Nhon Hoa Nguyen v Aardwolf Australia Pty Ltd

[2017] ATMO 63

TRADE MARKS ACT 1995

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

ReOppositions by Nhon Hoa Nguyen to registration of trade mark applications 1689002 (7) AARDWOLF and 1689004 (7) AARDWOLF (device) - in the name of Aardwolf Australia Pty Ltd

Delegate:  Robert Wilson

Representation:                  Opponent: Melissa Marcus of Counsel, instructed by Linda Xie of Watermark Intellectual Property Pty Ltd

Applicant: Andrew Sykes of Counsel, instructed by Actuate IP

Decision:  2017 ATMO 63

Trade Marks Act 1995 (Cth) - Section 52 opposition: ss 58, 62 and 62A considered – abandonment of trade marks by earlier related entity – no grounds established – trade marks may proceed to registration

Background

1.  This decision concerns oppositions brought by Nhon Hoa Nguyen (‘the Opponent’) pursuant to s 52 of the Trade Marks Act 1995 (‘the Act’) to registration of the trade marks the subjects of the divisional applications detailed below in the name of Aardwolf Australia Pty Ltd (‘the Applicant’):

Application Numbers:	1689002 and 1689004
Filing Dates:	23 April 2015
Priority Dates:	4 March 2013 (based on parent applications)
Goods:	Class 7: Equipment for use in the stone and construction industry; including material handling equipment, lifters, spreader-bars for slings, forklift booms, transport frames; site saws, brick saws, cement mixers; none of the aforementioned goods being linishers (‘the Applicant’s Goods’)
Trade Marks:	AARDWOLF	(‘the 9002 Trade Mark’)
	(‘the 9004 Trade Mark’)

1. The 9002 Trade Mark and the 9004 Trade Mark will be referred to collectively as ‘the Opposed Trade Marks’. The applications are divisional applications. The parent of the 9002 Trade Mark being application number 1544189 (‘the 9002 Parent’), and of the 9004 Trade Mark 1544186 (‘the 9004 Parent’). These trade marks will be discussed in more detail below.

2. On 7 May 2015 the applications’ acceptances for possible registration were advertised in the Australian Official Journal of Trade Marks. The Opponent filed Notices of Intention to Oppose the registrations on 6 July 2015 and Statements of Grounds and Particulars (‘the SGPs’) on 6 August 2015. The Applicant filed Notices of Intention to Defend on 4 September 2015. The SGPs nominated grounds of opposition corresponding to ss 42(b), 58, 60, 62 and 62A of the Act. I note that the opposition was originally filed in the name of Abaco Machines (Australasia) Pty Ltd (‘Abaco Machines’); however, as a result of a request filed on 7 April 2017, Mr Nhon Hoa Nguyen replaced Abaco as the opponent.

Evidence

4.  The parties filed the same evidence in respect of both oppositions. The Opponent filed Evidence in Support of its oppositions on 9 December 2015 being a declaration made on 9 December 2015 by Sean McGuire, trade mark attorney at Watermark Intellectual Property Pty Ltd, the representatives of the Opponent, with Annexures A to K (‘McGuire 1’). Annexures E and F to McGuire 1 are themselves declarations, being respectively:

• Declaration made on 30 January 2014 by Riad Tayeh, an official liquidator, (‘the Tayeh declaration’); and

• Declaration made on 11 February 2014 by Nhon Ai Nguyen, the director of Abaco Machines, with Annexures A to E (‘the Nguyen declaration’).

5.  The Applicant filed Evidence in Answer (‘EIA’) on 24 March 2016. This evidence consists of:

• Declaration made on 24 March 2016 by James Edmund Corbett, relating to his previous role as the Managing Director and Company Secretary of Herdgraph Pty Ltd, with Annexures JEC-1 to JEC-10 and JEC-37 to JEC-38 (‘Corbett 1’);

• Declaration made on 24 March 2016 by James Edmund Corbett, relating to his previous role as the Managing Director and Company Secretary of Aardwolf Pty Ltd, with Annexures JEC-11 to JEC-22, and JEC-39 to JEC-40 (‘Corbett 2’);

• Declaration made on 24 March 2016 by James Edmund Corbett, in his role as the Managing Director of Aardwolf Industries Sole Member LLC (a Vietnamese company), with Annexures JEC-23 to JEC-32, JEC‑34 to JEC-36 and JEC-41 to JEC-45 (‘Corbett 3’);

• Declaration made on 23 March 2016 by Mark Georg Corbett, the son of James Corbett and the Company Secretary of the Applicant, with Exhibits MGC-1 to MGC-19 (‘the Mark Corbett declaration’); and

• Declaration made on 23 March 2016 by James Woodyatt, the Joint Managing Director of CDK Stone Pty Ltd, with Exhibits JW-1 to JW-4 (‘the Woodyatt declaration’).

6.  The Opponent filed Evidence in Reply (‘EIR’) on 29 June 2016, being a declaration of Sean McGuire with Annexure A (‘McGuire 2’).

1. Once the time allowed for filing evidence had ended both parties requested an oral hearing. I heard the matter in Canberra on 19 April 2017 as a delegate of the Registrar of Trade Marks. Melissa Marcus of Counsel, instructed by Linda Xie of Watermark Intellectual Property Pty Ltd appeared for the Opponent. Ms Marcus’ oral submissions were supplemented by written submissions filed with IP Australia on 7 April 2017. Andrew Sykes of Counsel, instructed by Actuate IP, appeared for the Applicant. Mr Sykes’ oral submissions were supplemented by written submissions filed with IP Australia on 13 April 2017. Both representatives’ written submissions were filed in accordance with my earlier directions.

Grounds of Opposition, Onus and Standard of Proof

8. At the hearing Ms Marcus indicated that the Opponent would be pressing only the grounds of opposition pursuant to ss 58, 62 and 62A. 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 4 March 2013, being the filing dates of the parent applications (‘the Relevant Date’).[3]

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

[2] Following Gyles J in Pfizer Products Inc v Karam [2006] FCA 1663, [6]-[26].

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

The players

9.  The facts surrounding these oppositions are rather complex and involve a number of individuals, corporations, liquidations, oppositions and a deed of assignment. A key issue in this matter is the validity of the deed of assignment. Before considering the deed (and the grounds of opposition), however, it is necessary to discuss the entities involved. A useful starting point is Mr James Edmund Corbett (‘James Corbett’). Most of the information which follows is taken from James Corbett’s declarations; except where indicated, the facts are not controversial.

1. In the 1980s James Corbett owned and operated two large marble and granite processing yards which employed about 80 workers. Twenty or so of the 80 were Vietnamese speakers. Those workers included the Opponent and his brother Nhon Ai Nguyen. The Opponent was employed on a casual basis as a truck driver and Nhon Ai Nguyen was the foreman in charge of the Vietnamese workers. Another brother, Nhon Hau Nguyen was also employed by the business. This business closed in about 1991.

2. In around June 1991, James Corbett, with two others, incorporated Herdgraph Pty Ltd (‘Herdgraph’). Herdgraph was established to manufacture and sell tools and equipment for use in the stone and construction industries. According to Corbett 1, the Nguyen brothers ‘continually approached me requesting that we go into business together to conduct the same business activities which Herdgraph was undertaking at the time’. In or around July 1995, James Corbett agreed to go into business with the Nguyen brothers and together they established Abaco Machines. James Corbett held a directorship and 55% shareholding in Abaco Machines. The three Nguyen brothers were each directors and each held a 15% shareholding.

3. After Abaco Machines was incorporated, Herdgraph ceased trading in certain goods because James Corbett moved the business associated with those goods to Abaco Machines. Herdgraph continued to trade solely in manufacturing end caps for one customer with which it had an ongoing contract. On 12 July 2001, for reasons which need not concern us here, James Corbett resigned as a director of Abaco Machines and sold his shareholding to the Nguyen Brothers. On the same date, James Corbett incorporated Abaco Equipment Pty Ltd (‘Abaco Equipment’); he was the sole director and sole shareholder. Abaco Equipment was incorporated initially to be a temporary trading company which would allow James Corbett to sell his patented lifting clamps. The lifting clamps were manufactured in Vietnam and sold in connection with the sign ABACO LIFTERS.

4. According to Corbett 2, in around August 2002, James Corbett became aware that the Opponent had begun using the company name ‘Abaco Equipment Co’ with an address in the USA. This prompted James Corbett to come up with a new name and brand for Abaco Equipment. In or around January 2003, he invented the name AARDWOLF. In January 2003 James Corbett registered AARDWOLF as a business name in New South Wales. In or around January 2003, James Corbett’s son, Benjamen Corbett, a graphic designer, designed the sign which constitutes the 9004 Trade Mark (‘the AARDWOLF logo’).

5. On 26 February 2003, Herdgraph registered the trade mark shown below (‘the First AARDWOLF Registration’):

Trade Mark Number:

945207

Priority Date:

26 February 2003

Goods:

Class 7: Equipment for use in the stone and construction industry; including material handling equipment, lifters, spreader-bars for slings, forklift booms, transport frames, dollies and trolleys; site saws, brick saws, cement mixers and linishers

Trade Mark:

AARDWOLF 

Status:

Removed – Not Renewed

(removed from Register on 12 September 2013)

1. Herdgraph applied successfully to register AARDWOLF in the United States of America in July 2003. That registration was eventually cancelled because a declaration of continued use was not filed. Herdgraph also registered AARDWOLF in the European Union.

2. In March 2003, James Corbett changed the name of Abaco Equipment to Aardwolf Pty Ltd. After changing the name of the company, he decided to expand the company’s operations to become a trading entity selling tools and equipment for use in the stone and construction industry. He originally planned for Herdgraph to assume this role, but later made a decision to run those operations solely through Aardwolf Pty Ltd. The transition to Aardwolf Pty Ltd entirely away from Herdgraph occurred over the course of 2003.

3. According to Corbett 1, Herdgraph never used the First AARDWOLF Registration in any capacity in Australia. Instead, the First AARDWOLF Registration was used solely by Aardwolf Pty Ltd. Further, James Corbett declared that Herdgraph had no interest in using the AARDWOLF brand and abandoned the First AARDWOLF Registration along with its US and EU registrations at that time. The claim of abandonment by Herdgraph is disputed by the Opponent and is discussed further, below.

4. Herdgraph ceased trading in goods in about May 2007. The only ongoing matter for Herdgraph was a patent infringement action commenced in 2006 against Abaco Machines. The infringement action was undertaken with Aardwolf Pty Ltd as co‑applicant. Aardwolf Pty Ltd also ceased trading at this time as James Corbett had raised enough capital to establish a manufacturing company in Vietnam under the ‘Aardwolf’ name. In about May 2007 James Corbett incorporated Aardwolf Industries Sole Member LLC (‘Aardwolf LLC’) in Vietnam. In August 2007, James Corbett transferred Aardwolf Pty Ltd’s last contract to his son, Mark Georg Corbett (‘Mark Corbett’) in his personal capacity.

5. James Corbett declared in Corbett 2:

   Given that the operations of Aardwolf [Pty Ltd] had been overtaken by Aardwolf LLC (or Mark Corbett …) and there was no longer any need for Aardwolf [Pty Ltd] to continue operating in Australia, there was at the time [Aardwolf Pty Ltd ceased trading] and [sic] an accompanying intention to abandon any rights which Aardwolf [Pty Ltd] had accrued in the [sign AARDWOLF] and the AARDWOLF Logo from use in Australia … and for those rights instead to be adopted by Aardwolf LLC, who would be manufacturing (in Vietnam) and trading the Aardwolf Goods (in Australia) itself.

6. James Corbett did not voluntarily wind up Aardwolf Pty Ltd when it ceased trading because there were still some outstanding receivables and the company was still a party to the patent infringement proceedings. In about April 2008, Mark Corbett was appointed as a director of both Herdgraph and Aardwolf Pty Ltd to provide assistance with the patent infringement litigation and, in the case of Aardwolf Pty Ltd, to deal with the outstanding receivables. This was necessary as James Corbett had, by this time, permanently relocated to Vietnam, making managing the litigation difficult.

7. In November 2008 the patent infringement litigation was discontinued. In September 2010 costs were awarded against Herdgraph and Aardwolf Pty Ltd in favour of Abaco Machines. On 8 August 2011, both Herdgraph and Aardwolf Pty Ltd were placed into liquidation. Mr Riad Tayeh was appointed liquidator. In about March 2013, as part of documents entitled ‘Report as to affairs’ which were filed with ASIC, James Corbett declared that Herdgraph and Aardwolf Pty Ltd had no assets in their ownership. This, according Corbett 1, reflected the abandonment of the AARDWOLF trade marks by both Herdgraph and Aardwolf Pty Ltd which were discussed above.

8. James Corbett has declared in Corbett 2 that:

   Whilst there was use of the AARDWOLF Word and AARDWOLF Logo between March 2003 and May 2007, there was a clear and resolved intention to abandon any rights to those trade marks as at the [date Aardwolf Pty ceased trading]. …

9. Aardwolf LLC’s first use of the AARDWOLF Word and AARDWOLF Logo in Australia was in about May 2007 when it notified existing distributors of Aardwolf Pty Ltd’s goods that its goods would be replaced with goods provided by Aardwolf LLC. Since September 2007, Aardwolf LLC has distributed and sold its goods in Australia through a third party distributor, CDK Stone Pty Ltd, (‘CDK Stone’).

10. In approximately March 2011, Aardwolf LLC restructured its operations for Australia. Mark Corbett incorporated the Applicant and the Applicant became the Australian arm of Aardwolf LLC’s business. The Applicant operates independently of Aardwolf LLC and is entirely in charge of operations for the Australian territory, including control of promotion, sales and the quantities and quality of the Aardwolf LLC goods sold in Australia. According to both James Corbett (in Corbett 3) and Mark Corbett (in the Mark Corbett declaration), to reflect this arrangement an oral agreement was reached to assign all trade mark rights which Aardwolf LLC had accrued to the AARDWOLF Word and AARDWOLF Logo through use in Australia to the Applicant. Exhibit JEC-42 to Corbett 3 is declared to be ‘Confirmatory Trade Mark Deed of Assignment between Aardwolf LLC and the Applicant dated 8 April 2015 which confirms the oral agreement between the companies.’ The Opponent disputes the validity of the assignment.

11. Aardwolf LLC continues to use the AARDWOLF branding in jurisdictions other than Australia. This is, according to Corbett 3, reflected in its EU registration of the signs constituting the Opposed Trade Marks.

12. Nhon Ai Nguyen declared in the Nguyen declaration that:

    On 29 November 2013, Herdgraph and another company in liquidation, Aardwolf Pty Ltd … assigned to [the Opponent] all of their common law and registered rights in the trade mark AARDWOLF by written Trademark Deed of Assignment.

Annexure E to the Nguyen Declaration is declared to be a copy of that deed (‘the Deed’). The Applicant disputes the validity of the Deed.

1. According to Corbett 3:

   Aardwolf LLC … and [Abaco Machines] (and its related worldwide entities, the Nguyen brothers) are embroiled in trade mark disputes in a number of other jurisdictions, including Vietnam (where manufacturing for Aardwolf LLC/the Applicant and Abaco Machines are based), the United States of America and Canada, concerning the AARDWOLF branding. …

   By way of example … ‘Aardwolf LLC’, an American company and corporate vehicle of [the Opponent] (‘Aardwolf USA’), commenced legal proceedings in the United States District Court originally against Benjamen Corbett for invalidity of his copyright registration for the AARDWOLF Logo … Later, the pleadings were amended by Aardwolf USA to introduce allegations against [the Applicant], Aardwolf LLC and myself … In response, Aardwolf LLC filed a number of counterclaims against Aardwolf USA, Abaco Machines USA, Inc … and the Opponent. [The Opponent] is relying on [the Deed] to assert ownership of rights [in the USA], Aardwolf LLC is relying on a number of arguments … including the relevant abandonment of rights by Herdgraph and Aardwolf [Pty Ltd].

Associated AARDWOLF trade marks

1. The First Aardwolf Registration, detailed at para 14, above was registered by Herdgraph and removed from the Register of Trade Marks on 12 September 2013 because the registration renewal fees were not paid. As also indicated above, the applications, the subject of these oppositions, are divisional applications. In April 2013, the parent applications were examined and a ground for rejection under s 44 of the Act was raised for each. In both cases the First Aardwolf Registration was raised as the sole citation. The parent applications were accepted under the provisions of s 44(3)(b) on the basis of a Letter of Consent dated 27 May 2013 (‘the LOC’). A copy of the LOC appears at Annexure D to the Nguyen declaration. The LOC includes the statement:

   As owner of trade mark Aardwolf (logo) & Aardwolf (word) in Class 7, I hereby consent to the use and registration of the trade mark Aardwolf (logo) & Aardwolf (word) in Class 7 by [the Applicant] …

The LOC was signed ‘James Edmund Corbett, Herdgraph Pty Ltd’.

1. The LOC gives rise to some issues. Firstly, it is dated some six years after the time which James Corbett declared that Herdgraph had abandoned the AARDWOLF trade marks. Secondly, it is dated nearly two years after Herdgraph was placed into liquidation.

2. On 27 August 2013 Abaco Machines filed notices of intention to oppose the registration of the parent applications. The grounds of opposition included that under s 62(b) which was particularised as follows:

   The application is defective in that the Registrar accepted the application for registration on the basis of evidence or representations by Herdgraph Pty Ltd in the letter of consent that were false in material particulars, namely that James Edmund Corbett was able to perform or exercise a function or power of Herdgraph Pty Ltd by providing consent when he could not under s 471A of the Corporations Act 2001.

Those oppositions were heard on 29 May 2015. At that hearing the Applicant conceded that James Corbett had no authority to execute the letter of consent since Herdgraph was under external administration at the time. Registration of the parent applications was refused, the date of the decision being 24 June 2015.[4]

[4] Abaco Machines (Australasia) Pty Ltd v Aardwolf Australia Pty Ltd [2015] ATMO 55.

1. I note that the applications the subject of the present oppositions were filed approximately one month before the hearing of the oppositions to the parent applications. I note also that the First AARDWOLF Registration had been removed from the Register by the filing date. Consequently, the First AARDWOLF Registration was not an impediment to the acceptance of the applications for the Opposed Trade Marks; both applications were accepted without an adverse report being issued.

2. I move now to consider the grounds of opposition in detail.

Section 58 – Applicant not owner of trade mark

1. The ground based on s 58 of the Act is particularised in the SGPs as follows:

   The applicant is not the owner or first user of the opposed trade mark in Australia.

   The first user of the trade mark AARDWOLF in Australia in respect of, among other things, equipment for use in the stone and construction industry, was Herdgraph Pty Ltd and/or Aardwolf Pty Ltd. This use commenced at least as early as 2003.

   Herdgraph Pty Ltd and/or Aardwolf Pty Ltd assigned their rights in the trade mark AARDWOLF to Nhon Hoa Nguyen as part of the liquidation process.

1. Section 58 of the Act is reproduced below:

   Section 58. Applicant not owner of trade mark

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

   Note:For applicant see section 6.

2. It is well established at law that the owner of a trade mark is the person who first uses it in Australia, or first files a trade mark application in Australia, whichever is the earlier. In order to succeed under this ground of opposition the Opponent must establish three factors. These are:

   ·     that the Opposed Trade Marks are identical, or substantially identical, to the trade marks relied upon by the Opponent;[5]

   ·     that the Applicant’s Goods are the ‘same kind of thing’ as the goods for which the trade marks relied upon by the Opponent was used;[6] and

   ·     a person other than the Applicant has the earlier claim to ownership of the Opposed Trade Marks based on use prior to whichever is the earlier of: (a) the application to register; or (b) any actual use of the trade mark by the Applicant.[7]

   [5] Carnival Cruise Lines Inc. v Sitmar Cruises Limited (1994) 31 IPR 375.

   [6] Re Hicks’ Trade Mark (1897) 22 VLR 636.

   [7] Settef SpA v Riv-Oland Marble Co (Vic) Pty Ltd (1987) 10 IPR 402, 413..

3. There is no dispute that the first two factors above are satisfied. It is the last of the above factors which is the principal point of dispute in this matter, and this factor turns largely on the validity of the Deed. With respect to the Deed the Opponent has submitted:

   By written trade mark Deed of Assignment dated 29 November 2013, Herdgraph assigned its entire rights in the Aardwolf trade mark, including common law rights and registered rights, to [the Opponent]. The Deed of Assignment included assignment of [the First Aardwolf Registration].

In contrast the Applicant has submitted that the Deed did not assign any ownership rights to the Opposed Trade Marks or the First AARDWOLF Registration (as statutory rights) or the AARDWOLF Marks (as common law rights) to the Opponent.

1. The Deed is indicated to be between Herdgraph and Aardwolf Pty Ltd (jointly and severally the ‘Assignor’) and the Opponent (‘the Assignee’). The Deed indicates that for valuable consideration ‘Assignor hereby assigns to the Assignee all its rights and title to the Trade Marks, the applications and common law rights’. The Deed contains background information some of which is clearly incorrect. Item C of the background information states, ‘Herdgraph at the date of liquidation was the registered proprietor of [the 9002 Parent and the 9004 Parent]’. This is incorrect; the Applicant was always the applicant of the parents.

2. Item G states:

   It has come to the attention of Herdgraph that on or about 27 May 2013 a person not from the Liquidators office nor with the approval or authority of the Liquidators purported to consent to the registration of an assignment of [the 9002 Parent and the 9004 Parent] to [the Applicant].

This is also incorrect. As discussed above, there was a letter of consent to use the parent applications provided (the LOC), this is not an assignment.

1. Item I indicates that the Assignor was at the time of execution ‘the registered proprietor of the Trade Marks set out in Item 1 of the Schedule’. Item 1 lists the First AARDWOLF Registration, the 9002 Parent, the 9004 Parent and an EU trade mark registration. These are defined in the Deed as ‘the Trade Marks’. The EU registration need not concern us here. The statement in Item I is at least partly incorrect because the parent applications were never in the name of either Herdgraph or Aardwolf Pty Ltd. It is to be noted also that at the time the Deed was executed the First AARDWOLF Registration had been removed from the Register. Item B states that renewal of the First AARDWOLF Registration is possible. As the grace period for renewal had passed at the time the Deed was executed, renewal would be possible only with the granting of an extension of time to renew the trade mark. There is nothing in evidence in this matter to suggest there is any basis for such an extension of time.

2. The Applicant is critical of the Deed, and has submitted:

   The Opponent attempts to assert ownership in the AARDWOLF trade mark based on, with respect, a convoluted and ambiguous alleged deed of assignment which attempts to assign alleged ‘rights’ from either:

   (a)[Herdgraph] that held a registration for 10 years, failed to renew that registration, never used the mark the subject of that registration, and clearly permitted use and acquisition of the mark (which it never used) by other entities in their own right without license; or

   (b)[Aardwolf Pty Ltd] that used the mark between 2003 and 2007, ceased trading in 2007, and clearly permitted the use and acquisition of the mark post 2007 by the Applicant’s predecessor in title (Aardwolf LLC) in their own right who thereby acquired ownership rights.

3. The Applicant noted errors in the background information in the Deed, including those outlined above and made further submissions including:

   Herdgraph did not have any trade mark rights to the AARDWOLF Word in any capacity at the date of the Purported Deed because it had intentionally abandoned all such rights during 2003 (when it was decided that Aardwolf [Pty Ltd] would instead trade the Aardwolf [Pty Ltd] Goods under the AARDWOLF Marks instead of Herdgraph). Furthermore, Herdgraph never had any rights to the AARDWOLF Logo as it never used or sought registration for that trade mark in Australia. …

   Aardwolf [Pty Ltd] did not have any rights to the AARDWOLF Marks in any capacity at the time of the Deed because it had intentionally abandoned all such rights in mid-2007, when its trading operations ceased completely and were taken over by Aardwolf LLC. Shortly after Abandonment by Aardwolf [Pty Ltd], Aardwolf LLC began using the AARDWOLF Marks in Australia. …

   The Applicant submits that the effect of the above considerations is that [the Opponent] has not obtained any assignment of rights to the Opposed Marks, [the First AARDWOLF Registration] or AARDWOLF Marks from Herdgraph and Aardwolf [Pty Ltd] by virtue of the Purported Deed.

4. With respect to the validity of the Deed and the errors within it the Opponent has submitted:

   Despite some inaccuracies with the Trade Mark Deed of Assignment (for example, in the ‘Background details’), there is no denying that the assignment covers the Aardwolf Word Mark and common law rights owned by Herdgraph in the Aardwolf Mark.

5. In respect of abandonment the Opponent referred to the LOC and submitted:

   This letter is signed by Mr Corbett for and on behalf of Herdgraph Pty Ltd. There is no ambiguity in the statement made in the letter. Mr Corbett, then a director of Herdgraph, acknowledges that Herdgraph was the owner of the trade mark AARDWOLF (both word and logo) for the relevant goods. …

   At the crucial date, being the filing date of the Parent Applications, Herdgraph was the owner of [the First Aardwolf Registration]. The Official Liquidator of Herdgraph subsequently assigned [the First Aardwolf Registration] and common law rights associated with it to [the Opponent]. In view of Herdgraph’s common law and registered rights in Australia in relation to the Aardwolf Mark, the Applicant is not the owner of [the Opposed Trade Marks] (like it was not the owner of the Parent Applications). …

   The Opponent submits that the Applicant’s evidence does not support a finding that Herdgraph had intentionally abandoned [the First Aardwolf Registration] or any other rights in the Aardwolf Mark (common law or otherwise).

6. As well as a copy of the LOC, Annexure D to the Nguyen declaration includes copies of correspondence between the examiner of the parent applications and Mark Corbett. The correspondence includes ‘an example of an acceptable format for a letter of consent’. James Corbett referred to the LOC in Corbett 1. He indicated that in drafting the LOC he had followed the example letter provided to him by the examiner of the parent applications. A comparison of the LOC and the example supports this statement. James Corbett further declared:

   In hindsight, I should have communicated clearly in the letter of consent that my position in providing the letter was in the capacity of Herdgraph being the former owner of [the First AARDWOLF Registration], because Herdgraph had intentionally abandoned any rights afforded by that registration …

7. James Corbett also declared that the LOC was never intended to mislead IP Australia, rather that he was mistaken in his belief that, ‘as a former owner, [he] could provide a letter of consent on behalf of Herdgraph’. Additionally, he declared that the LOC was never intended to be a statement or acknowledgement that Herdgraph had ‘continuing or revived rights’ to any AARDWOLF trade marks.

8. As part of the ongoing disputes referred to by James Corbett at para 27 above, Aardwolf USA brought an action in the USA against a number of parties, being: the Applicant, Aardwolf LLC, Benjamen Corbett and James Corbett.[8] On 10 November 2015, James Corbett was deposed as part of those proceedings. A transcript of the deposition appears at Annexure A of McGuire 2. During the deposition the questions were asked by a representative of Aardwolf USA and answered by James Corbett. The transcript of the deposition includes the following at page 15:

   [8] United States District Court, Central District of California (Western Division) Proceedings Case No. 14-cv-09556-GW (JEMx).

   QYou said the Aardwolf trademark was first used in 2003 by Aardwolf Pty Ltd; correct?

   A Correct.

   Q Okay. How long did Aardwolf Pty Ltd use the trademark?

   AFour years.

   QUntil 2007?

   ACorrect.

   QFrom 2003 to 2007, did any other company use the Aardwolf trademark?

   AHerdgraph Pty Ltd.

   …

   QWhen did Herdgraph first start using it?

   ASame time, 2’03.

   QAnd when did it stop using it?

   A2’07.

9. The Opponent referred to the above extract of the deposition and to James Corbett’s statement in Corbett 1 that Herdgraph had never used the First AARDWOLF Registration and submitted:

   Mr Corbett’s sworn evidence on this point is completely at odds with his subsequent evidence in US proceedings. In the course of giving evidence in the US proceedings, Mr Corbett stated that from 2003 to 2007 Herdgraph in fact used the Aardwolf trade mark in Australia. Mr Corbett appears to have given false evidence in Australia or in the subsequent US proceeding. The Opponent submits that Mr Corbett’s evidence in relation to abandonment is obviously unreliable and should be given little or no weight.

10. In response the Applicant has submitted:

    The Opponent seeks to argue that [James Corbett] either gave false testimony in those US proceedings or false evidence in these proceedings and that therefore [James Corbett’s] evidence ‘in relation to abandonment is obviously unreliable and should be given little or no weight’. Yet, in these same proceedings, the Opponent seeks to rely on those same contradictory statements … [T]he Opponent wishes to have it both ways: that [James Corbett’s] evidence in these proceedings and his testimony in the US be both unreliable yet ‘remarkably’ reliable where it suits the Opponent’s case.

11. As indicated above, the circumstances surrounding this matter are complex. There are many corporations involved, many with very similar names. James Corbett’s deposition also concerned corporations which have not been mentioned in this decision. It is not surprising that errors may have been made during the deposition. On a number of occasions both James Corbett and the person deposing him corrected themselves because of apparent confusion as to which company was which. I imagine, also, that being deposed would be a rather stressful experience, perhaps adding to the likelihood of confusion. I am prepared to give James Corbett the benefit of the doubt and assume that his statement regarding Herdgraph’s use during the deposition was an unintentional error. The Opponent has provided no evidence to show that Herdgraph used any AARDWOLF trade mark. Further, had it been shown that Herdgraph had in fact used an AARDWOLF trade mark from 2003 up to 2007, this would not necessarily contradict James Corbett’s assertion that both Herdgraph and Aardwolf Pty Ltd had abandoned the AARDWOLF trade marks in 2007.

1. Both parties referred to the case of Riv-Oland Marble Co (Vic) Pty v Settef SpA wherein Bowen CJ stated:

   Once having acquired proprietorship it can only be lost upon some established general law basis such as estoppel, acquiescence or abandonment … Counsel for the Marble Co did argue that Settef had abandoned its trade mark through disuse … however, in my opinion, to show abandonment of the mark in circumstances such as the present it would be necessary to demonstrate more than slightness of use. There would have to be some evidence indicating an intention to abandon the trade mark to result in the right to proprietorship being lost.[9]

   [9] (1988) 12 IPR 321, 324.

2. I am satisfied that the surrounding circumstances to these oppositions indicate that both Herdgraph and Aardwolf Pty Ltd had abandoned the AARDWOLF trade marks by 2007. In particular, I accept that both companies had ceased trading by about May 2007. I further accept that Aardwolf LLC commenced use of the AARDWOLF trade marks in Australia by about September 2007 when it began using CDK Stones to distribute its goods. The combination of these various actions goes beyond simply a demonstration of slightness of use and is, rather, positive evidence indicating an intention to abandon the trade marks. As a consequence of the abandonment of the AARDWOLF trade marks in 2007 the Deed, executed some six years later in 2013, is ineffective so far as it purports to assign any rights in the AARDWOLF trade marks to the Opponent.

3. The Applicant has submitted that the use by Aardwolf LLC following the abandonment resulted ‘in it becoming the common law owner of the marks by virtue of that use’. I am satisfied that this is so. To successfully establish the s 58 ground it is not necessary that the Opponent show that he is the owner of the trade marks, only that someone other than the Applicant is. If Aardwolf LLC is found to be the owner the Opponent will also succeed. The Applicant has submitted, however, that the oral agreement discussed at para 24, above, effectively assigned the common law rights in the AARDWOLF trade marks to the Applicant, and that the ‘Confirmatory Trade Mark Deed of Assignment’ supports this view.

4. The Opponent disputes that Aardwolf LLC assigned any rights it might have had to the Applicant and in its submissions relies solely upon James Corbett’s deposition, discussed above, to support this. In particular the Opponent relies on page 19 of the deposition wherein the following appears:

   Q From 2007 through the present, has there been any other company [besides Aardwolf LLC] that’s used the Aardwolf trademark?

   ANo.

   QAre you familiar with [the Applicant]?

   AOh, yes, I have to correct myself, yeah.

   QOkay. Does [the Applicant] use the Aardwolf trademark?

   AYes.

   QOther than [Aardwolf LLC] and [the Applicant] are there any other companies that use the Aardwolf trademark?

   ANo.

   QWho owns – who currently owns the Aardwolf trademark?

   A[Aardwolf LLC].

5. In consideration of the above the Opponent has submitted:

   [R]emarkably in evidence in the US proceeding, being testimony after the date of the Confirmatory Deed of Assignment, Mr Corbett states that Aardwolf LLC is owner [sic] of the Aardwolf Mark.

   On the basis of Mr Corbett’s own evidence (under oath) in the USA, the Applicant is not the owner of rights in the Aardwolf Marks in Australia.

6. I am not satisfied that James Corbett’s statements contradict his assertion regarding the assignment of common law rights to the Applicant. James Corbett’s evidence, both in the present matter and in his deposition as a whole, indicates that Aardwolf LLC assigned it rights to the AARDWOLF trade marks in Australia only. Aardwolf LLC sells goods in a number of countries and has apparently retained its rights in those countries. In the context of the US proceedings, James Corbett’s statement in his deposition that Aardwolf LLC ‘owns the Aardwolf trademark’ is not surprising.

7. Both James Corbett and Mark Corbett have declared that there was an oral agreement whereby Aardwolf LLC assigned all rights which it had acquired through use of the AARDWOLF trade marks in Australia to the Applicant. The Opponent has not satisfied me on the balance of probabilities the situation is otherwise. Consequently, I am satisfied that the Applicant is the owner of the Opposed Trade Marks and that the Opponent has failed to establish this ground of opposition.

Section 62 – Application etc. defective etc.

1. Section 62 of the Act is reproduced below:

   Section 62 – Application etc. defective etc.

   The registration of a trade mark may be opposed on any of the following grounds:

   (a)that the application, or a document filed in support of the application, was amended contrary to this Act;

   (b)that the Registrar accepted the application for registration on the basis of evidence or representations that were false in material particulars

2. The Opponent relies on s 62(b) and the ground is particularised in the SGPs as follows:

   The application is defective in that the Registrar accepted the parent application for registration on the basis of evidence or representations by Herdgraph Pty Ltd in a letter of consent that were false in material particulars, namely that James Edmund Corbett was able to perform or exercise a function or power of Herdgraph Pty Ltd by providing consent when he could not under s 471A of the Corporations Act 2001. The filing of this divisional application cannot cure this defect as the parent application was accepted on the basis of evidence or representations that were false in material particulars.

3. The Opponent elaborated on the above in submissions, including the following:

   On the face of it, the letter of consent is clearly fraudulent and contrary to the Corporations Act 2001 (Cth). The Opponent submits that this act of fraud, which was both dishonest and intentional, was fatal to the Parent Applications and vitiates every transaction associated with the Parent Applications. The Opposed Marks are equally tainted by the fraudulent letter of consent and Mr Corbett’s actions.

   The letter of consent was filed by Mr Mark Corbett, in his capacity as a director or otherwise authorised representative of the Applicant, in order to secure acceptance of the Parent Applications. Mr Mark Corbett, also being a director of Herdgraph, must have had full knowledge an Administrator and Official Liquidator had been appointed, to Herdgraph.

   The Opponent submits that the actions of the Applicant in filing the letter of consent not only fatally tainted the Parent Applications, but also should equally taint the Opposed Marks and the Opposed Marks should also be rejected on the basis of the Registrar being defrauded and/or misled in relation to the Parent Applications on which the opposed applications rely.

4. The Applicant responded in submissions:

   In order to establish an opposition under section 62(b) of the Act, the opponent must demonstrate that the representations made by the applicant were false in material particulars and that there is a causal connection between those false representations and the decision to accept the application for registration.

   As set out below, the required causal connection is absent and this ground of opposition simply does not apply regardless of which parties interpretation of the facts is accepted.

   The letter of consent was filed in support of the acceptance of the Parent Applications, not the applications for the Opposed Marks. As such, the section 62(b) opposition ground does not prima facie apply to the Opposed Marks given the Registrar did not accept the Opposed Marks on the basis of the letter of consent. To circumvent this, the Opponent submits that, under the authority of Farley (Aust) Pty Ltd v R Alexander & Sons (Qld) Pty Ltd (‘Farley’),[10] as Mr J Corbett’s provision of the letter of consent was an ‘act of fraud’ and hence fatal to the registration of the Parent Applications, every transaction associated with the Parent Application is also vitiated, including the Opposed Marks.

   The Applicant submits that the defective letter of consent (which the Applicant vehemently denies can be categorised as ‘fraudulent’ for the reasons set out below) does not taint or vitiate the Opposed Marks and that the Opponent’s reliance on Farley is incorrect for the following reasons:

   (a)A divisional application can be filed while the parent application is pending.[11] There is no statutory stipulation as to restrictions on when a divisional application can be filed during the pending status of the parent application, so long as it occurs prior to registration. The Opposed Marks, were validly filed divisional applications of the then pending Parent Applications and prior to registration. The Parent Applications, in any event were never registered.

   (b)The authority in Farley that a fraud that enables the registration of an application necessarily taints and vitiates all other transactions flowing from that fraud is not applicable in the present circumstances. Firstly, the Applicant rejects that the filing of the letter of consent in respect of the Parent Applications was ‘fraudulent’. Indeed, while the Parent Applications were refused registration on the section 62(b) ground due to the defectiveness of the letter of consent, the Delegate in that instance made no finding of fraud.[12] Furthermore, the Opponent has not furnished any evidence supporting a serious allegation of this nature to demonstrate any fraud has been committed by the Applicant or Mr J Corbett. Secondly, even if fraud were to be found, the authority in Farley is not applicable as it specifically applies to ‘registration of a trade mark procured by fraud’.[13] The Parent Applications never reached registration.

   (c)Of note, given [the First AARDWOLF Registration] had lapsed on 23 August 2013 and removed from the Register on 12 September 2013 well prior to the lodgement of the Opposed Marks on 23 April 2015, [the First AARDWOLF Registration] was not raised as a citation against the Opposed Marks, which both proceeded to acceptance with a clear report. Therefore it cannot be said that any materials were submitted by the Applicant in support of Opposed Marks as none were required.

   [10] (1946) 75 CLR 635.

   [11] Trade Mark Act 1955 (Cth) s 45.

   [12] Abaco Machines (Australasia) Pty Limited v Aardwolf Australia Pty Ltd [2015] ATMO 55.

   [13] (1946) 75 CLR 635.

1. I concur with the Applicant’s assessment of the law and its application to the circumstances in this case. The Opponent has failed to establish this ground of opposition.

Section 62A – Application made in bad faith

1. 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.

2. This ground of opposition is particularised in the SGPs as follows:

   Herdgraph Pty Ltd and Aardwolf Pty Ltd are currently being liquidated for failure to pay debts due to the opponent. In their presentation of accounts and statement to the ACCC, Herdgraph Pty Ltd and Aardwolf Pty Ltd failed, refused or neglected to list Australian trade mark no. 945207 for AARDWOLF as personal property. It should have been included in the assets of the business and dealt with by the liquidator.

   Nevertheless, Herdgraph Pty Ltd purportedly ‘consented’ to the filing of AARDWOLF by the applicant, despite that consent being contrary to law. The opposed parent application was made in bad faith, possibly as a means of avoiding the AARDWOLF mark from being subject to the liquidation process and creditors.

   Further, the filing of this divisional application was made in bad faith because the applicant knows that Herdgraph Pty Ltd and/or Aardwolf Pty Ltd’s rights in the trade mark AARDWOLF were assigned to Nhon Hoa Nguyen as part of the liquidation process. The applicant also knows the matters described in relation to the s 42(b) ground above and s 62(b) ground below, and filed the divisional application in bad faith in attempt to circumvent the opposition procedure in relation to the parent application.

3. The Opponent elaborated on the particulars in its submissions, including the following:

   The Opponent submits that the Applicant was incorporated by Mr Corbett in full knowledge that Herdgraph was about to be placed into liquidation. A trade mark registration is personal property. The Corbetts failed to list the Australian and European Union trade mark registrations as assets of Herdgraph. The Applicant then filed the Parent Applications, despite knowing that Aardwolf was already registered by Herdgraph. The Opponent submits that a reasonable person standing in the shoes of Mr Corbett would have been aware that he ought not apply for Parent Applications in the name of the Applicant.

   The Parent Applications were filed with the full knowledge that [the First AARDWOLF Registration] would be cited during examination. The Applicant would have known, or ought to have known, that the only basis for the Parent Applications to be accepted for registration was to fraudulently sign a letter of consent.

   The Opponent submits that the evidence shows that the Applicant was merely a ‘phoenix’ company, incorporated to try and retain the Aardwolf trade mark rights and circumvent the liquidation process, despite those rights being dealt with by the Official Liquidator under the Corporations Act 2001 (Cth).

   Then, 23 days from hearing of the opposition proceedings in relation to the Parent Applications, the Applicant filed the Opposed Marks. The Opposed Marks, being divisional applications, carved out of the Parent Applications all but one good in class 7 for each application, leaving virtual shell Parent Applications.

   The Opponent submits that the filing of the Opposed Marks was a further means by the Applicant to circumvent the liquidation process and the opposition proceeding against the Parent Applications. Therefore, just as the filing of the Parent Applications was done in bad faith, the Opponent submits that the filing of the Opposed Marks was also done in bad faith. The Opponent submits that it is not in the public interest that such behaviour be condoned or encouraged.

4. 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.

1. 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.[14]

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

2. 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.[15]

   [15] Ibid [165]-[166].

3. The Opponent failed to satisfy me that the Applicant is not the owner of the Opposed Trade Marks. This finding, of course, extends to the parent applications. As indicated above, I am satisfied that Herdgraph and Aardwolf Pty Ltd had abandoned the AARDWOLF trade marks in 2006. The Applicant lodged both the parent applications and the present applications in the light of the earlier abandonment and on the strength of the assignment of rights to it by Aardwolf LLC. The Applicant has relevantly submitted:

   The Applicant was merely filing an application for a mark that, unlike the applicant, it had used in trade and developed a reputation in. …

   The Applicant applied for the Opposed Marks because it obtained an assignment of the AARDWOLF Marks from Aardwolf LLC. Also, it was not the case that the only way the Herdgraph Registration could be overcome as a citation to the Parent Applications was by obtaining a letter of consent because, at the filing date of the Parent Applications, the Herdgraph Registration had already expired and, if not renewed within the 6 month grace period, would no longer be considered a citation preventing registration of the Parent Applications.

4. I am not satisfied the Opponent’s conduct in filing the applications was unscrupulous, underhand or unconscientious in character. Consequently, the Opponent has failed to establish this ground of opposition.

Decision

1. The Opponent has failed to establish any of its grounds of opposition. Applications 1689002 and 1686004 may proceed to registration after 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 either the appeal is withdrawn or a court so orders.

Costs

1. Both parties requested an award of costs in their favour. As the successful party, the Applicant is entitled to its costs and I accordingly award costs against the Opponent as per Schedule 8 of the Trade Mark Regulations 1995, with costs for the second of the two oppositions to be assessed as set out in the table attached to the Hearing Officer’s decision in James Hardie & Co Pty Ltd v Hume Industries (Malaysia) Berhad.[16]

   [16] (2001) 53 IPR 591.

Robert Wilson

Hearing Officer

Trade Marks and Designs Hearings

26 June 2017