Advantage-Rent-A-Car Inc v Advantage Car Rental Pty Ltd

Federal Court of Australia|2000-08-31|Before: Finkelstein J, Madgwick J

REASONS FOR JUDGMENT HIS HONOUR: 1 In this matter, the applicant appeals from a decision of a delegate of the Registrar of Trade Marks ("the Registrar") given on 16 May 2000, dismissing the applicant's opposition to the registration of a trade mark and allowing the respondent's application for registration of the mark to proceed to registration. The applicant seeks orders from this Court, setting aside the decision of the Registrar; allowing the opposition to registration of the trade mark application, and refusing the trade mark application. 2 The first respondent has not appeared. The Registrar filed a notice of appearance as allowed, pursuant to s 196 of the Trade Marks Act 1995 (Cth) ("the Act") and O 58 r 3 of the Federal Court Rules. Accordingly, the Registrar was joined as the second respondent in the proceedings.

Background 3 On 29 October 1997, the priority date, the first respondent ("Rental") applied for the registration of a composite trade mark which included the words ADVANTAGE CAR RENTALS. The other features of the trade mark application included a portion of a six pointed star within a polygon-shaped border ("the first respondent's (or Rental's) mark"). The application was amended so that the trade mark was being sought in respect of services in Class 39 of the Trade Marks Register, being car rental and leasing services. 4 The application was opposed by the present applicant, a United States corporation which operates a large car rental business, pursuant to Part 5 of the Act, on two grounds: firstly, that the first respondent was not the owner of the trade mark (s 58); and secondly, that the mark is substantially identical with or deceptively similar to a trade mark that had acquired a reputation in Australia before the priority date and that, by reason of that reputation, the use of the mark would be likely to deceive or cause confusion (s 60). 5 On 16 May 2000, a delegate of the Registrar refused the opposition and ordered that, subject to any appeal, the application should proceed to registration. It is this decision that the applicant appeals from.

Grounds of appeal 6 The applicant claimed that the first respondent's application should not proceed to registration on the bases that: · The first respondent is not the owner of the trade mark (s 58); · The application is for a trade mark that is substantially identical or deceptively similar to the trade mark used by the applicant which, before the priority date had acquired a reputation in Australia such that the use by the first respondent of it's mark would be likely to deceive or cause confusion (s 60); · The use of the first respondent's mark would be contrary to law in that it would constitute an infringement of the Copyright Act 1968 (Cth) or a breach of the Trade Practices Act 1974 (Cth) (s 42); and · The use of the first respondent's mark would be likely to deceive or cause confusion as a result of the connotations of the trade mark (s 43). The last two grounds were not relied upon before the delegate.

The evidence 7 It was common ground that an appeal from a decision of a delegate of the Registrar is to be determined as a hearing de novo: see Jafferjee v Scarlett (1937) 57 CLR 115 at 119 and Registrar of Trade Marks v Woolworths Ltd (1999) 45 IPR 411 at 422. Further, in re-hearing an opposition to registration, the Court may receive new evidence: see Malibu Boats West Inc v Catanese [2000] AIPC 91-625. 8 The evidence presented to the Court may be summarised as follows: · The applicant is a company that operates car rental and leasing services; it was set up in 1963 and has over 140 outlets across the western United States and 10 outlets in Mexico; · The applicant's trade mark is registered as a trade mark in the United States; · The applicant's trade mark is registered in a large number of countries in Europe and South America and also in Japan; · The applicant applied for registration of Australian trade mark no. 761227, in Class 39 for car rental and leasing services on 4 May 1998; · Over 320 individual bookings of car rentals were made by Australians, from 1990 to 1996, with the applicant; · The applicant has operated an Internet site since 1995 in which the applicant's trade mark has been featured; · The applicant is listed with the SABRE Travel Information Network ("SABRE"), which is a worldwide travel reservation system used primarily by travel agents to make reservations for travel services directly from their computer terminals. Since at least 1984, the applicant has been part of SABRE and had its name but not logo listed on the system. During that time, the system has been available for use by travel agents in Australia and as at October 1997, 7,460 terminal addresses from Australia were linked to SABRE; · Before the priority date, 6 reservations were made from Australia for the applicant's services through SABRE; · The applicant advertised its services and had its name listed in the 1994 "SABRE Associates Directory" which was to be distributed to all SABRE subscriber locations, including Australia; · Since 1990, the applicant has been a part of a computerised travel reservation system known as Galileo. This is a system similar to SABRE and is used by travel agents to make reservations for travel services from their computer terminals; · The applicant advertised its services in the November 1991 issue of the United Airlines in-flight magazine entitled "Viz a Vis". This was placed in the seat pocket of all international flights, including those to and from Australia in November 1991. However, the trade mark was not displayed in the advertisement; · The applicant's services were listed in the 1995 edition of the travel book "Lonely Planet - Southwest". Between November 1995 and December 1996, a total of 1,743 copies of the book were distributed in Australia; · The applicant engaged in a wide variety of advertising in the United States both on television and in print media. It also sponsored sporting teams and advertised at airports. All employees of the applicant wore a uniform which included the applicant's trade mark; · On 23 February 1997, Mr Geissler, a director of the first respondent, advised the applicant with some insouciance, that he liked the applicant so much that he had decided to start his own company (with its very similar name to that of the applicant) in Australia; he attached promotional material bearing a mark broadly similar to the applicant's trade mark and the slogan "The rising star in Airport Car Rentals"; · The first respondent operates an Internet site which lists locations wrongly represented to be linked with the Advantage Group (of which the applicant is a part), including locations in the southwest of the United States and Mexico. These are locations in which the applicant has offices. The first respondent does not have any business in any of those locations; and · Neither the advertising agency which created the applicant's trade mark, nor its President authorised or licensed the first respondent or any other company or person other than the applicant to use or reproduce the applicant's trade mark.

The trade marks 9 The applicant's trade mark, as registered elsewhere, is: 10 According to trade mark application No. 747367, the respondent's trade mark is:

The legislation 11 The relevant sections of the Act are: "s 42 An application for the registration of a trade mark must be rejected if: … (b) its use would be contrary to law. s 43 An application for the registration of a trade mark in respect of particular goods or services must be rejected if, because of some connotation that the trade mark or a sign contained in the trade mark has, the use of the trade mark in relation to those goods or services would be likely to deceive or cause confusion. … s 58 The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark. … s 60 The registration of a trade mark in respect of particular goods or services may be opposed on the ground that: (a) it is substantially identical with, or deceptively similar to, a trade mark that, before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, had 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 of cause confusion." 12 The priority date referred to in s 60(a) is defined by s 12 to be the date of registration of the trade mark if the trade mark were registered. In this case, the date is 29 October 1997 as this is the date from which registration will be deemed to take effect, provided that there is no successful appeal from the decision the Registrar. 13 Section 57 of the Act allows for a trade mark application to be opposed on any of the grounds on which an application for registration may be rejected. By virtue of s 57, the applicant is entitled to rely on ss 42 and 43 to oppose the registration of the respondent's mark in this Court.

Use of trade mark contrary to law 14 Counsel for the applicant submitted that the use of the respondent's mark would be contrary to law as its use would contravene the provisions of the Copyright Act, because it would give rise to copyright infringement of an artistic work in which copyright belongs to the applicant. 15 It is for the applicant to demonstrate that the respondent's mark would be contrary to law. 16 Section 32(1) of the Copyright Act provides that "copyright subsists in an original literary, dramatic, musical or artistic work that is unpublished and of which the author was a qualified person at the time when the work was made". A qualified person is defined in s 32(4) as an Australian citizen, an Australian protected person or a person resident in Australia. However, s 184(1)(c) allows for the provisions of the Copyright Act to apply to persons who are citizens of another country in the same manner that they apply to persons who are Australian, by the making of regulations. Regulation 4 of the Copyright (International Protection) Regulations 1969 does what is allowed by s 184(1)(c). Schedule 1, Part 1 of the Regulations lists the United States of America as one of the countries to whose citizens the protection of the Copyright Act applies. 17 It was submitted by counsel for the applicant that the applicant's trade mark is an "artistic work". An artistic work is defined in s 10(1)(a) of the Copyright Act to include a drawing whether it is of artistic quality or not. Although the applicant's trade mark is not what one what consider to be particularly artistic and uses common words, the authorities are clear that the threshold for what is an artistic work is low and, for copyright to subsist, the work does not need to be remarkably artistic: see Karo Step Trade Mark [1977] RPC 255 per Whitford J at 273, British Northrop Ltd v Texteam Blackburn Ltd (1974) RPC 57 per Megarry J at 68-69, Roland Corporation v Lorenzo & Sons Pty Ltd (1991) 33 FCR 111 per Pincus J at 114. 18 The next requirement for copyright to subsist in an artistic work is that the mark must be original. The concept of originality is also not a particularly rigorous one. What is required is that the creator of the work should not have copied it from some other work: see University of London Press Ltd v University Tutorial Press Ltd (1916) 2 Ch 601 at 608-610, and Victoria Park Racing & Recreation Grounds Co Ltd v Taylor (1937) 58 CLR 479 per Dixon J at 511. The evidence of Ms Kich was that she alone created the applicant's trade mark as an original work. 19 Although, in contested copyright cases in this court, whether or not a device such as the applicant's mark is in fact an artistic work and original could be debated, this is not such a case and there was no evidence presented to the Court to contest the applicant's claim that its trade mark is an artistic work, or the evidence of Ms Kich as to her creation of the trade mark. Accordingly, I am prepared to accept that the applicant's trade mark is an artistic work and is original for the purposes of the Copyright Act and that, therefore, copyright subsists in the applicant's trade mark. Whether or not the owner of the copyright is the applicant, as a result of an oral agreement between the applicant and Kich & Company (the advertising company that designed the mark), as was said to be the case by Ms Kich in her evidence, or Kich & Company, is not an issue that needs to be determined in these proceedings. Whichever of those two entities owns the copyright, the evidence is that neither has licensed the respondent to use the work. 20 Section 36 of the Copyright Act provides that the copyright in an artistic work is infringed if a person, who is not the owner of the copyright, does any act comprised in the copyright without the licence of the owner. Section 14 deems acts done in relation to a substantial part of the work to be done in relation to the whole of the work. Section 31(1)(b) provides that copyright in an artistic work gives the owner the exclusive right, amongst other things, to reproduce the work in a material form (subs(i)) and to publish the work (subs (ii)). In my opinion, on the evidence presented, the first respondent's mark is reproduction of a substantial part of the applicant's trade mark, namely the use of a white five point star cut into a dark mass so as to form a stylised block letter "A", with the word ADVANTAGE in bold capitals directly beneath the "A": see the judgment of Lehane J in Aussie Home Loans v Phillips (1998) 40 IPR 392 where a rather less similar mark was held to be a reproduction. Furthermore, as counsel for the applicant correctly submits, use by the respondent of its trade mark would necessarily involve publishing it, which is the exclusive right of the copyright owner. 21 Counsel for the Registrar referred to the English case Arthur Fairest Ld's Application to Register a Trade Mark (1951) 68 RPDTMC 197, in which it was held that the contrary to law ground must be made out because of something inherent in the mark. Although that may be the case under the English legislation (and in the context of that case), s 42(b) provides that it is the use of the mark that must not be contrary to law and in this case it is the reproduction and publishing of the mark that would be contrary to law. 22 Accordingly, based on the evidence before the Court, in my opinion, use by the respondent of its trade mark would be contrary to the Copyright Act and accordingly contrary to law. Therefore, the ground for opposing the registration of a trade mark provided for by s 42(b) is made out by the applicant. It should however be noted, that this is but the expression of opinion upon a hypothesis and does not amount to a finding of any actual breach of the Copyright Act by the respondent.

Role of the Registrar 23 Issue was taken as to the appropriateness of the Registrar determining issues of law outside the area of his or her expertise, namely trade marks. It was submitted by counsel for the Registrar that it was not within the competence of the Registrar to determine at the stage of opposition proceedings whether a mark would be contrary to law if it involved issues beyond those set out in the Act. It was submitted that the proper administration of the Act requires that the Registrar only make determinations under s 42(b) where there is a clear finding that the Registrar can apply, such as a decision of a court of competent jurisdiction that a mark infringes the law and not when it involves complex considerations of legal matters going beyond those specifically set out in the Act. 24 Counsel for the applicant submitted that s 88 of the Act provides for the Register to be rectified by an order of the Court if use of a trade mark would be contrary to law and, accordingly, the Act should not be interpreted to provide a different meaning for the same expression in different proceedings: s 42(b) has one consistent meaning within the entire Act. Counsel for the applicant referred to Anheuser-Busch Incorporated v Castlebrae Pty Ltd (1991) 32 FCR 64, in which Davies J was dealing with the provisions of the predecessor to the current Act. His Honour found that the applicant, a United States company owned copyright in a work and that registration of the respondent's trade mark, which was very similar to the applicant's, was a breach of the former Copyright Act. Davies J accordingly ordered that, pursuant to s 22 of the former Act (materially the same as s 88), the Register should be rectified by expunging the respondent's trade mark because it was contrary to law. It was submitted that the meaning given to s 42(b) when applied by s 88 in proceedings for rectification is no different from its meaning when it arises for consideration in opposition proceedings, by virtue of s 57. Therefore the applicant claimed, once a finding is made, as in the Anheuser-Busch case, of a breach of copyright, this gives a valid basis for opposing registration. Counsel for the Registrar submitted to the contrary, arguing that the scheme of the Act indicates that s 42(b) is to be applied throughout the Act in three different types of proceedings and that it is not inconsistent to apply it differently depending on the purpose of the relevant section of the Act which calls for its consideration. 25 The contrary to law ground can fall for consideration at three different stages. Firstly, under s 42(b) itself, the Registrar is to reject an application for registration if it is contrary to law. Secondly, at the opposition stage a person may challenge registration of a trade mark on the basis that it is contrary to law. Thirdly, the court can rectify the Register by removing a trade mark if it is contrary to law. The first two are determinations made by the Registrar, which are judicially reviewable by this Court, whilst the third is a determination made by this Court. 26 However, in my opinion the fact that the existence of any contrariety to law is to be exercised in some circumstances by an administrative body and, in other circumstances, by a judicial body does not mean that the phrase "if its use would be contrary to law" should have an ambulatory meaning, depending upon what kind of tribunal is to apply it. Nor can any reticence on the part of an administrative decision-maker to express an opinion on a matter of law be encouraged. The idea that "contrary to law" in the context of judicial proceedings means contrary to all laws, whilst in the context of proceedings before the Registrar it means contrary to laws which are easy for the Registrar to determine or which are "clear cut", is not sustainable. As a matter of practice, delegates of the Registrar have in some cases determined that a trade mark submitted for registration is contrary to law as a result of its being in breach of other legislation: see Re Application by Slaney (1985) 6 IPR 307 at 309 where a trade mark was found to be in breach of the Health Legislation Amendment Act 1983 (Cth) and Re Application by Athol Thomas Kelly (1987) 8 IPR 667 at 672 where it was found that the trade mark would infringe the Advance Australia Logo Act 1984 (Cth). I see no reason why some legislation should be able to be relied on before the Registrar to establish contrariety to law and other legislation such as the Copyright Act, albeit more complex, should not. Further, it is well-settled that a power granted to the Registrar and to a court can be at once administrative and judicial depending on who was exercising the power. The High Court so held in R v Quinn; Ex parte Consolidated Foods Corporation (1977) 138 CLR 1, of a power to remove a trade mark from the Register. 27 The Registrar is far from the first or the only administrative officer or entity to be required to make decisions upon a view of legal matters of an undefined scope. Everyday examples are: · Delegates of the Minister for Immigration and Multicultural Affairs who need to consider and express views on the meaning and effect of not only the Migration Act 1958 (Cth) and Migration Regulations 1994 (Cth) but also a variety of international conventions and agreements; · The Refugee and Migration Review Tribunals, in reviewing such decisions of delegates of the Minister for Immigration & Multicultural Affairs; · Under the Workplace Relations Act 1996 (Cth), the Industrial Registrar must not give effect to the alteration of the rules of an existing or aspiring organisation of employees or employers if they do not comply with other provisions required by the Act or are "otherwise contrary to law" and may also grant exemption from compliance with certain provisions of the Act if proposed alterations of the rules comply with the provisions of the Act and are "not otherwise contrary to law", pursuant to ss 205(1) and 198(3); and · Members of the Administrative Appeals Tribunal, especially in its General Administrative Division, deal with, interpret and apply many different pieces of legislation. 28 I acknowledge the claim made by counsel for the Registrar that such an approach requires the Registrar to look at questions of law outside his or her expertise and that this can be difficult and may place a large and onerous responsibility upon the Registrar. However, the Registrar has the comfort that the criterion is that the use "would" not "could" be contrary to law. Further, there is no reason why the Registrar could not seek legal advice before forming his/her opinion. It should also be noted that what is required is that the Registrar form a view as to whether the use of a trade mark would be contrary to law. Such opinion does not have a similar effect to say, a judicial conclusion of law as to breach of copyright in copyright proceedings; the effect is limited to the refusal of registration. In any case, an appeal de novo lies from the Registrar's decision to this Court where any error of the Registrar may be corrected. 29 These reasons, on the contrary to law issue, are sufficient to dispose of this appeal and there is accordingly no need for the Court to deal with the other grounds upon which the applicant sought to oppose the registration of the respondent's trade mark.

Costs 30 The applicant having been successful in its appeal it is entitled to its costs as against the first respondent. 31 However, the issue of costs between the applicant and the Registrar was raised. The applicant submits that, if the Registrar had not intervened in the proceedings, it would have incurred less costs. The applicant relies on the judgment of a Full Court of this Court in The Sports Café Ltd v The Registrar of Trade Marks (1999) 42 IPR 552 at 559-560, in which the Court held that "today government in one form or another is an everyday litigant in the courts and should, generally speaking, be treated like all other litigants." 32 However, the Registrar has appeared to assist the Court in circumstances where the first respondent who sought the registration has chosen not to appear. Counsel for the Registrar has provided the Court with thorough and thoughtful submissions that have been of assistance. The Registrar has also adopted an impartial position and not sought to defend the delegate's primary decision but rather to deal with general questions of importance thought to be raised by the applicant's submissions. This is different from the circumstances of the Sports Café case, where the decision of the Registrar to refuse registration was challenged and the Registrar was involved in the proceedings to defend his decision. As Finkelstein J found in somewhat similar circumstances to these in Malibu Boats West Inc v Catanese, unreported, 31 August 2000, the Registrar has not acted improperly or unfairly but rather has been of assistance. Furthermore, the contrary to law ground was not raised in the opposition proceedings before the Registrar. That is a further reason why costs should not be awarded against the Registrar. Accordingly, the applicant's application for the division of a measure of costs against the Registrar will be refused and, as between the applicant and the Registrar, each will bear its own costs.

Disposition 33 For the reasons given, the appeal is allowed and the opposition to the registration of trade mark application No. 747367 is allowed. Trade mark application No. 747367 will be refused. The first respondent is to pay the applicant's costs of these proceedings and the proceedings before the Registrar. As between the applicant and the Registrar, each party is to bear its own costs of these proceedings.

I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick.

Solicitor for the Applicant: Clayton Utz

Counsel for the Second Respondent: S C G Burley

Solicitor for the Second Respondent: Australian Government Solicitor

Date of Hearing: 8 December 2000

Date of Order: 8 & 15 December 2000

Date of Reasons for Judgment 8 June 2001

Trade Practices Act 1974(Cth)

Health Legislation Amendment Act 1983(Cth)

Advance Australia Logo Act 1984(Cth)

Under the Workplace Relations Act 1996(Cth)

At a glance

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