BLACK SHEEP Trade Mark Dispute – Not all Sheep are the Same

Chris and Dora Di Lorenzo Partnership v Denversian Pty Ltd & Anor [2020] FCAA 1718 (30 June 2020)

 

On 30 June 2020, Chris and Dora Di Lorenzo Partnership (Di Lorenzo) unsuccessfully appealed against a decision by the Registrar of Trade Marks regarding registration of the trade mark BLACK SHEEP by Denversian Pty Ltd (Denversian).

 

Background

Di Lorenzo is the registered owner of Australian Registration 1681212 for the BLACK SHEEP & Device trade mark represented below. This registration covers goods in classes 30 (coffee and coffee products) and 43 (coffee bar and coffee house services, coffee shop services) and has a priority date of 16 March 2015.

Since September 2011, Di Lorenzo operated a café business in Sydney, New South Wales under the name Black Sheep.

Denversian filed Application 1720917 for BLACK SHEEP covering “restaurants, restaurant services; café and bistro services” in Class 43 on 10 September 2015. Since August 2013, Denversian operated a bistro restaurant on the Gold Coast, Queensland.

Application 1720917 was initially accepted for registration pursuant to the provisions of s44(4), which refer to registration on the basis of prior and continuous use, and the trade mark included the endorsement “Registration of this trade mark is limited to the State of Queensland”.

Di Lorenzo subsequently opposed Denversian’s application, the parties lodged evidence and written submissions, and the Delegate made his decision.

The Delegate was of the opinion that the BLACK SHEEP & Device trade mark and the BLACK SHEEP trade mark are deceptively similar, and cover similar services. However, the Delegate was satisfied that Denversian adopted the BLACK SHEEP trade mark without knowledge of the BLACK SHEEP & Device trade mark of Di Lorenzo, because:

  • the businesses were substantially different (i.e. a café restaurant and a mobile coffee van, respectively;
  • the businesses operated in geographically distinct locations (i.e. Queensland and New South Wales);
  • Di Lorenzo had no plans to expand its business into the Queensland market; and
  • Denversian had established a reputation by use of the BLACK SHEEP trade mark in its local region.

The Delegate found that there was sufficient honest concurrent use provided by Denversian, and that Di Lorenzo had failed to establish any ground of opposition. Costs were awarded to Denversian.

Di Lorenzo appealed this decision.

Appeal

The appeal filed by Di Lorenzo (which relied on Sections 58 and 58A, i.e. ownership of the trade mark) was filed out of time, however, following procedural orders to allow for an extension of time, the appeal proceeded.

The grounds were:

  • Denversian is not the owner of the trade mark ‘BLACK SHEEP’
  • Di Lorenzo have earlier use of the same/similar trade mark ‘BLACK SHEEP’;
  • Di Lorenzo first used the trade mark ‘BLACK SHEEP’ in September 2011 i.e. before Denversian in around December 2013; and
  • Di Lorenzo registered Trade Mark 1681212 ‘BLACK SHEEP’ on 16 March 2015 in Classes 30 and 43.

Evidence of Use

Di Lorenzo’s Evidence

An overview of Di Lorenzo’s evidence before the priority date of 16 March 2015 is as follows:

  • Bank statement – for “Mrs Dora Di Lorenzo & Mr Chris Di Lorenzo T/A Black Sheep Mobile Café” with a single opening deposit of $2000 dated 18 August 2011;
  • Supplier invoices – 9 third party supplier invoices during the period November 2011-March 2015 for food and beverage supplied addressed to “Black Sheep Mobile Café” or “blacksheep mobile café”. The payment withdrawal details are for “Mrs Dora Di Lorenzo” and Her Honour notes that they do not evidence any sales or supplies in the course of trade by any person under the BLACK SHEEP & Device trade mark, or “black sheep mobile café”;
  • Van signage and business cards – Di Lorenzo stated that a professional sign writing business placed the BLACK SHEEP & Device trade mark on the sides of their van and on business cards in July 2011. In evidence they provided colour artwork proofs dated 28 June 2011 of vinyl graphics, and an artwork proof for a proposed business card (example below). The proofs do not show the BLACK SHEEP & Device trade mark by itself. The artwork proofs also show the domain name blacksheep,cafe.com, however, there is no evidence that this domain was registered or used. Invoices related to the vehicle transfers and business card addressed to “Black Sheep Mobile Café” were also provide, but it is was not clear who made the payments;

  • Domain name – Di Lorenzo claimed that they hosted the bsmcafe.com.au domain name from 28 June 2011, however, there was no evidence of when the domain name was registered, in whose name or whether it was operated as a website promoting any trading activities under or by reference to the BLACK SHEEP & Device trade mark;
  • April 2013 webpage – there is single historical webpage capture from www.bsmcafe.com.au from 23 April 2013, which bears the “Black Sheep Mobile Café” logo. However, it did not evidence an existing trade channel.
  • Other evidence after the priority date of 16 March 2015 – this evidence included the purchase of the domain names black-sheep.com.au and black-sheep.net.au, and mobile numbers in June 2015, a trade mark application filed in August 2015 for the word BLACK1. This evidence was not sufficient to establish or support a claim to use of the BLACK SHEEP & Device trade mark, or the phrases black sheep” or “black sheep mobile café”. There was also a “to whom it may concern letter” from Di Lorenzo’s accountant. However, the claims made by the accountant do not constitute proof of trading activity.

In conclusion, the material relied on by Di Lorenzo had substantial evidentiary gaps and deficiencies. Her Honour was not satisfied that Di Lorenzo established that they had a commitment to offering to supply any of the services or goods claimed by the BLACK SHEEP & Device registration, the BLACK SHEEP mobile café logo, the phrase “black sheep” or “black sheep mobile café”, prior to 16 March 2015.

Denversian’s Evidence

An overview of Denversian’s evidence (by way of a witness statement and evidence from the owner and sole director, Ms Bressolles) is as follows:

  • Since August 2013, Denversian had operated a bistro under the name “Black Sheep Bistro” on the Gold Coast, in Queensland;
  • A business name registration was filed for “Black Sheep Bistro”, and Denversian’s accountant confirmed that “Denversian ATF Denversian Family Trust trading as Black Sheep Bistro” had filed the required Business Activity Statements and Trust Tax returns since 16 December 2013;
  • Facebook posts for the “Black Sheep Bistro” from 16 December 2013;
  • Marketing through online listings and reviews on well-known websites (e.g. Google, Good Food Gold Coast, TripAdvisor), large signage outside the restaurant, other signage, kerbside chalkboards, menus and flyers used in the restaurant and locally distributed through mail drops.

Ms Bressolles noted that she came up with the name honestly as she is the “black sheep” in her family, and there is a growing New Zealand population on the Gold Coast. She also indicated that she was not aware of the Di Lorenzo BLACK SHEEP & Device trade mark until mid 2015 after a search of the Australian Trade Marks Register.

Her Honour was satisfied that the evidence established honest, continuous and consistent use of the trade mark in the course of trade from 2013.

Grounds of Opposition

Sections 58 (not the owner)

Di Lorenzo failed that the first hurdle as they did not establish first use of the phrase “black sheep” or the BLACK SHEEP & Device trade mark in the course of trade.

They also needed to establish first use of a mark substantially identical to the opposed mark. In this regard, Her Honour noted that the device element within the BLACK SHEEP & Device trade mark substantially informs and affects the trade mark’s identity. It is an essential element and a dominant cognitive cue. It is also not an immediately recognisable image (i.e. not identifiable as a black sheep). The commonality of the word elements “BLACK SHEEP” is insufficient to convey and overall substantial identity. Accordingly, Her Honour found that the respective trade marks are not substantially identical.

Therefore, the s58 ground of opposition was unsuccessful

Di Lorenzo would also have had to establish that they had made first use in relation to services that are “the same kind of thing”. Her Honour commented that, in her view, “café services” and “coffee shop services” are the same of kind of thing; however, she considered restaurants, restaurant services, and bistro services not to be true equivalents.

Section 58A (first and continuous use)

Di Lorenzo did not establish first use of the BLACK SHEEP & Device trade mark (or any other trade mark) prior to Denversian (i.e. from 2013). Di Lorenzo also failed to show use of the BLACK SHEEP & Device trade mark (or any other trade mark) in the course of trade. Therefore, the s58A ground of opposition was unsuccessful

Her Honour also made the point that the prior use ground of opposition under s58A will only be established when there has been competing prior use in the same geographical area covered by the accepted application. In the present case, Denversian’s acceptance was limited to the State of Queensland, while Di Lorenzo’s claimed use was in Sydney, New South Wales. For this reason also, it could not succeed under this ground.

Decision

Di Lorenzo failed to establish either of the grounds of opposition, namely, s58 and s58A, and therefore, the appeal was dismissed.

Denversian’s Trade Mark 1720917 for BLACK SHEEP has since proceeded to registration.

Takeaway

This decision provides guidance on what types of evidence may, or may not, be sufficient to prove use of a trade mark in the course of trade. Use in the course of trade does not require an actual sale, however, there must be commercial dealing/offering to trade in the goods or services under or by reference to the sign.

The decision is also informative in demonstrating that a stylised trade mark incorporating a word and a design element may not be substantially identical to the word alone.