Habitat Holding BV v KMM Enterprises Pty Ltd
[2007] ATMO 65
•4 October 2007
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Oppositions by Habitat Holding BV to applications under section 92 of the Act by KMM Enterprises Pty Ltd to remove trade mark numbers 271498(24), 271499(21), 271500(20) and 734266(8, 11, 16, 18, 27, 28, 35, 42) - Habitat - in the name of Habitat Holding BV
Delegate: Alison Windsor Representation: Opponent: Trevor Stevens of Davies Collison Cave , Patent and Trade Mark Attorneys
Applicant: Did not appear, but provided written submissionsDecision: 2007 ATMO 65
S92 opposition: applicant is person aggrieved –no use demonstrated in Australia during relevant period – Registrar’s discretion under s101(3) not applied – opposition unsuccessful – trade marks to be removed.Background
On 26 August 2005, KMM Enterprises Pty Ltd (“KMM”) filed applications to remove four trade mark registrations on the basis of non-use, specifying the provisions of paragraph 92(4)(b) of the Trade Marks Act 1995 (“the Act”). The dates relevant to the non-use actions are therefore 26 July 2002 to 26 July 2005, and the actions are in respect of all the goods and services covered by the registrations.
The owner of the trade marks, Habitat Holding BV (“Habitat” or “the opponent”) filed a notice of opposition to the non-use application on 24 November 2005, claiming use of the trade marks in respect of the goods for which they are registered within the relevant period, and challenging KMM’s status as a person aggrieved.
The registrations subject of the non-use applications are all for the same trade mark, being the word HABITAT. Registrations 271498, 271499 and 271500, registered from 21 August 1973, claim all goods in classes 24, 21 and 20 respectively. Registration 734266, registered from 12 May 1997, claims a range of goods in classes 8, 11, 16, 18, 27 and 28 as well as a range of services in classes 35 and 42.
Evidence in support, in answer, and in reply were filed as required by the Regulations, and on 22 December 2006 Habitat requested a hearing. The matter came before me, as a delegate of the Registrar, in Sydney on 16 May 2007. Trevor Stevens of Davies Collison Cave, Patent and Trade Mark Attorneys in Sydney attended on behalf of Habitat. KMM did not attend, but provided written submissions.
Application to serve further evidence
KMM’s initial written submissions to support their case at the hearing were received on 16 April 2007, and these were followed by additional submissions on the morning of the hearing. Immediately following receipt of these submissions, Habitat sought leave to serve further evidence under the provisions of regulation 5.15. KMM objected to the proposal to file further evidence, expressing a view that the application was effectively an ambush on the morning of the hearing.
At the hearing, I asked Mr Stevens to give his submissions in respect of his application, and then advised I would issue a decision on whether to allow the evidence into proceedings at the same time as issuing the decision on the substantive matter. This I shall consider now.
Provided an application complies with procedural requirements under the Act and Regulations, there are three major factors to consider for a determination of admissibility of further evidence.[1] These are:
(1) Could the evidence have been obtained at an earlier stage by the exercise of reasonable diligence?
(2) Would the evidence, if admitted, probably have an important influence on the result for this opposition matter?(3) Is the material submitted apparently credible?
[1] Oxon Italia SpA's Application [1981] FSR 408 at 409 following Ladd v Marshall (1954) 1 WLR 1489
The proposed evidence consists of references to advertisements of Habitat’s goods in New Zealand published magazines which are accessible in Australia and examples of invoices in respect of the sales of Habitat goods via the internet from shops in New Zealand to customers in Australia. It is significant that none of the goods purchased in this way were actually delivered to Australia, but were sent to addresses in New Zealand. It is also significant that all these examples, magazines and invoices, are dated outside the relevant period. Mr Stevens submitted that the further evidence he sought to file was appropriate to the matter of the Registrar’s discretion under subsection 101(3) of the Act, which reads as follows:
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.
In considering the three factors above, I find the material provided to be credible. I do consider that, with reasonable diligence, it could have been provided earlier, even if only a few weeks earlier. Even that short length of time would have given both parties more time in which to consider their positions. However, in this particular matter, what has most relevance to my determination of the application is that this material is unlikely to have any significant effect on my eventual decision. The examples post date the final date of the non-use period by at least 12 months. Even if I were to decide to invoke the provisions of subsection 101(3), this material would not be of relevance to my decision.
I thus refuse the application to serve further evidence. However, before any consideration of the evidence filed in the normal course of events, it is necessary to consider the threshold question – whether KMM is a person aggrieved.
Threshold question - person aggrieved
The non-use application claims that KMM is aggrieved by the registrations noted previously. At the time of filing its application, KMM did not provide any information to explain the claim, and that could have been the end of the matter. However, Habitat has disputed KMM’s standing, and I must now investigate the question of aggrievent.
Mr Stevens referred me to the following statements of the law from Unilever v Karounos[2] where Hill J said the following:
The principles upon which the Court has determined whether a person is a "person aggrieved" within the meaning of the Act were stated by McLelland J in Ritz Hotel Ltd v Charles of the Ritz Ltd (1988) 15 NSWLR 158 at 193-196 ("Ritz Hotel") and have been approved by Full Courts of this Court in Kraft Foods Inc v Gaines Pet Foods Corporation (1996) 65 FCR 104 at 113 and Campomar Sociedad, Limitada v Nike International Ltd (1998) 85 FCR 331 at 363. Relevantly, they may be expressed as follows:
(a) The expression "person aggrieved" has no special or technical meaning and is to be liberally construed.
(b) The expression includes any person having a real interest in having the Register rectified, or the trade mark removed in respect of any goods, as the case may be, and thus would include any person who would be, or in respect of whom there is a reasonable possibility of his being, appreciably disadvantaged in a legal or practical sense by the mark remaining on the Register.
(c) The question whether an applicant for relief is a "person aggrieved" cannot be divorced from the nature and extent of the relief claimed. A person must be aggrieved in relation to the category of goods and services in respect of which they are seeking to have the trade mark cancelled.
(d) The material time at which a person must be aggrieved is the date of application. That is, the date of the commencement of the proceedings in which the claim for that relief is made.
[2] Unilever Australia Ltd v Karounos (2001) 52 IPR 361
KMM Enterprises has applied to register a trade mark, application number 1057010 in classes 20, 21 and 24. All the registrations subject of this non-use action have been cited as grounds for rejecting the application under the provisions of section 44. This fact is insufficient on its own to equate to aggrievement.[3] However, KMM has demonstrated that its trade mark has been used for a period of time prior to the date of the non-use application. There is no requirement that this use be of any particular extent or volume, as long as it is real commercial use. In addition, KMM has shown use in respect of the broad category of goods subject of the registrations, that being homewares, furniture and interior decoration items.
[3] Kraft Foods Inc v Gaines Pet Foods Corporation (1996) 34 IPR 198
KMM makes the following comments at paragraphs 17 and 18 of the McFayden declaration:
As a result of its use of the HABITAT Mark in Australia over the past three years, the Removal Applicant has established significant goodwill in the HABITAT mark. The Removal Opponent’s Registrations continue to prevent the Removal Applicant from properly protecting its rights in that mark, which in turn limits the Removal Applicant’s planned expansion of its business.
In addition, the Removal Applicant is concerned that the Removal Opponent’s Registrations also pose a risk of trade mark infringement associated with the Removal Applicant’s ongoing use of the HABITAT Mark
Mr Stevens submitted that the evidence in answer showed KMM has been trading under its trade mark for a period of time, without any apparent disadvantage caused by the Habitat’s registrations. The comments from the McFayden declaration quoted above, he said, might point to some degree of practical or legal disadvantage. However, these could be overcome in a relatively straightforward manner by use of the provisions of subsection 44(3) of the Act (honest concurrent use provisions), provisions which KMM has failed to use.
I do not consider KMM’s failure to provide evidence of honest concurrent use to be at all significant. Provision of that kind of information is an option, but not a requirement. The fact of the matter is that KMM has been using a trade mark and wishes to avail itself of the protection afforded by the trade marks legislation. Habitat’s trade marks stand in its way. In addition, while ever those trade marks remain on the register, use of its own trade mark may well put KMM at risk of infringing Habitat’s registered rights in respect of a very broad and undefined range of goods. This uncertainty is bound to have a material effect on KMM’s business plans at present and in the future. Under the circumstances, I am satisfied that KMM is a person aggrieved. The threshold question having been met, I will move onto a consideration of the evidence provided by both parties.
Evidence
Evidence in support and in reply
Habitat’s evidence in support and in reply consists of declarations sworn by Jens Nordahl Ravnbol, Director of the company and based in the Netherlands. Both declarations have attached exhibits. The exhibits amount to several hundred pages of catalogues, invoices and other material.
Mr Ravnbol gives a history of the development of the Habitat group of companies. He traces the development of the group from the first store which opened in London in 1964 to the current situation where there are more than 90 stores world wide, and a number of third party wholesalers and retailers who sell Habitat’s goods. The range of goods offered is extensive. The stores are mainly in Europe, with one also in Thailand. Sales figures over the totality of the business are very large indeed.
The company produces printed catalogues in various languages, and has also set up a website on the Internet, which allows customers from all parts of the world to view the Habitat range of products at any time. An electronic newsletter and catalogue may be accessed through this site.
Habitat also places advertisements into many publications, including particularly English language newspapers with an international distribution such as The Times, The New York Times, The Washington Post, The International Herald Tribune, The Sunday Times, Home and Gardens, Good Housekeeping and Marie Claire.
Mr Ravnbol specifies that Habitat’s on-line newsletter is circulated in Australia, with 105 subscribers in 2004 and 79 in 2005. Specific information (press packs) has been supplied each season to four Australian publications, namely Vogue Living, Reader’s Digest (Australia), Sunday Times (Australia) and Australia and New Zealand Magazine. This is the only information about Habitat’s commercial actions in Australia provided in the evidence in support.
The second Ravnbol declaration refers to use of the trade mark in New Zealand, where a company known as Nest Limited entered into an agreement with Habitat to sell their goods. Significantly, this agreement was signed on 1 April 2006, outside the relevant period. The 229 invoices attached to the declaration are all dated in 2006, outside the relevant period.
Evidence in answer
The evidence in answer consists of a declaration made by Kim Leanne McFayden, director of KMM. She refers to the original owners of her business commencing operations in Newcastle, NSW in July 2003. KMM purchased the business in August 2004, and has traded continuously since then. Trade appears, from the information in the declaration, to be mainly within the Newcastle local area, rather than Australia wide. Sales figures are very modest in comparison with Habitat, but show a regular increase. The exhibits refer to a range of furniture and decorator goods, as well as to an interior design service and a procurement service for sourcing goods specifically requested by customers and not stocked by the business.
Ms McFayden refers to her enquiries into Habitat’s business, noting that she has been unable to find any evidence of sales of goods within Australia. In particular, she refers to an e-mail query she made to Habitat in June 2005, asking if there were any stores in Australia, or plans for any. The response from Habitat referred her to the website, and stated there were no plans to extend its stores to Australia.
Discussion
The provisions of section 100 of the Act specify that the opponent to a non-use action has the burden of rebutting any allegations made on the basis of subsection 92(4). As this action is proceeding under the provisions of paragraph 92(4)(b), Habitat has the onus of demonstrating use of its goods and services in good faith within Australia during the relevant period – 26 July 2002 to 26 July 2005.
Habitat has provided, as mentioned previously, several hundred pages of material designed to support its claim for use. However, nowhere within this volume of evidence have I been able to find a single example of use pertinent to the Australian market. It has shown that potential Australian customers have access to its range of products via its website, and that a proportion of the potential market may have been exposed to advertisements available in imported magazines and newspapers. It has shown that its world-wide business is very large, with sales amounting to many millions of Australian dollars.
However, what Habitat has not shown is that Australian customers can purchase its goods within Australia, nor that any of its catalogues and advertising is specifically directed towards Australian customers. Indeed, it appears that for an Australian purchaser to access any of its goods they would have to attend one of Habitat’s shops or agencies, the closest of which during the relevant period was in Thailand.
While Habitat advertises a mail order service, I can find no ability for Australian customers to avail themselves of this facility. Habitat’s goods are advertised on its website but Australian customers do not appear to be able to purchase them via that route. In this regard, I refer to a question and answer in the FAQ section of Habitat’s website:
1. Why can't I buy items directly from the website?
At Habitat, we pride ourselves on offering to our customers the very highest levels of service and support at all times. Whilst our wish is to offer you the ability to purchase items directly from the website, we are not able to provide this facility at the moment. In the meantime, we would love for you to have fun exploring our new website. Whilst not designed to replace the very unique experience of the Habitat in store environment, we have tried to create a very tactile online experience to enable you to create your own unique Habitat.
The evidence in reply provided information about the availability of Habitat’s goods for purchase in New Zealand through Nest Limited, a recently licensed agency. The evidence included copies of 229 invoices for goods delivered to Nest from Habitat in the United Kingdom. Use in New Zealand, despite close economic ties and a relative geographical proximity, is not use in Australia. In any event, all the information is dated well outside the relevant period, and therefore is not pertinent to this action.
I am satisfied that Habitat has not demonstrated any use of any of its goods or services within Australia. This suggests that KMM has been successful in its applications. However, before making a final decision, I need to consider the matter of the Registrar’s discretion as embodied in section 101(3), quoted above at paragraph 8.
Registrar’s discretion
In his submissions Mr Stevens put significant weight on the matter of the Registrar’s discretion. He suggested that even if I found KMM was a person aggrieved and that there had been no use of the trade marks within Australia during the prescribed period, I should exercise the Registrar’s discretion in Habitat’s favour. He quoted Justice French in the Woolworths Metro[4] case as follows:
The policy of the 1995 Act can be said to some extent to have shifted the balance of the objectives of trade mark law more towards the identification and protection of commercial products and services than the protection of consumers, although the latter remains an objective.
[4] Registrar of Trade Marks v Woolworth Ltd (1999) 45 IPR 411
He said that the registered owner’s existing business and goodwill under its trade mark provides a strong basis for the ongoing protection of the opponent’s registrations under the Australian legislation, and there was also a public interest in safeguarding the registered owner’s goodwill. He reminded me of the opponent’s very large worldwide trade figures, and the fact that it has traded since 1960, albeit mainly in Europe and the UK. He referred to the fact that the applicant has used its trade mark since 2003, had chosen not to use the provisions of subsection 44(3) and the absence of any readily apparent prejudice to KMM if the registered trade marks continue on the trade marks register.
The quote from Woolworths Metro is as applicable to KMM as it is to Habitat, as both parties are commercial companies dealing in products and services. French J’s comment does not suggest the protection to be provided should be governed by the size of the commercial undertaking.
In respect of KMM’s failure to take advantage of the provisions of subsection 44(3), as I noted previously, these provisions are something which a trade mark applicant may choose to use. In this case, I am left wondering whether these provisions are open to KMM, given that Habitat does not appear to have any use within Australia. The likelihood of deception and confusion cannot be gauged if the cited trade marks are not in use.
What is clear to me is that if the benefits of Australian trade mark legislation are to be extended to a commercial entity, it should be extended to an entity trading within the jurisdiction in which the legislation takes effect. This does not appear to be the case for Habitat as I can find no evidence at all of use within the Australian jurisdiction.
The Registrar has the discretion to allow a trade mark to remain on the register, despite it not having had any use within Australia, if she is satisfied there is a good reason for doing so. In this case, Habitat has three trade marks registered from a date in 1973 which encompass all the goods in their respective classes, and one registered from 1997 which encompasses a broad range of goods and services. There is no indication that the trade marks are well known in this country, despite their apparent overseas reputation.
The Registrar's discretion under section 23 of the Trade Marks Act 1955 was generally exercised as per the directive in Ritz Hotel v Charles of the Ritz, 12 IPR 417, at pp 481-482. McLelland J states:
The court's powers to order rectification of the register under s 22(1) and to order removal of a trade mark under s 23(1) are in each case of a discretionary nature. This is the natural and ordinary meaning of the words used and promotes the underlying policy of the Act by giving the court a sufficient degree of flexibility to give effect to public interest considerations. ....
If the condition of exercise of the court's power has been established, the entry of the mark should be expunged, or the mark should be removed, as the case may be, "unless sufficient reason appears for leaving it there": cf Application by Carl Zeiss Pty Ltd (1969) 122 CLR 1 at 11 and Astronaut trade mark [1972] RPC 655 at 672.
Under subsection 101(3) the Registrar needs to be "satisfied that it is reasonable" to leave a trade mark on the register even when the grounds on which the removal application is made have been established. This requires the Registrar to be satisfied that there is sufficient reason for leaving it there. The reason would need to be based on special facts and circumstances, or an overriding question of public interest. The onus for showing that those circumstances exist is on the opponent to the removal application. The opponent has not shown me any circumstances which would fit this scenario.
Under these circumstances, I can find no good reason for allowing these trade marks to remain on the register where they are likely to serve only to interfere with the legitimate rights of bona fide Australian traders operating within the Australian market. I do not intend to apply the Registrar’s discretion in this matter in Habitat’s favour.
Decision
I have found that KMM’s application for removal was properly made, and that KMM was a person aggrieved. Having considered the evidence put before me, I find that Habitat has not been successful in rebutting the removal application, and I can find no reason to exercise discretion in favour of allowing the trade marks to remain on the register. I find that KMM has been successful in establishing a case for the removal from the register of the trade mark registrations subject of the non-use applications.
I direct that the registrations 271498, 271499, 271500 and 734266 be removed from the register after one month from the date of this decision. If the Registrar has been served with a notice of appeal before that time, I direct that removal shall not occur until the appeal has been discontinued or, in the event of a decision from the Court, the applications be subject to its orders.
Costs
Both parties claimed their costs. It is usual for costs to follow the event. Therefore I direct that Habitat pay KMM’s costs, such costs to be determined according to the official scale set out in Schedule 8 to the Trade Mark Regulations.
Alison Windsor
Hearing Officer
Trade Marks Hearings
4 October 2007
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