Appeal from decision of a delegate of the Registrar of Trade Marks refusing registration application – whether use of mark sought to be registered would be likely to mislead of deceive – whether closely related goods – ACL – owner of the mark - whether application made in bad faith
The appellant (Ragopika) is the corporate vehicle through which Mr Pillai operates an Indian restaurant in Perth known as Aachi Indian Cuisine. The restaurant has been operating under that name since around June 2016. The respondent (Aachi), described as a “proprietary concern”, was founded in 2006 by Mr Isaac, and is part of a group of enterprises under Mr Isaac’s control, based principally in Chennai, India, carrying on a business that Mr Isaac founded in 1995 under the name Aachi. A “proprietary concern” is a creature of Indian rather than Australian law, being the name under which one or more persons conduct a business.
Aachi produces a range of packaged foods such as spices and spice mixes, pickles, jams, wheat products and ghee which are sold in several countries including Australia. Since about 1998, Aachi has also operated “quick serve” restaurants in Chennai. Its packaged food products have been available in shops in Australia since 2008.
While there was some debate between the parties about how common the word “Aachi” was, the Court proceeded on the understanding that “Aachi” is an ordinary word which a person with a knowledge of the Tamil language would understand as referring either to a grandmother or a respected older woman.
Aachi had registered the word “AACHI” in several countries, including Australia, the latter with a priority date of 16 January 2008 (the Aachi mark). The Aachi mark was registered in class 29 (e.g., meat, fish, poultry etc) and class 30 (e.g., masala powder and spices, turmeric powder, flour and preparations made from cereals etc).
On 22 February 2018, Ragopika filed an application to register the words “AACHI INDICAN CUISINE” for “Restaurant services; fast food outlet” (the AIC Mark). Aachi opposed the AIC Mark under sections 42(b), 44, 58, 60, and 62A of the Trade Marks Act 1995 (Cth) (TMA). The delegate found that the AIC mark was likely to deceive and cause confusion and the section 60 ground of opposition was made out. The delegate did not consider the other grounds. Ragopika appealed and, by way of notice of contention, Aachi pressed the other grounds of opposition.
Sections 60 and 42
In relation to the ground of opposition under section 60 of the TMA, the Court concluded that the evidence did not support a finding that, in February 2018, the Aachi mark had a reputation that meant that confusion or deception would be likely to arise from use of the AIC mark.
While it could be accepted that Aachi had a significant presence in India and was a sizeable global business, sales of Aachi products in Australia in the period leading up to the relevant date were, according to the Judge, small. The evidence established that the volume of sales in Australia from 2016 to mid-2019 was approximately USD$297,787.94; or around $AUD447,000 for the whole of Australia over a period of two years or more ($179,000 to $223,500 per annum). It appears (although not clear from the decision) that these figures related to sales of small fast moving consumer goods. A finding of no reputation in those circumstances may seem surprising. However, it was not clear what the overall size of the market was. Moreover, the Court also found that there was no direct evidence of any advertising or promotional activity in relation to Aachi’s products in Australia. While Aachi had a website that was accessible from Australia, the evidence did not show the number of visits to that site by people from Australia.
The Court acknowledged that it is possible for a trade mark to acquire a reputation in Australia as a result of business activity outside Australia (e.g., ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 334 (Lockhart J)). However, there was no evidence which would allow an assessment of the extent to which members of the Indian diaspora in Australia had been exposed to the Aachi mark overseas.
Further, the intersection of the persons likely to encounter the AIC mark (e.g., by going to the restaurant or encountering its online presence when searching for Indian food in Perth) and the persons with an awareness of the Aachi mark was a small subset of the Australian community. The Court concluded that the chance of members of that relatively small subset being deceived or confused was limited. Interestingly, one of the factors that led the Court to form that conclusion was the fact that the word “Aachi” was an ordinary Tamil word with an obvious association with family, and therefore food. The fact that Aachi had commenced a large number of separate proceedings against third parties in India, the USA and Australia suggested that a number of other proprietors considered the word appropriate for naming a restaurant.
Given the above, unsurprisingly, the ground of opposition under section 42(b) of the TMA, based on an ACL claim, failed for similar reasons.
In relation to the ground of opposition under section 44 of the TMA, the Court found that the key issue for the purposes of section 44(2) of the TMA was whether, with the AIC mark sought to be registered in relation to identified services, the Aachi mark was a mark “registered ... in respect of ... closely related goods”. The Court stated the question was whether the various foodstuffs and preparations in relation to which the Aachi mark is registered are, or include, goods that are “closely related” to the services “restaurant; fast food outlet”.
The question turned on the relationship between these categories of goods and services, not on the specific nature of either Aachi’s or Ragopika’s business. Although a restaurant or fast-food outlet is highly likely to use at least some of the products in relation to which the Aachi mark is registered in the preparation of its offerings, the Court found that it did not follow that those goods are closely related to the services of operating a restaurant. Nor were the goods and services closely related because the specific subsets of the goods describe things that may be served in a restaurant.
Even for fast food, the food supplied is either eaten on the premises or taken away to be eaten, rather than taken home to be used as an ingredient or prepared for consumption. In regard to trade channels, the evidence did not allow any informed conclusion about how commonly the relevant goods or services are provided through the same channels or outlets, nor did it support a finding of an expectation or understanding among consumers that restaurant or fast-food services and packaged foodstuffs come from the same source.
As a result, the ground of opposition under section 44 of the TMA was not established.
The section 58 ground of opposition was also not made out. However, the Court did note that there may be a question concerning the application of section 58 in a case where the first user of a trade mark acts as trustee and the same person then seeks registration of the trade mark in their own right (thus seeking the beneficial interest in the rights conferred by registration) or vice versa. However, that scenario was not established in this case.
Finally, Aachi was also unsuccessful in its section 62A attack (bad faith application for the mark). Kennett J made a number of observations about what the section requires. His Honour said that “bad faith” usually connotes, if not outright dishonesty, at least an improper or extraneous purpose. Previous cases have referred to “bad faith” as involving the concept of “falling short of acceptable commercial behaviour”. Justice Kennett expressed the view that the behaviour needs to be more than simply ruthless or morally questionable, and if the behaviour is “not actually fraudulent or dishonest, it needs to have some quality that makes it repugnant to the purposes for which the statutory regime exists.”
Bad faith was not made out on the facts. Ragopika having been found to have done no more than trying to protect its right to use the mark on its existing business, and possibly trying to prevent a potential competitor from offering restaurant services under the same mark.