Re: Opposition by Flow Systems Pty Ltd to registration of trade mark application number 1828633 (class 4) - Flow Power in the name of Progressive Green Pty Ltd

[2020] ATMO 3

TRADE MARKS ACT 1995

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

Re:Opposition by Flow Systems Pty Ltd to registration of trade mark application number 1828633 (class 4) – FLOW POWER - in the name of Progressive Green Pty Ltd

Delegate:	M.Cooper
Representation:	Opponent: Margaret Shearer of Banki Haddock Fiora Applicant: Peter Creighton-Selvay of counsel instructed by Epiphany Law
Decision:	2020 ATMO 3 Trade Marks Act 1995 (Cth) – opposition under section 52 – ss 58, 59, 60 and 42(b) considered – no opposition grounds established – trade mark to proceed to registration.

Background

1. This matter concerns an opposition by Flow Systems Pty. Ltd. (‘the Opponent’), under s 52 of the Trade Marks Act 1995 (‘the Act’), to registration of the trade mark detailed below in the name of Progressive Green Pty. Ltd.  (‘the Applicant’):

   Application Number: 1828633

   Trade Mark: FLOW POWER

   (‘the Trade Mark’)

   Filing Date: 6 March 2017

   Goods and Services

   Class 4:

   Electricity (energy); electrical energy, including electrical energy generated using non-renewable energy sources such as coal and renewable energy sources such as solar, wind, wave and geothermal energy

   (‘the Goods’)

2. The Trade Mark was examined and advertised as accepted for possible registration on 27 July 2017 in the Australian Official Journal of Trade Marks.

3. On 27 September 2017, the Opponent filed a Notice of Intention to Oppose registration of the Trade Mark. On 27 October 2017, a Statement of Grounds and Particulars (‘SGP’) was filed which cited opposition grounds under ss 42(b), 58, 59 and 60 of the Act.

4. The Applicant filed a Notice of Intention to Defend (‘NID’) on 29 November 2017.

5. On 28 June 2019 the Applicant requested a hearing. I heard the matter in Melbourne on 7 November 2019 as a delegate of the Registrar of Trade Marks. Mr. Creighton-Selvay of counsel, with David Kwei of Epiphany Law, appeared for the Opponent. The Applicant was represented by Margaret Shearer, with Vina Ngo, of Banki Haddock Fiora.

   Evidence

6. Evidence in Support was filed by the Opponent on 6 March 2018. It comprised the statutory declarations of

   ·     Terence James Leckie made 5 March 2018 with exhibits TL-1 to TL-13 (‘the Leckie declaration’).

   ·     Harry Francis Knight dated 6 March 2018 with exhibits HK-1 to HK-6 (‘the Knight declaration’).

7. The Applicant’s Evidence in Answer was filed on 19 June 2018. It comprised the statutory declarations of

   ·     Bill van der Linden dated 8 June 2018 with exhibits BVDL-1 to BVDL-12 (‘the Linden declaration’).

   ·     Tiburce Blanchy dated 19 June 2018 with exhibits TB-1 to TB-12 (‘the Blanchy declaration’).

   ·     David Wah Hao Kwei dated 4 July 2018 with exhibits DWK-1 to DWK-10 (‘the Kwei declaration’).

8. The Opponent’s Evidence in Reply, filed on 21 May 2019 following the expiry of a cooling off period, comprised the statutory declaration of Andrew David McKillican, dated 21 May 2019 containing exhibits ADM-1 to ADM-5 (‘the McKillican declaration’).

9. In accordance with directions, the Opponent and Applicant filed written submissions on 18 and 25 September 2019 respectively. These are discussed further below.

   Evidence in support

10. In his declaration, Harry Knight a solicitor employed by the Opponent’s legal representatives, exhibited the Trade Mark application, various screenshots of the Applicant’s website, the Applicant’s authorisation by the Australian Energy Regulator (‘AER’) on 1 July 2012 as an electricity retailer and the announcement in February 2018 that a Canadian pension fund had acquired a majority share of the Applicant.

11. In his declaration, Terence Leckie, the Opponent’s founder and Executive Director, described its creation on 27 March 2009 as Australia’s ‘first sustainable water utility’. He said that in 2013 it decided to expand to provide embedded energy services to off-grid and strata communities, ‘providing private energy and water utility infrastructure and services’. By 2016 it had commenced retailing embedded energy network services under agency agreements with owners’ corporations and body corporates in NSW and Queensland. In 2017 the Opponent acquired Retail Authorisation from the Australian Energy Regulator (‘AER’) ‘to retail electricity directly to customers’ and it broadened its community-specific energy offerings to include ‘thermal services (such as efficient control hot water, cooker gas and air-conditioning) and onsite solar and cogeneration.’ He claimed that it is now ‘a successful and sustainable water services infrastructure operator and retail water and energy supply business’, currently contracted with owners’ corporations and body corporates to service approximately 27,500 customers in NSW and Queensland.

12. He exhibited Wayback Machine screenshots which he asserted showed the Opponent’s use of ‘FLOW’ as a trade mark for water in 2013 and for both water and energy utility services since 2014. He noted the registration of the business names Flow Systems and Flow Utilities and the Opponent’s domain name flowsystems.com.au. Various financial figures relating to revenue and promotion under FLOW and FLOW SYSTEMS (‘the Opponent’s marks’) were provided, of which he claimed embedded energy services represented one third.

13. In addition, several documents were exhibited, such as submissions to government, regulators, industry groups and developer clients; articles in third party publications and video presentations which were said to demonstrate use of the Opponent’s marks and its substantial reputation in them. He claimed that the use of the Trade Mark in relation to the Goods would be likely to deceive or cause confusion.

    Evidence in answer

14. In his declaration, Mr. Van der Linden, the Applicant’s Compliance Manager, outlined the Applicant’s history, noting that it was incorporated on 14 March 2008 but had traded under the different marks and domain names as listed. The business name ‘Flow Power’ was registered on 1 March 2017. He said it is a specialist electricity retailer which offers wholesale market access within the National Electricity Market (NEM), had purchased electricity from the NEM wholesale spot market daily from 7 June 2016, on-selling it to end-user customers at a small margin. He claimed the Applicant had built up significant market presence since its first authorisation to sell electricity in Victoria in 2009, offering its services initially as PG Energy. On 10 March 2017 he said it commenced offering goods and services under the Trade Mark. He said the energy sold includes non-renewable resources.

15. In his declaration, David Kwei, solicitor employed by the Applicant’s legal representatives, outlines his visits to the Opponent’s websites and their redirection to the Pitt Town Water and Central Park websites. The content of these websites indicates that they are subsidiaries of the Opponent, providing water utility services to these particular communities.

16. In his declaration, Tiburce Blanchy, director of Adour Pty Ltd which he described as a ‘boutique firm specialising in providing advice in relation to wholesale energy markets, including markets for electricity, gas, renewable, oil and carbon’, claimed to have worked in the electricity industry since 1997 and to have expert knowledge of the Australian energy industry. He outlined the operation of the Australian electricity supply chain as follows:

    The Australian electricity supply chain is divided into wholesale and retail markets, and energy networks all regulated by the Australian Energy Regulation (AER) and governed by the Australian Energy Market Commission (AEMC). The National Energy Market (NEM) is a competitive wholesale market which facilitates exchange of electricity from generators to consumers. It is operated by the Australian Energy Market Operator (AEMO).

17. He explained that through the NEM, electricity generators produce electricity into a ‘pool’ and get paid a spot price; network operators deliver the energy from the pool to the end users; energy retailers, who act as an interface between the wholesale market (generation, networks) and the consumers (end-users), buy electricity and package it with transport and sell it to the end users. They issue customers with a bill based on a meter-read and collect the payment to recover their costs, network charges and profit.

18. He described the end-users, or customers, as of 3 types – small customers, mostly residential and SMEs; large customers; and Exempt Embedded Network Service providers or energy onsellers- e.g. caravan park owners, office block and shop owners who must obtain an exemption from the AER and must appoint an embedded network manager, as the interface between the embedded network and the NEM. They do not buy or sell electricity ‘but provide ancillary services to market operations and commercial transactions’.

19. In analysing the Opponent’s projects and operations as outlined in the Leckie declaration and associated exhibits he relevantly stated that:

    ·     The water utility and thermal energy services are a separate industry from the electricity market.

    ·     The Opponent was unable to onsell electricity because it did not have retail authorisation until 28 September 2017 and in its AER application for authorisation it did not indicate any previous experience selling electricity.

    ·     The AER website does not disclose that the Opponent held a retailer exemption prior to this date. A search of the AER website indicates that Brookfield or other companies held the relevant exemptions for two projects claimed by the Opponent.

20. He concluded that the Opponent appeared to specialise in servicing developers and other embedded network owners and did not provide electricity to end users, as the Applicant did. While the Opponent’s AER application stated that it ‘is contracted to service 5,000 customers’ he clarified that these are customers of the embedded network providers, with the Opponent providing billing and metering services and possibly design services for electrical infrastructure.

21. He claimed that he had not heard of the Opponent before being asked to provide his opinion and deduced from the Leckie declaration that the Opponent has concentrated on providing water and energy infrastructure, extending its services to support the energy transactions of its clients who are the market participants. He observed that the Opponent’s evidence indicated that it provided supporting services to its clients (embedded network providers) whose end-users represent 5000 accounts of the 4.9 million residential electricity households in NSW and Queensland.

    Evidence in Reply

22. In his declaration, Andrew David McKillican described his role as the Opponent’s Executive Manager, Energy Solutions, responsible for oversight of ‘the energy business, energy pricing, market strategy, business development, product design and personnel management’.

23. He outlined his awareness of confusion in the market arising from the Applicant’s use of the Trade Mark and exhibited three emails, dated in 2018, purporting to demonstrate this. He claimed that the Opponent has operated and continues to operate in the water utility industry and also provides services to help reduce energy and electricity costs. He stated his belief that the Opponent ‘provides electricity in the course of trade which is the same kind of thing as the goods of the FLOW POWER operation.’

    Preliminary issue

24. The Applicant attached to its written submissions an Administrator’s Report (‘the Report’), dated December 2018 prepared under the Insolvency Practice Rules (Corporations) 2016 (Cth), in relation to a group of 16 companies which included the Opponent (‘the Group’). The Report’s purpose was ‘to table the findings of our investigations into the Groups’ business, property, affairs and financial circumstances, as well as setting out our opinion on the three options available to creditors in deciding the future of each Group company’. The Opponent objected to the late filing of this report, noting that no application had been made under reg 21 of the Trade Mark Regulations 1995 (Cth) and that it should have been afforded more notice. It further noted that the Opponent is no longer in voluntary administration and the negative assumptions and inferences sought to be drawn by the Applicant were irrelevant and should be given no weight. It contended that the differences in the financial figures contained in the Report and those in the Leckie declaration were explicable by the different accounting methods used.

25. The Applicant maintained that the Report contents were probative because, among other things, and contrary to the figures contained in the Leckie declaration, they indicated that the Opponent had made a financial loss 3 years in a row. Furthermore, the revenue claimed actually reflected the revenue for the 16 companies in the Group. Overall therefore the contents of the Leckie declaration were said to be unreliable and should be treated with caution.

26. In the absence of a request by the Opponent for further time to make additional submissions, I advised the parties at the hearing that I considered there was a compelling case to allow the material under reg 21.15(4) because it was highly probative of the issues before me and it was in the public interest in ensuring the integrity of the Register that all relevant material was before the delegate. The weight I attach to its contents is another matter. Given the reschedule of the hearing to a later date, I considered that the Opponent had sufficient time and a full opportunity to respond.

27. There was some later correspondence about this issue however no further formal submissions were filed.

    Onus and standard of proof

28. 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 goods and services of an opposed trade mark. The standard of proof required is on the balance of probabilities.[1]

    [1] 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].

29. As noted above, the Opposition grounds particularised in the SGP are those under ss 58, 59, 60 and 42(b) of the Act. The Opponent pressed all grounds.

30. The time at which a ground of opposition must be established is the date of filing of the application for registration.[2] In this case that date is 6 March 2017 (‘the relevant date’), also referred to as the ‘priority date’ in s 60.

    [2] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 [595].

    Consideration and reasons

31. The Opponent’s grounds of opposition are discussed below.

    Section 58

32. 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.

33. In the SGP the Opponent claimed as follows:

    The applicant is not the owner of the trade mark that is the subject of Australian Trade Mark Application 1828633 FLOW POWER (Trade Mark). The Opponent has used the trade marks FLOW AND FLOW SYSTEMS (Opponent’s FLOW Trade Marks) in Australia since at least 2013 in relation to the provision of water services, and since at least 2014 in relation to the provision of energy services in Australia. The Trade Mark is substantially identical to the Opponent’s FLOW Trade Marks. The Opponent’s use of the Opponent’s FLOW Trade Marks is prior to the filing date of the Application and is in relation to the same kind of thing as the goods of the Application.

34. Having regard to s 58, the Full Federal Court in Pham Global identified the relevant principles.[3] To succeed on this opposition ground, an opponent needs to establish that there is another mark that is identical or substantially identical to the applicant’s mark, that this mark has been used in respect of goods and services that are ‘the same kind of thing’ as the applicant’s mark and that another person/entity has the earlier claim to ownership based on its use of its mark/s before the filing of an applicant’s mark or any use of it as a trade mark.

    [3] Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83 [50] (‘Pham Global’).

    Same kind of thing

35. As noted above, in order to establish ownership, it is necessary to demonstrate that the use claimed was “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”.[4]

    [4] Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd [2018] FCAFC 6 [49].

36. What constitutes goods or services “of the same kind” was considered by Allsop J in Colorado Group Ltd v Strandbags Group Pty Ltd (“Colorado”):

    The aim of the enquiry is not to find some broad genus in which some common functional or aesthetic purpose can be identified. Nor is it an enquiry about the type of trade in which concurrent use might cause confusion. Rather, it is identifying, in a practical, common sense way, the true equivalent kind of thing or article. For example, use of a mark on hatchets or small axes, created proprietorship in relation to axes: Jackson v Napper 35 Ch D 160. This approach recognises ownership or proprietorship in a mark beyond the very goods on which the mark is used, to goods "though not identical... yet substantially the same" (Hemming HB, Sebastian’s Law of Trade Marks (4th Ed) p 91) or "goods essentially the same... though they pass under a different name owing to slight variations in shape and size" (Kerly DM and Underhay FG, Kerly on Trade Marks (3rd Ed) p 206). This approach is conformable with the terms of the 1995 Act.[5]

    [5] Colorado Group Ltd v Strandbags Group Pty Ltd [2007] FCAFC 184 [88-9].

37. In its submissions the Opponent outlined the energy and water utility services which it contended were the ‘same kind of thing’ as the Goods. They were relevantly said to include ‘embedded energy networks, embedded electricity distribution and electricity retail services (including energy procurement services, billing services and embedded on-seller retail services)’. While the Opponent acknowledged that it was not an authorised electricity retailer at the relevant date, it maintained that there were ‘other ways in which electricity can be sold and electricity retailing undertaken.’ It claimed it did this by acting as an agent for owner’s corporations and developers to obtain electricity from authorised retailers and then measure the electrical use by individual unit holders and invoice them directly.

38. As noted by the Applicant, this latter claim ‘has no foundation in the evidence.’ It maintained that the evidence demonstrated the Opponent ‘was not the owner of any embedded network… and therefore was not the entity selling the electricity’. It referred to the Blanchy declaration and the examples therein of the AER Retail Exemption Application by Brookfield District Energy for one of the developments nominated by the Opponent (TB-5). It demonstrated that it was the entity on-selling the electricity in that development, not the Opponent. On the evidence, the Opponent’s role was limited to providing ‘billing and metering services to energy on-sellers, who were its clients, not to the end-users of the electricity’.

39. Having carefully considered the evidence, I make the following observations of the use of the Opponent’s marks at the relevant date:

    ·     The Opponent was not an authorised electricity retailer or an exempt embedded network service provider.

    ·     Its clients were the developers/owner’s corporations/embedded energy networks, not the individual end users of electricity.

    ·     In the absence of persuasive evidence otherwise, I retain significant reservations that any of these contracts with developers/owner’s corporations were made by the Opponent (as opposed to other entities in the Group).

40. In this context I also give significant weight to the evidence provided by Blanchy, who I accept is an experienced person in the field, that the water utility and energy services industry is a separate market to the electricity market. He also observed that the Opponent’s AER application for authorisation it did not indicate any previous experience selling electricity.

1. Taken together, I am not satisfied that the goods provided under the Opponent’s marks can be  appropriately characterised as ‘essentially the same’ or ‘the same kind of thing’ as the Goods.

2. Given this, it is not necessary to consider the other elements of s 58. The Opponent has not established this ground of opposition.

   Section 59

3. Section 59 provides as follows:

   Applicant not intending to use trade mark

   The registration of a trade mark may be opposed on the ground that the applicant does not intend:

   (a)  to use, or authorise the use of, the trade mark in Australia; or

   (b)  to assign the trade mark to a body corporate for use by the body corporate in Australia;

   in relation to the goods and/or services specified in the application.

4. The Opponent has particularised the ground of opposition in the SGP in the manner set out below:

   The Application covers ‘Electricity (energy); electrical energy, including electrical energy generated using non-renewable energy sources such as coal and renewable energy sources such as solar, wind, wave and geothermal energy’ in class 4. The Applicant is a wholesale power provider and does not provide electricity itself as a good. The Applicant provides electricity services and can therefore have no intention to use the Trade Mark in relation to the goods of the Application.

5. Essentially the Opponent submitted that because the Applicant ‘does not have the relevant capacity to manufacture the relevant goods… the Applicant cannot have intended to use the mark FLOW POWER in relation to the goods..’ at the time it made the application.

6. The Applicant submitted there is no requirement, to substantiate trade mark use, that the user of the mark must manufacture the goods in respect of which it is used. The Applicant only need establish that it intends to use the Trade Mark ‘to distinguish the relevant goods (here, electricity) dealt with in the course of trade from [those] so dealt with by someone else.’ It noted AEMO’s explanation of the electricity market, and that the unique characteristics of electricity are such that ‘because one unit of electricity is indistinguishable from all other units, it is impossible to determine which generator produced which electricity.’  Consequently, when the Applicant purchases electricity which does not otherwise bear any trade mark and onsells it to end users under and by reference to the Trade Mark, ‘it constitutes classic trade mark usage’.

7. As Aickin J said in Pioneer Kabushiki Kaisha v. Registrar of Trade Marks[6]

   There is no foundation for the proposition that a registered user must manufacture the goods, any more than there is in the case of a registered proprietor, and it is plainly contrary to the authorities dealing with the nature of the required connexion in the course of trade. In the end counsel for the Registrar conceded that there were modes of using a mark other than physically marking the goods themselves, and kinds of connexions with the goods other than manufacture, a concession very properly made.

   [6] [1977] HCA 56; (1977) 137 CLR 670, 684

8. In the context of s 59, the Full Court said in Food Channel Network Pty Ltd v Television Food Network GP (‘Food Channel’):

   As has been noted, the filing of an application for registration of a mark is prima facie evidence of an intention to use that mark. Once an opponent has made out a prima facie case that there was a lack of intention to use a mark, it has been held that the onus shifts to the applicant to establish that intention. [7]

   [7] [2010] FCAFC 58, 72; (2010) 185 FCR 9; (2010) 269 ALR 17; (2010) 86 IPR 437; [2010] AIPC 92-383

9. Given the above, I am not satisfied that the Opponent has established a prima facie case that the Applicant did not intend to use the Trade Mark. Therefore, on the material before me and with reference to the relevant authorities, I am not satisfied that the Opponent has shifted the onus. Accordingly, the s 59 ground of opposition has not been established.

   Section 60

10. Section 60 provides as follows:

    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.

    Note:          For priority date see section 12.

11. Therefore, to establish the s 60 ground of opposition, an Opponent must demonstrate that, at the relevant date, there was another trade mark that had acquired a reputation in Australia and because of that reputation, use of the Trade Mark would be likely to deceive or cause confusion.

12. In its SGP the Opponent stated as follows:

    The Opponent has used the Opponent’s FLOW trade marks in Australia since at least 2013 in relation to the provision of water services, and since at least 2014 in relation to the provision of energy services in Australia. In light of this extensive use, the Opponent’s FLOW trade marks have become well known and have acquired a valuable reputation in the Australian marketplace in respect of the Opponent’s goods and services.

    The reputation held by the Opponent in the Opponent’s FLOW Trade Marks is such that the use of the Trade Mark on the goods of the Application is likely to deceive or cause confusion.

13. The Opponent submitted that its evidence demonstrated its substantial reputation. It nominated its use of the Opponent’s marks in invoices for energy services from 1 April 2014 to 2 December 2016, development agreements with several builders and owner’s corporations and its operation of established water utility services with a variety of communities (in NSW). It also contended that it used the Opponent’s marks in submissions to government, industry groups and developers, events and presentations, and articles in various publications. It claimed substantial revenue figures and that significant sums were spent on promotion. It submitted that it was reasonable to infer from these that the Opponent had a substantial reputation in the Opponent’s marks. It was contended that because of the similarity of the marks and the close relationship between the goods (water and energy utilities are inter-related and often offered and marketed as a bundle), that consumers, on seeing the Trade Mark would be ‘likely to wonder’ whether it was related or connected with the Opponent’s services. It noted the evidence of confusion outlined in the McKillican declaration which it submitted was caused by the Opponent’s substantial reputation in its marks.

14. The Applicant contended that to establish the necessary reputation the Opponent must show that ‘a substantial number of the 10+ million customers within the National Electricity Market were aware of the [Opponent’s marks] as at the Priority Date’. It submitted that the Opponent’s evidence did not establish that any of its claimed customer base was in place at the relevant date or whether energy was being delivered under the Opponent’s marks. It noted ‘a number of fundamental problems’ with the Opponent’s evidence such that it did not establish the sufficient reputation for the purposes of s 60 and that ‘much of the commercial activity on which the opponent seeks to rely ... did not feature any meaningful use of the [Opponent’s marks] at all.’ In relation to the Opponent’s invoicing claims, the Applicant observed the lack of supporting evidence and that the Opponent’s ‘[u]ndocumented practice of invoicing an unqualified number of customers using unidentified trade marks did not assist in establishing the requisite reputation’. In relation to the Opponent’s reliance on agreements with developers, the Applicant observed these were either not exhibited or that such evidence there is does not disclose when the agreements were executed or whether they referred to the Opponent’s marks. Furthermore, it submitted that the Administrator’s Report indicated that these agreements were not executed by the Opponent and it was unclear if the revenue and expenditure figures were specific to the Opponent’s marks or related to others in the ‘FS Group’s stable’. In addition it was contended that the evidence of promotional materials and submissions and presentations had no probative value because the Opponent had failed to demonstrate how much of the material was produced and to whom, the extent of the circulation of the submissions and presentations or that any of persons to whom they were delivered ever became a customer. It also noted that a number post-dated the relevant date and/or are policy documents which do not demonstrate use of the Opponent’s marks within the meaning of s 17 of the Act.

15. The Applicant also submitted that the Opponent’s failure to establish any reputation in its marks in relation to electricity was reinforced by Blanchy, an expert in the field who had never heard of the Opponent. It contended that the evidence of the Opponent’s reputation in water utility services is ‘a long way removed from electricity.’ The deficiencies in the limited evidence of purported confusion were also noted.  It was also submitted that electricity is not a good purchased on impulse and that customers ‘are sophisticated and highly engaged in their energy purchase decisions’. In such a context the possibility of confusion was diminished.

    Reputation

16. As referred to by both the Applicant and Opponent, Kenny J’s remarks in McCormick in relation to s 60 and the measurement of reputation are relevant:

    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: see, e.g., Isuzu-General Motors Australia Ltd v Jackeroo World Pty Ltd (1999) 47 IPR 198; Marks & Spencer plc v Effem Foods Pty Ltd (2000) AIPC 91-560; Photo Disc Inc v Gibson (1998) 42 IPR 473; and RS Components Ltd v Holophane Corp (1999) 46 IPR 451. This Court has followed this approach as well, acknowledging that public awareness of and regard for a mark tends to correlate with appreciation of the products with which that mark is associated, as evidenced by sales volume, amongst other things. Thus, in Toddler Kindy Gymbaroo Pty Ltd v Gymboree Pty Ltd [2000] FCA 618 (‘Gymboree’), Moore J accepted at [94] that the applicant had established a reputation for the purposes of s 60 solely on the basis of use and promotion of the relevant mark. Another example of this approach is Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd (1997) 38 IPR 495 (‘Nettlefold’), in which Heerey J relied upon the public visibility of the applicant’s marks over approximately two decades as well as a $100,000 promotional campaign in finding that a reputation for the purposes of s 28 of the 1955 Act existed.[8]

    [8] McCormick [86].

17. The Opponent’s submissions asserted a significant reputation based on its use of the Opponent’s marks in Australia commencing in 2013 in relation to water and from 2014 in relation to energy utility services.

18. The evidence demonstrates that the Opponent is one of many companies operating under the umbrella of Brookfield. ‘Flow’ and ‘Flow Systems’ appear in the documentation over the period 2013 to 2016 in which the Opponent most frequently describes itself as ‘a multi-utility company specialising in the design, operation, management and retailing of local sustainable water and energy infrastructure and services. Flow is a Brookfield company.’ Similarly, ‘Flow Systems is leading Brookfield’s sustainability multi-utility business in Australia, offering water and energy solutions for new housing and urban infill developments’. At its highest, the evidence of the various proposals and submissions the Opponent made to various organisations indicate that it is a provider of infrastructure solutions. As I understand it, the ‘energy infrastructure services’ to which the Applicant refers and which relate to electricity were to its embedded energy provider clients. There was no evidence that electricity was provided under or by reference to the Opponent’s marks or that they were visible to the actual consumers of the electricity.

19. Furthermore, the only evidence of one of these agreements (or offers) indicates it was entered into by Flow Systems Operations Pty. Ltd., not the Opponent. Similarly, the brochure concerning Sydney airport activities[9], while badged with ‘Brookfield’ and ‘Flow Systems’ at the end of the brochure, indicates that a Brookfield company installed the energy infrastructure and it is operated by another Brookfield company. The Blanchy declaration also demonstrates that the relevant retail licences for two other developments were not held by the Opponent but by other entities.

    [9] Exhibit TL-10, page 236

20. There is also no objective support for the Opponent’s revenue and promotion figures or its claim that one-third of its revenue was from its embedded energy services, or even that they were provided under the Opponent’s marks. On the contrary, as the Applicant observed, the Administrator’s report indicates that the revenue disclosed was the total for the Group of 16 companies.  On this basis I am not satisfied that these figures are either reliable or attributable to the Opponent or the use of the Opponent’s marks. It follows that I do not accept they form a basis on which to infer the Opponent’s reputation.

21. In addition, other evidence is either undated or post-dates the relevant date. For example, the Opponent’s application to the AER for an authorisation enabling it to deliver electricity directly to customers was made on 5 June 2017 and granted on 28 September 2017. Its domain name registration displays 11 October 2017.  The company Flow Systems Pty Ltd was registered on 19 July 2017 and the relevant website screenshots are dated in March 2018.

22. In order to enliven s 60, as Heerey J said in Le Cordon Bleu B.V. v Cordon Bleu International Ltee:

    ...the reputation contended for by the [opponent] would have to be one of which a significant or substantial number of persons were aware: ConAgra at FCR 346. What is ‘significant’ or ‘substantial’ will depend on the nature of the goods or services in question. For some highly specialised products, awareness among a few thousand persons, or even less, might be sufficient.[10]

    [10] Le Cordon Bleu BV v Cordon Bleu International Ltee [2000] FCA 1587 [91]

23. This view was endorsed by the Full Court in Renaud Cointreau, in upholding Heerey J’s approach:

    [H]is Honour correctly stated the test as being whether the reputation [of the mark] is one of which a significant number of people would be aware. He proceeded to say that the reputation of the trade mark must be of such a nature and extent as to create a real tangible danger of deception or confusion.’ [11]

    [11] Renaud Cointreau v Cordon Bleu International Ltee [2001] FCA 1170 [75]

24. The Goods in question are electricity. This is not a ‘highly specialised’ product but one with which most Australians are familiar and use every day. Therefore, to enliven s 60, the Opponent needs to demonstrate an awareness or appreciation of the Opponent’s marks among a significant or substantial number of Australian electricity consumers before the relevant date.

25. Based on the evidence as discussed above, I am not satisfied that the Opponent has done so. That is, while the evidence might be regarded as establishing the Opponent’s reputation at the relevant date in relation to water utility services, I am not satisfied that the Opponent’s marks had acquired a sufficient reputation among actual or potential Australian consumers of electricity for the purposes of s 60(a) at the relevant date.

26. In the circumstances it is unnecessary to consider s 60(b). It follows that the Opponent has not established the s 60 ground of opposition.

    Section 42(b) 

27. Section 42(b) of the Act provides:

    Trade mark scandalous or its use contrary to law
                       An application for the registration of a trade mark must be rejected if:
       (a) …; or

    (b)  its use would be contrary to law.

28. In its SGP the Opponent particularised this ground as follows:

    Because of the use by the Opponent of the Opponent’s FLOW Trade Marks as detailed in relation to ground 3 above, use of the Trade Mark would be likely to deceive or cause confusion, in breach of section 18(1) of the Australian Consumer Law 2010 and constitute passing off at common law. It is highly likely that an Australian consumer, upon seeing the Trade Mark and knowing the Opponent and the Opponent’s FLOW Trade Marks, would be confused or deceived into believing that the goods or services upon which the Trade Mark is used are related to the Opponent, or are traded with the authority or licence of the Opponent.

29. The onus is on the Opponent to establish that use of the Trade Mark would be, rather than could be, contrary to law on the balance of probabilities[12].

    [12] Advantage Rent-A-Car Inc v Advantage Car Renal Pty Ltd (2001) 52 IPR 24, [28].

30. Section 18 of the Australian Consumer Law (‘ACL’), formerly s.52 of the Trade Practices Act 1974 (‘TPA’), requires a likelihood that Australian consumers would be misled or deceived as to the true origin of the designated goods and/or services or their connection with the Opponent.

31. Several cases confirm that more is required to establish a likelihood of misleading or deceptive conduct under the ACL than is the case with trade marks likely to deceive or cause confusion under s 60. [13]

    [13] For example, Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1981] HCA 44; (1982) 149 CLR 191,199.

32. I note my findings above that the s 60 ground of opposition has not been established. In this context, where the Opponent has not established the relevant reputation, I am not satisfied, in the absence of any further persuasive evidence in this regard, that it has discharged the onus on it to establish that use of the Trade Mark would be likely to mislead or deceive within the meaning of s 18 of the ACL. It follows that I am not satisfied that the Opponent has established that use of the Trade Mark would be contrary to law in the sense that the Applicant would be regarded as having engaged in misleading or deceptive conduct as required by s 18 of the ACL.

33. The relationship between passing off and (then) s 52 of the TPA was addressed by Hill J in Re Equity Access Pty Ltd v Westpac Banking Corporation where he said:

    The scope for the operation of s 52 will thus be broader than that involved in the tort of passing off so that in a case such as the present where the claim is for the protection of the reputation in a name against the use of that name by another, failure to succeed under s 52 or s 53 will invariably mean that proceedings for passing off would likewise fail.[14]

    [14] Re Equity Access Pty Ltd v Westpac Banking Corporation [1989] FCA 506, [39]; (1989) 16 IPR 431.

34. That is, where use of a trade mark does not contravene s 18 of the ACL, neither will it amount topassing off. Further, there is no persuasive evidence before me that indicates or even suggests a relevant misrepresentation by the Applicant. It follows that the Opponent has not established that use of the Trade Mark would be contrary to law in the sense that it constituted passing off.

35. Accordingly, the s 42(b) ground of opposition has not been established.

    Decision

36. Section 55 of the Act relevantly provides:

    Decision

    (1) Unless subsection (3) applies to the proceedings, 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.

    Note: For limitations see section 6.

1. The Opponent has failed to establish any of the grounds of opposition it nominated in its SGP.

2. This Application may 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.

   Costs

3. The parties have sought costs. I see no reason to depart from the general rule that costs follow the event. As the Opponent has failed to establish a ground of opposition, I award costs against the Opponent as per Schedule 8 of the Trade Marks Regulations 1995.

   Mary-Ann Cooper
   Hearing Officer
   Delegate of the Registrar of Trade Marks
   13 January 2020