Energy Beverages LLC v Kangaroo Mother Australia Pty Ltd [2023] FCA 999

Intellectual Property
M Marcus
C Cunliffe 2
Marcus Fleming Headshot 1
Surkis Amy Headshot

Appeal of opposition decision – s 59 (whether applicant intended to use mark) – application to amend trade mark specification – s 44 (deceptive similarity) – s 60 (use likely to deceive or cause confusion)

The group behind the “MOTHER” energy drink has successfully opposed an application for “KANGAROO MOTHER”. Justice O’Callaghan found that the trade mark application failed for lack of intention to use under s 59 of the Trade Marks Act 1995 (Cth) (TMA). Although not necessary given his finding under s 59, his Honour also found the opposition would have been successful under ss 44 and 60 on the grounds that “KANGAROO MOTHER” was deceptively similar to the “MOTHER” marks and, in view of “MOTHER’s” reputation, “KANGAROO MOTHER” would be likely to deceive or cause confusion.

On the penultimate day of trial, the trade mark applicant made an attempt to improve its position by seeking to amend its trade mark application to remove problematic specified goods. Justice O’Callaghan refused that application by reference to the rigorous standards and procedures applicable in equivalent circumstances under Australian patent law, including the requirement for full and frank disclosure.


Energy Beverages LLC (EB) is a subsidiary of Monster Beverage Corporation, the group behind the “MOTHER” energy drink. EB owns the trade marks used on its products, including the word mark “MOTHER”.

Erbaviva Natural Care (New Zealand) Limited filed a trade mark application for “KANGAROO MOTHER” for a broad range of goods (Application), and then assigned the Application to Kangaroo Mother Australia (KMA). Mr Zheng was a common director of KMA and Erbaviva.

EB had unsuccessfully opposed the Application before the Delegate under ss 42(b), 44 and 60 of the TMA. This note concerns EB’s appeal of that decision. In its appeal, EB maintained the ss 44 and 60 grounds, jettisoned s 42(b) and asserted s 59.

Section 59 (Applicant not intending to use trade mark)

Section 59 is rarely a successful ground of opposition. The section applies if the trade mark applicant had no intention to use (or authorise the use of) the trade mark, or to assign the trade mark to a body corporate for its use in relation to the applied for goods and/or services. Once the opponent establishes a prima facie case of lack of intention, the onus shifts to the applicant to establish intention. The relevant test is whether the applicant had a “a real intention to use, not a mere problematical intention, not an uncertain or indeterminate possibility, but a resolve or settled purpose which has been reached at the time when the mark is to be registered.”

Before dealing with the substance of his Honour’s consideration of the s 59 case, one procedural matter is worth mentioning. During the course of the trial, before his cross examination, Mr Zheng produced a further extensive tranche of documents which his Honour said ought to have been produced in answer to an earlier order for discovery or subpoena. KMA sought leave to rely on certain of those documents. Justice O’Callaghan refused that application in an ex tempore ruling which appears in his judgment. His Honour found that there was no satisfactory explanation provided by the respondent for the delay in producing the documents, and that the respondent should not be permitted to depart from the deliberate forensic choice it made earlier in the matter not to adduce evidence on the question of intention to use.

As to the substantive issues, KMA’s case was that his Honour should accept, on its face, the bare assertion from Mr Zheng in his evidence that [a]t the time of filing the Application an [sic] 15 February 2019, I confirm that it was the intention of Erbaviva to use, or authorise the use, in Australia of the trade mark KANGAROO MOTHER…”. Justice O’Callaghan rejected that submission, found that Erbaviva did not possess the requisite intention and that the s 59 ground was made out. The following findings by his Honour in arriving at this conclusion are particularly noteworthy:

  • Mr Zheng’s proposal for the Application was “conjured in a matter of minutes” by Mr Zheng cutting and pasting class descriptions from an unrelated registration on IPONZ, indicating that the application was “obviously speculative and went beyond anything that could even remotely be said to have been the subject of an intention to use of any kind, let alone a ‘real and definite intention’ of the type necessary”.
  • The bare assertion by Mr Zheng regarding Erbaviva’s intention was “nonsensical” because the evidence showed that his trade mark attorney filed the specification with a significantly broader range of goods than the list Mr Zheng instructed be filed, and that Mr Zheng was not provided with an opportunity to review that broader list prior to filing.
  • There was no evidence of any documentation, plan or proposal for any intended use that went beyond a very limited range of products.
  • Since filing the Application over four years ago, neither Erbaviva or KMA has manufactured or attempted to manufacture the goods applied for.
  • There was “not a skerrick of evidence” that would support the conclusion that the state of mind of other companies suggested to be part of the same conglomerate as Erbaviva could be treated as the state of mind of Erbaviva (a single director company with no employees).

Amendment Application

Many IP practitioners will be aware that, as a general rule, it is far better for a patentee or patent applicant to seek to amend its patent wholly before the patent office (under s 104 of the Patents Act 1990 (Cth)) rather than before the Court (under s 105 of the Patents Act). This is because, unlike s 104, s 105 is discretionary and therefore rigorous standards and procedures apply, including the requirement for the patentee to make full and frank disclosure.

This decision suggests a similarly rigorous standard ought to apply to a trade mark applicant who seeks to amend the specification of goods or services during an appeal from the Trade Marks Office in opposition proceedings.

On the penultimate day of trial, KMA made an oral request (not supported by evidence) to amend the Application by deleting specified goods pursuant to the discretionary power provided by s 197 of the TMA. In considering the request, Justice O’Callaghan applied the discretionary principles applicable under s 105 of the Patents Act. His Honour considered that the “approach to the exercise of the discretion provided for in s 105 of the Patents Act is applicable to the exercise of the discretion provided for in s 197 of the Trade Marks Act, and each of the [s 105 discretionary] matters they mentioned above, when and if they arise, may be taken into account when exercising the discretion whether to permit an amendment pursuant to s 197.”

The only explanation proffered by KMA for the amendment was that it was “to narrow the issues in dispute” and was being sought “as a matter of efficiency”. In opposing the amendment, EB said that it had to be inferred that the real reason for the amendment was to avoid a finding (relying on Apple Inc v Registrar of Trade Marks [2014] FCA 1304) that, if part of the Application failed (i.e., in relation to some goods), then the whole mark would fail. EB said, and his Honour agreed, that the amendment should not be allowed because KMA had not provided full and frank disclosure of the reason for the amendment, or for the delay in making it.

Although not stated, these authors assume that his Honour’s reference to the principles applicable under s 105 of the Patents Act was intended as a reference to those principles as assessed in the context of s 105(1A) (being the applicable provision in the context of a patent application, cf s 105(1) which applies to granted patents). This distinction is important because in Meat and Livestock Australia Ltd v Cargill, Inc (No 2) [2019] FCA 33 Justice Beach said (at [365]-[366]) that: (i) knowledge of risk of potential difficulties with the application; (ii) whether the applicant has made full and frank disclosure; and (iii) unfair advantage and delay, being discretionary factors considered under s 105(1), were matters relevant to the exercise of discretion under s 105(1A) but, “in the context of an application to amend a patent application as distinct from a granted patent, the context of my consideration of these matters, their weighting and the balancing exercise may have a different dimension as compared with considering such factors in exercising a discretion under section 105(1). (emphasis added)

It is well established that the above discretionary considerations are not applicable before the Patent Office because s 104 of the Patents Act is not discretionary (New England Biolabs Inc v F Hoffman-La Roche AG [2004] FCAFC 213).

An interesting feature of O’Callaghan J’s decision is that, while his Honour referred to the exercise of discretion pursuant to s 197 of the Trade Marks Act, there is no discussion of s 63(1) or s 65(7) of the TMA, which is the source of the power exercised by the Registrar to make narrowing amendments to specifications of goods or services at the request of a trade mark applicant (often to overcome grounds of opposition or rejection). In the decision, O’Callaghan J referred with approval to the observations of Yates J in Frucor Beverages Ltd v Coca-Cola Company [2018] FCA 993 at [195], that the Court has power to quell the controversy as to the registrability of the mark the subject of the appeal, including in relation to matters not specifically raised before the Registrar. In Frucor, Yates J also observed that, while the source of the Court’s powers on appeal is s 197, the deployment of those powers must be exercised conformably with the boundaries and limitations imposed on the Registrar’s powers of amendment.

However, there does not appear to be any discussion in O’Callaghan J’s decision of the boundaries and limitations that are imposed on the Registrar’s powers of amendment under s 63(1) or s 65(7) of the TMA, or the nature or extent of discretion available to the Registrar in the exercise of that power. Like s 197, s 63(1) and s 65(7), both use the word “may”, but whether (at least in the latter context) “may” operates to confer a discretion or merely a permission is open to question. The latter construction is, perhaps, more consistent with the fact that the Registrar’s power to amend is exercisable not only in the context of opposition proceedings but also at earlier stages of prosecution (for example, where an adverse report is issued), as reflected in existing practice at the Trade Marks Office which, in certain circumstances, permits examiners to process amendment requests over the telephone (Trade Marks Manual of Practice and Procedure at 9.4). See also the not uncommon practice of Delegates permitting a trade mark applicant to accept amendments to the specification of goods or services following an opposition hearing to avoid refusal of acceptance in opposition proceedings.

Given the potential collision between existing practices at the Trade Marks Office, it will be interesting to see to what extent (if any) Justice O’Callaghan’s findings in this decision impact the Trade Mark Office’s approach to amendments.

Section 44 (deceptive similarity)

Surprisingly to some, Justice O’Callaghan considered “KANGAROO MOTHER” to be deceptively similar to “MOTHER”. His Honour’s view was that:

consistent with the finding in Energy Beverages LLC v Cantarella Bros Pty Ltd [2023] FCAFC 44, the use of “MOTHER” in the context of the applied for goods is inherently distinctive; and

  • Adding the word “KANGAROO” does not give the “KANGAROO MOTHER” mark an immediate and obvious meaning that avoids any prospect of confusion.

Further, his Honour found that the vast majority of the goods the subject of the Application were “similar goods” to the goods covered by EB’s “MOTHER” trade marks. While there was a dispute in relation to certain goods, this was irrelevant because, relying on Apple Inc, his Honour considered that his finding of deceptively similarity in relation to some goods was fatal to the Application as a whole.

Section 60 (use likely to deceive or cause confusion)

Finally, his Honour found that the trade mark “MOTHER” had acquired a significant reputation in Australia in connection with energy drinks and related products. His Honour also accepted that there was a reason for consumers to associate the “MOTHER” brand with foodstuffs, supplements and other forms of meal replacement products given that “a lot of people interchange breakfast with an energy drink” and that the trade channels through which energy drinks are distributed overlap with those through which snack products and other forms of supplements and meal replacement products are distributed.

Accordingly, his Honour was persuaded that there was a real risk that consumers familiar with “MOTHER” and the variety of ways that the trade mark had been used in Australia (including in products incorporating some variation of the “MOTHER” trade mark) will have cause to wonder whether products bearing the “KANGAROO MOTHER” mark might come from the same source.

Concluding remarks

These authors consider that Justice O’Callaghan’s s 59 findings, coupled with his application of patent law principles in denying KMA’s application to amend, raise important issues for trade mark owners and practitioners. If the approach is generally adopted, whether in the context of proceedings before the Court or before the Trade Marks Office or both, it would have the following consequences:

  1. Having regard to s 59 of the Trade Marks Act, trade mark applicants would need to very carefully consider the scope of the goods and services claimed to ensure that they do not extend beyond any possible genuine intention to use.
  2. Trade mark applicants would need to consider seeking an amendment as soon as possible after being possessed of knowledge of the risk of potential difficulties with the application (and one has to query when that might be).
  3. Before making an application to amend in Court (and potentially before the Trade Marks Office), trade mark applicants would need to be cognisant of the requirement for full and frank disclosure.
  • M Marcus

    Melissa Marcus practises in defamation law and all aspects of intellectual property

  • C Cunliffe 2

    Clare Cunliffe practises in intellectual property and general commercial litigation

  • Marcus Fleming Headshot 1

    Marcus Fleming has a significant practice in commercial litigation with a particular focus on intellectual property law.

  • Surkis Amy Headshot

    Amy Surkis is a general commercial litigator with a scientific background and over 10 years' experience.

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