Franklins Pty Ltd v No Frills Pty Ltd

[2014] ATMO 55

TRADE MARKS ACT 1995

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

Re:Opposition by Franklins Pty Ltd to application under section 92 of the Act by No Frills Pty Ltd to remove trade mark number 340213(1) - NO FRILLS - in the name of Metcash Trading Limited.

Delegate:

Robert Wilson

Representation:

Opponent: Not present

Applicant: Mr David Stewart and Ms Laura Tatchell from Wrays Lawyers Pty Ltd

Decision:

2014 ATMO 55

Section 96 opposition to a removal application: Section 92(4)(b) ground not rebutted for some goods – Discretion pursuant to s 101(3) exercised to leave goods unchanged – Discretion pursuant to s 102 exercised to restrict geographical scope.

Background

1. This is an opposition brought by Franklins Pty Ltd (‘the Opponent’) to an application for removal of a registered trade mark for non-use (‘the Application’) under s 92(4)(b) of the Trade Marks Act 1995 (‘the Act’) by No Frills Pty Ltd (‘the Applicant’). The Application is for removal of the trade mark detailed below registered in the name of Metcash Trading Limited (‘the Trade Mark Owner’).

Trade Mark Number:

340213

Filing Date:

16 November 1979

Goods:

Class 1: Chlorine powder packs and other swimming pool chemicals in this class; garden manure and chemical products used in gardens; fertilisers and potting preparations

(‘the Owner’s Goods’)

Trade Mark:

NO FRILLS   ‘the Trade Mark’

2.  The Application was filed on 1 February 2012, and advertised in the Australian Official Journal of Trade Marks on 16 February 2012. The Application is in respect of all the goods for which the trade mark is registered.

3.  The Opponent filed a Notice of Opposition to removal (‘the Notice’) on 15 May 2012.

Evidence

4.  The Opponent filed Evidence in Support of its opposition on 5 November 2012. This evidence consists of:

• Statutory Declaration made on 1 November 2012 by Michael Milnes, Senior Legal Counsel of the Trade Mark Owner, with Annexures MM-1 to MM-26 (‘the Milnes Declaration’). Annexures MM-7 to MM-11 are confidential.

5.  The Applicant filed Evidence in Answer on 6 August 2013. This evidence consists of:

• Declaration made on 5 August 2013 by Anthony John Quinlan, the sole director of the Applicant, with Annexures AJQ-1 to AJQ-37 (‘the Quinlan Declaration’). Annexures AJQ-4, AJQ-5, AJQ-7 and AJQ-8 are confidential.

• Declaration made on 2 August 2013 by Lisa Jannette Lough, Managing Director of marketing and research company CATALYSE Pty Ltd, with Annexures LJL-1 and LJL-2 (‘the Lough Declaration’).

6.  The Applicant’s oral submissions were heard by Ms Claudia Murray, a delegate of the Registrar of Trade Marks, in Canberra on 13 March 2014. Mr David Stewart and Ms Laura Tatchell from Wrays Lawyers Pty Ltd represented the Applicant. Mr Anthony Quinlan was also present. Mr Stewart’s oral submissions were supplemented by written submissions which were provided to both Ms Murray and the Opponent prior to the hearing. As is usual practice, an audio recording was made of the hearing in Canberra. The Opponent did not appear at the hearing but chose to rely on written submissions which were prepared by its attorneys, Piper Alderman Lawyers. The Opponent’s submissions were provided to both Ms Murray and the Applicant prior to the hearing.

7.  Subsequent to the hearing Ms Murray was transferred to another position in IP Australia and the matter has been allocated to me, also a delegate of the Registrar, for decision based on the submissions made at the hearing,[1] the evidence and the written submissions tendered prior to the hearing.

[1] Obtained from the recording of the hearing.

The Opponent

8.  According to the Opponent’s submissions, the Trade Mark Owner is the ultimate holding company of the Opponent, and:

[The Trade Mark Owner] is a marketing and distribution wholesaler, operating in grocery and other fast-moving consumer goods sectors (including liquor, hardware, automotive parts and garden products) and is the company behind IGA, Mitre 10, Autobarn, Franklins, Lucky 7, Cellarbrations, The Bottle-O and numerous other Australian retailers.

[The Opponent] was originally established in 1941 and has since at least 1984 operated a supermarket chain selling grocery and other fast-moving consumer goods including NO FRILLS branded products bearing the Trade Mark.

From 1984 to 1996, [the Opponent] sought and obtained 30 trade mark registrations (including for the Trade Mark) in Australia for the trade mark NO FRILLS, covering a broad range of grocery and fast moving consumer goods (‘the Trade Mark Family’).

By the end of the year 2000, there were 287 Franklin’s supermarkets operating across New South Wales, the Australian Capital Territory, Queensland, Victoria and South Australia, each of them marketing, promoting and offering for sale, and selling, a wide range of NO FRILLS branded products bearing the Trade Mark.

[The Opponent] maintained registration of the Trade Mark Family until transferring ownership to the [Trade Mark Owner].

Upon becoming the ultimate holding company of [the Opponent], all trade marks owned by [the Opponent] (including the Trade Mark) were assigned to, and are now owned by [the Trade Mark Owner]. …

As at September 2011, the Opponent’s NO FRILLS branded product range exceeded 700 products such as groceries, perishables, household and garden products. These products included, in particular, fish emulsion fertiliser, potting mix and pinebark.

Other retailers have been licensed by either [the Opponent] or [the Trade Mark Owner] to use the Trade Mark to market, promote and offering for sale, and have sold, a wide range of NO FRILLS branded products bearing the Trade Mark including within supermarkets.

The Applicant

9.  The Applicant has submitted that it is:

a Western Australian company which has manufactured and sold (both by wholesale and retail) fertilisers and fertiliser products in connection with the words NO FRILLS FERTILISERS [‘the NO FRILLS FERTILISER trade mark’] and the logo representation

since on or around August 2009 to the present day.

…

On 24 January 2012, the Opponent sent the Applicant a cease and desist letter in respect of the Applicant’s use of [the NO FRILLS FERTILISER trade mark].

The Applicant filed [the Application] on 1 February 2012, and served this on the Opponent with a covering letter confirming that the Applicant applied for removal of the NO FRILLS Trade Mark in the State of Western Australia only.

1. The Application itself makes no mention that it applies to Western Australia only. However, the cover letter of the Application states, inter alia, ‘It is to be understood that this Application applies to the removal of Registration 340213 in the State of Western Australia only’.

2. The Applicant is the owner of the trade mark detailed below for which it is currently seeking registration:

Trade Mark Application:

1551988

Filing Date:

16 April 2013

Goods:

Class 1: Chemicals used in industry, agriculture, horticulture and forestry; chemical substances used for agriculture and horticultural purposes; fertilisers, including liquid fertilisers and compound fertilisers; fertilising preparations; manures (natural and artificial); fertilisers and fertilising preparations including liquid fertilisers and compound fertilisers; fish hydrosate, potassium humate, seaweed and seaweed extracts, amino acids and volcanic rock dust

Class 35: Retailing and wholesaling of fertilisers and fertilising preparations

(‘the Applicant’s Goods’)

Trade Mark:

NO FRILLS FERTILISERS  

‘the Applicant’s Trade Mark’

Legal Framework

1. Part 9 of the Act governs the removal of trade marks from the Register for non‑use. The sections of Part 9 which are most relevant to the case in hand are ss 92, 96, 100, 101 and 102.

2. The Application specified that it was made according to the provisions of s 92(4)(b). Section 92 relevantly provides:

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

   (1)  … a person may apply to the Registrar to have a trade mark that is … 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.

   …

   (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.

   Note 2: If non-use of a trade mark has been established in a particular place or export market, then instead of the trade mark being removed from the Register, conditions or limitations may be imposed under section 102 on the registration of the trade mark so that its registration does not extend to that place or export market.

3. Section 96 makes provision for a person to oppose any application made under s 92 by filing a notice of opposition with the Registrar.

4. Section 100 specifies that the burden is on the person opposing the application to rebut any allegation of non-use. The opponent needs to establish that the registered owner of the challenged 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. Use of a trade mark in good faith has been taken by the courts to mean genuine commercial use as opposed to token use.[2] The relevant period is the three years ending one month before the day on which the opposed application was filed. The demonstrated use must be ‘use in the course of trade’.[3]

   [2] E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 265 ALR 645, 660.

   [3] E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144, 163; Trade Marks Act 1995 (Cth) s 17.

5. 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’. Section 101(3) explicitly provides that the discretion may however be exercised in the trade mark owner’s favour (if the Registrar is satisfied that it is reasonable to do so), notwithstanding that the grounds on which the application was made have been established.

6. Section 102 provides the Registrar with the discretion to, inter alia, impose a geographical restriction on a registration, where certain conditions are met, such that the registration no longer extends to the use of the challenged trade mark in a specified place. Section 102 is reproduced in its entirety below:

   102 Determination of opposed application—localised use of trade mark

   (1) This section applies if an application for the removal of a trade mark (challenged trade mark) from the Register is made on the ground referred to in paragraph 92(4)(b) and:

   (a) the applicant is the registered owner of a trade mark that is substantially identical with, or deceptively similar to, the challenged trade mark and is registered in respect of the goods and/or services specified in the application subject to the condition or limitation that the use of the trade mark is to be restricted to:

   (i) goods and/or services to be dealt with or provided in a particular place (specified place) in Australia (otherwise than for export from Australia); or

   (ii) goods and/or services to be exported to a particular market (specified market); or

   (b)the Registrar or the court is of the opinion that such a trade mark may properly be registered in the name of the applicant with that condition or limitation.

   Note 1: For registered owner see section 6.

   Note 2: For deceptively similar see section 10.

   (2) If the Registrar or the court is satisfied:

   (a) that the challenged trade mark has remained registered for the period referred to in paragraph 92(4)(b); and

   (b) that during that period there has been no use, or no use in good faith, of the challenged trade mark in relation to:

   (i) goods or services dealt with or provided in the specified place; or

   (ii) goods or services to be exported to the specified market;

   the Registrar may decide, or the court may order, that the challenged trade mark should not be removed from the Register but that the registration of the trade mark should be subject to the conditions or limitations that the Registrar or the court considers necessary to ensure that the registration does not extend to the use of the trade mark in relation to:

   (c) goods or services dealt with or provided in the specified place; or

   (d) goods or services to be exported to the specified market.

   Note: For limitations see section 6.

7. The definition of limitations contained in s 6 is expressed thus:

   limitations means limitations of the exclusive right to use a trade mark given by the registration of the trade mark, including limitations of that right as to:

   (a)    mode of use: or

   (b)    use within a territorial area within Australia; or

   (c)     use in relation to goods or services to be exported.

Discussion

1. To successfully oppose an application for removal of a trade mark (without needing to rely on the Registrar’s discretion under s 101(3)) an opponent must establish that the challenged trade mark has been used by the owner of the trade mark in the course of trade in respect of all the goods and/or services for which it is registered in the relevant period (or successfully rely on s 100(3)(c)). The date range forming the relevant period is crucial in a non-use matter. It is incumbent upon an opponent to provide clearly dated evidence showing use of the challenged trade mark upon, or in physical or other relation to, the goods and/or services[4] within that period in order to rebut the allegation of non-use. Undated examples of use carry little, if any, weight in support of a claim for use of a trade mark within the relevant period.

   [4] See s 7 of the Act.

2. The Application is for removal of the Trade Mark in respect of all the goods for which it is registered. The relevant period in this instance is the three year period ending on 1 January 2012. The Application is sought to be qualified by the Applicant’s attorneys’ covering letter which states:

   It is to be understood that this Application applies to the removal of Registration 340213 in the State of Western Australia only.

Further, it is clear from the Applicant’s oral and written submissions that it is not seeking that the Trade Mark be removed entirely, only that its scope be restricted to exclude Western Australia (‘WA’). The Applicant has submitted:

Significantly, as the Applicant seeks a territorial restriction of the NO FRILLS Trade Mark.[sic] As such, note 2 in Section 92 of [the Act] applies. Note 2 provides that if non-use of a trade mark has been established in a particular place, then instead of the trade mark being removed from the Register, conditions or limitations may be imposed under Section 102 on the registration of the trade mark so that its registration does not extend to that place. This has been readily accepted in many cases.

The Applicant submits that the NO FRILLS Trade Mark has not been used with respect to any of [the Owner’s Goods] in Western Australia during the Relevant Period.

The Applicant seeks a territorial limitation on the NO FRILLS Trade Mark so that the Opponent is territorially restricted to use outside of Western Australia in respect of [the Owner’s Goods].

1. There is no provision in the Act for the Application to be qualified in the way that is sought by the Applicant in the cover letter to the Application. I will, therefore, first consider whether there has been use of the Trade Mark anywhere in Australia, before considering the potential application of s 102.

Has there been use of the Trade Mark anywhere in Australia?

1. Whether there was in fact use of the Trade Mark during the relevant period is somewhat complicated by the fact that the Trade Mark was originally owned by the Opponent before being assigned to the Trade Mark Owner; the assignment occurred in July 2012, which is after the relevant period. Section 92(4)(b) specifically refers to use by ‘the person who was then the registered owner’. As the Opponent is that person, relevant use by the Opponent constitutes use for the purposes of rebutting the allegation of non-use contained in the Application.

2. Mr Milnes declared that by the end of 2000 there were some 287 ‘Franklins’ branded supermarkets operating in a number of Australian states which were selling goods bearing the Trade Mark; Western Australia is notably absent from the list of states. Mr Milnes has declared that:

   [A]s at September 2011, the NO FRILLS branded product range exceeded 700 products in products such as groceries, perishables, household and garden products. These products included, in particular, fish emulsion fertiliser, potting mix and pinebark.

3. I am satisfied by the evidence provided – and the Applicant does not dispute this – that the Opponent sold fish emulsion fertiliser, potting mix and pinebark, displaying the Trade Mark from its Franklins stores during the relevant period. These goods fall within some of the claims for which the Trade Mark is registered: specifically, garden manure and chemical products used in gardens; fertilisers and potting preparations.

4. As for the remainder of the Owner’s Goods, the Opponent has not indicated specifically which of the goods it has sold that it considers to be chlorine powder packs and other swimming pool chemicals in this class. The Opponent has submitted:

   [t]he registered owner has, during the relevant period, used the Trade Mark in Australia in respect of swimming pool chemicals, garden manure and chemical products used in gardens and fertilisers and potting preparations consisting of household goods which can be used in the swimming pools and garden such as insect spray, tea, coffee, oil, dishwashing, detergent, salt, sugar, bleach and vinegar.

5. It may be that some people intentionally put tea, coffee and/or sugar in their swimming pools, thereby potentially making them swimming pool chemicals but this seems unlikely. Salt, however, is commonly used in swimming pools. It appears, therefore, that the Opponent may be submitting that what it advertised as ‘NO FRILLS TABLE SALT’ or ‘NO FRILLS COOKING SALT’ in its catalogues are in the nature of swimming pool chemicals. There may be other goods that the Opponent considers to be swimming pool chemicals but this is a useful one to consider.

6. The Nice classification distinguishes between a number of different kinds of salt: some of these appear in Class 1, but many do not. Salts for bath use appear in Class 3. Sea salt for medical purposes appears in Class 5. Salt for cattle appears in Class 31. Most significantly, perhaps, table salt and salt for cooking appear in Class 30. The distinction between different types of salt is related to the principal intended use of the goods and the likely trade channels through which they are sold. A stockman might scrape a bit of salt off the block of salt that he recently purchased from a livestock supply store for his stock to lick and sprinkle it on his fish and chips, but to suggest that this potential use means that sales of salt for cattle demonstrates sales of Class 30 table salt is drawing a long bow indeed. It may even be that salt intended for consumption by cattle is not generally considered fit for human consumption. The trade channels and intended uses of table salt and cooking salt are very different to salt which is sold for the purpose of use as a stock feed, or indeed, for addition to swimming pools.

1. Where use of a trade mark is demonstrated in connection with goods marketed and sold for a particular purpose, that there also exist diverse potential uses for the same, or very similar, goods does not mean that the demonstrated use also constitutes use of the trade mark in connection with arguably similar goods marketed and sold for a different purpose.

2. The Applicant commissioned a survey, tendered in evidence, as to the dominant uses of tea bags, coffee, salt, sugar, vinegar and bleach. The results are not surprising and indicate that very few, if any people, considered the main uses of those goods were for gardening or use in the swimming pool. The Opponent has submitted that the survey was flawed, but that it nevertheless supported the Opponent’s submissions. It is not necessary for me to go into any further detail regarding the survey, but it does little, if anything, to support the Opponent’s submissions.

3. There does not appear to be any evidence of use of the Trade Mark in respect of any goods which clearly fall into the category of chlorine powder packs and other swimming pool chemicals in this class.

4. I am satisfied that the Opponent has demonstrated use of the Trade Mark in respect of garden manure and chemical products used in gardens and fertilisers and potting preparations in the relevant period for the purposes of rebutting the allegation of non‑use pursuant to s 92(4)(b). I am not satisfied that the Trade Mark was used in respect of chlorine powder packs and other swimming pool chemicals in this class during the relevant period.

Can s 102 be relied upon by the Applicant?

1. The Applicant is relying on s 102 as the basis for the Registrar imposing a geographical restriction on use of the Trade Mark. Section 102 applies only when a number of very specific criteria are met. The first criterion is that the Application must have been made ‘on the ground referred to in paragraph 92(4)(b)’. That requirement is satisfied in this instance. Beyond that there are a number of narrow, and alternative, criteria which are stated in ss 102(1)(a) and (b).

2. The Opponent has averred, and I agree, that there is no evidence before me that the Applicant is ‘the registered owner of a trade mark’ to which section 102(1)(a) applies. The Applicant’s Trade Mark is not registered as the trade mark application is still under examination as at the date of this decision. This requirement of s 102(1)(a) is, therefore, not satisfied. However, as will be seen below, this is not the end of the relevance of s 102(1)(a).

3. Notwithstanding the Applicant’s assertion to the contrary reproduced in para 20, above, there is apparently little to no case law to assist in the interpretation of s 102: especially in relation to s 102(1)(b). The Explanatory Memorandum to the Trade Marks Bill 1995 (‘the EM’), however, provides some guidance. Paragraph 83 of the EM reads:

   The court or the Registrar may also apply conditions or limitations to the registration of a trade mark.  Clause 102 provides for circumstances where both the applicant for removal of the trade mark and the opponent have established use of the trade mark in different locations, and the applicant’s trade mark is, or will be, subject to a condition or limitation relating to a specified place or market.  Under these circumstances, if non-use of the trade mark which is the subject of the removal action has been established for the relevant goods or services in that specified place or market, the court or the Registrar may apply conditions or limitations to the registration so that the specified areas or markets covered by the applicant’s registration and the registration the subject of the removal action will be mutually exclusive.

4. Interpreting s 102(1)(b) in the light of the EM suggests that s 102 applies where a removal applicant owns an unregistered trade mark which otherwise satisfies the requirements of s 102(1)(a) and which ‘may properly be registered’. The Opponent, without explicitly indicating what it considers ‘may properly be registered’ to mean has submitted that:

   [T]he Applicant has not adduced evidence that [the Applicant’s Trade Mark] ‘may properly be registered’, as required by section 102(1)(b). The Registrar is entitled to take judicial notice of what the Register of Trade Marks shows in relation to the Trade Mark Application. The Register shows that:

   1.     an adverse report was issued by the Examiner on 25 June 2013;

   2.     the Applicant applied to defer acceptance of that Trade Mark Application on 30 July 2013; and

   3.     the Examiner granted that deferment on 1 August 2013.

   The Opponent submits that deferment of the Trade Mark Application is evidently on the basis that the Applicant was unable to show that the Applicant is entitled to the registration of its trade mark in the absence of the Trade Mark being removed under this Removal Application.

5. The Opponent went on to submit that the Applicant’s Trade Mark application ought to be rejected under the provisions of s 44 of the Act, and that, in the Opponent’s opinion, there is insufficient evidence provided by the Applicant to establish that the Applicant’s Trade Mark application could be accepted under the provisions of s 44(3). The Applicant’s response to this submissions is as follows:

   Under the [Trade Marks Act 1955 (‘the 1955 TMA')], section 34 provided the honest concurrent user, special circumstances and prior use provisions now contained in s 44 of [the Act]. The major difference between section 23(3) of the 1955 TMA and section 102 of [the Act] is that it now remains open for the Applicant to demonstrate its entitlement to obtain registration of its trade mark in any manner it sees fit – there is no reference to a person needing to be permitted to obtain registration under the honest concurrent user, special circumstances or prior use provisions. This change in legislation alters the onus so that the Applicant no longer needs to demonstrate that it can obtain registration in the particular place in the face of the Opponent’s full and unrestricted registration … .

6. It is implicit in the Opponent’s submissions that it considers the words ‘may properly be registered’ to require an inquiry into the likelihood that a removal applicant’s trade mark will, or is likely to, proceed to registration. I am not inclined to this view. To satisfy the requirement that it ‘may properly be registered’ for the purposes of s 102(1)(b) it is necessary only that a removal applicant’s trade mark is capable of having a condition or limitation placed upon it that would be complementary to any condition or limitation that the Delegate might place upon a challenged trade mark, i.e. if the respective condition or limitations were in place the specific areas or markets covered by the removal applicant’s registration and the registration of the challenged trade mark would be mutually exclusive.

7. A removal applicant’s trade mark application will eventually be dealt with in the usual way: its trade mark application may or may not be accepted, and if accepted, may or may not be successfully opposed. It is unnecessary that the likelihood of any of these particular outcomes be assessed when deciding whether s 102 as a whole applies. Whether it is appropriate that a condition or limitation should be placed on a challenged trade mark falls to be considered under s 102(2) when, and only when, it is established that s 102 applies pursuant to s 102(1).

8. Where a removal applicant is relying on an existing trade mark application to trigger s 102 it is necessary that the trade mark application meet the following criteria before the section applies:

   1.the trade mark applied for is substantially identical with, or deceptively similar to, the challenged trade mark; and

   2.the trade mark application is in respect of the goods and/or services specified in the removal application; and

   3.the use of the trade mark applied for, if registered, may be restricted, by an endorsement, to either:

   (i)goods and/or services to be dealt with or provided in a particular place in Australia (otherwise than for export from Australia); or

   (ii)goods and/or services to be exported to a particular market; and

   4.the trade mark applied for ‘may properly be registered’.

9. The Opponent and Applicant have both submitted that their respective trade marks are substantially identical or deceptively similar. I agree that the trade marks are at least deceptively similar. The similarity of the goods is also not in contention, and I am satisfied that the Applicant’s Goods at least encompass the Owner’s Goods. It is possible for the Applicant to request that the scope of their trade mark be limited geographically to WA: such a restriction is complementary to the geographical restriction that the Applicant has requested be placed on the Trade Mark. I am satisfied, therefore, that the requirements of s 102(1)(b) have been met and that s 102 applies.

Application of s 102(2)

1. Having decided that s 102 applies the provisions of s 102(2) come into effect. Section 102(2) confers a discretion on the Registrar, inter alia, to impose a limitation on the challenged trade mark restricting its use to outside of a specified place where certain criteria are met.

2. Firstly, it is necessary that the Registrar is satisfied that the challenged trade mark has remained registered during the 3 years ending one month before the day on which the non-use application was filed.[5]

   [5] Trade Marks Act 1995 (the Act) s 201(2)(a).

3. Secondly, that during that period there has been no use of the challenged trade mark in relation to ‘goods or services dealt with or provided in the specified place’.[6] The ‘goods or services dealt with or provided in the specified place’ are otherwise unqualified. However, to construe this provision to mean that it refers to use of the challenged trade mark in respect of any goods or services whatsoever is inconsistent with the aims of the provision as described in the EM and the relevant criterion as it appeared in the corresponding provision in earlier legislation, i.e. s 23(3) of the Trade Marks Act 1955.

   [6] Trade Marks Act 1995 (the Act) s 102(2)(b)(i).

4. The EM includes the words:

   … if non-use of the trade mark which is the subject of the removal action has been established for the relevant goods or services in that specified place … (emphasis added).

5. Section 23(3) of the Trade Marks Act 1955 refers to ‘goods in respect of which a trade mark is registered’.

6. In light of the above and in the context of the Act as a whole, I consider the ‘goods or services’ referred to in s 102(2)(b)(i) to be those goods and/or services in respect of which an application for removal is made.

7. If the above two criteria are met the Registrar may then exercise the discretion to place a condition or limitation on the challenged trade mark.

8. I am satisfied that the Trade Mark remained registered during the relevant period. It is now necessary to consider whether there was use of the Trade Mark in WA in the relevant period in respect of the Owner’s Goods.

Has there been use of the Trade Mark in WA?

1. The Opponent has provided numerous examples of advertising material such as promotional catalogues which appear to be associated with its Franklins’ supermarkets. While the catalogues do show examples of use of the Trade Mark in connection with some relevant goods such as fish emulsion fertiliser and pine bark, there is no indication that any were distributed in WA. This evidence does not assist the Opponent in establishing use of the Trade Mark in WA.

2. Mr Milnes has declared also that:

   In 2001, Woolworths acquired a number of supermarket premises from the Opponent. Under a fixed term agreement, Woolworths was permitted to sell the Opponent’s NO FRILLS branded products bearing the Trade Mark from these newly acquired premises.

There is no indication: where the premises acquired by Woolworths are/were located; whether the ‘fixed term agreement’ included the relevant period; or what, if any, NO FRILLS branded products were actually sold by Woolworths. Consequently, I am unable to draw any conclusions about use of the Trade Mark by Woolworths.

1. The Opponent has also provided examples of use from its website from during the relevant period, such examples being obtained from a web archive service. None of the examples provided show use of the Trade Mark in connection with any relevant goods. This evidence too, does not assist the Opponent.

2. Beyond the evidence just considered, the Opponent appears to be specifically relying on fairly limited use of the Trade Mark by an authorised user in WA to rebut the allegation of non-use in that state. Authorised use is explicitly deemed by s 7(3) of the Act to be use by the owner of a trade mark. The Opponent has submitted with respect to use by its authorised user:

   During the relevant period, Hamper King was authorised by [the Opponent] to use the Trade Mark for marketing, promoting and offering for sale, and selling, a wide range of NO FRILLS branded products bearing the Trade Mark and did so use the Trade Mark for marketing, promoting and offering for sale, and selling, a wide range of NO FRILLS branded products bearing the Trade Mark.

   …

   In Western Australia, the registered owner has, during the relevant period, used the Trade Mark in respect of swimming pool chemicals, garden manure and chemical products used in gardens and fertilisers and potting preparations consisting of household goods which can be used in the swimming pools [sic] and garden such as tea, coffee, salt, sugar, bleach and vinegar.

   For each of the years 2009 to 2011, the Opponent engaged Hamper King Pty Ltd, a Christmas hamper company, to sell the Opponent’s NO FRILLS branded products bearing the Trade Mark in Christmas hampers. Hamper King Pty Ltd sold, and offered for sale, those hampers in every State and Territory of Australia including Western Australia. The products bearing the Trade Mark that were included in the hampers included, tea, coffee, salt, sugar, bleach and vinegar.

   …

   The Opponent’s quality and pricing strategy, and its place in the consumer market, mean that consumers do choose to purchase these products bearing the Trade Mark for application in swimming pools and gardens for the reasons described above.

1. Paragraph 31 of the Milne Declaration is marked ‘confidential’. This paragraph indicates the number of the Christmas hampers sold by Hamper King Pty Ltd in WA in 2009. The number is extremely modest in trade mark terms. There is no indication that hampers were sold in WA in any other year. Mr Milne has declared in para 31 of his declaration that the hampers sold in WA contained the following items which were listed in para 28 of the declaration:

• table salt

• white vinegar

• white sugar

• powdered instant coffee

• tea cup bags

1. It now needs to be considered whether use of the Trade Mark in connection with the goods in the hampers, listed above, constitutes use of the Owner’s Goods. The Applicant has stated in this regard that:

   ‘Tea bags’, ‘coffee’, ‘salt’, ‘sugar’ and ‘vinegar’ are all regarded by the [Nice Classification] as falling within class 30. Despite this, the Opponent contends that the sale of tea bags, coffee, salt, sugar and vinegar constitute use in relation to:

   a.  swimming pool chemicals (class 1);

   b.  garden manure and chemical products used in gardens (class 1); and

   c.   fertilisers and potting preparations (class 1),

   due to the alternative, and unlikely uses that tea bags, coffee, salt, sugar and vinegar can be put.

   This argument is as novel as suggesting that a car can function as an iron, because the car’s tyres can press clothes flat. This is the antithesis of the scenario in McHattan v Australian Specialised Vehicle Systems Pty Ltd and Anor (1996) 34 IPR 537 which stated:

   [A] registration can be preserved only for those goods or services for which use can be shown. Proof of use for goods or services of the same description will not suffice. (citations omitted)

2. With a definite nod to the principle of reductio ad absurdum the Applicant continued:

   If the use of products by a small number of people for an uncommon purpose is considered ‘use’ in relation to those purposes, then it also follows that the following goods may be registered with respect to the following classes:

   a.   pencil shavings for use to repel moths could be registered in class 16 for stationery and class 5 for insect repellent; [and]

   b.   erasers as a makeshift earring back could be registered in class 16 for stationery and class 14 for jewellery.

The Opponent provided references to where such uses of pencil shavings and erasers were suggested, but it is not necessary to provide them here.

1. I am satisfied that the table salt, white vinegar, white sugar, powdered instant coffee, and tea cup bags included in the hampers sold by Hamper King Pty Ltd were marketed and sold for purposes which did not include the alternative uses suggested by the Opponent. Following the approach taken earlier in my decision, I am, therefore, not satisfied that the use in WA of the Trade Mark in connection with table salt, white vinegar, white sugar, powdered instant coffee, and tea cup bags, sold in Christmas hampers is use of the Trade Mark in connection with any of the Owner’s Goods. Nor am I satisfied that the Trade Mark was used by the Opponent in connection with any of the Owner’s Goods in any other way in WA during the relevant period.

The discretion under s 102(2)

1. Having been satisfied that the Trade Mark has remained registered during the relevant period, and that there has been no use, nor use in good faith, of the Trade Mark in relation to the Owner’s Goods during the relevant period in WA, it remains to be considered whether the discretion afforded by s 102(2) ought to be exercised in the manner requested by the Applicant. In this regard the Opponent has submitted:

   [T]he Registrar should exercise his or her discretion to not place any conditions or limitations on the Trade Mark.

   Case law provides that there are a number of relevant factors for the Registrar to consider when exercising the discretion. Although much of the case law relates to the discretion provided by section 101(3), the Opponent submits that the same factors may equally be applied to the application of section 102(2) … .

   In the case of E & J Gallo Winery v Lion Nathan Australia Pty Limited,[7] Flick J, (following Falconer J in Hermes Trade Mark[8]) found the following issues to be useful in considering the exercise of the discretion:

   1.    whether the trade mark had been abandoned;

   2.    whether the registered proprietors of the mark still had a residual reputation in the mark;

   3.    whether the removal applicants had entered the market without having taken steps to ascertain from the Register whether anyone had a right to exclude their use of the mark; and

   4.    whether the registered proprietors were aware of the removal applicant’s sales under the mark.

   [T]here is no evidence that the Applicant in these proceedings took steps to ascertain from the Trade Marks Register whether anyone had existing intellectual property rights. In this case, the Opponent clearly has not abandoned its Trade Mark and maintains substantial residual reputation in the Trade Mark.

   [7] [2008] FCA 934.

   [8] [1982] RPC 42.

2. I agree that the Opponent has not abandoned its trade mark as it is clearly continuing to use it in parts of Australia, but not, it would seem, in WA. In the over thirty years that the Trade Mark has been registered there appears to be use only on a small number of occasions, in one particular year, in connection with a limited range of goods in WA. Such use is unlikely to imbue the Trade Mark with any significant reputation in WA.

3. The Opponent also submitted that there is a relevant public interest consideration, averring:

   In Pioneer Computers Australia Pty Ltd v Pioneer KK,[9] the trade marks in question had not been used across the scope of the goods claimed. The removal applicant had used a very similar mark on these remaining goods. The Federal Court determined that the public interest would be best served by allowing the marks to remain on the Register in respect of all the goods because confusion might result if the removal applicant was allowed to use its mark on the remaining goods. The Opponent submits that a similar consideration should be undertaken here, as confusion is likely to result if the Trade Mark is limited to States not including Western Australia, and the Applicant is subsequently allowed to register trade marks in Western Australia.

   Overall, the Opponent submits that, due to the substantial use of the Trade Mark Family and reputation acquired in the NO FRILLS trade mark over 30 years of trading in its wide range of NO FRILLS products in all States of Australia, the Registrar should exercise her discretion to maintain the registration of the Trade Mark on the Trade Marks Register in its current form, with no condition or limitation imposed.

   [9] (2009) AIPC 92-354.

1. The avoidance of deception or confusion amongst consumers as to the trade source of goods and services is a principal aim of the Act. In considering whether the discretion available to the Registrar pursuant to s 102(2) should be exercised likelihood of deception or confusion should, therefore, be a central consideration, although the private commercial interests of both parties are matters which can be taken into account.[10]

   [10] E & J Gallo Winery v Lion Nathan Australia Pty Limited [2008] FCA 934, [209]-[210]. This case concerned s 101(3) of the Act but the principle applies equally to s 102(2).

2. The evidence in this matter suggests that the Trade Mark has little if any significant reputation in WA. Where the Opponent has used the Trade Mark it has been almost entirely in the context of its supermarkets in states other than WA. The period of greater than 30 years over which it has used NO FRILLS in connection with supermarket goods suggests that the reputation of that trade mark in the geographical locations where it does trade is likely to be significant. There is the potential for such a reputation to spill over to a small degree into WA: people move around Australia, whether temporarily or permanently. However, consumers familiar with the NO FRILLS trade mark are likely to associate it with goods which are available only at Franklins’ supermarkets and identified by a particular get‑up rather than such goods available any other retail outlet.

3. The Applicant appears to use its trade mark in respect only of fertilisers which it sells from a variety of retailing outlets such as garden centres and hardware stores. The Applicant also appears to sell directly to a number of other businesses such as wineries. It seems extremely unlikely that the Applicant goods will ever be sold in a Franklins’ supermarket. There is no evidence before me to suggest that the Applicant has adopted the Opponent’s get-up. The Applicant markets and sells its goods only in WA.

4. The Act clearly contemplates the possibility of substantially identical or deceptively similar trade marks co-existing in mutually exclusive geographical locations. In this case I am not satisfied that the Trade Mark has a reputation in WA and there is nothing before me to show that the Opponent intends to open any Franklins’ supermarkets in that state. The trade channels of the Owner’s Goods and the Applicant’s Goods are quite different. The Trade Mark Owner uses a characteristic get-up for its goods which appears not to have been adopted by the Applicant. I am satisfied that if the use of the Trade Mark were not to extend to its use in connection with the Owner’s Goods in WA, and that the use of the Applicant’s Trade Mark were to be limited to the State of WA in respect of the Applicant’s Goods, then confusion amongst consumers is unlikely to occur. I therefore intend to exercise the discretion available to the Registrar under s 102(2) of the Act and place a limitation on the Trade Mark so that it use does not extend to the State of Western Australia.

The discretion under s 101(3)

1. The Opponent did not rebut the allegation of non-use contained in the Application in respect of the chlorine powder packs and other swimming pool chemicals in this class which it has claimed in Class 1. However s 101(3) of the Act confers a discretion upon the Registrar not to remove a trade mark from the Register even though the ground for removal has been established. This is a ‘broad discretion’[11] which may be exercised ‘when it is reasonable to do so’.[12] ‘The question to be asked is whether it [is] reasonable not to remove the trade mark from the Register, although the trade mark [has] not been used during the statutory period’.[13] A centrally relevant consideration is whether the public would be deceived or confused if the mark remains on the Register, although the private commercial interests of both parties are matters which may be taken into account when exercising the discretion.[14] The Registrar needs to be ‘positively satisfied’ that the trade mark should not be removed from the register, and ‘it is the opponent for removal who bears the burden of persuasion on that issue’.[15]

   [11] C A Henschke & Co v Rosemont Estates Pty Ltd (2000) 52 IPR 42; [2000] FCA 1539, [72].

   [12] Kowa Co Ltd V NV Organon [2005] FCA 1282, [98].

   [13] Austin, Nichols & Co Inc v Lodestar Anstalt [2012] FCAFC 8, [28].

   [14] E & J Gallo Winery v Lion Nathan Australia Pty Limited [2008] FCA 934, [209]-[210].

   [15] Optical 88 Ltd v Optical 88 Pty Ltd (2010) 89 IPR 457, [273].

2. I am satisfied, however, that because of the demonstrated reputation that the Trade Mark has acquired in parts of Australia other than WA, it is reasonable that the Trade Mark should remain on the Register with no change to the goods for which it is registered, provided that the registration is limited as indicated in para 63 of these reasons.

Decision

1. Notwithstanding, the Opponent’s failure to rebut the allegation of non-use in respect of certain of the Owner’s Goods I am satisfied that it is reasonable that the Trade Mark should remain on the Register for all of the Owner’s Goods, but that the registration should be subject to a condition or limitation such that its registration does not extend to use of the Trade Mark in Western Australia. To achieve this an endorsement is to be entered on the Register in connection with the Trade Mark in the following terms:

   Registration of this trade mark does not extend to the State of Western Australia.

2. In the event of an appeal from this decision, the endorsement will not be entered on the Register until the appeal has been discontinued or dismissed, or in the event of a decision from the court, the registration will be subject to that order.

Costs

1. The Applicant has requested an award of costs in its favour. As both parties have been successful to a degree in this matter – the Opponent in retaining the Trade Mark on the Register, and the Applicant in achieving the geographical restriction it sought – I consider it appropriate that each party bears its own costs. Consequently, I decline to award costs against the Opponent.

Robert F Wilson

Hearing Officer

Trade Marks Hearings

13 June 2014