XYZ Networks Pty Limited v XyZ iGlobal Inc

TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by XYZ Networks Pty Limited to application under section 92 of the Act by XyZ iGlobal Inc. to remove trade mark number 824901 (9, 16, 35, 41) – XYZ - in the name of XYZ Networks Pty Limited.

Delegate:

Debrett G. Lyons

Representation:

Opponent: Kimberley Evans, of Allens Patent & Trade Mark Attorneys

Applicant: written submissions only

Decision:

2016 ATMO 119

Trade Marks Act 1995 – s.92 application for removal – application successful; Trade Mark to be removed from the Register in respect of its class 35 services

Background

XYZ Networks Pty Limited (the “Opponent”) is the owner of registration 824901 (“the Registration”) for the trade mark XYZ (the “Trade Mark”) in classes 9, 16, 35 and 41.
This decision is pursuant to an application made on 21 January 2015 (the “Removal Application”) by XyZ iGlobal Inc (the “Applicant”) to remove the Trade Mark from the Register of Trade Marks in respect of the class 35 services shown below (“the Relevant Services”) for which the Trade Mark is registered.
Advertising and promotion services; promotion services in this class in relation to merchandise products connected with entertainment, education, media and communication services, films, television and radio programs; promotion of pre-recorded videos and other audio visual products, multimedia and interactive products; business management and administration services adapted for the entertainment, media and communications industry.
The Removal Application is made under section 92(4)(b) of the Trade Marks Act 1995 (“the Act”). Part 9 of the Act deals with removal of trade marks from the Register for non-use. Section 92 relevantly provides:
92Application for removal of trade mark from Register etc.
(4)An application under subsection (1) or (3) (non‑use application) may be made on either or both of the following grounds, and on no other grounds:
(a) …
(b)that the trade mark has remained registered for a continuous period of 3 years ending one month before the day on which the non‑use application is filed, and, at no time during that period, the person who was then the registered owner:
(i)used the trade mark in Australia; or
(ii)used the trade mark in good faith in Australia;
in relation to the goods and/or services to which the application relates.
Note 1:For file and month see section 6.
Note 2:If non‑use of a trade mark has been established in a particular place or export market, then instead of the trade mark being removed from the Register, conditions or limitations may be imposed under section 102 on the registration of the trade mark so that its registration does not extend to that place or export market.
Thus, the allegation under s92(4)(b) is that in the three years immediately preceding 21 December 2014 (“the Relevant Period”) the Trade Mark has not been used in good faith in connection with the Relevant Services.
A Notice of Intention to Oppose removal was filed by the Opponent on 2 April 2015 and a Statement of Grounds and Particulars was filed by the Opponent on 1 May 2015. The Applicant filed a Notice of Intention to Defend on 27 May 2015.
The parties filed evidence in support, evidence in answer, and evidence in reply, after which a hearing was convened in Canberra on 6 October, 2016. The Applicant was not represented at the hearing and relied on the written submissions of its attorney, Natasha Burns of Burns IP & Commercial, which had been provided before the hearing in accordance with my directions. The Opponent was represented by Kimberley Evans, a solicitor with Allens Patent & Trade Mark Attorneys, who attended in person.
The Evidence
This decision is made on the basis of the following declaratory evidence:
Opponent’s Evidence in Support
Sharon Grice made on 19 August 2015 and Exhibits SG-1 (Tabs 1, 2, 3(a), 3(b), 3(c) and 4) and SG-2 (Tabs 1(a), 1(b) and 2) (“Grice Declaration”)
Applicant’s Evidence in Answer
Gary Azimov made on 2 November 2015 and Exhibits GA1 – GA4 (“Azimov Declaration”)
Opponent’s Evidence in Reply
Cameron Stewart made on 19 January 2016 (“Stewart Declaration”)
Preliminary Observations
The determination of this matter turns almost exclusively on an evaluation of the evidence. To the extent that it depends on the law, section 100 of the Act (set out below in so far as relevant) comes into play.
Section 100 provides that:
100Burden on opponent to establish use of trade mark etc.
(1)In any proceedings relating to an opposed application, it is for the opponent to rebut:
(a)… ; or
(b)… ; or
(c)any allegation made under paragraph 92(4)(b) that the trade mark has not, at any time during the period of 3 years ending one month before the day on which the opposed application was filed, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services.
Note 1:If the registered owner of the trade mark has authorised another person to use it, any authorised use of the trade mark by that person is taken to be a use of the trade mark by the registered owner (see subsection 7(3)).
Note 2:For file, month and registered owner see section 6.
(2)…
(3)For the purposes of paragraph 1(c), the opponent is taken to have rebutted the allegation that the trade mark has not, at any time during the period referred to in that paragraph, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services if:
(a)the opponent has established that the trade mark, or the trade mark with additions or alterations not substantially affecting its identity, was used in good faith by its registered owner in relation to those goods or services during that period; or
(b)in a case where the trade mark has been assigned but a record of the assignment has not been entered in the Register:
(i)the opponent has established that the trade mark, or the trade mark with additions or alterations not substantially affecting its identity, was used in good faith by the assignee of the trade mark in relation to those goods or services during that period and that that use was in accordance with the terms of the assignment; and
(ii)the Registrar or the court is of the opinion that it is reasonable, having regard to all the circumstances of the case, to treat the use of the trade mark by the assignee during that period as having been a use of the trade mark in relation to those goods or services by the registered owner; or
(c)…
Note 1: If the registered owner of the trade mark has authorised another person to use it, any authorised use of the trade mark by that person is taken to be a use of the trade mark by the registered owner (see subsection 7(3)).
Note 2:For registered owner see section 6.
As seen, section 100(1)(c) places the burden on the Opponent to rebut an allegation made under paragraph 92(4)(b). The standard of proof is the ordinary civil standard of the balance of probabilities.[1]
[1] Pfizer Products Inc. v Karam [2006] FCA 1663 and more recently: Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, albeit in relation to proceedings under s.52 of the Act.
Other aspects of section 100 are relevant since the Applicant’s argument, in essence, is that the Trade Mark or a trade mark not varying by way of additions or alterations substantially affecting its identity as the Trade Mark, is not shown to have been used in the Relevant Period either (i) at all, or (ii) as a trade mark, or (iii) by the registered owner or an authorised user, or (iv) in respect of the Relevant Services.
Discussion
The Grice Declaration explains that the Opponent was incorporated in 1994 under the name XYZ Entertainment Pty Ltd as a joint venture between the television broadcasters Foxtel and Austar.[2]
[2] Grice Declaration [1].
In 2012 Foxtel and Austar merged (“the Foxtel merger”) and it is said that the Opponent came under the ultimate control and ownership of Foxtel.[3]
[3] Ibid. [12].
The Grice Declaration states that the Opponent operates as a separate entity and “provides advertising and promotional services to third parties under the XYZ trade mark.”[4]
[4] Ibid. [13].
The issue of “ultimate control” of the Trade Mark is of concern to the Applicant since in its submission there is no evidence of use of the Trade Mark by the Opponent.
However, it is not the question of who used the Trade Mark that is of critical importance in this case, but the matter of how it was used.
The Opponent’s position is that “the evidence clearly demonstrates use of the XYZ Trade Mark, both as a plain word mark and with additions or alterations that do not substantially affect the identity of the trade mark”.
The Applicant’s position that there is no evidence of use of the Trade Mark as a trade mark and none in respect of the Relevant Services. The Applicant further submits that the use of marks other than the registered Trade Mark is the use of marks having additions or alterations that substantially affect their identity.
There is very little use of the Trade Mark, as registered, without added matter. The other signs that appear in the evidence are:
i.xyznetworks.com.au
ii.XYZnetworks / XYZ Networks
iii.
iv.
The Opponent’s submissions proceed on the basis that these various forms of use are either use of the Trade Mark, or use of the Trade Mark within the latitude given by section 100(3)(a) of the Act.
The distinction is not always clear and so with the intention of giving the following analysis certain structure, I have divided the discussion into two parts: the first concerned with the variations on the Trade Mark (hereinafter, the “XYZnetworks mark”); the second with the evidence of use of the Trade Mark alone.
XYZnetworks
As I understand it, the Opponent regards the signs shown in paragraph 19(iii) and (iv) as qualifying for Trade Mark use under section 100(3)(a).[5]
[5] It should be added that other small variations appear in the evidence such as a colour version of the XYZnetworks mark where the letters “X”, “Y” and “Z” are themselves in difference colours.
The Opponent’s submission is that:
the stylised versions of the XYZ Trade Mark shown [in para. 20(iii) and (iv)] above constitute use of the XYZ Trade Mark as registered. Within each stylised mark, the emphasis is placed on the XYZ element of each depiction of the sign through:
-the use of different colours for the XYZ and NETWORKS elements; and
-the smaller lettering for the word NETWORKS.
Because of this, there is also an argument that the XYZ element of each stylised sign would be considered a separate mark.
The Opponent further reasons that:
Given that the business of the …Opponent is operating a television network, which naturally encompasses the provision of advertising services, the word NETWORKS is descriptive and does not substantially affect the identity of the XYZ Trade Mark. In addition, the stylisation itself is sufficiently simple so as not to affect the identity of the mark.
By depicting the letters XYZ in different colours and in bigger font than the word 'networks', the … [Opponent] has emphasised to consumers that its trade mark is the letters XYZ. The success of this approach in emphasising that the Removal Opponent's trade mark is the letter combination 'XYZ' (rather than the stylised version of the words 'xyznetworks') is demonstrated in the Australian media articles behind Tab 4 of Exhibit SG-1 of the Grice Declaration, where the …Opponent's services are referred to by its trade mark, the XYZ Trade Mark.
The Applicant’s argument is that use of the XYZnetworks mark does not qualify as use of the Trade Mark, citing the case of Global Track Warehouse Pty Ltd v YTO International Ltd [2009] ATMO 56 (“Global Track”).
The case is of limited value to me. There, an application was made to remove the trade mark shown hereunder from the Register for alleged non-use:
Hearing Officer Windsor explained that:
… while [the owner’s] evidence in support shows use of the letters YTO in plain uppercase letters during the relevant period for a crawler tractor, it does not show use of the trade mark which the applicant has registered. [The owner’s] evidence in reply similarly does not show use of the registered trade mark. The question which needs to be answered, therefore, is whether use of the letter YTO in plain uppercase script is use of the registered trade mark in respect of crawler tractors.
Paragraph 100(3)(a) refers to use of the trade mark “with additions or alterations not substantially affecting its identity” within the relevant period. I must decide if [the owner’s] use fits within that requirement.
Hearing Officer Windsor held that it did not. In coming to that conclusion the Hearing Officer took account of the case of Morny Ltd's Trade Mark (1951) 68 RPC 55 (“Morny”) in which Jenkins LJ held that where a word is registered in ordinary capitals, its use in various special scripts or with embellishments is a sufficient use of the registered trade mark to protect it from expungement. The hearing officer came to the conclusion she did despite Morny.
Whilst Morny might have boded well for the Opponent here had the evidence been of use of only the letters “XYZ” in a fanciful font and/or in colour, that is not the case and I do not think that either Global Track or Morny would have contemplated addition of the word “networks” to be an “embellishment”.
I am better guided by the case of PB Foods Ltd v Malanda Dairy Foods Ltd [1999] FCA 1602 where the applicant had applied to register the trade mark CHOC CHILL in class 29 in respect of “[a]ll goods in this class including chocolate flavoured milk, coffee flavoured milk, vanilla flavoured milk, strawberry flavoured milk and other dairy products.” The application carried a so-called “claim to vary” being that “[t]he descriptor CHOC appearing in the mark is varied in use in accordance with the application of the mark to goods of other flavours comprised in the specification.”
In that case the respondent was the proprietor of the trade mark CHILL and in the Federal Court, Carr J was asked to decide whether CHILL was “substantially identical” to CHOC CHILL within the meaning of the Act. I note here that it has been said many times that this is essentially the same test of whether two marks vary from each other by way of additions or alterations not substantially affecting their common identity for the purposes of section 100 of the Act.
His Honour noted the test propounded by Windeyer J in Shell Co. (Aust) Ltd v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407 at 414 that:
In considering whether marks are substantially identical they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison.
His Honour then reasoned from paragraph 31 onwards that:
…I consider that the essential feature of the trade mark is the word CHILL. When one considers the basic policy of the 1955 Act, it is the word CHILL which serves to denote the trade origin of the goods.
The word CHOC has, almost exclusively, different work to do. It describes the flavour of the goods. Registration is sought on the basis that that description will change with the flavour to COFFEE, VANILLA, STRAWBERRY and the like. Those words are (to borrow from a decision cited below) utterly descriptive.
…
On the other hand, in Microcom Pty Ltd v Microcom Systems Inc(1998) 41 IPR 163 at 168 Hearing Officer Forno compared MICROCOM with MICROCOM NETWORKING PROTOCOL and said this:
“… I do not think that the additional words “Networking Protocol” are sufficient to differentiate the applicant’s and opponent’s marks. Those two words are utterly descriptive for some of the goods covered and add nothing to the mark. This is, I think, analogous to the situation where, say, the trade mark Rinso was being compared with another mark Rinso Washing Powder. Clearly, these marks are substantially the same. I think that any comparison between the present opponent’s mark and that covered by No. 523656, [Microcom Networking Protocol] would lead to a conclusion that those marks are also substantially the same.”
His Honour came to the conclusion that that marks under consideration were substantially identical. It is noteworthy for present purposes that the reference therein to the case of Microcom Pty Ltd v Microcom Systems Inc(1998) 41 IPR 163 (involving addition of the words “Networking Protocol”) was a case where the goods in dispute were computer modems.
The case before me is different. It was said that “[g]iven that the business of the…Opponent is operating a television network, which naturally encompasses the provision of advertising services, the word NETWORKS is descriptive and does not substantially affect the identity of the XYZ Trade Mark.”
I am inclined to think that this submission too easily passes over the fact that my proper point of reference is the Relevant Services under attack and not some broader characterization of the Opponent’s business as a whole. So, to restate those services here for convenience, they are:
Advertising and promotion services; promotion services in this class in relation to merchandise products connected with entertainment, education, media and communication services, films, television and radio programs; promotion of pre-recorded videos and other audio visual products, multimedia and interactive products; business management and administration services adapted for the entertainment, media and communications industry.
I do not accept that the word “networks” is descriptive (or otherwise non-distinctive) of the Relevant Services, even at their most extensive, in the way that CHOC (and its variants) describes a diary product flavouring. Even if I consider only those services alluded to by the Opponent – advertising services – the word “networks” is, at most, suggestive of those services. Plainer examples of non-distinctive words akin to CHOC can be found within the Relevant Services and might include “promotions” or “media”.
That leaves the question of whether by depicting the letters XYZ in different colours and in larger font than the word 'networks', the Applicant has shown to consumers that its trade mark is the letters XYZ.
I would not draw that conclusion. Further, for the reasons which follow, I reject the Opponent’s submission that such proof can be found “in the Australian media articles behind Tab 4 of Exhibit SG-1 of the Grice Declaration, where the Removal Opponent's services are referred to by its trade mark, the XYZ Trade Mark.”
In conclusion, I am not ready to find that use of the XYZnetworks mark is use of the Trade Mark.
XYZ
The Grice Declaration has two exhibits, SG-1 and SG-2, each composed of multiple, tabulated, items. Exhibit SG-2 is confidential and so I can discuss it only in broad terms, as I will very shortly.
The media articles behind Tab 4 of Exhibit SG-1 of the Grice Declaration (“Tab 4”) are in black and white and I have no reason to think any relevant part of those articles was in colour. Certainly there was no submission that was so. It follows that the distinctions that might rest on colour differences argued by the Opponent in paragraph 23 above are not supported by this evidence.
Further, in my assessment, the same articles do not support the Opponent’s claim “that Australian consumers would – and do - understand the letters XYZ to indicate that the Removal Opponent is the provider of television network services, including any associated business activities such as advertising.”
Tab 4 includes an article from the 17 August 2015 edition of The Australian newspaper. It is well outside the Relevant Period but, putting that to one side, it reports on the Foxtel merger and makes reference to “XYZ Networks” in that context. It refers to the “Foxtel Channels Group” of companies. It uses language such as “…XYZ Networks Chief Executive” and “… Austar, Foxtel and XYZ will unite …”. It makes the statement that “[t]he new national Foxtel will be one of Australia’s most progressive and dynamic media companies…”. It further refers to XYZ Entertainment [Pty Ltd]”, the Opponent’s former company name without explanation.

Tab 4 further includes an article from TheMusic.com.au dated 13 August 2015 (also outside the Relevant Period) which refers to the Opponent, initially as “XYZ Networks”, and thereafter to the business as “XYZ”.
The Applicant complains that these are not examples of trade mark use. It may be right. It complains that they do not link the use to the Relevant Services. It may be right again, but what is clear to me is that these articles show very typical journalistic shorthand techniques and do not prove that Australian consumers see and understand the Trade Mark (XYZ) when they see “XYZ Networks” used.
Tab 2 to confidential Exhibit SG-2 of the Grice Declaration (“Tab 2”) is a bundle of invoices. There is reference to a company, XYZ Pty Ltd. When I questioned the Opponent’s representative at the hearing about this entity I was given to understand that no such company existed, nor is such a company currently part of the Foxtel group of companies (evidence of the company group being part of the Stewart Declaration). I can attribute no use of the Trade Mark to it.
Otherwise, it is enough to note only that none of the invoices in Tab 2 carry the Trade Mark, simpliciter, and that in many instances the invoice description is arcane and incapable of correlation with the Relevant Services.
The Opponent’s submission is that:
[w]hile these exhibits do not directly establish use of the XYZ Trade Mark specifically in relation to the [Relevant] Services, they do confirm that the … Opponent was using its XYZ Trade Mark before and during the Relevant Period in relation to its business activities and the Grice Declaration attests to the … Opponent's provision of advertising services to third parties during the Relevant Period.
Even without the invoices referred to at paragraph [49] above, it can reasonably be inferred from the evidence, and the nature of the … Opponent's business activities as a television network operator, that the … Opponent was providing advertising and promotional services to third parties under the XYZ Trade Mark.
The difficulty is that there is essentially no use of the Trade Mark, as registered, and I have already found that use of the XYZnetworks mark does not qualify as use of the Trade Mark. It is for that reason that the section 92(4)(b) application is successful.
In the event of that finding I have been asked by the Opponent to exercise the discretion given to me by section 101(3) of the Act, which states:
If satisfied that it is reasonable to do so, the Registrar or the court may decide that the trade mark should not be removed from the Register even if the grounds on which the application was made have been established.
The evidence of use is faulty in ways it has not, in the end, been necessary to consider and I find that there is nothing which compels exercise of the Registrar’s discretion in the Opponent’s favour. I decline to do so.
Decision
Having regard to the reasons given herein my decision is to remove the Trade Mark from the Register in respect of the class 35 services. This removal should be made 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 removal shall not occur until either the appeal is withdrawn or discontinued. Otherwise the disposition of the registration should be in accordance with the Court’s order or direction.
Costs
As the successful party, the Applicant is entitled to its costs and I award costs against the Opponent as per Schedule 8 of the Trade Mark Regulations 1995.
Debrett G. Lyons
Hearing Officer
Trade Marks Hearings
19 December 2016

[2016] ATMO 119

19 December 2016

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