Aquila Pty Ltd v Auqua Swimwear Pty Ltd

[2017] ATMO 11

TRADE MARKS ACT 1995

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

Re:Opposition by Aquila Pty Ltd to application under section 92 of the Act by Auqua Swimwear Pty Ltd to remove trade mark number 983776 (3, 18, 25 and

35) – [AQUILA] - in the name of Aquila Pty Ltd

DELEGATE:

Bianca Irgang

REPRESENTATION:

Opponent:   Mr   Peter   Creighton-Selvay   of   Counsel   instructed   by Madgwicks

Non-use applicant: Not present at the hearing

DECISION:

2017 ATMO 11

S 96 opposition–use shown by opponent for limited goods in class 25– s101(3) - Registrar’s discretion appropriate to keep the goods – non-use application unsuccessful – trade mark 983776 to remain on the Register for all goods in classes 25.

Background

1. This matter is an opposition proceeding under section 96 of the Trade Marks Act 1995 (‘the Act’) in which by an application under subsection 92(4)(b) filed on 21 April 2015, Auqua Swimwear Pty Ltd (‘the removal applicant’) has sought partial removal from the Register of the trade mark (‘Trade Mark’) appearing below in respect of the goods “swimwear; clothing for swimwear” in the class 25 specification. The details of the Trade Mark are as follows:

1. Aquila Pty Ltd (‘the opponent’) filed a notice of intention to oppose removal on 11 May 2015. The statement of grounds and particulars filed on 4 June 2015 asserted that the ground on which the removal applicant relied was not relevant because the opponent had continually used the trade mark in good faith for clothing and that “swimwear; clothing for swimwear” are goods that fall within the description or category of “clothing”. The opponent also asserted that it has established a substantial goodwill in the Trade Mark for class 25 goods and that it is in the public interest that the trade mark class 25 goods not be limited to exclude “swimwear; clothing for swimming” or amended due to the likelihood of confusion in the relevant marketplace due to the similarity of the trade mark ‘[AUQUA]’ subject of the removal applicant’s currently opposed application 1637279.

1. On 13 July 2015 the removal applicant filed its Notice of Intention to Defend. The parties then filed evidence in accordance with the Trade Mark Regulations 1995 (‘the Regulations’).

1. The matter came before me, as a delegate of the Registrar of Trade Marks, at a hearing in Canberra on 4 November 2016. Peter Creighton-Selvay of Counsel instructed by Madgwicks appeared on behalf of the opponent. The removal applicant was not present at the hearing but did provide written submissions for consideration by way of its legal representatives Macpherson Kelley.

Legal Framework

1. Part 9 of the Act governs the removal of trade marks from the Register for non-use. The sections of that part which are most relevant to the case in hand are sections 92, 96, 100 and 101.

1. Section 92(4)(b) provides that a person may apply to the Registrar to have a trade mark removed from the Register because it has not been used for a continuous period of three years. The removal application must be in accordance with the Regulations1 and may be made in respect of any or all of the goods in respect of which the Trade Mark is registered. In particular, subsection 92(4)(b) provides:

(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:

…

(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)  the trade mark in good faith in Australia;

in relation to the goods and/or services to which the application relates.

1. As the Registrar’s delegate observed in Courier Luggage Pty Ltd v Wenger SA Inc2:

Section 100(1) of the Act provides that the opponent bears the onus of rebutting the allegation made against it under s92(4) which it may do by, inter alia, establishing that the trade mark, (or, per section 100(3)(a), the trade mark with additions or alterations not substantially affecting its identity), was used by the registered owner in good faith during the relevant period. I proceed on the basis that the relevant standard of proof is on the balance of probabilities.

The required use is as a trade mark, that is to say it is as a badge of origin in that it indicates a connection in the course of trade between the goods and the person who applies the mark to the goods: for example see E&J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144 at [41] – [43].

The use must be genuine commercial use in accordance with the test in

Imperial Group Ltd v Philip Morris & Co [1982] FSR 72. A single bona

1 Regulations 9.1 to 9.4 of the Trade Marks Regulations 1995.

2 [2015] ATMO 10

fide use of the trade mark during the non-use period may be sufficient to resist an application for removal: Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261; (2001) 51 IPR 149 at [17]. However, Wilberforce J, in Nodoz Trade Mark (1962) RPC 1 (Nodoz) at 7, said that if a registered owner relies on one single act of use of the trade mark, then that single act ought to be established by “if not conclusive proof, at any rate overwhelmingly convincing proof.”

The tribunal may not be persuaded by evidence that is solely from the internal files of the opponent: Nodoz, supra; or of a circumstantial nature: Trina Trade Mark [1977] RPC 131; although one invoice, if genuine, may suffice: Geo W McPherson v Remington (1999) 47 IPR 636.

1. In the present matter the relevant period for the purposes of subsection 92(4)(b) is the three year period ending on 21 March 2015 (‘the relevant period’).

1. Further, section 101 of the Act deals, inter alia, with the Registrar’s discretion:

Determination 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)     Subject to subsection (3) and to section 102, if, at the end of the proceedings relating to an opposed application, the court is satisfied that the grounds on which the application was made have been established, the court may order the Registrar 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.

(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.

1. In Pioneer Computers Australia Pty Ltd v Pioneer KK3   Bennett J made the following observations concerning the Registrar’s discretion:

   [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 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).

…

[171] By amendment in 2006, s 101(4) was added to provide that without limiting the matters that the Registrar may take into account in deciding under s 101(3) not to remove a trade mark from the Register, the Registrar may take into account whether the trade mark has been used by the registered proprietor in respect of (a) similar goods or closely related services; or (b) similar services or closely related goods. The parties disagree as to whether or not the matters now raised in s 101(4) are able to be taken into account for the purposes of the unamended section; that is, whether it was necessary to insert s 101(4) to add discretionary factors not previously available, or to clarify that they were always available to be taken into account.

[172] There is no limitation within s 101(3) on the discretion, nor any indication of the factors to be taken into account. In the Explanatory Memorandum to the Trade Marks Amendment Bill 2006 (Cth) by which s 101(4) was introduced, it is stated that ‘[c]urrently, it is not clear that the Registrar is able to take use on closely related goods or services into account, when deciding whether to exercise his or her discretion not to remove a trade mark from the Register’ and that the amendment was for the purposes of clarifying the Registrar’s discretion.

Evidence

Evidence in Support

·The  declaration  of  Luke  Longo  (‘Longo  1’)  dated  19  October  2015 accompanied by exhibits LL-1 to LL-68

Evidence in Answer

3 [2009] FCA 135; (2009) 176 FCR 300; (2009) 80 IPR 38; [2009] AIPC 92-354

6

·The declaration of Camila Chirchella Barata Costa dated 27 January 2016 accompanied by exhibits AUQC-1 to AUQC-5

Evidence in Reply

·The declaration of Luke Longo (‘Longo 2’) dated 14 April 2016 accompanied by exhibits LL-69 to LL-77

·The declaration of Tim Sturt dated 14 April 2016 accompanied by exhibit TS- 01 (being exhibit LL-73 to Longo 2)

Discussion

1. To defeat the non-use application, the opponent must demonstrate that it has used the Trade Mark on the ‘swimwear; clothing for swimming’ (‘the removal goods’) in class 25 to which registration applies during the relevant period. This arises by virtue of section 100(1)(c) of the Act. As mentioned earlier, the evidentiary standard is on the ‘balance of probabilities’ which means that I must be satisfied it is more likely than not that the Trade Mark was used in the relevant period.

1. The main arguments advanced by the removal applicant in this case are that:

·The opponent has not demonstrated use of the Trade Mark as registered for the relevant goods; and

·That the opponent’s evidence is entirely insufficient and absent of any proof that the opponent had gone beyond investigating whether to use the Trade Mark and beyond planning to use the Trade Mark and had gotten to the stage where it can be seen objectively to have committed itself to using the Trade Mark.

1. The opponent has conceded that it has not used the Trade Mark on swimwear during the relevant period, but asserts that it has used the Trade Mark on related goods which are intended to be worn in conjunction with activities such as swimming and which are sold through the same trade channels. The opponent has supplied a number of exhibits and declarations which it claims demonstrate that it had gone beyond investigating and planning to use the Trade Mark on swimwear and that a line of swimwear bearing the Trade Mark was to be released in 2016/2017. I say now that many of the exhibits are not persuasive in and of themselves to prove use of the Trade Mark in the relevant period. The opponent has also pointed to the motivations of the removal applicant and directs my attention to the removal applicant’s trade mark

application for [AUQUA] in class 25. I do note the striking similarities between the opponent’s Trade Mark and the removal applicant’s trade mark [AUQUA].

1. However, the opponent has argued that if I am not satisfied that there was relevant use then it relies on the Registrar’s discretion under subsection 101(3). Indeed, the argument that I should exercise the Registrar’s discretion in this matter formed the majority of the opponent’s submissions at hearing.

1. Longo 1 states that the opponent is an Australian owned family company that has produced and distributed clothing products in Australia since 1958. The opponent first adopted and used the word AQUILA in 1958 as a (Latin) translation of the word “eagle”. However, it is since 1998 that the opponent has used its [AQUILA] trade mark continuously across a range of menswear including footwear and ladies footwear. The opponent says it applies its [AQUILA] trade mark to clothing items which, it argues, are typically related to swimwear and may be considered clothing for swimming. These clothing items are typically t-shirts, shorts and casual shoes such as thongs and sandals.

1. Significant portions of the opponent’s evidence demonstrate that its clothing goods were marketed during the relevant period as casual clothes which can be worn when going to the beach or pool4. The opponent also asserts that such casual clothes are often sold by retailers in close proximity to bathing suits and has provided evidence in exhibits LL-11 to LL-14 accompanying Longo 1 to support this argument.

1. The opponent sells its casual clothing goods through its own [AQUILA] branded retail stores, of which there are 30 in Australia5. The sales of its clothing goods from the years 2002 until 2015 are considerable and demonstrate significant growth over the years6. Longo 1 also demonstrates that the opponent has rigorously and extensively promoted its clothing goods through what appears to be most mediums of advertisement ranging from social media, billboards and catalogues to print and television7. The many examples of advertising and the level of detail the opponent has provided in its evidence is impressive. However, despite this, I note that the opponent

4 Exhibits LL-20 to LL-23 accompanying Longo 1

5 Exhibit LL-18 accompanying Longo 1
6 Exhibit LL-24 accompanying Longo 1

7 Exhibits LL-25 to LL-62 accompanying Longo 1

has simply not used its trade mark on the goods for which the removal applicant seeks removal, namely, swimwear and clothing for swimming. I note the opponent’s arguments that its casual clothing is similar and often sold in close proximity to swimwear but I believe that these arguments are more geared towards favorable exercise of the Registrar’s discretion rather than establishing use for the actual goods subject of the removal application within the relevant time period.

1. I am not satisfied that the opponent has used the Trade Mark on the relevant goods within the relevant period. Therefore, I turn to the opponent’s arguments that I should exercise the Registrar’s discretion to maintain the Trade Mark on the Register for the relevant goods.

Registrar’s Discretion

1. As indicated in paragraphs 9 and 10 above, there is a discretion embodied in subsection 101(3) of the Act.

   (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.

1. The application for partial removal of the trade mark is limited to removal of ‘swimwear and clothes for swimming’ in class 25. The opponent has requested the Registrar’s discretion to allow the Trade Mark to remain registered for all those goods. The opponent has not demonstrated use of the Trade Mark on the removal goods during the relevant time period although it has shown use for casual clothing goods which may well be used in close conjunction with them. As the onus was on the opponent to show use on the relevant, it is therefore open to me to decide to order removal for those goods. It is not my intention to do so, and my reasons for this decision follow.

1. The opponent has put forward a number of arguments for consideration in my exercise of the Registrar’s discretion. The main thrust of these arguments are:

·The opponent has a substantial and long standing reputation in Australia for the sale of casual wear bearing the Trade Mark;

9

·The opponent’s ] casual clothing is often sold in close proximity to swimwear and clothing for swimming8;

·The removal applicant’s [AUQUA] trade mark is very similar to [AQUILA] which only emphasized that confusion is likely to occur between the trade marks due to the similar nature of the respective goods;

·The opponent has demonstrated that it has long intended to move into the market for the removal goods which is evidenced by a series of drawings of board shorts and images of print patterns, emails and text messages sourcing the materials and plans to release a swimwear line (board shorts) in 2016/20179.

1. The removal applicant has argued that the opponent’s evidence of its intention to release a line of board shorts and pursue manufacture of such items had not gone beyond investigating and planning to use the trade mark on swimwear to the stage where it could be objectively seen to have committed itself to using the Trade Mark. The removal applicant pointed to the lack of clear details on the exhibits and noted that while there are some dates these are ambiguous and there appears to be a distinct period of time elapsing between that exhibit and the relevant period and without any action on the opponent’s part.

1. I am in agreement with the removal applicant that the lack of clear detail in the opponent’s evidence does preclude me from being satisfied that the opponent had established ‘use’ within the relevant period. However, taken in conjunction with the opponent’s substantial and long-standing reputation in casual wear often sold alongside swimwear and clothing for swimming as well as the striking similarities between the opponent’s Trade Mark and the removal applicant’s [AUQUA] trade mark, I consider it appropriate in this case to exercise the Registrar’s discretion in the opponent’s favour.

1. I consider the overall market in Australia for swimwear and clothing for swimming in class 25 is such that the casual clothing the opponent is selling may well be used and sold in such close conjunction with swimwear and clothing for swimming that it would produce a situation where trade mark confusion is a distinct likelihood. Particularly if the goods within the description of “swimwear and clothing for swimming” are divided up amongst a number of producers.

8 Exhibits LL-10 to LL-14 accompanying Longo 1

9   Paragraph  19  and  84  of  the  opponent’s  submissions;  paragraph  6  of  Longo  2;  Exhibit  LL-68 accompanying Longo 1; Exhibits LL-75 and LL-76 accompanying Longo 2

1. Drummond J commented on the issue of fine distinctions in respect of goods claims when he considered trade marks involving the word “Taipan” in McHattan v Australian Specialised Vehicle Systems Pty Ltd10. He said:

   The statute now makes clear that a mark can be limited by an order made on a non-use application to exclude goods in respect of which the mark was originally registered, but in respect of which specific goods the proprietor has not used his mark, while leaving his registration otherwise intact. Just as it was well established by authority that s 23 of the 1955 Act conferred a discretion not to remove or limit a registered mark even though relevant non-use was shown – see Carl Zeiss Pty Ltd’s Application (1969)122 CLR 1 – so does s 101 of the 1995 Act confer a discretion not to remove a mark from the Register or limit a registered mark to exclude from its scope specific goods in relation to which the registered proprietor of the mark has been unable to prove relevant use of his mark. In these respects, the liability of a registered mark to removal or limitation is much the same under both the 1955 and 1995 Acts.

   But in contrast to the position under s 23 of the 1955 Act, it is the registered proprietor who bears the onus of rebutting allegations of non- use of his mark in relation to the specific goods to which the non-use application relates. See s 100(1). As is clear from s 100(2) and (3), the registered proprietor will only rebut an allegation of non-use of specific goods covered by his registration by proving use of his mark in relation to those specific goods: proof of use of his mark in relation to different goods but which are goods of the same description as the goods the subject of the non-use application is no longer sufficient to defeat a non- use application in relation to particular goods covered by the original registration. The registered proprietor of a mark was thus better placed to defeat a non-use application brought under s 23 of the 1955 Act in reliance on his non–use of some of the goods covered by his registration than is the registered proprietor of a mark who is faced with a non-use application under s 92 of the 1995 Act.

   But, in my opinion, the restricted scope the registered proprietor of a mark has to defeat a non-use application brought under s 92 of the 1995 Act compared with the position under the 1955 Act shows that there is a real question as to the proper interpretation to be placed on the expression “any or all of the goods … in respect of which the trade mark … is registered” in s 92(1): if that provision is construed to permit fine distinctions to be drawn between two items, eg, between a sedan motor car and a utility motor car or the sort of distinction implicit in the second of the respondents’ non-use applications, viz, that between armoured military vehicles of greater than eight tonnes and smaller armoured military vehicles, the value of trade mark registration under the new Act is potentially capable of very great erosion. If s92, on its proper construction, permits of fine distinctions like this, s 44 might well need to be given a radically different reach from that which it appears on its face

10 (1996) 34 IPR 537

to have: there would seem to be little point in allowing limitation of a registration because of non-use of the mark in relation to goods only slightly different from those in respect of which the mark was registered, without also allowing the successful challenger to obtain registration for himself of that same mark in respect of those slightly different goods. The potential for fragmented ownership of the same or a very similar mark in respect of very similar goods to cause confusion, in my opinion, further illustrates the difficulties in identifying the construction that should be placed on the range of goods that s 92(2) permits to be made the subject of a non-use application.

1. Taking these judicial comments into account, I am satisfied that the distinction between casual wear sold in close conjunction with the removal goods would be akin to the distinction between the various species of motor cars and military vehicles to which Drummond J referred. Therefore, it would be inappropriate for me to restrict the class 25 claim of the opponent’s registration to only those goods for which actual use has been shown and I will not do so.

Decision

1. It is my decision that, the opponent having shown use on slightly less than the complete range of goods its specification in class 25 encompasses, and technically therefore removal applicant having made out a case for removal for at least some of the goods, it is not appropriate to restrict the goods specification to that demonstrated in the evidence in support. The application for removal is therefore unsuccessful.

Costs

1. The parties have requested costs. However, as each party has been successful in their claims to some degree, I determine that each party should bear its own costs.

Bianca Irgang Hearing Officer

Trade Marks Hearings 13 February 2017