Cellular One Group v AAPT Limited

[2003] ATMO 1

TRADE MARKS ACT 1995

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

Re:Opposition by Cellular One Development Inc, Vanguard Cellular Corp & Cellular One Marketing Inc to applications under section 92 of the Act by AAPT Limited to remove trade mark numbers 585817, 585818, 602120 & 602123 (classes 38, 9) - CELLULARONE & CELLONE - in the name of Cellular One Group, being a partnership comprising Cellular One Development Inc, Vanguard Cellular Corp & Cellular One Marketing Inc.

Background

Trade mark registrations 585817, 585818, 602120 and 602123 are in the name of Cellular One Group, a partnership comprising Cellular One Development Inc, Vanguard Cellular Corp & Cellular One Marketing Inc, all three being in turn corporations existing in the USA.  I will refer to the owner collectively as CG.

The trade marks in question, and the relevant goods or services are as follows:

Registration	Trade mark	Class	Goods/services
585817	CELLULARONE	38	Cellular telecommunications services
585818	CELLULARONE	9	Electronic communications products and parts accessories therefor, namely, cellular telephones, handsets, transceivers, antennas, pagers, facsimile machines, modems and carrying cases
602120	CELLONE	9	(as above)
602123	CELLONE	38	Cellular telecommunications services

AAPT Ltd, (AAPT) has applied under s 92(4)(b) of the Trade Marks Act 1995 (the act) to have these trade marks removed from the register.  In simple terms, its ground is that the trade marks were not used in trade for the relevant goods or services in the three year period beginning 19 September 1996 (the relevant period).  CG has opposed the removal applications in question and both sides have filed evidence to support their positions.

This evidence is as follows:

CG's Evidence in support

Declaration by	Capacity	Exhibits
Richard Lyons	President of CG	1-14
Lori Wagner	Regional Director- Product Management, Cingular Wirelesss

AAPT's Evidence in answer

Declaration by	Dated	Annexures
John McLean	Director, Cellular One Communications Ltd	A - C

Following this, the oppositions were set down for me to hear and decide under delegation from the Registrar of Trade Marks.  At that hearing AAPT was represented by Stephen Burley of counsel and CG was represented by Marianne Barker, also of counsel.

Evidence Considered

Mr Lyons asserted, in his declaration made in May 2001, that these marks are "now one of the most well known brands in the world".  CG's evidence shows that it is the licensor, in the USA, of the trade marks in question. CG does not itself provide telecommunications services, but it licenses those that do, to use its trade marks either by themselves or with a trade mark of the licensee. 

Mr Lyons, a resident of Texas, addresses the standing of the trade marks in the USA.  There seems little point in quibbling with the detail of this.  For the sake of argument I think this matter should proceed on the basis that the trade mark CELLULARONE is very well known in that country, though I agree that, under other circumstances, the evidence of this would be open to criticism on the basis of ambiguity. 

He also declares that merchandise bearing the trade mark was available for purchase in Australia during the relevant three year period.  The details of this are sketchy, and support is drawn from current website details plus the details of a paper catalogue that was available during the relevant time, though not necessarily in Australia.  Putting this aside, the merchandise appears to have been primarily clothing items, key tags, carry bags etc, though there were also novelty items such as mobile phones made of foam rubber for use as stress toys; and, indeed, at least one class 9 item, a combination data store and calculator.  By May 2001, the time of Mr Lyons declaration, and thus well after the end of the relevant period, the website had recorded 2017 hits from Australia.  The website was also referred to on the "Yahoo" site.

During the relevant period, CG apparently turned its mind to the possibility of expanding into international markets, including Australia.  Exhibit 6 lists potential partners in various countries though, in relation to Australia, it rates Optus and Vodaphone as "unlikely".  Overall, Exhibit 6 is quite inconclusive and does not support any finding that there was a definite intention to commit to the Australian market.

Mr Lyons declares that he understands that various technical journals available in Australia, and held "particularly" in university libraries, have mentioned CG.  Because of these and of trade fairs in the USA during the relevant time, Mr Lyons is of the opinion that CG's services would be well known to Australian in the telecommunications industry.  Mr Lyons declares, as an example of this, that where international telecommunications products require multi-operator routing, CG's services are "frequently" used.  I accept this as an overall proposition. 

Exhibit 7 is an excerpt from the website of "MESSAGE MANAGER"; a product developed by an Australian company which according to Mr Lyons uses the services of CG.  With this product, it is possible for an Internet user to send a text message to the display of a mobile phone in the USA.  However, the evidence does not suggest that such an Internet user would necessarily be aware of the trade mark CELLULARONE at any stage of the transaction.  The most that can be suggested is that someone who was au fait with the MESSAGE MANAGER product literature that makes up exhibit 7 would know that CELLULARONE was one of more than 60 North or South American networks with which the product was compatible or somehow interacted.  In any case, the exhibit in question is undated, but appears, in so far as a very obscure date can be made out, to indicate that it is compatible with MICROSOFT WINDOWS 2000 SERVER.  CG bears the onus of establishing the relevance of the exhibit, and I take the view that this item is either undated or, if dated, post-dates the relevant period.

Mr Lyons gives evidence that, during the relevant three year period, over 1.4 million Australian tourists visited the USA.  On this basis, he asserts that "it is likely that many Australians visiting the US may have used a cellular telephone service during their visit (and) would have used a Cellular One service.  Mr Burley characterised this as irrelevant, but I do not agree.  However, it is still a long step to assert that any significant number of Australians were necessarily aware of the CELLULARONE marks simply on the basis of visiting, or using a mobile phone in, a country where that network is apparently prominent.

Mr Lyons declares that 1.2 % of hits to the CBS Sportsline website during the NCAA basketball tournaments in the USA were from Australia.  He speculates from this that such hits will have caused the Australians in question to see the CELLULARONE marks in connection with CG's sponsorship of that tournament.  He also refers to the televising, in Australia, of other American sporting matches sponsored by CG in 1996 and 1997.  These things, he declares, will have interlocked with other aspects to which he has given evidence, to produce what he terms "an appreciable level of recognition of the CellularOne marks as strong international brands" in Australia.  One weakness of this, I note, is as Mr Burley pointed out: the trade marks of sponsors do not necessarily come to the attention of casual viewers.  Indeed, there is no evidence that they were even featured on the CBS website in question.  Even if they were featured, the extent to which they become fixed in the recollection of such viewers is pure conjecture.

Ms Wagner's declaration is the balance of the evidence in support.  It goes to the development of a vehicle tracking system in the USA.  This system was based on one previously designed and developed in Australia by British Aerospace.  Ms Wagner was part of a delegation that visited Australia in December 1993.  At all relevant times in dealing with Australian personnel, Ms Wagner had presented herself as a representative of Cellular One-Chicago.  She made it clear when in Australia that the product would be offered by her employer under the trade mark LocateOne trade mark as part of the CELLULARONE family - though where, she does not unambiguously say.  Irrespective, LocateOne became operational in the USA in 1994.  Ms Wagner opines that the relevant Australian personnel were already aware of the CELLULARONE trade mark.

It is not necessary to deal with AAPT's evidence at length.  Suffice to say that it is, and has been since 1994, an extensive user of the trade marks CELLULAR ONE, and AAPT CELLULAR ONE in Australia, primarily in relation to telecommunications services.  It sells, through media advertisements and through 175 retail outlets, mobile phones and the telecommunication connection network services to support these.  Annual sales for 1998-1999 were well in excess of $150 million.

Issues and Decision

After hearing the parties and considering their oral and written submissions, I will deal with the issues as follows.

It is common ground that AAPT has the necessary standing as a person aggrieved and can thus make these applications under the provision in question, s 92(4)(b). The relevant parts of this read:

Application for removal of trade mark from Register etc.

92(4)
(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.

The subsequent provision of s 100 reverses the onus in these matters, and leaves CG with the burden of showing use of the trade mark.  Consistent with this, Mr Burley noted that it is for CG to show either that the trade mark has been relevantly used in Australia during the three year period in question, or that there are sufficiently compelling circumstances that would justify its retention as an unused trade mark.

Ms Barker categorised the evidence on which CG relies as slim but sufficient.  It showed, she argued, that the trade mark had been used in relation to the MESSAGE MANAGER facility, various Internet hits and the development of LOCATE ONE.  However, I do not find this to be so. 

As to MESSAGE MANAGER, this was not a use of CELLULARONE as a trade mark.  At most, there was an obscure indication that a CellularOne mobile phone network existed, along with more than 60 others, in either North or South America.  However, there was simply no offer to trade in telecommunications services or class 9 goods under that trade mark.  Nor do I find this development to be relevant to the period ending in September 1999.

The evidence of Internet hits is unconvincing.  There is nothing in any of the cases to which Ms Barker referred me to suggest that the mere indicated availability of services in the United States amounts to use in Australia.  True it is that, leaving aside the gaps in the evidence to which I have referred, Australians could have ordered coffee mugs, jackets or electronic apparatus from CG.  But there is no evidence that any of them attempted to, or that CG would have wanted to supply such goods to Australia if they had.  The facts of this case simply do not match Zippo Manufacturing Co v Zippo Dot Com Inc 952 F. Supp 1119, to which Ms Barker referred. That case established no more than that the activities of an Internet site can, when supported by commerce for profit or something comparable to it in the circumstances of the case, e.g. the emailing of shareware, amount to a dilution of trade mark rights under state laws in the USA.

In relation to the development of the LocateOne product, there is nothing in Ms Wagner's evidence to indicate that the trade mark CELLULARONE was in use in Australia.  Put at its strongest, her evidence establishes no more than that, as an employee of a foreign company, she worked in Australia developing a product and adapting it for use in that country, and that the activities of her employer in relation to the CELLULARONE trade mark, were known to an unquantified number of telecommunications professionals.  

Ms Barker's fallback position was that, if unused, the trade mark should none the less be retained on the register.  She argued that CG was the "true proprietor" and that no amount of evidence of subsequent use by AAPT could erase or swamp this, Riv-Oland Marble Co (Vic) Pty Ltd v Settef Spa (1988) 12 IPR 321. Here, she noted that AAPT did not commence use before 1994. Such borrowings from abroad are sharp business practice, Moorgate Tobacco Co Ltd v Phillip Morris (1984) 156 CLR 414 at 432, and are frowned on by the courts. Thus, a small amount of use will be seized on to allow rectification of a registration that results from such borrowing. However, this is simply not a case of that sort. It concerns, instead, the removal of a trade mark, and the law for this has evolved in a different direction. What is at issue here is the continuance of CG's own registration, not the rights of AAPT and I am not prepared to be drawn into speculation about the durability of AAPT's own registration. Ms Barker did not refer me to any case where the slight amount of use that she argues has occurred here and that might support some future attack on AAPT's own registration was, in itself, sufficient to save a registration that was unused in the relevant period.

Consistent with this, and as Mr Burely argued, the bona fides of AAPT are not now at issue: see Heerey J in Conquip Holdings Pty Ltd v S & A Restaurant, (2000) AIPC 91-547; [2000] FCA 256, applying earlier comments by Kitto J in Continental Liqueurs Pty Ltd v GF Heublein & Bros Inc at (1960) 103 CLR 422 at 433. The discretion to allow a registration to remain:

... is not one to be exercised upon a consideration of any demerits of the particular person who happens to be moving for expungement. The question whether the respondent's non-user of his trade mark disentitles him to have it retained on the register is really one between the respondent and the public, and not only between the respondent and the applicant...

Ms Barker also urged me to have regard to the spillover of reputation, for which she said that there were many causes.  She referred me to US survey evidence, details of the number of Australians who have traveled to the USA, and various interactions via television and the Internet.  There was also the "insider" knowledge that those in the telecommunications field will presumably have of CG.  She referred to Hermes trade mark [1982] RPC 425 as establishing the principle that a trade mark with "some residual reputation" should be left on the register where there is no evidence of abandonment. However, I think this is an extreme reading of Hermes.  At least three factors in that case are absent here as regards the discretion to retain a trade mark.  In Hermes, the registered owner had:

• taken steps, unprompted by the proceedings, to revive their trade mark,

• sold goods since the end of the relevant period in continuance of steps begun within it, and

• faced only a relatively low level of usage of the same trade mark by the removal applicant, a usage of which the registered owner was entirely unaware.

Here, on the other hand, CG has done nothing to defend its registration.  There is no evidence that it was unaware of use by AAPT.  AAPT has, unchallenged, gone on to make very considerable domestic use of the trade mark.  CG's own evidence suggests, conversely, that it does not see great likelihood of using its mark in Australia in any mainstream way.

CG's evidence of a spillover of reputation is less than convincing.  It is not so much evidence of that reputation as evidence of facts that, if I took them to their maximum, would allow me to infer that a reputation could exist. 

Nor should the position be misunderstood.  CG is responsible for establishing why, despite the clear statutory scheme for the removal of trade marks, and the establishment of the necessary preconditions, its trade mark should remain registered.  It is true that in deciding an opposed removal application, the Registrar (or a court) is called on to exercise a discretion.  The Registrar or a court "may" remove a registration.  However, the proper exercise of that discretion by the Registrar will generally be as per Ritz Hotel v Charles of the Ritz, (1988) 12 IPR 417 , at 482:

... if the condition of exercise of the court's power has been established, the entry of the mark should be expunged, or the mark should be removed, as the case may be, "unless sufficient reason appears for leaving it there: cf Application by Carl Zeiss Pty Ltd (1969) 122 CLR 1 at 11 and ASTRONAUT trade mark [1972] RPC 655 at 672.

And as was said by Deputy Registrar Hardie in Figgins Holdings Pty Ltd v Beltrami SpA, (1998) 46 IPR 411 at 418-419, to which Mr Burley referred:

Under subsection 101(3) the Registrar needs to be "satisfied that it is reasonable" to leave a mark on the Register even when the grounds on which the removal application is made have been established.  This requires the Registrar to be satisfied that there is sufficient reason for leaving it there.  The reason would need to be based on special facts and circumstances, or an overriding question of public interest.  The onus for showing that those circumstances exist, is on the opponent to the removal application.

The commercial reality is that, in Australia, AAPT appears to be the owner of the trade mark CELLULAR ONE.  That position has not at any stage been challenged by CG.  That does not amount to abandonment of rights on the part of CG but it clearly amounts to a protracted failure to enforce them.  Therefore, all that stands between CG and the loss, now, of its registrations is a speculative argument about spillover reputation that I have already said I find unconvincing except perhaps as regards the perceptions of insiders, those in the telecommunications field.  Even within that sector, the extent of the group that is aware of CG is less than clear.  In effect, I am asked by CG to allow the retention of its registration rights simply on the basis of perceptions that are:

• restricted to an ill-defined portion of a specialized niche of the general population, or

• (arguably) held by some portion of those Australians who may (perhaps) have encountered the commercial activities of CG in the United States. 

This request simply has insufficient basis in terms of mainstream commerce in Australia.

Conclusion

My decision is that all four trade marks should be removed from the register unless an appeal is filed and a copy served on the Registrar of Trade Marks within the time allowed under the Federal Court rules.

I direct that CG pay the costs of AAPT, to be taxed if necessary in accordance with the practice set out in Hume Industries (Malaysia) Berhad v James Hardie & Coy Pty Ltd, [2001] ATMO 78, 53 IPR 591.

Terry Williams
Hearing Officer
Trade Marks Hearings
9 January 2003