Re: Opposition by Transwood Pty Ltd to registration of trade mark application number 1830485 (class 33) - Schmeider in the name of Acquire Investment Pty Ltd

[2020] ATMO 76

TRADE MARKS ACT 1995

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

Re:Opposition by Transwood Pty Ltd to registration of trade mark application number 1830485 (class 33) – Schmeider - in the name of Acquire Investment Pty Ltd.

Delegate:	Louise Tuohy
Representation:	Opponent: David William Schmeider, Director of Transwood Pty Ltd and Spruson & Ferguson. Applicant: Matthew Neville Drane, Director of Acquire Investment Pty Ltd.
Decision:	2020 ATMO 76 Trade Marks Act 1995 (Cth) – opposition under section 52 – ss 52, 58, 59, 60 and 62A – ss 58, 60 and 62A pressed – trade mark filed in bad faith – application refused.

Background

1. In these proceeding under s 52 the Trade Marks Act 1995 (‘the Act’), Acquire Investment Pty Ltd (‘the Applicant’) has made an application to register the following trade mark:

   Application No:         1830485
   Filing date:                 8 March 2017

   Specification:             Class 33 Alcohol for drinking; Alcoholic beverages (except beer); Alcoholic beverages containing fruit; Alcoholic beverages containing wine; Alcoholic cocktails; Alcoholic essences; Alcoholic extracts; Alcoholic extracts of fruits; Alcoholic mixed drinks; Alcoholic preparations for making beverages; Alcoholic punches; Distilled alcoholic beverages; Fruit based alcoholic beverages; Liquors (alcoholic beverages); Low alcohol cider; Low alcohol cocktails; Nira (sugarcane-based alcoholic beverage); Pre-mixed alcoholic beverages, other than beer-based; Rice alcohol; Sparkling cider (alcoholic); Blended whisky; Bourbon whisky; Malt whisky; Whisky; Rum; Rum punch; Vodka; Gin; Ginger Wine

   Trade Mark:  Schmeider (‘the Trade Mark’).

2. Acceptance of the application for possible registration was published in the Australian Journal of Trade Marks dated 3 August 2017. Subsequently Transwood Pty Ltd (‘the Opponent’) filed a Notice of Intention to Oppose Registration on 25 August 2017.

3. The Opponent filed a Statement of Grounds and Particulars (‘the SGP’) on 28 September 2017.

4. The Applicant then filed a Notice of Intention to Defend on 31 October 2017.

5. Thereafter the Opponent and Applicant respectively filled evidence in accordance with the provisions of the Trade Marks Regulations 1995 (‘the Regulations’).

6. In the letter issuing from IP Australia on 18 December 2018 the parties were notified that as neither party had requested a hearing, the matter would be given to a delegate of the Register for a decision based on the written record.

7. The opposition was referred to me as a delegate of the Register of Trade Marks on 13 February 2019 for my decision.

   Grounds of Opposition, Relevant Date and Onus

8. In the SGP the Opponent nominates the grounds of opposition under ss 42, 58, 59, 60 and 62A of the Act. Nevertheless, the Opponent’s submission only addressed the ss 58, 60 and 62A grounds of opposition. The s42 grounds have not been pursued.

9. The rights of the parties are to be determined as at the date of the application[1] which is generally, but not always, the filing date.[2] For the purposes of s 60 which refers to the priority date, the relevant date is 8 March 2017 which, in this case, is the same as the filing date of the application. Sections 58 and 62A, however, do not mention a filing date or a priority date. However, I will proceed on the basis that the filing date of 8 March 2017 is the ‘Relevant date’ at which to assess all the grounds in these proceedings.[3]

   [1] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1954] HCA 82; (1954) 91 CLR 592, [595].

   [2] See Sections 6, 12 and 72 of the Act.

   [3] Apple Inc v Registrar of Trade Marks [2014] FCA 1304, [45].

10. The Opponent bears the onus of establishing at least one of the grounds of opposition.[4] The standard of proof is the ordinary civil standard of the balance of probabilities.[5]

    [4] Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58, [32].

    [5] Telstra Corporation Ltd v Phone Directories Co Pty Ltd [2015] FCAFC 156, [132].

11. In the discussion below, I have only found it necessary to address the s 62A ground in this decision. Nonetheless, should the decision be appealed, then it is open to the Opponent to plead any ground it considers relevant in proceedings before the Court.

    Evidence

12. The parties filed evidence in accordance with the provisions of the Regulations being:

    Evidence in Support

    Declaration by David William Schmeider, Director of Transwood Pty Ltd with Exhibits DS-1 to DS-33, made on 6 February 2018 (‘Schmeider 1’).

    Evidence in Answer

    Declaration by Matthew Neville Drane, Director of Acquire Investments Pty Ltd, made on 12 May 2018 (‘Drane’).

    Evidence in Reply

    Declaration by David William Schmeider, Director of Transwood Pty Ltd with Exhibits DS-34 to DS-40, made on 20 July 2018 (‘Schmeider 2’).

    Additional Material

    Submission by Spruson & Ferguson, submitted on 12 November 2018 (‘S&F’).

    The Opponent’s Evidence of use

13. In the Schmeider 1 declaration, David Schmeider explains the Opponent, Transwood Pty Ltd, is a registered company (registered on 3 October 1985) owned wholly by David Schmeider and Pamela Schmeider in equal shares.[6]

    [6] Schmeider 1 [11], [DS-2].

14. However, in Schmeider 1 it is stated that since November 1982, David and Pamela Schmeider have operated a cooperage business under the name SCHMEIDER’S COOPERAGE and to distinguish their goods and services from those of other traders David and Pamela coined the trade marks SCHMEIDER and SCHMEIDER’S COOPERAGE, in light of the business being a family business and their surname SCHMEIDER being distinctive.[7]

    [7] Schmeider 1 [18].

15. Exhibit DS-4 to Schmeider 1 contains a current and historical Business Name Extract for the period 16 November 1982 until 1 December 1985 in which David and Pamela Schmeider were listed as the registered owners of the business name SCHMEIDER’S COOPERAGE, then on 1 December 1985 the business name was transferred to the Opponent. This registration was cancelled on 6 February 1995.[8]

    [8] Schmeider 1 [13], [DS-4].

16. Exhibit DS-5 to Schmeider 1 shows that for the period 16 February 1995 to 4 February 2007 David and Pamela Schmeider were the holders of the business name SCHMEIDER’S COOPERAGE & CRAFT CENTRE COMPLEX.[9]

    [9] Schmeider 1 [14], [DS-5].

17. Exhibit DS-3 to Schmeider 1 is a current and historical Business Name Extract as of 22 March 2007, in which David and Pamela Schmeider are listed as the registered owners of the business name SCHMEIDER’S COOPERAGE.[10]

    [10] Schmeider 1 [12], [DS-3].

18. Noting that the Opponent claims it lost the majority of its advertising, sales and financial records in 2013 during the floods caused by Ex-Tropical Cyclone Oswald[11] the following evidence of use has been submitted.

    [11] Schmeider 1 [45].

19. Exhibit DS-20 to Schmeider 1,  shows the Opponent’s annual turnover for the years 2009 to 2017, marked as confidential, is moderate, with sales covering cooperage services provided under the trade mark SCHMEIDER’S COOPERAGE which include the custom manufacture, installation, repair and maintenance of large barrels and vats and goods sold under the SCHMEIDER’S COOPERAGE trade mark including kegs, bottle holders, boxes, and furniture items.[12]

    [12] Schmeider 1 [50], [DS-20].

20. The Opponent claims that since 1982 the trade marks SCHMEIDER and SCHMEIDER’S COOPERAGE have been used continuously and consistently with respect to all the goods and services[13] The goods and services have been offered for sale both in Australia and internationally.[14]

    [13] Schmeider 1 [20].

    [14] Schmeider 1 [21].

21. Exhibits DS 16 to 18 and 25 of Schmeider 1 show that from 1982 up to the relevant date the trade marks SCHMEIDER and SCHMEIDER’S COOPERAGE have been promoted through brochures, signage, newspaper and magazine articles.[15]

    [15] Schmeider 1 [46-48], [56], [DS16-18], [DS-25].

22. Exhibit DS-23 of Schmeider 1 provides copies of the Opponent’s Queensland Tourism Awards for 1987, 1990 and 1991, its Central Queensland Southern Reef Region Tourism Awards for 1993 and 1998/99, its QR Traveltrain Tourism Award in 2000 and its Australian Small Business Award in 1986.[16]

    [16] Schmeider 1 [53-54], [DS-23].

23. Exhibit DS-24 of Schmeider 1 is a photograph of a Queensland Government official tourist sign located in Bundaberg that has used the wording SCHMEIDER’S COOPERAGE.[17] 

    [17] Schmeider 1 [55], [DS-24].

24. Exhibit DS-26 of Schmeider 1 provides examples of how the Opponent has promoted its trade mark through third parties[18] and Exhibit’s DS 8 to 15 and 26 provide examples of the Opponent’s long-standing relationship with the Bundaberg Rum Distillery.[19]

    [18] Schmeider 1 [57], [DS-26].

    [19] Schmeider 1 [31-44], [57], [DS8-15], [DS-26].

25. Exhibits DS 12 to 13 in Schmeider 1 provides copies of promotional material which shows how the Opponent’s relationship with the Bundaberg Rum Distillery was recognised by the launch of a special edition Dark Oak Bundaberg Rum product that was ‘inspired by David Schmeider’ in 2012.[20]

    [20] Schmeider 1 [39-40], [DS-12], [DS-13].

26. Exhibit DS-27 in Schmeider 1 provides documentation to the Opponents claims SCHMEIDER’S COOPERAGE has a significant and longstanding reputation with businesses and individuals across Australia, with recommendations of support from Bundaberg Brewed Drinks, The Beenleigh Rum Distillery, Radoux Australasia, Heidi Stanton-Cook and Paul Neville.[21]

    [21] Schmeider 1 [59], [DS-27].

    History of the Opponent’s relationship with the Applicant

27. Exhibit DS-28 in Schmeider 1 shows the owner of the Trade Mark at the filing date was Acquire Investment Pty Ltd a company wholly owned by Matthew Neville Drane.[22]

    [22] Schmeider 1 [60], [DS-28].

28. According to Schmeider 1 in 1988 due to the rapid expansion of the cooperage  business, David and Pamela Schmeider decided to build a Craft Centre to expand and to house local talent called the SCHMEIDER’S COOPERAGE & CRAFT CENTRE COMPLEX[23] (‘the Schmeider’s Cooperage Complex’). In early 2000s, David and Pamela Schmeider started leasing sections of the Schmeider’s Cooperage Complex for retail use.[24]

    [23] Schmeider 1 [22].

    [24] Schmedier 1 [25].

29. As noted above Matthew Neville Drane is the Director and sole shareholder of Acquire Investment Pty Ltd the owner of the Trade Mark at the filing date. Exhibit DS-29 of Schmeider 1 contains a historical Company Extract which shows Matthew Neville Drane is also a Director of another entity, Waterview Bundaberg Limited.[25]

    [25] Schmeider 1 [61], [DS-29].

30. Exhibit DS-30 of Schmeider 1 is a copy of a lease dated 1 September 2014, whereby David and Pamela Schmeider entered into a tenancy agreement with Waterview Bundaberg Limited, and the lease was executed by Matthew Neville Drane.[26]

    [26] Schmeider 1 [63], [DS-30].

31. In addition to providing the lease, David Schmeider in Schmeider 1 submits he also assisted Matthew Neville Drane in establishing the Waterview Distillery business, and that these services were provided free of charge.[27]

    [27] Schmeider 1 [65].

32. According to Schmeider 1 the tenancy agreement with Waterview Bundaberg Limited was due to be terminated on 31 August 2017.[28] However, the parties to the tenancy agreement entered into a dispute in January 2017 after David Schmeider requested payment of outstanding rent. This dispute is ongoing.[29]

    [28] Schmeider 1 [67].

    [29] Schmeider 1 [68].

33. In Schmeider 1, the Opponent states that within months of the commencement of the rental dispute, Aquire Investment Pty Ltd, applied for the Trade Mark on 8 March 2017,[30] registered the domain name schmeiderscooperage.com.au on 18 March 2017,[31] and registered the business name SCHMEIDER’S COOPERAGE & CRAFT CENTRE on 18 September 2017.[32]

    [30] Schmeider 1 [69].

    [31] Schmeider 1 [70] [DS-32].

    [32] Schmeider 1 [71] [DS-33].

    The Applicant’s Evidence in Answer

34. The declaration of Matthew Neville Drane claims the following:[33]

    ·the Applicant is authorised to hold the IP rights for Waterview Bundaberg Limited;

    ·the Applicant was first to use Schmeider in the Class 33 and first to register;

    ·the Opponent has no claim over this mark in this class;

    ·David and Pamela Schmeider did not disclose their interest in a competitor distillery as our landlord;

    ·the Applicant believes this opposition is an attempt to disadvantage its company;

    ·the Applicant’s products have been sold in Australia and internationally;

    ·the Applicant includes an Exhibit which shows the Trade Mark on its products; and

    ·the Applicant continues to use the Trade Mark and its previous landlord was aware of its intent to use the name. The Opponent’s statement regarding involvement is shown in their opposition documents.

    [33] Drane.

35. Exhibit 1 of the Drane declaration shows an undated copy of Waterview Distilling Company, online store, showing results for a whiskey product labelled with the Trade Mark.[34]

    [34] Drane [Exhibit 1]

    The Opponent’s Evidence in Reply

36. The Schmeider 2 declaration deposes that the Applicant did not develop or sell ‘Schmeider Whiskey’ and Exhibit DS-34 is a copy of webpages from the Applicant’s website ‘ obtained through the Internet Archive Wayback Machine captured for the date period 16 July 2016 to 28 October 2017 shows the product list of the Applicant and does not show the product ‘Schmeider Whiskey’.[35]

    [35] Schmeider 2 [5-6], [DS-34].

37. According to Schmeider 2, while David Schmeider did assist Matthew Neville Drane in establishing the Waterview Bundaberg Limited business in the Schmeider Cooperage Complex, at no stage did David Schmeider or the Opponent authorise Matthew Neville Drane or the Applicant to use the SCHMEIDER or SCHMEIDER’S COOPERAGE trade marks in relation to alcoholic beverages or any other goods.[36]

    Legal Framework

    [36] Schmeider 2 [4].

    Section 62A - Application made in bad faith

38. Section 62A of the Act provides:

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

39. In the SGP the Opponent particularised the section 62A ground of opposition as follows:

    We (the Opponent) “own” our surname, it is synonymous with our intellectual property rights across coopering and furniture making over a working lifetime. There is no operational link between the applicant, our surname or the classes nominated. Class 33 (Alcohol) is also in our opinion a mischievous claim. There is a direct link between our trade as a cooper (barrel making) and alcohol which is stored in our product. We (the Opponent) have owned and operated at Schmeider’s Cooperage since November 1982 and registered our trading name since then. We (the Opponent) have also won Queensland Tourism Awards and many local awards over the years under this name.

    There is history between the Opponent and the Applicant. On 1 September 2014, the Opponent and the Director of the Applicant, Matthew Drane, entered into a tenancy agreement. The tenancy agreement entered into dispute in January 2017 and has subsequently been terminated.

    In light of the above, a reasonable person, standing in the shoes of the Applicant, would be aware that they ought not to apply for registration of Schmeider as a trade mark in Australia in relation to the goods specified in the opposed trade mark application.

40. The Explanatory Memorandum to the Trade Marks Amendment Bill 2006 provided some illustrations of applications made in bad faith:

    • persons who monitors 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 deliberate misspellings of other registered trade marks; and
    • 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.

41. As these illustrations are not exhaustive, in DC Comics v Cheqout Pty Ltd (‘DC Comics’) Bennet J observes that all of the circumstances surrounding the application to register a trade mark are relevant.[37] Moreover, conduct after the priority date can be used to shed light on the Applicant’s subjective intent at the filing date.[38] 

    [37] DC Comics v Cheqout Pty Ltd [2013] FCA 478 [62].

    [38] Ibid [71].

42. In Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) (‘Fry’) Dodds-Streeton J made the following comments, quoting from Harrison’s Trade Mark Application:[39]

    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.[40]

    [39] Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) [2012] FCA 81; Harrison’s Trade Mark Application [2004] EWCA Civ 1028; [2005] FSR 10.

    [40] [2012] FCA 81, [147].

43. Her Honour also considered:

    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.[41]

    [41] Ibid [165-166].

44. Since 1982 the Opponent’s company directors David and Pamela Schmeider have operated a successful cooperage business under the trade marks SCHMEIDER’S COOPERAGE and SCHMEIDER.

45. The Opponent’s history with the Applicant was one of Lessor and Lessee of premises located at the Schmeider’s Cooperage Complex and this relationship ended in dispute when David Schmeider requested payment of outstanding rent.

46. In addition to entering into a lease agreement, David Schmeider assisted the Applicant in the establishment of its distillery business. However, the Opponent deposes that the Agreements between the parties did not include any assignment of the SCHMEIDER or SCHMEIDER’s COOPERAGE trade marks. 

47. While the Applicant argues that the Opponent has no rights in the name SCHMEIDER in relation to goods in Class 33, the evidence shows that the Opponent’s cooperage business has strong associations with distilleries, winemakers and brewers, especially as alcohol is stored in barrels.

48. Furthermore, in 2012 the Bundaberg Rum Distillery launched a limited release of a rum product Dark Oak that was inspired by David Schmeider which highlights the link between barrel making and alcohol products.

49. It is also noted that the Applicant made changes to its website by adding the Trade Mark to its list of products after the filing date and commencement of the opposition proceedings which indicates a conscious decision to usurp the Trade Mark from the Opponent, or otherwise sought to convey to consumers that is was associated with, or endorsed by, the Opponent.

50. It is clear to me that Applicant’s conduct falls squarely with the unconscious, unscrupulous, underhanded conduct described by Dodds-Streeton J in Fry.

1. I find that a person standing in Applicant’s shoes should have known that it should not apply for the registration of the Trade Mark. The Applicant’s conduct falls short of the ‘standards of acceptable commercial behaviour observed by reasonable and experienced persons’.[42]

   [42] DC Comics v Cheqout Pty Ltd [2013] FCA 478, [77].

2. The Opponent has established the ground for opposition under s 62A of the Act.

   Decision

3. Section 55 of the Act provides:

   55 Decision

   (1)Unless subsection (3) applied to the proceeding, 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.

4. I find that the Opponent has met the onus upon it, in terms of the ground of opposition under section 62A of the Act. Accordingly, as Delegate of the Registrar I refuse to register the Trade Mark. If the Registrar of Trade Marks is served with a notice of appeal within one month from the date this decision, I direct that the disposition of the applications be in accordance with the Court’s direction or order.

   Costs

5. The Opponent has sought an award for costs in its favour. I see no reason to depart from the general rule that costs follow the event. As the Opponent is the successful party, I award costs against the Applicant at the official scale set out in Schedule 8 the Regulations.

   Louise Tuohy
   Hearing Officer
   Oppositions and Hearings
   Trade Marks and Designs
   6 May 2020