Southcorp Brands Pty Limited v Li Li Shen

[2019] ATMO 42

TRADE MARKS ACT 1995

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

Re: Opposition by Southcorp Brands Pty Limited to registration of trade mark application numbers 1835246 (33) Ben Ford and 1840407 (33) Barry Ford in the name of Li Li Shen

Delegate:	Katrina Brown
Representation:	Applicant:	Not represented at hearing. Written submissions by Philip McCabe of McCabe and Company Limited.
	Opponent:	Celia Davies and Jeremy Herz Of Herbert Smith Freehills
Decision:	2019 ATMO 42 Trade Marks Act 1995 – s 52 opposition – grounds pursued under ss 42(b), 60 and 62A – s 62A established – registration refused.

Background

1. This decision is in respect of oppositions under section 52 of the Trade Marks Act 1995 (‘the Act’) by Southcorp Brands Pty Limited (‘the Opponent’) to the registration of the following trade marks (‘the Trade Marks’) in the name of Li Li Shen (‘the Applicant’):

Trade Mark No	1835246	1840407
Trade Mark	Barry Ford	Ben Ford
Filing Date	30 March 2017	26 April 2017
Specification	Class 33: Alcoholic extracts of fruits; Wine; Spirits (beverages); Brandy; Whisky; Alcoholic beverages (except beer); Rum; Vodka; Sake	Class 33: Alcoholic extracts of fruits; Wine; Spirits (beverages); Brandy; Whisky; Alcoholic beverages (except beer); Rice alcohol; Rum; Vodka; Sake

1. The Trade Marks were examined as required under s 31 of the Act. Acceptance of the Trade Marks for possible registration was advertised in the Official Journal of Trade Marks on 24 August 2017 in the case of application 1835246 and 21 September 2017 in the case of application 1840407.

2. For each of the Trade Marks, the Opponent filed a Notice of Intention to Oppose followed by a Statement of Grounds and Particulars (‘SGP’). The Applicant filed a Notice of Intention to Defend each of the oppositions.

3. In due course the Opponent filed evidence in support of the oppositions. The Applicant did not file evidence in answer.

4. The matters came before me, a delegate of the Registrar of Trade Marks, in Canberra on 15 March 2019. The Opponent was represented by Celia Davies and Jeremy Herz of Herbert Smith Freehills. The Applicant did not appear at the hearing. Philip McCabe of McCabe and Company Limited made written submissions on the Applicant’s behalf in accordance with the schedule for submissions.

Grounds of opposition and onus

1. In the SGP the Opponent nominated grounds of opposition under ss 42(b), 44, 60 and s 62A of the Act. The s 44 ground of opposition was not pursued by the Opponent in its written submissions or at the hearing.

2. The Opponent bears the onus of establishing at least one of the grounds of opposition.[1] In the event that the Opponent establishes one of the grounds in relation to all of the goods claimed in the trade mark applications, there is no requirement for me to consider the other grounds of opposition. In this matter, I consider that the Opponent has established the ground of opposition under s 62A.

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

3. The standard of proof is the ordinary civil standard of the balance of probabilities.[2] Any doubt that this standard was applicable in respect of s 62A was removed by the decision in Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) where it was explicitly stated that ‘the standard of proof is the balance of probabilities, rather than that of beyond reasonable doubt’.[3]

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

   [3] [2012] FCA 81 [145] (‘Fry Consulting’).

Evidence

1. The Opponent relies on the following declaration:

• Declaration of Andrew Geoffrey Butler (Registered Patent and Trade Marks Attorney - Wrays) made on 3 April 2018 with Exhibits AGB-1 to AGB-11 (‘Butler Declaration’).

The Opponent

1. The Opponent is a subsidiary of Treasury Wine Estates Limited (‘TWE’). In the Butler Declaration TWE is described as:

   one of the world’s largest premium wine producers…the world’s largest listed stand-alone wine company. It has an extensive portfolio of more than 80 brands servicing markets across 5 continents, and an enviable stable of premium wine brands including internationally recognised brands such as Wynns, Penfolds, Wolf Blass, Beringer, Lindemans and Rosemount.

2. The ‘Penfolds’ brand is of particular relevance to these matters. The evidence in support establishes that ‘Penfolds’ is a long established and highly revered wine brand.

3. In the Chinese market, TWE and the Opponent also use the Chinese characters (‘Opponent’s Chinese Character Trade Mark’) in relation to ‘Penfolds’ wine. These Chinese characters transliterate to ‘Ben Fu’ which is the Chinese phonetic approximation of ‘Penfolds’. The Opponent has Australian registrations for the Chinese Character Trade Mark (registration number 1762317) and for ‘Ben Fu’ (registration number 1762333).

The Applicant

1. The Applicant has not provided any evidence in these proceedings and the written submissions do not provide any information about the Applicant. As such all that is known about the Applicant is what can be inferred from the Opponent’s evidence.

Section 62A

1. Section 62A provides:

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

2. The phrase ‘bad faith’ is not defined in the Act. In DC Comics v Cheqout Pty Ltd the relevant test was expressed as:

   a combined test that involves subjective and objective elements. The subjective element refers to the knowledge of the relevant person at the time of making the application. The objective element requires the decision-maker to decide whether, in the light of that knowledge, the relevant person’s behaviour fell short of acceptable commercial standards.

   The question is whether the conduct falls short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in the particular area. It is whether the knowledge of the applicant was such that the decision to apply for registration would be regarded as in bad faith by persons adopting proper standards.[4]

   [4] [2013] FCA 478 [62] (‘DC Comics’).

3. In DC Comics, Bennett J also confirmed that exploitative conduct can amount to bad faith.[5] In that case the applicant used the words, which were the subject of the trade mark application, in conjunction with a device (BG Shield Device) that closely resembled the insignia associated with the opponent’s Superman character and registered trade marks. In finding that this conduct amounted to bad faith Bennett J observed:

   In my view, the inference is clear, from the immediate use of the Trade Mark together with the BG Shield Device that, in making the application to register the Trade Mark, [the applicant] intended to use it in combination with the BG Shield Device in order to strengthen the allusion to Superman. The inference can also be drawn that this use was designed to gain a benefit by appropriating Superman indicia and the reputation of [the opponent’s] superhero, so as to further the viewer’s association between the Trade Mark and the Superman word mark.

   …

   I also note that the red, white and blue colours traditionally used in conjunction with the Superman character were used by [the applicant] together with the BG Shield Device.[6]

   [5] Ibid.

   [6] Ibid [73].

4. There are similarities between the circumstances in DC Comics and those of the present matters. The evidence before me demonstrates that the words ‘Barry Ford’ in red cursive font are repeatedly used in close conjunction with the Opponent’s Chinese Character Trade Mark. Exhibit AGB-6 to the Butler Declaration contains the following example:

1. In this example, a stylised version of the Opponent’s Chinese Character Trade Mark is shown immediately to the left of the words ‘Barry Ford’. The Opponent asserted in both the evidence in support and its written submissions that this is a distribution authorisation issued by the Applicant. The Applicant did not file evidence in answer and it also chose not to address this assertion in its written submissions. Of particular note is the period of validity of the distribution authorisation which began on 20 May 2017, less than one month after the filing date of trade mark 1840407 and less than two months after the filing date of trade mark 1835246.

2. The evidence also demonstrates that the Applicant has adopted a trade dress that is notably similar to that of ‘Penfolds’. This similarity can be observed through the side by side comparison of a bottle of ‘Penfolds’ wine and a bottle of the Applicant’s ‘Barry Ford’ wine.

1. The similarities are readily apparent. The identifying brands ‘Penfolds’ and ‘Barry Ford’ are both in red cursive font on a white background with ornate capital letters, a red capsule is attached to the neck of each bottle, the use of B508 on the Applicant’s wine mimics TWE’s practice of using ‘BIN’ combined with numerals to designate vintages of its ‘Penfolds’ wines, and the broad leaf device on the Applicant’s wine bears, on a cursory inspection, some resemblance to the insignia on the ‘Penfolds’ label.

2. The evidence also establishes that the Applicant was aware of the Opponent’s rights and reputation in both ‘Penfolds’ and the Opponent’s Chinese Character Trade Mark at the time of filing the applications for the Trade Marks. The parties are known to each other having been involved in a number of legal proceedings in China (prior to the filing dates of the Trade Marks) relating to the Opponent’s Chinese Character Trade Mark. Exhibit AGB-8 to the Butler Declaration is a translation of the decision of the Beijing High People’s Court relating to a non-use action brought by the Opponent against the Applicant. In that decision, the Beijing High People’s Court observed that a:

   certain corresponding relationship had been established between Chinese characters “” and “Penfolds”. In addition Shen Li once claimed that she is the importer of “ (Penfolds)” wines…this Court holds the opinion that the wines reflected on the invoices bearing “ (Penfolds)” are Southcorp’s wines.

3. I am satisfied that the evidence establishes a pattern of behaviour in which the Applicant attempts to pass off its ‘Barry Ford’ wine as being, or being associated with, the ‘Penfolds’ brand. In the absence of any explanation from the Applicant as to its conduct, the behaviour is consistent with a desire to exploit the Opponent’s trade marks and reputation for its own commercial advantage. In my opinion this exploitative conduct amounts to bad faith as it falls short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in the wine industry.

4. For the s 62A ground to be established the bad faith must be at the time of making the trade mark applications.[7] Conduct soon after filing the applications may be evidence of bad faith at the time of making the applications.[8]  Whilst many of the examples of the Applicant’s conduct are not clearly dated, or perhaps more accurately the date has not been translated into English, the distribution authorisation (see [17] to [18] of this decision) provides a validity period beginning on 20 May 2017, which as previously mentioned is less than two months after the filing date of trade mark 1835246. I am satisfied that this use, with the validity period commencing soon after the filing date, is sufficient to infer that in making the application for 1835246, the Applicant intended to use ‘Barry Ford’ in red cursive font in conjunction with the Opponent’s Chinese Character Trade Mark to gain commercial benefit.

   [7] Fry Consulting [2012] FCA 81 [145]; DC Comics [2013] FCA 478 [61].

   [8] DC Comics [2013] FCA 478 [77].

5. Although the evidence does not show that the Applicant has used ‘Ben Ford’, the pattern of the Applicant’s behaviour is such that it is more probable than not that at the time of making the trade mark application for 1840407 the Applicant intended to use ‘Ben Ford’ in an exploitative manner designed to acquire a springboard or advantage by suggesting a connection with ‘Penfolds’ or some endorsed relationship with the Opponent.

6. I am satisfied that the Opponent has established that the Applicant made the applications for the Trade Marks in bad faith.  

7. The s 62A ground of opposition has been established in relation to both Trade Marks.

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 the ground on which the                    application was opposed has been established.

2. The Opponent has established the ground of opposition under s 62A of the Act in respect of both trade mark applications.

3. Accordingly I refuse to register trade mark numbers 1835246 and 1840407.

Costs

1. The parties each sought costs. As the successful party, the Opponent is so entitled.

2. In respect of trade mark number 1835246 I award costs against the Applicant as per Schedule 8 of the Trade Mark Regulations 1995.

3. In respect of trade mark number 1840407 I award reduced costs against the Applicant in the same manner as indicated in Hume Industries (Malaysia) Berhard v James Hardie & Coy Pty Ltd.[9]

   [9] [2001] ATMO 78.

Katrina Brown
Hearing Officer
Oppositions & Hearings
26 March 2019