Think twice before you copy and file: Lessons for trade mark applicants and attorneys

2023 marks the fall of Energy Beverages LLC’s (EB) MOTHERLAND trade mark registration in Australia, as Cantarella Bros Pty Ltd (Cantarella) has emerged victorious after a four-year trade mark battle between the beverage companies. In September 2023, the High Court of Australia refused EB’s special leave application to appeal the full Federal Court’s decision to remove EB’s registered MOTHERLAND mark (no. 1345404) from the register. You can read (or re-read) our key takeaways from the full Federal Court’s decision here. 

However, all is not lost. EB recently won its appeal against the Trade Marks Registrar’s decision to dismiss its opposition to an application for KANGAROO MOTHER (no. 1989429) in classes 5, 29, 30, 31 and 32 (Opposed Mark) in the name of Kangaroo Mother Australia Pty Ltd (KMA). In Energy Beverages LLC v Kangaroo Mother Australia Pty Ltd [2023] FCA 999, Justice O’Callaghan, sitting alone, held that KMA’s predecessor in title did not, at the timing of filing, have the requisite intention to use or authorise the use of the KANGAROO MOTHER mark in Australia in relation to the designated goods, and accordingly, KMA’s application was refused.

Background

The original applicant of the KANGAROO MOTHER mark was Erbaviva Natural Care (New Zealand) Limited (Erbaviva) which was incorporated to sell skincare products in New Zealand. Erbaviva had previously obtained a trade mark registration for KANGAROO MOTHER in classes 3, 5 and 21 in March 2019.  

In early 2019, Erbaviva decided to expand its product offering to include various foods and nutritional supplements (Intended Scope), which precipitated the decision to file a new Australian trade mark application for KANGAROO MOTHER in classes 5, 29, 30, 31 and 32 (that is, for the Opposed Mark). For reasons which were unclear on the facts, when Erbaviva was considering the goods to be covered by that application, it was heavily inspired by a third party’s trade mark registration in New Zealand. The sole director and shareholder of Erbaviva, Mr Zheng, decided to copy all but one of the goods claimed by that third party registration, and provided that list of goods to his trade mark attorneys for the purpose of preparing the application for the Opposed Mark. When Mr Zheng’s trade mark attorneys offered to expand the scope of the goods, Mr Zheng agreed that the “widest scope of protection would be preferable”. The trade mark attorneys then proceeded to significantly expand the scope of the designated goods, and filed the application with IP Australia without giving Mr Zheng a further opportunity to review the application. 

It is relevant to note that the significantly expanded specification, encompassed goods that were wholly unrelated to Erbaviva’s Intended Scope, such as ‘adhesive tapes for medical purposes’, ‘dog lotions for veterinary purposes’ and ‘preparations for destroying vermin’. 

In March 2020, Erbaviva assigned the application for the Opposed Mark to KMA, an Australian corporation, whose sole director was also Mr Zheng. KMA has never traded, and neither Erbaviva nor KMA has attempted to manufacture any of the designated goods since the filing of the application. 

Issues in dispute

EB unsuccessfully opposed the application before the Trade Marks Registrar on the basis of sections 42(b), 44 and 60 of the Trade Marks Act 1995 (Act). On appeal to the Federal Court, EB introduced a new ground of opposition under section 59 of the Act, namely that the application ought to be refused on the basis that, at the time of filing, Erbaviva did not have an intention to use or authorise the use of the Opposed Mark or assign the Opposed Mark to a body corporate that was about to be constituted for the purpose of using the Opposed Mark in relation to the designated goods. 

Justice O’Callaghan’s findings

At [43]-[46], O’Callaghan J provided a helpful summary of the relevant principles applicable to the determination of whether a trade mark applicant had the requisite intention to use or authorise the use of a mark. The starting point of his Honour’s analysis was Bauer Consumer Media Ltd v Evergreen Television Pty Ltd [2019] FCAFC 71, in which Burley J held at [247] that the act of lodging a trade mark application is considered to be prima facie evidence of an intention to use that mark. The onus falls on the opponent to prove otherwise, having regard to factors such as any statement of intent made by the applicant and any use (prior to or shortly after filing) that was consistent or otherwise with that intention. Once the opponent has established a prima facie case of a lack of intention on the part of the applicant, the onus then shifts to the applicant to prove otherwise.

Justice O’Callaghan observed at [46] that the requisite intention possessed by an applicant at the time of filing must be:

• “a real intention”; or 
• “a resolve or settled purpose which has been reached”: see Duckner’s Trade Mark [1929] 1 Ch 113, 121 per Lord Hanworth MR. 

It is not enough that there was:

• “a mere problematic intention”;
• “an uncertain or indeterminate possibility”;
• “a speculative possibility”; or
• “a general intention to use the mark at some future but unascertained time”: see Optical 88 Ltd v Optical 88 Pty Ltd (No 2) [2010] FCA 1380 per Yates J.

Applying the above tests to the facts of the case, O’Callaghan J opined at [103] that it was “nonsensical” for Erbaviva to assert that, at the time of filing, it had the requisite intention to use the Oppose Mark in relation to each designated good. This lack of intention was ascribed to Mr Zheng as the sole guiding mind of Erbaviva, on the basis that the application, as filed, included a much broader scope of goods than what Mr Zheng had instructed his attorneys to file in the first place. To argue that Mr Zheng – and Erbaviva by extension – had intended to use the Opposed Mark in relation to goods that he was not given a chance to review and instruct on prior to filing the application, would simply defy logic and common sense. Justice O’Callaghan also found at [107] that Mr Zheng’s proposed list of goods was “obviously speculative”, on the basis that the proposed goods were “conjured in a matter of minutes” by copying and pasting the specification of goods claimed by a third party’s registration.

Finally, his Honour considered at [110]-[125] KMA’s submissions that, given Mr Zheng was a director of Erbaviva, KMA and another company, a “unity of purpose” of those companies could be implied, and consequently, the state of mind of other persons who controlled the group could be attributed to Erbaviva at the time of filing. His Honour opined that, for KMA to successfully run that argument, it would have had to establish a close proximity and relevant connection between a specified person or persons and Erbaviva, so that the state of mind of the specified person/s can be treated as being identified with Erbaviva. Relevantly, Mr Zheng conceded during cross-examination that he did not take instructions from any other person or company within the group in relation to the filing of the application. Accordingly, in circumstances where Mr Zheng was the sole director and shareholder of Erbaviva and the company had no other employee, his Honour found, at [120], that there was “not a skerrick of evidence” to suggest that the state of mind of any related person or entity could be ascribed to Mr Zheng or Erbaviva, and as such, KMA’s submissions as to a unity of purpose must be rejected.

Accordingly, his Honour held that EB was successful on its ground of opposition pursuant to section 59 of the Act, and that KMA’s application must be refused.  

At HopgoodGanim, our expert Intellectual Property, Technology and Cyber Security team works closely with our clients in each step of the trade mark application process, and we ensure that each application is finalised and filed only after the applicant has had an opportunity to review the proposed specification and make any necessary amendments in line with its business objectives. Every trade mark application is crafted with care, to ensure that our clients are well-placed to establish the requisite intention to use the mark of the application in relation to every designated good or service.

You can access the full text of Justice O’Callaghan’s decision here.

For more information, please get in touch with our Intellectual Property, Technology and Cyber Security team.