Save My Bacon Ltd v Marketing Intelligence Ltd

[2014] ATMO 84

TRADE MARKS ACT 1995

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

Re:Opposition by SAVE MY BACON LTD to registration of trade mark application 1509463 (35, 36, 41) - SAVE MY BACON - filed in the name of MARKETING INTELLIGENCE LTD.

Delegate:	Heath Wilson
Representation:	Opponent: Written submissions from Maddocks. Applicant: Written submissions from Ben Cain of James & Wells Intellectual Property.
Decision:	2014 ATMO 84 Opposition under section 52 of the Trade Marks Act 1995 – sections 58, 59, 42(b), 60 and 62A pressed – s62A established – Trade Mark refused registration.

Background

1. Marketing Intelligence Ltd (‘the Applicant’) applied to register a trade mark under the provisions of the Trade Marks Act 1995 (‘the Act’), the current details of which are outlined below:

Trade Mark No. 1509463

Trade Mark: SAVE MY BACON (‘the Trade Mark’)

Filing Date: 21 August 2012

Specification of Services:

Class 35: Accountancy (including accountancy services related to tax); preparation of accounts; preparation of documents relating to taxation; preparation of income tax returns; preparation of invoices; preparation of statements of accounts; preparation of tax returns; executors of estates, businesses; business modelling services; business project management; registry services (administration services being recording and maintaining lists and information for others); collection of fees or payments for others; searches relating to company information; business accounting; computerised accounting; cost accounting; cost management accounting; management accounting; book-keeping; computerised book-keeping; administration of business affairs; auditing; computerised auditing; administration of the business affairs of franchises; administrative processing of purchase orders; advice relating to business management; advice relating to business organisation; advice relating to the acquisition of businesses; advice relating to the sale of businesses; payroll advisory services; payroll assistance; payroll preparation; payroll processing services (for others); auditing of accounts; budgeting advice and advisory services to businesses; budgeting advice and advisory services to householders and home owners; business accounts management; business advisory services including advisory services and the operation of franchises relating to the management of businesses; business consultancy to individuals, companies and bodies; business records keeping; business secretarial services; charitable services, namely business management and administration; charitable services, namely the recruitment, organisation and deployment of volunteers; charitable services, namely organising and conducting volunteer programmes and community service projects; organising and conducting volunteer programmes and community service projects; collecting information for business, data and statistics; company monitoring; company record-keeping; compilation of commercial information; computer data processing; computerised business records keeping; computerised payroll preparation; cost analysis; drawing up of statements of accounts; economic analysis for business purposes; economic forecasting analysis for business purposes; efficiency or process auditing (examining, reviewing or assessing the working of a business or organization); employee record services; invoicing; maintenance of registers; maintenance of asset registers (for others); maintenance of personnel records (for others); management advisory services for businesses; market reporting consultancy; market research data collection services; business plans and business planning; advisory services relating to business planning; strategic business planning; administration relating to business planning; promotion (for others) in relation to taxation, trusts and financial affairs, monetary affairs, insurance, superannuation services, equity and debt investments (including securities and financial products); advisory, consultancy and information services in relation to the aforesaid services; the provision of the aforesaid services online via the Internet or other computer networks

Class 36: Financial affairs; monetary affairs; financial, investment and monetary services; lending services; advancement of funds; collection of payments; charitable services, namely financial services and insurance services; financial payment services; payment of bills and accounts for others; provision of money and other credit and lending facilities; private equity and debt investment; term loan financing; loan services; financing services (commercial, consumer, inventory, financial assurance); financial management services; financial planning services; financing loans; fund investments; hire-purchase financing; joint venture financing; lease-purchase financing and loans; money management and investment services; insurance services including brokerage, consultancy and risk management; mortgage protection policies and insurance; general insurance, personal incapacity insurance, house owners and householders insurance, personal property insurance and professional indemnity insurance; services in this class rendered by agents engaged in such insurance businesses; money management and investment services; insurance claim settlements; insurance claims adjustments; insurance brokerage, distributing and organising insurance services; advisory, consultancy and information services in relation to the aforesaid services; the provision of the aforesaid services online via a website, the Internet or other computer networks

Class 41: Education services; legal education services; weblog (blog) services (online publication of journals or diaries); publication of educational texts; publication of educational materials; electronic publication of information on a wide range of topics, including online and over a global computer network; educational consultancy services; advisory services relating to education; providing online electronic publications (not downloadable); mentoring (education and training); publication of electronic books and journals online; coaching (education and training); publication of multimedia material online; providing information, including online, about education, training, entertainment, sporting and cultural activities; business educational services; education advisory services; provision of educational services via an online forum; charitable services, namely education and training; charitable services, namely academic mentoring; consultancy services relating to education; adult education services; educational seminars

1. After the Trade Mark was advertised as accepted in the Australian Official Journal of Trade Marks on 6 December 2012, a notice of opposition was filed by Save My Bacon Limited (‘the Opponent’) on 26 February 2013. The notice of opposition nominated grounds of opposition under sections 41, 42, 58, 59, 60, and 62A of the Act. Subsequently, the evidence stages for the opposition proceeded as follows:

Evidence

Evidence in Support

• Statutory declaration of Kent Gillman (Chief Executive Officer of the Opponent) made 23 August 2013 with exhibits KNG-1 to KNG-41.

Evidence in Answer

• Statutory declaration of Edward Recordon made 25 November 2013.

• Statutory declaration of Jon Mells (Managing Director of the Applicant) made 28 November 2013 with exhibits JRM1 to JRM13.

Evidence in Reply

• Statutory declaration of Kent Gillman made 3 March 2014 with exhibit KNG-42.

1. The Applicant requested a hearing by way of written submissions only. The Opponent provided its written submissions on 25 July 2014 and the Applicant filed its written submissions on 1 August 2014.

2. In its submissions, the Opponent relied on the grounds of opposition under sections 58, 59, 42(b), 60 and 62A of the Act. As with all oppositions before the Registrar of Trade Marks, the Opponent bears the onus of establishing a ground of opposition on the civil standard of the balance of probabilities.[1] Only one ground of opposition needs to be established in relation to all goods and services within a specification for an opposition to registration to be successful. The following constitutes my decision made as a delegate of the Registrar.

   [1] See Pfizer Products Inc v Karam [2006] FCA 1663; 237 ALR 787; (2006) 70 IPR 599; [2006] AIPC 92-146; Chocolaterie Guylian N.V. v Registrar of Trade Marks [2009] FCA 891; (2009) 180 FCR 60; (2009) 258 ALR 545; (2009) 82 IPR 13; [2009] AIPC 92-355 at [22] to [26] and NV Sumatra Tobacco Trading Company v British American Tobacco Services Limited [2011] FCA 1051; DC Comics v Cheqout Pty Ltd [2013] FCA 478; (2013) 101 IPR 334 at [13].

3. As a preliminary issue, the Applicant’s attorney makes a number of submissions alleging that various parts of the Opponent’s evidence are either hearsay or opinion and therefore should be inadmissible.

4. In that regard, the Applicant does acknowledge that the Registrar is not bound by the rules of evidence under regulation 21.15 of the Trade Marks Regulations 1995 (‘the Regulations’). In addition, I refer to the decision of Malibu Boats West, Inc v Catanese[2]  where Finkelstein J found (my emphasis in bold):

   It should be borne in mind, however, that the proceeding before the Registrar was not a curial proceeding and many of the rules that are applicable to courts have no application. That proceeding was an administrative proceeding before a person exercising a statutory function. The only question that arises in relation to the rejection of evidence is whether the decision maker acted with procedural propriety or fairness having regard to the task at hand. Generally speaking, it would not be proper or fair for an administrative decision maker to ignore relevant material while discharging his or her statutory duty. As a result, when the Registrar is required to decide whether a mark qualifies for registration, the Registrar is not entitled to disregard evidence which bears upon that question. In some cases, however, for one reason or another, the material that is placed before the decision maker will be so unreliable that reliance on the material could lead to a wrong decision being made. In such a case the material can properly be disregarded in the sense that the failure to take that material into account will not be an error of law. For example, if a person were to give evidence before a decision is taken and later informs the decision maker that the evidence was false, the decision maker would be at liberty to ignore that evidence. I think that is what happened in this case.

   [2] Malibu Boats West, Inc v Catanese [2000] FCA 1141 at [24]

5. In the current matter, much of the material is alleged to be opinion or hearsay because either there is little to support it, or it arises from a personal belief of the declarant or that it originates from a third party source. The truth of that evidence is not questioned by the Applicant. Given the judicial approach to evidence before the Registrar outlined above, it would be procedurally unfair and inappropriate to disregard any part of the Opponent’s evidence. I note that general unsupported assertions will be accorded less weight in the determination of this opposition.

6. The Applicant correctly points out that this opposition is not the correct forum to assert rights in a domain name. However, that fact does not mean I should disregard such evidence. The relevance of the Opponent’s evidence regarding the domain name registration will become evident in the following discussion on whether the Trade Mark was filed in bad faith. The basis for ownership of a related domain name may, for example, provide some insight into the basis for applying for the registration of a trade mark.

After reviewing the evidence on the official file, I am of the view that it is relevant to the ground of opposition under section 62A of the Act. I will therefore address that ground at the outset and turn to the remaining grounds of opposition should it become necessary.

Discussion

1. Section 62A of the Act provides:

62AApplication made in bad faith

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

1. In relation to section 62A, Dodds-Streeton J in the case of Fry Consulting Pty Ltd v Sports Warehouse Inc(No 2)[3], has said:

   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.

   The proposition advanced by Sports Warehouse, that mere awareness that an overseas company owning the mark is already operating or intending to operate in Australia would amount to bad faith, is unduly absolute. The question is whether, in all the particular circumstances, the applicant’s knowledge was such that his decision to apply for registration at the relevant date would be regarded as in bad faith by persons adopting proper standards.

   [3] Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) [2012] FCA 81 at 165-167 (‘Sports Warehouse’)

2. The examples of bad faith that were set out in the Explanatory Memorandum to the Trade Marks Amendment Bill 2006 (Cth) are not exhaustive, but they are instructive:

   • 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.

3. Dishonesty is not required to establish bad faith, although bad faith does include dishonesty. It is also true that the mere awareness that an overseas company intended to operate in Australia would not be sufficient by itself to amount to bad faith.[4] The relevant date at which bad faith is assessed is the priority date of the Trade Mark, in this case 21 August 2012.

   [4] Sports Warehouse per Dodds-Streeton J at [167].

4. The first declaration of Kent Gillman sets out the history of the Opponent. In April 2009, Mr Gillman was approached by Edward Recordon (former joint managing director of the Opponent) with an opportunity to discuss starting an online finance company in New Zealand on the short term loan market. At the time, Mr Recordon was registered as the owner of the New Zealand domain name Mr Gillman declares that the first use of the trade mark ‘Save My Bacon’ was on or around 1 October 2009 with the launch of the website at Ownership of the domain name was subsequently transferred to the Opponent.

5. The Opponent was established and its commercial business was launched in January 2010. The Opponent is a company based in New Zealand providing online short-term personal loans. I have before me significant evidence of use of the expression ‘Save My Bacon’ as a trade mark in relation to financial services in New Zealand since early 2010. The Opponent is also the owner of New Zealand Trade Mark Registration no. 811818: SAVE MY BACON filed on 28 August 2009 for services in classes 35 and 36.

6. Jon Mells is the founder and managing director of the Applicant, is a friend of Mr Recordon and had prior involvement with the initial application for the New Zealand domain name registration. Mr Mells declares that the Applicant “always has a number of trade marks and domain names in its system both in its own name and held on trust for clients.”[5] Mr Mells was later employed by the Opponent from April 2010 to provide consultancy services, develop a number of brands and to undertake marketing research for the Opponent.  

   [5] Declaration of Jon Mells at paragraph 4.

7. Unknown to Mr Gillman and later the Opponent, Mr Mells had registered the Australian domain name on 5 March 2009 on behalf of Guy Randall (the former business partner of Mr Recordon). I note that the registration of the domain name predates the incorporation of the Opponent. It is clear that Mr Mells did not disclose the existence of the Australian domain name to the Opponent[6], even during his employment. Mr Mells states regarding his later ownership of the Australian domain name that:

   When GR [Guy Randall] heard I was owed money he offered me the domain “for keeps”. I recall him saying “I think you need it more than me and will be more likely to use it than me” when he passed the domain over to me in October or November 2010. So the domain changed masters but not owners.[7]

   [6] Mells declaration at paragraph 13 and exhibit KNG-26 to the first Gillman declaration.

   [7] Declaration of Jon Mells at paragraph 26.

8. At the time Mr Mells was employed by the Opponent I find that he was aware of the Opponent’s intention to expand the business into the international sphere and also to Australia. An email to Mr Gillman[8] indicates that he advised the Opponent in August 2010 to apply for an Australian trade mark. At that time the Opponent did not take Mr Mells’s advice. Mr Gillman makes the declaration that it was the Opponent’s plan to expand its business to Australia (and asserts that Jon Mells was aware of these plans).[9]

   [8] Exhibit KNG-26 to the first Gillman declaration.

   [9] With reference to exhibits KNG-38 and KNG 40 to the Gillman declaration.

9. In June 2010, the Opponent sought to have a confidentiality agreement signed between the Opponent and Mr Mells. After some negotiation, the agreement was signed. However, on 16 September 2010, Mr Mells’s engagement with the Opponent ended. On 18 September Mr Mells requested from the Opponent ex gratia payments for work completed during his employment. The Opponent denied any outstanding payments were due to Mr Mells. Mr Mells declares that the Australian domain name was passed to him afterwards and:

   At the time it seemed wrong to use the domain as leverage and I made a mental note to give SMBL a year to file its Australian trade mark application and request the transfer of the domain name from MIL to SMBL. Something I would have been glad to do in return for the payment of my outstanding fees. [10]

   [10] Declaration of Jon Mells at paragraph 27. ‘SMBL’ is shorthand for the Opponent.

10. The above statement firstly makes clear that Mr Mells was aware that the Opponent desired to register a trade mark in Australia at some point in the future and also goes to the intention of the Applicant in retaining the Australian domain name for the purposes of receiving money allegedly owed to him. I also note that the purported “year to file its Australian trade mark application” from November 2010 does not accord with the actual filing date of the Trade Mark, being 21 August 2012.

11. In February 2011, Mr Recordon sold his shares in the Opponent and two years later, he set up his own New Zealand loan business in competition with the Opponent. In May 2011, Mr Gillman became aware that the Australian domain name was registered in the name of the Applicant, a company run by Mr Mells.

12. The Opponent registered its first Australian domain name ( on 18 August 2012 through a third party and shortly afterwards the Opponent purchased On the morning of 20 August 2012, Mr Mells sent the details for the Applicant’s online Trade Mark application to his intellectual property lawyer. Also, on the afternoon of 20 August, Mr Gillman had a telephone conversation with Mr Mells regarding the Australian domain name and the money Mr Mells claimed he was owed.

1. The application for registration of the Trade Mark was filed electronically with IP Australia on 21 August 2012. In addition, Mr Mells had registered the domain name on 20 August 2012.

2. The earlier statements regarding a possible Australian trade mark application to be filed by the Opponent are at odds with Mr Mells’ subsequent assertion that:

   -The application I made through the assisted filing service at occurred prior to me having any inkling that SMBL was interested in the Australian market. I filed the online application with IPOL at 8,31am on 20 August 2012. [11]

   [11] Declaration of Jon Mells, at paragraph 41.

3. The parties have since attempted to reach a resolution of their disagreement, but without success.

4. In his declaration, Mr Mells sets out the Applicant’s intention to use the Trade Mark.[12] He declares that he saw the Applicant’s business heading in the direction of insurance and intended to pitch the concept at the insurance, assurance and advocacy markets. He declares that the application for registration of the Trade Mark was for this purpose and not to trade in the payday loan market.

   [12] Declaration of Jon Mells at paragraphs 30 to 39.

5. In contrast to the above assertions, the intent of the Applicant in applying to register the Trade Mark is on display in the content of emails to the Opponent. Those emails are attached as exhibits to the first declaration of Kent Gillman. As previously outlined, the Applicant’s legal representative objected to the admission of most of this evidence. I have already found that such evidence will be taken into account in this matter.

6. In general, the emails refer to the money Mr Mells claims he is owed by the Opponent, his previous advice to the Opponent, the domain names and trade marks he owns and his offers to sell intellectual property to the Opponent. For example, on 17 September 2012 Mr Mells wrote to Mr Gillman:

   The fact I tried many times to get you guys to take IP out in OZ in 2010 to only blank looks. Then two year later you want me to come to heal because you’ve changed your mind and suddenly develop issues on matters that were previously of little interest?(sic)

On 16 November 2012 Mr Mells to Mr Gillman:

I have some unused and available IP that may be useful to you but I’m advised that to discuss such matters with objections or actions in the wind is prejudicial to my interests. I have convention rights on lawfully owned trademarks in NZ and Australia that I must soon exercise to maintain those rights all of these matters impact on any conceivable solutions. My intention was to start using my SMB trademark first in the UK before Australia but your actions mean I must defend rights and create business interests in reaction to your actions and timetable so it seems you wish to be a spoiler or a troll rather than a lawful and good spirited business operator.

On 7 February 2013, Mr Mells to Mr Gillman:

I’d actually welcome a hearing in Australia not fear but the fact is it wouldn’t happen until the end of the year by which time it would be of little value to either party. I’m hoping once you see my little treasure chest we also may find a way to avoid another hearing… Most of the IP in these portfolios is either under firm offer or going through a private bidding process as we speak…. If you are interested in the IP on offer it seems you will have to call earlier directors meeting.

On 8 February 2013, Mr Mells to Mr Gillman:

IF, and it is a big IF you can get a judgment in your favour in a judgement not likely to be released until 2014 it will be a victory for your ego or it may help justify decisions from the past that whether right or wrong are not serving the future interests of your business or your shareholders nor improving your company’s performance or positioning to take advantage of future conditions. If you lose at any IP hearing in Australia which is almost certain unless I fail to use my IP as per the trademark prior to then you have simply wasted much time and energy to simply go backwards. Please be aware I have held back using my trademark to puts full extent in an effort to sort matters to both our advantage rather than just my own (sic).

…

As advised repeatedly May [sic] first conversation with my IP lawyer on SMB was in June 2012 when I noticed you had no Australia trademark after urging in August 2010 to do and when you then told me you had… With no contact between us in between it is reasonable to accept you had changed your mind.

1. On 13 February 2013, Mr Mells made another offer to Mr Gillman and the Opponent to purchase the ‘Save My Bacon’ trade marks and the Australian domain name. While the Applicant may be in the practice of applying for a number of trade marks and domain names both in its own name and held in trust for clients, the Trade Mark was clearly not filed in the Applicant’s capacity as advisor for the Opponent. At the time of filing the application, Mr Mells was not employed by the Opponent and was allegedly owed money for previous work undertaken on its behalf.

2. The tendency of Mr Mells to use the Applicant’s ownership of domain names as collateral in negotiations is highlighted in the following statement:[13]

   He (GR) and ER had a minor dispute tidying up business ends and I remember offering to transfer the domain into GR’s name if he needed collateral to win the argument but they must have resolved it.

   [13] Declaration of Jon Mells at paragraph 11. ‘ER’ is a reference to Edward Recordon and ‘GR’ is Guy Randall.

3. Also, in relation to the Opponent’s trade mark application for SaveYourBacon (Australian Trade Mark no. 1510644) he declares:[14]

   I also became aware that SMBL had filed an Australian trade mark application for SaveYourBacon on the same date. I also noted that SMBL had not registered which I found strange. I considered registering the domain but decided it would be a complicating factor if I wanted to leave room to negotiate an agreement.

   [14] Declaration of Jon Mells at paragraph 45.

4. The inference that may be drawn here is that the Applicant has a similar purpose behind applying for the registration of the Trade Mark. That is, to gain further traction in Mr Mells’s negotiations with the Opponent to recover monies owed or, failing that, to frustrate the Opponents intended business activities in Australia.

5. Given the history between the parties and the tenor of the discussions referred to above, I am not convinced by Mr Mells’s submission that the Applicant intends to use the Trade Mark for a different range of services to the Opponent. On the material before me it is questionable whether the Applicant ever intended to use the Trade Mark. The Applicant is candid about having a practice of registering trade marks and domain names with the intention of on-selling them rather than using them itself. In this instance the evidence indicates that it had the express purpose of selling the Trade Mark firstly to the Opponent and if that failed, to the next highest bidder. It is further evident that the purpose of offering it for sale to the Opponent was to recover monies Mr Mells says he is owed by the Opponent.

6. In Hard Coffee Pty Limited v Hard Coffee Main Beach Pty Limited[15] Hearing Officer Nancarrow found:

   In circumstances where an applicant claims that the application was not made in bad faith but, rather, as a result of its own ignorance or naivety, then the evidence would need to show that the circumstances were such that the ‘reasonable man’ standing in the shoes of the applicant, should be aware that he ought not to apply for trade mark registration.

   [15] Hard Coffee Pty Limited v Hard Coffee Main Beach Pty Limited [2009] ATMO 26 at [11].

7. The question before me is not whether Mr Mells is owed such monies from his employment with the Opponent. A determination such as that would be outside my jurisdiction as a delegate of the Registrar of Trade Marks. Instead, the question is would a reasonable person standing in the Applicant’s shoes know that they ought not to apply for the registration of the Trade Mark? On the evidence, I find that question can only be answered in the affirmative.  

8. There is no doubt that an allegation of bad faith is a serious one and a finding under that ground should not be lightly made. On the other hand, the ground of opposition under section 62A is established on the balance of probabilities, rather than beyond any reasonable doubt.[16] The facts before me lead me to the conclusion that it is more likely than not that the current trade mark application was made in bad faith.

   [16] See Sports Warehouse at [145].

9. The ground of opposition under section 62A of the Act has been established.

Decision

1. Section 55 (1) of the Act 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.

   Note:  For limitations see section 6.

2. The Opponent has established a ground of opposition under the Act. I need not consider the remainder of the nominated grounds. Nevertheless, those grounds of opposition (and others under the Act) would be available to the Opponent should this decision be appealed.

3. I refuse to register trade mark application no. 1509463: SAVE MY BACON.

Costs

1. The Opponent has been successful in this matter and I award costs against the Applicant in line with Schedule 8 of the Regulations.

Heath Wilson
Hearing Officer
Trade Marks Hearings & Oppositions
12 September 2014