Fw: Bintex Holdings Pty Ltd v United Bonded Fabrics Pty Ltd
[2010] ATMO 35
•21 May 2010
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by United Bonded Fabrics Pty Ltd to applications under section 92 of the Act by Bintex Holdings Pty Ltd to remove trade mark numbers 542173(42) – Loftex and Device - and 568449(27) - Loftex - in the name of United Bonded Fabrics Pty Ltd
Delegate: | Alison Windsor |
Representation: | Opponent: Iain Tannahill of Ahearn Fox Patent and Trade Mark attorneys Applicant: Andrew Fox of Counsel instructed by Griffith Hack Patent and Trade Mark attorneys |
Decision: | 2010 ATMO 35 Section 92: Pre-amendment version of s92 applies – non-use applicant is person aggrieved – s92(4)(b) ground considered – no use demonstrated on goods in class 27 – registration to be removed – services in class 42 to be restricted in line with demonstrated use. Costs awarded against opponent. |
Background
Bintex Holdings Pty Ltd (“the non-use applicant” or “Bintex”) filed applications to remove two registered trade marks from the Register on the basis of non-use, as provided for by section 92 of the Trade Marks Act 1995 (“the Act”). The applications were filed on 15 December 2005.
United Bonded Fabrics Pty Ltd (“the opponent” or “United”) is the registered owner of the two trade marks, current details of which are as follows:
| Regn No | 542173 | 568449 |
| Registered from | 14 September 1990 | 29 November 1991 |
| Goods/Services claim | Class 42: Wholesale and retail services associated with the manufacture and/or sale of waddings including thermally bonded waddings in sheet form made from fibres such as polyester fibres, also filtering materials as well as all insulating materials, especially insulating materials for use in the building industry, the clothing industry and the furniture and bedding industry; wholesale and retail services associated with felt and felt products as well as jute and jute products | Class 27: Mats and matting included in this class, including bath mats; carpets, rugs and other floor coverings included in this class; artificial turf and all other goods included in this class |
| Trade Mark | LOFTEX |
United filed notices of opposition to the removal applications on 5 May 2006. Evidence in support, in answer and in reply were filed in due course. Following receipt of the opponent’s evidence in reply, the non-use applicant requested to be heard. I was delegated by the Registrar to hear the matter in Canberra on 5 May 2010. Andrew Fox of counsel represented the non-use applicant via video conference. He was accompanied by Albert Terry of Griffith Hack, patent and trade mark lawyers. Ian Tannahill of Ahearn Fox, Patent and Trade Mark attorneys, attended via telephone conference for the opponent.
The relevant law
As the applications were filed prior to the commencement of the Trade Marks Amendment Act 2006 (Cth), the version of section 92 which was in force at 15 December 2005 is the applicable version. It provides the following:
92 Application for removal of trade mark from Register etc.
(1) A person aggrieved by the fact that a trade mark is or may be registered may, subject to subsection (3), apply to the Registrar for the trade mark to be 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 aggrieved 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:
(a) that, on the day on which the application for the registration of the trade mark was filed, the applicant for registration had no intention in good faith:
(i) to use the trade mark in Australia; or
(ii) to authorise the use of the trade mark in Australia; or
(iii) to assign the trade mark to a body corporate for use by the body corporate in Australia;
in relation to the goods and/or services to which the non‑use application relates and that the registered owner:
(iv) has not used the trade mark in Australia; or
(v) has not used the trade mark in good faith in Australia;
in relation to those goods and/or services at any time before the period of one month ending on the day on which the non‑use application is filed;
(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: For file see section 6.
Of particular import is the requirement that an application for removal on the basis of non-use is to be made by a “person aggrieved”. The matter of standing is crucial as it forms a threshold test which, if successfully challenged, will result in the applications failing at the outset.
The non-use applicant has nominated both paragraphs 92(4)(a) and 92(4)(b) in its application. Section 93(2) specifies that application of the provisions of section 92(4)(b) is dependent on the trade mark(s) having been registered for a minimum of five years. The registrations under attack in this case had been registered for approximately 15 years by the time the applications for their removal were made. According to paragraph 70.510 of Shanahan’s Australian Law of Trade Marks and Passing Off (4th ed, 2008), paragraph (a) of section 92(4) merges with paragraph (b) once the trade mark has been registered for more than five years. I am satisfied that this is indeed so. Therefore, as provided for by section 100(c), the onus is on the opponent to rebut the claim that there has not been any use of its trade marks within the three year period ending one month prior to filing of the applications for removal on 15 December 2005.
Assuming that the applicant’s standing is upheld, Section 101 of the Act which provides the Registrar with a discretion not to remove a registration even if the grounds of the application have been established is also relevant and will be referred to when appropriate.
Evidence provided
Evidence in support
The opponent’s evidence in support consists of a declaration made by Ian Robert Tannahill, a trade marks attorney of the opponent’s legal representatives, Ahearn Fox. Mr Tannahill states that United and their predecessors in business have used the trade mark LOFTEX for over 17 years in respect of “waddings”. He says the waddings are used as filtering materials and as insulating materials in the building industry. They are also used in the manufacture of clothing items such as waterproof jackets; in the manufacture of furniture; in the construction of bedding items such as mattresses, pillows, quilts and bedspreads and in the manufacture of curtains. He states that the waddings are sold under the trade marks via wholesale to manufacturers of the various goods mentioned. The goods are sold as well to on-sellers such as craft shops where wadding is sold to home quilters, for example.
Evidence in answer
The non-use applicant’s evidence in answer consists of three declarations. The first is the declaration of Feng Zhang (also known as Frank Chang), director of Bintex. Mr Chang states that Bintex is part of an international group of companies which includes Loftex Industries Ltd of Shandong Province in China, Loftex USA and Loftex Shanghai. He refers to this group of companies as the “Loftex Group of Companies”.
Mr Chang states that Bintex has been trading in Australia selling goods which it imports from Loftex Industries Ltd since 1998. The goods imported include bath towels, bath mats, beach towels, tea towels, bathrobes and mats. He states that his company’s future intentions could be reasonably expected to cover other forms of textiles including bed coverings, bed sheets, quilts and quilt covers and tablecloths. The volumes of wholesale sales have been provided for the years 2003 to 2008. The sales figures attested to are very large. I note that none of these sales have been made under the non-use applicant’s trade mark LOFTEX.
Mr Chang states that the Loftex Group of Companies decided to adopt the trade mark LOFTEX on a global scale in 2004. The business had begun in 1980 as a small towel mill with the name “Shandong Binzhou Spinning & Weaving Corp.” By 2002 it had become one of the largest towel manufacturers in China and was supplying to leading retailers worldwide. Most of its sales were conducted through agents and third parties, with Bintex (established January 1998) as the only trading arm directly trading with retailers.
A review of the group’s global marketing strategies resulted in establishment of a subsidiary in New York in 2004. Loftex Shanghai was set up in the same year, and the name of the group of companies was changed to “Loftex Industries Limited”. In 2005 Bintex registered “Loftex Australia Pty Ltd” with the intention of changing the business name and company name from Bintex to Loftex if their trade mark application was successful.[1]
[1] Trade mark application 1080999, filed 17 October 2005 for the word LOFTEX in classes 24, 25 and 35, and now under opposition by United.
Mr Chang states that he sought professional advice on behalf of his company after an earlier trade mark application was unable to progress because of a prior registered trade mark owned by United.[2] He states that the advice given to him was to refrain from using the word LOFTEX in any way in relation to the company business because of the risk of infringing the two trade marks which Bintex has attacked in this action.
[2] Trade mark application 988116, for the word Loftex in class 24. United’s registration 568449 was raised as a citation under section 44 of the Act.
The evidence in answer also includes a declaration made by Michael Rumore, a licensed private enquiry agent who testifies to enquiries he made of the opponent company. It is significant that these enquiries were conducted after the period relevant to the non-use application had ended.
The third declaration is that of Albert Terry, a principal of based in the Sydney offices of Griffith Hack, patent and trade mark attorneys. The declaration is a vehicle to put into evidence a catalogue provided by Bintex showing use of the trade mark LOFTEX AUSTRALIA. Mr Terry specifies that the catalogue has not been exhibited in Australia.
Evidence in reply
The opponent’s evidence in reply consists of a declaration made by Thomas Gipps Ahearn, a trade mark attorney and principal of Ahearn Fox. Mr Ahearn states that he has personal knowledge of United’s business affairs dating back to as early as 1975.
There are six registrations for the LOFTEX word trade mark which taken together cover all of the goods in classes 17, 20, 24, 25, 22 and 27. The word and device mark has been registered for the services in class 42 which were quoted previously. Mr Ahearn states that LOFTEX waddings have been sold extensively since 1991. The evidence he has provided as exhibits and which falls within the relevant period is, however, slight.
Exhibit TGA-2 consists of an invoice dated 16 May 2005 for the sale by United of a number of rolls of Loftex wadding to a company situated in Papua New Guinea. This date is within the relevant period. However, it is not possible from the invoice to determine how the waddings were to be used. Exhibit TGA-7 is described as a list of sales of goods between July 2004 and December 2008, with prices for those goods provided from August 2006. The list is labeled “LOFTEX – Sales”, the first column is labeled “Qty Sales” but exactly what the quantity numbers refer to is not explained. The sales figures are all outside the relevant period. Again, there is no indication of what use the purchaser intends to make of the goods.
Mr Ahearn states that, as was nominated in the Notices of Opposition, Bintex is not a person aggrieved. He considers that Bintex has not endeavoured to claim that it has standing in the matter, and that there is nothing in the evidence to support the matter. Because of this belief, he considers that the non-use application should fail at the outset.
It is appropriate now to move on to a consideration of the non-use applicant’s standing.
Standing as a “person aggrieved”
At the hearing, the non-use applicant’s representative directed my attention to the recent decision of the High Court in Health World Ltd v Shin-Sun Australia Pty Ltd [2010] HCA 13 (21 April 2010). This decision, without going into the arguments the Court articulated, stressed the importance of the term “aggrieved” being construed liberally, rather than restrictively.
As noted before, Mr Ahearn stated that Bintex had not made claims in respect of its standing in this matter. I do not agree with this argument, as the Chang declaration made specific reference to the problems its group of companies suffers because of the existence of the opponent’s registrations. The Chang declaration makes the following statements at paragraphs 12 and 13:
I believed at the time and maintain the view at present that I had no option other than to follow the professional advice that was given to My Company on the understanding that it would be in the best interests of My Company notwithstanding the serious disadvantages that have resulted from failure to use LOFTEX as a trade mark consistently with use of that trade mark by the remainder of the companies in the Loftex Group of Companies.
Inability to use the trade mark LOFTEX in Australia has interfered and continues to interfere with the global brand strategy of the Loftex Group of Companies including the brand strategy of My Company in Australia. There are in addition more practical disadvantages such as the need to produce separate marketing and advertising material for use only in Australia that does not include the trade mark LOFTEX. It is also necessary to re-brand goods intended for sale in Australia to avoid use of the trade mark LOFTEX which increases costs, and need for the Loftex Group of Companies to maintain 2 separate types of stationery and invoicing procedures for Australia and the counties in which the remainder of the Loftex Group of Companies trade due to inability to use the trade mark LOFTEX in Australia.
Paragraphs 15 and 16 go on to describe the passage of application 1080999 for the trade mark LOFTEX, which was filed by Bintex for goods and services in classes 24, 25, 27 and 35. The application proceeded to acceptance but only after class 27 had been deleted from the claim. United subsequently opposed the registration of this application.
The goods in class 27 which Bintex had claimed are “carpets, rugs, mats and matting including bath mats”. The evidence provided states that “bath mats” are goods of interest to Bintex and form a part of the range of towels and towelling goods which it produces.
To my mind this is sufficient evidence that the existence of United’s trade mark registrations causes significant interference with the non-use applicant’s ability to use its chosen trade marks within this jurisdiction. On any consideration of the term “person aggrieved”, the information provided is sufficient for me to be satisfied that Bintex has passed the threshold test.
A classification matter
Before moving onto a discussion of the use of United’s trade marks, it is appropriate for me to consider a classification matter which was given significant weight and time during Mr Tannahill’s submissions at the hearing. Mr Tannahill particularly disputed Bintex’s status as a person aggrieved in respect of registration 568449 which claims all goods in class 27.
His argument is that Bintex is in the business of making towelling goods and that bath mats in the main are akin to towels, usually being made of towelling and often forming a part of a towel suite – a set of bath towel, hand towel, face cloth and bath mat for example. Mr Tannahill considered that a bath mat which resembles a bath towel or face towel in both appearance and manner of construction would be appropriately classified in class 24. He considered that one which resembled a rug or carpet, as well as non-slip mats and bath mats made principally of rubber materials would be properly classified in class 27. He backed up these contentions by quoting from the class headings and explanatory notes which form part of the Nice classification documents.
There may well be arguments for agreeing with what Mr Tannahill has said if you only refer to the class headings and explanatory notes. However, the guide to the classification of goods which Mr Tannahill submitted in support of his case includes the following comment:
If a product cannot be classified with the aid of the list of Classes, the Explanatory Notes and the Alphabetical List, the following remarks set forth the criteria to be applied:…………..
An examination of the Alphabetical List reveals the following item in class 27: B0172 – Bath mats. The item is thus clearly seated within class 27 and there is no requirement to undertake any intellectual exercise to determine correct classification. In addition, the classification list used within IP Australia, and which is available for access by all applicants through the official website lists the following items in class 27: bath mats; bathroom rugs; bathroom tiles (carpet); external bath mats; mats for bathroom use; non-slip mats for baths. I note also that the UK classification descriptions list a similar range of mats specifically for bathroom use in class 27, including the following item: bath mats sold in sets. Mr Tannahill’s arguments do not hold up in the face of these facts.
It is clear from these entries that a manufacturer who produces a range of matching towelling goods for bathroom use and who wants to register trade marks to cover all of its goods will need to make application in both classes 24 and 27. Bintex, however, has had to delete class 27 from its application 1080999 in order to achieve acceptance. This matter adds support to the non-use applicant’s claim to be an aggrieved person.
Use of United’s trade marks
As I mentioned previously, the evidence United has provided, being declarations from two members of the firm who provides its legal support, is somewhat lacking in quality and quantity. However, there is sufficient information before me to demonstrate that United has a long term and viable business, up to and including the relevant period, in the sale of “waddings” of various, but undefined, types. There is nothing which supports use in respect of any of the goods claimed in class 27, and I can find nothing to support the sale of any goods other than waddings under the LOFTEX trade mark.
Mr Tannahill made reference to the use of United’s waddings in the manufacture of Tontine® pillows and quilts. He contended that the market is such that bathroom goods such as towels and bathmats are likely to be purchased in the same area as a customer will go to purchase quilts or pillows. He has provided a catalogue from a major department store to support this contention. The catalogue shows various Tontine brand pillow and quilts on sale with other similar goods and with bathroom goods as well. I have no argument with his contention. My own forays into major stores have shown that is often the case. However, I am not satisfied that the argument supports the opponent’s use of the trade mark LOFTEX in respect of any of these finished goods.
Mr Ahearn stated at paragraph 9 of his declaration that United is the current authorized user of the TONTINE® trade marks on behalf of its recorded owner Pacific Brands Clothing Pty Ltd. There is, however, no information on file to support this claim. Exhibit TGA-11 does show a pillow which carries the LOFTEX label, as well as the TONTINE® label. The interesting fact about this packaging is the wording in red appearing on the plastic cover and which reads “Delivered in transport packaging. To maximize product recovery, outer sleeve should be removed on receipt into the store.” This instruction strongly suggests that any clear mention of the LOFTEX trade mark will be removed and will not be apparent to the purchaser when the goods are on the retailer’s shelf. The catalogue Mr Tannahill provided certainly did not show any mention of LOFTEX, unless it appears in small print in a subsidiary manner somewhere on one of the goods labels which were not displayed in the catalogue.
United submitted that it manufactures waddings which are in turn sold to manufacturers of the following goods:
· insulating materials for use in the building industry;
· clothing including waterproof jackets;
· furniture (padding for use in the construction of arm rests);
· bedding including mattresses, pillows, quilts and bedspreads and
· curtains.
This may well be true, but there is no information which clearly demonstrates who its customers are and more importantly, what they use the waddings for. While it is clear that United sells waddings, but seemingly only on a wholesale basis, it is not clear that it sells goods which may be specifically described as anything other than “waddings”.
The paucity of the information United has caused to be provided does not support its claims to be a retailer and wholesaler of the broad range of goods it has claimed, nor does it support the provision of any of the goods which could be claimed in class 27.
I consider that the evidence provided only demonstrates use of the trade mark in respect of the following service claim in class 42: “wholesale services in respect of waddings including thermally bonded waddings in sheet form made from fibres such as polyester fibres.”
This finding enlivens the matter of the Registrar’s discretion as provided for by section 101, and that is what I will now consider.
The registrar’s discretion
Section 101 of the Act relevantly provides:
(1) Subject to subsection (3) … , 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.
(4) Without limiting the matters the registrar may take into account in deciding under subsection (3) not to remove a trade mark from the Register, the Registrar may take into account whether the trade mark has been used by its registered owner in respect of:
(a) similar goods or closely related services; or
(b) similar services or closely related goods;
to those to which the application relates.
United submitted that the Registrar should give primary consideration to the public interest when deciding whether or not to remove a trade mark from the Register. Mr Tannahill submitted that the public interest in the integrity of the Register generally requires removal of a trade mark that has not been used. However, he said, given that the opponent’s waddings are used by a large number of their clients in the manufacture of a range of goods, “these persons, who are members of the public, would, given their knowledge of the opponent and their business activities be deceived by the use of the trade mark LOFTEX by another trader on textile goods. Accordingly, in our opinion, the public is best served if the Opponent is permitted to retain their registrations in classes 27 and 42, which they can use to assist them to prevent the use of trade marks that might lead to deception and confusion”.
Mr Ahearn stated his belief, at paragraph 11 of his declaration, that United “should be entitled to retain the registrations by virtue of the provisions of section 101 of the Act for the reason that waddings are “similar to” or “closely related to” other goods in the textile manufacturing industry.”
I do not find either of these arguments persuasive. From what I can see of the opponent’s business, it makes and sells waddings which may be used for various purposes. These sales appear to be wholesale only. There is no evidence to support use on any other textile materials at all. There is no evidence to suggest that the manufacturers who use LOFTEX waddings in their goods advertise the fact to the general public. There is no evidence to suggest that retailers such as craft and quilting stores advertise the goods as LOFTEX waddings.
In addition, while waddings may be used in the manufacture of other goods, that does not necessarily make them similar to those other goods. I am of the opinion that the market for waddings is separate to the market for the finished products in which they are used, and it is also likely to be separate from that of other textiles. Failing evidence which demonstrates that the makers of yard goods[3] for the manufacture of clothing, bedding and other products are likewise the manufacturers of waddings, I do not consider them to be similar goods in the sense intended by the Act.[4] I am aware that yard goods and waddings are often sold in close proximity in fabric and craft stores but my own knowledge of this market does not convince me that there is an expectation that they will originate from the same manufacturer.
[3] Yard Goods – fabric sold by the yard (From Oxford English Dictionary On-line, 2010)
[4] Section 10: definition of similar goods
(1) For the purposes of this Act, goods are similar to other goods:
(a) if they are the same as the other goods; or
(b) if they are of the same description as that of the other goods.
United has not provided me with the kind of persuasive evidence which would allow me to infer business dealing in a broader range of goods and services than that which has been demonstrated by the evidence. Neither is there persuasive evidence which allows me to infer that Bintex entering into the market will necessarily cause any significant degree of deception and confusion. I therefore do not intend to apply to these matters the discretion allowed for by section 101.
Decision
In respect of trade mark registration 568449 in class 27, United has not demonstrated any use within the relevant period in respect of any of the goods for which the trade mark is registered. I direct that this registration be removed from the Register one month from the date of this decision. If the Registrar has been served with a notice of appeal before then I direct that removal shall not occur until the appeal has been discontinued or, in the event of a decision from the Court, that the registration be dealt with as the Court sees fit.
In respect of trade mark registration 542173 in class 42, United has demonstrated use in respect of the following services only: wholesale services in respect of waddings including thermally bonded waddings in sheet form made from fibres such as polyester fibres. I direct that the registration be amended to delete all services except those services I have specified after one month from the date of this decision. If the Registrar has been served with a notice of appeal before then I direct that removal shall not occur until the appeal has been discontinued or, in the event of a decision from the Court, that the registration be dealt with as the Court sees fit.
Costs
Both parties requested their costs in the event of success. The non-use applicant having had the greatest measure of success, I award costs against the non-use opponent according to the official scale as set out in Schedule 8 of the Trade Mark Regulations 1995.
I will enter into the record here that because the two non-use actions proceeded on the basis of a single set of evidence and a single hearing, this award of costs does not equate to the costs which would be allowable for two separate actions. The matter will be dealt with by the taxing officer at the appropriate time.
Alison Windsor
Hearing Officer
Trade Marks and Designs Hearings
21 May 2010
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