Lifinia Pty Ltd v Zero International Holding GmbH

[2001] ATMO 106

TRADE MARKS ACT 1995

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

Re:Opposition by LIFINIA PTY LTD to application under section 92 of the Act by ZERO INTERNATIONAL HOLDING GMBH & CO KG to remove trade mark number 521571(18) in the name of LIFINIA PTY LTD

Background

Trade mark registration 521571 is registered in the name of Lifinia Pty Ltd ("Lifinia").  That registration has effect from 23 October 1989.  It is for the trade mark ZERO, registered in class 18 of the International (Nice) Classification of Goods and Services for the following goods:

Handbags, backpacks, purses, wallets (not included in any other classes) and all other goods in Class 18 but not including metal or metal-look luggage or attache cases.

Part 9 of the Trade Marks Act 1995 ("the Act") provides for a person aggrieved by the registration to seek the removal of a trade mark from the register on the basis of non-use. Specifically, s 92(4) provides that applications made to the Registrar of Trade Marks:

... 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.

Such an application has been filed by Zero International Holding GMBH & Co KG ("ZIH"). ZIH has relied on both s 92(4)(a) and (b). When filing the application, on 21 June 1999, it sought removal of the trade mark for all of the goods for which it is currently registered.

Lifinia opposes removal of the trade mark from the register and has followed the opposition process, set out in part 9 of the Trade Mark Regulations, to file a notice of opposition. After it took that step, but before it filed its evidence in support, ZIH amended the scope of the newly-opposed application. Such amendments are allowable, particularly when requested early in the process, see the Trade Marks Office Manual of Practice and Procedure Part 49, Paragraph 8.  The net effect of the amendment is that Lifinia currently opposes the cutting back of its registration to relate to just "travelling bags". 

Lifinia has filed evidence in support of its opposition, this being the declaration of Becky Chiu with annexures A to H.  Through its lawyers, Pigott Stinson Ratner Thom, Lifinia then requested that the mater be heard.  I have been assigned, as a delegate of the Registrar of Trade Marks, to hear and decide the matter.

At the hearing, Lifinia was represented by Julia Baird of counsel, instructed by Pigott, Stinson, Ratner Thom, solicitors.  ZIH was represented by John Carroll, a registered Patent and Trade Mark attorney, of the attorney firm of Collison & Co, Adelaide.

Factual Background

The Chiu declaration shows that Lifinia is an importer and distributor of what I will call, for the moment, various sorts of soft-sided bags and luggage, including beauty cases and wetpacks.  It has clearly sold such goods under the trade mark ZERO since it "first adopted" that mark in 1989.  As to this, Ms Chiu has declared that "the Mark was first created in about October 1989 by Mr Ron Turner, a director of Lifinia".  There is no evidence from Mr Turner, and Ms Chiu is not specific about the scope of any goods in question; she merely refers to "products within its (Lifinia's) range of products".

Lifinia has sourced its products, branded as required and to its specification, from overseas manufacturers.  It also has a non-exclusive licence arrangement with Kays Bag Stores (NSW) Pty Ltd ("Kays").  Under this arrangement, Kays, the distributor of products imported by Lifinia, is also able to procure, independently, products that meet "the standard acceptable to Lifinia". 

Kays has, on the evidence, obtained products bearing the mark ZERO, and sold them, Ms Chiu declares, through its Kays Bags retail stores.  There is no direct evidence of sales by Kays Bags but there is evidence (annexure A) of sales from Lifinia to Kays. Annexures C to G of the Chiu declaration are bundles of invoices or orders relating to goods sourced by Kays, in the years from 1996 through to 1999, both inclusive, from suppliers other than Lifinia.  Annexures B and H are bundles of photographs, allowing me to understand the style, appearance and size of items described under style or catalogue numbers shown in the invoices.

Kays and Lifinia share common premises and Ms Chiu declares that this allows employees of Lifinia to exercise supervisory control over products traded by Kays.

Issues and decision

Preliminary - standing

Ms Baird attacked the standing of ZIH as a person aggrieved, noting that only such a person can bring an application under s 92. She relied on the meaning of that term, as set out in Ritz Hotel v Charles of the Ritz Ltd (1988) 12 IPR 417 and 454, and on Upjohn v Sanofi (1999) 42 IPR 576.

The importance of standing is clear.  This has been emphasized by the handing down, since the time of the hearing, of the decision in Woolly Bull Enterprises Pty Ltd v Reynolds, 51 IPR 149. There, at 151, Drummond J said:

[4] Though the public and not just the applicant for removal of a mark has an interest in non-used marks not being allowed to remain on the register, the right to apply for removal created by s 92 is not given to “any person”, only to “a person aggrieved”.

[5] The registrar’s delegate cited The Ritz Hotel Ltd v Charles of the Ritz Ltd (1988) 15 NSWLR 158; 88 ALR 217; 12 IPR 417; at 454 and said:

The applicant here has applied for registration of the word trade mark RAGING BULL on application No 721838 and the statement of goods, “Beverages in this class including beers” in class 32. The present trade mark has been cited as a bar to the registration of application No 721838 and the opponent here has also accused the applicant that it is in breach of WBE’s registration. Accordingly, I find that the applicant is such a person and qualifies to apply for removal of the present trade mark from the register.

[6] I do not think that the registrar was correct in holding that if an applicant for trade mark registration is barred by an existing registration that, without more, means he is a “person aggrieved” with respect to the latter mark for the purposes of s 92. In The Ritz Hotel Ltd, it was said at 454 that a “person aggrieved” in the present context:

... 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 register remaining unrectified...

I think I should respectfully note that the registrar's delegate had in fact, in the case before Drummond J, given weight also to the fact that the non-use applicant had been threatened with infringement action.  The delegate was thus quite sensitized to the fact that the non-use applicant was "appreciably disadvantaged" in a legal sense:  if there is alleged infringement, there is, at the very least, an allegation by a trade mark owner that there is a conflict over the use of a similar trade mark by the alleged infringer. 

My point, however, in noting the words of Drummond J is simply to show that, in what follows, I keep the importance of standing, and its necessary attributes, firmly in mind. Standing is not one of the "grounds" set out in s 92(4). Rather, it is a preliminary and essential qualification of the non-use applicant. Any opponent who seeks to have a non-use application refused on the basis of lack of standing needs to bring the matter into contest in, at least, the notice of opposition. It seems to me that if an opponent does not mention the matter in the notice of opposition, or, having done so, omits to rely on it at hearing, it would be at best redundant, and at worst unfair, for the registrar to instigate, at the final hearing, an inquiry into the matter. Here, Lifinia has based no part of its opposition, up until the time of the hearing, on the question of standing. Procedural fairness now requires me to take the standing of ZIH as sufficiently verified by its making of the application under s 92.

Substantive

92(4)(a): no intention to use and no use up to 21 May 1999.
Ms Baird argued that the opponent, in showing use of the trade mark, had done sufficient to support the existence of an intention to use.  The making of an application is taken to be some evidence of an intention to use: Aston v Harlee Manufacturing Co 103 CLR 391 at 401. Ms Baird noted that, in Le Cravatte di Pancaldi Srl v Camiceria Pancaldi and B Srl, 45 IPR 533, I took that earlier precedent at full value when augmented by use soon after filing. Similarly, Hearing Officer Forno said, in Structureco Inc v Starite Distributors Pty Ltd, 49 IPR 209:

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.

However, in the present case, there is no direct evidence of use prior to mid-1996.  Ms Chiu refers to the adoption of the mark by Mr Turner, a Director of Lifinia, but it is quite arguable that the act of adoption she refers to was no more than the filing of the application for registration.  There is no evidence about the intention of the applicant at the time.  I do not believe that the making of an application, followed by the lapse of a period of nearly seven years from the date of filing in 1989, where there is neither evidence of use nor any explanation of that lack of evidence, can meet the onus on Lifinia to make at least some case for the existence of the necessary intent.

That need not be fatal. An application under s 92(4)(a) is based on two essential elements: in simple terms, lack of intent coupled with lack of use.  Both allegations are necessarily made whenever an application is filed under the provision in question.  Ordinarily, this would require the applicant for removal to make the necessary case, as was done under the generally comparable terms of s 23(1)(a) of the former 1955 Act.  However, the burden of proof, under the 1995 legislation, is reversed.  Therefore, the elements are both taken to have been established unless successfully rebutted.  Rebuttal is dealt with in s 100.  The relevant part of this reads (emphasis added):

100.(1) In any proceedings relating to an opposed application, it is for the opponent to rebut:

(a)       any allegation made under paragraph 92(4)(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 opposed application relates (relevant goods and/or services); or

(b)       any allegation made under paragraph 92(4)(a) that the trade mark has not, at any time before the period of one month ending on the day on which the opposed application was filed, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services;

I think that the proper reading of s 100 is that a rebuttal under s 100(1)(a) is an alternative to rebuttal under s 100(1)(b). One or the other, but not necessarily both, should be done. Lifinia has failed entirely to convince me with respect to s 100(1)(a) and therefore the fate of its registration initially hangs on use. If there has been use at any time up until 21 May 1999, the attack under s 92(4)(a) must fail.

It will be convenient, therefore, to leave s 92(4)(a) at this point. I will deal with the more specific attack under s 92(4)(b), which can initially be deflected only by showing use, or use in good faith, within a defined three year period. The results of that decision will therefore also resolve the matter under s 92(4)(a).

92(4)b: no use, or no use in good faith, in the period 21 May 1996 to 21 June 1996.

Section 100 also deals with rebuttal of an allegation made on this ground.

100.(1) In any proceedings relating to an opposed application, it is for the opponent to rebut:

...

(c)       any allegation made under paragraph 92(4)(b) that the trade mark has not, at any time during the period of 3 years ending one month before the day on which the opposed application was filed, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services.

It is clear, and clear to both parties, that this trade mark has been used for some, but only some, of the goods covered by the registration.  Ms Baird conceded that the registration runs to sausage casings and saddlery.  Such goods are clearly foreign to the business of the owner.  Ms Baird conceded that there has been no use on these "different" goods.  Essentially, the current debate is not about such goods.  It is about the appropriateness of a restriction of the goods, and if so, to what scope.

Ms Baird noted that the goods on which the opponent has used its mark are:

Travel handbags, travel bags, sports bags, backpacks, suitcases, wetpacks, trolley cases, briefcases, beauty cases, carry bags, carry-ons, totes, overnight bags, cabin bags, garment bags and barrel bags.

None the less, her argument is that the registration should be retained for all of the goods.  Predictably, ZIH is not of that view.

The inquiry is to be in terms of s 101.  As far as they affect the Registrar of Trade Marks, rather than a court, the relevant provisions are as follows:

101.(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.
...

(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.

I will leave s 102 aside as it relates to the situation where there is evidence of localised use of a trade mark by the non-use applicant.  This is not such a case.

Mr Carroll, for ZIH, argued firstly that "travelling bags" is an appropriate term, and a generous one as far as its scope goes, one used by the International (Nice) Classification of Goods and Services.  That last is true but, as Ms Baird argued the case, items such as C8031, shown in the Chiu declaration, are small hand carrybags, certainly useable as handbags, and there is also use on wetpacks and beauty cases.  Those, on the plain meaning of the words, are not travelling bags.  On the other hand, I do not agree that goods of the type of C8031 are ordinarily described as handbags.  They may be used as a handbag by those who are not fashion conscious, or who have established their own unilateral fashion trend, but I think that goods of this nature can better be covered by others of Ms Baird's descriptors.  I accept Mr Carroll's point that a bag of a type such as C8031 is equally amenable to being called a shoulder bag and would thus be within the scope of "travelling bags".  Ms Chiu herself goes no further than describing the item as a "travelling handbag".

Ms Baird tendered extracts from the Macquarie Dictionary to show that various others of Lifinia's goods were able to be described as "purses", "handbags" or "wallets", terms that appear in the present statement of goods.  However, I take Mr Carroll's point on this issue.  For all that Ms Baird may be right, the question is: "Is there a better description for them that will not embrace other items?"

Mr Carroll noted that none of the soft-sided goods sold by Lifinia within the relevant period were "high fashion" items.  Ms Baird was very critical of this, and I agree that it is largely a matter of subjectivity and personal taste, rather than an attribute that the goods can be said to either clearly possess or not possess.  Ms Baird said that it would be undesirable to see the registration held by Lifinia sapped of value by the drawing of such fine distinctions.  Ms Baird reminded me of the undesirability of making abstract distinctions or restrictions within the scope of a registration.  Here she referred to McHattan v Australian Specialised Vehicle Systems Pty Ltd, (1996) 34 IPR 537 at 544.

Mr Carroll distinguished that case on its facts.  He did not suggest that the decision here was to be made on an arbitrary basis by reference to, for example, weight.  Here, he argued that the decision was a practical one, and that the line that needed to be drawn was authorised by common sense.

Mr Carroll also noted that none of the goods on which the mark was used by Lifinia were "leathergoods".  If by this he means that none of them comprise any substantial amount of leather, he appears to be correct.  However, I think the term is sometimes used loosely, to indicate those goods that are sold in the leathergoods section of a department store.  This is a personal opinion.  I have not had the advantage of seeing any evidence that might have come into being if the matter had been canvassed earlier in the opposition process.

Both sides put to me somewhat abstract arguments about the consequences, for entirely hypothetical third parties, of any amendment of the registration.  Both advocates noted that the rights given under s 120, the infringement provision, are enforceable, in some circumstances, beyond the limit of the goods actually specified in the registration.  There was discussion also of the provisions of s 44 and of the specified acts in s 122 that do not constitute infringement.  At the end, I accept Mr Carroll's view, that it would be double-dipping to allow Lifinia to retain a "buffer-zone" of goods, within its registration but on which it has not shown use.  The clear intention of the legislation is that an unused trade mark should be removed.  If I am to use my discretion to leave the mark on the register for goods on which it has not been used, the reasons for doing so will need to be clear, rather than hypothetical.

It was one of Ms Baird's arguments that the possible infringement position is not a good guide to the restriction of property in a registered trade mark.  I agree with this.  However, the determination of a non-use application is not about the restriction of property so much as an assessment of whether the statutory requirement, use, justifies the continuance of the registration.

Conclusion

Partial removal

I direct that the trade mark be removed from the register for some goods, such that its scope becomes:

Travelling bags including sports bags, backpacks, suitcases, wetpacks, trolley cases, briefcases, beauty cases, carry bags, carry-ons, totes, overnight bags, cabin bags, garment bags and barrel bags; wetpacks; beauty cases; none of the aforesaid being metal or metal-look luggage or attache cases.

This amendment is to be effected after one month of the date of this decision unless, within that time, the Registrar of Trade Marks is served with a copy of a notice of appeal.  In such an event, I direct that the registration not be restricted until such time as the appeal is either discontinued or dismissed.

Costs

ZIH in effect conceded, when it amended its application to no longer seek removal in respect of travelling bags, that it was unlikely to succeed in its original goal, the complete removal of the registration.  Mr Carroll put it to me that only costs up to the date of the amendment should be determined by that concession.  Costs in subsequent events should follow the cause in the usual way, he suggested.  His client had been successful in winning a major restriction of the registration.

Lifinia, for its part, was obliged to oppose the non-use application when it was filed in the initial terms, or else lose the registration outright.  Even after the amendment, Ms Baird argued that the non-use opponent had shown use of the trade mark on goods broader than "travelling bags". 

On the one hand, the success enjoyed by ZIH has been considerable.  What was once a broad registration for a wide range of disparate goods is now to be substantially cut back.  On the other hand, the success in relation to sausage casings, parasols etc appears to be really more of a coincidence than anything.  The fact that the opposition was not settled between the parties after the amendment shows that, in reality, the cause was not extraneous goods such as sausage casings, but the sufficiency and appropriateness of the description "travelling bags".  In this, ultimately, Lifinia has been vindicated, both in its decision to oppose and its subsequent continuance of the opposition to removal.

I therefore direct that Zero International Holding GMBH & Co KG pay to Lifinia Pty Ltd the latter's costs in terms of the official scale.

Terry Williams
Hearing Officer

31 October 2001