Cheeky Bits Pty Ltd v Cheeky Bits for Women Pty Ltd

TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by Cheeky Bits Pty Ltd to application under section 92 of the Act by Cheeky Bits for Women Pty Ltd to remove trade mark numbers 1130646 (25) – CHEEKY BITS – and 1344338 (25) – CHEEKY BITS Logo – in the name of Cheeky Bits Pty Ltd.

Delegate:

Debrett Lyons

Representation:

Opponent: written submissions only.

Applicant: written submissions only.

Decision:

2020 ATMO 64

Application under section 92(4)(b) of the Act – no use in the 3-year period and no obstacles to use found. Trade marks to be removed from the Register.

Costs ordered against Opponent

Outline facts

On 26 September 2017, Cheeky Bits for Women Pty Ltd (‘the Applicant’) filed an application under section 92 of the Trade Marks Act 1995 (‘the Act’) for removal from the register of the following registered trade marks:
Registration No:   1130646
Trade Mark:   CHEEKY BITS              (‘the Word Mark’)
Specification of Goods:  Class 25: Clothing, including swimwear, underwear, lingerie and intimate apparel; footwear; headgear
·

Registration No: 1130646
Trade Mark:
(‘the Logo Mark’)

Specification of Goods: Class 25: Swimwear; underwear; lingerie; apparel (clothing, footwear, headgear); beach caps; beach clothing; beachwear

I will refer to both as ‘the Registrations’. Further, in this decision I can conveniently refer to the Word Mark and the Logo Mark together as ‘the Trade Marks’ since nothing turns on a distinction between them. Furthermore, the class 25 specifications of the goods of the Registrations are essentially co-extensive and I will refer simply to ‘the Goods’.
The removal application was made in relation to all the Goods of the Registrations. On 23 October 2017, a Notice of Opposition to the removal application was filed by the owner of the Registrations, Cheeky Bits Pty Ltd (‘the Opponent’) followed on 2 November, 2017 by a supporting Statement of Grounds and Particulars (‘the SGP’). The Opponent filed a Notice of Intention to Defend on 22 November 2017.
The parties later filed and served the following evidence:
Evidence in Support
·Statutory declaration of Michael Robinson, director of the Opponent, made 22 February, 2018.
Evidence in Answer
·Statutory declaration of Michelle Casey, director of the Applicant, made 1 May, 2018
The was no evidence in reply from the Opponent. The parties were invited to be heard in person but in the end the matter has come to me, a delegate of the Registrar, for a decision on the written record which comprises the aforesaid evidence together with written representations which in the case of the Opponent were prepared by its representatives, Trademark.Ventures, and in the case of the Applicant by IP Service International Pty Ltd.
The legislative framework
The removal application has been brought under section 92(4)(b) of the Act which provides that:
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)…
(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.
Section 100(1)(c) concerns the onus of proof in such applications which are opposed and it provides that:
Section 100: Burden on opponent to establish use of trade mark etc.
(1)In any proceedings relating to an opposed application, it is for the opponent to rebut:
…
(c) any allegation made under paragraph 92(4)(b) that the trade mark has not, at any time during the period of 3 years ending one month before the day on which the opposed application was filed, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services.
It follows that the Opponent must establish use of the Trade Marks in good faith in Australia in relation to the Goods during the three year period ending on 26 August 2017 (‘the Relevant Period’). The use need not be continuous[1] and it has been held that compelling evidence of a single use is enough[2].
[1] Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261; 51 IPR 149 at [17]
[2] Nodoz Trade Mark (1962) RPC 1 [at 7] per Wilberforce J.
Suitably redacted, the SGP particularizes that:
·     The Trade Marks were filed and registered in good faith by Mr Robertson of Cheeky Bits Pty Ltd.
·     More than $30,000 dollars has been invested in seeking to protect the brand name as a trademark in Australia and internationally.
·     Further expenses were incurred to design and create associated products and a website.
·     The brand creation and product development were underway when Mr Robertson was diagnosed with a potentially critical medical condition, Atrial Fibrilation, which prevented brand and product growth due to numerous hospitalisations.
·      Further, the manufacturer of the samples closed its operation.
Having regard to those particulars, the legislative framework in this case also requires consideration of section 100(3)(c) of the Act which provides that the Opponent is taken to have rebutted the section 100(1)(c) allegation that the Trade Mark has not been used in the Relevant Period if:
the opponent has established that the trade mark was not used … during that period because of circumstances (whether affecting traders generally or only the registered owner of the trade mark) that were an obstacle to the use of the trade mark during that period.
Finally, section 101(3) reserves with the Registrar discretion whether or not to remove a trade mark even where there has been no relevant use. It provides that:
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.
Discussion
The Opponent relies (a) on preparations to use the Trade Marks, and (b) on circumstances that were allegedly an obstacle to use, its namely, ill-health and loss of its manufacturer.
The Applicant’s position is that (a) the evidence filed on behalf of the Opponent does not show use of the Trade Marks in Australia before, during or after the relevant period, (b) the preparations for use are inadequate to satisfy the Act, and (c) on the facts, non-use cannot be attributed to obstacles to trade within section 100(3)(c).
Neither party made submissions in respect of the Registrar’s section 101(3) discretion.
In further detail, the Opponent’s submissions, so far as they relate to section 92(4)(b) of the Act and use within the Relevant Period, are that:
“Prior to Mr Robertson’s diagnosis of his … health conditions … the following steps had been taken to build the business under his registered trade marks’ brand. …
● Patterns for garments were made by Prudance Victoria and Coralie Newman designs.
● Fabrics were purchased for production of samples from Eclipse Textiles.
● Garment labelling and tags with trademark logos were designed and manufactured by Cashes.
● Binding for sample runs was manufactured by Designer Stitches.
● Embellishments were purchased from M.Recht.
● Garment test samples were manufactured by Solymar.
Mr Robertson engaged a local supplier ‘Solymar’ to create test samples with the intention to use Solymar as his manufacturer. During the period of Mr Robertson’s ill health, Solymar ceased operations. Whilst he was able to retrieve his textiles and some completed samples, he was then forced to source a new manufacturer.
A medical report provided by Dr Patricia Civitico has been provided … and clearly states the very serious medical issues that Mr Michael Robertson has endured. This critical medical diagnosis caused the owner to have very poor health, and thus directly causing any further development of the brand to be put on hold.
Between 2009 and 2010, Michael Robertson was diagnosed with Atrial Fibrillation. … In June 2011, after around fifteen hospital admissions for Cardioversions, Mr Robertson was to undergo an Ablation for the Atrial Fibrillation. Preparation for the operation included a scan that identified a tumour in his chest near the heart. He was admitted for surgery to remove the tumour and was diagnosed with Thymoma, a rare cancer of the thymus gland. On the 5 July 2011, he was readmitted for open heart surgery for a Thymectomy and was in care for over ten weeks before returning to normal physical function. …
At this point Mr Robertson was still dealing with the issue of Atrial Fibrillation and faced further cardioversions. Unfortunately his spate of bad luck continued and he underwent the following procedures consecutively.
● 2014 surgery for an AF Ablation.
● 2015 surgery to remove a malignant melanoma.
● 2016 surgery for an AF Ablation.”
The evidence includes undated photographs of a single style of black bikini swimwear bearing the Trade Marks and taken in conjunction with some other limited evidence it would appear that women’s swimwear is the particular goods of interest to the Opponent.
My initial observation is that there is no evidence of use of the Trade Marks on finished goods offered for sale in Australia during the Relevant Period, or otherwise. There is no explicit claim by the Opponent that goods bearing the Trade Marks have ever been offered for sale and the Opponent’s written submissions include broad statements such as Mr Richardson “was actively moving the business forward and was at the point of producing test samples, before his period of poor health”, or that “significant brand and product development was already underway, at immense cost to Mr Robertson, before his period of ill health.”
As such, what I am left to consider are the attempts to bring the Goods to market. The evidence includes a statement from Mr Richardson’s accountancy firm that he had “a clear strategy to bring the product to finalization” but there is no further elaboration of that strategy. There are undated examples of swingtags not attached to any goods in particular. They appear to be mock-ups. Mr Robertson claims to have spent $20,460.01 to have a website designed and developed. In evidence is what might be the homepage of such a website but it is less than clear that the image is a screenshot and there are indications that it is a draft page produced by the web designer not live at the that, unknown, time. The page carries a 2009 copyright notice but in 2014 email correspondence in evidence from Mr Richardson to third parties he describes his ten year interest in his business idea as having “stalled for a number of reasons”. Those reasons, no doubt, included his health issues already described which his doctor has attested to, stating that they went back to 2010. In evidence is a redacted 2016 EOFY statement of unknown provenance which does not refer to the Trade Marks or to the sale of swimwear but attributes $110.00 to “internet expenses”. There is no other cost obviously associated with an online business of any kind. I note, finally, that Mr Richardson described himself in 2014 as being in active employment as a hotel manager.
The Opponent’s evidence does not provide support for all of the claims made in its written submissions. To the extent that it does corroborate them, there are serious shortcomings. The Applicant is keen to underscore the facts that there is no evidence of sales, nor any agreement to sell Goods bearing the Trade Marks, nor any receipts or invoices for sample goods or website development.
As indicated already, there was no evidence in reply but the Opponent made further written submissions in response to the Evidence in Answer. Those submissions are largely repetitive of what had gone before but for observation that the Act contemplates “use of a trade mark upon, or in physical or other relation to, the goods.”
That observation does not improve on the evidence and I find that there has been no use at all of the Trade Marks in the relevant period.
Reasons for non-use
The Opponent argues that there were two obstacles to use of the Trade Mark in Australia during the relevant period. As argued, it is not entirely clear to me that there are in fact, two, reasons. If, as stated, the Opponent was unable to engage a new manufacturer because of ill-health, the obstacle is simply ill-health. Nevertheless, I find that neither asserted obstacle engages section 100(3)(c) for the following reasons.
Circumstances constituting an obstacle to the use of a trade mark within the meaning of section 100(3)(c) of the Act were considered by Drummond J in the case of Woolly Bull Enterprises Pty Ltd and Another v Reynolds [2001] FCA 261; (2001) 107 FCR 166. Drummond J stated that:
In my opinion, circumstances within s 100(3)(c) will only exist when events arise that are capable of disrupting trade in the area of commercial activity in which goods bearing the registered owner’s mark are traded. For the statutory excuse to be made out, those circumstances must cause (in a practical business sense) non-use of the particular mark by the owner, whether or not they have an impact on any persons other than the owner of that mark who are also involved in that same area of commercial activity. There must be a causal link shown between the relevant circumstances and the mark’s non-use. This requirement arises from the fact that s 100(3)(c) creates an excuse only where the mark has not been used by the registered owner “because of” circumstances etc. It will not assist the opponent to removal to show the existence of an impediment to use of the kind referred to in s 100(3)(c) if he does not also establish that, but for that impediment, he would have used the mark.
Circumstances that do not have a trade character but which only affect a mark owner in his personal character, such as illness afflicting the owner of the mark that is sufficiently disabling to prevent the owner using the mark, can never therefore found an answer within s 100(3)(c) to an application for removal of the mark for non-use.
Illness is therefore not a consideration enabling me to apply the section. Moreover, even if the failure to secure a new manufacturer was not wholly attributable to Mr Robinson’s health issues, I am not persuaded that the evidence shows that other manufacturers were not available, nor that Mr Robinson was in a position to put all his efforts into the enterprise by reason of his other employment. His own evidence shows that the venture faltered over many years. There is no evidence of his business plan before or after the Relevant Period and only a meagre suggestion that sometime in the future the Trade Mark may be used. It must be remembered that the Opponent bears the onus of proof and in this case I do not find that it has provided the type of evidence to excuse the non-use.
Discretion of the Registrar
As indicated earlier, neither side argued section 101 but I cannot, in any case, see a compelling argument that the Trade Marks should remain on the Register in spite of their on-use.
There is no reason to invoke the Registrar’s discretion.
Decision
The Opponent has failed to prove use or a sufficient basis to find obstacles to use or for the Registrar to apply its discretion. I direct that the Trade Marks be removed for all of the Goods. In the event of an appeal from this decision, I direct that the Trade Marks will not be removed until that appeal has been discontinued or dismissed, or in the event of a decision from the court, that the Trade Marks be subject to that order.
Costs
The Applicant has been successful in the proceedings and so I award costs against the Opponent to the extent allowed under Schedule 8 of the Trade Marks Regulations 1995.
Debrett Lyons
Hearing Officer
Trade Marks Hearings
24 April 2020

[2020] ATMO 64

24 April 2020

Key Legal Topics

Areas of Law

Commercial Law

Intellectual Property

Legal Concepts

Injunction

Costs

Statutory Construction

Remedies