Re: Opposition by AR & Ss Pty Ltd to registration of trade mark application 2026139 (3, 44) - Hair Crew & Co - in the name of Bilal Hammoud

[2021] ATMO 83

TRADE MARKS ACT 1995

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

Re:Opposition by AR & SS Pty Ltd to registration of trade mark application 2026139 (3, 44) – Hair Crew & Co – in the name of Bilal Hammoud

Delegate:

Nicholas Smith

Representation:

Opponent: IP Wealth Pty Ltd

Applicant: Self-represented

Decision:

2021 ATMO 83

Trade Marks Act 1995 (Cth) - Section 52 opposition: s 62A considered – ground established – registration refused

Background

1. This decision concerns an opposition brought by AR & SS Pty Ltd (‘Opponent’) to the registration of the trade mark which is the subject of the application detailed below in the name of Bilal Hammoud (‘Applicant’): 

Application Number:	2026139
Filing Date:	13 August 2019
Goods and Services	Class 3: Aerosol hairspray; Chemical preparations for the hair; Colour rinses (for the hair); Conditioners for treating the hair; Cosmetics for the use on the hair; Dyes for the hair; Gels for use on the hair; Hair balm; Hair bleaching preparations; Hair care agents; Hair care preparations; Hair care products; Hair cleaning preparations; Hair colorants; Hair colours; Hair conditioner; Hair conditioning preparations; Hair conditioning rinses; Hair cosmetics; Hair cream; Hair curling preparations; Hair dyes; Hair emollients (non-medicated); Hair finishing rinses; Hair fixers; Hair fixing oil; Hair gel; Hair grooming preparations Class 44: Consultancy services relating to personal appearance (hair, beauty, cosmetics); Hair care services; Hair colouring services; Hair cutting services; Hair dressing salon services; Hair styling; Hairdressing; Hairdressing salons; Shampooing of the hair; Barber services (‘Applicant’s Goods and Services’)
Trade Mark:	Hair Crew & Co	(‘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 on 7 April 2020 (‘SGP’).  The SGP raised grounds of opposition under ss 42(b), 58, 59, 60 and 62A.  The Applicant filed a Notice of Intention to Defend on 29 June 2020.[1] 

Evidence

[1] The Applicant, at the same time as it filed its Notice of Intention to Defend, filed a document described as a “Declaration for Response to Objection”. As this evidence was not filed in accordance with the Regulations (and indeed filed before the Opponent had filed its evidence in support) I have not had regard to it.

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

   ·Declaration made on 21 September 2020 by Arzoo Rahi, the director of the Opponent, with Exhibits AR-1 to AR-17 (‘Rahi Declaration’).

2. The Applicant did not file any evidence in answer:

3. The entirety of the evidence filed by the Opponent, including publicly available information such as the registration of a business name, is claimed to be confidential.  I adopt the approach of the Delegate in Source Homeloans Pty Ltd v Coles Group Ltd, who when in receipt of a similar claim (albeit in respect of the opponent in that case) stated:

   The confidentiality claim obviously extends to the whole of the evidence led in support of the opposition. It is not clear to me how I could decide this matter without discussing the evidence the opponent has served and filed in support of its opposition. The onus in these proceedings is on the opponent to establish its grounds of opposition, at least to my satisfaction. Seemingly barred from any discussion of the opponent’s statements and exhibits and the weight that I attach to them if I were to lend credence to the claim, my hands would appear to have been effectively tied. Prima facie, the easiest way out of the dilemma would be to accede to the opponent’s wishes and find that it has not established its opposition. Thus, if I were to take Mr Peter’s request (made within several declarations) at face value, that would be the end of these matters.

   This position, obviously, is extreme, since the opponent has filed this evidence in support of its opposition and must expect the evidence to be discussed and weighed. It will be sufficient for me to say, in setting out my reasons for my decision, that there are arguably commercially sensitive matters in the evidence that I do not need to discuss in detail (and, if I do, my consolation lies in the fact that the opponent in not being specific in its request has brought the problem upon itself). None the less, the evidence of the parties as a whole satisfies me of various things, which I will set out under the appropriate headings below.[2]

   [2] Source Homeloans Pty Ltd v Coles Group Ltd [2008] ATMO 17, [5]-[6].

4. I note that, if a party considers a piece of information to be commercially sensitive it must identify that information with specificity.  If in my summary of the evidence, I have disclosed information that is sensitive, then this is an issue that has arisen by that party not specifically identifying that information as sensitive.

   8.  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.  On 28 January 2021 the Opponent requested a hearing by submissions.  The matter was set down for a hearing in Canberra on 20 July 2021 and the matter was allocated to me.  In line with usual practice, an email was sent to the parties on 4 May 2021 which contained a schedule for the provision of written summaries of submissions to be filed prior to the hearing.  The Opponent filed written submissions on 5 July 2021 (‘Opponent’s Submissions’).  The Applicant did not file any submissions. 

   9.  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

5. The Opponent is an Australian company that operates a business trading as HAIR CREW & CO.   I note that much of the Rahi Declaration appears to treat the Opponent and Ms Rahi as one and the same so when I refer to the Opponent in my summary of the Rahi Declaration below such a reference may be to Ms Rahi.

   11.     The relevant claims/statements in the Rahi Declaration can be summarised as follows:

   ·     The Opponent and the Applicant were business partners of a hair salon franchise called Moe & Co with the Opponent being the franchisor of the Applicant under a verbal agreement.

   ·     On 28 March 2019 the Opponent approached the Applicant with a business idea to lease a new shopfront in Paramatta. On 1 April 2019 the Opponent coined the name for the new salon and engaged design company to create a logo.  That evening a colleague (and future employee) of the Opponent sent a copy of the new trade mark and logo to the Applicant.  As part of that WhatsApp conversation it was noted that the Opponent had taken steps to register the business name Hair Crew & Co for the Opponent’s new business.  The Opponent also registered the domain name <haircrew&co.com.au> on 1 April 2019(?). 

   ·     On 4 April 2019 the Opponent offered the Applicant the opportunity to become business partners in the new enterprise. While the parties were in negotiation over the exact terms of the business relationship and no contractual agreement had been signed, the Applicant commenced making financial contributions to the Opponent, totalling $69,600 between May and June 2019.

   ·     In May 2019, the Opponent entered into contractual negotiations with the landlord, arranged for the fitout of the new salon and obtained business insurance for the new Hair Crew & Co business.

   ·     Between May and July 2019 the relationship between the Opponent and the Applicant deteriorated and by 30 July 2019 the Opponent had fully reimbursed the Applicant for his financial contributions to the new business.  

   ·     Notwithstanding the conclusion of the relationship between the Applicant and the Opponent, and that the Applicant’s initial investment had been repaid, on 13 August 2019 the Applicant applied to register the Opponent’s business name as a trade mark.

6. The Exhibits to the Rahi Declaration display extensive WhatsApp messages regarding the new business as well as evidence of steps taken by the Opponent to establish the new business under the name Hair Crew & Co.

   The Applicant

7. The Applicant has not filed any evidence and as such I have no information about it other than what is set out on the Register. 

   Grounds of Opposition, Onus and Standard of Proof

8. As indicated above in the SGP the Opponent nominated grounds of opposition under ss 42(b), 58, 59, 60 and 62A. To successfully oppose the application the Opponent needs to establish one of the nominated grounds. 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.

9. The onus of proof in an opposition rests upon the Opponent.[3]  The relevant standard of proof is the ordinary civil standard based on the balance of probabilities.[4]  The date at which the rights of the parties are to be determined is the filing date 13 August 2019 (‘relevant date’), which is also the priority date for the purposes of s 60.[5]

   Discussion

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

   [4] 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).

   [5] 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).

   Section 62A

10. Section 62A is reproduced below:

    Application made in bad faith

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

11. 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.

12. The case of Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) (‘Fry’) 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:[6]

    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.[7]

    [6] [2004] EWCA Civ 1028; [2005] FSR 10.

    [7] [2012] FCA 81, [147] (‘Fry’).

13. 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.[8]

    [8] Ibid [165]-[166].

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

    1. A director of the Opponent (the Director) and the Applicant were business partners in relation to the MOE & CO branded hair salons.

    2. The Director sought to create their own unique brand and enterprise and took steps in coining the trade mark HAIR CREW & CO (the Trade Mark) and establishing a separate business under the Trade Mark providing various hairdressing and hair care services (Opponent’s Services).

    3. The Opponent registered the business name for the Trade Mark on 3 April 2019 and commenced operations of their hair salon branded with the Trade Mark and providing the Opponent’s Services on 6 July 2019 (the Business).

    4. There was a dissolution of the business relationship between the Director and the Applicant which occurred after the Business commenced.

    5. The Opposed Application was filed on 13 August 2019 for various hair and hairdressing related goods and services in Classes 3 and 44 (Applicant’s Goods and Services).

    6. The Applicant has no right, title or interest in the Trade Mark.

    21.     Based on the uncontradicted evidence of the Opponent, I find that the Opponent and the Applicant knew each other, that the Applicant was aware that the Opponent sought to set up a new (and competing) business under the name Hair Crew and Co, and at the relevant date, the Applicant had no connection to or rights in the Opponent’s Hair Crew & Co business as the relationship between the parties had broken down and the Applicant’s ‘investment’ had been repaid.  At the relevant date the Applicant clearly knew that the Opponent intended to launch a new business under the Trade Mark and there is no evidence before me of the Applicant’s use or intention to use the Trade Mark in any way.

    22.     On the evidence before me and on the balance of probabilities I find that the conduct of the Applicant in applying to register the Trade Mark would, to use Dodd-Streeton J’s formulation in Fry, ‘be regarded as in bad faith by persons adopting proper standards’.  I am satisfied on the evidence before me that the Applicant applied to register a trade mark that is substantially identical to the Opponent’s business name, in awareness of the Opponent’s intention to trade under that business name, after the relationship between the parties had become acrimonious,  in circumstances where the Applicant had not used the Trade Mark before, and on the basis of the evidence before the Registrar, has taken no significant steps to use the Trade Mark since.  These circumstances are analogous (though not identical) to the circumstances in Fry.  In the absence of mitigating circumstances and given the poor personal relationship between the parties, I find that the Opponent has established its s 62A ground.

    Decision and Costs

    23.     I have found the Opponent has established the ground of opposition it raised pursuant to s 62A.  As the delegate of the Registrar I accordingly refuse to register the Trade Mark. I direct that the refusal be recorded one month from the date of this decision. If the Registrar is served with a notice of appeal before that time, I direct that the refusal shall not occur until the appeal has been withdrawn or discontinued. Otherwise the disposition of this application should be in accordance with the Court’s orders or directions.

15. The Opponent 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 Applicant under s 221 in the relevant amounts under Schedule 8 of the Regulations.

    Nicholas Smith

    Hearing Officer

    Delegate of the Registrar of Trade Marks

    10 August 2021