SVP Industries Pty Ltd v Robert Patterson

TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
IN THE MATTER of Australian Trade Mark Application 1068616 in the name of ROBERT PATTERSON for BIPU in Class 11 and opposition thereto by SVP INDUSTRIES PTY LTD

Delegate: Debrett Lyons

Representation: Opponent: Frank Di Giantomasso of Knightsbridge Patent Attorneys
Applicant: Richard Smoorenburg of Smoorenburg Pini, Patent & Trade Mark Attorneys

Decision:
2008 ATMO 26
s. 52 opposition: s. 58 established since applicant not the owner of the trade mark.
Costs: applicant to pay opponent’s costs

Background

Robert Patterson (“the applicant”) filed an application to register a trade mark, current details of which appear below:
Application number:              1068616
Filing date:  8 August, 2005
Goods specification:             Class: 11 A series of chambers that provide primary treatment of sewage waste water
Trade mark:  BIPU
The trade mark was accepted for possible registration and advertised for opposition purposes. SVP Industries Pty Ltd (‘the opponent’) filed a Notice of Opposition under section 52 of the Trade Mark Act 1995 (‘the Act’), objecting to the registration of the trade mark. The parties served and filed evidence in accordance with the Trade Mark Regulations 1995 after which the matter was set down before me, Debrett Lyons, a delegate of the Registrar of Trade Marks, for a hearing on 7 March, 2008, in Melbourne. The applicant was represented by Richard Smoorenburg and the opponent by Frank Di Giantomasso.
Notice of Opposition
The Notice of Opposition makes no reference to section numbers but can be readily interpreted as invoking a number of grounds of opposition under the Act. At the hearing, the opponent stated that its primary ground of opposition was under section 58 of the Act and it is appropriate for me to consider that argument first.
Onus
The opponent bears the onus of establishing its grounds of opposition. The opposition will succeed if one of those grounds is established. The standard of proof is the balance of probabilities (Blount v Registrar of Trade Mark (1998) 83 FCR 50; Rejfek v McElroy (1965) 112 CLR 517 at 521).
Section 58
Section 58 of the Act states:
Applicant not owner of trade mark
  The registration of a trade mark may be opposed on the ground that
  the applicant is not the owner of the trade mark.
  Note: For applicant see section 6.
The principles governing a claim to ownership of an unused trade mark were established by Dixon J in Shell Co of Australia Ltd v Rohm & Haas Co (1949) 78 CLR 601, where his Honour stated at 627:
The basis of a claim to proprietorship in a trade mark so far unused has been found in the combined effect of authorship of the mark, the intention to use it upon or in connection with the goods and the applying for registration.
Authorship in that context means the origination or first adoption of the sign as and for a trade mark. In Aston v Harlee Manufacturing Co (1960) 103 CLR 391, Fullager J. said at p. 399:
I do not think that the requirement of “authorship” means that the applicant must be the true and first inventor: he has not to establish anything analogous to what an applicant for letters patent for an invention must establish. I do not think that an opponent of an application for registration of a trade mark could succeed by saying merely “I thought of it first”, or even “I thought of it first, and communicated it to the applicant”.
The analysis is different for a trade mark which has been used. In Moorgate Tobacco Co Ltd v. Phillip Morris Ltd (1984) 156 CLR 414 - 432, Deane J. said that:
the prior use of a trade mark which may suffice, at least if combined with local authorship, to establish that a person has acquired in Australia the statutory status of "proprietor" of the mark, is public use in Australia of the mark as a trade mark, that is to say, a use of the mark in relation to goods for the purpose of indicating or so as to indicate a connection in the course of trade between the goods with respect to which the mark is used and that person.
In Computer Business Works Inc v Dylan Mark Johnston [2005] ATMO 14, Hearing
Officer McDonagh observed:
In order to establish this ground, it is incumbent upon an opponent to show that, in the time before filing, the applicant is not the first user in trade in Australia of the applied-for trade mark. To do so, the opponent must show, at a minimum, that not only is the applied-for trade mark substantially identical to the older trade mark, but that it is applied to the same kind of goods: Re Hicks’ Trade Mark (1897) 22 VLR 636 at 640. The proper comparison for substantial identity is side by side, as described in Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407, per Windeyer J, at 414:
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.
The Evidence
Evidence-in-Support
Statutory Declaration by Michael Rodney Turner dated 21 September 2006.
Evidence-in-Answer
Statutory Declaration by Robert Maurice Charles Patterson dated 20 December 2006.
Statutory Declaration by Anthea Edwina Tangye Patterson dated 20 December 2006.
Evidence-in-Reply
Statutory Declaration by Michael Rodney Turner dated 20 June, 2007.
Further Evidence
Statutory Declaration by Robert Maurice Charles Patterson dated 12 September, 2007.
Statutory Declaration by Anthea Edwina Tangye Patterson dated 12 September, 2007.
Statutory Declaration by Donato Franco Di Giantomasso dated 17 November, 2007.
Preliminary Observations
The applicant and the opponent each have a business interest in septic waste disposal.
The parties arranged a meeting on 15 December 1998 to discuss how they might work together. There are no minutes or other evidence of the outcome of that meeting except for the parties’ general recollections set out in their declaratory statements.
The parties entered into informal business relations following that meeting.
In June 1999, the parties (either directly, or through companies they controlled) took an equal shareholding in a company by the name of Tasmanian Environmental Solutions Pty Ltd (“TES”).
There is no evidence of any assignment of intellectual property rights from the parties or otherwise to TES.
Irreconcilable differences marred the business relationship and this dispute arose over the trade mark application filed by the applicant some time after the parties had ceased working together.
References in the evidence and in this decision to the invention are references to the applicant’s patent. There is evidence that the patented invention predated the 15 December 1998 meeting but none that it bore the trade mark prior to that time.
The applicant’s patent specification is in evidence, as is a copy of Letters Patent for Australian Patent No. 661468. The title of the invention is “Field Septic Disposal System” and the body of the specification refers to the invention in that same way.
The evidence shows that the applicant referred to the invention by the letters FSDS, being an acronym for “Field Septic Disposal System”.
There are numerous instances in the applicant’s evidence where the use of FSDS is conflated with the alleged use of the trade mark.
Submissions and Reasoning
Mr Turner is the Managing Director of the opponent. He declares that the opponent manufactures a range of bioremedial infield personnel units, which are “mini-septic tank systems”, sold in flat-pack form and intended to be assembled and used in situ.
Mr Turner declares that during the 15 December 1998 meeting between himself and the applicant, he proposed BIWPU as the name for the products. He states that “the derivation of this name was that it was an acronym for the phrase ‘bioremediation in-field wastewater personnel unit’ which I had previously authored.”
He states that the opponent:
first used the BIWPU name as a trade mark for its products in commercial dealings with a third party on or about 29 January 1999. … During a period spanning approximately 29 January 1999 to 2 February 1999, as a result of further communications with the Applicant, I decided to change the previously proposed brand BIWPU to a visually more acceptable version that simply omitted the letter ‘W’. … The Opponent decided to adopt BIPU as the trade mark for its bioremedial infield personnel unit products. It has manufactured, sold and branded those goods ever since, with its BIPU trade mark.
Aside from Mr Turner’s declaratory statement, I can find no evidence that he in fact authored that phrase ‘bioremediation in-field wastewater personnel unit’, nor any evidence that the opponent used that phrase prior to 15 December 1998. Neither, however, is there a direct rebuttal by the applicant to either that claim, nor to Mr Turner’s claim to suggestion of the BIWPU name on 15 December 1998, nor to Mr Turner’s account of how BIWPU became BIPU. All that is directly said by the applicant in its evidence in answer is that “the first use of the acronym BIPU to describe my invention was made by Glenda de Jager, Associate Director of International Needs in correspondence dated 3 February, 1999, following my request for a testimonial made on or about 15 December 1998”.
Consistent with Mr Turner’s account of the origins of BIWPU is evidence of his letter dated 18 December 1998 to the applicant which is headed, “BIWPU (Toilet)”, and which makes the suggestion that the applicant “obtain an ‘Accreditation’ for BIWPU (Toilet) [your patented invention]” from various third parties, including Parks and Wildlife Tasmania.
Taking this evidence in isolation I would on balance decide that the opponent coined the BIWPU name. Were it necessary to decide the point, there may have been a live issue as to whether by 29 January 1999 the opponent was the owner of the trade mark BIWPU in the sense understood by the case law. Neither of those matters however bears on ownership of the trade mark at issue, BIPU, for the reason that in my assessment, BIWPU and BIPU are not substantially identical and so for the purposes of section 58, the ownership of BIWPU is immaterial to the ownership of BIPU.
My proper starting point is to look for the author of BIPU. We have Mr Turner’s account of the genesis of the name. Exhibited to the applicant’s evidence in answer is the letter of 3 February 1999 from Glenda de Jager. It is addressed TO WHOM IT MAY CONCERN. It is captioned, “RE: BIOREMEDIATION INFIELD PERSONNEL UNIT (TOILET) BIPU” and reads in part:
A tragic cholera epidemic early in 1998 claimed the lives of 127 children in the Makonge District near Kiyindi on the shores of Lake Victoria, 80 kms east of Kampala, capital of Uganda, central Africa.
International Needs arranged for the construction of a large scale BIPU facility to replace defective pit latrines that were a major cause of the cholera problem.
Mr Patterson’s statement in paragraph 27 is ambiguous. He may he saying that it was Ms de Jager who coined the trade mark, or he maybe saying that her testimonial is the first piece of evidence showing use of the trade mark. It seems to me that the latter construction is more likely for two reasons. First, the expression “bioremediation in-field personnel unit” is such an obscure euphemism for the actual goods that it is intuitively unlikely that Ms de Jager, the Assistant Director of an aid organisation, coined it. Secondly, there is in the evidence in answer a second testimonial letter dated 26 February 1999 which uses the exact same captioning. Mr Patterson refers only to his request for testimonials. We do not know if the request took the form of letters or not. There is nothing in evidence. If the request was by letter, it seems to me likely that the testimonials simply adopted the captioning of the letter to which they responded.
I only have Mr Patterson’s declaratory statement that his request was made on or about 15 December 1998. I have no evidence that he coined the trade mark on 15 December 1998 or at any time before his requests for the testimonials. The letter from the opponent to the applicant dated 18 December, 1998, which suggested obtaining accreditation (testimonials), still refers to BIWPU.
The evidence which might enable a fully informed decision to be taken as to who coined the acronym, BIPU, is missing What can be said, nonetheless, is that whilst the ownership of BIWPU is immaterial to the ownership of BIPU, the evidence of authorship of BIWPU is relevant to the issue of authorship of BIPU. In the absence of any account of the creation of the trade mark by the applicant, Mr Turner’s evidence is to be preferred with the result that I find that the opponent was the author of the trade mark.
I underscore that this finding is not finally determinative of who might be the owner of the trade mark and I turn to the enquiry into first use of the trade mark as a trade mark, that is, in the course of trade.
The testimonial letters represent the applicant’s earliest claims to use of the trade mark. The letters are not, of themselves, evidence of use of the trade mark in the course of trade. The question of whether the statements they contain provides evidence of prior use of the trade mark in trade can be answered by the observations that the testimonial of Ms de Jager refers only to activity outside Australia and is non-qualifying, together with the fact that neither it, nor the second testimonial (from Forestry Tasmania), refer to the applicant or provide any link between the trade mark and the applicant. They do not assist me.
The evidence in support of the opposition contains a number of references to alleged use of BIPU as a trade mark by the opponent from 2 February 1999 onwards. The first is a letter from the opponent to “SMEC” dated 2 February 1999. Interestingly, it is captioned, “Re:- Bioremediation In-field Personnel Units (Toilet) – BIPU”. In his supporting declaration, Mr Turner states that the recipient is Snowy Mountains Engineering Corporation Holdings Limited. The letter refers to discussions between the opponent and the company that day. The clear intention of the letter was to solicit future trade in the goods. The letter states in part that “technical data and product information details will be available later this month”. The teaching of the case law is that the letter is not evidence of use of the trade mark in trade.
The other examples of alleged use of the trade mark in the evidence up to 22 March 1999 are similar in nature and indeed Mr Turner describes them as “marketing correspondence to various third party customers or target customers”. They do not provide evidence of use of the trade mark in trade.
Mr Turner states that:
[U]ntil about July 1999, the Opponent marketed and sold its BIPU brand products directly to customers, while at the same time, receiving consultancy and advice from the Applicant. In about July 1999, in an attempt to clarify the commercial arrangements between the Opponent and the Applicant, a joint venture was established between the Opponent and interests held by or on behalf of the Applicant. That joint venture had as its primary commercial focus, the promotion of the Opponent’s BIPU range of products.
As part of the joint venture arrangements, each of the Applicant (through a family company called Hartzview Vineyard Pty Ltd) (Hartzview) and the Opponent acquired 50 per cent in the issued shares in an Australian company called ‘Tasmanian Environmental Solutions Pty Ltd’ (TES). The Applicant and the Opponent agreed that the initial directors of TES after forming the joint venture would be (1) me and (2) Mrs Anthea Patterson (the Applicant’s wife). It was also agreed that management of TES would reside initially with the Opponent.
The Applicant and the Opponent also agreed that the role of TES in the joint venture would be as a commercial agent for the sale of BIPU branded products manufactured by the Opponent. The joint venture partners had agreed that the Opponent would manufacture and brand those goods and sell them exclusively to TES, which would then be the commercial agent conduit for the on-sale of the goods to third party customers.
In accordance with these arrangements, the Opponent commenced invoicing TES for its BIPU branded goods. On or about 29 October 1999, the Opponent issued its invoice No 27285 to TES, for the sale by the Opponent to TES of BIPU branded products.
Mr Patterson declares that he never had a business relationship with the opponent and did not provide consultation services of any kind to the opponent. He declares that:
I have however provided extensive consulting to Mr Mike Turner during the production of the FSDS prototype and in his capacity as a Director of TES. … during December 1998 discussions were held between Mr Michael Turner, my wife Anthea Turner and me to discuss a possible business arrangement for the production and sale of my invention. The Opponent had or has no ‘BIPU range of products’. … Following the production of the successful FSDS prototype, Tasmanian Environmental Solutions was formed to arrange for the manufacturing, marketing and sale of the ‘BIPU’(my patented system’). … Basic administration assistance including Accounting and office support was also provided by the Opponent to TES, and paid for accordingly. … Accounting services provided by the Opponent later proved to be undesirable as there was no ‘Arms length’ between the SVP accountant issuing invoices (Stephen Freeman) issuing invoices and then the TES accountant (Stephen Freeman) paying the SVP invoices. … The management of TES was the responsibility of the Directors of TES and not the Opponent. … After the formation of TES I held no position as a Director on the Board of TES. I did not, and had no power to agree that TES would simply be a commercial agent for the sale of SVP ‘BIPU’ branded products. … There has been no agreement for the Opponent to manufacture and brand those goods and sell them exclusively to TES which would then be a commercial conduit for the on-sale of the goods to the third party. As indicated above the Opponent has only provided carcass components together with routing, packaging and dispatch operations.”
In so far as the evidence in answer relates to the invoice from the opponent to TES dated 29 October 1999, Mr Patterson declares: “This matter has been referred to Mrs Patterson for comment in her capacity as a Director of TES and currently managing the TES accounts.”
For her part, Mrs Patterson declares to being a director of TES. She continues:
TES was formed to facilitate the manufacture of my husband’s Patented invention FSDS also known as BIPU (collectively referred to as FSDS). TES commenced trading in July 1999 following the successful production of a prototype FSDS. The basic FSDS system consists of an outer casing or ‘carcass’ structure that supports an internal vinyl liner fitted with appropriate plastic plumbing fittings. SVP Industries supplied the components for the carcass together with labour to perform hole drilling (Routing), assembly and dispatch operations. … TES paid SVP for the individual carcass components. These components consisted of a series of ‘Sheerglide’ drawer panels and associated corner clips. In all of the SVP Industries invoices to TES these components are identified as “Sheerglide Drawer ).55”. … These are not complete FSDS units and each Sheerglide plastic panel was certainly not branded ‘BIPU’.
Exhibited to Mrs Patterson’s declaration is a copy of the 29 October 1999 invoice. The copy is defective in that the year and part of the month is cut off, leaving “29 / 1C”, but I find that it is a true copy of the October 1999 invoice as it carries the same invoice number 27285 referred to by Mr Turner. It is captioned “RE: BIPU UNITS” and refers to the delivery of “600 S’GLIDE (back) and 360 S’GLIDE (corner clip)”. The invoiced party is TAS ENVIRONMENTAL SOLUTIONS.

In summary, there is no evidence before me that in the period 22 March 1999 to July 1999, the opponent marketed and sold goods bearing the trade mark directly to customers. There is no evidence of those customers. There is no evidence of a single sale. Nor, for that matter is there one piece of physical evidence to show that the applicant used the trade mark in the course of trade. Therefore, prior to the parties (directly or indirectly) taking an equal shareholding in TES, there is no conclusive use of the trade mark in trade by either party.
Mr Patterson declares that:
It should be noted that the first approval by the Tasmanian Government for BIPU branded products as an Authorised waste water system for use in Tasmania did not occur until 15th September, 1999 and was granted to Tasmanian Environmental Solutions Pty Ltd.
The Certificate of Authorisation is exhibited by Mr Patterson. The product is identified as “Bioremediation Infield Personnel Unit (BIPU)” and the manufacturer as TES. The certificate does simply what it says – provides TES with authorisation to use the BIPU units in plumbing installations in Tasmania. It does not refer to any use of the trade mark in the course of trade and is not evidence of trade mark use.
A similar document is exhibited showing approval by the Health Department of Western Australia. Again, the manufacturer is identified as TES and the “Model Designation” as “BIPU”.
Mr Turner, in his evidence in reply, declares that:
During September and October 1999, TES had been discussing the supply of BIPU units to East Timor with the Australian Army. The Australian Army issued a Purchase Order to TES to the value of $22,598.10. A copy of that Purchase Order (No. PLSUP01 dated 27 October 1999) is exhibited…
The relevant exhibit is a copy of a Department of Defence Purchase Order by the Royal Australian Engineers. Again the photocopy in evidence is imperfect but it is clear that the supplier’s name is TES. The date and monetary value accord with Mr Turner’s statement. The description of goods is simply: AS PER YOUR QUOTE DATED 25 OCT 99 to HQ LSF ATTN CAPT F. CAMPAGNOLO. Nowhere else on the document can I discern the trade mark. The delivery address is unclear but the postcode of 0830 corresponds with a number of localities in the Northern Territory. It is also the postcode of the invoicing address on the order form given for the 17^th Construction Squadron in Palmerston, Northern Territory. This conforms with Mr Turner’s declaratory statement that the consignment was sent to Darwin.
From my assay of the evidence this is the first documentary proof of use of the trade mark in trade. The Purchase Order represents acceptance of the offer contained in the 25 October quotation. On 27 October 1999 there was a binding contract to purchase goods by the Australian Department of Defence. The contract was with TES. Although it would seem that the goods were destined for use abroad, the contract was made and concluded in Australia, payment was agreed in Australian dollars and the goods were to be delivered to an Australian address. In any event, section 228(1) of the Act would operate to render the contract evidence of use of the trade mark in Australia even if the goods were first consigned to a place outside Australia.
What is missing from the purchase order is identification of the goods sold and the trade mark. Ordinarily that would render evidence of this nature worthless. In this case, however, the situation is quite different. There is ample circumstantial evidence that the most likely subject of the contract was the BIPU units. From the earliest discussions between the parties, the defence forces had been considered a primary potential customer for the goods. The applicant himself had been at relevant times an officer in the defence forces. The evidence shows approaches in early 1999 to the defence forces to interest them in the goods. There is evidence the goods were needed in East Timor. Darwin is a likely embarkation point for goods sent to East Timor. Finally, I have Mr Turner’s declaratory account of the fact that the contract did relate to the BIPU units.
The weight of the evidence is that the 27 October 1999 government contract was for BIPU units. All that might still be said to be missing from the evidence is proof that the trade mark was used on the goods.
Section 7(4) of the Act states that "use of a trade mark in relation to goods" means use of the trade mark upon, or in physical or other relation to, the goods (including second-hand goods). In virtually all correspondence with third parties, the trade mark is included somehow. The weight of the evidence is that the trade mark was most likely used somehow in relation to the goods in connection with the government contract.
My finding is that by 27 October 1999 the trade mark had been used in the course of trade in Australia. At the hearing, an argument emerged which suggested that no coherent meaning could be given to the goods described in the application. The goods are described as “a series of chambers that provide primary treatment of sewage waste water”. The law under section 58 requires that use of the trade mark be in connection with “the same kind of thing” as that described in the application.
I can not agree that the goods description is meaningless. It is certainly obscure but any person of ordinary intelligence inspecting the register could be expected to comprehend that the goods related to some kind of sewage or septic system. Understanding is aided by the fact that the goods are properly classified in class 11, where septic and waste water systems are generally classified. In correspondence, both parties have more simply described the goods as a toilet. I decide that the 27 October 1999 use was in relation to the same kind of goods.
Returning to section 58, the last and critical finding is that the first use of the trade mark in trade was not by either party, but by TES. Accordingly, the section 58 ground of opposition is established since the applicant is not the owner of the trade mark.
Decision
The opposition succeeds since a ground of opposition has been established. I refuse to register the application.

Costs

I order that the applicant pay the opponent’s costs according to the official scale.
Debrett Lyons
Hearing Officer
Trade Marks Hearings
16 April 2008

Delegate:	Debrett Lyons
Representation:	Opponent: Frank Di Giantomasso of Knightsbridge Patent Attorneys Applicant: Richard Smoorenburg of Smoorenburg Pini, Patent & Trade Mark Attorneys
Decision:	2008 ATMO 26 s. 52 opposition: s. 58 established since applicant not the owner of the trade mark. Costs: applicant to pay opponent’s costs

[2008] ATMO 26

16 April 2008