Opposition by Junhui Zheng to registration of trade mark application 2010425 (33) – NEW BOSS CONCEPT – in the name of Weili Mu

[2021] ATMO 114

TRADE MARKS ACT 1995

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

Re:Opposition by Junhui Zheng to registration of trade mark application 2010425 (33) – NEW BOSS CONCEPT – in the name of Weili Mu

Delegate:

Nicholas Smith

Representation:

Opponent: Norman Waterhouse Lawyers Pty Ltd

Applicant: Cowell Clarke Pty Ltd

Decision:

2020 ATMO 114

Trade Marks Act 1995 (Cth) - Section 52 opposition: ss 59 and 62A considered – none established – trade mark to proceed to registration

Background

1. This decision concerns an opposition brought by Junhui Zheng (‘Opponent’) to the registration of the trade mark which is the subject of the application detailed below in the name of Weili Mu (‘Applicant’): 

Application Number:	2010425
Filing Date:	29 May 2019
Goods:	Class 33: Alcoholic beverages containing wine; Beverages containing wine (wine predominating); Blended wine; Cooking wine; Dessert wine; Drinks containing wine (wine predominating); Dry fortified wine; Dry red wine; Dry sparkling wines; Dry white wine; Dry wine; Fortified wines; Ginger Wine; Hampers consisting predominantly of wine; Low alcohol wine; Mulled wines; Non-sparkling wines; Red wine; Sparkling fruit wines; Sparkling wines; Still wines; Sweet fortified wine; Sweet red wine; Sweet sparkling wine; Sweet white wine; Sweet wine; Vintage wines; White wine; Wine (‘Applicant’s Goods’)
Trade Mark:	NEW BOSS CONCEPT	(‘Trade Mark’)

2.  Unless otherwise indicated, any references to sections or regulations in this decision are references to sections or regulations of the Trade Marks Act 1995 (Cth) (‘Act’) or the Trade Marks Regulations 1995 (Cth) (‘Regulations’), respectively.

3.  Following the advertisement of the application’s acceptance for possible registration in the Australian Official Journal of Trade Marks, the Opponent filed a Notice of Intention to Oppose the registration followed by a Statement of Grounds and Particulars, later rectified by this office, on 11 January 2020 (‘SGP’).  The SGP raised grounds of opposition under ss 59 and 62A.  The Applicant filed a Notice of Intention to Defend on 14 April 2020. 

Evidence

1. The Opponent filed the following evidence in support of its opposition:

   ·Declaration made on 31 August 2020 by Jia Xiao, the Director of Xiao Lawyers, the Opponent’s former legal representatives, with Attachments A to F (‘Xiao declaration’).

   5.  The Applicant filed the following evidence in answer:

   ·Declaration made on 2 December 2020 by Weili Mu, the Applicant, with Annexures WM-1 to WM-17 (‘Mu declaration’).

2. The Opponent filed the following evidence in reply:

   ·Declaration made on 3 February 2021 by Liyan Guo, with Annexure GL-1 (‘Guo declaration’).  Annexure GL-1 consists of a declaration by Ms Guo filed in a related matter.

   7.  Once the time allowed for filing evidence had ended the parties were given an opportunity to request a hearing in this matter or a decision without hearing.  The Opponent requested that the matter proceed to a decision without hearing and paid the appropriate fee.  As a result the matter has been allocated to a delegate of the Registrar for a decision based on the written record.

   8.  I am a delegate of the Registrar of Trade Marks and I am to decide the opposition as required by s 55 which provides that, unless the proceedings are discontinued, dismissed, or have lapsed under s 54A 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. 

   In doing so I take account of       the written record comprised of the materials mentioned in the preceding paragraphs.

   The Opponent

3. The Opponent is an individual based in China.  

   10.     The relevant claims/statements in the Xiao Declaration can be summarised as follows:

   ·     On 8 August 2017 the Opponent designed a mark containing the words ‘McLaren New Boss’ (‘McLaren Mark’) which was registered with the National Copyright Bureau of the People’s Republic of China.

   ·     The Opponent’s husband, Guotai Huang, is the sole director and shareholder of Pomerol Wine Industry Co. Ltd, later known as Magic Tree Winery (Guangzhou) Fine Wine Co Ltd. (‘Pomerol’), which is an entity incorporated in China. The Opponent licensed the McLaren Mark to Pomerol.

   ·     In 2016 Mr Huang met the Applicant who advised him that she would be able to source wine for Pomerol to sell in China and Pomerol entered into contracts with the Applicant’s company China Australia Mu Trading Group Pty Ltd (‘Mu Group’) for the supply of wine with Pomerol’s labels affixed to it.  Under the initial contract in February 2017 the wine was to be identified as ‘2012 McLaren New Boss Cabernet Sauvignon Dry Red Wine’ with the labels to be owned by Pomerol and provided by Pomerol.  Clause 16.6 of the contract provides that the Mu Group must not use the labels without authorisation.  Under the contract, the Mu Group provided wine to Pomerol that bore the McLaren Mark.

   ·     In May 2017 Mr Huang and the Applicant incorporated Magic Tree Wine Estate Pty Ltd (‘Magic Tree’) for the purpose of engaging in future endeavours together.

   ·     The Applicant’s decision to apply for the registration of the Trade Mark is in bad faith.  It has deliberately sought to take over the mark owned by Pomerol.

   11.     The attachments to the Xiao declaration include a copy of a 2017 contract between Pomerol and Mu Group with the statement ‘Label belong to buyer (e.g. Pernod), buyer has copyright if buyer provided the label’. It also includes an undated photo of 2016 wine displaying the McLaren Mark (noting that the wine was harvested in 2016; it is not clear when the label was applied).  

   12.     Much of the Guo declaration repeats the statements made in the Xiao declaration. The relevant additional claims/statements in the Guo declaration can be summarised as follows:

   ·     Prior to the Applicant seeking to register the Trade Mark (on 29 May 2019) the Applicant, on 10 November 2017, communicated to Mr Huang suggesting that he register the McLaren Mark as copyright.

   ·     In May 2018 Pomerol exhibited wines in Guangzhou that were provided under contract by the Mu Group including wine bearing the McLaren Mark.

   13.     The annexures to the Guo declaration include translations of WeChat messages between the Applicant and Mr Huang in which the Applicant, in 2017, asked whether the McLaren Mark had been registered.  

   14.     I am concerned with the nature of the Opponent’s evidence.  Both Mr Xiao and Ms Guo are lawyers employed by the Opponent’s (current and former) representative.  Absent any specific explanation (none having been provided) I would not expect either of them to have a direct level of knowledge of the Opponent’s business or the relationship between the parties.  However both declarations make sweeping statements such as (in the Xiao declaration) ‘On 8 August 2017, the Opponent (Ms Junhui Zheng) designed a mark comprising the words McLaren new Boss for use with wine…’  and ‘in or around October 2016… Ms Mu informed Mr Huang that her company, Mu Trading Group Pty Ltd, would be able to source wine from Australia for his Company to sell wine in China under the Company’s own labels, also known as OEM wines’.  These are not statements that I would expect the declarants would have the direct personal knowledge to make.  The declarants do not provide any reference to notes or other materials that they have had access to that enable them to make these statements, nor do they identify in any way any individual with direct knowledge who has provided them with information enabling them to make these statements.  In short, these statements amount to unsupported assertions that I would not expect a party’s representative to make and have been discounted accordingly.

   The Applicant

4. The Applicant is an individual based in Australia who is the sole shareholder and director of the Mu Group.  

   16.     The relevant claims/statements in the Mu declaration can be summarised as follows:

   ·     The Mu Group is the owner at common law of the McLaren Mark.  The Applicant designed the McLaren Mark and provided copies of it to Mr Huang.

   ·     The Mu Group is a company incorporated in 2015 that sources wine for customers which are then on sold to distributors, retailers or consumers in China.  It will either receive artwork from its customers and produce a bottle label for them based on the artwork, or it will design the entire wine label, including branding. 

   ·     In situations where Mu Group designs a label for the customer, it either provides the label to the customer in exchange for a design fee or agrees that the customer will have to purchase wine under that label exclusively through the Mu Group.

   ·     The Applicant and Mr Huang met in 2016 and discussed doing business together.  On 20 January 2017, in a WeChat conversation Mr Huang agreed that the Applicant would design the McLaren Mark.  The Applicant and Mr Huang did not enter into a formal contract regarding the McLaren Mark but Mr Huang confirmed verbally on 24 February 2017 that he would only order wine from the Mu Group and the Mu Group did not send Pomerol an invoice for the design of the McLaren Mark.

   ·     The Applicant sent Mr Huang copies of the McLaren Mark and related design documentation via WeChat between 10 February 2017 and 24 February 2017.   The final version of the McLaren Mark was created on 28 February 2017.

   ·     The initial contract between the Mu Group and Pomerol annexed to the Xiao declaration specified that the Mu Group would provide the wine and Pomerol was responsible for printing the label in China.  Clause 16.6 in the contract does not transfer any intellectual property rights from the Mu Group to Pomerol, rather it confirms that the Mu Group may use the labels provided by Pomerol on the bottles of wine sold by the Mu Group to Pomerol.

   ·     In any event the contract annexed to the Xiao declarationnever proceeded and the first contract between Pomerol and Mu Group was actually executed on 21 April 2017 and does not include any statement regarding ownership of the McLaren Mark.

   ·     Pomerol and the Mu Group continued to do business and in late 2017 the Applicant designed a printed sleeve, featuring the words ‘new boss’.  The Applicant sent copies of the sleeves to Mr Huang via WeChat.

   ·     In summary, the Mu Trading Group created the McLaren Mark which incorporates the Trade Mark in February 2017, and then applied it to wine bottles in April 2017.  It was also the first entity to use the Trade Mark by itself, creating the printed sleeve.  The Mu Trading Group has a considerable reputation in the Trade Mark and the McLaren Mark.

   ·     In 2018 the Mu Group arranged to rent a booth in Guangzhou to showcase its wine under the McLaren Mark. It did so unaware that Mr Huang had registered the McLaren Mark in China and hence had monopoly rights to the McLaren Mark in China.

   ·     Given the conduct of Mr Huang, the Applicant registered the Trade Mark to ensure that it was the only entity that could sell wine in Australia under the Trade Mark.  The Applicant confirms that if the opposition is dismissed the Mu Group intends to use the Trade Mark on wine in Australia. 

   17.     The annexures to the Mu declaration include a copy of further contracts between Pomerol and Mu Group as well as screenshots of conversations had via e-mail and WeChat that the Applicant provides translations for.

   Grounds of Opposition, Onus and Standard of Proof

5. As indicated above in the SGP the Opponent nominated grounds of opposition under ss 59 and 62A.  To successfully oppose the application the Opponent needs to establish one of the nominated grounds.

   19.     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 the filing date 29 May 2019 (‘relevant date’).[3]

   [1] Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58, [32] (Keane CJ, Stone and Jagot JJ).

   [2] Following Pfizer Products Inc v Karam (2006) 70 IPR 599, [6]-[26] (Gyles J), and Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [133] (Besanko, Jagot and Edelman JJ).

   [3] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592, 595 (Kitto J), see also s 29(1) Trade Marks Act 1995 (Cth).

   Discussion

   Section 62A

6. Section 62A 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.

7. 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.

8. The case of Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) is a current leading Australian authority on s 62A.  In that case, Dodds-Streeton J made the following comments, quoting from Harrison’s Trade Mark Application[4]:

   [4] [2004] EWCA Civ 1028; [2005] FSR 10.

   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.[5]

   [5] [2012] FCA 81, [147].

9. 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.[6]

   [6] Ibid [165]-[166].

10. The Opponent has particularised this ground of opposition in the SGP as follows:

    The infringing trademark “New Boss Concept” was taken from a trademark “McLaren New Boss”, designed by the opponent on 8 August 2017.  In August 2017, the opponent licensed the right to use the trade mark on wine labels to her husband’s company Pomerol Wine Industry Co. Ltd (“Pomerol”).  Pomerol commenced trading in Australia by engaging the Applicant’s company Mu Trading Pty Ltd to source wine products and bottling services for it.  According to the agreements signed by the parties, Pomerol was responsible for the design of the wine labels (trademark “McLaren New Boss”).  The trademark “McLaren New Boss” was FIRST used in Australia by Pomerol on its own products in mid-2017.  The applicant secretly lodged the infringing trade mark application when the relationship of the parties started deteriorating as a revenge to Pomerol by disrupting the business of Pomerol in Australia.  The applicant acted in bad faith and no real intention to use the infringing trade mark.

11. The onus is on the Opponent to establish bad faith and it will not be found easily given the serious nature of the allegation.[7]  The issue in this particular case is that the evidence provided by the Applicant and the Opponent is entirely inconsistent in a number of respects, including who created the McLaren Mark and the nature of the relationship between the parties; namely did Pomerol provide labels incorporating the McLaren Mark (and hence the Trade Mark) to the Mu Group for printing or did the Mu Group design the labels and sell its wine to Pomerol bearing Mu Group’s labels.  I note that the question of ownership of the respective marks is a difficult one to decide absent the benefit of cross-examination.

    [7] Hard Coffee Pty Ltd v Hard Coffee Main Beach Pty Ltd [2009] ATMO 26, [12] (Hearing Officer Nancarrow).

12. Noting the onus and the nature of the case particularised by the Opponent, I find that the Opponent has failed to establish bad faith on the balance of probabilities.  While noting that there is documentary evidence that is subject to different interpretations, I reach this conclusion for the following reasons:

    -The Opponent’s ground is particularised on the basis that Junhui Zheng designed the McLaren Mark in August 2017.  This is stated again in the application filed in China to register the McLaren Mark as well as the statement of Junhui Zheng in Attachment B of the Xiao declaration.  This is completely inconsistent with the evidence filed by both parties which suggests that the parties agreed to use the McLaren Mark on the wine in February 2017. 

    -The Opponent’s ground is particularised on the basis that Pomerol was responsible for the design of the wine labels.  The Applicant has provided detailed documentation showing her sending various draft concepts of the McLaren Mark and the label to Pomerol in February 2017, which strongly suggests that her statements about the design of the wine labels are likely to be accurate.

    -As noted above; the Opponent’s evidence suffers a significant flaw in that it consists of sworn declarations of facts provided by lawyers who simply had no direct knowledge of the facts.  The only direct evidence provided by the Opponent is an unsworn statement of Junhui Zheng which as discussed above is factually incorrect.  In circumstances where the Applicant has provided a sworn declaration as to particular facts and the Opponent’s evidence consists of declarations from people without direct knowledge of the facts, I am inclined to prefer the evidence of the Applicant.

    27.   While I note the complexity of the dispute between the parties, I am not satisfied that the Opponent has established the ground of opposition under s 62A.  

    Section 59

13. Section 59 is reproduced below:

    59 - 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.

14. The relevant date for assessing the Applicant’s intention to use the Trade Mark is the filing date being 29 May 2019.[8]

    [8] See the discussion of the authorities in Foxtel Management Pty Ltd v 111Pix.com Limited [2012] ATMO 29, [31]. The relevant authorities are Suyen Corporation v Americana International Limited [2010] FCA 638; (2010) 87 IPR 262 (‘Suyen’) and Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58; (2010) 86 IPR 437. (‘Food Channel’).

1. The nature of the intention in s 59 was considered by Jacobsen J in Health World Ltd v Shin-Sun Australia Pty Ltd where he stated:

   In my view, the intention, or lack thereof, to which s 59 is directed, is a ‘real and definite intention’ of the applicant for registration, to use the mark publicly as a trade mark, although it is not necessary that the intention be immediate or within a limited time.[9]

   [9] [2008] 75 IPR 478, [160].

2. There is a presumption that where an application has been filed, the applicant has the requisite intention.  However:

   There is authority for the proposition that where an applicant for registration has been put on notice that its intention to use the mark was in issue, and has not responded to the opponent’s evidence, a finding of lack of intention may be made.

   The principle which underlies these authorities seems to me to be that the evidentiary onus shifts to the applicant for registration where an opponent makes a prima facie case of lack of intention to use the mark.[10]

   [10] Ibid [162]-[163] (citations omitted).

3. Justice Jacobsen also recognised the difficulty that an opponent has in establishing a ground under s 59, stating in the same case:

   The subjective nature of the intention, the presumption of intention flowing from the application for registration and the onus on an opponent usually make it difficult for an opposition or an application for rectification, to succeed on this ground.[11]

   [11] Ibid [161] (citations omitted).

4. In view of the authorities discussed above, the onus of establishing the ground of opposition pursuant to s 59 remains with the Opponent until it has established a prima facie case that on the relevant date the Applicant lacked the requisite intention.  If the Opponent establishes a prima facie case the onus then shifts to the Applicant for rebuttal.

5. The Opponent has particularised this ground of opposition in the SGP in the same manner as for the s 62A ground.

6. Given the issues with the Opponent’s evidence discussed under the s 62A ground, I am not satisfied that the Opponent has provided sufficient evidence to shift the evidentiary onus to the Applicant for the purposes of s 59.  Nor is there a clear explanation in the evidence for why, if the Trade Mark was registered, the Applicant would not use the Trade Mark in Australia.  Finally, the Applicant has provided a clear sworn statement of its intention to use the Trade Mark in evidence (by licensing it to the Mu Group, who has and will apply labels bearing the Trade Mark to bottled wine)

7. The Opponent has failed to establish a prima facie case that the Applicant lacked the requisite intention as at the filing date, and has, consequently, failed to establish the ground of opposition pursuant to s 59.

   Decision and Costs

8. The Opponent has failed to establish any of the grounds of opposition it nominated in the SGP.  Trade mark application no. 2010425 may proceed to registration not less than 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 discontinued.  Otherwise the disposition of the application should be in accordance with the Court’s order or direction.

9. The Applicant has sought an award of costs in its favour. I see no reason to depart from the general rule that costs follow the event. I accordingly award costs against the Opponent under s 221 in the relevant amounts under Schedule 8 of the Regulations.

   Nicholas Smith

   Hearing Officer

   Delegate of the Registrar of Trade Marks

   5 October 2021