Opposition by Slogger Pty Ltd ATF S&S Family Trust and Whack Sports Melbourne Pty Ltd to registration of trade mark application number 1870843 (class 25, 28) in the name of Whack Sports Brisbane Pty Ltd.
[2019] ATMO 155
•31 October 2019
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re: Opposition by Slogger Pty Ltd ATF S&S Family Trust and Whack Sports Melbourne Pty Ltd to registration of trade mark application number 1870843 (class 25, 28) in the name of Whack Sports Brisbane Pty Ltd.
DELEGATE:
M. Cooper
REPRESENTATION:
Opponents: Virginia Beniac-Brooks of Arcadia Intellectual Property
Applicant: Ben Fitzpatrick of counsel instructed by Actuate IP
DECISION:
[2019] ATMO 155
Trade Marks Act 1995 (Cth) – opposition under section 52 – ss 58, 62A considered – no opposition grounds established.
Background
This matter concerns an opposition by Slogger Pty. Ltd. ATF S&S Family Trust and Whack Sports Melbourne Pty. Ltd. (‘the Opponents’), under s 52 of the Trade Marks Act 1995 (‘the Act’), to registration of the trade mark detailed below in the name of Whack Sports Brisbane Pty. Ltd. (‘the Applicant’):
Application Number: 1870843
(‘the Trade Mark’)
Priority Date: 2 March 2017 (Divisional - Parent application: 1829317)
Class 25:
Apparel (clothing, footwear, headgear); Athletic clothing; Athletics shoes; Sporting footwear; Sportswear
Class 28:
Bags adapted for sporting articles; Bats (sporting articles); Grips for sporting articles; Sporting articles for wear adapted for use in a specific sport (other than helmets); Handles for sporting goods; Sporting apparatus; Apparatus for playing sports; Gloves made specifically for use in playing sports; Knee guards (sports articles); Shin guards (sports articles); Nets for sports; Apparatus for use in the game of cricket; Cricket bags; Cricket bats; Leg guards (cricket pads); Protective padded articles for use in playing the game of cricket; Protectors for elbows for use when participating in the sport of cricket; Protectors for the knees for use when participating in the sport of cricket; Ball games; Fitness apparatus; Fitness exercise machines; Games; Leg guards adapted for playing sport; Pads for protecting the body against accident or injury (adapted for sports); Sports balls; Stomach protectors (adapted for use in a specific sport)
(‘the Goods’)
The Trade Mark was examined and advertised as accepted for possible registration on 22 February 2018 in the Australian Official Journal of Trade Marks.
On 4 April 2018, the Opponents filed a Notice of Intention to Oppose registration of the Trade Mark. On 3 May 2018, a Statement of Grounds and Particulars (‘SGP’) was filed which cited opposition grounds under ss 58 and 62A of the Act.
The Applicant filed a Notice of Intention to Defend on 3 July 2018.
On 9 May 2019 the Opponents requested an oral hearing. I heard the matter in Melbourne on 22 August 2019 as a delegate of the Registrar of Trade Marks. Ben Fitzpatrick of Counsel, instructed by Actuate IP, appeared for the Applicant. The Opponents was represented by Virginia Beniac-Brooks of Arcadia Intellectual Property.
Evidence
Evidence in Support (‘EIS’) was filed by the Opponents on 27 November 2018. It comprised the statutory declaration of Vipin Agrawal, sole director of the Trustee and Whack Sports Melbourne Pty. Ltd., with Annexures VA-1 to VA-6 (‘the Vipin declaration’).
The Applicant’s Evidence in Answer (‘EIA’) was filed on 29 January 2019 and comprised the following statutory declarations of that date:
Abhishek Agarwal, the Applicant’s co-manager and brother of Vipin Agrawal1, (‘the Abhishek declaration’).
Ambika Agarwal, the Applicant’s sole director and wife of Abhishek, with Annexures AA-1 to AA-46 (‘the Ambika declaration’).
The Opponents’ Evidence in Reply (‘EIR’) comprised a declaration by Bharti Gulati, wife of Vipin and beneficiary of the S&S Family Trust, dated 11 April 2019 (‘the Gulati declaration’) with Annexures BG-1 to BG-24.
In accordance with directions, the Opponents and Applicant filed written submissions on 8 August 2019 and 15 August 2019 respectively.
Late filed evidence
On 30 October 2018, the Opponents wrote to IP Australia advising that the EIS had been filed with the SGP in May 2018. IP Australia wrote to the Opponents on 8 November 2018 advising that the material attached to the SGP would not be regarded as its EIS and the due date for filing the EIS had passed. On 13 November 2018 Arcadia Intellectual Property wrote to IP Australia advising of its engagement by the Opponents.
On 27 November 2018, the EIS was filed and the Opponents’ representatives sought the material be allowed in evidence under reg 21.15(4) of the Trade Mark Regulations 1995 (Cth) (‘the Regulations’). Addressing the relevant factors outlined in the Trade Mark Office Manual of
1 I raised the issue of the different family name spellings, particularly for Abhishek Agarwal/Aggrawal at the hearing. Abhishek Aggrawal explained by further declaration that the Anglicised version of the Indian surname can be spelled in different ways and various members of the family have chosen to adopt different spellings.
Practice and Procedure (‘the Manual’), it submitted that there was a compelling case for admission on the following summarised basis:
The evidence was in fact filed with the SGP and the Applicant was provided a copy, so the lateness was a procedural failure and not an attempt to introduce new evidence at a late stage.
It is in the public interest that a serious matter be dealt with on its merits, rather than shut out in consequence of a failure to meet a procedural requirement.
The evidence supports the serious claims made under s 58 and s 62A and is relevant to the decision. It claimed the evidence would ‘show unequivocally’ that the Applicant is not the owner of the mark and was therefore crucial to the Opposition because it is of high probative value.
It is in the public interest of accuracy of the Register to admit because important serious issues relating to ownership need to be fully addressed.
In relation to the balance of convenience, there is little if any prejudice to the Applicant because it was provided with much of the evidence when the SGP was filed. Even if there was some inconvenience, it was significantly outweighed by strong public interest in accuracy of Register and ensuring procedural fairness to Opponents.
The Opponents reiterated the above factors in its written submissions and at the hearing.
The Applicant provided no written submissions in this regard however the Ambika declaration addressed it, claiming the Opponents’ allegations ‘were a surprise’ and they had been left with reduced time to respond which had ‘greatly prejudiced’ them. At the hearing the Applicant submitted there had been no proper explanation for the lengthy delay between the due date and the filing of the EIS.
I have had regard to the relevant considerations in such circumstances, as outlined in the Manual at Part 51, paragraph 2.6 which provides in part:
The delegate will not consider out of time evidence as a matter of routine. The party filing the evidence must make a compelling case in favour of it being considered.
In this context, I note that:
The reason for late filing was the misunderstanding by the Opponents’ director that he had filed this material with his SGP. He promptly sought appropriate professional advice on being informed by IP Australia of his error and his declaration and evidence were provided soon after.
The information/evidence is of direct relevance and high probative value and has the potential to significantly affect the outcome of the decision.
The material was made available to the Applicant in a timely manner, much of it having already been provided by the Opponents with its SGP, and it had sufficient time to consider and present its arguments.
If there was any inconvenience to the Applicant, it was minor and outweighed by the strong public interest in ensuring the integrity of the Register and the need to ensure an opponent has a full opportunity to put its case.
As I advised at the hearing, I regard these factors as constituting a compelling case favouring inclusion of the Vipin declaration and, for this reason, it will be allowed into evidence under reg 21.15(4).
Evidence in Support
In his declaration, Vipin Agrawal outlined his business relationship with his brother Abhishek and his wife Ambika, the Applicant’s director, referring to it variously as a partnership or a joint venture. He claimed in 2016 he was invited to join his brother’s business, which sold cricket gear online under the name Sports Kaboom, because Abhishek was expanding it to two retail stores, a website and 2 eBay stores. He said his role was to handle the company formation and accounting details, which he arranged with his accountant, and to run the Melbourne store. His brother and sister-in-law were to run the Brisbane store. Initially two companies were formed, Sports Kaboom Melbourne Pty Ltd and Sports Kaboom Brisbane Pty Ltd as well as the S&S Family Trust (‘the family trust’) with RS Traders Pty. Ltd. as trustee.
He said he became aware of a potential ‘IP issue’ with the business name ‘Sports Kaboom’ and, after discussions with other family members, they adopted a new business name, WHACK
SPORTS. He said in July 2016 his accountant arranged to change the company names to Whack Sports Melbourne Pty Ltd, of which he was sole director, and Whack Sports Brisbane Pty Ltd, of which his sister-in-law Ambika was the sole director. Business names were also registered. Two retail stores were also opened, one in Melbourne run by Vipin and his wife (Bharti Gulati) and one in Brisbane run by his brother and sister-in-law. Stock for both stores was imported and supplied through the family trust. He claimed that he made several trips to Brisbane to assist with the establishment of the Brisbane store. He attached email correspondence which he asserted demonstrated that Whack Sports was meant to be a joint venture and did not belong solely to the Applicant.
He described the extensive work he had undertaken to set up the stores however, he claimed, once the Brisbane store was established, the relationship with his brother and sister-in-law ‘began to sour’. He said they changed the website contents, deleting references to the Melbourne store and sent a letter of demand requiring him to change the name of the Melbourne store and shut down the Facebook page for Whack Sports Melbourne. At this time, he claimed he learned of the Applicant’s trade mark applications 1800604 and 18293172. He maintained that ‘it was always the case that whilst the Brisbane and Melbourne stores were operated by different members of the partnership, it was understood by all of us that everything including the IP would belong to all members of the S&S Family Trust’. He attached an annexure (VA-6) which he claimed demonstrated his brother’s acknowledgment that he was a partner in the business.
He maintained that they had worked collectively on the Trade Mark and he had understood it ‘would belong to all members of the S&S Family Trust and not only half of the joint venture.’
Evidence in Answer
The Applicant’s history is outlined in the Ambika declaration. She states that she and her husband launched an online store in 2013 selling cricket equipment on eBay under the name ‘Sports Kaboom’. They imported small consignments of goods, storing them in their apartment, and in 2014 established a standalone website ‘sportskaboom.com.au’ and a Facebook page. The
2 For the word mark ‘Whack Sports’ filed by the Applicant on 4 October 2016 and 1829317 for the logo mark filed by the Applicant on 2 March 2017.
business grew and in or around April 2016 she said they decided to expand it, launching a physical store in Albion, Brisbane, from which they commenced trading on 27 August 2016.
She claimed they wanted to assist Vipin, who was unemployed, by giving him a role in the business. They decided to open a Melbourne store in mid-2016 and invited him to be involved in preparations. A separate company was established for this store and a third company was established through which to import the stock (RS Traders Pty Ltd). She acknowledged that Vipin’s accountant had organised this but maintained that the ‘direction, authorisation and payment for the development of the business would all come from myself and Abhishek’. She said she paid for the incorporation and other items and the POS system was paid for by RS Traders Pty Ltd of which she and Abhishek were majority shareholders.3
In relation to the Trade Mark, she claimed that the Applicant ‘has always maintained control of the intellectual property’ having controlled the branding and accounts for the business, including Facebook, the website, eBay, the physical marketing materials and social media such as Twitter, Instagram and YouTube. She stated that she and her husband created the ‘Sports Kaboom’ logo around March 2014 with help of designer in India. They discovered while preparing to open the Brisbane store that it had been used by someone else and decided to rebrand their business by adding ‘WHACK SPORTS’ into the existing logo, as suggested by her husband. She acknowledged that Vipin, his wife and other family in India had all been engaged in informal conversations about a new name but the choice was hers and her husband’s alone. She claimed Vipin objected to its use.
On 4 October 2016, after consulting with her trade mark attorneys, the Applicant applied to register the word mark ‘WHACK SPORTS’ (1800604) in classes 25, 28 and 35 and on 2 March 2017 for the words and logo (1829317) in class 35. She claimed that Vipin had been made aware of the Trade Mark applications ‘at the time they were filed’ when Abhishek explained to him and his wife in a message on 6 October 2016 that they would be proceeding to apply for the Whack Sports mark 4.
3 At the time, RS Traders Pty Ltd was trustee for the family trust, of which all the parties were beneficiaries. Vipin was its sole director and Ambika, Abhishek and Bharti each held 40 shares in it.
4 The annexure referred to, AA-29, does not disclose such advice. On a message with a pasted-on date of 6 October 2016, the sender merely states, ‘looks like it’s all clear and we can apply for the trade mark’ and then advises he will proceed to purchase the domain names.
She maintained Vipin’s ‘incorporation’ into the business was ‘very informal’, the family did not consider a contract necessary, and it was never intended that he be a partner. She maintained that he contributed very little and that she had merely ‘allowed’ him to run the Melbourne store and use the Applicant’s marketing and branding. Their intention was to simply grant him a licence however he had failed to fulfil his oral agreement to pay $90,000 for stock and $10,000 for brand licensing and this was one of the reasons they had cut ties with him. She outlined several other serious allegations against Vipin including, relevantly, that on 16 December 2016 he made an unauthorised transfer of funds from the Applicant’s bank account to his own and he had failed to pay for stock delivered in November 2016. She maintained that Vipin’s statements regarding his partnership and the trust arrangements were untrue. She claimed that the Opponents had brought this opposition in bad faith ‘to threaten and harass our business’.
In his declaration, Abhishek Agarwal, brother of Vipin Agrawal, stated that he shares responsibility for the Applicant’s management with his wife, Ambika Agarwal.
He claimed that they only ever intended to license the ‘Sports Kaboom’ brand (subsequently WHACK SPORTS brand) to his brother for the Melbourne store. It was never intended that he or anyone else would be a partner. He noted that there was never any partnership agreement and referred to Vipin’s declaration and annexure VA-6, claiming that he had been angry when he had referred to the Opponents as a ‘partner in this business’ because he had failed to despatch products to a customer, putting the Applicant’s good reputation at risk. He claimed that he had meant to communicate that Vipin was a member of the team and had not been pulling his weight.
Evidence in reply
In the Gulati declaration, Vipin’s wife responds to and addresses the Ambika and Abhishek declarations, claiming to have witnessed many of the events. She expresses her ‘strong belief’ that they knew Vipin was joining the business as a partner, saying she witnessed Ambika and Abhishek offering him a 25% share of the business. She noted Abhishek’s accountant, when advising on the proposed business structure, suggested 37.5% share each to Abhishek and his brother in India and 25% to Vipin (or to the family trust of each of them) to which Abhishek responded that he would ‘leave the business structure decision on Vipin as accounting is not my area of expertise’. It was Vipin and his accountant who eventually set up the business structures
and, in consultation with Ambika and Abhishek, established the family trust with the clear intention that ‘ALL assets (including stocks) would be held by the family trust’5.
Attaching a copy of the trust document6, she further claimed that, following the family trust’s establishment in May 2016, it was her ‘clear understanding’ that the assets, including the brand name and logo, would belong to it. She noted that Ambika paid the accountant’s invoices for this work, thereby indicating her agreement to the proposals.7 She further noted, consistently with the establishment of the trust, that the POS system and licences were purchased by Vipin in the name of the corporate trustee RS Traders Pty Ltd8 and stock was imported in its name9. She claimed that this demonstrated the parties’ understanding that all assets were held in name of RS Traders Pty Ltd ATF for the S&S Family Trust.
She rejected Ambika’s claim that she paid for all stock and attached invoices demonstrating Vipin’s money transfers and payments for goods10. She also rejected Ambika’s statement that their agreement was ‘very informal’ reiterating that Vipin had a 25% share of the business11 and had been given access to the Brisbane accounts12. She maintained that his role was not limited, and the evidence demonstrated he was involved in all decisions relating to the business, having been integral in setting it up and having contributed money so that the Brisbane store could open earlier than the Melbourne store. Documents demonstrating Vipin’s arrangements for the Brisbane store, including banking, signage, storage, insurance and payroll, were annexed13. Ms Gulati further asserted that Ambika’s claim of a $10,000 licensing fee was baseless and attached documents demonstrating Vipin’s ‘significant investment of more than $100,000’ in the business14.
She noted Abhishek’s directions to Vipin to work on the logo15 and that, when they all decided on the new Trade Mark, it was Vipin who went back to his accountant to get the companies
5 Annexures BG-4 and BG-5.
6 Annexure BG-6.
7 Ambika declaration Annexures AA-7 and AA-9.
8 Annexures BG-8 and BG-9.
9 Annexures BG-10 and BG-11; Ambika declaration Annexure AA-3.
10 Annexures BG-13A, B, C and D and 17B.
11 Annexures BG-4.
12 Annexures BG-21A, B and C.
13 Annexures BG-8, BG-19, BG-20, BG-21A, B and C, and BG-22.
14 Annexures BG-13A, B, C and D.
15 Annexure BG-23.
names changed in July 2016. She denied that Ambika told Vipin that she would seek to register the Trade Mark and claimed that Ambika knowingly filed the Trade Mark in the wrong name, that the evidence clearly demonstrated that Vipin was a partner in the business, and conversations and emails showed that Abhishek accepted him as a part owner16.
Grounds, onus and standard of proof
In respect of proceedings under s 52, an opponent bears the onus of establishing one or more of the grounds of opposition in relation to the relevant goods and services of an opposed trade mark. The standard of proof required is on the balance of probabilities.17 As mentioned, the opposition grounds asserted are s 58 and s 62A.
The time at which a ground of opposition must be established is the date of filing of the application for registration18 which, in this application, is 2 March 2017, the filing date of the parent application (‘the relevant date’).
Consideration and reasons
The Opponents’ grounds of opposition are discussed below.
Section 58
Section 58 of the Act provides:
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.
The decision of the Full Federal Court in Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd. (‘Anchorage’) confirmed, among other things, that, while trade mark ownership may be acquired by the act of applying for registration of a trade mark, such a claim to ownership of the mark may be defeated if another person has previously used the mark, or a substantially identical
16 Annexure BG-24.
17 Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156 affirming the approach of Gyles J in Pfizer Products Inc. v Karam [2006] FCA 1663; (2006) 70 IPR 599, [6-26].
18 Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592, 595.
mark, in Australia as a trade mark in relation to the same goods or services, or goods or services of the same kind, as those that are the subject of the application for registration.19 If no prior use is demonstrated, ‘the combined effect of authorship of the mark, the intention to use it upon or in connection with the goods and applying for registration’ can establish ownership.20
The Opponents submitted that, in relation to the Applicant’s claims of prior use, there was no relevant use of the Trade Mark before the filing date in respect of any of the Goods. It contended in the alternative that, on the evidence, the Applicant did not have a valid claim to authorship of the Trade Mark, that its claim in this regard was inconsistent with the terms of the family trust by which the Opponents and Applicant had agreed that all the business assets, which included intellectual property assets, were to be held by it. This was said to be demonstrated by the email from the accountant on 27 May 2016 (BG-5) and the subsequent conduct of the parties in establishing the family trust and conducting the business through its trustee company, RS Traders Pty Ltd, including purchasing product and equipment through it. The Opponents further relied on a series of WhatsApp messages as establishing the Trade Mark’s collective creation by the family trust members in the period June to August 2016. In addition, the Opponents noted the Applicant’s claim that the Trade Mark device was the result of a request to an Indian designer for a redesign of its Sports Kaboom logo. Relying on KARO STEP Trade Mark21 it submitted that ‘absent evidence of assignment of the copyright in the work’ the Applicant’s claim to proprietorship could not be sustained.
The Applicant claimed ownership of the Trade Mark based on its first use of it in or around August 2016 and its continuous use since in relation to the Goods. Alternatively, if no first use was established, it submitted that the Applicant is the ‘author’ by virtue of its creation of the Sports Kaboom logo from which the Trade Mark is derived and the WhatsApp message threads which demonstrate the Applicant’s decision to adopt it. Its intention to use the Trade Mark was established by its application to register it and its actual use on the Goods. It rejected the Opponents’ assertions regarding the family trust, submitting there was no evidence of an assignment of the Trade Mark to it, that the creation of the trust was merely for taxation and liability purposes, and the trust deed is silent on intellectual property rights. The ‘WhatsApp’
19 Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd [2018] FCAFC 6, 49.
20 Shell Co of Australia v Rohm and Haas Co. [1948] HCA 27;(1948) 78 CLR 601, 631.
21 [1977] RPC 255, 274.
message threads relied on by the Opponents did not constitute any legal agreement or effective assignment of Trade Mark rights.
Having regard to the evidence filed, the Applicant’s claim to prior use is not supported by the objective evidence. The exhibits relied upon as demonstrating use22, which comprise various invoices, statements, photographs of merchandise and screenshots of website, Facebook, eBay, Twitter, Instagram and YouTube pages, are either undated, post-date the filing date or fail to demonstrate use of the Trade Mark by the Applicant in relation to the Goods. The undated eBay material indicated that ‘whacsport0’ had been a member since August 2016 however it did not show use of the Trade Mark. Similarly, the Twitter account said ‘whacksports.com.au’ had been a member since May 2016 but the page was undated. In any event, there is no evidence that the Applicant owned or operated any of the accounts, only that at some unidentified point in time Ambika and Abhishek were administrators. While three bank statements indicated an account operated by the Applicant, the transactions are all redacted except for three payments to different companies, the relevance of which is unclear. Invoices relating to the registration of the Trade Mark were sent to the Applicant from 2016 onwards however they do not demonstrate use of the Trade Mark by the Applicant. In addition, given the many contradictions in the declarations filed, I am not satisfied that, absent supporting evidence, they establish that the Applicant, or any other person, used the Trade Mark prior to the relevant date.
In the absence of prior use, in considering ‘authorship’, intention to use and the application for registration, the comments of Hearing Officer Kirov in Haoliang Sun & Golden Land Group Pty Ltd v Chinese Culture School Inc 23, as relied on by the Applicant, are particularly relevant in the context of this opposition. He said:
Mr Goldblatt opened his submissions by pointing out that there was, as he put it, a ‘direct clash’ between the evidence of the parties as to who might fairly assert ‘authorship ’ of the characters as a trade mark… Whereas the parties’ evidence contains conflicting accounts of who first thought of the characters and who first proposed using them as the name and trade mark for the Applicant’s school, I do not accordingly believe it is necessary for me to form a view one way or the other on those questions in order to decide the oppositions.
In this regard I note that although the word ‘owner’ is not defined in the Act, there are numerous decisions where courts have considered its meaning. It is well established
22 Ambika declaration, Annexures AA-25, AA-30 to AA-41.
23 [2009] ATMO 12 [50]-[52].
that in the absence of fraud the owner of a trade mark in Australia for particular goods or services is taken to be the first person to use it in the course of trade in Australia in relation to those goods or services. In the absence of any use for relevant goods or services, then the first person to apply to register a trade mark in relation to those goods or services will, in most cases, be entitled to claim to be the owner of it in relation to those particular goods or services.
It is particularly in relation to this latter case of an unused trade mark that the concept of ‘authorship ’ arises, this being one of the elements said to support the claim of ownership required of an applicant by s.27(1)(a) of the Act, although even in this case ‘authorship ’ of a trade mark does not necessarily refer to the person who first thought of it, or first decided to use it.
The meaning of ‘authorship’ was also explained in Anchorage as follows:
Authorship in this context does not require that the applicant for registration be the first to conceive of the mark. Rather, it refers to the applicant’s adoption of the mark with the intention of using it in Australia in relation to the goods or services with respect to which the applicant seeks to register the mark.24
As I understand the Opponents’ evidence and submissions, it is not claiming that it or anyone had first used the Trade Mark but that it was created by the collective effort of the parties in a context in which they had agreed that all business assets would be held by the family trust. Therefore, the Applicant was not the ‘author’ and could not legitimately claim exclusive proprietorship. To do so was inconsistent with the creation and terms of the trust and the subsequent conduct of the parties in relation to it.
While I accept that the evidence demonstrates that the trust (through the trustee) was used as a vehicle by the parties for business purposes, there is nothing in the trust deed itself or the correspondence related to it that indicates any advertence to intellectual property rights. The Opponents rely primarily on the email of 27 May 2016, from Vipin’s accountant to Vipin, in which he proposes that: ‘ALL assets (including stocks are held by RS Holdings ATF S&S Family Trust) and Lease for the shops are held by Family Trust. If bad things do occur (touch wood that it won’t), the trading entities can be liquidated without causing too much harm as the ALL assets are held with family trust’25 Vipin forwarded this email to Abhishek, only commenting ‘Structure for the company’. There is no evidence of any further communication indicating anyone’s understanding as to what ‘ALL’ assets meant. A prior email (also in BG-4) from Ambika
24 Anchorage [2018] FCAFC 6, [48].
25 Gulati declaration Annexure BG-5.
and Abhishek’s accountant had suggested a family trust ‘to maximise savings’. In particular, there is nothing in the trust deed, which was executed 3 days later by Vipin and his accountant as Appointor and Settlor respectively, that makes any general or specific provision for intellectual property assets or rights. While Abhishek had, in his communications with his former accountant and Vipin, specifically left the details of the company arrangements to Vipin because “accounting is not quite my area of expertise’26, there is no indication, as a lay person, that he or anyone else understood that any intellectual property rights, which included the Trade Mark, would be owned by or assigned to the family trust.
Notwithstanding the evidence of excerpted ‘WhatsApp’ discussions, I give them scant, if any, weight in considering the Trade Mark’s ‘authorship’ because many parts of the conversations are not in English, they do not properly identify the person who is responding and they do not objectively identify the date of the conversation27 or the context in which it occurred. Consequently, I do not accept them as enabling any inferences to be drawn as to authorship or the intentions of the parties regarding the Trade Mark.
In relation to copyright issues raised by the Opponents, as the Applicant noted, the appropriate ground under which to oppose on this basis was s 42(b) and the Applicant had not nominated this ground of opposition.
In the absence of persuasive evidence otherwise, even taking into account the fact that the trustee, RS Traders Pty Ltd later operated to receive and pay for goods consistently with the accountant’s proposals, I consider the Opponents’ characterisation of the accountant’s email and the trust document significantly conflates their content. I am not satisfied that there is sufficient evidence to draw any inference or establish any acknowledgment by the Applicant or the Opponents that any existing or later created Trade Mark or IP rights were owned by the family trust or assigned to it.
Conversely, I consider that the clear resemblance between the Trade Mark device and the Applicant’s previously owned and used ‘Kaboom Sports’ logo in respect of the same Goods, the invoicing to and payment by the Applicant, from mid-2016, for all work related to the registration of the Trade Mark, the filing of the application for registration and the evidence of
26 Gulati declaration, Annexure BG-4.
27 The dates appear to have been superimposed on the conversations.
the Applicant’s later actual use of the Trade Mark on the Goods, combine to support a finding that, at the relevant date, the Applicant had adopted the Trade Mark with the intention of using it in Australia in relation to the goods for which it was sought to be registered.
Alternatively, adopting the words used by the Full Court in Food Channel Network Pty Ltd v Television Food Network GP (‘ Food Channel’), ‘a finding that there was considerable confusion over who owned the mark means that this ground of opposition must fail given the onus on [the Opponent] to establish any ground of opposition.’28
In the circumstances, given the Opponents’ onus in this regard, I am not satisfied it has established that before the Applicant’s application for registration of the Trade Mark, there was any relevant prior use of it by another person or that the Applicant is not relevantly its owner.
In the circumstances the s 58 ground is not established.
Section 62A
Section 62A of the Act provides:
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.
The Opponents particularised this ground as follows:
The application was made with an intent to make me stop use (sic) ‘whack sports’ trademark and hence a legal letter was sent to me by my brother and his wife even though the whole venture was a joint venture. They both cheated me in business and took advantage of getting an approval from IP Australia and have been trying everything to ruin me and my business and defaming me and misleading my customers, and I have evidence for that too.
The Opponents submitted in this regard that the Applicant knew when it applied to register the Trade Mark that it did not own it. It relied in part on two documents, one purportedly from Abhishek on 10 June 2016, in which he advised that the search report results for ‘whack sports’ indicated ‘it’s all clear and we can apply for the trademark…’ (Opponents’ emphasis). Yet later, in a WhatsApp message purportedly sent by Ambika to her brother Sunit on 19 December
28 [2010] FCAFC 58, [66].
2016, she recounts telling her IP lawyer to ‘restrict the trademark to Whack Sports Brisbane only’29 (Opponents’ emphasis again), despite having acknowledged (by conduct and otherwise), and agreed in May 2016, to the family trust structure in which ‘ALL assets (including stocks)’ would be held by it. The Opponents contended that the Applicant has demonstrated ‘a wilful disregard to the rights of the trust as the rightful owner of the Opposed Mark’ and had sought to deflect attention by impugning Vipin’s character. This behaviour is said to fall well short of the standards observed by reasonable and experienced persons and forms a basis on which the application should be refused.
The Applicant maintained that it had applied in good faith for the Trade Mark. It reasonably believed it was the owner and submitted that the evidence relied on by the Opponents does not necessarily support its claims in this regard. It rejected the submission that Abhishek’s statement ‘we can apply’ demonstrated his awareness that he was not the Trade Mark’s owner, it being merely the ‘casual comment of a lay person in a family chat’ of which several interpretations are open. For example, he may have been referring to himself and his wife.
The Applicant submitted that the Opponents’ evidence, at its highest, demonstrates a commercial relationship between the parties but it does not support a finding of a transfer or assignment of Trade Mark ownership to any other entity, falling well short of the ‘cogent’ standard required. On the contrary, it was Vipin’s conduct, as referred to in paragraphs 26 to 31 of the Ambika declaration, that was said to have fallen well short of the relevant standards.
Section 62A was considered in Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2)(‘Fry Consulting’) where Dodds-Streeton J relevantly said:
It is clear that bad faith for the purposes of s 62A must be at the time of the application in this case (22 December 2006) and must relate to the making of the subject of that application… Further, the onus of proving bad faith rests on the Opponents. 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 … the standard of proof is the balance of probabilities, rather than that of beyond reasonable doubt.30
And after examining the various UK and Australian authorities Dodds-Streeton J concluded:
29 Ambika declaration Annexure AA-29.
30 [2012] FCA 81, [145].
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….
The question is whether, in all the particular circumstances, the applicant’s knowledge was such that his decision to apply for registration at the relevant date would be regarded as in bad faith by persons adopting proper standards.31
While many of the s 62A cases concern commercial relationships between the parties, this opposition involves both a commercial relationship and a family conflict, the facts and chronology of which are difficult to discern or separate. The evidence indicates that much of the parties’ conduct is not commercial in character but is related to a family relationship that seems to have broken down some time in the latter half of December 2016.
Having regard to the relevant objective evidence, Vipin clearly had significant responsibilities and engagement in the business. He organised and settled the company names and trust structures; negotiated the POS system, signage, furniture and insurance for the business; contributed significant funds and was one of the signatories to the (then), Sports Kaboom bank account. From July to 19 October 2016 evidence of email exchanges between Abhishek and Vipin demonstrate their ongoing discussions regarding business activities and on 17 August 2016 Vipin advises Abhishek he ‘will get a professional business plan for you’32. I therefore consider Ambika’s evidence that Vipin’s engagement in the business was ‘very informal’ and that he ‘contributed very little’, is unreliable and lacking in candour. Consequently I give it little weight. In this context, insofar as the Applicant’s knowledge at the time of filing the application can be attributed to its sole director Ambika, her comments in her WhatsApp message of 19 December 2016, in which she instructed the lawyers to file the Trade Mark ‘only’ in the Applicant’s name, although not fraudulent, appear duplicitous and might be seen to relevantly constitute ‘underhanded’ behaviour.
31 [2012] FCA 81 [165]–[167].
32 Gulati declaration, Annexures BG-8, 9, 19, 20, 22; BG-13A, B, C, D; BG-21A; BG-9, BG-23.
On the other hand, serious allegations of a commercial nature were made against Vipin including that he removed Ambika and Abhishek as shareholders in RS Traders Pty Ltd. in December 2016. He was also alleged to have made an unauthorised withdrawal of funds from the business account. In such a context, having regard to the Applicant’s knowledge at the relevant date, its application to register the Trade Mark might equally be seen as reasonable commercial action to protect or preserve what it regarded as its property.
On balance therefore, there is insufficient cogent evidence before me which establishes that the Applicant’s conduct in applying to register the Trade Mark might be said to constitute a ‘falling short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons’ or of an ‘unscrupulous, underhand or unconscientious character’.33
It follows that the s 62A ground of opposition has not been established.
Decision
Section 55 of the Act relevantly provides:
Decision
Unless subsection (3) applies to the proceedings, the Registrar must, at the end, decide:
to refuse to register the trade mark; or
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.
The Opponents have failed to establish any of the grounds of opposition nominated in the SGP.
The Trade Mark may accordingly 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.
33 Fry Consulting [165]–[166].
Costs
Both parties sought costs. I see no reason to depart from the general rule that costs follow the event. As the Opponents have failed to establish a ground of opposition, I award costs against the Opponents under s 221 of the Act in the amounts set out in Schedule 8 of the Regulations.
Mary-Ann Cooper Hearing Officer Oppositions and Hearings Trade Marks and Designs 31 October 2019
0
9
1