover software solutions and hardware, data protection solutions, and related services”, all under trade marks incorporating the word “NEVERFAIL”.

3. As far as the Australian market is concerned, the Stobo declaration makes reference to use of the trade mark in the jurisdiction as follows:

   (20) From my company’s website ( a global web based marketing strategy has been conducted since early 2002 aimed at all English speaking businesses and potential resellers in commercial software markets around the world.

   (21) In December 2003, I was approached and subsequently entered into discussions, usually via email, with a number of Australian companies who had became (sic) aware of the products and services provided by My Company and were interested in either reselling My Company’s NEVERFAIL branded products and services into the Australian market and to their respective customers, or acquiring NEVERFAIL branded products for their own use.

   (22) It is my understanding that between December 2003 and July 2004, these Australian based resellers downloaded NEVERFAIL branded web-demonstration software from My Company’s website.

   (23) In early July 2004, Microsoft held a resellers conference in Toronto, Canada which I attended.  At that conference I held meetings with three Australian based potential resellers of My Company’s products and services into the Australian market.

   (24) During such meetings it came to my knowledge that Australian customers of the potential resellers were aware of My Company’s NEVERFAIL branded products and services.

   (25) In late 2003 and early 2004 I had several discussions and communications with Mr Lewis Jackson, legal adviser to My Company, concerning the preparation of an Australian version of the International Partner Agreement (“IPA”) My Company uses to structure and manage its relationships with its global reseller network.

   (26) Now produced and shown to me and marked Exhibit SS-3 is a copy of the 19 May 2004 version of the IPA Mr Jackson prepared for me and which I subsequently sent to a potential Australian based reseller on or about that date.  The rights, restrictions and guidelines for use by a reseller of the Trade Marks are set out in section 7 of the IPA.

   (27) To my knowledge, products bearing the Trade Marks were exported or downloaded electronically into Australia subsequent to this agreement and continue to be imported into Australia to this day.  

4. The exhibits to the Stobo declaration show use of the opponent’s trade marks in a variety of publications available in print and on-line.  It is not clear from these examples where the publications were available, though most of the references appear to be UK based.  There are no examples of the opponent’s web-site before 24 August 2004 evidencing the global marketing strategy referred to in the declaration, and nothing that points specifically to accessibility in Australia within the time frame. 

5. It is clear from the declaration that Mr Stobo believes there was use of the opponent’s trade mark in Australia prior to the relevant date.  However, none of the evidence provided substantiates this belief.  What evidence there is shows relatively modest sales worldwide over the period April 2004 to March 2005, the time period incorporating the opposed application’s priority date.  There is nothing indicating what percentage of these sales occurred prior to that relevant date.  In addition, apart from Mr Stobo’s claims in his declaration, there is nothing concrete pointing to use of the trade mark in Australia prior to the opposed application’s filing date.  His understanding that Australian parties would have downloaded demonstration software is only an understanding, with nothing solid to back it up.  Paragraph 32 of his declaration, which refers to the number of licenses sold within Australia only refers to the period April 2005 to June 2006, dates later than the applicant’s filing date.  Mr Strobo’s belief, without more, is insufficient to establish a reputation in Australia. 

6. The opponent’s claims to a reputation resulting from Internet and on-line exposure are not supported by the evidence provided.[3]  The slight evidence of use within the Australian market post dates the relevant date.  The evidence in respect of overseas use is not compelling.  I am unable to find the opponent had a reputation in the Australian market at the time the applicant filed his trade mark.  This ground of opposition is thus not established.

   [3] Refer also to Ward Group Pty Ltd v Brodie & Stone Plc [2005] FCA 471, where Merkel J determined that an offer for sale on the Internet must be obviously directed to the Australian market, and result in sales to that market.

Decision

1. The opponent has not established either of the grounds of opposition upon which it relied at the hearing.  Its opposition is therefore unsuccessful.  I direct the application may proceed to registration one month from the date of this decision.  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 discontinued or registration is otherwise ordered by the court.

Alison Windsor

Hearing Officer

Trade Marks Hearings

14 March 2007