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innovare pty ltd v zikos holdings pty ltd
overview

This case was an opposition against an application for a trade mark INNOVARE in the building, construction and fit-out industry.  The main two grounds considered were s58 (that the Applicant is not the true owner) and s60 (that registration is likely to deceive or cause confusion, given the reputation of a prior trade mark).

Importantly, the director of the Opponent company, had originally established and used the trade mark in a company (the ‘Original Company’).  This Original Company was deregistered after many years and then nine years after the deregistration, the director started another business (and related entities) that re-used the mark (the Opponent).

Arguments for Section 58

The Opponent relied on its prior use of the mark and the prior use by the Original Company partly supported by its prior trade mark registrations which had expired. The Applicant relied on technical ownership issues to counter this, arguing that the opponent was not the true owner.

Arguments for Section 60

The Opponent relied on its history of awards, prestigious projects and one occurrence of confusion in the marketplace to establish a reputation.  The Applicant responded by claiming that this reputation was insufficient because it was 1) limited since the Opponent operated in a particular area within Queensland and 2) that any the reputation would be small as the Original Company’s contributing reputation would have dissipated after 9 years of deregistration.

decision

Section 58

  1. The Opponent failed to establish this ground.
  2. This was because it was held that the original company held the trade mark rights and when it was deregistered those rights were lost.
  3. To understand this outcome it is necessary to analyse the particular arguments and evidence around the director being the true common law owner-
    • The Applicant had first argued that the director was the owner of the mark.  They tried to use Pham Global as an authority to extend that this means the Opponent is not the true owner of the mark.
    • In response the Opponent’s director stated that after incorporating the Original Company his prior business and use of the trade mark as a sole trader was acquiesced into the incorporated entity and that he otherwise had caused all rights in the trade mark to be transferred to the Original Company.
    • The Hearing Officer accepted the Opponent’s argument here, stating that Pham Global isn’t an authority that prevents an assignment from a true owner to another, by the transfer of their entire business and its goodwill.  In this case, it was held that the director transferred the entire business and goodwill to the Original Company.
    • Importantly, for the s58 ground to be established, it’s not necessary for the Opponent to be the common law owner.  All that needs to be established is that there is at least one other entity which has prior common law rights.  This meant that even if the director was the owner, the Opposition could have succeeded.
    • It was later argued that if the rights were in the Original Company, these rights were lost when the original company was deregistered.
    • Here the Opponent then tried, but failed to conversely argue that the director had always owned the trade mark rights and had simply authorised its use under an unwritten license, first to the Original Company and then to the Opponent. This however was rejected as it conflicted with the previous statement which had already been accepted by the Hearing Officer.

Section 60

  1. The Opponent established this ground and succeeded with the Opposition.
  2. There was doubt over what strength the current reputation of the Opponent was, given that the Hearing Officer accepted that the reputation had dissipated to a degree over the nine years of non-use.
  3. However, the Opponent submitted one instance of actual clear confusion by a customer in its evidence and this carried great weight in the decision, rebutting all of the Applicant’s arguments.

key takeaways

  • Section 58 does not require that the opponent is the common law owner, just that someone else is.
  • Pham Global may be able to be distinguished from applying to every common law ownership situation.
  • For section 60, evidence of actual confusion in the marketplace carries significant weight.