Mantra IP Pty Ltd v Spagnuolo [2012] FCA 769 (19 July 2012)

Last Updated: 19 July 2012

FEDERAL COURT OF AUSTRALIA

Mantra IP Pty Ltd v Spagnuolo [2012] FCA 769

THE COURT ORDERS THAT:

1. The decision of the Registrar of Trade Marks of 5 November 2010, in the opposition by the respondent to the “Q1” trade mark applications in the name of the appellant, be set aside.
2. Australian Trade Mark Application 1228706 for the word mark “Q1” in class 36 proceed to registration, conditional on the withdrawal or dismissal of all pending opposition proceedings in relation to that application.
3. Australian Trade Mark Application 1228707 for the word mark “Q1” in class 39 proceed to registration, conditional on the withdrawal or dismissal of all pending opposition proceedings in relation to that application.
4. Australian Trade Mark Application 1228708 for the word mark “Q1” in classes 35 and 43 proceed to registration, conditional on the withdrawal or dismissal of all pending opposition proceedings in relation to that application.
5. The respondent pay the costs of the Registrar of Trade Marks for complying with the Court’s direction set out in the Order dated 12 August 2011 on a party/party basis.
6. The respondent pay the appellant’s costs of the proceedings and costs of the opposition proceedings below, on a party/party basis.
   
   

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

INTRODUCTION

1. It is not in dispute in these proceedings that a person cannot obtain the registration of a trade mark for a building. That is so because under the Trade Marks Act 1995 (Cth) (the Act) trade marks can only apply to distinguish goods and services: see s 17 of the Act. However, the central question posed in these proceedings is whether a person can obtain the registration of a trade mark for services where the mark concerned is also the name of the building from which the services are supplied.
2. With the plethora of large commercial and residential buildings constructed in cities throughout Australia, one might have thought that this question would have come to be judicially determined before now. However, with the exception of one decision of the Full Court of this Court and some decisions of the Registrar of Trade Marks, the counsel for the parties have informed me that is not so. This question arises in the factual context set out below.

FACTUAL CONTEXT – Q1 – ONE OF THE TALLEST RESIDENTIAL TOWERS IN THE WORLD

3. “Q1” is the name of an “iconic” high rise apartment building situated on the Gold Coast in Queensland. It has 78 levels which contain, among other things, 526 residential apartments (the residential component of the Q1 building) and an observation deck on levels 77 and 78. On the ground floor, there is a separate retail area incorporating a number of shops and restaurants, a “public” area known as the Q1 Piazza and a “public” pathway that links the various areas. These so-called “public” areas are part of the common property of the body corporate covering the retail component of the Q1 building and are governed by a Building Management Statement providing rights of access, and the like, to the various owners within the whole Q1 complex.
4. The Q1 building was developed by Sunland Group Limited (Sunland). It was constructed between June 2002 and October 2005. Prior to the commencement of construction, Sunland adopted the name “Q1” for the building and successfully applied for the registration of a number of logo marks for Q1 in relation to a range of classes including property development, real estate management and leasing services; hotels; motels and restaurants.
5. When the Q1 building was opened in 2005, it was claimed to be the world’s tallest residential tower.
6. In September 2005, Sunleisure Hotels & Resorts Pty Ltd (Sunleisure) was appointed caretaker and letting agent by the body corporate for the residential component of the Q1 building. Since then Sunleisure has operated a resort at the Q1 building called the “Q1 RESORT & SPA”. In February 2006, the Q1 logo marks were assigned by Sunland to Sunleisure Operations Pty Ltd, a related company to Sunleisure. Since then Sunleisure has promoted its resort under the stylised logo ‘Q1’ and under the sign “Ql RESORT & SPA”.
7. Sunleisure owns a lot (or lots) in the Q1 building which it uses to operate its resort business. The lot (or lots) includes the reception desk area, some office space, an apartment for the onsite caretaker, and a cafe called the “Q1 Beach Club”. It also conducts a function and conference business on the mezzanine level of the Q1 building. This area is a part of the common property of the body corporate for the residential component of the Q1 building, but Sunland has priority over the use of it.
8. In mid-2007, Sunleisure became a part of the Mantra Group of companies, which is one of Australia’s largest accommodation providers. As at May 2011, Sunleisure had letting agreements with the owners of approximately 193 apartments in the residential component of the Q1 building.
9. Mantra IP Pty Ltd (Mantra IP), the appellant, is also a member of the Mantra Group of companies. It was incorporated in March 2008 as Stella IP for the purpose of owning certain intellectual property rights on behalf of the Mantra Group and licensing other companies within the Mantra Group to use those rights. In that capacity, Mantra IP holds the domain name: ql.com.au. Prior to 2008 (and since 2005) that domain name was held by Sunleisure.
10. Stella IP changed its name to Mantra IP in October 2009.
11. Mr Spagnuolo, the first respondent, owns two apartments in the residential component of the Q1 building and has letting agreements with the owners of a number of other apartments. He operates a short term holiday accommodation business under the name “Ql Holidays Gold Coast”. He also holds the domain name: qlholidaysgoldcoast.com.au.

MANTRA IP’S THREE TRADE MARK APPLICATIONS

12. On 10 March 2008, Mantra IP filed three trade mark applications for the word mark “Q1” as follows:

(a) Trade Mark Application No 1228706

Class Number 36

Description Leasing of accommodation; rental of accommodation; accommodation letting agency; accommodation bureaux (apartments); apartment rental services; apartment letting agency; management and administration of buildings; real estate management; provision of long-term accommodation; apartment house management; management services including property management and administration; acquiring and managing real estate for investors; leasing of real estate; renting of apartments; real estate agency services; body corporate management services; insurance and financial services in relation to real estate and investment; financial management services for apartments, resorts and hotels; financial sponsorship of education, training, entertainment, sporting or cultural activities; and development, management, sale and financing of real estate.

(b) Trade Mark Application No 1228707

Class Number 39

Description Holiday travel reservation services; advisory services relating to travel; agency services for arranging travel; arrangement of travel; booking agency services for travel; computerised reservation services for travel; consultancy for travel; information services relating to travel; provision of information relating to travel; provision of tourist travel information; provision of travel information; reservation services for travel; ticket booking services for travel; tourist travel reservation services; travel agents services for arranging travel; travel information services; travel reservation; computerised reservation services for travel; computerised transport information services; luggage storage services; organising of excursions; parking of cars; parking services for vehicles; provision of parking facilities; reservation services for tours; services for the arranging of excursions for tourists; tour organising; and arranging rental of cars

(c) Trade Mark Application No 1228708

Class Number 43

Description Hotel and resort services; accommodation reservations; provision of accommodation including hotel, motel, apartment and resort; provision of temporary accommodation; administration and booking services for accommodation; rental of temporary accommodation; accommodation reservations; accommodation management services; advertising services for accommodation, including providing these services online provision of food and drink; restaurant services; reservations (temporary accommodation); hotel, motel, bar, cafe, restaurant, banqueting and catering services; rental of rooms for holding functions, conferences, conventions, exhibitions, seminars and meetings; accommodation letting agency services (holiday apartments); arrangement of accommodation for holiday makers; arranging holiday accommodation; holiday home services (accommodation); holiday information (accommodation); holiday lodgings; holiday planning (accommodation); letting of holiday accommodation; provision of self catering holiday accommodation; reservation of places at holiday resorts; travel agencies for arranging accommodation; travel agency services for booking accommodation; travel agency services for making hotel reservations; accommodation finding services for tourists and travellers; accommodation letting agency services (holiday apartments and hotels); accommodation reservation services; arranging holiday and temporary accommodation; booking of accommodation for travellers; booking services for accommodation; hospitality services (accommodation); information services relating to the provision of temporary accommodation; letting of holiday and tourist accommodation; providing information, including online, about services for providing food and drink, and temporary accommodation; provision of self catering holiday or temporary accommodation; and resort accommodation.

13. These three applications are at the centre of these proceedings. They were accepted by the Registrar under s 33 of the Act and that decision was duly advertised in the Official Journal. In response to those advertisements, Mr Spagnuolo filed notices of opposition under s 52 of the Act.

THE REGISTRAR’S DELEGATE REJECTS MANTRA IP’S APPLICATIONS

14. Mr Spagnuolo was successful in his opposition to Mantra IP’s applications and the Registrar’s delegate refused to register the word mark “Q1” as a trade mark under s 55(1)(a) of the Act: see Danilo Spagnuolo v Mantra IP Pty Ltd [2010] ATMO 110 (the Reasons). As the delegate correctly observed, an opponent’s success in relation to a single ground of opposition usually leads to total success: see the Reasons at [19].
15. The single ground upon which the delegate relied to reject Mantra IP’s applications was based on s 43 of the Act. That section provides:

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.

16. The delegate observed that the name “Q1” had a geographical connotation rather than being a badge of origin for Mantra IP’s services. She said (at [37] and [38]) that:
    37. The applicant’s evidence shows that, in practice, the ‘Q1’ name is predominantly used to identify the location of the services provided, rather than as a badge of origin ...

38. It is hardly surprising that use of the sign by the applicant’s agent [Sunleisure] would seek to reinforce rather than compromise its geographical connotation, at the expense of representation as a badge of origin. But it suggests that the applicant itself is aware of the need to avoid the potential deception and confusion of the public likely to result from any use of ‘Q1’ intended to separately identify the applicant’s services in isolation from any association with the Q1 building.

(Emphasis in original)

17. The delegate also pointed to other traders who may wish to use the name “Q1” to promote their rental accommodation services in the Q1 building. She considered this would lead to deception and confusion among the “holidaymaking public”. She said (at [41]–[42]) that:
    41. The issue here is simply that, regardless of the agreement between the applicant and the body corporate, other parties with an interest in advertising the provision of accommodation in the Q1 building must be able to use its name do so (sic). The applicant itself uses the name as a geographical identifier in the first instance, yet it seeks to prevent others from doing the same by applying for trade mark registration of the Q1 sign solus. Nothing short of deception and confusion of the holidaymaking public would be the likely result from the attempts of the applicant’s competitors to identify the location of their rental accommodation without straying into what it claims as the territory of its ‘brand’.
    42. Further, as Mr Spagnuolo has observed, the applicant’s current contract with Q1’s body corporate may not be renewed. Should the applicant have in the meantime succeeded in achieving registration of the opposed trade mark, it would then be in the very confusing position of retaining trade mark rights to identify its accommodation leasing and numerous related services by the Q1 sign, even though resident caretaker and exclusive on-site letting agency rights to the Q1 building may have passed to a competitor.
18. Accordingly, the delegate came to the following conclusion (at [43]):

... I find that, because of the geographical connotation contained in the Q1 sign, there is a real likelihood that its use as a trade mark by the applicant in respect of the very wide range of services specified in its applications will cause deception and confusion of the public. The Q1 sign is the only name of a building which, by virtue of its multi-faceted identity, has in the words of the Full Federal Court ‘become part of the common heritage’. As such, it has a connotation that effectively eclipses any function it might otherwise have performed in denoting any single trader, and which renders it simply unsuitable for use as a trade mark. Even with the best of intentions, any use of ‘Q1’ intended to denote a single trader cannot avoid creating deception and confusion in the marketplace, as it is a name patently required for use by all of the many traders with a connection to the building. The very nature of the sign means that it is, to return to the words quoted earlier from the ORLWOOLA case, ‘utterly unfit for registration as a trade mark’.

(Bold emphasis added)

THE GROUNDS IN THIS APPEAL

19. This matter comes before this Court as a consequence of an “appeal” (strictly speaking, it is not an appeal in the usual sense of that word: see Jafferjee v Scarlett [1937] HCA 36; (1937) 57 CLR 115 at 119). Mantra IP has filed under s 56 of the Act. Mantra IP’s notice of appeal claims the Registrar of Trade Marks erred in making the following findings, or conclusions:

(a) the Trade Mark had a geographical connotation;

(b) the Trade Mark formed “part of the common heritage” and was therefore unfit for registration as a trade mark;

(c) use of the Trade Mark by the Applicant, if the Trade Mark did in fact have a geographical connotation, was likely to deceive or cause confusion; and

(d) the Applicant used the Trade Mark to identify the location of the services provided rather than as a badge of origin.

20. In his amended statement of grounds of opposition, Mr Spagnuolo relies upon ss 41, 42, 43, 58, 59 and 92 of the Act and s 18 of the Australian Consumer Law. During the course of these proceedings, he abandoned reliance upon ss 59 and 92 of the Act. His statements in relation to the remaining grounds are as follows (in the order they appear in the statement of grounds of opposition):

Section 58

...

3. The first respondent repeats paragraph 2 above and further says that the applicant is not the owner of the mark the subject of any of the Applications.

Particulars

(i) the first respondent repeats paragraph 2 above;

[Paragraph 2 reads: The first respondent repeats paragraph 1 [not reproduced here as not relevant] above and further says that between 10 March 2008 and 11 January 2011 the applicant has not used the mark the subject of any of the Applications or used the mark the subject of any of the Applications in good faith in Australia.]

(ii) the following entities and/or persons used the mark the subject of any of the Applications prior to 10 March 2008:

(A) Q1 CTS 34498 Body Corporate;

(B) Ladislaus Assey;

(C) Dr Hendrik Prins & Others;

(D) Adam Loadsman;

(E) PRD Nationwide; and

(F) Others to be particularised in evidence.

Section 43

4. The mark the subject of each of the applications:

(a) connotes the iconic building on the Gold Coast;

(b) connotes a geographical location as found by the delegate; and

(c) because of the said connotations, use of the mark in respect of any of the designated services would be likely to deceive or cause confusion.

Section 41

5. The mark the subject of each of the Applications:

(a) is not capable of distinguishing the applicant’s designated services from the services of other persons;

(b) if (which is denied) the mark is to some extent inherently adapted to distinguish the designated goods or services of the applicant from those of other persons, no use by the applicant of it:

(i) prior to 10 March 2008;

(ii) prior to 12 February 2010;

(iii) prior to 8 September 2010

has made or will make the mark the subject of the Applications capable of distinguishing the designated services of the applicant.

Section 42

6. Use of the mark the subject of the Applications in respect of the services of those Applications would be conduct in trade or commerce.
7. The mark the subject of Application 1228706 would be contrary to law in that such use would cause persons to believe, contrary to the fact, that the applicant and its licensees had the exclusive right to provide the services of the Application in respect of the Q1 building.
8. The mark the subject of Application 1228707 would be contrary to law in that such use would cause persons to believe, contrary to the fact, that the applicant and its licensees had the exclusive right to provide the services of the Application in respect of the Q1 building.
9. The mark the subject of Application 1228708 would be contrary to law in that such use would cause persons to believe, contrary to the fact, that the applicant and its licensees had the exclusive right to provide the services of the Application in respect of the Q1 building.
10. By reason of the matters set out in paragraphs 6 – 9 above use of the mark the subject of the Applications would be likely to mislead or deceive or would mislead or deceive contrary to s.18 of the Australian Competition (sic) Law.

THE RELEVANT PROVISIONS OF THE ACT AND THE MATTERS TO BE DETERMINED THEREUNDER

21. The provisions of the Act that fall to be considered in relation to the grounds of appeal and opposition (above) are set out below (in the order they appear in the Act):

41 Trade mark not distinguishing applicant’s goods or services

(1) For the purposes of this section, the use of a trade mark by a predecessor in title of an applicant for the registration of the trade mark is taken to be a use of the trade mark by the applicant.

(2) An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant’s goods or services in respect of which the trade mark is sought to be registered (“designated goods or services”) from the goods or services of other persons.

(3) In deciding the question whether or not a trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons, the Registrar must first take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons.

(4) Then, if the Registrar is still unable to decide the question, the following provisions apply.

(5) If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons but is unable to decide, on that basis alone, that the trade mark is capable of so distinguishing the designated goods or services:

(a) the Registrar is to consider whether, because of the combined effect of the following:

(i) the extent to which the trade mark is inherently adapted to distinguish the designated goods or services;

(ii) the use, or intended use, of the trade mark by the applicant;

(iii) any other circumstances;

the trade mark does or will distinguish the designated goods or services as being those of the applicant; and

(b) if the Registrar is then satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons; and

(c) if the Registrar is not satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken not to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons.

(6) If the Registrar finds that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons, the following provisions apply:

(a) if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it does distinguish the designated goods or services as being those of the applicant—the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons;

(b) in any other case—the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons.

22. Fundamental to s 41 is s 17 of the Act, which describes what a trade mark is and what it is intended to achieve, viz distinctiveness. It is as follows:

A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.

23. In Chocolaterie Guylian NV v Registrar of Trade Marks [2009] FCA 891; (2009) 180 FCR 60; [2009] FCA 891 (Guylian), Sundberg J described the steps the Registrar must take under s 41 in considering an application for a trade mark. These observations were made in relation to an appeal against the non-acceptance of an application under s 35, but since the grounds for non-acceptance are the same as the grounds for opposition (see s 52(4)), I see no reason why they would not apply equally to an opposition under s 52. Further, I see no reason why they would not apply to this appeal under s 56 proceeding, as it does, as a hearing de novo of the delegate’s decision on the opposition (see [39(a)] below). Those steps were as follows (Guylian at [9]):

...

(a) The Registrar must first “take into account the extent to which the trade mark is inherently adapted to distinguish” the relevant goods from the goods of others: s 41(3);

(b) If that consideration leads to a conclusion that the trade mark is capable of distinguishing the goods from those of others, then, so long as the Registrar is not satisfied that any other grounds for rejecting the IRDA exist, she must accept the IRDA: reg 17A.24 (cf s 33 of the Act);

(c) However, if the Registrar is “unable to decide” whether the trade mark is capable of distinguishing the goods by the “inherently adapted” consideration alone, then either s 41(5) or s 41(6) applies: see s 41(4). Section 41(5) will apply if the Registrar finds that the trade mark “is to some extent inherently adapted to distinguish the ... goods ... from the goods ... of other persons but is unable to decide, on that basis alone, that the trade make is capable of so distinguishing the ... goods”. By contrast, s 41(6) will apply if the Registrar finds that the trade mark “is not to any extent inherently adapted to distinguish”.

(d) If the Registrar finds the trade mark is to some extent inherently adapted (s 41(5)), the Registrar is then required to consider whether the trade mark “does or will distinguish the ... goods as being those of the applicant”, by taking into account the combined effect of the following three matters (s 41(5)(a)):

• the extent to which the trade mark is inherently adapted to distinguish;
• the use, or intended use, of the trade mark by the applicant; and
• any other circumstances.

(e) After taking those matters into account, the trade mark is “taken to be capable of distinguishing the applicant’s goods ... from the goods ... of other persons” only if the Registrar is “satisfied” that the trade mark in fact does or will so distinguish the goods: s 41(5)(b). If the Registrar is not so satisfied, then the trade mark is taken not to be capable of distinguishing (see s 41(5)(c)), a ground for rejecting the IRDA will thereby exist and the Registrar is then required to reject the IRDA: reg 17A.24(3).

(f) In the alternative scenario that the Registrar finds that the trade mark is not to any extent inherently adapted to distinguish (s 41(6)), then the trade mark is taken not to be capable of distinguishing the goods unless the applicant “establishes” that, because of the extent to which the applicant has used the trade mark prior to the relevant filing date of the application, the trade mark does in fact distinguish the goods as being those of the applicant: s 41(6)(a) and (b).

(Emphasis in original)

24. Since Mantra IP was not incorporated until a few days before it filed its three applications, it has relied upon the use of the word mark “Q1” by Sunleisure from 2005 as provided for in s 41(1) (see at [21(1)] above). The expression “predecessor in title” is defined in s 6 of the Act as follows:

6 Definitions

...

predecessor in title, in relation to a person who claims to be the owner of a trade mark, means:

(a) if the trade mark was assigned or transmitted to one or more than one other person before it was assigned or transmitted to the first-mentioned person—that other person or any one of those other persons; or

(b) if paragraph (a) does not apply—the person who assigned the trade mark, or from whom the trade mark was transmitted, to the first-mentioned person.

...

(Emphasis in original)

25. The other provisions of the Act that arise in relation to the grounds of appeal and opposition (above) are ss 42, 43 and 58 of the Act. They are as follows:

42 Trade mark scandalous or its use contrary to law

An application for the registration of a trade mark must be rejected if:

(a) the trade mark contains or consists of scandalous matter; or

(b) its use would be contrary to law.

43. Trade mark likely to deceive or cause confusion

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.

...

58. Applicant not owner of trade mark

The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.

(Emphasis in original)

26. Finally, the “law” Mr Spagnuolo relies upon under s 42(b) (above) is s 18(1) of the Australian Consumer Law (ACL). It provides as follows:

18 Misleading or deceptive conduct

(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

...

(Emphasis in original)

A BRIEF SUMMARY OF THE CONTENTIONS ON THE MAIN ISSUES

27. In brief summary, Mr Webb SC, for Mr Spagnuolo, submitted that, because Q1 is so well-known as the name of the Q1 building and because other apartment owners and letting agents would, in the normal course of their business, wish to use the name “Q1” in connection with the provision of their accommodation services in relation to the apartments in the Q1 building, the mark “Q1” is not registrable. Further, he submitted, the mark “Q1” is so well-known as the name of the building that its registration as a trade mark held by Mantra IP would be likely to mislead or deceive members of the public into believing that Mantra IP and its licensees were the sole providers of accommodation services in relation to the apartments in the Q1 building.
28. Mr Crowe SC, for Mantra IP, submitted that Q1 was a name that was made up, or coined, by Sunland as the developer of the Q1 building and, while Q1 has become known as the name of the Q1 building, it has not become a geographical place name such that it has become part of the “common heritage” that all traders are entitled to use. Mr Crowe submitted that the “Q1” mark was an invented term with no dictionary meaning such that by its nature it is inherently adapted to distinguish the accommodation services provided by Mantra IP and its licensees from those services provided by other traders.
29. Both counsel agreed that this was a case where the issues raised by ss 41, 42(b) and 43 of the Act were interrelated or overlapped. It follows that this is a case where “[t]he questions of distinctiveness and absence of a likelihood of deception tend to run into one another”: see Chancellor, Masters and Scholars of the University of Oxford (trading as Oxford University Press) v Registrar of Trade Marks [1990] FCA 175; (1990) 24 FCR 1 (Oxford University Press) at 20 per Gummow J, referring to the observations of Kitto J in Bayer Pharma Pty. Ltd v Farbenfabriken Bayer Aktien-Gesellschaft [1965] HCA 71; (1965) 120 CLR 285 at 303.

THE MAIN ISSUES THAT ARISE

30. Taking into account the matters contained in the grounds of appeal and opposition, the relevant legislative provisions and the brief summary of the contentions of the parties above, the following are the main issues that appear to arise for determination in this matter:
    1. (a) Is the word mark “Q1”, alone, capable of distinguishing the services described in Mantra IP’s three applications (the Designated Services) from the services of other persons in that it is inherently adapted to distinguish those Designated Services (s 41(3))?

(b) If so, are there any grounds under paras 2–4 below for rejecting Mantra IP’s applications?

(c) If not as per 1(a) above, is the word mark “Q1” to some extent inherently adapted to distinguish the Designated Services from the services of other persons (s 41(4))?

(d) If so, taking into account the combined effect of the extent to which it is inherently adapted to distinguish the Designated Services, and the use, or intended use, of the word mark “Q1” by Mantra IP, or its predecessors in title and any other circumstances, is the word mark “Q1” capable of distinguishing the Designated Services from the services of other persons (s 41(5))?

(e) If so, are there any grounds under paras 2–4 below for rejecting Mantra IP’s applications?

(f) If not as per 1(c) above, taking into account the extent to which Mantra IP has used the word mark “Q1”, does it, in fact, distinguish the Designated Services from the services of other persons (s 41(6))?

(g) If so, are there any grounds under paras 2–4 below for rejecting Mantra IP’s applications?

2. Does the word mark “Q1” connote: an iconic building on the Gold Coast and a geographic location such that its use in respect of the Designated Services would be likely to deceive or cause confusion?
3. Would the use of the word mark “Q1” in respect of the Designated Services be likely to mislead or deceive, or would mislead or deceive, contrary to s 18(1) of the ACL, in that its use would cause persons to believe, contrary to the fact, that Mantra IP and its licensees had the exclusive right to provide the Designated Services in respect of the Q1 building?
4. Is Mantra IP the owner of the word mark “Q1”?
31. It should be noted that the parties agreed upon a common set of issues during the hearing of this matter. This was done to allow the submissions of the parties on each of the issues in this case to be easily compared. They are similar to, but not the same as, the issues set out above. Unfortunately, I was not able to use that agreed set of issues in preparing these reasons because, when it came to final submissions, both counsel did not follow them. This obviously defeated their main purpose. That being so, it was necessary to identify the main issues afresh. I will now proceed to deal with some preliminary matters and then consider the main issues in the order in which they appear above.

WHO BEARS THE ONUS OF PROOF UNDER SECTIONS 41(3), (5) AND (6)?

32. The first preliminary question is: who bears the onus of proof in the determinations required under each of the steps in s 41 of the Act? Justice Sundberg considered this issue in Guylian: see at [16]–[21]. In the process, his Honour referred: (at [16]) to the “presumption of registrability” contained in s 33 of the Act; (at [17]) to the observations of Branson J in Blount Inc v Registrar of Trade Marks [1998] FCA 440; (1998) 83 FCR 50 (Blount) (at 57–58), to the effect that the presumption in s 33 did not apply to the determinations under ss 41(3) to 41(6); and (at [18]–[19]) to the observations of French J in Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks (2002) 122 FCR 494; [2002] FCAFC 273 (Kenman Kandy) (at [22] and [50]), about the effect of the presumption of registrability mandated by s 33. His Honour then noted the tension between the presumption in s 33 and the text and structure of s 41 of the Act as follows (at [20]):

Section 41(3) requires the Registrar to “take into account” the extent to which a mark is inherently adapted to distinguish in deciding whether or not it is “capable of distinguishing” the applicant’s goods. Section 41(4) then directs the decision-maker to s 41(5) and s 41(6), if they are “still unable to decide the question”. Section 41(5) will be applicable if there is a finding that the mark is to some extent inherently adapted, but the Registrar is “unable to decide, on that basis alone, that the mark is capable of ... distinguishing”. Accordingly, where there remains some doubt after considering s 41(3) about a mark’s capability to distinguish, rather than resolving that doubt in favour of an applicant (by operation of a presumption), the statute expressly directs the decision-maker to consider the criteria in s 41(5) or s 41(6) (whichever is applicable).

33. His Honour proceeded to reconcile the decision of Branson J in Blount and that of French J in Kenman Kandy in the following terms (at [21]):

Reconciling s 41(4) and Branson J’s decision in Blount, with the presumption and French J’s decision in Kenman Kandy, is not entirely free from difficulty. The matter is further complicated by the fact that the onus is reversed under s 41(5) (the Registrar must be “satisfied” that the mark does or will distinguish) and s 41(6) (the applicant must “establish” that the mark does distinguish). In its submissions, the Registrar accepts that the presumption applies in relation to s 41(3), but says that the use of the term “satisfied” in s 41(5) suggests that the presumption no longer applies once the inquiry moves to s 41(5). I agree. Section 41(3) to (6) contemplates that there are degrees to which a mark might be inherently adapted to distinguish: see Kenman Kandy [2002] FCAFC 273; 122 FCR 494 at [82] (Lindgren J); Austereo [2004] FCA 968; 209 ALR 93 at [53] (Finn J). The ultimate question under s 41(3) is whether the mark is inherently adapted to a sufficient degree to conclude that it is “capable of distinguishing”. In my view, the effect of the presumption of registrability on s 41(3) is that, in considering whether a mark is capable of distinguishing by reason of the “inherently adapted” criteria, it should be presumed that the mark is sufficiently adapted unless the Registrar is satisfied otherwise on the balance of probabilities. If the Registrar is otherwise satisfied, then he or she will be “unable to decide the question” (see s 41(4)) whether the mark is capable of distinguishing on the basis of any inherent adaptation alone, and must then proceed to consider s 41(5) or 41(6). Under those provisions, the presumption no longer has any operation, as the applicant is then required to either “satisfy” the Registrar (s 41(5)), or “establish” (s 41(6)), that the relevant criteria set out therein is met. As Branson J said in Blount 83 FCR at 56, referring to Rejfek v McElroy [1965] HCA 46; (1965) 112 CLR 517 at 521, a test of satisfaction requires the Registrar to “be persuaded of the matter according to the balance of probabilities”.

(Emphasis in original)

34. I respectfully agree with this analysis of Sundberg J. However, since Guylian involved an appeal under s 35 of the Act and not s 56, it is necessary to consider whether this analysis can be applied to an appeal under s 56 involving a ground of opposition under s 41 of the Act. Kenny J considered that question in Sports Warehouse Inc v Fry Consulting Pty Ltd (2010) 186 FCR 519; [2010] FCA 664 (Sports Warehouse), which, as here, did involve an appeal under s 56 of the Act and a ground of opposition under s 41 of the Act. At [27], having noted (at [26]) that the presumption of registrability under s 33 of the Act applied on an appeal from such a decision under s 35 of the Act, her Honour observed that the presumption of registrability also applied to this kind of appeal, as follows:

There is also said to be a presumption of registrability at the opposition stage and in an appeal under s 56 (as here): see Pfizer Products Inc v Karam [2006] FCA 1663; (2006) 237 ALR 787 (Pfizer Products) at [8] (Gyles J). For the reasons about to be stated, however, in the present case only the application of s 41(3) is to be considered with the presumption in mind.

35. Then, her Honour adopted what Sundberg J had said in Guylian about this issue, in the following terms (at [28]):

I accept that, for the reasons explained by Sundberg J in Chocolaterie Guylian [2009] FCA 891; 180 FCR 60 at [21], the effect of the presumption on s 41(3) is that, in considering whether a mark is capable of distinguishing the goods or services of the applicant from the goods or services of other persons, by reason of being “inherently adapted”, the mark is presumed to be sufficiently adapted unless the Registrar is not so satisfied on the balance of probabilities. If the Registrar is not so satisfied, then the Registrar will be “unable to decide the question” (s 41(4)) whether the mark is capable of distinguishing on the basis of any inherent adaptation alone, and must proceed to consider s 41(5) or s 41(6). The presumption has no part to play under either of these subsections because the applicant is required either to “satisfy” the Registrar that the mark does or will distinguish in accordance with the criteria in s 41(5), or to “establish” that the mark does distinguish in accordance with the criterion in s 41(6).

36. Later in her reasons, Kenny J returned to the same issue and said (at [40]):

... That is, as noted earlier, these provisions [viz s 41(5) and 41(6)] require the applicant for registration to “satisfy” the Registrar (s 41(5)), or “establish” (s 41(6)), that the relevant criteria are met: compare Chocolaterie Guylian at [2009] FCA 891; 180 FCR 60 at [21]. As Branson J said in Blount 83 FCR at 56, referring to Rejfek v McElroy [1965] HCA 46; (1965) 112 CLR 517 at 521:

Where the Act requires the Registrar to be “satisfied” of any matter, it is to be understood as requiring that he or she be persuaded of the matter according to the balance of probabilities . . . That is, that the Registrar be persuaded, having given proper consideration to those factors and circumstances that the Act requires him or her to give consideration to, that such matter is more probable than not.

Under s 41(5), the Registrar must be persuaded by the applicant on the balance of probabilities that the trade mark does or will distinguish, having regard to the considerations in s 41(5)(a). The standard is the same under s 41(6), where the applicant must establish on the balance of probabilities that the mark does distinguish “because of the extent to which the applicant has used the trade mark before the filing date”.

37. I also respectfully agree with these reasons and conclusions of Kenny J.
38. It follows that the presumption of registrability in s 33 applies in this appeal to the determination that has to be made under s 41(3) and Mr Spagnuolo will bear the onus under that section with that presumption in mind. Mr Spagnuolo will also bear the onus on the determinations to be made under the issues identified in paras 1(b), (e), (g) and 2–4, at [30] above. However, for the reasons identified above, Mantra IP, as the applicant for registration, will bear the onus under ss 41(5) and 41(6) of the Act, that is on the issues identified in paras 1(c), (d) and (f) at [30] above.

SOME OTHER PRELIMINARY MATTERS

39. In addition to the question of onus considered above, there are some other preliminary issues that can be conveniently addressed at this stage. By the end of final submissions, all of these matters were agreed between the counsel for the parties so I propose to determine this appeal according to them. In short form they are that:

(a) these proceedings are to proceed as a hearing de novo, so the Court is required to consider the same questions as were before the delegate;

(b) the Court is to assess the rights of the parties as at the date of Mantra IP’s applications for registration of the trade mark, viz 10 March 2008;

(c) the delegate’s decision is not presumed to be correct but the Court is entitled to have regard to it as the decision of a person who is skilled and experienced in the field of trade mark registrations; and

(d) the usual civil standard of proof applies, viz the balance of probabilities.

40. The agreement in relation to (d) above removes any necessity for me to express any views on the effect of the Full Court’s decision in Lomas v Winton Shire Council (2003) AIPC 91-839; [2002] FCAFC 413 (see the discussion in Guylian at [22]–[26]). Otherwise, the parties’ agreement on these matters is consistent with authority: conveniently gathered and summarised, most recently, by Kenny J in Sports Warehouse at [24]–[25].

THE PRINCIPLES ON THE ASSESSMENT REQUIRED BY SECTION 41(3) OF THE ACT

41. The first of the main issues above (see [30]1(a)) requires an assessment as to whether the word mark “Q1” is inherently adapted to distinguish Mantra IP’s Designated Services from the services of other persons under s 41(3) of the Act.
42. In Kenman Kandy, Lindgren J elaborated upon the assessment that was required by the expression “inherently adapted to distinguish” in s 41(3) of the Act (although Lindgren J was in dissent, his Honour was in the majority on this point) as follows (at [81]–[85]):
    81. Section 41(5) and (6) make it clear that the expression excludes from consideration any secondary significance a mark acquires from use.
    82. Section 41(5) also makes it clear that there are degrees of inherent adaptation to distinguish.
    83. In Burger King Corporation v Registrar of Trade Marks (1973) [1973] HCA 15; 128 CLR 417, Gibbs J said of the expression “inherent adaptability to distinguish” (at 424):

“Inherent adaptability is something which depends on the nature of the trade mark itself – see Clark Equipment Co v Registrar of Trade Marks [1964] HCA 55; (1964) 111 CLR 511 at 515 – and therefore is not something that can be acquired; the inherent nature of the trade mark itself cannot be changed by use or otherwise.”

84. While inherent adaptation to distinguish requires attention to be focused on the mark itself, and is intended to stand in sharp contrast to a mark’s capacity to distinguish arising from use, the notion of “the mark itself” does not exclude from consideration the nature of the range of goods within the class or classes in respect of which registration is sought, or the various ways in which the mark might, within the terms of the registration, be used in relation to those goods. Indeed, those matters must be taken into account. But in the present case, all that falls for consideration in these respects is the proposed use of the Bug shape as the shape of items of confectionery. Whether the Bug shape is inherently adapted to distinguish can be tested by assessing how it would be perceived and understood by members of the public seeing items of confectionery of that shape for the first time, because this test excludes the possibility of a trade mark significance arising from use.
85. Probably the best known Australian authority on the notion conveyed by the expression “inherently adapted to distinguish” is Clark Equipment Co v Registrar of Trade Marks [1964] HCA 55; (1964) 111 CLR 511. In that case Kitto J heard an appeal against the Registrar’s refusal to register the word “MICHIGAN” in respect of various kinds of earth-moving and other equipment. His Honour was called upon to address the question of adaptation to distinguish as it arose under ss 25 and 26 of the 1955 Act, which, like s 41 of the 1995 Act, recognised the distinction between inherent adaptation to distinguish and an adaptation to distinguish acquired through use. Kitto J quoted, with approval, from Lord Parker of Waddington in Registrar of Trade Marks v W & G Du Cros Ltd [1913] AC 624 at 635 (Du Cros), as follows (at 514):

“The applicant’s chance of success in this respect [on the issue whether the mark is of such a kind that, quite apart from the effects of registration, the applicant for registration of it is likely, by the use of it, to distinguish his goods from the goods of other persons] must, I think, largely depend upon whether other traders are likely, in the ordinary course of their business and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connexion with their own goods.”

Kitto J stated (at 514):

“... the question whether a mark is adapted to distinguish [is to] be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives – in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess – will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it.”

Finally, in relation to the word “MICHIGAN” his Honour said (at 516-517):

“... it seems to me impossible to conclude that there is no likelihood of other traders, in the ordinary course of their businesses and without any desire to get for themselves a benefit from the appellant’s reputation, wishing in advertisements and otherwise to describe (eg) their power cranes from Michigan as Michigan power cranes.”

(Bold emphasis added)

43. The majority in Kenman Kandy also applied the test in Clark Equipment Company v Registrar of Trade Marks [1964] HCA 55; (1964) 111 CLR 511 (Clark Equipment): see at [47]–[48] per French J and [146] and [161] per Stone J. I will examine parts of the reasons of the majority in Kenman Kandy in more detail below.
44. Before considering those reasons, it is convenient to interpolate that, in Blount, Branson J considered the question whether the changes introduced by the Act affected these authorities dealing, as they were, with the 1955 Act. Her Honour concluded that the principles remained relevant, as follows (at 59):

The notion of a trade mark being inherently adapted to distinguish the designated goods was of primary significance under the 1955 Act. There is no reason to think that the phrase “inherently adapted to distinguish the designated goods from the goods of other persons” appearing in s 41(3) of the Act is not intended to be understood in the light of decisions under the 1955 Act, and comparable United Kingdom legislation which includes references to inherent adaptability.

See also Kenman Kandy at [142] per Stone J and Unilever Australia Ltd v Societe Des Produits Nestle SA (2006) 154 FCR 165; [2006] FCA 782 (Unilever) at [9]–[10] per Bennett J.

45. While I am mentioning the latter decision, it is convenient to identify some of the relevant principles highlighted therein by Bennett J by reference to a number of other decisions: see Unilever at [28]–[36]. They are: inherent adaption to distinguish cannot be acquired by use and is to be assessed by reference to the perception and understanding of members of the public seeing it for the first time (at [28] and [30]); an inherent capacity is an “essential permanent characteristic” and “intrinsic” to the trade mark itself (at [29]); because an expression is not descriptive of any characteristics of goods or services, it does not necessarily follow that it is inherently adapted to distinguish (at [33]); and evidence of use is not considered in assessing inherent capacity or adaptability to distinguish (at [35] and [55]). It should be noted that many of these points were also made by Lindgren J in Kenman Kandy: see at [84] set out at [42] above.
46. In Kenman Kandy, Stone J made a number of pertinent observations as to how one is to go about assessing whether a trade mark is inherently adapted to distinguish a trader’s goods or services. First, her Honour made the point that the test of inherent adaptability to distinguish looks to the future, as follows (at [142]):

The test must be whether it has the capacity to distinguish. In considering this requirement the comments of Isaacs J in Thomson v B Seppelt & Sons Ltd [1925] HCA 40; (1925) 37 CLR 305 are pertinent. Referring to the requirement that a trade mark be adapted to distinguish, and speaking in the context of the words “Great Western” then under consideration, his Honour said, at 312:

The statutory criterion looks wholly to the future, and seeks to know “What will be the effect of the mark after registration?” Is it adapted in future trade to distinguish the proprietor’s goods from those of other persons? That, however, does not mean “is the word adapted to acquire distinctiveness?” but “is the word instantly adapted to distinguish the proprietor’s goods in his future trade?” ... That must in all fairness be so, because otherwise it would be enlisting registration itself as an aid in making a mark actually distinctive, and so preventing partly by statutory assistance other traders from using the mark if they so desired.

47. Secondly, Stone J identified two categories of marks that cannot be registered, viz marks that are descriptive in nature, and those which use a geographical name. She said (at [145]) that:

Signs that are descriptive of the character or quality of the relevant goods or which use a geographical name in connection with them cannot be inherently distinctive because the words have significations or associations that invite confusion and because registration of a trade mark using such words would preclude the use by others whose goods have similar qualities or which have a connection with the relevant areas ...

48. In developing these remarks, her Honour made the following important observations:
    1. “It is the absence of the associations and significations that makes a sign inherently adapted to distinguish one trader’s goods from those of another. In other words, the concept is negative not positive”: at [147];
    2. “It is the absence of association and signification that accounts for invented words often being found to be inherently adapted to distinguish a trader’s product”: at [148]; and
    3. Trade marks are held to be inherently adapted not because of any positive content but because they have no associations or significations that prevent them from being inherently adapted to distinguish a trader’s goods: at [156].
49. Thirdly, Stone J observed (at [152]) that: “... a word or combination of words that is newly coined will not be acceptable unless it conveys no meaning, at least to ‘ordinary Australians’” referring to the Full Court decision of Advanced Hair Studio of America Pty Ltd v Registrar of Trade Marks (1988) 12 IPR 1 (Advanced Hair Studio). To similar effect, in his decision in Kenman Kandy, after referring to the test in Clark Equipment, French J said (at [47]) that the Clark Equipment test: “... requires a practical evaluative judgment about the effects of the relevant mark in the real world.”
50. In Advanced Hair Studio, the Full Court (Bowen CJ, Woodward and Lockhart JJ) considered an appeal from a decision of the Registrar of Trade Marks rejecting an application to register the mark “hairfusion”. The part of the decision that uses the expression “ordinary Australians” discusses the registrability of new or invented words as follows (at 4):

Reference was made by five of the members of the bench to Lord Parker’s dictum in the Diabolo case: Philipart v William Whiteley Ltd [1908] 2 Ch 274 at 279, that the new word “must be such as not to convey any meaning, or at any rate any obvious meaning, to ordinary Englishmen”: see Latham CJ at 179, Rich J at 179, Dixon J at 182–3, McTiernan J at 185–6 and Williams J at 187. Attention was also drawn to dicta in the speeches of Lords Herschell, Macnaghten and Shand in the Solio case: Eastman Photographic Materials Co Ltd v Comptroller-General of Patents, Designs, and Trade Marks [1898] AC 571. Lord Herschell said, at 581: “An invented word is allowed to be registered as a trade-mark, not as a reward of merit, but because its registration deprives no member of the community of the rights which he possesses to use the existing vocabulary as he pleases”. His Lordship went on to say: “I do not think the combination of two English words is an invented word, even although the combination may not have been in use before ...” (see also Lord Shand, at 585, to the same effect). Lord Macnaghten, in agreeing, cautioned that, “I do not think that it is necessary that it [the word] should be wholly meaningless”: at 583. See also Kimberley-Clark Corp v Registrar of Trade Marks [1963] HCA 38; (1963) 109 CLR 526 per McTiernan J at 527.

In order to qualify as an invented word under s 24(1)(c) of the Act, a word must be both newly coined and (to adopt Lord Parker’s dictum) convey no obvious meaning to ordinary Australians. The word “hairfusion” fails the second limb of this test, being obviously composed of the elements “hair” and “fusion” and conveying the meaning of the fusion, mixing, integration or joining of hair.

(Emphasis added)

51. As to the evidence that is relevant to the assessment, under s 41(3), of whether a mark is inherently adapted to distinguish, Sundberg J observed in Guylian that (at [54]):

... In my view, evidence of what other traders were selling prior to, at or subsequent to the priority date has the ability to rationally affect, albeit with varying degrees of weight, the conclusion one might reach about the extent to which a mark is inherently adapted to distinguish under s 41(3) of the Act ... In assessing as at the priority date the “likelihood” that other traders will behave in a certain way in the future, evidence of how they have in fact come to behave will be relevant, although close attention should be paid to whether such rival behaviour has been “actuated only by proper motives”. In the absence of evidence of improper motive, however, it seems to me logical and appropriate that post priority date events should, where appropriate, be taken into account by decision makers in exercise of the “evaluative judgment” (see French J in Kenman Kandy [2002] FCAFC 273; 122 FCR 494 at [47]) required under s 41(3).

52. In summary, the principles that can be extracted from these authorities, bearing on the assessment required by s 41(3) of the Act in the present case, are as follows. Mr Spagnuolo bears the onus of persuading the Court on the balance of probabilities that the word mark “Q1” should not be registered. In discharging that onus, regard must be had to the presumption of registrability in s 33 of the Act. The assessment under s 41(3) looks to the mark itself and its inherent nature; it does not take into account the effect of use; it considers how the mark would be understood by ordinary Australians seeing it for the first time. The question can be tested by asking whether other traders trading in services of the same or a similar kind and only actuated by proper motives are likely to want to use the mark in connection with the same or similar services. A proper motive is one founded on the “common right of the public to make honest use of words forming part of the common heritage”. Signs that are descriptive in nature, or use a geographical name, form part of the “common heritage” and, therefore, cannot usually be inherently distinctive. This test is to be applied negatively, not positively and the assessment is to involve a “practical evaluative judgment ... in the real world”.
53. I will now proceed to apply these principles to the assessment required under s 41(3) in this case.

Q1 IS ALONE INHERENTLY ADAPTED TO DISTINGUISH MANTRA IP’S DESIGNATED SERVICES

54. “Q1” is a sign or word that was coined, or made up, by the developer, Sunland, in 2001. It was made up of the letter “Q” and the number “1”. As such, the sign “Q1” does not, in my view, convey any obvious meaning to ordinary Australians. It is not, therefore, surprising to find that it is an agreed fact in these proceedings that: “in 2001, the term ‘Q1’ had no common meaning and was not used by the public in 2001 as a common term in relation to real estate services, hotel services or restaurant services”. Consistent with this agreed fact, whether it is considered as at 2001, or as at the present time, “Q1” was not, and is not, descriptive of the character or quality of Mantra IP’s Designated Services. It follows that the registration of the sign “Q1” as a trade mark will not infringe upon the “common heritage” in the sense that: “[t]he vocabulary of the English language is common property: it belongs alike to all; and no-one ought to be permitted to prevent the other members of the community from using for purposes of description a word which has reference to the character or quality of goods”: see Mark Foy’s Limited v Davies Coop and Company Limited [1956] HCA 41; (1956) 95 CLR 190 at 199 per Williams J, referring to the speech of Lord Herschell in The Eastman Photographic Materials Company, Limited v The Comptroller-General of Patents, Designs and Trade Marks [1898] AC 571. Accordingly, the sign “Q1” does not, in my view, fall into the first of the two categories of unregistrable trade marks identified by Stone J in Kenman Kandy: signs that are descriptive of the character or quality of Mantra IP’s Designated Services (see at [47] above).
55. However, the question raised in this case does not involve the public ownership of, and the rights to use, the common property in the English language. Rather, as the contentions of the parties show, the question here is whether the sign “Q1” infringes upon the “common heritage” because it falls into the second category of unregistrable trade marks identified by Stone J in Kenman Kandy: using a geographical name (see at [47] above). Stone J proposed a negative test to assess whether a sign fell into either of the two categories of unregistrable trade marks she identified. That test focused on the absence of any signification or association that prevented the sign being inherently adapted to distinguish the goods or services in question. Nonetheless, whether a sign uses a descriptive word or the name of a geographical place, the principle underlying both categories is the same: see Clark Equipment at 515 and Oxford University Press at 22 per Gummow J. That is, the sign is “not inherently, i.e. in its own nature, adapted to distinguish” (Clark Equipment at 515) the goods or services of a particular trader because it includes words or names over which there is a common or public right of use in that they form part of the “common heritage”, either in the English language (see at [54] above), or in a geographical name such as that of a town, suburb, district, municipality, region or state. Put differently, one trader is to be prevented from obtaining, by registration, a private monopoly over the use of such a word or name because other traders have a “common right of the public to make honest use of” it: see Clark Equipment at 514 emphasised in [42](85) above and also Oxford University Press at 8 per Lockhart J. Thus, where the phrases “without any improper motive”, “may legitimately desire to use”, “only by proper motives” or “without impropriety” are used in Clark Equipment (at 514–5), I consider they all refer to a use which relies upon a public right to make honest use of the “common heritage” in either of the senses described above.
56. The use of a geographical name forming part of the “common heritage” was one of the matters the delegate relied on to reject the registration of the word mark “Q1”. At [43] of the Reasons (see at [18] above), the delegate said that: “The Q1 sign is the only name of a building which, by virtue of its multi-faceted identity, has in the words of the Full Federal Court ‘become part of the common heritage’.” As appears from her Reasons, the delegate was referring to the Full Court decision of MID Sydney Pty Ltd v Australian Tourism Co Ltd [1998] FCA 1616; (1998) 90 FCR 236 (MID Sydney), which in turn adopted the expression “common heritage” from the decision of Kitto J in Clark Equipment at 514. While the delegate was directing these observations to the ground of opposition under s 43 of the Act, I consider she has misconstrued what the Full Court said in MID Sydney about the expression “common heritage”. In essence, I consider that occurred because the delegate became distracted by the fact that the sign “Q1” had been concurrently used as the name of the Q1 building. To demonstrate why this is so, it is necessary to examine what the Full Court said about that issue in MID Sydney.
57. MID Sydney involved a large city office building, the Chifley Tower, comprising 42 storeys. MID, the appellant, was the owner of the Chifley Tower building and it had a number of registered trade marks comprising the words “Chifley Tower” in respect of property maintenance services. Touraust, the third respondent, operated a number of hotels in five capital cities in Australia and wanted to use the name “Chifley” in the names of some of those hotels, including “Chifley on the Wharf” for a hotel situated on the Finger Wharf at Woolloomooloo in Sydney. Among other things, Touraust sought to attack MID’s registration of its trade marks on the ground that they lacked the capacity to distinguish the services in respect of which they were registered (see at 247). Touraust argued that Chifley Tower was “simply a geographical name, incapable of distinguishing services which are or are likely to be produced at that place ... Other persons trading in services of the relevant kind and being actuated only by proper motives, would think of the expression and want to use it in connection with similar services” (see at 249). It was in this context that the expression “common heritage” came to be considered in MID Sydney.
58. After quoting at length from the decision of Kitto J in Clark Equipment (at 514–5), the Full Court rejected the analogy between the name applied to a private building by its owner and the geographical names of towns, suburbs, districts, municipalities, regions or states. It said (at 250–1):

We rather doubt that any indication is to be found in the judgment of Kitto J in Clark Equipment that he would have regarded a large privately owned office building as analogous to a large and important industrial town or district or to a smaller town or district which is a seat of manufacture of goods of a particular kind. To say that is not conclusively to answer Touraust’s submission. But it does suggest that it may not be so simple a matter as to say that, as in a large town, so in a large office building, there will be found numerous traders who may wish to describe their goods or services by reference to their place of business.

MID acquired a building approaching completion and chose a name for it; at about the same time MID applied for the first of its registered marks in relation to property management services intending, no doubt, to provide those services, principally if not exclusively, in relation to the building. The Chifley Tower is not part of the common heritage in the sense that a town, suburb or municipality is. Chifley Plaza perhaps might answer that description, but the registered trade mark does not incorporate that expression. There is no public policy against MID restricting those who have come to occupy space within its building as to the way in which they use its name in connection with goods they produce or services they provide. That being so, it is not easy to see, in our view, why any separate public policy, of the kind identified by Kitto J, should apply so as to deprive the name selected by MID of a capacity to distinguish, in circumstances where there could be no legitimate reason for persons other than those carrying on business within The Chifley Tower to use its name in connection with their goods or services.

... Moreover, it cannot be said that it is likely that a trader operating from The Chifley Tower will, without impropriety, wish to use the name “Chifley Tower” in relation to property management services (other than as the trader’s place of business). The position is different from that of a town, suburb or municipality, since it could reasonably be expected that traders might wish to use the names of those geographic locations in connection with their services.

(Emphasis added)

59. Thus, it is apparent from what the Full Court said (above) in MID Sydney that a sign concurrently applied as the name of a privately owned building and to distinguish certain services to be provided from, or in relation to, that building, does not lose its inherent adaptability to distinguish the services concerned. The Full Court appears to have reached that conclusion because the name of a privately owned building cannot be regarded as being the equivalent of a geographical place name such that it is to be considered as part of the “common heritage” over which the public, including a competitor trading in, or near, the building can claim to have a public right to make honest use of that sign in relation to its goods or services. In other words, its use as a trade mark will not, in any way, infringe upon the “common heritage” because its concurrent use as a building name does not bring it within that domain. This does not, of course, prevent a trader operating within the building concerned from using the name of the building to indicate the location of its place of business.
60. Like the Chifley Tower, “Q1” was a sign devised by Sunland, a private entity, to, among other things, signify or name its private building development. When it chose the sign “Q1”, it did not adopt or incorporate a geographical name such as that of an established town, suburb or district, like Surfers Paradise, or the Gold Coast. Nor, for that matter, was it a name chosen following some public process, for example, by the Minister under the Place Names Act 1994 (Qld). For the same reason I also do not consider the fact that Sunland chose to register the address of the Q1 building with a Queensland Government Department affects this conclusion (see the delegate’s Reasons at [32] set out at [72] below).
61. At about the same time as it devised the sign “Q1” as the name of its building development, Sunland successfully applied for the registration of a number of logo marks for the sign “Q1” for a range of services essentially comprising the same services as Mantra IP’s Designated Services. It later assigned those Q1 logo marks to Sunleisure. From late 2005, Sunleisure used the Q1 word mark as a trade mark (see [91]–[92] below). Soon after Sunleisure became a part of the Mantra Group of companies, Mantra IP (then Stella IP) applied to register the word mark “Q1” in relation to its goods or services. From this history, I do not consider there is any basis upon which any trader could claim to have any “common right of the public” to make honest use of the sign “Q1” as a trade mark. Put differently, there is nothing about the sign “Q1” that could be said to bring it within the “common heritage” as discussed in Clark Equipment, or MID Sydney, such that it should be available for use by all members of the community and, as a consequence, remove its inherent adaptability to distinguish Mantra IP’s Designated Services.
62. In his submissions Mr Webb focused on the iconic status of the Q1 building in the Gold Coast area. He pointed to the size and height of the Q1 building and the number of owners and the diversity of ownership of the residential apartments within the building. He submitted there was a large body of evidence that demonstrated that, since 2001, the sign “Q1” had been used by Sunland, and subsequently by Sunleisure, as the name of the Q1 building. He instanced, by way of example, Ms Lalli’s evidence that the building had been “branded” as “Q1”. He also relied on the existence of the “public pathway” (see the observations at [3] above) on the ground floor of the Q1 complex and the existence of the area known as the Q1 Piazza. All of these matters were said to support the conclusion that the sign “Q1” had become so well-known as the name of a geographical location, that is the Q1 building, that it could not be inherently adapted to distinguish Mantra IP’s Designated Services.
63. I agree that the evidence supports the conclusion that the “Q1” sign has become known as the name of the Q1 building. Indeed, while he submitted that this was not the only use to which the sign “Q1” had been put, Mr Crowe accepted that was so. However, in my view, these submissions suffer from the same distraction as did the delegate’s reasoning on this issue (see at [56] above), viz that concurrent use of the sign “Q1” as the name of the Q1 building removed its inherent adaptability to distinguish Mantra IP’s Designated Services. Instead of focusing on the building name the sole relevant consideration under s 41(3) of the Act was whether, in itself, the sign “Q1” was inherently adapted to distinguish Mantra IP’s Designated Services. On this question, as I have endeavoured to explain above, the sign “Q1” was not, and is not, descriptive of Mantra IP’s Designated Services. Thus, when it was first devised in 2001, it is agreed that it had no common meaning. Nor did it, at that time, use or incorporate an existing geographical name. Thus, from its inception, it had none of the relevant significations or associations that may have affected its inherent capacity to distinguish Mantra IP’s Designated Services. If, as at 2001, the sign “Q1” was, by its essential characteristics, or intrinsic qualities, distinctive of Mantra IP’s Designated Services, in my view it necessarily remains so. In this context, that is not something that can be changed or acquired by use (see Burger King quoted at [42](83) above). Thus its concurrent and subsequent use as the name of the Q1 building does not, in my view, alter this. That use is no more relevant in considering its inherent adaptability to distinguish under s 41(3), than would be evidence of its acquired distinctiveness by use since 2001.
64. Finally, it is necessary to deal with the “borderline exception” the delegate referred to in her Reasons. The expression “borderline exception” comes from my decision in Mantra Group Pty Ltd v Tailly Pty Ltd (No 2) (2010) 183 FCR 450; [2010] FCA 291 (Tailly). In that decision, I considered, among many other things, the word “geographical” in s 122(1)(b) of the Act. As a part of that consideration, I quoted from the observations of the Full Court in MID Sydney (as set out at [58] above). I then observed (at [87]) that:

In my view, these observations suggest that the word “geographical” in s 122(1)(b) was intended to protect the common right of the public to use words forming part of the common heritage, specifically, the name of a country, region, city or town. On the other hand, they suggest that word was not intended to extend to a large privately owned residential apartment building like the Circle on Cavill complex that could not be said to be a part of the common heritage, any more than it did to the large privately owned city office building in the MID Sydney case. The borderline exception identified in MID Sydney was where a plaza or other public space adjoining such a building had become a part of the common heritage. There is nothing to suggest that arises in this case.

(Bold emphasis added)

65. In her Reasons, the delegate referred to these observations (Reasons at [30]). Then, after herself quoting from MID Sydney, she observed that (Reasons at [32]):

The Courts declined in both cases to be persuaded that either the “large privately owned city office building” known as Chifley Tower or the “large privately owned residential apartment building” known as Circle on Cavill could be described as “geographical locations”. However, far from shutting the door completely on the possibility, they suggested that a building containing well-known public spaces such as those of Chifley Plaza may indeed “answer that description” and “form part of the common heritage”.

(Bold emphasis added)

66. As noted above (at [62]), in his submissions Mr Webb relied upon the existence of the “public pathway” on the ground floor of the building and also the Q1 Piazza, in support of his more general submission that Q1 had become the name of a geographical location. If there is any such “borderline exception”, I do not consider it arises in this case. First, it will be noted that the Federal Court was highly equivocal as to whether there was such an exception – it used the words “perhaps might”. Secondly, as in MID Sydney, in this case the word mark Mantra IP has applied to register does not incorporate the expression “Q1 Piazza”. Thirdly, I do not consider the existence of an area of a private building that is open for public use alters the conclusion that, insofar as the sign “Q1” is used as the name of the Q1 building, it can be considered to incorporate the name of a geographical place such that it forms part of the “common heritage”.
67. As I have noted above (at [52]), the assessment of inherent adaptability to distinguish under s 41(3) of the Act proceeds on the basis of a practical real world assessment and with a presumption in favour of registration. Taking into account these considerations and the various matters set out above, I do not consider that Mr Spagnuolo has established, on the balance of probabilities, that ordinary members of the public seeing the sign “Q1” for the first time would consider that it has any common meaning, or that it signifies a geographical place name, such that it is not inherently adapted to distinguish Mantra IP’s Designated Services. In other words, I consider the question posed by issue 1(a) (see at [30] above) must be answered in the affirmative. This conclusion obviates the necessity to consider the questions posed in paras 1(c)–(g) (see also at [30] above). However, it is still necessary to consider the questions posed in paras 1(b) and 2–4, viz whether there are any other grounds for rejecting Mantra IP’s applications. I will now turn to do so.

NO CONNOTATION OR SECONDARY MEANING CONTAINED IN THE Q1 MARK ITSELF

68. At the outset, it is pertinent to reiterate a point that was made earlier in these reasons. That is, that both counsel agreed that the issues raised by ss 41, 43 and 42(b) of the Act are interrelated or overlap: see at [29] above. For that reason, the conclusion I have already reached in relation to s 41(3) of the Act that the sign “Q1” is alone inherently adapted to distinguish Mantra IP’s Designated Services, also serves to dispose of these other grounds for rejecting Mantra IP’s applications, at least so far as they are based on ss 43 and 42(b). Nonetheless, it is necessary to go to the particular grounds that have been raised and explain why that is so in relation to each of them.
69. The first possible ground for such rejection is set out at [30]2 above as follows:

Does the word mark “Q1” connote: an iconic building on the Gold Coast and a geographic location such that its use in respect of the Designated Services would be likely to deceive or cause confusion?

70. This issue relies on the ground of opposition set out in s 43 of the Act: see at [25] above. It focuses on whether there is any “connotation” contained in the trade mark “Q1” and, if so, whether the use of it “would be likely to deceive or cause confusion”. It will be recalled that this was the ground of opposition upon which Mr Spagnuolo succeeded before the delegate.
71. In her Reasons, the delegate found that the sign “Q1” had a geographical connotation. The delegate said (Reasons at [32]) that:

... the sign “Q1” has a geographical connotation which it has borne, arguably from its inception as the chosen name for what was always intended to be a prime tourist attraction, and at the least from the date the building opened to residents and the public.

72. The evidence and circumstances the delegate relied upon to reach this conclusion were set out immediately before the conclusion (above), as follows (Reasons at [32]):

... The name of the property at 9 Hamilton Avenue Surfers Paradise was registered at the Queensland Department of Natural Resources in 2005 as “Q1”. The tallest building in Australia and popular Surfers Paradise tourist icon, a building which, in addition to providing residential accommodation, also caters for the public in a myriad of ways, has just one name by which it is identified, and that is “Q1”. I believe that these circumstances satisfy the criteria which the Federal Court had in mind when considering the type of building which might validly be described as having earned the status of being a “geographical location”.

73. Having found that connotation in the sign “Q1”, the delegate then proceeded to identify the deception, or confusion, that she considered was likely to arise, if the sign were to be registered as a trade mark. The delegate did so on the basis of “what the applicant can do if registration is obtained” (see Reasons at [34]). The process of reasoning the delegate followed in that assessment is already set out at [15]–[18] above and does not require repeating here. In essence, the delegate decided that the geographical connotation contained in the sign “Q1” meant that if Mantra IP, as a single trader in the Q1 building, were successful in obtaining registration of the word mark “Q1”, because there were many traders having a connection with the Q1 building who would want to promote similar services, that was likely to create deception and confusion among the holidaymaking public.
74. Mr Spagnuolo’s submissions on this aspect are set out at [27] above. They are to similar effect, viz that the sign “Q1” has become so well-known as the name of the Q1 building that its registration as a trade mark in favour of Mantra IP would be likely to mislead or deceive members of the public into believing that Sunleisure was the sole provider of accommodation services in relation to the apartments in the Q1 building.
75. In my view, the delegate’s reasons for upholding this ground of opposition and Mr Spagnuolo’s submissions suffer from the same error as I have identified when considering the operation of s 41(3) of the Act in this case. That is, they incorrectly focused on the use that has been made of the sign “Q1” as the name of the Q1 building, rather than focusing on the mark “Q1” itself. My reasons for saying this are set out hereunder.
76. The explanatory memorandum to the Trade Marks Bill 1995 (Cth) (the Bill) which was the precursor to the Act described cl 43 of the Bill (now s 43 of the Act) as providing: “that an application for registration must be rejected if the trade mark ... because of some signification inherent to it, would be likely to deceive or cause confusion regarding a characteristic of the goods or services” (at [45]) (emphasis added). Prior to the Bill being presented to the Australian Parliament, the report of the Working Party to Review the Trade Marks Legislation entitled Recommended Changes to the Australian Trade Marks Legislation (1992) recommended (at 44–5) that a mark should not be capable of registration if it is “inherently ... likely in use to be deceptive or confusing”.
77. Consistent with these extrinsic materials, the word “connotation” in s 43 has been interpreted to mean: “... connotation or a secondary meaning of the mark ...”: see Pfizer Products Inc v Karam (2006) 237 ALR 787; [2006] FCA 1663 (“Pfizer”) at [27] per Gyles J; “... the inherent qualities of the trade mark of which registration is sought ...”: see Registrar of Trade Marks v Woolworths Ltd [1999] FCAFC 1020; (1999) 93 FCR 365; [1999] FCA 1020 at [79] per Branson J; and that: “The connotation must be contained within the mark itself”: see McCorquodale v Masterton (2004) 63 IPR 582; [2004] FCA 1247 (McCorquodale) at [26] per Kenny J, citing T.G.I. Friday’s Australia Pty Ltd v TGI Friday’s Inc (2000) 100 FCR 358; [2000] FCA 720 at [41]–[43]. Kenny J also pointed to the Oxford English Dictionary definition of the word “connotation”, in support of her interpretation (above) as follows (at [26]):
    1. The signifying in addition; inclusion of something in the meaning of the word besides what it primary denotes; implication.

...

2. That which is implied in a word in addition to its essential or primary meaning.

78. In Pfizer, Gyles J also went on to observe that: “The likelihood of deception or confusion must flow from the secondary meaning inherent in the mark itself”: see Pfizer at [53] and, to similar effect, McCorquodale at [26].
79. As I have already observed above, the sign “Q1” is a coined or made up word. It is agreed that in 2001, when it was first devised, it had no common meaning. It must follow, in my view, that at all times since 2001, “within the mark itself” the sign Q1 had neither any inherent essential or primary meaning, nor any implied or secondary meaning. The facts that the sign “Q1” has been applied as the name of the Q1 building since 2001 and is now well-known as the name of that building are, in my view, circumstances that are extrinsic to the “Q1” sign itself. Those extrinsic circumstances do not, in my view, alter the inherent or intrinsic meaning (or lack of meaning) of that sign.
80. For these reasons, I do not consider the delegate was correct in her conclusion that the sign “Q1” had a geographical connotation. To the contrary, I do not consider there is any implied or secondary meaning contained within, or inherent to, the sign “Q1”. It follows that, for the purposes of s 43 of the Act, the word mark “Q1” does not have any relevant connotation. If it has no such connotation, no opportunity for any consequential deception or confusion could arise. Accordingly, this possible ground for rejecting Mantra IP’s applications for its registration as a trade mark (set out in [30]2 above) has not been made out.

THE USE OF THE MARK “Q1” WOULD NOT BE CONTRARY TO LAW

81. The second possible ground upon which Mantra IP’s applications could be rejected is set out at [30]3 above, as follows:

Would the use of the word mark “Q1” in respect of the Designated Services be likely to mislead or deceive, or would mislead or deceive, contrary to s 18(1) of the Australian Consumer Law, in that its use would cause persons to believe, contrary to the fact, that Mantra IP and its licensees had the exclusive right to provide the Designated Services in respect of the Q1 building?

82. This ground of opposition relies on s 42(b) of the Act and s 18 of the ACL which are set out at [25]–[26] above. On this ground Mr Webb submitted that the use of the word mark “Q1” would be contrary to law in that such use would cause persons to believe, contrary to the fact, that Mantra IP and its licensees had the exclusive right to provide the Designated Services in respect of the Q1 building. It follows, so Mr Webb submitted, that the use of the word mark “Q1” would, or would be likely to, mislead or deceive contrary to s 18 of the ACL. Mr Webb identified the relevant class comprising the members of the public concerned as those:
    1. who are likely to view [Mantra IP’s] website at ‘Q1.com.au’ ... or other of the websites through which the combination wholesalers promote the business of Sunleisure ... in terms approved by it;
       
       
    2. who might be furnished with promotional material of [Mr Spagnuolo] all of which include content of the same sort as is in [Mantra IP’s] website; and
       
       
    100. who enter the public space in the lobby of the Q1 [building] and see the manner in which [Sunleisure] presents its business there. ...
         
         
83. This class of persons would appear to be similar to, if not the same as, the “holidaymaking public” identified by the delegate in her Reasons: see at [17] above. Mr Webb submitted that the hypothetical members of this class would be misled into believing that Sunleisure was the operator of the entire Q1 building, as a hotel or resort, and that the resort facilities available at the Q1 were only available to those who used Sunleisure’s services. He submitted that the same belief would be engendered by the manner in which the Q1 logo mark was deployed in Sunleisure’s lobby, eg behind the reception desk. He pointed to the fact that Sunleisure provided letting services in relation to less than 40% of the residential apartments in the Q1 building and the facilities in that building were available to all the occupiers and owners of the residential apartments.
84. Justice Cooper set out the principles relevant to this ground of opposition in Health World Ltd v Shin-Sun Australia Pty Ltd (2005) 64 IPR 495; [2005] FCA 5 at [44] as follows:

A contravention of the [Trade Practices Act 1974 (Cth)] would be sufficient to satisfy the contravention of law requirement of s 42(b) of the [Trade Marks] Act [1995]: CI Kasei v PGM Group Pty Ltd (2002) 57 IPR 267 at 269. The decision whether or not the use of the mark would be a contravention is a hypothetical question because it relates to future use: Kasei at 270. However, the test requires that use “would”, not merely “could”, be contrary to law: Advantage Rent-A-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683; (2001) 52 IPR 24 ; [2001] FCA 683 at [28].

85. Mr Webb’s submissions on this ground of opposition overlap with Mr Spagnuolo’s ground of opposition under s 43 (see at [27] and [74] above). However, in my view, this ground of objection raises a broader question than that raised by s 43. That is so because s 43 is confined to a connotation, or secondary meaning, inherent to the “Q1” word mark itself, whereas s 42(b), in conjunction with s 18 of the ACL, looks to the future use of “Q1” as a registered trade mark to determine whether that use would, or would be likely to, mislead or deceive. It follows that the assessment under this ground of objection may include extrinsic factors, such as the accepted fact that Q1 has, since 2001, become well-known as the name of the Q1 building. However, it is important to bear in mind that it is the effect of the future use of the word mark for which registration is sought that has to be considered, viz “Q1”, not the effect of some other word mark such as “the Q1 Building”. Taking into account these observations, I do not consider Mr Spagnuolo has established, on the balance of probabilities, that the future use of the “Q1” word mark would, or would be likely to, lead a hypothetical member of the class of persons identified by Mr Webb to believe that Sunleisure had the exclusive rights to provide the Designated Services in respect of the whole Q1 building as claimed. In my view, there is nothing about the “Q1” word mark, even adding that it is the well-known name of the Q1 building, that its future use would lead to such a person reasonably believing that Sunleisure is the operator of the entire Q1 building, whether as a hotel, or resort, or otherwise. Nor is there anything about it to suggest that Sunleisure is the only person who is able to provide the Designated Services in relation to the Q1 building.
86. It is worth adding that Mr Spagnuolo did not call any evidence from any members of the “holidaymaking public” to support his claims about the confusion or deception that would be likely to occur if Sunleisure (as Mantra IP’s licensee) were able to use the “Q1” word mark as a registered trade mark. Thus, on this ground of opposition, he was content to confine his case to the submissions set out above. However, on this aspect it is appropriate to mention the proviso identified by Wilcox J in Time Warner Entertainment Company LP v Stepsam Investments Pty Ltd (2003) 134 FCR 51; [2003] FCA 1502 at [50]. Applied to this case that proviso means that if Mr Spagnuolo can, at some point in the future, produce evidence to show that Sunleisure’s use of the “Q1” word mark is misleading or deceptive in contravention of s 18 of the ACL, he could bring proceedings at that time and those proceedings would fall to be determined on their merits. Nonetheless I do not consider that Mr Spagnuolo has established in these proceedings that this confusion or deception would be likely to occur if Mantra IP is successful in its applications.
87. It follows that I do not consider this ground of opposition provides a valid basis for rejecting Mantra IP’s applications.

MANTRA IP IS THE OWNER OF THE MARK “Q1” UNDER SECTION 58

88. Finally, the third possible ground upon which Mantra IP’s applications may be rejected is set out at [30]4 above, as follows:

Was Mantra IP the owner of the word mark “Q1”?

89. This ground of opposition relies upon s 58 of the Act, which is set out at [25] above. In Winton Shire Council v Lomas (2002) 119 FCR 416; [2002] FCA 288 (“Lomas”) Spender J identified what was meant by “ownership” in s 58 as follows (at [29]):

“Ownership” in s 58 of the 1995 Act in my view has the same meaning as proprietorship under s 40 of the 1955 Act. In The Shell Co of Australia Ltd v Rohm & Haas Co [1948] HCA 27; (1949) 78 CLR 601, Dixon J (as he then was) said at 627:

“The basis of a claim to proprietorship in a trade mark so far unused has been found in the combined effect of authorship of the mark, the intention to use it upon or in connection with the goods and the applying for registration...”

As I have already noted above, because Mantra IP was first incorporated about a week before it made its applications for registration it has relied upon the use of the Q1 word mark by Sunleisure as a predecessor in title under ss 41(1) and 6 of the Act: see at [24] above.

90. On this ground of opposition Mr Spagnuolo submitted that Mantra IP could not rely upon any prior use of the “Q1” word mark by Sunland or Sunleisure as predecessor in title essentially because there was a critical break in the chain of title said to show Sunleisure or Sunland were predecessors of Mantra IP. That break in the chain of title was said to have occurred in the deed of assignment from Sunleisure to Mantra IP dated 5 June 2008. Mr Spagnuolo submitted that that deed of assignment was confined to the registered “Q1” logo marks and some other rights not presently relevant. As a consequence, Mr Spagnuolo submitted that assignment did not include any unregistered trade marks, or common law rights, that by use, Sunleisure had established in the “Q1” word mark.
91. Mantra IP countered these submissions by going to a separate deed of assignment of the same date, viz 5 June 2008. That deed of assignment was entered into between Mantra IP (then Stellar IP) as assignee and a number of entities, including Sunleisure. As Mr Crowe, for Mantra IP, pointed out, by its terms that deed of assignment included unregistered trade marks, that is marks in relation to which Sunleisure had, by use, established common law rights. Based upon this separate deed of assignment, I find that Sunleisure did make a valid and effective assignment to Mantra IP of any common law rights it held in the unregistered “Q1” word mark. It follows that I reject Mr Spagnuolo’s submissions that there has been a break in the chain of title linking Sunleisure with Mantra IP. It remains to consider whether there is sufficient evidence of use of the “Q1” word mark by Sunleisure to bring Mantra IP within the terms of s 58 of the Act. As Spender J pointed out in Lomas (at [37]), by reference to High Court decisions, “a very small amount of use will suffice”.
92. To demonstrate such use, Mantra IP produced a schedule setting out details of Sunleisure’s use of the “Q1” mark as a trade mark taken from the affidavit and documentary evidence that was tendered at the trial. Included in that schedule of evidence was the following:
93. In his affidavit filed 16 May 2011, Mr Jamieson, General Manager – Distribution for the Mantra Group, stated (at [32]):

Since 2005, Sunleisure has run and currently runs, a letting business known as ‘Q1’ and ‘Q1 Resort & Spa’. This business is similar to a hotel business, but is conducted under a real estate agent’s licence because Sunleisure acts as property agent for each owner in the building that appoints Sunleisure to rent that owner’s apartment on behalf of the owner.

Exhibits to Mr Jamieson’s affidavit also demonstrated the use of “Q1 Special Packages” and “Q1 Functions” on its website.

94. Mr Munro held the role of Area Manager – Surfers Paradise Central for the Mantra Group. In his affidavit filed 16 May 2011, he stated:
    20. ... Prior to 2006, I was aware that Sunland heavily promoted the development using “Q1” as the branding for the development. I was also aware at that time that the Q1 resort was intended to be a property that was primarily marketed as a luxury resort for vacation and leisure travellers ...
    21. ... In 2006, I travelled to trade shows and industry events both in Australia and internationally to market the Q1 resort as a new resort on the Gold Coast
    22. ... In both written and oral marketing in 2006 and 2007, I used ‘Q1’ as the branding to promote the booking of accommodation at the Q1 resort ...
95. Ms Lalli, the Group Asset Manager for Mantra Group deposed (at [82] of her affidavit filed 13 May 2011):

Sunleisure operates its onsite letting business as ‘Q1’ and ‘Q1 Resort & Spa’.

96. Finally, it was an agreed fact that Sunleisure has used a website located at www.Q1.com.au to promote its businesses since 2005.
97. Based on this evidence, I find that Sunleisure made sufficient use of the “Q1” word mark, as a trade mark, prior to the priority date of 10 March 2008, to establish a claim to prior use as an owner for the purposes of s 58 of the Act. It follows that I do not consider that this ground of opposition provides any basis for rejecting Mantra IP’s applications.

CONCLUSION

98. In summary, I have concluded that the word mark “Q1” is alone inherently adapted to distinguish Mantra IP’s Designated Services and there is no other ground for the rejection of Mantra IP’s applications to register the “Q1” word mark in relation to its Designated Services. I therefore propose to make appropriate orders to reverse the delegate’s decision and dismiss Mr Spagnuolo’s notices of opposition to Mantra IP’s application.

THE APPROPRIATE FORM OF THE ORDERS

99. During the course of these proceedings, it emerged that there were a number of other unresolved notices of opposition to Mantra IP’s applications, apart from Mr Spagnuolo’s notices. This gave rise to a question about the form of the orders I should make, should Mr Spagnuolo be unsuccessful in these proceedings. This issue arose because of a perceived tension between the provisions of ss 55(1) and 197 of the Act. Section 55(1) provides as follows:

(1) Unless the proceedings are discontinued or dismissed, the Registrar must, at the end, decide:

(a) to refuse to register the trade mark; or

(b) to register the trade mark (with or without conditions or limitations) in respect of the goods and/or services then specified in the application;

having regard to the extent (if any) to which any ground on which the application was opposed has been established.

...

100. Section 197 provides as follows:

On hearing an appeal against a decision or direction of the Registrar, the Federal Court may do any one or more of the following:

(a) admit evidence orally, or on affidavit or otherwise;

(b) permit the examination and cross-examination of witnesses, including witnesses who gave evidence before the Registrar;

(c) order an issue of fact to be tried as it directs;

(d) affirm, reverse or vary the Registrar’s decision or direction;

(e) give any judgment, or make any order, that, in all the circumstances, it thinks fit;

(f) order a party to pay costs to another party.

101. The concern was that this appeal should be disposed of in a way that would not foreclose on the unresolved notices of opposition currently before the Registrar. Because this concern may have been affected by the practice adopted within the Trade Marks Office, I requested the Registrar to make submissions on the issue. Among other things, those submissions set out the approach the Registrar had adopted in the past when there were such multiple notices of opposition to an application. The Registrar’s submissions rightly pointed out that:

... Where there [are] multiple oppositions still to be decided and the Court decides to reverse the reviewable decision, the terms of that decision should be sensitive to the context. Where the Registrar’s decision refusing to register (i.e. upholding an opposition) is reversed, the only alternative decision available under s 55(1) is to decide to register the trade mark. In light of the outstanding oppositions, that decision to register needs to be conditional upon the resolution of those other opposition proceedings.

102. Ultimately, the parties agreed upon a form of orders which, they submitted, would accommodate these concerns. Having considered those orders, I agree that they do achieve that purpose and I propose to follow them in the orders I will make.
     
     

Associate:

Dated: 19 July 2012