Dennis Porlaje v Akuma Sports Ltd

[2013] ATMO 78

TRADE MARKS ACT 1995

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

Re:Opposition by Dennis Porlaje to application under section 92 of the Act by Akuma Sports Ltd to remove trade mark number 1009288(25) - AKUMA - in the name of Dennis Porlaje

Delegate:	Alison Windsor
Representation:	Removal Opponent:  Written submissions Removal Applicant:  John Hawker of Marks & Clerk Australia, Patent and Trade Mark Attorneys
Decision:	2013 ATMO 78 S96 – opposed non-use application – allegation of non-use not rebutted – registration to be removed.

Background

1.     Dennis Porlaje (‘the removal opponent’) is the owner of trade mark registration number 1009288 for the word AKUMA (‘the Trade Mark’) which has been registered since 2 July 2004 for the following goods in class 25:  Clothing, footwear and headgear.  The registration is endorsed as follows:  ‘The applicant has advised that the translation of the Japanese word AKUMA appearing in the trade mark is DEMON/DEVIL’.

2. On 6 February 2012 Akuma Sports Ltd (‘the removal applicant’) filed an application to remove the Trade Mark from the trade marks Register for non-use. The non-use application is in respect of all of the goods for which the Trade Mark is registered and is made under the provisions of subsection 92(4)(b) of the Trade Marks Act 1995 (‘the Act’).  It was advertised in the Australian Official Journal of Trade Marks on 23 February 2012.

3.     Once the non-use application has been advertised, there is a three month period in which an opponent may file a notice of opposition to the application.  The opposition period in this instance ended on 23 May 2012 without a notice of opposition being filed. 

4.     Although the official record is not entirely clear, it appears that on or about 12 June 2012, an IP Australia staff member called Mr Porlaje to ask whether he had received notification of the non-use application.  Mr Porlaje replied and advised that he had not received the notification.  The staff member then explained that IP Australia had recently become aware that there was a problem concerning the dispatch of non-use removal notices to a wide range of addresses for service, including attorney firms and individuals.  Since Mr Porlaje had not received his notice, it appeared that IP Australia may have failed to notify him as required by regulation 9.2(2) of the Trade Mark Regulations 1995 (‘the Regulations’)[1]  Mr Porlaje was then sent documents relevant to the non-use application and also information guides (which are readily available from the IP Australia website) as he had expressed his intention to oppose the non-use application.

5.     Mr Porlaje finally filed and served his notice of opposition to the non-use application on 26 June 2012.  Evidence in support was filed and served and in due course the removal applicant advised that it did not intend to file any evidence in answer.

6.     The removal applicant then requested that the matter be heard.  The hearing was set down for Melbourne on 11 September 2013.  As a delegate of the Registrar I heard Mr John Hawker of Marks & Clerk Australia on behalf of the removal applicant at the appointed time.  Mr Porlaje advised that he did not intend to appear, and he provided brief written submissions.

Legal Framework

[1] I was made aware of this problem (now resolved) in the dispatch of notification of non-use applications shortly after it was identified.  The cause was unknown for some time, and it was not at all clear just when the problem had begun and therefore how large it was likely to be.  On becoming aware of the problem IP Australia undertook to call trade mark owners who should have received the notification within a certain time period in order to both identify when the problem began and to ensure procedural fairness for parties who may have been adversely affected by the failure of the notification process.

1. Part 9 of the Act governs the removal of trade marks from the Register for non-use. The sections of that part which are most relevant to the case in hand are sections 92, 96, 100 and 101.

   8. The non-use application was made according to the provisions of paragraph 92(4)(b). Section 92 relevantly provides:

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

   (1)  Subject to subsection (3), a person may apply to the Registrar to have a trade mark that is or may be registered removed from the Register.

   (2)  The application: 

   (a) must be in accordance with the regulations; and

   (b) may be made in respect of any or all of the goods and/or services in respect of which the trade mark may be, or is, registered.

   (3)  An application may not be made to the Registrar under subsection (1) if an action concerning the trade mark is pending in a prescribed court, but the person may apply to the court for an order directing the Registrar to remove the trade mark from the Register. 

   Note:  For prescribed court see section 190. … 

   (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: 

   […]

   (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. 

   Note 1: For file and month see section 6.

2. Section 96 makes provision for a person to oppose any application made under section 92 by filing a notice of opposition with the Registrar. This notice must be in an approved form and must be filed in accordance with the Regulations.

3. Section 100 specifies that the burden is on the opponent to a non-use application to rebut allegations of non-use. The opponent needs to establish that the applicant for, or registered owner of, the Trade Mark has used the Trade Mark (or the Trade Mark with additions or alterations not substantially affecting its identity) in good faith in respect of the relevant goods, and that this use occurred within the relevant period as specified in the Act. The courts have held that use in good faith means genuine commercial use.

4. Section 101(1) provides the Registrar with the discretion to remove the Trade Mark from the Register “in respect of any or all of the goods … to which the application relates”, whilst s 101(3) explicitly provides that discretion may be exercised in the Trade Mark owner’s favour even if the grounds on which the application was made have been established provided the Registrar is satisfied it is reasonable to do so.

   Discussion and reasons

   12.     Under paragraph 92(4)(b) it is necessary to establish that there has been no use, or no use in good faith, of the Trade Mark in the 3-year period ending one month before the non-use application was filed, provided that at least 5 years have passed since the application for registration itself was filed.  The relevant period for the purposes of paragraph 92(4)(b) is the three year period ending on 6 January 2012.

   13.     The removal opponent’s evidence consists of a number of short declarations.  Clara Porlaje has provided a declaration made on 23 October 2012 which includes as an exhibit (although it is not formally identified as such) a photocopy of a document labelled ‘Tax Invoice/Statement’.  The document is made out to ‘cash’, and is for the sale of 10 garments for a total of $85.  Ms Porlaje’s declaration specifies that the garments sold consist of ‘AKUMA’ garments, and that they were sold to ‘several friends’.  The invoice is numbered 59 and is dated 15 November 2009.  It is headed with a stamp intended to identify the source of the invoice.  The stamp is reproduced below:

   14.     The remaining evidence consists of three declarations made by Dennis Bautista Porlaje (the removal opponent).  The first of these is made on 23 October 2012 and states the following:

   On Thursday night, 18^th of June 2009 I delivered 10 pairs of AKUMA denim jeans of various sizes and 14 AKUMA T-shirts of various sizes to Chris of UBA Menswear at 348A Greenhill Road Glenside.  The items were on consignment until the 22^nd of August 2009 at which point Chris – having sold all the goods, paid $390.00 in Cash.  I have provided the original receipt of this sale as evidence of the delivery date, items delivered and final payment date.

   15.     The photocopied invoice attached to the declaration is numbered 60 and dated 18 June 2009.  It carries the same stamp as shown above, and lists the goods referred to in the declaration, but does not specifically identify them as bearing any trade mark.

   16.     The second Porlaje declaration was also made on 23 October 2012.  It states the following:

   On the 29^th April 2010 my wife – Michelle Leanne Porlaje and I had a garage sale, where we sold clothing and other fashion products of the AKUMA clothing brand, to which I am the trademark owner.  I submit this bank statement showing bank SA registering the transaction for our garage sale advertisement with the advertiser newspaper.

   17.     The exhibit attached to the declaration consists of a photocopy of the statement referred to, with a payment of $16.50 made to the Adelaide Advertiser newspaper on the date mentioned.

   18.     The third Porlaje declaration is also made on 23 October 2012 and states the following:

   On Saturday 29^th of April 2010, my Wife Michelle Porlaje, Mother Clara Porlaje and myself sold AKUMA fashion products and merchandise during a garage sale advertised through the Adelaide newspaper – the Advertiser.  I have provided 9 x cash receipts of these purchases by people who’ve bought AKUMA clothing – dated 29/04/2010.

   19.     The nine cash receipts are indeed all dated 29 April 2010, are all stamped with the previously mentioned source stamp and are numbered 42, 43, 52, 53, 54, 55, 56, 57 and 58. All refer to various items of clothing, none of which are specifically referred to as bearing the trade mark AKUMA.

   20.     As stated by the Full Court of the Federal Court of Australia in Austin, Nichols & Co Inc v Lodestar Anstalt[2] (‘Austin Nichols’) the purpose of Part 9 of the Act is the removal of unused trade marks from the Register. If a non-use application is not opposed, the trade mark concerned will be removed from the Register without further notice. The Registrar has no discretion in the matter. However, if a notice of opposition to the non-use application is filed, pursuant to section 101(3) the Registrar has the discretion to allow the trade mark to remain on the Register even if the ground on which the non-use application was made has been established. The Full Court in Austin Nichols stated at [28] that:

   The question to be asked is whether it was reasonable not to remove the trade mark from the Register, although the trade mark had not been used during the statutory period.

   [2] (2012) 287 ALR 221 at [38]

   21.     In determining this matter I am not only required to decide whether or not the relevant trade mark has been used in good faith, but also, in the case of a trade mark where the allegation of non-use has not been rebutted, to decide whether or not to exercise the Registrar’s discretion and allow the unused trade mark to remain on the Register.  The Full Court in Austin Nichols stated (at [38]):

   The purpose of part 9 is to provide for the removal of unused trade marks from the Register. In that regard it is plainly designed to protect the integrity of the Register, and in this way, the interests of the consumer. At the same time, however, it seeks to accommodate, where reasonable, the interests of the registered trade mark owners. Otherwise, there would be no need for the discretion.

   22.     In his written submissions for the hearing Mr Porlaje says that he did have a business that manufactured and distributed ‘the Akuma fashion label’ from 2004 to 2008.  He says that since that time he has continued to sell garments and items with the AKUMA brand through garage sales and via enquiries from friends and acquaintances.  He says that the information he has provided is factual and proves this use.

   23.     However, there are a number inconsistencies and ambiguities in his evidence.  Firstly, the invoices provided are all headed with the stamp which I have reproduced at paragraph 13.  Mr Porlaje does not explain what the entitity ‘D&D Imagery’ is, nor does he explain its relationship to himself as the Trade Mark owner.  However, it is open to me to infer that it is the name of the business which he says he operated between 2004 and 2008, and for convenience I will do so.

   24.     Secondly, even assuming that the invoices have issued from a business which Mr Porlaje controls, there are inconsistencies within them.  Firstly, invoice number 59 is dated 15 November 2009 while invoice number 60 is dated 18 June 2009.  The other invoices I have quoted in paragraph 19 are all numbered prior to these two invoices, but all are dated 29 April 2010.  The inference to be drawn from these inconsistencies is that these are not true invoices at all, but are documents which have been created for the specific purpose of providing the evidence Mr Porlaje needed to file if he was to demonstrate use within the relevant period.  I can find no other explanation for the discrepancies in the dates and numbers of the invoices.

   25.     Another point which cannot be ignored is that in order for the non-use opponent to rebut an allegation of non-use any use which he demonstrates must be genuine commercial use.   A token use made simply to protect the registration from a non-use attack, will not be regarded as use in good faith.  This was made clear in Imperial Group Ltd v Philip Morris & Co Ltd[3] (‘Nerit’) where Shaw J said:

   In my judgement a bona fide course of trading involves a trading activity pursued with the primary intention of deriving from it a trading profit coupled with a trading goodwill, these being the ultimate and legitimate objectives of trade.

   [3] [1982] FSR 72 (CA UK).

   26. Because of the inconsistencies in the evidence, the fact that the invoices appear to have been contrived only for the purposes of the section 92 opposition and the lack of any actual demonstrated use of the trade mark itself I do not find Mr Porlaje’s evidence at all convincing. Under the circumstances, I am not satisfied that he has demonstrated any use within the relevant period, let alone real, as opposed to token, use. The removal opponent has thus not rebutted the allegation of non-use.

   27. Section 101 of the Act (previously mentioned at paragraph 11) relevantly provides:

   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)  …

   (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.

   28.     Subsection 101(3) thus provides the Registrar with the discretion to allow a trade mark to remain on the Register even if the allegation of non-use has not been rebutted.  The discretion is unlimited and is not restricted only to exceptional cases.  However, in this case, given the nature of the evidence put before me, I can find no reason at all to apply the discretion.  The registration should be removed from the Register in its entirety. 

   Decision

   29.     The removal applicant has been successful in its non-use application.  I direct that registration 1009288 shall be removed from the Register for all of the goods for which it is registered.

   Costs

   30.     The removal applicant has requested its costs and, having been successful, it is entitled to them.  I award costs against the removal opponent according to the Official Scale as set out in Schedule 8 to the Regulations.

   Alison Windsor
   Hearing Officer
   Trade Marks Hearings
   23 September 2013