P.A.C. Fest International Limited v Pacific World International Pty Ltd

[2017] ATMO 109

TRADE MARKS ACT 1995

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

Re:Opposition by P.A.C. Fest International Limited to registration of trade mark application 1703539 (41) – P.A.C FEST (Device) - filed in the name of Pacific World International Pty Ltd

Delegate:	Nicholas Smith Decision on the Written Record
Decision:	2017 ATMO 109 Trade Marks Act 1995 (Cth) - Section 52 opposition: s 62A considered – ground established – registration refused

Background

1.       This is an opposition brought by P.A.C. Fest International Limited (‘Opponent’) pursuant to s 52 of the Trade Marks Act 1995 (‘Act’) to registration of the trade mark subject of the application detailed below in the name of Pacific World International Pty Ltd (‘Applicant’):

Application Number:	1703539
Priority Date:	29 June 2015
Services:	Class 41: Educational, training entertainment and cultural services including high school leadership programs, high school mentoring programs, higher education training and support, high school music events, high school performances, high school instrument programs, cultural events and activities in Sydney, mini education, career and culture workshops, sporting activities across codes in Australia, career education and support (education or training advice), cultural instrument (from the pacific region) activities  (‘Applicant’s Services’)
Trade Mark:	(‘Trade Mark’)

2.       Following advertisement on 17 December 2015 in the Australian Official Journal of Trade Marks of the application’s acceptance for possible registration, the Opponent filed a Notice of Intention to Oppose on 17 February 2016, and a Statement of Grounds and Particulars (‘SGP’) on 17 March 2016. The SGP was assessed by this office as adequate. The Applicant filed a Notice of Intention to Defend on 26 April 2016. The SGP raised grounds of opposition pursuant to ss 43, 58, 60 and 62A of the Act.

Evidence

3.       The Opponent filed Evidence in Support of its opposition (‘EIS’) on 4 August 2016.  This evidence consists of a declaration made on 3 August 2016 by James Munroe, a person who provides assistance to the Opponent, with Exhibits JM-1 to JM-4 (‘Munroe Declaration’) and a declaration made on 3 August 2016 by Sy Laga’aia, a Director of the Opponent, with Exhibits SL-1 to SL-8 (‘Laga’aia Declaration’).  The Applicant did not file any evidence in answer.

1. Once the time allowed for filing evidence had ended the parties were given an opportunity to request a hearing or to file written submissions.  Neither party chose to avail itself of these opportunities.  By letter issuing from IP Australia on 11 January 2017 the parties were notified that as neither party had requested a hearing the matter would be given to a delegate of the Registrar for a decision based on the written record.  The letter indicated that the parties had one month from the date of the letter to file any written submissions they wished to reply upon.  Neither party chose to file submissions in this matter.

2. I am a delegate of the Registrar of Trade Marks and I am to decide the opposition as required by section 55 of the Act which relevantly provides that, unless the proceedings are discontinued or dismissed, the Registrar must, at the end, decide on the basis of the written record, comprised of the materials mentioned in the previous paragraphs:

   (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.

   The Opponent

3. The Opponent is a non-profit organisation, incorporated in 2016 as the successor to an unincorporated association that assists youth (particularly in the indigenous, Maori and Pacific Islander communities) by addressing challenges through performing arts and culture.   

4. The Munroe Declaration contain the following claims/statements:

   ·     The primary activity run by the Opponent is an annual festival for disadvantaged youth run under the name of ‘P.A.C. Fest’.  The Opponent also facilitates a leadership training program, runs personal development workshops and runs cultural workshops for disadvantaged youth.

   ·     On or around March 2013 an unincorporated association comprising of 6 individuals was formed (known as the PAC FEST Committee) for the purposes of developing the P.A.C. Fest festival.

   ·     In 2013 the Declarant, a member of the PAC FEST Committee, approached Iva Motusaga, a graphic designer, to author the Trade Mark.  Mr Motusaga created the Trade Mark for the PAC FEST Committee to use.  On 27 January 2015 Mr Motusaga assigned ownership and rights in the Trade Mark to the PAC FEST Committee and its chair Jessica Sevealli in writing.  On 16 February 2016, the date of incorporation of the Opponent, the PAC FEST Committee assigned all rights in the Trade Mark to the Opponent.

   ·     The Trade Mark was first used in 2014 by the PAC FEST Committee in respect of the 2014 P.A.C. Fest, held in August 2014.  The 2014 P.A.C. Fest incorporated a stage show, a market place and a Polynesian celebrity signing room.  The objectives of the festival including showcasing Polynesian and Aboriginal performing arts culture, providing access to positive role models and hosting a safe and enjoyable family concert.  A second P.A.C. Fest was held in June 2015 in Sydney.

   ·     Anne Rogers [who is identified in the Laga’aia Declaration as the sole director and secretary of the Applicant] was a volunteer at the 2014 P.A.C. Fest and in 2015 she acted as an event manager and assisted with operations, budgeting and general finances.  For convenience Anne Rogers held moneys in relation to the 2015 P.A.C. Fest in her bank account on trust.  Anne Rogers was never a member of the PAC FEST Committee.

   ·     In 2015, shortly before the 2015 P.A.C. Fest was held a dispute arose over Ms Rogers’ failure to provide a full accounting of moneys spent and received on behalf of the PAC FEST Committee.  Following accusations of impropriety Ms Rogers then renounced her role as event manager.  After the 2015 P.A.C. Fest the chairman of the PAC FEST Committee wrote to Ms Rogers and ended all relationship with her and the Applicant and reserved the PAC FEST Committee’s rights in the Trade Mark.

5. The Laga’aia Declaration contain the following claims/statements:

   ·     The Applicant is a company incorporated on 22 July 2014 with Anne Rogers as the sole director and secretary.  To the best of the Declarant’s knowledge, the Applicant’s business consists of providing sports events, business development and community programs, primarily in indigenous and Pacific Islander communities.

   ·     The Opponent is a non-profit company that assists youth in need (particularly in the indigenous, Maori and Pacific Islander communities) by addressing their social, economic, cultural, educational, health and welfare challenges through performing arts and culture, which includes running an annual festival for disadvantaged youth under the name P.A.C. Fest.  The Opponent also facilitates a leadership training program, runs personal development workshops and runs cultural workshops for disadvantaged youth.

   ·     The PAC FEST Committee was the first user of the Trade Mark, having used it in connection with its activities in Australia since May 2013 and continued to use it until February 16, when they assigned it to the Opponent.

   ·     At the time the Applicant applied to register the Trade Mark, Ms Rogers was aware that the Trade Mark was used to brand and identify the festival conducted by the PAC FEST Committee.  She knew that the Applicant had no ownership of and took no part in the creation of the Trade Mark.

   ·     The Applicant and Opponent are competitors in the same market and the Applicant knew that applying to register the Trade Mark would result in cost and burden for the Opponent.

   The Applicant

   9.       The Applicant has provided no evidence and, therefore, I am unable to provide any information about the Applicant and any use of the Trade Mark by it other than what is set out in the EIS.  The EIS states that Anne Rogers is the sole director and company secretary of the Applicant.  It also states that:

   ·     Anne Rogers was associated with the 2015 P.A.C. Fest in an event manager role;

   ·     She was never a member of the PAC FEST Committee and hence never used the Trade Mark; and

   ·     She, as the controlling mind of the Applicant, applied to register the Trade Mark in full knowledge that all rights in respect of the Trade Mark were owned by the PAC FEST Committee.

   Grounds of Opposition, Onus and Standard of Proof

   10. As indicated above, in the SGP the Opponent has nominated grounds of opposition pursuant to ss 43, 58, 60 and 62A. To successfully oppose the application the Opponent needs to establish at least one of those grounds in relation to all the claimed services. As will become apparent, the Opponent has successfully established a ground of opposition pursuant to s 62A. Consequently, it is unnecessary that I consider the remaining grounds. Of course, should the decision be appealed, it would remain open to the Opponent to plead any ground available to it under the Act in proceedings before the Court.

6. 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 29 June 2015, being the filing date of the application in Australia (‘relevant date’) (except in circumstances, not present here in which a different priority date is provided for in the Act).[3]

   Discussion

   Section 62A

   12. Section 62A of the Act is reproduced below:

   62A Application made in bad faith

   The registration of a trade mark may be opposed on the ground that the application was made in bad faith.

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

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

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

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) (‘Fry’) is a leading authority on this section.  In that case, Dodds-Streeton J made the following comments, quoting from Harrison’s Trade Mark Application[4]:

   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]

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

   [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. Her Honour also noted with approval a number of cases in which bad faith were found in specific circumstances as set out below:

    In William Leith New Century Marquees (SRISO/018/00, UK Registry), the applicant applied to register a trade mark in respect of marquees, tents and related goods, although aware that NEW CENTURY was the opponent’s trade mark in the United States of America and that the opponent had started to trade in the United Kingdom under the trade mark. He was himself a customer and the delegate found that he should have been aware that the opponent could be expected to expand that trade, if it had not already done so. He had previously proposed a licence arrangement with the opponent although its terms were not clear. The delegate of the Registrar concluded:

    Mr Leith subsequently adopted the sign NEW CENTURY MARQUEES as his own trade mark, and he used it in the UK. When he was challenged about this he sought to register the mark in combination with his own name. In my view, the mark he has applied to register is confusingly similar with the mark NEW CENTURY.
    ...
    It is difficult to see how a person who applies to register a mark in his own name which he has previously recognised as the property of a potential overseas principal can be said to be acting in accordance with acceptable standards of commercial behaviour. I do not believe that combining the mark with the applicant’s own name is any answer to that criticism.[7]

    …

    In Hard Coffee Pty Ltd v Hard Coffee Main Beach Pty Ltd [2009] ATMO 26, Hearing Officer Nancarrow held that applications to register the trade marks HARD COFFEE MAIN BEACH and HARD COFFEE were made in bad faith within the meaning of s 62A, where a company controlled by the applicant’s controller had previously obtained a licence from the opponent’s predecessor in title to use the HARD COFFEE MAIN BEACH trade mark, acknowledging in that context that it had not purchased any right, title or interest in the names and that the vendor retained title to all related intellectual property rights. The Hearing Officer considered that in the circumstances, the director clearly understood that the trade mark in question remained the property of the opponent in respect of coffee shops.[8]

    …

    In Pritchard Pacific Pty Ltd Baltimore Aircoil (Australia) Pty Ltd v Brendan McCarrison and Breezewater Pty Ltd [2011] ATMO 46, the delegate upheld opposition to the registration of a trade mark for, inter alia, cooling towers and like apparatus and related services, on grounds including bad faith under s 62A of the Act. The delegate found that the applicant’s controller had a prior business connection with and knowledge of the opponent, such that a person standing in his shoes should have known that he should not apply for the registration of a trade mark deceptively similar to that used by his former business partner (at [42]).[9]

    [7] Ibid [151].

    [8] Ibid [153].

    [9] Ibid [156].

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

    The Applicant is aware that the trade mark is owned by the Opponent, due to previous dealings between the Applicant and the Opponent before the application. The Applicant only came to be aware of the trade mark through dealing with the Opponent. The Opponent has written to the Applicant, requesting the application to be withdrawn, and has not received a response. The Application falls short of acceptable commercial behaviour.

12. In the absence of any evidence in answer I accept the evidence of the Opponent in this matter.  The Trade Mark was created by Iva Motusaga who assigned his rights in the mark to the PAC FEST Committee who later assigned their rights to the Opponent.  The Trade Mark was used by the PAC FEST Committee for two events prior to the relevant date, namely the 2014 and 2015 P.A.C. Fest festivals.  The sole director of the Applicant (Anne Rogers) provided services to the PAC FEST Committee in 2014 and 2015 but the provision of those services did not result in her or the Applicant using the Trade Mark or obtaining any ownership rights to the Trade Mark.  Shortly before the 2015 P.A.C. Fest a dispute arose in which allegations of impropriety were made against Ms Rogers and she renounced her role with the PAC FEST Committee.  Shortly after the 2015 P.A.C. Fest the Applicant applied to register the Trade Mark.

13. While the fact that the Applicant was aware of the Opponent’s business and its trade mark is not of itself fatal[10], the act of applying to register a trade mark in circumstances where there is a prior business relationship, such that a person standing in the applicant’s shoes should have known that they should not apply for the registration has previously been held to support a finding that s 62A has been established.[11]  In the present case the director of the Applicant had a prior business connection with the PAC FEST Committee, was aware of the committee’s use of and rights to the Trade Mark and then shortly after the relationship between the entities broke down, chose to register as a trade mark an identical mark to that used by the PAC FEST Committee.

    [10] Next Group Plc v Nexcorp Australia Pty Ltd [2016] ATMO 34, [77].

    [11] Pritchard Pacific Pty Ltd Baltimore Aircoil (Australia) Pty Ltd v Brendan McCarrison and Breezewater Pty Ltd [2011] ATMO 46.

14. I have been provided with no explanation of the Applicant’s actions, nor is there an obvious reason for the Applicant to seek to register the Trade Mark (as opposed to, for example, a Trade Mark that reflects the Applicant’s own name).  The only reasonable conclusion that may be drawn from the evidence before me is that the Applicant sought to take advantage of the PAC FEST Committee’s connection with and use of the Trade Mark, or otherwise sought to convey to consumers that it was associated or affiliated with, or otherwise endorsed by, the PAC FEST Committee, which is false.  In the absence of any alternative explanation and on the balance of probabilities, I am satisfied that the Applicant’s conduct falls short of the ‘standards of acceptable commercial behaviour observed by reasonable and experienced persons’.[12] I find that the Opponent has established the ground of opposition under s 62A.

    [12] DC Comics v Cheqout Pty Ltd [2013] FCA 478, [77].

    Decision

    21. I have found the Opponent has established the ground of opposition it raised pursuant to s 62A of the Act. As the Delegate of the Registrar I accordingly refuse to register the Trade Mark.

    Nicholas Smith
    Hearing Officer
    Oppositions and Hearings
    26 September 2017