privilege

A cautionary trade mark tale

In a rare case of a successful opposition under s 59, Energy Beverages has successfully opposed in the Court KMA’s attempt to register KANGAROO MOTHER.

Overview

As you might recall, Energy Beverages is the owner of registered trade marks in Australia for MOTHER in respect of amongst other things, non-acoholic beverages in class 5 and pharmaceutical and veterinary preparations, dietetic substances and food and beverages for babies in class 32.[1]

A New Zealand company, Erbaviva, applied to register KANGAROO MOTHER for a range of goods in classes 5, 29, 30, 31 and 32. Subsequently, the application was assigned to KMA. A Mr Zheng was the sole director and shareholder of both companies.

Energy Beverages’ opposition to the application on the basis of ss 42(b), 44 and 60 of the Trade Marks Act was unsuccessful. Energy Beverages “appealed” the Delegate’s decision to the Federal Court on the basis of s 59, s 44 and s 60.[2]

Secion 59

Section 59 provides:

The registration of a trade mark may be opposed on the ground that the applicant does not intend:

(a) to use, or authorise the use of, the trade mark in Australia; or

(b) to assign the trade mark to a body corporate for use by the body corporate in Australia;

in relation to the goods and/or services specified in the application.

which mirrors s 27.

Unlike s 92(4)(a), however, the person opposing registration under s 59 bears the onus of proving the lack of the requisite intention.

In very broad terms, this requires demonstration that the applicant does not have “a resolve or settled purpose at the time the application was filed to use the trade mark as a trade mark in relation to the relevant goods or services. A mere ”speculative possibility“ or ”a general intention to use the mark as some future but unascertained time” is not enough.

What happened

Before he incorporated Erbaviva and later KMA, Mr Zheng worked as the “Assistant to the Group Chairman” of NZ Skin Care Company. NZ Skin Care Company, as its name suggests, sold a range of skin care products and also home cleaning products.

The Group Chairman Mr Zheng assisted was a Mr Liu. Mr Liu was also the Chairman of a Chinese company, Shanghai Urganic. Mr Liu, however, was not a director of NZ Skin Care Company and Shanghai Urganic was not a shareholder in NZ Skin Care Company (although later it did become the ultimate shareholder of that company).

While he was still working for NZ Skin Care Company, Mr Zheng incorporated Erbaviva to sell “Erbaviva” brand skin care products and, after the trade mark application in issue had been filed, KMA. Neither company, however, has ever traded.

In the course of 2018, Erbaviva applied for and became registered as the owner of trade marks for a “Kangaroo Mother” logo and Kangaroo Mother in respect of a range of goods in classes 3, 5 and 21.[3]

In February 2019, Mr Zheng received an email from a Shanghai Urganic employee, Ms Lim,[4] informing him that Director Liu had “mentioned” we should apply for a food trade mark for “Kangaroo Mother”. Ms Lim supplied a catalogue for another company’s products to illustrate the goods under consideration. This exchange led to the application the subject of the appeal.

After some back and forth, Mr Zheng contacted Erbaviva’s then trade mark attorneys with instructions to file a trade mark application in Australia for a range of goods in classes 5, 29, 30, 31 and 32. (With the exception of “chocolate flavoured cola drinks”, Mr Zheng had simply cut and pasted the specification for another, unrelated company’s trade mark he had found on the IPONZ site.)

The attorney indicated he could file for this range of goods but proposed he amend it to ensure that Erbaviva had “the widest scope of protection in those classes.” So, after Mr Zheng approved that proposal, the application wound up in the form under opposition.[5]

What O’Callaghan J found

As the application was filed in Erbaviva’s name, the relevant intention was Erbaviva’s at the time the application was filed. That is, the question was whether or not Erbaviva had an intention to use the trade mark in any of the ways specified in s 59 when it filed the application.

O’Callaghan J held it did not.

First, the goods specified in the application as filed were much broader than those suggested by Ms Lim or proposed to the attorney by Mr Zheng.

Secondly, in cross-examination Mr Zheng’s evidence was that he did not regard Ms Lim’s report about what Director Liu “mentioned” as an instruction.

Thirdly, there were no documents produced through discovery or evidence of any plan or proposal beyond use for “gel candies, pressed candies, drops, powdered dairy products, solid beverages or capsules”.

Fourthly, Mr Zheng had simply cut and paste the specification he proposed to the attorney in a matter of minutes.

Fifthly, although the application had been made over four years ago, there was no evidence of any use or preparations to use.

Sixthly, there was no evidence to support the contention that Shanghai Urganic, NZ Skin Care Company and Erbaviva were part of a “conglomerate” (see “secondly” above).

Mr Zheng’s evidence unfortunately only went as far as claiming Erbaviva intended to use or authorise another company to use. So submissions that it intended to assign to KMA on its incorporation did not fly.

The evidence also included a non-disclosure agreement with an Australian manufacturer of various goods, but the counterparty was NZ Skin Care, not Erbaviva.

So O’Calaghan J found the s 59 ground proven and allowed the appeal to refuse registration. By way of obiter, O’Callaghan J would also have upheld the opposition grounds under s 44 and s 60.

Some observations

As noted above, successful oppositions under s 59 are not very common in view of the onus – unlike removal actions under s 92 in which s 100 places the onus on the trade mark owner to prove use.[6] And this case seems to have been particularly assisted by Mr Zheng’s problematic evidence and the amorphous nature of the relationship(s) with Director Liu.

That said, the first thing to note is that Energy Beverages did not pursue the ground before the Registrar but only on “appeal” where the Court procedures of discovery and cross-examination were deployed.

Next, it is significant that this was an opposition rather than an application under s 92. This is because O’Callaghan J followed Yates J’s decision in Apple (at [232]) and accepted that the whole application should be rejected if it failed in respect of any specified goods. At [28]:

There is but one application covering registration of the mark for all the services that have been specified. If the application fails in one respect, it fails as a whole….

In contrast, an application under s 92 may often result in removal of some, but not all, goods or services.

Thirdly, recognising this problem, KMA made an application on the penultimate day of the trial under s 197 to amend the specification of goods for a much more limited scope.

At [35], O’Callaghan J accepted that he should exercise this power in similar manner to that exercised by the Court when considering amendments to patents under s 105 of the Patents Act. That is, the power to amend was discretionary and required consideration of all the circumstances including when the owner became aware of the need to amend and any explanation for delay.

At [36] – [38], O’Callaghan J refused the request. KMA had been aware that Energy Beverages relied on the Apple approach from at least the opening. KMA failed to provide any explanation for its delay or the basis on which it proposed to exclude some goods but not others. Also, Erbaviva had deliberately sought the widest scope of protection possible, much broader than its own instructions.

In that connection, it is unusual to get the communications between the client and the attorney. While it is part of our jobs to ensure the client is getting appropriate protection, this case should serve as a warning against being too enthusiastic.

The question of discovery is also instructive. In October 2022, KMA had made discovery of 5 documents and a number of other documents over which privilege was claimed.

Two days before trial, however, KMA announced it proposed to rely on documents over which it had previously claimed privilege and, in the course of the trial just before Mr Zheng’s cross-examination, KMA sought to rely on a “further, extensive, tranche of documents which ought to have been produced in answer to the order for discovery”. At [62], O’Callaghan J invoked Aon Risk and refused that attempt on the grounds of prejudice and KMA’s failure to adequately explain the delay.

Energy Beverages LLC v Kangaroo Mother Australia Pty Ltd [2023] FCA 999 (O’Callaghan J)


  1. The class 32 goods were specified in TM No 1320799 for the “Mother” mark in gothic script.  ?
  2. Because the “appeal” is a hearing de novo, it is possible to raise grounds not raised before the Registrar.  ?
  3. After the trade marks were assigned to KMA, the logo mark has subsequently been removed for non-use under s 92 on application by Energy Beverages. KMA did not seek to defend the non-use application.  ?
  4. Although not an employee of NZ Skin Care Company, she did have the use of a NZ Skin Care Company email account.  ?
  5. Reasons for decision at [93] – [94].  ?
  6. S 92(4)(a) can be rebutted by showing use in good faith after the application was filed. And s 92(4)(b) proceedings can be brought only after the expiry of the period specified in s 93 (which is different depending on whether the application was filed before or after the Productivity Commission Implementation Act amendments).  ?

A cautionary trade mark tale Read More »

Logan J has ruled that documents prepared by a firm of trade mark attorneys in connection with a domain name arbitration are not covered by trade marks attorney privilege. The limits on the scope of “trade marks attorney privilege” is the main takeaway – in particular, Logan J considered that a draft statutory declaration prepared in connection with a UDRP complaint did not fall within the scope of the privilege. There is a warning about how a claim of privilege is made too.

Logan J has ruled that documents prepared by a firm of trade mark attorneys in connection with a domain name arbitration are not covered by trade marks attorney privilege. The limits on the scope of “trade marks attorney privilege” is the main takeaway – in particular, Logan J considered that a draft statutory declaration prepared in connection with a UDRP complaint did not fall within the scope of the privilege. There is a warning about how a claim of privilege is made too.

Titan is suing a Mr Cross and a Dr Harmon alleging that a website they, or one of them, operated – Beware of Titan Garages – infringed its trade mark rights and copyright.

Titan alleges that Mr Cross is a fictitious person.[1]

Titan had previously brought a complaint against Mr Cross under the UDRP unsuccessfully. Mr Cross was represented in that dispute by a firm of patent and trade mark attorneys (the attorneys) and not their associated law firm.

Titan issued a subpoena to the attorneys for production of documents which disclosed information about the identity of Mr Cross. The subpoena allowed redaction of information in the documents protected by client legal privilege (apart from name and contact details). The attorneys produced documents in answer to the privilege in redacted form. After inspection, Titan sought to access the documents in unredacted form. The attorneys objected, citing s 229.

Section 229 provides that a communication, or a record or document, made for the dominant purpose of a registered trade marks attorney providing “intellectual property advice” is privileged in the same way and to the same extent as if made by a lawyer.

The attorneys recognised that the privilege was Mr Cross’ privilege; not theirs. They had made efforts to obtain his instructions, but these were not forthcoming. Mr Cross did not appear at the hearing before Logan J either. As it was Mr Cross’ privilege to waive or not, the attorneys properly maintained the objection.

Why the claim of privilege was refused

In support of the claim, the trade mark attorneys provided an affidavit by the solicitors acting for them in connection with the subpoena. It stated that the deponent was informed the documents:

(1) were part of the trade mark attorney firm’s confidential files; and

(2) contained confidential communications with the attorneys for the purpose of them giving advice in connection with the UDRP complaint.

Logan J considered that the evidence did not rise above “mere assertion” and, in the circumstances of this case, was insufficient to discharge the onus on the person claiming the privilege to prove the privilege applied. His Honour had earlier explained at [9] that:

“the essential issue on a claim for privilege is the purpose for which the document or communication in question was made”: Hancock v Rinehart at [32]. It necessarily follows that the best, though not the only sufficient, source of evidence is the direct evidence of the person whose purpose is in question: Hancock v Rinehart at [32]. Procedural fairness questions in relation to other affected parties intrude in relation to any endeavour to prove the requisite purpose just by an inspection by the Court of the document which is the subject of the asserted privilege. That means that a court ought to be cautious about acting upon an invitation so to do, especially if that invitation is not attended by separate evidence describing the document and the circumstances of its creation….

Logan J did acknowledge that there might be other situations where the circumstances could lead to a different result. His Honour’s approach, however, highlights the risks that can be run by what might be thought to have been a fairly typical form of claim to privilege.

No doubt the attorneys were hampered in preparing the response by Mr Cross’ failure to provide instructions. One might also speculate whether his failure to provide instructions or to appear in circumstances where Titan alleged he was fictitious influenced his Honour’s approach. Titan did not take the point that the affidavit was “on information and belief”, but that is often problematic.[2] Logan J was not invited to inspect the documents and did not consider it appropriate to do so of his own motion. Presumably the point of claiming the privilege would be lost if his Honour had inspected the documents.

The scope of trade mark attorney privilege

Logan J noted that s 229 provides a privilege only in respect of communications and documents made for the dominant purpose of providing “intellectual property advice”.

Relevantly, that was defined as advice in relation to “trade marks” or (one might add) “any related matters”.

His Honour pointed out at [11] – [12] that the privilege was conferred only in respect of the advisory aspect of client legal privilege and did not extend to the litigation aspects.[3] While s 19(2) of the Code of Conduct for Patent and Trade Marks Attorneys 2013 incorporates a duty of confidentiality into the attorneys’ retainer. The terms and scope of that obligation were not co-extensive with the privilege. Consequently at [14]:

As s 229 is presently drawn, it is certainly possible to conceive of anomalous outcomes concerning the existence or otherwise of s 229 privilege with respect to such an arbitral proceeding. For example, it is not controversial that advice as to whether the rights associated with a registered trade mark confer rights in respect of an Internet domain name fall within the definition of “intellectual property advice” in s 229(3). And so, too, would advice as to whether the contents of a statutory declaration for use in an arbitral proceeding were sufficient to demonstrate that those rights did or did not extend to an Internet domain name seem to fall within the ambit of s 229 privilege – either by virtue of paragraph (b) or (e) of the s 229(3) definition. But the mere drafting of that statutory declaration by a registered trade mark attorney would not attract s 229 privilege. Likewise, advice as to what submission ought to be made to demonstrate that the asserted trade mark right did or did not extend to cover a domain name would seem to fall within the scope of the privilege, whereas the mere drafting of such a submission for use in an arbitral proceeding would not. However this may be, the present claim must be determined solely by reference to the scope of the privilege as presently enunciated by Parliament. (emphasis supplied)

If with respect his Honour’s approach is right, there would appear to be potentially quite drastic consequences for the normal practice of attorney firms, and for that matter patent attorneys,[4] in drafting statutory declarations and preparing submissions in contested hearings before the Office such as opposition proceedings.

Of course, given the view Logan J took about the adequacy of the claim to privilege, his Honour’s view on the scope of the privilege is “only” obiter dicta.

And, it must be said, the circumstances were rather unusual given Mr Cross’ failure to provide instructions or defend his claim.

Further, his Honour was not considering the potential application of the privilege to proceedings in the Office. And it might be possible to argue that such proceedings are not what is normally within the scope of litigation privilege rather than “advisory” privilege. Both privilege provisions for trade mark attorneys and patent attorneys draw a clear line between “intellectual property advice” and “court proceedings”. But “arbitrations” under the UDRP are not court cases either, officially being styled administrative proceedings without prejudice to the parties’ rights to litigate in court.

It may be arguable that, given the traditional role of patent attorneys and trade marks attorneys in preparing such documents before the Office (at least), it can be argued that they fall within the scope of the “any related matters” part of the definition of “intellectual property advice”. That may be seen as straining the concept of “advice” too far in the dichotomy Logan J acted under.

On a positive note, Logan J accepted that documents prepared by persons who were not registered trade marks attorneys could benefit from the privilege if prepared under the supervision of a registered trade marks attorney.

Titan Enterprises (Qld) Pty Ltd v Cross [2016] FCA 1241


  1. at [4].  ?
  2. For example, Ansell Healthcare Products LLC v Reckitt Benckiser (Australia) Pty Ltd (No 2)
    [2016] FCA 765 at [32] – [35].  ?
  3. Contrast s 118 and s 119 of the Evidence Act 1995.  ?
  4. Patents Act 1990 s 200  ?

Read More »

Dough Vo = no go

Arnott’s complained (e.g. here and here) that Krispy Kreme’s new dooughnut, the Dough Vo, infringed its trade mark for the Iced Vo Vo

You probably had those marshmallow and jam concoctions inflicted on you as a kid. But the trade mark, No 864, which is just for VO VO has been registered since 1906 for biscuits.

Krispy Kreme was reported in the press as saying it wasn’t going to back down – on legal advice, no less –

Arnott’s gave the Australian arm of the doughnut chain until 5pm (AEST) on Friday (April 24) to stop using the name and to undertake not to use similar names in the future.

However, Krispy Kreme Australia CEO John McGuigan said after taking legal advice, the company had decided to continue selling the Iced Dough-Vo.

Next thing we know, however, the headlines read “Dough-Vo bows to Vo-Vo” and “Krispy Kreme backs down on Vo-Vo boo-boo“.

One interesting question for trade mark students: to what extent can you look at what the Dough-Vo looks like when considering the trade mark infringement question? In this case, you probably get rather more latitude because the infringement would arise under s 120(2).

Another thing to worry about. How often do you see (or write in your letters):

we have taken legal advice and our advice is that it is not the case (that trademark was breached)

Has Mr Krispy Kreme just waived privilege in his legal advice?  Have a look e.g. at Bennett v Chief Executive Officer of the Australian Customs Service [2004] FCAFC 237 esp. at [4], [10] and [32].

Lid dip: James McDougall for word of Krispy Kreme’s retreat.

Dough Vo = no go Read More »