Shenzhen Fernfortune International Wines Co Limited v Bilyara Vineyards Pty Ltd

[2019] ATMO 131

TRADE MARKS ACT 1995

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

ReOpposition by Shenzhen Fernfortune International Wines Co Limited to registration of trade mark application 1883865 (33) – FEN FU - in the name of Bilyara Vineyards Pty Ltd

Delegate:                   Robert Wilson

Representation:        Opponent: Did not appear at hearing

Applicant: Jeremy Herz of Herbert Smith Freehills

Decision:                   2019 ATMO 131

Trade Marks Act 1995 (Cth) - Section 52 opposition: ss 60 and 62A considered – neither ground established – trade mark may proceed to registration

Background

1. This decision concerns an opposition brought by Shenzhen Fernfortune International Wines Co Limited (‘the Opponent’) pursuant to s 52 of the Trade Marks Act 1995 (‘the Act’) to registration of the trade mark the subject of the application detailed below. The application is in the name of Bilyara Vineyards Pty Ltd (‘the Applicant’):

Application Number:	1883865
Filing Date:	31 October 2017
Goods:	Class 33: Wine (‘the Applicant’s Goods’)
Trade Mark:	FEN FU	(‘the Applicant’s Trade Mark’)

2. On 22 March 2018 the application’s acceptance for possible registration was advertised in the Australian Official Journal of Trade Marks. The Opponent filed a Notice of Intention to Oppose the registration on 22 May 2018 and a Statement of Grounds and Particulars (‘the SGP’) on 22 June 2018. The SGP nominated grounds of opposition under ss 60 and 62A of the Act. The Applicant filed a Notice of Intention to Defend on 13 August 2018.

Evidence

3. The Opponent filed Evidence in Support of its opposition being a declaration made on 3 November 2018 by Ning, Zhongjun, the President of the Opponent (‘the Ning declaration’). The Ning declaration includes a single appendix consisting of some 49 pages. The appendix is neither paginated nor divided into separate exhibits.

4. The Applicant did not file any evidence.

5. Once the time allowed for filing evidence had ended the Applicant requested to be heard. After filing the EIS the Opponent did not respond to communications from the Oppositions and Hearings section of IP Australia and took no further part in the proceedings.

6. On 7 August 2019, I heard the matter as a delegate of the Registrar of Trade Marks. The hearing was conducted by video conference. Jeremy Herz of Herbert Smith Freehills appeared for the Opponent. Mr Herz’ oral submissions were supplemented by written submissions which were filed prior to the hearing in accordance with reg 5.17 of the Trade Mark Regulations 1995 (Cth).

Grounds of Opposition, Onus and Standard of Proof

7. As indicated above, in the SGP the Opponent nominated grounds of opposition under ss 60 and 62A. The onus of proof in an opposition rests upon the Opponent.[1] The relevant standard of proof is the ordinary civil standard based on the balance of probabilities.[2] The date at which the rights of the parties are to be determined is 31 October 2017, being the filing date of the application (‘the Relevant Date’).[3] The Relevant Date is also the priority date for the purposes of s 60.

Discussion

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

[2] Telstra Corporation Limited v Phone Directories Company Ltd [2015] FCAFC 156, [132]-[133].

[3] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1954] HCA 82, [2].

Section 60

8. The ground based on s 60 of the Act is particularised in the SGP as follows:

芬富(Fernfortune) is one of the most famous wineries in Western Australia.

Fernfortune has been rated as a five-star winery for ten years in a row: in the Australian Wine Competition.

Its product ratings rank among the top. The wines of Fernfortune won many trophies and gold medals for their excellent quality.

9. Section 60 of the Act is reproduced below:

Section 60 - Trade mark similar to trade mark that has acquired a reputation in Australia

The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:

(a)another trade mark had, before the priority date for the registration of the first‑mentioned trade mark in respect of those goods or services, acquired a reputation in Australia; and

(b)because of the reputation of that other trade mark, the use of the first‑mentioned trade mark would be likely to deceive or cause confusion.

1. To establish a ground of opposition under s 60 an opponent must demonstrate that at the Relevant Date there was another trade mark which had acquired a reputation in Australia amongst a significant number of persons in the relevant market such that use of the Applicant’s Trade Mark would be likely to deceive or cause confusion. The particulars in the SGP are unclear as to the trade mark(s) upon which the Opponent is relying to support this ground. In the absence of any submissions from the Opponent to clarify the situation I will assume that the Opponent is relying on two trade marks being:

• 芬富 (‘the Chinese Character Mark’); and

• FERNFORTUNE – (‘the Word Mark’).

1. That this is a reasonable assumption is supported by the Ning declaration which opens with the words: ‘Evidence that the applicant [sic] is the rightful owner of “fernfortune” and “芬富”.’ I note that the Ning declaration refers throughout to ‘the applicant’ where a reference to ‘the opponent’ is expected. For the sake of simplicity, I have corrected these apparent errors in quotations from the Ning declaration below.

Reputation

1. In McCormick & Co Inc v McCormick, Kenny J considered what is intended by the word ‘reputation’. Her Honour had consulted the Macquarie Dictionary and on the basis of the definition provided decided that, in s 60, reputation is ‘the recognition of the [trade mark] by the public generally’.[4] Her Honour quoted with approval the following words of Lockhart J from Re ConAgra Inc v McCain Foods (Aust) Pty Ltd:

   [R]eputation within the jurisdiction may be proved by a variety of means including advertisements on television or radio, or in magazines and newspapers within the forum. It may be established by showing constant travel of people between other countries and the forum and that people within the forum, (whether residents there or persons simply visiting there from other countries) are exposed to the goods of the overseas owner …[5]

   [4] [2000] FCA 1335, [81].

   [5] [1992] FCA 159, [118].

2. On the subject of reputation Kenny J also referred to the Hugo Boss decision, where the Registrar’s delegate observed:

   [I]t is true that the assessment of the reputation of a trade mark goes far beyond mere examination of sales or turnover of goods sold under that trade mark and contemplation of the advertising and promotional figures.

   As regards a trade mark, its reputation derives both from the quantum of sales under that mark and also its esteem, or image, projected by that trade mark. The quantum of sales, advertising and promotion contributes to the ‘recognition’ component of the trade mark’s reputation. The credit, image and values projected by a trade mark attaches to the ‘esteem’ component of the reputation as do the public events and other trader’s marks with which [the] owner of the trade marks in question chooses to associate the trade marks via sponsorships, cross-promotions, ‘contra deals’ and so forth.

   It follows that a trade mark used in relation to goods with comparatively low sales may have a high and strong reputation by virtue of the high credit or esteem in which it is held, or, conversely, that a trade mark which has very high sales may have a strong reputation notwithstanding the lack of esteem that attaches to it. The particular popular images, or sets of values, that attach to the trade mark are also, therefore, important parts of the reputation of the trade mark and may be as strong an associative force in the minds of the public as the association of the trade marks with the goods or services themselves.[6]

   [6] Jackson International Trading Co Kurt D Bruhl GMbH & Co KGv Hugo Boss AG [1999] ATMO 23 (Thompson).

3. The Ning declaration states:

   The mark of ‘fernfortune’ is a compound English word, a combination of ‘fern’ and ‘fortune’.

   Fern is widely distributed in Australia and is one of Australia’s representative plants. Lush fern can purify air. The mark of ‘fernfortune’ means that red wine with a fresh aroma is from Australia. The pronunciation of ‘fern’ is similar with the pronunciation of Chinese character of ‘芬’. ‘fortune’ means wealth with the same meaning of Chinese character of ‘富’. …

   The Opponent has the registered marks of ‘fernfortune’ and ‘芬富’ for class 33 in China.

4. The Ning declaration, in an apparent reference to what follows in its appendix, states, ‘Evidence that the Opponent has been using the trade mark from the year of 2013 to 2018, including some wine processing pictures, marketing pictures, invoices and contracts and related documents’. The appendix consists of some 49 pages. Approximately 18 pages are documents which are entirely, or consist mostly of, Chinese characters. No translations are provided for those pages. The Ning declaration does not refer to the documents with sufficient specificity that it is clear what each is. In the absence of submissions from the Opponent it is also unclear what conclusions might be drawn from those documents. Those documents therefore, do not assist the Opponent in establishing the acquisition of a reputation by either of its trade marks.

5. The remaining pages consist almost entirely of photographs. Many photographs appear to be duplicated. Again, the Ning declaration does not provide sufficient information to determine exactly what the photographs show. Some examples of what appears in the photographs are:

   ·    Boxes sitting on a pallet on a concrete floor. The boxes bear words including, ‘2017 FERNFORTUNE ESTATE SHIRAZ, 2018.05.20’.

   ·    Bottles bearing labels which include the words ‘FERNFORTUNE ESTATE SHIRAZ 2017’.

   ·    Bottles and boxes bearing the words ‘FERNFORTUNE ESTATE CABERNET SAUVIGNON 2016’.

   ·    A factory or warehouse with wine barrels on racks and what might be a box folding machine.

   ·    Possibly a bottling machine.

   ·    A room containing wine racks which bear the word ‘FERNFORTUNE’.

   ·    Possibly a stand at a trade exhibition. ‘FERNFORTUNE’ appears on a sign. The remaining signage appears to be entirely written in Chinese characters.

   ·    Groups of people in uniform. The uniforms possibly bear a stylised uppercase ‘F’ which has appeared near ‘FERNFORTUNE’ in many photographs.

   ·    Possibly a trade stand. Atop the stand is signage bearing the ‘F’ described above, but this time it is alongside a set of Chinese characters below which appear the words ‘FERNFOLDS WINES’.

   ·     A room containing wine racks which bear the word ‘FERNFOLDS’.

6. Many of the photographs include what appear to be trade stands or retail outlets which have signage almost entirely written in Chinese characters. Many of the photographs include signage bearing the ‘F’ described above and ‘FERNFOLDS’ (rather than ‘FERNFORTUNE’). There is no clear indication when any photograph was taken.

7. The Ning declaration does not include any information regarding the number of sales of goods which bear either the Chinese Character Mark or the Word Mark or indications of expenditure on promotion of its trade marks.

8. The Opponent’s evidence falls well short of establishing that either of its trade marks had, before the Relevant Date, acquired a reputation in Australia. As the Opponent has failed to establish this requirement of s 60 it has fallen at the first hurdle and consequently has also failed to establish this ground of opposition.

Section 62A – Application made in bad faith

1. In the SGP the ground under s 62A was particularised as follows:

   The opposer has applied for the trademark ‘芬富’, application no. 1844235. On May11, 2017, since a date prior to applicant’s date, October 31, 2017 for the trademark ‘fen fu’, application no. 1883865. Obviously this is the applicant's malicious registration after the opponent. Additionally, the opposer has applied for the trademark ‘芬富’ in China, and get registered more than 9 years.

2. 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.

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

   Clearly the court, when considering bad faith, cannot apply a purely subjective test, called by Lord Hutton ‘the Robin Hood test’. The dishonest person or one with low standards cannot be permitted to obtain trade mark registrations in circumstances where a person abiding by a reasonable standard would not. The registration of a trade mark is designed to enable bona fide proprietors to protect their proprietary rights without having to prove unfair trading. Registration is not provided to help those with low moral standards. …

   The words ‘bad faith’ suggest a mental state. Clearly when considering the question of whether an application to register is made in bad faith all the circumstances will be relevant. However the court must decide whether the knowledge of the applicant was such that his decision to apply for registration would be regarded as in bad faith by persons adopting proper standards.[7]

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

4. 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.[8]

   [8] Ibid [165]-[166].

5. In its particulars in the SGP the Opponent referred to trade mark application 1844325. As indicated by the Opponent the trade mark applied for was ‘芬富’. Registration of that trade mark was opposed by the Applicant. At the time of writing this decision the status of the application is ‘Lapsed: Notice of intention to defend not filed’. The application bore the following endorsement:

   The applicant has advised that the CHINESE characters appearing in the trade mark may be transliterated as FEN FU which may be translated into English as COMBINED WORDS WHICH HAS NO MEANING.

6. The Applicant has submitted:

   The question to be determined is whether the Applicant’s conduct in making the Opposed Application falls short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in the field. …

   The Opponent has failed to lead any evidence to support the ‘serious allegation’ that the Application was filed in bad faith. There is no evidence of unscrupulous, underhanded or unconscientious behaviour by the Applicant.

7. I am inclined to the Applicant’s view. The evidence, on its face, does not indicate bad faith on the part of the Applicant. In the absence of submissions from the Opponent as to how the Opponent’s evidence might support this ground it does not warrant further discussion. The Opponent has failed to establish this ground of opposition.

Decision

1. Section 55 of the Act relevantly provides:

   55Decision

   (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 failed to establish either of the grounds of opposition it nominated in the SGP. Accordingly, application 1883865 may proceed to registration after one month from the date of this decision. If the Registrar has been served with a notice of appeal before that time, I direct that registration shall not occur until either the appeal is withdrawn or a court so orders.

Costs

1. The Applicant 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 failed to establish a ground of opposition, I award costs against the Opponent under s 221 of the Act in line with the amounts in Schedule 8 of the Trade Mark Regulations 1995.

Robert Wilson
Hearing Officer
Trade Marks & Designs Oppositions & Hearings
2 September 2019