AB SCA Finans and SCA Hygiene Australasia Pty Limited v Sorbies Pty Ltd

[2010] ATMO 19

TRADE MARKS ACT 1995

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

Re:Opposition by AB SCA Finans and SCA Hygiene Australasia Pty Limited to application under section 92 of the Act by Sorbies Pty Ltd to remove trade mark number 907074 (3,16,21) – SORBENT - in the name of AB SCA Finans.

Delegate:	Debrett Lyons
Representation:	Opponents: Ben Fitzpatrick of counsel, instructed by Minter Ellison, Solicitors. Removal Applicant: Malcolm Bell of Phillips Ormonde Fitzpatrick, Patent & Trade Mark Attorneys.
Decision:	2010 ATMO 19 Section 92(4)(b) opposition: Use shown within the relevant period. Trade mark to remain on register. Costs awarded against removal applicant.

Background

1. Trade mark number 907074 (‘the registration’) for SORBENT (‘the trade mark’) is currently registered in the name of AB SCA Finans for the following goods (‘the goods’):

   ·     Tissues impregnated with cosmetic lotions (class 3)

   ·     Articles made of paper and cardboard, tissues, toilet paper, wet wipes (class 16)

   ·     Wet wipes, dispensers for wet wipes (class 21)

2. On 26 August 2008, Sorbies Pty Ltd (‘the removal applicant’) filed an application under section 92(4)(b) of the Trade Marks Act 1995 (‘the Act’) for removal of the registration of respect of the goods, alleging the trade mark was not used in relation to the goods during the three year period ending on 26 July 2008 (‘the non-use period’).

3. On 18 December 2008, AB SCA Finans and SCA Hygiene Australasia Pty Limited (collectively, ‘the opponents’) filed a Notice of Opposition to the removal application.

4. On 18 May 2009, the opponents served their evidence in support, which consisted of a Statutory Declaration by Richie John Condie made 17 March 2009.  No evidence in answer was filed by the removal applicant.

5. The matter was heard before me as delegate of the Registrar of Trade Marks in Melbourne on 27 November 2009.  The opponents were represented by Ben Fitzpatrick of Counsel, instructed by Minter Ellison, Solicitors.  The removal applicant was represented by Malcolm Bell of Phillips Ormonde Fitzpatrick, Patent & Trade Mark Attorneys.

   Statutory framework

6. 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) …

7. Sections 100(1)(c) and 100(3) of the Act provide that the opponent bears the onus of rebutting an allegation made against it under s.92(4)(b), by establishing that the trade mark (or the trade mark with additions or alterations not substantially affecting its identity) was used in good faith during the non-use period, or that there was an obstacle to use during that period. I proceed on the basis that the relevant standard of proof is on the balance of probabilities[1].

   [1] Following Gyles J in Pfizer Products Inc v Karam (2006) 70 IPR 599. See also Chocolaterie Guylian N.V. v Registrar of Trade Marks [2009] FCA 891 (18 August 2009) at [22] to [26].

8. Insofar as relevant to this matter, sections 7 and 8 of the Act state:

   7Use of trade mark

   (3)An authorised use of a trade mark by a person (see section 8) is taken, for the purposes of this Act, to be a use of the trade mark by the owner of the trade mark.

   (4)In this Act:

   use of a trade mark in relation to goods means use of the trade mark upon, or in physical or other relation to, the goods (including second‑hand goods).

   8Definitions of authorised user and authorised use

   (1)A person is an authorised user of a trade mark if the person uses the trade mark in relation to goods or services under the control of the owner of the trade mark.

   (2)The use of a trade mark by an authorised user of the trade mark is an authorised use of the trade mark to the extent only that the user uses the trade mark under the control of the owner of the trade mark.

   (3)If the owner of a trade mark exercises quality control over goods or services:

   (a)dealt with or provided in the course of trade by another person; and

   (b)in relation to which the trade mark is used;

   the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.

   (4)If:

   (a)a person deals with or provides, in the course of trade, goods or services in relation to which a trade mark is used; and

   (b)the owner of the trade mark exercises financial control over the other person’s relevant trading activities;

   the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.

   (5)Subsections (3) and (4) do not limit the meaning of the expression under the control of in subsections (1) and (2).

   Discussion

9. The removal applicant advanced two arguments – first, that there was no use of the trade mark by the registered owner, and secondly, in any case, there has not been use of the trade mark in relation to all of the goods.

   Authorised use

10. Mr Condie is a manager of SCA Hygiene Australasia Pty Limited (‘SCA Australasia’).  He declares that SCA Australasia is a related company of the registered owner, AB SCA Finans, being a company incorporated in Sweden.  He went on to explain that the opponents are both wholly owned subsidiaries of another Swedish company, Svenska Cellulosa AB. 

11. Mr Condie declares that he is authorised to give evidence on behalf of the registered owner.  He further explains that SCA Australasia manufactures and markets products carrying the trade mark pursuant to an exclusive licence from AB SCA Finans.

12. Mr Condie states that:

    Contrary to the Removal Applicant’s claim, AB SCA Finans has used the Trade Mark, through its authorised user SCA Australasia, during the Claimed Non-Use Period in respect of the goods covered by the Registration.

13. The removal applicant pointed out, correctly, that there is no evidence of use of the trade mark in Australia by the registered owner itself, and whilst it conceded use of the trade mark in Australia in the non-use period by SCA Australasia, it argued that the use was not authorized use within the meaning of the Act[2].

    [2] Sections 7 and 8.

14. In particular, the removal applicant submitted that there was an insufficient connection between the Australian use of the trade mark and the registered owner because (1) there was inadequate evidence as to the way in which the opponents were “related companies” and (2), that even if related to each other in some sense, there must be proof of control of the user in the ways described by section 8 of the Act. It argued that the opponents bore the onus of proving the corporate relationship between one another and bore the onus of proving the existence and terms of the trade mark licence.

15. I cannot agree. The declaratory evidence of Mr Condie is in my view quite adequate to meet the onus of proof required by section 100(3). There was no evidence-in-answer from the removal applicant and nothing, prior to the hearing, to put the opponents on notice that some further or better evidence of the matters just mentioned might be demanded of them.

16. In addition, I concur with the opponents’ aural submission that the term “related company” is defined in the Corporations Act 2001 and, to the extent that the removal applicant might still be correct in arguing that control of the user is necessary, I note that section 8(5) of the Act makes it clear that the examples of control described in section 8(3) and 8(4) are non-exhaustive. Regulation 21.15(8) entitles me to inform myself on any appropriate matter and in this case I need only take notice of the everyday notoriety of the trade mark to be assured that intra-group ownership, use and control of the trade mark would be regulated in a way satisfying section 8.

17. In my assessment, the Australian use of the trade mark by SCA Australasia is use by an authorised user and inures to the benefit of the registered owner.

    Actual use

18. Albeit that the removal applicant conceded use of the trade mark by SCA Australasia within the non-use period, it argued that the use was not in relation to all of the goods.

19. Mr Condie declared that the trade mark was used in relation to toilet paper, tissues, tissues impregnated with cosmetic lotion, wet wipes and dispensers for wet wipes. The supporting exhibits are television commercials, magazine advertisements and an image of an in-store display of some of the goods. Three television commercials, sharing a similar theme, either directly show or at least intimate that the goods being advertised are tissues, paper napkins, kitchen towels or toilet paper. Each commercial ends with the voice-over, “Australians love Sorbent” together with the image on a pack of what seems to be either SORBENT branded toilet paper or SORBENT branded kitchen towels. I note in this regard section 7(4) of the Act.

20. Mr Condie gave evidence that those television commercials were run nationally during the non-use period and there is no evidence to contradict that claim.

21. The remaining shop displays and magazine advertisements show use of the trade mark on, or in relation to, toilet paper, boxes of tissues, and wet wipes.  Although the removal applicant was critical of this evidence for the reason that it is not clearly date identified, I am satisfied with Mr Condie’s evidence that the use was made or the advertisements were placed during the non-use period.

22. There are pending proceedings before this Office in which SCA Australasia has opposed registration of trade mark application no. 1233031 for the mark Sorbies filed by the removal applicant.  In those proceedings, the removal applicant was served with a statutory declaration of Richie John Condie made on 12 May 2009.  Just prior to the hearing in this matter, the removal applicant was advised that the opponents intended to rely on that declaration in these proceedings.  The removal applicant strongly resisted any attempt to admit that evidence, which in short only went towards the length and extent of the use of the trade mark in Australia, but for the reasons which follow I did not find it necessary to consider the admissibility of the declaration. 

23. Additionally, following the hearing, the opponents indicated a willingness to consider a voluntary restriction of the goods, but again, it is unnecessary for me to consider that offer or the retort from the removal applicant.

    The Registrar’s Discretion

24. Section 101(1) gives the registrar the discretion to remove the trade mark “in respect of any or all of the [registered goods]”, whilst section101(3) explicitly provides discretion may be exercised in the opponents’ favour if the registrar is satisfied it is reasonable to do so.

25. Early decisions considering exercise of the discretion under section 101 suggested an opponent would need to show special facts or circumstances, or an overriding question of public interest, to warrant leaving a mark on the register in the absence of relevant use[3],  however in the recent decision in Pioneer Computers Australia Pty Ltd v Pioneer KK [2009] FCA 135 (23 February 2009), Bennett, J said:

    [3] See for example Figgins Holdings Pty Ltd v Beltrami SpA (1998) 46 IPR 411 (at pp 418-9).

    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 Company[4] 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 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:

    o    there had been no abandonment of the trade mark;
    o    the registered proprietors of the mark still had a residual reputation in the mark;
    o    there had been sales by the registered proprietors of goods for which removal was sought since the relevant period ended;
    o    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;
    

    [4] Kowa Co Ltd v NV Organon (2005) 66 IPR 131

    o    the registered proprietors were not aware of the applicant’s sales under the mark.

26. Following those decisions, I do not consider that the opponents are required to point to “exceptional circumstances” which would make it reasonable to exercise my discretion in their favour.  It is fair to say that the opponents’ evidence of use might have been better assembled and might have been more comprehensive.  There might be scant evidence of use of the trade mark on dispensers for wet wipes and in another case involving a different trade mark I might have felt some reluctance to preserve “articles made of paper and cardboard” in their entirety.  At the same time, and despite the removal applicant’s submissions to the contrary, I believe that this is exactly the type of case where the registrar’s discretion is justifiably exercised in an  opponent’s favour.  I refuse to restrict the goods in any way.  To the extent the use of the trade mark might fall some way short of covering all of the goods of the registration, I am reminded of the comments of Finkelstein J in Colorado Group Limited v Strandbags Group Pty Limited [2006] FCA 160:

    24 When considering proprietorship it is important to remember that there is no proprietorship in a mark per se. Under the common law "property in a trade-mark is ... the right to the exclusive use of some mark, name or symbol in connection with a particular manufacture or vendible commodity": Leather Cloth Co Ltd v American Leather Couch Co Ltd (1863) 4 De G J & S 137, 144. See also Ainsworth v Walmsley (1866) 1 Eq 518, 524 ("This Court has taken upon itself to protect a man in the use of a certain trade-mark as applied to a particular description of article"). The position is no different under the Trade Marks Act. The effect of the current statute, which is substantially similar to earlier legislation, is that a trade mark must be registered in respect of particular goods or services specified in Schedule 1 to the Trade Marks Regulations 1995 (Cth): Trade Marks Act, ss 19, 27 in combination with Trade Mark Regulations, reg 3.1, 4.4, Sch 1.

    25 It follows that proprietorship by first use is proprietorship in relation to the goods or classes of goods on which the mark has been used. The proprietor is entitled to have his mark registered in respect of those goods. This entitlement is not confined to identical goods or classes of goods. Registration may also be obtained for goods or classes of goods which is or are "a thing [or things] of the same kind" (Jackson & Co v Napper (1886) 35 Ch D 160, 178) or "like articles of production" (Columbia Mill Company v Alcorn, 150 US 460, 464 (1893)) or "articles of merchandise of the same kind" (Colman v Crump, 70 NY 573, 578 (1877)) or "kindred articles" (The Collins Co v Oliver Ames & Sons Corporation, 18 F 561, 570 (1882)), if there be any difference between these expressions. See also Edwards v Dennis (1885) 30 Ch D 454.

    Decision

27. My decision is that the opposition is successful and the trade mark is to remain on the register for the goods.

    Costs

28. As the successful party, the opponents are entitled to their costs and I award costs against the removal applicant, to be calculated in accordance with Schedule 8 of the Trade Marks Regulations 1995.

    Debrett Lyons
    Hearing Officer
    Trade Marks Hearings
    26 February 2010