Jaimon Thomas v Monsoon Group Australia Pty Ltd
[2023] ATMO 93
•11 July 2023
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by Jaimon Thomas to applications under section 92 of the Trade Marks Act 1995 (Cth) by Monsoon Group Australia Pty Ltd for removal of trade mark numbers 1774537 – KAYAL THE KERALA BACKWATER CUISINE (figurative) – and 2003430 – KAYAL – both in class 43 in the name of Jaimon Thomas
Delegate: | Nicholas Barbey |
Representation: | Opponent: Edwina Whitby of counsel instructed by Baxter Patent Attorneys Pty Ltd Applicant: Sonia Stewart of counsel instructed by LegalVision ILP Pty Ltd |
Decision: | 2023 ATMO 93 Trade Marks Act 1995 (Cth) – applications under ss 92(4)(a) and (b) – complete removal sought – intention in good faith to use or authorise use established in respect of registration 2003430 – evidence does not show use of registration 1774537 during the relevant period or obstacle to use – discretion not exercised – registration 2003430 to be retained on the Register and registration 1774537 to be removed |
Background
Jaimon Thomas (‘Opponent’) is the owner of the following Australian trade mark registrations (together ‘Registrations’):
Trade mark: (‘537 Mark’)
Registration number: 1774537
Filing date: 2 June 2016
Specification: Class 43: inn keeping (bar, restaurant and accommodation); restaurant booking or reservation services provided in relation to a customer loyalty or frequent buyer scheme; restaurant reservation services; restaurant services; restaurant services for the provision of fast food; restaurants; salad bar restaurant services; self-service restaurants; theatre restaurants (provision of food and drink); hospitality services (accommodation); hospitality services (food and drink); arranging of wedding receptions (food and drink); charitable services, namely providing food and drink catering; coffee bar and coffee house services (provision of food and drink); food and drink catering; food cooking services; food preparation; internet cafe services (provision of food and drink prepared for consumption); night club services (provision of food and drink); preparation of food and drink; preparation of take-away and fast food; providing food and drink; snack bars (provision of food and drink); take away food services; take out food and beverage services; takeaway food and drink services
(‘537 Services’)
Trade mark: Kayal (‘430 Mark’)
Registration number: 2003430
Filing date: 16 April 2019
Specification: Class 43: booking of restaurant seats; inn keeping (bar, restaurant and accommodation); restaurant services; restaurants; salad bar restaurant services
(‘430 Services’)
On 3 June 2021, Monsoon Group Australia Pty Ltd (‘Applicant’) filed a non-use application based on ss 92(4)(a) and (b) of the Trade Marks Act 1995 (Cth) (‘Act’) seeking removal of the 537 Mark from the Australian Register of Trade Marks (‘Register’). On the same day, the Applicant also filed a non-use application based on s 92(4)(a) of the Act seeking removal of the 430 Mark from the Register. Both non-use applications sought removal of all the registered services.
The Opponent filed notices of intention to oppose the non-use applications followed by Statements of Grounds and Particulars (‘SGPs’). In response, the Applicant filed a notice of intention to defend each non-use application.
The same evidence was filed in respect of both non-use applications. Evidence in Support (‘EIS’) was filed by the Opponent and the Applicant filed Evidence in Answer (‘EIA’). In turn, the Opponent filed Evidence in Reply (‘EIR’) and an oral hearing was requested. On 15 March 2023, the Opponent filed additional evidence (‘Late Evidence’) which will be addressed below. Submissions were filed by the Opponent on 28 March 2023 (‘Opponent’s Submissions’) and by the Applicant on 4 April 2023 (‘Applicant’s Submissions’).
As a delegate of the Registrar of Trade Marks (‘Registrar’), I heard this matter by video conference on 11 April 2023. Edwina Whitby of counsel presented submissions on behalf of the Opponent and Sonia Stewart of counsel presented submissions on the Applicant’s behalf.
Legal framework
Section 92 of the Act relevantly provides:
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) that, on the day on which the application for the registration of the trade mark was filed, the applicant for registration had no intention in good faith:
(i) to use the trade mark in Australia; or
(ii) to authorise the use of the trade mark in Australia; or
(iii) to assign the trade mark to a body corporate for use by the body corporate in Australia;
in relation to the goods and/or services to which the non-use application relates and that the registered owner:
(iv) has not used the trade mark in Australia; or
(v) has not used the trade mark in good faith in Australia;
in relation to those goods and/or services at any time before the period of one month ending on the day on which the non-use application is filed;
(b) that the trade mark has remained registered for a continuous period of 3 years ending one month before the day on which the non-use application is filed, and, at no time during that period, the person who was then the registered owner:
(i) used the trade mark in Australia; or
(ii) used the trade mark in good faith in Australia;
in relation to the goods and/or services to which the application relates.
Onus and relevant periods
The Opponent bears the onus of rebutting the non-use allegations.[1] If satisfied that it is reasonable to do so, the Registrar may decline to remove the Registrations from the Register even if the ground on which the relevant non-use application was made has been established.[2]
[1] Act ss 100(1)(a)–(c).
[2] Ibid s 101(3).
The non-use application made in respect of the 537 Mark was filed on 3 June 2021 and complies with s 93(2) of the Act.[3] It nominated grounds under ss 92(4)(a) and (b) of the Act. However, given the way that s 92(4)(a) is expressed, this provision essentially merges with s 92(4)(b) once a trade mark has been registered for 5 years.[4] Accordingly, it is only necessary to consider the s 92(4)(b) ground. To rebut the non-use allegation, the period in which the Opponent must establish good faith use of the 537 Mark in relation to the 537 Services in Australia is the three year period ending on 3 May 2021 (‘537 Period’).
[3] See Act s 93(2) prior to amendments to that section brought about by the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018 (Cth) sch 1 pt 3. The amended s 93(2) applies to trade mark applications filed from 24 February 2019 onwards.
[4] See, eg, Auswool Products Pty Ltd v Source Co International Pty Ltd [2022] ATMO 173, [9]; Bangkok Broadcasting & T.V. Co Ltd v Seven Network (Operations) Limited [2021] ATMO 78, [21]; Orientis Gourmet v ABCDEX Pty Ltd and Burkhard Geiger [2020] ATMO 134, [17]; Live Entertainment Investments III Pty Ltd v The Education Group Pty Ltd [2018] ATMO 3, [22].
The non-use application made in respect of the 430 Mark was filed on 3 June 2021 and complies with s 93(1) of the Act. Adapting the language of s 92(4)(a), the non-use allegation can be summarised as follows: i) on 16 April 2019 (‘Relevant Date’) the Opponent had no good faith intention to use, authorise use of or to assign the 430 Mark in Australia and ii) the Opponent has not used the 430 Mark in Australia in relation to the 430 Services at any time before 3 May 2021 (‘430 Period’). In this context, the Opponent can rebut the non-use allegation by establishing use of the 430 Mark in relation to the 430 Services during the 430 Period. Alternatively, the non-use allegation can be rebutted if the Opponent establishes that, on the Relevant Date, he had a good faith intention to use the 430 Mark in respect of the 430 Services in Australia.
I proceed on the basis that the standard of proof required is the ordinary civil standard based on the balance of probabilities.[5]
[5] Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [133] (Besanko, Jagot and Edelman JJ) in respect of oppositions under s 52 of the Act.
Evidence
The following declarations were filed in respect of both oppositions:
| EIS |
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| EIA |
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| EIR |
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| Late Evidence |
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As a preliminary observation, several declarations filed in this matter contain a blanket statement that their contents are confidential.[6] Statements of this nature are difficult to reconcile with the discussion of publicly available records and information in other parts of each declaration. I acknowledge each party’s interests in preserving their confidential information. However, the Registrar must provide reasons for her findings. In discharging this duty, information claimed to be confidential may require discussion. This is particularly relevant when little to no effort has been made to specify the allegedly confidential information. Accordingly, where such discussion is unavoidable, broad statements will be used to minimise the risk of divulging any sensitive information.
EIS
[6] Thomas 1, [3]; Cyriac Declaration, [3]; Simon Declaration [3]; Das Declaration, [5]; Thomas 3, [3].
The Opponent is the owner and founder of various restaurants which operate under the name ‘KAYAL’. The first ‘KAYAL’ restaurant was opened in or about April 2001 in India, with five ‘KAYAL’ restaurants subsequently opened across the United Kingdom from 2006 onwards. The first ‘KAYAL’ restaurant adopted the 537 and 430 Marks in or around 2001. Since that time, it is declared that all ‘KAYAL’ restaurants have used these marks in relation to ‘the provision of food, restaurant services, take away food, delivery of food and event management and catering services’.[7] The Opponent claims that the ‘KAYAL’ restaurants have a reputation for ‘providing quality, authentic, Kerala cuisine’.[8]
[7] Thomas 1, [20].
[8] Ibid [12].
The Opponent has ‘actively sought to franchise the KAYAL business’ and declares that it has been possible ‘to operate a franchise of the KAYAL business under the [537 and 430 Marks]’ since at least 2010.[9] These franchise opportunities have been offered on the website accessible at (‘Website’). The Opponent has sought trade mark protection of the 537 and 430 Marks across various jurisdictions. These filings formed ‘part of the global expansion of the KAYAL business’ and ensured ‘that in providing franchising opportunities the [Opponent’s] intellectual property’ would be protected.[10] To this end, the Opponent declares that he has and ‘always have had the intention to use and continue to use the marks the subject of [the Registrations]’.[11]
[9] Ibid [16], [21].
[10] Ibid [19].
[11] Ibid [51].
According to Thomas 1, the Opponent contacted ‘various parties to negotiate a franchise agreement for the expansion to Australia’ in or around 2015 and took his ‘first steps in applying to register [the 537 and 430 Marks] in Australia’ in 2016.[12] Thomas 1 states that the Website displayed an advertisement seeking ‘franchisees to run [the Opponent’s] business in Australia’.[13] The Opponent explains that potential Australian franchisees ‘were people who migrated from United Kingdom to Australia, and who have been patrons of my KAYAL restaurants and maintained a personal relationship with me’.[14] As such, ‘most communications were via telephone and face-to-face in the United Kingdom or India, prior to signing the franchise agreements’.[15]
[12] Ibid [24].
[13] Ibid [25].
[14] Ibid [26].
[15] Ibid.
Between December 2019 to January 2020, the Opponent signed two franchise agreements - one with a party located in Queensland and the other with a party located in New South Wales. Annexed to Thomas 1 are extracts from each franchise agreement. It is declared that each franchisee was ‘ready to launch their businesses shortly after signing their respective franchisee agreements’.[16] However, due to the COVID-19 pandemic, the ‘KAYAL’ restaurants have not yet opened in Australia. The Opponent states that notwithstanding this disruption, ‘the franchisees have now taken effective steps to commence business’.[17] These steps include arranging for the Opponent to visit Australia and provide in-person training.
[16] Ibid [29].
[17] Ibid [31].
Additionally, the Opponent claims to have registered several Australian domain names ‘in preparation for the launch of the KAYAL business in Australia’[18] including: kayalrestaurant.com.au, kayalrestaurnats.com.au [sic] and kayalherb.com.au (collectively ‘Domains’).The Opponent states that he has identified ‘potential locations for the Kayal businesses in Australia’ and asserts that steps have been taken ‘to secure a lease or purchase a commercial property in the coming months as the Covid-19 pandemic restrictions ease off’.[19]
[18] Ibid [34].
[19] Ibid [34].
According to the Cyriac Declaration, Mr Cyriac signed a franchise agreement with the Opponent in January 2020 to open a restaurant using the Registrations in Glenmore Park, New South Wales (‘NSW Agreement’). Prior to signing, Mr Cyriac conducted ‘a detailed feasibility review’ of the proposed franchise model including reviewing the Opponent’s ‘franchisee manual’.[20] He also met the Opponent in India and had his ‘local solicitor’ review the proposal. After signing the NSW Agreement, Mr Cyriac states that he undertook ‘effective steps to commence business’ including planning for the Opponent to visit Australia to ‘commence site selection and acquisition, restaurant building to specific requirements, and employee training’.[21] Mr Cyriac declares that he was ready to launch the restaurant ‘shortly after signing the franchise agreement’, however, this was postponed due to the COVID-19 pandemic. Mr Cyriac asserts that it remains his intention to open the restaurant within the parameters of the NSW Agreement. To this end, the Opponent has booked a flight to visit Australia in or about April 2022 to progress the opening of the restaurant.
[20] Cyriac Declaration, [9].
[21] Ibid [10(a)].
The Simon Declaration confirms that Mr Simon signed a franchise agreement with the Opponent in December 2019 to open a restaurant using the Registrations in Upper Kedron, Queensland (‘QLD Agreement’). The Simon Declaration essentially mirrors the Cyriac Declaration both in content and expression. That is, Mr Simon declares that he also undertook ‘a detailed feasibility review’ of the proposed franchise model, met with the Opponent in India and had his ‘local solicitor’ review the QLD Agreement. Mr Simon further states that he undertook the same ‘effective steps to commence business’ as Mr Cyriac. Finally, Mr Simon confirms that he was ready to launch the restaurant ‘shortly after signing the franchise agreement’ but the COVID-19 pandemic caused this to be postponed.[22]
EIA
[22] Simon Declaration, [6].
According to the Das Declaration, the Applicant uses ‘KAYAL’ (or iterations thereof) as a trade mark in Australia in relation to ‘packaged food and drink products, and services relating to the preparation, delivery, storage, retail and provision of food and drink’.[23] The Applicant is the owner of three trade mark applications in Australia which contain ‘KAYAL’ and these have encountered difficulties due to the presence of the Registrations on the Register.[24]
[23] Das Declaration, [23].
[24] Ibid [24]. See Australian trade mark numbers 2086107, 2183498, 2263017. The Applicant’s Submissions also identify the existence of trade mark 2176017 in addition to the aforementioned.
Mr Das first became aware of the Opponent in June 2019 when he received a cease and desist letter from the Opponent’s attorneys.[25] Mr Das subsequently investigated the Opponent and declares that he was unable to locate ‘any use of “KAYAL” by the Opponent, or any authorised, related or associated entities, outside of England’.[26] In Mr Das’ opinion, ‘the Opponent has no current presence anywhere in the Asia Pacific region, let alone Australia’.[27]
[25] Ibid [26]
[26] Ibid [26].
[27] Ibid [27].
The Das Declaration also responds to allegations made in Thomas 1. Relevantly, Mr Das asserts that the Registrations ‘are not the Opponent’s first steps in attempting to register the “KAYAL” mark in Australia’.[28] To support this, reference is made to lapsed Australian trade mark applications for the 537 and 430 Marks which the Opponent filed in March 2013 (‘2013 Applications’).[29] In this context, Mr Das opines that ‘the Opponent has had an apparent intention to expand to Australia for 9 years, possibly longer’.[30]
EIR
[28] Ibid [30].
[29] See lapsed Australian trade mark application numbers 1547401 and 1547402.
[30] Das Declaration, [30].
Thomas 2 disputes claims made in the Das Declaration. Relevantly, the Opponent acknowledges the 2013 Applications but explains that they were allowed to lapse because, at the time, he was expanding his business in the United Kingdom. The Opponent reiterates that at the time of filing each of the Registrations, he held an intention to use the Registrations in Australia.[31] In this regard, Thomas 2 emphasises that both Australian franchisees ‘were ready to launch the businesses shortly after signing their respective franchisee agreements’ but were prevented from doing so due to the COVID-19 pandemic.[32]
[31] Thomas 2, [16].
[32] Ibid [22].
Thomas 2 also provides supplementary material which the Opponent believes demonstrates his use or intention to use the Registrations in Australia. This includes a publication from ‘a very popular Indian online news media’[33] that is dated 27 September 2021. The publication states that ‘Kayal Restaurant … is now coming to Australia’ and ‘we are inviting franchise options all over Australia’.[34] The Opponent also declares that he has ‘been involved in commercial real estate negotiations through my existing Australian Franchisees since the beginning of 2022’ and provides evidence of his ‘latest restaurant property negotiations for a site in Surfers Paradise’.[35]
Late Evidence
[33] Ibid [23].
[34] Ibid Exhibit JT-4.
[35] Ibid [26].
On 15 March 2023, the Opponent filed Thomas 3 with a cover letter describing it as a ‘corrective Supplementary Declaration, which is being lodged pursuant to Regulation 21.19 Trade Mark Regulations 1995 (Cth)’.[36] No further explanation was given. Thomas 3 annexes a full copy of the NSW Agreement as well as a copy of a Federal Bank of India transaction statement which purportedly shows that ‘fees in accordance with Franchise Agreement were paid by Geogy Cyriac on 17 April 2019 and 22 April 2019’.[37]
[36] Opponent’s written correspondence dated 14 March 2023.
[37] Thomas 3, [5].
On 17 March 2023, I wrote to both parties acknowledging Thomas 3 had been filed late. Due to the imminent hearing date, I invited submissions regarding its admissibility to be made at the hearing.
The Opponent’s Submissions characterised Thomas 3 as being ‘limited to clarification of the franchise agreements discussed and annexed in extracted form in the [EIS]’.[38] The Opponent asserted that the balance of convenience favours the inclusion of the Late Evidence because ‘the franchise agreements are not new evidence’ and the Late Evidence is highly probative because it demonstrates that consideration has been paid in relation to the NSW Agreement.
[38] Opponent’s Submissions, [16].
The Applicant argued that the Late Evidence should be rejected because ‘no explanation is given for why the Opponent did not file this evidence until 15 March 2023’ and allowing it would be procedurally unfair.[39] The Applicant pointed out that ‘the Late Evidence was always known to the Opponent’ and the information disclosed by it ‘is apt to confuse and mislead’.[40] This is especially so given Mr Cyriac provided no corresponding evidence of any payments and no reason has been proffered as to why payments would be made before signing the NSW Agreement. Further, the Opponent emphasised that the purported payments ‘are inconsistent with the terms of the alleged Franchise Agreement’.[41]
[39] Applicant’s Submissions, [65], [72].
[40] Ibid [79].
[41] Ibid [73].
The arguments advanced by the Applicant are compelling. The material annexed to Thomas 3 was clearly available to the Opponent prior to and during the evidentiary stages. Yet, the Opponent has not explained why Thomas 3 was filed some eight months after the evidence stages had closed. This lengthy delay and failure to offer any explanation weighs heavily against its inclusion. Moreover, I am not satisfied that the Late Evidence is highly probative given it is not corroborated by Mr Cyriac and, as the Applicant stressed, it contains notable incongruities which diminish its probative value. Taken together, no compelling case exists for the Late Evidence to be included. As such, this decision will only have regard to the evidence which has been properly filed.
Discussion
537 Mark
The main issue for determination is whether the Opponent (or an authorised user) has used the 537 Mark in Australia in relation to the 537 Services during the 537 Period. If the evidence establishes that the Opponent (or an authorised user) has, then the non-use allegation is taken to have been rebutted. If the evidence fails to establish use of the 537 Mark for all the 537 Services, then consideration will turn to whether it is reasonable to invoke the Registrar’s discretion to preserve the 537 Mark for any services for which it has not been used.
The evidence of use required to be demonstrated is ‘use as a trade mark’. That is, the 537 Mark must have been used as a badge of origin.[42] The extent of use required is not onerous and a ‘relatively small amount of use’ may be sufficient to rebut a non-use application.[43] Potentially, a single bona fide use of a trade mark during the relevant period may suffice to prevent removal.[44] However, if reliance is placed on a solitary example of use, it should be established by ‘overwhelmingly convincing proof’.[45]
Use of the 537 Mark
[42] See Coca-Cola Co v All-Fect Distributors Ltd [1999] FCA 1721, [19] (Black CJ, Sundberg and Finkelstein JJ) wherein it was observed that ‘[u]se “as a trade mark” is use of the mark as a “badge of origin” in the sense that it indicates a connection in the course of trade between goods and the person who applies the mark to the goods’.
[43] E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2010] HCA 15, [64] (French CJ, Gummow, Crennan and Bell JJ).
[44] Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261, [17] (Drummond J).
[45] Nodoz Trade Mark [1962] RPC 1, 7 (Wilberforce J).
The Opponent submits that the 537 Mark has been used during the 537 Period with reliance being placed on three examples of asserted use. First, reference was made to the QLD Agreement and the NSW Agreement that were entered into during the 537 Period. The Opponent contends that the provision of these franchise agreements, each of which bears the 537 Mark, constitutes use of same in Australia.[46] Second, the Opponent contends that Mr Cyriac and Mr Simon were authorised users of the 537 Mark such that any uses made by these individuals would also constitute relevant use during the 537 Period.[47] Third, the Opponent referred to the registration of the Domains as further evidence of the 537 Mark having been used during the 537 Period.
[46] Opponent’s Submissions, [66].
[47] Act ss 7, 8.
The Applicant was critical of the abovementioned examples. It contends that neither franchise agreement establishes use of the 537 Mark in Australia. In the Applicant’s view, the QLD Agreement and the NSW Agreement contain substantial deficiencies because:
[They] were not signed and witnessed in Australia, the Territory is not defined to be Australia, and neither evidences “use” of the [Registrations] in Australia. There is no evidence that monies in AUD were ever paid. There is no obligation to commence the [sic] any franchise activity, whether in Australia or otherwise and there is no evidence that any franchise activity has in fact commenced.[48]
[48] Applicant’s Submissions, [88].
In this context, the Applicant opines that the agreements ‘were nothing more than potential business options, which might at some unidentified time in the future, be actioned by one of the alleged franchisees’.[49] As regards to the alleged authorised use of the 537 Mark, the Applicant submits that Mr Cyriac and Mr Simon did not make any uses of the 537 Mark in Australia.[50] Likewise, it asserts that there is no evidence of when the Domains were first registered or whether they were active during the 537 Period.
[49] Ibid.
[50] The Applicant also submitted that the Opponent should not be permitted to pursue this line of argument because, it its view, this was not explicitly identified in the SGPs filed.
In my assessment, the Applicant’s criticisms have considerable merit. I note that the mere fact that services were not provided under the 537 Mark to the Australian public during the 537 Period is not fatal to the Opponent’s case. It has been recognised that, in certain circumstances, activities in preparation for use of a trade mark may qualify as a relevant use.[51] However, the authorities make clear that mere preliminary discussions will not suffice.[52] In Woolly Bull Enterprises Pty Ltd v Reynolds, Drummond J observed that:
Though it is not necessary, for there to be such a use of a mark, that there be an actual trade in the sense of the offering for sale and the sale of goods bearing the mark, the owner will not use its mark unless it has so acted to show that it has gone beyond investigating whether to use the mark and beyond planning to use the mark and has got to the stage where it can be seen objectively to have committed itself to using the mark, ie, to carrying its intention to use the mark into effect.[53]
[51] See, eg, Buying Systems (Australia) Pty Ltd v Studio Srl [1995] FCA 1063 (Gummow J).
[52] See, eg, Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) [1984] HCA 73 (Gibbs CJ, Mason, Wilson, Deane and Dawson JJ); Settef SpA v Riv-Oland Marble Co (Vic) Pty Ltd (1987) 10 IPR 402 (McGarvie J); Dick Smith Investments Pty Ltd v Ramsey [2016] FCA 939 (Katzmann J).
[53] [2001] FCA 261, [40] (emphasis added).
Here, the evidence does not support a finding that the Opponent’s activities progressed beyond investigating and planning to use the 537 Mark. The cornerstone of the Opponent’s evidence is the two franchise agreements that were signed during the 537 Period. However, neither the NSW Agreement or the QLD Agreement, as filed, demonstrate an ‘objectively ascertainable commitment’ to provide the 537 Services under or by reference to the 537 Mark in Australia. This is because only 7 of the 46 pages of each agreement were put into evidence. As a result, it is unclear what the totality of the rights and responsibilities of each party were under the respective franchise agreements due to their incomplete nature. Indeed, the extracted pages do not provide a sufficient basis to conclude that the agreements pertained to Australia or use of the Registrations, given the ‘Interpretation’ section and schedule listing the ‘Trade Marks’ were omitted. As such, it is not possible to discern what the defined terms ‘Trade Marks’ and ‘Premises’ mean, or how these are intended to operate with the clauses that appear in the extracted pages which reference foreign legislation and display fees in Pounds Sterling.
Furthermore, many of the Opponent’s claims surrounding the franchise agreements are not borne out by the evidence. For example, no documentary evidence was filed to substantiate that the Website displayed an advertisement seeking Australian franchisees. I also note that Mr Cyriac and Mr Simon do not explain how they became aware of the franchise opportunity in Australia. Similarly, the evidence underpinning the alleged scouting of and negotiations for a potential Australian site consists of a single brochure that advertises a commercial retail space.[54] It is not apparent how this brochure, as opposed to correspondence with a real estate agent, supports the Opponent’s claim that it was ‘involved in commercial real estate negotiations’.[55]
[54] Thomas 2, Exhibit JT-7.
[55] Ibid [26].
Overall, the Opponent’s evidence fails to disclose any definitive steps to use the 537 Mark in Australia. I agree with the Applicant’s observation that the evidence is generally vague and does not provide a sufficient basis to conclude that the Opponent has objectively committed itself to using the 537 Mark in Australia. This is laid bare by the fact that at the end of the 537 Period, no restaurant site was selected for either franchisee, no lease had been signed, no advertisements for local staff had been circulated and no marketing materials had been distributed announcing, for example, that ‘KAYAL’ restaurants would be coming soon to Australia. Taken at its highest, the evidence simply indicates that investigations into and plans surrounding the use of the 537 Mark were still ongoing during the 537 Period.
The Opponent’s second argument is that Mr Cyriac and Mr Simon were authorised users of the 537 Mark. It is not necessary to consider the issue of authorised use because there is no evidence of either individual having used the Registrations during the 537 Period. Mr Cyriac and Mr Simon each declare that the Domains were registered to advertise their franchise under the Registrations, however, no documentary evidence is supplied of any advertising having occurred. It follows that this line of argument does not assist the Opponent.
Turning to the registration of the Domains, the Opponent has not identified when these were registered and no dated evidence has been filed to show what, if anything, appeared on the corresponding websites during the 537 Period. Instead, Thomas 1 simply states that the Domains were registered ‘in preparation for the launch of the KAYAL business in Australia’.[56] Plainly, this bare statement is not persuasive. Consequently, the Opponent is unable to rely on this purported use to rebut the non-use allegation.
[56] Thomas 1, [34].
Accordingly, the Opponent has not established that he used the 537 Mark in relation to the 537 Services during the 537 Period.
Obstacle to use of the 537 Mark
Section 100(3)(c) of the Act provides that an opponent is taken to have rebutted the allegation of non-use made under s 92(4)(b) during the relevant period if:
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.
The Opponent contends that the ‘pandemic-induced border closures resulted in circumstances that were an obstacle to the use of the [537 Mark] in the [537] Period as provided for in s101(3)(c) [sic]’.[57] Specifically, emphasis was placed on the fact that the Opponent needed to travel to Australia to finalise the expansion of the ‘KAYAL’ restaurants, had booked flights to do so, but was ultimately prevented from travelling due to the closure of international borders.
[57] Opponent’s Submissions, [7].
The Applicant submits that the Opponent should not be permitted to rely on this provision because the SGPs do ‘not explicitly identify paragraph 100(3)(c) of the Act (obstacle to use) as a separate basis for opposing removal of the [537] Mark’ and no application to amend the SGPs had been filed.[58] Attention was drawn to Lidl Stiftung & Co. KG v Conga Foods Pty Ltd (‘Lidl’) wherein the delegate commented:
While certain grounds that the Opponent subsequently argued were obstacles to use had been particularised as a basis for the Registrar to exercise its discretion, this does not change my view that I should not consider matters relevant to s 100(3)(c) of the Act. When particularising the basis for opposition for removal, it is necessary to particularise that basis, whether it is under s 100(3)(c) or as an exercise of discretion, not merely state facts in relation to basis that a party may later choose to rely on in respect of an unrelated basis not particularised in a statement of grounds and particulars. The purpose of a SGP in such a case is to place a removal applicant on notice that the opponent is seeking to rely on s 100(3)(c) of the Act. This was not done by the SGP in this proceeding.[59]
[58] Applicant’s Submissions, [32]–[33].
[59] [2020] ATMO 54, [28] (‘Lidl’).
A review of the SGPs reveals that the Opponent did not explicitly particularise s 100(3)(c) of the Act in his reasons for opposing the non-use application. However, this omission alone does not mean that I should automatically disregard any submissions made by the Opponent notwithstanding the delegate’s comments in Lidl. In my view, it is appropriate to consider whether the information contained in the SGPs disclosed a clear basis for the provision upon which the Opponent now seeks to rely. The closest the SGPs come to disclosing any intention to rely on s 100(3)(c) of the Act is in the following paragraph:
The Registrant stands to be severely disadvantaged if the Kayal Mark is removed from the Trade Marks Register. The Registrant has spent very substantial amounts of capital, time and effort in settling agreements with Franchisees in Australia to have Covid-19 intervene preventing necessary business trips to Australia from the United Kingdom and Kerala. The Registrant's efforts and investments over a three-to-four-year period to set up Franchisees in Australia, would be lost.[60]
[60] SGPs, [9] (emphasis added).
On any reasonable interpretation, I do not consider the above adequately signposts the Opponent’s intention to rely on s 100(3)(c) of the Act. Even if it did, I am not satisfied by the evidence before me that the Opponent’s failure to use the 537 Mark was caused by the travel restrictions imposed on the Opponent. Based on the partial franchise agreements in evidence, there is no requirement for the ‘Franchisor’ to be physically present at the ‘Premises’. Similarly, the remainder of the evidence does not explain why the Opponent’s proposed visit in Australia for 11 days[61] would be pivotal to site selection, training and progressing the franchising arrangements. It is unclear why his physical absence would cause preparations to establish each franchise to indefinitely halt. To this end, there is some merit in the Applicant’s contention that the Opponent’s failure to use the 537 Mark is ‘more properly characterised as the result of the Opponent’s own commercial or business decisions not to use the [537 Mark] in Australia’.[62]
[61] See Thomas 1, Annexure JT-6 which shows the Opponent’s travel itinerary was to land in Australia on 14 April 2020 and depart Australia on 25 April 2020.
[62] Applicant’s Submissions, [105].
Accordingly, the Opponent has not rebutted the s 92(4)(b) ground for removal in respect of the 537 Mark.
430 Mark
The onus rests with the Opponent to rebut the non-use allegation made under s 92(4)(a). The threshold for establishing an intention to use the 430 Mark at the Relevant Date is not high and it has been recognised that simply applying for the 430 Mark constitutes prima facie evidence of an intention to use it.[63] In this regard, the delegate’s observations in Structureco Inc v Starite Distributors Pty Ltd are apposite:
Although the opponent to removal does bear the initial onus, in accordance with the legislation, I think that, in the case of applications for removal under s.92(4)(a), where the primary allegation regards the state of mind of an applicant for registration about whether it intends to use a mark in good faith, then that onus is not high. I believe that it is so low that it can be overcome if the opponent or its agent states that it was the case that the applicant for registration had an intention to use the mark in good faith. The onus should then shift to the removal applicant to support its case - perhaps by the production of some evidence which might support a circumstantial case of a lack of good faith, or by some other means.[64]
[63] Aston v Harlee Manufacturing Co [1960] HCA 47, [21] (Fullagar J).
[64] [2000] ATMO 31 (emphasis added).
Here, the Opponent has filed the application and made two separate declarations in which he confirms his intention in good faith to use of the 430 Mark in Australia as at the Relevant Date.[65] These circumstances are sufficient to shift the onus from the Opponent to the Applicant.
[65] Thomas 1, [50]–[51]; Thomas 2, [16].
The Applicant submits that ‘the Opponent’s limited evidence mean[s] that the Opponent has not, on the balance of probabilities, discharged its onus to establish a bona fide intention to use, or to authorise the use of, the [430 Mark] in Australia’.[66] The Applicant’s reasoning seemingly contends that the Opponent’s apparent failure to furnish more extensive use of the 430 Mark between 16 April 2019 and 3 June 2021 casts doubt on its intention at the Relevant Date. I do not accept this line of reasoning.
[66] Applicant’s Submissions, [101].
In the present circumstances, the Opponent’s evidence reveals that he uses the 430 Mark in foreign jurisdictions as the name of his restaurants. There is nothing before me to doubt that the Opponent retains an intention to do likewise in Australia and the fact that some preliminary steps appear to have been undertaken reinforces his intention. In this regard, it is important to note that a good faith intention to use the 430 Mark can exist without use having been established.
As such, I am satisfied that, at the Relevant Date, the Opponent held a good faith intention to use the 430 Mark for the 430 Services in Australia. Therefore, the Opponent has rebutted the s 92(4)(a) non-use allegation.
Registrar’s discretion
Pursuant to s 101 of the Act, the Registrar has a broad discretion not to remove an unused trade mark if it is satisfied that it is reasonable to do so. In PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd, the Full Federal Court made the following observations regarding the discretion under s 101(3) of the Act:
The following propositions are relevant to the exercise of this discretion:
(1) It is broad and is unfettered in the sense that there are no express limits on it. It is to be understood as limited only by the subject-matter, scope and purpose of the legislation and, in particular, by the subject-matter scope and purpose of Part 9 of the Trade Marks Act.
(2) The scope and purpose of the Trade Marks Act strikes a balance between various disparate interests. On the one hand there is the interest of consumers in recognising a trade mark as a badge of origin of goods or services and in avoiding deception or confusion as to that origin. On the other is the interest of traders, both in protecting their goodwill through the creation of a statutory species of property protected by the action against infringement, and in turning the property to valuable account by licensing or assignment. …
(3) The particular purpose of Part 9, within which s 101 falls, is to provide for the removal of unused trade marks from the Register. It is designed to protect the integrity of the Register and in that way the interests of consumers. At the same time, it seeks to accommodate, where reasonable to do so, the interests of registered trade mark owners. Accordingly, the Court must be positively satisfied that it is reasonable that the trade mark should not be removed. The onus in this respect lies on the trade mark owner to persuade the Court that it is reasonable to exercise the discretion in favour of the owner. …
(4) The discretion in s 101(3) is expressed in the present tense. It requires consideration of whether, at the time that the Court is called upon to make its decision, it is reasonable not to remove the mark.
(5) The range of factors considered in the exercise of the discretion has included whether or not:
(a) there has been abandonment of the mark;
(b) the registered proprietor of the mark still has a residual reputation in the mark;
(c) there have been sales by the registered owner of the mark of the goods for which removal was sought since the relevant period ended;
(d) the applicant for removal had entered the market in knowledge of the registered mark;
(e) the registered proprietors were aware of the applicant’s sales under the mark;
(f) A further factor, explicitly noted in s 101(4), but which falls within the scope of the discretion in s 101(3), is whether or not the trade mark under consideration has been used by its registered owner in respect of similar goods or closely related services.[67]
[67] [2021] FCAFC 128, [153] (Jagot, Nicholas and Burley JJ) (emphasis altered) (citations omitted).
The Opponent advanced three reasons as to why the discretion should be exercised to preserve the 537 Mark in respect of the 537 Services. First, he contends that the evidence shows that the Opponent’s ‘KAYAL’ restaurants have acquired an international reputation in the 537 Mark.[68] Second, the Opponent states that Mr Cyriac, Mr Simon and his ‘businesses have been affected by COVID and they will all suffer if the [537 Mark] is removed’.[69] Finally, the Opponent remarks that the ‘evidence of [the Applicant] does not allege or demonstrate any instance of or prospect of confusion’ if the 537 Mark remains on the Register.[70]
[68] Opponent’s Submissions, [74].
[69] Ibid [77].
[70] Ibid [76].
The Applicant submits that the discretion should not be exercised. Relevantly, it highlights that ‘the period of non-use is substantially longer than the minimum statutory period, as [the 537 Mark] has been registered with effect from 2 June 2016’.[71] The Applicant further asserts that the public interest is served by removing the unused 537 Mark as this would maintain the integrity of the Register.
[71] Applicant’s Submissions, [121].
In my assessment, it is not reasonable to exercise the discretion to preserve the 537 Mark. The evidence filed demonstrates that the Opponent has not used the 537 Mark during the 537 Period. It may be the case that the 537 Mark enjoys a limited degree of reputation in some parts of the United Kingdom. However, the evidence before me provides no basis to infer that a spillover reputation exists in Australia. Meanwhile, I accept that the Opponent and his franchisees may experience some financial detriment if the 537 Mark is removed. However, the Opponent has not provided any particulars regarding the likely loss to be incurred nor has he apprised me of any other detriment that may be experienced by Mr Cyriac, Mr Simon and/or himself. Finally, the allegation that the Applicant has failed to lead any evidence of confusion between the 537 Mark and, for example, its trade marks distorts the fact that it is the Opponent who bears the burden of positively satisfying the Registrar to exercise the discretion.
Overall, the public interest is not served by allowing the unused 537 Mark to remain registered. The Applicant has directed me to its private interest in having the 537 Mark removed given its pending applications for the various trade marks that include the word ‘KAYAL’. By contrast, the Opponent has not drawn my attention to any compelling circumstance that would favour the discretion available under the Act being exercised to preserve the registration of the 537 Mark. As such, I decline to exercise the discretion.
Accordingly, I am not satisfied that it is reasonable to exercise the discretion available under the Act in favour of the Opponent to allow the 537 Mark to remain on the Register in respect of the 537 Services. As such, I decline to exercise the discretion.
Decision
The ground for removal under s 92(4)(b) of the Act has been established in respect of the 537 Mark in relation to all the 537 Services. I direct that trade mark registration 1774537 be removed from the Register one month from the date of this decision.
The ground for removal under s 92(4)(a) of the Act has not been established in respect of the 430 Mark. I direct that trade mark registration 2003430 is to remain on the Register in respect of all the 430 Services.
If the Registrar is served with a notice(s) of appeal within the relevant timeframe, the relevant registration(s) shall not be removed until the appeal has been discontinued or dismissed, or in the event of a decision from the court, the registration(s) will be subject to that decision.
Costs
Both parties have sought an award of costs. The general rule is that costs follow the event. However, as each party has been partially successful, it is appropriate that each party bears its own costs.
Nicholas Barbey
Hearing Officer
Delegate of the Registrar of Trade Marks
11 July 2023
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