Re: Opposition by Southcorp Brands Pty Ltd to registration of trade mark application 1849960 (33) - Perfumen (Fancy) in the name of Shanghai Benka Wines Co., Ltd

[2020] ATMO 9

TRADE MARKS ACT 1995

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

Re:     Opposition by Southcorp Brands Pty Ltd to registration of trade mark application 1849960 (33) – PERFUMEN (Fancy) in the name of Shanghai Benka Wines Co., Ltd

Delegate:

Nicholas Smith

Representation:

Opponent: Self-represented

Applicant: Ran Tao

Decision:

2020 ATMO 9

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

Background

This decision concerns an opposition brought by Southcorp Brands Pty Ltd (‘Opponent’) pursuant to s 52 of the Trade Marks Act 1995 (Cth) (‘Act’) to the registration of the trade mark which is the subject of the application detailed below in the name of Shanghai Benka Wines Co., Ltd (‘Applicant’): 

Application Number:

1849960

Filing Date:

6 June 2017

Goods:

Class 33: Wine; Fruit extracts (alcoholic); Brandy; Whisky; Aperitifs; Liqueurs; Alcoholic beverages (except beer); Baijiu (Chinese distilled alcoholic beverage); Peppermint liqueurs; Cocktails

(‘Applicant’s Goods’)

Trade Mark:

(‘Trade Mark’)

Following the advertisement on 26 October 2017 in the Australian Official Journal of Trade Marks of the Trade Mark’s acceptance for possible registration, the Opponent filed a Notice of Intention to Oppose on 8 November 2017.  The Opponent then filed a Statement of Grounds and Particulars (‘SGP’) on 6 December 2017. The SGP raised grounds of opposition under ss 42(b), 44, 60 and 62A of the Act. The Applicant filed a Notice of Intention to Defend on 15 January 2018.

Evidence

The Opponent filed Evidence in Support of its opposition (‘EIS’) on 19 April 2018.  This evidence consists of a declaration by Andrew Geoffrey Butler, Trade Marks Attorney for the then Opponent’s representative, made on 19 April 2018 with Exhibits AGB-1 to AGB-12 (‘Butler Declaration’).  The Applicant did not file any Evidence in Answer.

Once the time allowed for filing evidence had ended the parties were given an opportunity to request a hearing or to file written submissions.  By letter issuing from IP Australia on 9 October 2018 the parties were notified that as a hearing had not been requested the matter would be given to a delegate of the Registrar for a decision based on the written record.  The letter indicated that the parties had one month from the date of the letter to file any written submissions upon which they wished to rely.  On 6 November 2018 the Opponent filed submissions in this matter (‘Opponent’s Submissions’).  The Applicant did not file any submissions.

I am a delegate of the Registrar of Trade Marks and I am to decide the opposition as required by s 55 of the Act 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

The Opponent is an Australian company that is the wholly owned subsidiary of Treasury Wine Estates Limited and the producer of wine sold under various well-know wine brands including Penfolds.

The relevant claims/statements in the Butler Declaration can be summarised as follows:

•    The Opponent’s Penfolds brand is Australia’s most famous wine brand having been in existence since 1844.  The Penfolds brand has a reputation for high quality wine, including the iconic Grange range, produced since 1951.

•    The Penfolds brand is used either in plain word font (‘Penfolds Mark’) or red cursive script (‘Script Mark’), which is commonly displayed on the Opponent’s Penfolds wine.  The Opponent extensively promotes the Penfolds brand, including through advertising and marketing featuring both the Penfolds Mark and the Script Mark, and sales of wine under the brand are extensive.

•    The Opponent and its parent company are constantly under attack from companies based in China that seek to misappropriate key elements of the Opponent’s branding, including the Script Mark, the Penfolds Mark, its transliteration ‘Ben Fu’ and the Chinese character version of the Penfolds Mark (‘Opponent’s Marks’).

•    The Applicant has engaged in extensive behaviour in China involving the misappropriation of the Opponent’s branding, including seeking to register in China numerous marks that are similar or identical to the Opponent’s Marks.  The Applicant also produces wine with labels that display marks that are stylised in the same manner as the Script Mark and copy various other elements of the Opponent’s labels.

•    The Applicant trades under two separate names (Shanghai Benka Wines Co. Ltd and Shanghai Penkar Wines Co. Ltd) as a way of obscuring its true identity.

•    In summary the Applicant, at the date of application, was aware of the Opponent and seeks to register the Trade Mark as part of a pattern of behaviour (including registering other marks similar to the Opponent’s Marks and producing wine copying the Opponent’s trade dress) of attempting to pass itself off as the Opponent.  Such conduct falls short of commercially acceptable behaviour. 

The Exhibits to the Butler Declaration contain details of the Opponent’s trade mark registrations, the renown of the Penfolds brand, and details of the Applicant’s attempts to register various marks in Australia and China that are similar to the Opponent’s Marks.  

The Applicant

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

As indicated above in the SGP the Opponent nominated grounds of opposition under ss 42(b), 44, 60 and 62A of the Act. To successfully oppose the application the Opponent needs to establish at least one of those grounds. As will become apparent, the Opponent has successfully established a ground of opposition pursuant to s 62A. Accordingly, I have found it necessary to discuss this ground only. 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.

The onus of proof in an opposition rests upon the Opponent.  The relevant standard of proof is the ordinary civil standard based on the balance of probabilities.  The date at which the rights of the parties are to be determined is 6 July 2017 (‘relevant date’), being the filing date of the application in Australia.

Discussion

Section 62A

Section 62A of the Act is reproduced below:

62A Application made in bad faith

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

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.

The case of Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) 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:

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.

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.

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

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

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

…

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

…

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

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

The Applicant and the Opponent are known to each other.  The Opponent has already opposed Application No. 1833316 by the Applicant in Australia for a script form of the word 'Pencards'.  The Opponent has also opposed an application in China for a trade mark which is substantially identical to the opposed trade mark.  That opposition was initiated well before the filing date of the opposed application.  The Applicant was therefore well aware of the Opponent's concerns with respect to the opposed trade mark prior to its filing date, but that notwithstanding elected to proceed to file the opposed application.  The Opponent has also opposed a number of other Chinese applications filed by the Applicant in respect of trade marks which are deceptively similar to the Opponent's well known PENFOLDS trade mark and its Chinese language equivalent and its transliteration thereof.  There is accordingly a pattern of conduct by the Applicant which is calculated to misappropriate the Opponent's reputation in its trade marks. 

The opposed trade mark is represented in the same upper/lower case stylised script form, with a florid upper case 'P' as the Opponent's well known PENFOLDS trade mark.  Further, the opposed trade mark can be represented on alcohol labels in the same colour and upwardly extending manner as the Opponent’s well known PENFOLDS trade mark, including the marks which are the subject of Registration Nos. 227561, 314018, 814667, 822544, 902664, 1061216, 1199837 and 1741400.

The Applicant has further indicated in the opposed application that its name is Shanghai Benka Wines Co. Ltd.  In the many applications filed by the Applicant in China, which have been opposed by the Opponent, the Applicant is identified as Shanghai Penkar Wines Co Ltd.  It is reasonable to infer that the Applicant, by changing its name to 'Benka', is attempting to obscure its true identity in order to prevent detection of its activity in Australia with regard to misappropriation of the reputation in the PENFOLDS trade mark.  The Opponent believes the Applicant is trying to prevent its filing activity with regard to trade marks which are deceptively similar to PENFOLDS from being detected.  In addition, the Opponent has reason to believe that wines bearing the opposed trade mark are destined for the Chinese market in order to compete unfairly with the Opponent’s products there.  The Opponent therefore believes the Applicant filed the application with the intention of gaining some benefit from the reputation subsisting in the Opponent’s trade marks.  Such conduct falls short of commercially acceptable behavior.

In the absence of any evidence in answer I accept the evidence of the Opponent in this matter.  The Applicant seeks to register a mark for wine that has similarities in both content and stylisation to the marks that comprise the Opponent’s well-known Penfolds brand, an iconic mark for wine that is exceptionally highly regarded by wine critics and other experts in Australia.  The Applicant has done so clearly aware of the Opponent and its Penfolds brand. 

In the absence of any alternative explanation of the Applicant’s conduct I consider that the application to register the Trade Mark was part of a pattern of conduct by the Applicant, who for a period of several years has sought to both register and use a series of trade marks, the effect of which is to confuse the public and misappropriate the goodwill the Opponent has in its Penfolds brand. The Applicant, through its application to register the Trade Mark, sought to convey to consumers that it was associated or affiliated with, or otherwise endorsed by, the Opponent, which is false. I am satisfied that the Applicant’s conduct falls short of the ‘standards of acceptable commercial behaviour observed by reasonable and experienced persons’. I find that the Opponent has established the ground of opposition under s 62A.

Decision

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

Costs

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 in respect of trade mark number 1849960 against the Applicant under s 221 of the Act in the relevant amounts under Schedule 8 of the Trade Mark Regulations 1995. 

Nicholas Smith

Hearing Officer

Oppositions and Hearings

29 January 2020