Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83

Authors: Jasmine Burrows & Zeinab Farhat, Progressive Legal

Facts

Parties both provided radiology services.

The Respondent, Insight Clinical Imaging Pty Ltd (ICI), operated in Western Australia and began trading under the below mark in 2008:

ICI is also the registered owner of the trade mark which had a priority date of 10 October 2012.

The Appellant, Pham Global Pty Ltd (previously known as Insight Radiology (IR), operated in New South Wales and Tasmania, and used the following mark:

The second Appellant, Mr Pham is the sole director of Pham Global Pty Ltd and filed an application for registration of the IR Composite Mark on 7 December 2011 for radiological services.

Mr Pham submitted the trade mark application under his own name. However, the trademark was actually designed for and used by his company, IR. The IR Composite Mark had been used from March 2012 by IR .

Despite claiming that he intended to license the trademark to his company, this was never implemented in reality.

Later on, Mr. Pham transferred the trademark application to Pham Global Pty Ltd.

Note that IR submitted its trade mark application in first, but ICI had been using its trade mark to distinguish its radiology services since 2008.

Both ICI’s registered trade mark, and IR’s application for registration of its mark were identified in the relevant services as within class 44 for radiological services.

The parties’ respective trade marks each used the word ‘insight’ and a circular eye device.

ICI opposed the registration of the IR Composite Mark and commenced proceedings alleging infringement, misleading or deceptive conduct, and passing off.

The Procedural history was somewhat extensive and included multiple claims, cross claims and appeals.

Issues

The Court considered a wide range of issues, including:

1. Whether Mr Pham was the true owner of the trade mark for the purposes of s 27 and 58 of the Trade Marks Act 1995 (Cth) (the Act)?
2. Whether there was a valid assignment of the trade mark by Mr Pham?
3. Whether the marks were substantially identical?
4. Whether the registration of IR’s mark could be opposed because it was likely to cause confusion or deceive due to the reputation of ICI’s trade mark under s 60 of the Act?

Decision

IR was granted leave to appeal. However, all grounds for appeal were dismissed, with costs.

Mr Pham was not the true owner of the trade mark under s 27 and 58 of the Act.

There was no valid assignment of the trade mark by Mr. Pham.

The marks were substantially identical.

The court decided it was unnecessary to consider the implications of s 60 of the Act in the circumstances.

Ultimately, the IR Composite mark was refused by IP Australia.

Reasoning

Application for registration of IR composite mark

Mr Pham applied for registration of the IR composite mark on 7 December 2011. Pursuant to s 27(1) of the Act, he claimed to be the owner of the mark, and a person who intended to authorise IR to use the mark in relation to radiological services.

Section 27(1)(a) questions:

The Court considered s 27(1) of the Act, which provides that a person can apply for the registration of a trade mark in respect of goods and or services if the person claims to be the owner of a trade mark and:

1. the person is using or intends to use the mark; or
2. the person has authorised or intends to authorise another person to sue the mark; or
3. the person intends to assign the mark to a body corporate that is about to be constituted with a view to the use by the body corporate.

Section 58 of the Act also provides that:

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

The Primary Judge found Mr Pham was not the owner of the IR composite mark and never intended to authorise IR to use the mark in relation radiological services. Instead, it was actually the company, IR, that was the owner of the mark at all times.

ICI argued that the Primary Judge should have accepted that the requirement of ownership must be satisfied at the time of making the application and not after.

Ultimately, the Court noted:

1. To satisfy s 27 of the Act, the current and previous trade marks legislative scheme provided for “registration of ownership, not ownership by registration”. Thus, only the owner of a trade mark can file for its registration.
2. When the capacity to file an application depends on a claim of ownership or intention to use a mark, the ground of opposition contained in section 58 is to be construed as applying at the time the application is made, not after. Mr. Pham did not claim to be the true owner at this time.
3. If a claim for ownership is not justified at the time of the making of an application, section 58 and 59 are available as grounds of opposition. Where the applicant is not the owner of the mark at the time of filing the application, the assignment provisions in section 106-111 do not assist as they pre-suppose that the applicant owns the mark. Simply put, if someone is not the owner of a trademark, they cannot transfer the rights to that trademark to another person. Only the actual owner of the trademark has the authority to assign it to someone else. Mr. Pham was not the owner of the trademark, so he could not effectively assign it to anyone.

Most importantly, the Court noted the following:

“where the rights of the registered owner extend back to the filing date of the application, it is essential that the initial applicant on the filing date be the owner of the mark.  Otherwise, the applicant cannot transfer ownership of the mark by an assignment in accordance with the legislative provisions on and from the filing date and can claim on becoming the registered owner an account of profits or damages for infringement when not in fact the owner of the mark”.

The Court held that the purported assignment of Mr Pham to IR after the filing of the application on 1 July 2013 made no difference and the requirement for ownership applied at the filing date of the application on 7 December 2011. No actions after this date cured the deficiency in ownership.

Substantially identical marks: Was the IR composite mark substantially identical to the ICI composite mark?

ICI argued that the Primary Judge should have found that the IR composite mark was substantially identical to the ICI composite mark.

The Court noted it was not in dispute that the Primary Judge accurately identified the principles applicable an opposition under s 58, which included that Insight Clinical had to prove.

1. the IR composite mark is identical or substantially identical to the ICI composite mark: Carnival Cruise Lines Inc v Sitmar Cruises Limited (1994) 120 ALR 495;
2. the ICI composite mark has been used in respect of goods or services as “the same kind of thing” as the IR composite mark: Re Hicks’ Trade Mark (1897) 22 VLR 636 at 640; and
3. it had the earlier claim to ownership based on its use of the ICI composite mark before the filing of the IR composite mark application, or any use of the IR composite mark by Insight Radiology: Settef SpA v Riv-Oland Marble Co (Vic) Pty Ltd 10 IPR 402 at 413.

ICI argued that the Primary Judge focused on the visual differences between the marks and these were immaterial once regard was had to the essential features of the mark (i.e. the word ‘insight’ and the circular eye mark).[9]

ICI submitted that the words “clinical imaging” and “radiology” are merely descriptive and incapable of distinguishing radiology services from another. This meant the primary Judge’s approach to this issue did not involve a side-by-side comparison which had had regard to the essential features of the mark.[10]

The Court rejected IR’s submission that ICI was “positing a new and unprincipled test” for the determination of substantial identity.

The Court did find that the Primary Judge’s reasoning in [18] was erroneous. In particular, the Primary Judge (unlike the Register) did not refer to the essential elements of the marks or the importance in similarities or differences.

The essential elements were the word “Insight” and the circular eye device.

Ultimately, the Court held that there was considerable resemblance between the marks.

The Court “accept[ed] ICI’s contention that the Primary Judge ought to have found that the IR composite mark was substantially identical to the ICI composite mark, which ICI had used for a number of years before IR filed its application.”

Section 60 – Reputation

The Court did not consider it necessary to consider the contention by IR relating to the incorrect approach to the ground of opposition under s 60.

Section 60(b) provides that registration of a trade mark can be opposed on the ground that because of the reputation of the other mark, the use of the first mentioned trade mark would be like likely to deceive and cause confusion.

The Court noted that “given current modes of communication and discourse and free and unfettered rights of travel within Australia, a substantial reputation in Western Australia in this national industry constituted a sufficient reputation in and across Australia for Section 60(b) to be engaged”.

Basically, because the ICI had a reputation in Western Australia, this was sufficient to satisfy the requirement for a reputation in Australia. It is unrealistic to confine reputation to particular states or territories. The widespread use of the internet, and freedom of travel, makes it a lot more difficult to establish territorial boundaries for reputation.

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