AgCare Biotech Pty Ltd v Crop Smart Pty Ltd

TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by AgCare Biotech Pty Ltd to application under section 92 of the Act by Crop Smart Pty Ltd to remove trade mark number 824645 - SMART (stylised) – in Classes 1 and 5 in the name of AgCare Biotech Pty Ltd

Delegate: Michael Kirov

Representation: Opponent: Michelle Howe of Davies Collison Cave, Patent and Trade Mark Attorneys
Applicant: Tim O’Callaghan of Piper Alderman, Lawyers

Decision: 2009 ATMO 41
s.92(4)(b) opposition: No relevant use shown and opposition not established. No reason for exercise of discretion in Opponent’s favour. Trade Mark to be removed. Costs awarded against Opponent.
Background

AgCare Biotech Pty Ltd (“the Opponent”) is the registered owner of trade mark registration 824645, relevant details of which are as follows:
Trade mark number: 824645
Registered from:                   22 February 2000
Goods:Class: 1 Chemicals used in agriculture, horticulture and forestry
Class: 5 Preparations for destroying vermin; pesticides, insecticides, parasiticides; fungicides, weedicides and herbicides
(“the Goods”)
Trade Mark:   (“the Trade Mark”)
On 16 April 2007 Crop Smart 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 Trade Mark from the register, alleging the Trade Mark was not used in good faith in relation to the Goods during the three year period ending on 16 March 2007 (“the Non-use Period”).
Section 92 of the Act as it stood at 16 April 2007 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 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) that, on the day on which the application for the registration of the trade mark was filed, the applicant for registration had no intention in good faith:
(i) to use the trade mark in Australia; or
(ii) to authorise the use of the trade mark in Australia; or
(iii) to assign the trade mark to a body corporate for use by the body corporate in Australia;
in relation to the goods and/or services to which the non-use application relates and that the registered owner:
(iv) has not used the trade mark in Australia; or
(v) has not used the trade mark in good faith in Australia;
in relation to those goods and/or services at any time before the period of one month ending on the day on which the non-use application is filed;
(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) If the right or interest on which a person relied to make an application (under subsection (1) or (3)) to obtain the removal of a trade mark from the Register becomes vested in another person, the other person may, on giving notice of the relevant facts to the Registrar or the court (as the case requires), be substituted for the first-mentioned person as the applicant.
Section 100(1)(c) of the Act provides that the Opponent bears the onus of rebutting the allegation made against it under s.92(4)(b), which it may do by, inter alia, establishing that the Trade Mark, (or, per s.100(3)(a), the Trade Mark with additions or alterations not substantially affecting its identity), was used in good faith during the Non-use Period. I proceed on the basis that the relevant standard of proof is on the balance of probabilities.
The Opposition
On 10 August 2007 the Opponent filed a Notice of Opposition to the removal raising two relevant grounds, which may be summarized as follows:
· the Trade Mark, or the Trade Mark with additions or alterations not substantially affecting its identity, was used in Australia for relevant goods during the Non-use Period; and
· the Registrar in her discretion ought to refuse the application for removal.
The Opponent’s evidence in support consists of statutory declarations by:
· David Andrew Idda made on 9 May 2008, with Exhibits DAI-1 to DAI-3; and
· Manjit Singh Bhaur made on 27 June 2008, with Exhibits MSB-1 to MSB-3.
The Removal Applicant chose not to rely on any evidence in answer.
The matter was heard before me as delegate of the Registrar of Trade Marks in Sydney on 7 May 2009. Tim O’Callaghan of Piper Alderman, Lawyers appeared for the Removal Applicant. Michelle Howe of Davies Collison Cave, Patent & Trade Mark Attorneys, appeared for the Opponent.
The Evidence and Submissions
Actual use
The Opponent’s evidence is that, whereas it has not used the trade mark as registered, it has continuously used the trade mark SMART 450 in Australia from August 1998 in relation to a particular herbicide. Mr Idda exhibits copies of many purchase orders and invoices issued during the Non-use Period which demonstrate this use of the trade mark SMART 450 and both Mr Idda and Mr Bhaur exhibit a label and an instruction sheet sold with the herbicide which each prominently feature the trade mark SMART 450. In the case of the exhibited purchase orders and invoices the SMART 450 trade mark is either typed or hand-written in plain script, with the element SMART sometimes rendered in upper case only and sometimes as “Smart”. The SMART 450 mark appears on the exhibited label and instruction sheet as shown below:

The Removal Applicant does not dispute this use. The Removal Applicant does however dispute the Opponent’s claim that the trade mark SMART 450 qualifies as the trade mark “with additions or alterations not substantially affecting its identity” as comprehended by s.100(3)(a) of the Act[1].
[1] Which essentially reflects the words used in the definition of “use of a trade mark” provided in s.7(1) of the Act.
Both parties’ representatives noted that the words “with additions or alterations not substantially affecting its identity” used in sections 7(1) and 100(3)(a) are echoed in other provisions of the Act, such as those dealing with amendments to pending or registered marks, and those relating to series applications. Both parties consequently referred in their submissions to case law in some of these other areas.
On behalf of the Opponent, Ms Howe referred firstly to QH Tours Ltd v Mark Travel Corporation (1999) 45 IPR 533, wherein the hearing officer concerned held that use of the trade mark FUNJET for travel agency services was effectively use of the trade mark FUNJET SERVICE as registered, since omission of the element SERVICE was an alteration that did not substantially affect the identity of the registered mark.
It is however difficult to see how this decision, where the element SERVICE was clearly both descriptive and redundant in the context of the services for which the mark was registered, assists the Opponent in the case at hand. In the present case the differences between the SMART 450 trade mark for which use has been shown and the trade mark as registered are on the face of it much more significant. It is apparent from consulting the Trade Marks Register that there are currently more than a hundred registered marks in Class 5 alone which feature the element SMART, presumably owned by many different parties. While one must be careful not to place too much emphasis on the state of the Register without knowing details of the registrations or how the relevant trade marks may be used, this large number of Class 5 registrations does prima facie tend to confirm that the element SMART is a relatively popular one. Its popularity is not surprising since, unlike the apparently made up word FUNJET, (which could on the face of it function in its own right as a trade mark for the services concerned), SMART is both a relatively common surname (appearing some 3,750 times on the Australian Electoral Roll as at the time of writing) and may also be a descriptive, indeed laudatory, word. In my view the manner of stylization of the trade mark is thus very significant in both signalling it is a trade mark in the first place and in distinguishing it from the trade marks of others which also feature the word or name SMART. In other words, whereas the element SERVICE in the FUNJET SERVICE trade mark was descriptive and redundant in relation to a travel agency service, the stylization of the element SMART in the Trade Mark is in my opinion part of the identity of the Trade Mark.
Ms Howe also referred to the decision of Assistant Registrar Farquar in Lynson (Aust) Pty Ltd’s Appn (1987) 9 IPR 350. In this case it was held that the trade marks LYNSON (in plain capital letters) and qualified for registration as a series under s.39(1)(c) of the Trade Marks Act 1955[2] because “they resemble each other in material particulars” and “differ in respect of … matter which is not distinctive and does not substantially affect the identity of the mark”. Ms Howe further referred me to a number of current registrations for series of trade marks where, she submitted, the marks showed as much variation from each other as that between the SMART 450 mark and .
[2] Whose analogue is found in s.51 of the 1995 Act.
Mr O’Callaghan suggested caution in treating the test for qualification as a series as necessarily directly analogous to the case before me. However I do not find Ms Howe’s submissions based on the Lynson case persuasive in any event. She relied in particular on the following quote from the Assistant Registrar’s decision:
Briefly, and only in general terms, the variation between members of a series must be such that no additional element or dimension is contributed thereby to the overall identity of the marks; the “idea” of the mark must remain the same. If the marks consist of a word, then that word must be the only element in the identity of each member of the series. The typescript may be varied, but only between known, conventional scripts, not fanciful get-up. The spelling may be varied, but only if the pronunciation and meaning remain unaffected. The separation of one word into two, or the running together of two words would be governed by the same considerations: the sound and meaning must remain the same. The appearance of the word or words must also be taken into account when the spelling or physical arrangement of the letter is varied. Minor changes (such as “pelican” and “pelikan” or “fastfoto” and “fast-foto”, will be acceptable where more extensive ones will not (eg “tablet” and “tabblett” or “tab-let”, “ta-blet” and “tabl-et”).
On these criteria, properly applied, the trade marks SMART 450 and would not qualify for registration as a series in my view.
Moreover, as Mr O’Callaghan highlighted, the Assistant Registrar had continued:
It is obvious that the addition of a device element to a word mark would, in almost all cases, constitute a substantial alteration to its identity, the only exception being the simplest of conventional embellishments, contributing nothing of distinction to the mark as a whole.
I thus do not believe the Lynson case supports the Opponent’s position. Nor do I consider relevant the examples of registered series said to conform to the principles in Lynson which Ms Howe mentioned in her submissions.
Both parties’ representatives referred also to the Full Federal Court’s decision in Woolworths Ltd v BP Plc (No 2) (2006) 70 IPR 25. In this case Heerey, Allsop and Young, JJ were considering whether amendments made by BP Plc to the endorsements of its applications, (which resulted in the applications being for the colour green as the “predominant” colour rather than for the colour green alone), were made contrary to s.65 of the Act. Section 65 only permits an amendment which “does not substantially affect the identity of the trade mark”. On this issue generally their Honours said:
[48] The analysis, in any case, of the “identity of the trade mark” will not necessarily be straightforward: see Re British Hoist & Crane Co Ltd’s Trade Mark (1955) 72 RPC 66; Otrivin Trade Mark [1967] RPC 613 (Otrivin); Pelican Trade Mark [1978] RPC 424 (Pelican) and Re Lawson (2001) AIPC 91-693 (Re Lawson). Bound up in the notion of “identity” is the feature or features by which the mark will be recognised as distinguishing the proprietor’s goods or services from those of others. When the mark is a word or device or combination thereof, any change that affects what is conveyed in terms of distinctiveness will affect the identity of the mark. Thus to change spelling, unless there is no change in meaning or pronunciation, has been taken to change identity: Otrivin and Pelican. In Re Lawson, the proposed omission of a word adjacent to the device, leaving just the device, changed the identity of the mark. See generally the discussion and cases referred to in M Davison, et al, Shanahan’s Australian Law of Trade Marks and Passing Off (3rd ed, Lawbook Co, Sydney, 2003) at 328–30
As indicated in paragraph 13 above, the stylization of the element SMART in the Trade Mark is in my opinion part of the identity of the Trade Mark, since I believe it contributes significantly to the capacity to distinguish enjoyed by the mark as a whole. Such view is, I consider, entirely consistent with their Honours’ above quoted words.
Finally, Mr O’Callaghan referred to Hearing Officer Thompson’s decision in Re Application by Brown (2004) 64 IPR 421, another case which concerned whether a proposed amendment to a pending trade mark fell within s.65 of the Act. There the hearing officer said:
[13] As a matter of logic, any amendment that does not substantially affect the identity of a trade mark is one that leaves it substantially identical to the trade mark before the amendment was applied. Thus, the principle in Melbourne Chinese Press Pty Ltd v Australian Chinese Newspapers Pty Ltd (2004) 63 IPR 38; [2004] FCAFC 201 of considering the two trade marks “in one go” is not transferable to these reasons as that matter was one in “deceptive similarity”. The tests in deceptive similarity are ones of impression in which market context and the habits of purchasers and traders are considered and in which doctrines such as an “imperfect recollection” might apply. In substantial identity cases, the tests are more objective.
[14] The test is, thus, the familiar one of trade mark law: it is the comparison of the two trade marks (the one as at publication and the putative other after the amendment), and consideration of whether the two trade marks are substantially identical. The test for substantial identity is that with the two trade marks side by side and an objective comparison of their features: Shell Co of Australia Ltd v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407 at 414 ; 1B IPR 523 at 528 (reversed on appeal but not on this principle):
“In considering whether marks are substantially identical they should, I think, be compared side by side their similarities and differences noted and the importance of these assets having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison.”
When the SMART 450 and trade marks are compared side by side and considered in this light, I agree with Mr Callaghan’s submission that they are not substantially identical. It follows, “as a matter of logic”, that use of the SMART 450 mark is not use of the Trade Mark “with additions or alterations not substantially affecting its identity”. I mention that I do not consider Ms Howe’s argument that “consumers [would] recall and refer to both trade marks as the ‘SMART’ trade marks”, even if correct, to be relevant to the somewhat more objective judgment called for by a side by side comparison of the marks.
In summary, I find the Opponent’s use of the trade mark SMART 450 in relation to herbicides is not directly relevant to its opposition except possibly in relation to exercise of the Registrar’s discretion pursuant to s.101(3) of the Act[3].
[3] I mention section 101(4) is not relevant in this case because I have found there has been no use of the Trade Mark.
The Registrar’s Discretion
Where a ground on which a removal application was made has been established, s.101(1) gives the Registrar the discretion to remove the trade mark “in respect of any or all of the [registered goods]”, whilst s.101(3) explicitly provides discretion may be exercised in the Opponent’s favour if the Registrar is satisfied it is reasonable to do so.
Early decisions considering exercise of the discretion under s.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[4]. As Ms Howe noted, however, the Courts have subsequently clarified that “exceptional circumstances” are not required. In the recent decision in Pioneer Computers Australia Pty Ltd v Pioneer KK [2009] FCA 135 (23 February 2009), for example, Bennett, J said:
[4] See for example Figgins Holdings Pty Ltd v Beltrami SpA (1998) 46 IPR 411 (at pp 418-9), to which both Ms Howe and Mr O’Callaghan referred at the hearing.
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[5] 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[6] 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.
[5] Kowa Co Ltd v NV Organon (2005) 66 IPR 131
[6] E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2008) 77 IPR 69

In considering Falconer, J’s suggested guidelines in relation to the present facts I note the Opponent’s evidence indicates it has not used the trade mark at any time, whether before, during or after the Non-use Period, despite its being registered since February 2000. The Opponent has therefore never had any reputation in the trade mark , residual or otherwise, of which anyone, the Removal Applicant included, could be aware.
Ms Howe nevertheless reasoned that the evidence showed the SMART 450 trade mark would be well known amongst what she described as “the specialized agricultural herbicide market”, given its use since August 1998, and that the sales figures in the Idda declaration suggested there was a “strong awareness of the trade mark”. Because of the resemblance of the SMART 450 trade mark to the mark as registered, she argued, “consumers would automatically associate the registered SMART mark with the Opponent”. She submitted that removal of the registration “would be deceptive as it would misrepresent the marketplace reality”. Finally, she submitted that removal might allow a third party to adopt and use the Trade Mark and that because of its resemblance to the known SMART 450 mark deception or confusion would result.
In this regard Ms Howe referred to the decision of Sackville, J in Soncini v Registrar of Trade Marks (2001) 51 IPR 411, where the registered owner of the trade marks bEWARE, bEWARE designs and bAby bEWARE was also opposing removal pursuant to s.92(4)(b) of the Act. All three registrations covered the identical goods in Class 25. His Honour found that the bEWARE and bEWARE designs trade marks had enjoyed relevant use, but that the bAby bEWARE mark had not. The registered owner’s attorney argued that the prominence of the element bEWARE in all three marks suggested use of the bAby bEWARE mark by an unrelated party would be likely to deceive or cause confusion and that the discretion under s.101(3) to not remove the bAby bEWARE mark should therefore be exercised in the registered owner’s favour to prevent this happening. Without an appearance by, or contrary submissions from, the removal applicant, his Honour accepted this submission, albeit without great enthusiasm, stating:
[19] Not without some hesitation, I accept the argument advanced by Mr Webb in relation to the bAby bEWARE mark. I have not had the advantage of hearing a contradictor on this issue. In the absence of such a contradictor, I think that the risk that use of the mark would deceive or cause confusion is sufficient to justify an exercise of discretion in the applicant's favour.
I am not, however, persuaded by Ms Howe’s submissions. I do not believe the relevant public would be adversely affected by removal of the trade mark. Logic suggests no member of the public should be adversely affected by the removal from the Register of a trade mark which has never been in public use and which is not therefore known by the public at all. As to whether removal might lead to deceptive or confusing use of the trade mark by a third party, there is no evidence before me suggesting this is likely to happen. I do not in any event consider the facts in the Soncini case are analogous to the position here. In Soncini the element bEWARE common to all three trade marks was on the face of it very distinctive. It was neither a common surname nor a descriptive or laudatory word in relation to Class 25 goods and it was rendered in a consistent stylized manner in all three trade marks. The element SMART common to the SMART 450 and trade marks, by contrast, contains little inherent capacity to distinguish. As mentioned in paragraph 13 above, the element SMART currently appears in more than a hundred registered trade marks in Class 5 alone. It does not therefore seem to me removal of the trade mark from the Register is likely to contribute to deception or confusion amongst the relevant public in any significant way.
Ms Howe further submitted the Opponent would be prejudiced by removal of the trade mark from the Register. There does not however appear to me to be any obvious need for the Opponent to maintain registration 824645, given the trade mark has already been registered for more than nine years without being used and given, as Mr O’Callaghan pointed out, the evidence discloses no plans for its future use. Nor on the face of it would removal of the registration have any relevance to the Opponent’s ability to continue using the SMART 450 trade mark for its herbicides in the same manner it has done since August 1998[7].
[7] I note from the Trade Marks Register that the Opponent in fact relied on ss.41(5) and 44(4) of the Act to have its SMART 450 trade mark registered as from 12 February 2008 in respect of “Non-selective herbicides” in Class 5.
In summary, while I accept that the Opponent is not required to point to “exceptional circumstances”, the Opponent has not satisfied me 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 its favour.
Decision
I find that there was no use of the Trade Mark in good faith in the course of trade in Australia for the Goods during the Non-Use Period and thus that the opposition has not been established. I further find no circumstances have been shown which warrant exercise of the Registrar’s discretion to not remove the Trade Mark in respect of all of the Goods. I accordingly direct that registration 824645 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
As the successful party, the Removal Applicant is entitled to its costs and I award costs against the Opponent as per Schedule 8 of the Trade Marks Regulations 1995.
Michael Kirov
Hearing Officer
Trade Marks Hearings
9 June 2009

Delegate:	Michael Kirov
Representation:	Opponent: Michelle Howe of Davies Collison Cave, Patent and Trade Mark Attorneys Applicant: Tim O’Callaghan of Piper Alderman, Lawyers
Decision:	2009 ATMO 41 s.92(4)(b) opposition: No relevant use shown and opposition not established. No reason for exercise of discretion in Opponent’s favour. Trade Mark to be removed. Costs awarded against Opponent.

[2009] ATMO 41

9 June 2009