NSW Squash Limited v Carin Clonda
[2012] ATMO 71
•20 August 2012
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by NSW Squash Limited to registration of trade mark application 1362659 (41) - - filed in the name of Carin Clonda
Delegate: | Michael Kirov |
Representation: | Opponent: Oliver Lind, President and a Director of the Opponent Applicant: Darren Gardner, Patent and Trade Marks Attorney, of Gardner Patent Services |
Decision: | 2012 ATMO 71 Section 52 opposition: s 62A considered – application made in bad faith – opposition successful and registration refused. Costs awarded against the Applicant. |
Background
This is an opposition brought by NSW Squash Limited (“the Opponent”) pursuant to s 52 of the Trade Marks Act 1995 (“the Act”) to registration of the trade mark subject of the application detailed below in the name of Carin Clonda (“the Applicant”):
Application Number: 1362659
Priority Date: 20 May 2010 (“the Priority Date”)
Services:Class 41: Advisory services relating to the organisation of sporting events; arranging of sporting events; arranging of sports competitions; booking of sports facilities; booking of tickets for sporting events; coaching services for sporting activities; event management services (organization of educational, entertainment, sporting or cultural events); handicapping or seeding of sports events; hire of equipment for sports; hire of sports facilities; information services relating to sport; instruction in sports; management of sporting events; officiating at sports contests; organisation of sporting activities; organisation of sporting competitions; organisation of sporting events; organisation of sports competitions; production of sporting events; providing facilities for sports events; providing information, including online, about education, training, entertainment, sporting and cultural activities; providing sports facilities; providing sports training facilities; provision of apparatus for sports; provision of club sporting facilities; provision of facilities for sports; provision of information about sports; provision of sport facilities; provision of sporting club facilities; provision of sporting competitions; provision of sporting events; rental of equipment for use at sporting events; rental of sporting apparatus; rental of sports equipment; rental of sports facilities; rental of sports grounds; social club services (entertainment, sporting and cultural services); sport camp services; sporting activities; sporting information; sporting results services; sports club services; sports coaching; sports consultancy; sports education services; sports information services; sports instruction services; sports officiating; sports refereeing; sports training; sports tuition; coaching; organising of entertainment and social events; provision of recreational events
(“the Services”)
Trade Mark: (“the Trade Mark”)
The Opponent was incorporated in 1979 and is recognized by the NSW Department of Sport and Recreation as the governing body of the sport of squash in NSW. It organizes pennant competitions and tournaments in NSW, including the NSW Open and a number of junior competitions. It is affiliated with Squash Australia Limited, (itself a member of the World Squash Federation, which governs the sport of squash internationally), which organizes various squash tournaments around Australia known collectively as the “Australian Tour” and culminating in the Australian Open.
The Applicant, (who was both Company Secretary and a Director of the Opponent at the time), agreed on 1 January 2007 to be employed as CEO of the Opponent for a period of three years. The agreement was formalized in a written contract on 1 July 2007, but the Applicant’s employment ended on 29 October 2009 following her resignation (as CEO, Company Secretary and Director) on 22 September 2009. The Applicant is also the sole Director and sole shareholder of a company named Casquash Pty Ltd (“Casquash”), which was officially affiliated with the Opponent until this association ceased in, as I understand it, late 2009 or early 2010, following the breakdown in relations between the Applicant and Opponent.
From January 2007 Casquash was the informal lessee of squash courts located in Thornleigh, NSW owned by the Opponent. Following an extraordinary sequence of events which were later to form the subject of litigation between Casquash and the Opponent (discussed in more detail below), a formal lease was eventually registered on 29 October 2009, the day the Applicant’s employment as CEO of the Opponent ceased. The lease was however rectified in the Opponent’s favour by the NSW Supreme Court in May this year following a finding by Pembroke J that it “was procured by conduct that [the Court] characterized as dishonest”[1] and that it was in any event subject to breaches by Casquash which “were deliberate and recalcitrant”[2]. With reference to the relationship between the Applicant and the Opponent, the Applicant’s attorney’s written submissions note that “it is relevant to acknowledge that there is a long running and acrimonious dispute between the parties”.
[1] Casquash Pty Ltd v NSW Squash Limited (No 2) [2012] NSWSC 522 at [59].
[2] Ibid.
Unbeknownst to other officers of the Opponent at the time, the Applicant obtained a NSW business name registration in her own name for “Squash NSW” on 12 January 2009 (“the Squash NSW Business Name”) while still CEO and Director of the Opponent. Other officers of the Opponent apparently first learned of this in or about May 2010 when the Opponent tried to register the same business name. It subsequently had the law firm Landers & Rogers write to the Applicant’s solicitor[3] on 6 May 2010 requesting that she “transfer ownership of the business name to [the Opponent]”. The Applicant apparently declined to do so and, as indicated above, she applied to register the Trade Mark on 20 May 2010.
[3] Being the Applicant’s brother, Victor Clonda, of Leys Law Firm.
Acceptance of the opposed application for possible registration was advertised in the Australian Official Journal of Trade Marks on 23 September 2010 and the Opponent filed its Notice of Opposition (“the Notice”) on 20 December 2010.
I heard the matter as delegate of the Registrar of Trade Marks on 20 June 2012 in Sydney. Darren Gardner, Patent and Trade Marks Attorney of Gardner Patent Services, appeared for the Applicant. Oliver Lind, who is both President and a Director of the Opponent, appeared for the Opponent. The parties’ oral submissions were supplemented by written submissions exchanged the day before the hearing.
Grounds of Opposition and Onus
The Notice nominates two grounds corresponding to ss 43 and 62A of the Act, both of which were pressed at the hearing. To succeed in its opposition the Opponent bears the onus of establishing at least one of these two grounds. As will become apparent, I have not found it necessary to address the Opponent’s s 43 ground in this decision and thus only the s 62A ground is discussed below. Of course should this decision be appealed, it would always remain open to the Opponent to plead any ground it considered relevant in proceedings before the Court.
Standard of Proof
I confirm I am proceeding on the basis that the relevant standard of proof required of the Opponent is the ordinary civil standard based on the balance of probabilities.[4]
[4] Following Gyles J in Pfizer Products Inc v Karam (2006) 70 IPR 599 at [6] to [26]. See also Chocolaterie Guylian N.V. v Registrar of Trade Marks (2009) 82 IPR 13 per Sundberg J at [22] to [27], Sports Warehouse, Inc v Fry Consulting Pty Ltd (2010) 87 IPR 300 per Kenny J at [30] to [40], NV Sumatra Tobacco Trading Company v British American Tobacco Services Limited [2011] FCA 1051 (9 September 2011) per Greenwood J at [16] to [32], Allergan, Inc v Di Giacomo (2011) 94 IPR 541 per Stone J at [11] to [12] and, most recently, Tricarico v Dunn Bay Holdings Pty Ltd [2012] FCA 271 (23 March 2012) per McKerracher J at [9] to [10] and Fry Consulting Pty Ltd v Sports Warehouse Inc (2012) 94 IPR 551 per Dodds-Streeton J at [13].
As indicated by Kitto J in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 595, the relevant date at which the rights of the parties are to be determined is the Priority Date.
The Evidence
As discussed below there were some irregularities concerning the evidence relied on by the Opponent, but the formally served evidence was as follows:
Evidence in Support
▪ Declaration by Oliver C Lind made 14 December 2010 (“Lind 1”)
Evidence in Answer
▪ Statutory Declaration by Carin Clonda made 30 June 2011, with Annexures A and B
Evidence in Reply
▪ Declaration by Oliver C Lind made 11 November 2011, with Annexures 1 to 10 (“Lind 2”)
There were, in addition, three further documents upon which the Opponent sought to rely. The first is referred to in paragraph 16 of Lind 2 as “a statement from Mr John Lee, President of Squash Australia (sent under separate cover)”. The “Lee Statement”, as I will refer to it, is in fact a letter dated 4 July 2011 sent to IP Australia by Mr Lee which consists of twenty numbered paragraphs. It provides some background information relating to the recognition of Squash Australia Limited (“SA”) within Australia and internationally as the national body which administers the sport of squash in Australia and confirms that the Opponent is an affiliate which performs a corresponding role in NSW. The Lee Statement contains, in addition, some legal argument which does not bear directly on the grounds pressed in the opposition before me. At the hearing Mr Gardner confirmed he had been provided with a copy of the Lee Statement and that he did not object to its admission given the factual matters related by Mr Lee were not in dispute and he did not consider anything significant turned on its contents in any event. Indeed, Mr Gardner had already addressed some of the contents of the Lee Statement in his written submissions. Mr Gardner’s sole caveat was to emphasize that since the Lee Statement was not a witnessed declaration per se, it should be treated with appropriate caution. I confirm I have taken on board some of the uncontested background information in the Lee Statement, but that none of this has been critical to my decision.
The second irregularly served[5] document upon which the Opponent sought to rely is a brief declaration (with a single Annexure) by Mr Lind. The declaration was made on 25 November 2011 and was referred to at the hearing as “Lind 3”. The substance of Lind 3 is contained in its Annexure, which Mr Lind says “is a document prepared for presentation to the NSW Squash board in October 2008 for board approval in November 2009” (sic) and “deals with logos and board policy with regard to same”. Mr Gardner had not previously seen this document and I confirm I have not taken its contents into account in deciding the opposition.
[5] According to Mr Gardner this document was not served on the officially recorded address for service of the opposed application and Mr Lind suggested it may have been served directly on the Applicant.
Finally, the Opponent sought to rely on the 25 May 2012 judgment by Pembroke J of the Equity Division of the NSW Supreme Court that I referred to earlier[6] (“the Pembroke Judgment”), a copy of which Mr Lind emailed to IP Australia on 6 June 2012. In his covering email on behalf of the Opponent Mr Lind referred to a telephone conversation he had had with an employee of IP Australia and wrote:
In confirmation of our conversation this morning please find attached the Supreme Court judgment in support of our application on the ground of bad faith.
[6] Casquash Pty Ltd v NSW Squash Limited (No 2) [2012] NSWSC 522.
Since it was not immediately apparent whether Mr Lind had also copied the Applicant’s representatives with this email and the attached judgment, I did so by email on 18 June 2012. That said, Mr Gardner confirmed that he was already aware of the judgment and had read it some weeks earlier. Pembroke J notes that the plaintiff, Casquash Pty Ltd, “is a company whose sole director and shareholder is [the Applicant]” and, as explained further in the course of my decision, I consider the judgment to be of significant relevance to the present opposition. Given its provenance and its relevance, given Mr Gardner was familiar with it and given the fact that it issued so recently (and thus could not have been served during the formal evidence stage of the opposition), I confirmed at the hearing that I would take it into account in deciding the opposition.
Discussion
Section 62A
The ground based on s 62A is indicated in the Notice as follows:
Trade mark application made in bad faith –s 62A
Section 62A itself is reproduced below:
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.
In support of this ground Mr Lind firstly highlighted the evidence before me that the Applicant had obtained the Squash NSW Business Name in her own name in January 2009 without informing any of the Opponent’s other officers, while a Director of, and employed as CEO of, the Opponent. When the Opponent eventually learned of this in May 2010 and requested she assign the Squash NSW Business Name she refused to do so and she then filed the opposed trade mark application later that month. This, submitted Mr Lind, indicated the trade mark application was made in bad faith because “it was a breach of her fiduciary duty as a director” and “was a flagrant breach of her employment contract as CEO of the [Opponent]”.
A copy of the employment contract in question, which was executed by the Applicant on 30 June 2007, is included as Annexure 2 to Lind 2. The contract is dated 1 July 2007 and is expressed to be for 3 years “unless terminated earlier in accordance with the terms of the Agreement”.[7] Mr Lind highlighted several of its provisions, such as:
that the employee’s duties included that she “seek new opportunities for developing the game, promote the game and develop the commercial activities of the organization”, that she “lead the marketing activities of [the Opponent], ensuring that all areas of the marketing mix are developed to optimize the potential of the organization, members and the game as a whole” and that she provide the board with “a monthly written [report] prior to each monthly board meeting [which] should include…a summary of any unusual events or occurrences since the last board meeting”;
that the employee was obliged to “use her best endeavours and judgment to promote the business and reputation of the employer and the business”;
that “[i]f the employee holds any other position or engages in any other work which may be in competition with the [Opponent’s] business or which may be in conflict with the employee’s duties with the [Opponent] without approval of the [Opponent]” this would constitute “serious and wilful misconduct”; and
that “[a]ll intellectual property rights in any document, work or other matter whether or not created or contributed to by the employee during the employment will remain the property of the employer”.
[7] As already mentioned, the Applicant did in fact terminate the contract as from 29 October 2009.
Mr Lind further noted that in July 2010, some two months after filing the opposed trade mark application, the Applicant registered a company called “Squash NSW Limited”, which Mr Lind characterized as a “non profit entity apparently designed to operate in direct competition with [the Opponent]”.[8] The Applicant says at paragraph 7 of her declaration that Squash NSW Limited is the owner of the Squash NSW Business Name, indicating that she must have assigned it to her company at some point after the company’s incorporation in July 2010.
[8] I note the publicly available online records of the Australian Securities and Investments Commission indicate that, like the Opponent company NSW Squash Limited, the Applicant’s company Squash NSW Limited is a company limited by guarantee.
Mr Lind submitted that it was “abundantly clear that there is likely to be confusion in the marketplace if this registration is allowed” given the relevant market for the Services was “those persons who wish to engage or be involved in the sport of squash at one or more levels” and “[T]here is, and has been for some time, an entity which fulfils the purpose of catering to the needs of the marketplace, and that entity is [the Opponent]”. Thus, “[t]he only purpose in registration of [the Trade Mark] would appear to be to allow an entity controlled by the Applicant to present itself as at least an alternative to the official body, if not indeed to represent itself as being the proper body for the representation of the interests of persons involved in squash”.
Indeed, said Mr Lind, there was evidence of apparent confusion between the phrases “NSW Squash” and “Squash NSW”, (or possibly of something more questionable than mere confusion), which occurred whilst the Applicant was still CEO of the Opponent and well before her application to register the Trade Mark was even filed. In particular, Annexure 4 to Lind 2 is a copy of an invoice dated 3 June 2009 for $13,100.00 from a company called Quantum Leisure Pty Ltd (“Quantum”) and addressed to “Squash NSW Ltd, c/o Elanora Squash, 50 Kalang Rd, Elanora, NSW 2101”. As mentioned, Squash NSW Ltd was not incorporated by the Applicant until July 2010 and, notwithstanding Quantum is apparently a regular supplier of goods to the Opponent, quite possibly NSW Squash Ltd (that is, the Opponent) was the intended invoicee. At the very least, therefore, it seems either the Applicant (who apparently ordered the goods) or Quantum (or both of them) confused the names NSW Squash Ltd and Squash NSW Ltd.
That said, Lind 2 states that the invoice, which is for squash equipment for a schools program conducted by the Opponent, “never appeared in our accounts as a transaction between [the Opponent] and Quantum”. Rather, the Opponent’s Administration Manager requested and obtained a copy of the invoice directly from Quantum as part of an audit of the schools program. It seems the Applicant, apparently in her capacity as the Opponent’s CEO, paid the invoice directly from the Opponent’s dedicated grant account which had been set up for the schools program and thus Lind 2 states that “it is likely the transaction was between [the Opponent] and Quantum”. According to Lind 2, however, the Elanora address on the invoice is a mystery since this has never been the Opponent’s address and Mr Lind speculates that it is possible the Applicant may even then, as early as mid-2009, have been trading under the Squash NSW Business Name and ordered the goods in question for that business notwithstanding she paid Quantum’s invoice from the Opponent’s dedicated grant account.
As evidence of more recent confusion between the phrases “NSW Squash” and “Squash NSW” Mr Lind referred to Annexure 10 to Lind 2, which is a copy of an invoice for $6,259.38 dated 1 October 2011 from the Opponent’s long-standing insurer addressed to “Squash NSW”. The invoice is for insurance for the Opponent’s squash courts at Thornleigh, NSW, of which the Applicant’s company Casquash was then the lessee. As Lind 2 puts it, payment of the invoice “was refused by [the Applicant] (quite properly.)” and she forwarded it to the Opponent. Lind 2 says that “[t]his clearly illustrates the confusion that exists in the marketplace in that [the Opponent] has used [the insurance company] for a substantial period of time and [they] know us well. Yet they sent the invoice to the wrong company”.
I mention that Lind 2 also refers to a statement in the Applicant’s declaration that “[the Opponent has] attempted to trade as Squash NSW, as shown in a letter dated 1 December 2010…” A copy of the letter in question downloaded from the Opponent’s website forms Annexure B to the Applicant’s declaration and in the body of the letter the Opponent consistently refers to itself several times as “NSW Squash”. However the Opponent’s contact details at the top of the letter bear the words “NSW Squash Ltd trading as Squash NSW” and the subject line of the letter reads “Re: Invitation to Become a Member of Squash NSW 2011”. While it is true that a company trading under a business name different from its company name is in principle obliged first to register that name, which of course the Opponent had not done, I think there is considerable force in Mr Lind’s point that ordinary members of the public are unlikely to distinguish between the two names. Certainly the trend over recent years of countless State and national organizations and government departments changing or amending their names so that they end with the designations “NSW” or “Australia” would not, I think, have escaped most people’s attention. Indeed, as mentioned, the evidence before me is that the Opponent was in fact trying to register the business name “Squash NSW” when it first discovered the Applicant had already done so on her own account and had its solicitors demand she assign the name. Accordingly the response made in Lind 2 indicating the Opponent simply considered both names were in essence alternatives, and had done so for some years, does not strike me as implausible. In this regard Lind 2 states:
[The Applicant’s statement that the Opponent has attempted to trade as Squash NSW] simply reinforces our contention that NSW Squash and Squash NSW have been names used interchangeably for years. … This supports our contention that both terms have been used in the market place. So, rather than attempting to trade as Squash NSW the [author of the letter] simply fell into what was a common usage, that is, using either term to describe [the Opponent].
As indicated earlier, Mr Lind also relied on the Pembroke Judgment in support of the Opponent’s case that the opposed trade mark application was made in bad faith. The proceedings in question were commenced against the Opponent in the NSW Supreme Court by Casquash, the company of which the Applicant was at all material times the sole Director and shareholder, and essentially concerned the validity of the commercial lease granted to Casquash over squash courts owned by the Opponent. The particular bone of contention leading to the court proceedings was whether Casquash or the Opponent was liable for Council rates and outgoings on the premises. Casquash relied on a version of the lease that had apparently been executed by both parties which stated the Opponent was liable for these outgoings and which Casquash’s solicitor, the Applicant’s brother, had registered on or about 29 October 2009. Put briefly, the Opponent successfully argued that this version of the lease had been procured by the Applicant and her brother by fraudulent conduct whose genesis was traced by Pembroke J to a board meeting of the Opponent on 28 November 2008 held “to negotiate and finalize the terms of the proposed lease”.[9] As mentioned, the Applicant was both Director and Company Secretary of, and employed as CEO of, the Opponent from at least 1 January 2007 (in the case of her employment as CEO) until she resigned from these positions as from, coincidentally, the day her brother registered the impugned lease on 29 October 2009. Prior to formalization and registration of the lease in question Casquash had also already been (informal) lessee of the Opponent’s premises since 1 January 2007.
[9] Casquash Pty Ltd v NSW Squash Limited (No 2) [2012] NSWSC 522 at [9].
It is unnecessary to detail here the precise sequence of events leading up to the creation and registration of the lease which was eventually rectified in the Opponent’s favour by Pembroke J. Suffice it to say that amongst other things his Honour variously characterizes the conduct of the Applicant (either personally or in concert with her brother) vis-à-vis the Opponent during this period as “act[ing] with guile and deception”[10], as “not in [the Opponent’s] commercial interests”[11], as a “failure … to act honestly, openly and frankly in their dealings with [the Opponent]”[12], as “disingenuous and misleading”[13], as “knowingly deceiv[ing]” and “not merely sharp, [but] dishonest”[14], as “duplicitous”[15], as “derisory” and “provocative and possibly also embittered” [16], and as “wilful and obdurate”[17].
[10] Casquash Pty Ltd v NSW Squash Limited (No 2) [2012] NSWSC 522 at [8].
[11] Ibid at [22].
[12] Ibid at [23].
[13] Ibid at [24].
[14] Ibid at [35].
[15] Ibid at [36].
[16] Ibid at [39].
[17] Ibid at [59].
Nor is Pembroke J any less scathing in his description of the Applicant’s conduct towards the Opponent after the lease was registered on 29 October 2009, describing the evidence before him as “replete with instances of [Casquash’s] unreasonable behaviour”[18] and detailing much of this in the course of his judgment. Indeed, his Honour considered this was not a case in which his discretion to grant relief against forfeiture of the lease, which was being sought by Casquash, was appropriate, concluding at [59]:
I will not detail all of the unsavoury evidence that reflects the wholesale breakdown in the relationship or the wilful and obdurate conduct on behalf of [Casquash]. The relationship is poisonous, acrimonious and unsalvageable. … The parties are engaged in litigation on other fronts, not just in these proceedings. [Casquash’s] breaches were deliberate and recalcitrant. The monetary breach[19] was the ultimate result of the insistence by [the Applicant] on a form of the lease that was procured by conduct I have characterised as dishonest. The non-monetary breaches[20] were the result of wholly unreasonable behaviour. There is no hope for the continuation of a stable commercial relationship. [The Applicant] said herself that the relationship between [Casquash] and [the Opponent] was untenable. Some evidence suggested that she wanted to send [the Opponent] “broke”. She refuses to deal with anyone on behalf of [the Opponent] other than through a psychologist whom she has appointed as her representative. This is an extreme case. If I grant relief against forfeiture, there will only be more disputation. And there will likely be more litigation.
[18] Ibid at [43].
[19] Being the non-payment of Council rates and the other disputed outgoings.
[20] Being inadequate compliance with obligations to provide the Opponent with access and office space.
As mentioned, Mr Gardner acknowledged that there was “a long running and acrimonious dispute between the parties”. The essence of his submissions were nevertheless that this was of peripheral relevance to the s 62A ground and that what really mattered was that when the Applicant filed the opposed application in May 2010 she “had no affiliation with the Opponent or any duty thereto”. As he put it:
…the issues in the present matter are trade mark issues and specifically, whether or not the [Trade Mark] is registrable. The issues for discussion should therefore be confined to trade mark issues.
…
At the outset, the Applicant points out that the issue to be considered is whether the trade mark has been applied for in bad faith. Many points provided in the Opponent’s evidence that are purportedly directed to the issue of bad faith have no bearing on the current trade mark and therefore no bearing on s 62A.
(Original emphasis)
Mr Gardner also submitted that it was the composite trade mark as a whole which needed to be considered and that any person might reasonably apply to register an inherently distinctive composite mark such as the Trade Mark, notwithstanding it might contain “descriptive words”. As he put it in his written submissions:
The [Trade Mark] features the descriptive words SQUASH and NSW. Under the Trade Marks Act 1995, no single proprietor would be entitled to monopolise these terms for the presently applied for services. Furthermore, at the time of making the trade mark application, the Opponent had no proprietary right to the term SQUASH NSW by way of a business name registration.
In order to provide distinctiveness to the words SQUASH NSW, the Applicant added the logo components, including the bouncing ball and a particular stylisation of the words SQUASH and NSW. The Opponent has no claim to the logo components, being components commissioned by the Applicant well after the Applicant’s duty to the Opponent had ceased.
The above submission notwithstanding, Mr Gardner quoted from the website of the Australian Securities and Investments Commission, emphasizing that it said “[t]he registration of a business name conveys no rights with regard to a trade mark” and reasoning that “[t]he actions in registering a business name have no bearing on the question of bad faith under s 62A of the Trade Marks Act 1995”. Therefore, he said:
It is not relevant whether the SQUASH NSW business name was registered, nor whether or not such registration was in bad faith.
With reference to Mr Lind’s above quoted submission that “[t]he only purpose in registration of [the Trade Mark] would appear to be to allow an entity controlled by the Applicant to present itself as at least an alternative to the official body, if not indeed to represent itself as being the proper body for the representation of the interests of persons involved in squash”, Mr Gardner submitted that:
It is not relevant as to who has the right to control or operate squash in Australia or NSW. Neither Squash Australia [Limited] nor NSW Squash [Limited] are legislative bodies with any monopoly control over squash. Neither Squash Australia [Limited] nor NSW Squash [Limited] have any right to prevent other entities from providing squash related services and events.
…
Any desire to operate in competition to Squash Australia [Limited] and/or NSW Squash [Limited] alleged in [the Lee Statement], while obviously undesirable to Squash Australia [Limited] and/or NSW Squash [Limited], does not constitute bad faith and in particular does not constitute bad faith under s 62A in relation to the current trade mark.
Mr Gardner also dismissed the Pembroke Judgment as irrelevant, submitting that:
…the decision relates to contract disputes and to actions taken while the Applicant (sic) was the lessee of the Duffy Road, Thornleigh squash premises owned by the Opponent. Nothing in the Casquash case relates to trade mark matters. As stated above, any bad faith alleged by the Opponent must be in relation to the [T]rade [M]ark and the decision to register the [T]rade [M]ark at the time of making the application to register. The Casquash case is wholly irrelevant to these issues.
In support of his submissions Mr Gardner relied on a recent decision of the Federal Court which considered s 62A in some detail, being Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) [2012] FCA 81 (13 February 2012) (“Fry”). In Fry Dodds-Streeton J examined several English and Australian decisions which have dealt with either s 62A itself or with its equivalent under s 3(6) of the Trade Marks Act 1994 (UK)[21]. Her principal conclusions were that:
[21] Section 3(6) says that “A trade mark shall not be registered if or to the extent that the application is made in bad faith”.
“While the seriousness of an allegation of bad faith that ‘impugns the character of an individual or collective character of a business...’ requires correspondingly cogent evidence (statement of the Hearing Officer [at first instance] in Maslyukov v Diageo Distilling Ltd [2010] EWHC 443 (‘Maslyukov’), quoted with approval by Arnold J at [36] and [37]), the standard of proof is the balance of probabilities, rather than that of beyond reasonable doubt.” (at [145]);
“The examples of bad faith applications in the Explanatory Memorandum[22] are predominantly, but not exclusively, manifestations of blocking or holding to ransom the party which is, at least in conscience, entitled to a mark, but the illustrations in the Explanatory Memorandum are merely inclusive and do not limit the breadth of the concept of bad faith.” (at [163]);
“Bad faith, in the context of s 62A, does not, in my opinion, require, although it includes, dishonesty or fraud. It is a wider notion, potentially applicable to diverse species of conduct.” (at [164]);
“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.”[23] (at [165]); and
“…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” (at [166]).
[22] The Explanatory Memorandum to the Trade Marks Amendment Act 2006, (which introduced s 62A), gives as examples “a person who monitors new property developments; registers the name of the new property development as a trade mark for a number of services; and then threatens the property developer with trade mark infringement unless they license or buy the trade mark; a pattern of registering trade marks that are deliberate misspellings of other registered trade marks; and business people who identify a trade mark overseas which has no market penetration in Australia, and then register that trade mark with no intention to use it in the Australian market and for the express purpose of selling the mark to the overseas owner.”
[23] Harrison’s Trade Mark Application [2004] EWCA Civ 1028; [2005] FSR 10, which Dodds-Streeton J characterized as “the leading United Kingdom decision”.
On these last two points, Dodds-Streeton J had earlier noted (at [147]) that in Harrison:
Sir William Aldous rejected the appellant’s contentions that bad faith required dishonesty (at [20]) and that an applicant’s subjective state of mind was the sole consideration (at [24]). His Lordship stated that “bad faith” in this context was a “combined test” that involved both subjective and objective elements. His Lordship referred to the leading speech of Lord Hutton in Twinsectra Ltd v Yardley [2002] UKHL 12 at [27] and [36], a case involving dishonesty on the part of a solicitor, and stated at [24]-[26]:
24. 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.
25. Lord Hutton went on to conclude that the true test for dishonesty was the combined test. He said:
36. … Therefore I consider … that your Lordships should state that dishonesty requires knowledge by the defendant that what he was doing would be regarded as dishonest by honest people, although he should not escape a finding of dishonesty because he sets his own standards of honesty and does not regard as dishonest what he knows would offend the normally accepted standards of honest conduct.
26. For my part, I would accept the reasoning of Lord Hutton as applying to considerations of bad faith. 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.
In the present opposition I am satisfied that the Applicant’s knowledge was such that her decision to apply for registration would be regarded as in bad faith by persons adopting proper standards. To my mind Mr Gardner’s submission that the decision to register was taken “well after the Applicant’s duty to the Opponent had ceased” is tantamount to saying that because by May 2010 the relationship between the parties was well on its way to becoming, as Pembroke J put it, “poisonous, acrimonious and unsalvageable”, all bets were then off. I think, rather, that the “apt touchstone” referred to by Dodds-Streeton J in Fry is met, namely that applying to register the Trade Mark “[fell] short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons”. Moreover in finding against the opponent in Fry her Honour expressly noted at [168] that she considered it relevant the applicant had not learned of the opponent’s claimed conflicting rights “through a licence agreement or a prior relationship which imposed obligations of a fiduciary or quasi-fiduciary character”. That, as discussed above, is far from the position in the present opposition.
I would only add that implicit, too, in Mr Gardner’s submission that the Trade Mark is inherently distinctive and that “the Applicant, or anyone else, is wholly within their rights, if they choose, to operate … in competition to (sic) Squash Australia and/or NSW Squash” is the assumption that use of the Trade Mark for the Services would not cause any confusion amongst ordinary members of the public. This strikes me as most unlikely. As discussed, the evidence is that the Applicant has already registered “Squash NSW” as a business name and “Squash NSW Limited” as a company name. There is evidence before me that the Opponent, for its part, has officially traded under the name “NSW Squash” for several decades and has itself used the name “Squash NSW” interchangeably in recent years. The only words contained in the Trade Mark are “Squash NSW” and the mark would undoubtedly be remembered and referred to by these words. In my view confusion is inevitable if the Applicant uses the business and company names in question and would only be exacerbated by her use of the Trade Mark for the Services. Indeed, the evidence before me is that confusion has already taken place.
I accordingly find that the Opponent has established its ground under s 62A.
Decision
Section 55(1) of the Act provides:
Unless the proceedings are discontinued or dismissed, 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.
I have found the opposition to be successful on the ground raised pursuant to s 62A of the Act. I accordingly refuse to register trade mark application number 1362659.
Costs
Both parties requested an award of costs in their favour. As the successful party, the Opponent is entitled to its costs and I accordingly award costs against the Applicant as per Schedule 8 of the Trade Marks Regulations 1995.
Michael Kirov
Hearing Officer
Trade Marks Hearings
20 August 2012
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