Geo W. McPherson Nominees Pty Ltd v Remington Arms Company, Inc.

[1999] ATMO 101

TRADE MARKS ACT 1995

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

Re:Opposition by GEO W. McPHERSON NOMINEES PTY LTD to an application under section 92 in the name of REMINGTON ARMS COMPANY, INC. for the removal of the trade mark STRENLON of registration number 178880

Background

Trade mark registration number 178880 is owned by Geo W. Nominees Pty Ltd.  It is registered for the word mark STRENLON in respect of "fishing lines and tackle" in class 28.

On 7 January 1997, an application by Remington Arms Company, Inc. ('the removal applicant') was filed, under the provisions of s.92(4)(b), for the removal of the mark of registration 178880 from the Register for all the goods for which the mark is registered.  The application was accompanied by a statutory declaration by Alan Malone, company director of Nils Master Australia Pty Ltd, a distributor of fishing equipment, including fishing lines and tackle.  He states that the removal applicant is an aggrieved person, pursuant to s.92(1), because of its use of the trade mark STREN in relation to fishing equipment.  During his 15 years involvement in the fishing equipment industry, he has never encountered any use of the mark for the goods covered by registration 178880.  His investigations and enquiries into the use of the mark by the registered owner have proved to be futile, he says.  It is therefore his belief that there has been no use of the opponent's mark for a continuous period of at least three years and one month before the making of the declaration which shows the date 3 January 1997. 

The removal application was advertised in the Australian Official Journal of Trade Marks of 23 January 1997.  On 23 April 1997, notice of opposition to removal of the mark was filed by Geo W. McPherson Nominees Pty Ltd. ('the opponent').  Essentially the grounds of opposition assert that:

*the applicant is not a person aggrieved by registration of the subject mark

*during the relevant period there has been use, in Australia, of the mark, or of a mark with additions or alterations not substantially affecting its identity

*the Registrar in his discretion ought to refuse the application for removal.

Evidence
The following statutory declarations were served as evidence in the proceedings:

Evidence in support of opposition to removal of the mark

• Donald Bruce McPherson, managing director of the opponent company, dated 20 August 1997.  The declaration was supported by exhibits.  This declaration will be referred to as the first McPherson declaration.

Evidence in answer to the opposition:

• Kenneth Janes Taylor, director of Trade Mark Investigation Services, dated 25 May 1998.  Exhibits accompanied the declaration

• Shane Phillip Edmonds, licensed inquiry agent in the employ of Trade    Mark Investigation Services, dated 20 May 1998.  One exhibit was annexed to the declaration.

• Alan Malone, managing director of Nils Master Australia Pty Ltd, dated 20 May 1998.  His declaration was supported by exhibits.  He is the same person who made the declaration in support of the removal application.  I will refer to this declaration as the second Malone declaration.

• Dr Bryan Harry Pratt, proprietor of two fishing shops in Canberra, dated 15 May 1998

• Wayland E. Hundley, legal counsel of the removal applicant, dated 20 May 1998

• Lance Newman Scott, solicitor of the firm acting for the removal applicant, dated 21 May 1998.  One exhibit is attached to the declaration.

Opponent's evidence in reply

• Donald Bruce McPherson, the same declarant whose declaration comprises the evidence in support, dated 7 December 1998.  It will be identified as the second McPherson declaration.  

The hearing concerning the opposition to the removal application was held in Canberra.  Mr Helmut Eichberger of Cullen & Co, patent and trade mark attorneys of Brisbane, represented the opponent by telephone.  Ms Elspeth Strong of Counsel, instructed by Freehill Hollingdale & Page, solicitors of Melbourne, appeared in person on behalf of the removal applicant.  

Submissions and discussion
Whether the removal application is in accordance with the requirements
At the outset of the hearing, Mr Eichberger drew my attention to the application for removal of the mark and the statutory declaration by Mr Malone that accompanied the application, in terms of reg.9.1.  That regulation states:

9.1  For the purpose of paragraph 92(2)(a) of the Act (which deals with applications), an application for the removal of a trade mark from the Register:
      (a)       must be in an approved form; and

(b)must be accompanied by a declaration made by, or on behalf of, the applicant:

(i)stating that an inquiry into the use of the trade mark has been conducted by, or on behalf of, the applicant; and

(ii)setting out the findings of that inquiry that support the grounds referred to in subsection 92(4) of the Act in reliance on which the application is made.

Referring to the last clause in the declaration:

"[a]s a result of my investigations and enquiries into the use of the Mark by McPherson, I believe that for a continuous period of at least 3 years and one month before the making of this declaration, McPherson has not used the Mark in Australia nor has it used the Mark in good faith in Australia",

Mr Eichberger submitted that it failed to support the allegation that the mark had not been used in the relevant period, given the period ran from 7 December 1993 until 7 December 1996, i.e. Mr Malone had omitted reference to the days between 4 December and 7 December 1996.  

The application for removal of the opponent's mark is based on the grounds of s.92(4)(b) which read:

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.

As Mr Malone's declaration is dated 3 January 1997, from the wording of the statement quoted above, his conclusions resulting from the investigations relating to use of the opponent's mark, cover the period from 3 December 1993 until 3 January 1997.  Pursuant to s.92(4)(b), the relevant time, in relation to which the removal applicant is required to substantiate prima facie non-use of the mark, is from 7 December 1993 to 7 December 1996.  It seems therefore that Mr Malone's findings embrace a longer period than is stipulated under the provisions and certainly cover the critical three years.  I find then that the statutory declaration in support of the removal application meets the requirements of reg.9.1. 

Person aggrieved
S.92(1) allows that:

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.

Although, in the notice of opposition, the opponent had included a ground based on the assertion that the removal applicant was not a person aggrieved, at the hearing, Mr Eichberger said that the opponent was prepared to concede that the applicant was such a person and therefore did not propose to press the ground. 

The opponent's onus
In terms of s.100(1)(c), the onus rests on the opponent to rebut any allegations made under s.92(4)(b).  What constitutes a rebuttal in this context is prescribed in s.100(3)(a):

100.(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.

The opponent may also succeed, under the provisions of s.100(3)(c), if it is able to establish that the mark was not used by it during the period in relation to the goods in question because of circumstances (whether affecting traders generally or only the registered owner of the mark) that were an obstacle to the use of the mark during that period. 

Has the opponent established that its mark has been used in good faith in the relevant period?

As a preamble, I wish to put on record that I have not been able to inspect the reel of the fishing line, which had been annexed to Mr McPherson's first declaration for the purpose of illustrating the subject mark, as it appears to have been lost since it was sent to the Melbourne State Office of IP Australia to be viewed by the removal applicant's solicitors.  However, both parties in the present proceedings were satisfied that the reel did exist and carried the mark.  Mr Eichberger stressed that the purpose of exhibiting the reel was to show what the fishing line looked like.   

As evidence that the opponent sold a product under the mark STRENLON during the period between 7 December 1993 and 7 December 1996, Mr McPherson refers to two copies of invoices annexed to his declaration.  He also attaches documents outside the critical period - a purchase order and an invoice, dated 20 December 1996, addressed to "Shakespeare", a company in Bankstown, New South Wales.  The invoice identifies the mark and shows the value of the goods to be $5,185.00, which amount, apparently, includes sales tax.  It was submitted by Mr Eichberger that the purpose of this invoice was to show that sales under the mark were continuing after the expiry of the stipulated period. 

The first of the invoices relating to the critical period is dated 5 November 1996.  Seven entries of the product described as "STRENLON NYLON", which I take to be nylon fishing lines bearing the mark, are listed there.  The total value of the product is given as $950.86 and settlement discount terms are stamped on the invoice.  This invoice does not identity the person to whom the product was sold, as only the words "Cash Sales" are inserted under the relevant item.  However, according to the invoice, the sold goods were to be delivered to 'Techlon Industries' at a specified Post Office box number address. 

Referring to the words of Wilberforce J in "Nodoz" Trade Mark [1962] RPC 1 at 7 that, if the registered owner relies on one single act of use of the mark, then that single act ought to be established by "if not conclusive proof, at any rate overwhelmingly convincing proof", Ms Strong submitted that the claimed sale to Techlon Industries was not established in such terms. She pointed to the unsuccessful attempts by the private investigator, Mr Taylor, to confirm the identity of Techlon Industries or even its existence.

Here Ms Strong refers to Mr Taylor's declaration attesting to searches, which had embraced Telstra White/Yellow Pages for 1996 and 1997, as well as the current business listings.  He says that he had also conducted an Australian Securities Commission browse search and searched the Queensland Business Names Index.  In addition, he had checked all fishing tackle shop advertisements in the Yellow Pages in the Ashgrove area.  From the 500 general business listings in Ashgrove, he could not find any with that address.  In an attempt to clarify the situation,  in his second declaration, Mr McPherson explains that Techlon Industries is operated by a private individual, who sells large quantities of goods under the subject mark through mail order, direct to fishing clubs and through sub-agents to weekend markets.  Techlon Industries is not, the declarant says, a registered business name, nor is it listed in telephone directories.  He goes on to state that it "does not advertise in fishing magazines or in the general media", but has adopted the practice of sending direct mail-outs to fishing clubs and individual customers in relation to the STRENLON goods.

Commenting on the lack of any supporting evidence relating to these sales, Ms Strong questioned the validity of the invoice relating to the goods that were directed to Techlon Industries.  Even if a sale to Techlon Industries had been established, which on the available evidence it had not, Ms Strong contended that such sale was not use "in good faith".  She first directed my attention to what was considered to be the meaning of bona fide use under comparable earlier English legislation in Electrolux Ltd v Electrix Ltd (1954) 71 RPC 23. She submitted it indicated that there must be real commercial use of the mark, not merely "pretended", "spasmodic", or "temporary" use, to prevent it from being removed from the Register, otherwise it could not be regarded as use in good faith. This principle had been accepted in Imperial Group Ltd v Philip Morris & Co Ltd [1982] FSR 72, she said, where Lawton L.J., at 79-80, had found that the mark NERIT had no real use in any commercial sense but

"… it was a colourable stratagem for making their trade rivals think that they were using the mark "Nerit" in a way which gave it the protection of the Act."  

Ms Strong also referred to the words of Shaw L.J. in the same case:

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

In reality the sparse and intermittent selling of cigarettes under the name "Nerit" was not in pursuit of a course of trade at all…".

For the term "substantial" in the present context, Ms Strong took me to "Concord" Trade Mark [1987] FSR 209, i.e. that it had to be judged by commercial standards as they related to the trade concerned.

Applying the principles set down in the above cited cases, Ms Strong asserted that the value of the goods shown on the Techlon Industries invoice - $950.86 - was not a substantial sale.  The opponent had not shown that the use of STENLON in that instance had been an ordinary and genuine use, given its failure to provide evidence of its dealings with Techlon Industries. 

Mr Eichberger did not accept the suggestion that the somewhat unusual way Techlon Industries appeared to trade, or the fact that its existence could not be established, would somehow influence whether or not the sales of the goods to that entity had been sales in good faith.  He said he could not see how the irregular manner of that entity's trading could reflect on the opponent's conducting of its business.  If the owner of a business elected to trade in a certain fashion, then that was its prerogative.  In no way could this reflect upon the opponent, who did not make checks on its potential purchasers to ascertain whether their business was established correctly.  If Techlon Industries has not been registered under the Business Names Act in Queensland, that did not mean that the opponent was somehow trading in an unlawful manner.  The failure of the investigator to establish the identity or location of Techlon Industry was of no consequence, because the invoice established that sales of the goods did, in fact, occur.  He said it was conceded that the sales were not of a substantial quantity, but here the purpose of those particular sales was not to show distinctiveness of the mark but only that a sale had occurred. 

While it may be true that Techlon Industries conducts its business in an almost unique fashion, as related by Mr McPherson and described by Mr Eichberger, it seems to me that this factor in itself is not sufficient to prevent the owner of the business from providing evidence material to rebut the removal applicant's claims as to its alleged non-existence.  Mr McPherson appears to be very familiar with the nature of this business.  However, rather than clarify the uncertainties which had resulted from Mr Taylor's investigations, Mr McPherson has added a further complication by failing to reveal the name of the "private individual" behind Techlon Industries.  If this person "sells large quantities of goods under the STRENLON trade mark" through various channels, albeit unusual, then it would appear that the business would have been in possession of some suitable evidence, such as confirmation of the consignment of the goods, receipt for payment, samples of the direct mail-outs, or other material.  Alternatively, it could have provided statutory declarations from some of its customers to support the sales.  Such material would have assisted in dispelling serious doubts created by Mr Taylor's failure to find any traces of Techlon Industries, or its business.  Having regard to these defects then, to the extent the opponent relies on the invoice addressed to Techlon Industries for any evidence relating to the mark's use, it is my opinion that the opponent has failed to provide convincing proof that the mark STRENLON was in use during the period prescribed under section 92(4)(b) of the Act.

The second copy of an invoice relating to the critical period is dated 13 November 1996.  It shows three entries for the item STRENLON NYLON, the total value of the goods being $340.43.  According to the invoice, these goods have been sold to Overseas Distributors of a Post Office box number address in Stafford, Queensland, and were to be delivered to an address also in Stafford. 

In relation to this evidence, Ms Strong submitted that no supporting documentation other than the invoice had been provided.  The opponent appeared to be familiar with Overseas Distributors, but had not chosen to put forward conclusive evidence that the sale had taken place.  She said it had not shown that the claimed sale ever resulted in the STRENLON goods having been supplied, as directed on the invoice.  The opponent had not stated clearly whether the sale to Overseas Distributors was for export.  Furthermore, no documents had been made available to show a continuing course of trade with this entity.  Even if the sale had taken place, Ms Strong submitted, in the absence of full documentation and evidence, it was not a substantial sale.  For those reasons, the same considerations that applied to the claimed sale to Techlon Industries also applied here. 

I note that Mr Taylor's search had also extended to Overseas Distributors.  From the telephone directories, he had found five listings under the address appearing on the copy of the invoice, including the said business.  On visiting the site bearing the sign Overseas Distributors, he had met a person who identified himself as Henry Balfour.  This person had informed him that the company operated as importer and exporter of goods.  He had sold some fishing lines but, although he had heard of a STRENLON product, he did not say he had ever sold any.  In his second declaration, Mr McPherson comments that Mr Balfour would not wish to admit to selling STRENLON goods "as this is a private brand he sells to various fishing tackle outlets in opposition to the main Platypus brand". 

Despite the uncertainty as to whether Overseas Distributors have sold fishing line under the mark STRENLON to any of its customers, I take note of the fact that Mr Taylor's investigations confirm the existence of such a company at the address given on the copy of the invoice at the time of his investigations.  Furthermore, as reported by Mr Taylor, Mr Balfour apparently was aware of the STENLON product but did not volunteer any more information.  It is for me to decide therefore whether this one invoice constitutes sufficient evidence as to use of the mark in the relevant three year period.  If I decide the affirmative, I am also to consider whether the factors, which have emerged from the removal applicant's evidence and submissions at the hearing, have been rebutted and that use of the mark has been in good faith. 

Section 100(3) requires that the opponent needs to rebut the allegations that the mark has not been used at any time during the period in terms of s.92(4)(b).  Pursuant to the Trade Marks Act 1955, the onus rested on the applicant for removal to establish that, during the three-year period, the registered proprietor/owner of the mark did not once use the mark in good faith in Australia.  The contest between the combatants was whether the party, in whose name the mark was registered, used the mark in Australia at least once during that period, as per McGarvie J in Settef SpA v Riv-Oland Marble Co (Vic) Pty Ltd 10 IPR 402 at 437. Although the onus is now on the person who opposes the removal of the mark to rebut the removal applicant's allegations, there seems to be no reason why the opposition could not succeed in the present case if the opponent satisfies me that the sole invoice to the Overseas Distributors was "overwhelmingly convincing proof" contemplated by Wilberforce J in "Nodoz" case, supra.  Indeed, in Prosimmon Golf (Aust) Pty Ltd v Dunlop Australia Ltd 9 IPR 425, the hearing officer, Mr T. Williams, said at p. 431:

Ms Lennon argues that on the basis of the Nodoz and Trina cases [1962] RPC 1 and [1977] RPC 131 respectively, this sale, or rather the evidence of use which the proprietor asserts it constitutes, is not demonstrated in an "overwhelmingly convincing" manner. That is an argument which I do not accept, since in both of those cases the words "overwhelmingly convincing" are used not to stipulate a level of documentation but as a liberalisation of "conclusive" proof, which Wilberforce J would otherwise have required. In the present instance, I have in front of me a copy of what the applicant concedes to be a genuine invoice, supported by the statutory declaration of a responsible officer of the proprietor company, who has sworn that the invoice relates to a sale of a BLACK KNIGHT golf club.

For the present purposes, it is not really relevant whether Overseas Distributors had sold any STRENLON brand fishing lines, as per Mr Taylor's declaration, but it is significant that Mr Balfour at the business premises recognized the brand.  Even though the invoice in question was subjected to severe criticism by Ms Strong, there is no evidence that it was false.  The sales value of the STRENLON goods is certainly not impressive, but even a small amount of use may serve the purpose of establishing use for commercial purposes.  In the present case, if the sales of the fishing line under the STENLON mark are offered through limited trade channels, as opposed to normal retail outlets, as would appear from Mr Pherson's evidence, then that factor ought to be taken into account when evaluating the sales.  Moreover, the subsequent invoice to Shakespeare which, for the purposes of s.100(1)(c) cannot be considered has, at least, shown the opponent's interest in the mark and continuing sales of the STENLON goods, as presently registered.  Even though the opponent could have provided additional material to strengthen its case, particularly when faced with the knowledge of the removal applicant's unsuccessful efforts, after an extensive search, to find the goods on the market, I must accept that, owing to the opponent's peculiar trading style, the persons consulted in the relevant trade might not have been familiar with the mark.  

The unusual practice of passing the opponent's STRENLON goods to its customers may be the reason why a person like Dr Pratt, an enthusiastic fisherman for over 55 years, with long and extensive experience in fishing and related products, has neither encountered nor heard of the mark, as he states in his declaration.  It would be assumed that, in normal circumstances, in his capacities as an operator of two fishing shops in Canberra, Australian Capital Territory, his contacts with other anglers, and active involvement in matters concerning angling, which include the following: articles in newspapers and a magazine, regular talks on the radio, and a spot on the local television channel, as well as publishing a book, Dr Pratt would have been well equipped to have some knowledge of the mark.  

The private investigator, Mr Edmonds, declares that he had attended five stores in an attempt to purchase fishing line products and had also made the same number of unsuccessful enquiries by telephone. On visiting four of the stores, the salesmen had not heard of a STRENLON fishing line.  In the fifth store he had been advised that the STRENLON product was not sold there.  However, the person had asked Mr Edmonds if it was a "yellow tension Japanese line", which was believed to be manufactured locally.  A connection of STRENLON with a Japanese product has also been raised in one of Mr Taylor's telephone enquiries, when the person, who had identified himself as Ray, had quoted the price of the fishing line but denied any knowledge of it being made locally.  To this, in his second declaration, Mr McPherson responds by saying that the STRENLON goods are not advertised as being made in Australia, because many fishermen believed that an imported product was better than one made in Australia.

In view of the contradictory statements on the Japanese origin of the STRENLON fishing line made by the interviewees, it is not possible to draw any conclusions whatsoever.  As to the fruitless investigations and enquiries concerning the availability of the STRENLON fishing line, Mr McPherson reiterates the point, which Mr Eichberger emphasized repeatedly during his submissions, that such goods are not sold through the traditional channels. 

In addition to the other arguments, discussed earlier, in support of the removal applicant's contention that use of the opponent's mark was not in good faith, Ms Strong referred to Mr Malone's second declaration, where he relates a visit to Mr McPherson.  During a conversation at that time, Mr McPherson is said to have revealed his dislike of the owners of the STREN mark, because he had not been treated well by them in the early days, and to have subsequently registered the mark STRENLON to keep the STREN fishing line out of the Australian market.  Mr McPherson does not deny this.  However, these claims even if true do not directly affect the issue as to whether the mark was or was not used in good faith.  Even if that was Mr McPherson's intention, it is worth noting that, as was pointed out by Mr Eichberger, and the removal applicant's own evidence supports it, fishing lines under the STREN brand have been available for sale in Australia for some time.  Dr Pratt, for instance, remembers having purchased the product as early as about mid-1965.  Thus, it would appear that the removal applicant's STREN goods have been marketed concurrently with the STRENLON products. 

Having regard to the foregoing, I have not found that the mark STRENLON has not been used in the relevant period in respect of the goods specified, nor have I found that any use of the mark was not in good faith.  Whilst acknowledging that, generally, the opponent's evidence is open to criticism and has left some questions unanswered, I consider that the copy of invoice concerning the sales to Overseas Distributors is just sufficient to discharge the opponent's onus in terms of s.100(3).

Decision
I have found that the application for removal of trade mark of registration 178880 has been unsuccessful, as the opponent has used the mark during the relevant three year period.  Accordingly, I have decided the mark is not to be removed from the Register.

Costs
The opponent has succeeded in the proceedings.  It is therefore entitled to costs as listed in the official scale.  I so award the costs.

Vija Zars
Hearing Officer
29 September 1999