Brett Wilson v Sura Bangyikhan Company Limited

[2010] ATMO 58

TRADE MARKS ACT 1995

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

Re:Opposition by BRETT WILSON to application under section 92 of the Act by SURA BANGYIKHAN COMPANY LIMITED to remove trade mark number 1041519 (33) - MEKONG - in the name of BRETT WILSON.

Delegate:	Heath Wilson
Representation:	Removal opponent: Gary Nock of Cullens, Patent and Trade Mark Attorneys. Removal applicant: Siobhan Ryan of Counsel instructed by Davies Collison Cave, Patent and Trade Mark Attorneys.
Decision:	2010 ATMO 58 Section 92(4)(a) – Intention to use the trade mark in good faith - use of the trade mark with additions or alterations substantially affecting the identity of the trade mark – s92(4)(a) not established and non-use application dismissed – costs awarded against the removal applicant.

Background

1.     On 20 July 2007, Sura Bangyikhan Company Limited (‘the removal applicant’) filed an application for the removal of trade mark registration no. 1041519 from the Register. Brett Wilson (‘the removal opponent’) subsequently filed a notice of opposition to the application for removal on 14 November 2007. The relevant details of the removal opponent’s trade mark registration are reproduced below:

Trade Mark	Filing Date	Class / Statement of Goods
MEKONG	11.2.05	Class: 33 Rum, whiskey, alcoholic spirits, but excluding rice wine and cocktails

2.     I heard this matter as a Delegate of the Registrar of Trade Marks on 22 June 2010 in Canberra. Siobhan Ryan of Counsel, instructed by Davies Collison Cave, patent and trade mark attorneys appeared for the removal applicant and Gary Nock of Cullens (patent and trade mark attorneys) appeared for the removal opponent.

Evidence

Evidence in Support

·Statutory Declaration of Brett Wilson dated 5 February 2008 with attached exhibits 1 -2 (‘the Wilson declaration’).

Evidence in Answer

·Statutory Declarations of Katherine Louise Kemp dated 10 November and 12 December 2008 with attached exhibits KK-1 to KK-15 (‘the Kemp declaration’).

·Statutory Declaration of Puchong Chandhanakij Peerapong Sirakarnbandit dated 12 January 2009 with attached exhibits PC-1 to PC-4 (‘1^st PC declaration’).

Evidence in Reply

·Statutory Declaration of Brett Wilson dated 10 April 2009 with exhibit 1. (‘2^nd Wilson declaration’).

Further Evidence

·Statutory Declaration of Puchong Chandhanakij Peerapong Sirakarnbandit dated 18 September 2009 with attached exhibit PC-5 (‘2^nd PC declaration’).

The Law

3. The application for removal of the above trade mark was filed under section 92(4)(a) of the Trade Marks Act 1995 (‘the Act’), and its provisions are as follows:

Section 92: Application for removal of trade mark from Register etc.

(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;

Onus

4. In the first instance, the onus in respect of section 92(4)(a) lies with the removal opponent[1] to establish the intention in good faith to use the trade mark ‘Mekong’ in Australia. As the owner of the trade mark has the presumption of intention to use the trade mark arising from the act of applying for the registration of that mark, the onus may be shifted to the removal applicant simply by making a positive statement regarding its intention to use it.[2] The removal opponent has made the following statement regarding his intention in paragraph 2 of the Wilson declaration:

The trade mark application that led to Australian trade mark registration number 1041519 was filed on 11 February 2005. I state that, on that date, I intended in good faith to use the trade mark MEKONG in respect of rum, whisky and alcoholic spirits. I further state that I continue to have an intention to use, in good faith, the trade mark MEKONG in respect of rum, whisky and alcoholic spirits.

[1] Section 100(1) of the Act.

[2] Structureco Inc v Starite Distributors Ltd (2000) 49 IPR 209.

5.     Accordingly, I find that the onus of proof has shifted to the removal applicant to establish the owner’s lack of intention to use the trade mark in good faith in Australia, at the time of filing the application. 

Reasons

6. If the removal opponent can establish actual use of the above trade mark in Australia at any time before 1 July 2007 (the filing date of the non-use application), the application under s92(4)(a) will be rebutted and therefore unsuccessful. A consideration of the removal opponent’s intention at the time of filing would then become unnecessary.

7.     In relation to the type of evidence that would be sufficient to establish trade mark use, “the tribunal may not be persuaded by evidence that is solely from the internal files of the opponent[3]: although one invoice, if genuine, will suffice.”[4] The removal opponent has not provided any evidence of sales of the product under his trade mark, but it is not in dispute that he has engaged in negotiations to use the trade mark in relation to the claimed goods.

[3] Nodoz Trade Mark (1962) RPC 1 per Wilberforce J.

[4] Geo W McPherson v Remington (1999) 47 IPR 636.

8.     Regarding use of the trade mark by the removal opponent, the submitted evidence establishes that the opponent commenced negotiations with suppliers, created websites and designed a bottle label for his product. Exhibit PC-3 from the removal applicant comprises correspondence from the opponent to the applicant around January 2007 outlining his desire to import the removal applicant’s ‘Mekhong Whisky’ product to Australia, and describing the arrangements he has made in preparation. These arrangements include negotiations with a supplier from Thailand, obtaining Australian liquor licenses, and setting up the websites of and in the name of Asian Spirit Imports Pty Ltd, a company that the removal opponent declares is under his control and direction.[5] While the existence of the websites is confirmed by examples attached to the declaration, the liquor licenses are not, and the supply negotiations are still in the preliminary stages. As a result, I am not satisfied that these arrangements constitute use of the trade mark in the course of trade in Australia for the purposes of this section.       

[5] Wilson Declaration, paragraph 5.

‘MEKONG’ and ‘MEKONG-GOLD’

9.     Ms Ryan submitted that the removal opponent has only intended to use the trade mark ‘Mekong-Gold’ from the filing date and not ‘Mekong’ as claimed. The preparations to use the trade mark ‘Mekong-Gold’ are borne out by the opponent’s previous statements in the exhibit to the 1^st PC declaration, the above website addresses, the appearance of ‘Mekong^TM Gold’ on the website, and the produced bottle label:

10.     While these examples do not necessarily indicate that he has no intention of using the trade mark ‘Mekong’ by itself in the future, I still find it appropriate to consider whether or not the use of the word “Mekong” with the addition of the word “Gold” amounts to use by the removal opponent of his trade mark ‘Mekong’.

11.     Both words are presented in the same font and have equal prominence on the bottle label and website, but should be considered in the context of the claimed goods, namely alcoholic spirits. Mr. Nock submitted that it is not uncommon for alcoholic drinks to feature an analogous reference to their quality or alcoholic strength. He pointed to examples in this particular industry such as “Johnny Walker Red/Black” and “XXXX Gold.” However, those brands have the additional advantage of trade reputation in their well-known “house mark” element, and do not suffer the disadvantage that the word ‘Mekong’ is less distinctive as a trade mark - being the name of a major river flowing through Thailand.     

12.     In relation to the issue of ‘alterations substantially affecting the identity of a trade mark’, the Hearing Officer in the case of QH Tours Ltd v Mark Travel Corp[6] found that omitting the word ‘service’ from the trade mark ‘Funjet-Service’ in relation to travel agency services did not amount to an alteration substantially affecting the identity of that trade mark. The addition of the word “Gold” has a different function[7] in the advertisement of the product as it may indicate a higher standard or strength of alcoholic beverage. However, the word “service” in the above case was entirely descriptive and I am not satisfied that the use of the word “Gold” is comparable in this matter. I find that its addition substantially affects the identity of the trade mark.

[6] QH Tours Ltd v Mark Travel Corp (1999) 45 IPR 553

[7] See Wellness Pty Ltd v Pro Bio Living Waters Pty Ltd [2004] 61 IPR 242

13.     Accordingly, the above examples of ‘Mekong-Gold’ cannot be relied upon to establish actual use of the trade mark ‘Mekong’. Despite the finding that ‘Mekong-Gold’ constitutes an addition which substantially affects the identity of the removal opponent’s trade mark, the result is not that there is a lack of intention to use ‘Mekong’. The removal opponent’s actions in relation to ‘Mekong-Gold’ at the very least establish that he has the capability and genuine intention to use Mekong albeit in a somewhat different format. It is also worth noting that the opponent’s common law trade marks do not solely consist of the word ‘Mekhong’ but are either a composite trade mark, or feature Thai characters which are translated as ‘Mekhong’, in conjunction with the English word. As the removal opponent has not established actual use of the trade mark, I will address the issue of intention to use, where the removal applicant now bears the onus.

Intention to use in good faith

14. Under section 92(4)(a) of the Act, an intention to use the trade mark ‘in good faith’ does not mean honest use, but a genuine (or bona fide) intention to use the trade mark. In Woolly Bull Enterprises Pty Ltd v Reynolds[8] it was stated that:

…the expression “use in good faith” has a well understood meaning in this context, viz, real, as opposed to token, use in a commercial sense.

[8] Woolly Bull Enterprises Pty Ltd v Reynolds (2001) 51 IPR 149 [at 154]: affirming the comments made in New South Wales Dairy Corporation v Murray Goulburn Co-Operative Company Ltd (1989) 14 IPR 26 [at 45] per Drummond J.

15.     This purpose was again confirmed in Edwards v Liquid Engineering 2003 Pty Ltd.[9] During the hearing of the current matter there was some discussion between the parties regarding the facts surrounding the appeal to the Full Federal Court in Liquideng Farm Supplies Pty Ltd v Liquid Engineering 2003 Pty Ltd[10] and whether those facts are analogous to this matter. While I agree that the facts of the current matter can be distinguished from those in Liquideng, the overall principles addressed by Justice Gordon in the Federal Court and subsequently by the Full Bench on appeal, are still applicable.  

[9] Edwards v Liquid Engineering 2003 Pty Ltd [2008] FCA 970 at [8].

[10] Liquideng Farm Supplies Pty Ltd v Liquid Engineering 2003 Pty Ltd [2009] FCAFC 7.

16.     In the first instance, the removal opponent stated that it intended to market the trade mark and bottle label ‘MEKONG’ in Australia after negotiating with a potential supplier in Thailand for the goods themselves. It was later revealed that this potential supplier was Thai Beverage Plc and that the removal applicant is in fact an affiliated business group within the Thai Beverage Co., Ltd (Plc) Group.

17.     While the removal applicant was not agreeable to the removal opponent’s labeling arrangement in Australia, I am not satisfied that this refusal means that the removal opponent no longer has the necessary intent to use (or to authorise/assign) his trade mark. However, there is no doubt that it was a setback in relation to his initial plans for the ‘MEKONG’ trade mark. In the meantime, the removal opponent agreed to advertise and distribute the applicant’s products ‘Mekhong’ and ‘Sang Som’ whiskey on his own website accompanied by the following wording:[11]

Buy now Mekong & Sang Som – Asian Spirit Imports Pty Ltd is the sole Australian distributor of Mekhong and Sangsom spirits from Thailand.  

[11] Wilson Declaration, Exhibit 2.

18. The removal applicant has provided evidence relating to the use of its own trade mark incorporating the word ‘MEKHONG’ in relation to the same goods. However, the relevance of this material to the initial question of the removal opponent’s intention is negligible. The removal applicant has also stated that the opponent is not the sole distributor of its products in Australia (despite the above advertisement) and has provided invoices to support this statement. The invoices indicate that a company named T.C.C. Cosmo Corporation Ltd shipped bottles of “Mekhong Original Thai Spirit” to an Australian business in 2002,[12] and exhibit PC-5 of the PC declaration establishes that TCC is the authorised agent for the removal applicant. It was also suggested that the auctioning of abandoned items (i.e. bottles of the removal applicant’s product named “Whiskey Mekong”) claimed from overseas travelers by Australian Customs to the general public would be sufficient to constitute trade mark use in Australia by the removal applicant.

[12] Exhibit PC-2 of the PC Declaration.

19.     While it is clear that Australian Customs is not an authorised user of the removal opponent, the above sales of the goods may still constitute use in the course of trade in Australia.[13] An overseas manufacturer does not have to knowingly project his goods into the course of trade in Australia in order to establish use, however, it should be noted that these particular items were either abandoned or warehoused goods (including unclaimed baggage). As a result, it is unclear whether the initial purchases were made by the ultimate consumers for their own consumption, or whether they were intended to be resold in Australia.  

[13] See E & J Gallo Winery v Lion Nathan Australia Pty Limited [2009] FCAFC 27.

20. In any event, while the invoices and the auction may establish use of the removal applicant’s trade mark in Australia, that fact still does not nullify the opponent’s intention to use this current trade mark, and therefore has little effect on the ultimate outcome of this matter. Ms Ryan further submitted that I should take into account the removal applicant’s “worldwide reputation in the MEKHONG trade mark in relation to whiskies…” particularly when exercising the discretion under section 101 of the Act. Even if the removal applicant enjoyed a substantial reputation in Thailand and Australia for its trade mark, that fact would not even support a circumstantial case of a lack of good faith, as it does not address the primary issue of whether the removal opponent has a genuine intention to use the trade mark. The common law reputation of the removal applicant’s trade mark does not assist the application for removal and would be better suited to a ground of opposition under section 60 of the Act.

21. Section 92(4)(a) of the Act is not the appropriate avenue in which to address any possible prior common law rights or reputation the removal applicant may or may not have in its trade mark, or any possible confusion which may result from the use of the removal opponent’s trade mark in Australia. Justice Gordon in Edwards v Liquid Engineering (supra) commented that [at 8]:          

…during the course of the hearings it became apparent that what LE 2003 really wanted, and should have applied for in the first place, was the expungement of the registrations by Edwards under s 88 of the TMA on the basis that Edwards was not the owner of the unregistered marks; ss52 and 58 of the TMA.

And [at 11]:

…it was apparent that s 92 of the TMA was not apt to raise the real issue between the parties in this case. Parties should not be encouraged to bring inapposite claims on the grounds that they are cheaper; such a strategy may, as this case shows, backfire and if that occurs, it will result in more costs being incurred than if the best claim was brought in the first place.

22. Ms Ryan also submitted that the removal opponent has not demonstrated his intent to supply goods under the trade mark, other than intent to supply the goods produced by the removal applicant. In short, he has not provided evidence of a secondary plan to use the trade mark if, as has occurred, his initial supplier did not agree to ship its product under his label. The onus is on the removal applicant to establish its case however, and the fact that the removal opponent has not used the ‘MEKONG’ trade mark at all in relation to the goods but rather ‘Mekong-Gold’, does not address s92(4)(a) of the Act. In the same way that a lack of actual trade mark use does not establish a lack of intention to use, I find that the use (or preparations for the use) of a different trade mark would similarly fail to establish a lack of intention to use the claimed mark.

23.     Even if the meaning of the expression ‘in good faith’ referred to an application made with honest motives, I am not of the view that the removal applicant intended to frustrate the removal applicant’s trade in Australia or deceive the Australian public. If the evidence made it clear that the removal opponent always intended to either sell the trade mark MEKONG to the removal applicant, or only to frustrate the trade in the removal applicant’s product in Australia, this may have supported a finding that the intention to use the trade mark himself at the time of filing was not bona fide.

24.     The evidence does not bear this out however, as there is no discussion of him offering to sell the trade mark to the removal applicant, and only that he appeared to want to sell the removal applicant’s product in Australia, albeit under his own label. It is clear that he was such an admirer of the removal opponent’s product from his statements that he agreed to advertise and sell the removal applicant’s goods (with their own label) through his own website despite their refusal to use his label on their product in Australia. In my view, these actions are unlikely to be attributed to a distributor seeking to frustrate or misappropriate a supplier’s intellectual property rights.

25.     Ms Ryan submitted that as the removal opponent applied for the trade mark in full knowledge of the removal applicant’s use of its trade mark, this fact should favour the removal of the mark. However, an earlier application of a substantially identical trade mark with the knowledge of the other overseas trade mark would not be sufficient to amount to more than “sharp business practice”[14] by the removal opponent. Even if the removal opponent had fraudulent intent or dishonest motives in applying for this trade mark (and I am not satisfied that he did), copying a successful overseas trade mark for use in Australia has been found to be “not in itself fraudulent or a breach of the law.”[15]

[14] Campomar Sociedad, Limitada v Nike International (1999) 46 IPR 481 at [17]

[15] Re Registered Trade Mark “Yanx”; Ex Parte Amalgamated Tobacco Corporation Ltd (1951) 82 CLR 199 per Williams J [at 202]

26. As addressed earlier, the expression of “in good faith” contained in 92(4)(a) of the Act pertains to whether the intention was a genuine commercial one, not whether it was honest. Therefore, section 92(4)(a) is not the appropriate avenue to pursue an action that a trade mark applicant has acted in bad faith, nor is it the appropriate ground to establish prior use or reputation at common law. Finally, the removal opponent has stated in correspondence to the removal applicant following the refusal to apply his label to their whisky, that his remaining options were:[16]

1.I keep the trade mark and carry on with what I am doing.

2.Keep the trade mark, but licence it to whoever wishes it and charge an appropriate fee.

3.Sell the trade mark to whoever wishes to buy it, for an appropriate sum.

[16] Exhibit PC-3 of the PC Declaration.

27.     I can find no reason within this removal application to suggest that these options should not still be available to the removal applicant. While the removal opponent has not yet used his trade mark ‘Mekong’ in the course of trade in Australia for the relevant goods, the owner of a trade mark registration has a period of three years from the date of registration in which to do so.

28. The consideration of the “public interest” in this matter would only be available in the exercise of the discretion available to the Registrar under s101. This discretion may come into effect only if “the Registrar is satisfied that the grounds on which the application was made have been established.”[17] As I am not satisfied that a lack of intention under s92(4)(a) has been established in relation to this trade mark registration, the exercise of the discretion becomes irrelevant. The removal applicant has not, on the balance of probabilities, established a lack of intention to use the trade mark “Mekong” by the removal opponent at the time of filing, and the application for removal under s92(4)(a) of the Act has not been successful.

[17] Section 101(1)(b) of the Trade Marks Act 1995 (Cth).

Decision

29. Section 101 of the Act provides:

101 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.

30. The application for removal under s92 (4)(a) of the Act has not been successful, and is hereby dismissed.

Costs

31. Both parties have requested an award of costs in the event of their success in this matter. As costs generally follow the event, and the removal opponent has been successful, I award costs against the removal applicant to the extent allowed under Schedule 8 of the Trade Marks Regulations 1995.

Heath Wilson
Hearing Officer
Trade Marks Hearings
14 July 2010