Sand 4 U Supplies Pty Ltd v BSC Assets Pty Ltd

[2017] ATMO 89

TRADE MARKS ACT 1995

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

Re:Opposition by Sand 4 U Supplies Pty Ltd to registration of trade mark application 1688164 (19) - ALL SAND 4 U SUPPLIES - in the name of BSC Assets Pty Ltd

Delegate:

Nicholas Smith

Decision on the Written Record

Decision:

2017 ATMO 89

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

Background

1.  This is an opposition brought by Sand 4 U Supplies Pty Ltd (‘Opponent’) pursuant to s 52 of the Trade Marks Act 1995 (Cth) (‘Act’) to the registration of the trade mark subject of the application detailed below in the name of BSC Assets Pty Ltd (‘Applicant’):  

Application Number:	1688164
Filing Date:	27 April 2015
Goods:	Class 19: Building sand; Sand (except foundry sand); Sand (other than moulding sand); Sand for use in building; Sand for use in civil engineering; Sand for use in construction; Sand for use in sand blast decoration; Cement  (‘Applicant’s Goods’)
Trade Mark:	ALL SAND 4 U SUPPLIES     (‘Trade Mark’)

2.  Following the advertisement on 17 September 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 13 November 2015.  The Opponent then filed a Statement of Grounds and Particulars (‘SGP’) on 14 December 2015. Following an amendment to the SGP, the SGP was assessed by this office as adequate. The Applicant filed a Notice of Intention to Defend on 24 February 2016. The SGP raised grounds of opposition under ss 41, 42, 58, 58A, 60 and 62A of the Act.

Evidence

3.  The Opponent filed Evidence in Support of its opposition (‘EIS’) on 6 June 2016.  This evidence consists of a declaration made on 3 June 2016 by Luke Caridi (‘Caridi’), director of the Opponent, with Exhibits LC-01 to LC-10 and ML-01 (‘Caridi 1’).

4.  The Applicant filed Evidence in Answer (‘EIA’) on 26 August 2016.  This evidence consists of a declaration by Dominic Giannini (‘Giannini’), the director of the Applicant, made on 23 August 2016, with Exhibits DG-1 to DG-10 (‘Giannini Declaration’).  The Giannini Declaration was accompanied by a letter from the Applicant’s representatives, Griffith Hack Patent & Trade Mark Attorneys, that I will treat as submissions. 

5.  Paragraph 3 of the Giannini Declaration claims the entirety of the declaration, including publically available information such as the result of ASIC searches, as confidential.  I adopt the approach of the Delegate in Source Homeloans Pty Ltd v Coles Group Ltd, who when in receipt of a similar claim (which involved evidence from the opponent in that case) stated:

The confidentiality claim obviously extends to the whole of the evidence led in support of the opposition. It is not clear to me how I could decide this matter without discussing the evidence the opponent has served and filed in support of its opposition. The onus in these proceedings is on the opponent to establish its grounds of opposition, at least to my satisfaction. Seemingly barred from any discussion of the opponent’s statements and exhibits and the weight that I attach to them if I were to lend credence to the claim, my hands would appear to have been effectively tied. Prima facie, the easiest way out of the dilemma would be to accede to the opponent’s wishes and find that it has not established its opposition. Thus, if I were to take Mr Peter’s request (made within several declarations) at face value, that would be the end of these matters.

This position, obviously, is extreme, since the opponent has filed this evidence in support of its opposition and must expect the evidence to be discussed and weighed. It will be sufficient for me to say, in setting out my reasons for my decision, that there are arguably commercially sensitive matters in the evidence that I do not need to discuss in detail (and, if I do, my consolation lies in the fact that the opponent in not being specific in its request has brought the problem upon itself). None the less, the evidence of the parties as a whole satisfies me of various things, which I will set out under the appropriate headings below.[1]

[1] Source Homeloans Pty Ltd v Coles Group Ltd [2008] ATMO 17, [5]-[6].

6.  In addition to the claim to confidentiality in paragraph 3 of the Giannini Declaration, paragraph 43 of the Giannini Declaration specifically claims that two paragraphs and one exhibit are confidential.  Since these two paragraphs and one exhibit contain information which might reasonably be considered commercially sensitive I will not refer to the information contained in those two paragraphs or the exhibit in question in this decision.

7.  The Opponent filed Evidence in Reply (‘EIR’) on 31 October 2016.  This evidence consists of a second declaration made on 28 October 2016 by Luke Caridi, with Exhibits LC-01 to LC-06 as well as Exhibits PI-01a and PI-01b (‘Caridi 2’).

8.  By letter from IP Australia dated 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.  On 10 February 2017, the Opponent filed its submissions (‘Opponent’s Submissions’).  On 13 February 2017, the Applicant filed its submissions (‘Applicant’s Submissions’). 

9. 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 this case the written record consists of the original application, the SGP, the evidence and submissions described above and the letter from the Applicant’s attorneys which accompanied its EIA and which, as mentioned, I propose to treat as a submission.

The Opponent

1. The Opponent has conducted a business since at least 2011 that supplies a range of building and landscaping products such as sands, soils, gravels and cements and provides related delivery and pick up services.

2. Caridi 1 and 2 contain the following claims/statements, paraphrased unless otherwise noted:

   ·     Prior to 2014 the Opponent traded under a different name to its current name.  In February 2014 the Opponent registered the business name ‘Sand4U Building and Landscape Supplies’ and in July 2014 the Opponent adopted its present company name, Sand 4 U Supplies Pty Ltd, with public promotion of the new name commencing in September 2014.

   ·     Since September 2014 the Opponent has used the unregistered trade marks SAND4U and SAND4U SUPPLIES in connection with a range of building and landscaping products such as sands, soils, gravels, cements and in providing related delivery and pick up services.

   ·     The Priority Date for the Trade Mark is 27 April 2015, well after the Opponent commenced use of its SAND4U and SAND4U SUPPLIES marks.

   ·     The director of the Applicant, Giannini, is also the director of a company that trades as ‘Bankstown Sand and Cement’.  Giannini is Caridi’s uncle by marriage and Caridi worked full time for Giannini for 12 years from 2002 to 2014 and part time for several years before that.  Ultimately the relationship between Caridi and Giannini broke down over a personal matter and Caridi chose to start a competing business.  

   ·     Caridi 1 states that ‘Given the extensive history between us, the family connection and the closeness of our geographical locations, I have no doubt that [Giannini] was aware that I started my own business in 2014 and I have no doubt he was aware that I had selected the name SAND4U Supplies Pty Ltd and adopted to use the SAND4U Marks in promoting my business.’ The Applicant’s Bankstown Sand and Cement business and the Opponent trade from locations 8 kilometres apart.

   ·     As of the date that Caridi 1 was deposed, Caridi had been unable to find any evidence that the Trade Mark has ever been used at any time in the course of trade in connection with the relevant goods.  In particular the Trade Mark does not appear on the invoices for sales of goods from Bankstown Sand and Cement.

   ·     The Opponent has promoted its SAND4U and SAND4U SUPPLIES marks since September 2014 by way of a website at company stationery, vehicle and premise signage, and through use on promotional items.  It used the SAND4U and SAND4U SUPPLIES marks prior to the date the Applicant applied to register the Trade Mark on invoices, as part of its ‘Sand4U Building and Landscape Supplies’ business name, on the packaging of goods and on its website.

3. Caridi 1 attaches a declaration from a third party, Martin Lagana, who joined the Opponent’s business after previously working for Bankstown Sand and Cement, wherein Mr Lagana claims neither the Applicant nor any affiliated enterprises including Giannini Holdings Pty Ltd used or made any attempt to use the Trade Mark.

Response to the Opponent’s evidence

1. The Giannini Declaration states that:

   ·     the EIS provided by the Opponent allegedly showing use of the SAND4U and SAND4U SUPPLIES marks prior to the relevant date is either undated or does not show use of the SAND4U and SAND4U SUPPLIES marks as trade marks; and

   ·     The Opponent is acting in bad faith in that its director and founder was aware of the Applicant’s use of the Trade Mark prior to leaving the business of the Applicant and starting his own business with a similar name.

The Applicant

1. The Applicant is a producer and wholesaler of building supplies, plastering and concreting materials, road base materials, materials for retaining walls, sand, soil, stones and gravel. 

2. The Giannini Declaration claims that the Applicant first used the term ‘Sand 4 U’, which is the distinctive and dominant element in the Trade Mark, in 1998 and has used it to promote the Applicant’s business from that date.  

3. The Giannini Declaration contains exhibits that are stated to be evidence of the Applicant’s use of the term ‘Sand 4 U’ being:

   ·      A document indicating the registration of a number plate for the term ‘Sand 4 U’ for entities connected to the Applicant including Bankstown Sand & Cement or Giannini Family Holding Pty Ltd;

   ·     A photograph of a truck, said to be taken in 2005, bearing the Sand 4 U number plate;

   ·     Declarations from employees of Bankstown Sand & Cement as to the use of the Sand 4 U number plate;

   ·     Examples of designs for a logo containing the words ‘All Sand 4U’ (‘All Sand 4 U Logo’) that is stated as being intended to be be displayed on the Applicant’s trucks and trailers; and

   ·     The All Sand 4 U Logo displayed as part of what is stated to be the Applicant’s website in August 2016;

   ·     A tax invoice dated 4 July 2016 that features the name ‘Bankstown Sand & Cement’ at the top, flanked on either side with two logos, one being ‘BSC’ in blue surrounded by a yellow oval, and the other being the All Sand 4U logo.

Response to the Applicant’s evidence

1. Caridi 2 states that the evidence in the Giannini Declaration allegedly showing the use of the Trade Mark prior to September 2014 is either not use as a trade mark or is not use by the Applicant.  At the date when the Giannini Declaration was made the Applicant had not used the Trade Mark (or one similar thereto).  

Grounds of Opposition, Onus and Standard of Proof

1. As indicated above the SGP nominates grounds of opposition under ss 41, 42, 58, 58A, 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. Consequently, it is unnecessary that I consider the remaining grounds. 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.

2. The onus of proof in an opposition rests upon the Opponent.[2]  The relevant standard of proof is the ordinary civil standard based on the balance of probabilities.[3]  The date at which the rights of the parties are to be determined is 27 April 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).[4]

Discussion

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

[3] 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].

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

Section 62A

1. 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.

2. 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.

1. The case of Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) (‘Fry’) is a leading authority on this section.  In that case, Dodds-Streeton J made the following comments, quoting from Harrison’s Trade Mark Application[5]:

   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.[6]

   [5] [2004] EWCA Civ 1028; (2005) FSR 10.

   [6] [2012] FCA 81, [147].

2. 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.[7]

   [7] Ibid [165]-[166].

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

   The Applicant was aware of the Opponent's business and SAND4U branding at the time of filing for the Opposed Mark.  The parties have past dealings with one another. The Opponent understands that the Applicant trades a business [sic] known as Bankstown Sand and Cement. The parties have been closely connected in the past and the Opponent has first hand knowledge the Applicant does not use the Opposed Mark. The Opponent considers the Applicant filed as it identified the Opponent had not yet filed to protect its established brand and has done so simply to create issues for the Opponent.

4. It is not in dispute that the director of the Opponent (Caridi) is the son-in-law of the director of the Applicant (Giannini).  I accept that Caridi worked for the business known as Bankstown Sand & Cement, which is owned by Giannini Family Holding Pty Ltd, of which Giannini is also a director, that the two men had a falling out over a personal issue and that Caridi subsequently left and started his own company.

5. The EIA contains statements to the effect that the Applicant operates a business known as Bankstown Sand & Cement (and indeed exhibits declarations from individuals said to be employees of the Applicant).  This is incorrect.  As indicated in Annexures DG-1 and DG-9 to the Giannini Declaration, Bankstown Sand & Cement is a business owned by Giannini Family Holding Pty Ltd and not the Applicant.  While Giannini Family Holding Pty Ltd and the Applicant may have a common director, there is no evidence of any other connection between them or evidence that the Applicant has licensed (formally or informally) the Trade Mark to Giannini Family Holding Pty Ltd.

6. The Opponent and director of the Applicant work in the same industry and their respective businesses trade from locations 8 kilometres apart.  The Opponent registered ‘Sand4U Building and Landscape Supplies’ as a business name in February 2014 and changed its name to ‘Sand 4 U Supplies Pty Ltd’ in July 2014.  I accept the Opponent’s evidence that at the relevant date the Opponent was using the following logo  (‘SAND4U Logo’) on its trucks, on its bags of sand and other goods and on its price lists.  For several months prior to the relevant date the Opponent also operated a website at where it offers sand, cements, gravel, concrete mix and other building materials.  On this website the Opponent uses the SAND4U Logo and SAND4U (‘SAND4U Mark’, collectively the ‘Opponent’s Marks’) to identify its products.   

7. Given the family connection between the director of the Applicant and the director of the Opponent, the fact that the Opponent and Bankstown Sand & Cement trade in the same industry and geographical location, I find it unlikely that at the relevant date, the Applicant’s director (Giannini) was unaware that the Opponent was using the Opponent’s Marks, both of which are in my view ‘deceptively similar’[8] to the Trade Mark.

   [8] As defined in s 10 of the Act.

8. I am not satisfied that the Applicant used the Trade Mark or a similar mark prior to the relevant date.[9] The use of the number plate SAND4U on a single truck owned by Bankstown Sand & Cement from 1998 to 2004/5 is not use of a mark similar to the Trade Mark by the Applicant. Not only is not use by the Applicant (as noted in paragraph 26 above), there is no evidence supporting the Applicant’s claim that the number plate was being used as a trade mark, as opposed to a vanity number plate. While I accept the Applicant’s Submissions that vehicle number plates are often used for promotional purposes and a display on a number plate could amount to trade mark use, in the present case there is simply no evidence that satisfies me that by registering a particular number plate Giannini Family Holding Pty Ltd was using SAND4U as a trade mark in the sense described by s 17 of the Act.

   [9] This also answers the allegations made in the cover letter to the EIA, treated as submissions, that suggest that the Opponent is acting in bad faith, although the Opponent’s bona fides is not strictly relevant to a finding under s62A of the Act.

1. There is also no evidence of any use of any mark corresponding to the Trade Mark by the Applicant after the relevant date.  The EIA provides evidence of a logo consisting of the words ‘All Sand 4 U’ on the Bankstown Sand & Cement website and on a Bankstown Sand & Cement invoice.  However this is both after the commencement of the opposition proceedings and is not use by the Applicant.  As such, I do not accept the Applicant’s Submissions that the Applicant is the true owner of the SAND 4 U Trade Mark and hence no bad faith can be found.

2. On the evidence before me and on the balance of probabilities I find that the conduct of the Applicant in applying to register the Trade Mark would, to use Dodd-Streeton J’s formulation in Fry, ‘be regarded as in bad faith by persons adopting proper standards.’  I am satisfied on the evidence before me that the Applicant applied to register a trade mark that is deceptively similar to the Opponent’s Marks, in awareness of the Opponent’s use of them, in circumstances where the Applicant had not used the Trade Mark before, and on the basis of the evidence before the Registrar, has taken no significant steps to use the Trade Mark since.  These circumstances are analogous (though not identical) to the circumstances in Fry. However in that case, there were mitigating circumstances that the then applicant could rely on in answer to the s 62A ground of opposition, namely its offering to cease use of the mark and its development of a business under the mark for two years prior to the application for registration. In the absence of similar mitigating circumstances and given the poor personal relationship between the directors of the parties, I find that the Opponent has established its s 62A ground.

Decision

1. 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

1. 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.  As the Opponent has established a ground of opposition, I award costs against the Applicant as per Schedule 8 of the Trade Marks Regulations 1995.

Nicholas Smith

Hearing Officer

Trade Mark and Designs Hearings

16 August 2017