CATCHWORDS TRADE MARK - claim to be a proprietor of trade mark - prior use by opponent - connection in the course of trade between opponent and mark. Trade Marks Act 1955, s. 40. Moorgate Tobacco Co. Limited v Philip Morris Limited [No 2] (1984) 156 CLR 414 Carnival Cruise Lines Inc. v Sitmar Cruises Ltd (1994) 120 ALR 495 BUYING SYSTEMS (AUSTRALIA) PTY LIMITED v STUDIO Srl No. NG813 of 1992 BEFORE: GUMMOW J. PLACE: SYDNEY. DATE: 14 FEBRUARY 1995. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. NG813 of 1992 GENERAL DIVISION BETWEEN: BUYING SYSTEMS (AUSTRALIA) PTY LIMITED Applicant AND: STUDIO Srl Respondent BEFORE: GUMMOW J. PLACE: SYDNEY. DATE: 14 FEBRUARY 1995. MINUTE OF ORDERS THE COURT ORDERS THAT: (1) The decision of the delegate of the Registrar of Trade Marks dated 13 October 1992 be reversed. (2) Registration of trade mark application No. B400951 be refused. (3) The respondent pay the costs of the applicant in this Court. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. NG813 of 1992 GENERAL DIVISION BETWEEN: BUYING SYSTEMS (AUSTRALIA) PTY LIMITED Applicant AND: STUDIO Srl Respondent BEFORE: GUMMOW J. PLACE: SYDNEY. DATE: 14 FEBRUARY 1995. REASONS FOR JUDGMENT (EX TEMPORE) HIS HONOUR: This is an appeal pursuant to s. 51 of the Trade Marks Act 1955 ("the Act") from a decision dated 13 October 1992 of a delegate of the Registrar of Trade Marks. The effect of the decision was to dismiss an opposition by the present appellant to a trade mark application No. B400951. The application had been made on 8 December 1983 for goods specified as "fashion and hairdressing magazines". The trade mark comprised the word "STUDIO". The applicant was an Italian corporation, Studio Srl and the opponent, an Australian corporation, Buying Systems (Australia) Pty Limited. The Registrar has indicated by communication to the New South Wales District Registry that there is no intention to exercise the right to appear given the Registrar under the Rules of Court. The managing director of the opponent company, now named Studio Magazines Pty Limited, is Mr Marcello Grand. He has sworn a lengthy affidavit in this Court on 30 June 1993. There were several grounds unsuccessfully urged in support of the opposition. One was based on s. 28 of the Act, and another on s. 40. The allegation under s. 40 was that the applicant was not one who properly could claim to be proprietor of the trade mark. As will become apparent, before this Court it will be necessary only to deal with the ground of opposition based upon s. 40. In the reasons for decision dated 13 October 1992, the ground of opposition based upon s. 40 was disposed of in the following passages: "In my view the opponent cannot succeed here: it had apparently assessed the market for a specialised hairdressing magazine, but there is no evidence that it had necessarily offered its goods in trade, either by magazine subscriptions or advance orders, or otherwise in trade in the sense left open by the hearing officer in the case of Application by Estate Agents Co-operative Ltd 20 IPR 547. The opponent may well have been carrying out necessary steps prior to the use of the mark, but that is not use. The opponent's brochure (circulated to an unspecified number of hairdressers in October or November 1983) was no more than a fishing expedition: there is no evidence that subscribers were sought for the sale of any pending publication, there is no indication of how many of the letters, sample directories and brochures were sent out and by Mr Grand's own admission the process constituted no more than a test which was sufficient to convince him to alter his planned product and pursue a broader market. I do not accept that the booking of advertising space in POL and Vogue was in itself use, and the opponent's advertisements did not appear until after the application had been lodged." I should say straight away that the evidence before the Court is quite different and is much more extensive than that which was before the delegate of the Registrar. The applicable principles are discussed in Moorgate Tobacco Co. Limited v Philip Morris Limited [No 2] (1984) 156 CLR 414, particularly at 433-4. Mr Ellicott, who appears for the appellant, refers also to Carnival Cruise Lines Inc. v Sitmar Cruises Ltd (1994) 120 ALR 495 at 507-12, with particular reference to 511-12. In Moorgate, the proprietorship issue is posed and dealt with in the following passages in the judgment of Deane J at pages 433-4. The first passage is as follows: "To establish prior use of the mark in Australia, Moorgate relies upon evidence that, during or in connexion with discussions between Loew's and Philip Morris about the introduction of the low tar and nicotine cigarette in Australia, packets of cigarettes and associated advertising material displaying the name 'KENT GOLDEN LIGHTS' were handed personally, or in one instance sent by mail, to representatives of Philip Morris in Australia. That evidence indicates that there were at least three occasions on which such cigarette packets and advertising material were so delivered. At the times when those items were so delivered, there was no intention on the part of Loew's that it would itself trade in the goods in Australia. Nor, for that matter, had it been decided what name would be used if Philip Morris were, under licence from Loew's, to commence to manufacture and market the goods in Australia at some indefinite future time." The second passage is as follows: "In the present case, there was not, at any relevant time, any actual trade or offer to trade in goods bearing the mark in Australia or any existing intention to offer or supply such goods in trade. There was no local use of the mark as a trademark at all; there were merely preliminary discussions and negotiations about whether the mark would be so used. The cigarette packets and associated advertising material were delivered to Philip Morris to demonstrate what Loew's was marketing in other countries and what Philip Morris might market, under licence from Loew's, if it decided to manufacture and trade in the goods in Australia and to use the mark locally at some future time. There was no relevant trade in the goods in Australia and the delivery of the cigarette packets and associated material to Philip Morris did not, in the circumstances, constitute a relevant user or use in Australia of the mark 'KENT GOLDEN LIGHTS' for the purpose of indicating or so as to indicate a connexion in the course of trade between the new cigarettes and Loew's." His Honour concluded that it followed that Moorgate had failed to establish a proprietorship of that mark. In the present case, the position as it now appears from the evidence in this Court is quite different. In late September or early October 1983, Mr Grand had decided that there was a space in the Australian market for a new fashion magazine and that he should set about publishing it. He then took a number of steps, including the obtaining ofbusiness cards and the printing of letterheads. Potential advertisers were approached and solicited for the placing of advertisements in the new magazine. These steps are illustrated by the material contained in Exhibit A and by what is said, not only in Mr Grand's affidavit, but in the affidavits of several independent parties. These include Mr David Spencer, Managing Director of the Sportfactor Pty Limited, who in 1983 was employed as a retail manager by Mountain Territory Sports at their shop at 195 Elizabeth Street, Sydney. He was approached on behalf of Mr Grand in November 1983 and told that there was to be a new fashion magazine called Studio Collections. He later had a meeting with Mr Grand. This was in late November 1983. He was given further information and his business assistance was solicited. He received a business card bearing the word "Studio". As events came to pass, advertising space was taken up by Mountain Territory Sports in the first issue which appeared on the date June/August 1984. Another affidavit is provided by Mr Brian Lambert, who in 1983 was the Deputy Managing Director of Marigny Australasia Pty Limited. This company sold L'Oreal brand products in Australia. Shortly after 14 November 1983, he received a letter on Studio letterhead, a copy of which is annexed to his affidavit. The letter was signed by two persons, one of whom was Mr Grand and the other Ann Marie Christie. He signed as editor and she as public relations officer. The letter stated that the first edition of Studio would be launched in March 1984 to be preceded by a high quality promotion brochure consisting of eight pages in mid-January. The promotional brochure was to have a print run of 12,000 copies throughout Australia and New Zealand. It was said: "'Studio' is a quarterly magazine and is purchased on a subscription basis only. 'Studio' will not only cover the areas of Hair/Beauty and Fashion, but will be a magazine covering cultural, social and general interests, which makes 'Studio' informative reading not only for the people working within the field but catering more towards the consumer. We consider the possibility of discussing an agreement by which we offer L'Oreal a purchase offer of subscription against advertising space to create 'Studio' as a promotional item for your products in the area of Hair and Beauty. ... We feel that this proposal is to your advantage and hope to meet with you in the near future to discuss this matter." As things turned out, an advertisement was subsequently placed by Mr Lambert's company for L'Oreal brand products in the first issue of the magazine. These steps amount to sufficient activity by the opponent to produce the result that the applicant for registration at the date of its application on 8 December 1983 could not accurately put itself forward as claiming to be proprietor of the relevant mark. The activities of the opponent were sufficient to constitute a relevant use of the mark in Australia for the purpose of indicating or so as to indicate a connection in the course of trade between it and the new magazine. This is not a case where those activities occurred without any existing intention to offer or supply the magazine in trade. The case is quite different from activities of the nature discussed in Moorgate. As I have already indicated, the material before this Court is far more extensive than that which was before the Registrar. Accordingly, in my view, the appellant has made out its ground of opposition under s. 40 of the Act. The respondent in this Court (the applicant who was successful before the Registrar) has not appeared on the hearing of the matter. The evidence indicates that it has been notified of that hearing and has had ample opportunity to appear if it wished to do so. I order that: 1. The decision of the delegate of the Registrar of Trade Marks dated 13 October 1992 be reversed. 2. Registration of trade mark application No. B400951 be refused. 3. The respondent pay the costs of the applicant in this Court. I certify that this and the preceding six (6) pages are a true copy of the reasons for judgment of the Honourable Mr Justice Gummow. Associate: Date: Counsel and solicitors Mr M.R.J. Ellicott for the applicant: instructed by Norton Smith & Co. There was no appearance for the respondent. Date of hearing: 14 February 1995. Date of judgment: 14 February 1995.