Chris and Dora Di Lorenzo Partnership v Denversian Pty Ltd & Anor [2020] FCAA 1718 (30 June 2020)

On 30 June 2020, Chris and Dora Di Lorenzo Partnership (Di Lorenzo) unsuccessfully appealed against a decision by the Registrar of Trade Marks regarding registration of the trade mark BLACK SHEEP by Denversian Pty Ltd (Denversian).

Background

Di Lorenzo is the registered owner of Australian Registration 1681212 for the BLACK SHEEP & Device trade mark represented below. This registration covers goods in classes 30 (coffee and coffee products) and 43 (coffee bar and coffee house services, coffee shop services) and has a priority date of 16 March 2015.

Since September 2011, Di Lorenzo operated a café business in Sydney, New South Wales under the name Black Sheep.

Denversian filed Application 1720917 for BLACK SHEEP covering “restaurants, restaurant services; café and bistro services” in Class 43 on 10 September 2015. Since August 2013, Denversian operated a bistro restaurant on the Gold Coast, Queensland.

Application 1720917 was initially accepted for registration pursuant to the provisions of s44(4), which refer to registration on the basis of prior and continuous use, and the trade mark included the endorsement “Registration of this trade mark is limited to the State of Queensland”.

Di Lorenzo subsequently opposed Denversian’s application, the parties lodged evidence and written submissions, and the Delegate made his decision.

The Delegate was of the opinion that the BLACK SHEEP & Device trade mark and the BLACK SHEEP trade mark are deceptively similar, and cover similar services. However, the Delegate was satisfied that Denversian adopted the BLACK SHEEP trade mark without knowledge of the BLACK SHEEP & Device trade mark of Di Lorenzo, because:

  • the businesses were substantially different (i.e. a café restaurant and a mobile coffee van, respectively;
  • the businesses operated in geographically distinct locations (i.e. Queensland and New South Wales);
  • Di Lorenzo had no plans to expand its business into the Queensland market; and
  • Denversian had established a reputation by use of the BLACK SHEEP trade mark in its local region.

The Delegate found that there was sufficient honest concurrent use provided by Denversian, and that Di Lorenzo had failed to establish any ground of opposition. Costs were awarded to Denversian.

Di Lorenzo appealed this decision.

Appeal

The appeal filed by Di Lorenzo (which relied on Sections 58 and 58A, i.e. ownership of the trade mark) was filed out of time, however, following procedural orders to allow for an extension of time, the appeal proceeded.

The grounds were:

  • Denversian is not the owner of the trade mark ‘BLACK SHEEP’
  • Di Lorenzo have earlier use of the same/similar trade mark ‘BLACK SHEEP’;
  • Di Lorenzo first used the trade mark ‘BLACK SHEEP’ in September 2011 i.e. before Denversian in around December 2013; and
  • Di Lorenzo registered Trade Mark 1681212 ‘BLACK SHEEP’ on 16 March 2015 in Classes 30 and 43.

Evidence of Use

Di Lorenzo’s Evidence

An overview of Di Lorenzo’s evidence before the priority date of 16 March 2015 is as follows:

  • Bank statement – for “Mrs Dora Di Lorenzo & Mr Chris Di Lorenzo T/A Black Sheep Mobile Café” with a single opening deposit of $2000 dated 18 August 2011;
  • Supplier invoices – 9 third party supplier invoices during the period November 2011-March 2015 for food and beverage supplied addressed to “Black Sheep Mobile Café” or “blacksheep mobile café”. The payment withdrawal details are for “Mrs Dora Di Lorenzo” and Her Honour notes that they do not evidence any sales or supplies in the course of trade by any person under the BLACK SHEEP & Device trade mark, or “black sheep mobile café”;
  • Van signage and business cards – Di Lorenzo stated that a professional sign writing business placed the BLACK SHEEP & Device trade mark on the sides of their van and on business cards in July 2011. In evidence they provided colour artwork proofs dated 28 June 2011 of vinyl graphics, and an artwork proof for a proposed business card (example below). The proofs do not show the BLACK SHEEP & Device trade mark by itself. The artwork proofs also show the domain name blacksheep,cafe.com, however, there is no evidence that this domain was registered or used. Invoices related to the vehicle transfers and business card addressed to “Black Sheep Mobile Café” were also provide, but it is was not clear who made the payments;
  • Domain name – Di Lorenzo claimed that they hosted the bsmcafe.com.au domain name from 28 June 2011, however, there was no evidence of when the domain name was registered, in whose name or whether it was operated as a website promoting any trading activities under or by reference to the BLACK SHEEP & Device trade mark;
  • April 2013 webpage – there is single historical webpage capture from www.bsmcafe.com.au from 23 April 2013, which bears the “Black Sheep Mobile Café” logo. However, it did not evidence an existing trade channel.
  • Other evidence after the priority date of 16 March 2015 – this evidence included the purchase of the domain names black-sheep.com.au and black-sheep.net.au, and mobile numbers in June 2015, a trade mark application filed in August 2015 for the word BLACK1. This evidence was not sufficient to establish or support a claim to use of the BLACK SHEEP & Device trade mark, or the phrases black sheep” or “black sheep mobile café”. There was also a “to whom it may concern letter” from Di Lorenzo’s accountant. However, the claims made by the accountant do not constitute proof of trading activity.

In conclusion, the material relied on by Di Lorenzo had substantial evidentiary gaps and deficiencies. Her Honour was not satisfied that Di Lorenzo established that they had a commitment to offering to supply any of the services or goods claimed by the BLACK SHEEP & Device registration, the BLACK SHEEP mobile café logo, the phrase “black sheep” or “black sheep mobile café”, prior to 16 March 2015.

Denversian’s Evidence

An overview of Denversian’s evidence (by way of a witness statement and evidence from the owner and sole director, Ms Bressolles) is as follows:

  • Since August 2013, Denversian had operated a bistro under the name “Black Sheep Bistro” on the Gold Coast, in Queensland;
  • A business name registration was filed for “Black Sheep Bistro”, and Denversian’s accountant confirmed that “Denversian ATF Denversian Family Trust trading as Black Sheep Bistro” had filed the required Business Activity Statements and Trust Tax returns since 16 December 2013;
  • Facebook posts for the “Black Sheep Bistro” from 16 December 2013;
  • Marketing through online listings and reviews on well-known websites (e.g. Google, Good Food Gold Coast, TripAdvisor), large signage outside the restaurant, other signage, kerbside chalkboards, menus and flyers used in the restaurant and locally distributed through mail drops.

Ms Bressolles noted that she came up with the name honestly as she is the “black sheep” in her family, and there is a growing New Zealand population on the Gold Coast. She also indicated that she was not aware of the Di Lorenzo BLACK SHEEP & Device trade mark until mid 2015 after a search of the Australian Trade Marks Register.

Her Honour was satisfied that the evidence established honest, continuous and consistent use of the trade mark in the course of trade from 2013.

Grounds of Opposition

Sections 58 (not the owner)

Di Lorenzo failed that the first hurdle as they did not establish first use of the phrase “black sheep” or the BLACK SHEEP & Device trade mark in the course of trade.

They also needed to establish first use of a mark substantially identical to the opposed mark. In this regard, Her Honour noted that the device element within the BLACK SHEEP & Device trade mark substantially informs and affects the trade mark’s identity. It is an essential element and a dominant cognitive cue. It is also not an immediately recognisable image (i.e. not identifiable as a black sheep). The commonality of the word elements “BLACK SHEEP” is insufficient to convey and overall substantial identity. Accordingly, Her Honour found that the respective trade marks are not substantially identical.

Therefore, the s58 ground of opposition was unsuccessful

Di Lorenzo would also have had to establish that they had made first use in relation to services that are “the same kind of thing”. Her Honour commented that, in her view, “café services” and “coffee shop services” are the same of kind of thing; however, she considered restaurants, restaurant services, and bistro services not to be true equivalents.

Section 58A (first and continuous use)

Di Lorenzo did not establish first use of the BLACK SHEEP & Device trade mark (or any other trade mark) prior to Denversian (i.e. from 2013). Di Lorenzo also failed to show use of the BLACK SHEEP & Device trade mark (or any other trade mark) in the course of trade. Therefore, the s58A ground of opposition was unsuccessful

Her Honour also made the point that the prior use ground of opposition under s58A will only be established when there has been competing prior use in the same geographical area covered by the accepted application. In the present case, Denversian’s acceptance was limited to the State of Queensland, while Di Lorenzo’s claimed use was in Sydney, New South Wales. For this reason also, it could not succeed under this ground.

Decision

Di Lorenzo failed to establish either of the grounds of opposition, namely, s58 and s58A, and therefore, the appeal was dismissed.

Denversian’s Trade Mark 1720917 for BLACK SHEEP has since proceeded to registration.

Takeaway

This decision provides guidance on what types of evidence may, or may not, be sufficient to prove use of a trade mark in the course of trade. Use in the course of trade does not require an actual sale, however, there must be commercial dealing/offering to trade in the goods or services under or by reference to the sign.

The decision is also informative in demonstrating that a stylised trade mark incorporating a word and a design element may not be substantially identical to the word alone.

Authored by Danielle Spath and Sean McManis

Dr August Wolff GmbH & Co. KG Arzneimittel v Combe International Ltd [2020] FCA 39 (3 February 2020)

On 3 February 2020, Dr August Wolff GmbH & Co. KG Arzneimittel (Dr Wolff) successfully appealed against a decision by the Registrar of Trade Marks, which refused registration of its VAGISAN trademark.

Background

The VAGISAN trade mark was filed by Dr Wolff on 27 May 2015 for a broad range of personal care products in classes 3 and 5.

This registration was successfully opposed by Combe International Ltd (Combe), the owner of prior VAGISIL trade mark registrations which also cover personal care products classes 3, 5 and 10.

A Delegate of the Registrar of Trade Marks refused registration of the VAGISAN trade mark on 29 September 2017 under s60 of the Trade Marks Act 1995 based on Combe’s reputation of its earlier VAGISIL trade mark.

Dr Wolff subsequently appealed this decision.

Grounds of Opposition

Section 44

The VAGISAN application covers the following goods:

Class 3: Soaps and cosmetics, all aforementioned goods not for the indication and application of tired legs and/or arms

Class 5: Pharmaceutical products, sanitary products for medical purposes; dietetic substances for medical purposes, all aforementioned goods not for the indication and application of tired legs and/or arms

(VAGISAN Goods).

The VAGISIL registrations cover the following goods:

Class 3: Medicated lotions and medicated creams; non-medicated products for feminine use

Class 5: Medicated products for feminine use; vaginal lubricants; medicated creams, gels, lotions

(VAGISIL Goods).

Dr Wolff accepted that the class 3 VAGISAN Goods are similar to the class 3 VAGISIL Goods.  However, it did not consider the class 5 VAGISAN Goods to be similar due to the “highly specialised” nature of the class 5 VAGISIL Goods.

Stewart J found that “pharmaceutical products” and “sanitary products for medical purposes” covered by the VAGISAN trade mark are similar to the class 5 VAGISIL Goods on the basis that:

(1) the goods would typically sold through the same trade channels (i.e. pharmacies, supermarkets and online);

(2) producers of pharmaceutical products might also produce medicated lotions and medicated creams; and

(3) producers of sanitary products for medical purposes might also produce medicated products for feminine use, medicated douches and various other goods.

On the issue of deceptive similarity, Stewart J found that both the VAGISAN and VAGISIL trade marks are likely to be understood as being associated with products to be used in relation to the female genital area. However, while the idea of VAG (or VAGI) is descriptive, the words VAGISAN and VAGISIL do not have a close phonetic resemblance and neither of the words lends itself to mispronunciation. Further, both words are invented words and the suffix elements SIL and SAN are quite distinct.

Stewart J also dismissed Combe’s argument that there is a greater likelihood of confusion as consumers of products for feminine use are not likely to pay attention to what they are purchasing.

The s44 ground of opposition was unsuccessful

Section 60

Section 60 requires a reputation amongst a significant or substantial number of people or potential customers in the relevant mark i.e. the potential customers of the VAGISAN goods. Although, there is not a significant distinction given the overlap in the goods provided by the VAGISAN and VAGISIL trade marks.

Combe sought to rely on evidence comprised of schedules of sales figures and consumption data for VAGISIL products, extracted from a computer database by IRi Australia. It argued that the evidence should be admissible as an exception to the rule against hearsay on the basis that it constitutes business records. Dr Wolff objected to the admissibility of the schedules, not the data contained in the schedules. However, Stewart J was satisfied that the schedules should be admitted.

Both Combe and Dr Wolff sought to tender survey evidence, although Dr Wolff’s evidence was in relation to consumer behaviour rather than Combe’s reputation. Dr Wolff objected to Combe’s survey reports on the basis that they were not business records of the survey companies or Combe itself. Stewart J was satisfied that the reports submitted form part of the records belonging to or kept by Combe in the course of, or for the purposes of a business. The survey evidence from both parties were admitted and Stewart J indicated that there is no reasons to suppose that the hearsay statements recorded in the reports are other than accurate.

There has been consistent use of the VAGISIL brand in Australia since 1986 for personal products for feminine use, which have been sold through approximately 6,400 supermarkets and pharmacies. Further, there has been significant advertising and promotional activity through various channels. Despite the relatively small market share based on the sales figures provided, Stewart J considered that reputation of the VAGISIL trade mark was established in Australia as at the priority date. However, the form of trade mark which enjoys reputation is the VAGISIL trade mark used in conjunction with a “V” Device, rather that VAGISIL on its own. It is used in this composite form:

Consequently, confusion between the trade marks is likely to be less in light of the distinctive “V” Device.

Combe was not able to establish that because of the reputation of the VAGISIL trade marks a significant or substantial number of potential customers might be confused or deceived by the VAGISAN mark such as to wonder whether there is any connection between it and VAGISIL.

Accordingly, the s60 ground of opposition was also unsuccessful

Section 59

As at May 2015, Dr Wolff had the intention to sell five VAGISAN products in Australia. Based on evidence provided on behalf of Dr Wolff, none of these products were directed for use on any part of the human body other than the female genital area. On this basis, Combe submitted that there was no intention to use the trade mark in relation to soaps and cosmetics for use on other body parts

Even though the goods were limited for use on a specific area of the body, Stewart J considered the fact that soap and cosmetic products were proposed to be introduced is sufficient intention to use the VAGISAN trade mark in respect of the designated goods.

The s59 ground of opposition was also unsuccessful

Decision

Combe failed to establish any ground of opposition and, therefore, Dr Wolff’s appeal was successful.

Combe subsequently filed an appeal to the Full Federal Court of Australia.

Takeaway

This decision is under appeal and it will be interesting to see if the first instance decision is maintained. Nevertheless, the decision provides some guidance regarding what might be admitted into evidence as business records, and the potential for difficulty establishing reputation in a word alone when it is used with other significant branding elements.

Other Opposition / Invalidity Actions

The VAGISAN trade mark has also been opposed by Combe in a number of other countries. The most recent decisions handed down were in Singapore and the United States.

Combe filed an application for declaration of invalidity with the Intellectual Property Office of Singapore based on the grounds of likelihood of confusion. Combe successfully invalidated the VAGISAN trade mark in Singapore, however, an appeal from this decision to the High Court is pending.

In the United States, the Trademark Trial and Appeal Board (TTAB) dismissed an opposition filed by Combe in the first instance. This decision was subsequently appealed to the US District Court. However, on appeal, the VAGISAN trade mark was found to be likely to cause confusion with the VAGISIL registration.

Authored by Danielle Spath and Sean McManis

Malaysia has introduced a new Trademarks Bill 2019 (Bill) which is set to replace the current Trade Marks Act 1976. It is anticipated that the new Act will come into force on 27 December 2019.

Some of the key changes are set out below:

Accession to the Madrid Protocol

Malaysia is set to join the Madrid Protocol from 27 December 2019. This means that a trade mark can be protected by way of an International Application covering Malaysia, instead of filing a separate national Malaysian trade mark. This is particularly useful if there are multiple countries of interest, as it is generally more cost effective to file a trade mark via an International Application which designates more than one country, as opposed to filing national applications in each country of interest.

Multi class applications

Currently, only single class trade mark applications are accepted in Malaysia. However, the Bill will allow for multi-class applications to be filed.

Non-traditional trade marks / collective trade mark

The Bill recognises non-traditional trade mark marks such as the following, however, they must be capable of being graphically represented:

  • shape mark or its packaging
  • sound
  • scent
  • colour
  • hologram
  • positioning
  • sequence of motion

The Bill also recognises collective trade marks.

Filing Date

The date of filing will no longer be recorded as the date of receipt of a new application. It will only be recorded once all formality requirements have been met (e.g. lodgement of power of attorney).

Division and Merger of trade mark applications and registrations

The Bill will provide for the division and merger of applications and registrations. Consequently, it may be possible for trade mark owners to consolidate current single class registrations. This may assist in the reduction of future renewal costs.

Defensive and Association trade marks

Defensive and association trade marks will no longer be available.

Security Interests

It will be possible to apply for registration of a security interest over a pending or registered trade mark.

Registration conclusive period

Currently, a trade mark is taken to be valid in all respects after a period of 7 years unless the registration (1) was obtained by fraud, (2) offends against Section 14 of the current Act (Section 23 of the proposed new Act) or (3) that the trade mark was not distinctive of the goods or services. This period will be reduced to 5 years.

Infringement

  • Scope – The scope of trade mark infringement is to be expanded to cover goods or services which are similar to those registered under the trade mark.
  • Groundless threats – Groundless threats provisions will be introduced, where it will be possible for an aggrieved person to bring an action against a person who threatens trade mark infringement without basis.
  • Remedies – The remedies available under a trade mark infringement action include damages, account of profits, injunctions (including interim injunctions) and mandatory orders.

Final Comments

As noted above, from 27 December 2019, Malaysian applications can be filed via the Madrid Protocol filing process in addition to national Malaysian applications.

If you have an International Registration and are considering seeking trade mark protection in Malaysia, you may wish to apply for a subsequent designation to extend protection of the registration to cover Malaysia, rather than applying for a separate national application.

Further, if your national Malaysian trade mark registrations have upcoming renewal deadlines due after 27 December 2019, you may also wish to consider the merging of your registrations in order to reduce future renewal and maintenance costs.

More detailed information regarding the Bill can be found in the Intellectual Property Corporation of Malaysia’s Consultation Paper at: http://www.myipo.gov.my/wp-content/uploads/2019/09/Consultation-Paper-Trademarks-Regulations.pdf

Authored by Sean McManis and Danielle Spath

Congratulations to Allira Hudson-GofersDuncan Longstaff and Michael Deacon, Shelston IP’s newly appointed Principals. Congratulations also goes to Nathan SinclairSerena White, and Danielle Spath for their promotions. This is well deserved recognition for their hard work and dedication shown towards their IP practice  and clients each day.

Allira Hudson-Gofers
Principal
BE(Mechatronic) (Hons 1), MBiomedEng, MIP, BA(Technology)Allira specialises in the provision of commercially relevant advice regarding patents and registered designs. Her expertise includes medical devices and diagnostic technologies; robotics; building and construction; sustainable technologies; and manufacturing processes.

Duncan Longstaff
Principal
LLM(IP) LLB(Hons1st) BSc(Biol)With over a decade of experience and higher degree training specialising in IP topics, Duncan’s IP litigation practice focuses on patent disputes involving pharmaceuticals, biotechnology, medical devices, mining and information technology.

Michael Deacon
Principal
BA LLB (Hons) GradCert TMLPMichael is a Lawyer and Registered Trade Mark Attorney with a focus on IP commercialisation. He has broad experience providing legal advice and drafting agreements across various commercial transaction types and assisting with brand protection, enforcement and strategy.

Nathan Sinclair
Senior Associate
BSc (Hons) (Chem) MIP (UTS)Nathan manages all aspects of Australian and overseas trade mark filings and prosecutions, filing strategies and trade mark portfolio management.

Serena White, DPhil
Senior Associate
MChem (Hons) (Oxon), DPhil (Oxon)Serena is a European qualified patent attorney, a UK and trans-Tasman patent attorney. She has
a strong technical background in organic chemistry.

Danielle Spath
Associate
GradCert TMLPDanielle maintains client trade mark portfolios and deals with the registration and protection of trade marks in Australia and overseas.

The UK is scheduled to leave the EU in March 2019. In the event of the UK leaving the EU without a deal being reached, the UK Government has provided some guidance on how trade mark rights will be affected.

EU Trade Mark Registrations

For existing national EU trade mark registrations, the UK Government has confirmed that it will automatically provide an equivalent UK registration. Owners will be informed of the new UK registration, but will be given the opportunity to opt out. At this stage, it is unclear whether there will be costs payable.

In order to provide continued protection in the UK for trade marks protected through Madrid and Hague systems designating the EU, the UK Government is proposing to work directly with the World Intellectual Property Organization (WIPO).

EU Trade Mark Applications

For national EU trade mark applications which are still pending on the day of the UK’s exit from the EU, trade mark owners can apply to file a corresponding UK application within 9 months from the exit date. During this process, the date of the EU application will be retained for priority purposes. Additional UK application costs will be payable.

The UK Government is also proposing to discuss “practical solutions” for pending EU designations filed through Madrid and Hague systems with the WIPO.

Recommendation for Proposed New EU and UK trade mark applications

Assuming no objections are filed during examination, and no oppositions are filed by third parties, the current national EU trade mark registration process usually takes approximately 4.5 months to complete.

If you are considering obtaining trade mark protection in both the EU and UK, you may wish to consider filing a national EU application (not via the Madrid process) as soon as possible.[1] As noted above, if no objections are raised or oppositions are filed, EU trade marks filed now are likely to be registered before 29 March 2019.

The main benefit of filing a national EU application now is that extra costs for separate UK protection (assuming the EU trade mark is registered before the UK’s exit) may be avoided (although this is not confirmed at this stage).

If trade mark protection is required in the UK on a more urgent basis, it may be preferable to file separate applications in the EU and UK simultaneously, since the timeframe for obtaining automatic equivalent UK registrations from EU registrations, and the costs involved, are uncertain at this time.

*The UK Government’s guidance notes can be located at: https://www.gov.uk/government/publications/trade-marks-and-designs-if-theres-no-brexit-deal/trade-marks-and-designs-if-theres-no-brexit-deal

Authored by Danielle Spath and Sean McManis