ABC Tissue Products Pty Limited v Solaris Paper Pty Ltd

[2018] ATMO 98

TRADE MARKS ACT 1995

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

Re:Opposition by ABC Tissue Products Pty Limited to application under section 92 of the Act by Solaris Paper Pty Ltd to remove trade mark number 946047 (16) - COTTONSOFT - in the name of ABC Tissue Products Pty Limited

Delegate:	Decision on the Written Record Iain Campbell Thompson
Representation:	Opponent: FB Rice Pty Ltd Applicant: Phillips Ormonde Fitzpatrick – written submissions
Decision:	2018 ATMO 98 Trade Marks Act 1995 Section 96 opposition to application for partial removal under subparagraph 92(4)(b); non-use conceded in relation to Impugned Goods during Relevant Period; section 101 – exercise of the Registrar's discretion, similar and associated goods –Trade Mark to remain registered for the Impugned Goods.

Background

1. As provided for by section 96 of the Trade Marks Act 1995 (‘the Act’) ABC Tissue Products Pty Limited (‘the Opponent’) has opposed an application by Solaris Paper Pty Ltd (‘the Applicant’) under subparagraph 92(4)(b) of the Act for the partial removal from the Register of the trade mark which appears below:

Registration No:           946047

Priority Date:               6 March 2003

Goods:Paper tissues; paper towels; toilet tissue; facial tissue; paper wipes; paper napkins; babies’ disposable nappies; and serviettes

Trade Mark:                COTTONSOFT

(‘the Trade Mark’)

1. The application for removal of the Trade Mark was filed on 1 April 2016 and, as amended, seeks removal of the Trade Mark from the Register for all of the goods for which it is registered with the exception of ‘toilet tissue’ viz:

   Paper tissues; paper towels; facial tissue; paper wipes; paper napkins; babies’ disposable nappies; and serviettes.

   (‘The Impugned Goods’)

2. The non-use period under subparagraph 92(4)(b) of the Act is, accordingly, the three year period ending on 1 March 2016 (‘the Relevant Period’).

3. The proceedings have followed the course outlined hereunder:

   14 June 2016 – Notice of Intention to Oppose the Removal filed by the Opponent;

   14 July 2016 – Statement of Grounds and Particulars filed by the Opponent;

   17 August 2016 – Notice of Intention to Defend filed by the Applicant;

   29 August 2016 – Application for Removal amended;

   21 December 2016 – Evidence in Support filed by the Opponent:

   Declaration by Sunny Ngai – Marketing Director of the Opponent – made on 14 December 2016 with Annexures 1-8 (‘Ngai’);

   3 April 2016 – Evidence in Answer filed by the Applicant:

   Declaration of Terry Hughes – Chief Executive Officer ANZ of the Applicant – made on 3 April 2017 with Exhibits TH-1 and TH-2 (‘Hughes’).

4. Both parties have been informed of their right to be heard or to make written submissions. Neither party requested to be heard and the Applicant has filed written submissions. Now, in order that the Registrar may decide this matter in terms of subsection 101(1) of the Act, it has been passed to me, one of her delegates, for my decision which is to be based on the written record – that is, those materials mentioned in this and the foregoing paragraphs.

Onus and Standard

1. Concerning the onus in these proceedings, section 100 of the Act relevantly provides:

   100Burden on opponent to establish use of trade mark etc.

   (1)In any proceedings relating to an opposed application, it is for the opponent to rebut:

   […]

   (c)any allegation made under paragraph 92(4)(b) that the trade mark has not, at any time during the period of 3 years ending one month before the day on which the opposed application was filed, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services.

2. The relevant standard of proof that the Opponent bears is on the balance of probabilities.[1] In this regard, section 101 of the Act provides that if ‘the Registrar is satisfied that the grounds on which the application [for removal] was made have been established, the Registrar may decide to remove the trade mark from the Register …’ [Stress added]

   [1] Pfizer Products Inc v Karam [2006] FCA 1663; (2006) 70 IPR 599.

3. In Blount Inc v Registrar of Trade Marks[2] Branson J observed:

   Where the Act requires the Registrar to be “satisfied” of any matter, it is to be understood as requiring that he or she be persuaded of the matter according to the balance of probabilities (Rejfeck v McElroy [1965] HCA 46; (1965) 112 CLR 517 at 521). That is, that the Registrar be persuaded, having given proper consideration to those factors and circumstances that the Act requires him or her to give consideration to, that such matter is more probable than not.

   [2] [1998] FCA 440; (1998) 83 FCR 50; (1998) 40 IPR 498; [1998] AIPC 37-241.

Truncated Nature of Proceedings

1. In its Statement of Grounds and Particulars the Opponent concedes the non-use of the Trade Mark in relation to Impugned Goods during the Relevant Period but seeks the beneficial exercise of the Registrar’s discretion in relation to relation to the Impugned Goods under subsections 101(3) or (4) of the Act. The Applicant, for its part, argues that the exercise of the Registrar’s discretion is not appropriate.

2. With the foregoing in mind, I find that the Opponent has not used the Trade Mark in relation to the Impugned Goods during the Relevant Period and move to a discussion of the parties’ evidence which concerns the exercise of the Registrar’s discretion.

The Evidence

1. In support of the Opposition the Ngai declaration states:

   [The Opponent] is the leading tissue paper product supplier in Australia and is well-known for its toilet tissues, facial tissues, kitchen towels, napkins and wipes marketed under the QUILTON, NATURALE, SYMPHONY, COTTONSOFT, EARTHCARE and STYLE trade marks. [The Opponent] also has a commercial division which specialises in commercial bathroom fittings including dispensers and hand cleanser systems, soaps and cleaning products including industrial wipes.

   The [Trade Mark] has been used in Australia by [the Opponent] since as early as 2003 and has been used continuously in Australia since this time, including during the Non-Use Period, in relation to [toilet tissue].

   [The Opponent] sells [toilet tissues bearing the Trade Mark] predominantly to pharmacies, independent supermarkets, corner stores and service stations for on-sale to the public, and to wholesalers, suppliers and businesses such as restaurants, […]

   [The Opponent] estimates sales of [many thousands of][3] packs of [toilet tissues bearing the Trade Mark] to independent supermarkets, corner stores and independent pharmacies during the Non-Use Period.

   [3] This is information for which confidentiality is claimed.

2. The Ngai declaration provides annual turnover figures in relation to sales under the Trade Mark during the Relevant Period.  Although the Ngai declaration provides an approximate overall promotional spend, the Opponent indicates the advertising expenditure on the Trade Mark cannot be isolated from the overall advertising expenditure on the Opponent’s portfolio of trade marks.

3. The Ngai declaration goes on to discuss the nature of the Opponent’s industry:

   Now produced and shown to me and marked Annexure 7 are extracts from an Industry Report in relation to Sanitary Paper Product Manufacturing in Australia dated April 2016 produced by IBISWorld, Australia's largest provider of industry-based research. The report indicates the main activities of this industry are the manufacture of tissues, paper towels, toilet tissues and paper napkins; sanitary napkins; tampons; and disposable nappies. At 45.7% sanitary tissues, which broadly include toilet tissues, sanitary handkerchiefs and napkins, paper towels and sanitary wipes, makes up the majority of products produced by this industry in Australia. The report shows that ABC holds an 18.5% market share in this industry in Australia. In addition, the report specifically cites [the Trade Mark] as a core brand manufactured by [the Opponent].

   [Companies] in this industry typically manufacture toilet tissue/toilet paper, paper tissue, paper towels, facial tissues, wipes and napkins, feminine hygiene products and nappies, as the manufacturing process to produce these goods is so similar. In addition, it is common for companies in this industry to bring to market many of these products under the one core brand, for example:

   (a) KLEENEX is a well-known facial tissue brand owned by Kimberly-Clark Worldwide, Inc ("KCW"). KCW also manufactures and sells wet wipes under the KLEENEX trade mark and toilet tissue/toilet paper under the combined KLEENEX COTIONELLE brand. In addition, KCW manufactures nappies, disposable diapers and diaper pants, feminine napkins, pads, panty liners and tampons, incontinence pads and liners, paper towels and napkins, disposable wipes.

   (b) SORBENT is a well-known toilet tissue brand owned by Asaleo Holdings Australia Pty Ltd ("Asaleo"). Asaleo also manufactures and sells facial tissues and flushable wipes under the SORBENT trade mark. Asaleo also manufactures feminine napkins, pads, panty liners and tampons, paper towel, napkin dispensers, nappies and paper serviettes.

   (c) QUILTON is [the Opponent's] well-known toilet tissue brand. In addition to toilet tissue, ABC also manufactures facial tissue, paper towel, napkins and wipes under the QUILTON brand.

   (d) Likewise, Solaris Paper manufactures toilet paper, facial tissue, paper towel products, napkins and wipes. Now produced to me and marked Annexure 8 are printouts from the KCW, KLEENEX, Asaleo and QUILTON websites showing use of the KLEENEX, SORBENT and QUILTON trade marks on a range of sanitary/tissue paper products.

4. Ngai refers to the following applications for registration filed by the Applicant:

Application No:           1762392

Priority Date:               1 Apr 2016

Goods:Class 3: Wipes in this class impregnated with cosmetic or cleaning compositions, including flushable wipes

Class 16: Paper and paper products, including paper towels, facial tissues and toilet paper

Trade Mark:                COTTONSOFT

Application No:           1790627

Priority Date:               18 August 2016

Goods:Class 5: Babies' disposable nappies, disposable nappies, sanitary wear, sanitary pads, sanitary liners, incontinence pads, incontinence liners, medicated wipes, wipes for pets, absorbent nappies for pets

Trade Mark:                COTTONSOFT

1. In evidence in answer Hughes states:

   [The Applicant] is the sole distributor of New Zealand company Cottonsoft Limited, which has owned and used the COTTONSOFT mark in New Zealand since at least 1996. A copy extract from the New Zealand Trade Marks Register for registration no. 263790 COTTONSOFT is attached as Exhibit TH-1.

   COTTONSOFT is a popular brand of toilet paper in New Zealand, comprising just over 10% of the market. Figures obtained from market research company Aztec IRI showing Moving Average Total sales of toilet paper in New Zealand are attached as Exhibit TH-2.

2. Hughes goes on to analyze the sales figures supplied by the Opponent and concludes that those figures represent a small fraction of the Australian market for toilet tissues.

The Registrar’s Discretion

1. Section 101 of the Act relevantly provides:

   101Determination of opposed application—general

   […]

   (3)If satisfied that it is reasonable to do so, the Registrar or the court may decide that the trade mark should not be removed from the Register even if the grounds on which the application was made have been established.

   (4)Without limiting the matters the Registrar may take into account in deciding under subsection (3) not to remove a trade mark from the Register, the Registrar may take into account whether the trade mark has been used by its registered owner in respect of:

   (a)similar goods or closely related services; or

   (b)similar services or closely related goods;

   to those to which the application relates.

   Note 1:If the registered owner of the trade mark has authorised another person to use it, any authorised use of the trade mark by that person is taken to be a use of the trade mark by the registered owner (see subsection 7(3)).

   Note 2:For registered owner see section 6.

The Applicant’s submissions

1. The Applicant submits at some length that toilet tissues are not similar goods to the Impugned Goods.  As I will discuss, below, it is fair to observe that this argument cuts both ways.

2. The Applicant also submits

   S.101(4) states that consideration of use on similar goods is not a limitation on the matters which the Registrar may take into account when considering whether it is reasonable to exercise of the discretion under s.101(3). Other considerations which have been made in other cases include the level of reputation held in the mark, (Hermes Trade Mark [1982] RPC 425); and the private interests of the parties (CUB Pty Ltd v Elixir Signature Pty Ltd [2013] ATMO 74 (10 September 2013, at para. 124). It is noted once again that the onus is on the opponent to satisfy the Registrar that it is reasonable to exercise the discretion in its favour.

   In the present case, ABC has provided evidence showing sales of toilet tissue under the COTTONSOFT mark [during the Relevant Period]. Whilst it is not contended that these are not sales occurring in the [Relevant Period], it is noted that the level of sales and advertising is extremely low.

Consideration

1. In many ways some aspects of this matter are perplexing; for instance:

   ·    The Applicant is, prima facie, a mere distributor in New Zealand of ‘toilet tissues’ supplied to it by the owner of the New Zealand registration of the Trade Mark COTTONSOFT;

   ·    The Applicant has argued at length that ‘toilet tissues’ and the Impugned Goods are not similar – if this were so (and concerning the Applicant’s intentions to use the Trade Mark) the Applicant’s private interests in having the Trade Mark removed from the Register in relation to the Impugned Goods might be perceived on the facts before the Registrar as being very limited.

2. Otherwise I note that all of the goods nominated by the Applicant on its application 1762392 appear to be similar goods to ‘toilet tissues’.  Moreover, that application still expressly seeks registration in respect of ‘toilet tissues’.  I also accept that medicated and scented wipes have come to be regarded by many as performing the same function as ‘toilet tissues’ and are accepted by many as being interchangeable goods: on this basis it is difficult to see how application 1790627 could be regarded as being prima facie acceptable for registration.  Whilst this is so, there is little to be gained from removing the Trade Mark from the Register in relation to the Impugned Goods.

3. Further, I acknowledge the Opponent’s proposition that whilst ‘toilet tissues’ might not be goods which are similar to the Impugned Goods they are viewed by many in the public as being closely associated and commonly provided by the one trader under the same trade mark.  The Opponent’s evidence establishes that ‘toilet tissues’ and the Impugned Goods are frequently made and marketed by the one manufacturer.

4. Accordingly, I consider it to be reasonable that I exercise the Registrar’s discretion to allow the Trade Mark to remain registered in relation to the Impugned Goods.

Decision

1. Subsection 101(1) of the Act provides:

   101Determination of opposed application—general

   (1)Subject to subsection (3) and to section 102, if:

   (a)the proceedings relating to an opposed application have not been discontinued or dismissed; and

   (b)the Registrar is satisfied that the grounds on which the application was made have been established;

   the Registrar may decide to remove the trade mark from the Register in respect of any or all of the goods and/or services to which the application relates.

2. I am satisfied that the Opponent has established that it is reasonable to allow the Trade Mark to remain registered in relation to the Impugned Goods and that the Opponent has, accordingly, established its opposition to the partial removal of the Trade Mark.

Iain Campbell Thompson
Hearing Officer
Trade Marks Hearings
25 June 2018