Telstra Corporation v Next IP Distribution Pty Ltd

TRADE MARKS ACT 1995

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

Re:Opposition by Telstra Corporation to registration of trade mark application 1173286(35, 37 and 38) - NEXT IP DISTRIBUTION - filed in the name of Next IP Distribution Pty Ltd.

Delegate:

Iain Thompson

Representation:

Opponent: Siobhan Ryan of Counsel instructed by Davies Collison Cave

Applicant: Chris Round, solicitor, of Middletons

Decision:

2012 ATMO 69

s52 opposition: s44(4) - applicant has not shown use of trade mark in relation to services – s44(2) established; s62(b) acceptance on the basis of a misrepresentation as to a material particular - s62(b) established - registration refused

Background

1. In this matter Next IP Distribution Pty Ltd (‘the applicant’) of Hawthorn East, Victoria, has applied under the Trade Marks Act 1955 (‘the Act’) to register the trade mark, current details of which appear below:

Application No: 1173286

Priority Date: 27 April 2007

Services: Class 35: Sale and distribution of telecommunications goods

Class 37: Installation and repair services for telecommunications apparatus and system; providing information and consultancy services on all of the foregoing
Class 38: Advisory services relating to telecommunications, hire of telecommunication apparatus, installations, and instruments
(‘the Services’)

Trade Mark: NEXT IP DISTRIBUTION

(‘the Trade Mark’ or ‘the Application’ as is appropriate)

2. During examination of the Application a then pending trade mark owned by Telstra Corporation of Melbourne, Victoria, was cited under subsection 44(2) as a ground for the rejection of the Application. Current details of the Telstra Corporation trade mark are:

Registration No: 1169987

Priority Date: 5 April 2007

Goods/Services: Class 9: Telecommunications and communications equipment, apparatus and systems; telephone cards, debit and credit cards, machine readable apparatus, such as telephone and calling cards, and apparatus which include integrated circuits, magnetic strips and memory chips; telephone equipment, apparatus and systems; facsimile equipment, apparatus and systems; computer equipment, apparatus and systems; computer hardware; computer software; computer peripheral devices; modems; transmission, receiving and storage equipment, apparatus and systems; publications in electronic form supplied on-line from databases or from facilities provided on the Internet (including web sites); publications in electronic format; apparatus and instruments for recording, transmission, reception, processing, retrieval, reproduction, manipulation, analysis, display and print out of sound, images and/or data; CD-ROMs; discs and tapes; video and audio equipment, apparatus and systems; all associated parts, accessories and fittings in this class
Class 37: Construction; installation and repair services; installation and repair of telecommunications apparatus and systems; installation and repair of telecommunications networks and infrastructure; providing information and consultancy services on all of the foregoing
Class 38: Telecommunication and communication services; telecommunication of information (including web pages), computer programs and any other data; local, long distance and international voice, text, facsimile, video and data telecommunication services; television broadcasting including pay, free to air and cable; broadcasting services; data casting services; web casting services; telecommunication services allowing video and audio streaming through telecommunication devices including mobile handsets; telecommunication services allowing users to download music and data through telecommunication devices including mobile handsets; telecommunication services for the collection, transmission, processing and storage of messages and data; telecommunication services to automate outbound dialling functions; electronic mail services; voice mail and messaging services; SMS services; picture and video messaging; audio and video conferencing; provision of telecommunication access and links to computer databases and the Internet; rental of telecommunications apparatus, equipment and systems; telecommunications information services; providing access, including access time, to computer databases and the internet; providing information services concerning all of the foregoing; transmission of information on a wide range of topics, including on-line transmission; provision of telecommunications networks; telecommunications consultancy; providing access time to computer databases and the Internet; Internet Service Provider services
Class 42: Research services; computer programming services; computer rental; design, drawing and commission writing all for the compilation of web pages on the Internet; design and implementation of IT solutions; network outsourcing, being the technical management and operation of networks for others; providing of information services on all of the foregoing; computer hardware and software consultancy services; provision of web hosting services; maintenance of computer software
(‘the Opponent’s Services’)

Trade Mark:

(‘the Opponent’s Registration’ or ‘the Opponent’s Trade Mark’ as is appropriate)

Endorsements: The second trade mark in the series of trade marks is depicted in the colours BLACK and ORANGE as shown in the representation attached to the application form.
Provisions of paragraph 44(3)(b) and/or Reg 4.15A(3)(b) applied.

3. The applicant filed a statutory declaration by Mr Ilan Rubin, a director of the applicant, which was said to establish the prior use of the Trade Mark in terms of subsection 44(4) of the Act in respect of the Services; however, the examiner maintained the ground for rejection. The applicant filed a further declaration by Ilan Rubin with the same outcome. The applicant then requested a hearing and appeared before Mr Jock McDonagh a delegate of the Registrar of Trade Marks (‘the First Delegate’) who, on the basis of Mr Rubin’s declarations and the submissions made by Mr Chris Round of Middletons, accepted the Trade Mark for possible registration.

4. Acceptance of the Trade Mark was advertised in the Australian Official Journal of Trade Marks on 23 July 2009. On 25 January 2010, after seeking and receiving an extension of time in which to do so, Telstra Corporation, (‘the opponent’) filed Notice of Opposition (‘the Notice’) to the registration of the Trade Mark. The Notice includes the grounds subsequently argued by the opponent in support of its opposition (these being under section 44 and subparagraph 62(b) of the Act). For the sake of completeness, I observe that the other grounds listed in the Notice have not been established.

5. As a delegate of the Registrar of Trade Marks I heard the submissions of the parties at a hearing in Melbourne on 18 July 2012. Mr Chris Round, solicitor, of Middletons appeared for the applicant and Siobhan Ryan of Counsel, instructed by Davies Collison Cave appeared for the opponent.

Onus

6. The opponent bears the onus of establishing one or more grounds of opposition on the balance of probabilities. See Pfizer Products Inc v Karam [2006] FCA 1663; 237 ALR 787; (2006) 70 IPR 599; [2006] AIPC 92-146 per Gyles J at [6] to [26]; Chocolaterie Guylian N.V. v Registrar of Trade Marks [2009] FCA 891; (2009) 180 FCR 60; (2009) 258 ALR 545; (2009) 82 IPR 13; [2009] AIPC 92-355 per Sundberg J at [22] to [26]; Sports Warehouse, Inc v Fry Consulting Pty Ltd [2010] FCA 664; (2010) 87 IPR 300 per Kenny J at [30] to [40]; NV Sumatra Tobacco Trading Company v British American Tobacco Services Limited [2011] FCA 1051; (2011) 198 FCR 435; (2011) 283 ALR 743 per Greenwood J at [16] to 32] and more recently, Allergan, Inc v Di Giacomo [2011] FCA 1540 per Stone J at [11] to [12] and Tricarico v Dunn Bay Holdings Pty Ltd [2012] FCA 271 per McKerracher J at [9] to [10].

Evidence

7. The evidence served and filed by the parties comprises the following declarations:

In Support Michael Charles Wolnizer - 2 February 2011 (Wolnizer 1)
In Answer Ilan Rubin - 2 May 2011 (Rubin)
17 September 2007 (Rubin Exhibit IR-4)
6 November 2007 (Rubin Exhibit IR-7)

In Reply Michael Charles Wolnizer - 5 October 2011 (Wolnizer 2)

8. Mr Wolnizer is a practitioner of the Supreme Court of Victoria and a partner of Davies Collison Cave. His first declaration exhibits two reports by a private investigation firm, Rumore & Associates, concerning the possible use of the Trade Mark by the applicant. The reports are attached to Mr Wolnizer’s declaration as Exhibits MCW-1 and MCW-2.

9. The investigator’s first report is dated 20 April 2007. In my consideration the report relevantly states:

·          An ASIC registration of the company ‘NextIP Distributions Pty Ltd’ [sic] with offices at three associated street addresses; of which
·          Head Office was at an address in Hawthorn East.
·          Staff at those three offices, when phoned, identified the business as being ‘Wavelink Communications’ but when prompted identified the business as including NEXT IP, the latter being a new name which involved a change of name from the entity DeTeWe Australia Pty Ltd.
·          The goods sold by the applicant were produced by a German company called DeTeWe AG and/or Aastra Telecom.
·          The business was described by staff to the investigator as providing ‘installation of cordless telephone communications systems’.
·          Staff informed the investigator that the trade mark had only been used as the new name of the applicant – it had not been applied to products or services.
·          An Internet website at was registered on 30 March 2007 and subsequently advertised ‘SIP telephone systems’.
·          The investigator does not state that the trade mark appeared on the home page of the above web address.

The subsequent investigator’s report, dated 20 July 2010, showed no product to be advertised on the website at or around that date but that signage ‘has appeared on the front doors to the Hawthorn East offices which include the Next IP Distribution name’.
Mr Rubin is a director of the applicant. In his declaration, which exhibits the two previous declarations made in relation to the Application, Mr Rubin refers the filing of the first declaration in response to the first report, and to a prior telephone conversation with the examiner in which the examiner allegedly misstated the basis for rejection of the Application. Mr Rubin, or the drafter of the declaration for Mr Rubin, has apparently misunderstood the nature of proceedings before the Registrar – the role of a Hearing Officer whether in opposition or ex parte proceedings is not as a potential critic of an examiner (or to discover whether an examiner was at fault) but to consider the ground for rejection and bring a fresh and independent eye to the matter.
In his declaration dated 2 May 2011 Mr Rubin states that in his declaration of 17 September 2007, (which is Exhibit Rubin 4) he provided details of:
(a)      registration of the business name ‘Next IP Distribution’ on 8 February 2007;
(b)      registration of the domain name ‘Next IP’ on 6 February 2007;
(c)       evidence of continuous use of the Trade Mark by the Applicant in respect of all of the Services on the website since 6 February 2007; and
(d)      a statement that the Applicant has constantly used the Services by reference to the Trade Mark since 6 February 2007.
Mr Rubin’s second pre-acceptance statutory declaration (which is Exhibit Rubin 7) in its turn exhibits what are stated to be three invoices. In Mr Rubin’s words:
Now produced and shown to me and marked Exhibit C is a copy of 3 invoices dated 9 March 2007, 2 April 2007 and 5 April 2007 issued by the Applicant to customers in Australia on the date they bear. I note that each of the invoices was issued before the priority date for the Cited Mark.
This claim was enlarged upon prior to acceptance of the Application at the hearing before the First Delegate by Mr Chris Round who submitted:
‘[the declaration] attached three invoices. Those invoices disclose sale of product, handset product, base station product, and the type of product which requires our client to provide services in setting it up. This is not like going into a Crazy John’s and buying a Nokia phone and turning it on. These products require our client to provide other services in association with the sale of these telecommunication products.
The first invoice carries the company name ‘Next IP Distribution Pty Ltd’ at the top of it and invoices a customer in Caulfield for one ‘OpenPhone 24 Handset’. The second two ‘invoices’ are, in reality, not invoices but are in fact the applicant’s purchase orders for telephone handsets and associated equipment from the German supplier: these purchase orders are also headed ‘Next IP Distribution Pty Ltd.’ A picture of an OpenPhone 24 Handset appears below:
Relevantly, Mr Rubin also attaches material from the website dated 16 July 2007 to his declaration. This material shows use of the trade mark NEXT IP DISTRIBUTION in the form shown below:
Mr Rubin states at [20] of his declaration dated 2 May 2011:
At the hearing, the Applicant stressed that the Trade Mark had been used for all of the Services and provided a table referring to sections of Rubin 1 which disclosed the following services undertaken by reference to the Trade Mark in respect of classes 37 and 38.
The table referred to by Mr Rubin in his declaration and Mr Round in his submissions to the Registrar’s delegate at the hearing of the ex parte matter appears below:

Service claimed	Page number of exhibit	Reference on page to provision of services
Installation and repair services for telecommunications apparatus and system	1	‘we distribute a range of IP capable business communication products, including convergent telephone systems, SIP handsets and SIP DECT wireless telephone systems’
3	The Aastra products discussed on this page, cannot be merely purchased, they must be installed by the Applicant.
5	‘Next IP plans to progressively expand our offering of SIP / VoIP, wireless solutions, telephone systems and associated products over the coming months.’
6	‘Next IP ... is a value added distributor of a range of business telecommunications solutions. Covering Australia and New Zealand, our core focus is on IP, wireless telephony and convergent telephone systems.’
6	‘Our range of value added services include ... providing repairs’
7	‘Organisations that are migrating to a converged IP environment whether it is hosted VoIP, a premised based IPPBX / Hybrid PBX or Open Source PBX will be able to find an Aastra IP telephone perfectly suited to their needs’
Providing information and consultancy services on all of the foregoing	1	‘for further information or to obtain an obligation free assessment of your needs, CLICK HERE’
3	‘for further information or to obtain an obligation free assessment of your needs’
3	‘Through our national partner network, we have a solution to meet your needs whether simple or complex, small or large’
6	‘Our range of value added services include ... technical support’
Advisory services relating to telecommunications	1	‘for further information or to obtain an obligation free assessment of your needs, CLICK HERE’
3	‘for further information or to obtain an obligation free assessment of your needs’
3	‘for further information or to obtain an obligation free assessment of your needs’
‘Through our national partner network, we have a solution to meet your needs whether simple or complex, small or large’
6	‘Our range of value added services include ... technical support’
Hire of telecommunication apparatus, installations, and instruments	3	‘Through our national partner network, we have a solution to meet your needs whether simple or complex, small or large’
5	‘Next IP plans to progressively expand our offering of SIP / VoIP, wireless solutions, telephone systems and associated products over the coming months.’
6	‘Next IP ... is a value added distributor of a range of business telecommunications solutions. Covering Australia and New Zealand, our core focus is on IP, wireless telephony and convergent telephone systems.’

Mr Wolnizer’s second declaration brings into evidence website material from the previously referred to German supplier of telephony goods to the applicant.

Section 44

Section 44 of the Act 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).
[…]
(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 title see section 6.
Note 3:For priority date see section 12.
The parties are agreed that the Trade Mark is deceptively similar to the Opponent’s Trade Mark, that the Services are similar services to the Opponent’s Services and that the priority date of the Application is later than that of the Opponent’s Registration.
The applicant, however, relies on the provisions of subsection 44(4) based on its claims of prior use of the Trade Mark.
The wording of subsection 44(4) makes two factors plain:
· The onus lies squarely on the applicant to establish to the Registrar’s satisfaction that it has continuously used the Trade Mark in relation to all of the Services for a period beginning before the priority date of the Opponent’s Registration and ending on the priority date of the Application;
· Subsection 44(4), via the use of the words ‘may not’ rather than ‘must not’, gives the Registrar a discretionary power to accept a trade mark which conflicts with one which has an earlier priority date because of the continuous use of the Trade Mark from before that priority date.
In the pre-acceptance assessment of an application, the transfer of the onus which exists under subsections 44(1) or 44(2) onto an applicant which seeks to avail itself of the provisions of subsection 44(4) means that the ‘mandatory language’ of section 33 which applies under subsections 44(1) and (2) and which was referred to by French J in Registrar of Trade Marks v Woolworths [1999] FCAFC 1020; (1999) 93 FCR 365; (1999) 45 IPR 411 at [34] no longer applies:
The mandatory language of s 33 and the legislative policy which informs it also suggest that the acceptance stage is not the time for the kind of detailed adversarial examination of the application that might emerge from a contested opposition. This will have an impact upon the way in which the Registrar approaches the question whether a mark proposed for registration is deceptively similar to others. The condition of refusal of an application is that the Registrar is satisfied that there are grounds for rejection. If not so satisfied the Registrar must accept the application. Unless the Registrar thinks that the proposed trade mark is likely to deceive or to cause confusion then all other things being equal, the application must be accepted.

Subsections 44(1) and (2) also contain mandatory language - once the Registrar is satisfied in terms of section 33 of the Act that there are valid grounds for rejecting a trade mark, the Registrar must, by the wording of section 33, reject it. In the matter before me, the applicant acknowledges that the ground under subsection 44(2) is valid. If an applicant seeks to avail itself of the provisions of subsection 44(4) and does not satisfy the Registrar that on the balance of probabilities ‘the applicant (or its predecessor in title) has/have continuously used the trade mark on the particular similar services for a period of time which begins before the priority date of the cited trade mark and continued the use to the date of its own application’, the Registrar remains obliged to reject the trade mark under section 44(1) or 44(2).
The Trade Marks Examiners Manual states in relation to subsection 44(4):
Evidence to support a claim for prior use should consist of a leading declaration usually provided by a competent member of the applicant organisation. The declaration should contain a history of the trade mark with information as to the first known use of the trade mark by the applicant or the applicant’s predecessor. The applicant needs to provide sufficient statements of fact, supported by examples (which may be in electronic form other than on USB keys, and including digital photos of objects bearing the mark) showing the trade mark in actual use, which will be able to satisfy the examiner that use occurred before the priority date of the cited trade mark. Again, the applicant must provide material that allows the examiner to be satisfied that this use has been continuous.
If the information is supplied in a statutory declaration, statements of facts on these matters will be taken at face value at the examination stage. However, a bald statement such as ‘the trade mark was first used in 1990’, unsupported by any material that would allow an examiner to know what this ‘use’ might have entailed, can carry little weight.
Note: It may be necessary to restrict the specification of an application before allowing it to proceed under this paragraph if the information demonstrates use on goods and/or services less than those originally claimed in the application.
The standard of proof to establish the use of a trade mark is, however, (as was observed by French J) higher in opposition proceedings than it is before acceptance of the application. During opposition proceedings, an application is subject to adversarial scrutiny; that is, it has the benefit of evidence and forensic argument from an opponent. Moreover, subsection 44(4) has statutory safety nets: where an applicant has relied on statements or representations which are false in their material particulars in order to gain acceptance, a ground of opposition may exist in terms of subsection 62(b) and, if not opposed, the trade mark when registered will remain vulnerable to an action for cancellation in terms of section 88 of the Act.
The discretion afforded to the Registrar by subsection 44(4) is as broad as the discretion afforded elsewhere in the Act: see Hills Industries Ltd v Bitek Pty Ltd [2011] FCA 94; (2011) 90 IPR 337; [2011] AIPC 92-409. Considerations which may arise include the demonstration of the continuous use during the relevant period of the trade mark in relation to the similar goods or services in respect of which registration is sought; the degree of similarity between the trade marks and goods or services under consideration; the interests of the owner of the prior trade mark; and the public interests.

Subsection 44(4) Reasoning

Section 17 of the Act provides:
17What is a trade mark?
A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.
Note:For sign see section 6.
Relevantly, if the sign relied upon by a person to establish use as a trade mark is not shown on the balance of probabilities to have been used by the applicant as a trade mark, that person cannot establish use of a trade mark.
Section 7 provides:
7Use of trade mark
(1)If the Registrar or a prescribed court, having regard to the circumstances of a particular case, thinks fit, the Registrar or the court may decide that a person has used a trade mark if it is established that the person has used the trade mark with additions or alterations that do not substantially affect the identity of the trade mark.
Note:For prescribed court see section 190.
(2)To avoid any doubt, it is stated that, if a trade mark consists of the following, or any combination of the following, namely, any letter, word, name or numeral, any aural representation of the trade mark is, for the purposes of this Act, a use of the trade mark.
(3)An authorised use of a trade mark by a person (see section 8) is taken, for the purposes of this Act, to be a use of the trade mark by the owner of the trade mark.
(4)In this Act:
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).
(5)In this Act:
use of a trade mark in relation to services means use of the trade mark in physical or other relation to the services.
And section 6 relevantly provides:
services of a person means services dealt with or provided in the course of trade by the person.
It follows that if the services of a person were not dealt with or provided in the course of trade, there can have been no use of the trade mark in physical or other relation to those services.
The standard of proof which is necessary under subsection 44(4) to establish prior continuous use of a trade mark is therefore the usual one where use of a trade mark is considered in trade mark proceedings, such as those under sections 58 or 92. And, consistent with the definitions of ‘trade mark’, ‘use of a trade mark’ and ‘services’, above, the applicant may only register the Trade Mark in relation to services in relation to which it has shown it has actually used the Trade Mark during the relevant period. This requirement is also consonant with the observation of Carr J in PB Foods Ltd v Malanda Dairy Foods Ltd [1999] FCA 1602; 47 IPR 47; [1999] AIPC 40,117 at [78] that ‘The scheme of the Act is not proprietorship by registration but rather registration of proprietorship.’
This latter observation is a convenient start point to the consideration of whether the applicant has established to my satisfaction that it has continuously used the Trade Mark in physical or other relation to the Services in the course of trade in the period starting before 5 April 2007 (the priority date of the Opponent’s Registration) and ending on 27 April 2007 (the priority date of the Application)(‘the Relevant Period’).
In his submissions Mr Round focused the applicant’s claims to have continuously used the Trade Mark in the Relevant Period on what the applicant claims to be invoices; the Internet materials exhibited to Mr Rubin’s declaration and statements within the investigator’s reports prepared by Rumore & Associates and exhibited to Wolnizer 1.
As I have observed above, two of what are claimed to be invoices from within the relevant period are in fact purchase orders and do not show a public use of the trade mark. The invoice is for the telephone handset described above. The fact that this item was sold on its own is puzzling as the applicant has previously (during Mr Round’s submissions to the First Delegate) submitted that these are ‘the type of product which requires our client to provide services in setting it up. This is not like going into a Crazy John’s and buying a Nokia phone and turning it on. These products require our client to provide other services in association with the sale of these telecommunication products.’
I would surmise that the purchaser of the handset had already purchased at least one handset, the ancillary equipment and any associated services from the applicant before its change of name from DeTeWe Australia Pty Ltd and that the purchaser bought an additional handset after the name change. Whatever the explanation, I conclude that there were no services provided in relation to the sale of the handset apart from those directly involved in the sale – those being ‘the retail of telephone handsets’.
Further, the heading of the invoice is problematical since what appears there is a company name (Next IP Distribution Pty Ltd) rather than the Trade Mark. While it may be that a company name might used as a trade mark, there are obvious problems in perceiving an isolated instance to be such: see Smith & Nephew Plastics (Australia) Pty Ltd v Sweetheart Holding Corporation and Another (1987) 8 IPR 285 (‘Sweetheart’) per King J at page 290:
Another matter argued before me as showing that the sale of the seized goods would not infringe the registered mark is that the use of the mark complained of is, where it appears as part of the name of a company, not infringement by virtue of s 64(1)(a). This section provides that the use in good faith by a person of his own name is not infringement of a regis-tered trade mark. It has been held that the use of a company name as a trade mark is protected by this provision: Parker-Knoll Ltd v Knoll International Ltd [1962] RPC 265. The view has also been expressed that the name concerned need not be that of a defendant, but may be that of the manufacturer of the goods concerned: Baume & Co Ltd v A H Moore Ltd [1958] 1 Ch 907.
I think that where a person such as a manufacturing company has placed its name on goods in good faith, anyone who trades in those goods, and is thus prima facie liable to be sued for infringement, may take advantage of this defence. It has been argued on the basis of judgments of the House of Lords in Parker Knoll Ltd v Knoll International Ltd, supra, that the protection extends to the use of a company name without reference to such features as ‘Ltd’ and ‘Inc’. The question is whether such an abbreviation reduces the name used to less than the ordinary name of the person concerned: per Denning MR at 275.
In the present case no corporation name has emerged which can be reduced to ‘Sweetheart’ by omitting such a feature. Thus, it cannot be said that ‘Sweetheart’ alone is an acceptable abbreviation of ‘Sweetheart Plastics Inc’, which is a corporate name which appears on some of the goods.
My general conclusion is that articles included among the seized articles which are marked with the words ‘Sweetheart Plastics Inc’ and do not also bear the word ‘Sweetheart’ by itself should be regarded as not infringing the registered mark and should be released. However, if both appear, the goods should not be released. In the case of articles packaged in quantity, the above tests are to be applied not only to the individual articles but also to their packs such as the plastic envelopes in which the defendant’s plastic cups are imported.
If it holds true that (by analogy) the expression Next IP Distribution alone is not an acceptable abbreviation of Next IP Distribution Pty Ltd, then logically the converse also holds true as regards the latter’s trade mark usage in terms of the formulation in Sweetheart.
Further, it is not the company name in respect of which the applicant seeks registration. On the face of it, the name and the trade mark do not share an identity and the presence or absence of the abbreviations ‘Pty Ltd’ are not alterations or additions which do not affect their identity as in the context of the receipt they signify different things. Accordingly, it is difficult to conclude that the use of the one is a use of the other in terms of subsection 7(1) of the Act.
Therefore, it appears probable that the applicant provided the service, ‘retail of telephone handsets’ evidenced by the single invoice but it does not logically follow that because the service was provided a trade mark must have been used.
Moreover, if the receipt had shown use of the Trade Mark (which it does not) it is a single use of the Trade Mark during the Relevant Period and, although the Relevant Period is short, the single use does not in my consideration demonstrate the continuous use of the Trade Mark.
Accordingly, I am not satisfied that the single receipt in evidence establishes continuous use of the Trade Mark in the Relevant Period in relation to any of the Services.
Registration of a business name is not proof of the use of a trade mark: Lone Star Steakhouse & Saloon Inc v Zurcas [2000] FCA 29; 48 IPR 325, it merely signifies compliance with a necessary business formality and is not a public use of a trade mark.
The Internet material relied upon by the applicant as dating from within the Relevant Period consists of the fact of the registration of the domain name on 30 March 2007 and a printout of the contents of the website dated 16 July 2007 (after the Relevant Period).
The registration of a domain name, while within the relevant period, is not in and of itself evidence of use as a trade mark. The applicant states and Mr Round submits that there was material on the Internet website after the registration of the domain name. The applicant does not definitively give a precise date that this material was placed on the website. Similarly, Mr Rubin’s statement concerning what material was placed onto the applicant’s website is vague:
Attached and marked ‘Exhibit 8’ are print outs from the Website which are the same as the look of the Website prior to the priority date of the Cited Mark.
It is reasonable to suppose that the applicant possesses records of the exact date of the placement of material onto the Internet and copies of the material which was put up on its website in the Relevant Period but it has not submitted these as evidence, nor has it submitted any declaration from a web-designer, or person in the applicant company, who was responsible for doing so. I am apparently asked to infer (or accept an unsupported statement) that this material was on the website on or close to 30 March 2007 but I am unwilling to do so when these claims in the context of the balance of the applicant’s evidence appear to be tenuous.
The only fact that is agreed by the parties is that there was something on the applicant’s website on 20 April 2007 (within the Relevant Period) when the private investigator from Rumore & Associates reported it as advertising ‘SIP Telephone Systems.’ However, the investigator did not report the use of any Trade Mark within the website nor did he report whether there was any purchase or order facility on the website.
Further, as the one documented sale from within the Relevant Period (albeit not under the Trade Mark) was apparently a further purchase from a customer who had previously bought from DeTeWe Australia Pty Ltd, it is not clear that the applicant’s website had any more function in relation to any business conducted under the trade mark than did the sandwich board in Shahin Enterprises Pty Ltd v Exxonmobil Oil Corporation [2005] FCA 1278; [2005] AIPC 92-132. Without evidence which affirmatively ties the website to real commercial activity and the supply of goods or services under the Trade Mark, the website was to all intents akin to a Shahin sandwich board on the information superhighway.
Further, if I am to rely on the investigator’s reports in one regard, as the applicant wishes me to do as establishing that the website was in use within the Relevant Period, it is not apparent why those reports should not be regarded as being of the same weight in all aspects of their content. The applicant has not seriously negatived any aspect of the investigator’s reports and it is obviously within the applicant’s power to do so if it wished. The investigator reported that he or she was told by the applicant’s staff that the words ‘Next IP Distributions’ had only been used as the new name of the applicant – it had not been applied to products or services. The single invoice in evidence bearing the applicant’s corporate name rather than its trade mark is consistent with that observation within the first investigator’s report.
Putting to one side the difficulty in placing much weight on Mr Rubin’s evidence concerning the applicant’s website further problems arise from the scale and extent of applicant’s extrapolations from its claims founded upon material on the website which in my view have no sound basis. These extrapolations include, for example, claims to have used the Trade Mark in the past based on the applicant’s website statements of its current or future plans; or claims to have provided information, advisory and consultation services based on the offer of a free assessment whereas, prima facie, if no payment is provided for an advisory service there is no service involved – what is claimed to have been offered appears, rather, to be a necessary adjunct to a retail service albeit it a specialised retail service.
An applicant can only avail itself of the provisions of subsection 44(4) in relation to services which it has actually performed or provided in relation to the trade mark in the course of trade on a continuous basis during the relevant period. The requirement and evidentiary standard as I have observed, are akin to those when establishing ownership in terms of section 58 or the use of a trade mark in terms of a defended section 92 application (albeit the use of a trade mark on a continuous basis is looked for in terms of subsection 44(4) in contra-distinction to those other sections).[1] The reasons for this include: firstly, it is a requirement of the Act; secondly, another trader’s rights are being affected; thirdly, the resultant confusion or deception from the registration of two deceptively similar trade marks should be limited to where rights have been affirmatively established by an applicant; and, fourthly, traders are encouraged to research and apply to register trade marks before commencing the use of them. It is appropriate to reiterate here that the scheme of the Act is the registration of ownership and not of ownership by registration.
[1] See Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261; (2001) 107 FCR 166; [2001] AIPC 91-713; (2001) 51 IPR 149; Thunderbird Products Corporation v Thunderbird Marine Products Pty Ltd [1974] HCA 51; (1974) 131 CLR 592.
Accordingly, the claims in the table in Mr Rubin’s evidence which appears at paragraph 18 of these reasons, when viewed in the light of the evidence provided by the applicant and submissions of the opponent, do not stand up to the kind of scrutiny which is applied in adversarial proceedings.
While the applicant does not rely on a single instance of use, it does rely on very slight evidence. Under such circumstances the use should be established by ‘if not conclusive proof, at any rate overwhelmingly convincing proof’: Nodoz Trade Mark (1962) RPC 1 at 7 per Wilberforce J.
The applicant has not established to my satisfaction that it continuously used the Trade Mark in the Relevant Period in relation to any of the Services.
The opponent has established its opposition under section 44 of the Act.

Section 62

Section 62 of the Act relevantly provides:
62Application etc. defective etc.
The registration of a trade mark may be opposed on any of the following grounds:
[…]
(b)that the Registrar accepted the application for registration on the basis of evidence or representations that were false in material particulars.
Note:For file see section 6.
In order for this ground to be established, an opponent needs to show that acceptance was based either on evidence which was false in a material particular or on a representation which was false in a material particular. The question of materiality was considered by Bennett J in Mars Australia Pty Ltd (formerly Effem Foods Pty Ltd) v Societe des Produits Nestle SA [2010] FCA 639; (2010) 86 IPR 581 at [20]: ‘Section 62(b) requires a causal connection between the suggested false statement and the acceptance of the application.’

It is not a requirement that an opponent establish that the applicant knew the statement was false; nor is there any requirement that a determination be made that an applicant knew that the statement was false. In Analyses Conseils Informations ACI v Iguassu (No 16) Pty Ltd [2001] ATMO 4, Hearing Officer Nancarrow observed:
This ground of opposition does not necessarily allege any misleading conduct, bad faith or other form of deception. The challenge that evidence or representations were ‘false in material particulars’ may simply seek to alert the Registrar that the applicants themselves are confused, or have been given incorrect information which has been passed on to this Office. The false particular, if it exists, may be entirely unintentional.
In my consideration, the falsity in the representation or material particular must go beyond the slight colouration of the facts or minor exaggerations which are occasionally encountered in the declarations of applicants and their representations to the Registrar or her delegates.
I do not consider that it is an answer to a ground under subsection 62(b) to suggest that a delegate of the Registrar ought to have looked beyond the statements and representations of an applicant and found that the evidence did not support those statements and representations. The Registrar reasonably expects that applicants will make true statements and representations in the belief that those statements and representations will carry weight and will be accepted and acted upon. In an instance where a delegate did not verify from evidence the veracity of any statement, submission or representation made by an applicant, and accepted those at face value, the applicant can hardly (when it subsequently emerges that the representation was false in a material particular) complain that it was not disbelieved.
Thus, notwithstanding the cautionary words of the Trade Marks Examiners Manual concerning unsupported statements, where a statement, submission or representation is accepted by a delegate at face value and relied upon in the acceptance of an application, and it is not supported by the evidence before that delegate, and it later transpires to have been false in a material particular, a valid ground under subsection 62(b) may exist whether or not the falsity might have become apparent on closer scrutiny of the evidence prior to acceptance.
Moreover, there are many factors which contribute to each decision to accept an application for registration. In my consideration, it is not a requirement of subparagraph 62(b) that the false representation or particular be the sole basis for that decision to accept an application but that the affirmative decision would have been unlikely to have been formed in the absence of that representation or particular.
There are three representations made by the applicant which were material to the acceptance of the Application and which were false. These representations were made by the applicant during the hearing before the First Delegate and, in my consideration, were material to the decision of the First Delegate to accept the Application.
The first representation is Mr Rubin’s statement that the commercial documents attached to his declaration of 6 November 2007 are invoices dated 9 March 2007, 2 April 2007 and 5 April 2007 for the sale of a wide range of telecommunications goods. In fact, as discussed above, two of these commercial documents are purchase orders which do not constitute a public use of the Trade Mark and the third is an invoice which shows the sale of one telephone handset.
I am satisfied that the First Delegate relied upon the representation as to the ‘receipts’ in evidence in deciding to accept the Application for registration and that the representation was false.
As to the second false representation, during submissions Mr Round said to the First Delegate:
The client Next IP Distribution as part of its telephony offerings to its customers prior to Telstra’s priority date offered the hire of telecommunications apparatus installations and instruments. It sometimes sells and sometimes hires. Those offerings are again set out in the paragraphs [within the evidence] that I have referred you to.
The applicant has asserted that it offered the hire of telecommunications apparatus installations and instruments during the Relevant Period (implicitly by reference to the Trade Mark). There is no evidence before me which supports this assertion. The applicant has been aware that subparagraph 62(b) is a ground of opposition and it has known of the challenge to the veracity of its representations and of materials that it placed before the First Delegate in order to gain acceptance of the Trade Mark. An adverse inference may be drawn from the fact that the applicant has not addressed this issue with evidence refuting it: see Jones and Dunkel [1959] HCA 8; (1959) 101 CLR 298, page 312, at [9]:
(i) that the absence of the defendant Hegedus as a witness cannot be used to make up any deficiency of evidence; (ii) that evidence which might have been contradicted by the defendant can be accepted the more readily if the defendant fails to give evidence; (iii) that where an inference is open from facts proved by direct evidence and the question is whether it should be drawn, the circumstance that the defendant disputing it might have proved the contrary had he chosen to give evidence is properly to be taken into account as a circumstance in favour of drawing the inference.
I am satisfied that the First Delegate relied upon the applicant’s representation that it had offered the hire of telecommunications apparatus installations and instruments during the Relevant Period (in relation to the trade mark) and that this representation was false.
As to the third representation, Mr Round made verbal submissions to the First Delegate:
Mr Rubin states that the trade mark has been used in respect of all of the Services which you note that I have defined in paragraph 1 of my submissions.
Paragraph 1 of Mr Round’s written submissions reads:
1. The Applicant filed a trade mark application for the mark NEXT IP DISTRIBUTION (Trade Mark) in classes 35, 37 and 38 for the following services:
(a)     Class: 35 Sale and distribution of telecommunications goods;
(b)     Class: 37 Installation and repair services for telecommunications apparatus and system; providing information and consultancy services on all of the foregoing; and
(c)     Class: 38 Advisory services relating to telecommunications, hire of telecommunication apparatus, installations, and instruments
(Services)
Mr Rubin’s statement is, in view of my finding in relation to the falsity of the representations concerning hire services, also false and I am satisfied that the First Delegate based his decision to accept the Application upon this statement.
The opponent has established its opposition in terms of subparagraph 62(b) of the Act.
If the applicant had established continuous use in relation to any of the Services during the Relevant Period and thus preserved them within the application, it would have been open to me to refuse the application in its entirety on the establishment of the ground under subparagraph 62(b) of the Act.

Decision

Section 55 of the Act relevantly provides:
55Decision
(1)Unless the proceedings are discontinued or dismissed, the Registrar must, at the end, decide:
(a)to refuse to register the trade mark; or
(b)to register the trade mark (with or without conditions or limitations) in respect of the goods and/or services then specified in the application;
having regard to the extent (if any) to which any ground on which the application was opposed has been established.
Note:For limitations see section 6.
I refuse to register application 1173286.

Costs

Having been successful, the opponent is entitled to its cost which I award at the official scale against the applicant.

Iain Thompson

Hearing Officer

Trade Marks Hearings

17 August 2012

[2012] ATMO 69

17 August 2012

Key Legal Topics

Areas of Law

Intellectual Property

Administrative Law

Legal Concepts

Costs

Statutory Construction

Remedies