bad faith

Attorneys can’t witness stat decs for IPONZ

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In dismissing Lolicel’s opposition to the registration of SIMPLY DELISH by Stanmar, Assistant Commissioner Rendle excluded evidence witnessed by a patent attorney in Australia because a patent attorney is not authorised to witness a declaration under New Zealand’s Oaths and Declarations Act 1957. The Assistant Commissioner would have dismissed the opposition even if the evidence had been allowed.

Background

Stanmore applied to register SIMPLY DELISH, TMA No. 1163933, in respect of dessert mixes, dessert mousse, dessert puddings and the like in class 30.

Lolicel opposed, claiming use of the mark by Stanmore was likely to deceive or cause confusion and the application was filed in bad faith, respectively, Trade Marks Act 2002 (NZ) ss 17(1)(a) and (2). Lolicel in effect claimed it was the owner of the trade mark and Stanmore was merely its distributor. Stanmar claimed it was the owner and Lolicel was just its contract manufacturer.

Lolicel filed a statutory declaration by its trade mark attorney, a Ms Rimmer, in support of its opposition. Most of the contents of the declaration were based on information provided by Lolicel’s trade mark attorney in South Africa and so were hearsay. Ms Rimmer’s declaration was witnessed in Brisbane Australia by its Australian patent attorney.

Stanmare did not file any evidence in answer but requested a hearing.

(After the hearing was requested, Lolicel sought to file a declaration by one of its employees which “confirmed” the contents of Ms Rimmer’s declaration. As it was filed out of time and an extension of time had not been requested, however, this declaration was excluded from the evidence.)

The declaration was inadmissible

Section 160 of the New Zealand Trade Marks Act requires evidence before IPONZ to be in the form of an affidavit or a statutory declaration in the absence of a direction to the contrary. (There was no direction to the contrary.)

The Rimmer declaration purported to have been made and witnessed under s 11 of the Oaths and Declarations Act 1957 (NZ).

Section 11(1) of the Oaths and Declarations Act 1957 provides:

A declaration made in a Commonwealth country other than New Zealand shall be made before a Judge, a Commissioner of Oaths, a notary public, a Justice of the Peace, or any person authorised by the law of that country to administer an oath there for the purpose of a judicial proceeding, or before a Commonwealth representative, or before a solicitor of the High Court of New Zealand. (emphasis supplied)

The Assistant Commissioner contrasted the specific requirements of s 11 with the terms of s 10 and s 12, the latter of which authorised officers of the armed services of a Commonwealth country, or an ally, to witness both affidavits and statutory declarations.

So it was necessary to show that the patent attorney had authority under the law in Australia to administer an oath for the purposes of a judicial proceeding.

It is clear that a patent attorney can witness a statutory declaration under Australian law – at least for the purposes of matters arising under Commonwealth laws.[1]

The Assistant Commissioner agreed with Stanmore, however, that a statutory declaration was not interchangeable with an affidavit, the truth of which has been sworn on oath or affirmation.

Moreover, it may be noted, s 6(3) of the Statutory Declarations Act 1959 (Cth) provides that the section does not authorise the use of a statutory declaration in a judicial proceeding.

As the declaration was made in Brisbane, the Oaths Act 1867 (Qld) s 16A provides:

(1)A person’s affidavit may be witnessed by any of the following persons without a commission being issued for the purpose—

(a) a justice, commissioner for declarations or notary public under the law of the State, the Commonwealth or another State;

(b) a lawyer;

(c) a conveyancer, or another person authorised to administer an oath, under the law of the State, the Commonwealth or another State;

(d) if the affidavit is witnessed outside Australia—a person authorised to administer an oath under the law of the place in which the affidavit is witnessed;

(e) another person prescribed by regulation for this subsection.

and reg. 4 of the Oaths Regulations 2022 (QLD) prescribes only “a senior police officer”.

The Assistant Commissioner was also referred to s 186 of the Evidence Act 1995 (Cth) which identifies the persons authorised to witness an affidavit for the purposes of court proceedings in the federal jurisdiction as “any justice of the peace, notary public or Australian lawyer”.

As a result, the Assistant Commissioner concluded at [38] – [41] that Lolicel’s Australian patent attorney was not authorised to witness affidavits under Queensland or Australian Federal law. Accordingly, the Rimmer declaration was not admissible in the opposition proceedings before IPONZ.

Hearsay

There was a further problem with the Rimmer declaration. Ms Rimmer had made it on the basis of information supplied by Lolicel’s trade mark attorney in South Africa. In other words, it was hearsay.

The Assistant Commissioner referred to an earlier IPONZ decision, BitFlyer Inc v Coinbase Inc, in which another Assistant Commissioner, recognising that trade mark oppositions dealt with valuable property rights, explained at [36] that hearsay evidence should be given little, if any, weight:[2]

in trade mark oppositions the Assistant Commissioners take the tribunal approach but are guided by and rely on the Evidence Act when assessing the reliability and probity of evidence. A high standard of evidence is expected.

As there was no way of separating statements made by Ms Rimmer from her own knowledge and those which were hearsay, at [52] the Assistant Commissioner concluded that Ms Rimmer’s declaration was inadmissible or of no probative weight.

The Assistant Commissioner appears to have made an exception from this ruling for invoices and emails between the parties as “business records”. At [53], however, the Assistant Commissioner considered these materials, even if admitted, were not adequate to sustain Lolicel’s grounds of opposition.

The substantive grounds

Section 17(1)(a) required the opponent to show that there was an “awareness, cognisance or knowledge” of its mark in the relevant market at the application date to found a likelihood of deception or confusion.

The business records annexed to Ms Rimmer’s declaration did not provide a sufficient foundation for this as they did not address the typical indicators of the extent of use in New Zealand such as sales volumes or advertising and promotional expenditure on the brand in New Zealand.

The s 17(2) ground required Lolicel to show that Stanmore had made its application in bad faith.

At [62], the Assistant Commissioner considered this required Lolicel to prove it was the owner of the trade mark in New Zealand when Stanmore applied to register it and it was unreasonable for Stanmore to have made the application in those circumstances.

While there were email communications between the parties that showed they had dealings with one another before the priority date, these communications left ownership of the trade mark unclear. Accordingly, this ground failed too.

Short comment

As the Trans-Tasman arrangements mean that all Australian and New Zealand patent attorneys are admitted to practise in both Australia and New Zealand, regardless of whether they are based in New Zealand or Australia, precluding patent and trade mark attorneys based in Australia from witnessing statutory declarations for use in IPONZ proceedings seems anomalous as well as inconvenient for businesses.

Lolicel (Pty) Ltd v Stanmar International [USA] Inc. [2023] NZIPOTM 49

  1. Statutory Declarations Act 1959 (Cth) [s 8][s8] and, for prescribed persons, see the Statutory Declarations Regulations 1993 (Cth) reg. 4 and items 107 and 111 of Sch. 2.  ?
  2. Citing Lacoste v Crocodile International Pte Ltd [2014] NZIPOTM 26 at [18].  ?

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Big Mac sues Big Jack

Leave a Comment / Trade marks / / / , , , , , , , , , , , ,

Two all beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun – it’s a …

As you have no doubt heard, late last month McDonald’s Asia Pacific sued Hungry Jacks following the launch in July of the “Big Jack”.[1]

Michaela Whitbourn at the Channel 9 paper has a clean slide over comparison or you can get messy fingers here (your choice whether you skip the ads or not).

Mr Too Aussie’s video suggests the Big Jack is a special or limited time offer. However, Hungry Jack’s did file for and has obtained registration for “Big Jack” as a trade mark, No 2050899, for hamburgers etc. in classes 29 and 30, way back in November 2019. And Ben Butler at The Guardian reports McDonalds is also seeking revocation of that registration on the grounds the application was made in bad faith.[2]

After news of the court proceeding broke, Hungry Jack’s doubled down:

Someone’s suing Hungry Jack’s. They reckon Aussies are confusing the Big Jack with some American burger. But the Big Jack is clearly bigger ….

Hmmm. Earlier this year, Katzman J, in another case about burgers, explained:

What is the line between inspiration and appropriation? That is the question at the heart of the dispute in the present case.

That case didn’t turn out so well for the emulators.

As you will appreciate, McDonald’s have to get TM No. 2050899 cancelled in light of s 122(1)(e). Presumably, in addition to the “bad faith” allegation, McDonald’s is also asserting s 44 and s 60.

These provisions, like s 120, raise the question whether Big Jack is substantially identical with, or deceptively similar to, Big Mac.

You might think, even on the expanded and controversial test for “substantial identity” declared in Pham Global, the side by side comparison doesn’t work out in McDonald’s favour. Mac and Jack look and sound different and, you might think, convey rather different ideas.

What about deceptive similarity tested on the basis of imperfect recollection?

There couldn’t be too many Australians, especially of the fast food consuming public, who wouldn’t appreciate that Big Jack is gunning for Big Mac. But, is there a real and appreciable risk that a significant number of them would be caused at least to wonder whether there was some association with McDonald’s?[3]

Also, you would have to think, all those ordinary Australians would know you can only get a Big Mac in a McDonald’s outlet.

You would probably have to think they pretty much know Hungry Jack’s is a direct competitor, which makes a point of being critical of McDonald’s.[4]

Similarly, pretty much all those ordinary Australians winding up in a Hungry Jack’s take away could hardly be under any illusions that they were in Big Mac land?

Now, at 50(iii), French J did wholly orthodoxly say:

In considering whether there is a likelihood of deception or confusion all surrounding circumstances have to be taken into consideration. These include the circumstances in which the marks will be used, the circumstances in which the goods or services will be bought and sold and the character of the probable acquirers of the goods and services.

Does being in the shop count? Or is that violating the rule that you compare only the allegedly infringing trade mark to the registered trade mark?

What about billboards and the like? No shop context, probably a Hungry Jack’s logo – maybe not.

Also, you might think that “Big Mac” gets into the Woolworths territory of a household name and there could have lots of fun re-running the fight between Woolworths and Henschke.[5]

What do you think?

Would things be any different if we had an anti-dilution law?

Maybe, at 50c to almost $1 more, the Big Jack will turn out to be a commercial flop and Hungry Jack’s will give up. I guess we’ll have to wait and see.

Lid dip: Jasper Kwok

  1. And, by way of fig leaf, Hungry Jack’s also introduced a “Mega Jack”. NSD967/2020 – First case management hearing before Justice Burley on 2 October.  ?
  2. Shades of “merit” and “nerit”, but note the interesting approach in OHIM rejecting Banksy’s – or those representing him – attempt to “trade mark” one of his, er, graffiti.  ?
  3. See Registrar of Trade Marks v Woolworths at [50] per French J.  ?
  4. Just exactly whose burgers are Hungry Jack’s supposed to be better than?  ?
  5. Most recently addressed in the AMG case at [36] – [42]: The more famous your trade mark, the less likely people will recall it imperfectly.  ?

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Superman KOs “superman workout”

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DC Comics, the owner of rights to the, er, man of steel character, has successfully blocked an attempt the register “superman workout” for “conducting exercise classes; fitness and exercise clinics, clubs and salons; health club services (exercise)” in class 41. It did have to appeal from the Registrar of Trade Marks to the Federal Court and it did not win for the reasons you might think.

Like the Registrar, Bennett J rejected DC Comics’ opposition based on s 60. Her Honour accepted that the superhero was indeed well-known, but noted that the term “superman” was also an ordinary English word defined as such in both the Macquarie and Oxford Dictionaries:

[49] …. the use of the word “superman” in the Trade Mark is, or has become, descriptive. Use of a word originally associated with a particular trade source, may over time become descriptive of a class of goods or characterisations.

[50] When the Trade Mark is used without reference to any of the well known indicia associated with the DC Comics superhero and as contained in the registered Trade Mark or other trade marks registered by DC Comics, there is no likelihood that use of the Trade Mark would be likely to deceive or cause confusion by reference to the Superman word mark, or the subject matter of DC Comics’ registered trade marks. The public would not be caused to wonder whether “superman workout” came from the same source as the Superman character or DC Comics.

Accordingly, there was no real, tangile danger of people confusing use in relation to fitness workouts with the superhero.

When Cheqout began using “superman workout”, however, it also used it with this logo:

cheqout logo
cheqout logo

Bennett J was willing to infer that this logo was being used to strengthen the allusion to the Man of Steel and so appropriate the benefit of DC Comics’ reputation for Cheqout’s fitness services. That was not in accordance with acceptable commercial standards and so the application was made in bad faith contrary to s 62A.

In reaching that conclusion, Bennett J adopted the approach previously taken by Dodds-Streeton J in the Tennis Warehouse case. Bennett J emphasised that Dodds-Streeton J rejected a submission that exploitative conduct alone could never constitute ‘bad faith’. Rather, it was the particular circumstances of that case, especially the US company’s failure to follow up its demands for 2 years.

DC Comics v Cheqout Pty Ltd [2013] FCA 478

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Registering a trade mark in bad faith

1 Comment / Trade marks / / / , , , , , , ,

Dodds-Streeton J has handed down what appears to be the first detailed judicial consideration in Australia of what constitutes making an application for a trade mark in bad faith contrary to s 62A.

Sports Warehouse Inc. and Fry both sell tennis products online using trade marks based on TENNIS WAREHOUSE.

Sports Warehouse started first, in 1984 in California although in time its business expanded and in 1994 it went on line. Eventually, its sales expanded internationally including to Australia.

Fry had successfully opposed Sports Warehouse registering TENNIS WAREHOUSE.

Sports Warehouse successfully opposed Fry registering:

However, Dodds-Streeton J has now upheld Fry’s appeal.

The grounds of opposition included that the trade mark lacked capacity to distinguish, that it was confusingly similar to Sports Warehouse’s trade mark and also that the application was made in bad faith.

The s 62A ground was based on the fact that, before Fry adopted its trade mark, its principal, Mr Fry had done a Google search and come across Sports Warehouse’s website. He also used some photographs from Sports Warehouse’s website for his own site. However, he said that before he adopted the name his wife had done a trade mark search to confirm it was not an “international” trade mark. Further, he acknowledged at [21]:

there was potential that some people would confuse the websites (at least at the point of the domain name) and acknowledged that he chose the name partly for that reason, but denied that he hoped to use Sports Warehouse’s reputation in order to boost early sales.  He also denied that he believed the name TENNIS WAREHOUSE would cause customers aware of Sports Warehouse’s website to think that the Fry Consulting website was an arm or affiliate of Sports Warehouse.

Dodds-Streeton J noted that, when introduced in 2006, the EM had included a number of examples of bad faith:
  • a person who monitors new property developments; registers the name of the new property development as a trade mark for a number of services; and then threatens the property developer with trade mark infringement unless they licence or buy the trade mark;
  • a pattern of registering trade marks that are deliberate misspellings of other registered trade marks; and
  • business people who identify a trade mark overseas which has no market penetration in Australia, and then register that trade mark with no intention to use it in the Australian market and for the express purpose of selling the mark to the overseas owner.

(The last example may be contrasted to the “sharp”, but previously legitimate, practice of registering such a mark and operating a business in Australia – see [20] here.)

The concept in s 62A, however, was not limited to those examples. Her Honour drew substantial guidance from a number of English cases (and consideration of those decisions in the Office) on s 3(6) of the Trade Marks Act 1994 (UK) which adopted a “combined test” involving both subjective and objective elements:

dishonesty requires knowledge by the defendant that what he was doing would be regarded as dishonest by honest people, although he should not escape a finding of dishonesty because he sets his own standards of honesty and does not regard as dishonest what he knows would offend the normally accepted standards of honest conduct.

and

The words “bad faith” suggest a mental state. Clearly when considering the question of whether an application to register is made in bad faith all the circumstances will be relevant. However the court must decide whether the knowledge of the applicant was such that his decision to apply for registration would be regarded as in bad faith by persons adopting proper standards.

Accordingly, her Honour considered:

  1. Bad faith, in the context of s 62A, does not, in my opinion, require, although it includes, dishonesty or fraud. It is a wider notion, potentially applicable to diverse species of conduct.
  2. The formulation in United Kingdom authority of bad faith as falling short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in a particular area is, in my view, an apt touchstone. An overly literal application may, however, tend to negate the relevance attributed to the applicant’s mental state in the combined test preferred in Harrison.
  3. Further, in my view, mere negligence, incompetence or a lack of prudence to reasonable and experienced standards would not, in themselves, suffice, as the concept of bad faith imports conduct which, irrespective of the form it takes, is of an unscrupulous, underhand or unconscientious character.

Dodds-Streeton J rejected the proposition that it was enough that Fry knew of Sports Warehouse’s trade mark and usage.

While her Honour regarded Fry’s conduct as exploitative, the factor which saved it in the end was an exchange of correspondence between the parties. After Sports Warehouse learnt of Fry’s use and demanded it stop on the basis of its international trade mark, Mr Fry had challenged it to provide proof of the international trade mark. Sports Warehouse said it would do so the next day but, her Honour found, never did so. At [174]:

  1. In circumstances where:

(a) Mr Fry unequivocally indicated his willingness to cease using TENNIS WAREHOUSE if Sports Warehouse provided evidence of its entitlement, and sought a prompt response, so that if necessary he could change the name prior to significant business development and expenditure on advertising;

(b) Mr Fry did not acknowledge Sports Warehouse’s ownership or rights in Australia and Kenny J did not find that Mr Fry did not believe his assertions about the implications of a business name search, although they were misconceived;

(c) Sports Warehouse, despite undertaking to do so, did not provide any documentation or evidence of its entitlement or rights to the “TENNIS WAREHOUSE” mark, the subsequent application to register which in Australia was unsuccessful. It failed to make any further contact or objection until Fry Consulting again initiated contact two years later; and

(d) During that period, in the absence of any further objection or contact from Sports Warehouse, Mr Fry proceeded to develop his business using the words “TENNIS WAREHOUSE”, to which he added the word “AUSTRALIA”, and subsequently commissioned Mr Hughes to design a tennis ball logo, resulting in a composite mark,

it was difficult to accept that Fry’s conduct fell short of what would be acceptable commercial behaviour (especially, one might add, where Fry did not lodge its application until 2 years after Sports Warehouse said it would provide its proofs the next day).

Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) [2012] FCA 81

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