Red Energy Pty Limited v Registrar of Trade Marks

1. The appeal be allowed.
2. The decision of the Registrar of Trade Marks by her delegate given on 9 May 2018 in Canberra (Registrar of Trade Marks v Red Energy Pty Limited [2018] ATMO 66) be set aside.
3. The Registrar accept the Australian Trade Mark Application Number 1746950 for EVENPAY and publish a notice of acceptance in the Official Journal of Trade Marks. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

BEACH J: 1 The appellant (Red Energy) is an energy retailer in the National Electricity Market. On 18 January 2016, Red Energy filed Australian Trade Mark Application No. 1746950 (the Application). The goods and services that are the subject of the Application in classes 9, 16, 35, 36, 37, 38, 39, 40, 41 and 42 are set out in an annexure to these reasons (the Goods and Services). In this proceeding Red Energy appeals pursuant to s 35 of the Trade Marks Act 1995 (Cth) (the Act) against the decision of a delegate of the Registrar of Trade Marks on 9 May 2018 to reject the Application pursuant to s 33(3) invoking s 41(3). The Application was filed as a divisional from the parent application no. 1556106 and claims a priority date of 9 May 2013. 2 As the appeal involves a rehearing de novo, the applicable principles are as summarised by French J in Registrar of Trade Marks v Woolworths (1999) 93 FCR 365 at [33]: There is therefore no presumption in favour of the correctness of the Registrar's decision save that weight will be given to the Registrar's opinion as that of a skilled and experienced person. But the Court on appeal from the Registrar must, in determining the question of acceptance of the application, apply to it the same legal criteria that the Registrar is required to adopt. That is to say the application must be accepted unless the Court is satisfied that it has not been made in accordance with the Act or that there are grounds for rejecting it. If the matter is left in doubt, then the application should be accepted. That is consistent with the possibility, adverted to earlier, that after a contested opposition registration may eventually be refused. Weight can be given to the Registrar's opinion without compromising the duty of the Court to construe the relevant legal criteria. (Emphasis added.) 3 French J further explained, by reference to the earlier version of s 33, that "the acceptance stage is not the time for the kind of detailed adversarial examination of the application that might emerge from a contested opposition" (at [34]). 4 Section 33(1) of the Act provides for a presumption of registrability of a trade mark application: The Registrar must, after the examination, accept the application unless he or she is satisfied that: (a) the application has not been made in accordance with this Act; or (b) there are grounds under this Act for rejecting it. 5 With operation from 15 April 2013, s 41 of the Act was amended so as to make clear that the presumption of registrability applied to the ground of lack of distinctiveness in s 41 also. This policy intention was explained in the Explanatory Memorandum, Intellectual Property Laws Amendment (Raising the Bar) Bill 2011 (Cth), which included the following paragraph (at 146): The changes are intended to clarify that the presumption of registrability, as provided for in section 33, does apply to section 41. This is achieved by removing the reference to the decision-making process in section 41, and instead focussing on the characteristics that a mark must possess for it to be capable of distinguishing. The intention is that, if the Registrar is equally unsure of whether the mark is or is not capable of distinguishing, that doubt should be resolved in the applicant's favour. 6 After the commencement of the appeal before me and considering submissions from Red Energy, the Registrar informed my Chambers on 29 August 2018 that she would not be advancing any submissions or evidence in opposition to Red Energy's appeal. 7 Now in circumstances where the appeal is by way of a rehearing de novo, and the Registrar does not seek to assert that the Application has not been made in accordance with the Act, or that there is any ground under the Act for rejecting it, in my view the presumption of registrability in s 33(1) has the result that the appeal should be upheld, and orders 1 to 3 of the notice of appeal should be made. That being so, the status of the Application becomes 'accepted', and the two-month opposition period commences. 8 In any event, let me now address the single ground of objection raised by the delegate of the Registrar, which was the ground in s 41. 9 Red Energy has tendered as evidence on the appeal the relevant extract from the Register of Trade Marks that I have set out as an annexure. Red Energy has not tendered any evidence other than the relevant extract. The Registrar has not participated on the appeal and accordingly has not filed any evidence. 10 Section 41(2) provides that a trade mark is taken not to be capable of distinguishing the designated goods or services if either of ss 41(3) or (4) applies. Section 41(3) applies if the trade mark is 'not to any extent inherently adapted to distinguish', and the applicant has not used the trade mark to such an extent that the trade mark does in fact distinguish the relevant goods or services as being those of the applicant. Section 41(4) applies if the trade mark is 'to some extent, but not sufficiently, inherently adapted to distinguish' and, when the combined effect of the matters in s 41(4)(b) is had regard to, the trade mark does not and will not distinguish the designated goods or services. 11 In my view, I am not able to say that Red Energy's EVENPAY trade mark is not inherently adapted to distinguish each of the relevant designated goods and services. On the material before me and as Mr Craig Smith, counsel for Red Energy, pointed out in his helpful written submissions: (a) EVENPAY does not appear to directly describe or indicate 'the kind' of Goods and Services covered by the Application as it is too abstract to perform that function, even in respect of the class 36 services which include financial services. (b) The EVENPAY mark appears to be formed from a combination of two words in a syntactically unusual way. The absence of a space between the words also arguably reinforces the distinctiveness of the mark. (c) The EVENPAY mark appears to be evocative, not descriptive. In this respect, the word 'EVEN' does not appear to be the natural descriptor for payments of an equal amount. 12 Now the overall mark must be considered when assessing the applicability of s 41 and a number of cases have considered the distinctiveness of neologisms. But I do not need to linger on these for present purposes. 13 In my view on the material before me, it would seem that EVENPAY does not have an ordinary meaning or signification in respect of the designated Goods or Services. In this respect: (a) EVENPAY appears to present as an invented word. (b) EVENPAY appears not to have a meaning in the context of these services that a consumer would immediately perceive. (c) EVEN would seem to have multiple meanings, adding to the ambiguity and richness of meaning from a consumer standpoint. Those meanings include being divisible by two, level, smooth or balanced. It is also used as an adverb to give emphasis to an action, as in 'she will even travel to…'. (d) Further, the apparent lack of any ordinary signification or meaning appears to be reinforced by the removal of the space between EVEN and PAY. (e) Further, whilst being formed from the combination of two words, the combination seems to me to be syntactically unusual which takes it outside of 'the common stock'. 14 Further, even if the ordinary signification of EVENPAY were to be assessed as directly describing any of the designated Goods and Services, then as to the needs of other traders and any hypothesised desire to use EVENPAY, the following observations may be made: (a) The meaning of EVENPAY is not immediately apparent. In Bohemia Crystal Pty Ltd v Host Corporation Pty Ltd (2018) 129 IPR 482; [2018] FCA 235, Burley J noted that "[n]aturally, the desire of traders to use a word may depend on the perception of consumers' understanding of it" (at [90]). (b) Any descriptiveness of any of the designated Goods or Services is oblique. (c) There is no evidence of third-party descriptive use of EVENPAY as at or even after the priority date, or evidence of the needs of other traders. In any event, as Mr Smith points out, such evidence would be more appropriately considered in the context of an opposition proceeding or a removal proceeding. (d) Further, other traders have a universe of alternative marks to choose from. 15 I will allow Red Energy's appeal and make orders in the terms sought. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Beach.