IP @ Ashurst 30 Jun 2020

Copycat in bad faith, stopped in its tracks: Southcorp successfully opposes copycat trade mark application

Southcorp Brands Pty Ltd v Shanghai Benka Wines Co., Ltd [2020] ATMO 9

What you need to know

The onus of proof in establishing "bad faith" as a ground of opposition to a trade mark registration under s 62A of the Trade Marks Act 1995 (Cth) rests on the opponent and requires evidence of conduct which falls short of what would be considered commercially acceptable behaviour.
The opposition ground of bad faith can be a useful way to stop would-be copycats in their tracks if there is a clear attempt to misappropriate existing brands and goodwill and particularly if there is proof of a deliberate course of dubious conduct and awareness of the brand owner's rights.

What you need to do

If relying on the ground of "bad faith" to oppose registration of a trade mark, consider whether the applicant's conduct falls short of commercially acceptable behaviour. Was the applicant already aware of the brand owner's rights? Is there evidence, in the application process or elsewhere, to suggest a particular course of unscrupulous behaviour?

Background

This matter involved an opposition brought by Southcorp Brands Pty Ltd (Southcorp), the producer of wine under various names, including the well-known wine brand, Penfolds. The Penfolds brand was established in 1844 and is one of Australia's most famous wine brands. The brand is used in plain word font or red cursive script on the wine bottles, as shown below.

Southcorp's (and its parent company) brands have been the subject of a string of other copycat trade mark applications in both China and Australia which seek to appropriate elements of the Penfold's branding. For example, we previously reported on the case involving the transliteration 'Ben Fu' and the Chinese character version of the Penfolds Mark here.

In fact, the applicant of the mark in this case had previously filed other marks in Australia and China seeking to misappropriate Southcorp's branding. Further, one of the Chinese applications had actually been opposed by Southcorp before the date on which the applicant filed this application, confirming that not only was the applicant very well-aware of Southcorp and its brands, but was engaged in a deliberate course of conduct. Southcorp had also filed an opposition against one of the applicant's Australian applications for PENCARDS.

Conduct of the Applicant

The relevant registration in this case was for the trade mark PERFUMEN (stylised) as shown below, filed on 6 June 2017 for a range of alcoholic beverages in class 33.

The above mark bears similarities with Southcorp's branding by using similar script stylisation, a florid upper case 'P' and could potentially be used in the same colour as the Penfolds branding. Additionally, when it filed this application, the applicant used a different company name to the name which it had used for the Chinese applications which had already been opposed by Southcorp. This appeared to be an attempt to mask the true identity of the applicant.

Southcorp had raised a number grounds of opposition against registration of the mark but the Hearing Office dealt only with s62A (that the application was made in bad faith and should not proceed to registration).

Decision of the Hearing Officer

In deciding the question of whether the applicant's conduct had been in bad faith, the Hearing Officer relied on Fry Consulting Pty Ltd v Sports Warehouse Inc (No.2) (2012) 201 FCR 565, as a leading Australian authority. The Hearing Officer adopted the formulation of bad faith from that decision as:

"falling short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons" and that "mere negligence, incompetence or a lack of prudence to reasonable and experienced standards would not, in themselves, suffice, as the concept of bad faith imports conduct which, irrespective of the form it takes is of an unscrupulous, underhand or unconscientious character."

The Hearing Officer found that at the date of the application, the applicant was aware of Southcorp and that the applicant's conduct of filing multiple applications over a period of years was a pattern of behaviour which was calculated to misappropriate Southcorp's reputation. It was also held that the change of the company name was a deliberate attempt to obscure the true identity to seek to prevent detection of its activity.

The Hearing Officer held that such behaviour of the applicant fell short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons and constituted 'bad faith'.

As the applicant did not file any evidence in answer, the Hearing Officer confirmed that there was no explanation other than that registration of the mark was sought for the purpose of confusing the public and misappropriating Southcorp's goodwill it has in its Penfolds Brand.

Therefore, Southcorp's opposition was successful and the trade mark application was refused.

Authors: Josephine Gardiner, Lawyer; and Anita Cade, Partner.

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