Taxiprop Pty Ltd v Neutron Holdings Inc  FCA 1565 (29 October 2020)
Taxiprop was unsuccessful in its claims for infringement of its registered LIME mark and under the Australian Consumer Law (ACL) and passing off. Neutron was successful in its cross claim for removal of Taxiprop’s LIME registration on the ground of non-use for all class 39 services other than taxi services.
Taxiprop owns a trademark registration for LIME dating from 6 October 2005 and covering “Transport; packaging and storage of goods; travel arrangements; taxi, hire car, bus, coach and limousine services; none of the aforesaid services involving the transport, packaging or storage of lime” in class 39.
The Lime brand was initially used in 2006 in connection with a wheel chair focused taxi service in Sydney by a business called Austaxi. That business was subsequently sold in 2011 to CCN which is part of the A2B group (formerly Cabcharge) which operates the 13CABS taxi business. Between September 2016 and July 2017 Lime branded taxis were rebranded with 13 CABS livery. In December 2016, the Lime online booking portal and website ceased, but the limetaxis.com.au domain name was pointed at the 13CABS website server until early 2017. The Lime trade mark was assigned from Austaxi to Taxiprop in December 2017 with a licence back to Austaxi. Taxiprop owns the intellectual property of A2B which is its holding company.
Neutron Holdings launched, in 2017, a bicycle share business under the Lime brand in North Carolina, USA. This business commenced operations in Australia on 7 November 2018 offering Lime branded electric bicycles and scooters for hire through its Lime app. Neutron filed, on 20 August 2018, an application to register the LIME trade mark which was blocked by Taxiprop’s LIME registration. Neutron filed, on 21 September 2018, an application for removal of Taxiprop’s LIME trademark registration on the ground of non-use during the 3 years period ending on 21 August 2018 (the “first non-use period). Neutron then filed, on 16 April 2020, a second non-use application with the relevant 3 years period ending on 16 March 2020 (the “second non-use period”).
After the first non-use application was filed, CCN arranged, from 20 November 2018, for 2 Sydney based taxis to be rebranded with Lime livery. The limetaxi.com.au domain name had been inactive, but that was rectified in October 2018 so that this domain name redirected to (rather than pointed at) the 13CABS website. Taxiprop then commenced, on 21 December 2018, an action alleging infringement of its LIME trademark registration as well as claims under the ACL and passing off.
Taxiprop did not dispute that the Lime mark has only ever been used in respect of taxi services. However, there was a dispute as to whether Taxiprop had proven that it, through CNN, had continued to operate 7 Lime branded wheelchair accessible taxis in Sydney at various times between March 2017 and October 2018 and whether the drivers of those taxis wore Lime branded uniforms. Neutron also disputed whether Taxiprop exercised control over use of the Lime trade mark and argued that use of the Lime brand on the 2 taxis after filing of the first non-use application and during the second non-use period was not in good faith.
First non-use period
Neutron accepted the Lime trade mark had been used for taxi services during the first non-use period.
Second non-use period
O’Callaghan J found the LIME trade mark had been used in good faith under the control of Taxiprop for taxi services on the 2 rebranded Camry taxis from 20 November 2018.
Good faith use requirement
The case law establishes that, to be in good faith, the trade mark use relied upon by the registered owner must be ‘real commercial use’ or ‘ordinary and genuine use’ and not ‘some fictitious or colourable use’ if it is to defeat a non-use application. Further, the motives of the registered owner are largely irrelevant. Given this, O’Callaghan J found the use relied upon by Taxiprop was in good faith even though it was clearly for the purpose of defending the LIME trademark registration from attack.
Taxiprop’s control of use of the Lime trade mark
Taxiprop argued the requisite control arose by virtue of a “unity of purpose” of the relevant companies in the A2B group and control by CCN over the taxi operators pursuant to its Code of Conduct.
O’Callaghan J agreed and found that the use of the Lime mark on the 2 Camry Taxis was controlled by Taxiprop. Indeed, there was evidence that a director of Taxiprop had turned his mind to this issue and suggested the rebranding of the 2 taxis be done for the express purpose of protecting Taxiprop’s rights.
Other evidence relied upon by Taxiprop
Given his Honour’s findings on the good faith and control issues supporting use of the LIME mark in the second non-use period, it was not strictly necessary to consider the other use relied upon by Taxiprop from 16 March 2017 to October 2018. Nonetheless, his Honour did discuss this evidence. Essentially, Taxiprop was seeking to draw an inference of use based on a collection of materials from internal records. The difficulty was that Taxiprop never kept records which recorded which taxis in the fleet where branded with Lime and when they were on the road. O’Callaghan J was not prepared to draw such an inference. Taxiprop also asserted use of the Lime brand on drivers’ uniforms, but his Honour agreed with Neutron that Taxiprop had not proven that any driver actually wore any Lime branded uniform while operating a taxi after 16 March 2017.
Taxiprop also relied on use of the limetaxi.com.au domain name as constituting use of the LIME trade mark. However, O’Callaghan J rejected this and considered that the public “being “redirected” or “repointed” (the difference is immaterial for present purposes) by the Lime domain name to a 13CABS website, is not likely to understand that the domain name is a sign for online services identified by the trade mark LIME. Taking the process as a whole, where a user has navigated to the Lime domain name and been instantaneously repointed or redirected to the 13CABS website, it seems to me that the conclusion that a reasonable member of the public would draw is that the mark LIME is no longer in use, because, upon arriving at the 13CABS website, it is readily apparent that the Lime domain name is not a sign for online services identified by the LIME mark. On the contrary, those services are identified by the 13CABS mark.”
Having decided that the LIME trade mark had only been used during the second non-use period for taxi services, O’Callaghan J then went on to consider whether Taxiprop could show that it would be reasonable not to remove the LIME registration for any other services. However, his Honour was not persuaded to exercise discretion and directed the mark be removed from the Register for all services other than taxi services.
Having decided that Taxiprop’s LIME trademark registration should be restricted to taxi services, Callaghan J then turned to whether Neutron’s use of the marks LIME, LIME-S, LIME-E and LIMEBIKE in relation to micro-mobility services, being the hire of electric bicycles and scooters, and an app for the provision of such services, infringed Taxiprop’s LIME registration. Of course, the critical issue was whether Neutron’s micro-mobility services were of the same description to taxi services and whether Micron’s LIME app was closely related to taxi services. His Honour found in favour of Neutron and considered that “the sale of micro-mobility services and taxi services under the same mark by different companies is not likely to lead to confusion or deception.” His Honour concluded that “the nature of the services, their respective uses, and the trade channels through which they are bought and sold, so it seems to me, are different, and vastly so; and I do not accept that a consumer would possibly wonder whether the two services had the same trade origin.” Further, “[i]t follows that an app for the provision of electric bicyle and scooter hire is not “closely related” to “taxi services”.”
Given this finding, it was unnecessary for his Honour to consider whether Neutron could avail itself of the proviso to s120(2) or any defences to infringement.
It should be noted O’Callaghan J gave Taxiprop the opportunity to make further submission on the issue of infringement occurring prior to the date of the order for removal of its LIME registration on the ground of non-use for all services other than taxi services. Section 127 was not discussed but provides that the court may not grant relief to Taxiprop by way of damages or an account of profits in these circumstances.
Australian Consumer Law and passing off
Taxiprop also alleged that Neutron’s use of LIME for its micro-mobility services would be misleading or deceptive under the Australian Consumer Law and/or constitute passing off. However, O’Callaghan J also rejected these claims. His Honour agreed with Neutron that there was no sufficient residual reputation of the LIME taxi business and “there is no real risk that any consumer across Australia would think that the global Lime electric bicycle and scooter hiring service is commercially related to the Lime taxi business conducted in Sydney”.
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