PayPal Inc v Giftmobile Pty Ltd

[2017] ATMO 113

TRADE MARKS ACT 1995

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

Re:Opposition by PayPal Inc. to registration of trade mark application 1677875 (16, 35) - GIFTPAL - filed in the name of Giftmobile Pty Ltd.

Delegate:	Jock McDonagh
Representation:	Opponent: Melissa Marcus of counsel instructed by King & Wood Mallesons Applicant: Relied on written submissions
Decision:	2017 ATMO 113 Trade Marks Act 1995 (Cth) - Section 52 opposition: ss 42(b), 44, 60 and 62A considered – s60 established – registration refused

Background

1. This matter relates to an opposition under section 52 of the Trade Marks Act 1995 (‘the Act’) to the registration of a trade mark filed by GiftMobile Pty Ltd (‘the Applicant’). Relevant details of the opposed application are set out below.

Application No	1668176
Trade Mark	GIFTPAL            (‘the Trade Mark’)
Filing Date:	3.03.2015 (‘the Priority Date’)
Goods & Services:	Class 16: Gift cards Class 35: Retail services

2. The Trade Mark was examined in compliance with section 31 of the Act and was advertised as accepted for possible registration in the Australian Official Journal of Trade Marks on 23 July 2015. PayPal Inc. (‘the Opponent’) filed Notice of Intention to Oppose the registration of the Trade Mark on 23 September 2015 and a Statement of Grounds and Particulars (‘the Statement’) on 23 October 2015.  Thereafter the Applicant filed a Notice of Intention to Defend on 27 November 2015. The Opponent then filed evidence as provided by the Trade Mark Regulations 1995 (‘the Regulations’).

1. I heard the matter in Canberra on 3 April 2017 as a delegate of the Registrar of Trade Marks. The Opponent was represented by Melissa Marcus of counsel instructed by King & Wood Mallesons. The Applicant relied upon written submissions in the form of an email.

2. I note from correspondence from both the Opponent’s solicitors and the Managing Director of the Applicant that the Applicant company has been deregistered and its business subsumed by MobileDigital Marketing Pty Ltd. The Registrar has not received official notice of this and the Register has not been amended to date.

   Grounds of Opposition

   5. The Opponent pressed the following grounds of opposition under the Act:

   ·Section 44: The Trade Mark is substantially identical with or deceptively similar to a prior application or registration;

   ·Section 60: The Trade Mark is similar to a trade mark that has acquired a reputation in Australia;

   ·Section 42(b): Use of the Trade Mark would be contrary to law; and

   ·Section 62A: The application was made in bad faith.

3. To succeed in its opposition the Opponent bears the onus of establishing at least one of these four grounds on the ‘balance of probabilities’.[1]

   [1] Following Gyles J in Pfizer Products Inc v Karam [2006] FCA 1663, [6]-[26], affirmed by the Full Federal Court in Telstra Corporation Limited v Phone Directories Company Ltd [2015] FCAFC 156, [132]-[133].

4. The time at which the grounds of opposition must be established is the date of filing of the application for registration.[2]

   Evidence

   The evidence consists of the following declaration:

   [2] See Southern Cross Refrigerating v Toowoomba Foundry Pty Ltd (1953) 91 CLR 592, 595

Declarant	Position	Date Made	Annexures
Evidence in Support
Clifford C Webb (‘Webb Declaration’)	Head of Trademarks, Copyrights, and Domains of the Opponent	7.03.2016	CW-1 to CW-5

1. The Webb Declaration provides details of the Opponent’s business in Australia and worldwide in the provision of an electronic on-line facility for people to send and receive funds without sharing financial information. The facility can be used in Australia and worldwide, utilizing funds in 26 different currencies.

2. The Webb Declaration also provides the following details of trade mark registrations the Opponent holds in Australia:

Number	Trade Mark	Priority Date	Goods and Services
895146	PAYPAL	15.11.01	Class 36: Clearing and reconciling financial transactions via a global computer network; providing a wide variety of banking services and providing financial services, credit card services, processing and transmission of bills and payments thereof, and insurance for financial transactions
941392	29.01.03	Class 36: Clearing and reconciling financial transactions via a global computer network; providing a wide variety of payment services and providing financial services, including credit card processing and transmission of bills and payments thereof, conducted via a global computer network
991252	PAYPAL	3.09.03	Class 9: Mouse pads Class 14: Money clips Class 21: Mugs Class 25: Clothing
1171776	19.04.07	Class 9: Computer software including computer software for processing electronic payments and transferring funds to and from others; authentication software that may be downloaded from a global computer network and/or recorded on computer media; magnetically encoded credit cards and payment cards; wired and wireless computer peripherals; mouse pads; computer security device, including a non-predictable code calculator for accessing a host data bank computer Class 16: Paper, cardboard and goods made from these materials, not included in other classes; printed matter; bookbinding material; photographs; stationery including paper postcards, bumper stickers, calendars, decorative stickers and decals and pens; publications and printed materials; instructional and teaching material (except apparatus), including a series of instructional and teaching materials relating to clearing and reconciling financial transactions via electronic communications networks; credit cards without magnetic coding Class 21: Containers for food or beverages in this class, including mugs, tumblers, water bottles and containers Class 36: Insurance; monetary affairs; real estate affairs; financial affairs including enabling transfer of funds and purchase of products and services offered by others, all via electronic communications networks, clearing and reconciling financial transactions via electronic communications networks, providing a wide variety of payment and financial services, including, credit card services, issuing credit cards and lines of credit, processing and transmission of bills and payments thereof, payment services, providing guaranteed payment delivery and money market funds Class 45: Security services for the protection of property and individuals including financial fraud protection, prevention and dispute resolution services; personal and social services rendered by others to meet the needs of individuals
1327935	26.10.09	Class 9: Computer software for use in developing other computer software and software applications; computer software development tools Class 42: Design and development of computer software and application programming interfaces (API); providing information in the field of computer software and computer software design and development; technical support services, namely, troubleshooting of computer software problems Endorsements: Colour Series Description: The first mark in the series of trade marks is depicted in the colours BLUE as shown in the representation.
1473772	13.01.12	Class 9: Computer software for processing electronic payments; authentication software for controlling access to and communications with computers and computer networks Class 36: Financial services, namely, credit card and debit card transaction processing services; clearing and reconciling transactions via global communications networks; electronic payment processing services Class 42: Providing temporary use of on-line non-downloadable software for processing electronic payments; providing temporary use of on-line non-downloadable authentication software for controlling access to and communications with computers and computer networks
1603454	17.01.14	Class 35: Business consulting services in the field of online payments; Managing and tracking credit card, debit card, ACH, prepaid cards, payment cards, and other forms of payment transactions via electronic communications networks for business purposes; Business information management, namely, electronic reporting of business analytics relating to payment processing, authentication, tracking, and invoicing; Business management, namely, optimization of payments for businesses Class 36: Financial services, namely, electronic funds transfer via electronic communications networks; clearing and reconciling financial transactions via electronic communications networks; providing a wide variety of payment and financial services, namely, credit card services, issuing credit cards and lines of credit, processing and transmission of bills and payments thereof, bill payment services with guaranteed payment delivery, and brokerage of money market funds, all conducted via a global communications network Class 42: Providing temporary use of on-line non-downloadable software for processing electronic payments; providing temporary use of on-line non-downloadable authentication software for controlling access to and communications with computers and computer networks
1659299	28.04.14	Class 9: Computer software for processing electronic payments and for transferring funds to and from others; authentication software for controlling access to and communications with computers and computer networks; magnetically encoded credit cards and payment cards Class 35: Promoting the goods of others, namely, providing information regarding discounts, coupons, rebates, vouchers and special offers for the goods of others; promoting the goods and services of others by providing hypertext links to the web sites of others; promoting the goods and services of others by providing a web site featuring links to the online retail web sites of others; business consulting services in the field of online payments; managing and tracking credit card, debit card, ACH, prepaid cards, payment cards, and other forms of payment transactions via electronic communications networks for business purposes; business information management, namely, electronic reporting of business analytics relating to payment processing, authentication, tracking, and invoicing; business management, namely, optimization of payments for businesses Class 36: Financial services, namely, electronic funds transfer; clearing and reconciling financial transactions; providing a wide variety of payment and financial services, namely, credit card services, issuing credit cards and lines of credit, processing and transmission of bills and payments thereof, bill payment services with guaranteed payment delivery, and brokerage of money market funds, all conducted via a global communications network; credit card and debit card transaction processing services; reimbursement of funds for disputed items in the field of electronic payment purchases; providing purchase protection services for goods and services purchased by others via a global computer network and wireless networks; credit card transaction processing services; credit services, namely, providing revolving credit account services; bill payment services; providing electronic mobile payment services for others; credit card and payment processing services; electronic foreign exchange payment processing; payment processing services, namely, providing virtual currency transaction processing services for others Class 42: Providing temporary use of on-line non-downloadable software for processing electronic payments; providing temporary use of on-line non-downloadable authentication software for controlling access to and communications with computers and computer networks Endorsements: Colour Claimed: The color(s) MEDIUM BLUE and LIGHT BLUE is/are claimed as a feature of the mark.; Parts Colour Claimed: The mark consists of the word PAYPAL in stylized lettering, where the word "PAY" appears in MEDIUM BLUE and the word "PAL" appears in LIGHT BLUE.; Mark Description: The mark consists of the word PAYPAL in stylized lettering, where the word "PAY" appears in MEDIUM BLUE and the word "PAL" appears in LIGHT BLUE.

1. The Webb Declaration refers to the above registrations collectively as the ‘PayPal Marks’, which I shall also adopt. I note that the essential feature of each of the PayPal Marks is the word ‘PayPal’.

2. According to the Webb Declaration, the PayPal Marks have been used in Australia since 2000, when the first Australian signed up for a PayPal account. Since that time the Opponent has registered over 1.5 billion accounts worldwide, with over 6 million active user accounts registered in Australia as at 2014.

3. The Webb Declaration notes that total payment volume (value of payments) in Australia in 2009 was approximately 1.9 billion US Dollars (2.1 billion Australian Dollars), an increase of 32% from 2008. For the period from 2012 through 2014, the total payment volume conducted via PayPal users in Australia was over 20 billion US Dollars and worldwide was nearly 570 billion US Dollars.

4. The Webb Declaration states that the Opponent’s PayPal services are used to pay for goods and services online, including the purchase of stored value gift cards.  The Webb Declaration also advises that the Opponent has developed an online store dedicated solely to selling digital gift cards called ‘PayPal Digital Gifts’.

   Section 60: Trade mark similar to trade mark that has acquired a reputation in Australia

5. Section 60 of the Act is reproduced below:

   Section 60 - Trade mark similar to trade mark that has acquired a reputation in Australia

   The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:

   (a)another trade mark had, before the priority date for the registration of the first‑mentioned trade mark in respect of those goods or services, acquired a reputation in Australia; and

   (b)because of the reputation of that other trade mark, the use of the first‑mentioned trade mark would be likely to deceive or cause confusion.

6. To establish its ground of opposition under section 60 the Opponent must demonstrate that as at the Priority Date there was another trade mark that had acquired a reputation in Australia amongst a significant number of persons in the relevant market such that use of the Trade Mark would be likely to deceive or cause confusion.

7. It is necessary to bear in mind that each of the PayPal Marks listed at [10] above is a separate mark for the purpose of considering the operation of s 60 of the Act in the present case.[3] However, as I have already mentioned at [10] the essential feature of each of the PayPal Marks is the word ‘PayPal’.

   [3] Qantas Airways Limited v Edwards [2016] FCA 729 (‘Qantas’) at [160]

8. Reputation is to be assessed according to the test set out in McCormick & Company Inc v McCormick[4] by Kenny J at [81] – [82]:

   What is intended by the word “reputation” in s 60? The word is defined in The Macquarie Dictionary as follows:

   reputation ... 1. the estimation in which a person or thing is held, esp. by the community or the public generally; repute ... 2. favourable repute; good name ... 3. A favourable and publicly recognised name or standing for merit, achievement, etc. ... 4. The estimation or name of being, having done, etc, something specified.

   Cf. The Oxford English Dictionary. In s 60, the word is, I think, apt to refer to “the recognition of the McCormick & Co marks by the public generally”.

   Does the evidence establish that in Australia before 9 March 1992 the McCormick & Co marks were recognised by the public generally and, because of that, the use by Mary McCormick of her marks would be likely to cause the public confusion, as for example, by the public’s mistakenly attributing a business connection between the two or attributing her product to the company?

   [4] (2000) 51 IPR 102

9. Further, at [86], Kenny J said:

   In practice, it is commonplace to infer reputation from a high volume of sales, together with substantial advertising expenditures and other promotions, without any direct evidence of consumer appreciation of the mark, as opposed to the product.

10. The Opponent submitted, and I accept, that the Opponent’s PayPal Marks and the Trade Mark consist of the English colloquialism PAL – meaning ‘friend’, ‘comrade’, or ‘buddy’ - as a suffix, with the Opponent’s PayPal Marks commencing with the common English word PAY and the Trade Mark commencing with the common English word GIFT.

11. I am satisfied that the Webb Declaration establishes that the Opponent had used its PayPal Marks in Australia and globally in relation to an electronic online fee paying facility for some fifteen years before the Priority Date. The Opponent is arguably the worldwide leader in such online services.

12. The Webb Declaration demonstrates that at the priority date the Opponent’s revenue and customer base in Australia and globally under the PayPal Marks can be described as substantial.

13. I am satisfied that as at 30 April 2012, the PayPal Marks used by the Opponent had acquired a reputation in Australia in respect of online financial transactions, including processing electronic payments and transferring funds to and from account holders, as well as use of credit and debit cards, prepaid cards and payment cards.

14. Having regard to the evidence of the Opponent’s reputation in the areas described above, I consider that the use of the Trade Mark is likely to cause deception or confusion. Consumers knowing of the Opponent’s substantial business and reputation in the area of online payments, particularly in the retail context, are very likely to assume that the Opponent has extended its product and service line into the provision of ‘gift’ cards (i.e. GiftPal rather than PayPal).

15. I am satisfied that there is a real, tangible risk that persons seeking the Applicant’s services, who are aware of the Opponent’s extensive reputation in the PayPal Marks will regard goods and services emanating from the Applicant and sold or provided under or by reference to the Trade Mark as being goods or services sourced from, or otherwise having the licence, sponsorship or approval of, the Opponent. At the very least, such persons would be caused to wonder, or left in doubt, as to whether such goods or services come from the same source.

16. I am satisfied that the Opponent has established this ground of opposition. 

    Decision

    26. I have found the Opponent has established the ground of opposition it raised under to s 60 of the Act. As the Delegate of the Registrar I accordingly refuse to register the trade mark application number 1677875.

17. I have only found it necessary to address the section 60 ground in this decision. Of course, should the decision be appealed, it is open to the Opponents to plead any ground it considers relevant in proceedings before the Court.

    Costs

    28.     The Opponent has sought its costs.  I see no reason to depart from the general rule that costs follow the event.  As the Opponent has established a ground of opposition, I award costs against the Applicant in accordance with the amounts in Schedule 8 of the Regulations.

    Jock McDonagh
    Hearing Officer

    6 October 2017