Richard Khouzame v Melambada Pty Ltd

[2017] ATMO 88

TRADE MARKS ACT 1995

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

Re:Opposition by Richard Khouzame to registration of trade mark application 1678344 (43) – HEAVEN WOODFIRE PIZZA (and Device) - filed in the name of Melambada Pty Ltd

Delegate:	Nicholas Smith Decision on the Written Record
Decision:	2017 ATMO 88 Trade Marks Act 1995 (Cth) - Section 52 opposition: ss 58 and 62A considered – neither ground of opposition established – trade mark to proceed to registration

Background

1.       This is an opposition brought by Richard Khouzame (‘Opponent’) pursuant to s 52 of the Trade Marks Act 1995 (‘Act’) to registration of the trade mark subject of the application detailed below in the name of Melambada Pty Ltd(‘Applicant’):

Application Number:	1678344
Priority Date:	3 March 2015
Services:	Class 43: Booking of restaurant places; Booking of restaurant seats; Inn keeping (bar, restaurant and accommodation); Provision of information relating to restaurants; Provision of restaurant booking or reservations from customer loyalty and frequent buyer schemes; Rental of cooking equipment for restaurants; Restaurant booking or reservation services provided in relation to a customer loyalty or frequent buyer scheme; Restaurant booking or reservation services provided in relation to a frequent flyer scheme; Restaurant booking or reservation services provided in relation to frequent flyer schemes; Restaurant reservation services; Restaurant services; Restaurant services for the provision of fast food; Restaurants; Salad bar restaurant services; Self-service restaurants; Theatre restaurants (Provision of food and drink)Booking of restaurant places; Booking of restaurant seats; Provision of information relating to restaurants; Restaurant booking or reservation services provided in relation to a customer loyalty or frequent buyer scheme; Restaurant booking or reservation services provided in relation to a frequent flyer scheme; Restaurant booking or reservation services provided in relation to frequent flyer schemes; Restaurant reservation services; Restaurant services; Restaurant services for the provision of fast food; Restaurants; Salad bar restaurant services; Self-service restaurants; Takeaway food and drink services  (‘Applicant’s Services’)
Trade Mark:	(‘Trade Mark’)

2.       Following advertisement on 12 November 2015 in the Australian Official Journal of Trade Marks of the application’s acceptance for possible registration, the Opponent filed a Notice of Intention to Oppose on 6 January 2016, and a Statement of Grounds and Particulars (‘SGP’) on 6 February 2016. The SGP was assessed by this office as adequate. The Applicant filed a Notice of Intention to Defend on 1 March 2016. The SGP raised grounds of opposition pursuant to ss 58 and 62A of the Act.

Evidence

3.       The Opponent filed as Evidence in Support (‘EIS’) of its opposition a declaration made on 29 June 2016 by the Opponent (‘Khouzame Declaration’).  The declaration included a number of annexures identified in various manners including a signed letter from a Trevor Mok, Property Manager of the Sunshine Trust.  The Applicant did not file any evidence.

1. Once the time allowed for filing evidence had ended the parties were given an opportunity to request a hearing or to file written submissions.  Neither party chose to avail themselves of these opportunities.  By letter issuing from IP Australia on 11 January 2017 the parties were notified that as neither party had requested a hearing 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 they wished to reply upon.  Neither party chose to file submissions in this matter.

2. I am a delegate of the Registrar of Trade Marks and I am to decide the opposition as required by section 55 of the Act which relevantly provides that, unless the proceedings are discontinued or dismissed, the Registrar must, at the end, decide on the basis of the written record, comprised of the materials mentioned in the previous paragraphs:

   (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.

   The Opponent

   6.       It apparent from the SGP and the EIS that the Opponent is the owner of a number of trade marks which are registered in New Zealand, including the following relevant trade mark:

NZ Trade Mark Number:

789900

Filing Date:

23 May 2008

Services:

Class 43: Pizza takeaway services

 (‘Opponent’s Services’)

Trade Mark:

(‘Opponent’s Trade Mark’)

1. The Opponent has licensed a similar word mark, ‘HEAVEN WOODFIRE PIZZA’ to the purchaser of a New Zealand business which the Opponent previously owned.  The Opponent sold this ‘Heaven Woodfire Pizza’ business in 2013, following which the Opponent moved to Australia.  The Opponent is currently resident in Australia and intends to commence trading in Australia.

   The Applicant

   8.       The Applicant has provided no evidence and, therefore, I am unable to provide any information about the Applicant and any use of the Trade Mark by it.

   Grounds of Opposition, Onus and Standard of Proof

   9. As indicated above, in the SGP the Opponent has nominated grounds of opposition pursuant to ss 58 and 62A. To successfully oppose the application the Opponent needs to establish at least one of those grounds in relation to all the claimed services.

2. The onus of proof in an opposition rests upon the Opponent.[1]  The relevant standard of proof is the ordinary civil standard based on the balance of probabilities.[2]  The date at which the rights of the parties are to be determined is 3 March 2015, being the filing date of the application in Australia (‘relevant date’) (except in circumstances, not present here in which a different priority date is provided for in the Act).[3]

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

   [2] Following Pfizer Products Inc v Karam (2006) 70 IPR 599, [6]-[26], and Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [133].

   [3] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592, 595, see also s 29(1) Trade Marks Act 1995 (Cth).

   Discussion

   Section 58 – Applicant not owner of trade mark

   11. Section 58 of the Act is reproduced below:[4]

   [4] While this decision has been based on an independent analysis of the evidence before me, in summarising the principles that apply with respect to the ss 58 and 62A of the Act and the conclusion in respect of the s 58 ground I have paraphrased the unpublished decision of the Registrar’s Delegate in respect of the opposition to Trade Mark Application No. 1678345 – Heavens Woodfire Pizza - in the name of Melambada Pty Ltd.

   Section 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.

   Note:For applicant see section 6.

3. The owner of a trade mark is the person who first uses it in Australia, or first files a trade mark application in Australia, whichever is the earlier.  It is now well established at law that in order to succeed under this ground of opposition the Opponent must establish three factors.  These are:

   · that the Trade Mark is identical, or substantially identical, to the trade mark(s) relied upon by the Opponent (‘the first factor’);[5]

   [5] Carnival Cruise Lines Inc. v Sitmar Cruises Limited (1994) 31 IPR 375.

   · that the Applicant’s Services are the ‘same kind of thing’ as the services for which the trade mark(s) relied upon by the Opponent was used (‘the second factor’);[6] and

   [6] Re Hicks’ Trade Mark (1897) 22 VLR 636.

   ·     that a person other than the Applicant has the earlier claim to ownership of the Trade Mark based on use of the trade mark(s) relied upon by the Opponent prior to whichever is the earlier of: (a) the application to register; or (b) any actual use of the Trade Mark by the Applicant (‘the third factor’).[7]

   [7] Settef SpA v Riv-Oland Marble Co (Vic) Pty Ltd (1987) 10 IPR 402, 413.

4. The ground based on s 58 of the Act was particularised in the SGP as follows:

   The opposed party as licensees of the trademark ‘Heavens Woodfire Pizza’ in New Zealand, have entered into a legal agreement with the opposing party. This agreement states that they shall not use the trademarks for any other purpose, therefore I feel that applicant does not have good title to the mark.

5. There is no assertion by the Opponent, nor is there any evidence to show, that the Opponent has used the Trade Mark, ‘HEAVEN WOODFIRE PIZZA’, or any other trade mark, in Australia prior to the relevant date.  The Opponent has therefore failed to establish the third factor and, consequently, has failed to establish this ground of opposition.  It is unnecessary for me to consider the other two factors.

   Section 62A – Application made in bad faith

   15. 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.

6. 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.

7. The case of Fry Consulting Pty Ltd v Sports Warehouse Inc. (No 2) is a current leading Australian authority on this section of the Act. In that case, Dodds-Streeton J made the following comments:

   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.[8]

   [8] Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) [2012] FCA 81, [24]-[26].

8. 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.[9]

   [9] Ibid [165]-[166].

9. The Opponent has particularised this ground of opposition as follows:

   The applicant are licensees of the trade mark ‘Heaven Woodfire Pizza’[10] in New Zealand, of which I own. Knowing that we are residing in Australia they made no effort to contact us prior to opening a store in VIC using our trademarks. When contacting them regarding the application they suggested that we ‘could come to some agreement’, but have since ignored all contact. As our children are now reaching school age we plan on trading in Australia using our much invested in IP. This application was made in bad faith and is of great concern to us.

   [10] Notwithstanding the Opponent’s Trade Mark consists of the words ‘Heaven’s Woodfire Pizza’ and device, identical to the Trade Mark other than the addition of the ‘’s’ this reference to ‘Heaven Woodfire Pizza’ appears to be intentional as there are other documents, discussed later, which make the same reference.  

10. There are significant issues with the evidence upon which the Opponent relies upon in establishing this ground of opposition.  The EIS includes a number of pages from a document which is declared to be a ‘contractual agreement with the applicants’.  The pages appear to be parts of a contract for the sale of a business.  The pages provided include clauses controlling the use of ‘Heaven Woodfire Pizza’ by ‘the Purchaser’.  

11. However the pages provided are incomplete.  The EIS does not exhibit the whole of the document and in particular the parties to the contract are not shown and importantly it is not established that the Applicant is a party to this contract or has even entered into a contract of this nature. 

12. The EIS also includes a document which is declared to be, ‘a statement from Trevor Mok, who is the landlord and property manager of the Heaven Pizza premises in New Zealand’.  Mr Mok’s statement indicates that the Heaven Woodfire Pizza’s business was sold by the Opponent to Nicholas Haidamouse and Chadi Boussab.  

13. The Opponent has provided no evidence or statements that set out the connection, if any, between the Applicant and Nicholas Haidamouse and Chadi Boussab.  Given the assertion in the EIS that the sale of the Heaven Woodfire Pizza business was to the ‘the applicants’, Mr Mok’s statement only adds to the uncertainty as to who the parties to the contractual agreement actually were.  There is no clear evidence of the Applicant’s knowledge of the Opponent, the Opponent’s Trade Mark or the intentions of the Opponent to use the Opponent’s Trade Mark or related marks in Australia.

14. Because of the shortcomings of and the uncertainties contained in the EIS I am not satisfied that the knowledge of the Applicant was such that its decision to apply to register the Trade Mark in Australia would be regarded as in bad faith by persons adopting proper standards.  Consequently, the Opponent has failed to establish this ground of opposition.

    Decision

    25.     The Opponent has failed to establish any of the grounds of opposition it nominated in the SGP. As a result, I find that Trade Mark application no. 1678344 may proceed to registration not less than 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 discontinued.  Otherwise the disposition of the application should be in accordance with the Court’s order or direction.

    Nicholas Smith
    Hearing Officer
    Oppositions and Hearings
    16 August 2017