Mainstay International Hotels Limited v Choice Hotels International, Inc

[2002] ATMO 86

TRADE MARKS ACT 1995

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

Re:Oppositions by Mainstay International Hotels Limited to applications under section 92 of the Act by Choice Hotels International, Inc to remove trade mark numbers 648201(42) - MAINSTAY INTERNATIONAL - in the name of Mainstay International Hotels Limited

Date of Decision:  2 October 2002
Delegate:  Hearing Officer Mary Skivington
Representation:  Opponent: Mr Gint Silins of Cullen & Co.
Decision: S92 application refused

Background
Mainstay International Hotels Limited (Mainstay) are the owners of registered trade mark number 648201 which is registered for services in class 42 namely:

Hotel accommodation services in this class.

On 7 February 2000, Choice Hotels International, Inc., (Choice), allegedly a person aggrieved, filed an application for removal from the Register of this trade mark for all of the services for which it is registered, through its trade mark attorneys, Carter Smith & Beadle. The removal application was filed under the provisions of subsection 92 (4)(b) of the Trade Marks Act 1995. The relevant three year period for alleged non-use began on 7 January 1997 and ceased on 7 January 2000.  The application notes that there are no pending proceedings in a court, concerning the trade mark.

The declaration that accompanies the application states that an inquiry has been conducted to determine if the trade mark MAINSTAY INTERNATIONAL has been used by the registered owner, Mainstay International Hotels Limited, during the three year period immediately preceding one month before the date of the statutory declaration. The inquiry did not reveal any use of the trade mark MAINSTAY INTERNATIONAL in Australia. These findings support the application in terms of subsection 92(4) of the Act.

The removal application was advertised on 2 March 2000 and on 29 May 2000 notice of opposition was filed and served on behalf of Mainstay by its agent Cullen & Co, Registered Patent and Trade Mark Attorneys.
The grounds of opposition state:

1. The section 92 applicant is not a person aggrieved by registration of the trade mark.

2. On the day on which the application for the registration of the trade mark was filed, the registered owner intended in good faith to use, or authorise the use of, the trade mark in relation to the relevant services.

3. During the relevant period there has been use of the trade mark in Australia by the registered owner or an authorised user in relation to the relevant services.

4. Any failure to use, or authorise the use of the trade mark in relation to the relevant services during the relevant period was due to circumstances that were an obstacle to use of the trade mark during that period.

5. The Registrar in his discretion ought to refuse the application for removal.

In accordance with regulation 9.4, regulations 5.7 to 5.17 then came into operation, and the opponent, Mainstay International Hotels Limited, had three months in which to serve and file evidence in support of its opposition.

Following several extensions of time, all of the evidence in support of the opposition was filed and served on 28 August 2001.  As a consequence the evidence in answer fell due on 28 November 2001.  Choice sought and was granted an extension of time to 28 February 2002.  A second application for an extension of time to 28 May 2002 was opposed by Mainstay.  Both extension applications claimed extra time was required to complete and serve evidence in answer or to reach an amicable settlement between the parties.  Choice was invited to file submissions in support of its application for an extension of time but failed to do so and did not request a hearing on the matter.

Choice's failure to provide any information about its progress in preparing evidence in answer, and Mainstay's submissions, which indicated that no real negotiations were proceeding, resulted in the extension of time application being refused.

On 14 May 2002 both parties were advised that either party could now request a hearing.  Neither party has requested a hearing but Mr Gint Silins of Cullen & Co filed written submissions on behalf of Mainstay.  The matter has now come to me, as a delegate of the Registrar, to determine in accordance with section 101 of the Act.

Section 101 authorises the Registrar to remove the trade mark from the Register in respect of any or all of the goods or services to which the application relates providing the Registrar is satisfied that the grounds on which the application was made have been established.

In accordance with section 100 of the Act when an application is made under the provisions of subsection 92(4)(b) the onus falls to the opponent to rebut any allegation 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.

Evidence in Support

Evidence in support of the opposition is in the form of two statutory declarations.  The first of these with exhibits CMM1 to CMM6, was declared by Christopher Mark Mitchell a director of Mainstay International Hotels Limited.  The second declaration with exhibits LG1 to LG11, was declared by Lyall Guthridge who is the managing director of the Burleigh Beach Tower Apartment Hotel in Queensland and a director of Mainstay International Hotels Australia Pty Ltd.

The Mitchell declaration provides a brief history of Mainstay 's services to the hotel industry in New Zealand and its subsequent expansion to Australia.  Mainstay provides marketing, reservation and administrative support services to independently owned and operated hotels.  On 18 November 1999 Mainstay reached a formal agreement with the Burleigh Beach Tower Apartment Hotel in Australia to provide marketing, reservation and administrative support services.  The Burleigh Beach Tower Apartment Hotel was promoted as a Mainstay hotel in the travel industry publication Traveltrade, in editions dated 3 November 1999, 11 November 1999 and 1 December 1999.

Mainstay at the date of the declaration, 20 August 2001, provided services to 77 hotels throughout Australia. This use which has become quite substantial in the short period since the date of first use, is in fact subsequent to the relevant period for the non-use action.  Although it can have no bearing on my decision it does demonstrate how easily the gap between a serious intent on the part of the owner of a trade mark, to use the trade mark and actual first use of the trade mark can be unintentionally extended to thereby put the registration at risk

The Guthridge declaration confirms that use in Australia began in 1999 and includes exhibits showing the trade mark in use in Australia and a letter to Mr Guthridge from Mr Mitchell, dated 27 October 1999, which refers to an intention to 'discuss the enclosed agreement'.

Submissions

A person aggrieved

Mr Silins submitted that the applicant is not a person aggrieved as understood by subsection 92 (1) of the Act. There is no real evidence of its aggrieved status in the removal application, nor has any evidence been provided to support this assertion. He noted that Choice has filed an application for registration of the trade MAINSTAY SUITES & logo but as per Sackville J. in Kraft General Foods v Gaines Petfoods Corp (1996) 34 IPR 198, the filing of an application does not support the inference that the applicant intends to use the trade mark or that the applicant is a person aggrieved. On this point, Drummond J in  Woolly Bull Enterprises Pty Ltd v Reynolds 107 FCR 166, at paragraph 7, said:

An object of the 1995 Act is to create, by registration of trade marks, a species of tradeable property - see ss 21 and 22 - but only where such marks are connected with actual or contemplated trade in goods and services. It would be contrary to this object of the 1995 Act to accord standing to a person to attack a registered mark on the ground that that person had made his own application for registration of a conflicting mark where there was no proof that the person either had a trade in goods marked with the mark the subject of his registration application or had a bona fide intention to trade in such goods. Such a person cannot be said to be "appreciably disadvantaged in a legal or practical sense" by a mark he wishes to attack remaining on the Register, though he might wish to traffick in marks as distinct from to trade in marked goods.

Mr Silins then referred to the decision Lorelle Cotter v World Wrestling Federation Entertainment Inc [2002]ATMO 28 (28 March 2002) where the Hearing Officer J.McDonagh said:

The first ground of opposition cited by the opponent was that the applicant was not a person aggrieved. This put the applicant on notice that the matter was in dispute and was likely to be argued at the hearing. The applicant had an opportunity to provide evidence to support its claim in evidence in answer. However, the applicant did not do so.

Although the Act places the burden on the registered proprietor of a trade mark regarding the proof of use or intention to use, the authorities support the proposition that there is still an onus on the removal applicant to establish that he/she is an aggrieved person and therefore entitled to make an application under section 92. It seems to me that this is consistent with an underlying philosophy of the Act that the party best able to provide evidence of certain things is the party required to prove those things.

Under the provisions of section 92 of the Act the only person entitled to file a removal application is an aggrieved person. Since Mainstay filed its notice of opposition, Choice has been on notice that its entitlement to file a removal application was under challenge but it has made no effort to provide any evidence that might establish its status as an aggrieved person. Given that there is nothing on file to support Choice's claim, I find that it has failed to establish to my satisfaction that it is a person aggrieved by the registration of trade mark number 648201. As a consequence, I find that Choice is not a person entitled to file a removal application in respect of this trade mark.

Use of the trade mark

As I have found that the applicant is not a person entitled to file a removal application, there is no need for me to consider if Mainstay has used its trade mark in Australia, however for the sake of completeness, I note that negotiations to use the trade mark in Australia were under way at least as early as 1999.  In Sizzler Restaurants International Inc v Sabra International Pty Ltd, 20 IPR at 331, it was found that by means of market research and negotiations public use of the trade mark Sizzler had been achieved. I believe that the circumstances are similar here, so that the opponent's trade mark would have achieved public use some time before the opponent became operational in Australia, in the latter part of 1999, which in any case is within the relevant period for non-use.

Decision

As I have found that the applicant has failed to establish that it is a person aggrieved in terms of section 92 of the Trade Marks Act 1995, I refuse this application.

Mary Skivington
Hearing Officer
Trade Marks Hearings
2 October 2002