Studio S R L v Buying Systems Australia Pty Ltd

[1992] ATMO 63

Trade Marks Act 1955
Decision of a Delegate of the Registrar of Trade Marks

Re:Opposition by Buying Systems (Australia) Pty Ltd to the registration of application 400951 in the name of Studio S.r.l.

Background
On 26.11.86, trade mark application 400951 was advertised accepted for registration.  The application is in the name of Studio S.r.l. ("the applicant") and the goods specified in the application are "fashion and hairdressing magazines".  The trade mark the subject of the application, which was lodged on 8.12.83, is STUDIO.

Registration of the application has been opposed, as provided for by sub-section 49(1) of the Trade Marks Act 1955, by Buying Systems (Australia) Pty Ltd ("the opponent"), on grounds which are generalised and which I will not recite at length as they were not fully pursued at the hearing. The opponent now claims in general terms that the applicant is not the proprietor of the mark. The applicant is also alleged to have intended to traffic in the mark. Finally it is said that the application should be refused in any case under section 28 of the Act for a variety of reasons including blameworthy conduct on the part of the applicant giving rise to deception and confusion of the public, albeit the opponent submits that the relevant date is or may be either the current date or the date of opposition.

After the evidence stages provided in the regulations the matter was set down for hearing on 5.3.92.  The opponent was represented by Angela Bowne of Counsel, instructed by solicitors Allen Allen and Hemsley, while the applicant was represented by David Catterns of Counsel, instructed by the attorney firm Halford and Co.  Having heard the parties' submissions on the evidence and the law applicable I turn to the evidence as it relates to the questions to be resolved.

The evidence
At the heart of the opponent's case is the allegation that the applicant's dealings with them have been dishonest.  In the principal declaration in support Marcello Grand sets the scene for this, saying that he was told in Italy in May 1983 that the applicant's Italian-produced magazine was not distributed in Australia, that he "gained the impression" that the applicant had no such intention, and that he was offered the use of various photographs from the applicant's magazine to make money in Australia.  Mr Grand declares that he had no discussions about the use of the applicant's trade mark under licence, that he subsequently informed the applicant that he intended to set up an independent fashion magazine in Australia, and that the applicant was happy to supply photographs for use in the opponent's independent magazine.  He declares that he later adopted the trade mark STUDIO COLLECTIONS, "which he was free to adopt in Australia", and which he also used as one of two business names he applied to register in September 1983.

The applicant is of an entirely opposite view, and the declaration of Fernando Trono gives a picture of a man negotiating over full co-operation in adapting the applicant's Italian magazine for marketing in Australia. 

The concrete evidence
The difference in view between Mr Grand and Mr Trono is inexplicable:  on this evidence I can come to no conclusion as to why there was or was not an accidental confusion between them.  None the less there are some concrete matters which emerge from the exhibits of the two parties, the only tangible evidence of the dealings between the applicant and the opponent:

* The applicant was producing a magazine in Italy, first published in 1981 and directed primarily to hair stylists.  It concentrated primarily but not exclusively on the hair and on photographs of hair styles.  

* Collaboration agreement
           in September 1983 Mr Trono had written to Mr Grand offering to collaborate very closely ("same type of paper, same format, type of print etc"); this was to be what Mr Catterns described as an Australian edition of the Italian magazine. 

* Business established
           In September and October 1983 Mr Grand organised business name registrations, letterheads and copyright agreements for the pending magazine.

* There does not seem to be any dispute that in October 1983 Mr Grand told that Mr Trono that he proposed to publish independently of the Italian company. 

* The Brochure
           Mr Grand declares that in late October or early November 1983 the opponent's brochure was distributed to hair salons, hair dressers and the like advertising the new magazine.  Also distributed was an accompanying letter and what Mr Grand calls a sample Directory, which illustrates to potential advertisers the various styles and layouts available in single column advertisements, and shows the prices applicable. 
           The brochure and the accompanying letter both lean heavily on the Italian magazine, the covers of which are shown in the brochure, which asserts that, "Thanks to its success in Europe, 'Studio' has come a long way:  to Australia" and refers to "Fashion previews from 'Studio Italia'".  The accompanying letter refers to the pending launch, in June, of a "high quality fashion magazine of particular interest to hairdressers and beauty salons, and speaks of "our ITALIAN parent, STUDIO FASHION COIFFURE" and "our AUSTRALIAN edition".
           In Mr Grand's own words "this reference (to an Italian parent) is misleading" but Mr Catterns argued at the hearing the applicant has had 9 years to attempt to redress the situation and has not yet taken any form of legal action.  He and Mr Grand both justify the conduct on the basis that the opponent was at that time using photographs from the applicant.
           I also note that the brochure, in addition to the reference to fashion reviews from Studio Italia, refers to regular columns of art, photography, design, social life, good living and interviews with famous people.  However, as to the intended market and content, Mr Grand declares that copies of the brochure, the directory and the accompanying letter were sent to hair salons and hairdressers "to determine the possible interest in the Magazine as a purely hair coiffure magazine.  It was clear to me, as a result of that circulation, that there was little or no interest in a purely hair coiffure magazine". 
           Moreover, while the accompanying letter refers to an attached order form on which advertising space in the Directory could be booked, the cut-off for such bookings was not until 31.3.84 and there is no evidence that the order needed to accompanied by payment. 

* Advertising
           In November 1983 the opponent booked advertising space in the magazines Pol and Vogue.  Those advertisements were scheduled to appear in the Vogue issues to be on sale on 28.2.84 (though that advertisement was subsequently cancelled by the opponent), 30.4.84 and subsequently in the issues available at the end of August and October.  The advertisements in Pol were to appear in the February, March, May and later issues of 1984.

* On 8.12.83 the disputed application was lodged.

* On 1.3.84 Mr Trono wrote to Mr Grand, making a proposal for "sending you all the published material so you have everything on site and you can choose directly what to use" as an alternative to sending photos by "simultaneous photocopying machine".  Mr Trono does however ask that before going to that stage, "I would like to have a better idea of where things stand for settling everything".

* On 6 March 1984 (apparently in response to telephone discussions, not to Mr Trono's letter as above) the opponent wrote to the applicant, sending a copy of the "brochure rate card" with a covering letter which refers to an apparent failure to receive the earlier-sent copy of the brochure.  There is also some reassurance for the applicant:  "do not worry, I am one of the few left with whom a handshake is sufficient to respect an agreement", but the letter itself does not say what Mr Grand thought the agreement to be.

* The opponent's brochure, to which I have referred above, is said to have been received by the applicant in the (northern) spring of 1984 - some time in March to May 1984.

* First Australian issue
           A copy of the first issue of the applicant's magazine is tendered as exhibit MG14, and was declared to have been released in May 1984.  It has an introductory preamble addressed "Dear Reader", which begins:

Here is the result of many months of work:  STUDIO COLLECTIONS.

When we decided to make the Australian edition of the Italian STUDIO fashion coiffure we thought of a new formula:  "Total fashion".  This concept does not require explanation, it will be evident reading through the magazine.

STUDIO COLLECTIONS is also art, cultural events, entertainment, travel, good living, food, wine, design, finance, theatre.  We hope you will enjoy it and become a regular reader of our pages.

I take this opportunity to thank all those who supported and contributed to this publication.  A special thanks goes to STUDIO ITALIA for the material supplied and their continuous support.

Marcello Grand

Mr Grand concedes that the reference to STUDIO ITALIA should be a reference to the applicant, saying that this error is a misprint, though the same misprint seems to have occurred previously in the Brochure.
           Facing this is the contents page, which is reproduced below. 

Mr Catterns argued that this showed that there were clearly two different magazines involved, and that this was relevant to the building up of the opponent's reputation post-application. 
           Below is a small panel which asserts that "STUDIO Fashion Coiffure is distributed in the following countries ... - the list which follows does not include Australia - and (inter alia) an assertion that "registration of trade mark has been made for Studio Collections".  Mr Catterns stressed that the evidence shows that the first edition was sent to the applicant, who made no objection to the setting out or to the list of countries in which STUDIO Fashion Coiffure is distributed.  He did concede though that the typeface used by the opponent and applicant for the word STUDIO is identical.
           It appears that of the 400 photos in the first edition, only 28 related to hair coiffure, of which 26 were supplied by the applicant.  Clearly the magazine which emerged in May 1984 was aimed at a different market to the one tested and found wanting when the brochure was circulated some seven months earlier.

* Second agreement
           A draft of a different agreement was sent by the applicant to the opponent in June 1984, with attachments said in the letter to be copies of the "registrations both in Italy and Australia".  Mr Grand has declared that the agreement and the attachments were received in July 1984. 
           The draft agreement relates to the sending of copies of the Italian magazine and of "the texts of the Italian magazine" and "the photographic material used for the publication of the Italian magazine" to the opponent.  The agreement would have obliged the opponent to notify the applicant of its intended use of material and given to the applicant the power to veto use, with the opponent to supply the applicant copies of the Australian magazine after printing.  Aside from the specification of paper type the format was left "free but previously agreed in writing between the parties".  Royalties were to be paid on a percentage basis.

* In July 1984 the applicant wrote to the opponent, referring to the draft agreement and saying "I hope everything is o.k. so that we can settle everything" and that the applicant was still waiting to receive the first edition of the Australian magazine.

* an invoice sent to Mr Grand shows that in July 1984 the opponent was invoiced for photos and slides to be published in "STUDIO COLLECTION".

* In September 1984 Mr Trono again wrote to Mr Grand, after having received the first issue of the Australian magazine, and stressed the need to regularise the agreement between them, by signing the draft agreement previously sent.

* On 4.12.84 the opponent lodged its own application, to register the trade mark STUDIO COLLECTIONS.

* Mr Grand visited Italy and met with the applicant in December 1984; he was confronted with a contract agreement calling for the payment of royalties.  That agreement was not signed at the time.

* The opponent has since gone on to publish STUDIO BAMBINI and STUDIO UOMO, described respectively as "The Children's Fashion Magazine" and "The Gentlemen's Fashion Magazine" and the STUDIO BICENTENNIAL FASHION BOOK, described as "a special issue of STUDIO COLLECTIONS".

Additional material relied on:
In addition to the declaration of Mr Grand the opponent has also served various trade declarations of a common form which are framed to establish that the opponent's trade mark is well known, at least now.

The applicant relies also on the declaration of George Piazza, who states that until 1982 his salon subscribed to the Italian magazine produced by the applicant.  Mr Piazza declares that either his salon was first given these magazines by a distributor of international magazines in Adelaide or that either he or his mother purchased them on a visit to Italy.

The evidence shows that another hairdresser, Mr D'Aguano, had submitted photographs to the applicant in Italy in May 1982, and that as a member of an international association of hairdressers he was sent a complimentary copy of the Italian magazine, to which he immediately took out a subscription - "in 1981 or 1982 (I do not remember which)".  Mr Trono is able to fix the date of that subscription as 4.3.82, though this is simple assertion not backed up by any actual evidence.  Also annexed to Mr D'Aguano's declaration is a copy of an undated reminder letter advising that the subscription was due to expire, and exhibits (copies of magazine pages) showing that one of Mr D'Aguano's hair styles was published in the third issue of the Italian magazine, in the third trimester of 1982.

Decision

Section 28
The opponent argues that the recent High Court decision in New South Wales Dairy Corp v Murray Goulburn Co-operative Co Ltd (the Moo case) 18 IPR 385 gives section 28 a continuing action, and that therefore the registrability of an application under that section is to be determined as at the current date, or at least as at the date on which notice of opposition was filed. Such a submission is not new, and has been dealt with by Hearing Officer Homann in relation to Opposition by John Terrence Coyne to the registration of an application in the name of The Titan Manufacturing Company (the Titan case), (1991) AIPC 90-808. Hearing Officer Homann considered that question, and relied on the Moo case, supra, and on the Federal Court decision in Riv-Oland Marble Co v Settef SpA 12 IPR 321 to conclude that it would be "extraordinary" if an applicant, having become the proprietor of a mark in law, was able to be stripped of that proprietorship by "the assiduous efforts of a misappropriating user".

Mr Catterns submitted that the conduct of the applicant since that time was a limit on this interpretation and that the applicant had not done enough to defend its mark.  However, while the MOO case shows that section 28 has a continuing present action in respect of registrations, the relevant date for determining the rights of the parties in relation to an application is the date of the application.  (See Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd 91 CLR 592 at 595, and McGarvie J in Settef SpA v Riv-OlandMarble (Vic) Pty Ltd 10 IPR 402 at 427.)

It follows that section 28 may obstruct registration of the applicant's mark in Australia only if (firstly) section 28(a) is applicable to the applicant's mark at the date of application, and if (secondly, and in the light of the Titan decision, supra) the likelihood of deception or confusion arises because of some blameworthy action on the part of the proprietor.

The initial test under section 28(a) is as per Smith Hayden & Co's Application, 63 RPC 99 at p101 and adapted to the mark in suit:

Having regard to the reputation acquired by (the opponent's mark), is the tribunal satisfied that the mark applied for, if used in a normal and fair manner in connection with any goods covered by the registration proposed, will not be reasonably likely to cause deception and confusion amongst a substantial number of persons?

In December 1983 the reputation of the opponent's magazine cannot have been more than minuscule; some work had been done to commence publication but the number of people who can have been aware of its impending release was insignificant.  On that basis section 28 will not hinder the registration of the applicant's mark.

I therefore turn to consider the question of who was in law the proprietor of the mark STUDIO at the date of application.

Section 40
An application to register a trade mark can only be properly made by the proprietor.  On that subject, McGarvie J said in Settef S.p.A. v Riv-Oland Marble Co (Vic) Pty Ltd (supra, at 413):

The basic common law principle is that the first person who uses a trade mark of an appropriate type within a country becomes the proprietor of the mark there: Re Registered Trade Mark "Yanx"; Ex parte Amalgamated Tobacco Corp Ltd (1951) 82 CLR 199 at 203; Thunderbird Products Corp v Thunderbird Marine Products Pty Ltd (1974) 131 CLR 592 at 603; Moorgate Tobacco Co Ltd v Philip Morris Ltd(No 2) 59 ALJR 77 at 83. ...

...

In considering who, within s.40(1) of the Act, was at the time of Settef's application for registration the proprietor of the trade mark, one considers who at common law was the proprietor in Australia: The Shell Co of Australia Ltd v Rohm & Haas (1949) 78 CLR 601 at 625 and 627. Settef claims to be the first person to have used the trade mark in Australia and therefore to have been proprietor at common law in Australia.

Use of the trade mark by Settef overseas gave it no right to proprietorship in Australia.  Any use at all in Australia gave it that proprietorship: the Thunderbird case (1974) 131 CLR 592 at 600.

The fact that a manufacturer is proprietor of a trade mark overseas and has earlier used it overseas does give it a forensic advantage in a contest between it and an Australian distributor who claims proprietorship of the trade mark.  There is authority that a court will regard slight use in Australia by the overseas proprietor as sufficient to give it proprietorship of the trade mark in Australia: The Seven Up Co v O T Ltd (1947) 75 CLR 203 at 211; Aston v Harlee Manufacturing Co (1960) 103 CLR 391 at 400; Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 59 ALJR 77 at 83."

And Fullager J. made it very clear in Aston v Harlee: 

'I do not think that an opponent to an application' (or in this case an applicant) 'for registration of a trade mark could succeed by saying merely "I thought of it first" or "I thought of it first and communicated it to the applicant"'.

Trade mark use was considered by the High Court in the case of Moorgate Tobacco Co Ltd v Philip Morris Ltd, 3 IPR 545 at 557:

The court was referred to a large number of cases and to some administrative decisions in which consideration has been given to what constitutes a use or user of a trade mark for the purposes of the statutory notion of proprietorship of the mark before registration.  The cases establish that it is not necessary that there be an actual dealing in goods bearing the trade mark before there can be a local use of the mark as a trade mark.  It may suffice that imported goods which have not actually reached Australia have been offered for sale in Australia under the mark (Re Registered Trade Mark "Yanx"; Ex parte Amalgamated Tobacco Corporation Ltd, supra, at 204-5) or that the mark has been used in an advertisement of the goods in the course of trade (Shell Co of Australia v Esso Standard Oil (Australia) Ltd, supra, at 422).  In such cases, however, it is possible to identify an actual trade or offer to trade in the goods bearing the mark in trade. 

On that basis, even if I accept Mr Cattern's argument that the early subscriptions held by Mr D'Aguano and Mr Piazza were not (by analogy with the purchase of cigarettes in the United States in Rothman's Limited v W. D. and H. O. Wills 92 CLR 131) use in Australia, the applicant can defend its claim to proprietorship unless the opponent can succeed in one of the following areas:

Trade mark use prior to 8.12.83:  In my view the opponent cannot succeed here:  it had apparently assessed the market for a specialised hairdressing magazine, but there is no evidence that it had necessarily offered its goods in trade, either by magazine subscriptions or advance orders, or otherwise in trade in the sense left open by the hearing officer in the case of Application by Estate Agents Co-Operative Ltd. 20 IPR 547. The opponent may well have been carrying out necessary steps prior to the use of the mark, but that is not use.

The opponent's brochure (circulated to an unspecified number of hairdressers in October or November 1983) was no more than a fishing expedition:  there is no evidence that subscribers were sought for the sale of any pending publication, there is no indication of how many of the letters, sample directories and brochures were sent out, and by Mr Grand's own admission the process constituted no more than a test, which was sufficient to convince him to alter his planned product and pursue a broader market. 

I do not accept that the booking of advertising space in Pol and Vogue was in itself use, and the opponent's advertisements did not appear until after the application had been lodged.

Fraud on the part of the applicant:  As Williams J. noted in the case of Seven Up Co. v O.T. Ltd, 75 CLR 203:

in the absence of fraud it is not unlawful for a trader to become registered proprietor of a trade mark which has been used, however extensively, by another trader as a trade mark for similar goods in a foreign country, provided there has been no use of the foreign trade mark in Australia at the date of application.

Mere allegation and counter-allegation as to the substance of telephone and other conversations will not necessarily establish fraud when the trail of documentary evidence is consistent with no more than a simple initial misunderstanding.  While the onus is on the applicant at all times to show that it is entitled to registration, there is an evidentiary onus on the opponent to make a prima facie case for the applicant to answer.  The applicant has done so here to the extent that is necessary.

Intention to use:  Mr Catterns also stressed the importance of the intention to use in staking a valid claim to proprietorship in relation to a trade mark not in use at the time of lodgement, relying on Shell Co of Australia Ltd v Rohm and Haas 78 CLR 601. He submitted that the applicant had no intention to itself use the mark, but had lodged the application in an underhand way, to extract money from the real proprietor. He relied on Batt's case 15 RPC 262, but that case is not comparable with the facts of the present one: this application was at least arguably a reasonable filing to protect the applicant's interests from misappropriation in the production of an Australian edition of the Italian magazine. As per Aston v Harlee, supra, at p 401, the onus is on the opponent to show that the applicant was lacking in the requisite intention to use the mark in this country, either by direct subscription or through some sort of collaboration. Mere speculation is not sufficient.

Mr Catterns relied on Mr Grand's declaration as establishing that in October 1983 Mr Grand told Mr Trono that he proposed to publish independently of the Italian company.  However, in the context of the dealings between the parties, this alone would not establish any wrongdoing on the part of the applicant.

My view then is that the applicant became the proprietor in law when the application was lodged.

Conclusion
The opposition has failed on all grounds and is dismissed.  I award costs in accord with the scale to the applicant.

T. Williams

Hearing Officer

13 October 1992