G'day Baby Pty Ltd v Discovery Holiday Parks Pty Ltd

[2022] ATMO 77

TRADE MARKS ACT 1995

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

Re:Opposition by G’day Baby Pty Ltd to an application under section 92 of the Trade Marks Act 1995 (Cth) by Discovery Holiday Parks Pty Ltd for partial removal of trade mark numbers 1620905 (24, 25, 35) – G’DAY BABY (Figurative) and 1620941 (18, 25, 35) – G’DAY KIDS (Figurative) – both in the name of G’day Baby Pty Ltd

Delegate:	Nicholas Smith
Representation:	Opponent: Shelley Einfeld IP Pty Ltd Applicant: Minter Ellison
Decision:	2022 ATMO 77 Trade Marks Act 1995 (Cth) - section 96 opposition: s 92(4)(b) application for removal - Removal Opponent’s evidence does not show use of the Trade Marks during the relevant period or obstacle to use – exercise of Registrar’s discretion not appropriate – Trade Marks to be partially removed from the Register

Background

1. This decision is pursuant to an application made on 7 October 2020 under s 92(4)(b) of the Trade Marks Act 1995 (‘Act’) by Discovery Holiday Parks Pty Ltd (‘Applicant’) to partially remove the trade marks detailed below (‘Trade Marks’) from the Register of Trade Marks.  The application is made in respect of the following class 35 services: mail order sales services; organisation and management of customer loyalty programs (‘Relevant Services’).  Regardless of the outcome of this proceeding the Trade Marks will remain registered for all other goods and services for which they are registered.

Registration No.	1620905
Lodgement date	5 May 2014
Goods and Services	Class 24: Bath linen; towels; bean bag covers; blankets; bed clothes and coverings; bed linen; bedding; bedroom textile fabrics; blankets, covers and sheets for cots; mattress covers; coverings for walls and windows; curtains; mosquito nets; pyjama cases; soft furnishings; washcloths; wrapping cloths Class 25: Clothing, footwear, headgear; bibs for babies; clothing for babies; bootees; bathrobes; clothing for children; footwear for infants; pyjamas; dressing gowns; raincoats; hats; rain hats; sun hats; rash vests; swimwear; romper suits; slippers; socks; t-shirts; wraps Class 35: Retail and wholesale sales services; online retail services; mail order sales services; retail and wholesale sales of clothing and accessories for babies and children; organisation and management of customer loyalty programs
Owner	G’day Baby Pty Ltd
Trade Mark	(‘Baby Mark’)

Registration No.	1620941
Lodgement date	5 May 2014
Goods and Services	Class 18: Baby carriers (slings or harnesses); baby slings; backpacks; bags; carrying bags; luggage; nappy bags; pouch baby carriers; school bags; portable sunshades; tote bags Class 25: Clothing, footwear, headgear; bibs for babies; clothing for babies; bootees; bathrobes; clothing for children; footwear for infants; pyjamas; dressing gowns; raincoats; hats; rain hats; sun hats; rash vests; swimwear; romper suits; slippers; socks; t-shirts; wraps Class 35: Retail and wholesale sales services; online retail services; mail order sales services; retail and wholesale sales of clothing and accessories for babies and children; organisation and management of customer loyalty programs
Owner	G’day Baby Pty Ltd
Trade Mark	(‘Kids Mark’)

1. G’day Baby Pty Ltd (‘Opponent’) has opposed the application to remove the Trade Marks for the Relevant Services, filing a Notice of Intention to Oppose removal on 7 January 2021 and a Statement of Grounds and Particulars (‘SGP’) on 2 February 2021.  In the SGP the Opponent states that it has used the Trade Marks in good faith in relation to ‘organisation and management of customer loyalty programs’.  With respect to ‘mail order sales services’ the Opponent states that it has used the Trade Marks in good faith in respect of sales services via telephone orders and online orders which are services closely related to ‘mail order sales services’.  The Applicant filed a Notice of Intention to Defend on 4 March 2021.

2. The Opponent subsequently filed evidence in support of its opposition to removal (‘EIS’).  The Applicant filed evidence in answer (‘EIA’) and the Opponent filed evidence in reply (‘EIR’).  This material will be discussed in more detail below.

3. Once the time allowed for filing evidence had ended the parties were given an opportunity to request a hearing.  The parties requested a hearing by submissions and paid the appropriate fee. In line with usual practice, a letter was sent to the parties on 25 February 2022 which contained a schedule for filing of written submissions.  The Opponent filed written submissions on 11 March 2022 (‘Opponent’s Submissions’).  The Applicant filed written submissions on 18 March 2022 (‘Applicant’s Submissions’). 

4. I am a delegate of the Registrar of Trade Marks and the matter has been allocated to me to decide, which I have done, on the basis of the following relevant material and the evidence listed below:

   ·The Application for Removal;

   ·The Notice of Intention to Oppose and SGP;

   ·The Opponent’s Submissions; and

   ·The Applicant’s Submissions. 

   Evidence in Support
   Evidence in Answer
   Evidence in Reply

   • Declaration by Sarah Hammond, co-founder of the Opponent, dated 8 June 2021 (‘Hammond 1’) together with Exhibits SH-1 to SH-13.
   • Declaration by Lisa Jarrett, Partner of Minter Ellison, legal representative for the Applicant, dated 9 September 2021 (‘Jarrett declaration’) together with Exhibits LJ-1 to LJ-3.
   • Declaration by Sarah Hammond, dated 14 November 2021 (‘Hammond 2’) together with Exhibits SH(EIR)-1 to SH(EIR)-11.
   • Declaration by Rochelle Einfeld, Principal of Shelley Einfeld IP Pty Ltd, legal representative of the Opponent, dated 2 November 2021 (‘Einfeld declaration’) together with Exhibit RDE-1.

   The Relevant Provisions

5. Part 9 of the Act deals with removal of trade marks from the Register on account of non-use. In respect of this matter s 92 of the Act relevantly provides:

   92  Application for removal of trade mark from Register etc.

   (4)An application under subsection (1) or (3) (non‑use application) may be made on either or both of the following grounds, and on no other grounds:

      (a)  …

   (b)that the trade mark has remained registered for a continuous period of 3 years ending one month before the day on which the non‑use application is filed, and, at no time during that period, the person who was then the registered owner:

   (i)used the trade mark in Australia; or

   (ii)used the trade mark in good faith in Australia;

   in relation to the goods and/or services to which the application relates.

   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.

6. Under s 92(4)(b) the relevant period during which the Opponent must establish use of the Trade Marks is the three year period ending on 7 September 2020 (‘relevant period’).

7. I note that an application under s 92(4)(b) may not be made before a period of five years has passed from the filing date of the application,[1] and I confirm that five years since filing the application have in fact passed for both the Trade Marks.

   [1] Per s 93(2) of the Act prior to the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018 as applies in the present matter. The updated s 93(2) of the Act applies to Trade Marks filed from 24 February 2019 onwards.

8. The onus of rebutting an allegation of non-use lies with the Opponent. This onus is articulated in s 100 of the Act which provides, relevantly to this matter:

   100  Burden on opponent to establish use of trade mark etc.

   (1) In any proceedings relating to an opposed application, it is for the opponent to rebut:

   (a) …
   (b…
   (c) any allegation made under paragraph 92(4)(b) that the trade mark has not, at any time during the period of 3 years ending one month before the day on which the opposed application was filed, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services.

   […]

   (3) For the purposes of paragraph 1(c), the opponent is taken to have rebutted the allegation that the trade mark has not, at any time during the period referred to in that paragraph, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services if:

   (a) the opponent has established that the trade mark, or the trade mark with additions or alterations not substantially affecting its identity, was used in good faith by its registered owner in relation to those goods or services during that period; or
   (b)  in a case where the trade mark has been assigned but a record of the assignment has not been entered in the Register:

   (i)  the opponent has established that the trade mark, or the trade mark with additions or alterations not substantially affecting its identity, was used in good faith by the assignee of the trade mark in relation to those goods or services during that period and that that use was in accordance with the terms of the assignment; and
   (ii)  the Registrar or the court is of the opinion that it is reasonable, having regard to all the circumstances of the case, to treat the use of the trade mark by the assignee during that period as having been a use of the trade mark in relation to those goods or services by the registered owner; or

   (c) the opponent has established that the trade mark was not used by its registered owner in relation to those goods and/or services during that period because of circumstances (whether affecting traders generally or only the registered owner of the trade mark) that were an obstacle to the use of the trade mark during that period.

9. I proceed on the basis that the standard of proof is the ordinary civil standard being on the balance of probabilities.[2]

   [2] Pfizer Products Inc. v Karam [2006] FCA 1663 (Gyles J) and more recently: Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [133] (Besanko, Jagot and Edelman JJ).

10. In accordance with s 101 of the Act I may decide to remove the Trade Marks from the Register for all or some of the Relevant Services, or if satisfied it is reasonable to do so, decide not to remove the Trade Marks for the Relevant Services even if the grounds under which the application for removal was made are established.

11. I further note that a single bona fide use of the Trade Marks in the course of trade during the relevant period may be sufficient to rebut the allegation under s 92(4)(b),[3] but if a single act of use is relied upon then it should be established by ‘if not conclusive proof, at any rate overwhelmingly convincing proof’.[4] Use of the Trade Marks by an authorised user (as defined by s 8 of the Act) is taken to be use of the Trade Marks by the Opponent.[5] 

    [3] Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261, [17] (Drummond J).

    [4] Nodoz Trade Mark (1962) RPC 1, 7 (Wilberforce J).

    [5] Act s 7(3).

    Discussion

12. To successfully oppose the application the Opponent must establish that it has used the Trade Marks (or a substantially identical trade mark)[6] pursuant to s 100 of the Act (either through use or circumstances that were an obstacle to use in the relevant period) for the Relevant Services.

    [6] AgCare Biotech Pty Ltd v Crop Smart Pty Ltd [2009] ATMO 41, [10]-[21] (Hearing Officer Kirov).

13. If the Opponent fails to establish such use, I have discretion under s 101(3) to decide that the Trade Marks should not be removed from the Register.

    Use of the Trade Marks in the relevant period for the Relevant Services

14. The Opponent’s evidence in this matter consists of two declarations by its co-founder, Sarah Hammond and one declaration by the Opponent’s representative.  The Einfield declaration operates to address concerns raised about whether Hammond 1 should be given full evidentiary weight.  I accept the statements in the Einfield Declaration and shall take Hammond 1 into account to the extent it purports to show use of the Trade Marks in the relevant period and other evidence relevant to my exercise of discretion.

15. Hammond 1 notes that the Opponent was founded in 2013 and its main field of business is the design, manufacture, promotion and sale of children’s clothing.  Ms Hammond states that its sales channels include through the mail (customers order by telephone and the internet with the product being delivered by mail) and that it operates a customer loyalty program.  In support of these statements are documentary evidence of catalogues offered by the Opponent in the relevant period and a customer loyalty program which it has operated since 1 December 2017.  There is no evidence of the Opponent organising customer loyalty programs or arranging mail order sales services for any other entity; such activities were solely connected to the operation of its children’s clothing business that traded under the Trade Marks.

16. Hammond 2 responds to criticisms made of the evidence in Hammond 1, stating that its customer loyalty program is an opt in program available to customers who register their details as part of the checkout process.  Its customer loyalty program is not available online to visitors to the website who do not purchase products.  Hammond 2 also contains broader information about the innovations and changes made in the Opponent’s customer loyalty program since the end of the relevant period.   Hammond 2 also contains a screenshot, taken during the relevant period, of a database of the Opponent’s clients who had joined the loyalty program.

17. In Hammond 2, the declarant also asserts that ‘mail order sales services’ includes the production and distribution of product catalogues, taking of written orders, and dispatch of orders by post.

18. Given my findings made below in respect of the Opponent’s use of the Trade Marks for the Relevant Services it is not necessary to summarise the Applicant’s evidence in great detail.  Ms Jarrett makes a number of criticisms of the Opponent’s evidence, including the lack of documentary evidence of sales, the lack of evidence of a mail-order program and the lack of evidence of a customer loyalty program. 

19. In my review of the evidence, I am satisfied that that the Opponent operates a business selling its branded children’s clothing.  In connection with its children’s clothing business it operates a customer loyalty program and will deliver its products to the customer by mail if they are ordered online or through the telephone.  The key question in this case is whether this amounts to trade in the Relevant Services or whether the fact that the Opponent offers a loyalty program and will deliver its products by mail is merely ancillary or incidental to the actual goods traded by the Opponent, being children’s clothing.  

20. This issue was discussed in Capricorn Society Limited v Ignitionone, Inc.[7], which involved the question of whether the then opponent to the removal action was offering advertising services.  The then opponent’s primary business activity was the provision of trade credit accounts however it offered a magazine which included space for third parties to advertise their products.  The delegate, while finding in favour of the then opponent, stated the following at [20], [28] and [29]:

    It is further evident that the publication includes advertisements for businesses other than the Opponent. If it were the case that the Opponent was simply advertising its own services, this would not equate to the provision of advertising services in the requisite sense (i.e. for others).  

    The Opponent is not an advertising agency per se but its business activities encompass such a service provided to others.

    It must, however, retain the essential characteristic of being an advertising service offered in the course of trade to consumers.

    [7] [2014] ATMO 112 (Hearing Officer H Wilson).

21. A business that advertises itself is not offering advertising services as there has been no trade in the services in question; they are not being offered to consumers.[8]  As discussed in Watermark Restaurant Pty Ltd v The Watermark Hotel Group Ltd[9] (which concerned the operation of hotels and a claim that the then non-use opponent was offering advertising services), a consumer at a hotel is unlikely to expect to be able to purchase advertising material and services from a hotel; rather the advertising offered by the then non-use opponent was incidental to the hotel services which was its primary business.

    [8] Watermark Restaurant Pty Ltd v The Watermark Hotel Group Ltd (2002) 55 IPR 406 (Hearing Officer A Ryan).

    [9] Ibid

22. The same issue arises with the Relevant Services.  Mail order sales services and organisation and management of customer loyalty programs are specialist services offered to businesses in order to optimise their business and relationship to the customer (by outsourcing the operation of mail delivery or loyalty program management).  They are not commonly offered by children’s clothing companies.  When a customer orders a product to be delivered by mail they are not ordering ‘mail order sales services’ and it is a misreading of the specification ‘mail order sales services’ to surmise that every entity that posts its products to customers is using its trade mark in the course of business for mail order sales services.  The same principle applies with ‘organisation and management of customer loyalty programs’.  The mere fact that an entity manages its own customer loyalty program, does not mean that it is offering, in the course of trade to customers, services being organisation and management of customer loyalty programs; when a customer joins a customer loyalty program it is not purchasing ‘organisation and management of customer loyalty programs’.

23. The Opponent posting its goods to customers and operating a customer loyalty program does not equate to the provision of the Relevant Services in the requisite sense (i.e. for others) any more than a business doing its own accounts involves the provision of accounting services or advertising its own products involve the provision of advertising services; rather its activities in this space are ancillary or incidental to its primary business involving the design, manufacture, promotion and sale of children’s clothing.  I am unsatisfied that the Opponent has used (in the requisite sense) the Trade Marks for the Relevant Services in the relevant period.

    Obstacles to use

24. The Opponent does not formally submit that there have been any matters that amount to an obstacle to the use of the Trade Marks for the Relevant Services in the relevant period, pursuant to s 100(3)(c) of the Act and in the interests of completeness I note that I have been unable to identify any such obstacles. As there is no obstacle to use of the Trade Marks, it is therefore necessary to consider whether I should exercise the discretion to allow the Trade Marks to remain on the Register for any of the Relevant Services.

    Registrar’s Discretion

25. As noted in Shanahan’s Australian Law of Trade Marks and Passing Off the policy of the Act is to facilitate the removal of an unused trade mark, and the public interest of the integrity of the Register will generally demand the removal of an unused trade mark.[10] However, as indicated at paragraph 14, above, s 101(3) provides the Registrar with a discretion, which, in the words of Bennett J, is:

    a broad discretion to decide not to remove a trade mark from the Register or not to carve out some of the goods and services for which the mark is registered, even if s 92 grounds have been made out, if the Court [or Registrar] is satisfied that it is reasonable to do so. Irrespective of the lack of use of the trade marks on the removal goods and the removal services in the relevant period, there is a discretion not to alter the registrations.[11]

    Her Honour also noted:

    By amendment in 2006, s 101(4) was added to provide that without limiting the matters that the Registrar may take into account in deciding under s 101(3) not to remove a trade mark from the Register, the Registrar may take into account whether the trade mark has been used by the registered proprietor in respect of (a) similar goods or closely related services; or (b) similar services or closely related goods. …

    There is no limitation within s 101(3) on the discretion, nor any indication of the factors to be taken into account.[12]

    [10] M Davison, I Horak Shanahan’s Australian Law of Trade Marks and Passing Off online edition, 2016 Thomson Reuters, [70.2505].

    [11] Pioneer Computers Australia Pty Limited v Pioneer KK [2009] FCA 135, [167].

    [12] Ibid [171]-[172].

1. While considering the discretion in E & J Gallo Winery v Lion Nathan Australia Pty Limited Flick J stated:

   Although the ‘guiding principle behind the discretion is public interest, particularly in the integrity of the register’,[13] the private commercial interests of both [parties] remain matters which may be taken into account when exercising the discretion. Trade mark law, it has been recognised, is more complex than is suggested by the proposition that the supreme—or at least—a predominant interest is the maintenance of the integrity of the Register.[14] Speaking of the 1955 Act, Gleeson CJ, Gaudron, McHugh, Kirby, Hayne and Callinan JJ there pointed out the balance struck by the legislation between various interests. Both the interests of the consuming public and the interests of traders have to be recognised.[15]

   [13] Kowa Co Ltd v Organon [2005] FCA 1282, [92].

   [14] Campomar Sociedad Limitada v Nike International Ltd [2000] HCA 12, [40].

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

2. Factors that have been found relevant to the consideration of whether to exercise the discretion include:

   ·There had been no abandonment of the trade mark;

   ·The registered proprietor of the mark still had a residual reputation in the mark;

   ·There had been sales by the registered proprietor of goods for which removal was sought since the relevant period ended;

   ·The applicant for removal 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;

   ·The registered proprietor was not aware of the applicant’s sales under the mark.[16]

   [16] Pioneer Computers Australia Pty Ltd v Pioneer KK [2009] FCA 135 at [169] citing E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2008] FCA 1005 [202]-[203] (Bennett J).

3. In the present case, I am not satisfied that the Opponent has ever used the Trade Marks or intends to use the Trade Marks in the future in Australia for any of the Relevant Services; rather it intends to continue to operate its children’s clothing business which (amongst other activities) maintains a customer loyalty program and delivers its products by post.  Given that, I am unpersuaded that the removal of the Trade Marks for the Relevant Services would result in consumer confusion or practically impact on the interests of the Opponent in any way as the Opponent does not compete and is unlikely to ever compete with a specialist entity offering the business services that comprise the Relevant Services.  Given the importance of the integrity of the Register I do not consider it appropriate to exercise my discretion not to remove the Trade Marks in respect of any of the Relevant Services.

   Decision

4. The Opponent has not established its opposition to the partial removal. Accordingly, I direct that registrations 1620905 and 1620941 be amended one month from the date of this decision as set out below to remove the Relevant Services.  If the Registrar is served with a notice of appeal before then I direct that removal shall not occur until the appeal has either been discontinued or, in the event of a decision from the Court, that the registration/s be dealt with as the Court sees fit.

   1620905

   Class 24: Bath linen; towels; bean bag covers; blankets; bed clothes and coverings; bed linen; bedding; bedroom textile fabrics; blankets, covers and sheets for cots; mattress covers; coverings for walls and windows; curtains; mosquito nets; pyjama cases; soft furnishings; washcloths; wrapping cloths
   Class 25: Clothing, footwear, headgear; bibs for babies; clothing for babies; bootees; bathrobes; clothing for children; footwear for infants; pyjamas; dressing gowns; raincoats; hats; rain hats; sun hats; rash vests; swimwear; romper suits; slippers; socks; t-shirts; wraps
   Class 35: Retail and wholesale sales services; online retail services; mail order sales services; retail and wholesale sales of clothing and accessories for babies and children; organisation and management of customer loyalty programs

   1620941 

   Class 18: Baby carriers (slings or harnesses); baby slings; backpacks; bags; carrying bags; luggage; nappy bags; pouch baby carriers; school bags; portable sunshades; tote bags
   Class 25: Clothing, footwear, headgear; bibs for babies; clothing for babies; bootees; bathrobes; clothing for children; footwear for infants; pyjamas; dressing gowns; raincoats; hats; rain hats; sun hats; rash vests; swimwear; romper suits; slippers; socks; t-shirts; wraps
   Class 35: Retail and wholesale sales services; online retail services; mail order sales services; retail and wholesale sales of clothing and accessories for babies and children; organisation and management of customer loyalty programs

   Costs

5. The Applicant has sought an award of costs in its favour.  I see no reason to depart from the general rule that costs follow the event.  I accordingly award costs in respect of trade mark number 1620905 against the Opponent under section 221 in the relevant amounts under Schedule 8 of the Trade Mark Regulations 1995 (Cth). In respect of trade mark number 1620905 I award reduced costs against the Opponent in the same manner as indicated in Hume Industries (Malaysia) Berhad v James Hardie & Coy Pty Ltd.[17]  

   [17] [2001] ATMO 78 (Hearing Officer Williams).

   Nicholas Smith
   Hearing Officer
   Delegate of the Registrar of Trade Marks
   17 May 2022