The Real Thing Food Supplements (Pty) Ltd v Media Tag Pty Ltd, Robyn Lasarow and Graham Meyerowitz

[2018] ATMO 173

TRADEMARKSACT 1995

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

ReOpposition by The Real Thing Food Supplements (Pty) Ltd to registration of trade mark application 1712776 (5) – THE REAL THING ORGANIC SUPPLEMENTS THAT KEEP IT REAL - in the name of Media Tag Pty Ltd, Robyn Lasarow and Graham Meyerowitz

DELEGATE:                 Robert Wilson

REPRESENTATION:       Opponent: Victor Ng of Cooper Mills Lawyers, instructed by Noelle Pearson of Smit &Van Wyk Attorneys (South Africa) Applicant:   Allen   Blank   of   Counsel,       instructed   by Eric Shmilovits of UX Law

DECISION:                   2018 ATMO 173

TradeMarks Act 1995 (Cth) - Section 52 opposition: ss 58 and 62A considered – application made in bad faith – registration refused

Background

1.This decision concerns an opposition brought by The Real Thing Food Supplements (Pty) Ltd (‘the Opponent’) pursuant to s 52 of the Trade Marks Act 1995 (‘the Act’) to registration of the trade mark the subject of the application detailed below in the name of Media Tag Pty Ltd, Robyn Lasarow and Graham Meyerowitz (‘the Applicant’):

ApplicationNumber:	1712776
FilingDate:	7 August 2015
Goods:	Class 5: Food supplements (dietary supplements) (‘the Applicant’s Goods’)
TradeMark:	(‘the Trade Mark’)

2.

On 16 February 2017 the application’s acceptance for possible registration was advertised in the Australian Official Journal of Trade Marks. The Opponent filed a Notice of Intention to Oppose the registration on 17 April 2017 and a Statement

of Grounds and Particulars (‘the SGP’) on 15 May 2017. The SGP nominated grounds of opposition under ss 42(b), 58, 60, 62(b) and 62A of the Act. The Applicant filed a Notice of Intention to Defend on 26 June 2017.

Evidence

3.The Opponent filed Evidence in Support of its opposition (‘EIS’) on 5 October 2017. This evidence consists of:

·     Declaration made on 4 October 2017 by David Mark Allen, the founder and sole director of the Opponent, with Annexures DMA-1 to DMA-11 (‘Allen 1’); and

·     Declaration made on 5 October 2017 by Victor Wei-Cho Ng, a lawyer and registered trade mark attorney at Cooper Mills Lawyers, the representatives of the Opponent, with Annexures VWN-1 to VWN-4 (‘the Ng declaration’).

4.The Applicant filed Evidence in Answer (‘EIA’) on 8 January 2018. This evidence consists of:

·     Declaration made on 18 December 2017 by Graham Meyerowitz, one of the Applicants, with Exhibits GM-1 and GM-2 (‘the Meyerowitz declaration’).

5.The Opponent filed Evidence in Reply (‘EIR’) on 2 March 2018. This evidence consists of:

·     Declaration made on 27 February 2018 by David Mark Allen (‘Allen 2’).

6.As is their right, once the time allowed for filing evidence had ended the parties requested to be heard. I heard the matter in Canberra on 6 September 2018 as a delegate of the Registrar of Trade Marks. Victor Ng of Cooper Mills Lawyers appeared for the Opponent. Mr Ng was instructed by Noelle Pearson of Smit & Van Wyk Attorneys, a South African law firm. Allen Blank of Counsel, instructed by Eric Shmilovits of UX Law, appeared on behalf of the Applicant.

The Opponent

7. According to Allen 1:

Since 2006, [the Opponent] has been manufacturing and supplying a range of organic health supplements (Products). Ingredients for the Products are sourced from raw materials from various locations around the world and are manufactured and packaged in South Africa and sold in the form of capsules, tablets or powders. …

The Products are advertised and sold through retailers (including online), health food stores, pharmacies, health centres and health practitioners in South Africa. [The Opponent] has also exported the products to Kenya, Dubai, Namibia, Swaziland,

Zambia, Botswana and Australia. …

[The Opponent] promotes and supplies the Products under the brand name ‘THE REAL THING’, utilising the following trade marks [(‘the Opponent’s Trade Marks’)].:

‘THE REAL THING’

‘ORGANIC SUPPLEMENTS THAT KEEP IT REAL’

‘YOU ARE THE REAL THING. THAT’S WHY YOU NEED THE REAL THING’

[The Opponent’s Trade Marks] have been used by [the Opponent]:

(a)    On its product labels packaging since 2006. …

(b)    On its website at < since 2008. …

(c)    On its online store … since at least 2010.

Relationship between the Opponent and Robyn Lasarow

8.According to Allen 1, there was a significant working relationship between the Opponent and Robyn Lasarow which arose out of a social meeting between David Allen and Ms Lasarow. That meeting occurred in Australia ‘in around October 2011’. At that time Mr Allen was residing in South Africa and Ms Lasarow was residing in Australia. In late 2011 Ms Lasarow had moved temporarily back to South Africa to care for her sick father. On the strength of the friendship between Mr Allen and Ms Lasarow, the Opponent offered Ms Lasarow a job in South Africa. Ms Lasarow commenced employment with the Opponent ‘in or around March 2012’.

9. Also according to Allen 1:

In or around March 2013, Robyn approached me about distributing and selling the Products in Australia. Robyn told me that:

(a)    she had some contacts in Australia …;

(b)    [the Opponent] could supply the Products to her contacts and they would distribute the Products … in Australia; and

(c)    there  would  be  a  short  trial  period  for  supermarkets  to  assess  how  the Products would sell.

I told Robyn that if she was prepared to oversee the project, I was happy for her to sell into Australia but that she should keep me updated. As Robyn had previously worked in the health industry in Australia, I considered that it was a good idea for her to be responsible for launching [the Opponent’s] Products into Australia. … I considered this would be a good opportunity for … [the Opponent] to expand its business into a new market. …

On 11 July 2013, Robyn and [the Opponent] executed an agreement entitled ‘Trade Agreement between The Real Thing (David Allen) and Robyn Ellen Lasarow’, under which [the Opponent] granted Robyn the exclusive right to distribute the Products into Australia, New Zealand and Papua New Guinea.

I was not aware of exactly what arrangements Robyn had made to distribute the Products in Australia. I had told Robyn that it was her project and that I would not be extensively involved. She did tell me that she had a contact in Australia, Graham Meyerowitz, and that if [the Opponent] sold Products to Graham, he would distribute and on-sell to Woolworths.

1. As time passed the Opponent had issues with Ms Lasarow’s employment which resulted in that employment being terminated in July 2014. According to Allen 1:

   Following the termination of her employment, Robyn commenced proceedings … against [the Opponent] for unfair dismissal. Those proceedings were finalised by way of a settlement in or around October 2014 …

The Trade Agreement

1. A copy of the document entitled Trade Agreement between the Real Thing (David Allen) and Robyn Ellen Lasarow (‘the Trade Agreement’) referred to in Allen 1 is provided at Annexure DMA-7 to Allen 1. The document consists of a single page executed by Mr Allen on behalf of the Opponent and by Ms Lasarow on 11 July 2013. The document includes in its header the South African contact details of the Opponent and the trade mark shown below:

(‘the Agreement Trade Mark’)

1. The terms of the Trade Agreement are brief and are reproduced in full below:

Territory

The Real Thing agrees to provide Robyn Ellen Lasarow exclusive rights to distribute its products to the territory of Australasia (Australia, New Zealand and New Guinea).

Any direct or indirect enquiries to The Real Thing or orders from Australasia will be referred to Robyn Ellen Lasarow.

Updated Information

The Real Thing agrees to provide information new developments and/or products when they are developed. (sic)

Faulty Merchandise

The Real Thing agrees to accept faulty merchandise that will be either replaced or credited.

Terms

This agreement is valid for 5 (five) years with Robyn Ellen Lasarow having first option to renew every 5 (five) years.

This done and signed at Cape Town on the 11 day of July 2013.

The Applicants

1. The EIA does not provide any details of the Applicants’ background; however, it is apparent from the evidence generally that Robyn Lasarow and Graham Meyerowitz are directors of Media Tag Pty Ltd. Media Tag Pty Ltd appears to be involved, at least to some extent, in the distribution of products to Woolworths supermarkets and other retail outlets in Australia.

Grounds of Opposition, Onus and Standard of Proof

1. As indicated above, in the SGP the Opponent nominated grounds of opposition under ss 42(b), 58, 60, 62(b) and 62A of the Act. At the hearing the Opponent pressed only the grounds under ss 58, 59, 62(b) and 62A. As will become apparent it is necessary only that I consider the grounds pursuant to ss 58 and 62A. Of course, should the decision be appealed, it would remain open to the Opponent to plead any ground available to it under the Act in proceedings before the appellate Court.

1. The onus of proof in an opposition  rests upon the Opponent.1 The relevant standard of proof is the ordinary civil standard based on the balance of probabilities.2 The date at which the rights of the parties are to be determined is 7 August 2015 , being the filing date of the application (‘the Relevant Date’).3

Discussion

Section 58

1. The ground based on s 58 of the Act is particularised in part in the SGP as follows:

   [The Trade Mark] is identical, substantially identical and deceptively similar to the Opponent’s trade marks which are reproduced below (‘the Section 58 Trade Marks’).

   The Opponent has extensively used and promoted [the Section 58 Trade Marks]:

   (i)       overseas and in Australia;

   (ii)       in connection  with  goods  which are the same kind  as or  similar  to [the Applicants’ Goods]; and

   (iii)before [the Relevant Date].

   The Opponent is the first user in Australia of a mark that is substantially identical to [the Trade Mark] in connection with goods that are the same or similar to [the Applicants’ Goods].

   Accordingly, the Applicants are not the owners of [the Trade Mark].

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

2 Telstra Corporation Limited v Phone Directories Company Ltd [2015] FCAFC 156, [132]-[133].

3 Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1954] HCA 82, [2].

1. Section 58 of the Act is reproduced below:

Section 58. 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.

1. The owner of a trade mark for particular good/services is the person who first uses it in Australia, or first files a trade mark application in Australia, whichever is the earlier. It is now well established that in order to succeed under this ground of opposition the Opponent must establish three factors. These are:

·that the Trade Mark is identical, or substantially identical, to at least one of the trade marks relied upon by the Opponent;4 and

·that the Applicants’ Goods are the ‘same kind of thing’ as the goods for which the trade mark relied upon by the Opponent was used;5 and

·that a person other than the Applicants has the earlier claim to ownership of the Trade Mark based on use prior to whichever is the earlier of: (a) the application to register; or (b) any actual use of the trade mark by the Applicant.6

1. According to Allen 1, following the execution of the Trade Agreement:

In order to comply with Australian regulations, all information regarding the Products, including ingredients, labels and marketing information, needed to be sent to pharmacists in Australia for review. For this purpose, Robyn liaised and was in contact with:

(a)    … the registration pharmacist used by [the Opponent] in South Africa at that time;

(b)    … [The Opponent’s] graphic designer; and

(c)    … [The Opponent’s] contact at Canterbury Dried Foods, the company from which [the Opponent] bought ingredients for the Products.

…

The  first  order  of  Products  for  Australia  was  sent  in  or  around  October  2013. Annexed and marked DMA-10 is a copy of the invoice for this order.

4 Carnival Cruise Lines Inc. v Sitmar Cruises Limited (1994) 31 IPR 375.

5 Re Hicks’ Trade Mark (1897) 22 VLR 636.

6 Settef SpA v Riv-Oland Marble Co (Vic) Pty Ltd (1987) 10 IPR 402, 413.

1. Annexure DMA-10 to Allen 1 consists of two invoices: dated 25 October 2013 and 4 March 2014 respectively. Both invoices are addressed to Grant Samuel who, according to Allen 2, ‘was a director and shareholder of Media Tag at the relevant time’.

1. Annexure DMA-9 to Allen 1 is declared to be ‘samples of the labels that were created for Products that were to be sold in Australia’. The annexure contains five labels which have a similar overall layout with differing graphics and text depending on the particular product. The example below is typical (‘the Wheat Grass Label’):

1. Certain parts of the label are of particular interest and are enlarged and discussed in turn below:

The Trade Mark does not appear on the Wheat Grass Label; nor does it appear on any of the other sample labels. What does appear is only ‘THE REAL THING’ part of the Trade Mark.

1. The bottom right hand side of the Wheat Grass Label indicates that the goods were made in South Africa. Further, according to Allen 2 the label identifies the Opponent’s MCC Registry number and NAPPI code.

1. The bottom left hand corner of the Wheat Grass Label indicates that the goods were distributed by Media Tag Pty Ltd.

1. Exhibit GM-2 to the Meyerowitz declaration, which forms part of the EIA, is declared to be ‘[p]hotographs of the labels of the goods sold under the Trade Mark in Australia’. GM-2 exhibits a number of labels including the Wheat Grass label.

1. I am satisfied by the evidence before me that goods manufactured by the Opponent and bearing (amongst others) the Wheat Grass label were sold in Australia prior to the Relevant Date and that those sales arose out of the Trade Agreement. I am also satisfied that the labels were used on goods which are the same kind of thing as the Applicants’ Goods. However, I am not satisfied that this constitutes use of the Trade Mark in Australia. The sign ‘THE REAL THING’ appears on the Wheat Grass label as shown above. However, I am not satisfied that this constitutes use of a trade mark that is substantially identical to the Trade Mark. The Trade Mark includes the words ‘ORGANIC SUPPLEMENTS THAT KEEP  IT  REAL’.  Those words are absent  from the sign on the  labels.  This

difference between the two signs is sufficient such that the signs are not identical or substantially identical. I am not satisfied that the Opponent is the owner of the Trade Mark in Australia based on the evidence before me.

1. Exhibit GM-2 to the Meyerowitz declaration also exhibits one label which is significantly different to those provided in Allen 1. That label bears the words ‘THE REAL THING’ in the manner shown below:

For similar reasons I am not satisfied that sales of goods bearing this label constitutes use of the Trade Mark.

1. I am not satisfied that the Opponent (nor the Applicants) used the Trade Mark in Australia prior to the Relevant Date. The Opponent has therefore failed to establish this ground of opposition.

Section 62A – Application made in bad faith

1. In the SGP the ground under s 62A was particularised, in part, as follows:

Robyn Lasarow was formerly employed by the Opponent. Her employment was terminated in or around July 2014.

Further, Robyn Lasarow, was formerly appointed as the Australian distributor of the Opponent’s goods. Ms Lasarow used Media Tag Pty Ltd to distribute the Opponent’s goods in Australia under the Opponent’s marks. The current directors of Media Tag Pty Ltd are Graham Meyerowitz and Mark Lasarow.

The Applicants on longer distribute the Opponent’s goods in Australia.

The Applicants have applied to register the opposed mark for the purpose of causing confusion and deception, appropriating the Opponent’s goodwill and reputation and preventing the Opponent from using its own mark in Australia.

Accordingly, [the Trade Mark] has been filed in bad faith.

1. Section 62A of the Act is reproduced below:

62A Application made in bad faith

The registration of a trade mark may be opposed on the ground that the application was made in bad faith.

1. The  Explanatory  Memorandum  to  the  Trade  Marks  Amendment  Bill  2006

   provided some non-exhaustive examples of applications made in bad faith:

   ·     persons who monitor new property developments, register the names of new developments as trade marks for a number of services and then threaten the property developers with trade mark infringement proceedings unless the developers licence or buy the trade marks;

·     persons who have a history of applying for trade marks that are deliberate misspellings of other registered trade marks;

·     persons who identify trade marks used overseas but with no Australian use as yet who then apply to register the trade marks in Australia for the express purpose of selling them to the overseas owners.

1. The case of Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) (‘Fry Consulting’) is a current leading Australian authority on this section of the Act. In that case, Dodds-Streeton J made the following comments:

   Clearly the court, when considering bad faith, cannot apply a purely subjective test, called by Lord Hutton ‘the Robin Hood test’. The dishonest person or one with low standards cannot be permitted to obtain trade mark registrations in circumstances where a person abiding by a reasonable standard would not. The registration of a trade mark is designed to enable bona fide proprietors to protect their proprietary rights without having to prove unfair trading. Registration is not provided to help those with low moral standards. …

   The words ‘bad faith’ suggest a mental state. Clearly when considering the question of whether an application to register is made in bad faith all the circumstances will be relevant. However the court must decide whether the knowledge of the applicant was such that his decision to apply for registration would be regarded as in bad faith by persons adopting proper standards.7

1. Her Honour continued later in the same decision:

The formulation in United Kingdom authority of bad faith as falling short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in a particular area is, in my view, an apt touchstone. An overly literal application may, however, tend to negate the relevance attributed to the applicant’s mental state in the combined test preferred in Harrison.

Further, in my view, mere negligence, incompetence or a lack of prudence to reasonable  and  experienced  standards  would  not,  in  themselves,  suffice,  as  the

7 Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) [2012] FCA 81, [24]-[26].

concept of bad faith imports conduct which, irrespective of the form it takes, is of an unscrupulous, underhand or unconscientious character.8

1. Allen 1 includes examples of trade marks declared to have been used by the Opponent. Annexure DMA-3, for example, is declared to be screenshots of the Opponent’s website. The screenshots show the Trade Mark prominently in the banner of the top of the pages. The pages bear a 2015 copyright notice. I make the observation that the Agreement Trade Mark (referred to at para 11, above) is substantially identical to the Trade Mark. Ms Lasarow worked for the Opponent for over two years. She worked in a role which would likely have exposed her to many of the trade marks used by the Opponent. I am satisfied that Ms Lasarow was aware of at least the Agreement Trade Mark at the time she executed the trade agreement. I note also that the Applicants have not disputed that Ms Lasarow had knowledge of the Opponent’s trade marks which arose out of her prior relationship with the Opponent.

1. The Applicants have sought to defend this ground on the basis that at the Relevant Date they were the owners of the Trade Mark in Australia. As discussed in connection with the s 58 ground, above, I am not satisfied by the evidence before me that the Applicants have a claim to ownership of the Trade Mark arising out of use of that trade mark prior to the Relevant Date.

1. In Fry Consulting, Dodds-Streeton cited with approval the words of the delegate of the Registrar in William Leith New Century Marquees where it was concluded:

   It is difficult to see how a person who applies to register a mark in his own name which he has previously recognised as the property of a potential overseas principal can be said to be acting in accordance with acceptable standards of commercial behaviour.9

I find those words apposite. While I make no finding in regards to her co-applicants, I am satisfied that Ms Lasarow’s knowledge was such that her decision to apply for registration of the Trade Mark would be regarded as in bad faith by persons adopting proper  standards.  Ms  Lasarow’s  bad  faith  is  sufficient  to  taint  the  application

8 Ibid [165]-[166].

9 Ibid [151].

regardless of whether  or  not bad  faith were to be  found  in connection with her co-applicants. The Opponent has therefore established this ground of opposition.

Decision

1. Section 55 of the Act relevantly provides:

55  Decision

(1)Unless subsection (3) applies to the proceedings, 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.

1. I have found the Opponent has established the ground of opposition it raised pursuant to s 62A of the Act. As the Delegate of the Registrar I accordingly refuse to register the Trade Mark.

Costs

1. The Opponent has sought an award of costs in its favour. I see no reason to depart from the general rule that costs follow the event. As the Opponent has established a ground of opposition, I award costs against the Applicant under s 221 of the Act in line with the amounts in Schedule 8 of the Trade Mark Regulations 1995.

Robert Wilson Hearing Officer

Oppositions and Hearings 29 October 2018