Southcorp Brands Pty Ltd v Modern Ancient Brands Pty Ltd

[2019] ATMO 164

TRADE MARKS ACT 1995

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

Re:Opposition by Southcorp Brands Pty Ltd to registration of trade mark application 1677074 (33) – THE GALATEA HUMBLY INSCRIBED TO HIS ROYAL HIGHNESS THE DUKE OF EDINBURGH and device, 1677076 (33) SKELETON THE CELEBRATED ENTIRE IRISH RACE HORSE. SO SUCCESSFULLY RUN AT 2 YEARS OLD AND DURING FIVE SUCCESSIVE SEASONS BY THE MOST NOBLE THE MARQUESS OF SLIGO. SUBSEQUENTLY THE PROPERTY OF PRINCE ESTERHAZY AND NOW AT RABY IN NEW SOUTH WALES and device and 1677081 (33) – Treasure Chest each in the name of Modern Ancient Brands Pty Ltd

Delegate:	Nicholas Smith
Representation:	Opponent: Wrays Applicant: Madderns Pty Ltd
Decision:	2019 ATMO 164 Trade Marks Act 1995 (Cth) - Section 52 opposition: s 62A considered – ground established – registration refused

Background

1. This decision concerns oppositions brought by Southcorp Brands Pty Ltd (‘Opponent’) pursuant to s 52 of the Trade Marks Act 1995 (Cth) (‘Act’) to the registration of the trade marks (collectively ‘Trade Marks’) which are the subject of the applications detailed below in the names of Modern Ancient Brands Pty Ltd (‘Applicant’): 

Application Number:	1677074
Filing Date:	25 Feb 2015
Goods:	Class 33: Beverages containing wine (alcohol content 1.15% or more by volume); Beverages containing wine (wine predominating); Blended wine; Cooking wine; Dessert wine; Drinks containing wine (wine predominating); Dry fortified wine; Dry red wine; Dry sparkling wines; Dry white wine; Dry wine; Fortified wines; Ginger Wine; Mulled wines; Non-sparkling wines; Red wine; Sparkling fruit wines; Sparkling wines; Still wines; Sweet fortified wine; Sweet red wine; Sweet sparkling wine; Sweet white wine; Sweet wine; Vintage wines; White wine; Wine (‘Applicant’s Goods’)
Trade Mark:	(‘Galatea Mark’)
Application Number:	1677076
Filing Date:	25 Feb 2015
Goods:	Applicant’s Goods
Trade Mark:	(‘Skeleton Mark’)
Application Number:	1677081
Filing Date:	25 Feb 2015
Goods:	Applicant’s Goods
Trade Mark:	Treasure Chest  (‘Treasure Chest Mark’)

2. Following the advertisement on 23 July 2015 in the Australian Official Journal of Trade Marks of the Trade Marks’ acceptance for possible registration, the Opponent filed Notices of Intention to Oppose on 23 September 2015.  The Opponent then filed a single Statement of Grounds and Particulars in connection with all of the Trade Marks on 16 October 2015 (‘SGP’). The SGP raised grounds of opposition under ss 42(b), 58, 60 and 62A of the Act. The Applicant filed a Notice of Intention to Defend on 13 November 2015. Progress of this Opposition proceeding has been delayed due to a number of cooling-off periods being in place in order for the parties to consider settlement of this matter.

Evidence

1. The Opponent filed Evidence in Support of its opposition (‘EIS’) on 19 February 2018.  This evidence consists of a declaration by Sandra Elizabeth Forman, Trade Marks Attorney for the Opponent’s representative, made on 19 February 2018 with Exhibits SF-1 to SF-11 (‘Forman Declaration’).  The Applicant did not file any Evidence in Answer.

   4. Once the time allowed for filing evidence had ended the parties were given an opportunity to request a hearing or to file written submissions.  By letter issuing from IP Australia on 25 July 2018 the parties were notified that as a hearing had not been requested the matter would be given to a delegate of the Registrar for a decision based on the written record.  The letter indicated that the parties had one month from the date of the letter to file any written submissions upon which they wished to rely.  On 30 August 2018 the Opponent filed submissions in this matter (‘Opponent’s Submissions’).  The Applicant did not file any submissions.

   5. I am a delegate of the Registrar of Trade Marks and I am to decide the opposition as required by s 55 of the Act which provides that, unless the proceedings are discontinued, dismissed, or have lapsed under s 54A 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.  

   In doing so I take account of the written record comprised of the materials mentioned in the preceding paragraphs.

   The Opponent

2. The Opponent is an Australian company that is the successor in title of an entity known as Woodley Wines Pty Ltd (including all of its intellectual property).   

   7. The Foreman Declaration exhibits copies of various declarations filed in respect of an opposition to removal of the Opponent’s trade mark registrations for WOODLEY and a composite device for Woodley’s Sherry.  It also contains statements the nature of which amount to submissions as to the effect of each of these pieces of evidence in respect of the present oppositions.  I shall do my best to summarise the key aspects of the Opponent’s evidence below:

   ·     The Opponent, being the successor in title to Woodley Wines Pty Ltd, is the owner at common law of a number of wine brands that are described as the Treasure Chest Series. 

   ·     Woodley Wines commissioned the design of a number of wine labels in the 1940s and 50s that featured rare images of Australian history, including labels displaying images that are almost identical to the Galatea and Skeleton Marks (differing only by the removal of a reference to Woodley Wines in the respective trade marks).  These images have been recognised by the State Library of South Australia as being some of the most beautiful wine labels designed and printed in Australia.  The Galatea Mark was displayed on Woodley’s claret, while the Skeleton Mark was displayed on Woodley’s Coonawarra wine products.  These wines form part of the Treasure Chest Series.

   ·     The Opponent’s predecessor in title was the owner of Trade Mark 243033, depicted below, for wine.  This registration was not renewed and was removed from the Register in 1991.

   ·     From 1983 to 2004 the Opponent (and its predecessor in title) was the owner of a trade mark for the word ‘SKELETON’ registered for wine, spirits and liqueurs.

   ·     A number of third party sources, including Wine Genius and Daily Wine News, have described the wines produced by Woodley Wines from 1949-1956 featuring the Galatea and Skelton Marks as the Treasure Chest Series.  These exceptionally highly recharged wines are still in the marketplace and presently and presently sell for over $4000 a bottle.

   ·     James Halliday, one of the leading wine writers and winemakers in Australia, has described the Treasure Chest Series as ‘legendary wines and deservedly so… For while the wines are remarkable in their own right, the labels are even more so.’ 

   ·     The Applicant, in creating the Galatea Mark and the Skeleton Mark, have blatantly and obviously reproduced the labels used by Woodley Wines on their Treasure Chest Series.

   8. The Exhibits to the Foreman Declaration contain additional material as to the reputation of the Treasure Chest Series and the renown of the wine labels reproduced as the Galatea Mark and Skeleton Mark.  

   The Applicant

   9. The Applicant has not filed any evidence and as such I have no information about it other than what is set out on the Register. 

   Grounds of Opposition, Onus and Standard of Proof

   10. As indicated above in the SGP the Opponent nominated grounds of opposition under ss 42(b), 58, 60 and 62A of the Act. To successfully oppose the Opponent needs to establish one of the nominated grounds for each of the applications. As will become apparent, the Opponent has successfully established a ground of opposition for each of the applications pursuant to s 62A. Accordingly, I have found it necessary to discuss this ground only. Of course, should the decision be appealed, it would remain open to the Opponent to plead any ground available to it under the Act in proceedings before the Court.

   11.     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 25 February 2015 (‘relevant date’), being the priority date of the applications in Australia.[3]

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

   [2] Following Pfizer Products Inc v Karam (2006) 70 IPR 599, [6]-[26], and Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [133].

   [3] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592, 595, see also s 29(1) Trade Marks Act 1995 (Cth).

   Discussion

   Section 62A

3. 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.

4. The Explanatory Memorandum to the Trade Marks Amendment Bill 2006 provided some non-exhaustive examples of applications made in bad faith:

   ·persons who monitor new property developments, register the names of new developments as trade marks for a number of services and then threaten the property developers with trade mark infringement proceedings unless the developers licence or buy the trade marks;

   ·persons who have a history of applying for trade marks that are deliberate misspellings of other registered trade marks;

   ·persons who identify trade marks used overseas but with no Australian use as yet who then apply to register the trade marks in Australia for the express purpose of selling them to the overseas owners.

5. The case of Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) is a current leading Australian authority on s 62A. In that case, Dodds-Streeton J made the following comments, quoting from Harrison’s Trade Mark Application[4]:

   [4] [2004] EWCA Civ 1028; [2005] FSR 10.

   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.[5]

   [5] [2012] FCA 81, [147].

6. 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.[6]

   [6] Ibid [165]-[166].

   16.      Her Honour also noted with approval a number of cases in which bad faith was found in specific circumstances as set out below:

   In William Leith New Century Marquees (SRISO/018/00, UK Registry), the applicant applied to register a trade mark in respect of marquees, tents and related goods, although aware that NEW CENTURY was the opponent’s trade mark in the United States of America and that the opponent had started to trade in the United Kingdom under the trade mark. He was himself a customer and the delegate found that he should have been aware that the opponent could be expected to expand that trade, if it had not already done so. He had previously proposed a licence arrangement with the opponent although its terms were not clear. The delegate of the Registrar concluded:

   Mr Leith subsequently adopted the sign NEW CENTURY MARQUEES as his own trade mark, and he used it in the UK. When he was challenged about this he sought to register the mark in combination with his own name. In my view, the mark he has applied to register is confusingly similar with the mark NEW CENTURY.
   ...
   It is difficult to see how a person who applies to register a mark in his own name which he has previously recognised as the property of a potential overseas principal can be said to be acting in accordance with acceptable standards of commercial behaviour. I do not believe that combining the mark with the applicant’s own name is any answer to that criticism.[7]

   [7] Ibid [151].

   …

   In Hard Coffee Pty Ltd v Hard Coffee Main Beach Pty Ltd [2009] ATMO 26, Hearing Officer Nancarrow held that applications to register the trade marks HARD COFFEE MAIN BEACH and HARD COFFEE were made in bad faith within the meaning of s 62A, where a company controlled by the applicant’s controller had previously obtained a licence from the opponent’s predecessor in title to use the HARD COFFEE MAIN BEACH trade mark, acknowledging in that context that it had not purchased any right, title or interest in the names and that the vendor retained title to all related intellectual property rights. The Hearing Officer considered that in the circumstances, the director clearly understood that the trade mark in question remained the property of the opponent in respect of coffee shops.[8]

   [8] Ibid [153].

   …

   In Pritchard Pacific Pty Ltd Baltimore Aircoil (Australia) Pty Ltd v Brendan McCarrison and Breezewater Pty Ltd [2011] ATMO 46, the delegate upheld opposition to the registration of a trade mark for, inter alia, cooling towers and like apparatus and related services, on grounds including bad faith under s 62A of the Act. The delegate found that the applicant’s controller had a prior business connection with and knowledge of the opponent, such that a person standing in his shoes should have known that he should not apply for the registration of a trade mark deceptively similar to that used by his former business partner (at [42]).[9]

   [9] Ibid [156].

7. The Opponent has particularised this ground of opposition in the SGP as follows:

   The application has been made in bad faith as the applicant at the time of filing the application would have been aware that it was not and cannot claim to be the owner of the trade mark.

8. In the absence of any evidence in answer I accept the evidence of the Opponent in this matter.  The Applicant seeks to register a series of marks that reproduce the labels (or adopt the description) of an iconic series of wines that are extraordinarily highly regarded by wine critics and other experts in Australia.  The Applicant has not demonstrated any connection to the Treasure Chest Series, nor any right to any associated goodwill. 

9. In summary and in the absence of any alternative explanation of the Applicant’s conduct I consider that in applying to register the Trade Marks, the Applicant was aware of the Opponent and its rights to and its reputation in the Treasure Chest Series.  I find on the balance of probabilities that the Applicant applied to register the Trade Marks in order to take advantage of the Opponent’s (or Woodley Wines’) reputation in the Treasure Chest Series, or otherwise sought to convey to consumers that it was associated or affiliated with, or otherwise endorsed by, the Opponent, which is false.  I am satisfied that the Applicant’s conduct falls short of the ‘standards of acceptable commercial behaviour observed by reasonable and experienced persons’.[10] I find that the Opponent has established the ground of opposition under s 62A in respect of each application.

   [10] DC Comics v Cheqout Pty Ltd [2013] FCA 478, [77].

   Decision

   20. I have found the Opponent has established the ground of opposition it raised pursuant to s 62A of the Act. As the Delegate of the Registrar I accordingly refuse to register the Trade Marks.

   Costs

   21. The Opponent has sought an award of costs in its favour. I see no reason to depart from the general rule that costs follow the event. I accordingly award costs in respect of trade mark number 1677074 against the Applicant under section 221 of the Act in the relevant amounts under Schedule 8 of the Trade Mark Regulations 1995.  In respect of trade mark numbers  1677076 and 1677081 I award reduced costs against the Applicant in the same manner as indicated in Hume Industries (Malaysia) Berhard v James Hardie & Coy Pty Ltd.[11] 

   [11] [2001] ATMO 78.

   Nicholas Smith
   Hearing Officer
   Oppositions and Hearings
   19 November 2019