Federal Court of Australia

Taxiprop Pty Ltd v Neutron Holdings Inc (No 2) [2020] FCA 1822

ORDERS

THE COURT DECLARES THAT:

1.    By using the Neutrons Signs, namely LIME, LIME-E, LIME-S and LIMEBIKE, as trade marks in relation to micro-mobility services, being a network of dockless bicycles, electric bicycles and electric scooters, which consumers could use by unlocking the vehicles through the smartphone app, the respondents infringed Australian Trade Mark No. 1079430 for LIME while it was registered in respect of transport services up to 1 December 2020, pursuant to s 120(1) of the Trade Marks Act 1995 (Cth).

THE COURT ORDERS THAT:

2.    The applicant’s claim for threatened trade mark infringement be dismissed.

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

REASONS FOR JUDGMENT

O’CALLAGHAN J:

Introduction

1    On 29 October 2020 I delivered reasons for judgment in Taxiprop Pty Ltd v Neutron Holdings Inc [2020] FCA 1565 (Taxiprop No 1).

2    These reasons are to be read in conjunction with those reasons, and assume familiarity with them.

3    On 26 November 2020 I ordered:

1.    Pursuant to s 101(2) of the Trade Marks Act 1995 (Cth) (Trade Marks Act), the Registrar of Trade Marks is directed to remove Australian Trade Mark No. 1079430 from the Register in respect of all services other than taxi services.

2.    Pursuant to s 105 of the Trade Marks Act, the Court certifies that Australian Trade Mark No. 1079430 for LIME was used in good faith in Australia by the Applicant between 20 November 2018 and 16 March 2020 in respect of taxi services.

 3.    The cross-claims otherwise be dismissed.

 4.    Costs reserved.

4    Two issues now arise.

5    First, I omitted in Taxiprop No 1 to deal with the applicant’s (Taxiprop’s) threatened trade mark infringement claim, including whether an injunction should go restraining the respondents (collectively, Neutron) from using the mark LIME in respect of taxi services, and whether a declaration in relation to such threatened infringement should also be made.

6    At the hearing on 15 December 2020, senior counsel for Taxiprop said that it no longer presses for the granting of any injunctive relief. And in response to questions from me about the terms of the declaration sought, rephrased the declaration, as follows:

While the Neutron trade mark application [set out at [11] below] designated the goods and services that have subsequently been excluded by amendment on [11 November 2020,] that application comprised an intention to use the [LIME] mark in a manner which would infringe the Taxiprop trade mark in respect of taxi services.

7    Secondly, in Taxiprop No 1 at [238]-[241] I gave leave to the parties to make further submissions about whether Taxiprop is entitled to relief for any infringement that may have occurred in the past, before Taxiprop’s mark was pared back. Taxiprop now seeks a declaration in these terms:

By using the Neutrons Signs [namely, LIME, LIME-E, LIME-S and LIMEBIKE] as trade marks in relation [to] micro-mobility services, being a network of dockless bicycles, electric bicycles and electric scooters, which consumers could use by unlocking the vehicles through the smartphone app, the Respondents infringed [Australian Trade Mark No. 1079430 for LIME] while it was registered in respect of ‘transport services’ up to 1 December 2020, pursuant to subsection 120(1) of the Trade Marks Act 1995 (Cth).

8    The reference to 1 December 2020 is relevant because Taxiprop submits (and Neutron did not say otherwise) that where a court orders a trade mark to be removed in whole or in part, the removal takes effect from the date that the Registrar makes the necessary amendments on the Register in accordance with the court’s order. That proposition was assumed to be correct by the Full Court in E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2009) 175 FCR 386 at 405-406 [62]-[67], esp at [66] (Moore, Edmonds and Gilmour JJ). I too assume it to be correct.

9    For the reasons that follow:

(1)    I decline to grant the declaration sought in respect of Taxiprop’s claim for threatened trade mark infringement because Neutron is not, or is no longer, threatening to engage in the conduct sought to be enjoined – indeed, it expressly disavows any such intention to engage in it and, in any event, the declaration would be hypothetical and serve no purpose.

(2)    I will make the declaration substantially in the form set out at [7] above. I do so reluctantly. The applicant presses for the making of it, principally for the purpose of founding a claim for damages, which, it seems to me, given the limited scope of the declared infringement, are likely to be minimal to non-existent. But Taxiprop submits otherwise, and wishes to bring a case which it says will result in Neutron being liable to it for what counsel describes as “substantive” damages.

The applicant’s claim for a declaration in respect of the threatened trade mark infringement claim

10    Neutron submits that in this case an infringing act is not imminent, or even contemplated. Neutron says that the evidence, including evidence given at trial by Mr Price, Neutron’s Director of Government Strategy (Asia Pacific), shows that it never intended to use LIME in respect of taxi services (or services of the same description as taxi services, or goods that are closely related to taxi services) and even if it once had that intention, it does not have that intention now. In that regard, Neutron relies, in particular, on Mr Price’s sworn evidence, not disturbed in cross-examination, that Neutron “has no intention to expand its modality offering beyond micro-mobility (e-scooter and e-bike) services”.

11    Neutron also relies on the fact that (as foreshadowed in its closing submission at trial, and consistent with the court’s decision that Taxiprop’s registration ought to be removed for all services other than taxi services), on 11 November 2020, it made a request, which was granted, to the Registrar of Trade Marks to amend its pending trade mark application number 1949564 for LIME as follows:

Class 9: Downloadable computer software in the field of vehicle motorised, electric and non-electric bicycle and scooter sharing and use of vehicles motorised, electric and non-electric bicycles and scooters; downloadable software in the fields of transportation and delivery

Class 12: Vehicles; Bicycles; electric bicycles; motorised bicycles; scooters; electrically powered scooters; motorised scooters; parts and fittings for all of the aforesaid

Class 35: Rental of advertising space

Class 39: Vehicle Motorised, electric and non-electric bicycle and scooter sharing services; rental of motorised, electric and non-electric bicycles, and scooters, and electric and motor vehicles; providing a website featuring motorised, electric or non-electric bicycle and scooter transportation information; motorised, electric and non-electric bicycle and scooter transportation consulting services; motorised, electric and non-electric bicycle and scooter transportation reservation services; transportation and delivery services

Class 42: Software as a Service (SaaS) services, namely, providing non- downloadable software in the field of vehicle motorised, electric and non-electric bicycle and scooter sharing and use of vehicles motorised, electric and non-electric bicycles and scooters; Software as a Service (SaaS) services, namely, providing non-downloadable software in the fields of transportation and delivery.

12    One would have thought, in light of the fact that Mr Price has sworn that he was authorised to give evidence of behalf of both respondents and that Neutron “has no intention to expand its modality offering beyond micro-mobility (e-scooter and e-bike) services”, and given that its own revised mark application would not permit it to do so in any event, that would be the end of the matter. But it is not, because although Taxiprop sensibly enough abandoned its claim to quia timet injunctive relief, it nonetheless presses for the making of the (revised) declaration.

13    Taxiprop submits that “the act of Neutron filing the Neutron Trade Mark Application for the Neutron Threatened Goods and Services [being the goods and services described in Neutron’s application before it was amended] is prima facie evidence of threatened use of the LIME trade mark (or stylistic variations thereof) in respect of each of those goods or services”. It cited the following passage from the judgment of Fullagar J in Aston v Harlee Manufacturing Co (1960) 103 CLR 391 at 401:

There is another element mentioned by Dixon J. in the Shell Co.’s Case [(1949) 78 CLR 601 at 627], which is stated as essential to the proprietorship of an unused trade mark. That element is the intention of the applicant for registration to use it upon or in connexion with goods. As to this I need only say that I do not regard his Honour as meaning that an applicant is required, in order to obtain registration, to establish affirmatively that he intends to use it. There is nothing in the Act or the Regulations which requires him to state such an intention at the time of application, and the making of the application itself is, I think, to be regarded as prima facie evidence of intention to use. I cannot think that the Registrar is called upon to institute an inquiry as to the intention of any applicant, and I think that, on an opposition or on a motion to expunge, the burden must rest on the opponent, or the person aggrieved, of proving the absence of intention. Again, I do not think that ‘intention’ in this connexion ought to be regarded as meaning an intention to use immediately or within any limited time. A manufacturer of (say) confectionery would, I should suppose, be entitled to register three trade marks in relation to confectionery, though he intended only to use two of them and had not made up his mind as to which two he would use. If he in fact does not use any of them for the period specified in s. 72, the unused mark or marks may be expunged under that section. On the other hand, a manufacturer of confectionery, who had no intention of ever manufacturing motor cars, might be held disentitled to register a mark in relation to motor cars: the effect of In re Registered Trade-Marks of John Batt & Co. [(1898) 2 Ch 432; (1899) AC 428], is, I think, correctly stated in the first paragraph of the headnote to the report of the case before Romer J. and the Court of Appeal.

14    In support of its case that, at least at one time, Neutron intended to use the LIME mark in respect of something other than micro-mobility (e-scooter and e-bike) services, including car share services, Taxiprop also relies on a statement made by a Mr Savanh, who was Neutron’s Public Affairs Manager, at a taxi industry conference in May 2019 that Neutron was “committed” to car share, and a statement in the 2018 annual report of Neutron Holdings, Inc. that Neutron looked to launch a car share service called LimePod in markets other than the United States in 2019.

15    Taxiprop also submits, for reasons set out at [5.4]-[5.16] of its written submissions dated 9 December 2020, that Mr Price’s evidence that Neutron has no intention of expanding its modality offering beyond micro-mobility (e-scooter and e-bike) services is not to be taken at face value; that he was not sufficiently aware of relevant events to be able to say so; and that he was not authorised by his superiors in the United States to say what he did.

16    I reject Taxiprop’s claim that Mr Price’s evidence should not be accepted. His evidence was emphatic that Neutron does not intend to expand its modality offering beyond micro-mobility services. And there is no basis for the assertion that he was not authorised to say so, or that he was not sufficiently informed by his superiors.

17    Even accepting that at one time in the past Neutron may have contemplated a business that would have expanded its modality offering beyond micro-mobility services, and into a car sharing model, that is a flimsy basis to make a declaration that “while the Neutron trade mark application designated the goods and services that have subsequently been excluded by amendment [on 11 November 2020,] that application comprised an intention to use the [LIME] mark in a manner that would infringe the Taxiprop mark in respect of taxi services”. I fail to see what possible utility there could be in a court declaring that, at some time in the past, a party intended, or is taken to have intended, to infringe a mark, in circumstances where it never acted upon any such intention (because it never used the mark in respect of taxi services).

18    The only utility in making the declaration identified by Taxiprop is in the emphasised portion of this exchange at the hearing on 15 December:

HIS HONOUR: Why would I make a declaration about the respondent’s proposed use of the mark in respect of car share services or taxis … if you’re not pressing the claim for quia timet relief. And if … by not pursing that claim, you concede that there isn’t any threat that Neutron will use the mark with respect to taxi services … why would I make a declaration about it?

MR CORDINER: Your Honour, we say that a declaration can be made in the alternative to an injunction, and in certain circumstances … a declaration may be of more utility than quia timet relief. We accept in this - - -

HIS HONOUR: Well, in certain circumstances that might be true, but why in these circumstances?

MR CORDINER: Well, your Honour, we accept that there are some difficulties in terms of the immanency of the threat, having had our friends just recently amend the trade mark application they sought in relation to [LIME]. And for that purpose, your Honour, we say up until that date the threat was imminent, but we accept now – that is, [post] your Honour’s reasons – the immanency has abated to some degree. But there is no undertaking from our friends not to engage in the conduct, for example, of applying for a further [mark] in relation to those extended goods and services, and as [there] has been the debate, your Honour, which is a debate which we say should be determined in our favour, that there was a threat in relation to the use of the [mark in respect of] those goods and services, and it does assist, we say, your Honour, in avoiding what would potentially be a multiplicity of proceedings, either before the trade marks office or also the court, to have a declaration which, at least between the parties, sets in stone what would constitute an infringement by way of the use of the [LIME] mark as was proposed in the trademark application.

(Emphasis added.)

19    As Gaudron J said in Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591 at 613 [52], there may be cases where a bare declaration that some legal requirement has been contravened will serve to redress some or all of the harm brought about by that contravention, “[b]ut a declaration cannot be made if it will produce no foreseeable consequences for the parties. That is not simply a matter of discretion. Rather, a declaration that produces no foreseeable consequences is so divorced from the administration of the law as not to involve a matter for the purposes of Ch III of the Constitution. And as it is not a matter for those purposes, it cannot engage the judicial power of the Commonwealth” (footnotes and internal quotations omitted).

20    In the present case, it seems to me, with respect, that the suggestion that a declaration should be made because “it sets in stone what would constitute an infringement”, in circumstances where Taxiprop concedes that there is no imminent harm threatened, runs headlong into the proposition that declarations are not generally made if they would not serve any practical purpose, including if they relate to academic or theoretical matters. In particular, as the authors of The Declaratory Judgment explain (at 170 [4-101]), “where a declaration would only … give [the claimant] an extra assurance against the possible challenge or infringement of his rights in the future, it will (if there is no material ground for doubt or anxiety) be refused as being hypothetical”, citing the English Court of Appeal in Thames Heliports Plc v Tower Hamlets LBC (1997) 74 P & CR 164 and the Court of Appeal for Ontario in Monachino v Liberty Mutual Fire Insurance Co (1999) 183 DLR (4th) 577. See Lord Woolf and Jeremy Woolf, The Declaratory Judgment (Sweet & Maxwell, 4th ed, 2011). See too University of New South Wales v Moorhouse (1975) 133 CLR 1 at 10 (Gibbs J, as his Honour then was) (“[t]here is no doubt that a declaration may be an appropriate remedy in an action by an owner of copyright to assert his rights, but a declaration will as a general rule not be made for that purpose unless it is established either that an actual infringement has occurred or that the defendant intends to take action that will amount to an infringement”).

21    Accordingly, I will not make a declaration of the type sought.

22    In that circumstance, I will also dismiss Taxiprop’s claim for threatened trade mark infringement.

Actual use – declaratory relief

23    As to whether Taxiprop is entitled to declaratory relief for any infringement that may have occurred in the past, as I said earlier, I will make the declaration sought, albeit reluctantly, because it reflects my findings and relevant admissions made by Neutron in Taxiprop No 1 (especially at [221]). I should also record that Neutron conceded at trial, and I accept, that its services fall within the description of “transport” (one of the items in respect of which Taxiprop’s mark was registered until 1 December 2020).

24    Whether Taxiprop will ultimately prove a case for more than nominal damages remains to be seen.

25    Accordingly, I will declare as follows:

By using the Neutrons Signs, namely LIME, LIME-E, LIME-S and LIMEBIKE, as trade marks in relation to micro-mobility services, being a network of dockless bicycles, electric bicycles and electric scooters, which consumers could use by unlocking the vehicles through the smartphone app, the respondents infringed Australian Trade Mark No. 1079430 for LIME while it was registered in respect of transport services up to 1 December 2020, pursuant to s 120(1) of the Trade Marks Act 1995 (Cth).

Associate:    

Dated:    18 December 2020

SCHEDULE OF PARTIES