FEDERAL COURT OF AUSTRALIA

Enagic Co Ltd v Horizons (Asia) Pty Ltd (No 3) [2021] FCA 1512

ORDERS

THE COURT ORDERS THAT:

1.    The appeal is allowed.

2.    The decision of the delegate of the Registrar of Trade Marks given on 27 November 2018 in relation to trade mark application No. 1798917 be set aside and in lieu thereof there be a decision that trade mark application No. 1798917 be refused registration.

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

REASONS FOR JUDGMENT

CHARLESWORTH J

1    On 24 September 2016 the respondent, Horizons (Asia) Pty Ltd, filed an application under s 27(1) of the Trade Marks Act 1995 (Cth) (TMA) for registration of the trade mark “KANGEN” in respect of specified services in Class 35. In these reasons, the mark forming the subject of that application (Trade Mark 1798917) will be referred to as the Opposed Mark.

2    The appellant, Enagic Co Ltd, opposed the registration on five grounds.

3    A delegate of the Registrar of Trade Marks determined that Enagic had failed to establish each of its grounds of opposition and allowed the registration of the Opposed Mark in respect of the specified services: Enagic Co Ltd v Horizons (Asia) Pty Ltd [2018] ATMO 192. This is an appeal from the delegate’s decision.

4    Enagic maintains all of the grounds of opposition advanced before the delegate, founded on ss 42(b), 44, 58, 62 and 62A of the TMA. For the reasons given below, the grounds founded on ss 44, 58 and 62A are upheld and, accordingly, the appeal will be allowed. The delegate’s decision will be set aside and substituted with a decision that Horizons’ application for registration of the Opposed Mark be refused.

THE TMA

5    A trade mark is a sign that is used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person:  TMA, s 17. A trade mark may be registered under the TMA in respect of goods, services, or both goods and services:  TMA, s 19(1). The Trade Marks Regulations 1995 (Cth) provide for 45 classes into which goods and services are divided. Classes 1 to 34 relate to goods. Classes 35 to 45 relate to services. Trade mark protection only applies to the specific goods and services listed in the trade mark application.

6    For the purposes of the TMA, use of a trade mark in relation to goods means use of the trade mark upon, or in physical or other relation to the goods:  TMA, s 7(4). Use of a trade mark in relation to services means the use of the trade mark in physical or other relation to the services:  TMA, s 7(5). Section 9 of the TMA provides:

Definition of applied to and applied in relation to

(1)    For the purposes of this Act:

(a)    a trade mark is taken to be applied to any goods, material or thing if it is woven in, impressed on, worked into, or affixed or annexed to, the goods, material or thing; and

(b)    a trade mark is taken to be applied in relation to goods or services:

(i)    if it is applied to any covering, document, label, reel or thing in or with which the goods are, or are intended to be, dealt with or provided in the course of trade; or

(ii)    if it is used in a manner likely to lead persons to believe that it refers to, describes or designates the goods or services; and

(c)    a trade mark is taken also to be applied in relation to goods or services if it is used:

(i)    on a signboard or in an advertisement (including a televised advertisement); or

(ii)    in an invoice, wine list, catalogue, business letter, business paper, price list or other commercial document;

and goods are delivered, or services provided (as the case may be) to a person following a request or order made by referring to the trade mark as so used.

  (2)    In subparagraph (1)(b)(i):

covering includes packaging, frame, wrapper, container, stopper, lid or cap.

label includes a band or ticket.

7    There will be trade mark use where goods are offered or advertised for sale in Australia:  Shell Co of Australia Limited v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 (at 422). By extension, there will be use of a trade mark in respect of services where the services are offered to or advertised to persons situated here. In Ward Group Pty Ltd v Brodie & Stone Plc (2005) 143 FCR 479, Merkel J explained the circumstances in which use of a trade mark on a website operated from a place outside of Australia may constitute use of the mark within Australia (at [43]):

… use of a trade mark on the internet, uploaded on a website outside of Australia, without more, is not a use by the website proprietor of the mark in each jurisdiction where the mark is downloaded. However, as explained above, if there is evidence that the use was specifically intended to be made in, or directed or targeted at, a particular jurisdiction then there is likely to be a use in that jurisdiction when the mark is downloaded.  …

8    As Gummow J observed in Carnival Cruise Lines Inc v Sitmar Cruises Ltd [1994] FCA 68; 120 ALR 495, a service “will not exist before its supply”. Accordingly, his Honour said, the use of a trade mark in relation to services “may readily be understood as a use in and about the soliciting and conclusion of contracts for the supply thereafter of services” (at 509).

9    An “authorised use” of a trade mark by a person is taken, for the purposes of the TMA, to be a use of the trade mark by the owner of the trade mark:  TMA, s 7(3). A person is an “authorised user” of the trade mark if the person uses the trade mark in relation to goods or services under the control of the owner of the trade mark:  TMA, s 8(1). If the owner of a trade mark exercises quality control over goods or services dealt with or provided in the course of trade by another person in relation to which the trade mark is used, the other person is taken to use the trade mark in relation to the goods or services under the control of the owner:  TMA, s 8(3).

10    Regulation 4.4 prescribes the manner in which a trade mark application should specify the goods and/or services in respect of which registration is sought. It relevantly states:

…

(2)    The expression ‘all goods’, ‘all services’, ‘all other goods’, or ‘all other services’ must not be used in an application for registration of a trade mark to specify the goods and/or services in respect of which registration is sought.

(3)    The goods and/or services must be grouped according to the appropriate classes described in Schedule 1.

(4)    The applicant must nominate the class number that is appropriate to the goods or services in each group.

…

(6)    The goods and/or services must, as far as practicable, be specified in terms appearing in any listing of goods and services that is:

(a)    published by the Registrar; and

(b)    made available for inspection by the public at the Trade Marks Office and its sub-offices (if any).

…

11    The Registrar must examine and report on whether a trade mark application has been made in accordance with the TMA and whether there are grounds for rejecting it:  TMA, s 31. The Grounds for rejecting an application are prescribed in Div 2 of Pt 4 of the TMA (which includes s 42 and s 44).

12    After examination, the Registrar must accept the application unless he or she is satisfied that the application has not been made in accordance with the TMA, or there are grounds for rejecting it:  TMA, s 33(1). Conversely, if the Registrar is satisfied that the application has not been made in accordance with the TMA, or there are grounds for rejecting it, the Registrar must reject the application:  TMA, s 33(3).

13    Part 5 of the TMA is headed “Opposition to registration”. Section 52(1) provides that if the Registrar has accepted an application for a trade mark, a person may oppose the registration by filing a notice of opposition. The registration of a trade mark may be opposed on any of the grounds specified in the TMA and on no other grounds:  TMA, s 52(4). After hearing from the applicant and the opponent, the Registrar must decide either to refuse to register the trade mark or to register the trade mark (with or without conditions) having regard to the extent (if any) to which any grounds of opposition have been established:  TMA, s 55. The grounds upon which an application may be opposed are prescribed in Div 1 of Pt 5. Subject to an exception that does not apply, s 57 of the TMA provides that the registration may be opposed on any of the grounds on which an application for the registration of the mark may be rejected under the TMA.

APPLICATION AND OPPOSITION

14    Horizons’ application for registration of the Opposed Mark was lodged on 24 September 2016. Horizons sought registration of the mark in respect of a broad array of services falling within class 35, extracted at [24] of these reasons.

15    In most cases (including the present case) the registration of a trade mark is taken to have had effect from (and including) the filing date of the application for registration:  TMA, s 72(1). As Horizons’ application was filed on 24 September 2016 that is the “priority date” for the purposes of determining the grounds of opposition:  TMA, s 12 and see:  Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 595.

16    Enagic’s grounds for opposition invoked two grounds for rejection (contained in Div 2 of Pt 4), being those provided for in s 42(b) and s 44. The additional grounds of opposition (contained in Div 2 of Pt 5) were founded on ss 58, 60 and 62A extracted elsewhere in these reasons. The notice of opposition also invoked s 43 and s 59 of the TMA, however those grounds were not pressed before the delegate and do not feature in the grounds of appeal.

THE APPEAL

17    An appeal under s 56 of the TMA is a hearing de novo and is determined in the exercise of the Court’s original jurisdiction:  Sports Warehouse Inc v Fry Consulting Pty Ltd (2010) 186 FCR 519 (at [24]). The Court is to determine the opposition issues for itself and is not limited to the material before the delegate:  Blount Inc v Registrar of Trade Marks (1998) 83 FCR 50, Branson J (at 58 – 59); Sports Warehouse (at [24]). The parties may adduce further evidence and examine and cross-examine witnesses. There is no general presumption that the Registrar’s decision is correct, although appropriate weight will be given to the Registrar’s opinion as a “skilled and experienced person”:  Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365, French J (at [33]). In Woolworths, French J went on to say that:

…  there is room for a degree of deference to the evaluative judgment actually made by the Registrar. That does not mean the Court is bound to accept the Registrar’s factual judgment. Rather it can be treated as a factor relevant to the Court’s own evaluation.

18    The onus of making out the grounds of opposition rests with the party opposing the registration:  Food Channel Network Pty Ltd v Television Food Network GP (2010) 185 FCR 9 (at [32]); Pfizer Products Inc v Karam (2006) 219 FCR 585 (at [8]). The Court must be satisfied that Enagic’s case has been proved on the balance of probabilities:  Evidence Act 1995 (Cth), s 140(1). In deciding whether it is so satisfied, the Court is to take into account the nature of the case, the nature of the subject matter of the appeal and the gravity of the matters alleged:  Evidence Act, s 140(2).

19    The appeal has a complicated procedural history, some of which is set out at the conclusion of these reasons to the extent necessary to explain why the Court refused Horizons’ application for an adjournment of the hearing.

SECTION 44

20    Section 44 of the TMA provides:

Identical etc. trade marks

(1)    Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of goods (applicant’s goods) must be rejected if:

(a)    the applicant’s trade mark is substantially identical with, or deceptively similar to:

(i)    a trade mark registered by another person in respect of similar goods or closely related services; or

(ii)    a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; and

(b)    the priority date for the registration of the applicant’s trade mark in respect of the applicant’s goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.

(2)    Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of services (applicant’s services) must be rejected if:

(a)    it is substantially identical with, or deceptively similar to:

(i)    a trade mark registered by another person in respect of similar services or closely related goods; or

(ii)    a trade mark whose registration in respect of similar services or closely related goods is being sought by another person; and

(b)    the priority date for the registration of the applicant’s trade mark in respect of the applicant’s services is not earlier than the priority date for the registration of the other trade mark in respect of the similar services or closely related goods.

(3)    If the Registrar in either case is satisfied:

(a)    that there has been honest concurrent use of the 2 trade marks; or

(b)    that, because of other circumstances, it is proper to do so;

the Registrar may accept the application for the registration of the applicant’s trade mark subject to any conditions or limitations that the Registrar thinks fit to impose. If the applicant’s trade mark has been used only in a particular area, the limitations may include that the use of the trade mark is to be restricted to that particular area.

(4)    If the Registrar in either case is satisfied that the applicant, or the applicant and the predecessor in title of the applicant, have continuously used the applicant’s trade mark for a period:

(a)    beginning before the priority date for the registration of the other trade mark in respect of:

(i)    the similar goods or closely related services; or

(ii)    the similar services or closely related goods; and

(b)    ending on the priority date for the registration of the applicant’s trade mark;

the Registrar may not reject the application because of the existence of the other trade mark.

21    Enagic is the registered proprietor of the mark “KANGEN WATER” (Trade Mark 1756433) in respect of goods in class 11, which has the heading “Apparatus for lighting, heating, steam generating, cooking, refrigerating, drying, ventilating, water supply and sanitary purposes”:  Regulations, Sch 1, Pt 1, item 11. The specified goods are:

Class 11:  Electrolytic water generators for electrically decomposing tap water to generate electrolytic water and for removing chlorine odor [sic] from tap water

22    I will refer to that mark as Enagic’s Goods Mark, and to the specified goods as the Class 11 Goods.

23    The Enagic Goods Mark has an earlier priority date of 11 February 2016, thus fulfilling s 44(2)(b) of the TMA.

24    Horizons sought registration of the Opposed Mark in respect of services in class 35, which has the heading “Advertising; business management; business administration; office functions”:  Regulations, Sch 1, Pt 2, item 35. The specified services are.

Class 35: Distribution of goods (not being transport services) (agent, wholesale, representative services, by any means); wholesale; retail; sales by any means; advertising, marketing, promotion and public relations; operation, supervision and management of loyalty programs, sales and promotional incentive schemes; discount services (retail, wholesale, or sales promotion services); customer support services; compilation and maintenance of directories, mailing lists including such lists compiled and maintained via the global computer network; conferences and exhibitions for commercial purposes; business administration; business development; dissemination of commercial information; distribution of prospectus; importing services; exporting services; providing information, advisory and consultancy services, including by electronic means, for all of the aforesaid services

25    I will refer to those services as the Class 35 Services.

26    For the purposes of the TMA, “a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion”:  TMA, s 10. As Nicholas J said in Vivo International Corporation Pty Ltd v Tivo Inc [2012] FCAFC 159; 294 ALR 661 (at [114], Dowsett J agreeing):

… it is the statutory rights of use that are to be compared rather than any actual use, and in considering whether an application for a mark should be rejected under s 44(1) because it is deceptively similar to an existing registered trade mark, it is necessary to have regard to all legitimate uses to which each mark might be put by its owner:  see Re Application by Smith Hayden & Coy Ld (1946) 63 RPC 97 at 101; Berlei Hestia at CLR 362; ALR 449 and Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd (1993) 42 FCR 227 at 230-1; 114 ALR 157 at 161–2; 26 IPR 246 at 249–50.

27    The delegate concluded that Enagic’s Goods Mark (KANGEN WATER) and the Opposed Mark (KANGEN) are deceptively similar. I agree with that conclusion. Whilst Enagic’s Goods Mark includes the word “WATER”, the word “KANGEN” is a memorable feature of the mark that is likely to have the greater impression on consumers. The two marks are such that it is likely that consumers will be caused to wonder whether the goods or services in respect of which the marks are used come from the same source:  Coca-Cola Company v All-Fect Distributors Ltd (1999) 96 FCR 107 (at [39]); Southern Cross Refrigerating Co (at 595). I have arrived at that conclusion by a textual comparison of the marks, having regard to the trade context in which each mark might legitimately be used.

28    It is necessary to determine whether the Class 35 Services specified for the Opposed Mark are “closely related to” the Class 11 Goods specified for the Enagic Goods Mark within the meaning of s 44(2)(ii).

29    As French J said in Woolworths, the term “closely related” recognises the obvious circumstance that goods and services are not the same thing:  at [37]. His Honour said that the expression “closely related” is of wider import than the word “similar”, and observed:

…  There will be classes of goods which are similar to each other. There will also be classes of services which are similar to each other. But the word ‘similar’ does not apply as between goods and services. So there must be some other form of relationship between the services covered by one mark and the goods covered by another to enable the goods or services in question to be described as ‘closely related’.  …

30    The meaning of the word “services” in the TMA was considered by Lockhart J in Caterpillar Loader Hire (Holdings) Pty Ltd v Caterpillar Tractor Co (1983) 48 ALR 511 (at 522) at a time when service marks were in their infancy in Australia. His Honour predicted that they may give rise to confusion between goods and service marks “of greater difficulty and subtlety than has previously been experienced in the case of goods marks alone”. His Honour gave the following examples of cases where there the potential for confusion in the minds of consumers might arise:

… the sale of goods such as data processing equipment and the sale of programs for their operation; the sale of curtains and furnishing materials on the one hand, and the sewing of curtains on the other, as interior decorators often sell curtains and perform the service of sewing; the sale of clothes on the one hand and tailoring on the other because the service of custom tailoring is frequently provided in addition to the sale of ready-made clothes; and the sale of educational material on the one hand and educational services (language courses, home study programmes) on the other.

31    A further example was identified by French J in Woolworths (at [38]):

…  Services which provide for the installation, operation, maintenance or repair of goods are likely to be treated as closely related to them. Television repair services in this sense are clearly related to television sets as a class of goods. A trade mark used by a television repair services which resembles (to use the language of s 10) the trade mark used on a prominent brand of television sets would be deceptively similar for suggesting an association between the provider of the services and the manufacturer of the sets.  …

32    As these examples illustrate, it is relevant to consider the nature of the goods or services, the use or purpose of the goods or services, and the channels of trade:  Southern Cross Refrigerating Co at 606 – 607.

33    The phrase “closely related” is to be interpreted having regard to the objects of the TMA, which can be discerned in part in the definition of a trade mark as an indicia of the origin of goods or services. Section 44(2) is plainly intended to address the mischief that may be created where two marks are the same or deceptively similar. It recognises the potential for confusion in the minds of consumers as to the origin of goods in respect of which a mark is registered or sought to be registered and the origin of services in which an identical or a deceptively similar mark is registered, or sought to be registered as the case may be. The more closely related the goods on the one hand and the services on the other, the greater the potential for confusion as to whether they originate from the same person. Whether the relevant services and the relevant goods are “closely related” is to be assessed in that context and in a commercially sensible way, having regard to all legitimate uses of the Opposed Mark.

34    In its closing submissions in support of this ground of opposition, Enagic submitted:

Enagic’s water filtration products are a bespoke, high end product, retailing for several thousands of dollars, sold through a direct selling model where its customers in turn become prospective distributors. There is synergy in the Appellant’s business model between the product and the Relevant Services, whereby its distributors have a certain level of expertise common to the provision of goods and services.

35    In my view, that submission introduces an irrelevant consideration for the purposes of s 44(2), namely the services said to be provided in fact by Enagic. Whether Enagic has used any relevant mark in respect of any services is relevant to other grounds of opposition. However, the Court is not presently concerned with a comparison between the services allegedly provided by Enagic on the one hand and the services in respect of which the Opposed Mark is sought to be registered on the other. For the purposes of s 44(2)(a)(ii) of the TMA, the relevant inquiry is whether the narrowly described Class 11 Goods referred to in Enagic’s Goods Mark registration are closely related to the broadly described Class 35 Services referred to in the Opposed Mark registration.

36    On their face, the headings used in the Regulations for the goods classification 11 and the services classification 35 appear to be disparate. By reference to the headings alone, it is not immediately apparent how goods in the nature of “Class 11 Apparatus for lighting, heating, steam generating, cooking, refrigerating, drying, ventilating, water supply and sanitary purposes” could be closely related to services in the nature of “Class 35 Advertising; business management; business administration; office functions”.

37    Horizons referred the Court to the Trade Marks Office Manual of Practice and Procedure and a “Cross Class Search List” contained within it. The list identifies goods or services which the Trade Marks Office considers “are most likely to be goods or services that are similar or closely related”. I consider the list to be of limited assistance to the Court in performing its task under s 44(2), and indeed liable to detract from it. The Court must interpret the particular words chosen by the trade mark applicant to describe the services so as to identify the nature and scope of the trading activities in respect of which trade mark protection is sought. In the present case, the descriptions in the specification are of very broad import. As discussed below, it is significant that most of the specified services are either inherently concerned with or expressly connected to the marketing, sale and distribution of goods. As explained in Southern Cross Refrigerating Co, it is relevant to consider their purpose. For the most part, the purpose of the broadly described services is to facilitate the promotion of goods for sale, as well as their actual sale.

38    It is open to a trade mark applicant to describe services in the widest of terms so as to achieve the greatest possible protection provided that the services are specified in accordance with the Regulations:  TMA, ss 27(3)(b), (4) and (5); 33(1)(a); 57. Enagic has not advanced any argument to the effect that the Class 35 Services did not in fact fall within the parameters of the relevant class, nor any argument that the services described are impermissibly broad or vague so as to require the application to be rejected in accordance with the provisions just cited. That is not surprising, given that most of the specification was copied by Horizons from an earlier trade mark registration obtained by Enagic in 2014 (as discussed later in these reasons).

39    By their nature, any or all of the listed “services” are services in relation to which the Opposed Mark may legitimately be used in the course of Horizons’ trade. The focus is on the use of the Opposed Mark as an indicia of the origin of the services by Horizons in the course of trade with other persons. It is in the nature of services that they are provided by one entity to another. They are not to be understood as incorporating inherent business activities internal to Horizons.

40    The services expressly include “distribution of goods”, which must be understood as a service for the distribution of goods. There is no limitation on the goods that are to be the subject of the distribution services. Notionally, registration of the Opposed Mark would permit its use in connection with the provision of distribution services where the subject of the distribution includes goods of an infinite variety. More importantly for present purposes, the legitimate use of the mark also includes its use as an indicia of the origin of distribution services in connection with goods of a singular description or specialised nature. The services described as “sales by any means” must also be taken to include services for the sale of goods of all descriptions or a singular description, and so on. The services also include advertising, marketing, promotion and public relations, which must be understood to include services for the advertising and marketing of goods of a specific kind or all kinds. Moreover, the phrase “providing information, advisory and consultancy services, including by electronic means, for all of the aforesaid services” is not limiting. It is expressed as a discrete service in addition to all other services preceding it and so significantly expands the field of services in respect of which the Opposed Mark may be used exclusively by Horizons as a trade mark.

41    On the topic of whether the relevant services and goods were closely related, the delegate said:

The Opponent’s Goods relate to a very specific type of water generator and purifier. The Applicant’s Services are distribution and business administration services that have no specific connection to the Opponent’s Goods. The mere fact that an entity could engage in distribution and business administration services incidental to the course of selling the Opponent’s Goods is not a basis to find that they are closely related. There is no particular relationship between the Applicant’s Services and the Opponent’s Goods and hence no basis to conclude that these services are closely related to the Opponent’s Goods. I find that the Opponent has failed to establish the ground of opposition under s 44 of the Act.

42    I respectfully disagree with the delegate’s reasoning. I do not consider the sale of particular goods (for example) as being merely incidental to the provision of the services described. The phrase “sales by any means” as listed in the specification must be understood as “service” in its own right. That aspect of the specification necessarily encompasses services for the sale of goods.

43    Moreover, Horizons has chosen to draft the list of services commencing with the phrase “distribution of goods”. Read in its proper context, the phrase “distribution of goods” must be understood to refer to a service offered or provided in the course of trade between Horizons and other persons. The activity of “distributing” the goods is not merely incidental to such a service, it is the very essence of it.

44    As I have said above, that drafting encompasses services for the distribution of goods either of a confined kind or of infinite variety. Absent words of limitation, the specification must be understood to encompass both, as if both were separately described in the text. In respect of the former, the specification encompasses any or all goods falling within classes 1 to 34, which necessarily encapsulates all goods in class 11, including “Electrolytic water generators for electrically decomposing tap water to generate electrolytic water and for removing chlorine odor [sic] from tap water”. The distribution services referred to in the registration may be provided (and promoted) in respect of only those goods.

45    I have no difficulty concluding that services for the distribution of goods “X” are closely related to goods “X” within the meaning of s 44(2)(ii) of the TMA. To illustrate the point, the words “electrolytic water generators” may be inserted in Horizon’s Class 35 Services specification so as to illuminate the protection afforded by the registration of the word KANGEN. The word may be used as an indicia of the trade origin of the following services:  distribution services in connection with electrolytic water generators (not being transport services); services for the sale of electrolytic water generators by any means; services for the advertising, marketing, promotion and public relations in connection with electrolytic water generators; services involving operation, supervision and management of loyalty programs in respect of electrolytic water generators; services involving the sales and promotional incentive schemes in respect of electrolytic water generators; customer support services in respect of electrolytic water generators; services for compilation and maintenance of directories in respect of electrolytic water generators; services for the provision of conferences and exhibitions for commercial purposes in connection with electrolytic water generators; import and export services in connection with electrolytic water generators; services for the provision of information and advisory and consultancy services for all of the aforesaid.

46    Once the permitted use of the Opposed Mark is understood in that way, it is readily apparent how the Class 11 Goods are closely related to the Class 35 Services. That consequence follows from Horizons’ choice to capture within the services description all goods without exception or qualification, so capturing the goods the subject of Enagic’s Goods Mark. It follows that the requirements for the successful opposition of the mark under s 44(2) are fulfilled.

47    It is of course open to the Registrar to consider whether to accept the registration subject to a condition or limitation, so as to confine the use of the mark to exclude services that are closely related to goods in the same class in respect of which the Enagic Goods Mark is registered:  TMA, s 33(2). A discretion of the same kind applies in opposition proceedings and may also be exercised by this Court on appeal:  TMA, s 55(1)(b).

48    However, I have determined not to embark upon that exercise or to hear further from Horizons in respect of it. That is because I am satisfied that the appeal should be allowed on multiple grounds such that registration should not proceed on a more limited specification, as it might otherwise have done had the ground of opposition under s 44 of the TMA been the only successful ground.

Sub-section 44(3)

49    In its closing submissions, Horizons sought to invoke s 44(3)(a) and (b) of the TMA so as to allege honest concurrent use of the two marks and to suggest “other circumstances” that might make it proper to accept the Opposed Mark for registration. These issues were not dealt with by the delegate because he was not satisfied that the conditions in s 44(2) were fulfilled.

50    Enagic submits that Horizons has abandoned any prior reliance on both limbs of s 44(3). That submission should be accepted.

51    Enagic first filed Points of Claim on 28 March 2019. By its Points of Defence filed on 12 April 2019, Horizons expressly invoked s 44(3)(a) and (b) and provided brief particulars (at [2(f)] and [2(g)]).

52    Enagic filed Amended Points of Claim on 12 December 2019. Horizon did not file an amended pleading in response until 14 August 2020. The Amended Points of Defence filed on that day invoked neither s 44(3)(a) nor s 44(3)(b). An unnumbered introductory paragraph states that Horizons relied on any Points of Defence filed by its former legal representatives “in respect of the Amended Points of Claim dated 13 December 2019”. However, Horizons’ former representatives had filed no prior pleading in response to the Amended Points of Claim. Horizons filed Further Amended Points of Defence on 14 December 2020. It contains no reference to s 44(3) of the TMA. Whilst it also contains a statement to the effect that Horizons relied on any points of defence filed by its former legal representatives in respect of the Amended Points of Claim filed on 12 December 2019, that statement could not operate to pick up and re-enliven the previously abandoned plea. My interpretation of the documents is reinforced by the circumstance that the various iterations of the amended defences for the most part simply repeat other aspects of the previous versions. To the extent that there is ambiguity, I do not consider it to be in the interests of justice to interpret the documents beneficially toward Horizons. In my view, an appellant in Enagic’s position ought to be entitled to refer to the latest iteration of the defence to identify the issues that are in dispute.

53    If I am wrong in interpreting Horizons’ pleadings in that way, I would conclude in any event that the evidence adduced on Horizons’ case was insufficient to enable a finding to be made as to honest concurrent use. The reasons for that conclusion will become apparent in my discussion of the grounds of opposition founded on s 58 and s 62A of the TMA. My conclusions in respect of those grounds also weigh against the exercise of the discretion under s 44(3)(a) and (b) or otherwise render s 44 of the TMA inapplicable.

SECTIONS 58 AND 60

54    Section 58 of the TMA provides:

Applicant not owner of trade mark

The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.

55    For Enagic to succeed on this ground it must establish that:

(1)    the mark KANGEN (being a mark used by Enagic before the priority date for the Opposed Mark) is identical or substantially identical to the Opposed Mark;

(2)    it has used the mark in respect of goods or services that are the same, or the “same kind of thing” as the Class 35 Services:  Aston v Harlee Manufacturing Co (1960) 103 CLR 391, Fullagar J (at 399 – 400); Hicks’ Trade Mark (1897) 22 VLR 626; Carnival at 514; Colorado Group Ltd v Strandbags Group Pty Ltd (2007) 164 FCR 506 (at [89]), and

(3)    as at the priority date for the Opposed Mark, it had the earlier claim to ownership based on its use of the mark before Horizons’ first use:  Settef SpA v Riv-Oland Marble Co (Vic) Pty Ltd (1987) 10 IPR 402.

56    The first requirement is uncontentious. Horizons accepts that the marks are identical or substantially identical.

57    In Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 156 CLR 414, Deane J said (at 432 – 434), (Gibbs CJ, Mason, Wilson and Dawson JJ agreeing):

The prior use of a trade mark which may suffice, at least if combined with local authorship, to establish that a person has acquired in Australia the statutory status of ‘proprietor’ of the mark, is public use in Australia of the mark as a trade mark, that is to say, a use of the mark in relation to goods for the purpose of indicating or so as to indicate a connexion in the course of trade between the goods with respect to which the mark is used and that person: see, generally, Shell Co (Aust) Ltd v Esso Standard Oil (Australia) Ltd; Re Registered Trade Mark ‘Yanx’; Ex parte Amalgamated Tobacco Corporation Ltd; and the definition of ‘trade mark’ in s 6(1) of the Trade Marks Act. The requisite use of the mark need not be sufficient to establish a local reputation and there is authority to support the proposition that evidence of but slight use in Australia will suffice to protect a person who is the owner and user overseas of a mark which another is seeking to appropriate by registration under the Trade Marks Act. In such a case, the court ‘seizes upon a very small amount of use of the foreign mark in Australia to hold that it has become identified with and distinctive of the goods of the foreign trader in Australia’:  see Seven Up Co v O.T. Ltd; Aston v Harlee Manufacturing Co.

…

…  The cases establish that it is not necessary that there be an actual dealing in goods bearing the trade mark before there can be a local use of the mark as a trade mark. It may suffice that imported goods which have not actually reached Australia have been offered for sale in Australia under the mark (Re Registered Trade Mark ‘Yanx’;Ex parte Amalgamated Tobacco Corporation Ltd) or that the mark has been used in an advertisement of the goods in the course of trade:  Shell Co of Australia v Esso Standard Oil (Australia) Ltd. In such cases, however, it is possible to identify an actual trade or offer to trade in the goods bearing the mark or an existing intention to offer or supply goods bearing the mark in trade.  …

(footnotes omitted)

58    See also Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd (2018) 259 FCR 514 (at [49]).

59    The requirement that use of the mark be in respect of the “same kind of thing” was discussed by Allsop J (as his Honour then was) in Colorado Group. In respect of a comparison between goods (including backpacks, handbags, purses and wallets) his Honour said:

88    In Carnival Cruise Lines v Sitmar Cruises 120 ALR at 514, Gummow J referred to there being no differences of ‘character or quality’ of the services in that case to gainsay that they were the ‘same kind of thing’.

89    There is a certain difficulty in fixing upon the proper frame of reference for the enquiry identified by the words used by Holroyd J, ‘same kind of thing’. Assistance is gained from the statutory context in which the question arises (see above), the common law notion of the right to registration from use, when that was the defining requirement:  see Edwards v Dennis (1885) 30 Ch D 454 and Jackson & Company v Napper (1886) 35 Ch D 162 and the notion of the ownership of a common law trade mark:  see the cases referred to by the primary judge at [25] of his first judgment (set out at [66] above). The aim of the enquiry is not to find some broad genus in which some common functional or aesthetic purpose can be identified. Nor is it an enquiry about the type of trade in which concurrent use might cause confusion. Rather, it is identifying, in a practical, common sense way, the true equivalent kind of thing or article. For example, use of a mark on hatchets or small axes, created proprietorship in relation to axes: Jackson v Napper 35 Ch D 160. This approach recognises ownership or proprietorship in a mark beyond the very goods on which the mark is used, to goods ‘though not identical … yet substantially the same’ (Hemming HB, Sebastian’s Law of Trade Marks (4th ed, Stevens and Sons, 1899) p 91) or ‘goods essentially the same … though they pass under a different name owing to slight variations in shape and size’ (Kerly DM and Underhay FG, Kerly on Trade Marks (3rd ed, Sweet & Maxwell) p 206). This approach is conformable with the terms of the 1995 Act.

90    That backpacks are a type or style of bag does not answer the question as to whether they should be viewed as essentially the same goods as any bag or receptacle. The backpack is a bag with straps to be worn on the back. It is not essentially the same or the same kind of thing as other bags, handbags, purses or wallets. The task is not to identify the genus into which the goods upon which the mark was used fall, but to identify the goods.

60    Section 60 of the TMA provides:

Trade mark similar to trade mark that has acquired a reputation in Australia

The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:

(a)    another trade mark had, before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, acquired a reputation in Australia; and

(b)    because of the reputation of that other trade mark, the use of the first-mentioned trade mark would be likely to deceive or cause confusion.

61    As O’Bryan J said in Rodney Jane Racing Pty Ltd v Monster Energy Company [2019] FCA 923; 370 ALR 140 (at [83]), the reputation of a trade mark has both quantitative and qualitative dimensions:

The quantitative dimension concerns the breadth of the public that are likely to be aware of the mark, which can be evidenced by the quantum of sales, advertising and promotion of goods or services to which the mark is applied. The qualitative dimension concerns the image and values projected by the trade mark, which affects the esteem or favour in which the mark is held by the public generally …

62    In McCormick & Co Inc v McCormick (2000) 51 IPR 102, Kenny J confirmed that “reputation” in s 60 of the TMA refers to recognition of the mark by the public generally. In Le Cordon Bleu BV v Cordon Bleu International Ltee [2000] FCA 1587; 50 IPR1, Heerey J (at [91]) said that the reputation to be demonstrated was to be:

… one of which a significant number of persons were aware …  What is ‘significant’ or ‘substantial’ will depend on the nature of the goods or services in question. For some highly specialised products, awareness among a few thousand persons, or even less, might be sufficient.  …

63    As Kenny J said in McCormick (at [86]):

In practice, it is commonplace to infer reputation from a high volume of sales, together with substantial advertising expenditures and other promotions, without any direct evidence of consumer appreciation of the mark, as opposed to the product:  see, eg, Isuzu-General Motors Australia Ltd v Jackeroo World Pty Ltd (1999) 47 IPR 198; Marks & Spencer Plc v Effem Foods Pty Ltd (2000) AIPC 91-560; Photo Disc Inc v Gibson (1998) 42 IPR 473; and RS Components Ltd v Holophane Corp (1999) 46 IPR 451. This court has followed this approach as well, acknowledging that public awareness of and regard for a mark tends to correlate with appreciation of the products with which that mark is associated, as evidenced by sales volume, among other things. Thus, in Toddler Kindy Gymbaroo Pty Ltd v Gymboree Pty Ltd (2001) 51 IPR 1, Moore J accepted at [94] that the applicant had established a reputation for the purposes of s 60 solely on the basis of use and promotion of the relevant mark. Another example of this approach is Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd (1997) 38 IPR 495 (Nettlefold), in which Heerey J relied upon the public visibility of the applicant’s marks over approximately two decades as well as a $100,000 promotional campaign in finding that a reputation for the purposes of S 28 of the 1955 Act existed.

The parties’ cases

64    For the purposes of s 58 of the TMA, both Enagic and Horizons allege that they are the owner of the Opposed Mark, based on the first use of the word as a trade mark in respect of the Class 35 Services or in respect of goods or services that are the “same kind of thing”.

65    Horizons alleges that it first used the word KANGEN as a trade mark as early as 10 January 2009, being the date of its registration of the mark in respect of certain goods in Class 11, including bottled water (Trade Mark 1280502). It alleges that it has, since that time, used the mark in connection with a distribution and export business, specifically in relation to air purifiers and bottled water products.

66    Enagic alleges that it is the owner of the Opposed Mark by virtue of having been the first user of the word KANGEN or the words KANGEN WATER as a trade mark in Australia in the provision of “distribution, sales and marketing” services. It contends that it first used the Opposed Mark in connection with goods and services in Australia as early as 2007.

67    For the purposes of s 60 of the TMA, Enagic alleges that the mark KANGEN WATER had, before the priority date for the Opposed Mark, acquired a reputation in Australia such that use by Horizons of the mark KANGEN would be likely to deceive or cause confusion. The reputation is alleged to have been acquired both in respect of the Class 35 Services and in respect of water purifying, electrolytic and alkaline-ioniser apparatus, and “related goods and services”. It relies on its activities conducted overseas (including those of its predecessor), particularly the manufacture and sale of water-ionisation systems to produce alkaline water as early as 1990.

68    It is convenient to first make factual findings as to the parties’ activities in connection with the word KANGEN before the priority date. Each ground will then be resolved separately having regard to the facts as found.

Horizons’ activities

69    Horizons was registered in Australia on 18 April 2007. Between that date and 4 April 2016 it had as its director, secretary and shareholder Ms Cheung Hoi Lan Penson. The current director, secretary and shareholder is Mr Pyng Lee Shih. Neither Ms Penson nor Mr Shih gave evidence on the appeal.

70    Records from the Australian Securities and Investments Commission show that Ms Penson is:

(1)    the former director and company secretary of Aquaqueen Australian Spring Water Pty Ltd (12 November 1993 to 28 December 2012), its former Principal Executive Officer (12 November 1993 to 8 December 1995); and the former owner of all of its 100 ordinary shares; and

(2)    the former director and company secretary of Aquaqueen International Pty Ltd (ACN 094 129 389) (14 August 2008 to its deregistration on 6 February 2017).

Ng Lee

71    Ms Ng was the only officer or employee of Horizons called to give evidence on the appeal. In her affidavit evidence-in-chief, Ms Ng said that she was “instructed” to make the application for the Opposed Mark. That instruction could only have come from Mr Shih.

72    Ms Ng first commenced employment with Horizons in 2014. She was originally engaged to work as the personal assistant to the original sole director and shareholder, Ms Penson. Until 2016, Ms Ng was assigned clerical and administrative and research tasks. From 2016, Ms Ng’s duties “evolved into that of a Manager”. I take that to mean that there was no formal process by which Ms Ng was assigned greater responsibility within the business.

73    Ms Ng deposes to there being six to eight people working for Horizons, but does not specify which of them were engaged in particular roles at particular times.

74    To a large extent, Ms Ng’s evidence-in-chief was said to be based upon her knowledge of Horizons’ business records, said to have been gained from her responsibility for gathering evidence to assist Horizons in intellectual property disputes (including disputes with Enagic) as a part of her current role. She states, “Conservatively, I would have spent countless hours reviewing and analysing the business records of Horizons dating back to 2009”. Notwithstanding that statement, the business records annexed to Ms Ng’s affidavits are lacking in probative force (both qualitatively and quantitatively) in the several respects discussed below. And, as explained below, Ms Ng’s personal knowledge about the events allegedly recorded in the business records predating her employment (and to some extent afterward) was also lacking. In cross-examination, she could not explain some matters concerning the transactions recorded within the documents because the events occurred before her employment commenced. To the extent that Ms Ng has expressly or implicitly asserted that she is familiar with actual events occurring prior to her employment, the assertion is rejected. In my view, she is in no better position to draw inferences from the content of the documents than the Court itself. Her inability to explain the transactions and to give contextual evidence concerning the transactions affects the weight to be given to the documents as well as to the broad assertions in the body of her affidavit about Horizons’ trading activities and its use of trade marks in respect of them.

75    In addition, as with the evidence of Enagic’s witnesses, the evidence of Ms Ng is in part expressed in conclusionary terms in the description of trading activities. For example, Ms Ng deposes that since its establishment in Australia in 2007, Horizons has:

… engaged in trading and distribution of consumer goods and services relating to packaged drinks, including bottled water and related products (for example, water coolers), beverage dispensing units and also a selected range of apparatus goods, including air purifiers, to customers around Australia and certain other countries overseas.

76    The words “trading and distribution” is there used without any explanation of the difference between them or the particular activities said to meet each description. Whilst the words “goods and services” are used, Ms Ng does not personally identify any person to whom services have been provided. Instead, Horizons invites the Court to draw inferences from the annexed business records on that critical topic. In addition, to the extent that it is alleged that all of the activities described in the above passages have been undertaken since 2007, the affidavit annexes no business records providing objective support for such a claim. That is significant, given that Ms Ng cannot describe the trading activities of Horizons on the basis of her personal knowledge at any time prior to 2014, and for some time afterward. The circumstance that Ms Ng has made a sweeping assertion of fact in respect of matters not within her own knowledge affects the reliability of her evidence more generally.

77    Ms Ng goes on to refer to two types of “distribution”, one relating to the products sourced directly from a manufacturer in respect of “selected brands”, the other is described as follows:

… Horizons also owns and sells products under its own brands, including “KANGEN®”. KANGEN is one of Horizons’ household brands for bottled water and air purifiers as well as Horizons’ signature distribution services.  …

78    It is of course necessary to read the affidavit as a whole to understand what is intended by the phrase “signature distribution services” but it yields little on the topic. The other thing to note in respect of the above passage is the acknowledgement that Horizons’ trading activities include the distribution of its own goods, being goods in the nature of bottled water and air purifiers. The affidavit does not identify any other person to whom distribution “services” have been provided. As explained below, the objective evidence does not demonstrate that Horizons distributed goods on behalf of any entity other than itself.

79    In light of the above observations, I have afforded little weight to the broadly stated facts deposed to by Ms Ng, except where they find support in reliable objective material. As explained below, the business records are insufficient to support a claim that Horizons used the Opposed Mark in the provision of the Class 35 Services (or the same kind of thing) to any person in the course of trade before the priority date for the Opposed Mark.

Prior trade mark registrations

80    Horizons is the registered owner of the trade mark KANGEN in respect of goods in classes 11 and 32 (Trade Mark 1280502). Enagic was unsuccessful in opposing the registration of that mark:  Enagic Australia Pty Ltd and Enagic Co Ltd v Horizons (Asia) Pty Ltd [2014] ATMO 72.

81    Trade Mark 1280502 is relevant to the extent that its priority date is said to be the date from which Horizons also used the Opposed Mark (being the same word, KANGEN) in relation to Class 35 Services such that it is to be regarded as the owner of the mark in respect of such services for the purposes of s 58 of the TMA.

82    I have concluded that the earlier registration is of limited evidentiary value for the purposes of the grounds of opposition presently under consideration. For the purposes of s 58 of the TMA, the focus is on Horizons’ earliest use of the Opposed Mark in relation to the Class 35 Services, not upon rights it might have previously secured to exclusive use of the word KANGEN in relation to goods. As explained by the Full Court in Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd (2017) 251 FCR 379 (at [19]):

In either case, be it ownership by authorship and prior use or ownership by the combination of authorship, the filing of the application and an intention to use, the scheme of the legislation under both the 1995 Act and its predecessors, the Trade Marks Act 1905 (Cth) (the 1905 Act) and the Trade Marks Act 1955 (Cth) (the 1955 Act) provide for ‘registration of ownership not ownership by Registration’ (PB Foods Ltd v Malanda Dairy Foods Ltd (1999) 47 IPR 47 at [78]-[80] per Carr J cited in Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd (2017) 345 ALR 205 (Accor) at [170]).

83    Similarly, the circumstance that Enagic was previously unsuccessful in opposing a prior registration is of little relevance, this Court having the task of determining grounds of opposition to a different registration having a different priority date on the basis of different evidence. The present focus is on the actual uses Horizons in fact made of the Opposed Mark, not on the existence of registered rights of use.

Logo design

84    On 5 January 2009, Horizons was invoiced for the preparation of a logo utilising the word KANGEN. A copy of the logo accompanies the invoice for the artwork. That occurred shortly prior to Horizons securing registration of the mark KANGEN on 10 January 2009 in connection with (among other things) bottled water. The invoice goes some way to demonstrate Horizons’ intention to use the mark KANGEN in relation to the particular goods specified in that earlier trade mark registration at that time.

Bottled water products

85    On the basis of the evidence concerning Horizons’ only operational website (discussed below), I am satisfied that Horizons has, since July 2012, offered for sale in Australia a 600ml water product and a 10 litre water product each having the product name KANGEN. A photograph on the website shows a plastic bottle bearing a label on which the word is prominently displayed. There is no image for the 10 litre water product and there is otherwise no evidence as to how that product was packaged or labelled.

86    Ms Ng asserts that these products have been offered for sale (and sold in fact) to consumers situated in Australia since 2009. She states that the word KANGEN has been “extensively used on promotion materials, products packaging, customer orders, and invoices in the course of marketing and trading these products” which I take to refer to times as early as 2009. That assertion has been read as a submission. As explained below, I do not accept that submission is made good on the evidence, both because it concerns a period of time in respect of which Ms Ng has no personal knowledge and because it finds no support in the records upon which Horizons relies.

Domain names

87    Ms Ng annexes two invoices dated 4 September 2012 and 14 December 2012 said to have been issued to Horizons by a website developer in connection with the website address www.wateronline.net.au. The invoices make no reference to the url for that website. Ms Ng’s evidence that Horizons has conducted a business primarily through that website is nonetheless supported by objective evidence as to the content of the website at various times. On the basis of that evidence, I am satisfied that Horizons has operated a website using the address www.wateronline.net.au since around July 2012. I will refer to it as the WaterOnline website.

88    Ms Ng deposes to there being 59 additional domain names registered to Horizons, each of which contains the word KANGEN, with dates of registration ranging from 10 January 2009 to 30 January 2018. I proceed on the assumption that the domain names are registered to Horizons or its related entities.

89    Ms Ng acknowledged that the domains had been deployed to direct web enquiries using the word KANGEN to the WaterOnline website. The evidence does not support a conclusion that Horizons operated any website with readable content from any one of the KANGEN domains, nor that it conducted any business under or from websites having the domain names, other than for the purpose of redirecting internet users searching the word KANGEN to the WaterOnline website.

90    There is a single leaflet in evidence displaying an email address support@mykangenwater.com.au, however, the evidence does not establish whether, when and how that leaflet was used in any particular course of trade and the leaflet does not refer to any website utilising the domain. The email address does not appear on any other document before me. The evidence does not establish that it has ever been used.

91    Affidavit evidence of Enagic’s solicitor confirms that at the present day, the landing pages for the domain names are pages from the WaterOnline website from which users can purchase the two KANGEN bottled water products. The earliest date from which the domains were utilised in that way is not established on the evidence, except to say that such uses could not pre-date the earliest date of operation of the WaterOnline website in July 2012. To the extent that any of the domain names were registered prior to that time, I am not satisfied that the act of registration constitutes “use” of the Opposed Mark in the sense defined in the TMA at any time before July 2012 (if at all).

Kangen as a business name

92    On 26 April 2016, Horizons registered the business name KANGEN AIR & WATER TECHNOLOGIES AUSTRALIA. Also in evidence is an extract from the Australian Investments and Securities Commission recording the registration of the business name KANGEN AIR & WATER TECHNOLOGIES AUSTRALIA on 6 January 2011 (now cancelled). However, the holder of the business name is not identified in that earlier extract.

93    Ms Ng deposes that Horizons used the business name KANGEN AIR & WATER TECHNOLOGIES AUSTRALIA “to distinguish its distribution services” from 2011. Ms Ng asserts that she was responsible for applying for the business name and that she “routinely observed its application to those invoices since 2011”. It is to be recalled that Ms Ng did not commence employment with Horizons until 2014. Accordingly, I do not consider she could have had made any personal observations in respect of the application of the business name to invoices or any other document before that time. In addition, Ms Ng acknowledged in cross-examination that she had no involvement in the issuing of invoices. I am not satisfied that she has any personal knowledge about the transactions referred to in them or the commercial context in which they occurred, and I give no weight to her assertion as to the purpose for which the name was employed in 2011.

94    The use of the business name in the provision of “distribution services” is said to be evidenced by three leaflets, together with seven invoices annexed to Ms Ng’s affidavit. The invoices are given separate consideration at [99] to [113] below.

95    The first leaflet is a single page document depicting the use of the stylised word KANGEN in its application to an air purifier product. The leaflet is undated. Ms Ng asserts that the leaflet was “distributed to prospective customers of Horizons no later than early 2009”, however that assertion is not based on her personal knowledge but rather upon her “significant involvement in reviewing the business records of Horizons during the preparation of evidence in this and related trade mark disputes”. No business records objectively evidencing the distribution or other use of the leaflet from early 2009 in Australia were adduced by Horizons.

96    The next leaflet is also headed with the stylised word KANGEN at the top. It shows the word KANGEN in connection with a bottled “alkaline water” product. The leaflet is undated. That leaflet is also said to have been distributed to prospective customers of Horizons from 2009 however the assertion is also based on Ms Ng’s review of Horizons’ business records and not upon her personal knowledge. Horizons has adduced no business records to support Ms Ng’s assertion as to when and how the leaflet was deployed in its business.

97    The third leaflet does include the words KANGEN AIR & WATER TECHNOLOGIES AUSTRALIA at the top. The undated leaflet contains information about an air purifier product described as having the “Brand Name” KANGEN. It goes some way to evidence the use of the Opposed Mark in connection with goods of that nature. It also goes some way to evidence the use of the business name KANGEN AIR & WATER TECHNOLOGIES as a business name in connection with the sale of that product. However, as with the other leaflets, the actual use of that document in the course of trade is not explained by any person having personal knowledge of the facts. Ms Ng deposes that the leaflet was “distributed no later than around 2015”, but that assertion is also said to be based on her review of Horizons’ business records. Again, no further business records are adduced to support the assertion as to the use of the leaflet whether in 2015 or otherwise.

98    In the absence of evidence from a person with knowledge as to whether and how the leaflets were distributed, I attribute them little weight, especially having regard to the lack of cogency attending other documentary evidence upon which Horizons relied in support of its claimed activities between early 2009 and at least July 2012. Even if the leaflets were capable of supporting a conclusion that they were used in the course of any trade, it would not follow that the Opposed Mark had been used in Australia as opposed to in a foreign place in which goods may have been promoted to prospective importers.

Invoices

99    The invoices relied upon by Horizons may be considered in three categories: those bearing the issuer name Horizons (Asia) Pty Ltd, those bearing the issuer name “Kangen Air & Water Technologies Australia – Division of Horizons (Asia) Pty Ltd” and those bearing the issuer name WATER ONLINE.

100    As has been mentioned, Ms Ng confirmed that she has had no involvement in the issuing of invoices by Horizons. She told the Court that the fulfilment of orders is the responsibility of a warehouse operated by an “external third party”. It is not her usual duty to visit the warehouse. Ms Ng also confirmed that she has no general involvement in Horizons’ finances. She confirmed that her role is concerned with the maintenance of Horizons’ trademarks, domain names, business registrations and the like.

101    When Ms Ng’s affidavit was first filed, the invoices annexed to it were redacted, purportedly for the purpose of protecting the confidentiality of information concerning their recipients. In the course of cross-examination, Ms Ng was taken to the invoices in their unredacted form, as provided to Enagic on discovery.

102    The three invoices in the first category are dated 2 February 2009, 18 February 2009 and 8 May 2010. Each of them contain the heading “Payment” after which the words “as arranged” appear. No other information about method of payment is included. The first of them is issued to an entity named Hung Fung Trading Co, situated in Hong Kong. It relates to a shipment of a quantity of goods referred to as “KANGEN Air Ioniser” (100 units) and “KANGEN RO Water Purifiers” (10 units) direct from a factory, with shipment to Hong Kong. As discussed below, I am not satisfied that transactions with an entity trading under the name Hung Fung Trading Co are arm’s length transactions so as to evidence the use of the mark KANGEN in the course of trade in Australia. The remaining two invoices in this category are issued to “Aquaqueen Int’l Pty Ltd”. They relate to the purchase of product referred to as “KANGEN Natural Mineral Water”, with shipment in each case to Hong Kong. As explained below, I am not satisfied these transaction are arm’s length transactions. When viewed together with the invoices in the next category, this evidence causes me to place little weight on Ms Ng’s assertions about Horizons’ trading activities at any time prior to the commencement of her employment in 2014, and for some time afterward. The three invoices referred to by Ms Ng in respect of this period are insufficient to support her claim that Horizons provided or promoted distribution services to consumers in Australia. To the extent that they evidence the existence of goods bearing the name KANGEN, I am not satisfied that such goods were promoted for sale in Australia in the period to which these early invoices relate. Whilst to an extent they evidence the movement of stock between entities having common directors, they are insufficient to show the use of the mark KANGEN in its application to goods sold or promoted for sale in Australia.

103    The second category of invoices are those issued under the name “Kangen Air & Water Technologies Australia – Division of Horizons (Asia) Pty Ltd”. There are seven of them. They each require payment within 14 days, but no details are provided as to how payment might be made.

104    Five of them (dated between 28 October 2011 and 10 August 2016) are addressed to purchasers situated in Hong Kong. No GST is charged in respect of any of the transactions recorded in them. The recipient of two of them is “Horizons Asia P/L (HK)”. When asked in cross-examination whether that company was a separate entity from Horizons, Ms Ng responded “If you say so. I understand it was.” Ms Ng did not disclose the information upon which her asserted understanding was based, nor was she re-examined on the topic. Ms Ng later denied that the company to whom the product was sold was an entity related to Horizons. The cross-examination continued:

Q:    So you can’t say one way or the other whether the company is related or not?

A:    To my knowledge, no.

105    Given the name of the entity and in light of the vague responses given by Ms Ng I am not satisfied that the transactions recorded in those invoices are arm’s length transactions evidencing the use of a trade mark in the course of trade with consumers in Australia.

106    A further invoice in this category names AquaQueen International Pty Ltd as the recipient. Ms Ng was taken to a company extract showing that the owner and director of AquaQueen was Ms Penson (the original owner and director of Horizons for whom Ms Ng acted as a personal assistant). When it was put to Ms Ng that the company AquaQueen is related to Horizons, Ms Ng responded “It was before my era. If you say so”. She said that she did not know that Ms Penson was a director of AquaQueen. She said it was “before my time” at Horizons. Ms Ng said that at the time of preparing her affidavit she was unaware of Ms Penson’s relationship with AquaQueen. When it was put to Ms Ng that Ms Penson remained a director of AquaQueen until 2016, Ms Ng responded that whilst acting as Ms Penson’s personal assistant she was confined to tasks of a clerical and administrative nature. She said “I was personally assisting. I did not know anything else other than assisting Ms Penson”. In light of that response, I conclude that Ms Ng is unable to give evidence about Horizons’ activities from her own knowledge from the commencement of her employment until she assumed different duties some time in 2016.

107    Other invoices in this category are addressed to an entity referred to as “Hung Fung Trading Co Limited”. Considering the evidence as a whole, I do not accept Ms Ng’s general assertion that these invoices were issued in the course of the conduct of a distribution business trading under the name KANGEN. The entity Hung Fung Trading Co utilises the same address as the entity Horizons Asia P/L (HK) so raising a question as to the relationship between them (a topic about which Ms Ng had no personal knowledge). Second, Ms Ng’s ignorance of the relations between Horizons and AquaQueen, together with her vague response to the questions to whether Horizons Asia P/L (HK) was a separate entity to Horizons, affects the reliability of all of her assertions concerning Horizons’ trading activities by reference to the invoices. I do not accept that she has any personal knowledge about the conduct of any distribution business in the period to which these invoices relate, nor about the entities to which Horizons might have issued invoices, nor about the commercial context in which the invoices to Hung Fung Trading Co were issued.

108    I have taken into account Ms Ng’s assertion that she has spent hundreds of hours scrutinising Horizons’ business records, including those relating to periods of time to which these invoices relate. However, if the evidence of the extent of her scrutiny of Horizons’ records is to be accepted, it is reasonable to expect that she would locate and produce invoices (as they exist) evidencing transactions in the course of trade with entities that she knows are truly external to Horizons and to which its goods and services have been promoted in the critical early times at which Enagic asserts it was using the same mark.

109    In addition, I consider the redaction of the invoices annexed to Ms Ng’s affidavit to have gone well beyond what was necessary to protect confidential information. The redaction of the “ship to” address is demonstrative, as is the redaction of the invoice number. Those redactions initially concealed probative material that undermined Horizons’ case and cannot, on any reasonable view, be characterised as commercially confidential. An additional effect of redacting invoices in that way was to conceal the fact that Ms Ng had annexed the same invoices to her affidavit three times (Annexures NG-9, NG-11 and NG-14) and to conceal the fact that the goods referred to in the invoices were not delivered to places situated in Australia. Ms Ng denied that the invoice numbers had been redacted for the purpose of concealing the duplication of invoices so as to convey the impression that there were more transactions evidenced by them than in fact was the case. She could not provide adequate explanation as to why the “ship to” location had been redacted. When afforded the opportunity to explain why the annexures to her affidavit were redacted in that way no explanation was forthcoming, other than a denial of any involvement in the redaction process. Ms Ng was not re-examined on that topic. The circumstances just described further reinforce my concerns as to the reliability of Ms Ng’s evidence as a whole.

110    In addition, it may reasonably be expected that Ms Ng would have selected invoices that she considered to be truly representative of Horizons’ trading activities to provide objective support for her testimony. To the extent that the invoices are a representative of any activity, they indicate that in the period to which the invoices relate, Horizons was involved in transactions directing the shipment of goods from a factory (the whereabouts of which is unknown) to entities situated in Hong Kong that were either related to it, or otherwise for purposes that are not explained by any person with knowledge of the commercial context of the transactions. Additionally, at least until the establishment of the WaterOnline website in 2012, there is insufficient evidence to show that the products described in the invoices were in fact promoted for sale to consumers in Australia, whether by reference to the Opposed Mark or otherwise.

111    It is curious that there are no invoices in respect of sales generated from the WaterOnline website in the period between mid-2012, when the website was established until May 2017 (after the priority date), but that anomaly was not the subject of cross-examination and I draw no adverse inference from it for the purposes of s 58 and s 60 of the TMA.

112    Of the remaining two invoices in this category, only one predates the priority date for the Opposed Mark. It is dated 13 June 2016, and appears to relate to 30 personal air purifier products shipped to an address in Botany in New South Wales. Ordinarily, I would regard that invoice as capable of evidencing the conduct of a business at that time for the sale of goods in the nature of personal air purifiers. However, I am not satisfied that it is sufficient, in and of itself, to evidence the conduct of a business for the provision of distribution services offered or provided to any person in Australia whether under the name KANGEN (or similar) or otherwise. To the extent that air purifiers were distributed by Horizons, I am not satisfied that the distribution occurred other than as an internal delivery activity to complete the transfer of possession of the goods to the end consumer. Given my concerns about the reliability of Ms Ng’s evidence generally I do not accept her assertion (expressed or implied) as to the existence of a distribution business and I am not prepared to draw an inference favourable to Horizons by reference to that document.

113    The third category of invoices are those issued under the name WATER ONLINE. There are 21 of them. They all bear dates after the priority date for the Opposed Mark, ranging from 30 May 2017 to 19 April 2019. Each of them records the sale of water products in 10 litre or 600ml units, with delivery addresses in New South Wales, Victoria, Queensland and South Australia. The amounts vary from $173.80 at the lowest to $422.40 at the highest.

Horizons’ use of the Opposed Mark before the priority date

114    On 29 February 2012 Horizons became the registered owner of the business name AQUARIAN WATER ONLINE AUSTRALIA. The business name WATER ONLINE was first registered to Horizons on 10 October 2017. On 17 April 2012, Horizons secured registration of a logo incorporating the stylised words WATER ONLINE. The logo is registered in respect of goods in class 32 (waters including spring waters, mineral waters and aerated waters and other non-alcoholic beverages; fruit beverages and juices; beer; syrups and other preparations for making beverages) and services in class 35 (advertising; business management; direct marketing and selling).

115    Both parties have adduced evidence obtained by use of an internet archive known as the Wayback Machine to demonstrate the content of various websites at various times. The Court has before it evidence as to how the internet archive operates:  Affidavit of Elizabeth Rosenberg affirmed on 2 November 2020. The Court may rely on the extracts from the websites as reliable representations of the textual content of web pages at the times of their capture, although in some respects the captured pages do not depict all visual features one might expect to see on a web page. As to the use and reliability of such evidence, see:  Pinnacle Runway Pty Ltd v Triangl Limited [2019] FCA 1662; 375 ALR 251.

116    The earliest content captured from the WaterOnline website is dated 26 July 2012.

117    A capture dated 27 July 2012 shows products promoted for sale via the WaterOnline website under the brand KANGEN. Two products are referred to:  a 10 litre quantity (the receptacle and packaging for which is not proven) and a 600ml plastic bottle (sold in quantities of 20 bottles per case). Both products are described as “NEW”. On the basis of that evidence, I am satisfied that the word KANGEN was used in relation to goods in the nature of drinking water. It was used in physical relation to the 600ml product by the affixation of a label prominently displaying the word and otherwise as a name for both products, under which they were promoted for sale. I am satisfied those two products were offered for sale to consumers situated in Australia via the WaterOnline website in July 2012.

118    It is otherwise apparent that the business operated by Horizons via the WaterOnline website does not involve the provision of any service to consumers in Australia. Rather, the website is the trade channel by which Horizons offers its own goods for sale. To the extent that goods might be delivered for the purpose of transferring them into the possession of the purchaser following their sale, that is an activity internal to Horizons. Delivery of the goods to the end consumer in the context of a sale does not constitute the provision of a service to the end consumer.

119    If I am wrong about that, I would conclude in any event that any service offered to be provided in Australia via the WaterOnline website was not a service in respect of which the Opposed Mark was used.

120    The contact details on the website, together with the visual presentation of its content, make it plain that in conducting any business via the website Horizons traded under the name WaterOnline and not under the names of any one of the particular products for sale on the website. Contact details are provided as “Water Online Australia, Division of Horizons (Asia) Pty Ltd”. There is no use of the word KANGEN in that part of the website, nor in that part which contains information about Horizons’ privacy or shipping policies. The website offers goods for sale having different brands, of which KANGEN is but one. The word KANGEN appears in the context of a list of eight different brands promoted on the website. It also appears on a page in which the two products may be selected for sale.

121    Accordingly, for the purposes of identifying the first user of the Opposed Mark, I reject Horizons’ contention that it first used the mark as a trade mark in Australia before July 2012 and I reject its contention that it first used the Opposed Mark in connection with the Class 35 Services at any time before the priority date 24 September 2016.

122    It remains for Enagic to establish that it was the first user of the Opposed Mark in the requisite sense. I will now examine all of Enagic’s asserted uses before the priority date, including its first asserted use dating back to 2007. I will also consider uses outside Australia, as that evidence will inform the analysis to be undertaken under s 60 of the TMA.

Enagic’s activities

123    Subject to rulings in respect of some of their content (and some material that was not pressed), the Court has read the following materials:  two affidavits of Mr Kenso Matsuoka affirmed on 13 June 2019 and 28 August 2020;  three affidavits of Ms Jacqueline Jessica Chelebian sworn on 25 June 2020, 6 July 2020, and 28 August 2020; an affidavit of Mr Samuel Tan sworn on 7 July 2020,; affidavit of Mr Ian Faulkner sworn on 28 August 2020; affidavit of Ms Danielle Hyndman sworn on 28 August 2020; affidavit of Ms Elizabeth Rosenberg affirmed on 2 November 2020; affidavit of Mr Michael Rumore dated 10 November 2020; and documents marked M through to U and W to Z contained in a court book.

124    As with Ms Ng, Enagic’s witnesses have expressed themselves in terms that characterise Enagic’s activities in the language of conclusions, particularly in their use of the words “distribution”, “distributors” and “services”. To some extent, that is explained by Enagic’s use of the word “distributor” in the ordinary course of its business to describe certain persons who are involved in a direct marketing scheme, whether or not those persons are involved in the provision of services in the nature of distribution within the ordinary meaning of the word. The witnesses’ use of the word “distributor” or like terms is to be considered in that context.

125    The following findings are based on the business records adduced in Enagic’s case as well as the evidence of its witnesses, principally Mr Matsuoka, Ms Hyndman and Mr Faulkner. The evidence of the witnesses was not directly contradicted by competing testimony. Horizons did not require either Mr Matsuoka or Ms Hyndman to attend for cross-examination, following rulings limiting the use to which some parts of their evidence might be put. Mr Faulkner was briefly cross-examined.

126    Enagic is a company incorporated in Japan in 1974, originally under a different name. It assumed its current name in 1990. It has “affiliate” companies incorporated, and branches situated, in other countries including Enagic Australia Pty Ltd and Enagic HK Co Limited (Hong Kong affiliate). The word “affiliate” is not defined in the affidavits. It is employed in a way to describe corporate entities that Enagic alleges are authorised users of the trade marks that it owns within the meaning of s 8 of the TMA. Considering the evidence as a whole, it may readily be inferred that the entities referred to as affiliates are to be regarded as authorised users vis a vis Enagic.

127    Mr Matsuoka has been Enagic Australia’s Managing Director since its incorporation on 9 February 2010. Prior to that date he worked for Enagic from branch offices situated in Tokyo, Hawaii and Hong Kong.

128    In 1990, in places outside of Australia, Enagic began selling machines known as electronic water generators, manufactured in Japan. I will refer to them as the Enagic Machines. Documents relating to the present day show that the Enagic Machines are promoted as devices that produce filtered tap water, as well as alkaline and acidic waters through a process of electrolysis. They are promoted in a way that attributes beneficial characteristics to the water generated by them for drinking, cooking, beauty and cleaning. They are promoted in a way that describes the water produced by them as falling within different types, one of which is described as Kangen Water. The Enagic Machines fall into different product lines marketed under different names. The product lines differ in the range of water types they produce. An image of one of the products appears at [214] of these reasons.

129    At the time of the hearing Enagic had offices situated in 23 locations around the world. There are records of sales of Enagic Machines with delivery addresses to 38 different countries.

Direct sales model

130    Mr Matsuoka describes Enagic as an “integrated development, manufacturing, sales and service company”. He describes its business as one that utilises a “direct sales marketing strategy” which:

… includes the management of commission and various promotional incentive schemes for distributors and customers, and also provides support services for its distributors and customers including service, maintenance and supply services, distributor training seminars, customer support services, assisting in business development, and the advertising and promotion of the [Enagic machines], which includes the provision of marketing material, the distribution of goods, and marketing and promotion training assistance (Kangen Services).

131    The Court made rulings under s 136 of the Evidence Act limiting the use of some parts of Mr Matsuoka’s evidence as containing material in the nature of a submission or subjective understanding as to how Enagic’s trading activities should be characterised. The above passage is an example. It has been read as evidence of Mr Matsuoka’s understanding of the services provided by Enagic and the classes of persons to whom they are provided.

132    As its name suggests, Enagic’s “direct sales marketing strategy” is sales program whereby commissions are paid to individuals (referred to within the business as “distributors”). The strategy is correctly described in Enagic’s closing submissions as a “multi-level” marketing scheme, which organises and rewards participants in a pyramidal structure. I will refer to it as the “direct marketing scheme”.

133    It is reasonable to infer that Enagic’s strategy is intended to encourage and reward Enagic’s “distributors” to treat prospective consumers of Enagic Machines as persons who might also wish to participate in the direct marketing scheme so as to earn commissions on future sales. That encouragement is built into the terms of the scheme. A person cannot become a “distributor” without first purchasing an Enagic Machine.

134    As explained below, I have concluded that a person who purchases an Enagic Machine as a consumer is described as a “distributor” in Mr Matsuoka’s evidence (and to an extent in Enagic’s records) whether or not the person participates in the direct marketing scheme by going on to induce (or even attempt to induce) any sales of their own.

135    Those who do participate become part of a payment scheme under which commissions are received on the sales achieved by that person, as well as on the sales achieved by persons who have been converted to become “distributors” and so form a part of their “sales team”.

136    To avoid confusion in these reasons, those who in fact participate in that scheme so as to receive commission payments (or undertake marketing activities with a view to receiving them) will be referred to as Participants rather than “distributors”.

137    The commission payable to a Participant is the product of a formula with inputs that reflect the model of the machine sold and the rank of the Participant vis a vis the seller. The commission incentivises participants to induce consumers to become Participants who will in turn induce more consumers to become Participants and so on. Commissions are calculated against a pyramidal structure, with payments made to a Participant who has introduced the Participant who has made the same, and so on down the line. It is reasonable to infer that a person may be induced to purchase an Enagic Machine because he or she perceives that income may be derived from the direct marketing scheme, and purchase of the product is a condition of entry into it. That inference is supported by the promotion of the machines as a means of actioning “financial health” as I will later explain.

138    Participants in the direct marketing scheme are not wholesalers, retailers or resellers of Enagic Machines. They do not take delivery of a product on the purchaser’s behalf and have no physical involvement in their transportation. If a Participant induces a consumer to purchase an Enagic Machine, the consumer’s contract is with Enagic Australia, not with the Participant. It is Enagic Australia that receives the order, produces the invoice, processes the sale, causes the delivery of the Enagic Machine and issues the receipt.

139    Prior to Enagic Australia’s incorporation, orders for delivery to Australia were placed with Enagic’s Hong Kong affiliate.

140    When Mr Matsuoka refers to “services” he refers in part to the support provided by Enagic (and its “affiliates”) to the Participants in the direct marketing scheme with a view to maximising their sales which (by virtue of its pyramidal structure) includes information and materials to assist the Participants to maximise the sales of other Participants below them in the structure. As will be seen, the direct marketing scheme is itself the subject of promotion and marketing distinct from the promotion and marketing of the Enagic Machines to end consumers.

141    The use of trade marks in that business environment is to be examined with these different aspects of the business in mind. Use of a trade mark as an indicia of the goods is not to be equated with use of the same trade mark as an indicia of the trade origin of the direct marketing scheme under which the sellers of the goods are rewarded. In each case where it is asserted that a service is provided, it is necessary to identify the nature of the service, and to whom and by whom the service is provided.

142    Mr Matsuoka asserts (and I accept) that Enagic exercises supervisory control over the use of promotional material by the Participants, including the use of the words KANGEN and ENAGIC. That evidence is supported by correspondence passing between Enagic and certain Participants in respect of particular promotional materials (adduced as representative examples), as well as by the website evidence below and the nature and purpose of the contractual relationship between Enagic and those participating in the direct marketing scheme.

The number of Participants

143    Mr Matsuoka alleges that Enagic “looks after” more than 10,000 “distributors” across Australia. In support of that statement, he has caused a list to be prepared, based on records kept by Enagic Australia. The 551 page list is in the form of a table covering the period between May 2010 and December 2018. It has four columns, respectively containing a number (or in some cases the word MEMBER), a name, a place and a year. The list does not identify which entries bearing the year 2016 relate to the period before the priority date for the Opposed Mark. A few entries relate to New Zealand and will be disregarded. The entries marked 2017 and 2018 are also to be disregarded.

144    Mr Matsuoka does not explain the meaning of the number in the left column. However, on the basis of other evidence discussed below, I infer that when a person purchases an Enagic Machine, the person is given a number referred to as a Distributor ID.

145    A notable feature of the list is that some names are repeated within it. For example, Mr Faulkner’s name occurs 11 times in entries dated between 2013 and 2018. Considered in conjunction with other evidence, I am not satisfied that each entry on the list evidences the existence of a different Participant in the direct marketing scheme. Rather, I consider each item on the list records the sale of an Enagic Machine, the year in which it occurred and the place in which the purchaser was situated. The consequence of that finding is that I am not satisfied that before the priority date Enagic had 10,000 Participants in its direct marketing scheme situated in Australia, each of whom was actively promoting the Enagic Machines for sale.

Sales volumes and revenue

146    My conclusion that the list of “distributors” prepared by Mr Matsuoka is in fact a list recording each sale is reinforced by Enagic’s business records concerning the total volume of sales.

147    In evidence is a bundle of order forms said to relate to orders placed with Enagic’s Hong Kong affiliate over a 12 year period between July 2007 and April 2019 by persons situated in Australia. Mr Matsuoka alleges that 229 Enagic Machines were delivered to places within Australia over that 12 year period by Enagic’s Hong Kong affiliate. The bundle of order forms is described by Mr Matsuoka as a selection of invoices evidencing some of those sales. Mr Matsuoka does not state how many of the 229 sales occurred in the period before the priority date for the Opposed Mark. Among the selected order forms are seven that pre-date 10 January 2009 (the date of Horizons’ first alleged use of the Opposed Mark), although my findings concerning Horizons’ activities causes that date to lose significance. The order forms are heavily redacted. In some instances it is not possible to tell whether the order was made by a person situated in Australia. In most instances the “sponsor” name and addresses has been redacted, so that it is impossible to tell the place in which the Participant inducing the sale was situated.

148    The first order in the bundle is for the most part in a foreign language, and there is no translation of that document in evidence. I am not satisfied that that document supports the assertion that an Enagic Machine was sold to a person situated in Australia as early as 11 July 2007 as alleged by Mr Matsuoka. The remaining documents are for the large part in English. Most of them evidence sales of Enagic Machines to persons with addresses situated in Australia, processed by Enagic’s Hong Kong affiliate up to and including 15 January 2010.

149    These forms do not demonstrate that any one of the persons who placed an order for an Enagic Machine before 2009 in fact became a Participant in the direct marketing scheme. I am reinforced in that conclusion by Enagic’s more direct evidence indicating that the first person situated in Australia who became a Participant was Ms Hyndman. She purchased an Enagic Machine for the first time in 2009.

150    Also in evidence is a bundle of forms titled “Product Order Form & Distributor Agreement” emanating from Enagic Australia and postdating its incorporation. As the title suggests, the form is intended to serve two purposes. I am satisfied that its primary purpose is to place an order for the purchase of an Enagic Machine. The forms also contain a checkbox with the words “Register as a Distributor” beside it. On some forms the box is checked, on others it is not. The forms show that each person who has placed an order for an Enagic Machine has been given a “Distributor number” whether or not they have checked the box to register as a distributor. The distributor numbers for all purchasers are included in Mr Matsuoka’s list of “distributors”, whether or not the purchaser has elected to be a “distributor”. In light of that material, his assertion that Enagic “looks after more than 10,000 distributors” in Australia cannot be accepted.

151    Mr Matsuoka deposes to the number of units sold in Australia between the years 2009 and 2016. The units sold in the eight years between 2009 and 2016 are respectively as follows:  795, 1044, 722, 880, 825, 1297, 2130 and 2935. The sales occurring in 2009 are not identified as falling before or after the date of Horizons’ first alleged use of the Opposed Mark, but as that date is less than two weeks into 2009, it is reasonable to infer that of the 795 sales that occurred in that year, about 30 could be attributed to the period before Horizons’ alleged first use. On that basis, I am satisfied that the total sales to consumers situated in Australia in the period before Horizons’ alleged first use of the mark is approximately 825.

152    The sales in 2016 are not identified as falling before or after the priority date for the Opposed Mark. In the absence of a contrary submission, I will proceed on the assumption that about 60% of the sales made in that year may properly be attributed to the period before the priority date, so that the appropriate figure is about 1760. I am satisfied that the total sales occurring in the eight years before the priority date is accordingly about 9,445. The evidence does not support a finding of sales of units exceeding that figure before the priority date.

153    In a table summarising the units sold and resultant sales revenue, Mr Matsuoka identifies the number of “distributors” who made the sales. The number of distributors is the same as the number of sales recorded in each year. That curious feature of the table further reinforces my view that the word “distributor” is used in the evidence in a way that does not discriminate between those persons who purchase an Enagic Machine as a consumer per se and those persons who purchase an Enagic Machine with a view undertaking the promotional activities of a Participant.

154    The sales revenue generated from the units sold is a reflection of the price of the Enagic Machines. By way of illustration, sales of 2130 units in 2010 generated revenue exceeding AUD$10 million, suggesting an average unit price of about $4,700.00. That broadly accords with the purchase prices stated on the order forms to which I have referred and with the price lists advertised on the website pages discussed below. Total revenue generated by the sale of Enagic Machines in Australia between 2009 and 2016 exceeded $48 million. Revenue from sales achieved globally in the same period exceeded $285 million.

155    Having rejected Mr Matsuoka’s evidence that there are more than 10,000 “distributors” of Enagic Machines in Australia, I am nonetheless able to infer from the available evidence that there were in Australia some Participants undertaking promotional activities in the context of the direct marketing scheme prior to the priority date. They include the Participants who operated some of the websites described below before the priority date, as well as Ms Hyndman and Mr Faulkner, whose activities will be discussed separately.

156    I am also satisfied that a large proportion of purchasers indicated on their purchase order form the desire to become registered as a “distributor”. That supports an inference that each of them was aware of the existence of the direct marketing scheme at the time that the order was placed.

Websites

157    Enagic relies on material drawn from a number of websites, including the following:

(1)    a site with the address www.enagic.com (Enagic US website);

(2)    a site with the address http://enagic-australia.com/ (Enagic AU website); and

(3)    a site with the address www.enagicwebsystem.com (EWS website).

158    The content of these and other websites is evidenced by screen shots of archived pages generated by the Way Back Machine. As explained earlier, I have had regard to the printouts of website pages generated by the Way Back Machine as sufficient proof of the fact that the website in question was operational at the time that the pages were captured, and also of some of the content of the websites as they appeared at the capture dates.

159    Mr Matsuoka’s evidence is that prospective consumers or prospective Participants were not directed to the Enagic AU website until 2017, that is, after the priority date for the Opposed Mark. The evidence does not otherwise support a conclusion that the Enagic AU website was operational at any time before the priority date. Mr Matsuoka deposes that prior to 2017 prospective consumers or Participants were directed to the Enagic US website. That is supported by the evidence of Mr Faulkner and Ms Hyndman and I accept it.

160    The Enagic US website has operated since 2003. I am satisfied that it is a site that has been capable of being accessed from Australia since that time. There is no direct evidence as to the total number of persons situated in Australia who in fact accessed and read its content prior to the priority date for the Opposed Mark or at any other time. There is however a body of evidence capable of supporting the inference that persons in Australia were specifically directed to Participants in the promotion of the Enagic Machines for sale here.

161    From January 2016, customers who purchased an Enagic Machine received an email thanking them for their purchase and welcoming them to the “Enagic sales team”. The email contained information about how to use the machine and directed the customer to the Enagic US website “where you can find numerous answers to the most frequently asked questions, download documents for Enagic Australia and much more”.

162    The specific content of the Enagic US website will be considered in the context of the evidence about Enagic’s use of trade marks in the various aspects of its business (see [208] – [241] below).

163    The EWS website is said to be operated by “Enagic Web Systems” (EWS). For reasons explained below, I accept Mr Matsuoka’s evidence that the website offers “services in the form of a web marketing program to assist distributors to market and grow their business”. The particular content of the EWS website will be considered elsewhere in these reasons.

164    It is unclear on the evidence whether EWS is a separate legal entity from Enagic. However, as explained below, I am satisfied that whether or not it is a separate legal entity, it is an authorised user of Enagic’s trade marks for the purposes of the TMA. I am also satisfied that the services offered via the EWS website are properly to be regarded as services provided by Enagic through EWS as its authorised user. That conclusion is supported by the Enagic US website which refers to the “launch” of EWS as part of Enagic’s own corporate history.

165    Mr Matsuoka lists an additional nine websites administered by Participants. He does not name the Participants who administer them, although in some instances names of Participants appear on the websites themselves, and can be matched to the list of “distributors”.

166    Whilst the years on which they became Participants are given, the dates on which the websites were first created by them are not. The evidence does not establish how many people have accessed the websites since their creation, nor does it establish how many sales have been achieved by the Participants who operate them. It is nonetheless plain that most of them are directed to prospective consumers situated in Australia.

167    Two of the website addresses are in fact different pages drawn from the same site (www.kangenwaterinaustralia.com).

168    One of the sites is said to be operated by a Participant situated in the US who accepts orders in Australia. Whilst I am satisfied that website was operational in October 2010, the evidence does not demonstrate that the page has been accessed by any person in Australia (and if so when), nor whether the Participant has generated any sales here.

169    One of the websites is administered by a Participant having the same “Distributor ID” as the person who operates one of the Facebook pages referred to below. I am satisfied that the website has been operational since 2012, however the evidence does not establish how many people in Australia have accessed it.

170    The content of two further sites suggest they are operated by the same Participant, whose name appears twice on the list of “distributors”. The first of those sites appears to have been operational as at 12 December 2015 (before the priority date), the other as at 10 November 2016 (after the priority date).

171    One of the websites appears to have been operational as at 23 July 2014. Mr Matsuoka states that the Participant operating that website has been a “distributor” since 2012. The name of the Participant, “Live With Health”, appears on the list of “distributors” once in an entry dated 2013.

172    One of the websites appears to have been operational as at 12 January 2016. The name of the Participant administering that site is not given. Mr Matsuoka asserts that the operator of that website has been a “distributor” since 2012. However, as there is no objective evidence on the website itself or on the “distributor” list to support that particular claim I afford it little weight.

173    Further websites operated or referred to by the witnesses Mr Faulkner and Ms Hyndman will be discussed separately.

Social media accounts

174    Mr Matsuoka refers to Participants operating “various social media accounts” including on Twitter and Pinterest. Only one example of each is given. The dates on which the accounts were established are not given. A screen shot of a page from a Twitter account shows that it emanates from the same Participant (an entity apparently trading under the name “Live With Health”) who operates one of the websites referred to above.

175    Enagic Australia created a Facebook page on 19 January 2017 (after the priority date). As at the date of Mr Matsuoka’s first affidavit, the page had 1,699 likes and 1,728 followers.

176    There are other Facebook pages created by Participants, of which four examples are given. The evidence of those pages is in the nature of screen shots taken in 2019. The entire content of the pages since the dates of their creation is not shown.

177    The first page titled “Enagic Kangen Water Australia” was created on 30 September 2011. On the day the printout was created the page had 483 likes. The identity of the person who administers the page is not known. The screen shots do not evidence any activity occurring on the page after 2014.

178    The second is a group page titled “Kangen Water Sydney Australia” created on 29 October 2018. At the time the printout was created (in 2019) the group had 292 members. The group is administered by a person whose name appears once on the “distributor” list in an entry dated 2018.

179    The third is a page titled “Kangen Water Australia” created on 11 December 2014, although the content of the page at that time is unknown. At the time the screenshot was taken the page had 475 likes. The page states that it is operated by an “Enagic Independent Distributor” for whom a name and “Distributor ID” is provided. From the list of “distributors” referred to in Mr Matsuoka’s affidavit, it may be inferred that the first purchase of an Enagic Machine by that Participant occurred in 2012. There were four subsequent entries in the list in which the same Participant’s name is used. Without further evidence, no reliable finding can be made as to whether the subsequent purchases were made by the same Participant or whether they were purchases made by persons who were induced by the Participant to purchase a machine of their own.

180    The fourth page is titled “Kangen Water Australia”. It was created on 21 April 2017. On the date the screen shots of that page were taken it had 782 likes. The identity of the person who created the page is unknown.

181    For the purposes of both s 58 and s 60 I do not take into account any of the above pages that were created after the priority date or in respect of which the creation date is not proven.

Conferences and events

182    Mr Matsuoka refers to three overseas conferences occurring in Germany (June 2011), Japan (June 2014) and Las Vegas (July 2015) and to the distribution of promotional material at those events. From his personal observation, he asserts (and I accept) that 30 Australians attended each event.

Marketing expenditure

183    Mr Matsuoka provides a table of the estimated marketing expenditure by Enagic in relation to the sales of the Enagic Machines encompassing all forms of marketing within and outside of Australia. The figures do not include expenditure outlaid by individual Participants. The figures for the years 2010 to 2016 are, respectively $57,000, $190,762, $116,945, $70,285, $132,432, $138,839 and $142,000. The total global expenditure is $848,263.

184    Mr Matsuoka estimates that 30% of that expenditure is attributable to marketing within Australia, but he does not explain how that estimate is arrived at. It is difficult to reconcile the estimate with evidence given elsewhere in Mr Matsuoka’s affidavit concerning the sales of Enagic Machines achieved globally relative to sales achieved in Australia. In the years 2010 to 2016, revenue from sales in Australia accounted for approximately 17 % of global sales, on average. In the absence of an explanation from Mr Matsuoka to justify his 30% estimate, I will not adopt it. I am nonetheless prepared to accept that Enagic’s marketing expenditure between 2010 and the priority date attributable to Australia to be about $130,000, roughly equating to 17 % of the global figure, less a portion to account for the period in 2016 after the priority date.

185    The the weight to be given to the evidence of expenditure is diminished to the extent that the manner of spending and the use of trade marks in respect of it is not explained. More weight is to be afforded to evidence that demonstrates the nature and extent of the promotion in a practical sense. Outside of the websites, social media accounts and personal marketing efforts of the Participants, there is no evidence of marketing activity in the nature of (for example) mainstream advertising.

Television coverage

186    In 2014, a story was broadcast on the Australian public affairs program “Today Tonight”. The story featured the Enagic Machines and discussed their purported benefits. It contained interviews with (at least) a Participant and an end consumer. The evidence does not show that the story was broadcast outside of South Australia. In the absence of evidence to the contrary, I infer that it was not. The story is nonetheless available to be viewed online. Its total viewership is unknown.

Ms Hyndman

187    Ms Hyndman refers to herself as a distributor of Enagic Australia. She has actively participated in Enagic’s direct marketing scheme and I am satisfied that she is a Participant in the sense described earlier in these reasons. She is a person who has actively promoted the Enagic Machines for sale with a view to earning income through the direct marketing scheme. I accept her evidence on the topics narrated below.

188    In February 2009, Mr Ian Oakley (described as an Enagic distributor based in the United Kingdom) sent Ms Hyndman a DVD concerning a “potential business opportunity” in Australia as a distributor of water systems. The DVD contained a presentation from a representative of Enagic in the United States of America about Enagic and the water systems.

189    On 6 February 2009, Ms Hyndman researched Enagic and its water systems, including by accessing the Enagic US website and conducting Google searches. Ms Hyndman annexes to her affidavits printouts of webpages which are similar to those she recalls viewing at that time. Later the same day, Ms Hyndman contacted Enagic’s office in Hong Kong to enquire about opening an office for Enagic in Australia. She also completed a Distributor Agreement & Product Order Form and purchased an Enagic Machine from Enagic’s Hong Kong affiliate. Ms Hyndman believed that she formally became an Enagic distributor around 18 February 2009 and describes Mr Oakley as her “sponsor”, although for reasons that Ms Hyndman cannot explain, another person is named as her sponsor on her initial order form. I do not consider anything of moment turns on that discrepancy.

190    From that time, Ms Hyndman promoted the Enagic Machines in Australia and sought to increase the number of Participants. She utilised materials provided to her from Participants situated overseas, including pamphlets and brochures, DVD presentations and slides, which she adapted for use in Australia. She annexes photographs of some of those materials.

191    At that time, Ms Hyndman was informed by Enagic representatives in the United States of America that the material they had provided to her was created using a “third party website” www.6atools.com and www.mykangentools.com, a website used by distributors in the USA to create marketing and promotional materials. The two websites just referred to are not mentioned in Mr Matsuoka’s affidavit. However, I accept that the websites were operational in 2009 and that they were accessed by Ms Hyndman, as she asserts, in 2009. Ms Hyndman asserts, and I accept, that the content of the website www.mykangentools.com (extracts of which are in evidence) are consistent with her personal recollection of the content of that website as it appeared in 2009. Relevantly, the website states:

My Kangen Tools was founded in May of 2008. MKT was established for distributors, by distributors. Professional, high quality sales aides are essential to marketing and selling top shelf products sold through the network marketing channel.

Enagic products are second to none, and our inaugural product was the Why Kangen Water? DVD. This DVD won two International Awards in the ‘Direct Sales & Marketing’ category. Not only has the Why Kangen Water? DVD received accolades from top professionals in the in the [sic] direct sales industry, but it has also proven itself with the distributor force.

Enagic distributors have set all-time US sales records since its launch date of October 31st 2008. My Kangen Tools has set the standard in professional and effective marketing materials and will continue to create tools and sales aides with the distributor in mind to help them achieve 6A and beyond.

192    It is reasonable to infer that the reference to “6A” in that blurb is a reference to the highest and most lucrative level achievable in the pyramidal structure of Enagic’s direct marketing scheme. The blurb also supports Ms Hyndman’s characterisation of the website as a “third party” website in the sense that it is operated by Participants, rather than by Enagic directly.

193    Ms Hyndman asserts (and I accept) that she acquired materials from Participants located in the United States of America (including Mr Oakley and his own sponsor) for the purposes of promoting the Enagic Machines in Australia and that those Participants obtained the materials from the www.mykangentools.com website. The material includes the DVD referred to in the website and brochures which were then labelled with Ms Hyndman’s name, contact details and the address of her own website discussed below, for use in her promotion of the Enagic Machines in Australia. I am satisfied that the use of trade marks in the materials was use that was authorised by Enagic. I am reinforced in that view by emails adduced by the evidence of Mr Matsuoka to the effect that Enagic supervised the use of promotional materials by Participants.

194    Since February 2009, Ms Hyndman has promoted the Enagic Machines in Australia by hosting presentations and demonstrations including in homes and workplaces and by attending networking functions. Until 2016, Ms Hyndman hosted weekly training sessions in Sydney “for distributors and their prospects”. Her reference to “distributors” may be fairly understood as a reference to Participants, indicating that Participants provided training to Participants in their pyramidal structure.

195    Ms Hyndman attended conferences hosted by Enagic in Japan in November 2011, 2013, 2015, 2016 and 2017. She collated material at the conferences which she then distributed at the events and presentations that she hosted. I accept her evidence that she also obtained and downloaded promotional material from the Enagic US website for that purpose.

196    Ms Hyndman asserts that in 2009, she established a website at the address www.specialwater.com. That assertion is supported by a hard copy brochure dated 2009 which includes the website address in conjunction with the promotion of an Enagic Machine by Ms Hyndman, together with an historical extract showing a page from the website dated 28 September 2009.

197    Ms Hyndman alleges that the website www.specialwater.com was created by EWS. She does not give details as to how that was done. There is an anomaly in the evidence in that respect, given that a timeline of activities referred to in the Enagic US website indicates that EWS was “launched” in 2010. However, Ms Hyndman’s assertion that her website is very similar in format content to Mr Faulkner’s websites (discussed below), at least one of which contains a statement on its face that EWS is its creator. I infer that they are based on the same template. Considering the evidence as a whole, I am satisfied that the EWS website was operational in 2009 and that it was accessed by Ms Hyndman from Australia for the purposes of establishing her own website utilising the address www.myspecialwater.com.

198    From late 2015, Ms Hyndman reduced her role to a part-time capacity.

199    Ms Hyndman does not state how many persons she has induced to become Participants, nor the number of sales of Enagic Machines she has achieved whether before or after the priority date for the Opposed Mark.

Mr Faulkner

200    Mr Faulkner also refers to himself as a distributor of Enagic Australia. As with Ms Hyndman, I am satisfied that he is a Participant in the direct marketing scheme. Mr Faulkner was briefly cross-examined on his affidavit, to clarify the extent of his knowledge of some aspects of Enagic’s business affairs. His evidence about his activities as a Participant was otherwise not the subject of challenge and, for the most part, I accept it. I say “for the most part” because, like Mr Matsuoka, in one respect Mr Faulkner’s evidence appeared to equate persons who were purchasers of Enagic Machines with persons who actually participated in the direct market scheme as active promoters of the Enagic Machines for sale.

201    Mr Faulkner became a Participant in January 2010. His “sponsor” is Ms Hyndman. Before becoming a distributor, Mr Faulkner accessed the Enagic US website as well as the website that had been established by Ms Hyndman. He annexes images from the Enagic US website which he says (and I accept) are consistent with his recollection of the content of the website he accessed in 2009. On 21 January 2010, Mr Faulkner completed a Product Order Form & Distributor Agreement which was submitted by Ms Hyndman to Enagic’s Hong Kong affiliate.

202    As a Participant, Mr Faulkner has promoted the Enagic Machines by referring prospective customers to the Enagic US website, and I am satisfied that he has done so since the date from which he became a Participant.

203    Mr Faulkner has obtained four domain names and has used EWS to create websites using those domains on a “monthly subscription model”. He annexes screenshots taken from the EWS website, as well as screenshots from the websites he has created using that website. EWS is responsible for the content on all of Mr Faulkner’s websites, although he can customise the content to a degree by selecting from files and videos that have been created by Enagic and EWS. I accept that to have been the case since 2010 when the first website was created.

204    Three of Mr Faulkner’s websites (www.kangenhealthy.com, www.kangenhealth.net and www.kangendemo.live) are websites to which prospective purchasers of Enagic Machines are directed. The fourth site (www.kangenthealthy.org) is described as a “team building (internal site)” for keeping in touch with Participants that Mr Faulkner has introduced. In cross-examination, Mr Faulkner confirmed that he did not have direct personal knowledge of the relationship between Enagic and EWS (assuming they are different entities). However, as the Enagic US website contains an express reference to EWS, I do not consider Mr Faulkner’s lack of personal knowledge on the subject to be of any significance. In light of the evidence as a whole, the Court may readily infer that the activities conducted on the EWS website are authorised by Enagic in that the content produced for Participants’ websites is content that is either created by or controlled by Enagic.

205    Mr Faulkner’s main method of marketing has been by attending what he calls networking events. He describes attending meetings at which he is likely to meet potential prospective purchasers or future Participants. He asserts (without challenge) that since becoming a distributor he has attended about one such event each week, with attendee numbers ranging from between 10 and 100. He uses those meetings to generate contacts.

206    Mr Faulkner states:

…  Since becoming a distributor, through both personal sales made by me and sales by those persons in my distribution network that I have sold to, my distribution team has made a total of 696 sales of Enagic products.

207    Given my earlier observations about the use of the word “distributors”, I consider that statement to be of limited probative value, other than to demonstrate that Mr Faulkner has earned commissions on the sale of 696 Enagic Machines and so may be regarded as genuinely participating in the direct marketing scheme. The manner in which the scheme operates is such that other Participants would have earned commissions on the same sales. I approach that aspect of Mr Faulkner’s evidence with caution insofar as it is adduced to prove the scale of Enagic’s activities and the reputation of any trade mark in Australia

Conclusions in respect of s 58 of the TMA

Courses of trade

208    As has been mentioned, the submissions on the appeal at times wrongly sought to equate the sale and associated delivery of goods with the provision of distribution services. The delivery of goods by their seller for the purpose of transferring them into the possession of the end consumer does not necessarily evidence the provision of a distribution service as a discrete course of trade. Similarly, the promotion of goods for sale on a website does not necessarily evidence the provision of a distribution service to persons who may view the website as a prospective purchaser of the goods. In my opinion, proof that a person uses a trade mark in the promotion of goods does not constitute proof of use of the trade mark in relation to the provision of a service in the sense defined in s 9 and s 17 of the TMA.

209    An allegation that Enagic provides after-sale maintenance and repair services following the sale of an Enagic Machine did not feature heavily in Enagic’s evidentiary case, nor did Enagic make any forceful submission in relation to it. It has not been submitted that such services are the “same kind of thing” as the Class 35 Services in respect of which the Opposed Mark is registered in any event.

210    In the commercial context of an entity promoting its own goods by the mode of direct selling, it is necessary to identify to whom services are offered and by whom. The circumstance that the Participants have a contractual relationship with Enagic does not mean that they provide distribution services to Enagic, nor does it mean that they provide distribution services to the end consumers of the Enagic Machines. Enagic’s practice of referring to them as “distributors” in its internal and external communications does not make them distributors in fact.

211    It is appropriate to characterise the Participants as independent contractors who act (for consideration in the form of sales commissions) as Enagic’s representatives and agents in the promotion of the Enagic Machines to induce consumers to enter contracts for the purchase of goods with Enagic or its affiliates. Under the pyramidal reward structure, they also have a financial interest in encouraging consumers to become Participants who will in turn introduce new Participants. That incentive arises because the Participant receives a commission from sales made by Participants in the downward line in the structure. In a limited sense, each Participant may be regarded as operating a business in his or her own right. The business is limited in that the only source of revenue is that to be derived under the Participant’s contractual relationship with Enagic.

212    Against that background, I am satisfied that the Participants are both the promoters of Enagic’s goods as sales representatives and agents of Enagic, as well as consumers or prospective consumers of services provided by Enagic (whether directly or by authorised users of its trade marks) relating to the direct marketing scheme identified below. As such, I consider there to be two courses of trade in which the use of the Opposed Mark is to be considered. The first is the course of trade for the sale of the Enagic Machines to end users of those goods. The second is a course of trade in services offered to the Participants by Enagic (directly or through its agents) to assist them to (adopting the language of Mr Matsuoka) “market and grow their business”.

Use of the Opposed Mark in relation to goods

213    In this course of trade, the relevant transaction is between the purchaser of the Enagic Machine and the supplier with whom the purchase order is placed. The evidence shows that orders from consumers situated in Australia have been placed both with Enagic’s Hong Kong affiliate since 2009 and with Enagic Australia following its incorporation. I am satisfied that sales of the Enagic Machines are effected through the promotional and marketing efforts of Participants situated both within and outside Australia. I am satisfied that Participants situated in Australia and elsewhere have directed prospective purchasers to the Enagic US website for that purpose. In addition, I am satisfied that Participants have established their own websites specifically directed to consumers situated in Australia, and distributed promotional material within Australia, with a view to achieving sales of the Enagic Machines to Australian consumers. From 2017, Australian consumers were also directed to the Enagic AU website, which (I accept) is relevantly the same in its content as the Enagic US website in the years prior to 2017. The use of the Opposed Mark on the Enagic AU website otherwise post-dates the priority date and does not inform the inquiry under s 58 of the TMA.

214    The content of the Enagic US website as well as the Participants’ websites and associated materials ascribe to the Enagic Machines the ability to produce five types of water, including “Kangen Water” and “Strong Kangen Water”. Images of the Enagic Machines show that the word KANGEN is used in physical relation to them in the sense that it is applied to the machine itself. An extract from the Enagic US website depicts an image of a machine with the word Kangen physically applied to it. The word is used in addition to the model name of the machine (“Leveluk SD 501”), which itself is used as a trade mark:

215    Among various other words and signs, the word KANGEN can be seen on the blue pushbutton control panel and the words KANGEN WATER can be seen on the changeable soft electronic display, indicating the type of water selected, to be produced by the machine.

216    The circumstance that the model name is a trade mark does not preclude a finding that the use of the word KANGEN in its physical application to the machine is not also to be regarded as a relevant instance of trade mark use. The word KANGEN is also physically applied to an Enagic Machine with the model name “Leleluk R”, promoted as a “starter” machine capable of generating three types of water utilising the word KANGEN. The phrase KANGEN WATER appears in images in physical application to an Enagic Machine with the model name “Leveluk K8”. Of these machines, I am satisfied that (at least) the model Leveluk Super 501 was in production and available for purchase in Australia as early as 2008.

217    The phrase KANGEN WATER is used throughout the websites and promotional materials in a way that refers to the water that can be produced by the Enagic Machines and in a more generalised way to promote purported lifestyle benefits both from the water itself and (as explained below) purported financial benefits to be gained in the direct marketing scheme. As early as 2008, the Enagic US website employed phrases promoting the benefits of the water produced by the Enagic Machines such as “The power of Kangen preserves your body and the environment”. I conclude that the word KANGEN (usually in association with the word WATER) is used as a marketing device to drive sales of the machines by reference to the purported benefits of the water produced by them. It is used as an indicia of origin of the machines and so constitutes a trade mark as defined in s 17 of the TMA. A further example is to be found in this extract from 1 March 2010:

Kangen Water® is the delicious, healthy water created from Enagic’s innovative water technology. Not only do these amazing devices filter harmful chemicals out of tap water, but they also produce Kangen and acidic waters through the process of ionisation. These waters can be used for various purposes, including drinking, cooking, beauty and cleaning. ‘Kangen’ means ‘return to origin’ in Japanese.

218    The materials provided to Ms Hyndman (and later employed by her in her own activities as a Participant) are replete with the phrase KANGEN WATER, including in conjunction with the slogan “change your water, change your life”. Brochures and website content describing the Enagic Machines contain references to KANGEN WATER and STRONG KANGEN WATER.

219    It is also the case that the word ENAGIC is used extensively throughout the promotional materials discussed earlier. It, too, is used as an indicia of the origin of the Enagic Machines. But that does not preclude a finding that the word KANGEN is also used as an indicia of trade origin of the same goods.

220    As to sales, the evidence demonstrates that Enagic’s direct marketing strategy had active Participants situated overseas from as early as 2003. On the basis of invoices issued by Enagic’s Hong Kong affiliate, I am not satisfied that any orders for Enagic Machines were placed with that entity by consumers in Australia in 2007 as alleged by Enagic. As I have mentioned, the invoice said to evidence that sale was not expressed in English. To the extent that there is an assertion by Mr Matsuoka as to its meaning, I do not consider his evidence sufficient to prove the fact of that particular sale.

221    However, I am satisfied that the Hong Kong affiliate did process orders for the sale of Enagic Machines placed by or on behalf of consumers situated in Australia in 2008 and that the model of the machine was that which included the word KANGEN in physical relation to it. I am also satisfied that orders for the purchase of those machines were placed as a consequence of the efforts of Participants situated overseas extending their promotional efforts to prospective consumers situated in Australia. That inference may be drawn from the content of the order forms, together with the evidence of Mr Matsuoka that puts them into a commercial context in respect of which he has personal knowledge. In addition, I am satisfied that Enagic’s Machines are not offered for sale on a retail or in-store basis, so reinforcing the inference that the sales were achieved by the mode of direct selling. Together, those circumstances are sufficient to establish that Enagic first used the mark KANGEN in relation to goods (the Enagic Machines) sold to consumers in Australia from 2008. The relevant sales in that year were of the Leveluk SD501 model, evidenced by purchase orders dated 1 July 2008 (to a consumer in New South Wales), 21 July 2008 (to a consumer in New South Wales), 11 August 2008 (to a consumer in New South Wales) and 30 December 2008 (to a consumer in Victoria). It does not matter that the word KANGEN does not appear on the purchase orders just referred to. For the purpose of s 58 of the TMA, it is sufficient to find that the sale was induced by a Participant in the direct marketing scheme whose efforts were directed to a purchaser situated in Australia, and to find that the word KANGEN was used in physical relation to the Leveluk SD 501 model as evidenced by images of the product as it existed in 2008.

222    If I am wrong in drawing the above inference by reference to the 2008 sales, I would nonetheless conclude that the first use by Enagic in Australia of the word KANGEN as a trade mark in relation to goods occurred in the context of Mr Oakley’s sale of an Enagic Machine to Ms Hyndman in February 2009. I have found that Mr Oakley directed Ms Hyndman to the Enagic US website in connection with that sale. As such, the website is to be regarded as not only capable of being accessed by consumers situated in Australia but actively drawn to their attention by the direct selling efforts of Participants and so directed to consumers here. I accept Ms Hyndman’s evidence that she, too, directed prospective Australian consumers to that website and also, from September 2009, to her own website. In the circumstances just described, the use of the word KANGEN on the Enagic US website in relation to goods is to be regarded as trade mark use in Australia in the requisite sense. Four extracts captured in December 2008 and January 2009 are said by Ms Hyndman to be consistent with the content she viewed at around that time. They each display the phrases “Enagic Kangen Water” and “Revolutionalize your life Style with Kangen Water (TM)”, as well as menus with headings KANGEN WATER and STRONG KANGEN WATER. Those uses are inextricably related to the Enagic Machines as the goods being promoted by reference to them. They are uses that indicate the trade origin of the Enagic Machines themselves (albeit by way of branding the water produced by them).

223    Ms Hyndman was also sent promotional material (including in the form of a DVD) by Mr Oakley. The arrival of the promotional DVD in Australia on 6 February 2009 was the first instance of trade mark use of the word KANGEN in connection with the inducement of Ms Hyndman to purchase a machine, and prompted her to access the Enagic US website. Its cover displays the title “Why Kangen Water?”. I am satisfied that that use of the word is trade mark use in relation to the Enagic Machines in the same sense I have just described.

224    Considering the evidence as a whole, I am satisfied that the use of the DVD by Mr Oakley in his capacity as a Participant was an instance of use of the word KANGEN as a trade mark that was authorised by Enagic. That inference may be drawn by reference to the relationship between a Participant and Enagic, as well as from the webpage www.mykangentools.com from which it may be inferred that the DVD is a promotional item offered for sale to Participants in obvious association with Enagic and the direct marketing scheme. I extend that reasoning to the use of Enagic’s trade marks by all Participants, including Ms Hyndman. In addition, by using EWS to construct her own website, Ms Hyndman incorporated promotional materials using the word KANGEN, the content of which was authorised by Enagic. As with the Enagic US website, the word was used on Ms Hyndman’s website from September 2009 in a way that promotes the machines by reference to the water that can be produced by them. I am satisfied that constitutes a trade mark use in relation to the machines themselves.

Use of the Opposed Mark in relation to services

225    Recent extracts from the Enagic US website demonstrate that the direct marketing scheme is itself the subject of promotion by Enagic that is distinct from the promotion of the Enagic Machines themselves. On a page that prominently displays the word KANGEN in large font, the site promotes “Company Culture, Personal Growth & Business Opportunity”. The blurb that follows states:

The Enagic Corporation believes in empowering people through the direct-sales marketing system. Our independent and passionate distributors love to speak about the benefits of Kangen Water® to others as they build their own personal wealth.

As a result of this philosophy, our global distributors are able to achieve financial freedom and realize their dreams while promoting a product they believe in and truly love.

Ours is a family that supports one another to achieve universal success. Our business opportunity has been sometimes referred to as ‘personal growth with a compensation plan’, because we want our team to grow financially and as individuals.

226    I am conscious that that extract is dated 2019, however I consider it to be consistent with trade mark use pre-dating the priority date as discussed below.

227    Mr Matsuoka refers to extracts from the Enagic US website which he states demonstrate the use of the word KANGEN as a trade mark since the Enagic Machines were first listed on the website. The extract evidences the use of the phrase KANGEN WATER in the promotion of the direct marketing scheme. The extract depicts images of an Enagic Machine with the words KANGEN WATER physically applied to it, and includes the following statement:

The Enagic Corporation direct sales system empowers hard-working and passionate independent distributors around the world.

They fall in love with our products, and they spread the word about the positive changes Kangen Water® has brought into their lives and finances.

228    Mr Matsuoka deposed (without challenge) that Enagic conducts “distributor training seminars” and that it is engaged in “assisting business development” and “promotion training and assistance”. Whilst that aspect of his testimony is expressed in generalised terms, I am satisfied that it finds support in other evidence of Mr Matsuoka, as well as the evidence of Ms Hyndman and Mr Faulkner, and in various aspects of the documentary evidence discussed below.

229    The extract from the Enagic US website from 2019 shows that it incorporates an online store from which Participants can purchase devices and written materials of a kind that may be used for the sale and promotion of Enagic Machines, including a demonstration kit, packs of brochures about how to use the machines, product catalogues (including in multiple packs) and holiday cards. That extract post-dates the priority date, however, an extract from the Enagic US website dated 28 November 2010 evidences the operation of the online store at that time, offering for sale marketing materials such as brochures, product catalogues and promotional items such as magnets, bags and holiday cards. Mr Matsuoka deposes that in the seven years before and including 2015, more than 40,000 items were purchased from the online store. If 2016 is included, the figure approaches 55,000. Whilst the global figures do not distinguish between purchasers of the items situated in Australia and those situated elsewhere, on the basis of the evidence given by Ms Hyndman and Mr Faulkner, I am nonetheless satisfied that Participants situated in Australia have been directed to the Enagic US website for that purpose from about 2009 and through to the priority date for the Opposed Mark. I am satisfied that a store for the provision of promotional materials to Participants has been in existence from as early as 2009 through to 2019.

230    Extracts from the EWS website are annexed to the affidavit of Mr Faulkner. Whilst he does not ascribe a date to the extracts, he deposes to having been a subscriber of EWS, including for the purpose of constructing his own websites (discussed earlier in these reasons), the earliest of which came into existence in 2010. The purpose of the EWS website is apparent from the extracts themselves, including the following statements:

EWS is the official worldwide business management and marketing system for Enagic® Distributors. Learn more about Enagic® at www.Enagic.com

…

…  We want to EMPOWER you by giving you ever-evolving, high-end, high-quality, state-of-the-art, resulting-producing tools, not commonly found in the home-based business arena.

We are focused on doing Business with Heart, and our main goal is to help you succeed.

(original emphasis)

231    Hyperbole aside, it is apparent that the EWS website offers web-based tools to assist in the conduct of a business. So much is reinforced by the remainder of the extracts. I am satisfied that has been its purpose since its inception. I have already found that Ms Hyndman used EWS to create her website as early as September 2009.

232    I am satisfied that the services provided by and promoted on the EWS website are those of Enagic in the requisite sense. The EWS website and the Enagic US website cross-refer to each other, and the “launch” of EWS is referred to on the Enagic US website as an event forming a part of its own corporate history. The services are offered for monthly subscription fees with prices varying according to the level of services selected. They include:

(1)    services for the construction of websites by way of template designs including text, graphics and video content;

(2)    electronic business management tools (including for the monitoring of “contacts” who may be prospective purchasers of the Enagic Machines), database tools, email marketing tools, business organisation tools (for the scheduling of tasks, the organising of meetings and the placement and tracking of orders);

(3)    customisable marketing and merchandising tools by way of the website mykangenmarket.com;

(4)    internet advertising tools;

(5)    e-commerce tools (including a facility to enable Participants to take and place orders by their own websites); and

(6)    training services, promoted with the words “Access all the information and knowledge you need to empower yourself as a business owner with our trainings and True Health Webinars”.

233    The word KANGEN appears throughout the EWS website extracts in different contexts. For the most part, those references are references to “Kangen Water” as a product depicted and promoted on the website templates on offer to Participants. In that context it is used in a way that is inextricable from the Enagic Machines that produces the so-called “Kangen Water”. Most of the website templates are to be understood as possible website options to which end-consumers might be directed. As such, in that particular context I do not consider the use of the word KANGEN on the images of templates to evidence use of a trade mark in connection with a service provided by EWS.

234    The EWS website also incorporates the phrase:  “You can take your Kangen Water® business with you anytime, anywhere” to promote a particular website template. In that context the word is used as a trade mark not only in connection with a service offered by EWS but also to describe the direct marketing scheme.

235    The word is also used in a way that references KANGEN WATER as the subject matter of the Participants’ business activities. Examples include: