Federal Court of Australia
Ragopika Pty Ltd v Padmasingh Isaac trading as Aachi Spices and Foods [2023] FCA 487
ORDERS
Appellant | ||
AND: | A D PADMASINGH ISAAC T/A AACHI SPICES AND FOODS Respondent | |
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. The decision of the Delegate in decision [2021] ATMO 47 to refuse to register trade mark application number 1909008 in favour of the appellant be set aside.
2. The respondent’s grounds of opposition in respect of trade mark application number 1909008 by the appellant be dismissed.
3. Trade mark application number 1909008 be registered in favour of the appellant.
4. If no party files written submissions seeking a different costs order by 1 June 2023:
(a) the costs order made by the Delegate be set aside and instead there be an order that the respondent pay the appellant’s costs of the proceedings before the Delegate to be taxed if not agreed; and
(b) the respondent pay the appellant’s costs of the appeal to be taxed if not agreed.
5. If either party files written submissions as permitted by order 4, any submissions in response be filed by 15 June 2023.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
KENNETT J
Background
1 The appellant (Ragopika) is the corporate vehicle through which Mr Iyyappan Pillai (who goes by the name Mr Pillai) operates an Indian restaurant in Perth known as Aachi Indian Cuisine. The restaurant has been operating under that name since around June 2016.
2 The respondent is described as a “proprietary concern”, founded in 2006 by Mr AD Padmasingh Isaac (Mr Isaac). It is part of a group of enterprises under Mr Isaac’s control, based principally in Chennai, India, and carrying on a business that he founded in 1995 under the overall name Aachi. A “proprietary concern” is evidently a creature of Indian rather than Australian law, and the meaning of the expression was not explored in the evidence. I understand it to mean, in effect, the name under which one or more persons conduct a business. A “proprietary concern” is not a company and, it would seem, does not have a legal personality distinct from its owner or owners: Raghu Lakshminarayanan vs M/S Fine Tubes (2007) 5 SCC 103. For present purposes there is no need to distinguish between the various entities in the group, and I refer to the respondent and related entities collectively as Aachi. Aachi produces a range of packaged foods such as spices and spice mixes, pickles, jams, wheat products and ghee which are sold in several countries including Australia. Since about 1998 Aachi has also operated “quick serve” restaurants in Chennai. Its packaged food products have been available in shops in Australia since 2008.
3 “Aachi” is a word in the Tamil language which, depending on the context, can mean “grandmother” or can be a respectful way of addressing or referring to an older woman. There was a difference of view between the parties as to how commonly the word is used and how it should be understood, but not a fundamental one. Ragopika’s position was that “Aachi” is a commonly used word and its evidence emphasised the meaning “grandmother”. Aachi did not accept that the word was a commonly used one, but also did not suggest that it was especially arcane. I have proceeded on the basis that “Aachi” is an ordinary word which a person with a knowledge of the Tamil language would understand as referring either to a grandmother or a respected older woman.
4 Aachi has registered the word “AACHI” (along with various phrases including that word and graphics incorporating it) as a trade mark in several countries. In Australia, “AACHI” is registered with a priority date of 16 January 2008 (the Aachi mark). Aachi has been vigilant in protecting its trade marks against what it sees as infringements, including by commencing many proceedings in the courts in India and elsewhere.
5 On 22 February 2018, Ragopika filed an application to register the words “AACHI INDIAN CUISINE” (the AIC mark) as a trade mark under the Trade Marks Act 1995 (Cth) (the Act). The background to that application will need to be discussed in more detail later in these reasons. The application was examined and advertised as having been accepted for possible registration on 4 July 2019. Aachi opposed registration. It filed a Notice of Intention to Oppose on 3 September 2019 and a rectified Statement of Grounds and Particulars on 17 September 2019. A delegate of the Registrar of Trade Marks heard the matter by video conference on 4 March 2021.
6 The delegate published his decision under s 55 of the Act, refusing the application to register the AIC mark, on 4 June 2021. He accepted that the Aachi mark had established a reputation in Australia, as a consequence of which the use of the AIC mark would be likely to deceive or cause confusion, and that the ground of opposition in s 60 of the Act was therefore made out. Aachi had also relied on the grounds of opposition provided for in ss 42, 44, 58 and 62A of the Act. The delegate, having upheld Mr Isaac’s opposition under s 60, did not express any view on the other grounds.
7 Ragopika filed a notice of appeal on 25 June 2021. It was amended on 17 September 2021 and 26 May 2022. Relevantly, it alleges that the delegate erred in upholding Aachi’s opposition under s 60. Aachi filed a notice of contention on 26 August 2021 which was amended on 3 June 2022. It contends that the delegate should have upheld Aachi’s other grounds of opposition. In effect, therefore, all of the grounds of opposition advanced before the delegate are pressed in these proceedings.
Nature of the appeal
8 Section 56 of the Act provides that the applicant or the opponent may appeal to this Court from a decision under s 55. The powers of the Court on the hearing of an appeal are set out in s 197 of the Act. Although described as an “appeal”, the proceeding is in the Court’s original jurisdiction: Jafferjee v Scarlett (1937) 57 CLR 115, 119 (Latham CJ, McTiernan J agreeing), 126 (Dixon J). The Court is to determine the matter on its merits, on the material before it. While due weight and respect is to be given to the evaluative judgments made by the Registrar or their delegate as an experienced and skilled person, there is no presumption in favour of correctness of the Registrar’s decision: Registrar of Trade Marks v Woolworths Ltd [1999] FCA 1020; 93 FCR 365 (Woolworths) at [32]–[34] (French J, Tamberlin J agreeing).
9 The Court is to apply the legal criteria that the Registrar was required to apply: Woolworths at [33]. The provisions applicable to the resolution of the appeal thus include s 55(1) of the Act, which requires a decision to register a trade mark or refuse to do so to be made “having regard to the extent (if any) to which any ground on which the application was opposed has been established”. The permissible grounds of opposition are limited to those specified in Part 5 of the Act (s 52(4)), which include (with one exception) the grounds on which an application may be rejected under Division 2 of Part 4 (s 57).) Thus, it was not in dispute that Aachi bore the onus of establishing that one or more of the grounds pursued by it before the delegate was established (see Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58; 185 FCR 9 at [32] (Keane CJ, Stone and Jagot JJ)).
10 It was also common ground that the relevant date for determining whether each ground of opposition is made out is the “priority date” for the AIC mark (ie 18 February 2018, the date of filing of Ragopika’s application: see ss 12 and 72(1) of the Act). In the case of ss 44, 60 and 62A that seems to be clear from the terms of the provisions (which are set out below). In Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83; 251 FCR 379 (Pham Global) at [22] the Full Court (Greenwood, Jagot and Beach JJ) appears to have regarded the date of application as the relevant date for grounds of objection under the Act generally, referring to earlier cases where that view was taken on issues of deceptive similarity (s 44) and ownership (s 58). Evidence of events and circumstances after the priority date is therefore relevant only to the extent that it supports inferences about circumstances or motivations existing at the priority date.
evidence
11 Before the delegate, Aachi relied on two statutory declarations by Mr Isaac. The first (dated 24 February 2020) comprised 31 paragraphs with 19 annexures, running to 891 pages in all. The second, dated 21 July 2020, responded to a statement by Mr Pillai and comprised 14 paragraphs with 7 further annexures, running to 171 pages in all. Ragopika relied on a statutory declaration by Mr Pillai dated 27 May 2020, comprising 27 paragraphs with 13 annexures, running to 178 pages in all.
12 An order was made on 22 November 2021 allowing the parties to rely on these declarations as if they were affidavits in the appeal, subject to any objections. Nevertheless, both parties filed further material.
(a) Ragopika filed an affidavit affirmed by Mr Pillai, which included substantially the same material as his statutory declaration but expanded upon it. The affidavit contained 20 annexures, overlapping with the material that had been annexed to his statutory declaration.
(b) Aachi filed an affidavit sworn by Mr Isaac on 18 April 2022 which substantially repeated the contents of his two statutory declarations and introduced a further 26 annexures (a total of 1,400 pages).
(c) Counsel for Ragopika raised, by way of objections to Mr Isaac’s declarations and his first affidavit, deficiencies in the way these documents had been witnessed. In response, and by leave, Aachi filed a second affidavit sworn by Mr Isaac on 31 May 2022 (and properly witnessed) which annexed and adopted the contents of his two statutory declarations and his earlier affidavit (and their respective annexures).
13 Given the significant duplication that resulted from these filings, I asked counsel to consider whether they needed to rely on their clients’ statutory declarations as well as their affidavits. Counsel for Ragopika read Mr Pillai’s affidavit and did not rely on his statutory declaration (although two letters that were annexed to the declaration were later tendered by counsel for Aachi). Counsel for Aachi read Mr Isaac’s second affidavit, which incorporated his earlier affidavit and two statutory declarations with their annexures, thereby placing 2,462 pages of evidence before the Court. Only a small fraction of this material was referred to in the parties’ submissions.
14 Both Mr Pillai and Mr Isaac were cross-examined. It will be necessary to refer to some aspects of their oral evidence below. I formed general impressions of their credibility, which I record here as part of the background to that discussion.
(a) Mr Pillai presented as a generally truthful witness who recounted events as best he could remember them. He readily accepted that his recall of details such as dates was not strong, and made appropriate concessions when presented with documentary material that differed from his recollection.
(b) Mr Isaac gave his evidence by video link and, due to a late change in the timetable, did so from his office rather than a neutral venue. The audio-visual connection was adequate but not perfect. Although he is fluent in English it is not his first language; he spoke with a strong accent and (I was told) had some difficulty understanding Australian-accented English. For these reasons it was important not to place too much weight on his demeanour. Despite that, I found Mr Isaac to be an unsatisfactory witness.
(i) While giving his evidence Mr Isaac often appeared to be looking away from the video screen, either at somebody else in the room (to his right) or at another screen (down and to his left). Sometimes this coincided with pauses (some of which were very long) before he answered a question. When asked about this, on more than one occasion, he denied that he had any other electronic devices with him and that there was anybody else present except the technician assisting with the audio-visual equipment. Afterwards I was informed by Mr Isaac’s counsel that, in fact, his wife had been standing in the doorway trying to remind him of the need to eat something (Mr Isaac being diabetic). It is not possible to reach any conclusions about these matters, save that Mr Isaac’s response when directly asked whether there was someone with him other than the technician was different from the explanation given later through his counsel. I have reservations about the completeness (at least) of that explanation, because the behaviour that caused concern to me continued after a short adjournment during which Mr Isaac could have had something to eat.
(ii) Even if Mr Isaac was receiving some kind of assistance during his cross-examination, it did not result in satisfactory answers to many of the questions he was asked. His answers were frequently non-responsive and argumentative. Some questions had to be put to him several times before he gave an answer. He was unable or unwilling to accept the truth of quite simple propositions, even in the face of documents showing them to be true, when he thought they might be adverse to Aachi’s case. I formed the impression that he was more concerned with advancing Aachi’s position as he saw it than genuine engagement with the factual questions he was being asked.
(iii) Accordingly, to the extent that Mr Isaac’s credibility has significance, I did not find him to be credible. I have serious reservations about accepting his evidence, except where it is consistent with other evidence in the proceeding or constitutes an admission.
The appeal – Trade Marks Act s 60
15 Section 60 of the Act provides as follows.
60 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.
16 Pursuant to s 20 of the Act, registration of a trade mark confers the exclusive right to use (or authorise use of) the mark in relation to the goods and/or services in respect of which it is registered. The Act therefore operates on the basis that trade marks are to be registered in respect of identified categories of goods and services. For this purpose, s 19(3) provides that the regulations under the Act may provide for the “classes” into which goods and services are to be divided for the purposes of the Act. These classes are defined by s 3.1 of the Trade Marks Regulations 1995 (Cth) (the Regulations) by reference to Schedule 1 of those Regulations. Trade marks are thus registered in relation to classes of goods or services and (usually) specified categories of goods or services within the relevant classes.
17 The Aachi mark, referred to earlier, is registered in respect of goods in classes 29 and 30. These classes cover a wide variety of foodstuffs. The particular goods in relation to which the Aachi mark is registered are listed as follows:
Class 29: Meat, fish, poultry and game, meat extracts, dates, fruit jellies, jams, processed peanut, pickle, potato chips and potato crisps, preserved, dried and cooked fruits and vegetables, ghee and dairy products, jellies, jams, fruit sauces, potato chips, fruit chips, eggs, milk and milk products, and all kinds of edible oil and coconut oil and coconut powder and fats.
Class 30: Masala powder and spices, turmeric powder, flour and preparations made from cereals, bread, pastry and confectionary, ices, honey, treacle, yeast, baking powder, salt, mustard, vinegar, sauces (except salad dressings), coffee, tea, cocoa, sugar, rice, tapioca, sago and articial coffee, masala rice for biryani and other allied preparations, asafoetida, idly chilly powder, appalams, orid dhall, dhoor dhall, moong dhall and all kind of dhall.
18 Ragopika initially sought registration of the AIC mark in class 1, which was clearly inappropriate, and later amended its application so as to seek registration in respect of class 43. The delegate considered it on that basis. Class 43 comprises “services for providing food and drink; temporary accommodation”. The application, as amended, seeks registration for services described as “Restaurant services; fast food outlet”.
19 There is thus an important difference between the domain in which Aachi has exclusive rights to use its mark and the domain in which Ragopika seeks exclusive rights to use its mark. However, while that distinction is important to some other grounds of opposition, it does not affect the application of s 60. Section 60 refers to the registration of a mark in respect of particular goods and services only as the subject of opposition. The ground for opposition is that:
(a) before that registration was sought, “another trade mark had … acquired a reputation in Australia” (the existing trade mark); and
(b) because of that reputation, use of the mark sought to be registered (the new trade mark) would “be likely to deceive or cause confusion”.
20 The first of these elements calls for a factual inquiry into the extent and nature of the reputation that had been acquired by the existing trade mark – here, the Aachi mark – in Australia. The second element calls for an assessment of the likelihood of deception or confusion arising from use of the new trade mark as a consequence of that reputation.
21 The existing trade mark need not even be registered for s 60 to be engaged (Fry Consulting Pty Ltd v Sports Warehouse Inc [2012] FCA 81; 201 FCR 565 (Fry Consulting) at [121] (Dodds-Streeton J); Qantas Airways Ltd v Edwards [2016] FCA 729 (Qantas Airways) at [144] (Yates J)). The classes of goods and/or services in respect of which the existing trade mark has been used, and those in which the new trade mark is intended to be used, may be very relevant to the likelihood of confusion (see Qantas Airways at [143] and GAIN Capital UK Limited v Citigroup Inc (No 4) [2017] FCA 519 at [148] (Markovic J)), but the fact that the classes are not the same cannot be determinative. The reputation of the existing trade mark need not relate specifically to the goods or services that are the subject of the proposed application (Qantas Airways at [143]; Rodney Jane Racing Pty Ltd v Monster Energy Company [2019] FCA 923 (Rodney Jane Racing) at [87] (O’Bryan J)). The question is simply whether the reputation of the existing trade mark in Australia is such that the use of the new trade mark is “likely” to be deceptive or cause confusion.
22 “Reputation” in this context has been held to mean awareness of the existing trade mark by the public generally (McCormick & Company Inc v McCormick [2000] FCA 1335; 51 IPR 102 at [81] (Kenny J)). Slightly confusingly, there is also authority that the reputation must be one of which a significant number of people would be “aware” (Renaud Cointreau & Cie v Cordon Bleu International LTEE [2001] FCA 1170; 193 ALR 657 at [74]–[75] (Moore, Tamberlin and Goldberg JJ)), which Dodds-Streeton J in Fry Consulting took to mean that the reputation must exist amongst “a significant section of the public” (at [121]). Logically, the existing trade mark must be known to, and carry meaning for, a significant section of the Australian public before there can be any significant likelihood of confusion or deception arising. Although it does not need to be shown that use of the new trade mark is more likely than not to deceive or cause confusion, it does need to be shown that there is a real and tangible danger rather than a mere possibility (Rodney Jane Racing at [84]).
23 In cross-examination, Mr Isaac accepted that there was no confusion between his business and that of Ragopika. Indeed, he stated that view quite confidently. It was then submitted for Ragopika that: (a) this was a statement against interest, which (unlike most of Mr Isaac’s evidence) I should accept; and (b) it was fatal to Aachi’s s 60 ground. I have not treated it in this way. This is for the following reasons:
(a) A concession by a witness of fact in the witness box is not usually regarded as equivalent to an admission or abandonment of an allegation in pleadings or originating process. Those admissions or abandonments conventionally occur by amendment, through the relevant party’s legal representatives. Even if the witness is a party to the litigation, concessions made in the heat of cross-examination should not, in my view, be treated as equivalent to the formal abandonment of part of the case.
(b) A party’s case may of course collapse in a practical sense if a key witness does not give evidence as expected or makes a damaging concession. I did not regard Mr Isaac’s evidence in that light, at least on this topic. He had no way of knowing whether consumers in Australia were confused or deceived by the use of the AIC mark. Had he asserted that there was such confusion or deception I would have given it little if any weight, quite apart from the view I have reached on his credibility. For the same reason, even if I accept that Mr Isaac’s oral evidence of the lack of any confusion was truthful because it was against his interest, I cannot give it much weight. (I note as an aside that Mr Isaac’s willingness to give a confident answer on a topic as to which he clearly had no direct knowledge tends to support the view I have expressed above as to how he approached the task of giving evidence.)
24 No evidence was led of any consumers actually being confused or deceived by the similarity of the Aachi mark and the AIC mark. There was some evidence of an absence of confusion, but this did not take matters very far. Annexed to Mr Pillai’s affidavit were two certificates, apparently signed on behalf of businesses involved in importing and wholesaling Indian food brands in Australia, both of which stated that there was no confusion in the minds of customers about Aachi and Aachi Indian Cuisine. These were not objected to, but are not in sworn form and obviously hearsay. In addition, they are at best evidence of the understanding of their authors at the time they were written (May 2020). They cannot be given much weight, although they can be taken as indicating that these businesses had not encountered instances of customers being confused.
25 The evidence before the Court in the present case does not support a finding that, in February 2018, the Aachi mark had a reputation that would be likely to cause confusion or deception to arise from use of the AIC mark. This is so for the following reasons.
26 First, while it can be accepted that Aachi has a significant presence in India and is a sizeable global business, sales of Aachi products in Australia in the period leading up to the relevant date were small. According to Mr Isaac’s affidavit evidence, Aachi’s “total sales volumes in Australia from 2016 to mid-2019 was approximately USD$297,787.94”. Very roughly (noting that exchange rates would have varied over this period), that equates to around $447,000 for the whole of Australia over a period of two years or more, which is in the region of $179,000 to $223,500 per annum. There was no direct evidence of any advertising or promotional activity undertaken in relation to Aachi’s products in Australia. If that was occurring, the sales figures suggest that it did not have any great effect. Aachi also has a website that is accessible from Australia, but the evidence did not show the number of visits to that site by people from Australia.
27 Secondly, it is possible for a trade mark to acquire a reputation in Australia as a result of business activity outside Australia (eg ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 334 (Lockhart J)). Thus, it was submitted by Aachi that members of what was termed the “Indian diaspora” in Australia (which comprises a significant number of people) were likely to be aware of the Aachi mark and its connection with a wide range of foods through their travel to or time living in India, interaction with relatives and Indian television stations that are available on the internet. However, this did not go beyond speculation; there is no evidence that allows an assessment of the extent of such exposure (let alone the extent to which the Aachi mark penetrated the consciousness of people of Indian heritage in Australia at the relevant time). Mr Isaac’s description of his business in terms such as “world-leading”, “one of the leading manufacturers and marketers of spices”, having “enormous goodwill” and “a common household name for consumers of Indian food and beverage products” cannot be given much if any weight, partly because of his very limited credibility, and partly because such descriptions are not meaningful in the absence of objective standards of measurement. At best they represent the way he sees his business. India, notoriously, is a large country with a very large population and a variety of regional cultures. It is not safe to assume that any individual brand of foodstuffs (even one associated with a relatively large business) would lodge in the memory of any significant proportion of people who have emigrated from India, visitors to India or consumers of Indian media.
28 I am therefore not satisfied that the Aachi mark, at the relevant time, had acquired a reputation amongst “a significant section of the public”. Aachi has not made out the first element of the ground of opposition set out above. That is enough to require rejection of the ground.
29 Thirdly, the AIC mark is sought to be registered in respect of a class of services (specifically “restaurant services” and “fast food outlet”) and is intended to be used in connection with a single restaurant in Perth. (Mr Pillai had hoped to open restaurants in other parts of Western Australia in 2017 but lacked the time and finance to take these plans forward.) The intersection of the persons likely to encounter the AIC mark (eg by going to the restaurant or encountering its online presence when searching for Indian food in Perth) and the persons with an awareness of the Aachi mark was therefore, at the relevant time, a small subset of the Australian community.
30 Fourthly, the chance of members of that relatively small subset being deceived or confused was limited for the following reasons.
(a) Aachi has never operated restaurants in Australia; its presence in this country is limited to the sale of ingredients and pre-made foodstuffs in supermarkets and grocery shops. Aachi was operating four restaurants in Chennai at the relevant time, but there is no evidence that they were particularly well known even in that city. People who are aware of the Aachi mark in Australia are therefore overwhelmingly likely to associate it only with spices and other preparations sold in supermarkets or grocery shops. A further cognitive step would be needed in order to apprehend that Ragopika’s restaurant might have something to do with the manufacturer of those goods.
(b) That further cognitive step is not a large one, given that both businesses are connected with Indian food. However, in my view it is relatively unlikely to be taken by people of Indian (particularly South Indian) heritage in circumstances where the common element of the two marks – the word “Aachi” – is an ordinary Tamil word that has obvious associations with family and therefore with food. Evidence was adduced by Aachi of 24 separate proceedings commenced by Aachi in India, one in the United States and one other proceeding in Australia, all against businesses seeking to use the word “Aachi” in trade marks for restaurants. Its relevance to the grounds of opposition was unclear; however, it does suggest that a number of proprietors around the world have considered the word suitable for naming a restaurant. A consumer who understands the ordinary meaning of the word “Aachi”, and its obvious suitability as a name for certain types of business, is unlikely to think that use of that name by businesses in different places or spheres of activity means they are connected to each other.
(c) Aachi led evidence of the manner in which the Aachi mark appeared on its website and product packaging, and made submissions comparing the appearance of the mark with that of the AIC mark in the uses to which it has been put by Ragopika. However, I understood this to be put in connection with the “bad faith” issue under s 62A of the Act and not as something going to the likelihood of confusion under s 60. For the purposes of s 60, the relevant comparison is between the actual use of the prior mark and a notional normal and fair use of the mark sought to be registered: see the cases cited in Rodney Jane Racing at [84(c)]. The particular way in which the AIC mark appeared in Ragopika’s restaurant signage, menus, etc around the priority date are therefore not relevant to the present question. If they were relevant, I would have found that the graphic representations of the two marks were sufficiently different to suggest that Aachi’s and Ragopika’s businesses were not connected.
31 The ground of opposition under s 60 is therefore not made out. The delegate erred in this respect.
The notice of contention
Ground 2(a) – s 44(2)
32 Section 44(2) of the Act provides as follows:
(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.
33 The Aachi mark satisfies the requirement in s 44(2)(b). Further, the Aachi mark and the AIC mark are “substantially identical”. Both marks comprise words, so that the graphic designs in which they have been or are to be used are not relevant for this purpose. The “essential element” or “dominant cognitive clue” in both marks (to use the language of the Full Court in Pham Global at [52]) is the word “Aachi”. The further words “Indian Cuisine” in the AIC mark are “mere descriptive elements”, indicating the nature of the services offered.
34 Questions of deceptive similarity therefore do not arise. The key issue for the purposes of s 44(2) is whether the Aachi mark comes within sub-para (a)(i): that is, whether, with the AIC mark sought to be registered in relation to identified services, the Aachi mark is a mark “registered … in respect of … closely related goods”.
35 The comparison required by s 44(2)(a), relevantly here, is between “an application for the registration of a trade mark … in respect of services” and a trade mark that is “registered … in respect of … closely related goods”. Read according to its terms, that wording calls for attention to the specified categories of services in respect of which the applicant seeks registration of its mark, and the categories of goods in respect of which the opponent’s mark is registered. That understanding accords with recent observations made by the High Court in Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8 (Self Care) in concluding that reputation should not be taken into account in assessing deceptive similarity for the purposes of s 120 of the Act. The Court (Kiefel CJ, Gageler, Gordon, Edelman and Gleeson JJ) said at [37]–[39] (citations omitted):
The starting point is the TM Act. As has been explained, the [Act] provides for the registration of trade marks and sets out and protects the rights deriving from registration. A registered trade mark is personal property and it is the Act that defines the rights that constitute that property, when the rights will come into existence (the date of registration), and what conduct will infringe those property rights. Of particular significance is that the rights that constitute the property – a monopoly – are limited to use of a mark on the particular goods in a particular class, being the goods for which registration was sought and then obtained. It is that registered mark, and that mark alone, which constitutes the property and against which allegedly infringing conduct is assessed. Registration of the trade mark alone confers the right of its exclusive use on the registered owner or, in the case of a defensive trade mark, the right to exclude use. If reputation was considered after registration other than where expressly provided for in the Act, the level of protection afforded to that right would vary and be inherently uncertain.
That conclusion is reinforced by the structure and policy of the [Act], including that a Register of Trade Marks, which is publicly available, must be kept by the Registrar; all particulars of registered trade marks must be entered on that Register (including the identified limits on the monopoly in the form of the mark, the class and the particular goods); and the Register is prima facie evidence of any particular entered in it. Neither the reputation of the mark nor the trade mark owner's reputation is a particular on the Register.
It is inspection of the Register that enables a person to identify what marks are registered, the extent of the monopoly of each mark and what actions the person might take under the Act – whether to seek registration of another mark, challenge the registration of an existing mark or modify their behaviour so as to avoid action under s 120 for infringement of a mark.
36 In the present case, as noted above, Ragopika seeks registration of the AIC mark in respect of services in class 43 described as “restaurant; fast food outlet”; while the Aachi mark is registered in respect of a fairly wide variety of foodstuffs and preparations within classes 29 and 30. Taking the approach I have outlined above, the question would appear to be whether goods and services within those descriptions are “closely related”. Resolution of the question does not depend on the trade actually engaged in by either party.
37 This approach finds support in the cases on s 44.
(a) In Woolworths at [25] French J (with whom Tamberlin J agreed) referred to the classes of goods and services defined by reg 3.1 of the Regulations and observed that the classes of goods appeared to be identical to the classes prescribed under the Trade Marks Act 1955 (Cth) (1955 Act), while the classes of services were “more elaborately expressed”. The 1995 Act was, as his Honour noted at [20] (and Branson J also noted at [72]), intended to be “an evolution from, rather than a revolutionary change of, the 1955 Act”. His Honour said at [38]:
The range of relationships between goods and services which may support the designation "closely related" will be limited by the requirement in s 44(2) that there be a substantial identity or deceptive similarity between the potentially conflicting trade marks which attach to them. The relationships may, and perhaps in most cases will, be defined by the function of the service with respect to the goods. 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 closely related to television sets as a class of goods. A trade mark used by a television repair service which resembles (to use the language of s 10) the trade mark used on a prominent brand of television sets could be deceptively similar for suggesting an association between the provider of the service and the manufacturer of the sets. Similar examples were suggested in Caterpillar Loader Hire (Holdings) v Caterpillar Tractor Co [1983] FCA 145; (1983) 48 ALR 511 [(Caterpillar Loader)] by Lockhart J who saw service marks as potentially giving rise to problems of confusion with goods marks and other service marks "...of greater difficulty and subtlety than has previously been experienced in the case of goods marks alone". His Honour observed that:
"Confusion is more likely to arise where services protected by service marks necessarily involve the use or sale of goods or where services (for example, consultancy services) involve goods but can be provided either with or without the sale or promotion of goods." (at 522)
(b) Caterpillar Loader was an infringement case (not decided under s 44 or any direct predecessor), and Woolworths turned on questions of deceptive similarity rather than whether the relevant goods and services were closely related. It may well be that in many cases the potential for confusion (and thus for two trade marks to be “deceptively similar”) arises from how the respective trade marks are actually used or proposed to be used. There may therefore be some interplay between the concepts of trade marks being “deceptively similar” and goods being “closely related”, as noted by French J in the passage extracted above (see also at [40], where the “practical judgment” as to deceptive similarity is expressed to depend in part on the closeness of the relationship between the relevant goods and services). However, as explained by Yates J in Qantas Airways at [111]–[118], French J is not to be understood as having folded the questions of deceptive similarity and close relationship into one.
(c) Further, the interplay between the concepts of trade marks being “substantially identical” and goods being “closely related” is much less obvious. Whether the two marks are “substantially identical” depends on a side-by-side comparison of the marks (as discussed in Pham Global at [50]-[52]), which is not influenced by consideration of the spheres in which they are used. Where (as in the present case) the two marks are regarded as substantially identical, the meaning of “closely related” clearly needs to be considered as a distinct issue.
(d) The High Court in Self Care at [50] described its preferred approach (which, as noted above, focuses on the contents of the register rather than actual use) as representing a departure from what had been said in Woolworths, but also noted the different issues involved and did not overrule the decision.
(e) In Winton Shire Council v Lomas [2002] FCA 288; 119 FCR 416 (Lomas) at [48] Spender J described the trade mark in respect of which registration was sought and two pre-existing marks as “identical”. He framed the question that therefore arose, for the purposes of s 44(2), as “whether the goods of the registered proprietor are closely related to the services covered by the application” (emphasis added). However, the “goods of the registered proprietor” must to be taken to mean the “goods covered by” the two pre-existing marks, which his Honour identified at [49]–[50] and then compared with the “services of relevance” (at [55]). His Honour was thus considering the relationship between the categories of goods in relation to which the pre-existing marks were registered, and the services in respect of which registration of the new mark was sought. He was “not satisfied that the operational outlets for the supply and provision of meals and refreshments should be considered as ‘closely related’ to the Registered Goods, namely beverages” (at [57]). The judgment of Spender J was overturned on appeal, but not on this point: Lomas v Winton Shire Council [2002] FCAFC 413.
(f) More recently, in Enagic Co Ltd v Horizons (Asia) Pty Ltd [2021] FCA 1512 (Enagic), the appellant’s existing trade mark (“KANGEN WATER”) covered a fairly specific type of equipment within class 11 (at [21]). The respondent sought registration of its mark (“KANGEN”) in relation to a wide variety of services within item 35 that included “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”. Charlesworth J concluded that the two marks were deceptively similar (at [27]). Her Honour then framed the relevant inquiry as “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” (at [35]).
38 At least in so far as it identifies the relevant comparators for the purposes of s 44(2)(a)(i) as the categories of goods in relation to which the existing mark is registered and the categories of services in relation to which registration of the new mark is sought, the analysis in Enagic accords with the text of s 44(2) and the approach preferred in Self Care. It also accords with Lomas. Following the same approach, the question here is whether the various foodstuffs and preparations in relation to which the Aachi mark is registered (set out at [17] above) are, or include, goods that are “closely related” to the services “restaurant; fast food outlet”. The question turns on the relationship between these categories of goods and services, not on the specific nature of either Aachi’s or Ragopika’s business.
39 Decisions of this Court concerning whether goods and services are “closely related” have focused on the nature and function of those goods and services – for example, whether goods of the description in question are a necessary aspect of the provision of the relevant services) (Woolworths at [40] (noting also the example of televisions and a television repair service mentioned in that case at [38], and the other examples suggested in the earlier case of Caterpillar Loader at 522 (Lockhart J)); see also Dunlop Aircraft Tyres Limited v the Goodyear Tire and Rubber Company [2018] FCA 1014 (Dunlop Aircraft Tyres) at [305] (Nicholas J)). Some attention has also been given to the circumstances of trade – for example, whether goods of the description in question are offered through the same trade channels or outlets (eg Dunlop Aircraft Tyres at [305]).
40 Advertence to the latter of these factors – the relevance of which appears to lie in the possibility that consumers may associate the services with the goods because they are generally offered by the same people – indicates that the expression “closely related” (which is not defined in the Act) is to be understood in the light of the objects of s 44. As Charlesworth J noted in Enagic at [33]:
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.
41 It is in this sense that the relationship between the concept of “closely related” goods and services and the potential for confusion arising from the use of the two trade marks is relevant. To treat s 44(2) as precluding registration of a trade mark where the use of that mark, in relation to some or all of the services in relation to which registration is sought, would create little or no potential for confusion would undermine the balance sought to be struck by the Act (cf Qantas Airways at [120]).
42 Hence, although a “restaurant” or “fast food outlet” is highly likely to use at least some of the products in relation to which the Aachi mark is registered in the preparation of its offerings (eg “meat, fish, poultry and game”; “dairy products”; “edible oils”; “spices”), I do not think it follows that those goods are “closely related” to the service of operating a restaurant. Nor do I consider that the goods and the services are “closely related” on the footing that specific subsets of the goods (“pickle”; “sauces”) describes things that may be served in a restaurant.
43 The view I have reached is consistent with that of Spender J in Lomas at [55]–[56]. It is also supported by reasoning of the hearing officer in Sizzler Restaurants International Inc v Sabra International Pty Ltd (1990) 20 IPR 331, 344-345 (Sizzler):
The nature of the class 30 food products is that they are edible commodities, either fresh, frozen, dried, or otherwise preserved. The nature of a restaurant service (excluding any takeaway services) is that it is a catering service whereby food is prepared and made available to be eaten on the premises.
The class 30 food products are purchased for domestic need or restaurant use. They may be processed or not; ready to eat or not. Restaurant services, excluding takeaway services, provide the purchasers with food in its finally prepared state, the premises in which to partake of that food, and the various ancillary functions needed to present and enjoy the service.
The trade channels through which the goods, as opposed to the services, pass are the primary producer, the manufacturer, the wholesaler, (perhaps an importer) and then the various retail outlets. Restaurant services excluding takeaway restaurant services, are not available through these outlets. They are available at establishments dedicated to the services of preparing and serving meals. Conversely, the restaurant services specified in the subject application are not available from food outlets. They are available only at establishments whose sole business is the preparation and serving of meals in situ. Such restaurants are not outlets where class 30 food products may be purchased.
44 As the submissions for Aachi emphasised, in contrast to the situation in Sizzler, the services in relation to which Ragopika seeks registration of the AIC mark do not expressly exclude “takeaway services” and instead expressly include a “fast food outlet” (an aspect of the present case which also differs from what Spender J regarded as the relevant services in Lomas, at [55]). That changes the analysis to some degree but not, in my view, in a fundamental way.
45 “Fast food” is food “which can be provided without delay”, according to the Macquarie Dictionary, and may well include food that is intended to be consumed away from the premises in which it is sold. However, the expression connotes food that has been prepared so as to be ready to eat as a meal, presented or packaged so as to be easily consumed straight away (for example, cooked or reheated if appropriate and/or assembled into a sandwich or salad) and usually offered with things such as napkins and disposable cutlery. Converting foodstuffs (including those of the kinds included in classes 29 and 30) into a form suitable to be sold as “fast food”, and offering it for sale freshly prepared and appropriately packed, are the essential elements of the service. The food thereby supplied is either eaten on the premises or taken away to be eaten, rather than taken home to be used as an ingredient or otherwise prepared for consumption. It is in a quite different category from the foods included in classes 29 and 30. Thus, to adapt what Yates J said in Qantas Airways at [126], what is it that makes the goods which are the subject of the Aachi mark goods that are “related to” restaurant or fast food services beyond the fact that they are, along with a vast range of other goods, capable of being used in the provision of those services? Nothing in the nature or function of the goods does so.
46 As to the issue of trade channels, common experience indicates that nowadays takeaway food is sometimes offered in premises which also sell foods in classes 29 and 30. As to restaurant services more generally, Mr Isaac’s evidence included what were said to be seven examples of businesses in Australia that offer food and drink products for sale as well as café or restaurant (or takeaway food) services.
(a) At least two of these examples are of very doubtful relevance. One is a major supermarket chain which sells drink products branded with the name of a chain of fruit juice and smoothie bars through its website. The only service in this example appears to be the sale of pre-packaged drinks in conjunction with the many other things that large supermarkets sell. Another is a maker of ice cream and related products whose website announces the availability of its products in various supermarkets and other shops.
(b) Three of the examples involve chains of cafés or restaurants selling products, closely related to the food or drink offerings for which they are known, under their own brand names (the only direct evidence being of such sales through their websites rather than at their cafés or restaurants).
(c) Another involves cafés, operated by and under the brand name of a major chocolate maker, that sell some of its products.
47 Noting that the question whether relevant goods and services are “closely related” needs to be approached at the level of the categories of goods identified in the registration of the Aachi mark and the categories of services identified in Ragopika’s application, the evidence does not allow any informed conclusion about how commonly those goods and services are provided through the same channels or outlets. Nor does it support any finding of an expectation or understanding among consumers that restaurant or fast food services and packaged foodstuffs come from the same sources. The understanding in Lomas and Sizzler, that goods in classes 29 and 30 and the service of providing meals and refreshments in a restaurant have different trade channels, may not be correct in every instance but has not been shown to be inaccurate to any material degree.
48 Aachi also referred to some other, more recent, decisions by delegates of the Registrar. These, of course, are not binding but are useful to the extent that their reasoning is persuasive. In Holder of IP Pty Ltd AFT Intelligent Assets Trust v Joseph Buttita [2020] ATMO 169 and Kicking Horse Coffee Co. Ltd [2018] ATMO 193 coffee products were held to be closely related to services for the provision of food and drink including café services, in the light of evidence that demonstrated examples of cafés that sold coffee beans and ground coffee. The opposite conclusion had been reached on the evidence available in McDonald's Inc v Future Enterprises Pte Ltd [2007] ATMO 22. In Bickfords Australia Pty Ltd v Frank Ward [2008] ATMO 84 juice beverages were held not to be closely related to juice bar services, as the evidence did not show a public understanding that they were provided by the same industry. These cases, and the analysis in the earlier decision in Societe Des Produits Nestle v Cosi Sandwich Bar (2002) 56 IPR 305, support the view that consideration of whether particular kinds of goods and services are “closely related” is an evaluative exercise whose outcome is likely to depend on the evidence presented.
49 For these reasons, the ground of opposition in s 44(2) is not made out.
Ground 2(b) – s 42(b)
50 Section 42(b) of the Act requires an application for registration of a trade mark to be rejected if “its use would be contrary to law”.
51 In its written submissions Aachi contended that use of the AIC mark would contravene ss 18 and 29(1)(g) of the Australian Consumer Law (the ACL), being Sch 2 to the Competition and Consumer Act 2010 (Cth). Section 18 prohibits conduct in trade or commerce that is “misleading or deceptive or is likely to mislead or deceive”. Section 29(1)(g) prohibits the making in trade or commerce of “a false or misleading representation” that goods or services have (relevantly) “sponsorship” or “approval”.
52 The contentions that use of the AIC mark would be misleading or deceptive, and that it would amount to a representation that AIC’s services have sponsorship or approval, rely on the similarity between the AIC mark and the Aachi mark and the reputation that Aachi’s goods, sold under its mark, are said to have acquired. The question, like the question raised by s 60, is forward-looking but is to be assessed from the perspective of the time of lodgment: should registration be refused because use of the new mark would amount to a breach of the ACL. Authority supports that view: Time Warner Entertainment Co LP v Stepsam Investments Pty Ltd [2003] FCA 1502; 134 FCR 51 at [47] (Wilcox J); Community First Credit Union Limited v Bendigo and Adelaide Bank Limited [2019] FCA 1553 at [483] (Markovic J).
53 Plainly enough, there was a very large degree of overlap between the matters that Aachi needed to establish in order to succeed on this ground, and the matters that it needed to establish under s 60. The written submissions on s 42(b), having outlined the legal principles, referred back to the submissions that had been made on the s 60 ground.
54 The submissions were not developed further in oral argument. Counsel accepted that if Aachi did not succeed on s 60 it would not succeed in demonstrating that use of the AIC mark would contravene the ACL.
55 That acceptance was well founded. The requirements to establish a breach of the ACL are more onerous than those to make out the s 60 ground: Taylor v Killer Queen, LLC (No 5) [2023] FCA 364 at [757]. My conclusions above on the extent of the reputation of the Aachi mark in Australia and the potential for consumers to be misled or confused as to whether there was a relationship between Aachi and the restaurant operated by Ragopika, lead to the rejection of Aachi’s arguments concerning contravention of the ACL.
Ground 2(c) – s 58
56 Section 58 of the Act provides:
The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.
57 The word “owner” is not defined in the Act. In the case of a trade mark that was being used prior to the application for registration, ownership flows from authorship of the mark and prior use (see eg Pham Global at [19]).
58 The owner of another trade mark can successfully oppose registration on the ground set out in s 58 if it establishes that its mark and the subject mark are identical or at least substantially identical; the goods or services in respect of which the marks are used are “the same kind of thing”; and the trade mark relied on by the opponent was in use before the subject mark was used or its registration was sought (see eg Enagic at [55]). In its written submissions Aachi developed an argument along these lines, relying on its own registration and use of the Aachi mark in 2008 and what was said to be the similarity between the two marks. However, that argument was not pressed at the hearing.
59 Instead, Aachi developed an argument (foreshadowed in its written submissions) that Ragopika had not commenced trading under the AIC mark until sometime in 2017; some other entity (seemingly either Mr Pillai personally or the V&P Family Trust) had used the mark in relation to the restaurant business from May 2016; and that other entity therefore had a better claim to ownership of the AIC mark than Ragopika. This argument, however, is not made out on the evidence.
60 Ragopika, according to an extract from ASIC records, was established on 18 May 2016. Mr Pillai is currently its Secretary and sole director. Although the evidence does not directly establish whether the company has had other office holders, Mr Pillai gave unchallenged evidence that he formed the company in the lead-up to his acquisition of the restaurant, when he discovered that it was necessary in order to obtain a liquor licence. On 3 June 2016 Ragopika entered into a contract to purchase the restaurant, which was then known as “The Dhaba”. Mr Pillai executed the contract as director of Ragopika, along with another person named Anu Nadarajan. The contract was in evidence. It was a term of the contract that Ragopika would change the name of the business to “Aachi Indian Cuisine”. It was also a term of the contract that the business would be handed over on the date of settlement, which was defined as 1 June 2016 although the contract was not executed until 3 June. There was no evidence of anybody carrying on a business using the AIC mark before that date.
61 On 4 May 2016, “Aachi Indian Cuisine” had been registered as a business name with ASIC in the name of the Vasantha & Panbu Family Trust (the V&P Trust). Mr Pillai gave evidence that at that time he was the trustee of the V&P Trust. He was named as the trustee in the trust deed that established the V&P Trust, dated 21 May 2013. On 30 May 2016 (just before the restaurant was acquired) a deed of appointment and removal of trustee was executed, removing Mr Pillai as trustee and appointing Ragopika. This was also in evidence. The contract executed on 3 June 2016 did not specify that Ragopika was contracting in its capacity as trustee of the V&P Trust. However, to the extent that it matters, I accept that Ragopika has carried on the restaurant business in that capacity. Mr Pillai’s evidence was to that effect and the financial records of the business, which were in evidence, indicate that it was being conducted on that understanding. There was no evidence to the contrary.
62 Even if it owns the restaurant business in its own right and holds the rights flowing from registration of the business name as trustee, the important point for present purposes is that Ragopika has carried on the business since 3 June 2016 and has done so using the name “Aachi Indian Cuisine”. This was the effect of Mr Pillai’s evidence, which I accept. It is supported by:
(a) Ragopika being the entity that acquired the business from its former owner with effect from 3 June 2016;
(b) the absence of any evidence of a different entity having operated the business or owned the business name at any time since that date;
(c) Ragopika’s contractual promise to re-name the restaurant “Aachi Indian Cuisine”; and
(d) evidence that in late May of 2016 Mr Pillai was corresponding with the graphic designer mentioned earlier, concerning the design of signage and menus using the name “Aachi Indian Cuisine” (on Monday 30 May 2016 he sent an email to the designer asking for everything to be ready by the following Thursday (2 June) “cuz i cannot run my restaurant with out name”).
63 Aachi sought to draw different conclusions from two pieces of evidence.
(a) The first was a certificate from Ragopika’s accountants, dated 27 May 2020, which said “We are the Accountants & Registered Tax Agent for ‘Ragopika Pty Ltd’ ABN- 36 710 433 593 trading as Aachi Indian Cuisine since 2017”. (Another certificate bearing the date 25 May 2020 says that the firm is the accountant for the V&P Trust “trading as Aachi Indian Cuisine”.) This was said to be evidence that Ragopika had not started trading under the AIC mark until 2017. That is what the certificate conveys on its ordinary meaning (it could also be taken to mean that the accountants had been appointed in 2017, but Mr Pillai’s evidence in re-examination indicated that that would not be right). It was submitted that the year in which a client commenced a business is something an accountant would be likely to know. This may be so, but there is no indication of what records the accountant had consulted or whether the date had any importance in the context in which the certificate was written. I prefer the other documentary evidence and the evidence of Mr Pillai.
(b) Something was sought to be made of the description used by Ragopika in prosecuting its application for registration. A search of the IP Australia Register in relation to Ragopika’s application shows that on 3 July 2019 the “owner name details” were changed from “The Trustee for [the V&P Trust]” to “Ragopika Pty Ltd as trustee for [the V&P Trust]”. This was soon after correspondence had been sent to Ragopika reminding it that the delegate’s initial report on the application was adverse. The next day (4 July), the class of services in relation to which Ragopika was seeking registration was corrected to class 43. For some reason there was a further change of owner name details on 4 July 2019, the details of which are not shown, but the “owner” is listed in the printout (as at 24 December 2021) as “Ragopika Pty Ltd”. I do not think this sequence of changes suggests anything adverse to Mr Pillai’s credibility, or founds any suggestion that the user of the trade mark up to the time of application (and thus, relevantly, its owner) was any entity other than Ragopika. I infer that Ragopika initially made the application in the name of the trustee of the V&P Trust and was later advised that the name of the actual entity seeking registration should be specified. As noted earlier, the evidence is that Ragopika was in fact the trustee.
64 As I indicated to the parties during argument, there may be a question concerning the application of s 58 in a case where the first user of a trade mark is a person acting as trustee and the same person then seeks registration of the trade mark in their own right (thus seeking the beneficial interest in the rights conferred by registration) or vice versa. However, that issue does not need to be explored here. Aachi has not established that Ragopika sought registration in any capacity other than the capacity in which it had carried on the restaurant business, using the AIC mark, since its acquisition of the business in June 2016.
65 The ground of opposition under s 58 is therefore not made out.
Ground 2(d) – s 62A
66 Section 62A of the Act provides as follows:
62A Application made in bad faith
The registration of a trade mark may be opposed on the ground that the application was made in bad faith.
67 “Bad faith” in this context has been understood as having a particular meaning. It is not limited to situations where dishonesty is established. Dodds-Streeton J reviewed the authorities in Fry Consulting at [146]–[166] and her Honour’s analysis has been distilled and adopted in subsequent decisions. As summarised by Bennett J in DC Comics v Chequout Pty Ltd [2013] FCA 478; 212 FCR 194 (DC Comics) at [62] (a summary adopted by Stewart J in Allergan Australia Pty Ltd v Self Care IP Holdings Pty Ltd [2020] FCA 1530 at [406]) the principles are:
• Bad faith is a serious allegation and the more serious the allegation, the more cogent the evidence required to support it.
• Bad faith does not require dishonesty.
• Bad faith is a combined test that involves subjective and objective elements. The subjective element refers to the knowledge of the relevant person at the time of making the application. The objective element requires the decision-maker to decide whether, in the light of that knowledge, the relevant person’s behaviour fell short of acceptable commercial standards.
• The question is whether the conduct fell short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in the particular area. It is whether the knowledge of the applicant was such that the decision to apply for registration would be regarded as in bad faith by persons adopting proper standards.
• Mere negligence, incompetence or a lack of prudence to reasonable and experienced standards would not, in themselves, suffice, as the concept of bad faith imports conduct which, irrespective of the form it takes, is of an unscrupulous, underhand or unconscientious character.
68 In its submissions Aachi emphasised a statement in Fry Consulting at [174], which was part of Dodds-Streeton J’s conclusion on the evidence before her rather than part of her Honour’s analysis of the law. That statement corresponds with the first sentence of the fourth dot point above, and frames the issue as whether “people adopting proper standards” would regard the decision to register as “in bad faith” or as “falling short of acceptable commercial behaviour”.
69 This statement needs to be read in the context of the whole exposition of the principles, a summary of which has been set out above. Two important points need to be borne in mind.
70 First, the test involves a subjective element. The question whether the decision to apply for registration would be regarded as falling short of acceptable commercial behaviour needs to be addressed in the light of the knowledge that the applicant had.
71 Secondly, the Court has no particular knowledge of who “people adopting proper standards” are or what they think is “acceptable commercial behaviour”, and it generally does not receive expert evidence on this topic. The formulation in substance imports the Court’s understanding of what acceptable commercial behaviour is. High-level glosses of this kind are helpful but cannot be substituted for the text of the provision. Section 62A uses the expression “bad faith” which usually connotes, if not outright dishonesty, at least an improper or extraneous purpose.
72 The examples of behaviour that prompted the enactment of s 62A, set out in the Explanatory Memorandum to the Bill for the relevant amending Act (quoted in Fry Consulting at [144]), provide some guidance. They are:
• a person who monitors new property developments; registers the name of the new property development as a trade mark for a number of services; and then threatens the property developer with trade mark infringement unless they licence or buy the trade mark;
• a pattern of registering trade marks that are deliberate misspellings of other registered trade marks; and
• business people who identify a trade mark overseas which has no market penetration in Australia, and then register that trade mark with no intention to use it in the Australian market and for the express purpose of selling the mark to the overseas owner.
73 What these examples have in common is an attempt to use the statutory regime for registration and protection of trade marks for a purpose that is foreign to the purposes of that regime, and undermines or hampers the proper use of that regime by businesses consistently with those purposes. Trade mark legislation balances various interests, as discussed by reference to the 1955 Act in Campomar Sociedad, Limitada v Nike International Limited [2000] HCA 12; 202 CLR 45 at [40]–[49], but its objectives can be said to boil down to “consumer protection and protecting the interest of traders in both the goodwill associated with their trade mark and the value of the registered trade mark as property in its own right” (Davidson and Horak, Shanahan’s Australian Law of Trade Marks and Passing Off (7th ed, Thomson Reuters 2022) at [1.05]). A leading English case described registration of a trade mark as “designed to enable bona fide proprietors to protect their proprietary rights without having to prove unfair trading” (Harrison v Teton Valley Trading Co Ltd [2004] 1 WLR 2577 at [24], quoted in Fry Consulting at [147]).
74 The concept of “falling short of acceptable commercial behaviour”, as an aspect of or pointer to “bad faith”, needs to be understood in this context and anchored in the Act. The behaviour needs, in my view, to be more than simply ruthless or morally questionable. If not actually fraudulent or dishonest, it needs to have some quality that makes it repugnant to the purposes for which the statutory regime exists. The cases reviewed in Fry Consulting at [147]–[162] indicate that applying for registration inconsistently with a prior undertaking or an acknowledgement of the opponent’s rights may be regarded as involving bad faith. Clearly, also, opportunistic registration of a trade mark in an attempt to profit from someone else’s intellectual property or the work done by another business to build its reputation, or to gain a windfall from the sale or licencing of the mark, at least suggests bad faith. Racing to register a trade mark that the applicant is actually using, in order to prevent somebody else from registering the same or a similar mark, may well be seen in a different light.
75 Before turning to the evidence in the present case, I note that there was some dispute between the parties as to the application of what was said in Briginshaw v Briginshaw (1938) 60 CLR 336, 360-362 (Dixon J). The point being made in that well known passage was that the degree of persuasion required in order to find a fact proved depends on (among other things) the seriousness of the allegation and the consequences flowing from such a finding (at 362). There is not a distinct “Briginshaw standard” that applies only when fraud is alleged. This point is neatly captured in the first dot-point of the summary drawn from DC Comics and set out above. Bad faith, in the sense there discussed, is a serious allegation that calls for cogent proof.
76 As recounted earlier, Ragopika commenced operating the restaurant and using the AIC mark for that purpose in June 2016. At some time in 2017 (Mr Pillai was unsure of the date but thought it was in the second half of the year), a Mr Abhishek, who is apparently Mr Isaac’s son, came to the restaurant with some other people. In his evidence Mr Pillai described how they made a booking for dinner and arrived late. He fed them and there was apparently an amicable discussion, in the course of which he was told that they came from a company called Aachi in India. From this time Mr Pillai was aware that there was a business in India that sold spices and other foods under the name “Aachi”. Although reference was made to the fact that Mr Pillai had grown up in Tamil Nadu and continued to visit the area after coming to live in Australia, it was not clearly submitted that he had been aware of Aachi’s business before 2017; nor was that suggested to him in cross-examination. The question of bad faith is therefore to be approached on the basis that Ragopika had no knowledge of Aachi’s business until roughly a year (perhaps more) after it had started operating its business under the AIC mark.
77 It was suggested, based on asserted similarities between the graphic designs used by Aachi in connection with its mark prior to 2018 and the signage employed by Ragopika, that Mr Pillai had some knowledge of the Aachi business at an earlier time. I do not think the evidence supports that suggestion.
(a) Evidence was tendered in the form of printouts, generated using the “Wayback Machine”, of parts of Aachi’s website as they appeared prior to 2018. The word “Aachi” generally appeared in white lettering on a red oval with a yellow border. The text overlapped the border of the oval. An example is reproduced in the annexure to these reasons.
(b) Mr Pillai gave evidence that in 2016 he retained a graphic designer to design a device which has been used, with some minor changes in recent times, in signage on the front of his restaurant up to the present day. A photograph of the restaurant with that signage was in evidence. It is also reproduced in the annexure. A similar device was used on the restaurant’s menus. It is similar to the device used by Aachi in that it is oval in shape and includes the word “Aachi”, but different in several other respects. The font is quite different and the word “Aachi” is wholly within the oval (and not in white). There is a “slash” underneath the words “Aachi Indian Cuisine”, which has no counterpart in Aachi’s device. It is reproduced on the outside of the restaurant in eight different colours, most of which are very different to Aachi’s red (and none of the eight versions has white lettering). Finally, it includes a representation of a grandmotherly figure (apparently engaged in cooking) which has no counterpart in Aachi’s device.
(c) The only similarities are the word “Aachi” and the roughly oval shape of the two devices. These are an insufficient basis for any inference that Mr Pillai was aware of and was being influenced by the use of the Aachi mark.
78 In February 2018 Mr Pillai received a 14 page letter from Aachi’s lawyers in Chennai, Daniel & Gladys (the Daniel & Gladys letter). The letter was dated 29 January 2018 and Mr Pillai said that it arrived at his address while he was in India, so that he did not see it until a few days later. The letter was aptly described by counsel for Aachi as a “cease and desist letter”. Like many solicitors’ letters it was forcefully expressed. It put the position that Mr Pillai had no right to use the AIC mark or any mark using the word Aachi and demanded that he cease doing so, give certain assurances, hand over his menus and any other material “bearing the impugned trading style”, and give an account of the profits made by his business. It foreshadowed legal action if these “reasonable demands” were not complied with within 10 days.
79 Mr Pillai gave evidence in cross-examination that he received advice from a friend to the effect that he did not need to worry about the Daniel & Gladys letter because it did not come from an Australian law firm. I have some reservations as to whether he received that advice and whether any business person would act on such advice. Be that as it may, it is clear that Mr Pillai and Ragopika did not engage with Daniel & Gladys. Ragopika continued trading under the name “Aachi Indian Cuisine”.
80 It was on 22 February 2018 (ie, probably around two weeks after Mr Pillai saw the Daniel & Gladys letter) that Ragopika lodged the application for registration that is now the subject of these proceedings. It is that lodgement that Aachi must prove was done “in bad faith” in order to succeed under s 62A.
81 Mr Pillai gave evidence that he had had plans to expand his business in 2017 and considered registering a trade mark for that purpose, but these plans did not go anywhere because he lacked time and finance. He said that, once he received the Daniel & Gladys letter, he decided not to waste any more time. He obtained some money and started the process of applying for registration.
82 By the time Ragopika lodged its application, therefore, it knew through Mr Pillai that there was a business based in Chennai which sold spices and other foods under the name “Aachi”. It probably also had some appreciation that Aachi was a substantial business which might have interests outside India. Mr Pillai agreed in cross-examination that he had looked at the Daniel & Gladys letter but said that he had found it difficult to understand and only took in some parts. He (and therefore Ragopika) can be taken to have understood that Aachi was, or at least claimed to be, a global business with many trade marks registered in its name; and that Aachi was concerned about Ragopika’s use of the AIC mark, wanted it to stop, and was threatening to commence proceedings in the courts. If Mr Pillai had read the Daniel & Gladys letter carefully, he would also have known that Aachi had registered the Aachi mark in Australia. Mr Pillai was asked in cross-examination whether he had found the Aachi mark in the searches that he made before lodging Ragopika’s application. Although the evidence is not completely clear, it appears that he did not.
83 In summary, therefore, Ragopika had been trading under the AIC mark for around 20 months. It was faced with a “cease and desist” letter from an overseas business claiming to have rights in the word “Aachi”. It at least had the means to know, although it may not actually have appreciated at the time, that Aachi had registered the Aachi mark in Australia some years earlier. (There is no suggestion in the evidence that Mr Pillai had any awareness of Aachi’s goods being available in Australia or any advertising of them.) Faced with this situation, and within a short time after receiving the letter, Ragopika applied for registration of the AIC mark.
84 This conduct on Ragopika’s part did not have any of the characteristics that have led to applications being held to have been made in bad faith in the cases, or the characteristics of the examples referred to in the Explanatory Memorandum. Ragopika had not made any agreement with Aachi or any acknowledgement that Aachi had pre-existing rights in the AIC mark or similar marks. Ragopika had been trading under the AIC mark for some time and there is nothing to suggest that its intention was to do anything other than continue using the mark. In applying to register the AIC mark, Ragopika was trying to protect its right to use the mark on its existing business, and possibly also trying to prevent a potential competitor from offering restaurant services under the same name. These are normal and unexceptionable objectives.
85 When asked what “acceptable commercial behaviour” would look like in these circumstances, counsel for Aachi suggested that Ragopika should have responded to the Daniel & Gladys letter and entered into negotiations. That might have been preferable. However, it by no means follows that Ragopika’s conduct was so unsatisfactory as to constitute bad faith. It could legitimately have taken the view that any negotiations were better undertaken from a position of strength. There was no trickery or underhandedness involved in applying for registration of the AIC mark, in circumstances where Ragopika had done nothing to suggest to Aachi that matters would somehow be put on hold. The application was something that Aachi, as a sophisticated and well-resourced operator in the trade mark field, was well placed to anticipate.
86 It is not established that Ragopika’s application for registration was made in bad faith.
conclusion
87 Aachi has not made out any of its grounds of opposition. Ragopika has therefore succeeded on its main ground of appeal, and the grounds in the notice of contention must be rejected.
88 The appeal will therefore be allowed. I will make orders allowing written submissions to be filed if either party contends that costs should not follow the event in the usual way.
I certify that the preceding eighty eight (88) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Kennett. |
Associate:
ANNEXURE
