Shophouse LLC v David Loh

[2016] ATMO 93

TRADE MARKS ACT 1995

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

Re:Opposition by Shophouse LLC to registration of trade mark application 1562117 (43) - SHOP HOUSE KITCHEN ASIAN EATING HOUSE BY DAVID LOH and DEVICE - in the name of David Loh.

Delegate:	Katrina Brown
Representation:	Opponent: Fiona Brittain of Davies Collison Cave Applicant: Marcus Fleming of Counsel instructed by Cornwall Stodart
Decision:	2016 ATMO 93 Trade Marks Act 1995 – s 52 opposition – grounds pursued under ss 42(b); 60 and 62A – none established – trade mark may proceed to registration.

Background

1. This decision is in respect of an opposition under s 52 of the Trade Marks Act 1995 (‘the Act’) by Shophouse LLC (‘the Opponent’) to the registration of the following trade mark:

Trade Mark No:

1562117

Trade Mark:

 (‘the Trade Mark’)

Applicant:

David Loh (‘the Applicant’)

Filing Date:

11 June 2013

Specification:

Class 43: Arranging for the provision of food; Consultancy services relating to food; Consultancy services relating to food preparation; Consultation services relating to food; Food and drink catering; Food preparation; Hospitality services (food and drink); Preparation of food and drink; Preparation of take-away and fast food; Providing food and drink; Take away food services; Takeout food and beverage services; Takeaway food and drink services

(‘the designated services’)

Endorsement:

The applicant has advised that the first set of CHINESE characters in the trade mark may be transliterated as DA SHI JIA which may be translated into English as FOOD CRITICS or BIG EATING FAMILY. The second set of CHINESE characters may be transliterated as CHA CHAN TENG which may be translated into English as CAFE.

1. The trade mark application was examined as required under s 31 of the Act. The examiner requested a transliteration and translation of the Chinese characters that are in the Trade Mark. The Applicant provided this information and it was recorded in the form of the above endorsement.

2. Acceptance of the Trade Mark was advertised in the Official Journal of Trade Marks on 31 October 2013.

3. The Opponent filed a Notice of Intention to Oppose on 2 January 2014 followed by a Statement of Grounds and Particulars (‘SGP’) on 3 February 2014.

4. The Applicant filed a Notice of Intention to Defend on 24 February 2014.

5. In due course, the parties filed evidence in support of the opposition, evidence in answer and evidence in reply.

6. The matter came before me, a delegate of the Registrar of Trade Marks, in Canberra on 17 October 2016. Mr. Marcus Fleming of Counsel instructed by Cornwall Stodart made oral and written submissions on behalf of the Applicant. Prior to the hearing Ms. Fiona Brittain of Davies Collison Cave made written submissions on behalf of the Opponent.

Grounds of opposition and onus

1. In the SGP, the Opponent nominated grounds of opposition under ss 42(b), 43, 60 and 62A of the Act. The s 43 ground of opposition was not pursued by the Opponent.

2. The Opponent bears the onus of establishing at least one of the grounds of opposition.[1] The standard of proof is the ordinary civil standard of the balance of probabilities.[2]

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

   [2] Telstra Corporation Ltd v Phone Directories Co Pty Ltd [2015] FCAFC 156 [132].

3. The relevant date at which the rights of the parties are to be determined is 11 June 2013 (‘the relevant date’) being the filing date of the trade mark application.[3]

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

Evidence

1. For their evidence, the parties rely on the following declarations:

Evidence in support

• Declaration of Steve Ells (Manager of Shophouse LLC) made on 27 May 2014 with annexures SE-1 to SE-5 (‘Ells 1’).

Evidence in answer

• Declaration of David Wai Hoong Loh (Director of Secret Kitchen Pty Ltd) made on 2 September 2014 with annexures DL-1 to DL-37 (‘Loh Declaration’).

Evidence in reply

• Declaration of Steve Ells (Manager of Shophouse LLC) made on 4 November 2014 with annexures SE-6 to SE-8 (‘Ells 2’).

The Opponent

1. The Opponent operates six restaurants in the United States of America (USA) that trade under the name Shophouse.[4] The restaurants are located in Washington DC, California and Maryland.[5] The first of the Opponent’s Shophouse restaurants opened in Washington DC in September 2011.[6]

   [4] Ells 1[2].

   [5] Ibid.

   [6] Ibid.

2. The restaurants serve South East Asian cuisine. They are inspired by the traditional shophouses of South East Asia which are 2 or 3 storey buildings with families living in the upper floors and running restaurants on the ground floor.[7]

   [7] Ibid.

3. The Opponent uses the following two trade marks in relation to its Shophouse  restaurants (‘Opponent’s Shophouse Trade Marks’):[8]

[8] Ibid Annexure SE-1.

1. The Opponent’s Shophouse Trade Marks are used on external and internal signage, menus, napkins, carry bags and cups.[9] The trade marks are promoted on the Opponent’s website,[10] Twitter® account[11] and via online articles published in the restaurant and business press.[12]

   [9] Ibid [4]; Annexure SE-1.

   [10] ‘ Ells 2 Annexure SE-7.

   [11] Ells 1[6].

   [12] Ibid [7]; Annexure SE-3.

The Applicant

1. The Applicant is a director of Secret Kitchen Pty Ltd (‘Secret Kitchen’).[13] On 23 May 2013 Secret Kitchen opened a restaurant in Melbourne which trades as Shophouse Kitchen.[14] The Trade Mark has been used continuously since the opening of the restaurant.[15]

   [13] Loh Declaration [4].

   [14] Ibid [7].

   [15] Ibid [8].

2. The Applicant’s restaurant serves Hong Kong cuisine fused with Chinese and Western styles.[16] The Applicant declares that one of the reasons they chose the name Shophouse Kitchen was because they understood it to be a colloquial name to describe family-owned restaurants in Asia that are operated from the ground floor of residential buildings.[17] The Applicant’s restaurant is located on the ground floor of a residential apartment building.[18]

   [16] Ibid [24].

   [17] Ibid [12].

   [18] Ibid.

3. The words ‘Shophouse Kitchen’ or the Trade Mark are used on signage and menus.[19] They are also used in marketing and promotional materials on the websites ‘ and ‘ on Facebook®[22] and Yelp®,[23] and in printed publications such as Melbourne Taste magazine.[24]

   [19] Ibid [23]; [26]; Annexure DL-8.

   [20] Ibid [28]; Annexure DL-9.

   [21] Ibid [30]; Annexure DL-11.

   [22] Ibid [31]; Annexure DL-12.

   [23] Ibid [32]; Annexure DL-13.

   [24] Ibid [34]; Annexure DL-15.

Section 60

1. Section 60 of the Act provides:

   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.

2. To establish this ground of opposition, the Opponent must demonstrate the existence of a reputation in another trade mark in Australia as at the relevant date. The Opponent must then establish that because of the aforesaid reputation use of the Trade Mark would be likely to deceive or cause confusion.

3. In McCormick & Co Inc v McCormick the meaning of the word ‘reputation’ for the purposes of s 60 was provided in light of the dictionary definition:

   reputation ... 1. the estimation in which a person or thing is held, esp. by the community or the public generally; repute ... 2. favourable repute; good name ... 3. A favourable and publicly recognised name or standing for merit, achievement, etc. ... 4. The estimation or name of being, having done, etc. something specified.[25]

   [25] [2000] FCA 1335 [81] (‘McCormick’).

4. The reputation in the other trade mark must be amongst a significant or substantial number of people.[26]  The reputation cannot be assumed, but rather must be established as a matter of fact by the Opponent.[27] In McCormick Kenny J stated:

   In practice, it is commonplace to infer reputation from a high volume of sales, together with substantial expenditures and other promotions, without any direct evidence of consumer appreciation of the mark, as opposed to the product.[28]

   [26] See Renaud Cointreau & Cie v Cordon Bleu International Ltee [2001] FCA 1170; ConAgra Inc. v McCain Foods (Aust) Pty Ltd [1992] FCA 159 (‘ConAgra’).

   [27] ConAgra [1992] FCA 159 [77].

   [28] [2000] FCA 1335 [86].

5. To establish its case, the Opponent relies on its Shophouse Trade Marks reproduced at [14] of this decision.

6. The Opponent’s Shophouse Trade Marks are used in relation to restaurants located in the USA. The Opponent does not have restaurants in Australia. However, this does not preclude the Opponent from being able to establish the requisite reputation. In this regard I note the following:

   It is no longer valid, if it ever was, to speak of a business having goodwill or reputation only where the business is carried on…Goods and services are often preceded by their reputation abroad. They may not be physically present in the market of a particular country, but are well known there because of the sophistication of communications which are increasingly less limited by national boundaries, and the frequent travel of residents of many countries for reasons of business, pleasure or study.[29]

   [29] ConAgra [1992] FCA 159 [115].

7. As such the Opponent need not have opened restaurants in Australia. However, it must establish, as a matter of fact, that it had a reputation in one of its trade marks amongst a significant number of people in Australia, as at 11 June 2013.

8. Evidence provided by the Opponent including restaurant reviews and published articles lead me to believe that the Opponent enjoys some reputation in the USA. However, I am unable to quantify the extent of the Opponent’s reputation in the USA at the relevant date with any degree of certainty. The Opponent did not provide figures for revenue generated through its Shophouse restaurants in the USA. Advertising and marketing expenditure were also not provided presumably because as stated in Ells 1 the Opponent’s business model does not include traditional advertising.

9. The question to be answered is how much of that reputation had transferred into the Australian consciousness at the relevant date. Other than the existence of a website and online articles which can be accessed from Australia, there is no information before me to suggest that the Opponent has undertaken any promotional activities in Australia.

10. Analytics for the Opponent’s website, ‘ for the period of 19 September 2011 to 19 May 2014 have been provided.[30] This period goes beyond the relevant date and although Australian traffic to the website for the total period is provided I am unable to determine how many times the Opponent’s website was accessed from Australia prior to the relevant date. In any event I consider the number of visits from Australians during the total period is modest. A separate report has been provided for the period of 1 January 2013 to 10 June 2013 (prior to the relevant date).[31] During this period, the Opponent’s website was accessed 371 times from Australia. I consider this number to be very modest and not sufficient to establish the reputation contemplated by s 60.

    [30] Ells 1 Annexure SE-5.

    [31] Ibid.

11. The Opponent has provided online articles from various sources which reference the Opponent’s Shophouse restaurants. There is one article that is from a website with a ‘com.au’ extension – What It’s Like to Eat at ShopHouse from the website ‘ – and it is dated 28 December 2013, more than six months after the relevant date.[32] Reviews of the Opponent’s Shophouse restaurants posted on the following websites have also been provided: ‘ and ‘ As pointed out by the Applicant, none of the reviewers identify as being Australian or being located in Australia. As such I do not consider that these give much support to the proposition that the Opponent had the requisite reputation in Australia at the relevant date.

    [32] Ibid Annexure SE-3.

    [33] Ibid.

12. The Opponent asks me to infer that large numbers of Australians travelling to the USA would have become aware of the Opponent’s Shophouse restaurants.[34] The most I can conclude is that some people departing Australia for the USA, or departing the USA for Australia, might be aware of the Opponent’s restaurants.  Whether it would be a small or large number of people is impossible for me to assess on the evidence before me.

    [34] Opponent’s hearing submissions [24].

13. I am not satisfied, as a matter of fact, that there was a reputation in one of the Opponent’s Shophouse Trade Marks amongst a significant number of people in Australia as at 11 June 2013. As such, the first limb of the test for s 60 has not been met.

14. Accordingly the s 60 ground of opposition has not been established.

Section 42(b)

1. Section 42(b) of the Act relevantly provides:

   Trade mark scandalous or its use contrary to law

   An application for the registration of a trade mark must be rejected if:

   …

   (b) its use would be contrary to law.

2. The Opponent must satisfy the Registrar that use of the Trade Mark would not could be contrary to law.[35]

   [35] Advantage-Rent-A-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683 [28].

3. The Opponent relies on s 18 of Schedule 2 to the Australian Consumer Law (‘the ACL’) of the Competition and Consumer Act 2010.  The Opponent also asserts that use of the Trade Mark would amount to passing off.

ACL

1. Schedule 2 of the ACL relevantly provides:

   Section 18: Misleading or deceptive conduct

   (1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

2. The ACL requires conduct or misrepresentations that have been or are likely to mislead or deceive. As already indicated in respect of s 60, I am not satisfied that use of the Trade Mark is likely to cause deception or confusion. It follows that, on the stricter test posited by the ACL, use of the Trade Mark is not likely to mislead or deceive.

Passing off

1. Where use of a trade mark does not contravene s 18 of the ACL, neither will it amount to passing off.

2. The relationship between passing off and s 52 of the now repealed Trade Practices Act 1974 (‘TPA’) was addressed in Re Equity Access Pty Ltd v Westpac Banking Corporation:

   [T]he scope for the operation of s 52 will thus be broader than that involved in the tort of passing off so that in a case such as the present where the claim is for the protection of the reputation in a name against the use of that name by another, failure to succeed under s 52 or s 53 will invariably mean that proceedings for passing off would likewise fail.[36]

   [36] [1989] FCA 506 [40].

3. The above comments are equally applicable to the relationship between s 18 of the ACL and the tort of passing off because s 18 of the ACL is essentially the equivalent of s 52 of the TPA.

4. As I have found that s 18 of the ACL has not been contravened, it follows that use of the Trade Mark does not amount to passing off.

5. Accordingly the s 42(b) ground of opposition has not been established.

Section 62A

1. Section 62A of the Act provides:

   Application made in bad faith

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

2. Bad faith was judicially considered in Fry Consulting Pty Ltd v Sports Warehouse (No 2) wherein Dodds-Streeton J stated:

   Bad faith, in the context of s 62A, does not, in my opinion, require, although it includes, dishonesty or fraud. It is a wider notion, potentially applicable to diverse species of conduct.

   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 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.[37]

   [37] [2012] FCA 81 [164].

3. This approach was endorsed by Bennett J in DC Comics v Cheqout Pty Ltd.[38]

   [38] [2013] FCA 478.

4. The Opponent asserts that the Applicant’s conduct was designed to gain a benefit by appropriating the Opponent’s indicia ‘Shophouse Kitchen’ together with the Opponent’s orange and white colour scheme so as to further the customer’s association between the Trade Mark and the Opponent’s business.[39]

   [39] Opponent’s hearing submissions [60].

5. The Opponent asks me to reach this conclusion by drawing inferences from perceived gaps in the Applicant’s evidence, namely:

• the Applicant has not provided all of the reasons why the name ‘Shophouse Kitchen’ was chosen;

• the Applicant has not explained whether any searches were conducted prior to filing the trade mark application; and

• the Applicant has not provided an explanation as to why an orange and white colour scheme was chosen for the Trade Mark.

1. The implication being that the Applicant’s silence on these matters raises considerable doubt as to the good faith of their adoption of the Trade Mark.

2. I cannot agree with the Opponent’s argument. Although the Applicant may be silent on the 3 points above, they are not silent as to their knowledge of the Opponent or lack thereof, at the time of filing the trade mark application.

3. In the Loh Declaration, the Applicant deposes that they had no knowledge of the Opponent at the time of filing the trade mark application. There is nothing before me to suggest that the credibility of the following statements should be questioned:

   Prior to becoming aware of this opposition proceeding, which was started on 31 December 2013, I had never heard of the “SHOPHOUSE restaurant chain” in the United States that is described in the Ells Declaration. Accordingly, when I filed the Application on 11 June 2013 and the Plain Text Application on 25 February 2013, and when the Shophouse Kitchen restaurant was opened on 23 May 2013, I had no knowledge of the chain.

Secret Kitchen and I have not, at any time during the Shophouse Kitchen restaurant’s history, sought to indicate any connection between the Shophouse Kitchen restaurant and that chain of American restaurants.

I was not aware of the use by Shophouse LLC of the names “ShopHouse” or “ShopHouse Kitchen” in the United States at the time when I decided to adopt the Trade Mark and lodge a trade mark application for the Trade Mark.[40]

[40] Loh Declaration [14] – [16].

1. There is no need for the above inferences to be drawn in the face of the clear statement, made in a statutory declaration, that the Applicant had no knowledge of the Opponent at the time of filing the trade mark application. As the Applicant was not aware of the Opponent or the Opponent’s Shophouse Trade Marks, and as no other circumstances have been brought to light which cast doubt upon the Applicant’s statements, it is difficult to fathom how the trade mark application was made in bad faith.

2. In relation to the similar colour scheme, the Opponent draws my attention to Footwear Industries Pty Ltd v PT Alasmas Berkat Utomo.[41] In that matter, the colour red featured prominently in the respective trade marks and the Delegate concluded that the applicant consciously adopted trade marks and associated indicia for which there was some prospect of association with the opponent. I do not consider this to be analogous to the matter before me. In Footwear Industries the Applicant had previously been a licensee of the Opponent and it elected to remain silent throughout the proceedings. In the current matter, there is no evidence of any relationship between the parties and the Applicant has provided evidence and submissions including a declaration stating that they were unaware of the Opponent or its use of ‘Shophouse’ prior to the opposition proceedings. Given I am satisfied that the Applicant had no knowledge of the Opponent or the Opponent’s Shophouse Trade Marks I do not conclude that the Applicant consciously adopted trade marks or indicia for which there was some prospect of association with the Opponent.

   [41] [2014] ATMO 41 (‘Footwear Industries’).

1. In addition, whilst it may have been prudent for the Applicant to carry out at least a basic Internet search prior to filing the trade mark application, failing to do so does not amount to conduct ‘of an unscrupulous, underhand or unconscientious character’.[42]

   [42] Fry Consulting Pty Ltd v Sports Warehouse (No 2) [2012] FCA 81 [166].

2. The Opponent has not discharged the onus of establishing that the Applicant applied for the Trade Mark in bad faith. Accordingly I find that the s 62A ground of opposition has not been established.

Decision

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

   Decision

   (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 not established a ground of opposition.

3. Accordingly trade mark application 1562117 may proceed to registration one month from the date of this decision.

4. If the Registrar is served with a notice of appeal before that time, I direct that registration shall not occur until the appeal has been decided or discontinued and that the disposition of the application should be in accordance with the Court’s order or direction.

Costs

1. The parties sought costs. As the successful party, the Applicant is so entitled and I accordingly award costs against the Opponent as per Schedule 8 of the Trade Marks Regulations 1995.

Katrina Brown
Hearing Officer
Trade Mark Hearings
31 October 2016