Bunter v Hobarama LLC
[2005] ATMO 49
•26 September 2005
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS, WITH REASONS
Re:Opposition by Adrian Bunter and Stuart McDonell to application under section 92 of the Act by Hobarama LLC to remove trade mark number 803820(32) - BAWLS - in the name of Adrian Bunter and Stuart McDonell
Delegate: Terry Williams Representation: Opponent: Written submissions by Adrian Bunter, trade mark owner, on behalf of himself and the other owner Stuart McDonell
Applicant: Helen Kearney, Pipers patent and trade mark attorneysDecision: S 92 opposition: standing: Applicant is aggrieved in view intention to market if distributor found – intention of opponent either towards sharp business practice or to use not in good faith - use not established – registration to be removed Background
Trade mark registration 803820 covers “mineral and aerated waters and other non-aerated waters and other non-alcoholic drinks, fruit drinks and fruit juices, syrups and other preparations for making beverages and beers”, in class 32. It is registered in the names of Adrian Maxwell Bunter and Stuart McDonell, (the owners). The trade mark in question is the word BAWLS. The date on which the owners applied to register the trade mark was 16 August 1999.
Hobarama LLC (Hobarama) is a firm that uses the trade mark BAWLS overseas in relation to a high-caffeine drink based on guarana. Hobarama claims to be aggrieved by the owners’ registration of this trade mark in Australia. It has therefore applied under s 92(4)(a) of the Trade Marks Act 1995 (the Act) to have the owners’ registered trade mark removed from the register. Briefly, and to oversimplify the issues in the interest of brevity, this is on the ground that the trade mark was not used in trade by the owners and that the relevant application for registration was filed without the requisite intention to use the trade mark, authorise its use, or assign it to a body corporate. Hobarama’s removal application was filed on 3 June 2003.
The owners oppose the application to remove their trade mark from the register and have filed a notice of opposition as provided by Part 9 of the Trade Mark Regulations. Beyond that point, the filing of evidence followed the process set out in Parts 9 and 5 of the regulations, culminating in a hearing which I conducted under delegation from the Registrar of Trade Marks. At that hearing Hobarama was represented by its trade mark attorney, Helen Kearney, on behalf of its then-current patent attorney firm, Pipers. The owners filed written submissions prepared on their own behalf by Mr Bunter.
Issues
Threshold question – standing of Hobarama as a person aggrieved
This is a main point of the written submissions by the owners. Mr Bunter notes the decision of Drummond J in Woolly Bull Enterprises Pty Ltd v Reynolds[1].
It would be contrary to this object of the 1995 Act to accord standing to a person to attack a registered mark on the ground that that person had made his own application for registration of a conflicting mark where there was no proof that the person either had a trade in goods marked with the mark the subject of his registration application or had a bona fide intention to trade in such goods. Such a person cannot be said to be “appreciably disadvantaged in a legal or practical sense” by a mark he wishes to attack remaining on the register, though he might wish to traffick in marks as distinct from to trade in marked goods.
[1] (2001) 51 IPR 149; (2001) AIPC 91-713; [2001] FCA 261
This is consistent with Kraft Foods Inc v Gaines Pet Foods Corp (1996) 34 IPR 198 at 210. There is clear authority for the proposition that an intention to use the trade mark - in Australia[2] - is mandatory.
[2] see Carnival Cruise Lines Inc v Sitmar Cruises Ltd - 31 IPR 375 at 389
With this in mind, Ms Kearney took me to the detail of the evidence. I will turn to this, taking it in the light of Ms Kearney’s submissions which in turn were aimed at the written submissions of the owners.
Ms Kearney first argued that I should see the fact of the non-use application, in the circumstances of the present case, as itself suggesting that Hobarama intended to use the trade mark in Australia. That would be circular reasoning and in the face of the Gaines decision, see above, I cannot give the existence of the application any weight in deciding if Hobarama was entitled to make that application in the first place.
I note that Hobarama uses and has registered the trade mark BAWLS overseas; registrations for the USA and New Zealand are in evidence. It is asserted by both parties that Hobarama uses the trade mark also in Germany, Holland, United Arab Emirates, Britain, Bermuda and Japan. I do not read the apparent use of the trade mark in Asia and New Zealand as going very far to establish an intention to use in Australia, despite Ms Kearney’s argument that this shows a picture of expanding use in the Asia-Pacific sphere. Ms Kearney argued that the New Zealand market, in particular, was a strong portent for matters in Australia. I am required to be satisfied that Hobarama intends to use its trade mark in Australia; its intentions with regard to, inter alia, New Zealand can shed very little light on that question.
The owners concede quite frankly in their written submissions that their own registration in Australia is “sharp business practice”[3] but note that there is long-standing authority for the principle that this is not unlawful and that such an applicant may have the necessary degree of authorship.
[3] A form of words coming from Yanx trade mark (1951) 82 CLR 199 at 202, see also 1B IPR 504 at 506.
The owners maintain, in Mr Bunter’s written submissions, that there is absolutely no suggestion in the evidence that Hobarama intends to use its trade mark in Australia. This is an interesting proposition, in that the owners filed their trade mark application after approaching Hobarama about what Mr Bunter describes in his declaration as “exclusive distribution of their Guarana-based beverage in Australia”[4] and receiving what can fairly be described as favourable but cautious support from Hobarama. Adrian Bunter declares to the result of his proposal to Hobarama. The relevant email from Hobarama reads:
Thank you for your fax regarding distribution of BAWLS guarana in Australia. I will put together a package of information including product and market information, pricing structure and point of sale material.
[4] That approach was made on 23 August 1999, a week after the owners filed their application at the Trade Marks Office.
While it is not clear to me how much information was sent, ultimately by fax and email, it is clear that there was enough preparedness on the part of Hobarama for the owners to obtain a number of quotes on the sea-freight of goods from Miami (where Hobarama is located) to Sydney. As Hobarama put it at the time (24 August 1999):
Currently we have no representation in Australia and would be interested in exploring any opportunities that might exist with your company.
While Mr Bunter asserts in his evidence that this simply establishes a lack of intention prior to that date, I think it also establishes something about subsequent intentions. It shows that the intentions of Hobarama were to export to Australia, and thus place its trade mark into use in this country, if a suitable distributor could be found. Clearly that intention alone could not establish actual use in Australia. However, the contemporary evidence about the dealings between the parties suggests that there was definitely an intention, amounting to preparedness on the part of Hobarama, to use the mark in Australia. The owners seem to have taken Hobarama seriously at the time. I do not think that they should be able, now, to resile from this and to deny Hobarama standing to challenge the bona fides of the owners’ own intentions and/or use.
It follows that I am prepared to allow further consideration of the substantive matter.
Section 92(4)(a) ground.
I will set out the provisions of s 92(4)(a), adding upper case to break it into its two most readily distinguishable components, intention and use:
(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;
Lack of intention in good faith to use
The owners are very critical of Hobarama’s case under this heading. Mr Bunter’s written submissions go as far as suggesting that the removal application should not have been made by Hobarama’s former attorneys, so far short of dealing with the requisite grounds is it alleged to be. For similar reasons, the submissions argue that the removal application should not have been received for filing at the Trade Marks Office. However, I think that no such failings exist. The receiving of a non-use application is governed by regulation 9.1, which specifies only that (my emphasis added) the application, when filed:
(a) must be in an approved form; and
(b) must be accompanied by a declaration made by, or on behalf of, the applicant:
(i) stating that an inquiry into the use of the trade mark has been conducted by, or on behalf of, the applicant; and
(ii) setting out the findings of that inquiry that support the grounds referred to in subsection 92(4) of the Act in reliance on which the application is made.Long-standing practice at the Trade Marks Office is to expect that the “findings” set out will reflect either substantially all of the period specified by s 92(4)(a) or the three-year period specified by s 92(4)(b) as the case may be, and address the use of the trade mark during that period. Our practice is not to require a removal applicant to conduct an inquiry as to an owner’s intention. That practice is consistent with the stipulation in paragraphs (i) and (ii) above. To go further would be outside the mandate of the regulation and would, in practice, expect the virtually-impossible of a removal applicant. Registrations may, of course, continue for decades. They may be assigned many times but even in the simplest case it would, in my experience, often be impossible for a currently registered owner to give convincing evidence of the intentions of any predecessor who had filed an application for registration anything up to 100 years previously. I therefore believe that our practice is sound and was correctly followed.
Mr Bunter takes issue with Ms Kearney’s statement in her declaration made in compliance with reg 9.1: “Neither have the investigations revealed any evidence that, on the day on which the application for registration was filed, the applicant for registration had an intention in good faith to use or authorise … the trade mark in Australia”. This is probably a fair criticism.
The result of the investigation, which both Mr Chandler, a patent attorney of the firm that previously represented Hobarama, and Mr Bunter declare to in the course of the evidence stages, shows that the investigation was never an investigation into intentions at the time of filing. The investigator’s report shows that it went to “the nature and extent of any use of the above mark”. Mr Chandler, in his own declaration, notes that the addresses of the two owners set out in the register of trade marks were residential properties. However, this seems to be a retrospective elaboration on his own part, given the clear statement of the investigator’s brief, which in turn is entirely consistent with the evidence about a conversation between the investigator and Mr Bunter. I conclude that Ms Kearney appears to be in error in the declaration she filed under reg 9.1.
However, as I have said, it is not for the removal applicant to bring in evidence of intention. Consistently, of course, the burden of proof lies on a removal opponent (here, the owners) with respect to intention in the event that they challenge removal. This is because of the “reversed onus” created by s 100. As Mr Bunter noted, the evidentiary onus imposed on the owners in regard to intention at the time of filing is not great. He referred to two Trade Marks Office decisions[5] to the effect that a statement that (so far as can be known over time) an intention existed would suffice. I agree entirely, and accept that this approach would be consistent with the minimum information in the present matter.
[5] Structureco Inc v Starite Distributors Pty Ltd (2000)ATMO 31; Lifinia Pty Ltd v Zero International Holding GmbH (2001) ATMO 106. To this might be added my own preparedness to infer intention where there was actual use shortly after filing: Camiceria Pancaldi & B Srl v Le Cravatte Di Pancaldi Srl [1999] ATMO 12.
This establishes that the owners had some form of intent to import and sell relevant goods under the trade mark in question. Mr Chandler argued in the evidence in answer that the intentions of the owners amounted to bad faith, in that they had set out to import Hobarama’s goods while having already applied to register the trade mark in their own names. Ms Kearney relied on a similar argument at the hearing but I think that this is, to a degree, speculative. It is true that the owners at no stage disclosed to Hobarama that they had already sought to register the trade mark. They spoke, or rather faxed or emailed, of importing trading quantities of Hobarama’s product and of an exclusive distribution agreement. However, Mr Bunter’s evidence in support makes it clear that, had Hobarama not been prepared to supply goods bearing the trade mark, Messrs Bunter and McDonell would have been prepared to arrange for another source of supply, while still using the trade mark. The latter course, while “sharp business practice” as Mr Bunter concedes, would have been a common enough commercial strategy. Mr Bunter’s evidence notes that the goods covered by the registration are broader than the guarana-based drink sold under the trade mark by Hobarama overseas. He declares, consistently, that such goods can be “sourced from a variety of suppliers, not necessarily Hobarama Corp.”
In the evidence in reply, Mr Bunter attempts to cast Hobarama in the role of, at most, a contracted manufacturer of products, branded BAWLS at the behest of the owners and made and labelled to their own requirements but based on Hobarama’s formulation. It is not easy to reconcile this version of events with Mr Bunter’s reference to putting a proposal to Hobarama about “exclusive distribution of their Guarana-based beverage in Australia” and the written reply from Hobarama, both of which I have already noted. On balance, I am inclined to say that the evidence is more consistent with an intention on the part of the owners do either one of two things:
·to engage in sharp but not unlawful business practice (which would establish the owners’ case in relation to intention); or
·to import the goods of Hobarama into Australia bearing the trade mark, and to act as a distributor (thereby establishing use, but not use in good faith by the owners).
It seems to me that, since the possibility of the latter sort of intention has not been ruled out or even rendered unlikely, the owners have not established positively that they had what the Act calls an “intention in good faith to use” the trade mark, at least in relation to some of the goods.
The owners have relied, in dealing with this, on an earlier decision of mine. This was the matter of M. and D. Davidson v B. Daisley, D. Wilson, T. Gaze[6]. In that decision, I said: “In so far as the removal application is based on allegations of bad faith, the burden of proof is still on the applicants.”
[6] 2003 ATMO 11, (2003) AIPC ¶91-872
On a broader reading of s 100, I no longer believe that this approach is tenable. Correctly applied, s 100 requires the owners to satisfy me that their intentions were bona fide. They have failed to reasonably exclude an intention to register the trade mark in bad faith, supported by no more than an intention to import the guarana-based goods of Hobarama, bearing the trade mark of Hobarama. Therefore, they have not established this ground of opposition.
Use of the trade mark
Even if I am wrong, and the intention of the owners was to engage in some sharp business practice for commercial purposes, in a manner that did not extend to bad faith, that alone will not save their registration. The owners bear the onus of showing good-faith use, in addition to establishing a good-faith intention. There is no evidence whatsoever that the trade mark has been used in Australia in the period up to 3 May 2003.
Conclusion and costs
The owners have not established either leg of their opposition. I direct that the trade mark be removed from the register after one month from the date of this decision. If the Registrar has been served with a notice of appeal before that time, I direct that removal shall not occur until the appeal has been decided or discontinued.
I direct that the owners pay the costs of Hobarama up to the limit of the scale in the regulations.
Terry Williams
Hearing Officer
Trade Marks Hearings
26 September 2005
Key Legal Topics
Areas of Law
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Intellectual Property
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Commercial Law
Legal Concepts
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Intention
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Remedies
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Costs
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Appeal
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