Virgin Australia Airlines Pty Ltd v Regional Express Holdings Limited

[2023] ATMO 31

TRADE MARKS ACT 1995

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

Re:Opposition by Virgin Australia Airlines Pty Ltd to registration of trade mark application number 2131289 (class 39) – ECONOMY X - in the name of Regional Express Holdings Limited.

Delegate:	Nicholas Butson
Representation:	Opponent: Edward Heerey KC from Nigel Bowen Chambers, Caelan Bruce, Lawyer from Gilbert + Tobin Lawyers and Rebecca Walker, Head of Legal at Virgin Australia Airlines Pty Ltd Applicant: Qi Zhang from Baxter Patent Attorneys Pty Ltd
Decision:	2023 ATMO 31 Trade Marks Act 1995 (Cth) – opposition under s 52 – grounds pursued under ss 42, 58, 60, 62A – s 58 established in relation to all services – registration refused.

Background

1. This decision is in respect of an opposition under s 52 of the Trade Marks Act 1995 (Cth) (‘Act’)[1] by Virgin Australia Airlines Pty Ltd (‘Opponent’) to the registration of the following trade mark:

   Trade mark number:   2131289

   Trade mark:               Economy X (‘Trade Mark’)

   Applicant: Regional Express Holdings Limited (‘Applicant’)

   Filing Date:                26 October 2020

   Specification:             Class 39: Air travel services; Air passenger transport services; Arrangement of passenger transport; Arranging of passenger transportation services for others via an online application; Passenger transport; Passenger transportation services (‘Applicant’s Services’)

   [1] Unless otherwise stated, each reference to a regulation below is a reference to a regulation in the Trade Marks Regulations 1995 (Cth) and each reference to a section is a reference to a section of the Trade Marks Act 1995 (Cth).

1. The application for the Trade Mark was accepted for possible registration on the 3 February 2021, with acceptance advertised on 27 March 2021.

2. A Notice of Intention to Oppose was filed by the Opponent on 22 April 2021, followed by a Statement of Grounds and Particulars (‘SGP’) on 20 May 2021. A Notice of Intention to Defend was filed by the Applicant on 14 July 2021.

3. The Opponent filed Evidence in Support on 20 October 2021. Evidence in Answer was filed by the Applicant on 25 January 2022. The Opponent filed Evidence in Reply on 28 March 2022.

4. Following the evidence stages, the parties requested to be heard. Prior to the hearing, both parties filed an outline of written submissions. The Applicant requested to be heard based on its written submissions.

5. As a delegate of the Registrar of Trade Marks, I heard the matter by video conference on 13 February 2023. Edward Heerey KC from Nigel Bowen Chambers, Caelan Bruce, Lawyer from Gilbert + Tobin Lawyers and Rebecca Walker, Head of Legal at the Opponent appeared on behalf of the Opponent. While not in attendance, the Applicant’s written submission were prepared by Qi Zhang from Baxter Patent Attorneys Pty Ltd.

6. I have decided this matter in my role as delegate of the Registrar of Trade Marks.

Evidence

Opponent

1. The evidence comprises of:

• Declaration by Jane Davies (Senior Legal Counsel at the Opponent), made on 20 October 2021 with Exhibits JD-1 to JD-15 (‘First Davies Declaration’).

• Declaration by Jane Davies, made on 28 March 2022 with Exhibits JD-16 to JD-24 (‘Second Davies Declaration’).

1. The First Davies Declaration details the history of the Opponent as an Australian-based airline, being part of the Virgin Australia Group and one of the largest domestic airlines in Australia with a substantial market share.

2. The First Davies Declaration provides information on the creation of the brand ‘Economy X’ by the Opponent in 2016 and the subsequent launch of marketing and sales in relation to the brand through February 2017 to March 2017. Examples are provided of marketing campaigns, as well as a variety of media reports on the brand from late March 2017. A variety of other evidence is also provided of the brand demonstrating use in emails to subscribers, promotional flyers, brochures, online and television campaigns, on the Opponent’s website, as well as celebrity and sport sponsorships. The declaration further details the success of the services and marketing campaigns, including supporting reviews from the public, media articles and industry awards.

3. The First Davies Declaration also provides information on the business interactions of the parties. Ms Davies states that in late 2020 the Opponent reduced its number of aircraft due to the impacts and restrictions of Covid-19. Some of the aircraft removed from its service included leased aircraft which were outfitted in the Opponent’s livery. It is declared that the Applicant or a related body corporate of the Applicant took delivery of these aircraft. Evidence is provided of the Chief Executive Officer of the Applicant stating that the aircraft ‘would be painted in Rex livery at the airline’s Wagga Wagga depot but the interior would remain largely the same’.

4. Ms Davies declares that it appears that the Applicant updated some of the interior aircraft cabin features, however, left the Economy X branding. The declaration states that shortly after the Applicant or a related body corporate took delivery of the aircraft on 26 October 2020, the Applicant applied to register the Trade Mark. Ms Davies declares that the Applicant or any related body corporate did not have permission to use the Opponent’s branding, and that the Opponent has a reputation due to its prior use in the brand, which the Applicant would have been aware of at the time they sought registration.

5. The Second Davies Declaration includes more specific details relating to the evidence of use provided in the First Davies Declaration, as well as providing additional examples. Ms Davies provides information in relation to the creation of the brand and confidential figures in relation to marketing campaigns and sales data. Information is also provided in relation to the ownership and members of the Opponent’s corporate group.

Applicant

1. The evidence comprises of:

• Declaration by Qi Zhang (Trade Mark Attorney of Baxter IP Patent & Trade Mark Attorneys), made on 25 January 2022 with Exhibits 001 to 015 (‘Zhang Declaration’).

1. The Zhang Declaration includes statements in the nature of submissions, rather than evidence. Such statements will be treated as submissions for the purpose of this decision.

2. The Zhang Declaration refutes a variety of the evidence supplied in the First Davies Declaration including when and where the Trade Mark was used. In Mr Zhang’s opinion some of the examples provided in the First Davies Declaration do not constitute use as a trade mark, but would instead be seen descriptively as a class of service or ‘seat class’. Evidence is provided in support of this view, including a website dated 2016, showing that Qantas uses the letter ‘X’ as the class code for flight rewards/award bookings in economy class.

3. Mr Zhang disputes the ownership of the brand ‘Economy X’. Exhibit 005 to the Zhang Declaration consists of  terms of use from the website In Mr Zhang’s opinion, the terms of use are vague in relation to who owns the intellectual property rights appearing on that website, whether it be the Opponent or another member of its corporate group. Mr Zhang also declares that the Opponent was sold to another party in 2020, asserting that even if the brand was a trade mark owned by the Opponent, it was an unregistered trade mark at that point in time and ownership would have been transferred to the other party through the business deal as part of the goodwill of the Opponent.

4. Mr Zhang also declares that the evidence provided by the Opponent does not demonstrate a reputation in relation to the brand. This includes further statements that the brand would not be seen as a trade mark due to the descriptive nature of its use in the Opponent’s evidence, but also due to its close proximity to the Virgin Australia house brand or other trade marks. Mr Zhang declares that these other brands would be seen as the trade mark or badge of origin, rather than the term ‘Economy X’. Mr Zhang states that a number of the exhibits provided by the Opponent are of internal plans for marketing campaigns, rather than demonstrating actual marketplace use.

5. Furthermore, Mr Zhang states that in his opinion, the Opponent was not and is not the owner of, and does not have a reputation in the Trade Mark, and the application for the Trade Mark was not made in bad faith.

Grounds of Opposition, Onus and Relevant Date

1. The grounds of opposition nominated in the SGP were ss 42, 58, 60 and 62A. The Opponent bears the onus of establishing one or more of the grounds of opposition.[2] The required standard of proof is on the balance of probabilities.[3]

   [2] Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58, [32] (Keane CJ, Stone and Jagot JJ).

   [3] Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [133] (Besanko, Jagot and Edelman JJ).

2. The date at which the rights of the parties are to be determined is 26 October 2020 (‘Relevant Date’) being both the filing and priority date of the Trade Mark.

Discussion and Reasons

Section 58

1. Section 58 provides:

   The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.

2. The term ‘owner’ is not defined in the Act. However, it is well established that in the absence of fraud, the original owner of a trade mark is the person who first uses it in Australia, or first files a trade mark application for it in Australia, whichever is earlier.

3. To succeed under this ground of opposition, the Opponent must establish that:

1. the trade mark relied upon by the Opponent is identical or substantially identical with the Trade Mark;[4]

2. the Applicant’s Services are the ‘same kind of thing’ as the services for which the trade mark relied upon by the Opponent has been used;[5] and

3. a person (other than the Applicant) has the earlier claim to ownership based on use, of the trade mark relied upon by the Opponent, prior to the application to register the Trade Mark or any actual use of the Trade Mark (whichever is the earlier).[6]

i. The trade mark relied upon by the Opponent is identical or substantially identical with the Trade Mark

[4] Carnival Cruise Lines Inc v Sitmar Cruises Limited [1994] FCA 936, [62] (Gummow J).

[5] Re Hick’s Trade Mark (1897) 22 VLR 636, 640 (Holroyd J).

[6] Settef SpA v Riv-Oland Marvle Co (Vic) Pty Ltd (1987) 10 IPR 402, 413 (McGarvie J).

1. The Opponent relies upon its use of the brand ‘Economy X’ as the basis for this ground of opposition. The Applicant does not contest that the brand used by the Opponent is substantially identical to the Trade Mark. Rather, the Applicant submits that the Opponent is not using ‘Economy X’ as a trade mark.

2. Use as a trade mark has relevantly been defined as use of a sign that distinguishes the services of the user from those of other persons or traders, that is, to act as a ‘badge of origin’.[7] Whether ‘Economy X’ would be viewed descriptively needs to be considered, as does the context of the use in the Opponent’s evidence to determine whether a sign is being used as a trade mark or for some other purpose.[8]

   [7] Coca-Cola Co v All-Fect Distributors Ltd [1999] FCA 1721, [19] (Black CJ, Sundberg and Finkelstein JJ).

   [8] Aldi Stores Ltd Partnership v Frito-Lay Trading Company GmbH [2001] FCA 1874, [30] (Hill J).

3. The evidence provided by the Opponent demonstrates use of the words ‘Economy X’ to designate a class of service, differing from more established classes that appear to be more commonly used in travel industries, such as economy, commercial, business class and so forth. ‘Economy X’ is described in the Opponent’s evidence, to include a service class with additional leg and body room and additional benefits such as priority boarding and storage.

4. Whilst the term ‘Economy’ has an obvious descriptive meaning due to its common usage indicating a cheaper class of seat or service in the travel industry, I do not think the use of the word in combination with the letter ‘X’ creates a term with an overall descriptive meaning. ‘Economy X’ would undoubtably allude to relating somehow to economy class, but I do not think there would be any kind of certainty as to the meaning among customers of airline services.

5. The Applicant also submits that the term ‘Economy X’ would be viewed descriptively, rather than as a trade mark, because other traders use the letter X to designate ‘service classes’ or ‘class codes’. Evidence is provided of an article from a travel website explaining to the general public that class codes can be searched to check whether a particular flight has that service class available.  The article includes a table of codes used by Qantas to designate which services are available on flights. The table can be seen below:

1. The article effectively explains that you would be able to tell if ‘Classic Flight Rewards (Economy)’ seats were available on this airlines flights, if X was present in a result from the search. In my opinion, this information appears to be rather specific to that airline and technical, rather than common knowledge. Nor does it show descriptive use of the term ‘Economy X’ together. I am not persuaded that this evidence demonstrates a descriptive meaning is likely to be taken away of the term by consumers of such travel services.

2. Furthermore, I note that a s 41 ground for rejection was not raised in respect of the Trade Mark, which is identical to the Opponent’s ‘Economy X’ brand and is in respect of the same services.  

3. The context of use in the evidence provided by the Opponent, further demonstrates that it would be viewed as a trade mark. The brand is shown to be used in media reports, on the seats themselves in the aircraft, in email advertisements and more. In these examples, ‘Economy X’ is being used prominently as a badge of origin, to represent a class of service provided by the Opponent. Below I have included a few of the many examples of such use provided in the Opponent’s evidence:

A report from the website reporting on the announcement of the Economy X service.

Advertising in an email in 2018.

1. The Applicant has also submitted that because other trade marks, such as Virgin Australia have been used in relatively close proximity, that ‘Economy X’ would be viewed descriptively, rather than as a trade mark by consumers. I do not find this submission persuasive. It is normal business practice for traders to have multiple trade marks for different aspects of their goods or services. In my view, Virgin Australia is clearly acting as a ‘house brand’, but I do not agree this would deter consumers from also viewing ‘Economy X’ as a badge of origin in relation to a service class on its airline services. Furthermore, as seen in the above examples, ‘Economy X’ often appears by itself, or is somewhat separated from the other trade marks.

2. In considering all of the above, I find in at least a majority of the examples of use provided by the Opponent of the term ‘Economy X’, that it would be viewed as a badge of origin by consumers and as such, amounts to trade mark use.

3. I therefore find the evidence provided by the Opponent clearly demonstrates reliance upon an identical trade mark (‘Common Law Trade Mark’). As such, this element is made out.

ii. The Applicant’s Services are the ‘same kind of thing’ as the services for which the trade mark relied upon by the Opponent has been used

1. My second consideration is whether the services are the ‘same kind of thing’. The Applicant’s Services include a variety of air travel or transport services. The Opponent’s evidence demonstrates use of the Common Law Trade Mark in relation to air travel and transport services (‘Opponent’s Services’).In my opinion, these services fall within the wording of each and all of the broad claims in the Applicant’s Services. While the broad claims in the Applicant’s Services may include other services, any attempt by me to differentiate between the Opponent’s Services and the full range of services covered in the Applicant’s broad claims would be arbitrary.[9]

iii. A person (other than the Applicant) has the earlier claim to ownership based on use, of the trade mark relied upon by the Opponent, prior to the application to register the Trade Mark or any actual use of the Trade Mark (whichever is the earlier)

[9] Body Tease v D & Y International [2002] ATMO 102 (Hearing Officer Skivington).

1. Ownership of a trade mark can be established through authorship and use of a trade mark,[10] or, in the absence of use, a combination of authorship, the filing of an application with an intention to use the trade mark.[11] Authorship of a trade mark in respect of particular goods or services, depends not on conception of the trade mark, but on adoption of the mark with an intention to use it on relevant goods and services in Australia specifically.[12]

   [10] Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) [1984] HCA 73, [21] (Deane J); Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58, [49], [55] (Keane CJ, Stone and Jagot JJ).

   [11] Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83, [50] (Greenwood, Jagot and Beach JJ); Shell Co of Australia Ltd v Rohm and Haas Co (1948) 78 CLR 601, 627 (Dixon J).

   [12] Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd [2018] FCAFC 6, [48] (Nicholas, Yates and Beach JJ).

2. The Opponent asserts that it used the Common Law Trade Mark in Australia before the Relevant Date (noting that the Applicant has not provided any indication of when it began using the Trade Mark). In my opinion the evidence clearly establishes use of the Common Law Trade Mark from 2017 in relation to the Opponent’s Services. The Applicant contends that some of the use provided by the Opponent may be internal, for example documentation on proposed marketing campaigns rather than real commercial use. Regardless I am satisfied there are sufficient examples of use of the Common Law Trade Mark in the marketplace dated before the Relevant Date. As I have previously discussed, there are multiple dated media articles reporting on the announcement of the service, demonstrating use of the Common Law Trade Mark from as early as 30 March 2017. Confidential evidence has also been provided in relation to sales of tickets/services to customers provided in relation to the Common Law Trade Mark from 2017 up to the Relevant Date, as well as information on web pages visited by consumers.

3. I briefly note, the Applicant also questions who authored the Common Law Trade Mark and who the use is by, whether it is the Opponent or one of its subsidiaries or related companies. The Applicant has also submitted there were some changes in ownership of the Opponent at some point over the last few years which may have affected the ownership of the Common Law Trade Mark.  Regardless, this ground does not require the Opponent to establish that it is the owner, merely that there is an earlier claim to ownership based on use by someone other than the Applicant.

4. I therefore find that the evidence establishes that a person (other than the Applicant) has an earlier claim to ownership of the Trade Mark based on the aforementioned use.

Conclusion

1. The Opponent has established that a person other than the Applicant has an earlier claim to ownership of an identical trade mark in respect of the ‘same kind of thing’ as the Applicant’s Services. The elements of the ground are therefore made out and s 58 is established.

2. Having found in favour of the Opponent under s 58, there is no need to discuss the other grounds set out in the SGP. However, all the grounds of opposition may be relied on in the event of an appeal from this decision.

Decision and Costs

1. Section 55(1) 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.

1. The Opponent has established the ground of opposition under s 58.

2. As a delegate of the Registrar, I accordingly refuse to register the Trade Mark. I direct that the refusal be recorded one month from the date of this decision. Should the Registrar be served with a notice of appeal before then, refusal of the Trade Mark shall not occur until the appeal has been decided or discontinued. Any disposition of the application should of course be in accordance with the court’s orders or direction.

3. Both parties have sought costs. It is usual for costs to follow the event, and I see no reason to depart from that principle. I award costs against the Applicant under s 221, in accordance with the amounts detailed in sch 8 of the Trade Marks Regulations 1995 (Cth).

Nicholas Butson
Hearing Officer
Delegate of the Registrar of Trade Marks
6 March 2023