2Eros Pty Ltd v L Beling - [2018] ATMO 83

TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS

Re:Opposition by Joel Beling to application by 2eros Pty Ltd for removal of trade mark registration 1407212 (25) SUPA & Device in the name of Joel Beling

Delegate:

Michael Kirov

Decision on the Written Record

Decision:

2018 ATMO 83

Trade Marks Act 1995 s 92(4)(b) opposition: No relevant use or obstacles to use shown. No reason for exercise of Registrar’s discretion in Opponent’s favour. Trade Mark to be removed.

Background

Joel Beling (“the Opponent” or “Mr Beling”) is the registered owner of trade mark registration 1407212, relevant details of which are as follows:

Registration Number: 1407212

Registered From: 6 February 2011

Goods: Class 25: Apparel (clothing, footwear, headgear); aprons (clothing); articles of clothing for theatrical use; articles of waterproof clothing; articles of water-resistant clothing; articles of weatherproof clothing; articles of windproof clothing; athletic clothing; beach clothing; boys’ clothing; casual clothing; clothing; clothing for babies; clothing for sports; girl’s clothing; headbands (clothing); hoods (clothing); infants’ clothing; jump suits (clothing); ladies clothing; men’s clothing; paper hats (clothing); playsuits (clothing); ready-to-wear clothing; thermal clothing; thermally insulated clothing; waterproof clothing; water-resistant clothing; weather resistant outer clothing; weatherproof clothing; windbreakers (clothing); women’s clothing

Trade Mark: (“the Trade Mark”)

On 23 June 2016 2eros Pty Ltd (“the Removal Applicant”) filed an application based on s 92(4)(b) of the Trade Marks Act 1995 (“the Act”) seeking removal of the Trade Mark from the Register for all of the goods it covers (“the Removal Goods”).
The allegation made is that the Trade Mark was not used in good faith in relation to any of the Removal Goods during the three year period ending on 23 May 2016 (“the Non-use Period”).
On 12 August 2016 the Opponent filed a Notice of Intention to Oppose removal, followed by a Statement of Grounds and Particulars (“SGP”) on 28 August 2016. Relevant details of the SGP are set out later in the decision.
The Removal Applicant filed a Notice of Intention to Defend on 28 September 2016.
The Opponent then filed his evidence in support, being declarations by:
Eden Henderson made 29 December 2016, with Exhibits EH-1, EH-2A to EH-2H, EH-3, EH-4A to EH-4C and EH-5 to EH-7; and
Joel Lorensz Beling made 4 January 2017, with Exhibits JLB-1 to JLB-43
I understand that IP Australia has had no further contact from the Opponent concerning the removal application since the filing of this evidence.
The Removal Applicant did not file any evidence in answer and, apart from a request from its then attorneys to have the Removal Applicant itself recorded as address for service in the proceedings, I understand IP Australia has likewise had no further contact from the Removal Applicant or its (former) attorneys concerning the removal application.
IP Australia subsequently wrote to the parties on 17 July 2017 advising that as neither party had requested a hearing the matter would be allocated to a delegate of the Registrar to decide based on the evidence described above and on any written submissions the parties might yet file. As to possible submissions, the letter stated:
IMPORTANT
If you wish to file written submissions, you have 1 month from the date of this letter to file your submissions. To ensure that a copy of the submissions is on file when the matter is assigned to a Delegate, please file the submission through online services. Please also provide a copy of the written submissions to the other party at the same time as filing them with IP Australia. This can be done through Objective Connect.
As foreshadowed, neither party responded to this letter and the matter has now been allocated to me to decide, as a delegate of the Registrar of Trade Marks, based solely on what is contained in the SGP and in the Opponent’s evidence.

The Law

Insofar as relevant to this matter, section 92 of the Act is reproduced below:

92 Application for removal of trade mark from Register etc.

(1) Subject to subsection (3), a person may apply to the Registrar to have a trade mark that is or may be registered removed from the Register.
(2) The application:
(a) must be in accordance with the regulations; and
(b) may be made in respect of any or all of the goods and/or services in respect of which the trade mark may be, or is, registered.

(3) An application may not be made to the Registrar under subsection (1) if an action concerning the trade mark is pending in a prescribed court, but the person aggrieved may apply to the court for an order directing the Registrar to remove the trade mark from the Register.
Note: For prescribed court see section 190.
(4) An application under subsection (1) or (3) (non-use application) may be made on either or both of the following grounds, and on no other grounds:
(a) …
(b) that the trade mark has remained registered for a continuous period of 3 years ending one month before the day on which the non-use application is filed, and, at no time during that period, the person who was then the registered owner:
(i) used the trade mark in Australia; or
(ii) used the trade mark in good faith in Australia;
in relation to the goods and/or services to which the application relates.

Note 1: For file and month see section 6.
Note 2: If non-use of a trade mark has been established in a particular place or export market, then instead of the trade mark being removed from the Register, conditions or limitations may be imposed under s.102 on the registration of the trade mark so that its registration does not extend to that place or export market.
(5) …

Section 93(2) of the Act specifies that an application under s 92(4)(b) “may not be made before a period of 5 years has passed from the filing date in respect of the application for the registration of the trade mark.” This requirement is satisfied here since the Trade Mark was filed on 6 February 2011 and the application for removal was filed on 23 June 2016.
Section 100(1)(c) of the Act indicates that the Opponent bears the onus of rebutting the allegation made under s 92(4)(b). He may do this by establishing either that the Trade Mark (or the mark “with additions or alterations not substantially affecting its identity”) was used in good faith in relation to the Removal Goods during the Non-use Period (s 100(3)(a)) or that there were “circumstances (whether affecting traders generally or only [him]) that were an obstacle to [the mark’s] use during that period” (s 100(3)(c)). I proceed on the basis that the standard of proof required of the Opponent is on the balance of probabilities.[1]
[1] In line with Gyles J’s approach in Pfizer Products Inc v Karam (2006) 70 IPR 599 with respect to oppositions under s 52 of the Act, affirmed by the Full Federal Court (Besanko, Jagot & Edelman JJ) in Telstra Corporation Limited v Phone Directories Company Pty Ltd (2015) 116 IPR 207 at [132]-[133].

The Evidence and the SGP

As mentioned, the Opponent’s evidence is contained in two declarations, one by Mr Beling himself and one by Eden Henderson, who describes himself as “an independent illustrator and web designer contracted by the Opponent” via a “work-hire agreement” entered into on 21 October 2015. I will avoid describing the evidence in detail since in both cases the declarants claim that they “regard the information which is disclosed…as relating to the business affairs of [Mr Beling’s company, Supa Characters Pty Ltd (“Supa”), or Mr Henderson’s business, as the case may be] within the meaning of Sections 47 and 47G of the Freedom of Information Act 1982 (Cth) and to be strictly confidential.” I will instead reproduce those parts of the SGP that summarise the Opponent’s activities during the Non-use Period and which arguably support the Opponent’s claim to have “used” the Trade Mark for the Removal Goods during that period. In this regard I note that the SGP in this case is very detailed, running to some five pages, and that I am satisfied that the evidence of Mr Beling (also very detailed at some 21 pages long with a further 523 pages of exhibits) and Mr Henderson does generally corroborate the matters put in the SGP.
I mention by way of overview that the SGP and the evidence indicate that the Opponent’s defense of the Trade Mark is not based upon use involving actual sales of any of the Removal Goods. Rather it is based either on his intention to use the mark and his preparations for such use, (which the SGP characterizes as “showing an objective commitment to using [the Trade Mark]”), or on claimed use “through an offering for sale of the [Removal Goods].” In the alternative, as it were, the Opponent also says there were “circumstances that were an obstacle to…use” in terms of s 100(3)(c) of the Act.
That said, to aid in understanding some of the matters mentioned in the SGP it is necessary to at least say the following about the Beling and Henderson declarations. The principal declaration is that of the Opponent himself. Mr Beling is a practicing lawyer, albeit his declaration is made in his “capacity as Opponent…and as Director of [Supa].” He describes Supa as “a character licensing company that [he] founded in January 2011,” apparently relevant to the present proceedings because the Trade Mark is “intended to be used by [Supa] in Australia.” I mention that Mr Beling often refers to Supa in the first person, without necessarily distinguishing between himself and the company. I accept nevertheless that, based on his (unchallenged) evidence, Mr Beling is effectively Supa’s “directing mind.”[2] I am accordingly satisfied all of the actions by Supa disclosed in Mr Beling’s evidence were done under his “control” as registered owner of the Trade Mark as required by s 8 of the Act, despite there being no evidence before me of any formal, written agreement between him and Supa.
[2] In the sense discussed by the Full Federal Court in Food Channel Network Pty Ltd v Television Food Network GP (2010) 86 IPR 437.
Mr Beling explains that Supa “has a diverse range of characters with a focus on creating and leveraging franchises” and much of his declaration is devoted to providing a long list of the many characters’ names and their “character profiles.” He goes on to describe Supa’s “twofold mission” (albeit in the first person) as follows:
First, I aim to create complex, three-dimensional characters licensable for film and television which will both attract marquee acting talent as well as offer star-making vehicles for talented but generally unknown professional actors.
Second, I strive to create high quality merchandise for people of all ages, ranging from infants through teens to adults based on our roster of marketable characters. The nature of this merchandise is limited only by one’s own imagination, and can range from clothing and toys to comic books, video games and novels.
That Mr Beling had not yet commenced use of the Trade Mark by way of actual sales of any of the Removal Goods as at 4 January 2017 when his declaration was made, and, indeed, the somewhat inchoate nature of his intention to use it for Class 25 goods as at that time, is indicated by his statement that:
Since [Supa] is a start-up company, I may likely need to start with lower-level commercial activities such as a clothing, headwear and footwear range (the goods to which the [Trade Mark] relates) or toys, before tackling more expensive and expertise-heavy activities such as film or TV production.
Mr Beiling exhibits copies of letters (having letterhead featuring the Trade Mark) he emailed “offer[ing] a large number of [his] marks”[3] to, inter alia, “a range of Australian clothing, footwear, headgear, stationery and toy retailers…for license for payment.” He also exhibits copies of similar letters he sent to a number of literary or motion picture agents in the United States “seek[ing] literary representation for [his] character licensing company [Supa].” I note that none of these letters actually refers to goods in Class 25 and no replies (if any) from any of these parties are in evidence.
[3] Mr Beling applied to register some 78 trade marks in Australia between 4 February 2011 and 8 May 2012.
The final thing I would specifically mention concerns the domain name <supacharacters.com>, which Mr Beling registered on 25 January 2011 and through which he says, “I intend to sell goods under the [Trade Mark].” It is nevertheless conceded in the Opponent’s evidence that no website using the domain name had been created as at the time the Beling and Henderson declarations were made.
The second declaration relied on by the Opponent is that of Eden Henderson, who is employed as a sales agent with a large energy retailer but who has here made his declaration “in [his] capacity as an independent illustrator and web designer contracted by the Opponent.” In this regard he exhibits “a copy of the work-for-hire agreement dated 21 October 2015” between Mr Beling and him in which, in essence, Mr Henderson agrees to “illustrate for [Mr Beling] sixteen (16) original images” of five of the characters conceived by Mr Beling. I note that these five characters (referred to by both Mr Henderson and Mr Beling and in the SGP as “the Big Five”) include the “Lion-Man”, “Leopard-Man”, “Elephant-Man” and “Rhino-Woman” characters mentioned in the SGP. The relevance of these characters to the matter at hand is apparently, as Mr Henderson puts it, that:
During the several months preceding and at the time of entering into the agreement, Mr Beling advised me on numerous occasions that he intended to affix the [Trade Mark] to the original images created by me, in addition to Mr Beling’s Big Five trademark.
Mr Henderson goes on to explain that various matters had, at the time his declaration was made in December 2016, thus far “prevented [him] from completing the images” under the agreement, but notes he “genuinely intend[s] to complete the work.”
Mr Henderson also says that “in or about May 2016 [he] set up a website for Mr Beling’s legal practice,” with the brief being that “the hosting package…should be capable of hosting a number of websites, including a website for his character licensing company, [Supa], which would heavily focus on products bearing the [Trade Mark] and other trademarks.” Mr Henderson had however not yet set up the proposed Supa website as at the time his declaration was made.
With that as background, I note that the SGP is relevantly divided into three sections[4] dealing with (1) use of the Trade Mark “through an intention to offer the [Removal Goods]”, (2) use “through an offering for sale of the [Removal Goods]” and (3) “circumstances that were an obstacle to…use.” These aspects of the Opponent’s case are discussed below.

Discussion

Section 92(4)(b)

[4] A fourth (final) section is also included in the SGP but this specifically concerns the Opponent’s claim for costs should the removal application be withdrawn or in the event that it is otherwise unsuccessful on the merits.

Actual use

As mentioned, the Opponent does not claim to have used the Trade Mark by way of actual sales of any of the Removal Goods. He does however claim that he used the mark in the course of trade during the Non-use Period by virtue of the “preparatory steps” he took at that time, which are particularized in the SGP as follows:
1. Use in the course of trade through an intention to offer the [Removal Goods] which is manifested through prepa[ra]tory steps showing an objective commitment to using [the Trade Mark].
[I have omitted paragraphs 1.1 to 1.14 of the SGP because they relate to Mr Beling’s actions prior to the Non-use Period and (apart from anything else) are not relevant to my decision for this reason.]
1.15 Attempts to Obtain an Agent
In mid-2013 the Opponent made many attempts to obtain an agent to offer to third parties the Opponent’s goods for license for payment.
1.16 Renewal of Company Registration
In or about February 2014 the Opponent renewed the company registration for [Supa].
1.17 Opposition to Applicant’s First Removal for Non-Use Application
On 24 October 2014 the Opponent opposed the non-use application by the [Removal] Applicant in respect of the [Trade Mark].
1.18 T-shirt Designs
In approximately February, 2015 the Opponent illustrated two designs for t-shirts which he intends to sell under the [Trade Mark]. The t-shirts bear the [Trade Mark].
1.19 Renewal of Company Registration
In February 2015 the Opponent renewed the company registration for [Supa].
1.20 Baseball Cap Designs
In approximately May, 2015 the Opponent illustrated two designs for baseball caps which he intends to sell under the [Trade Mark]. The baseball caps bear the [Trade Mark].
1.21 Contract with Mr. Eden Henderson, Illustrator and Web Designer
On 21 October 2015, the Opponent entered into a work-for-hire agreement with Mr. Eden Henderson, an illustrator and web designer, for the illustration of 16 original images of the Opponent’s Big Five character profiles in both hard copy and digital form. The Opponent intends that the resultant original images shall bear the [Trade Mark], in addition to the Opponent’s Big Five trademark.
1.22 Leopard-Man Character Image
From about 21 October 2015-late October 2015, Mr Henderson sent the Opponent a number of drafts of an image of a leopard-man. From mid-late October 2015, the Opponent attached the [Trade Mark] to the digital images of the leopard-man character.
1.23 Shoe Designs
In approximately November, 2015 the Opponent illustrated two designs for shoes which he intends to sell under the [Trade Mark]. The shoes bear the [Trade Mark].
1.24 Registration of Domain name
On 27 December 2015 the Opponent renewed the registration for the domain name supacharacters.com with America Registry, an Instra Corporation Pty Ltd. The license expiry date for this domain name is on or about 25 January 2017, prior to which the Opponent intends to renew the license.
1.25 Lion-Man Character Image
On or about 14 January 2016, Mr Henderson sent the Opponent a draft of an image of a lion-man. On or about 15 January 2016, the Opponent attached the [Trade Mark] to the digital image of the lion-man character.
1.26 Lion-Man Character Image
On or about 31 January 2016, Mr Henderson sent the Opponent a draft of an image of a lion-man. On or about 1 February 2016, the Opponent attached the [Trade Mark] to the digital image of the lion-man character.
1.27 Amending the Opponent’s Business Plan
On or about 2 February 2016 the Opponent updated the business plan for his character licensing company.
1.28 Renewal of Company Registration
In February 2016 the Opponent renewed the company registration for [Supa].
1.29 Elephant-Man Character Image
On or about 7 March 2016, Mr Henderson sent the Opponent a draft of an image of an elephant-man. On or about 8 March 2016, the Opponent attached the [Trade Mark] to the digital image of the buffalo-man character.
1.30 Tracksuit Designs
In approximately March 2016 the Opponent illustrated three designs for tracksuits which he intends to sell under the [Trade Mark]. The tracksuits bear the [Trade Mark].
1.31 Rhino-woman Character Image
On or about 10 May 2016, Mr Henderson sent the Opponent a draft of an image of a rhino-woman. On or about 11 May 2016, the Opponent attached the [Trade Mark] to the digital image of the rhino-woman character.
Preparations in good faith for future use of a trade mark may in principle qualify as “use” for the purposes of the Act, provided it is shown the preparations are well advanced and the trader concerned can be seen objectively to be committed to using his trade mark.[5] As Davies J put it in her recent decision in Singtel Optus Pty Limited v Optum Inc:[6]
To constitute trade mark use, the mark must also be used “in the course of trade”: s 17 of the Act. The words “in the course of trade” do not require an actual dealing in goods or services under a mark to show use as a trade mark (Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) [ 1984] HCA 73; (1984) 156 CLR 414 (“Moorgate”) at 432) but, as the cases illustrate, trade mark use is not established where the evidence does not show use of the mark beyond engaging in some preliminary discussion or taking preliminary steps to ascertain whether to offer to trade in the goods or services under the mark: Settef SpA v Riv-Oland Marble Co (Vic) (Pty Ltd) (1987) 10 IPR 402 (“Settef”); Woolly Bull Enterprises v Reynolds [2001] FCA 261; [2001] FCA 261; (2001) 107 FCR 166; 51 IPR 149 (“Woolly Bull”); Unilever Aust Ltd v Karounos [2001] FCA 1132 (“Karounos”); cf. Buying Systems (Australia) Pty Limited v Studio Srl [1995] FCA 1063.
[5] See for example Woolly Bull Enterprises Ltd and Anor v Reynolds (2001) 51 IPR 149 and Buying Systems (Australia) Pty Limited v Studio Srl (1995) 30 IPR 517.
[6] [2018] FCA 575 at [23].

In the present case none of the activity identified in the SGP or in the evidence suggests to me that Mr Beling’s preparations to deal in goods in Class 25 were well advanced during the Non-use Period. In this regard whatever Mr Beling’s subjective intention to offer such goods in the course of trade may have been, this does not inform the objective question of whether his preparations for doing so were at an advanced stage. As Lander J noted in Shahin Enterprises Pty Ltd v Exxonmobil Oil Corporation:[7]
69. It is not necessary to establish an actual dealing in the goods to which is attached the mark. There must, however, be more than a subjective intention to use a mark in the course of trade in the future. There must be goods to which the mark can attach…
70. …the subjective intention must be accompanied by some evidence of objective proof of that intent. In Woolly Bull, Drummond J said at 155, speaking of dicta of Deane J in Moorgate:
Deane J did not say that a subjective intention of the owner of the mark to use the mark in trade at some time in the future was, without more, sufficient to show use of a mark. What he said was that such an intention, if accompanied by objective proofs of that intention in the form of evidence of action by the mark owner to commit goods bearing the mark to actual trade in Australia, would suffice to show use of the mark here at the time in question, though no marked goods had yet been offered for sale in this country.
…
71. Drummond J’s explanation is consistent with the passage which I have cited above. A mere claim of intention to use a mark could never be enough. It would mean an intention by itself could give rise to personal property: s 21. In Moorgate and Settef (the authority to which Drummond J referred), there was evidence that the mark had been applied to the goods. There is no such evidence in this case.
[7] [2005] FCA 1278.
Matters such as renewing Supa’s company registration (paragraphs 1.16, 1.19 and 1.28 of the SGP) or renewing an (unused) domain name registration (paragraph 1.24), or opposing an earlier removal application (paragraph 1.17), have no relevance to this objective question. Nor does “updating the business plan for [Mr Beling’s] character licensing company” (paragraph 1.27) which, if anything, suggests Mr Beiling’s plans for use of the Trade Mark in February 2016 had not significantly advanced at all. In this regard I note that the updated business plan in question, which is exhibited with Mr Beling’s declaration, consists of eight dot points, none of which has anything to say about the possible manufacture, sourcing, distribution or sale of clothing, footwear or headgear.
As regards Mr Beling’s interactions with Mr Henderson as described in paragraphs 1.21, 1.22, 1.25, 1.26, 1.29 and 1.31 of the SGP and the corresponding evidence, these too fall well short of indicating Mr Beling’s preparations to deal in Class 25 goods under the Trade Mark were well advanced. Indeed, the sole apparent connection between the Trade Mark itself and the (draft) images of the “Big Five” characters produced by Mr Henderson appears to be that Mr Beling “attached the [Trade Mark] and the Big Five trade mark to the digital image[s]” of those characters.
As for the “designs” for t-shirts, baseball caps, shoes and tracksuits mentioned in paragraphs 1.18, 1.20, 1.23 and 1.30 of the SGP which Mr Beling “illustrated” and which are also exhibited with his declaration, these are no more than rudimentary, very roughly sketched, generic representations of the articles mentioned, on a single piece of what appears to be scrap paper in each case, and could not by any means be characterized as well advanced.
To conclude, I am not satisfied based on the evidence before me that the Opponent’s claimed preparatory steps amount to relevant “use” of the Trade Mark as contemplated by ss 7(4) or 17 of the Act.
As mentioned, the Opponent also claims in the SGP that relevant use of the mark occurred based on offers by him as registered owner (or Supa as an authorized user) to sell the Removal Goods, particularized in the SGP as follows:
2. Use in the course of trade through an offering for sale of the [Removal Goods]
[Again, I have omitted paragraph 2.1 and paragraphs 2.3 to 2.8 of the SGP because they relate to Mr Beling’s actions prior to the Non-use Period and (apart from anything else) are not relevant to my decision for this reason.]
2.2 On 31 October 2012 the Opponent, in a letter bearing the trade mark to DC Comics (whose parent company is Warner Bros. Entertainment, including Warner Bros. Consumer Products), offered his Super Dogs characters for license for payment. DC Comics’ licensees, including Warner Bros. Consumer Products, produce merchandise including clothing, footwear and headgear, which is sold in Australia.
…
2.9 Various Australian websites mention the Opponent’s company, including:
5 August 2014 the Opponent offered a large number of his marks, including the [Trade Mark], to a range of Australian clothing, footwear and headgear retailers, including Target, Toys R Us, Myer, David Jones, Coles, and K-mart, for license for payment.
2.11 On or about 27 February 2015, Mr Liam Dixon, lawyer for Shoes Online Enterprises Pty Ltd, offered the Opponent $1,000 for a letter of consent to use the [Trade Mark] with respect to “a type of running shoe.”
2.12 On or about 2 March 2015, the Opponent offered Mr Liam Dixon, lawyer for Shoes Online Enterprises Pty Ltd, a license to use the [Trade Mark] “on mutually agreeable terms or at a substantially greater sum than that which [Shoes Online Enterprises Pty Ltd] offered” in its letter dated 27 February 2015.
2.13 On or about 7 September 2015, the Opponent, in written negotiations regarding costs with the lawyers of Tatsunoko Production Company (whose parent company is Takara Tomy), proposed a joint venture for the production of goods and services with Tatsunko Production Company involving some of his trademarks and the characters underpinning these. Tatsunoko Production Company’s licensees produce merchandise including clothing, footwear and headgear which is sold in Australia.
Leaving aside the issue of whether an “offer for sale” of goods which do not actually exist, have not ever existed and whose imminent procurement or manufacture was not on the evidence likely would amount to relevant use of the Trade Mark, none of the above mentioned actions identified in the SGP constitutes an offer for sale of the Removal Goods in any event.
In particular, regardless of whether the businesses referred to in paragraphs 2.2 and 2.10 of the SGP “produce merchandise including clothing, footwear and headgear,” or retail such goods, merely offering them an opportunity to license use of the Trade Mark is not use of the mark in the course of trade in relation to the Removal Goods. At best such an unsolicited offer might be characterized as “engaging in some preliminary discussion” (as it was put in Moorgate), albeit no response from any of the businesses in question is in evidence or is otherwise claimed. As the evidence shows, none of these offers specifically refers to goods in Class 25 in any case.
Moreover, whether or not Supa is “mentioned” on the indicated third party websites (paragraph 2.9 of the SGP), this would obviously not amount to an offer by the Opponent (or Supa) to sell any goods. Indeed, none of the websites in question provides any information about Supa at all apart from its ACN.
As to the claimed request by Shoes Online Enterprises Pty Ltd (“Shoes Online”) and Mr Beling’s response described in paragraphs 2.11 and 2.12, it is apparent from the evidence that this company was not in fact seeking “a letter of consent to use the [Trade Mark] with respect to ‘a type of running shoe’.” Rather, registration 1407212 had been cited by IP Australia against Shoes Online’s later application to register its own trade mark (SUPA TRAK) for “shoes; sports shoes” in Class 25 and Mr Beling’s consent to coexistence of the parties’ marks was sought. That aside, neither the request nor Mr Beling’s response in any event constitutes use of the Trade Mark in the course of trade in relation to the Removal Goods.
Finally, Mr Beling’s proposal to Tatsunoko Production Company described in paragraph 2.13 of the SGP for “a joint venture for the production of goods and services… involving some of his trademarks and the characters underpinning these” does not constitute relevant use of the Trade Mark for the same reasons indicated in paragraph 34 above.
In summary, I am not satisfied that Mr Beling’s claimed offers of the Removal Goods for sale amount to relevant “use” of the Trade Mark as contemplated by ss 7(4) or 17 of the Act.

Obstacles to Use

Having found that there was no actual use of the Trade Mark during the Non-use Period, I turn now to the Opponent’s claim that there were “obstacles” to such use of the kind contemplated by s 100(3)(c) of the Act. The relevant claim is particularized in the SGP as follows:
3. Circumstances that were an obstacle to the use of the [Trade Mark]
3.1 Inability to obtain agent representation to offer the [Removal Goods] to third parties.
3.2 Government restrictions on legal aid funding which restricted funding to Opponent’s character licensing business.
3.3 Changes to Victoria Legal Aid’s grants eligibility criteria which restricted funding to Opponent’s character licensing business.
3.4 Trade competitors tying up Opponent’s time and resources in trade mark litigation. See proceeding numbers 1441489, 1489613, 1489614, 1489616, 1489618, 1415736, 1415737, 1416169, 1467506, 1467508, 1467509 before the Australian Trade Marks Office and proceeding numbers 91203884, 92055374, 91205751, 92056215 and 92056633 before the United States Patent and Trade [M]ark Office.
3.5 Two former law clients who refused to pay the Opponent’s outstanding account in the amount of $42,600.00, which has restricted funding to Opponent’s business.
3.6 The Opponent’s contractor, Mr Eden Henderson, has experienced a heavy workload and other issues and has been unable to complete the original images the subject of the contract dated 21 October 2015 to schedule.
In Woolly Bull at [42] to [59] Drummond J discusses s 100(3)(c) in some detail, noting at [46] that, unlike its predecessor under the Trade Marks Act 1955:
It is now not necessary to show unusual or abnormal, as opposed to normal or usual, trading conditions (a difficult concept to comprehend and apply) before s 100(3)(c) can operate. Ordinary incidents of the trade cycle commonly encountered by traders, as well as abnormal ones, are now within the provision. Further, it is clear that a circumstance of a trading nature that has an impact only on the registered owner can also now be relied on to justify non-use of the mark.
Nevertheless, Drummond J did not think that the word “circumstances” used in s 100(3)(c) “embrac[ed] any event of any kind.” He considered that the circumstances relied upon “must arise from or comprise events external to the registered owner in the sense of not having been brought about by the voluntary act of the owner” (at [47]). He did not believe that parliament contemplated this would extend to circumstances such as “financial impecuniosity,” or “illness,” or a “falling out between joint registered owners” (as he put it at [48]), but rather that they would need to be “circumstances of a trading nature.” As he explained at [49]:
If the parliament intended any circumstance external to the owner to be capable of providing an excuse for non-use, little purpose would be served by the words in parenthesis in s 100(3)(c), viz, “whether affecting traders generally or only the registered owner of the trade mark”. The presence of these words is some indication that the circumstances comprising an obstacle to use of the mark must not only arise externally to the registered owner, but must also be circumstances of a trading nature.
After considering the rationale behind the section’s enactment[8] his Honour concluded (at [55]-[56]):
In my opinion, circumstances within s 100(3)(c) will only exist when events arise that are capable of disrupting trade in the area of commercial activity in which goods bearing the registered owner’s mark are traded. For the statutory excuse to be made out, those circumstances must cause (in a practical business sense) non-use of the particular mark by the owner, whether or not they have an impact on any persons other than the owner of that mark who are also involved in that same area of commercial activity. There must be a causal link shown between the relevant circumstances and the mark’s non-use. This requirement arises from the fact that s 100(3)(c) creates an excuse only where the mark has not been used by the registered owner “because of” circumstances etc. It will not assist the opponent to removal to show the existence of an impediment to use of the kind referred to in s 100(3)(c) if he does not also establish that, but for that impediment, he would have used the mark: cf Re James Crean & Son Ltd's Trade Mark[9] at 162.
Circumstances that do not have a trade character but which only affect a mark owner in his personal character, such as illness afflicting the owner of the mark that is sufficiently disabling to prevent the owner using the mark, can never therefore found an answer within s 100(3)(c) to an application for removal of the mark for non-use.
[8] As indicated, inter alia, in the relevant Minister’s second reading speech of the then Trade Marks Bill 1995.
[9] (1921) 38 RPC 155.
Bearing the foregoing in mind, I do not consider any of the matters mentioned in the SGP in the present matter fall within the ambit of s 100(3)(c). The Opponent is accordingly unable to rely on the section in my view.

The Registrar’s Discretion

I have found that there was no use of the Trade Mark in relation to any of the Removal Goods during the Non-use Period and that there were no relevant circumstances in terms of s 100(3)(c) of the Act that were an obstacle to use. That being the case, s 101(1) gives the Registrar the discretion to remove the Trade Mark “in respect of any or all of the [Removal Goods]”, whilst s 101(3) explicitly provides that discretion may nevertheless be exercised in the Opponent’s favour if the Registrar is satisfied it is reasonable to do so.
As Bennett J explained in Pioneer Computers Australia Pty Ltd v Pioneer KK:[10]
[167] The discretion under s 101(3) is a broad discretion to decide not to remove a trade mark from the register or not to carve out some of the goods and services for which the mark is registered, even if s 92 grounds have been made out, if the court is satisfied that it is reasonable to do so. Irrespective of the lack of use of the trade marks on the removal goods and the removal services in the relevant period, there is a discretion not to alter the registrations.
[168] In Kowa Co Ltd[11] at [98], Lander J rejected the submission that a party seeking the exercise of the discretion needs to show “exceptional circumstances”. In E & J Gallo[12] at [198], Flick J agreed with Lander J that there is no requirement to establish exceptional circumstances. With respect, I also agree with Lander J that there is no warrant to read a requirement for exceptional circumstances into s 101(3).
[169] In E & J Gallo at [202]–[203], Flick J stated that the following factors set out by Falconer J in Hermes Trade Mark [1982] RPC 425 were of assistance in considering the exercise of the discretion:
• there had been no abandonment of the trade mark;
• the registered proprietors of the mark still had a residual reputation    in the mark;
• there had been sales by the registered proprietors of goods for which    removal was sought since the relevant period ended;
• the applicants for removal had entered the market without having    taken steps to ascertain from the register whether anyone had a right    to exclude their use of the mark;
• the registered proprietors were not aware of the applicant’s sales    under the mark.
[10] (2009) 80 IPR 38.
[11] Kowa Company Limited v NV Organon (2005) 66 IPR 131.
[12] E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2008) 77 IPR 69.
While it need not show “exceptional circumstances” exist, an opponent must nevertheless satisfy the tribunal that it is reasonable that the Registrar’s discretion be invoked. As Yates J put it in Optical 88 Limited v Optical 88 Pty Limited (No. 2):[13]
However, as s 101(3) makes clear, the court (or the registrar, as the case might be) may only decide that the trade mark should not be removed from the register “if satisfied that it is reasonable to do so”. This requires, in my view, the court (or the registrar) to be positively satisfied of that condition. In my view it is the opponent for removal who bears the burden of persuasion on that issue.
[13] (2010) 89 IPR 457 at [273].
In the present matter the Opponent has not filed any submissions on this issue. Based on the evidence before me, nevertheless, I am not satisfied that any facts or circumstances exist, or that there is any relevant public interest, which would make it reasonable to exercise the Registrar’s discretion in his favour. As discussed, the evidence confirms that the Trade Mark has never been used in the course of trade in relation to any of the Removal Goods, whether before, during or after the Non-use Period. Nor does the Opponent otherwise appear to be in a position to claim the mark has garnered any significant reputation in Australia. In summary, this is not a case which I believe warrants exercise of the Registrar’s discretion in the Opponent’s favour pursuant to s 101(3) and I decline to do so.

Decision

The Opponent has not satisfied me that he used the Trade Mark in the course of trade for the Removal Goods during the Non-use Period, or that there were any relevant circumstances which were an obstacle to use. Further, no circumstances have been shown which in my view warrant exercise of the Registrar’s discretion not to remove the Trade Mark in respect of all of the Removal Goods. I accordingly direct that registration 1407212 be removed from the Register one month from the date of this decision. If the Registrar has been served with a notice of appeal before then I direct that removal shall not occur until the appeal has been discontinued or, in the event of a decision from the Court, that the registration be dealt with as the Court sees fit.

Costs

While costs are generally awarded against the losing party, given the Removal Applicant has played no part in the proceedings since filing the removal application I make no award of costs on this occasion.

Michael Kirov

Hearing Officer

Hearings and Oppositions

30 May 2018