Armco Steel Corp & Armco, Inc v Road & Construction Supplies of Australia Pty Ltd

[2000] ATMO 94

TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS,

WITH REASONS

Re:Opposition by ARMCO STEEL CORP & ARMCO, INC (respectively) to applications to remove trade mark registrations number 171831 & 220477 - ARMCO- under section 92 of the Act, by ROAD & CONSTRUCTION SUPPLIES OF AUSTRALIA PTY LTD.

Background

Trade marks number 171831 and 220477 consist, essentially, of the word ARMCO.  That is the entire of the latter trade mark.  The exact particulars of the first-numbered registration are as follows:

It will be convenient and appropriate, in this decision, to overlook the triangle device and to refer to both registrations in similar terms. 

The two trade marks have been registered with effect from their respective filing dates, 30 January 1962 and 9 July 1968.  The class 6 goods covered by the two registrations are similar - a broad range of wrought and semi-wrought goods of common metal in class 6, including rolled and cast goods, building materials, bridge decking fences and guardrails.

Since 22 May 1980, Armco Inc has been recorded as the owner of registration 220477.  However, because of an error at the Trade Marks Office, the earlier registration, 171831, still shows the original form of the name of that owner, ie Armco Steel Corporation.  I am satisfied that the two names reflect the same entity, a corporation of the state of Ohio that, in 1978, simply changed its name. 

Removal of the trade marks from the register is sought by Road and Construction Supplies Pty Ltd ("the removal applicant"). The removal applicant argues, under s 92(4)(b) of the Trade Marks Act 1995 (the act), that the two trade marks were not in use in the three year period ending 19 January 1999.

Non-Use application - history

The removal applicant filed applications to remove the two trade mark registrations on 19 February 1999.  This was accompanied by the declaration specified in regulation 9.1, stating that an inquiry has been conducted into the use of the mark and setting out the findings that support the ground relied on under s 92.

The respective registered owners have opposed removal of the registrations.  In this decision, I will refer to the opponents in the plural, as "the opponents", noting however that the two names represent the one company.

The opponents have served the removal applicant with a copy of their evidence in support of the opposition.  The opposition itself has followed the steps set out in parts 9 and 5 of the regulations.   In summary form, the evidence consists of:

·     Opponents' evidence in support, a declaration by Gary Hildreth

·     Removal applicant's evidence in answer, declarations by Pieter van Meel, Richard Keller and Meliza Smith

·     Opponents' evidence in reply, a declaration by Vaughan Barlow.

At the conclusion of the evidence stages, the removal applicant's attorneys, Callinan Lawrie, requested that the opposition be heard.  I conducted the hearing that was ultimately set down. Robert Kelson, patent attorney, represented the removal applicant.  The opponents neither appeared nor made written submissions.

Issues and decision:

The non-use provisions of Part 9 of the act have been often enough reproduced in Trade Marks Office decisions.  In basic terms, the provisions relied on by the removal applicant confer on the Registrar of Trade Marks, in particular circumstances, either an obligation or a discretion to remove a trade mark from the register.  If, as one possibility, it is alleged that the attacked trade mark has not been used in good faith for a three year period ending one month before a removal application has been made, the registration must be removed unless (as here) the removal application has been opposed. 

As a preliminary point, the notice of opposition impugns the removal applicant's standing as a person aggrieved.  However, the removal applicant's evidence makes it quite clear that it intends to use the trade mark ARMCO.  It is prevented from doing so by the continuance of the registrations in question and therefore has proper standing.

In the present instance, given that the removal application is opposed, the onus under s 100(1)(c) is on the opponents to rebut the allegation that the trade mark was unused.  As an alternative, the opponents could argue, under s 100(3), that various specified circumstances exist to justify retention of the mark.  However, there is nothing in the evidence to suggest that such arguments are intended or justified.  My approach, therefore, is to ask one question, and one only: has this trade mark been used in the relevant period, the three years ending 19 January 1999, for any goods covered by the registration?

In the lack of submissions from the opponents, I will first deal with the evidence itself, to set the scene.  Then I will turn to Mr Kelson's submissions on the import of the evidence.

The opponents' declarant, Gary Hildreth, has declared to what he refers to as sales of substantial amounts of goods under the trade mark ARMCO in Australia in the relevant period.  He also asserts that there has been a significant level of advertising and promotion of the goods "worldwide, including Australia".  I fully accept Mr Hildreth's veracity.  However, the determination of a critical question of fact, the use or non-use of a trade mark in Australia, is one for my decision, as a delegate of the Registrar of Trade Marks.  Deciding the ultimate fact that will essentially determine this opposition is to be done on the evidence, to my satisfaction.

Taking the evidence in answer and in reply together, it becomes clear that the use attested to by Mr Hildreth is for steel strip sold to Australian manufacturers, during the relevant period, for use as a raw material.  Such goods as the opponents sell into Australia are made in the USA and shipped here in the form of coils of stainless steel strip.  The buyers, manufacturers in this country, then consume that steel.  It does not retain its original form but is incorporated into whatever goods the opponents' customers put onto the Australian market.  There is no evidence of the specifics of this consumption, or of the use of the trade mark ARMCO on goods sold by those customers.  Therefore, the attacked registrations hang on a single question: is there, in the invoices attending the sales to those customers during the relevant period, evidence of actual use within Australia? 

The invoices use somewhat cryptic terminology.  I will accept that "CR STRIP STNLS", followed by a type number, identifies cold rolled stainless steel strip.  I will also accept that the abbreviations "C & F", in expressions such as "C & F Melbourne" or "C & F Sydney", under the heading "Basis of Sale", stands for "cost and freight".  This means the price includes both purchase and freight to the respective ports.  Likewise, "FOB" stands for "free on board".  Thus, "FOB Middleburg Heights, Ohio", indicates that the price includes purchase, but not freight from the place of consignment in Ohio.

Mr Kelson argued that these terms are standard commercial ones, meaning that ownership of the goods passed to the customer in the USA and that the goods are being freighted at the customer's risk.  In other words, he argued that all of the commerce under the goods was conducted in the USA.  All trade in the goods under the trade mark finished, he argued, in that country.  All that was left was a process of consumption in Australia.

Mr Kelson noted the terms of s 9(1)(c) of the act.  This reads, with para b also reproduced for the sake of completeness:

(b)a trade mark is taken to be applied in relation to goods or services:

(i)if it is applied to any covering, document, label, reel or thing in or with which the goods are, or are intended to be, dealt with or provided in the course of trade; or

(ii)if it is used in a manner likely to lead persons to believe that it refers to, describes or designates the goods or services; and

(c)a trade mark is taken also to be applied in relation to goods or services if it is used:

(i)on a signboard or in an advertisement (including a televised advertisement); or

(ii)in an invoice, wine list, catalogue, business letter, business paper, price list or other commercial document;

and goods are delivered, or services provided (as the case may be) to a person following a request or order made by referring to the trade mark as so used.

However, he noted that there was no evidence of any order making reference to the trade mark. 

Mr Kelson referred me to the YANX[1] and PALL MALL decisions, which he said showed up the key failing in the opponents' case.  The former decision illustrates the fact that, where goods are imported for resale, they need not be in the country at the time of the sale provided there is evidence of use of the trade mark in commerce in this country.  The PALL MALL decision, WD & HO Wills (Australia) Limited v Rothmans Limited, (1956) 94 CLR 182, looks at the import of goods into Australia for private consumption. The goods were cigarettes, ordered and paid for in the United States. The currently relevant part of the decision is as follows:

[1] Re Registered Trade Mark YANX; ex parte Amalgamated Tobacco Crop Limited (1951) 82 CLR 199.

In our opinion the whole trading in the cigarettes took place in the United States. It was there and there only that the trade mark "Pall Mall" was being used for the purposes of trade. When the goods left the United States they were no longer in the course of trade. Trading in them had finished. They had been consigned to the consumer and were at his risk. To repeat the words of Lord McMillan: "After goods have reached the consumer they are no longer in the course of trade. The trading in them has reached its objective and its conclusion in their acquisition by the consumer" [1945] AC at 97.

That is not to say that too much weight should be put on where the ownership of the goods changes hands.  In Estex Clothing Manufacurers Pty Ltd v Ellis and Goldstein Ltd, Kitto J said, of the connection between a seller of goods and his trade mark:

The mark is his property although the goods are not; and the mark is being used by him so long as the goods are in the course of trade and it is indicative of their origin that is as his products.  Goods remain in the course of trade so long as they are upon a market for sale.  Only when they are bought for consumption do they cease to be in the course of trade.  The concepts upon which the case turns are economic, commercial, business concepts concerning the marking and marketing of goods, rather than the provisions of the Sale of Goods Act concerning the passing of property.

Therefore, the fact that the goods ceased to be the property of the opponents while still at ports in the United States does not, of itself, determine the matter.  It is, in such a case, the background circumstances that will determine if there was trade mark use in Australia.  For example, consider Thunderbird Products Corp v Thunderbird Marine Products Pty Ltd (1974) 131 CLR 592. That case turned on the circumstances attending the importation of a single loosely assembled fibreglass boat into Australia. That boat was never intended for resale but for the making of moulds, from which other similar boats could be made and sold in Australia. In such a case, the High Court found that use lay in "the correspondence, the invoice and the shipping documents". Jacobs J expressly rejected the argument that the purpose of the sale was critical in itself. The test was a factual one: was there use in the Australian market "for the purpose of indicating a connexion in the course of trade between the goods and the person who uses the mark. … The clearest case of use for such a purpose in the course of trade is a use on an article sold by the user [of the mark] in Australia."

The present case is a long way short of that standard, let alone the "clear example" given by Jacobs J.  The goods were sold, not to a retailer but to an ultimate consumer, in such a way that they became the property of the buyer while still outside Australia, in circumstances about which there is no evidence.  Clearly, somebody has made a decision to supply ARMCO stainless steel strip to the Australian consumers but I have no way of knowing precisely what was originally ordered, or why, or how.  The evidence simply does not show that the trade mark figured in any of the transactions prior to the invoices.  The invoices themselves, prima facie, are evidence only of a trade in the United States.

Accordingly, I find that the trade mark has not, on the evidence, been used in Australia at any time during the relevant period.  While I have a discretion to allow the mark to remain on the register in such a case, I see no reason whatsoever for doing so.  The legislative presumption, in the absence of reason to the contrary, is that the registrations should be removed.

Conclusion

I decide that the trade mark registrations in question should be removed for all of the goods for which they are registered.  That will be effected after 30 days from the date of this decision unless, within that time, the Registrar of Trade Marks is served with a copy of a notice of appeal.  In the event of an appeal, the registrations will not be removed unless the appeal is decided or discontinued.

Costs

I award the removal applicant its costs as per the scale.  However, those costs will be taxed as follows:

• preparing evidence in answer: the costs to be taxed as one single matter

• receiving and perusing the notices of opposition and the opponents' evidence: Costs as per the scale for the first matter, and 20% of the scale for the second

• preparation of the matters for hearing, time at the hearing: one single matter.

Terry Williams

Hearing Officer
28 August 2000