FEDERAL COURT OF AUSTRALIA

Red Energy Pty Limited v Registrar of Trade Marks [2018] FCA 1449

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be allowed.

2.    The decision of the Registrar of Trade Marks by her delegate given on 9 May 2018 in Canberra (Registrar of Trade Marks v Red Energy Pty Limited [2018] ATMO 66) be set aside.

3.    The Registrar accept the Australian Trade Mark Application Number 1746950 for EVENPAY and publish a notice of acceptance in the Official Journal of Trade Marks.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BEACH J:

1    The appellant (Red Energy) is an energy retailer in the National Electricity Market. On 18 January 2016, Red Energy filed Australian Trade Mark Application No. 1746950 (the Application). The goods and services that are the subject of the Application in classes 9, 16, 35, 36, 37, 38, 39, 40, 41 and 42 are set out in an annexure to these reasons (the Goods and Services). In this proceeding Red Energy appeals pursuant to s 35 of the Trade Marks Act 1995 (Cth) (the Act) against the decision of a delegate of the Registrar of Trade Marks on 9 May 2018 to reject the Application pursuant to s 33(3) invoking s 41(3). The Application was filed as a divisional from the parent application no. 1556106 and claims a priority date of 9 May 2013.

2    As the appeal involves a rehearing de novo, the applicable principles are as summarised by French J in Registrar of Trade Marks v Woolworths (1999) 93 FCR 365 at [33]:

There is therefore no presumption in favour of the correctness of the Registrar's decision save that weight will be given to the Registrar's opinion as that of a skilled and experienced person. But the Court on appeal from the Registrar must, in determining the question of acceptance of the application, apply to it the same legal criteria that the Registrar is required to adopt. That is to say the application must be accepted unless the Court is satisfied that it has not been made in accordance with the Act or that there are grounds for rejecting it. If the matter is left in doubt, then the application should be accepted. That is consistent with the possibility, adverted to earlier, that after a contested opposition registration may eventually be refused. Weight can be given to the Registrar's opinion without compromising the duty of the Court to construe the relevant legal criteria. (Emphasis added.)

3    French J further explained, by reference to the earlier version of s 33, that “the acceptance stage is not the time for the kind of detailed adversarial examination of the application that might emerge from a contested opposition” (at [34]).

4    Section 33(1) of the Act provides for a presumption of registrability of a trade mark application:

The Registrar must, after the examination, accept the application unless he or she is satisfied that:

(a)     the application has not been made in accordance with this Act; or

(b)     there are grounds under this Act for rejecting it.

5    With operation from 15 April 2013, s 41 of the Act was amended so as to make clear that the presumption of registrability applied to the ground of lack of distinctiveness in s 41 also. This policy intention was explained in the Explanatory Memorandum, Intellectual Property Laws Amendment (Raising the Bar) Bill 2011 (Cth), which included the following paragraph (at 146):

The changes are intended to clarify that the presumption of registrability, as provided for in section 33, does apply to section 41. This is achieved by removing the reference to the decision-making process in section 41, and instead focussing on the characteristics that a mark must possess for it to be capable of distinguishing. The intention is that, if the Registrar is equally unsure of whether the mark is or is not capable of distinguishing, that doubt should be resolved in the applicant’s favour.

6    After the commencement of the appeal before me and considering submissions from Red Energy, the Registrar informed my Chambers on 29 August 2018 that she would not be advancing any submissions or evidence in opposition to Red Energy’s appeal.

7    Now in circumstances where the appeal is by way of a rehearing de novo, and the Registrar does not seek to assert that the Application has not been made in accordance with the Act, or that there is any ground under the Act for rejecting it, in my view the presumption of registrability in s 33(1) has the result that the appeal should be upheld, and orders 1 to 3 of the notice of appeal should be made. That being so, the status of the Application becomes ‘accepted’, and the two-month opposition period commences.

8    In any event, let me now address the single ground of objection raised by the delegate of the Registrar, which was the ground in s 41.

9    Red Energy has tendered as evidence on the appeal the relevant extract from the Register of Trade Marks that I have set out as an annexure. Red Energy has not tendered any evidence other than the relevant extract. The Registrar has not participated on the appeal and accordingly has not filed any evidence.

10    Section 41(2) provides that a trade mark is taken not to be capable of distinguishing the designated goods or services if either of ss 41(3) or (4) applies. Section 41(3) applies if the trade mark is ‘not to any extent inherently adapted to distinguish’, and the applicant has not used the trade mark to such an extent that the trade mark does in fact distinguish the relevant goods or services as being those of the applicant. Section 41(4) applies if the trade mark is ‘to some extent, but not sufficiently, inherently adapted to distinguish’ and, when the combined effect of the matters in s 41(4)(b) is had regard to, the trade mark does not and will not distinguish the designated goods or services.

11    In my view, I am not able to say that Red Energy’s EVENPAY trade mark is not inherently adapted to distinguish each of the relevant designated goods and services. On the material before me and as Mr Craig Smith, counsel for Red Energy, pointed out in his helpful written submissions:

(a)    EVENPAY does not appear to directly describe or indicate ‘the kind’ of Goods and Services covered by the Application as it is too abstract to perform that function, even in respect of the class 36 services which include financial services.

(b)    The EVENPAY mark appears to be formed from a combination of two words in a syntactically unusual way. The absence of a space between the words also arguably reinforces the distinctiveness of the mark.

(c)    The EVENPAY mark appears to be evocative, not descriptive. In this respect, the word ‘EVEN’ does not appear to be the natural descriptor for payments of an equal amount.

12    Now the overall mark must be considered when assessing the applicability of s 41 and a number of cases have considered the distinctiveness of neologisms. But I do not need to linger on these for present purposes.

13    In my view on the material before me, it would seem that EVENPAY does not have an ordinary meaning or signification in respect of the designated Goods or Services. In this respect:

(a)    EVENPAY appears to present as an invented word.

(b)    EVENPAY appears not to have a meaning in the context of these services that a consumer would immediately perceive.

(c)    EVEN would seem to have multiple meanings, adding to the ambiguity and richness of meaning from a consumer standpoint. Those meanings include being divisible by two, level, smooth or balanced. It is also used as an adverb to give emphasis to an action, as in ‘she will even travel to…’.

(d)    Further, the apparent lack of any ordinary signification or meaning appears to be reinforced by the removal of the space between EVEN and PAY.

(e)    Further, whilst being formed from the combination of two words, the combination seems to me to be syntactically unusual which takes it outside of ‘the common stock’.

14    Further, even if the ordinary signification of EVENPAY were to be assessed as directly describing any of the designated Goods and Services, then as to the needs of other traders and any hypothesised desire to use EVENPAY, the following observations may be made:

(a)    The meaning of EVENPAY is not immediately apparent. In Bohemia Crystal Pty Ltd v Host Corporation Pty Ltd (2018) 129 IPR 482; [2018] FCA 235, Burley J noted that “[n]aturally, the desire of traders to use a word may depend on the perception of consumers’ understanding of it” (at [90]).

(b)    Any descriptiveness of any of the designated Goods or Services is oblique.

(c)    There is no evidence of third-party descriptive use of EVENPAY as at or even after the priority date, or evidence of the needs of other traders. In any event, as Mr Smith points out, such evidence would be more appropriately considered in the context of an opposition proceeding or a removal proceeding.

(d)    Further, other traders have a universe of alternative marks to choose from.

15    I will allow Red Energy’s appeal and make orders in the terms sought.

Associate:

Dated:    21 September 2018

ANNEXURE

Specification of Goods and Services

Class 9 Directories (electric or electronic); apparatus for recording, transmitting and reproducing data; telecommunications hardware and software; computer software; computers; computer software for systems management; computer software for database management; computer software for energy management; downloadable publications; DVDs and CD-ROMs, including pre-recorded DVDs and CD-ROMs; recorded media containing energy management related information and data; digital and magnetic devices able to store and/or process information, including those containing integrated circuit cards and/or memory chips; gas meters; gasometers; gas testing instruments; gas apparatus in this class; gas monitoring instruments; gas testing instruments; electrical equipment for the generation and transmission of electricity; transformers (electricity); electric conductors; electric cables; meters; regulators; switches, monitors, controllers, filters, transformers, circuit breakers, and capacitor banks all for evaluating, monitoring, managing, controlling, supplying, converting, conditioning and testing energy operations, usage, power quality and energy efficiency; computer programmes and recorded software distributed online; electronic publications including those sold and distributed online

Class 16 Paper, cardboard and goods made from these materials, not included in other classes; printed material and stationery; databases and directories in printed form

Class 35 Advertising and promotion services; business administration; office functions not including transcription of communications; organisation and management and supervision of customer loyalty programmes; organisation and administration services relating to the supply of benefits for customer loyalty and frequent buyer or frequent flyer schemes; organisation and management of customer loyalty programmes whereby customers obtain an discount on their utilities bills by obtaining these services; organisation and management of discount card loyalty schemes; sales promotion through customer loyalty programmes; compilation and provision of online directories; compilation of directories for publishing on the internet; retail and wholesale of industrial oils and greases, lubricants, fuels and illuminants; retail and wholesale of household and office appliances; retail and wholesale of electrical and gas supply equipment and appliances; business and commercial information services; business management and consultancy services; project management services; business management consultancy services in relation to energy usage, energy cost reduction, energy management and energy information management; retailing and wholesaling in relation to apparatus of lighting, heating, steam generating, cooking, refrigerating, drying, ventilating, water supply and sanitary purposes including air conditioning; production of home shopping programmes including production of advertisements and commercials for the promotion of industrial oils and greases, lubricants, fuels, illuninants [sic], household and office appliances, electrical and gas supply equipment and appliances; advertising and promotional services including on-line advertising and promotional services in relation to the promotion of industrial oils and greases, lubricants, fuels, illuminants, household and office appliances, electrical and gas supply equipment and appliances

Class 36 Issuing of tokens of value in relation to customer loyalty schemes; issuing of vouchers or tokens of value in relation to the supply of benefits for customer loyalty and frequent buyer schemes; financial services in this class including financial services relating to supplying and provision of energy, including electricity and gas; issue of charge and/or identification cards for use of pre-pay metering system; issue and redemption of tokens, vouchers and points; financing services including provision of prepay services; electronic payment services including provision of prepay services; electronic payment services including electronic fund transfer services and on-line transaction services, home banking, Internet banking, charge card, credit card, debit card, discount card and provision of payment, billing and fund transfer facilities including those utilising communications networks, such services being accessed by telecommunications equipment provided to customers for paying for use of energy, including electricity and gas; pre-payment metering system provided to customers for paying for use of energy, including electricity and gas; provision of sponsorship; all of the aforesaid being in relation to the supply of energy including electricity and gas; banking services; billing services

Class 37 Building construction; repair; installation services; construction, installation, maintenance and repair of domestic or commercial electricity or gas supply components; installation, maintenance and repair services in relation to the provision, supply and distribution of electricity and gas; installation, maintenance and repair services in relation to plant, apparatus and equipment used in the production, generation, distribution, transportation and supply of energy, including electricity and gas; electrical contracting services being installation, maintenance and repair; rental in relation to apparatus for drying and ventilating

Class 38 Telecommunication services; communications by any means; transmission of information on a wide range of topics, including online and over a global computer network; providing user access to a global computer network and online sites containing information on a wide range of topics; wireless broadcasting and communication services; provision of wireless application protocol services including those utilising a secure communications channel; Internet and web portal services

Class 39 Distribution and transportation of energy, including electricity and gas; supply of electricity and gas; consultancy services in relation to the distribution and transportation of energy; provision of energy including electricity and gas; provision of supply services in the energy industry, including electricity and gas

Class 40 Production and generation of energy, including electricity and gas

Class 41 Education; providing of training; entertainment; sporting and cultural activities; entertainment, cultural or sporting event booking or reservation services provided in relation to a customer loyalty or frequent buyer scheme; provision of entertainment, sporting or cultural services from customer loyalty and frequent buyer schemes; education services relating to the environment, including environmental protection, and to the production, generation, distribution, transportation, supply and usage of energy, including electricity and gas; education services and providing information and instruction in the management, efficient utilisation and conservation of energy and on the use of solar energy, wind power, sump oil, liquid petroleum gas, electricity, gas and of heat pumps; publication services in this class; electronic publication of information on a wide range of topics, including online and over a global computer network

Class 42 Scientific and technological services and research and design relating thereto; industrial analysis and research services; design and development of computer hardware and software; creating indexes of online information including websites and information sources; advisory services in relation to the consumption and conservation of electricity and gas provided to residential, commercial and industrial consumers; research services relating to the environment, including environmental protection, and the production, generation, distribution and transportation of energy; research services relating to energy efficiency and conservation; design and project management services to develop and achieve energy savings opportunities; computer consultancy services; computer software and website development and design; software maintenance and support; information and consultancy services relating to all the aforesaid