Slimtox (Australia) Pty Ltd v Slim By Nature Pty Ltd

[2019] ATMO 141

TRADE MARKS ACT 1995

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

ReOppositions by Slimtox (Australia) Pty Ltd to registration of trade mark applications 1835881(5) and 1835882(44) – DETOX26 – in the name of Slim By Nature Pty Ltd

AND

Opposition by Slim By Nature Pty Ltd to registration of trade mark application 1835887(5, 44) – DETOX26 – in the name of Slimtox (Australia) Pty Ltd

DELEGATE:                  Debrett Lyons

REPRESENTATION:         Slim By Nature Pty Ltd: Max Steinhausen of IP Service International Pty Ltd

Slimtox (Australia) Pty Ltd: written submissions by IP Solved (ANZ) Pty Ltd1 and Jesmini Ambikapathy of Counsel2

DECISION:                   2019 ATMO 141

Trade Marks Act 1995 (Cth) - s 52 oppositions: ownership considered; s 58 established in respect of application 1835887 – opposition successful – trade mark refused registration; ss 42(b), 58, 60 and 62A considered in respect of applications 1835881 and 1835882 – none established – oppositions unsuccessful – trade mark applications to proceed to registration.

Background

1. This decision concerns cross-oppositions between two Australian companies, Slimtox (Australia) Pty Ltd (‘Slimtox’) and Slim By Nature Pty Ltd (‘Slim By Nature’), both doing business in the weight-loss field. Both lay claim to the same trade mark, DETOX26 (‘the Trade Mark’).

1. In broad outline, Slim By Nature was incorporated on 3 September 2014 and states that since that time it has offered a variety of dietary goods (health supplements) and in particular, its ‘Detox Support Drops’, together with services (weight loss and fitness programs), and in particular, its ‘Body Slimming Detox’ program. It claims use of the Trade Mark since September 2016 in respect of a 26-day ‘Body Slimming

1 In relation to the oppositions by Slimtox (Australia) Pty Ltd to registration of trade mark applications 1835881 and 1835882.

2 In relation to the opposition by Slim By Nature Pty Ltd to registration of trade mark application 1835887.

Detox’ program during which a participant makes daily use of the ‘Detox Support Drops’.

1. On 3 April 2017 Slim By Nature filed two applications for the Trade Mark. Those applications were examined, accepted and advertised as ready for registration before being opposed by Slimtox on various grounds, discussed later.

1. Ms. Jennifer Whalland and Mr. Paul Whalland (together, ‘the Whallands’) claim to have used the Trade Mark in relation to diet-related goods and services since February 2017. On 4 April 2017 they jointly applied to register the Trade Mark. Later, on 14 November 2017, the Whallands incorporated Slimtox and on that same day assigned the application they had made for the Trade Mark to Slimtox. This office recorded that assignment on 13 February 2018. The application was examined and accepted for registration under section 44(4) of the Trade Marks Act 1995 (‘the Act’).

1. These proceedings concern the following applications where the roles of the parties in the oppositions are indicated:

App. No.	Applicant	Opponent	Goods Class	Services Class	Filing Date	Grounds    under the Act pressed
1835881	Slim     By Nature	Slimtox	5	-	3.4.17	ss. 42(b), 58, and 60
1835882	Slim     By Nature	Slimtox	-	44	3.4.17	ss. 42(b), 58, and 60
1835887	Slimtox	Slim      By Nature	5	44	4.4.17	ss 58 and 62A

1. The parties each filed evidence (detailed later) in accordance with the Trade Mark Regulations 1995 (‘the Regulations’) and later asked to be heard. I was delegated to take the hearing set for 1 July 2019 in Canberra and in accordance with a letter of invitation sent to the parties by this office both sides filed outline written submissions in advance of the hearing.

1. At the hearing Slim By Nature was represented by Max Steinhausen of IP Service International Pty Ltd who appeared by video-conference. Slimtox advised the office that it would be represented by Jesmini Ambikapathy of Counsel but just prior to the

   hearing Slimtox sought a postponement due to the unavailability of Ms Ambikapathy and the inability of her instructing attorney to replace her.

1. I determined that the hearing should proceed and Slimtox be given a short period of time following the hearing to make submissions on any matter arising from the hearing not foreshadowed by Slim By Nature’s outline written submissions. Mr Steinhausen acceded to that arrangement. After the hearing I wrote to Slimtox advising that oral submissions had followed the written submissions and the evidence of record without attempt to introduce or argue anything new. In keeping with the deadline I gave in that letter, Slimtox advised that it had nothing material to add to its submissions as filed. It follows that Slimtox’s arguments are those set out in the written submissions.

The Evidence

1. When the oppositions are taken together, Slim By Nature relies upon the declarations of:

·     Zhanna Gee made on 8 May 2018 and on 22 May 2018;

·     Erica (Bo) Wong, also made on 8 May 2018 and on 22 May 2018; and

·     Mr. Max Steinhausen, made on 4 January 2018.

1. Slimtox relies on the declarations of:

·     Jennifer Whalland, made on 11 April 2018, which incorporates by reference her earlier declarations made on 2 February 2018 and 30 October 2017, filed during examination of Slimtox’s Trade Mark application;

·     Jennifer Whalland made on 20 August 2018; and

·     Colin Hanns, made on 20 August 2018.

Legal framework, Ownership & Section 58

1. As noted above, there are various grounds of opposition and cross-opposition but my observation is that the superior claim to ownership of the Trade Mark is largely dispositive of all three matters. I have therefore first examined the s 58 ground of opposition raised by both sides since that section provides that:

The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.

Conditioned by this observation I have distilled the following information from the Evidence.

Prior Dealings

1. The parties had dealings with each other in early 2017 before either applied for the Trade Mark. In January 2017 Jennifer Whalland initiated contact with Slim By Nature. She was emailed certain material. She placed an order for certain goods. She was invited to, and did, join a private Facebook group established by Slim By Nature. She there posted that she was reading information sent to her by Slim By Nature. In February 2017 she made a Facebook enquiry about wholesale product purchase to which Slim By Nature responded.

Use by Slimtox

1. Slimtox lays claim to use of the Trade Mark by its predecessors-in-title, the Whallands, in furtherance of a plan they hatched in January 2017 to start a “detox and wellness business” selling weight loss drops. Slimtox’s account of the facts is that Jennifer Whalland did in fact contact Slim by Nature on 31 January 2017, placing an order for its weight loss drops and later making enquiry about wholesale pricing. Nevertheless, Slimtox maintains that the Whallands only became aware of Slim By Nature’s use of the Trade Mark in March 2017.

1. Slimtox’s submission is that on or around 31 January 2017, Jennifer Whalland chose the Trade Mark. Further, that on or around 9 February 2017 she registered the domain name <detox26.com.au>, launched a website at on 13 February 2017 and registered the Trade Mark as a business name on 18 February 2017.

Use by Slim By Nature

1. Slim By Nature claims use of the Trade Mark since September 2016 and in support its evidence includes a screenshot dated 8 September 2016 of its Instagram post, shown below, where the Trade Mark appears in the text.

1. Its evidence further includes a screenshot dated 6 October 2016, shown below, of another Instagram post, this time using the Trade Mark in both the text and a video.

1. Furthermore, the following screenshot is of its Facebook post, dated 15 October 2016.

Reasoning

1. The word “owner” is not defined in the Act and the judicial attention it has received over the years has resulted in a meaning perhaps less intuitively understood than may be expected. So, for example, the courts have long distinguished the concepts of “authorship” and “ownership”3. So, too, the meaning of “owner” is informed by its common law roots and the statutory scheme still gives primacy to the first user rather than the first to file4; as the aphorism puts it, the Act provides for the registration of trade mark rights rather than rights by registration. Thus, it is established law that in the absence of any use in Australia, the first person to apply to register a trade mark for relevant goods or services is entitled to claim to be the owner5.  However, as in this case, where both parties claim to have used the Trade Mark before the filing dates of both their own and their adversary’s applications, the filing dates become (largely6)

3 See, for  example, Aston v Harlee Manufacturing Co [1960] HCA 47; (1960) 103 CLR 391, Fullagar, J said at [19].

4 See, for example, Moorgate Tobacco Co Ltd v Phillip Morris Limited (No. 2) [1984] HCA 73; (1984)

156 CLR 414. In particular, Deane J (with whom the other members of the Court agreed) at pp 433-434. 5 Shell Co (Aust) Ltd v Rohm and Haas Co [1948] HCA 27; (1949) 78 CLR 601, per Dixon J at 627-628. 6 See the discussion which follows later.

irrelevant. In these circumstances the law is that in the absence of fraud the owner of the trade mark for particular goods or services is taken to be the first person to use it  in the course of trade in Australia in relation to those goods or services7 (or in relation to goods or services considered to be “the same kind of thing”8).

1. From time to time the authorities are revisited and in Bauer Consumer Media Limited v Evergreen Television Pty Ltd (‘Bauer’)9 the Federal Court restated a number of pertinent subsidiary principles, as follow:

· s 58 of the Act creates a ground of opposition which engages the usual rule as to onus of proof, namely that ‘the party who asserts must prove.’ [Bauer 268]

·     while the mark must be used for the purpose of indicating a connection in the course of trade, this does not mean that any actual trade or dealing in the goods is required. It is sufficient if there is an offer to trade in the goods, or an existing intention to offer or supply goods bearing the trade mark. [Bauer 269-71]

·     those actions must have gone beyond investigating whether to use the mark and beyond planning to use the mark and must objectively demonstrate a commitment to using the mark, ie, to carrying an intention to use the mark into effect. [Bauer 273]

·     authorship of a trade mark, alone, does not suffice to establish ownership: [Bauer 274]

Application to the facts and submissions

1. The earliest claim Slimtox makes to the Trade Mark is on or around that 31 January 2017 when Jennifer Whalland chose the Trade Mark. That is a bare claim to authorship. Slimtox’s actual use of the Trade Mark was later and, for reasons which follow, has no influence of the determination of ownership.

7 Seven Up Co v OT Ltd (1947) 75 CLR 203.

8 Re Hicks’ Trade Mark [1897] VicLawRp 118; (1897) 22 VLR 636.

9 [2017] FCA 507 (12 May 2017)

1. Slim By Nature’s evidence speaks for itself and Slimtox’s objections do not move my mind away from what appear to be self-evident examples of first use of the Trade Mark. The complaint that the Trade Mark does not appear on actual product is irrelevant when there are clear instances of use of the Trade Mark in accompanying text. The submission that there is no evidence that the social media posts showing the Trade Mark “continued to be visible after the date of posting and were not, for example, removed for any period of time” may be true, but there is nothing to make me think the posts did not survive; nor, if they establish first use, is it imperative that they did. Equally, the observation that Instagram posts are capable of being edited at a later time and may have in fact been edited in March and/or April 2017 is not enough by itself to cast lingering doubt over whether or not the Trade Mark was used, given other contemporaneous evidence of its use in 2016.

1. Slimtox’s further criticism is that there is no evidence of sales of goods or services under the Trade Mark, nor of marketing or promotional expenditure. It is observed that even the purchase by Jennifer Whalland on 31 January 2017 of weight loss drops resulted in an order confirmation and invoice from Slim By Nature describing the purchase as ‘Body Detox Cleanse Basic Kit – 26 Day Program’. Be that as it may, the evidence of use of the Trade Mark in respect of a dietary program is clear and s 7(4) of the Act states that use of a trade mark in relation to goods means use of the trade mark upon, or in physical or other relation to, the goods. I find that Slim By Nature made use of the Trade Mark in 2016, not just in connection with services, but also in relation to goods being ‘Detox Support Drops’.

1. That said, I turn to consideration of a point I have deliberately postponed, namely, the breadth of Slim By Nature’s Trade Mark application. As stated, both parties do business in the weight-loss field and both (by their own submissions) have shown an interest in what are essentially the same goods and services. Slimtox’s application in classes 5 and 44 expresses the scope of that interest as follows:

Class 5: Antioxidants (dietary supplements); Dietary food supplements; Dietary nutritional supplements; Dietary preparations for slimming purposes (medical); Dietary protein supplements; Dietary supplements; Herbal dietary supplements; Plant compounds

for use as dietary supplements (medicinal); Plant extracts (dietary supplements); Homeopathic preparations

Class 44: Advisory services relating to diet; Counselling relating to diet; Dietetic counselling services (medical); Provision of dietetic advice

1. By contrast, Slim By Nature’s applications claim the following goods and services:

Class 5: Herbal, plant and flower compounds, extracts, infusions, preparations, and remedies for medical, pharmaceutical, dietary, nutritional and veterinary purposes; herbal medicine; nutritional food additives in the nature of natural food extracts derived from herbs, plants and flowers for medical, dietary and nutritional purposes including for the removal of toxins from the body; medicated powders and medicated preparations in the form of powders; medicated liquids for the removal of toxins from the body; tinctures for medical purposes, including those made from fresh whole plants and extracts

thereof; tonics based on herbs, plants and flower extracts for medical, pharmaceutical, dietary, nutritional and veterinary purposes; elixirs (pharmaceutical

preparations); infusions made from herbs, plants and flower extracts for medical, pharmaceutical, dietary, nutritional and veterinary purposes; extracts of medical herbs and plants, including those in liquid, liquid drops and capsule form; root extracts for medical purposes; natural and dietary herbal supplements; nutritional and dietary supplements including in the form of liquids, powders, capsules, tablets, syrups, gummies, gels, and caplets including for the purpose of removing toxins from the body; herbal, plant and flower extracts and compounds sold as components of dietary supplements (medicinal); dietary food supplements; benzol and chorine detoxification agents for medical purposes; dietetic foods for medicinal purposes; natural healthcare preparations (medicated); natural pharmaceutical products; drinks, beverages, teas, waters and tisanes for medical, pharmaceutical, dietary, nutritional and veterinary purposes; veterinary products and preparations; dietary supplements and substances for animals and veterinary

purposes; medicated food and nutritional supplements for animals, being minerals, trace elements or vitamins; vitamins; serums; medicinal oils; medicated skin care, body care and baby care preparations and products; pharmaceutical and veterinary preparations; sanitary preparations for medical purposes; dietetic food and substances adapted for medical or veterinary use, food for babies; dietary supplements for humans and  animals; plasters, materials for dressings; material for stopping teeth, dental wax; disinfectants; preparations for destroying vermin; fungicides, herbicides

Class 44: Advisory services relating to nutrition, health, and diet; advisory services relating to nutrition and health including advisory in relation to detoxification; medical services including medical care, consultancy, testing and treatments namely medical services, consultancy, testing and treatment for removing of toxic substances from the body; provision of information relating to nutrition; nutrition consultancy; counselling relating to health or diet; counselling relating to nutrition; advisory services relating to diet; health and fitness information and advice; fitness testing; health care; alternative medicine services, namely detoxification services; medical services, namely, in relation to weight loss, nutrition, health, diet and detoxification; advisory services in relation to personal wellbeing, health and fitness, medical services, stress management, mediation and relaxation techniques, diet, nutrition, healthy eating, weight gain, weight loss and weight control or maintenance; consulting in the field of health and wellness to bring about personal happiness; counselling services in the fields of health, nutrition and lifestyle wellness; therapy and rehabilitation services in relation to anti-alcohol, anti-drugs and anti-smoking; health care services including conducting health assessments, health screening and guidance; dietetic and lifestyle counselling (medical and

psychological); drug, narcotic and alcohol rehabilitation services including detoxification treatment; psychological assessment, counselling, consultation, examination and testing, including for medical purposes; health counselling and consultancy; managed health care services; health spa services; health spa services for health and wellness of the body and spirit including detoxification of the body and spirit; lifestyle counselling (medical); lifestyle counselling (psychological); personal care services (medical nursing, health, hygiene and beauty care); health care consultancy services (medical); rehabilitation services (health care), including the treatment process of removing toxins from the body and rehabilitating it back to health; providing weight loss programme services; weight control evaluation and treatment services; weight reduction diet planning and supervision; weight management services, namely, providing weight loss and/or weight maintenance programmes; services for the planning of weight reduction

programmes; providing information, advisory and consultancy services in relation to the aforesaid services; provision of all the aforesaid services including by electronic means, on-line, via a website, the Internet or other computer networks, by wireless technology, accessible by mobile phone and other Internet-enabled devices, and/or via a global computer network

1. Those lists nominate goods and services going far beyond actual use of the Trade Mark by Slim By Nature but, absent a s 59 ground of opposition asserting there was no bona fide intention to use the Trade Mark on all those goods and services, I return

to the explanation of ownership expressed above at [18] and in particular to the principle that, in the absence of use, the first person to apply to register a trade mark for relevant goods or services is entitled to be the owner.

1. Even when I take note of Slimtox’s asserted use of the Trade Mark prior to the filing date of Slim By Nature’s applications on 3 April 2017, it follows from what I have said (namely that the use by Slimtox of the Trade Mark was no different that the use by Slim by Nature) that Slimtox can have no better claim to ownership of any of what might be termed the “extended goods and services” embraced by Slim By Nature’s application and so Slim By Nature remains the owner of even those extended goods and services by reason of its application.

1. What remains to be said of s 58 of the Act is largely a formality. Slim By Nature has shown itself to be the owner of the Trade Mark. Section 58 was nominated in its Statement of Grounds and Particulars against application 1835887. That ground was pressed at the hearing and for the reasons given that ground has been established. Accordingly, the opposition to application 1835887 has been successful.

Applications 1835881 and 1835882

1. Slimtox’s oppositions to these applications is in each case premised on ss 42(b), 58, 60 and 62A of the Act which were nominated in its Statements of Grounds and Particulars. It follows from what has gone before that Slimtox is unable to establish s 58 and what follows is a short examination of the remaining grounds.

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.

1. To establish a ground of opposition under s 60 Slimtox must first demonstrate a reputation exists in a trade mark within Australia as at the priority date – here, 3 April 2017 – such that, as a result of that reputation, use of the Trade Mark by Slim By Nature would be likely to deceive or cause confusion. The word ‘reputation’ is given its ordinary dictionary meaning and refers to the recognition of the trade mark by the public generally10. Reputation can be inferred from evidence showing a high volume of sales or promotional expenditure,11 such as evidence of television, radio or print advertising.12

2. As noted already, Slimtox claims use of the Trade Mark since February 2017. Slim By Nature’s application was filed two months later. Confidential turnover and promotional expenditure figures are provided but having regard to the critical priority date, they are insignificant. I am not satisfied of the existence of a reputation in the Trade Mark at the relevant date and it follows that Slimtox has failed to establish the ground of opposition under s 60 of the Act.

Section 42(b)

1. Section 42(b) of the Act 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.

1. The onus is on Slimtox to establish, on the balance of probabilities, that use of the Trade Mark would be contrary to law13 and its submission is that use of the Trade Mark would contravene ss 18 and 29(1)(g) and (h) of the Australian Consumer Law 2010 (‘the ACL’), reproduced below:

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.

10 McCormick & Company Inc v McCormick [2000] FCA 1335, [79].

11 McCormick & Company Inc v McCormick [2000] FCA 1335, [86].

12 ConAgra Inc v McCain Foods (Aust) Pty Ltd [1992] FCA 159, [118]; see also more recently the Full Court’s discussion in Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83, at [81]. 13 Advantage Rent-a-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683, [28].

Section 29: False or misleading representations about goods or services

(1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:

...

(g)   make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits; or

(h)   make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation.

1. I have found that Slimtox failed to establish a ground of opposition under s 60 of the Act and the case law relevant to the ACL has made plain that s 18 imposes a more stringent test than that for deception or confusion under s 60.14 Further, the alleged breaches of ss 29(1)(g) and (h) of the ACL can be dismissed since it has been held that where a trade mark does not offend s 18 of the ACL, neither will it offend s 29 of the ACL.

1. It follows that I am not satisfied that use of the Trade Mark would be contrary to law. Slimtox has accordingly failed its ground of opposition under s 42(b) of the Act.

Section 62A

1. Section 62A of the Act is reproduced below:

62A Application made in bad faith

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

1. The Courts have held that bad faith imports conduct which, irrespective of the form it takes, is of an unscrupulous, underhand or unconscientious character. In its written submissions Slimtox states:

We believe that it is clear from the evidence that the [Slim By Nature] was aware, or should have been aware adopting the standards prescribed, that it ought not to make the application. We believe that it is also reasonable to infer that the [Slim By Nature] became aware of the commercial intentions of the [Slimtox’s] predecessors on or before 18 February 2017. That being the case, we submit that a reasonable and experienced person, knowing of

14 See, for example, Ownit Homes Pty Ltd v Ownit Conveyancing Pty Ltd [2005] ATMO 47, [36]; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191, 198 (Gibbs CJ).

those intentions, would not regard it as acceptable commercial behaviour to apply for registration of the same trademark in respect of the same goods and/or services.

1. I have already found Slim By Nature to be the owner of the Trade Mark. It would be entirely at odds with that finding if I were to then discover that it had acted in an unscrupulous, underhand or unconscientious character by filing its applications for registration of the Trade Mark. I reject such a conclusion and with it the ground of opposition under section 62A. In my assessment the action of Slim By Nature in making application for the Trade Mark was entirely in conformity with its belief that it was the owner of the Trade Mark. Consequently, I find that the Opponent has failed to establish the ground of opposition under s 62A.

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.

1. Slim By Nature has established a ground of opposition under the Act with respect of trade mark application 1835887 and so registration is refused.

1. Slimtox has not established a ground of opposition with respect to either trade mark application 1835881 or 1835882 which 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. Both parties sought costs. Slim By Nature has been successful in all three oppositions and I see no reason to depart from the general rule that costs follow the event. I award costs in respect of trade mark number 1835887 against Slimtox under s 221 of the Act in line with the amounts in Schedule 8 of the Regulations. Since all three matters proceeded on what was essentially the same evidence, I award reduced costs against Slimtox in respect of trade mark numbers 1835881 and 1835882 in the manner indicated in Hume Industries (Malaysia) Berhard v James Hardie & Coy Pty Ltd.15

Debrett Lyons Hearing Officer

Trade Mark Oppositions and Hearings 26 September 2019

15 [2001] ATMO 78.