Next Group Plc v Nexcorp Australia Pty Ltd

[2016] ATMO 34

TRADE MARKS ACT 1995

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

Re:Oppositions by Next Group Plc to registration of trade mark applications nos. 1468752, 1468758, 1469963, all in class 35 - NEXTRA logos - in the name of Nexcorp Australia Proprietary Limited.

Delegate:

Debrett Lyons

Representation:

Opponent: D F Di Giantomasso, Registered Patent and Trade Mark Attorney, Solicitor and Principal of Knightsbridge Patent Attorneys, Consultant to Marks & Clerk Australia, instructed by Marks & Clerk Australia

Applicant: Ben McEniery of Counsel, instructed by Anna Sharpe of Sharpe Ivo, Solicitors

Decision:

2016 ATMO 34

Trade Marks Act 1995: s52 opposition to registration; ss42(b), 44, 58, 59, 60 and 62A pressed; none established; opposition unsuccessful; trade mark to proceed to registration

Background

1.  In this matter Nexcorp Australia Proprietary Limited (“the Applicant”) has made the following applications under the Trade Marks Act 1995 (“the Act”):

Application No.	Trade Mark	Filing/Priority date
1468752	10 January 2012
1468758	10 January 2012
1469963	17 January 2012

2. The applications were examined as mandated by section 31 of the Act and advertised as accepted for possible registration in the Australian Official Journal of Trade Marks on 3 May 2012, all in respect of the following services in Class 35 of the Register:

Retailing services including retailing services in relation to newsagencies; retailing of printed material including newspapers, magazines, books and comics; retailing of stationery including educational stationery, business stationery, diaries, calendars, and gift stationery including greeting cards and wrapping paper; retailing of ink cartridges and collection of used ink cartridges for recycling; retailing of toys and games including puzzles; retailing of tableware and manchester including candles, napkins, crockery, cutlery and glassware; retailing of art and craft equipment and supplies including brushes, paint, pens, and crayons; retailing of jewellery, character merchandise, supplies, accessories for hobbies, clothing, tobacco products and tobacco accessories, snack food including confectionary, ice confectionary, non-alcoholic drinks and crisps; retailing of gambling tickets, postage stamps, telephone cards, souvenirs, toiletries, vitamins, cosmetics, fitness and sporting equipment and accessories, and watches and clocks.

(“the applied-for services”)

3. On 3 August 2012, Next Group Plc (“the Opponent”) filed Notices of Opposition against each of the applications pursuant to section 52 of the Act.

4.  Thereafter and in accordance with the Trade Mark Regulations 1995 (“the Regulations”) the parties filed evidence in support, evidence in answer and evidence in reply, described later.

5.  The parties are in agreement that since the Notices of Opposition recite the same grounds of opposition and since the trade marks the subject of the applications are similar then a single hearing is convenient and proper.

6.  A hearing was set down and took place in Canberra on 8 April 2016.  As a delegate of the Registrar of Trade Marks, I heard submissions from both sides.  Attendance was in person, the Opponent represented by Frank Di Giantomasso, Registered Patent and Trade Mark Attorney, Solicitor and Principal of Knightsbridge Patent Attorneys, acting as a consultant to and instructed by Marks & Clerk Australia, Patent & Trade Mark Attorneys.  The Applicant was represented by Ben McEniery of Counsel, instructed by Sharpe Ivo, Solicitors.  Anna Sharpe, Solicitor and Principal of that firm, was also in attendance.

7.  In the lead-up to the hearing and in accordance with directions I gave, both sides provided me with written outline submissions.

8.  Three days before the hearing, the Applicant’s solicitors made application to file and rely on further evidence.  That application is discussed later.

Grounds of Opposition and Onus

9. In its written submissions, the Opponent foreshadowed that its arguments would rest on sections 42(b), 44, 58, 60 and 62A of the Act. At the hearing and without objection from the Applicant, section 59 of the Act was also argued.[1]

[1] All of those grounds having been listed in the Notices of Opposition.

10.  In order to succeed, the Opponent bears the onus of establishing one or more of those grounds of opposition on the balance of probabilities.[2] 

[2] Pfizer Products Inc v Karam [2006] FCA 1663; 237 ALR 787; (2006) 70 IPR 599; [2006] AIPC 92-146 per Gyles J at [6] to [26]; Telstra Corporation Ltd v Phone Directories Co Pty Ltd [2015] FCAFC 156].

The opposition in outline

11.  The Opponent is a publicly listed UK company which sells its goods, principally clothing but also homeware items, to consumers in a number of countries, including Australia, by reference to the trade mark, NEXT (“the NEXT trade mark” or “the Opponent’s trade mark”).

12.  The Applicant is an Australian company which franchises use of the trade marks shown above in paragraph 1 in connection with stores located in Australia which sell newspapers, magazines and other miscellaneous items (discussed later).

13.  As stated already, the parties agree that the trade marks the subject of the applications are similar.  Since nothing in my decision turns on the differences between the trade marks, I will hereinafter refer to all three as “the Trade Marks” and my reasoning and decision applies equally to all three.

14.  The Opponent’s position is that the Trade Marks are substantially identical or deceptively similar to the Opponent’s trade mark.  Further, that the applied-for services are either the same or similar to those for which the Opponent’s trade mark is already protected in Australia.  Furthermore, that before applications for the Trade Marks were made, the NEXT trade mark had gained a substantial reputation in Australia for retailing services generally so that there existed, at the time of filing, a serious risk that use of the Trade Marks on the applied-for services would be likely to cause deception or confusion or to falsely suggest that those services were offered by the Opponent or offered with the permission and approval of the Opponent.

15.  Additionally, it is the Opponent’s position that the Trade Marks were applied for in bad faith in the knowledge of the NEXT trade mark and, further, that the Applicant did not intend to use the Trade Marks or permit someone else to use the Trade Marks at the time it made the applications to register the Trade Marks.

16.  The Applicant denies these assertions and points, amongst other facts, to its own Australian registrations for the trade mark NEXTRA from as early as 1995 which antedate Opponent’s entry into the Australian market by 15 years, and to the lack of any evidence of actual confusion between the parties’ trade marks over the time they have been used concurrently in this country.

17.  I have deferred more detailed consideration of the Applicant’s argument as it relates to the particular grounds of opposition pressed until after my summary of the evidence.

Evidence

Evidence in support

18.  The evidence in support of the oppositions consists of a Declaration made on 27 January 2014 by Sarah Louise Waterland, the Company Solicitor of Next Retail Limited, a wholly-owned subsidiary of the Opponent, together with Annexures 1 to 17.  I note that the sales and advertising figures for goods bearing the Opponent’s trade mark are marked as confidential, presenting something of an unnecessary difficulty[3] for me in my later discussion of the Opponent’s reputation in the NEXT trade mark in Australia.

[3] Given that the Opponent is a publicly listed company much of that information would be published.

19.  Ms Waterland’s declaration can be summarized in simple terms as follows.  The Opponent owns the trade mark NEXT and so-called “brand extensions” thereof (considered later) which it licenses for use in Australia by Next Retail Limited.  Use of the NEXT trade mark began in the UK in 1982 on clothing and from 1985 use extended to homeware items.  Since 1982, UK sales were via high street shops bearing the Opponent’s trade mark (“NEXT shops”) spread throughout much of that country and, since 1999, sales have also been made via the Opponent’s website.

20.  Australian sales began in 2010 via the Opponent’s website and have continued up to and after the January 2012 priority dates of the applications.  There have never been NEXT shops or store sales of NEXT branded goods in Australia.

21.  Clothing accounts for 89% of all sales of NEXT branded goods; homeware items account for the remaining 11%.

Evidence in answer

22.  The Evidence in Answer in all three oppositions consists of a Declaration made on 22 December 2014 by Gregory Richard Campbell, the CEO of the Applicant, together with Exhibits GRC- 1 to GRC-13.

23.  In short, Mr Campbell declares his long background in running newsagencies.  He declares that the Applicant franchises the use of the Trade Marks in relation to “newsagencies (otherwise known as newsagent's shops) and retail stores”.  He declares that by December 2012 there were 295 such franchised shops across Australia, the first having opened in 1995.  He further declares that the Applicant’s website at was launched in 2002.  He references TV and other advertising since 2004.

Evidence in reply

24.  The Evidence in Reply in all three oppositions consists of a second Declaration by Sarah Louise Waterland, made on 23 April 2015, together with Annexures 18 to 21.  The Declaration is largely argumentative, taking issue with statements and conclusory remarks made by Mr Campbell and it does not assist the reader to summarise the Declaration here.

Application under Regulation 5.15 [4]

[4] The Intellectual Property Legislation Amendment (Raising the Bar) Regulation2013 (No. 1) which came into force on 15 April 2013 regulation 5.15, which permitted the service of further evidence in an opposition to registration but the former provision continues to apply in these oppositions commenced by Notices of Opposition filed before 15 April 2013.

25.  On 5 April 2016, three days before the hearing, this Office received an application from the Applicant’s representative to have further material considered under regulation 5.15 of the Regulations as they stood some time back and before amendment.

26.  In response, I indicated that it I would hear submissions on that application from both sides as a preliminary matter at the start of the hearing.  I did so and I have the written summary of arguments from both the Applicant and the Opponent on this matter.

27. The application includes a declaration from the Applicant’s solicitors foreshadowing evidence, it seems not then in existence, which would seek to address certain statements made in the Opponent’s outline written submissions. On the face of it, it appears to be a request to clarify the extent of the goods which have been offered by the Applicant by reference to the Trade Marks. One of the Opponent’s objections to the admission of such evidence rests on the claim that the Applicant’s real intention is to provide late support for a position that the Applicant has made honest concurrent use of the Trade Marks for the purposes of section 44(3)(a) of the Act.

28. For reasons I give shortly, the Opponent has not established a ground of opposition under section 44 of the Act. Accordingly, it is not necessary for me to further examine the application under regulation 5.15 as it would have no bearing on the final disposition of this matter.

Discussion and reasoning

29.  Much of the agitation between the parties stems it seems from the apparent ambiguity of the Applicant’s intentions for the future use of the Trade Marks.  So, for example, Mr Campbell states that the Applicant’s aspirations for the NEXTRA brand are no longer “limited to the traditional items associated with newsagencies, such as newspapers, magazines, cigarettes and snacks” but seek to convey to consumers the notion that NEXTRA branded stores offer a “one stop shop” or “the world in a shop”.

30.  To some extent, the Opponent is attempting to close the gate to a paddock from which the horse has long bolted.  Since 1995 the Applicant has owned registration 670930 for the word mark, NEXTRA, in class 42 for:

Retailing services in relation to newsagencies including retailing of goods being printed material including newspapers, magazines, books and comics; stationery including educational stationery, business stationery including diaries and calendars, and gift stationery including greeting cards and wrapping paper; toys and games including puzzles; tableware and manchester including candles, napkins, crockery, cutlery and glassware; art and craft equipment and supplies including brushes, paint, pens and crayons; jewellery; character merchandise; supplies and accessories [sic] for hobbies; clothing; tobacco products and accessories; snack foods including confectionary, ice confectionary, non-alcoholic drinks and crisps; gambling tickets; postage stamps and telephone cards; souvenirs; toiletries, vitamins and cosmetics; fitness and sporting equipment and accessories; and watches and clocks.

31.  Be that as it may, I turn to the detail of the argument as it relates to the grounds of opposition pressed.

Section 58

32. I begin with section 58 because it disposes of the argument that the Trade Marks are substantially identical to the Opponent’s trade mark.

33. Section 58 of the Act states that:

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

34. In order to establish a ground under section 58, the Trade Marks must, as a minimum, be substantially identical to the Opponent’s trade mark.[5]  Substantial identity is assessed according to the test described by Windeyer J at page 414 of Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd [1963] HCA 66; (1963) 109 CLR 407:

In considering whether marks are substantially identical they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison.

[5] Carnival Cruise Lines Inc v Sitmar Cruises Ltd [1994] FCA 936; (1994) 120 ALR 495; (1994) 31 IPR 375; [1994] AIPC 91-049 at [62].

35.  The Opponent submits that “the only difference is the letters “RA” as the suffix portion of the Applicant’s marks. Yet, the element ‘NEXT’ is the first aspect of the marks which the consumer encounters. The case law establishes that this is usually the most important element of a mark, and to which consumers would normally attach greater significance.” [6]

[6] citing in support, London Lubricants (1920) Ltd’s Application (1925) 42 RPC 264 at 279.

36.  The parties’ submissions are not explicit as to exactly which trade marks are to be compared but I have as a starting point assumed a position most favourable to the Opponent by taking the comparison to be between that of the trade mark of registration 1468758 and an all lower case iteration of the Opponent’s trade mark - next - as the evidence shows it has been used. If that comparison does not produce a finding of substantial similarity then the section 58 ground fails against all of the Trade Marks.

37.  The Applicant was right to point out that “substantial identity cannot be proven by simply demonstrating that one trade mark is entirely contained within another.  Rather, it is necessary to compare the entirety of the two marks and determine overall their similarities and dissimilarities.”[7]

[7] citing in support, Angoves Pty Ltd v Johnson (1982) 66 FLR 216 holding ST AGNES LIQUOR STORE not to be substantially identical to ST AGNES; SAP (Australia) Pty Ltd v Sapient (Aust) Pty Ltd (1999) 48 IPR 593 holding SAPIENT COLLEGE not to be substantially identical to SAPIENT; and E & J Gallo Winery v Lion Nathan Australian Pty Ltd (2010) 241 CLR 144 holding BAREFOOT RADLER not to be substantially identical to BAREFOOT.

38.  The compared trade marks look different and sound different.  They are different in length and in the number of syllables.  The Opponent’s premise is that the shared element of the compared trade marks is the dictionary word “next” to which is suffixed two meaningless additional letters “ra”.  The comparison is by no means that simple.  I am more inclined to think that it is a subjective matter whether “nextra” might be deconstructed as the word “next” plus the letters “ra”, or as the letter “n” followed by the word “extra”.  I do not think one reading is more obvious than the other and to the extent that the reasoning in London Lubricants (1920) Ltd’s Application, relied upon by the Opponent[8], might be applied to the analysis, that thinking is at least counterbalanced by the third possibility which is that “nextra” might be simply perceived as an invented word and so not dissected at all.[9]

[8] Op.cit fn 6

[9] See, for example, Bausch & Lomb Inc v Registrar of Trade Marks (1980) 28 ALR 537 (‘Soflens’).

39.  The “essential feature” of the Opponent’s trade mark is not unambiguously reproduced in the Trade Marks and weighing similarities and differences I do not find any of the Trade Marks to be substantially identical to the Opponent’s trade mark, in consequence of which the Opponent has not established this ground of opposition.

Section 44

40. Section 44 states:

44Identical etc. trade marks

(1)Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of goods (applicant’s goods) must be rejected if:

(a)the applicant’s trade mark is substantially identical with, or deceptively similar to:

(i)a trade mark registered by another person in respect of similar goods or closely related services; or

(ii)a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; and

(b)the priority date for the registration of the applicant’s trade mark in respect of the applicant’s goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.

Note 1:For deceptively similar see section 10.

Note 2:For similar goods see subsection 14(1).

Note 3:For priority date see section 12.

Note 4:The regulations may provide that an application must also be rejected if the trade mark is substantially identical with, or deceptively similar to, a protected international trade mark or a trade mark for which there is a request to extend international registration to Australia: see Part 17A.

(2)Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of services (applicant’s services) must be rejected if:

(a)it is substantially identical with, or deceptively similar to:

(i)a trade mark registered by another person in respect of similar services or closely related goods; or

(ii)a trade mark whose registration in respect of similar services or closely related goods is being sought by another person; and

(b)the priority date for the registration of the applicant’s trade mark in respect of the applicant’s services is not earlier than the priority date for the registration of the other trade mark in respect of the similar services or closely related goods.

Note 1:For deceptively similar see section 10.

Note 2:For similar services see subsection 14(2).

Note 3:For priority date see section 12.

Note 4:The regulations may provide that an application must also be rejected if the trade mark is substantially identical with, or deceptively similar to, a protected international trade mark or a trade mark for which there is a request to extend international registration to Australia: see Part 17A.

(3)If the Registrar in either case is satisfied:

(a)that there has been honest concurrent use of the 2 trade marks; or

(b)that, because of other circumstances, it is proper to do so;

the Registrar may accept the application for the registration of the applicant’s trade mark subject to any conditions or limitations that the Registrar thinks fit to impose. If the applicant’s trade mark has been used only in a particular area, the limitations may include that the use of the trade mark is to be restricted to that particular area.

Note:For limitations see section 6.

(4)If the Registrar in either case is satisfied that the applicant, or the applicant and the predecessor in title of the applicant, have continuously used the applicant’s trade mark for a period:

(a)beginning before the priority date for the registration of the other trade mark in respect of:

(i)the similar goods or closely related services; or

(ii)the similar services or closely related goods; and

(b)ending on the priority date for the registration of the applicant’s trade mark;

the Registrar may not reject the application because of the existence of the other trade mark.

Note 1:An authorised use of the trade mark by a person is taken to be a use of the trade mark by the owner of the trade mark (see subsection 7(3)).

Note 2:For predecessor in title see section 6.

Note 3:For priority date see section 12.

41. I have found that none of the Trade Marks is substantially identical to the Opponent’s trade mark and so the question which arises is whether the compared marks are deceptively similar having regard to section 10 of the Act which states that “a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion.”

42.  The Opponent states that it relies upon, inter alia, registration 783870 in class 35 for: “Services in the bringing together, for the benefit of customers, of a variety of all clothing (excluding footwear) in Class 25 (excluding the transport thereof) enabling customers to view and purchase those goods”, and upon application 1325398[10]  for:

[10] Accepted but under opposition, albeit not be the Applicant here I note.

Class 9:

Sunglasses; glasses; spectacle cases; nautical, surveying, photographic, cinematographic, optical, weighing, measuring, signaling, checking (supervision), and life-saving apparatus and instruments; apparatus and instruments for conducting, switching, transforming, accumulating, regulating or controlling electricity; apparatus for recording, transmission or reproduction of sound or images; magnetic data carriers, recording discs; automatic vending machines and mechanisms for coin-operated apparatus; computers; fire-extinguishing apparatus

Class 14:

Precious metals and their alloys and goods in precious metals or coated therewith, not included in other classes; jewellery, precious stones; horological and chronometric instruments

Class 18:

Leather and imitations of leather, and goods made of these materials and not included in other classes; animal skins, hides; trunks and travelling bags; umbrellas, parasols and walking sticks; whips, harness and saddlery

Class 25:

Clothing, footwear, headgear

Class 35:

Retail services, including retail services offered via a general merchandising and clothing store, mail order catalogue, online, via television channel, via mobile phone and by direct marketing, all connected with the sale of clothing, headgear and footwear, jewellery, watches, fashion accessories, household articles, towels, bedding, textiles, furniture, lighting apparatus, toys, cosmetics, non-medicated toilet preparations, eyewear, carrying cases, leather goods, handbags, sports bags, travel bags, shopping bags, toiletry bags, messenger bags, carrier bags, document bags and children's bags, kitchenware, paints, wallpaper, wall stickers and borders, pictures, picture frames, cameras; the provision of information and advice in relation to retail services relating to the aforesaid goods; business management consultancy including giving living assistance and advice in the management of retail stores in the field of the aforesaid goods

43.  Registration 783870 has a priority date of 25 January 1999 and application 1325398 has a priority date of 13 October 2009, both predating the priority dates of the applications for the Trade Marks.  Both are for the trade mark, NEXT.

44.  I note that the applied-for services include:

retailing of toys and games including puzzles; retailing of tableware and manchester including candles, napkins, crockery, cutlery and glassware; …; retailing of jewellery, …, clothing, …; retailing of … , toiletries, vitamins, cosmetics, … and watches ...

and so there is no avoidance of my finding that the prior rights held by the Opponent are in respect of similar services or closely related goods.  In my assessment, this is the high water mark in these opposition proceedings, for as Mason, J observed in Berlei Hestia Industries Ltd v Bali Co Inc (1973) 129 CLR 353 at 362:

the question whether there is a likelihood of confusion is to be answered, not by reference to the manner in which the [Applicant] has used its mark in the past, but by reference to the use to which it can properly put the mark. The issue is whether that use would give rise to a real danger of confusion.

45.  Nevertheless, as French, J observed in Woolworths Limited v Registrar of Trade Marks (1998) 42 IPR 615 (at 624):

In the end there is one practical judgment to be made. Whether any resemblance between different trade marks for goods and services renders them deceptively similar will depend upon the nature and degree of that resemblance and the closeness of the relationship between the services and the goods in question. It will not always be necessary to dissect that judgment into discrete and independent conclusions about the resemblance of marks and the relationship of goods and services. Consistently with that proposition, the Registrar or a judge on appeal from the Registrar could determine in a particular case that, given the limited degree of resemblance between the relevant marks he or she could not be satisfied, no matter how closely related the goods and services concerned, that the use of the applicant's marks would be likely to deceive or to cause confusion.

46.  In this case it is the nature and degree of resemblance between the compared trade marks which is critical and in that respect it is, in my assessment, the following submission from the Applicant which encapsulates all that is of importance:

The essential consideration would seem to be not whether the earlier trade mark is an identifiable word or element in the later trade mark, but whether it has retained its identity in the trade mark sense as the distinguishing or essential feature. The classic statement on ‘essential features’ is contained in Lord Radcliffe’s opinion in de Cordova v Vick Chemical Co (1951) 68 RPC 103 (‘de Cordova’) at 105-106:

The identification of an essential feature depends partly on the court’s own judgment and partly on the burden of the evidence that is placed before it. A trade mark is undoubtedly a visual device; but it is well-established law that the ascertainment of an essential feature is not to be by ocular test alone. Since words can form part, or indeed the whole of a mark, it is impossible to exclude consideration of the sound or significance of those words.

47.  It is the Applicant’s position that NEXT ‘loses its identity’ in NEXTRA.  It submits that “[T]here is no common idea between NEXTRA and NEXT, principally as a result of the pronunciation of NEXTRA being NEX-TRA (as in ‘extra’). NEXTRA is an imaginary, coined word that conjures no particular meaning (other than a resemblance to ‘extra, extra, read all about it’).[11]

[11] A reference to evidence from Mr Campbell’s declaration at paragraph 9 where he describes the allusion in the Trade Marks to the paperboy’s cry of old: “Extra, extra, read all about it!”).

48.  As I said during the hearing, I cannot easily call to mind another dictionary word commencing with the letters, “next”.  If they exist, such words are very rare and help to validate the Applicant’s claim that NEXTRA is a coined word.  Further, I cannot think of a dictionary word ending with the letters, “extra”.  What emerges is the comparison of a relatively common dictionary word with an invented word with no obvious connotations.  I do not find there is a common idea in the compared trade marks.  Instead, I find the compared trade marks to be quite different.

49.  In the result, I do not find that that there is a real tangible danger of deception and confusion occurring.  As the courts have said, a mere possibility is not sufficient.[12]  I do not find that there is any significant risk that ordinary people would have cause to wonder whether it might not be the case that the two products or closely related products and services come from the same source.  I make that finding taking account of all the circumstances in which the services might be offered.

[12] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 594-595, per Kitto J.

50. I do not find the Trade Marks to be deceptively similar to the Opponent’s trade mark and for that reason the section 44 ground of opposition is not established.

Section 59

51. Although included as a ground of opposition in each case, there was no indication in the Opponent’s written outline submissions that section 59 would be pressed at the hearing. Nonetheless the Applicant’s representative took no exception to that omission and traversed the Opponent’s arguments on the day.

52. Section 59 states:

Applicant not intending to use trade mark

The registration of a trade mark may be opposed on the ground that the applicant does not intend:

(a)  to use, or authorise the use of, the trade mark in Australia; or

(b)  to assign the trade mark to a body corporate for use by the body corporate in Australia;

in relation to the goods and/or services specified in the application.

53.  In short, the Opponent’s argument is that although the Applicant runs its business as a franchise, permitting the Trade Marks to be used by others at the NEXTRA branded shops in Australia, there is no evidence of a franchise agreement, nor of any document which demonstrates control over use of the Trade Marks.

54.  It is true, there are no details of the franchise.  There is no evidence of written or oral agreements as to how the Trade Marks can be used.  Nonetheless, Mr Campbell’s declaration shows that he has a long background in the newsagency business.  Further, the filing of the applications raises a presumption in favour of the Applicant company, of which he is the CEO, that it will be using the Trade Marks.[13]  Moreover, although there is no evidence that either the Applicant or Mr Campbell himself manages any one of the 295 Australian stores using the Trade Marks, there is a single and developed website associated with the business, established long before the priority dates, and a reasonable inference is that the Applicant is the moving force behind that internet presence. 

[13] Aston v. Harlee Manufacturing Co. [1960] HCA 47; (1960) 103 CLR 391.

55.  This ground of opposition is not established.

Section 60

56. Section 60 provides:

60Trade mark similar to trade mark that has acquired a reputation in Australia

The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:

(a)another trade mark had, before the priority date for the registration of the first‑mentioned trade mark in respect of those goods or services, acquired a reputation in Australia; and

(b)because of the reputation of that other trade mark, the use of the first‑mentioned trade mark would be likely to deceive or cause confusion.

Note:For priority date see section 12.

57.  To found this ground the Opponent must establish to my satisfaction that before the priority dates of the applications, 10 and 17 January 2012, the Opponent’s trade mark had a reputation in Australia such that the use of the Trade Marks would confuse or deceive.

Reputation

58.  What is the reputation of a trade mark?  In McCormick & Co Inc v McCormick [2000] FCA 1335; (2000) 51 IPR 102; [2000] AIPC 38-192 (‘McCormick’) Kenny J said at [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”.

59.  Concerning the assessment of a contended reputation, in McCormick, Kenny J said at [86]:

In practice, it is commonplace to infer reputation from a high volume of sales, together with substantial advertising expenditures and other promotions, without any direct evidence of consumer appreciation of the mark, as opposed to the product: see, e.g., Isuzu-General Motors Australia Ltd v Jackeroo World Pty Ltd (1999) 47 IPR 198; Marks & Spencer plc v Effem Foods Pty Ltd (2000) AIPC 91-560; Photo Disc Inc v Gibson (1998) 42 IPR 473; and RS Components Ltd v Holophane Corp (1999) 46 IPR 451. This Court has followed this approach as well, acknowledging that public awareness of and regard for a mark tends to correlate with appreciation of the products with which that mark is associated, as evidenced by sales volume, amongst other things. Thus, in Toddler Kindy Gymbaroo Pty Ltd v Gymboree Pty Ltd [2000] FCA 618 (“Gymboree”), Moore J accepted at [94] that the applicant had established a reputation for the purposes of s 60 solely on the basis of use and promotion of the relevant mark. Another example of this approach is Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd (1997) 38 IPR 495 (“Nettlefold”), in which Heerey J relied upon the public visibility of the applicant’s marks over approximately two decades as well as a $100,000 promotional campaign in finding that a reputation for the purposes of s 28 of the 1955 Act existed.

60.  Putting aside the awkwardness presented by the Opponent’s claim to confidentiality which has been made for Ms Waterland’s first declaration, it can be said in general terms that, at the priority dates, the Opponent had a very significant reputation in the UK.  Assessment of the Opponent’s reputation in Australia based on internet sales from (an unspecified time in) 2010 through to January 2012 is less easy.  At its most generous, this is a two year period and the confidential records for that period relate to “Gross dispatches pounds sterling”.  The figures increase dramatically from 2010 onwards.  By the priority dates the value of the “gross dispatches” is very high.  The advertising and promotion of the Trade Mark in Australia is largely unspecified.  The 2013 spend on advertising is significant but after the priority dates.

61.  I find on balance that that the Opponent had a reputation in the NEXT trade mark in Australia at the priority dates, but less significant than the “massive” reputation that is claimed in submissions. 

62.  Something must be said about the nature of that reputation.  The Opponent’s claim is that the NEXT trade mark has a reputation in Australia for retailing services generally.  It listed the diverse goods for sale at its website and indeed, they are diverse.  However, at its heart “NEXT” is a “clothes brand” and the direct evidence is that clothing accounts for 89% of overall sales.  The remaining 11% of sales are of “homeware” items and that is generally borne out by the evidence.  Those remaining items listed by the Opponent which could not properly be classified as clothing or homeware do not rank at all in the sales breakdown.

63.  In the result, I do not find that the reputation in the NEXT trade mark is in relation to general retailing.   Although 11% of the total sales is a sizeable amount, I am not persuaded that the reputation extended to homeware items.  I find that the reputation at the priority dates was in respect of clothing only.

64.  Further, the Applicant has commented on the inherent distinctiveness of the word “next” when used in respect of the Opponent’s business.  To quote from its written submissions, “examples of its adjectival use are ‘the next online shop’, ‘the next season’s clothing range’ and ‘the next types of jewellery’.”  To the extent that this informs the global assessment of the Opponent’s reputation in the NEXT trade mark at the priority dates, I would characterise that reputation – in spite of impressive “gross dispatches” – as fairly modest.

Deception or Confusion

65.  In Pottle Productions Inc v Rute Ithalat Ve Ihracat Anonim Sirketi [2012] ATMO 124 at [40] the Registrar’s delegate observed that:

The assessment of the likelihood of deception or confusion under section 60 is informed by the strength of the reputation of the Opponent’s trade mark(s), the inherent distinctiveness thereof, the degree of similarity between the trade marks under consideration and the nexus or connection between the goods and/or services of the parties. Each of these is a variable and it is possible that a trade mark’s reputation might be sufficiently strong and the degree of similarity to an opposed trade mark be so great (particularly where the trade marks are inherently distinctive) that confusion or deception will be a likelihood where very little, if any, nexus or connection exists between the goods and/or services under consideration.

66.  There is no evidence of actual confusion, before or after the priority dates.  Both parties’ marks are in use.  Both were in use concurrently from two years before the priority dates.  As I understand it, both are still in use.  The evidence of gross sales from the Opponent has been considered.  The Applicant has 295 stores using the Trade Marks.  The fact that there is no evidence of confusion before me is telling.

67.  Nonetheless, and although I have no evidence on the point, I would think it unlikely that a great percentage of the Applicant’s business has been in respect of the sale of clothing but I must adopt a position where registration of the Trade Marks, if permitted, would place the Applicant in direct conflict with the Opponent in terms of the Opponent’s primary business.

68.  The assessment to be made takes account of this potential identity of services but balances it against the other factors mentioned above.  I have already found that the similarity of the compared trade marks is low.  I have found the Opponent’s reputation in the NEXT trade mark at the relevant times to be modest.  Further, I have considered the various ways in which the Opponent’s trade mark has been put to use.  So, for example, although Ms Waterland’s declaration would suggest a collective of NEXT trade marks owned and used by the Opponent or its group companies, the evidence is of marks which combine NEXT with descriptive terms, such as NEXT GROUP, NEXT KIDS and NEXT STORE.  It is plain that NEXTRA does not fit within that pattern.

69.  For these reasons, I would consider that there is no real and tangible danger of deception or confusion, in that a person who knew of the Opponent’s business and who saw the Trade Marks used in a normal and fair manner in respect of the applied-for services would be caused to wonder whether they were being offered, sponsored, licensed by, or were otherwise associated with, the Opponent.

70. The Opponent has not established its ground of opposition under section 60.

Section 42(a)

71. Section 42(b) provides that: ‘An application for the registration of a trade mark must be rejected if: ... (b) its use would be contrary to law.’

72.  I am in agreement with the Applicant’s summary submissions, set out below:

This general ground of opposition may afford protection to marks with a reputation by reference to the law of passing off or consumer protection legislation, or both: Advantage Rent-A-Car Inc v Advantage Car Rental Pty Ltd (2001) 52 IPR 24; [2001] FCA 683 (Madgwick J).

Arguably, s 42(b) could be made out where the applicant’s use of a trade mark sought would constitute a passing off or a breach of the prohibition on misleading and deceptive conduct in s 18 of the Australian Consumer Law.

To establish a cause of action in passing off, three elements (the classical trinity) must be satisfied:

(a)that the plaintiff’s goods, business or get-up, including any brand name, enjoy a certain reputation or goodwill in the jurisdiction, to be recognised by the public as distinctive, specifically of the plaintiff;

(b)a misrepresentation by the defendant (intentional or otherwise) in the course of trade; and

(c)that the plaintiff suffers, or in a quia timet action is likely to suffer, damage by reason of the erroneous belief engendered by the defendant’s misrepresentation that the source of the defendant’s goods or services is the same as the source of those offered by the plaintiff.[14]

The opponent’s s 42(b) case must fall with its s 60 case. Thus, for the reasons given in relation to the opponent’s s 60 case, the applicant submits that the opponent has not established a reputation sufficient to satisfy the first element of passing off. That is, namely that the opponent has not by its evidence established that it has a sufficient reputation or goodwill in Australia.[15]

Secondly, the applicant using the opposed marks as trade marks would not amount to a breach of the prohibition on misleading and deceptive conduct. The threshold for establishing misleading or deceptive conduct is considerably higher than showing deception or confusion under ss 44 or 60. In Parkdale v Puxu (1982) 149 CLR 191 at 209-210 Mason J, in reference to s 52(1) of the former Trade Practices Act 1974 (Cth) stated that:

Conduct does not breach s 52(1) merely because members of the public would be caused to wonder whether it might not be the case that two products come from the same source. . . Under s 52 the onus is on the plaintiff to show that the conduct is likely to mislead or deceive.

[14] ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 355-356 (Gummow J) citing Reckitt & Colman Products Ltd v Borden Inc [1990] RPC 341 at 406 and Consorzio del Prosciutto di Panna v Marks and Spencer plc [1991] RPC 351 at 368-369; TGI Friday’s Australia Pty Ltd v TGI Friday’s Inc (1999) 45 IPR 43, [25].

[15] Which I would qualify by adding – not the type of reputation to overcome the very apparent differences between the compared trade marks.

1. The ground of opposition under section 42(b) is not established.

   Section 62A

2. Section 62A states that:

   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.

3. The Opponent reasons that the Trade Marks were applied for in bad faith because:

   (a)      at the time of the applications were made, the Applicant had actual or constructive knowledge of the Opponent’s trade mark;

   (b)      that knowledge can be inferred from the Applicant’s adoption of the Trade Marks “despite having the ability to select and adopt exclusively a trade mark such as NEWS EXTRA or even NEWSTRA”; and

   (c)       further inferred since the Trade Marks emulate the font and styling that the Opponent has adopted for its NEXT trade mark, below[16], which similarity in styling cannot be coincidental:

   [16] An example of such use shown in Annexure 6 to Ms Waterland’s Declaration of 27 January 2014.

   76.  Based on those assertions, the Opponent states that the Applicant’s conduct clearly falls below acceptable commercial standards.[17]

   [17] As outlined by Bennett, J at paragraph 62 of her decision in DC Comics v Cheqout Pty Ltd [2013] FCA 478.

   77.  Those submissions, even if proven, are not compelling evidence of bad faith.  The fact that the Applicant may have been aware of the Opponent’s business and NEXT trade mark is not of itself fatal.[18]  Combined with other conduct it might take on more importance, but here the evidence is of a business established long before entry into the Australian market by the Opponent, indeed long before the Opponent had an online presence even in the UK,[19] whose genesis is found in the newsagency business but whose aspirations extend to that of a general retailer as circumscribed by the applied-for services.

   [18] McCormick & Co Inc v McCormick [2000] FCA 1335; (2000) 51 IPR 102; [2000] AIPC 38-192 at [33] (albeit in relation to honest concurrent use).

   [19] Underscored by the existence of Australian registration 670930 for the word NEXTRA filed in August 1995.

   78.  I accept the evidence of Mr Campbell concerning the conceptual origins of the Trade Marks as credible.  I note a connection, at one level, between the name of the Applicant, Nexcorp, and the Trade Marks.  I note, too that the Applicant’s earlier registrations are for the plain, upper case, rendition, NEXTRA, but it entails an unjustifiably malign vision to see the migration to a lower case iteration of the word  as indicating bad faith, per se. 

   79.  As stated earlier, it is the Opponent which bears the onus of proof and I do not find this ground to have been established.  To find otherwise would require me to accept on the balance of probability that Mr Campbell, who has a background in the running of newsagency businesses, had the Opponent’s trade mark and reputation ­– as I have already decided, in clothing – in mind at the time the Trade Marks applications were made, with the intention of somehow benefitting from that reputation in the conduct of a business offering the applied-for services, and in spite of the credible evidence that he coined the Trade Marks from a combination of the element “Nex” stemming from the Applicant’s name, together with the paperboy cry of “Extra, extra, read all about it!”.

   80. The ground of opposition under section 60A has not been established.

   Decision

   81. Section 55 of the Act relevantly provides:

   55Decision

   (1)Unless subsection (3) applies to the proceedings, the Registrar must, at the end, decide:

   (a)to refuse to register the trade mark; or

   (b)to register the trade mark (with or without conditions or limitations) in respect of the goods and/or services then specified in the application;

   having regard to the extent (if any) to which any ground on which the application was opposed has been established.

   Note:For limitations see section 6.

   82.  The three trade mark applications may then 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 decided or discontinued.

   Costs

   83.  The Applicant has requested its costs and I accordingly award costs against the Opponent at the scale set out in Schedule 8 to the Regulations.

   Debrett Lyons

   Hearing Officer

   Trade Marks Hearings

   15 June 2016