The Shoe Studio Group Limited v Wittner's Australia Pty Ltd

TRADE MARKS ACT 1995

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

Re:Opposition by The Shoe Studio Group Limited to registration of trade mark application 926088(25) - BERTIE - filed in the name of Wittner's Australia Pty Ltd.

Delegate:

Alison Windsor

Representation:

Opponent: Simon Kneebone of Banki Haddock Fiora, lawyers

Applicant: Jurgen Bebber of Griffith Hack, patent and trade mark attorneys.

Decision:

2007 ATMO 77

S52 opposition: grounds under sections 58, 60 and 62(b) not established. Opposition not established. Costs awarded against opponent.

Background

Wittner’s Australia Pty Ltd (“the applicant”) filed an application to register a trade mark in class 25 for “footwear”. The application was filed on 5 September 2002, and consisted of the word BERTIE in a particular font as shown below:

The application was examined in the normal course of events, and on 18 March 2004 was advertised as accepted for possible registration. On 16 June 2004, within the three months allowed for the purpose, The Shoe Studio Group Limited (“the opponent”) filed a notice of opposition. The service of evidence in support, in answer and in reply was completed by 22 March 2006 and on 12 April 2006 the opponent requested a hearing.
The matter came before me as a delegate of the Registrar in Canberra on 25 May 2007. The opponent was represented by Simon Kneebone of Banki Haddock Fiora, Lawyers of Sydney. The applicant was represented by Jurgen Bebber of Griffith Hack, Patent & Trade Mark Attorneys of Melbourne. Messrs David and Michael Wittner of the applicant company also attended.

Notice of opposition

The notice of opposition nominated grounds under sections 41, 42(b), 43, 58, 59, 60 and 62(b) of the Trade Marks Act 1995 (“the Act”). At the hearing the opponent specified that it would be relying only on the grounds under sections 58, 60 and 62(b). For completeness, I find that the opposition in respect of the remaining grounds has not been established.

Onus

In an opposition, the onus is on the opponent to establish grounds of opposition. In order to be successful, the opponent needs only to establish a single ground, and that ground needs only to be established on the balance of probabilities.[1]
[1] Pfizer Products Inc v Karam (2006) 70 IPR 599

Evidence

The evidence submitted in this matter is shown in the following table:

Declarant	Relationship	Date Made	Exhibits
Evidence in support
Donald McCarthy	Chief Executive Officer	5 October 2004	DM1 to DM5
Grainne Brunsdon	Individual	30 November 2004	Nil
Amy Stewart	Individual	30 November 2004	Nil
Korina Lok Yee Hui	Solicitor of Banki Haddock Fiora	2 December 2004	KLYH1 to KLYH2
Evidence in Answer
Michael Wittner	Director	14 June 2006	MW-1 to MW-3
Evidence in reply
Donald McCarthy	Chief Executive Officer	7 March 2006	Annexures 1 and 2

Evidence in support

The evidence in support refers to the opponent’s footwear business and trade mark registrations in the United Kingdom (“UK”), with some reference to registrations and applications in other countries, including an application in Australia.[2] At the time the declaration was made, the opponent had 224 shoe shops in the UK, a further seven in the Republic of Ireland and 2 more in the Channel Islands. Sales figures over a number of years total several hundreds of millions of Australian dollars. The figures, however, are not split to show what proportion of these very significant sales could be apportioned to the BERTIE branded goods. The opponent claims use of the trade mark BERTIE since the early 1990s, and use in the form applied for by the applicant since 1997.
[2] Application 968615, filed 4 September 2003, in classes 18 and 25.
The declaration then goes into a discussion of the likelihood of Australian customers being familiar with the brand because of the frequency of travel between the UK and Australia, and the level of migration one country to another. This is also the content of the Hui declaration. The Brunsdon and Stewart declarations are from two English migrants who attest to knowledge of the opponent’s BERTIE brand from exposure to it in England.
A significant proportion of the declaration is a discussion of contacts between the two parties to this opposition. I will deal with this matter in detail later in this decision.

Evidence in answer

Michael Wittner states that the applicant company was founded in 1913 and has operated continuously in Australia from that date as a retailer of footwear. The company currently has 35 retail stores situated in Victoria, New South Wales and Queensland, selling footwear under a number of different brands. Since 1987 it has also sold footwear via its website. Annual sales are significant, though not in the same range as that of the opponent.[3]
[3] A direct comparison of sales figures is not relevant here because of the difference in the size of the markets each business serves, namely the UK and Australia.
The declaration attests to use of the trade mark BERTIE in Australia since early 2003. While the initial order from the manufacturer in China was in excess of 6000 pairs, at an average price of approximately $100 per pair, the applicant gives no indication of the proportion of its total sales over time which can be attributed to the BERTIE brand.
The remainder of the declaration refers to the previously mentioned failed business connection between the two parties, and a degree of opinion about the opponent’s business.

Evidence in reply

This declaration consists largely of Mr McCarthy’s opinion on various matters, and attempts to refute claims made in the evidence in answer. I shall deal with any relevant portions as required during my discussions.

Submissions, the law and comments

The opponent’s evidence and its submissions at the hearing provided support for grounds under section 58, 60 and subsection 62(b).

Section 58 – applicant not owner of the trade mark.

The legislation here allows:
58. The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.
This ground of opposition places an onus on the opponent to direct me to a trade mark that meets the following:
- it is either identical with, or at least substantially identical with, the opposed trade mark
- that has been used commercially in Australia on the “same kind of thing”
- by a person (other than the applicant)
- who has the earlier claim to ownership based on use prior to both the present application to register and to the earliest actual use of the trade mark by the applicant. (Carnival Cruise Lines Inc. v Sitmar Cruises Ltd (1994) 31 IPR 375 (FC), Hicks’s Trade Mark (1897) 22 VLR 636, Settef S.p.A. v Riv-Oland Marble Co (Vic) Pty Ltd 10 IPR 402).
There is no question that the two parties to this opposition are both claiming the same trade mark, and both are using the trade mark on the same goods, namely footwear. The remaining question is whether the opponent is able to substantiate its claim to have the right to the trade mark under common law, based on prior use in terms as above.
The opponent submitted that the applicant is not the true owner of the trade mark BERTIE, but has misappropriated a trade mark owned by the opponent. It says there had been an association between the applicant and the opponent prior to the filing date of the application, and therefore the applicant owed a duty to the opponent not to misappropriate the BERTIE trade mark in Australia. It is appropriate here to discuss this particular matter in detail, as the parties are not in total agreement about what occurred between them, and it is material to the matter of ownership.
Both parties do agree that there was contact between Mr Michael Wittner and the opponent company at some time in the 1990s. Mr Wittner describes the contact as follows (para 8 et seq of the Wittner declaration):
At some time in the late 1990s, I meet [sic] Mr McCarthy at the GDS trade fair in Europe. During the course of the meeting Mr McCarthy mentioned that he was interested in my ideas relative to the growing trend toward casual footwear in the direction of the sports/fashion athlesa [sic].[4] I offered at that meeting to present a range of sports casuals to him branded with a sport BERTIE label for the UK market.
In order to facilitate this change, I recommended that some work on the brand for the UK market be undertaken by our advertising agency, Paper Stone Scissors and provided Mr McCarthy with an estimate of the costs of that work. Mr McCarthy agreed to pay for this work and was comfortable with the cost estimate I verbally advised him of.
With his agreement, I subsequently commissioned Paper Stone Scissors, and the advertising agency prepared a marketing proposal for the UK market which I passed on to Mr McCarthy. I paid the advertising agency for its work. When I discussed the issue of re-imbursement of costs with Mr McCarthy, he indicated in no uncertain terms that he did not propose to honour our agreement to reimburse Wittner’s for the costs we had incurred as he did not like the work done by the agency. In the circumstance, I concluded that there was no point issuing an invoice and decided not to further pursue a working relationship with Mr McCarthy.
[4] I have been unable to ascertain a meaning for this word, but assume is either a typographical error or it refers to athletic type shoes of some kind.
Mr McCarthy sees thing differently. Annexure 4 to the first McCarthy declaration is a copy of a letter from the opponent’s trade mark attorneys to the applicant following discovery of applicant’s attempt to register the BERTIE trade mark. The letter noted the opponent’s view that there was no commercial relationship between the two companies, expressed a belief that the applicant was not using the BERTIE trade mark and requested a comprehensive explanation of the applicant’s reasons for seeking to register the opponent’s trade mark.
In response, Mr David Wittner, chairman of the applicant company responded thus:
We confirm that we registered the mark in order to use it in Australasia and have in fact used it.
Mr Michael Wittner has had an association with your client, the Shoe studio Group and in discussion some years ago with Mr Don McCarthy, was invited to consult with the advertising agency we were then using to re-design the logo and branding of the line.
The costs associated with this project were not met by your client, and as a result we started to use the brand as a supplement to the other trade marks noted by you. It is incorrect to state that we have not made use of the ‘Bertie’ trade mark.
The first paragraph on the second page of your letter seeks an explanation as to why we would register a trade mark like ‘Bertie’. The answer is quite simple. We registered it because we believed it would enhance our other registered brands from a marketing viewpoint, and because neither your client, nor anyone else has otherwise reserved it.
We have, at this time, plans to use the mark in Australasia as a stand alone retail concept.
Having said this, we have enjoyed a good relationship with your client over the years, and do not wish to weaken it. For this reason, we would consider the assignment of the brand to your client for a reasonable consideration, and we invite your clients consideration of this if there is any wish to persue [sic] this matter further.
Mr McCarthy’s view of the relationship between the companies is set out in paragraphs 8 and 9 of his first declaration:
The true situation is not as painted by Mr David Wittner, but is in fact as follows: some years ago, I did, indeed, have a discussion with Mr Michael Wittner of Wittner’s Australia Pty Ltd. Mr Michael Wittner had found a source of sports shoes in the People’s Republic of China and intend [sic] to arrange for those sports shoes to be imported into Australia branded with one of Wittner’s Australia Pty Ltd’s trade marks. We discussed Mr Wittner arranging for a further supply of the same sports shoes from the People’s Republic of China to be branded with my Company’s BERTIE trade mark, so that the BERTIE-branded sports shoes from China could be shipped directly to the United Kingdom for sale in the United Kingdom by my Company. In connection with that proposal, I sent samples of my Company’s stylized BERTIE trade mark to Mr Wittner. In the end, nothing came of the proposals. No BERTIE-branded sports shoes emanated from China as a result of the proposal, and, so far as I was concerned, any possibility of involvement with or association with Mr Michael Wittner or with Wittner’s Australia Pty Ltd ceased to exist, if indeed it had ever existed. At no time did I authorise Mr Michael Wittner or anyone else within Wittner’s Australia Pty Ltd to use my Company’s BERTIE trade mark for its own purposes. My Company has never consented to the use or registration of my Company’s BERTIE trade mark by Wittner’s Australia Pty Ltd.
…At no time has Wittner’s Australia Pty Ltd ever sought to render an invoice to my Company in connection with the “costs associated with this project”, nor did Wittner’s Australia Pty Ltd ever ask my Company to pay for any such costs. In any event, however, it clearly cannot be right, irrespective of whether or not design costs had or had not been paid, that Wittner’s Australia Pty Ltd thereby acquired rights to my Company’s trade mark in Australia.
It is clear that at some time in the 1990s, Michael Wittner and Donald McCarthy did discuss the sourcing of some footwear from China to which the trade mark BERTIE could be applied. Nothing else about the matter is clear at all, except that there does not appear to ever have been a formal financial agreement between the companies and that Mr Wittner was well aware that the opponent owned the BERTIE trade mark, at least in the UK. While the opponent appears to believe that there may have been a moral obligation for the applicant to act differently, there does not seem to be any other duty implied by the contacts between the two companies.
The applicant was quite prepared to admit that its assumption of the trade mark might well be seen as “sharp business practice”, and in support of that admission provided the following quotation from the Yanx case[5], where Williams J said at p 506:
To try and register in Australia a word which the applicant, to the knowledge of the respondent is using elsewhere on its cigarettes, is sharp business practice. But it is not in itself fraudulent or a breach of the law. The two companies were competitors in business and there were no agreements or business arrangements between them which prevented the one company outwitting the other if it could lawfully do so.
[5] Amalgamated Tobacco Corporation Ltd (1951) 1B IPR 504
However, whether or not the applicant has indulged in some sharp business practice is beside the point. Before the opponent can establish the ground of opposition under section 58, it needs to substantiate that it had first use of the trade mark in Australia, and therefore has ownership of it.
As noted above, the opponent has over 200 sales outlets in the UK. However, the evidence provided does not refer to a single sales outlet in Australia, nor does it give any information about availability of the goods or even advertisement of the goods in Australia. There is reference to the opponent’s website, and a copy of the front page of that website is appended to the first McCarthy declaration. This screen shot clearly shows the BERTIE trade mark. But that is as far as it goes. There is no indication that shoes are available to Australian customers unless they actually travel to the UK and buy them there, or else purchase them via an on-line service such as e-bay®.

Both parties provided various examples of internet searches as part of their evidence. The applicant’s internet searches were quite restricted, one being specifically for brand names for “athletic shoes” and the other brand names for “boots”. Neither search found the trade mark BERTIE as the trade mark for either the applicant’s or the opponent’s footwear.
The opponent’s searches, on the other hand, did find the trade mark on the internet. The first search, a search for “women’s footwear” in general found one instance of the trade mark BERTIE in a reference to the opponent’s business. A search for the word BERTIE on the e-bay® auction site found a significant number of references.
It is clear from these references that the opponent’s goods are being sold on e-bay® and that the goods may be available to Australian customers via this route. However, this availability is not a result of any of the opponent’s actions. The goods are generally second-hand, and are sold by a variety of individuals. In addition, the e-bay® records provided are recent records, being well after the applicant’s filing date, and it is impossible to determine whether the eventual buyer would assume the goods belong to the applicant or to the opponent.
There is thus nothing before me to demonstrate that the opponent has had any use at all of its trade mark in Australia prior to the relevant date, 5 September 2002. Without that indication of use, the opponent is unable to effectively claim ownership of the trade mark in Australia. There is also no apparent common law impediment that would have prevented the applicant from making the application. The ground under section 58 has not been established.

Section 60 – trade mark similar to one with a reputation in Australia

Section 60 requires the opponent to establish the following elements:
As noted previously, the trade marks are identical. What remains to be decided is whether the opponent’s trade mark has a reputation in Australia, and whether, because of the extent of that registration, the applicant’s use of its trade mark in the market in Australia would result in deception or confusion.
The opponent submitted that its trade mark had a significant reputation within the UK, a reputation dating from well before the relevant date, 5 September 2002. Given the information provided to me, I am prepared to accept that this is most likely the case. However, when it comes to whether that reputation spills over into the Australian market, I do not consider the situation to be as clear.
Much of the evidence provided in support of the opponent’s case refers to figures relating to the movement of people between the UK and Australia. The opponent submitted that this information has been provided to support the case that a significant number of people will have been exposed to the opponent’s trade mark in the UK, and thence will carry that knowledge back to Australia, in effect spilling the UK reputation over into the Australian market. In support of this contention, two declarations were provided from individuals who had emigrated to Australia recently, and who had knowledge of the opponent’s trade mark before they left England.
The opponent submitted that its evidence clearly showed that visitors or immigrants to Australia before the priority date of the application had been exposed to its trade mark in the UK. It said the evidence of a significant reputation in the UK, long standing use and extensive advertisement of the trade mark, along with the number of visitors between the two countries, attested to the trade mark being known in Australia by a “sufficiently significant section of the public before the priority date of the application”.

However, the raw travel figures and declarations from only two persons familiar with the trade mark are scarcely sufficient to attest to a spill-over reputation. This is made clear by the words of Lockhart J in Conagra Inc v McCain Foods (Aust) Pty Ltd [1992] 23 IPR 193 (at 238-39), which the opponent quoted in its submissions:
Before turning to the second form of evidence, brief reference should be made to evidence led at the trial by the appellant of statistics showing the movement of people between Australia and the United States. The number of persons who departed Australia to go to the United States in the financial year 1989-90 was 534,010. Of that number only 2,223 were Australian residents departing permanently, 257,171 were short term visitors who were departing, 110 were long term visitors departing and 234,603 were Australian residents departing for a short term. Evidence was also given of the frequent airline traffic between Australia and the United States. His Honour was asked to infer that there was a substantial number of people who travelled between Australia and the United States and that those persons would have been exposed to advertising in the United States of the appellant's "Healthy Choice" product and would have seen the product itself on shelves in that country.
Evidence of this kind has considerable difficulty, it seems to me, as proof of reputation. It is not possible to assess how many travellers on short visits to the United States would have watched television either at all or at the times of the appellant's advertising, or would have visited shops or supermarkets, whether in the frozen food section or elsewhere. One does not know how many of the travellers would have been interested in the appellant's product itself, especially as it was not available for sale in Australia. Also the theme of the appellant's advertising stressing health was not unique to it because the evidence shows that competitive food products in the United States also used the advertising theme of "healthy product - low in fat, low in sodium, low in cholesterol".
With respect to travellers to Australia from the United States, whether as long or short term visitors, there was no evidence as to the extent to which such people were or were likely to be buyers of frozen food products including, in particular, dinners in the United States or likely to be aware of the appellant's Healthy Choice products. Nor was there evidence of whether such people were or were likely to be the purchasers of frozen dinners in Australia during their visit here. The most that one could conclude from this evidence, in my opinion, would be that some of the persons departing Australia for the United States or departing the United States for Australia, whether for short or long term visits, would be aware of the appellant's frozen food products, but whether it would be a small or large number of the travellers is virtually impossible to assess. While some assistance to the appellant's case is given by the evidence that the appellant's frozen food products were generally well known in the United States amongst a substantial percentage of the population (47%) and in particular among the buyers of frozen food dinners at the premium end of the market (about 68%), it seems to me, at the end of the day, that the statistics of travel of persons between the two countries is a rather flimsy twig on which to support evidence of reputation of a truly worthwhile kind.
I agree with Justice Lockhart that the travel statistics are “a rather flimsy twig” on which the opponent is attempting to support its case for spill-over reputation in Australia. Even the e-bay® sales mentioned previously do not serve to demonstrate that a significant proportion of the Australian footwear market will necessarily be aware of the opponent’s trade mark, as these sales are not made under the aegis of the opponent company itself. A reputation in the UK and parts of Europe, without more, is insufficient to prove a reputation within the Australian market. I am therefore satisfied that there is unlikely to be significant deception or confusion in the Australian footwear market based on use by the applicant of the BERTIE trade mark. The ground under section 60 has thus not been established.

Section 62(b) – representations false in material particulars

Section 62 relevantly reads:
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.
The opponent submitted that the applicant made misrepresentations to the Registrar in claiming that it was the owner of the trade mark when it filed the application for registration in its own name. These representations were false, the opponent said, because the applicant was well aware that the opponent was the true owner of the trade mark. Therefore it submitted, the Registrar accepted the application for registration on the basis of representations that were false in material particulars, namely that the applicant’s claim to ownership of the trade mark BERTIE was a wrongful claim.
Paragraph 27(1)(a) impacts on the opponent’s claim in this regard. This reads:

Application—how made

27.(1) A person may apply for the registration of a trade mark in respect of goods and/or services if:
(a) the person claims to be the owner of the trade mark; …

Thus, a person who ‘claims to be the owner’ by means of an application does not actually make a false representation at all – merely a claim that is tested elsewhere in terms of section 58. I have already found that the opponent has not established the ground of opposition under section 58, that is, in Australia the opponent is not the owner of the trade mark. Accordingly, this ground of opposition cannot be established.

Decision

The opponent has not established any of the grounds of opposition it pursued at the hearing. Application 926088 may therefore proceed to registration one month from of the date of this decision. If the Registrar is notified of an appeal before that time, I direct that, unless the appeal is discontinued, the disposition of the application be in accordance with any direction or order of the Court.

Costs

The applicant has been successful, and is thus entitled to its costs. I award costs against the opponent according to the official scale.

Alison Windsor

Hearing Officer

Trade Marks Hearings

21 November 2007

[2007] ATMO 77

21 November 2007

Key Legal Topics

Areas of Law

Commercial Law

Contract Law

Civil Procedure

Legal Concepts

Breach

Damages

Remedies

Contract Formation

Offer and Acceptance