Stretch Lab Franchise LLC v Caddee Pty Ltd

[2023] ATMO 186

TRADE MARKS ACT 1995

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

Re:Opposition by Stretch Lab Franchise LLC to registration of trade mark application number 2010324 (class 41) – THE STRETCH LAB - in the name of Caddee Pty Ltd

Delegate:

Tracey Berger

Representation:

Opponent: AJ Park

Applicant: Progressive Legal Pty Ltd

Decision:

2023 ATMO 186

Trade Marks Act 1995 (Cth) – opposition under section 52 – ss 42(b), 44, 58 and 60 considered – s 44 established – evidence of prior continuous use – no other ground of opposition established - trade mark to proceed to registration under s 44(4)

Background

1. This decision pertains to an opposition by Stretch Lab Franchise LLC (‘Opponent’) pursuant to s 52 Trade Marks Act 1995 (Cth)[1] to registration of the trade mark detailed below in the name of Caddee Pty Ltd (‘Applicant’):

   Number:                   2010324 (‘Application’)

   Trade Mark:            THE STRETCH LAB (‘Trade Mark’)

   Filing Date:              20 May 2019

   Services:Class 41:  Personal trainer services (fitness training); Fitness and exercise clinics, clubs and salons; Physical fitness training services; Instruction in body awareness; Health club services (exercise); Providing information, including online, about education, training, entertainment, sporting and cultural activities; Provision of information relating to training; Instruction in physical fitness; Operation of physical fitness centres; Physical training services (‘Applicant’s Services’)

   Endorsement:        Provisions of paragraph 44(3)(b) and/or Reg 4.15A(3)(b) applied.[2]

   [1] Any references to sections or regulations in this decision are references to sections or regulations of the Trade Marks Act 1995 (Cth) (‘Act’) or the Trade Marks Regulations 1995 (Cth) (‘Regulations’), respectively.

   [2] This endorsement appears to have been entered erroneously as the Applicant filed evidence and argued for acceptance under s 44(4).  The examiner appears to have been satisfied that the application should be accepted under s 44(4).

2. After the advertisement of acceptance of the Application on 7 June 2021, the Opponent filed a Notice of Intention to Oppose on 30 June 2021 followed by its Statement of Grounds and Particulars on 27 July 2021.  The Applicant filed a Notice of Intention to Defend on 7 October 2021.

3. The parties then proceeded to file their evidence in accordance with the Regulations. The Opponent’s evidence in support was filed on 7 January 2022. The Applicant filed its evidence in answer (‘EIA’) on 22 April 2022 and the Opponent filed evidence in reply on 28 June 2022.

4. Once the evidence stage had concluded, both parties requested a hearing by written submissions.  The Opponent filed its written submissions on 3 October 2023 followed by the Applicant’s written submissions on 11 October 2023.  This matter has been allocated to me to determine as a delegate of the Registrar of Trade Marks based on the aforementioned materials.

   Grounds, Onus and Relevant Date

5. In its SGP, the Opponent particularised grounds of opposition under ss 42(b), 44, 58 and 60. 

6. The Opponent bears the onus of establishing at least one of the nominated grounds of opposition.[3]  The standard of proof is the ordinary civil standard of the balance of probabilities.[4]

   [3] Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58, [32] (Keane CJ, Stone and Jagot JJ).

   [4] Telstra Corporation Ltd v Phone Directories Co Pty Ltd [2015] FCAFC 156, [133] (Besanko, Jagot and Edelman JJ).

7. The date at which the rights of the parties are to be determined is 20 May 2019 being both the filing date and priority date of the Application (‘Relevant Date’).

   Opponent’s Evidence

8. The Opponent filed the following evidence:

   Declaration of Brad Walker, Chief Stretch Advisor of the Opponent, made on 16 January 2022 with Exhibits BW-01 to BW-12 (‘Walker Declaration’); and

   Confidential Declaration of Verdine Baker, Chief Executive Officer of the Opponent, made on 28 June 2022 with Exhibits BW2-01 to BW2-11 (‘Baker Declaration’).

9. The entirety of the Baker Declaration is claimed as confidential but little of the evidence appears to be commercially sensitive.  I adopt the approach of the delegate in Source Homeloans Pty Ltd v Coles Group Ltd, who when in receipt of a similar claim stated:

   The confidentiality claim obviously extends to the whole of the evidence led in support of the opposition. It is not clear to me how I could decide this matter without discussing the evidence the opponent has served and filed in support of its opposition. The onus in these proceedings is on the opponent to establish its grounds of opposition, at least to my satisfaction. Seemingly barred from any discussion of the opponent’s statements and exhibits and the weight that I attach to them if I were to lend credence to the claim, my hands would appear to have been effectively tied. Prima facie, the easiest way out of the dilemma would be to accede to the opponent’s wishes and find that it has not established its opposition. Thus, if I were to take Mr Peter’s request (made within several declarations) at face value, that would be the end of these matters.

   This position, obviously, is extreme, since the opponent has filed this evidence in support of its opposition and must expect the evidence to be discussed and weighed. It will be sufficient for me to say, in setting out my reasons for my decision, that there are arguably commercially sensitive matters in the evidence that I do not need to discuss in detail (and, if I do, my consolation lies in the fact that the opponent in not being specific in its request has brought the problem upon itself). None the less, the evidence of the parties as a whole satisfies me of various things, which I will set out under the appropriate headings below.[5]

   [5] Source Homeloans Pty Ltd v Coles Group Ltd [2008] ATMO 17, [5]-[6] (Hearing Officer Thompson).

10. I note that, if a party considers a piece of information to be confidential it must identify that information with specificity.  If in my summary of the evidence, I have disclosed information that is sensitive, then this is an issue that has arisen by that party not specifically identifying that information as such.

11. Mr Walker attests to his background including as an expert in stretching having been involved in the field of stretching, flexibility and sports injury management since the 1990s.  In November 2017, Mr Walker claims he was recruited by Xponential Fitness to develop a stretching training and education program and investigate potential businesses focused on stretching for Xponential Fitness to purchase.

12. According to the Walker Declaration, in 2017 Xponential Fitness acquired the Opponent, a company founded in the United States of America in 2015.  The Opponent was one of the world’s first stretching studios.  In April 2018, the Opponent started to franchise its business.  At the time of the Walker Declaration, the Opponent had 148 studios in America and by December 2021 was averaging sales of 12 new franchise territories per month.  Mr Walker attests that the Opponent always intended to operate a global franchise business and since 2017 was in discussions with potential franchisees in Australia.[6]  In 2021, the Opponent opened two STRETCH LAB locations in Western Australia with four more studios planned for 2022.

    [6] Walker declaration, at [28], Confidential Exhibit BW-12.

13. The Opponent is the owner of the following Australian trade mark registrations (‘Opponent’s Marks’):

Number	Trade Mark	Priority Date	Services
1945231	STRETCH LAB	1 Aug 2018	Class 41: Providing fitness training services in the field of stretching and flexibility; Providing personal fitness training for increased flexibility; Providing stretching and flexibility services (fitness, motion, and flexibility training)
1970615 (IR 1433817)	STRETCH LAB	2 Oct 2018	Class 41: Providing fitness training services in the field of stretching and flexibility; providing personal fitness training for increased flexibility

1. Mr Walker claims that the Opponent has received significant media attention including from celebrities, social media influencers and international publications.  As a result, Mr Walker declares that the Opponent had acquired a reputation in the Opponent’s Marks in the USA by 2017 and in Australia by 2018.  Details and examples of some of the publicity the Opponent received are included in the Walker Declaration.

2. In addition, the Opponent claims it has operated a website at (‘Website’) since 2015 and since 1 August 2018, the domain has redirected to the Website.  Mr Walker attests that Australians accounted for 1% of its internet traffic between January 2018 and July 2018.  As an Australian, Mr Walker claims he has also promoted the Opponent on his personal social media accounts.

3. Between January 2018 and July 2018, 8 individuals from Australia made enquiries with the Opponent about the possibility of an Australian franchise.

4. The Baker Declaration makes various criticisms of the EIA and in particular, alleges that the Applicant knew about the Opponent at the time of adopting the Trade Mark. In support of this claim, the Baker Declaration annexes the results of a Google search for ‘STRETCH LAB’ as of 1 May 2018.  The Baker Declaration also attests to the Opponent having four ‘STRETCH LAB’ locations in Australia with a further 8 locations listed as coming soon. 

5. Ms Baker declares that preparations to secure an Australian franchise arrangement commenced in January 2018 and annexes emails between Xponential Fitness and individuals interested in opening Australian franchises.

   Applicant’s Evidence

6. The EIA consists of a declaration of Hana Jager, Director of the Applicant, made on 22 April 2022 with Annexures HJ-1 to HJ-31 (‘Jager Declaration’).

7. The Applicant was incorporated on 5 September 2016 and operated as a Gecko Sports franchise until May 2018 when it registered THE STRETCH LAB AUSTRALIA as a business name to operate a stretching clinic under the Trade Mark in Terrigal, New South Wales.  Ms Jager claims that the Trade Mark was adopted because it alludes to the bespoke stretching services offered to customers and had the best reaction with potential consumers.

8. The Applicant claims it has used the Trade Mark for the Applicant’s Services offered at its Terrigal clinic since 4 June 2018 and also from its clinic in Newcastle since November 2019.  According to the Jager Declaration, the Applicant has a number of agreements with private health insurers to provide rebates and is a provider within the National Disability Insurance Scheme.

9. The Jager Declaration states that the Applicant has promoted the Trade Mark by sponsoring local athletes, providing a subsidised program in 2018 to the Gold Coast Mariners A-League soccer team for the treatment of players and in 2019 setting up a program with Micro Surf Academy to treat elite surfers.

10. Ms Jager declares that the Applicant’s Services have also been promoted on its website at since at least 6 June 2018, its Facebook account since 4 June 2018, Instagram account since around 16 June 2018 and LinkedIn account from about July 2018. 

11. The EIA includes details of the Applicant’s revenue for services offered under the Trade Mark between 2015 to 2021, advertising expenditure for promoting the Applicant’s Services and a graph of client appointments for 2018-2022.

12. The Applicant claims it was unaware of the Opponent until 25 April 2019 when it commenced opposition proceedings to the Opponent’s then trade mark application 1945231 for STRETCH LAB.  The EIA also attaches various documents to demonstrate that the Opponent did not commence using the Opponent’s Marks in Australia until April 2021 and two instances of apparent confusion between the parties’ respective businesses.

    Discussion

    Section 44

13. Section 44 relevantly provides:

    44  Identical etc. trade marks

    …

    (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)  it 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 similar see section 10.

    Note 2:       For similar services see subsection 14(2).

    Note 3:       For priority date see 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 limitations see 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.

14. Therefore, to succeed on this ground of opposition, the Opponent must identify at least one trade mark which satisfies the following requirements:

    (i) is in the name of a person other than the Applicant (‘First Requirement’);

    (ii) has a priority date which is earlier than the Relevant Date (‘Second Requirement’);

    (iii) is substantially identical with, or deceptively similar to, the Trade Mark (‘Third Requirement’); and

    (iv) is in respect of services and/or goods which are either similar and/or closely related to the Applicant’s Services (‘Fourth Requirement’).

15. In its SGP, the Opponent particularised the Opponent’s Marks as the basis for this ground of opposition.  I note that both of the Opponent’s Marks satisfy the First and Second Requirements.

16. In terms of the Third Requirement, the Opponent contends that the Trade Mark is substantially identical to the Opponent’s Marks and the Applicant concedes that the marks are at least deceptively similar.  The assessment of substantial identity was identified by Windeyer J in Shell Company of Australia Limited v Esso Standard Oil (Australia) Limited as follows:

    In considering whether marks are substantially identical they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison.[7]

    [7] (1963) 109 CLR 407, 415.

17. This test requires the trade marks to be considered side by side while having regard to the essential features of the marks.   In Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd,[8] the Full Court held that a comparison of marks is to be carried out cognisant of the essential elements of the trade marks, noting that essential elements are unlikely to be found in mere descriptive elements.

    [8] [2017] FCAFC 83, [52] (Greenwood, Jagot, and Beach JJ).

18. The relevant marks for comparison are:

Opponent’s Marks	Trade Mark
STRETCH LAB	THE STRETCH LAB

1. In my opinion, the Trade Mark is substantially identical to the Opponent’s Marks.  The essential element of both the Opponent’s Marks and the Trade Mark is ‘STRETCH LAB’ and the only difference is the non-distinctive definite article THE.  In my view, the present comparison is distinguishable from that in Samuel Smith & Son Pty Ltd v Pernod Ricard Winemakers Pty Ltd[9] in that the inclusion of the word ‘THE’ does not change the idea of the Trade Mark, place particular emphasis on the element STRETCH LAB or serve some other purpose.  Accordingly, I consider the Trade Mark to be substantially identical to the Opponent’s Marks and hence the Third Requirement is satisfied.

   [9] [2016] FCA 1515, [106] (Charlesworth J).

2. With respect to the Fourth Requirement, the Applicant accepts in its written submissions that the Applicant’s services are similar to the registered services of the Opponent’s Marks and I concur.

3. The Opponent has established a ground of opposition under s 44.  However, this is not fatal to the Application as ss 44(3) and 44(4) make provision for the Applicant to overcome a s 44 ground of opposition on the basis of honest concurrent use, other circumstances or prior use.

   Honest Concurrent Use, Other Circumstances and Prior Continuous Use

4. In their written submissions, both parties have directed their arguments to the question of whether the Applicant has made honest concurrent use of the Trade Mark. 

5. In its written submissions, the Opponent often refers to the decision in an earlier proceeding between the parties in which the Applicant unsuccessfully opposed registration of the Opponent’s Marks (‘Earlier Proceeding’).[10]  The evidence filed in the present case is not the same as that filed in the Earlier Proceeding and accordingly, the findings in that decision are not necessarily relevant here.  In particular, the delegate found in the Earlier Proceeding that there was no objective evidence substantiating the Applicant’s claim of first use of THE STRETCH LAB as of 6 July 2018.  In the present case, the Applicant alleges use of the Trade Mark from at least 19 June 2018 based on Ms Jager creating ‘the concept of the Trade Mark’ in 2016 and a Facebook post on 4 June 2018.[11]  This post is a photo of a room with the caption “carpet being laid”.  It does not constitute an offer to provide the Applicant’s Services.  However, the Jager Declaration also includes a post on the Applicant’s Facebook account, The Stretch Lab Australia, in June 2018 referring to the ‘COUNTDOWN TO OUR OPENING 17 DAYS (Friday 6 July)’,[12] a similar post on 27 June 2018 with 9 days until the opening and posts on The Stretch Lab Instagram account stating ‘coming to Terrigal’[13] and on 6 July 2018 referring to The Stretch Lab being ‘open today’.[14]  On 7 July, 2018, the Applicant posted on Facebook about its grand opening the day before and that it had 27 stretching appointments on the first day.  In addition, Annexure HJ-29 of the Jager Declaration consists of a graph showing appointments at the Applicant’s Terrigal studio from July 2018. 

   [10] Caddee Pty Ltd v Stretch Lab Franchise LLC [2020] ATMO 178 (Hearing Officer M. Cooper).

   [11] Jager Declaration, Annexure HJ-16.

   [12] Ibid.

   [13] Ibid Annexure HJ-18.

   [14] Ibid.

6. The Opponent argues that the Applicant uses the Trade Mark in various forms including ‘The Stretch Lab Australia’ and in a logo form .  In my view, use of ‘The Stretch Lab Australia’ is use of the Trade Mark with additions or alterations not substantially affecting the identity of the Trade Mark.  Further, I consider that use of the logo form also constitutes use of the mark with additions or alterations not substantially affecting the identity of the Trade Mark given that THE STRETCH LAB is ‘clearly legible’,[15] is the dominant part of the mark and is the essential element.   In addition, the evidence also demonstrates use of the Trade Mark in the form which is the subject of the Application.

   [15] Re Morny Ltd's Trade Marks (1951) 68 RPC 55 (Jenkins J).

1. On my assessment of the evidence, I am satisfied that the Applicant has continuously used the Trade Mark in relation to the Applicant’s Services since 6 July 2018 and hence the Applicant is entitled to registration of the Trade Mark under s 44(4).  Accordingly, the s 44 ground of opposition is not successful.   

   Section 58

2. Section 58 provides that a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.

3. Ownership of a trade mark is established either by authorship and prior use, or by the combination of authorship, the filing of the application and an intention to use or authorise use.[16]  Authorship refers to an applicant’s adoption of a trade mark with the intention of using it in Australia.[17]  The use must be ‘public use in Australia of the mark as a trade mark’.[18]  Preliminary discussions and negotiations are not sufficient.[19]

   [16] Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83, [29] (Greenwood, Jagot and Beach JJ).

   [17] Anchorage Capital Partners Pty Limited v ACPA Pty Ltd [2018] FCAFC 6, [48] (Nicholas, Yates and Beach JJ).

   [18] Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 156 CLR 414, 432–433 (Deane J).

   [19] Ibid 434.

4. The trade mark for which an opponent claims prior use must be at least substantially identical to the opposed mark[20] and used for the ‘same kind of thing’.[21]  I have already found that the Trade Mark and the Opponent’s Marks are substantially identical at [32] of this decision.  Further, the Applicant’s Services and those for which the Opponent’s Marks are registered are essentially the same.

   [20] Carnival Cruise Lines v Sitmar Cruises Ltd [1994] FCA 68 (Gummow J).

   [21] Re Hicks's Trade Mark (1897) 22 VLR 636.

5. The Opponent’s Marks were filed on 1 August 2018 (registration 1945231) and 2 October 2018 (registration 1970615).  Accordingly, the Applicant needs to establish use of the Trade Mark for the Applicant’s Services before 1 August 2018 or before the Opponent’s first use of STRETCH LAB as a trade mark in Australia, whichever is earlier.

6. The Opponent’s first Australian STRETCH LAB studio opened in Australia in 2021.  The Opponent refers to various cases relating to foreign trade mark ownership for goods.  None of those cases are on point with the present case.  The queries that the Opponent received about the possibility of Australian franchises are mere preliminary discussions and not use of STRETCH LAB in the course of trade in relation to the relevant services.  The Opponent was not in a position to offer its stretching services or take bookings for such services until it had an Australian location from which the services could be provided.  Whilst the Opponent’s website was accessible to Australian consumers, it was not directed or targeted at Australians.  On my assessment of the Opponent’s evidence, the Opponent has not used STRETCH LAB as a badge of origin for the Applicant’s Services or the same kind of thing before 1 August 2018.

7. At [38] of this decision, I have found that the Applicant has established use of the Trade Mark in Australia for the Applicant’s Services since 6 July 2018.  As this use is earlier than the filing date of the Opponent’s Marks and any use of STRETCH LAB as a trade mark by the Opponent in Australia, the s 58 ground of opposition is unsuccessful.

   Section 60

8. Section 60 provides:

   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.

9. Accordingly, to succeed on this ground of opposition, the Opponent must establish:

   ·a reputation in another trade mark in Australia before the Relevant Date; and

   ·that use of the Trade Mark would be likely to deceive or cause confusion because of the reputation of the other trade mark.

10. Reputation, in the context of section 60, refers to the ‘recognition of [the mark] by the public generally’.[22] Reputation cannot be assumed and must be established by the Opponent as a matter of fact.[23]

    [22] McCormick & Co Inc v McCormick [2000] FCA 1335, [81] (Kenny J) (‘McCormick’).

    [23] Conagra Inc v McCain Foods (Australia) Pty Ltd [1992] FCA 159, [77] (Lockhart J).

11. There are a variety of ways the reputation of a trade mark may be established, including by demonstrating that a significant number of people have been exposed to the trade mark,[24] or providing evidence of high volume of sales, advertising expenditure or other forms of promotion of goods or services to which the trade mark applies.[25]

    [24] Ibid [118].

    [25] McCormick (n 22) [86].

12. In Rodney Jane Racing Pty Ltd v Monster Energy Company, it was observed that:

    The reputation of a trade mark has quantitative and qualitative dimensions. The quantitative dimension concerns the breadth of the public that are likely to be aware of the mark, which can be evidenced by the quantum of sales, advertising and promotion of goods or services to which the mark is applied. The qualitative dimension concerns the image and values projected by the trade mark, which affects the esteem or favour in which the mark is held by the public generally.[26]

    [26] [2019] FCA 923, [83] (O’Bryan J).

13. The reputation relied on by the Opponent must be amongst a significant or substantial number of persons.[27] What amounts to a significant or substantial number of people is informed by the relevant market and the nature of the goods or services in question.[28]  In the present case, the relevant market is considerable being Australians who attend fitness/exercise classes and/or utilise massage, physiotherapy or similar services.

    [27] Renaud Cointreau v Cordon Bleu International Ltee [2001] FCA 1170, [75] (Moore, Tamberlin, Goldberg JJ).

    [28] Le Cordon Bleu BV v Cordon Bleu International Ltee [2000] FCA 1587, [91] (Heerey J).

14. The Opponent relies on its use of the Opponent’s Marks in Australia and overseas.  The Opponent first commenced offering its assisted stretching services in Venice, Los Angeles in June 2015.  The number of studios did not significantly increase until late 2018 after the Opponent began offering STRETCH LAB franchises, by which time it had about 30 locations in the USA.  No evidence as to the revenue generated or advertising expenditure is provided by the Opponent so as to gauge the size of the Opponent’s business.  Instead, the Opponent relies on promotion of its business online, on social media accounts and in publications.  In particular, the Opponent’s STRETCH LAB services were promoted in over 20 posts by social media influencers, the most significant being 2 posts on the Instagram account of Gwenyth Paltrow’s business GOOP in 2017, 3 posts by Lana Antonova (founder of WebVixxen boutique design agency), and a post by YouTuber and American TV host Michelle Khare, each of which received a few thousand ‘likes’.  The Opponent’s own Instagram and YouTube accounts had reasonable followings[29] by the time of the Walker Declaration in January 2022 but appear to be significantly lower in the extracts at Exhibit BW-10.  The Opponent’s business also received publicity from American media as well as an article in The Australian on 2 July 2018 mentioning STRETCH LAB and other stretching businesses overseas and 2 online articles on PopSugar Australia in July 2018 about long haul travel which quote Mr Walker of StretchLab but do not promote the Opponent‘s services.  The Opponent claims that the publicity it received led to them being contacted by 8 parties for potential franchises in Australia in 2018.

    [29] Walker Declaration, [22].

15. I am satisfied on the evidence that the Opponent had a reputation in the USA at the Relevant Date for stretching services.  However, I am not satisfied that reputation extended to a substantial number of Australian persons.  Most of the social media posts occurred when the Opponent operated only one or two studios overseas and had a low level of customer engagement.  The Opponent also relies on about 20 media articles which principally refer to StretchLab Venice, refer to the Opponent’s services being offered in America or quote Mr Walker of StretchLab.  None of the articles indicate that the Opponent offers services outside of the USA.  In my view, the social media posts and articles were directed to Americans and it is unlikely that this publicity came to the attention of many Australians.  The fact that a few Australians had contacted the Opponent about potentially opening franchised venues in Australia indicates a limited awareness of the Opponent amongst those with a particular interest in running an exercise business but is not evidence of a reputation generally in the relevant Australian market.

16. On my assessment of the evidence, the Opponent did not hold the requisite reputation in the Opponent’s Marks amongst a significant number of Australians at the Relevant Date and on that basis, the s 60 ground of opposition is unsuccessful.

    Section 42(b)

17. Section 42(b) provides that a trade mark must be rejected if its use would be contrary to law. 

18. The Opponent bears the onus of establishing that use of the Trade Mark would (rather than could) be contrary to law.[30] 

    [30] Advantage-Rent-A-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683, [28] (Madgwick J).

19. In its SGP, the Opponent relies on its use and reputation in the Opponent’s Marks and claims that use of the Trade Mark would be misleading and deceptive and/or contravene ss 18 and 29 of the Australian Consumer Law (‘ACL’), Schedule 2 Competition and Consumer Act 2010 (Cth), and would also amount to passing off.

20. Where an opponent is unsuccessful in establishing its s 60 ground, it will almost invariably be unable to establish the relevant sections of the ACL had been breached in circumstances where the opponent relies on a reputation of the very same trade mark(s). Unlike s 60,
    ss 18 and 29 ACL are not concerned with behaviour that “would be likely to deceive or cause confusion” but rather require a likelihood that relevant consumers be misled or deceived as to the true origin of the Applicant’s Services or their connection to the Opponent. Under the ACL, mere confusion or simply being caused to wonder is not sufficient as is the case with
    

    [31] Weili Mu v Guotai Huang [2021] ATMO 113,[35]-[36] (Hearing Officer N. Smith).

    s 60. Having been unsuccessful under s 60, it follows that on the stricter test of the ACL,[31] I am not satisfied that use of the Trade Mark is likely to mislead or deceive, or amount to a false or misleading impression under ss 18 and 29 of the ACL.

21. As I have found that the ACL has not been contravened, it also follows that use of the Trade Mark does not amount to passing off.[32] 

    [32] Equity Access Pty Ltd v Westpac Banking Corporation [1989] FCA 506, [40] (Hill J).

22. Accordingly, the s 42(b) ground is unsuccessful.

    Decision and Costs

23. The Opponent has established a ground of opposition under s 44 but I am satisfied on the evidence that the Applicant is entitled to registration under s 44(4) based on its prior continuous use of the Trade Mark.  None of the other grounds of opposition have been established.  Trade mark application 2010324 may proceed to registration not less than one month from the date of this decision with an endorsement that the Trade Mark has been allowed under the provisions of s 44(4).  If the Registrar is served with a notice of appeal before that time, I direct that registration shall not occur until either the appeal is withdrawn or discontinued.  Otherwise the disposition of the application should be in accordance with the Court’s order or direction.

24. The Applicant 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 against the Opponent under s 221 in the relevant amounts under Schedule 8 of the Regulations.

    Tracey Berger

    Hearing Officer

    Delegate of the Registrar of Trade Marks

    17 November 2023