BBQ KING removed from register

In Anakin Pty Ltd v Chatswood BBQ King Pty Ltd ([2008] FCA 1467, September 30 2008), Chatswood BBQ King Pty Ltd has succeeded in its cross-claim for cancellation of Anakin Pty Ltd's trademark BBQ KING (Registration 1027525). 
BBQ King is the name of a well-known restaurant in Haymarket, Sydney. There have been numerous owners and operators of the restaurant since it was first opened by Yuen Cheung and his company Bar-B-Q King Restaurant Pty Ltd in the early 1980s. In 1992 ownership of the restaurant was transferred to Mempoll Pty Ltd by a sale agreement which included the goodwill of the business. Anakin then operated the restaurant from 1999 to August 2004 when Gold Kings Australia Pty Ltd (the second applicant) took over the operation of the restaurant. There was no formal transfer of the ownership of the restaurant or the goodwill from Mempoll to Anakin, or from Anakin to Gold Kings. Anakin subsequently applied to register the trademark BBQ KING on October 29 2004.    
In September 2005 Chatswood opened a restaurant named Chatswood BBQ King in Chatswood, New South Wales, and started using the 'Chatswood BBQ King' logo on restaurant signage, menus and staff uniforms. 
Anakin commenced an action against Chatswood for:
  • infringement of the BBQ KING mark;
  • misleading and deceptive conduct in contravention of Sections 52 and 53 of the Trade Practices Act 1974 (Cth); and
  • passing off.
In response, Chatswood cross-claimed, seeking cancellation of the BBQ KING mark on the grounds that Anakin was not the owner of the mark when it filed its application.
Anakin succeeded in its action against Chatswood for misleading and deceptive conduct and passing off, obtaining:
  • an injunction preventing Chatswood from using the name Chatswood BBQ King in relation to its restaurant; and
  • an order for damages of A$20,000. 
However, Anakin lost its BBQ KING mark in the process. The Federal Court found that Chatswood had succeeded in establishing its cross-claim for cancellation of Anakin's trademark registration for BBQ KING and ordered that the registration be cancelled.
Under Section 88(1)(a) of the Trademarks Act 1995 (Cth), a court may, on the application of an aggrieved person, order that the Trademarks Register be rectified by cancelling the registration of a trademark. Under Section 88(2), the application can be made on any of the grounds on which the registration of the trademark could have been opposed, including that the applicant was not the owner of the trademark (Section 58).
The court found that:
  • Chatswood was a person aggrieved within the meaning of Section 88(1), as it was using a trademark that was deceptively similar to Anakin's mark; and
  • Anakin was not the owner of the BBQ KING mark when it filed the application on October 29 2004.
The court also found that Gold Kings, rather than Anakin, was the owner of the BBQ KING mark and the BBQ King restaurant. Gold Kings had been operating the restaurant on its own account since August 2004 and, as of October 29 2004, was the owner of the goodwill in the BBQ KING trademark, notwithstanding the retention in Mempoll's accounts of the goodwill purchased under the sale agreement.
In reaching this conclusion, the court commented on the informal way in which Anakin and the other applicants had managed their business affairs, which included failures to comply with the requirements of the Corporations Act 2001 (Cth), as well as uncertainty as to whether the sale agreement with Mempoll had been properly duty-stamped. In these circumstances, the court declined to exercise its discretion to allow the BBQ KING mark to remain on the register, stating that "to do otherwise would [...] be to allow the applicants to benefit from the informal way in which their affairs have been handled".
The case highlights the importance of ensuring that:
  • trademark applications are made in the name of the correct entity; and
  • any transfers of the trademark and the goodwill of any business associated with the mark are properly formalized and documented, and comply with all relevant laws and regulations.
Lisa Ritson and Joanna Lawrence, Blake Dawson, Sydney and Melbourne

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