Hip Hop Beverage Corporation v Red Bull GmbH

[2015] ATMO 47

TRADE MARKS ACT 1995

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

Re:Opposition by Hip Hop Beverage Corporation to application under section 92 of the Act by Red Bull GmbH to remove trade mark number 1192498(32) - PIT BULL ENERGY DRINK - in the name of Hip Hop Beverage Corporation

Delegate:	Jock McDonagh
Representation:	Opponent: Written submissions from Griffith Hack, Patent and Trade Mark Attorneys Applicant: Stephen Rebikoff, instructed by Davies Collison Cave, Patent and Trade Mark Attorneys
Decision:	2015 ATMO 47 Section 92 opposition – s92(4)(b) ground for removal - no use nor obstacle to use established within relevant period – Registrar’s discretion not appropriate - registration to be removed for all goods

Background

1. This matter is a proceeding under subsection 92(4)(b) of Trade Marks Act 1995 (‘the Act’) in which, by an application filed on 10 August 2012, Red Bull GmbH (‘the Applicant’) has sought the removal from the Register of the trade mark (‘Trade Mark’) appearing below in respect of all of the goods for which it is registered:

Regn No.                  1192498
Priority Date             10 August 2007
Trade Mark              PIT BULL ENERGY DRINK

Goods  Class 32: Non-alcoholic beverages, including, energy drinks

1. On 22 November 2012, Hip Hop Beverage Corporation (‘the Opponent’) filed Notice of Opposition to the removal of the Trade Mark.

2. Thereafter, the parties have filed evidence as allowed by the Trade Mark Regulations 1995 (‘the Regulations’), which I further detail below.

3. The parties elected to be heard.  I conducted a hearing in Canberra on 18 February 2015.  The Opponent did not appear, but relied on written submissions prepared by Griffith Hack, Patent and Trade Mark Attorneys.  The Applicant was represented by Stephen Rebikoff of Counsel, instructed by Davies Collison Cave, Patent and Trade Mark Attorneys.

4. Prior to the hearing (12 February 2015) the Applicant lodged its summary of argument, which included references to, and extracts from, matters regarding Food Standards Code and Customs matters. On 13 February 2015, the Opponent objected the material as being ‘new evidence’.

5. On 16 February 2015, I advised the parties that I would adjourn the hearing to allow the parties to make further submissions as to whether or not I should consider the new material. The parties provided such submissions.

6. I have decided not to consider the further information submitted by the Applicant. Since this is ultimately not adverse to the interests of the Applicant, I shall not provide detailed reasons for this decision.

7. However, I note that the onus is on the Opponent to rebut the allegations of non use (see below). The material sought to be introduced by the Applicant seems to be designed to rebut matters raised by the Opponent but not supported by corroborating material in the Opponent’s declarations.

8. In any event, the material is not covered by a declaration as required by regulation 21.17. If the material were to be considered as evidence it would be under regulation 21.19 of the Regulations.

9. As I consider that the material is not required for me to make my ultimate decision, I do not consider it reasonable or appropriate to consider it under the provisions of regulation 21.19 of the Regulations.

The Law

1. Section 92 of the Act relevantly states:

92Application for removal of trade mark from Register etc.

(1)Subject to subsection (3), a person may apply to the Registrar to have a trade mark that is or may be registered removed from the Register.

(2)The application:

(a)must be in accordance with the regulations; and

(b)may be made in respect of any or all of the goods and/or services in respect of which the trade mark may be, or is, registered.

(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 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)… ;

(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.

1. Section 100(1) of the Act provides that the Opponent bears the onus of rebutting the allegation made against it under s92(4) which it may do by, inter alia, establishing that the Trade Mark, (or, per section 100(3)(a), the Trade Mark with additions or alterations not substantially affecting its identity), was used it in good faith during the relevant period. I proceed on the basis that the relevant standard of proof is on the balance of probabilities.

2. The required use is as a trade mark, that is to say it is as a badge of origin in that it indicates a connection in the course of trade between the goods and the person who applies the mark to the goods: for example see E&J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144 at [41] – [43].

3. The use must be genuine commercial use in accordance with the test in Imperial Group Ltd v Philip Morris & Co [1982] FSR 72. A single bona fide use of the trade mark during the non-use period may be sufficient to resist an application for removal: Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261; (2001) 51 IPR 149 at [17]. However, Wilberforce J, in Nodoz Trade Mark (1962) RPC 1 (Nodoz ) at 7, said that if a registered owner relies on one single act of use of the trade mark, then that single act ought to be established by “if not conclusive proof, at any rate overwhelmingly convincing proof.”

4. The tribunal may not be persuaded by evidence that is solely from the internal files of the opponent: Nodoz, supra; or of a circumstantial nature: Trina Trade Mark [1977] RPC 131; although one invoice, if genuine, may suffice: Geo W McPherson v Remington (1999) 47 IPR 636.

5. As the application for removal was filed on 10 August 2012 the relevant period (‘the relevant period’) for the purposes of 92(4)(b) is the three years ending on 10 July 2012.

6. In the event that the Opponent cannot demonstrate the requisite use during the relevant period, it may still rebut the allegation under section 100(3)(c) where it establishes 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.

7. Finally, section 101 of the Act deals, inter alia, with the Registrar’s discretion:

Determination of opposed application—general

(1) Subject to subsection (3) and to section 102, 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) Subject to subsection (3) and to section 102, if, at the end of the proceedings relating to an opposed application, the court is satisfied that the grounds on which the application was made have been established, the court may order the Registrar 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.

(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.

Note 1:       If the registered owner of the trade mark has authorised another person to use it, any authorised use of the trade mark by that person is taken to be a use of the trade mark by the registered owner (see subsection 7(3)).

Note 2:       For registered owner see section 6.

1. In Pioneer Computers Australia Pty Ltd v Pioneer KK [2009] FCA 135; (2009) 176 FCR 300; (2009) 80 IPR 38; [2009] AIPC 92-354 Bennett J made the following observations concerning the Registrar’s discretion:

   [167] The discretion under s 101(3) 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 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.

   [168] In Kowa Company at [98], Lander J rejected the submission that a party seeking the exercise of the discretion needs to show “exceptional circumstances”. In E & J Gallo at [198], Flick J agreed with Lander J that there is no requirement to establish exceptional circumstances. With respect, I also agree with Lander J that there is no warrant to read a requirement for exceptional circumstances into s 101(3).

   […]

   [171] 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. The parties disagree as to whether or not the matters now raised in s 101(4) are able to be taken into account for the purposes of the unamended section; that is, whether it was necessary to insert s 101(4) to add discretionary factors not previously available, or to clarify that they were always available to be taken into account.

   There is no limitation within s 101(3) on the discretion, nor any indication of the factors to be taken into account. In the Explanatory Memorandum to the Trade Marks Amendment Bill 2006 (Cth) by which s 101(4) was introduced, it is stated that ‘[c]urrently, it is not clear that the Registrar is able to take use on closely related goods or services into account, when deciding whether to exercise his or her discretion not to remove a trade mark from the Register’ and that the amendment was for the purposes of clarifying the Registrar’s discretion.

Evidence

1. The evidence filed and considered in this matter is as shown below:

Declarant	Status	Date, Known as	Exhibits
Evidence in Support
Antonia Ochoa	Director of International Sales of Opponent	19.06.13 ‘Ochoa 1’	AO-1 to AO-21
Evidence in Answer
Cheryl Hrvoj	Solicitor for Applicant	29.11.13 ‘Hrvoj 1’	CXH-1
Larissa Baxter	Area Legal Counsel for Applicant	28.11.13 ‘Baxter’	LB-1 to LB-9
Evidence in Reply
Shannon Brown	Attorney for Opponent	13.03.14 ‘Brown 1’	SB-1
Antonia Ochoa	Director of International Sales of Opponent	21.01.13 ‘Ochoa 2’	AO-22 to AO-24
Applicant’s Further Evidence
Cheryl Hrvoj	Solicitor for Applicant	16.04.14 ‘Hrvoj 2’	CXH-1 to CXH-2
Applicant’s Further Evidence
Shannon Fati (nee Brown)	Attorney for Opponent	4.08.14 ‘Brown 2’	SB-2 to SB-4

1. Ochoa 1 outlines the history of the Opponent’s attempts to obtain business partnerships to distribute the its goods in Australia during the period 14 September 2006 and 26 April 2013.

2. In outline this involved:

• 14 September 2006, preparation of a three year distribution agreement with Pitbull Australasia Pty Ltd; not implemented.

• 17 October 2006 and 4 June 2007 correspondence with Kollaras Group about possibility of distribution arrangement; no evidence of conclusion.

• April 2008, negotiations with Real Business Group Pty Ltd regarding possibility of distribution agreement; never formalized.

• 8 February 2012, began discussions with unnamed potential Australian distributor; no evidence of conclusion.

• 14 July 2012 to 26 April 2013, further approaches of another unnamed potential distributor; beyond relevant period.

1. Ochoa 1 also exhibits some invoices for ‘promotional packs’ of nominal value, including samples of the specified goods. However, none of the invoices fall within the relevant period.

2. Hrvoj 1 exhibits a marketplace survey conducted in October 2013, seeking availability of the Opponent’s goods in various supermarkets. None were located.

3. Baxter details a number of overseas trade mark ‘conflicts’ with the Opponent and other parties using PIT BULL in their trade marks.

4. Browne provides more complete details regarding overseas trade mark conflicts cited in Baxter.

5. Ochoa 2 states that the Opponent had commenced further distribution negotiations in November 2013 and provides ‘Wayback Machine’[1] printouts of the Opponents website indicating that in the period between 26 March 2012 and 30 August 2013, the website showed Australia as one of the countries the Opponent was negotiating distribution.

   [1] A digital archive of the World Wide Web and other information of the Internet created by the Internet Archive

6. Ochoa 2 also exhibits an Australian Therapeutic Goods Administration (‘TGA’) product analysis report dated 14 January 2014.

7. Hrvoj 2 exhibits an English translation of a Dominican Republic opposition decision relating to the Applicant’s oppositions to the registration of the Opponent’s trade mark in that country in 2006.

8. Brown 2 provides complete copies of the Dominican Republic opposition proceedings and copies of Peruvian and Chinese registrations of the Trade Mark.

Discussion

1. Much of the Opponent’s evidence, particularly Ochoa 1, seemed to be attempting to establish the Opponent’s intention to use the Trade Mark; however, since the Applicant sought removal only on the section 92(4)(b) ground and not the section 92(4)(a) ground, such evidence is largely irrelevant in the these proceedings.

2. The only conduct within the relevant period that is supported by the Opponent’s evidence is the beginning of discussions with an unnamed (or at least redacted in the evidence) potential Australian distributor.

3. In Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2)[2], it was held that mere preliminary discussions and negotiations about trade in goods bearing the trade mark do not amount to actual use.

   [2] (1984) 156 CLR 414, at 433-4

4. Further, even if the efforts to appoint a distributor had been successful, Unilever Australia Ltd v Karounos[3] provides that that would still be insufficient to establish use. However, there is no evidence of any distribution agreement coming into effect.

   [3] 52 IPR 361 at [62]

5. Therefore, I find that the Opponent has not established use of the Trade Mark during the relevant period for the purposes of sections 92(4)(b) and 100(3)(a) of the Act.

6. The Opponent contends that, in the event I found no use within the relevant period, such non-use was a result of obstacles to use during the relevant period.

7. In order to satisfy the requirements of section 100(3)(c) of the Act, it is necessary to show, first, that there were circumstances that constituted an obstacle to the use of the Trade Mark, secondly that those circumstances were of a trading nature, and thirdly, that there was a causal link between those circumstances and the failure to use the mark during the relevant period[4].

   [4] Austin, Nichols & Co Ltd Inc v Lodestar Anstalt (2011) 90 IPR 310 at [108]; Woolly Bull Enterprises Pty Ltd v Reynolds (2001) 51 IPR 149 at [55] – [56]

8. The Opponent contends that there were two relevant obstacles that prevented use of the Trade Mark: its failure to secure a distribution agreement for its products in Australia, and its difficulty in satisfying government requirements in relation to the importation of its products.

9. However, there is no evidence that the Opponent made any attempts to negotiate with potential distributors of its goods from May 2008 until July 2012. The only evidence (Ochoa 1, Exhibit AO-7) of communications with a potential distributor on 8 February 2012 involves the Opponent effectively rebuffing an approach from the potential distributor.

10. In Woolly Bull Enterprises Pty Ltd v Reynolds (supra), it was held that an obstacle must be ‘external’ to the registered owner. Here the non-use appears to be the result of the Opponent’s own decisions not to seek out Australian distributors or take any steps to distribute its goods itself during the relevant period. It has been held ‘an unhurried pace of negotiations towards the eventual launch of a new product’ does not constitute an obstacle to use[5].

    [5] .P & T Basile Imports Pty Ltd v Societe des Produits Nestle SA (2002) 55 IPR 216 at 226-7.

11. As to the second obstacle, there is no evidence of any interaction between the Opponent and any Australian authority prior to the TGA analysis conducted in 2014, which falls well outside the relevant period. The Opponent has not provided any evidence of what government requirements applied to the Opponent’s goods and how such requirements could affect the Opponent.

12. I am not satisfied that the Opponent has established that the Trade Mark was not used during the relevant period because of circumstances that were an obstacle to the use of the Trade Mark during the relevant period.

13. Having found that the Opponent has not established use, nor an obstacle to such use, during the relevant period, I need to consider whether or not to exercise the discretion under section 100(3). I have outlined the relevant law in paragraphs 18 and 19, above.

14. The Opponent bears the onus of establishing a basis for the exercise of the discretion[6], it is not sufficient to show that no harm would be caused by the retention of the Trade Mark; rather, it is necessary to point to evidence that establishes a positive reason why the Trade Mark should not be removed.

    [6] Austin, Nichols & Co Ltd Inc v Lodestar Anstalt (2011) 90 IPR 310

15. In this case, there is no evidence that the Trade Mark has ever been used in Australia before the expiry of the relevant period, or indeed since. There is no reputation at all in the Trade Mark in Australia. There is no established prejudice that might be caused by the removal of the Trade Mark. In Pioneer Computers cited in paragraph 19 above, at [178] it strongly supports the contention that where there has been no use, the public interest generally demands the removal of the Trade Mark.

16. The Opponent has not demonstrated the existence of circumstances that are sufficient to satisfy me that it is reasonable to exercise the discretion to retain the Trade Mark on the Register. Therefore, I refuse to do so.

Decision and Direction

1. Pursuant to Section 101 of the Act, I have decided that the Trade Mark is to be removed from the Register for all goods in respect of which it is registered.

2. Absent an appeal from either party filed within the required time, I direct that the Trade Mark is to be removed from the Register for all goods in respect of which it is registered.  If such an appeal is filed, the disposition of the application for removal should be in accordance with the Court’s order or direction.

Costs

1. The Applicant has been successful. I direct that costs in relation to the opposition be awarded against the Opponent in accordance with Schedule 8 of the Regulations.

Jock McDonagh
Hearings Officer
Trade Marks Hearings
5 June 2015