In Taxiprop Pty Ltd v Neutron Holdings Inc [2020] FCA 1565, the Federal Court of Australia held that micro-mobility services are not services of the same description as taxi services within the meaning of s 120(20 of the Trade Marks Act 1995 (Cth). The use of “LimeBike” for micro-mobility services by Neutron Holdings Inc did not infringe the registered trade mark “LIME” by Taxiprop Pty Ltd.

Court: Federal Court of Australia

Judge: O’CALLAGHAN J

Date of Judgment: 29 October 2020

Taxiprop Pty Ltd (“Taxiprop”) is the proprietor of registered trade mark 1079430 for “LIME” (“the taxiprop mark”) in Class 39 including transport; packaging and storage of goods; travel arrangements; taxi, hire car, bus coach and limousine services. The application was filed in 2005. In December 2017, Taxiprop was assigned the taxiprop mark by Austaxi who in turn licensed the taxiprop mark back to Austaxi for use.

Neutron Holdings Inc (“Neutron”) is the operator of bicycle-sharing schemes under the “LimeBike” including scooters. Neutron offers first and last mile personal transport options from major transport nodes such as train station to their destination. Neutron launched its operations in Australia on the 7 November 2018.

Registration of a trade mark in New Zealand confers exclusive rights to the use of that mark reflected in the prohibitions on use detailed in Part 4 of the Act. However, the philosophy which underpins the Act is one of “use it or lose it”.

Tasman Insulation New Zealand Ltd v Knauf Insulation Ltd [2014] NZHC 960; 108 IPR 162 at 182 [72]

On 20 August 2018, Neutron filed trade mark application no. 1949564 for “LIME” in classes 9,12,35,39 (including Motorised, electric and non-electric bicycle and scooter sharing services; rental of motorised, electric and non-electric bicycles and scooters; providing a website featuring motorised, electric and non-electric bicycle and scooter transportation information; motorised, electric and non-electric bicycle and scooter transportation consulting services; motorised, electric and non-electric bicycle and scooter transportation reservation services) and 42. The application met with an adverse examination report on the 7 September 2018. On 21 September 2018, Neutron filed non-use application against the taxiprop mark on grounds of non-use under s 92(4)(b). The first period of non-use was from 21 August 2015 – 21 August 2018 but this ground was eventually abandoned during trial. The second period of non-use was from 16 March 2017- 16 March 2020. 

Taxiprop advanced argument that two Toyota Camry taxis were rebranded to LIME taxis after 5 October 2018. Neutron counter-argued that the move to rebrand was a ‘reaction’ to the non-use application. O’Callaghan J considered evidence tendered and held that the use of the taxiprop mark by the two Toyota Camrys was in good faith and for commercial reasons (to make profit). The use of the mark was held to be ‘real and genuine’ and not ‘fictitious or colourable’.

The court further considered if the use of the mark was use under control by Taxiprop. His Honour found Mr. Lucchese who is director of Taxiprop and A2B group of companies had employees of A2B group operating on behalf of Taxiprop. His Honour held that the common directorship found in Mr. Lucchese meant that there was ‘unity of purpose’ and there was control by Taxiprop on the use of the taxiprop mark. 

However, the court found use of the taxiprop mark was only confined to ‘taxi services’ and not on other services claimed in the registration. His Honour then considered if he should exercise discretion under s 101(3) of the Trade Marks Act 1995 (Cth) to retain the mark for all other services that are ‘vulnerable to attack’ as Taxiprop claimed residual reputation in the “LIME” mark. Taxiprop submitted that the removal of the other services of the taxiprop mark will enable Neutron to move into car-sharing schemes that might cause the public to wonder if there’s any association between Taxiprop and Neutron and confusion is highly likely. His Honour remained unpersuaded by Taxiprop’s submissions and he did not believe that consumers would be led into thinking that the use of “LIME” on bicycles, scooters and app would in any way be associated with A2B’s LIME taxi business as the nature of business is different and appeals to different segments of the market. There was no evidence of A2B heading into the bicycle-sharing or scooter services. His Honour eventually ordered the removal of the other services for the taxiprop mark to protect the integrity of the register.

Did LimeBike Infringe the LIME Trade Mark?

Taxiprop alleged infringement of the taxiprop mark by Neutron under on grounds that Neutron’s services are of the same description as taxi services under s 120(1) and Neutron’s goods (app) are closely-related to taxi services under s 120(2). His Honour held that “LimeBike” is deceptively similar to “LIME” and that a number of persons will be caused to wonder if the goods and services originated from the same source. His Honour then considered if micro-mobility services are ‘services of the same description‘ as taxi services and concluded that the nature of services, the user market and the trade channels (taxi services average 8km, had a driver and will be utilized by the aged, visually impaired, wheelchair bound consumers and its services are dispatched through the booking dispatch system while micro-mobility services average 2km, self-operated and instantaneous) and concluded that Neutron’s services are not the same as taxi services. His Honour also held Neutron’s goods are not closely related to taxi services for the same reasons. The allegation of trade mark infringement was not made out.

Misleading, Deceptive Conduct and Passing Off

With insufficient residual reputation in the taxiprop mark, there would be no real risk that any consumers in Australia would think that the “LimeBike” bicycles or scooters hiring service is commercially linked to ‘LIME” taxi business. The primary judge concluded that misleading conduct and passing off claims were therefore not established. 

Disclaimer: The above is provided to assist in the understanding of the decision by the Federal Court of Australia. It should not be relied upon as legal advice. Any errors or omissions are the author’s. For queries related to the article, please contact the author here.