SPG Investments Pty Ltd v Preferred Guest, Inc

[2017] ATMO 131

TRADE MARKS ACT 1995

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

Re:Opposition by SPG Investments Pty Ltd to registration of trade mark application 1542792(36, 43) - SPG - in the name of Preferred Guest, Inc.

Delegate:	Jock McDonagh
Representation:	Opponent: Ben Fitzpatrick of Counsel instructed by Cornwall Stodart Lawyers Applicant: Ken Hamilton & Francesca Colubriale of Spruson and Ferguson Patent & Trade Mark Attorneys
Decision:	2017 ATMO 131 Trade Marks Act 1995 (Cth) - Section 52 opposition: ss 44, 58, and 60 considered – none established – trade mark to proceed to registration

Background

1.       This is an opposition brought by SPG Investments Pty Ltd (‘the Opponent’) pursuant to s 52 of the Trade Marks Act 1995 (Cth) (‘the Act’) to registration of the trade mark subject of the application detailed below in the name of Preferred Guest, Inc (‘the Applicant’):

Application Number:

1542792

Priority Date:

16 August 2010

Services:

Class 36: Real estate services, namely, real estate brokerage, real estate and land acquisition, real estate equity sharing, namely, managing and arranging for ownership of real estate, condominiums, apartments; real estate investment, real estate management, real estate time sharing and leasing of real estate and real property, including condominiums and apartments; all the foregoing services being limited to those pertaining to hotel, resort and vacation time sharing services

Class 43: Services for providing food and drink; temporary accommodation; the preceding services including hotel services, motel services, motor inn services, resort services; restaurant services, cafe services, bar and lounge services, cocktail services; providing facilities for meetings and functions

(‘the relevant services’)

Endorsements: Provisions of paragraph 44(3)(b) and/or Reg 4.15A(3)(b) applied

Trade Mark:

SPG (‘the Trade Mark’)

1. Following the advertisement in the Australian Official Journal of Trade Marks of the application’s acceptance for possible registration on 3 October 2013, the Opponent filed a Notice of Intention to Oppose on 29 November 2013.  The Opponent then filed a Statement of Grounds and Particulars (‘Statement’) on 20 December 2013. The Applicant filed a Notice of Intention to Defend on 9 January 2014. The Statement raised grounds of opposition under sections 44, 58 and 60 of the Act.

   Grounds of Opposition, Onus and Standard of Proof

   3.       To oppose the application successfully the Opponent needs to establish at least one of the abovementioned grounds.

   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 16 August 2010, being the Priority Date.[3]

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

   [2] Following Gyles J in 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

2. I heard the matter in Canberra on 19 November 2016 as a delegate of the Registrar of Trade Marks. Ben Fitzpatrick of Counsel, instructed by Cornwall Stodart Lawyers, represented the Opponent. The Applicant was represented via telephone link by Ken Hamilton and Francesca Colubriale of Spruson and Ferguson Patent & Trade Mark Attorneys.

3. After the hearing, this Office was advised that the parties were seeking to negotiate a settlement and the proceedings were therefore adjourned sine die. Ultimately a settlement did not eventuate and the parties sought a decision.

   Evidence

   6.       The Opponent filed Evidence in Support of its opposition, consisting of a declaration made on 15 April 2014 by Isaac ‘Zac’ Fried, director of the Opponent, with Exhibits ZF-1 to ZF-9 (the ‘Fried Declaration’).

4. The Fried Declaration, at [5] to [13], provides some background to the Opponent’s business interests and history. The Opponent is part of the family owned and privately run group of companies, Spotlight Property Group, which owns the brands SPOTLIGHT and ANACONDA. Mr Fried declares that the initials SPG stand for Spotlight Property Group.

5. The Opponent incorporated in 2000 and has operated as an integrated property group that develops, leases and manages real property in Australia and New Zealand. The focus of the Opponent’s property investments is on high quality retail and office spaces, but the focus has recently expanded to hotels.

6. At [14] to [22] of the Fried Declaration, the Opponent discusses its own trade mark used in its business activities (‘the Opponent’s Mark’), which it cites against the Trade Mark. The details of the Opponent’s trade mark registration are extracted below:

Trade Mark No.	Trade Mark	Services	Priority Date
1222365	SPG	Class 35: Business management, business administration and office functions, all of the aforesaid in relation to building construction and property development and excluding promotional hotel, resort and vacation services through a rewards incentive program; tracking and monitoring incentive awards program for members Class 36: Real estate services included in this class; real estate affairs excluding real estate affairs pertaining to hotel, resort and vacation time share services Class 37: Building construction, repairs and installation services; property development excluding services pertaining to hotel, resort and vacation time share properties	4.02.2008

1. The Fried Declaration, at [24] states that in 2008 the Opponent and the Applicant were involved in opposition proceedings in respect of the Opponent’s Mark, and that the opposition proceeding was withdrawn by the Applicant.

2. In the current opposition, the Applicant filed Evidence in Answer, consisting of a declaration made on 7 October 2015 by Marshall J. Donat, Vice President and Assistant Secretary of the Applicant, with Exhibits 1 to 13 (the ‘Donat Declaration’).

3. The Donat Declaration states at [7] that the Applicant is the fully integrated owner, operator and franchisor of hotels, resorts and residences and provides its services under internationally renowned brands collectively known as the Starwood Hotel Group. The hotels operating under this group include, for example, Sheraton, Le Meridien and Four Points by Sheraton.

4. At [8] to [24] of the Donat Declaration, Mr Donat details the history and use of the Trade Mark worldwide and in Australia. In the late 1990s the Applicant launched a guest loyalty program under the STARWOOD PREFERRED GUEST trade mark and the Trade Mark.

5. This loyalty program is a frequent traveller program that unites all of the hotels in the Applicant’s Starwood Hotel Group. The program enables members to redeem points derived from previous stays at hotels within the program. Points can be redeemed for free nights’ accommodation, award flights on certain airlines, and various entertainment events. The Applicant plans to extend its services to time sharing services in hotels and resorts.

6. At [26] and Exhibit 10 of the Donat  Declaration, the Applicant lists a ‘family’ of trade marks containing the element SPG, as follows:

Trade Mark No.	Trade Mark	Goods and Services	Priority Date
1110237	SPG	Class 35: Promoting hotel, resort and vacation services through a rewards incentive program; tracking and monitoring incentive awards program for members	18.07.2005
1123648	SPG	Class 43: Hotel services, motel services, inn services, resort services in the nature of temporary accommodation and provision of food and drink	18.07.2005 (Convention)
1489964	SPG LIFETIME	Class 35: Administration of customer loyalty programs in the hotel and resort fields, which provide free or discounted hotel rooms, food, beverage and recreation credits to frequent guests at participating hotels or resorts through the issuance and processing of loyalty points to frequent Class 43: Hotel services	6.02.2012
1490269	SPG PERSONALIZED TRAVEL	Class 43: Hotel accomodation services; hotel, motel, restaurant, bar and catering services; preparation of food and beverages; providing advice to tourists and business travelers on hotel and restaurant destinations; providing personalized information about hotels and temporary accommodations for travel via the Internet; restaurant services, namely, providing of food and beverages for consumption on and off the premises; serving of food and drink/beverages	10.05.2012
1542793	SPG PREFERRED GUEST	Class 35: Business services, namely, providing a hotel loyalty program Class 36: Real estate services, namely, real estate brokerage, real estate and land acquisition, real estate equity sharing, namely, managing and arranging for ownership of real estate, condominiums, apartments; real estate investment, real estate management, real estate time sharing and leasing of real estate and real property, including condominiums and apartments; all the foregoing services being limited to those pertaining to hotel, resort and vacation time sharing services Class 43: Services for providing food and drink; temporary accommodation; the preceding services including hotel services, motel services, motor inn services, resort services; restaurant services, cafe services, bar and lounge services, cocktail services; providing facilities for meetings and functions Endorsements: Provisions of paragraph 44(3)(b) and/or Reg 4.15A(3)(b) applied.	12.08.2010 (Divisional)
1579883	SPG	Class 39: Travel and tour ticket reservation service	1.08.2013

1. At [33] of the Donat Declaration, Mr Donat refers to the Fried Declaration’s discussion, at [24], of the withdrawal of the Applicant’s opposition to the Opponent’s Mark. Mr Donat states that the Applicant withdrew its opposition after the Opponent limited its application to exclude those items that conflicted with the Applicant’s services for the Applicant’s first two of the Applicant’s trade marks as seen in the table under [9] above.

   Discussion

   Section 44 – Identical etc. trade marks

   17. Section 44 of the Act relevantly states:

(2)  Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of services (applicant’s services) must be rejected if:

   (a)  the applicant’s trade mark is substantially identical with, or deceptively similar to:

   (i)  a trade mark registered by another person in respect of similar  services or closely related  goods; or

   (ii)  a trade mark whose registration in respect of similar  services or closely related   goods is being sought by another person; and

   (b)  the priority date for the registration of the applicant’s trade mark in respect of the applicant’s services is not earlier than the priority date for the registration of the other trade mark in respect of the similar  services or closely related  goods.

Note 1:       For deceptively similarsee section 10.

Note 2:       For similar servicessee subsection 14(2).

Note 3:       For priority datesee section 12.

Note 4:       The regulations may provide that an application must also be rejected if the trade mark is substantially identical with, or deceptively similar to, a protected international trade mark or a trade mark for which there is a request to extend international registration to Australia: see Part 17A.

             (3)  If the Registrar in either case is satisfied:

   (a)  that there has been honest concurrent use of the 2 trade marks; or

   (b)  that, because of other circumstances, it is proper to do so;

the Registrar may accept the application for the registration of the applicant’s trade mark subject to any conditions or limitations that the Registrar thinks fit to impose. If the applicant’s trade mark has been used only in a particular area, the limitations may include that the use of the trade mark is to be restricted to that particular area.

Note:          For limitationssee section 6.

             (4)  If the Registrar in either case is satisfied that the applicant, or the applicant and the predecessor in title of the applicant, have continuously used the applicant’s trade mark for a period:

   (a)  beginning before the priority date for the registration of the other trade mark in respect of:

   (i)  the similar goods or closely related services; or

   (ii)  the similar services or closely related goods; and

   (b)  ending on the priority date for the registration of the applicant’s trade mark;

the Registrar may not reject the application because of the existence of the other trade mark.

Note 1:       An authorised use of the trade mark by a person is taken to be a use of the trade mark by the owner of the trade mark (see subsection 7(3)).

Note 2:       For predecessor in titlesee section 6.

Note 3:       For priority datesee section 12.

1. Thus to found its ground of opposition under subsection 44(2) the Opponent has to establish to my satisfaction the existence of at least one trade mark registration or application for registration of a trade mark that is owned by a person other than the Applicant and which:

   ·       has a priority date earlier than that of the opposed trade mark; and

   ·is registered or made in respect of the same or similar services or closely related goods; and

   ·is substantially identical with or deceptively similar to the opposed trade mark.

2. The Opponent relies on the Opponent’s Mark, shown above at [9], which has a priority date earlier than that of the Trade Mark and is registered in classes 35, 36 and 37.

3. The parties agreed that the Opponent’s Mark is identical with the Trade Mark. Therefore, the issue for determination is whether the Opponent’s Mark is registered in respect of the same services claimed in the specification of the Trade Mark.

4. I consider that the exclusions made to specifications of services in the Opponent’s Mark and the limitations included in the Trade Mark’s specifications, effectively avoids an overlap of conflicting services for the purposes of s 44.

5. Further, I refer to a comparison of services made by the Full Federal Court in MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 42 IPR 561, where the Court found that hotel management services were not services of the same description as property management services. At 568 the Court found:

   “For reasons that have already been given, the services involved in managing an hotel have different characteristics than property management services. If, as we have held, particular incidental services take their character from the whole, the position is not altered by the fact that managing an hotel may involve the performance of incidental services akin to those carried out by property managers.”

   “This conclusion is reinforced if, as Southern Cross suggests, the proper approach is that attention should be directed to the “trade channels” through which the services are provided. It is not difficult to infer that hotel management is a specialised undertaking, ordinarily carried out by different entities than those involved in providing property management services, such as real estate agents or shopping centre managers. Partly for this reason, it is difficult to regard hotel managers as being engaged in the same trade or industry as those providing property management services.”

6. Therefore I find that subsection 44(2) has not been satisfied.

7. I am not satisfied that this ground of opposition has been established.

   Section 58 – Applicant not owner of trade mark

8. Section 58 of the Act is reproduced below:

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

9. The applicable law regarding ownership of a trade mark in Australia is well known.  As eloquently put by Hearing Officer Michael Kirov in L.T. Overseas Limited v Chemico Pty Ltd[4]  at [18]:

   The word “owner” is not defined in the Act, although there are numerous decisions where courts have considered its meaning. It is well established that in the absence of fraud the owner of a trade mark in Australia for particular goods is taken to be the first person to use it in the course of trade in Australia in relation to those goods[5] (or in relation to goods considered to be “the same kind of thing” or to apply to register it).[6]

   [4] [2008] ATMO 44

   [5] Seven Up Co v OT Ltd (1947) 75 CLR 203.

   [6] Re Hicks’ Trade Mark (1897) 22 VLR 636.

10. The reference to a trade mark includes one that is at least substantially identical to it[7]. As discussed above, the Opponent’s Mark and the Trade Mark are substantially identical.

    [7] Carnival Cruise Lines Inc v Sitmar Cruises Ltd [1994] FCA 936; (1994) 120 ALR 495; (1994) 31 IPR 375; [1994] AIPC 91-049

11. The Opponent has submitted that it is the owner of the SPG trade mark in Australia in respect of the relevant services in Class 36 based on its ‘act of filing its application for SPG in respect of, inter alia, real estate services in class 36. The Opponent relies on Blackadder v Good Roads Machinery Co. Inc. (1926) 38 CLR 332 at 337 in support of this submission. This case is relevant in the absence of any relevant use of a trade mark in Australia, so that registration amounts to first use.

12. The Applicant’s registrations 1110237 and 1123648, both ‘SPG’ and for Classes 35 and 43 respectively, predate the Opponent’ Mark in the course of trade in Australia in relation to the relevant services of the Applicant.

13. I am not satisfied that the Opponent has established this ground of opposition.

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

14. 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.

15. To establish its ground of opposition under section 60 the Opponent must demonstrate that as at the Priority Date there was another trade mark that had acquired a reputation in Australia amongst a significant number of persons in the relevant market such that use of the Trade Mark would be likely to deceive or cause confusion.

16. Reputation is to be assessed according to the test set out in McCormick & Company Inc v McCormick[8] by Kenny J at [81] – [82]:

    What is intended by the word “reputation” in s 60? The word is defined in The Macquarie Dictionary as follows:

    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.

    Cf. The Oxford English Dictionary. In s 60, the word is, I think, apt to refer to “the recognition of the McCormick & Co marks by the public generally”.

    Does the evidence establish that in Australia before 9 March 1992 the McCormick & Co marks were recognised by the public generally and, because of that, the use by Mary McCormick of her marks would be likely to cause the public confusion, as for example, by the public’s mistakenly attributing a business connection between the two or attributing her product to the company?

    [8] (2000) 51 IPR 102

17. Further, at [86], Kenny J said:

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

1. I am not satisfied that there is sufficient evidence of reputation of the Opponent’s Mark. None of the Exhibits ZF-1 to ZF-4, which relate to wealth and value of the various investments demonstrate use of the Opponent’s Mark. ZP-1 refers to SPOTLIGHT and ANACONDA in relation to the wealth of Mr Fried’s business. In ZP-2, ‘spg’ seems to be used as a product identifier code in a spreadsheet, and ZP-4 only shows use of SPOTLIGHT PTY LTD.

2. There is no specific evidence of any advertising or other promotional expenditure that can be attributed to reputation as at the priority date.

3. I note that the Opponent has not adduced any evidence of confusion. This is despite the co-existence of the Opponent’s mark and the Opposed Mark in the Australian marketplace since 2000 and 1999 respectively (i.e. in excess of 15 years).

4. I note the Applicant’s submissions that the Opponent’s activities under the SPG trade mark have been directed to its various suppliers and tenants (i.e. business to business). On the other hand, the Applicant’s activities under the SPG trade mark have been targeted to the general public via the internet, social media, and other means of consumer marketing: ( Donat Declaration at [35] (i.e. business to consumer)).

5. I am not satisfied that this ground of opposition has been established.

   Decision

6. Subsection 55(1) of the Act requires me to decide either to refuse to register the trade mark, or to register the trade mark (with or without conditions or limitations) in respect of the 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.

7. The Opponent has not established any of its grounds of opposition. The trade mark application may then proceed to registration 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 the appeal has been dismissed or discontinued. Otherwise, the disposition of the application should be in accordance with the Court’s order or direction.

   Costs

8. The parties sought their costs.  I see no reason to depart from the general rule that costs follow the event.   As the Applicant has been the successful party, I award costs against the Opponent at the scale set out in Schedule 8 to the Regulations.

   Jock McDonagh
   Hearings Officer
   Trade Marks and Designs Oppositions and Hearings
   31 October 2017