Jianqing Ltd v Linhope International Limited

[2022] ATMO 169

TRADE MARKS ACT 1995

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

Re:Opposition by Jianqing Ltd to an application under section 92 of the Trade Marks Act 1995 (Cth) by Linhope International Limited for removal of trade mark number 2055948 (25) – HOUSEOFCB – in the name of Jianqing Ltd

Delegate:	Debrett Lyons
Representation:	Opponent: None Applicant: Jürgen Bebber of Corrs Chambers Westgarth
Decision:	2022 ATMO 169 Trade Marks Act 1995 (Cth) - section 96 opposition: s 92(4)(a) application for removal – application unsuccessful and Trade Mark to remain on the Register

Background

1. This decision is pursuant to an application made under s 92(4)(a) of the Trade Marks Act 1995 (Act) on 12 November 2020 by Linhope International Limited (Removal Applicant) to remove the Registration 2055948 for HOUSEOFCB (Mark) from the register in respect of all the goods for which it is registered, namely:

   Class 25: Shoes; Clothing; Hosiery; Neckties; Scarfs; Girdles; Swimsuits; Trousers; Coats; Skirts; Pyjamas; Infants' clothing; Outerclothing; Gloves (clothing); Hats (Registered Goods)

2. The Mark is registered with a priority date of 6 December 2019 in the name of Jianqing Ltd. (Removal Opponent).

3. A Notice of Intention to Oppose the removal application was filed on 4 January 2021 followed by a Statement of Grounds and Particulars on 25 January 2021.   A Notice of Intention to Defend was filed on 3 February 2021.

4. The evidence in support comprises a declaration of Jianqing Chen made 12 March 2021 with Exhibits A – G.  Evidence in answer comprises a declaration of Richard Southall made 22 June 2021 with Annexures 1 – 26 and a declaration of Brian Walker made 28 June 2021[1].

   There was no evidence in reply.

   [1] The Walker declaration was filed one week after the Removal Applicant’s deadline for evidence in answer but for the reasons given in reaching the Decision it became unnecessary to consider this issue.  Descriptions of the Removal Applicant’s business made later are sufficiently premised on the Southall declaration.

5. Once the time allowed for filing evidence had ended the parties were given an opportunity to request a hearing or to file written submissions.  The Removal Applicant requested a hearing and paid the appropriate fee.  In line with usual practice, a letter was sent to the parties inviting them to file outline submissions.  The Removal Applicant did so; the Removal Opponent did not.  I was then asked to hear and decide the matter, acting as a delegate of the Registrar of Trade Marks.  I did so on 1 September 2022.

   Legislative framework

6. Section 92 of the Act provides, relevantly:

   (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;

7. Section 93(1) allows a s 92(4)(a) application to be made at any time after the filing date of the application giving rise to the at-issue registration. In this case the application was filed on 12 November 2020. Sections 100(1)(a) and (b) provide that the onus is on the Removal Opponent to rebut an allegation that it had no intention to use the Mark in good faith at the time of filing and has not used the Mark or used it in good faith in Australia.

8. Section 101(1) provides that, if the Registrar is satisfied that the grounds on which the application was made have been established, the Registrar may decide to remove the Mark from the Register in respect of any or all of the Registered Goods.  Section 101(3) gives the Registrar a discretion not to remove the Mark from the Register even if the grounds on which the application was made have been established.

   Discussion

9. The Removal Applicant is the owner of registration 2135860 for “HOUSE OF CB” in classes 3, 9, 14, 18, 25 and 35.  The evidence shows that it has used the HOUSE OF CB trade mark in a number of jurisdictions since 2014 in respect of women’s clothing and accessories.  In Australia, those goods are sold through concession stands in Myer and David Jones stores around Australia and sales during the period 2014 – 2020 were in excess of AUD 8,500,000.

10. These details of use, here and abroad, are part of the compelling case that the Removal Opponent is a blatant copycat which has no legitimate interest in the Mark.  For some years, the Removal Opponent has operated an online women’s fashion business under the Mark but, in spite of its unsubstantiated claims to the contrary, not before conspicuous public use of the Mark by the Removal Applicant.  There is no evidence that the Removal Opponent used the Mark any earlier than 2020.

11. The evidence is that the Removal Opponent has filed numerous applications for the Mark not only in Australia but in the United States, Canada, France, Japan and Hong Kong.  Further,  in the operation of its online women’s fashion business, the Removal Opponent has registered domain names, including and

12. The flagrancy of its actions caused the Removal Applicant to commence trade mark and copyright infringement proceedings in the UK High Court of Justice in December 2019 which resulted in a permanent injunction restraining the Removal Opponent’s conduct.  The Removal Applicant has also been successful in several domain name disputes under the UDRP.

13. That is as much of the evidence as I need describe.  The matter now comes before me in the form of an application under Part 9 of the Act which deals with removal of trade marks from the Register on account of non-use.  The Removal Applicant does not dispute that the Mark has been used in relation to the Registered Goods, but alleges that the Removal Opponent (i) lacked an intention to use the Mark in good faith at the time of filing, and (ii) did not use the Mark in good faith. 

14. My attention was drawn to a recent decision of this office, Kevin Robinson v Little Wings Limited [2021] ATMO 11 (Little Wings), a case where the owner affirmatively stated his good faith intention to use the trade mark, but the Delegate nonetheless upheld an application under s 92(4)(a), finding that on the filing date of the trade mark application, the owner was actuated, not by a genuine trading interest, but by the ulterior purpose to use the trade mark to exert influence over others for financial and other gain, and thus, had no intention in good faith to use the trade mark.

15. In making that finding the Delegate at [44-45] determined that the removal applicant’s prospects of success turned on what constitutes an intention in good faith and he cited the case of Edwards v Liquid Engineering 2003 Pty Ltd [2008] FCA 970 (Edwards), where Gordon J wrote:

    Having considered the evidence led, and submissions made, I was poised to answer that question in the affirmative and uphold the appeal, on the basis that “good faith” for the purposes of s 92(4) requires no more than genuine intent to use a mark for commercial purposes; it does not involve any element of honesty or subjective good intentions: see generally E & J Gallo Winery v Lion Nathan Australia Pty Ltd[2008] FCA 934 at [187]-[192] (examining the meaning of “good faith” under related provisions of the TMA).

16. The Delegate accepted the proposition put to him by the removal applicant’s counsel that the absence of a good faith intention was made plain by the owner’s conduct, in particular, conduct that showed the removal opponent to have lacked an intention in good faith to use the trade mark for commercial purposes because he possessed an ‘ulterior purpose’ when filing the application.  The parties were known to each other and the ulterior purpose was linked to a letter of demand send by the removal opponent to his erstwhile employer, the removal applicant, in which legal proceedings were threatened unless the removal applicant refrained from using the trade mark; paid financial compensation for prior authorised use of the trade mark; and empowered the removal opponent to select and appoint a new board of directors to the removal applicant.

17. The Delegate wrote at [48]:

    “In my view, the evidence put forward by the Applicant regarding the Opponent’s lack of good faith intention has merit. The Opponent’s repeated attempts to remove the Applicant’s board of directors prior to and after registration of the Trade Mark are telling and indicate his intention in applying for registration of the Trade Mark was not driven by commercial purposes. …

18. In the matter before me, the evidence is clear enough that the Removal Opponent had a real, rather than token, intention to use the Mark, but the Removal Applicant relies on Little Wings for the proposition that “the ulterior purpose characterisation of [the] trade mark filing … meant that [the Removal Opponent] was not motivated by commercial purposes and fell outside the requirement to file the application with an intention in good faith …”

19. I was offered no explanation as to how the Removal Opponent’s trade mark application passed through to registration.   At the hearing, the ‘elephant in the room’ was any discussion of s 88 of the Act which provides that an aggrieved person may apply for rectification of the Register by removal or cancellation of a trade mark registration on the basis of, inter alia, any of the grounds on which the registration of the trade mark could have been opposed under the Act.

20. With that in mind a question arises as to whether the Delegate in Little Wings misdirected himself.  In particular, Edwards took the discussion further than Little Wings since the question Gordon J was poised to answer in the affirmative, and upon which the Delegate premised his discussion, was, on a wider reading of the case, rendered moot after Her Honour determined that the claims should properly be considered under s 88 of the Act[2].

    [2] See Edwards v Liquid Engineering 2003 Pty Ltd [2008] FCA 970 at [8].

21. In Liquideng Farm Supplies Pty Ltd v Liquid Engineering 2003 Pty Ltd, [2009] FCAFC 7, the Full Federal Court decided the appeal from Gordon J’s decision in Edwards and, as explained therein:

    Her Honour noted that the principal question then presented in those proceedings was whether evidence of a bona fide intention to use a mark for trading purposes was sufficient to demonstrate good faith within the meaning of s 92(4) of the Act, even when the applicant for registration gained knowledge of the mark as an employee of the owner of the unregistered mark, in circumstances tending to suggest a breach of fiduciary duty. Her Honour stated that, having considered the evidence, she would have upheld the appeal on the basis that, contrary to the submissions of the respondent, “good faith” for the purposes of s 92(4) required no more than a genuine intent to use the mark for commercial purposes as opposed to a token use or use for an ulterior purpose, and did not involve any element of honesty or subjective good intention. …

    However, her Honour formed the view, after some discussion, that LE2003 should have applied more promptly, and at an earlier stage, to expunge the registration by Mr Edwards under s 88 of the Act on the basis that he was not the owner of the unregistered marks. Her Honour refrained from giving judgment on the s 92(4) application so that a new application could be brought and the issue resolved in a more appropriate way. Her Honour granted leave to LE2003 to issue a s 88 application, and adjourned the s 92(4) application.

    On 24 September 2007 the application presently under appeal was brought under s 88 of the Act … [and] Her Honour noted that the s 92(4) application by Mr Edwards had been rendered moot by the institution of the new proceeding under s 88, and considered that even if that application was successful, the Court would not have granted the relief sought. In her Honour’s view, the application by LE2003 to the Registrar for removal of the trade mark under s 92(4) was not appropriate, and LE2003 should have brought its s 88 application in the first place. Accordingly, her Honour dismissed the application under s 92(4), but ordered the respondents to pay the costs of Mr Edwards of those proceedings on the basis that the application would have been successful on its merits.

22. The Full Court decision largely focused on how those costs should be attributed and in so doing there was some discussion of “good faith” but nothing which upset Gordon J’s opinion and, to the point, nothing which questioned Her Honour’s direction that the matter be re-instituted under s 88.

23. Whereas the Removal Applicant’s submissions position the critical issue in the matter before me as being whether the Removal Opponent’s use of the Mark on the Registered Goods is effectively disqualified because of the character of that use, it follows from the case law that the fundamental question is whether, as a Delegate of the Registrar, I have a mandate to determine that issue under s 92. The tested practice of this Office is that I do not[3] and the matter is put beyond dispute by Gordon J who in Edwards spelt out that the courts discouraged the use of s 92 for a purpose other than the removal of unused trade marks. Her Honour wrote:

    LE 2003 contends that such an approach would have the effect of discouraging parties from availing themselves “of the opportunities afforded by the TMA to resolve [trade mark disputes] by application to the Registrar, rather than by the more expensive alternative of Federal Court litigation.” That submission, while perhaps unobjectionable as a general proposition, is not appropriate here, where it was apparent thats 92 of the TMA was not apt to raise the real issue between the parties in this case. Parties should not be encouraged to bring inapposite claims on the grounds that they are cheaper; such a strategy may, as this case shows, backfire and if that occurs, it will result in more costs being incurred than if the best claim was brought in the first place. If a dispassionate analysis suggests that the client’s only realistic chance of success requires resort to a more expensive forum, then that is the advice an independent adviser should give. Whether the client in those circumstances wishes to pursue the claim is then a matter for the client. If it chooses not to follow that course or the advice, then it does so at its own risk. In the present case, that risk was realised in the form of the costs of the unsuccessful proceeding or application.

    [3] See, for example, the decision earlier this year in Deco Australia Pty Ltd v Aluwood Australia Pty Ltd [2022] ATMO 79 at [19].

    Decision and Costs

24. The Removal Applicant has been unsuccessful in its application for removal of the Trade Mark. Accordingly, I direct that registration 2055948 is to remain on the Register for all of the Registered Goods.  If the Registrar is served with a notice of appeal from that decision then the registration will be dealt with as the Court sees fit.

25. Costs normally follow the event but the Removal Opponent has made no request for costs and so I do not make any award as part of this decision.

    Debrett Lyons
    Hearing Officer
    Delegate of the Registrar of Trade Marks
    30 September 2022