Wheel Pros LLC v KMC Chain Industrial Co Ltd

[2018] ATMO 88

TRADE MARKS ACT 1995

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

Re:Opposition by Wheel Pros, LLC to registration of trade mark application 1625626 (12) – KMC (Fancy) - filed in the name of KMC Chain Industrial Co., Ltd

Delegate:

Nicholas Smith

Decision on the Written Record

Decision:

2018 ATMO 88

Trade Marks Act 1995 (Cth) - Section 52 opposition: ss 42(b) and 60 considered – neither established – trade mark to proceed to registration

Background

1.  This is an opposition brought by Wheel Pros, LLC (‘Opponent’) pursuant to s 52 of the Trade Marks Act 1995 (Cth) (‘Act’) to the registration of the trade mark which is the subject of the application detailed below in the name of of KMC Chain Industrial Co., Ltd (‘Applicant’): 

Application Number:

1625626

Filing Date:

29 May 2014

Goods:

Class 12: Bicycle chains

(‘Applicant’s Goods’)

Trade Mark:

(‘Trade Mark’)

2.  Following the advertisement on 10 March 2016 in the Australian Official Journal of Trade Marks of the application’s acceptance for possible registration, the Opponent filed a Notice of Intention to Oppose on 9 May 2016.  The Opponent then filed a Statement of Grounds and Particulars (‘SGP’) on 9 June 2016. The SGP raised grounds of opposition under ss 42(b), 60 and 62A of the Act. The Applicant filed a Notice of Intention to Defend on 21 July 2016.

Evidence

3.  The Opponent filed Evidence in Support of its opposition (‘EIS’) on 28 October 2016.  This evidence consists of a declaration made on 28 October 2016 by Mark Andrew Williams, Managing Associate of the Opponent’s representatives Allens Patent & Trade Mark Attorneys, with Exhibits MAW-1 to MAW-16 and Confidential Exhibit MAW-4 (‘Williams Declaration’).

4.  The Applicant filed Evidence in Answer (‘EIA’) on 6 February 2017.  This evidence consists of a declaration made on 6 February 2017 by Cheryl Hrvoj, legal practitioner employed by the Applicant’s representatives Davies Collison Cave Pty Ltd, with Exhibits CH-1 to CH-8 (‘Hrvoj Declaration’).  The Opponent chose not to file any evidence in reply.

5.  Once the time allowed for filing evidence had ended the parties were given an opportunity to request a hearing or to file written submissions.  Neither party chose to avail themselves of these opportunities at that time.  By letter issuing from IP Australia on 7 June 2017 the parties were notified that as neither party had requested a hearing the matter would be given to a delegate of the Registrar for a decision based on the written record.  The letter indicated that the parties had one month from the date of the letter to file any written submissions they wished to reply upon.  The Opponent filed written submissions on 23 June 2017 (‘Opponent’s Submissions’).  The Applicant did not file any submissions. 

6. I am a delegate of the Registrar of Trade Marks and I am to decide the opposition as required by s 55 of the Act which provides that, unless the proceedings are discontinued, dismissed, or have lapsed under s 54A the Registrar must, at the end, decide on the basis of the written record, comprised of the materials mentioned in the preceding paragraphs:

(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.

The Opponent

7.  The Opponent is a US company that sells after-market vehicle wheels and accessories under a number of brand names. The Opponent is the owner of the trade mark listed in the table below (‘Opponent’s Mark’).  The goods for which the Opponent’s Mark are registered are collectively referred to as the (‘Opponent’s Goods’). 

Number	Trade Mark	Priority Date	Goods
1027290	KMC	30 Apr 2004	Class 12: Motor vehicle accessories, including wheels, wheel parts and accessories, lug nuts, washers, wheel nuts, wheel covers, wheel rims, wheel spokes, hub caps, hub covers, centre caps, wheel cover shields, hub cap shields, valve stems, wheel rim components in the nature of locks, installation kits; integral components of wheels, including spinners, spacers, studs and adapters

8.  The Williams Declaration contains the following claims/statements:

·     The Opponent has used the Opponent’s Mark for various goods since 1982 in the United States and 2001 in Australia.  The Opponent’s Mark has been used in various forms, with different logos and varying accompanying words, such as ‘KMC Wheels’, ‘KMC Rockstar’, ‘KMC XD’ and ‘KMC XD Forged’.

·     The Opponent’s Mark is used for after-market aluminium wheels and wheel accessories, which it sells though its distributor Ozzy Tyres and at Bob Jane T-Mart stores.  The Opponent also sells t-shirts and caps branded with the Opponent’s Mark through a US website.

·     The Opponent promotes its products bearing the Opponent’s Mark through various marketing methods including catalogues, posters, Facebook pages, websites, print advertising and trade shows.    

·     Goods branded with the Opponent’s Mark are sold worldwide by 3,200 dealers in over 15 countries.

·     The Opponent promotes its goods featuring the Opponent’s Mark through display stands, magazine advertising, online media (including Facebook and YouTube), and sponsorship (focused mostly on motor bike and motor cross riders).

9.  The Williams Declaration provides details of its sales in Australia since 2011 of products featuring the Opponent’s Trade Mark.  Sales between 2011 and the priority date are limited but not insignificant.  The Williams Declaration also provides evidence of the Applicant’s global advertising spend from 2012.

The Applicant

1. While much of the EIA is detailed and well-prepared, I note that while the Evidence Act 1995 (Cth) does not apply to proceedings before the Registrar, in the preparation of evidence, such evidence should normally come from persons with direct knowledge of the particular fact asserted or through authoritative documents that can be relied on to establish a particular fact. As such I have placed little weight on material in the Hrvoj Declaration that consists of statements about the Applicant from unidentified third party bloggers on the Internet; there is no way of verifying the individual’s knowledge or credibility with respect to facts asserted.

2. The Applicant is a manufacturer founded in Taiwan in 1977 that specialises in the manufacture of bike chains.

3. The Hrvoj Declaration contains the following statements:

   ·     The Applicant’s bicycle chains featuring the Trade Mark are available at a large number of stores in Australia.

   ·     The first 20 organic Google search results for ‘KMC Bicycle Chain’ in Australia refer to the Applicant.

   ·     The Applicant and the Opponent’s respective registered trade marks co-exist in a number of overseas jurisdictions, including the United States, Canada, Brazil, the EU and Japan.

Grounds of Opposition, Onus and Standard of Proof

1. In the SGP the Opponent nominated grounds of opposition under ss 42(b), 60 and 62A. In the Opponent’s Submissions the Opponent indicates that it now only seeks to rely on the grounds under ss 42(b) and 60. To successfully oppose the application the Opponent needs to establish at least one of those grounds.

2. 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 29 May 2014 (‘relevant date’), being the filing date of the application in Australia.[3]

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

   [2] Following Pfizer Products Inc v Karam (2006) 70 IPR 599, [6]-[26], and Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [133].

   [3] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592, 595, see also s 29(1) Trade Marks Act 1995 (Cth).

Discussion

Section 60

1. Section 60 of the Act is reproduced below:

   Section 60 - Trade mark similar to trade mark that has acquired a reputation in Australia

   The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:

   (a)another trade mark had, before the priority date for the registration of the first‑mentioned trade mark in respect of those goods or services, acquired a reputation in Australia; and

   (b)because of the reputation of that other trade mark, the use of the first‑mentioned trade mark would be likely to deceive or cause confusion.

2. To establish a ground of opposition under s 60 an opponent must demonstrate that as at the relevant date there was another trade mark which had acquired a reputation in Australia amongst a significant or substantial number of persons in the relevant market[4] such that use of the Trade Mark would be likely to deceive or cause confusion.[5]

   [4] See Registrar of Trade Marks v Woolworths Ltd [1999] FCA 1020.

   [5] The present paragraph and the following paragraphs summarizing the requirements under s 60 of the Act are paraphrased from the decision of the Registrar’s Delegate in Australian Boutique Markets Pty Ltd v Rachael Zelensky and Jeffrey Zelensky [2013] ATMO 97.

3. In McCormick & Co Inc v McCormick, Kenny J considered what is intended by the word ‘reputation’ as used in s 60. Her Honour had consulted the Macquarie Dictionary and on the basis of the definition provided concluded that it was ‘the recognition of the [trade mark] by the public generally’.[6]  Her Honour quoted with approval the following words of Lockhart J in Re ConAgra Inc v McCain Foods (Aust) Pty Ltd:

   [R]eputation within the jurisdiction may be proved by a variety of means including advertisements on television or radio, or in magazines and newspapers within the forum. It may be established by showing constant travel of people between other countries and the forum and that people within the forum, (whether residents there or persons simply visiting there from other countries) are exposed to the goods of the overseas owner …[7]

   [6] [2000] FCA 1335, [81].

   [7] [1992] FCA 159, [118].

4. On the subject of reputation Kenny J also referred to the Hugo Boss decision, where the Registrar’s delegate observed:

   [I]t is true that the assessment of the reputation of a trade mark goes far beyond mere examination of sales or turnover of goods sold under that trade mark and contemplation of the advertising and promotional figures.

   As regards a trade mark, its reputation derives both from the quantum of sales under that mark and also its esteem, or image, projected by that trade mark. The quantum of sales, advertising and promotion contributes to the ‘recognition’ component of the trade mark’s reputation. The credit, image and values projected by a trade mark attaches to the ‘esteem’ component of the reputation as do the public events and other trader’s marks with which [the] owner of the trade marks in question chooses to associate the trade marks via sponsorships, cross-promotions, ‘contra deals’ and so forth.

   It follows that a trade mark used in relation to goods with comparatively low sales may have a high and strong reputation by virtue of the high credit or esteem in which it is held, or, conversely, that a trade mark which has very high sales may have a strong reputation notwithstanding the lack of esteem that attaches to it. The particular popular images, or sets of values, that attach to the trade mark are also, therefore, important parts of the reputation of the trade mark and may be as strong an associative force in the minds of the public as the association of the trade marks with the goods or services themselves.[8]

   [8] Hugo Boss AG v Jackson International Trading Co Kurt D Bruhl Gesellschaft MbH & Co KG (1999) 47 IPR 423, 426.

5. As stated above, in assessing reputation under s 60, what constitutes a significant or substantial number of persons in the relevant market must be considered. The case of Le Cordon Bleu BV v Cordon Bleu International Ltee[9] was decided under s 28(a) of the (now repealed) Trade Marks Act 1955.  That provision did not refer to ‘reputation’ at all, only that use of the impugned trade mark would be ‘likely to deceive or cause confusion’.  Nevertheless the words of Heerey J provide some guidance:

   What is ‘significant’ or ‘substantial’ will depend on the nature of the goods or services in question. For some highly specialised products, awareness among a few thousand persons, or even less, might be sufficient … We are here concerned with foodstuffs sold in supermarkets, delicatessens, milk bars and other retail outlets. The relevant market is virtually the entire Australian population from early teenage years onwards.[10]

   [9] (2000) 50 IPR 1.

   [10] Ibid 20. Heerey J’s decision was overturned on appeal to the Full Federal Court, although not on the point quoted. Indeed the court specifically noted that his approach contained no error; see Renaud Cointreau v Cordon Bleu International Ltee [2001] FCA 1170, [75].

6. Furthermore, in practice, once the requisite reputation is demonstrated, the likelihood of deception or confusion increases the more closely the trade marks resemble each other.[11]

   [11] Mark Davison, Shanahan’s Australian Law of Trade Marks and Passing Off Online Westlaw AU, [50.2415] <

7. The Opponent has particularised the ground of opposition in the SGP in the manner set out below: 

   By virtue of extensive use in Australia, the Opponent's KMC trade mark had, before the priority date of the application, acquired a reputation such that use of the trade mark by the Applicant would be likely to deceive or cause confusion.

8. The evidence in the Williams Declaration is that the Opponent has used the Opponent’s Mark in Australia since 2001 however I have only been provided with figures for the Opponent’s gross retail sales of goods in Australia branded with the Opponent’s Mark since 2011, being just over 3 years of sales prior to the priority date.  Although no breakdown is provided I assume the majority of those sales relates to the sales of wheels and not clothing material.  It appears from the manner in which the products branded with the Opponent’s Mark are advertised that they are fairly high-value specialist products.  Bearing this in mind, I consider that the overall level of sales between 2011 and the priority date are unimpressive.  The evidence of the Opponent’s sales in 2011 is particularly unimpressive and there is no reason to infer that sales prior 2011 were any more significant.

9. I have also been provided with evidence of worldwide marketing expenditure by the Opponent since 2012.  Given that the marketing expenditure figures are worldwide such expenditure is equally unimpressive and provides limited assistance in establishing the reputation of the Opponent’s Mark in Australia.  I acknowledge that the Opponent has engaged in advertising featuring the Opponent’s Mark but much of the evidence of advertising and sponsorship exhibited to the Williams Declaration, such as its sponsorship of the Joe Gibbs Racing Motocross team or its advertising in ‘Offset the Custom Wheel Journal’, postdates the relevant date.  I do find that the wheel products sold by the Opponent under the Opponent’s Mark are high value products held in high esteem.

10. When considering whether the reputation of the Opponent’s Mark in Australia at the relevant date was sufficient such that use of the Trade Mark would be likely to deceive or cause confusion, I also note the considerable difference between the respective goods.  The Opponent’s Mark would have a reputation, if any, in specialised car or motorbike wheels while the Applicant is seeking to register the Trade Mark for bicycle chains.  The goods are not substitutes, complements or sold through similar stores to similar clients.

11. Given the limited evidence of advertising, the low level of sales and the difference between the respective goods sold by the parties, I am not persuaded that at the relevant date the Opponent’s Mark had acquired a reputation in Australia amongst a significant or substantial number of persons in the relevant market such that use of the Trade Mark would be likely to deceive or cause confusion. I find that the Opponent has failed to establish the ground of opposition pursuant to s 60 of the Act.

Section 42

1. Section 42 of the Act is reproduced below:

   42 Trade mark scandalous or its use contrary to law

   An application for the registration of a trade mark must be rejected if:

   (a) the trade mark contains or consists of scandalous matter; or

   (b) its use would be contrary to law.

2. The Opponent pressed this ground of opposition solely on the basis that the use of the Trade Mark would be contrary to law (s 42(b)).  The onus is on the Opponent to establish that use of the Trade Mark by the Applicant would be, rather than could be, contrary to law on the balance of probabilities.[12]  The relevant time for assessing whether an application is contrary to law is at the relevant date but ‘looking forward to prospective conduct after registration’.[13]

   [12] Advantage Rent-a-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683.

   [13] Time Warner Entertainment Co LP v Stepsam Investments Pty Ltd [2004] 59 IPR 343, 353.

3. The Opponent has particularised the ground of opposition in the SGP as follows: 

   Use of the mark by the Applicant would constitute misleading and deceptive conduct in breach of sections 18 and 29 of the Australian Consumer Law

4. As previously stated the Opponent has failed to establish a ground of opposition under s 60 of the Act. The test for misleading or deceptive conduct under s 18 of the Australian Consumer Law (‘ACL’) is a more stringent one than that for deception or confusion under s 60.[14] Accordingly I find that the Opponent has failed to establish that the Applicant’s use of the Trade Mark would be contrary to s 18 of the ACL.

   [14] See, e.g.: Ownit Homes Pty Ltd v Ownit Conveyancing Pty Ltd [2005] ATMO 47, [36]; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191, 198.

5. Paraphrasing the statement of the Registrar’s Delegate in A G Professional Hair Care Products Ltd v Geagroup Invest SRL[15], where a trade mark does not run afoul of s 18 of the ACL, neither will it run afoul of s 29 of the ACL. In Pacific Publications Pty Ltd v IPC Media Pty Ltd, Beaumont J considered—in connection with the superseded Trade Practices Act1974 (‘TPA’)—that ‘the Court’s conclusion on s 52 would necessarily carry with it a conclusion on s 53(c) and (d)’.[16] Sections 52 and 53 of the TPA were, respectively, the equivalent provisions to ss 18 and 29 of the ACL.

   [15] [2014] ATMO 65, [50].

   [16] [2003] FCA 104, [107].

6. For these reasons I am not satisfied that use of the Trade Mark by the Applicant would be contrary to law. Therefore, the Opponent has failed to establish the ground of opposition under s 42(b).

Decision

1. The Opponent has failed to establish any of the grounds of opposition it nominated in the SGP.  Trade Mark application no. 1625626 may proceed to registration not less than one month from the date of this decision.  If the Registrar has been served with a notice of appeal before that time, I direct that registration shall not occur until either the appeal is withdrawn or discontinued.  Otherwise the disposition of the application should be in accordance with the Court’s order or direction.

Nicholas Smith

Hearing Officer

Oppositions and Hearings

1 June 2018