Re: Opposition by Sylka Limited to registration of trade mark application number 1868877 (class 27) Nusilk in the name of Fyber Flooring Pty Ltd

[2020] ATMO 101

TRADE MARKS ACT 1995

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

Re:Opposition by Sylka Limited to registration of trade mark application number 1868877 (class 27) - NUSILK - in the name of Fyber Flooring Pty Ltd

Delegate:	Katrina Brown
Representation:	Opponent: Davies Collison Cave Applicant: Mills Oakley Lawyers
Decision:	2020 ATMO 101 Trade Marks Act 1995 (Cth) – opposition under section 52 – grounds pursued under ss 42(b), 58, 59, 60 and 62A – s 58 established in respect of some of the goods – no other grounds established - applicant given opportunity to amend goods – goods amended - trade mark to proceed to registration

Background

1. This decision is in respect of an opposition under s 52 of the Trade Marks Act 1995 (‘Act’) by Sylka Limited (‘Opponent’) to the registration of the following trade mark:

Trade Mark No:       1868877

Trade Mark:             NUSILK (‘Trade Mark’)

Applicant:                 Fyber Flooring Pty Ltd (‘Applicant’)

Filing Date:               25 August 2017

Goods:Class 27 - Carpets, rugs, mats and matting, linoleum and other materials for covering existing floors; wall hangings (non-textile) (‘Applicant’s Goods’)

1. The trade mark application was examined as required under s 31 of the Act. Acceptance of the Trade Mark was advertised in the Australian Official Journal of Trade Marks on 18 January 2018.

2. The Opponent filed a Notice of Intention to Oppose on 16 March 2018, followed by a Statement of Grounds and Particulars (‘SGP’) on 16 April 2018. The SGP was inadequate and the Opponent filed a rectified SGP (‘Rectified SGP’) on 1 May 2018.

3. The Applicant filed a Notice of Intention to Defend on 11 May 2018.

4. The Opponent filed the following declaration as evidence in support of its opposition:

• Declaration of Steve Farrell (Managing Director of the Opponent) made on 17 August 2018 with Exhibits 1 to 17 (‘Farrell Declaration’).

1. Exhibits 5 to 13 of the Farrell Declaration are marked confidential. Some of these exhibits contain material crucial to my findings. Whilst I will not discuss any sensitive commercial matters in any detail, I will discuss the evidence to the degree necessary to provide sufficient reasons for my decision.

2. The Applicant did not file evidence in answer.

3. On 10 December 2018 IP Australia wrote to the parties advising that the evidence in answer stage had ended and that either party could now request a hearing. Neither party did so and accordingly the parties were duly informed that the matter would be decided based on the material properly filed during the proceedings including evidence and any written submissions.

4. Neither party filed written submissions.

5. As a delegate of the Registrar of Trade Marks I will now decide this opposition.

Grounds of opposition, onus and relevant date

1. In the Rectified SGP, the Opponent nominated grounds under ss 42(b), 58, 59, 60 and 62A of the Act.

2. The Opponent bears the onus of establishing at least one of the nominated grounds of opposition. The standard of proof is the ordinary civil standard of the balance of probabilities.[1]

   [1] Telstra Corporation Ltd v Phone Directories Co Pty Ltd [2015] FCAFC 156 [133].

3. The date at which the rights of the parties are to be determined is 25 August 2017 (‘relevant date’) being both the filing and priority date of the Trade Mark.

Section 58

1. Section 58 of the Act provides:

   The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.

2. This ground of opposition is particularised in the Rectified SGP as follows:

   The Opponent and/or its manufacturing partner Specialty Textile Group Inc ("STG") first used the trade mark NUSILK in Australia in relation to fibres for use in carpets and floor covering products including carpets ("the Goods") before the priority date of the opposed application. The Applicant is therefore not the owner of the opposed trade mark.

3. The term ‘owner’ is not defined in the Act. However, it is well established that in the absence of fraud, the owner of a trade mark is the person who first uses it in Australia, or first files a trade mark application for it in Australia, whichever is the earlier.

4. As noted above, the Applicant has not involved itself in this matter beyond filing the Notice of Intention Defend. Consequently, there is no information before me to indicate when the Applicant first used the Trade Mark. In these circumstances, to establish this ground of opposition the Opponent needs to show that:

• A person (as defined in s 6 of the Act) other than the Applicant used the Trade Mark, or a substantially identical trade mark,[2] in the course of trade in Australia; and

• The use was before 25 August 2017, being the filing date of the Trade Mark; and

• The use was in relation to the Applicant’s Goods or in relation to goods considered to be the ‘same kind of thing’ as the Applicant’s Goods.[3]

  [2] Carnival Cruise Lines Inc v Sitmar Cruises Ltd [1994] FCA 936.

  [3] Re Hicks’ Trade Mark (1897) 3 ALR 75.

1. At [10] of the Farrell Declaration, it is declared that an entity, other than the Applicant, has used ‘Nusilk’ as a trade mark in Australia since as early as May 2013. Confidential Exhibits 5 to 13 consist of invoices or cost estimates from the Opponent, or an associated entity, to businesses located in Australia. The earliest is dated 2014, each contain the word ‘Nusilk™’ and is in relation to carpets (floor covering), rugs or mats made of carpet.

2. I am satisfied that this evidence demonstrates that before the relevant date, the Trade Mark had been used by the Opponent or a related entity, in the course of trade in Australia in relation to goods which I consider to be the same as the following of the Applicant’s Goods: Carpets, rugs, mats and matting.

3. My next consideration is whether carpets, rugs or mats made of carpet (‘Opponent’s Goods’) are the ‘same kind of thing’ as the remainder of the Applicant’s Goods, namely linoleum and other materials for covering existing floors; wall hangings (non-textile) (‘Remainder of the Applicant’s Goods’).

4. Goods considered to be the ‘same kind of thing’ are goods ‘that are essentially the same, though they may differ in size, shape and name’.[4] In Colorado Group Limited v Strandbags Group Pty Limited (‘Colorado’) Allsop J stated:

   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.[5] 

   [4] Colorado Group Limited v Strandbags Group Pty Limited [2007] FCAFC 184 [14] (Kenny J) (‘Colorado’).

   [5] Ibid [89].

5. Applying these principles, hatchets (small axes) have been considered the same kind of thing as axes,[6] but bags, wallets and purses were considered not to be the same kind of thing as backpacks[7].  

   [6] Jackson & Co v Napper (1886) 35 Ch D 162.

   [7] Colorado (n 4).

6. I am not satisfied that any of the Remainder of the Applicant’s Goods are the same kind of thing as the Opponent’s Goods for the following reasons:

• Linoleum – The Opponent’s Goods are carpet or goods made from carpet.  Carpet is a textile floor covering consisting of an upper layer of pile attached to a backing. It is made of wool or synthetic fibres and has different textures depending on how the pile is constructed. Linoleum is ‘formed by coating hessian or canvas with linseed oil, powdered cork and rosin and adding pigments of the desired colour’.[8] It has a smooth surface akin to vinyl flooring. Whilst linoleum and the Opponent’s Goods belong to the same genus (that is floor coverings) they clearly differ in ways other than size, shape or name.

• Wall hangings (non-textile) – As mentioned above the Opponent’s Goods are all floor coverings being, or being made from, carpet. Wall hangings are designed to be hung on walls. The different nature and purpose of these goods is sufficient for me to conclude that they are not true equivalents.  

• Other materials for covering existing floors – Looking to the language used to specify the Applicant’s Goods, the most natural and logical interpretation is that ‘other materials for covering existing floors’ does not include carpets, rugs, mats and matting; goods which would be most obviously likely to be true equivalents of the Opponent’s Goods. Additionally, neither party has provided any evidence to assist me in understanding what goods would be included in ‘other materials for covering existing floors’, nor has the Opponent pointed to any other materials for covering existing floors which are essentially the same as its own goods. Considering all of the above and bearing in mind that the onus is on the Opponent, I am unwilling to find that ‘other materials for covering existing floors’ is the same kind of thing as the Opponent’s Goods.  

  [8] Macquarie Dictionary (online at 8 May 2020) ‘linoleum’.

1. As such, the s 58 ground of opposition has been established only in relation to carpets, rugs, mats and matting.

Section 60

1. Section 60 of the Act provides:

   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.

2. To establish this ground of opposition, the Opponent must demonstrate the existence of a reputation in another trade mark in Australia before the relevant date. The Opponent must then establish that because of the aforesaid reputation use of the Trade Mark would be likely to deceive or cause confusion.

3. The Opponent particularises this ground as follows:

   The Opponent and/or STG has used the NUSILK trade mark in Australia and overseas in relation to the Goods since before the priority date of the opposed application. By virtue of this use, the Opponent and/or STG has acquired a reputation in the NUSILK trad mark in Australia as at the priority date of the Opposed application. Use of the Opposed Mark is therefore likely to deceive or cause confusion.

Reputation

1. For the purposes of s 60 ‘reputation’ is ‘the recognition of the [trade mark] by the public generally’.[9] It has also been expressed as recognition of the other trade mark by a ‘significant’ or ‘substantial’[10] number of people or potential consumers. The evaluation of what amounts to significant or substantial ‘will depend on the nature of the goods that are the subject of the application in question and the class of consumers of those goods’.[11]

   [9] McCormick & Company Inc v McCormick [2000] FCA 1335 [81].

   [10] Renaud Cointreau & Cie v Cordon Bleu International Ltee [2001] FCA 1170.

   [11] Dr August Wolff GmbH & Co. KG Arzneimittel v Combe International Ltd [2020] FCA 39 [80].

2. It is declared in the Farrell Declaration that the goods that the Opponent uses NUSILK in relation to are targeted at the high-end luxury market. Notwithstanding, as stated above it is the nature of the Applicant’s Goods which I must consider. The Applicant’s Goods are not circumscribed with any specificity as to what cross-section of the market they are targeted toward. As such, the relevant market is considerably large since floor coverings are used by a diverse range of consumers. The relevant market is certainly larger than consumers of high-end luxury floor coverings.

3. Reputation cannot be assumed; it must be established as a matter of fact by the Opponent.[12] In Rodney Jane Racing Pty Ltd v Monster Energy Company it was observed that:

   The reputation of a trade mark has quantitative and qualitative dimensions. The quantitative dimension concerns the breadth of the public that are likely to be aware of the mark, which can be evidenced by the quantum of sales, advertising and promotion of goods or services to which the mark is applied. The qualitative dimension concerns the image and values projected by the trade mark, which affects the esteem or favour in which the mark is held by the public generally.[13]

   [12] ConAgra Inc v McCain Foods (Australia) Pty Ltd [1992] FCA 159 [77].

   [13] [2019] FCA 923 [83].

4. Turning to the evidence in this matter, the Farrell Declaration states that the Opponent or a related entity, first used the trade mark NUSILK on or in relation to carpets, carpet fibres and rugs internationally as early as May 2010, and as early as December 2013 in Australia. As such the Opponent is claiming approximately eight years of international use, and three and half years of use in Australia, before the relevant date.

5. The Opponent has provided the ‘total sales figures for Australia’ for 2015 to 2018. It is not clear what percentage of these figures relate to use of NUSILK. Notwithstanding the figures are relatively modest.

6. The Opponent has also provided an indication of expenditure on the promotion and marketing of goods branded with NUSILK. These figures relate to global expenses over a five-year period and as such they are not substantial. I acknowledge that many brands are now promoted via social media at little to no cost and as such marketing expenditure is not always reflective of the level of promotion that a brand has enjoyed. However, the Farrell Declaration makes no mention of promoting NUSILK via social media.

7. The Opponent does promote the NUSILK trade mark on its website ‘ in brochures downloadable from its website and in various publications which are declared to have an ‘internal reach, including in Australia’ or ‘circulated internationally including in Australia’. However, the Opponent has not provided any means to quantify the exposure that the Australian market had to these promotional sources. The same deficiency exists in relation to the international awards that the Opponent has received and the list of international locations where its carpet has been fitted. There is simply insufficient information for me to quantify any reputation that may have spilled over into Australia.

8. Considering the above, I am not satisfied, as a matter of fact, that at the relevant date the Opponent, or a related entity, had the reputation in NUSILK that is contemplated by s 60 of the Act.

9. The s 60 ground of opposition has not been established.

Section 42(b)

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

   An application for the registration of a trade mark must be rejected if:

   …

   (b) its use would be contrary to law.

2. The Opponent must satisfy the Registrar that use of the Trade Mark would not could be contrary to law.[14] As observed by Rangiah J in Primary Health Care Limited v Commonwealth of Australia:

   It is not enough for a party opposition registration to show that s 18 of the ACL [Australian Consumer Law] or s 52 of the TPA [Trade Practices Act 1974] might be contravened. The opponent must prove, on the balance of probabilities, that the provision would be contravened by use of the trade mark.[15]

   [14] Advantage-Rent-A-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683 [28].

   [15] [2017] FCAFC 174 [411].

3. The particularisation of this ground of opposition includes:

   Given the Opponent and/or STG's use of and reputation in the NUSILK trade mark at the priority date in Australia, consumers are likely to be misled or deceived into believing that goods provided under the opposed mark are those of the Opponent's and/or STG's or somehow associated or affiliated with the Opponent and/or STG. Use of the trade mark would therefore be contrary to section 18 and/or 29 of the Australian Consumer Law and/or amount to passing off at common law.

Australian Consumer Law

1. The Opponent submits that use of the Trade Mark would be contrary to ss 18 and 29 of the Australian Consumer Law (‘ACL’) which forms schedule 2 to the Competition and Consumer Act 2010. Section 18 of the ACL concerns conduct or representations that have, or are likely to, mislead or deceive. Section 29 of the ACL concerns representations that are false or misleading.

2. I have found that the Opponent has not demonstrated a reputation in NUSILK sufficient for the use of the Trade Mark to cause confusion or deception under s 60 of the Act. It follows that it is unlikely that use of the Trade Mark will amount to misleading or deceptive conduct under the ACL because ‘for the public to be misled or deceived…there must be in the minds of the relevant public some established truth against which the notion of misleading or deceptive conduct can be measured’.[16] Similarly, without sufficient reputation having been demonstrated, the use of the Trade Mark would not falsely represent to an Australian consumer that the Applicant’s Goods have the sponsorship or approval of the Opponent.

   [16] Dairy Vale Metro Co-op Ltd v Brownes Dairy Ltd [1981] FCA 63 [42].

3. The Opponent has not satisfied me that use of the Trade Mark would not could be contrary to the ACL.

Passing Off

1. Where use of a trade mark does not contravene s 18 of the ACL neither will it amount to the tort of passing off.

2. The relationship between passing off and s 52 of the now repealed Trade Practices Act 1974 (‘TPA’) was addressed in Re Equity Access Pty Ltd v Westpac Banking Corporation:

   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 the name by another, failure to succeed under s 52 or s 53 will invariably mean that proceedings for passing off would likewise fail.[17]

   [17] [1989] FCA 506 [40].

3. Section 18 of the ACL is the equivalent of s 52 of the TPA.[18] The above comments are equally applicable to the relationship between s 18 of the ACL and the tort of passing off.

   [18] Primary Health Care Limited v Commonwealth of Australia [2017] FCAFC 174 [410].

4. As I have found that s 18 of the ACL has not been contravened, it follows that use of the Trade Mark does not amount to passing off.

5. The ground of opposition under s 42(b) of the Act has not been established.

Section 59

1. Section 59 of the Act provides:

   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.

2. In Health World Ltd v Shin-Sun Australia Pty Ltd, Jacobson J described the nature of the intention under s 59 as:

   A ‘real and definite intention’ of the applicant for registration, to use the mark publicly as a trade mark, although it is not necessary that the intention be immediate or within a limited time.[19]

   [19] Health World Ltd v Shin-Sun Australia Pty Ltd [2008] FCA 100 [160].

3. It is well established that applying for registration of a trade mark brings with it a presumption that an applicant intends to use that trade mark.[20] The onus is on an opponent to displace this presumption by making out a prima facie case that the applicant lacked the requisite intention at the filing date.[21] If an opponent makes out a prima facie case, the evidentiary onus shifts to the applicant to show its intention to use the trade mark at the filing date.[22]

   [20] Suyen Corp v Americana International Ltd [2010] FCA 638 [197].

   [21] Aston v Harlee Manufacturing Co [1980] HCA 47.

   [22] Suyen Corp v Americana International Ltd (n 20) [190].

4. In support of the prima facie case, the Farrell Declaration states that the Applicant is only using the Trade Mark in relation to carpets and carpet yarns on its website and that there is nothing on the website to suggest that it is in the business of selling any goods other than carpets and carpet yarns.

5. The above material amounts to little more than demonstrating non-use of the Trade Mark in relation to some of the Applicant’s Goods. In Suyen Dodds Streeton J observed that:

   There is a long standing recognition that the absence of the requisite intention to use cannot be inferred from lack of use per se.[23]

   [23] Ibid [207].

1. Whilst some inferences may be drawn from the state of the Applicant’s website on 14 November 2017 and 8 October 2018, they are far from conclusive. The Opponent has not pointed to any particular circumstances beyond mere non-use and as such the material before me is insufficient to shift the evidentiary onus to the Applicant.

2. The ground of opposition under s 59 of the Act has not been established.

Section 62A

1. Section 62A provides:

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

2. The phrase ‘bad faith’ is not defined in the Act. In DC Comics v Cheqout Pty Ltd, Bennett J explained:

   Bad faith is a combined test that involves subjective and objective elements. The subjective element refers to the knowledge of the relevant person at the time of making the application. The objective element requires the decision-maker to decide whether, in the light of that knowledge, the relevant person’s behaviour fell short of acceptable commercial standards.

   The question is whether the conduct falls short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in the particular area. It is whether the knowledge of the applicant was such that the decision to apply for registration would be regarded as in bad faith by persons adopting proper standards.[24]

   [24] [2013] FCA 478 [62].

3. This ground of opposition is particularised as follows:

   Given the Opponent and/or STG's reputation in the NUSILK mark at the priority date in Australia, the Applicant knew, or ought to have known, that it was not entitled to registration of the mark. The application was therefore made in bad faith.

4. As I have already found in relation to s 60, the evidence before me does not establish that the Opponent, or a related entity, had a reputation in NUSILK in Australia at the relevant date. Furthermore, awareness of the Opponent’s reputation would not of itself, amount to bad faith.

5. In Hard Coffee Pty Limited v Hard Coffee Main Beach Pty Limited, the Registrar’s delegate stated:

   The onus of demonstrating ‘bad faith’ falls squarely on the party making such an allegation with the need for evidence able to fulfil the degree of proof required to satisfy the civil standard of ‘balance of probabilities’. That said, the allegation of ‘bad faith’ is a very serious one and a finding of bad faith should not be taken lightly. [25]

   [25] [2009] ATMO 26 [12].

6. In this matter, the Opponent has not provided cogent evidence to support its assertion under s 62A of the Act. In the absence of such evidence I cannot be satisfied that the trade mark application was made in bad faith.

7. Accordingly, the ground of opposition under s 62A has not been established.

Decision

1. Section 55 of the Act relevantly provides:

   (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.

1. The s 58 ground of opposition has been established in respect of carpets, rugs, mats and matting.

2. None of the other grounds of opposition have been established.

3. On 18 May 2020 I informed the Applicant that it was my intention to refuse to register the Trade Mark unless the specification was amended so as to remove carpets, rugs, mats and matting (the goods for which the s 58 ground has been established).

4. On 2 June 2020 the Applicant agreed to the amendment and the specification has been amended to:

   Class 27: Linoleum and other materials for covering existing floors, none of the aforementioned being carpets, rugs, mats or matting; wall hangings (non-textile).

5. Accordingly, the Trade Mark can proceed to registration in respect of the above goods.    

Costs

1. The parties sought cost. As both parties were, strictly speaking, partly successful I believe it is appropriate in this case that each party bears its own costs.

Katrina Brown
Hearing Officer
Oppositions and Hearings
Trade Marks and Designs
5 June 2020