Zorro Production, Inc v Heshan Star Metal Products Co. Ltd

[2024] ATMO 163

TRADE MARKS ACT 1995

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

Re:Opposition by Zorro Production, Inc to registration of trade mark application number 2275972 (class 34) – ZORRO (in fancy script) - in the name of Heshan Star Metal Products Co., Ltd

Delegate:

Nicole Worth

Representation:

Opponent: written submissions by M Evetts, counsel, instructed by Corrs Chambers Westgarth

Applicant: none

Decision:

2024 ATMO 163

Trade Marks Act 1995 (Cth) – opposition under s 52 – grounds of opposition under ss 60 and 42(b) – no grounds established – trade mark to proceed to registration.

Background

1. This decision is in relation to an opposition by Zorro Production, Inc (‘Opponent’) to registration of the trade mark the subjection of application number 2275972 (‘Application’), in the name of Heshan Star Metal Products Co., Ltd (‘Applicant’). The relevant details of the Application are below.

   Trade Mark:      (‘Trade Mark’)
   Filing date:   9 June 2022

   Goods:Class 34: Lighters for smokers; Firestones; Cigarette tips; Tobacco pipes; Cigarette cases; Ashtrays for smokers; Pocket machines for rolling cigarettes; Matches; Cigar cutters; Electronic cigarettes.

2. The Application was examined as required by s 33 of the Trade Marks Act 1995 (Cth) (‘Act’)[1] and advertised as accepted for possible registration on 10 November 2022.

   [1] In this decision, all references to a section or regulation are references to sections of the Trade Marks Act 1995 (Cth) or regulations of the Trade Marks Regulations 1995 (Cth) respectively, unless otherwise indicated.

3. The Opponent opposed registration of the Trade Mark under s 52, filing a Notice of Intention to Oppose registration followed by a Statement of Grounds and Particulars (‘SGP’). The SGP nominated grounds of opposition under ss 60 and 42(b) of the Act.

4. The Opponent filed evidence in support of its opposition (‘EIS’), discussed in more detail below. The Applicant did not file evidence in answer, and has not participated in the opposition proceedings beyond the filing of a Notice of Intention to Defend the Application.

5. Once the period for filing evidence had expired the Opponent requested to be heard by way of written submissions. The Opponent filed said submissions, written by M Evetts of counsel instructed by Corrs Chambers Westgarth, on 22 May 2024.

6. The matter has now been allocated to me, a delegate of the Registrar of Trade Marks, to decide on the basis of the material identified above. This is my decision.

Evidence

1. The EIS consists of a declaration by John Gertz, Chairman and CEO of the Opponent, dated 8 June 2023 with Annexures JG-1 to JG-4 (‘Gertz’).

2. According to Gertz:

   [The Opponent] was incorporated as a Californian corporation in 1985 and is the successor in title of all global intellectual property and other rights in the ZORRO name and trade mark.

   [The Opponent] is the proprietor of the trade mark ZORRO which is registered in numerous countries including in Australia. [The Opponent] has controlled the name, visual likeness and character of Zorro, holding all pertinent copyright rights, trade mark registrations and other intellectual property rights for many years.

   …

   The character Zorro was created in 1919 by the writer Johnston McCulley in the serialized novel ‘The Curse of Capistrano’. ‘The Curse of Capistrano’ was the first of over seventy immensely popular novels and stories sold in numerous countries, including in Australia, in which the romantic hero called Zorro travelled throughout Spanish California fighting injustice and saving damsels in distress.[2]

   [2] Gertz, [5]-[8].

3. Gertz outlines a number of novels, movies and television series which feature Zorro and asserts that ‘virtually every one of [them] have [sic] been sold or shown to Australian consumers over the decades and before the Priority Date. Thus Zorro has become part of the cinematic and literary heritage of large numbers of Australians’.[3] Such films and television series have been produced since 1920, from ‘The Mark of Zorro’ in the silent film era, to the most recent being ‘ZORRO The Chronicles’, an animated series produced in 2014. Included in this were two films ‘The Mask of Zorro’ and its sequel ‘The Legend of Zorro’, released in 1998 and 2005 respectively, which raised worldwide box office figures in excess of $250 million and $140 million respectively[4], and $2.8 million in Australia in respect of ‘The Legend of Zorro’.[5] All of the movies and television series are claimed to have been shown in, or sold to, Australian consumers in various formats including at the cinema, on video cassette and DVD, on pay TV, YouTube and on streaming platforms.

   [3] Ibid [7].

   [4] Ibid [8]-[16].

   [5] Ibid [33].

4. Zorro themed video games have been available since the 1980’s on all major gaming platforms. In respect of Australia Gertz claims that ‘tens of thousands of the video games listed above have been sold in Australia over decades, each under or by reference to the ZORRO name and mark’.[6] Similarly, ‘tens of thousands’ of comic books featuring Zorro are claimed to have been sold in Australia over the decades.[7]

   [6] Ibid [29].

   [7] Ibid [27].

5. Gertz claims that ‘Pursuant to the many licensing agreements into which [the Opponent] has entered into over the decades, a very wide range of different types of products have been advertised, offered for sale and sold by reference to the ZORRO name and mark globally, including in Australia.’[8] To support this statement extracts from various websites and from the Internet Archive Wayback Machine[9] are exhibited displaying various items of merchandise featuring the word ZORRO or character Zorro for sale.[10] The majority of them make no mention of the Opponent and appear to identify other entities as the trade source of the goods, and whilst some extracts are from Australian websites the majority are not identified so. Of this merchandise it is claimed that ‘There were hundreds of thousands if not millions of items that have been advertised, offered for sale and sold in dozens of countries around the world on a continuous basis’.[11]

   [8] Ibid [23].

   [9] The Internet Archive Wayback Machine allows users to visit archived pages of websites.

   [10] Gertz, Annexure JG-1.

   [11] Gertz, [24].

6. Gertz also states that one of the Opponent’s Australian licensees is Aristocrat Technologies Australia Pty Ltd (‘Aristocrat’) who has been ‘authorised to distribute thousands of Zorro themed slot machines to casinos and licensed venues around Australia…Since 2006, Aristrocrat has paid [the Opponent] hundreds of thousands of dollars in royalties under its license’.[12] Two subsidiaries of Aristocrat are likewise described as licensees, who specialise in online social gaming. ‘Multiple Australian consumers each day’[13] are claimed to be exposed to the ZORRO trade mark by Aristocrat and the two subsidiaries.

   [12] Ibid [30].

   [13] Ibid [30]-[31].

7. Zippo Manufacturing Company (‘Zippo’) is declared to have been one of the Opponent’s licensees since 2008. Zippo is most well-known for its reusable metal lighters and also produces pocket knives. It is allegedly authorised by the Opponent to use the ZORRO name and trade mark. A number of images of lighters and pocket knives bearing the name and character Zorro are exhibited,[14] some of which contain a copyright notice identifying the Opponent. There is no statement in relation to sales of these goods, either in Australia or elsewhere.

   [14] Gertz, Annexures JG-2 and JG-3.

8. The Opponent is the owner of nearly 1500 ‘ZORRO’ trade marks worldwide, and is also the owner of a further 300 trade marks which contain the word ‘ZORRO’ with other features. In Australia the Opponent is the registered owner of three trade marks:

• Registration number 522499, ZORRO, in class 28;

• Registration number 522500, ZORRO, in class 16; and

• Registration number 522501, ZORRO, in class 25.

1. Of the Application, the Opponent states:

   The strength of [the Opponent’s reputation] in the ZORRO trade mark is such that consumers would be confused, misled and deceived into believing that lighters and smoking paraphernalia bearing the [Applicant’s] Trade Mark have a connection or affiliation with [the Opponent]. Lighters and ashtrays are two products that commonly bear third party names, logos or marks licensed by their owner to the lighter manufacturer.[15]

   [15] Gertz, [39].

Grounds, onus and standard of proof

1. The SGP nominated grounds of opposition under ss 60 and 42. It is clear from the particulars provided for this ground of opposition that the ground pursued is that under s 42(b). In order to succeed in its opposition, the Opponent bears the onus of establishing one of the grounds of opposition.[16] If it does so, there is no requirement for the Registrar to consider any remaining grounds.

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

2. The relevant standard of proof is the ordinary civil standard based on the balance of probabilities.[17] The date at which the rights of the parties are to be determined is 9 June 2022,[18] which is also the priority date for the purpose of s 60.

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

   [18]  Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1954] HCA 82, [2], wherein Kitto J stated that the rights of the parties are determined as at the date of the application.

Section 60

1. Section 60 provides (notes omitted):

   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. The Opponent must therefore satisfy two limbs: first, that its trade mark had a reputation in Australia before the priority date of the Trade Mark; and second, that because of that reputation, use of the Trade Mark would be likely to deceive or cause confusion. It is therefore a comparison of the actual use of the Opponent’s trade mark ZORRO with a notional use of the Trade Mark.

3. For the purposes of s 60 ‘reputation’ is ‘the recognition of the [trade mark] by the public generally’.[19] It has also been expressed as recognition of the other trade mark by a ‘significant’ or ‘substantial’[20] number of people or potential consumers. Reputation cannot be assumed; it must be established as a matter of fact by the Opponent.[21] In Rodney Jane Racing Pty Ltd v Monster Energy Company it was observed that:

   The reputation of a trade mark has quantitative and qualitative dimensions. The quantitative dimension concerns the breadth of the public that are likely to be aware of the mark, which can be evidenced by the quantum of sales, advertising and promotion of goods or services to which the mark is applied. The qualitative dimension concerns the image and values projected by the trade mark, which affects the esteem or favour in which the mark is held by the public generally.[22]

   [19] McCormick & Company Inc v McCormick [2000] FCA 1335, [81] (Kenny J) (‘McCormick’).

   [20] Renaud Cointreau & Cie v Cordon Bleu International Ltee [2001] FCA 1170, [75] (Moore, Tamberlin and Goldberg JJ).

   [21] ConAgra Inc v McCain Foods (Australia) Pty Ltd [1992] FCA 159, [77] (Lockhart J).

   [22] [2019] FCA 923 [83] (O’Bryan J).

4. In McCormick & Company Inc v McCormick Kenny J further explained:

   In practice, it is commonplace to infer reputation from a high volume of sales, together with substantial advertising expenditures and other promotions, without any direct evidence of consumer appreciation of the mark, as opposed to the product ... public awareness of and regard for a mark tends to correlate with appreciation of the products with which that mark is associated, as evidenced by sales volume, amongst other things.[23]

   [23] McCormick (n 19) [86].

5. It is clear that the character ZORRO has a significant reputation. It has existed for more than 100 years and its popularity has given rise to numerous books, comic books, television series, movies, games and more.

6. However, it is not clear that the reputation of ZORRO is associated with the Opponent at all in Australia, as opposed to the reputation of Zorro as a famous literary character in history.

7. The Opponent is referenced in some of its exhibits, either as the holder of copyright or as a designer and seller of certain goods. However, none of these exhibits give any indication of traffic to the particular web pages or any sales made, and only unsupported statements are made such as ‘tens of thousands’ and ‘hundreds of thousands if not millions’ of sales globally and in Australia. Moreover, none of the pages relating to lighters give any indication of those goods being made available in Australia at all. It is also far from clear that the use exhibited is under the control of the Opponent. There are no licenses in evidence; for the most part there are only broad statements that alleged licenses exist. The most detail is given in respect of the alleged licensing arrangement with Aristocrat, however there are no supporting exhibits showing use of the Opponent’s ZORRO trade mark by Aristocrat, nor any licensing agreement or documented royalty payments.

8. The remainder of the exhibits make no mention of the Opponent. It is difficult to envisage that the traders mentioned in those exhibits have any commercial arrangement in place with the Opponent, such as the makers of products listed on ‘Redbubble’, an online market place for independent designers and artists.

9. The onus is upon the Opponent to establish its reputation as a matter of fact. The lack of detail regarding any sales in Australia, traffic to websites or licensing agreements means that I cannot be satisfied that the Opponent’s ZORRO trade mark has a reputation in Australia.

10. Accordingly, the ground of opposition under s 60 fails.

Section 42

1. Section 42 relevantly provides:

   42 – Trade mark scandalous or its use contrary to law

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

   …

   (b) its use would be contrary to law.

2. 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.[24]

   [24] Advantage Rent-a-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683, [28] (Madgwick J).

3. The Opponent asserts that use of the Trade Mark by the Applicant would amount to misleading and deceptive conduct in contravention of s 18 and/or 29(1) of Sch 2 to the Competition and Consumer Act 2010 (Cth) (commonly referred to as ss 18 and 29 of the Australian Consumer Law, (‘ACL’)), and that such use would amount to passing off.

4. The Opponent has failed to establish a reputation in its trade mark in respect of the ground under s 60. It therefore cannot meet the higher threshold in s 18 of the ACL of conduct which would be, not could be, misleading or deceptive (and not merely confusing per s 60 of the Act).[25]

   [25] See for example Ownit Homes Pty Ltd v Ownit Conveyancing Pty Ltd [2005] ATMO 47, [36] (Hearing Officer Williams); Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191, 198 (Gibbs CJ, Mason, Murphy and Brennan JJ).

5. The delegate in EMI (IP) Limited v Spotlight Pty Ltd[26] commented in similar circumstances:

   Paraphrasing the statement of the Registrar’s Delegate in A G Professional Hair Care Products Ltd v Geagroup Invest SRL[27], where a trade mark does not run afoul of s 18 of the ACL, neither will it run afoul of s 29 or s 151 (which has the same requirements as s 29 of the ACL) 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)’.[28] Sections 52 and 53 of the TPA were, respectively, the equivalent provisions to ss 18 and 29 of the ACL. Hill J in Re Equity Access Pty Ltd v Westpac Banking Corporation also addressed the relationship between s 52 of the TPA and passing off. His Honour considered that:

   The scope for the operation of s 52 will thus be broader than that involved in the tort of passing off so that in a case such as the present where the claim is for the protection of the reputation in a name against the use of that name by another, failure to succeed under s 52 or s 53 will invariably mean that proceedings for passing off would likewise fail.[29]

   [26] [2021] ATMO 40, [43] (Hearing Officer Smith).

   [27] [2014] ATMO 65, [50] (Hearing Officer Wilson).

   [28] [2003] FCA 104, [107] (Beaumont J).

   [29] [1989] FCA 506, [40] (Hill J) (citations omitted).

6. Bearing the above in mind, I am not satisfied that use of the Trade Mark would be contrary to law. Accordingly, the ground under s 42 fails.

Decision and Costs

1. The Opponent has failed to establish either of the grounds of opposition it nominated in the SGP.  Trade mark application no. 2275972 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.

2. The Opponent sought an award of costs in its favour. However. it has not succeeded in its opposition and so I award costs against the Opponent under s 221 in the relevant amounts under Schedule 8 of the Trade Mark Regulations 1995.

Nicole Worth

Hearing Officer

Delegate of the Registrar of Trade Marks

4 September 2024