Shanghai Longfong Foods Co, Ltd v International ANEC Pty Ltd and Junko Morimoto

[2012] ATMO 41

TRADE MARKS ACT 1995

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

Re:Opposition by Shanghai Longfong Foods Co, Ltd to registration of trade mark application no. 1236417 (5, 31, 39, 43) - LONG FONG (and Device) filed in the name of International ANEC Pty Ltd AND trade mark application no. 1246638 (29, 30) - LONG FONG (Chinese Characters and Device) filed in the name of Junko Morimoto.

Delegate:

Heath Wilson

Representation:

Opponent: Ben Fitzpatrick of counsel instructed by Griffith Hack, Patent and Trade Marks Attorneys.

Applicants: Junko and Yoshi Morimoto.

Decision:

2012 ATMO 41

Section 52 opposition – grounds pressed under sections 42(b), 44, 58, 59, 60 and 62A - section 59 established – trade marks refused registration and costs for one opposition awarded against applicants.

Background

1.     On 22 April 2008 International ANEC Pty Ltd (‘ANEC’) applied for the following trade mark (no. 1236417):

Class 5:

Baby food; food for babies; food for infants; food for invalids; food supplements for medical purposes; food supplements for the dietary management of illness in humans; health food supplements for persons with special dietary requirements; health food supplements made principally of minerals; health food supplements made principally of vitamins; preparations for food for human consumption (for babies); preparations for food for human consumption (for infants); preparations for food for human consumption (for persons with a dietary requirement due to a medical condition); preparations for use as additives to food for human consumption (medicated); slimming aids (food), for medical use; slimming preparations (food), for medical use; slimming products (food), for medical use; vitamin preparations in the nature of food supplements

Class 31:

Bird food; cat food; cattle food; dog food; food for animals; food for aquarium fish; food for birds; food for cats; food for dogs; food for fish; food for insects; food products for animals; pet food

Class 39:

Frozen food storage services; frozen-food locker rental

Class 43:

Restaurant services; restaurant services for the provision of fast food; restaurants; self-service restaurants; preparation of take-away and fast food; take away food services; accommodation bureaux (hotels, boarding houses); hotel services; hotels; tea room services; food and drink catering; food cooking services; food preparation

2.     Junko Morimoto applied for the following trade mark (no. 1246638) on 16 June 2008:

Class 29: Bean curd (processed vegetables); deep frozen vegetables; dried vegetables; frozen prepared meals consisting principally of vegetables; frozen vegetables; meat products; prepared meals made wholly or principally from meat products; prepared meals, predominantly of meat or vegetables; products consisting principally of meat; products made from meat; sausage meat; smoked prepared meat; food products containing meat; frozen prepared meals consisting principally of meat; hamburgers (meat patties); deep frozen fish; fish balls; fish cakes; fish crackers; fish fingers; fish paste; fish products; fish sausages; food products made from fish; food products made of fish; dried pork; pork products; salt pork; beef jerky; beefburgers; dehydrated beef; powdered beef; chicken extracts; chicken products; powdered chicken; pre-fried prawn; deep frozen chicken; deep frozen foods; deep frozen vegetables; fresh frozen shrimps; frozen fruits; frozen seafood; frozen seafood products

Class 30:

Bacon buns; bun mix; buns; filled buns; hamburgers in buns; dumplings; meat dumplings (cooked meat in a pastry envelope); ravioli; meat dumplings (cooked meat in a pastry envelope); meat pies; pies containing meat; meat dumplings (cooked meat in a pastry envelope); meat pies; pies containing meat; bread buns; flour concentrate for food; flour for food; flour preparations for food; fish sauce (condiments); flavourings made from fish; pies containing fish; flavoured rices; flour of rice; rice biscuits; rice cakes; rice flour; rice paper; rice tapioca; pork pies; cakes; frozen cakes; sponge cakes; frozen cakes; frozen confectionery; frozen desserts; frozen fruit desserts; frozen ices; frozen pastries; frozen pizzas

Endorsements: The applicant has advised that the CHINESE characters appearing in the trade mark may be transliterated as LONG FONG and translated into English as DRAGON and LUCKY BIRD (PHOENIX).* Provisions of paragraph 44(3)(b) and/or Reg 4.15A(3)(b) applied.*

3.     Throughout the remainder of this decision I will refer to ANEC and Junko Morimoto collectively as ‘the applicants’. Following examination, the acceptances of the applicants’ trade marks were advertised in the Australian Official Journal of Trade Marks on 21 August 2008 and 20 November 2008 respectively.

4.     Shanghai Longfong Foods Co, Ltd (‘the opponent’) filed notices of opposition to trade mark application no. 1236417 on 18 November 2008 and to trade mark application no. 1246638 on 20 February 2009. The notices of opposition listed each ground of opposition available under the Trade Marks Act 1995 (‘the Act’).

5.     By way of further background, the details of the other relevant trade marks in respect of which the applicants have achieved registration are extracted below:

Trade Mark No. 796526 (filed 8 June 1999):

Class 30: Breakfast cereals, rice, pasta, foodstuffs having a base of rice, of flour or of cereals, also in the form of ready-made dishes; chocolate, chocolate products, confectionery, sweets; sweeteners; bakery products being bread, yeast, pastry, biscuits, cakes, desserts and puddings; ice cream, preparations for making ice cream being cane sugar, glucose sugar, flavourings, vegetable gum, salt; honey, maple syrup and brown and white sugar

Endorsements: The applicant has advised that the translation of the CHINESE words appearing in the trade mark is DRAGON and LUCK BIRD.*

Trade Mark No. 922315 (filed 5 August 2002):

Class 29: Fish balls, shrimp balls, cuttlefish balls, pork balls and jellies, all of the forgoing being goods in class 29

Trade Mark No. 1251999 (filed 16 July 2008):

Class 29: Bean curd (processed vegetables); deep frozen vegetables; dried vegetables; frozen prepared meals consisting principally of vegetables; frozen vegetables; prepared meals, predominantly of meat or vegetables; food pastes made from meat; food preparations consisting principally of meat; frozen meat; frozen meat products; grilled meat; hamburgers (meat patties); meat products; preparations made from meat; prepared dishes consisting principally of meat; smoked meats; smoked prepared meat; deep frozen fish; dried fish; fish balls; fish cakes; fish crackers; fish fillets; fish fingers; products made from fish; cooked pork meats; dried pork; pork extracts; pork products; pork sausages; salt pork; beef; beef products; beefburgers; dehydrated beef; dehydrated beef broth; powdered beef; prepared meals made wholly or substantially wholly from beef; roast beef flavoured extract; chicken extracts; chicken flavouring; chicken pieces; chicken products; dehydrated chicken; dehydrated chicken broth; powdered chicken; chilled desserts; desserts made from milk; desserts made from milk products; desserts made from yoghurt; desserts made principally of milk; flavoured desserts; fruit desserts; milk desserts; preparations with a milk base for use as desserts; prepared desserts (fruit based); prepared desserts (milk based); soya desserts; ingredients for making pizzas

Class 30:

Meat pies; pork pies; sandwiches containing minced beef; chicken gravy; sauces for chicken; bacon buns; bread buns; bun mix; buns; filled buns; hamburgers in buns; dumplings; meat dumplings (cooked meat in a pastry envelope); foodstuffs made of rice; prepared rice dishes; puffed rice; rice; rice cakes; rice crackers; rice flour; rice milk; rice tapioca; breakfast cake; cake fillings; cake flour; cake mixes; cake paste; cakes; chocolate covered cakes; frozen cakes; sponge fingers (cakes); frozen desserts; frozen fruit desserts; ice cream desserts; ice desserts; mousse desserts; prepared desserts (chocolate based); prepared desserts (confectionery); prepared desserts (pastries); frozen pizzas; pizza bases

Endorsements:

The applicant has advised that the Chinese characters appearing in the mark may be transliterated as LONG and FONG and translated into English as DRAGON and LUCKY BIRD.*

The Evidence

6.     The parties filed and served the following evidence supporting their respective positions:

Evidence in Support

·Statutory declarations of Anne Makrigiorgos dated 27 August and 5 October 2009 with annexure AM-1 and AM-2 (‘Makrigiorgos’).

·Statutory declaration of Renee De Ravin dated 9 February 2010 with attached Schedule A (‘De Ravin’).

·Statutory declaration of Scott Tsai dated 20 April 2010 (‘Tsai 1’).

·Statutory declaration of Sanjay Iyer dated 22 April 2010 (‘Iyer 1’).

Evidence in Answer

·Statutory declaration of Junko Morimoto dated 26 October 2010 with exhibits A to K (‘Morimoto’).

Evidence in Reply

·Statutory declarations of Renee De Ravin dated 1 February 2011 with annexure A to B and Sanjay Iyer dated 25 January 2011 (‘De Ravin 2’).

• Statutory declaration of Hsiao Fung Tsai (‘Scott Tsai’) dated 25 May 2011 (‘Tsai 2’).

7.     Ms Junko Morimoto is the director of ANEC and another company named Twin Bridge Enterprises Pty Limited (‘Twin Bridge’). Twin Bridge is an Australian company wholly owned by Junko and Yoshi Morimoto.

8.     In May 1997, Ms Morimoto met with a representative of the opponent at a food trade show in Singapore. Following that meeting, in around July 1998 the opponent began exporting ‘Longfong’ food products to Australia ordered by another company named DCB Trading (Aust) Pty Ltd but distributed through ANEC. ANEC received a commission for the sale of those products.

9.     On 25 January 1999 Scott Tsai (International Trade Director of the opponent) sent a facsimile to Ms Morimoto proposing terms of an official business arrangement regarding the importation of Long Fong products to Australia. Following this facsimile, Mr Tsai also had discussions with Ms Morimoto regarding the registration of the ‘Long Fong trade mark’ in English (Tsai 1 at 7) in Australia. On 19 April 1999 Mr Tsai sent another facsimile to Ms Morimoto referring to the artwork for the opponent’s logo.

10.   In or around this time, Ms Morimoto says that Mr Tsai “suggested I register the Long Fong trademark in Australia in my name because that would protect my business efforts and the possibility of Shanghai Long Fong no longer using my services” (Morimoto at 10). Mr Tsai denies this allegation, indicating rather that he asked Ms Morimoto to register it on behalf of the opponent (and in the opponent’s name). He declares (Tsai 1 at 7):

I agreed that the trade mark should be registered in Australia by ANEC but in the name of Longfong … It was never the intention of Longfong that the LONG FONG trade mark was registered in any name other than Longfong. I advised Junko Morimoto that she should send Longfong an invoice for the cost of obtaining the registration so she could be reimbursed and after she was reimbursed, that the registration should be transferred to Longfong.

He later elaborates (in Tsai 2):

I recall that [Junko Morimoto] expressed a concern that if the news that Longfong was investing in Australia to develop the LONG FONG brand was leaked, there might be opportunists who could register the trade mark LONG FONG to either block Longfong’s business development in Australia or to make money by selling the trade mark LONG FONG to Longfong. In view of these concerns, I recall that in order to get the trade mark registered as a fast as possible, I decided the best way to move forward was to ask Junko Morimoto (ANEC) to register the name LONG FONG on Longfong’s behalf and in the name of Longfong in Australia.

11.   In or around May 1999, the first distribution agreement for food products was purportedly executed between the opponent and ANEC, but there is no copy of a distribution agreement in evidence. In any event, the applicants do not dispute the existence of a distribution agreement, either express or implied.

12.   On 8 June 1999 trade mark no. 796526 was filed in the name of ANEC for class 30 food products and on 5 August 2002, ANEC also registered an identical trade mark (no. 922315) for specific items of food in class 29.

13.   In October 2004, Heinz China Investment Company (‘Heinz’) purchased Country Food Development Ltd, the company that owns 58% of the opponent. Despite this change, the distribution of Long Fong food products to the applicants in Australia appeared to have continued unaffected until 2008.  

14.   Between December 2007 and March 2008, Sanjay Iyer (then Business Manager of Heinz), Mr Tsai and Ms Morimoto had various discussions regarding the expansion of the range of Long Fong goods to Australia and (according to Mr Tsai) those discussions also concerned the registered trade marks in Australia. Mr Iyer attests to his belief that Ms Morimoto “registered the trade mark on behalf of Longfong. I recall that Junko Morimoto expressed her hesitation to give the LONG FONG & Device trade mark back to Longfong for fear that Longfong would “cut her loose” once this occurred.” As mentioned earlier, Ms Morimoto disputes the allegation that she applied for the trade marks on behalf of the opponent. In April 2008 there was a further discussion that the supply of the opponent’s products to the applicants would cease in June 2008 due to export restrictions to Australia.

15.   On 11 June 2009, Ms De Ravin (Business Manager of Heinz) met with Ms Morimoto to discuss a new business distribution arrangement between Heinz and ANEC/Twin Bridge. At this stage the current opposition proceedings were afoot. Ms De Ravin declares that Ms Morimoto mentioned “that it was not her intention to register the LONG FONG trade marks” (De Ravin 1 at 14). Letters of intention were drawn up regarding this potential distribution arrangement which contained a condition that the trade marks would be assigned to HJ Heinz Company Limited Australia. The applicant’s trade marks were not assigned as negotiations between the parties broke down in November 2009. 

16.   Ms Morimoto declares that from June 2010 the applicants now import Long Fong products from Taiwan, and from “the Long Fong factory in Tianjin, China” to sell in Australia.

Opposition Grounds and the Onus of Proof

17.   On 6 February 2012, I heard these two opposition matters in Canberra as a delegate of the Registrar of Trade Marks. Junko and Yoshi Morimoto appeared in person on behalf of the applicants. Ben Fitzpatrick of counsel appeared on the opponent’s behalf instructed by Griffith Hack, Patent and Trade Marks Attorneys.

18.   The opponent bears the onus of establishing at least one of the grounds of opposition on the balance of probabilities.[1] The opponent indicated, via its written submissions, that it would be pursuing the grounds of opposition under sections 42(b), 44, 58, 59, 60 and 62A of the Act. The opponent need only establish one of the opposition grounds for each of the applicant’s trade marks to prevent them from proceeding to registration.

Reasons

[1] Sports Warehouse, Inc v Fry Consulting Pty Ltd (2010) 87 IPR 300 per Kenny J at [30] to [40]; NV Sumatra Tobacco Trading Company v British American Tobacco Services Limited [2011] FCA 1051 (9 September 2011) at [16] to [32].

Section 44: Identical etc. trade marks

(1) Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of goods (applicant’s goods) must be rejected if:

(a)the applicant’s trade mark is substantially identical with, or deceptively similar to:

(i)a trade mark registered by another person in respect of similar goods or closely related services; or

(ii)a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; and

(b)the priority date for the registration of the applicant’s trade mark in respect of the applicant’s goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.

(2)Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of services (applicant’s services) must be rejected if:

(a)         it is substantially identical with, or deceptively similar to:

(i)a trade mark registered by another person in respect of similar services or closely related goods; or

(ii)a trade mark whose registration in respect of similar services or closely related goods is being sought by another person; and

(b)the priority date for the registration of the applicant’s trade mark in respect of the applicant’s services is not earlier than the priority date for the registration of the other trade mark in respect of the similar services or closely related goods.

19.   Section 44 of the Act was pursued by the opponent on the basis of its earlier filed (21 January 2002) trade mark registration no. 899670. The details of that trade mark are:

Class 29: Fish balls, shrimp balls, cuttlefish balls, pork balls, jellies, all included in class 29

Class 30: Dumplings, buns with meat filling, glutinous rice balls, spring rolls, spring roll skins, cup shape flour dough with minced pork and shrimp filling, shrimp dumplings, flour dough pouch with minced pork filling, shrimp rolls, glutinous rice wrapped in bamboo leaves, egg dumplings, fish dumplings, cuttlefish dumplings, steamed dumplings, all included in class 30

Endorsements: The applicant advises that the Chinese characters appearing in the trade mark may be transliterated as LONG and FONG and translated into English as DRAGON and PHOENIX.*

20. It is worth noting that after January 2002 ANEC applied to register trade marks nos. 922528 and 1228768 which comprised identical traditional Chinese characters to the opponent’s trade mark and claimed similar goods. During examination, a ground for rejection under section 44 was raised on the basis of the opponent’s trade mark and both trade mark application nos. 922528 and 1228768 have now lapsed.

21.   In the current matter, the applicant’s trade mark no. 1246638 contains a broad specification for a variety of food products in classes 29 and 30. Those products clearly encompass the specific goods for the opponent’s trade mark. The remaining consideration for that particular trade mark is its degree of similarity to the opponent’s trade mark.  

22.   For trade mark application no. 1236417, Mr Fitzpatrick indicated that the opponent was only opposing the trade mark in relation to classes 39 and 43, submitting that those services are closely related to the opponent’s food products. While it is true that frozen food storage services in class 39 would be used in relation to food products I am not convinced that this possibility is, by itself, sufficient to find that food, which may or may not be frozen, and the service of frozen food storage are closely related. I am also not of the view that the average Australian consumer would regard those goods and services as being part of the one industry.[2]

[2] See relevantly Re: Aussat Pty Ltd’s Application (1993) 27 IPR 309 at 311

23.   A similar comparison between restaurant services, take away/fast food services and fast food preparation in class 43 and food products themselves in classes 29 or 30, has been considered previously by delegates of the Registrar of Trade Marks[3]. The nature of the opponent’s goods is relevant in this respect as cooked dumplings, spring rolls, fish balls, and pork buns are traditionally sold from restaurants and takeaway food stores as well as in Asian supermarkets. Within the ambit of the applicants’ claim for class 43 services it is possible that the particular food products of the opponent could be considered by the purchasing public as being similar to the applicants’ restaurant and take away food services.

[3] See, for example, Sizzler Restaurants International Inc v Sabra International Pty Ltd (1990) 20 IPR 331 and Bickfords Australia Pty Ltd v Frank Ward [2008] ATMO 84.

24.   A comparison of the trade marks side by side leads me to the conclusion that neither of the applicants’ trade marks is substantially identical to the opponent’s trade mark registration. Putting aside the obvious visual differences between traditional Chinese characters and English transliterations of those characters, the applicant’s trade marks also contain a prominent and distinctive device that is absent from the opponent’s trade mark. The primary question is whether the trade marks are deceptively similar, to which I will now turn.

25.   The relevant test was set out in the Australian Woollen Mills[4] case where Justices Dixon and McTiernan stated:

[T]he marks ought not … to be compared side by side. An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought. The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same … The usual manner in which ordinary people behave must be the test of what confusion or deception may be expected. Potential buyers of goods are not to be credited with any high perception or habitual caution. On the other hand, exceptional carelessness or stupidity may be disregarded.

[4] Australian Woollen Mills Ltd v F. S. Walton and Company Ltd (1937) 58 CLR 641 (at 658)

26.   In the first instance, the applicants’ trade marks and the trade mark of the opponent are visually distinct. Both of the applicants’ trade marks feature a device which is absent from the opponent’s trade mark and they also include an expression in English lettering ‘LongFong’ as opposed to two traditional Chinese characters. Trade mark no. 1246638 features, in addition, four characters in simplified Chinese characters. At this point, the comparison between the trade marks for Australian consumers unfamiliar with the pronunciation and meaning of the Chinese characters (being a visual comparison) would result in the conclusion that they are clearly different.   

27. The above finding is not decisive for section 44. The aural similarity and the meaning of the trade marks should also be considered.[5] According to the endorsement for trade mark registration no. 899670, the Pinyin transliteration for the traditional Chinese characters is LONG and FONG which in English means DRAGON and PHOENIX. Trade mark application 1236417 features the words Long Fong (and device) and trade mark application 1246638 includes the words Long Fong with simplified Chinese characters (and a device) which (according to the endorsement on the Register) transliterate as LONG FONG and translate as DRAGON and LUCKY BIRD (or PHOENIX).

[5] In relation to the consideration of the meaning of Chinese characters see the decision of the Full Federal Court in Australian Chinese Newspapers Pty Ltd v Melbourne Chinese Press Pty Ltd [2004] FCAFC 201

28.   Neither party has disputed the accuracy of the translations into English nor the transliterations provided in the endorsements for any of the trade marks. Further information has also been provided by the opponent in the Makrigiorgos declaration confirming the translation/transliteration of the Chinese characters. For example, exhibit AM-2 confirms that characters in the opponent’s trade mark mean ‘Dragon’ pronounced as ‘Long’, and ‘Phoenix’ pronounced as ‘Feng’. The declaration establishes that the first two simplified Chinese characters in trade mark 1246638 have the same meaning and pronunciation. The meaning of the remaining two simplified Chinese characters remains unexplained in the endorsement or the opponent’s evidence. In the absence of such explanation, I can only infer that the existence of those additional characters creates a further point of difference between the two trade marks. 

29.   In Part 26.6.10 of the Trade Marks Office Manual of Practice and Procedure it states:

In general, except where the words are visually or aurally similar, the English equivalent of a non-English language trade mark will not be cited as the basis for rejecting an application under section 44. For example, RED MAN will not be cited against ROUGE HOMME or the Chinese or Arabic characters meaning “red man”.

30.   Distinguishing the above practice, I do not have before me the English words “Dragon Phoenix” compared with LONG FONG or compared with the Chinese characters meaning ‘Dragon Phoenix’. Rather, I must compare the traditional Chinese characters of an expression with the transliteration of that expression and/or the same expression in simplified Chinese characters.

31.   The similarity between the respective trade marks of the opponent and the applicants is therefore an aural and a contextual one. As a result, the relevant group of Australian consumers who may be confused is smaller than it would be for two trade marks that bore some form of visual similarity. Additionally, the consumer would need to be familiar with simplified and traditional Chinese characters and with the English transliteration of those characters to reach the point where confusion may be said to occur.

32.   Mr Fitzpatrick relied heavily on the meaning of the expressions and the likelihood of confusion amongst Chinese Australians, being the more probable consumers of the respective goods and services. Parker J in Pianotist Co Ltd’s Application[6] (‘Pianotist’) considered that:

You must take the two words. You must judge of them, both by their look and by their sound. You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact, you must consider all the surrounding circumstances; and you must further consider what is likely to happen if each of those trade marks is used in normal way as a trade mark for the goods of the respective owners of the marks.

[6] Pianotist Co Ltd’s Application (1906) 23 RPC 774 at 777.

33.   There is no evidence before me of the likelihood of confusion amongst the Australian Chinese community when an English transliteration is used in place of the traditional Chinese characters. While I can envisage a situation where a trade mark comprising simplified Chinese characters may be deceptively similar to a trade mark with the (aural and contextual) equivalent traditional Chinese characters, the question before me is more complex given the additional distinctive elements (i.e. device, transliterations and additional characters) in the applicants’ trade marks.

34.   Taking into account all the factors referred to in Pianotist, I consider that a real and tangible danger of confusion does not exist between the opponent’s trade mark and either of the applicants’ trade marks. For this reason, the ground of opposition under section 44 of the Act has not been established.

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.

35. Under section 58 of the Act, the first person to apply to register a trade mark in Australia will usually (in the absence of fraud) be entitled to claim to be the owner of it. An exception to this general statement will apply if the trade mark has been used before the filing dates of the applicants’ trade marks (22 April and 16 June 2008 respectively).

36.   In the event that there has been use of the trade mark prior to those filing dates, the owner in Australia is taken to be the first person to use it (‘first user’) in the course of trade in Australia in relation to those goods or services. If the opponent can establish that a party other than the applicants first used a ‘substantially identical’ trade mark[7] in Australia on goods/services that are the ‘same kind of thing’[8] as the applicant’s goods and services, then the opponent will have established that the applicants are not the owners at common law and the section 58 ground will be made out. The first user need not have invented or first thought of the trade mark[9], but rather it is the first party to use it in a trade mark sense in Australia.

[7] Carnival Cruise Lines Inc v Sitmar Cruises Ltd [1994] FCA 936; (1994) 120 ALR 495.

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

[9] Aston v Harlee Manufacturing Co (1960) 103 CLR 391 at 399 per Fullagar J.

37.   If the trade mark relied upon by the opponent to establish prior use is the opponent’s trade mark registration no. 899670, the question is whether it is substantially identical to the opposed applications. On a side-by-side comparison, the trade marks are visually distinct and even were an Australian consumer familiar with traditional and/or simplified Chinese characters, to recognise the connection between the trade marks that would not be sufficient to find that they are substantially identical. I find that they are not.

38.   An important consideration is the fact that the applicants are the exclusive distributors of the opponent’s products in Australia. Ms Morimoto does not dispute the existence of a distribution agreement and such an arrangement may be inferred from the conduct and relationship of the parties.[10] However, due to the absence of documentation the nature of the agreement is unclear. Another consideration is the disagreement between the parties regarding whether the opponent asked the applicant to register the original trade mark in the opponent’s or in ANEC’s name. Importantly, the opponent asked ANEC to apply for a trade mark in Australia in 1999, the result of which was trade mark no. 796526. That earlier trade mark is identical to one of the opposed applications (no. 1236417) but claims different goods and services.

[10] Shanahan’s Australian Law of Trade Marks and Passing Off.  4^th Edition (2008) [at 10.3005].

39.   Concerning trade mark no. 796526, Ms Morimoto states that on 19 April 1999, she received a facsimile “from Mr Tsai stating that he would send the artwork for the Long Fong logo to me for lodging Long Fong trademark in Australia (sic)”. The English translation of the facsimile to Ms Morimoto simply states:

The logo of our company will be sent out next week. The logo is in the storeroom of the Enterprise Planning Department. At present the company is under renovation and we cannot get anything from the storeroom. There are two types of the logo. One having logo on top and words underneath; the other is having the words on the right side of the logo. I was wondering which type suits you better? Please let me know.

40.   However, Mr Tsai later declares (in Tsai 2) that (with emphasis added):

I cannot recall the purpose of the artwork referred to in my facsimile to Junko Morimoto of 19 April 1999 but I believe it unlikely that its purpose was for trade mark registration in Australia.

41.   Apart from the above reference, there is no evidence of the actual appearance of the trade mark or logo referred to by Mr Tsai. It is likely that the logo referred to is the same device forming part of the letterhead alongside the company name Long Fong Goods Co., Ltd. on the aforementioned faxes sent 25 January 1999 and 19 April 1999. The device is identical to the one comprising the device element of the opposed trade mark applications.

42.   Mr Tsai declares that (emphasis added) “Apart from the sales of original LONG FONG in Chinese characters products in Australia, at this time, there were also sales of original LONG FONG in Chinese characters products in Canada, Korea and Japan.” Mr Tsai then mentions a discussion with Ms Morimoto prior to 8 June 1999 about “registering the Long FONG trade mark in English in Australia” (Tsai at 7). Ms Morimoto states that at the time of applying for the first trade mark (no. 796526) on 9 June 2009:

…I did not understand the concept of trademark registration. I did not realize that Chinese characters could also be registered as a trademark. Therefore I did not register the Long Fong Chinese characters, but only the diamond shape and English words ‘LONG FONG’ (Morimoto at 16).

43.   While the applicants attest to a substantial amount of the opponent’s product being distributed and sold in Australia, the evidence before me of the use of any trade marks, whether in China or Australia, is lacking. It is for this reason that I cannot determine with any accuracy the appearance of the actual trade mark used by the opponent in China or the actual trade mark used by the applicants in Australia on the opponent’s food products. Given the lack of detail, it is also difficult to determine whether the food products sold are the same kind of thing as the goods and services of the opposed trade marks. The opponent does not assist its case by failing to provide any examples of trade mark use on the goods overseas, or evidence of which trade mark was applied to which particular goods in Australia.  With the deficiencies in the evidence in mind, I turn to the opponent’s primary submissions in this matter.

Authorised Use

44.   Mr Fitzpatrick argues that the applicants, being distributors of the opponent’s food products in Australia, are using trade marks which the opponent actually owns and has authorised them to use. The owner of a trade mark is usually the trader whose goods or services are distinguished by the use of the trade mark. Mr Fitzpatrick relies on the comments in E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2010] HCA 15 (‘Gallo’) and the reference to Estex Clothing Manufacturers Pty Ltd v Ellis & Goldstein Ltd [1967] HCA 51; (1967) 116 CLR 254 (‘Estex’). Estex is authority for “the proposition that the foreign owner of an Australian mark uses it in Australia when he sells goods for delivery abroad to Australian retailers and those retailers import them into Australia for sale and there sell them.”[11] In Estex the High Court of Australia considered that the use of a trade mark:

…is not limited by any concept of the physical use of a tangible object and we have no doubt that when an overseas manufacturer projects into the course of trade in this country, by means of sales to Australian retail houses, goods bearing his mark and the goods, bearing his mark, are displayed or offered for sale or sold in this country, the use of the mark is that of the manufacturer. Indeed, in this case, the respondent (i.e. the English manufacturer, which had registered its mark in Australia) is the only person who has the right to use the mark and the retailer to whom the goods have been sold for re-sale does not, in any relevant sense, use it.

[11] Pioneer Kabushiki Kaisha v Registrar of Trade Marks [1977] HCA 56 [at 44]

45. In other words even if a distributor expends time, effort and money (as the applicants clearly have done here) in building up a particular business in Australia that does not mean that the distributor thereby attains ownership of the manufacturer’s trade mark. The trade mark remains the badge of origin of the manufacturer. However, on the facts of this case, it is not sufficient to say that the applicants distributed the opponent’s products in Australia. In order for the section 58 ground to apply, the food products must also bear the opponent’s trade mark when sold in Australia and the opponent must demonstrate that the trade mark is substantially identical to the opposed trade mark applications. The opponent has not established this nor has it demonstrated use in relation to those goods claimed in the opposed trade marks.

46. Under sub-section 7(3) of the Act, an authorised use of a trade mark by a person is taken to be use of the trade mark by the owner of the trade mark. Even if the opponent was definitively able to demonstrate that a trade mark which it had authorised the applicants to use was a substantially identical one, it must also establish that the applicant’s use of the trade marks was in fact authorised use. Under section 8, an authorised user of a trade mark is a person who uses the trade mark in relation to goods and services under the control of the owner of the trade mark. Some of the ways in which authorised use can be established are if the trade mark owner exercises quality control over goods or services provided in the course of trade and/or financial control over the other person’s trading activities. I am not satisfied that either of these forms of control has been established on the evidence before me.

47. In short, the majority of the opponent’s argument relies on assumption and bare assertions. The opponent has not provided sufficient proof to discharge the onus and to establish that the applicants are not the owners of the trade marks. The ground of opposition under section 58 of the Act has therefore not been made out.

Section 59: Applicant not intending to use trade mark

The registration of a trade mark may be opposed on the ground that the applicant does not intend:

(a) to use, or authorise the use of, the trade mark in Australia; or

(b) to assign the trade mark to a body corporate for use by the body corporate in Australia;

in relation to the goods and/or services specified in the application.

48. An intention to use or authorise the use of a trade mark is determined as at the date of filing the application,[12] and the filing dates for the opposed trade mark applications are 22 April 2008 and 16 June 2008 respectively. There is a presumption that a trade mark applicant intends to use a trade mark for all the goods and services, that assumption arising solely from the act of filing the trade mark.[13] However, that assumption of a prima facie intention may be rebutted by slight evidence[14] from the opponent.

[12] Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58 [at 74].

[13] Aston v Harlee Manufacturing Co (1960) 103 CLR 391.

[14] Suyen Corporation v Americana International Limited [2010] FCA 638 (‘Suyen’).

49.   In terms of putting the applicants on notice that the intention to use the applicants’ trade marks would be a live issue, the ground is nominated in the notice of opposition and the issue is referred to more than once in the opponent’s declarations.

50.   The opponent’s primary argument was that the applicants lacked the intention to use the trade marks but filed them for purely defensive or tactical reasons[15] and/or to use them as the badge of origin for the opponent’s products rather than as their own trade marks. Mr Fitzpatrick also submitted that the applicants have not used the trade marks in Australia and they have only ever distributed the opponents’ products in Australia.

[15] Rolewa Rentals Pty Ltd v Champagne Moet et Chandon (1985) 5 IPR 71 and Ducker’s Trade Mark (1928) 45 RPC 397 at 402.

51.   It is true that there is no evidence that the applicants have used the opposed trade marks on the relevant goods and services in Australia. However, a lack of actual trade mark use in Australia by an applicant is not decisive in determining the lack of an intention to use a trade mark. As Justice Dodds-Streeton stated in Suyen [at 207]:

There is long standing recognition that the absence of the requisite intention to use cannot be inferred from lack of use per se, particularly as there may be good reason to defer use until the protection of registration is secured.

52.   Ms Morimoto also indicates that the opponent is not the only supplier of Long Fong products (referring to other suppliers in Taiwan and Tianjin). Even if the opponent was the sole supplier to the applicants, the applicants’ past trading activities would neither preclude an expansion of their current business nor demonstrate a lack of intention to use the trade marks applied for. Neither would it shift the onus to the applicants to establish an intention to use the trade marks.

Admissions by the Applicants

53.   In previous decisions from delegates of the Registrar of Trade Marks, certain statements or admissions made by the applicant have been sufficient to infer a lack of intention to use a trade mark. It has also been accepted that prior actions between the same parties can be a further source of inference[16] in finding a lack of intention to use a trade mark. In her statutory declaration, Ms Morimoto made a number of statements that warrant close scrutiny in the context of the opposed trade mark applications.   

[16] Phillip Morris Products SA v Sean Ngu [2002] ATMO 96;Sapient Australia Pty Ltd and Sapient Corporation v SAP Aktiengesellschaft [2002] ATMO 31; Danjaq LLC v Resource Capital Australia Pty Ltd [2004] ATMO 18.

54.   There was much debate as to whether or not Mr Tsai told Ms Morimoto to register the initial trade mark no. 796526 on behalf of the opponent or in the name of ANEC, but the answer to that question is not as important as the actual reasons for filing that trade mark in the first place. Ms Morimoto made the following statements in that regard:

Scott Tsai subsequently suggested I register the Long Fong trademark in Australia in my name because that would protect my business efforts and possibility of Shanghai Long Fong no longer using my services. I agreed with this suggestion to own the Long Fong trade mark in Australia. (Morimoto at 10).

On 31 May 1999 ….after my discussions with Scott Tsai, and his advice on registering the trademark in my name, I felt my business position was be secured [sic] and decided to cooperate with Shanghai Long Fong. (Morimoto at 13)

It was clear to me that Scott Tsai said registration would protect me if I was interested in beginning a business relationship with Shanghai Long Fong (Morimoto at 15).

[I] recalled Scott Tsai saying to me in 1999 that I could use my name to register the trademark in Australia and that Shanghai Long Fong would register its trademark in other countries individually through their Chinese agents (Morimoto at 23).

55.   Therefore, the applicants’ intention in applying for the registration of trade mark no. 796526 was for that mark to function as a badge of origin for the opponent’s products and to protect their exclusive distribution arrangement with the opponent. The likely reason that the applicants did not apply for the exact traditional Chinese characters presumably used by the opponent in China was that Ms Morimoto declares she did not know that traditional Chinese characters could be registered as trade marks in Australia. This finding is also reinforced by the two later attempts from the applicants in 2004 (no. 922528) and 2008 (no. 1228768) to register a trade mark identical to the opponent’s trade mark no. 899670 for goods of the same description. 

56.   It is also worth noting that the filing of the two opposed trade mark applications occurred on 22 April 2008 and 16 June 2008. The filing of these applications followed the discussions between Ms Morimoto, Mr Tsai and Mr Iyer around February 2008 where Heinz indicated a plan “to expand the range of products under the LONG FONG English and Chinese character trade marks into sauces, meat varieties of dumplings, frozen vegetables, bean curd and other frozen products… and to expand the customer base of products….to include Asian grocery stores and restaurants in Australia” (Tsai 1 at 12)  In this regard, I particularly note that the specifications for the opposed trade marks jointly include all of the discussed products and include restaurant services and frozen food storage.

57.   Shortly after those discussions (and prior to filing) Ms Morimoto declares that Mr Iyer called her on the telephone saying:

Long Fong frozen vegetable and other projects are having problems because we found the trade mark of Long Fong in Australia does not belong to Mr Ye, but you. We hope you will transfer its ownership to Shanghai Long Fong. Otherwise Shanghai Long Fong may stop supplying the products to you and you will lose the market anyway.

58.   Following those comments from Mr Iyer, it is perhaps unsurprising that the applicants subsequently filed trade mark applications nos. 1228768, 1236417 and 1246638. In relation to trade mark no. 1236417 Mr Iyer states:

In May 2008….I questioned Junko about these additional trade marks and she stated that she had registered these additional trade marks on the basis of the expansion discussions we had between December 2007 and March 2008 (Iyer 1 at 15).

He also commented, in relation to trade mark no. 1246638:

I contacted Junko in relation to this recently filed Application No. 1246638. I questioned her as to why she would be lodging a LONG FONG trade mark while Heinz and ANEC were in negotiations (Iyer 1 at 16).

59.   I note that after filing these trade mark applications, Ms De Ravin of Heinz attests to a conversation that took place between her and Ms Morimoto:

I further recall Junko Morimoto stating that the LONG FONG trade mark was registered in Australia by Twin Bridge Enterprises but that it was not the intention of Longfong that the trade mark LONG FONG be registered in this name (De Ravin 2 at 4).

…

During our discussions [in June 2009] I recall Junko Morimoto stating that it was never the intention of Longfong for ANEC, Junko Morimoto or Twin Bridge Enterprises to register the trade marks LONG FONG in their names (De Ravin 2 at 4).

60.   The issue for the opposed trade marks is whether the intention behind filing the earliest trade mark registration, the subsequent attempts to register a trade mark identical to the opponent’s trade mark and the timing of the current trade mark applications are sufficient factors to infer a lack of intention to use the trade marks. Each factor by itself would not be sufficient to rebut the presumption of an intention to use.  However, when viewed together in the context of the history between the parties, an inference may reasonably be drawn that the applicants in filing of those trade marks, in those particular classes, on 22 April and 16 June 2008 was undertaken to obtain a commercial or tactical advantage rather than because of a decided intention to use them in the course of trade.     

61. Given the above set of circumstances, the opponent has highlighted circumstances in the evidence that point to the applicant’s lack of intention to use the trade marks at the time of filing. This evidence rebuts the presumed intention to use arising from filing the trade marks and the applicants have not, in my view, indicated a positive intention to use these particular trade marks on those goods and services. I find that the ground of opposition under section 59 of the Act has been established on the balance of probabilities for both of the opposed trade marks.

62. As section 59 has been established, it is unnecessary to consider the remaining grounds of opposition pressed by the opponent, namely sections 42(b), 60 and 62A of the Act. Those grounds would, however, be available to the opponent in the event of an appeal from this decision.

Decision

63.   Section 55 (1) of the Act provides:

(1) Unless the proceedings are discontinued or dismissed, 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.

64. The opponent has established a ground of opposition under the Act. As a result, the applicants are unsuccessful in this matter and I refuse to register trade mark applications nos. 1236417 and 1246638.

Costs

65. The opponent has been successful and it is entitled to costs. As the majority of the evidence for the oppositions to the trade marks was filed and served concurrently, I will treat the proceedings as one opposition for costs purposes. I therefore award costs against the applicants in accordance with the Official Scale contained in Schedule 8 of the Trade Marks Regulations 1995.

Heath Wilson

Hearing Officer

Trade Marks Hearings

24 April 2012