Re: Opposition by Conquip Holdings Pty Ltd to the registration of trade marks 594459(42) and 594460(42) - bennigan's grill and bennigan's - filed in the name of S & A Restaurant Corp

[1998] ATMO 40

TRADE MARKS ACT 1955

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

Re:      Opposition by Conquip Holdings Pty Ltd to the registration of trade marks 594459(42) and 594460(42) - bennigan’s grill and bennigan’s - filed in the name of S & A Restaurant Corp. 

As provided in the transitional provisions of Part 22 of the Trade Marks Act 1995, the provisions of the Trade Marks Act 1955 continue to govern this opposition.  Accordingly, unless otherwise indicated, any reference to the Act in this decision is a reference to the Trade Marks Act 1955.

Trade mark details

Trade mark applications 594459 and 594460 were filed on 20 January 1993 by S & A Restaurant Corp., a Delaware corporation of 12404 Park Central Drive, Dallas, Texas, United States of America (hereinafter S & A Restaurant).  594459 consists of the words bennigan’s grill and 594460 is the one word, bennigan’s.  Both applications were filed for restaurant services in class 42, and, on 15 December 1994, both marks were advertised for acceptance.  The scope of the services which originally included a claim for all services in class 42, was by then amended back to read:

Restaurant services; preparation and service of foodstuffs and alcoholic and non-alcoholic beverages; take-away and eat-in food services.

Conquip Holdings Pty Ltd, a company located at 363 Chapel Street, South Yarra, Victoria, opposed both marks. It relies on three grounds which, as stated in its notice of opposition, read:  

1. the applicant has no intention to trade under the name bennigan’s  (section 6(1) and 45)

2. the opponents have acquired prior rights to the name through use in Australia (section 40(1))

3. the opponent’s mark is so well known in the market place that the applicant’s mark is likely to deceive or cause confusion (section 28(a)).

The evidence

Conquip’s supporting evidence was served on S & A Restaurant in two lots - the first on 8 September 1995 and the balance on 1 November 1995. In total it consists of three declarations provided, as follows,  by :

·   Jacqueline Moutsias  - 10 July 1995 - with exhibit MM1 

·   Helen Batzios  - 22 August 1995 -  with exhibit HB-1

·   Bill Lambropoulos - 1 November 1995 - with exhibits BL-1 and BL-2 - which I shall refer to as ‘the first Lambropoulos declaration’.

S & A Restaurant’s evidence in answer was served on Conquip on  12 February 1997. It comprises six declarations  provided by:

·   Todd Watson - 30 January 1997 -  with exhibit TW-1

·   Jody H. Armstrong  - 30 January 1997 - with exhibits JA-1 to JA-11

·   Cheree Sotolongo - 30 January 1997 - with exhibits CS-1 to CS-64 which I shall refer to as the first Sotolongo declaration

·   P. J. Evans - 10 February 1997

·   Graham Leslie Cowin - 10  February 1997 - with exhibits GLC-1 to GLC-7.

·   Cheree Sotolongo - 11 February 1997 - with exhibits CS-A and CS-B, called the second Sotolongo declaration.

Conquip’s  evidence in reply was served on S & A Restaurant on 22 December 1997. It is a single declaration provided by:

·   Bill Lambropoulos - 12 December 1997 - the second Lambropoulos declaration.

Hearing details

In accordance with the provisions of regulation 49, the Registrar appointed a hearing which took place on 3 June 1998, in Melbourne, before me. Mr John McCormack of Griffith Hack represented the opponent, Conquip.  Mr Graham Cowin of Phillips Ormonde & Fitzpatrick  represented S & A Restaurant, the trade mark applicant.

The background

S & A Restaurant’s history is set out in the supporting declarations. The facts are not in dispute.

Mr Watson is vice president and general counsel of S & A Restaurant. His declaration gives the following broad historical picture. Bennigan’s restaurant chain was founded in 1976. It features “casual dinner-house dining and beverages” and is designed to target the young adult market.  S & A Restaurant operates over 200 Bennigan’s restaurants in the United States and, in terms of number of restaurants and market share, rates amongst the top ten dinner-house restaurant chains in that country.  By January 1997 it had expanded into overseas locations with three franchised Bennigan’s restaurants operating in South Korea, and with agreements being negotiated for similar franchise operations in the United Kingdom, in Ireland and in the Philippines. S & A Restaurant does not have an operation in Australia, but, says Mr Watson (in January 1997), the company is interested in opening a Bennigan’s restaurant in this country. From time to time S & A Restaurant receives enquiries  from parties interested in operating bennigan’s restaurants in Australia.

Ms Armstrong is an attorney, in Dayton, Ohio. Her declaration provides material evidence of the significant standing achieved by the S & A Restaurant’s restaurant chain in the United States. Ms Armstrong has expertise in managing the LEXIS/NEXIS online computer data base, and the exhibits to her declaration include over 120 pages of LEXIS/NEXIS data. There are articles, summaries, directories and so forth from various newspapers, magazines, newsletters, professional journals, wire services and other sources. The extracts range through the years 1979 to 1996. There are stories and reports concerning Bennigan’s advertising expenditure, its advertising slogans and its market strategies and promotions; restaurant reviews from different areas of the United States; Bennigan’s menus; growth and change in the corporate ownership of S & A Restaurant; and S & A Restaurant’s expansion into the Korean market.  The business has clearly had its ups and downs.  The New York Times (23 July 1980) reports:

Mr Neeb helped develop Bennigan’s,  a turn-of-the-century corner restaurant concept that now comprises 35 units. “The name Bennigan was the maiden name of my father’s mother” he said proudly. 

The Regional News in Little Rock, Arkansas reported on 26 December 1980:

Fire investigators said Friday,  a blaze that did at least $500,000 damage to Bennigan’s restaurant, Christmas Day was probably the work of an arsonist.

In 1985 The San Diego Union-Tribune under the heading Mission Valley, where the Yuppies meet to eat,  reported:

Bennigan’s food is surprisingly good for a place where food plays second fiddle. The sandwiches are fine, especially the Reuben and the Philadelphia Cheese. 

In 1991 USA Weekend published an article entitled The dual faces of Bennigan’s.  It reads: 

Bennigan’s has two faces;  The first branch our family visited was like walking into a party - loud music and equally loud chatter …. On our second visit to another Houston location, we found a family crowd and a bargain … 

In 1994 the Nations Restaurant News published an article describing the unsuccessful result of S & A Restaurant’s attempt to diversify with what is known as a line extension. In this venture S & A Restaurant changed the name and character of a number of its Bennigan’s casual dinner-houses.  They became Café Americas and featured a ‘bistro ambience’. The National Restaurant News reports clients wanted the old Bennigan’s back and, in response, S & A Restaurant abandoned the line extension project. In 1996 there are articles referring to S & A Restaurant’s entry into the South Korean market.

The first Sotolongo declaration provides more material evidence of S & A Restaurant’s long-standing presence in the United States. In the exhibits are copies of menus, advertisements, and reports on foreign and domestic expansion. One advertisement, CS-3, promotes the United Kingdom venture.  This advertisement in Restaurant News of March 1996 says

Bennigan’s continues to globally expand, adding to its existing 220 restaurants in three countries.  

As well as the two pending applications for the trade marks bennigan’s grill and bennigan’s, S & A Restaurant is the registered proprietor of trade mark number 376352.  This is the word bennigan’s.  It has a priority date of 3 June 1982  and it is registered in respect of:

Services relating to restaurants, cafeterias, cafes, bars, taverns and hotels, consisting of preparation and service of foodstuffs and alcoholic and non-alcoholic beverages; retailing services. 

The opponent is a local Melbourne business. Its history, and this again is not in contention, is set out in the first Lambropoulos declaration.  Mr Lambropoulos is a director of Conquip and has been associated with that company since shortly after its incorporation in 1992.

Conquip has one restaurant.  It is in Chapel Street in the Melbourne suburb of South Yarra. From the outset this restaurant was known as bennigans and, from inception to February 1994, the business prospered. Retail sales figures are substantial, and the outlay on advertising is significant. Promotional material describes bennigans as a Bar & Bistro which provides entertainment, food and beverages. The menu offers some 250 items.  The business has recently been included in a publication entitled The Age “Cheap Eats” Guide.

Mr Lambropoulos explains how his company came to adopt the name bennigans.  He says it was Conquip’s intention to find a name easy to pronounce, easy to remember, and capable of distinguishing the Conquip restaurant from other ‘ethnically-derived’ names which, apparently, abound in the Chapel Street locale. It also sought a ‘non-European sounding name’.  The company was inspired to use the word shannigans, which it associated with a Touchstone film entitled Cocktail (featuring the American actor Tom Cruise). For some uncertain reason, however, shannigans was not taken up, and Conquip settled instead on bennigans. It began trading under this name in early 1994, and filed an application to register bennigans as a trade mark for restaurant and entertainment services on 9 March 1995.

On the same day that Conquip filed an application to register bennigans as a trade mark, it also applied to remove trade mark number 376352 - S & A Restaurant’s 1982 registration of bennigan’s .

The grounds of opposition

I turn now to the grounds of opposition which I shall deal with in the order they are set down in the notice of opposition.

The applicant has no intention to trade under the name bennigan’s

A challenge from an opponent that a trade mark applicant does not have an intention to use the trade mark which it applies to register, requires the opponent to make good that claim.  As per Fullagar J.  in Aston v Harlee  Manufacturing Co., (1906) 103 CLR 391 at 401,

the making of the application itself is, I think, to be regarded as prima facie evidence of intention to use.  I cannot think that the Registrar is called upon to institute an inquiry as to the intention of any applicant, and I think that, on an opposition or on a motion to expunge, the burden must rest on the opponent or the person aggrieved, of proving the absence of intention.

Conquip does not bring in evidence anything to show the intention of  S & A Restaurant at the time that it filed these trade mark applications.  Instead it relies on the evidence put by S & A Restaurant and on Mr Watson’s statement that, as of January 1997, it had no restaurant business in Australia.  Mr McCormack points me to S & A Restaurant’s registered  trade mark, 376352. He points out  that since June 1982, S & A Restaurant has stood as registered proprietor of the trade mark bennigan’s, and on Mr Watson’s admissions, in the following 15 years to 1997, failed to establish any restaurant service in Australia.  Mr McCormack submits that, on this history, S & A Restaurant cannot have a bona fide intention to use the subject trade marks, bennigan’s grill and bennigan’s.  He wished me to infer that, as of the date of lodgement, January 1993, S & A Restaurant had abandoned all intention to use these marks in the Australian jurisdiction.  He contrasted this situation with that disclosed in the Sizzler case (Sizzler Restaurant International Inc v Sabra International Pty Ltd (1990-1991) 20 IPR 331). There, the evidence made it very clear that Sizzler had actively searched out prospective franchisees and had materially progressed with plans for local development of its restaurant chain. By contrast, he says, S & A Restaurant has not demonstrated any actual franchise negotiations with any prospective Australian organisations.

Mr Cowin, in response, pointed to statements in the Watson and second Sotolongo declarations.  These, he said, clearly and unambiguously show S & A Restaurant’s intention to use these marks.  Mr Watson says while S & A Restaurant has not yet franchised the Bennigan’s concept in Australia, it has an interest in doing so.  Ms Sotolongo says, since the first Bennigan’s restaurant was opened in 1976, the owners intended expanding the chain throughout the United States and, eventually, the world.  To that end, in order to protect its rights, the owners secured trade mark rights for the name bennigan’s in the countries in which it hoped to establish its operations.   Since 1992, she says, Australia has been among the top 15 targeted countries into which S & A Restaurant wishes to expand.  In late 1992 and early 1993, S & A Restaurant conducted research into the Australian market and pursued negotiations with some prospective Australian franchisees.  These were ultimately unsuccessful but, in early 1993, Ms Sotolongo instructed Phillips Ormonde, through the applicant’s US trade mark attorney, to file for registration of bennigan’s and bennigan’s grill.  At that date, she says, S & A Restaurant had the intention to use, by itself and/or under licence, the trade marks throughout Australia in relation to restaurant services. This intention is borne out in a statement from Phillips Ormonde which, in response to the  examiner’s first report, stated, on behalf of S & A Restaurant,

... we advise that this trade mark is used or is proposed to be used by the applicant throughout Australia in relation to all of the services for which registration is sought.

S & A Restaurant does not dispute the fact that, at the date of lodgment (20 January 1993), it had no restaurant service established in Australia. That fact is in its own evidence. In light of this I do take note that at that time S & A Restaurant had a registration for bennigan’s for services which include restaurant services.  However, whatever the implications may be for that registration, the applicant’s evidence shows that S & A Restaurant has long held an intention to expand its restaurant chain beyond the shores of the United States. As of January 1993, Ms Sotolongo has demonstrated S & A Restaurant’s interest in international expansion, and its interest in achieving a presence in Australia.  On the evidence I am not able to infer that S & A Restaurant had at any time abandoned its intention to use its trade marks in the Australian jurisdiction, or that it had no intention to use these marks on the nominated services. Certainly, S & A Restaurant’s level of activity is much less intense that the level of activity demonstrated in the Sizzler opposition (supra)— but Sizzler Restaurant International Inc was not out to establish simply an intention to use — it was out to establish proprietorship through a claim at common law. In contradistinction, S & A Restaurant has only to show an intention to use.

Mr McCormack has argued that the inference of intended use which attaches to S & A Restaurant’s applications to register bennigan’s grill and bennigan’s is, to a degree, weakened by the length of time it has been the registered owner of bennigan’s (376352), and its acknowledgment that it has failed to deliver any restaurant services in this country. However, I find that there is nothing in the Conquip evidence to rebut the statements made by Mr Watson and  Ms Sotolongo.  Their evidence demonstrates that S & A Restaurant has a significant business in the United States which it developed in association with the mark bennigan’s; that it is extending its operations internationally;  and that in the course of pursuing this objective, it has a real intention to provide restaurant services in Australia. In the light of that evidence, I am not prepared to hold that the circumstances of S & A Restaurant’s earlier registration can be taken to have diminished that intention.

I find then that the burden on the opponent of proving the absence of intention has not been acquitted. I am satisfied that these applications were made with the intention that the trade mark would be used in respect of the services nominated. I therefore dismiss this ground of opposition.

The opponents have acquired prior rights to the name through use in Australia

For this ground Conquip cites section 40(1) -

A person who claims to be the proprietor of a trade mark may make application to the Registrar for the registration of that trade mark in Part A or Part B of the Register.

The effect of this section has been settled as per the High Court ruling in Shell Co. (Aust.) Ltd, v Rohm and Haas Co, 78 CLR 601:

[I]t is clear enough from the course of legislation and of decisions that an application to register a trade mark so far unused must, equally with a trade mark the title to which depends on prior user, be founded on proprietorship.  The basis  of a claim to proprietorship in a trade mark so far unused has been found in the combined effect or authorship of the mark, the intention to use it upon or in connection with the goods and the applying for registration

per Justice Dixon - and through a long line of case law  to Karu Pty Ltd v Jose (1994-1995) 30 IPR 407.

It is evident (from the Lambropoulos declaration) that Conquip started to use the trade mark bennigans in 1994. The S & A Restaurant application, however, was lodged on 20 January 1993 - that is some 12 months earlier. Conquip thus did not achieve first use, and cannot claim first use as a ground for a superior proprietorship.

Mr McCormack, however, put an argument that, in the face of S & A Restaurant’s admitted lack of use of the trade mark,  Conquip’s common law usage established its superior claim. The facts are, however, that Conquip commenced its use in the face both of S & A Restaurant’s 1982 registration and of its pending 1993 trade mark applications. As I mentioned above, when Conquip lodged its trade mark application, it simultaneously lodged an action to remove the 1982 mark.  It seems clear, therefore, that Conquip proceeded with its use of bennigans  in full knowledge of S & A Restaurant’s Australian trade marks.   While I have no reason to doubt that Conquip honestly adopted its trade mark, I also must take note of the court’s attitude to assiduous infringement (Re Bali Brassiere Co. Inc.'s Registered Trade Mark and Berlei Ltd.'s  Application (1968) 118 C.L.R. 128, at p. 133; Riv-Oland Marble Co. (Vic) Pty Limited v Settef SpA (1988) AIPC 90-517; Murray Goulburn Co-operative Co Limited v The New South Wales Dairy Corporation, [1990] AIPC 90-664). Contrary to Mr McCormack’s claim that Conquip’s use could upset the S & A Restaurant proprietorship, Conquip’s activity appears to me to open up issues of infringement, and I am not prepared to hold that Conquip’s use of bennigans conducted, as it was, in the face of S & A Restaurant’s registered and pending trade mark rights, entitles it to a superior claim of proprietorship.

Accordingly, I dismiss the ground of opposition founded on proprietorship and section 40.

The opponent’s mark is so well known in the market place that the applicant’s mark is likely to deceive or cause confusion

This ground relies upon section 28, paragraph (a) and, in accordance with the finding of the High Court in Murray Goulburn Co-operative Co Limited v The New South Wales Dairy Corporation, [1990] AIPC 90-664, and the subsequent directives of the CanonKabushiki Kaisha v Brooks and Another 36 IPR 88, and Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd, 38 IPR 495, paragraph 28(a) is to be read conjunctively with paragraph 28(d).

As submitted by Mr Cowin, the test to be applied under paragraph 28(a) is well established and, as enunciated by Evershed J in Smith Heyden & Co.’s  Application (1946) 63 RPC 97, can be stated as follows:

Having regard to the opponent’s use of the mark bennigan’s, is the tribunal satisfied that the marks applied for, that is bennigan’s grill and bennigan’s, if used in a normal and fair manner in connection with any services covered by the proposed registrations, will not be reasonably likely to cause deception or confusion among a substantial number of persons?

As per Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592, this test is to be determined as of the date of application - 20 January 1993.  At that date, on the evidence, Conquip had not commenced business and had not started to use the trade mark bennigans.  Consequently, I find that on 20 January 1993 there was no likelihood whatsoever that, as regards any use by Conquip, the applicant’s trade marks bennigan’s grill and bennigan’s were likely to give rise to deception or confusion.

With regard to section 28(d)  Mr McCormack  proposed that S & A Restaurant was to be held blameworthy through not mounting an infringement action against Conquip.  Rights had to be preserved, he said, or they were lost, and through neglect, S & A Restaurant had forfeited its rights.  The subjects of  its current applications should therefore be held not entitled to protection in a court of justice.   As Mr Cowin pointed out, however, this test also applied as of the date of lodgment, and at that date, the current applications gave S & A Restaurant no right to take an infringement action.

I find no substance in the opposition so far as it relies on paragraphs 28(a) or 28(d), and I dismiss this third ground.

Decision

Each of the three grounds has failed, and so must the opposition.  Subject to any appeal, these two trade mark applications, 594459 and 594460 may proceed to registration.

Costs

Mr McCormack has asked for costs on the bases of S & A Restaurant’s alleged neglect of its trade marks in respect of use, and of infringement. As regards the present applications, however, use prior to filing is not a requirement, and no infringement action is available until the trade marks are registered. As regards trade mark 376352, there is no statutory obligation on a proprietor to raise infringement actions and, in light of the evidence of use, there may well be good reason which deterred S & A Restaurant from reliance on that registration. On the other hand, all the details of the S & A Restaurant trade marks would have been available to Conquip if it had it searched the Register in 1994.  I understand from the evidence, and from the filing of the non-use application, that Conquip did carry out a search and had discovered the S & A Restaurant trade mark registration and its pending applications. Conquip thus proceeded to use the trade mark bennigans in knowledge of these existing and prospective trade mark rights.

On balance I see no reason why the costs should not follow the event, and I therefore award them to the trade mark applicant.

Helen R. Hardie
Deputy Registrar

25 August 1998