Federal Court of Australia

Somers Enterprises Australia Pty Ltd v Basefun Pty Ltd (No 2) [2025] FCA 418

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 105 of the Trade Marks Act 1995 (Cth), the Court certifies that Australian Trade Mark No 583812 in class 28 was used in good faith in Australia by the Appellant during the three-year period ending 21 August 2021.

2.    The Respondent pay the Appellant’s costs of the appeal proceeding on a standard basis up until 13 June 2024, as taxed in default of agreement.

3.    The decision as to costs made by the delegate of the Registrar of Trade Marks at paragraph [91] of the decision dated 2 April 2024 be reinstated, with the effect that the Respondent be awarded its costs of the opposition against the Appellant in accordance with the amounts set out in schedule 8 of the Trade Marks Regulations 1995 (Cth).

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

REASONS FOR JUDGMENT

BENNETT J

Introduction

1    The Respondent (Basefun) filed an application pursuant to s 92(4)(b) of the Trade Marks Act 1995 (Cth) (the Act) seeking removal of the Trade Mark number 583812 "Celebrity Head" in class 28 (the Trade Mark). The Appellant opposed the application. The Respondent was successful before a delegate of the Registrar of Trade Marks (the Delegate) in a decision given on 2 April 2024 (the Delegate’s Decision). The Appellant appealed the Delegate’s Decision to this Court on 23 April 2024. The Respondent filed a submitting notice on 13 June 2024 and took no active part in the proceeding after that time, reserving only the option to make any submissions as to the appropriate orders as to costs.

2    The Appellant was successful in retaining registration of the Trade Mark in respect of a narrower scope of goods, being “board games; games, toys and playthings; video game apparatus” (Somers Enterprises Australia Pty Ltd v Basefun Pty Ltd [2025] FCA 218) (the Appeal Judgment). The Appellant now seeks its costs of both the opposition proceeding before the Registrar of Trade Marks and the appeal proceeding in this Court. The Respondent submits that there should be no order for costs of the appeal and that Somers should pay Basefun’s costs of the opposition proceeding before the Delegate.

3    The Appellant also seeks (for the first time) a certificate under s 105 of the Act that the Trade Mark was used in good faith by the Appellant between 21 August 2018 and 21 August 2021. The grant of the certificate is not opposed by the Respondent. These reasons assume familiarity with the Appeal Judgment.

THE COSTS OF THE APPEAL

4    An award of costs is in the discretion of the Court (s 43(2) of the Federal Court of Australia Act 1976 (Cth) (the FCA Act)). The discretion must be exercised judicially, by reference only to considerations relevant to its exercise and upon facts connected with or leading to the litigation (Crawford v State of Western Australia [2025] FCAFC 48 at [6] (Mortimer CJ, Stewart and O’Bryan JJ), citing Northern Territory v Sangare (2019) 265 CLR 164 at [24] (Kiefel CJ, Bell, Gageler, Keane, Nettle JJ)). In the absence of special circumstances, costs follow the event (Hillier v Martin (No 21) [2024] FCA 546 at [8] (O’Sullivan J)). That is, usually the discretion to award costs is exercised in favour of a successful party (Malone on behalf of the Western Kangolou People of the State of Queensland (No 5) [2025] FCA 353 at [15] (O’Bryan J)).

5    The fact that a submitting notice is filed is undoubtedly relevant to the exercise of the broad discretion in s 43 of the FCA Act, but does not create a prima facie position that costs will not be awarded from the date of the notice. The question of costs (and the importance of the submitting notice) is to be determined on the basis of an appraisal of all the facts forming the context in which the submitting notice was filed (Dyer v Chrysanthou (No 3) [2021] FCA 642 at [5] (Thawley J); Commissioner of Taxation v Warner (No 2) [2015] FCA 1281 at [22] (Perry J)). It is relevant that the Appellant was required to meet the burden of establishing its case in this Court: that burden was not shifted by the filing of a submitting notice (Kisimul Holdings Pty Ltd v Clear Position Pty Ltd (No 2) (2014) 86 NSWLR 645; [2014] NSWCA 317 at [16] (Beazley, Barrett and Gleeson JJA)).

6    The fact that the Appellant was successful in retaining registration of the Trade Mark is also a relevant factor in favour of the Appellant obtaining a costs order in its favour. I also accept that it is relevant that the Appellant was required to take steps to defend its position in the face of an attempt by the Respondent to both remove the Trade Mark, and itself register the same mark in relation to the same or similar goods.

7    However, there are a number of matters which I consider weigh against the exercise of my discretion as to costs in favour of the Appellant:

(1)    a submitting notice was filed by the Respondent at an early stage. The Respondent took no active part in the appeal from that time;

(2)    the Appellant provided further particulars to its notice of appeal the day prior to the hearing of the appeal and it was ultimately this formulation that was accepted in the Appeal Decision. The ability to reformulate the particulars late in the proceeding was no doubt assisted by the lack of an active contradictor, which reinforces the significance of the Respondent’s submitting notice;

(3)    the Appellant filed evidence on the appeal that was not before the Delegate at first instance. It is relevant that the evidence was related to establishing that the use of the Trade Mark occurred in Australia – an issue of some importance before the Delegate in deciding that the Appellant had not discharged its burden to show use of the Trade Mark in the relevant sense. Similarly, the new or more focused evidence of use in Australia that was filed in the appeal was important to the Appeal Decision;

(4)    the Appellant sought a different, narrower, scope of registration on the appeal than that which it sought to defend in the proceedings before the Delegate. That narrower scope of registration altered the analysis in relation to the discretion between the decision of the Delegate and the task before this Court.

8    On balance therefore, I consider that these factors weigh against an order as to costs in the Appellant’s favour. The Appellant was successful, but on a more limited class of goods, and in part because of a case that was pursued differently from the way the case was put below, including by the filing of new evidence. In some respects, the Appellant’s position was assisted by the fact that there was no opposition to the late change to the way that the Appellant put its case in the hearing. Overall, the proceedings in this Court were in part necessary because the Appellant did not put its case before the Delegate in the way that it put it before this Court. This is distinguishable from the position in Kisimul Holdings Pty Ltd v Clear Position Pty Ltd (No 2) (2014) 86 NSWLR 645; [2014] NSWCA 317. It is relevant in this respect that Basefun did nothing to lead the Delegate into error (EEU20 v Meat Industry Employees’ Superannuation Fund Pty Ltd (Trustee) (No 2) [2020] FCA 1536 at [16] (Mortimer J, as her Honour then was)).

9    Overall, therefore, I am satisfied that the Appellant should have its costs of the appeal on a standard basis, but only until 13 June 2024. In respect of the balance of the appeal proceeding (including the question of costs) there will be no order as to costs.

The costs of the proceeding before the Registrar

10    Section 43 of the FCA Act does not confer power on the Court to make an order as to the costs of a proceeding before the Registrar’s delegate. However, s 197 of the Act provides:

On hearing an appeal against a decision or direction of the Registrar, the Federal Court or the Federal Circuit and Family Court of Australia (Division 2) may do any one or more of the following:

(a)    admit evidence orally, or on affidavit or otherwise;

(b)    permit the examination and cross examination of witnesses, including witnesses who gave evidence before the Registrar;

(c)    order an issue of fact to be tried as it directs;

(d)    affirm, reverse or vary the Registrar’s decision or direction;

(e)    give any judgment, or make any order, that, in all the circumstances, it thinks fit;

(f)    order a party to pay costs to another party.

11    As identified by Greenwood J in analysing the cognate provision of the Designs Act 2003 (Cth) in Key Logic Pty Ltd v Sun-Wizard Holding Pty Ltd (No 2) [2022] FCA 81 (Key Logic), this provision confers power to make an order as to the costs of the proceeding before the Registrar of Trade Marks (or the delegate) (at [8] (Greenwood J); see also UCP Gen Pharma AG v Mesoblast, Inc (No 2) [2012] FCA 500 (Mesoblast) at [3] (Jessup J)).

12    The relevant test is whether, in light of the Appeal Decision, it can now be said that the Appellant ought to have succeeded before the Registrar’s delegate, such that it would have been awarded its costs – and the respondent would not have been awarded its costs – on the conventional basis (Mesoblast at [3]). The factors that I have set out at subparagraphs [6(2)]-[6(4)] above are relevant to this analysis.

13    Similar to the situation in Mesoblast, in this case I did not hold, and I do not take the view that the Delegate was wrong to have disposed of the matter in the way that they did, on the evidence which was before the Delegate. The new and more focused evidence and manner of presentation of the appeal were significant to the disposition of the matter before this Court. This was important because in this case there were very few instances of use relied upon, thus even small amounts of evidence about the nature and extent of that use was of significance.

14    In reaching this conclusion, I have taken a high level, impressionistic view of the evidence, which is appropriate to applications of this kind. Moreover, I accept the Respondent’s submission that by seeking on appeal to defend a substantially narrower registration, the Appellant implicitly accepted that it could not sustain the broader registration which it had defended before the Delegate. In this respect, it is relevant that the Delegate considered the breadth of the registration as relevant to the exercise of the discretion, concluding that many of the goods which would include “outdoor games, toys and playthings, gymnastics and sporting articles… and decorations for Christmas trees” could be dispensed with without a great deal of discussion (Delegate’s decision at [78]). The narrowing of the category for which registration was sought was therefore important to a different outcome in the exercise of the discretion.

15    Taken together, I am not satisfied that the Appellant ought to have succeeded before the Delegate, such that it would have been awarded its costs. This is not a case where, like in Key Logic, despite additional material being advanced before the court “the findings engaging the declarations critical to the application before the delegate suggest that the initial application the subject of the delegate’s decision was unmeritorious and ought not to have been made” (at [18] (Greenwood J)).

16    Overall, I have concluded that the most just and practical outcome is that the Delegate’s order as to costs be reinstated, with the effect that Basefun be awarded its costs of the opposition against Somers in accordance with the amounts set out in schedule 8 of the Trade Marks Regulations 1995 (Cth).

Certificate

17    The Appellant has requested that the Court issue a certificate under s 105 of the Act. I accept that my findings at [67] and [69] of the Appeal Judgment are to the effect that the Trade Mark was used in good faith during a particular period, and make it appropriate to issue a certificate under s 105 of the Act. The order is not opposed. I will make the order sought by the Appellant.

Associate:

Dated: 30 April 2025