Re: Oppositions by Caddee Pty Ltd to registration of trade mark application number 1945231 (class 41) and application to extend protection to Australia of International Registration Designating Australia..

[2020] ATMO 178

TRADE MARKS ACT 1995

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

Re:Oppositions by Caddee Pty Ltd to registration of trade mark application number 1945231 (class 41) and application to extend protection to Australia of International Registration Designating Australia 1433817 (Australian Trade Mark Application Number 1970615) (class 41) –both consisting of the words STRETCH LAB - in the name of Stretch Lab Franchise LLC.

Delegate:

M. Cooper

Representation:

Opponent: DCS Lawyers Pty Ltd

Applicant: Baldwins Intellectual Property

Decision:

2020 ATMO 178

Trade Marks Act 1995 and Trade Marks Regulations 1995 (Cth)– oppositions under section 52 and reg 17A.33 – ss 42(b), 43, 58 and 60 considered – no opposition grounds established – trade marks to proceed to registration/protection.

Background

1. This matter concerns oppositions by Caddee Pty. Ltd. (‘the Opponent’), under the Trade Marks Act 1995 (‘the Act’) and the Trade Mark Regulations 1995 (‘the Regulations’), to registration of trade mark 1945231 and to the extension of protection to Australia of the International  Registration Designating Australia (‘IRDA’) 1433817[1], both detailed below and both in the name of Stretch Lab Franchise LLC (‘Applicant’[2]):

   [1] Referred to collectively in the decision as the ‘Trade Marks’.

   [2] Although the reference is properly to the ‘holder’ of the IRDA for Trade Mark 1970615, for ease of reference I have referred to Stretch Lab LLC as the ‘Applicant’ for both Trade Marks.

Australian Appln No.	1945231	1970615 (IRDA 1433817)
Filing date	1 August 2018	2 October 2018 (Convention priority date)
Trade Mark	STRETCH LAB	STRETCH LAB
Services	Class 41: Providing fitness training services in the field of stretching and flexibility; Providing personal fitness training for increased flexibility; Providing stretching and flexibility services (fitness, motion, and flexibility training)	Class 41: Providing fitness training services in the field of stretching and flexibility; providing personal fitness training for increased flexibility

2.  Trade Mark 1945231 was examined and advertised as accepted for possible registration on 9 April 2019 in the Australian Official Journal of Trade Marks. Trade Mark 1970615 was examined and similarly advertised as accepted for possible protection in Australia on 24 June 2019.

1. Opposition documents were filed as below:

TM 1945231 date filed	TM 1970615 date filed	Grounds
Notice of Intention to Oppose	25 April 2019	1 July 2019
Statement of Grounds and Particulars (‘SGP’)	21 May 2019	4 July 2019	Ss 42(b), 43, 58 and 60 (same grounds for both trade marks).
Notice of Intention to Defend	7 August 2019	22 August 2019

1. On 30 April 2020, the Applicant requested a hearing for both oppositions. A hearing was scheduled for 22 October 2020 however the parties elected not to appear. In accordance with directions, written submissions were filed on 7 October and 14 October 2020, respectively.

Evidence

1. Evidence in this matter was filed as detailed in the below table[3]:

   [3] As far as I can determine, aside from substitution of the Trade Mark numbers, the same evidence was provided by each party for each Trade Mark.

TM 1945231	TM1970615
Evidence in Support	Declaration of Hana Jager, the Opponent’s co-director (‘first Jager declaration’) with Annexures HJ-1 to HJ-11	Dated 30 October 2019 and filed on 4 November 2019.	Dated 18 November 2019 and filed on 21 November 2019.
Evidence in Answer	Statutory declaration of Brad Walker, the Applicant’s Chief Stretch Advisor with Annexures BW-1 to BW-09 (‘Walker declaration’)	Dated 12 February 2020 and filed on 13 February 2020	Dated 12 February 2020 and filed on 14 February 2020
Evidence in Reply	Further declaration by Hana Jager (‘second Jager declaration’).	Dated 2 April 2020 and filed on 7 April 2020	Dated 2 April 2020 and filed on 14 April 2020.

1. The Opponent claimed in respect of each declaration that its contents were commercially sensitive and ‘must not be released to any party’. No specific commercially sensitive or confidential information is identified by the Opponent and, on the face of it, little in the declarations appears to me possess that character. In a context in which the Opponent bears the onus of establishing the opposition grounds it advances and I am required to provide cogent reasons for my decision, it is not feasible or reasonable to omit discussion of the Opponent’s evidence. Accordingly, remaining conscious of any potentially commercially sensitive or confidential material, I have proceeded to do so.

Evidence in Support

1. The first Jager declaration describes the Opponent’s founding and operation in September 2016, initially as a Gecko Sports franchise and, from mid-2018, as ‘The Stretch Lab’. Ms Jager asserts that the Opponent owns the common law trade mark ‘The Stretch Lab’ (‘Opponent’s mark’) and has used it since at least 6 July 2018 in respect of fitness services, ‘particularly in regard to stretching and body motion/flexibility’. She claimed it was adopted as ‘a name and brand that was easy to define the services offered and would clearly identify the Opponent.’ Ms Jager further outlines the Opponent’s sponsorship and merchandising activities and social media presence as ‘The Stretch Lab’. She disputes any use of the Trade Mark by the Applicant in Australia and asserts that its registration will cause consumer confusion.

Evidence in Answer

1. In his declaration Brad Walker, chief stretch advisor with the Applicant, lists his academic qualifications and experience, stating he was recruited by Xponential Fitness (the Applicant’s owner) in November 2017 ‘to help put together a training and education program for stretching.’ He describes the Applicant’s founding in California in June 2015 and states it ‘has developed reputable online presence through the health and wellness community globally’. He notes that Stretch Lab franchises were offered from April 2018 and, by October 2019, 238 had been sold. Several exhibits demonstrate the Applicant’s significant online presence, including endorsements from US social media influencers as well as considerable press and media attention. Mr Walker notes that the website and articles are accessible in Australia and that he, as an Australian, has promoted the brand to Australian followers and consumers generally. He states that since 1 August 2018 the Applicant has registered and operated three Australian domain names which revert to the Applicant’s US website. He further asserts that between January and July 2018, 8 Australians had made ‘specific enquiries regarding Stretch Lab franchising opportunities’ and 1% of the Applicant’s internet traffic in that period was from Australia. He notes his personal involvement in those inquiries.

Evidence in Reply

1. The second Jager declaration asserts that the Applicant’s evidence does not demonstrate any Australian presence. She denies any awareness of the Applicant’s business prior to commencing the Opponent’s ‘STRETCH LAB’ business. She further observes that the Applicant’s Australian online domains were registered after the Trade Mark filing dates .

Grounds of Opposition and Onus

1. The Opponent bears the onus of establishing one or more of the opposition grounds and the standard of proof required is on the balance of probabilities.[4]

   [4] Telstra Corporation Limited v Phone Directories Company Pty Ltd (2015) FCR 388, 420 [133] (Besanko, Jagot and Edelman JJ) affirming the approach in Pfizer Products Inc. v Karam (2006) FCR 585, 587-94 [6]-[26] (Gyles J).

2. As noted above, the opposition grounds claimed in the SGP are those under ss 42(b), 43, 58 and 60 of the Act. The Opponent advised in written submissions that it no longer pressed its s 43 ground of opposition.

3. The relevant date at which the grounds under s 52 and reg 17A.33 must be considered is the filing date of the opposed application (which in the case of the IRDA, is also the convention priority date).[5] In this case these dates are 1 August 2018 for Trade Mark 1945231 and 2 October 2018 for Trade Mark 1970615 (the‘relevant dates’ also referred to as the ‘priority date’ in s 60).

Consideration and reasons

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

Section 58

1. 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.

2. Having regard to s 58, the Full Federal Court in Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd identified the relevant principles.[6] 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 trade mark and that another person/entity has the earlier claim to ownership based on its use of the mark/s before the filing of an applicant’s mark or any use of it by the applicant as a trade mark.

   [6] (2017) 251 FCR 379, 390-1 [50].

3. The Opponent’s SGP in relation this ground is particularised as follows:

   The Opponent is the owner of the business name “The Stretch Lab”, in Australia and has used this trade mark, as defined by section 17 of the Trade Marks Act 1995 (Cth), to designate its business in the Australian market since 6 July 2018. The Opponent has used its “The Stretch Lab” trade mark in regard to the provision of services for fitness training, particularly relating to stretching and body motion/flexibility. The use of “The Stretch Lab” trade mark by the Opponent continues to the date of submission of this statement. The Opponent has in turn applied for a trade mark, No. 2010324 to register its common law trade mark rights to the Trade Mark.

4. The comments of Windeyer J in Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (‘Shell’) are relevant to the assessment of substantial identity:

   In considering whether marks are substantially identical they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison.[7]

   [7] Shell Co of Australia Ltd v Esso Standard Oil (Aust) Ltd [1963] HCA 66 [12].

5. On a side by side comparison of the Trade Marks and the Opponent’s mark I am satisfied that there is a total impression of resemblance between them such that they are appropriately regarded as substantially identical. The only difference, the use of the definite article ‘The’ in the Opponent’s mark, is of no material distinction.[8]

   [8] Carnival Cruise Lines v Sitmar Cruises Ltd [1994] FCA 936 [63].

6. As also 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’.[9] The evidence establishes that the Opponent provides fitness services, ‘particularly in regard to stretching and body motion/flexibility’. They are self-evidently ‘essentially the same’ services as those of the Trade Mark and I am satisfied they can be characterised as ‘the same kind of thing’.[10]

   [9] Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd (2018) 259 FCR 514, 528; [2018] FCAFC 6 [49].

   [10] Colorado Group Ltd v Strandbags Group Pty Ltd (2007) 164 FCR 506, 530 [88]-[89].

7. In relation to the question of prior use, Deane J said in Moorgate Tobacco Co Ltd v Philip Morris Ltd (No.2):

   The prior use of a trade mark which may suffice, at least if combined with local authorship, to establish that a person has acquired in Australia the statutory status of ‘proprietor’ of the mark, is public use in Australia of the mark as a trade mark, that is to say, a use of the mark in relation to goods for the purpose of indicating or so as to indicate a connexion in the course of trade between the goods with respect to which the mark is used and that person.[11]

   [11] (1984) 156 CLR 414, 432.

8. The Opponent relies significantly on the lack of evidence of the Applicant’s Australian use of the Trade Marks, contending that it has not provided evidence to prove its claims of prior use. This focus misconceives the Opponent’s onus. As noted above, it is not for the Applicant but for the Opponent to establish that it or another person has the earlier claim to ownership arising from its use of the mark/s prior to the Applicant’s first use of the Trade Marks in Australia.

9. The Opponent’s submissions contend that its evidence shows it has been ‘the owner of the common law trade mark for ‘STRETCH LAB’ since 25 May 2018’. The fact of the Opponent’s registration of ‘The Stretch Lab’ as a business name on 25 May 2018, on its own, does not establish Trade Mark use. The first Jager declaration asserts use of the Opponent’s mark ‘since at least 6 July 2018’ but does not offer or refer to any objective evidence substantiating this claim. The significance of this date is unclear. The Facebook and Instagram screenshots are dated 2019 and post-date the relevant dates. The photographs provided are unclear and/or undated and on this basis I give them little weight in assessing whether they demonstrate relevant use of the Opponent’s mark. While the Facebook page screenshot indicates that the page was created on 4 June 2018[12], without more, such as a screenshot from around that date, it is insufficient in establishing or enabling an inference to be drawn that at that date the Opponent’s mark was being used to distinguish its services in the course of trade. A TripAdvisor screenshot is also dated September 2019 however I note two comments on it are dated 18 and 19 August 2018 and apparently refer to attendance at the Opponent’s business. I give these comments little weight because they do not demonstrate the Opponent’s use of ‘The Stretch Lab’ at those dates. The various client testimonials are either undated or post-date the relevant dates.

   [12] First Jager declaration, annexure HJ-3, p27.

10. On this basis I am not satisfied the Opponent has demonstrated prior use of the Opponent’s mark (or marks substantially identical to the Trade Marks), at the relevant dates, such as to defeat the Applicant’s claim to ownership arising from its decision to apply to register/extend protection to the Trade Marks. It follows that the Opponent has not established the s 58 grounds of opposition.

Section 60

1. 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.

1. To succeed on this ground the Opponent must first establish that the trade mark on which it relies had a reputation in Australia at the Trade Marks’ priority dates and, secondly, that because of that reputation, the Applicant’s use of the Trade Marks would be likely to deceive or cause confusion.

2. The Opponent claimed in the SGP as follows:

   The Opponent commenced use of its “The Stretch Lab” trade mark, in the Australian marketplace on 6 July 2018 for fitness training, particularly relating to stretching and body motion/flexibility services (the Opponents services). The Opponent contends that the Applicant has not commenced use in Australia and in turn has acquired no reputation in the trade mark. As a result of the Applicant being granted registration and using its trade mark in relation to the applied for services, the Opponent submits that confusion is likely to arise amongst consumers (including initial interest confusion) between the substantially identical uses of the trade mark by the Opponent and Applicant.

3. Again, it is for the Opponent, not the Applicant, to establish the relevant reputation in the Opponent’s mark at the relevant dates (i.e., 1 August and 2 October 2018).

Reputation

1. Kenny J’s remarks in McCormick & Co Inc v McCormick[13] in relation to s.60 and the measurement of reputation are relevant in this respect:

   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.

   [13] (2000) 51 IPR 102; [2000] AIPC 91-637; [2000] FCA 1335 [127].

2. In addition, the reputation required to be demonstrated must be one of which a considerable number of people in the relevant market would be aware.[14]

   [14] Renaud Cointreau v Cordon Bleu International Ltd [2001] FCA 1170 [75].

3. The Opponent’s submissions refer to the Jager declarations in this regard and contend that the scope of persons and/or groups that are aware of and know the Opponent and its “STRETCH LAB” branded services ‘spans at least a population of 855,000 people across the Central Coast, Newcastle and Lake Macquarie areas of New South Wales, not to mention any other knowledge or reputation held in other areas and that this is enough to be considered significant for the purposes of section 60’.

4. The Jager declarations relevantly note that the Opponent has two clinics with plans to open more in New South Wales (‘NSW’). In addition to local sponsorships and agreements to treat various sportspersons, the Applicant is said to have received ‘unpaid plugs’ on the local radio station. The evidence of a modest number of Facebook and Instagram likes and followers, and 5-star reviews, is presented as of 26 September 2019. The Applicant is also shown, again at 26 September 2019, to be No. 7 of ‘things to do in Terrigal’ by Trip Advisor. As previously noted, the client testimonials provided by the Opponent are either undated or also post-date the relevant dates. Further, there is no evidence of any advertising and promotion expenditure, or sales revenue, under or by reference to the Opponent’s mark prior to the relevant dates. Therefore, while the Opponent may be developing a reputation in the fitness industry in NSW, its evidence falls short of establishing that its common law mark ‘The Stretch Lab’  was one of which a significant number of people in the Australian market, i.e. the fitness industry, were aware at the relevant dates.

5. It follows that I am not satisfied the evidence demonstrates the Opponent’s mark had acquired a reputation, at either 1 August or 2 October 2018, sufficient to enliven s 60(a). In the circumstances it is unnecessary to consider s 60(b).

6. The Opponent has failed to establish the s 60 ground of opposition.

Section 42

1. Section 42 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)  the trade mark contains or consists of scandalous matter; or

   (b)  its use would be contrary to law.

2. The Opponent particularised this opposition ground[15] as follows:

   The Opponent commenced use of its “The Stretch Lab” trade mark, in the Australian marketplace on 6 July 2018 for the Opponents services. The Opponent has in turn applied for a trade mark, No. 2010324 to register its common law trade mark rights to the Trade Mark. The Opponent has therefore and continues to build reputation and goodwill in the trade mark, for substantially the same services as the Applicant. It is submitted that registration and use of a substantially identical trade mark for the same or similar services constitutes misleading and deceptive conduct under section 18 of the Australian Consumer Law (ACL), in additional to being a false representation (section 29 of ACL) and a breach of the tort of passing off, as an incorrect association and connection in trade is likely to arise between the Opponent and Applicant. This connection is also one which is likely to cause confusion amongst consumers and suggest that the Applicant’s services are provided by or with the approval of the Opponent.

   [15] This is the same SGP content as for trade mark 1970615 with the addition of the second sentence.

1. 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.[16]

   [16] Primary Health Care Limited v Commonwealth of Australia [2017] FCAFC 174 [411] (Rangiah J).

2. The Opponent has failed to establish a ground of opposition under s 60. As the test for misleading or deceptive conduct under s 18 or s 29 of the Australian Consumer Law (‘the ACL’) is more strict than that for deception or confusion under s 60,[17] it follows that the Opponent has also failed to establish that the use of the Trade Mark would be contrary to s 18 or s 29 of the ACL. Also, where trade mark use does not contravene s 18 or s 29 of the ACL, it will not constitute passing off.[18] 

   [17] See, eg: Ownit Homes Pty Ltd v Ownit Conveyancing Pty Ltd [2005] ATMO 47, [36]; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191, 198 (Gibbs CJ).

   [18] Re Equity Access Pty Ltd v Westpac Banking Corporation [1989] FCA 506 [40].

3. For these reasons I am not satisfied, in the absence of any further persuasive evidence in this regard, that the Opponent has discharged the onus on it to establish that use of the Trade Marks would be likely to mislead or deceive within the meaning of s 18 or s 29 of the ACL or would constitute passing off. It follows that the s 42(b) ground has not been established.

Decision

1. In relation to trade mark 1945231, s 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.

2. The Opponent has failed to establish any of the grounds of opposition nominated in the SGP. The Trade Mark may accordingly proceed to registration after one month from the date of this decision. If the Registrar is 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.

3. In relation to trade mark 1970615, reg 17A.34N relevantly provides:

   Decision on opposition

   (1) Unless the opposition proceedings are discontinued or dismissed, the Registrar must decide:

   (a) to refuse protection in respect of all of the goods or services listed in the IRDA; or

   (b) to extend protection in respect of some or all of the goods or services listed in the IRDA (with or without conditions or limitations);

   having regard to the extent (if any) to which the grounds on which the IRDA was opposed have been established.

4. As noted above, the Opponent has failed to establish a ground of Opposition. Protection of the Trade Mark shall therefore be extended to Australia one month from the date of this decision. If the Registrar is served with a notice of appeal before that time, I direct that the extension of protection shall not occur until either the appeal has been withdrawn or the court so orders. If the Registrar is not served with a notice of appeal before that time the International Bureau will be notified of this decision as soon as practicable after the appeal period has ended, in accordance with reg. 17A.34N(2).

Costs

1. The Applicant has sought an award of costs. As the Opponent has not established a ground of opposition, I award costs respect of trade mark number 1945231 against the Opponent under section 221 of the Act in the relevant amounts under Schedule 8 of the Trade Mark Regulations 1995. In respect of trade mark number 1970615 I award reduced costs against the Opponent in the same manner as indicated in Hume Industries (Malaysia) Berhard v James Hardie & Coy Pty Ltd.[19]

   [19] [2001] ATMO 78.

Mary-Ann Cooper

Hearing Officer

Oppositions and Hearings

Trade Marks and Designs

16 November 2020.