Mantaport Pty Ltd v Brockman Research Pty Limited

[1996] ATMO 65

TRADE MARKS ACT 1955

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

Re:Opposition by BROCKMAN RESEARCH PTY LIMITED to an application under section 23 of the Trade Marks Act 1955 by MANTAPORT PTY LTD to remove, on the grounds of non-use, trade mark registration number 564266 from the Register

As set down in the transitional provisions of Part 22 of the Trade Marks Act 1995, the provisions of the Trade Marks Act1955 continue to govern these proceedings.  Accordingly, unless otherwise specified, the authority I refer to is the 1955 Act.

An application under s.23 of the Act to remove trade mark registration number 564266 from the Register was lodged on 26 April 1995 by MANTAPORT PTY LTD (the applicant). The application was opposed on 2 November 1995 by BROCKMAN RESEARCH PTY LIMITED (the opponent). The mark comprises the word KYPHI and is registered for the statement of goods “Cosmetics, toiletries soaps and perfumery; personal care products in this class” in Class 3.

The grounds relied upon by the applicant were that the mark had been registered by the applicant for registration without an intention to use it in good faith on the goods included in the specification and that there had been no use in good faith by the proprietor or a registered user, and also that, up to one month before the date of the s.23 application, a period of three years had elapsed during which time the mark had not been used by the registered proprietor or a registered user in relation to those goods.

The opponent submitted, in its notice of opposition to removal, that the mark had not been registered without an intention to use it in good faith on the goods included in the specification and that there had, in fact, been use in good faith by the proprietor or a registered user; and also that, up to one month before the date of the s.23 application, a period of three years had not elapsed during which time the mark was a registered trade mark and during which there was no use in good faith of the trade mark in relation to those goods by the registered proprietor or a registered user.

The evidence
The applicant lodged evidence in support in the matter.  This comprised two declarations by Pamela Violet Isaacs, dated 18 October 1995 (first Isaacs declaration) and 26 October 1995 (second Isaacs declaration), respectively.  In her first declaration, Ms Isaacs, the General Manager of the applicant, declared that her company had filed its own trade mark application, including the word KYPHI in class 3, unaware of the registration of the present mark.  She said that she had no knowledge of the KYPHI mark being used in Australia for the goods of the present registration.  She gave some details of her own market survey which failed to find use of that mark on the subject goods and also of telephone contact with a representative of the opponent.  In her second declaration (second Isaacs declaration), Ms Isaacs annexed two exhibits, the second of which was a copy of a report by a private investigator into whether there was any commercial use of the subject mark.

The opponent’s evidence in answer comprised declarations by Brian J. McLean, dated 15 January 1996 and Robert John Fernance, dated 28 November 1995. Mr McLean, the Director of Technical Research of the opponent, declared that the opponent had used the mark during the period 26 March 1992 to 26 March 1995 with respect to “hand and body gel”. He also said that the opponent had been continuously developing the KYPHI range of skin care products since 1990. Mr Fernance, the Public Officer of the opponent, declared that his company had used the mark in question from the 1980s, and within the period in dispute, in relation to hand and body gel, and that it had ongoing and continuous plans to expand its use to other personal care products. Annexed to his declaration were invoices which, he said, showed sales of goods by the opponent within the s.23 period and other material related to design work related to product packaging.

The applicant advised that it would not be serving any evidence in reply.  The opponent subsequently sought a hearing and the matter came before me, as the Registrar’s delegate, in Canberra on 4 October 1996.  Representing the applicant by telephone was Mr Peter Fisher of Fisher Adams Kelly, Patent and Trade Mark Attorneys.  Appearing for the opponent at the hearing was Ms Annette Freeman of Spruson & Ferguson, Patent and Trade Mark Attorneys.

Submissions

At the hearing, both attorneys made extensive submissions in the matter.  I have attempted to summarise here what I believe to be the main points raised.

Mr Fisher said that the applicant had not been aware of the subject mark’s presence on the Register and had selected the word KYPHI as part of its own trade mark because it was the name of a perfume developed in ancient Egypt.  After an examiner of trade marks had cited the subject registration against its own self-filed application, the applicant’s agent had conducted research which found no use of the mark by the opponent.  He said that this was the basis of the present application to remove it from the Register.  Because the applicant had not known about the present registration, it had started to export its own KYPHI goods to Singapore “about 18 months ago”.  He said that, because of the citation, it could not now expand its business activities based on goods bearing the mark.  Thus the applicant had been adversely affected by the present trade mark’s presence on the Register, establishing it as being a person aggrieved.  For support in this proposition, he referred to several cases, including the decisions in Powell’s Trade Mark 11 RPC 4 and Ritz Hotel Ltd v Charles of the Ritz & Anor (1988) 12 IPR 417.

Mr Fisher was critical of the opponent’s evidence, saying that it was insufficient in establishing that the present mark had been registered with an intention to use it in good faith or that it had been used by the proprietor or registered user for a specific three year period - Estex Clothing Manufacturers Pty Limited v Ellis & Goldstein Limited (1967) 116 CLR 254. He said that this evidence all went towards demonstrating that that the opponent had not yet launched its products under the KYPHI mark. The investigator’s report, included in the evidence, showed that the applicant was a chemical retailing agent owned by Hammersley Chemicals (Australia) Pty Ltd (Hammersley) and also having a relationship to Tri Nature Distributors (Tri Nature). All of these entities shared a common address. Tri Nature, a manufacturer and wholesaler, was involved in the multi level marketing of cosmetics from only 12 outlets around Australia. He said that the investigator had found that the opponent performed a research function in respect of certain body care goods, Hammersley manufactured them and Tri Nature was involved in their distribution. He said that there was nothing close about this arrangement, Hammersley being a holding company only, and that no evidence had been submitted regarding control of the use of the mark. One of Tri Nature’s agents had never heard of goods bearing the KYPHI mark. From this and other investigations made, the investigator had concluded that KYPHI goods might be under research but not yet sold. Thus, the applicant had met its onus to show that the mark had not been used.

With respect to the evidence submitted by the opponent in relation to its contention that it had used the mark in good faith, Mr Fisher said that Mr McLean, in his declaration, had said that his company had used the mark, during the critical period, on “hand and body gel”.  This was despite the fact that the invoices, purporting to show use, referred to Hammersley, an entity which had not been shown to be controlled by the opponent, or have a formal connection with that party.  In any event, this material could only impute use of the mark on washing preparations, being hand gels, which were not goods of the same description as toiletries and cosmetics.  He referred for support here to the case of Lever Bros, Port Sunlight Ltd v Sunniwite Products Ltd (1949) 66 RPC 84, where soaps and detergents had been found not to be goods of the same description as cosmetics.

Mr Fisher said that Mr McLean had declared that some products required formulation and testing (presumably before release). This may have been an attempt to show that “special circumstances” had prevented use of the mark but this fell far short of the requirements of s.23(4) and the criteria developed from the case law that such circumstances must be trade wide and not caused by the actions of the trader itself. He referred to several cases to support his submissions here, including an as yet unreported Office decision of 30 August 1996, Albert Goldberg and the Estate of Miriam Goldberg epouse Benaym (deceased), represented by Jean-Pierre Benaym on behalf of the heirs of Miriam Goldberg epouse Benaym v John Brown Hosiery Pty. Ltd., Columbia Gramophone Co Ltd's Trade Mark (1932) 49 RPC 483 and Aktiebolaget Manus v R J Fulwood and Bland Ltd (1949) 66 RPC 71. Mr Fisher said that, here, no trade-wide circumstances existed which might have prevented use, only an inference that self-imposed circumstances existed which had precluded sales of the relevant goods under the mark.

Mr Fisher also questioned other aspects of the opponent’s evidence, maintaining that much of the material in the declarations was uncorroborated and contradictory, including statements by the declarants and some of the exhibits which referred, respectively, to both “hand and body wash” and “hand gel”.  He said that this evidence did not show what the opponent’s goods were, or whether they were actually sold.  At best, it amounted to an intention to use the mark on some of the goods but nothing conclusive had been established, despite claims of use since the 1980s.  He said that this case could be distinguished from the situation in the Hermes trade mark, (1982) RPC 425, with respect to preparations for use during the critical period, because here there had been no attempt to advertise or offer the goods for sale.

Mr Fisher said the opponent had not discharged its onus of showing that the mark had been used and that there was no basis for the Registrar to exercise his discretion to maintain the status quo.  He said that the primary concern of the Registrar should be the public interest, which would best be served here by the removal of an unused mark from the Register.  He referred for support in this respect to the decisions in Carl Zeiss Pty Ltd's Appn (1969) 122 CLR 1 and the Ritz case.

He concluded his submissions by seeking costs in the matter in favour of the applicant.

In reply, Ms Freeman said that any comments which Mr Fisher might make about use of the mark over a 15 year period were irrelevant.  She said that the opponent needed only to show that use of its mark had occurred during the subject three year period - 26 March 1992 to 26 March 1995.  She said that it had clearly been established in the Estex case, supra, that an applicant for removal must show that it was a person aggrieved.  To do this, it was not sufficient for it to have to have an application for registration; it must show that it was disadvantaged in a legal or practical sense - Kraft General Foods Inc v Gaines Pet Foods Corporation 34 IPR 198. She said that the applicant had not, until this point, showed that it was a person aggrieved and had only produced, at the hearing, details of the subject registration being cited against its own mark and export use. The latter claim was not supported by any evidence.

She said that, in any case, the applicant had not discharged its onus to show non-use, its evidence falling far short of what was necessary to shift the onus to the opponent. She said that there were many defects in the applicant’s evidence, and questioned the worth of the Isaac’s declarations, especially regarding the report of the phone call made to the opponent’s premises and an alleged market survey of department stores which did not comprehend the “party plan” mode of selling employed by the opponent. All of this, she said, had little or no probative value in establishing non-use. She was particularly critical of the investigator’s report which, she said, was deficient in many ways including, most importantly, in addressing any alleged non-use during the relevant period under s.23. She referred for support here to the Econovent Trade Mark 6 IPR 92 and Prosimmon Golf (Aust) Pty Ltd v Dunlop Australia Ltd (1987) 9 IPR 425 cases with respect to the need for evidence to be sufficient to establish a prima facie case.

Ms Freeman said that it was unclear whether the applicant was pursuing its claim under s.23(1)(a), that the opponent had a lack of intention to use its mark in good faith. She said that there had been nothing shown by the applicant about a lack of intention by the opponent to use its mark. In contrast, the opponent’s evidence clearly showed its current preparations for use.

With respect to the applicant’s case under s.23(1)(b), that there had been no use by the opponent during the period in question, Ms Freeman said that the applicant had claimed that, if there had been use, it was only on “hand and body gel” and not the other goods included in the specification. However, the label included in the evidence showed that that the gel was a general body product. She said that there only needed to be shown some use on the goods during the period in question and this had certainly been done - certainly for the hand and body gel. With respect to the other goods covered by the mark, Ms Freeman said that, in the case of the Hermes trade mark, supra, preparations for use, such as had been carried out by the present opponent for other goods in the specification, had been found to equate to use in the course of trade sufficient to overcome expungement.  She said that the opponent’s evidence had not been intended to show that special circumstances had prevented the mark being used but that there had been a continuous move on its part to put its goods on the market.  This had been shown by the packaging design work commissioned by the opponent and in the printing of labels to place on the goods.  She submitted that nothing had been produced by the applicant to refute the opponent’s evidence showing these preparations for sale.

Ms Freeman said that it was obvious, from the applicant’s own evidence, that the opponent and Hammersley were inter-related and it was not fatal to the opponent’s case that Hammersley’s name appeared on the labels or invoices.  She referred to the decision of Aicken J. in Pioneer Electronic Corp. v Registrar of Trade Marks (1977) 17 ALR 43 where he found that use by an unregistered user was sufficient to defeat a non-use removal application, and also to the Ritz  case, supra, where McLelland J. found that the evidence showed that two parties there were an integrated business enterprise.  Ms Freeman said that this was the case in the present instance, where the opponent and Tri Nature were owned by Hammersley, each of these entities having different roles within their integrated structure.  With respect to whether control was being exercised in the use of the mark, Ms Freeman said that, such was the relationship between the companies, no one party could do something without the other arms of the organisation knowing.

Ms Freeman submitted that hand and body gel could be considered goods of the same description as those covered by the registration as they were all goods used in the upkeep of the body.  For support here, she referred to the Ritz case, supra, where it had been found that perfume and, dusting powder, body lotion and soap were goods of the same description as cosmetics.  She said that this was a more recent and authoritative precedent than the case of Lever Bros, Port Sunlight Ltd v Sunniwite Products Ltd, supra, which compared washing detergents and soaps with personal care products.  She said that consideration should be given to whether the nature, use and channels of sale of the goods were the same.

In relation to the residual discretion of the Registrar to leave the mark on the Register, Ms Freeman said that there were a great many grounds which would enable him to do this.  She said that the public interest would not be best served by the removal of a mark which had been used, and was increasingly being used, by the opponent on goods in the specification.  Such a removal would, because of this use, cause deception and confusion - especially if then used by the applicant on the same goods.  The opponent clearly had not abandoned its mark.  She said that the decision in the Hermes case, supra, showed that the Registrar could consider sales after the critical period in the exercise of his discretion.  She submitted that the Registrar should not lightly deprive a proprietor of its property, especially as the opponent here would suffer relatively greater disadvantage than the applicant if the mark was removed.  This was because it had used the mark on the goods and had made extensive preparations for further use - including research and the obtaining of labels.  Although the opponent had not advertised its goods during the critical period, it could point to actual sales.  On the other hand, the applicant may have used the mark but should not have, as it would have been infringing use.  She said that, as the later and improper user of a mark which had been registered and used by another party, the applicant should now not be allowed to proceed.

She concluded her submissions by seeking costs in the matter in favour of the opponent.

Discussion

Section 23 of the Act reads:

23. (1) Subject to this section and to section 93, a prescribed court or the Registrar may, on application by a person aggrieved, order a trade mark to be removed from the Register in respect of any of the goods or services in respect of which it is registered, on the ground-

(a) that the trade mark was registered without an intention in good faith on the part of the applicant for registration that it should be used in relation to those goods or services by him or, if it was registered under sub-section (1) of section 45, by the body corporate or registered user concerned, and that there has, in fact, been no use in good faith of the trade mark in relation to those goods or services by the registered proprietor or a registered user of the trade mark for the time being earlier than 1 month before the application; or

(b) that, up to 1 month before the date of the application, a continuous period of not less than 3 years had elapsed during which the trade mark was a registered trade mark and during which there was no use in good faith of the trade mark in relation to those goods or services by the registered proprietor or a registered user of the trade mark for the time being.

Person aggrieved

The threshold question, which needs to be resolved in a matter of an application under s.23 for removal of a registered mark, is whether the applicant is a “person aggrieved” in terms of that section of the Act. The applicant here has also applied for registration of a trade mark, number 644932 in class 3, for the word KYPHI and against which was cited the present registration under s.33 of the Act. Additionally, Mr Fisher said at the hearing, and I am willing to accept his word, that the applicant had commenced exporting its own KYPHI goods to Singapore about 18 months ago, not being aware of the opponent’s registration (with the possibility of infringing use). Ms Freeman was concerned that this information only came to light at the hearing but there is nothing in the legislation about when such revelations should be made. I am also aware that the expression, “person aggrieved” for the purposes of s.23(1) of the Act has no special or technical meaning and is to be liberally construed - Kraft Foods v Gaines Pet Foods, supra.  Given the combination of these factors, I am willing to accept that the applicant has demonstrated at least, “a reasonable possibility of being appreciably disadvantaged in a legal or practical sense...,” by the mark remaining on the Register - Kraft Foods v Gaines Pet Foods, supra, and Ritz case, supra. I therefore find that the applicant was a person aggrieved as at the time of applying for the present mark’s removal and was, accordingly, a proper applicant under the provisions of s.23.

Onus

It is well established that, under the Trade Marks Act1955, the onus of proof of the non-use of a trade mark rests with the applicant for removal - Estex case, supra, at 258 and 259:

It is for the applicant who seeks to have a mark removed to prove his case.  The onus is on him to show an absence of use in good faith during the period. ... slight evidence may suffice at this stage for the applicant has the task of proving a negative ... but ... when all the evidence is complete, the question is still, has the applicant proved his case?

However, if the applicant does succeed in establishing a prima-facie case of non-use, the onus in the matter shifts to the opponent to demonstrate that it has used its mark on the appropriate goods during the specified period, or that there are grounds for the favourable exercise of the Registrar’s discretion under s.23.

The applicant’s prima-facie case in this matter depends, in part, on an investigator’s report lodged as part of the evidence in support.  There, the investigator outlined inquiries made in relation to use of the mark and the relationship between the opponent, Hammersley and Tri Nature.  The report shows that the investigator had conducted historical company and Telecom listing searches which revealed the opponent’s relationship with the other two companies.  He also described telephone calls which he had made to Tri Nature’s head office, and to two of that company’s distributors who, reportedly, had not heard of KYPHI products.  Annexed to the report were copies of sales material distributed by Tri Nature.  None of this material mentions KYPHI products.  Another part of the applicant’s evidence is the declaration by Ms Isaacs who said that she had conducted a market survey of large department and chain stores, chemists, health shops and retail outlets which normally sell Class 3 goods.  Ms Isaacs also gave details of a phone call to an employee of the opponent who allegedly told her that KYPHI goods had not yet been released on the market.

All of this does not create a strong case for removal and is justifiably open to some of the criticism levelled at it by Ms Freeman. There are declarations by one individual only - albeit one exhibiting an investigator’s report. It would have been much more helpful if several independent people in the trade were prepared to declare as to their lack of knowledge of the mark. Ms Isaac’s “market survey” of conventional retail outlets for cosmetics would not have located use through party plan sellers. There is no mention of the critical period under s.23 - although the inference can be drawn that the applicant is alleging that no use was made of the KYPHI mark at all. However, some questions were raised in all of this as to whether the mark was used during the critical period and I do feel that the applicant’s evidence, taken together, is just sufficient in establishing a prima-facie case of non-use for the goods contained in the specification. The rules regarding evidence in such matters are not as strict as in a court of law and, as the applicant has the difficult task of proving a negative, I am satisfied that the information assembled is sufficient to shift the onus to the opponent to demonstrate use of its mark for the subject goods during the s.23 period. Alternatively, that party could show that there are grounds for the favourable exercise of the Registrar’s discretion under s.23 which would lead to the mark remaining on the Register.

With respect to the application for removal under s.23(1)(a), that the trade mark had been registered without an intention to use it in good faith on the goods included in the specification, there was nothing in the evidence to support this. Mr Fisher contended at the hearing that Mr McLean had only mentioned use on limited goods in his declaration. However, as both of the opponent’s declarants have sworn as to current preparations for use, this would seem to indicate that legitimate use was indeed being contemplated. Consequently, I do not think that this part of the applicant’s case can be sustained.

Use

Under s.23, the thing which must be used is a trade mark, and that term is defined in section 6(1) of the Act as:

(a)except in relation to Part XI, a mark used or proposed to be used in relation to goods or services for the purpose of indicating, or so as to indicate, a connexion in the course of trade between the goods or services and a person who has the right, either as proprietor or as registered user, to use the mark, whether with or without an indication of the identity of that person;

Mr Fisher has submitted that it is far from unclear who had used the mark if, indeed, it had been used at all, pointing out that all of the applicant’s evidence refers to Hammersley.  He has also said that nothing at all had been shown about any control over the mark’s use.  On the other hand, Ms Freeman has said that Hammersley and the opponent were so interlinked - with Hammersley being the holding company for the opponent, and both companies having the same directors and the same business address - that use of the mark by one equated to use by the other.  I am inclined to accept this view.  The opponent’s literature, included as part of the applicant’s evidence, goes towards explaining this relationship.  Whilst the question of who controls who in the arrangement is unclear, I think it is the case that the three companies, the opponent, Hammersley and Tri-Nature, act as different arms of the same entity.  I am of the opinion that, from the evidence, the relationship of these companies is akin to the “integrated business enterprise involving the manufacture and distribution of cosmetic, fragrance and toiletry products...,” as discussed by Justice McLelland in the Ritz case, supra, at 451. I therefore find that use of the mark on any of the goods by one party in the relationship can be attributed to the other.

I am not assisted, in coming to a conclusion in this matter, by the inconclusive evidence of use, proffered by the opponent, intended to show use on goods under the mark.  It can be inferred, from the invoices submitted by the opponent in its evidence, that if it was used at all, the mark was applied to only one good during the critical period.  These invoices only refer to the supply of KYPHI HAND AND BODY WASH.  Additionally, the labelling, said to be applied to the goods, only refers to KYPHI HAND GEL but does say that the product leaves the skin conditioned and protected, and that it may also be used as a hair shampoo.  A closer reading of the label indicates that the product is, essentially, a hand and body cleanser - albeit endowed with other qualities.  Its primary function, however, is to remove dirt, oils and greases from the skin.  Although I would have preferred to have been shown something more substantial indicating use, I am satisfied that the material comprising the opponent’s evidence is enough to show use on that good, sufficient to rebut the applicant’s not too convincing evidence supporting its prima facie case.  However, I cannot agree with Ms Freeman that use on a cleanser - in my experience usually found in dispensers in wash or shower rooms of workshops or factories - can normally be equated to use on the other goods in the specification.  I would think that this type of cleaner - despite its multitudinous uses - cannot be considered as a good of the same description as cosmetics, toiletries, perfumery and personal care products.  In my opinion, the nature, use and usual channels of sale of the cleaner and the other goods would, usually, be different.

However, having decided that such goods are not of the same description as the other items in the specification, there is also the possibility of a perception in the relevant market that there is a “family” of KYPHI products.  The label for the hand gel does claim that it can be used as a hair shampoo, a moisturiser and conditioner for the skin, and for medicated skin protection.  Therefore, it is possible that purchasers could infer a connection of this particular gel with a wider range of products intended for maintaining the body.

Discretion of the Registrar

The question of the residual discretion of the Registrar, in such cases as this, is well discussed in an Office decision, dated 21 August 1996, by Hearing Officer Homann in the case of an application by Britax Child -Care Products Pty Ltd to remove trade mark registration number 344486 in the name of Takata Kojyo Co Ltd (as yet unreported).  He said there that the discretion to remove or not to remove is a residual discretion; that is, when all the evidence is in, if a case for removal has been made out, is it nevertheless in the public interest that the mark should be removed, or should it remain on the Register?

That the Registrar has a residual discretion is now well established, though there was formerly some doubt.  As Kitto J said in  Re Carl Zeiss Pty Ltd’s Application, supra:

In Continental Liqueurs Pty Ltd v G F Heublein and Bro. Inc. (1960) 103 CLR 422 at 433, I noticed the question thus raised, but expressed no view upon it. In Estex Clothing Manufacturers Pty Ltd v Ellis and Goldstein Ltd (1967) 116 CLR 254, at pp 260, 261, Windeyer J indicated a tendency of opinion against the existence of a discretion to refuse an application for removal, but found no need to decide the point. I have now heard full argument upon it and have come to the conclusion that a discretion exists. As Lord Evershed pointed out in Re J Lyons & Co. Ltd.’s Application [1959] RPC 120, at p 130, the terms of the proviso to s26(1) of the Trade Marks Act, 1938 (U.K.), corresponding with those of the Australian sub-s (2), carry the implication that where the special facts there referred to are not shown the tribunal prima facie ought not to refuse the application; but as his Lordship said: “That is not to say that no discretion whatever is left by the use of the word “may”... Exceptional circumstances may arise...which would make it just to refuse the application even though the proviso were not at all called into play.”  This view seems to have been held consistently in England under successive forms of the removal section.

The present position is as expressed by McLelland J in the Ritz, case, supra:

The Court’s power to order rectification of the register under s22(1) and to order the removal of a trade mark under s23(1) are in each case of a discretionary nature. This is the natural and ordinary meaning of the words used and promotes the underlying policy of the Act by giving the court a sufficient degree of flexibility to give effect to public interest considerations. The existence of a discretion to withhold relief even if a ground for rectification or removal has been made out is also well established by authority: see ... as to removal, Re Application by Carl Zeiss Pty Ltd (1969) 122 CLR 1 at 5-6 and the earlier cases there referred to, and Astronaut [1972] RPC 655 at 672.

The proper approach under both ss22(1) and 23(1) is that if the condition of the exercise of the court’s power has been established, the entry of the mark should be expunged, or the mark should be removed, as the case may be, “unless sufficient reason appears for leaving it there”: cf Carl Zeiss at 11; Astronaut at 672.

Although the reference there is to “the court”, I think the decision is also applicable to the exercise of the Registrar’s discretion: cf Kitto J in Carl Zeiss: “... the tribunal prima facie ought not to refuse the application”, (my emphasis).

“The sufficient reason” for refusing to remove a mark from the Register is closely bound up with questions of public interest.  As Woodward J said, in Paragon Shoes v Paragini Distributors 13 IPR 323 at 345, in referring to rectification under s22 of the Act:

There are several points which emerge from this line of authority [ie Carl Zeiss, Astronaut and others mentioned].  The first is the importance of the public interest - whether anyone has been deceived or is likely to be if the mark remains on the register; whether, on the other hand, the public has an interest in the preservation of an established mark.  The second is the significance of an unimpeached title to the mark and its continuous use in good faith by the person entitled to it.  Finally, if the public interest is not adversely affected and such title and use are shown, then the technicalities or defects in legal formalities may be overlooked.

Thus, the discretion to refuse an application under s23 is a residual discretion to be exercised on the basis of all the evidence. If the applicant has made out its case for removal then the mark should be refused unless it can be shown that there are “special facts”, “exceptional circumstances” or that there is an overriding question of the public interest which demands that the mark should remain on the Register in the name of the present proprietor. The onus is clearly on a person who objects to the removal of a mark to show that those circumstances exist.

In the present case, I do not think that it can be claimed that any alleged lack of use was caused by “special circumstances in the trade” and I do not think that the opponent is claiming that there were any such conditions existing. However, it is the public interest which is the main determinant for the exercise of the Registrar’s discretion to remove or retain a trade mark on the Register. The applicant has claimed that the opponent did not use the mark on all, or at least some, of the goods listed in the specification during the non-use period. However, as I have said, its evidence is flawed in several respects. Conversely, the opponent’s case, in showing that sales of class 3 goods took place during the critical period, is also not strong. It has not supplied any evidence which categorically shows that anything outside of hand and body gel/wash was sold under the mark. However, it has lodged evidence of preparations for use of the KYPHI mark on a range of skin care products including the examples of design work for product packaging of skin cleaners, toners and moisturising creams; the product labels bearing the mark; and the invoice for the printing of cleanser/toner labels (which is dated within the s.23 period). However, these show preparations for use in the market rather than actual sales. Mr Brockman has declared that each product involves formulation and stringent testing. The opponent’s literature says that it is, “constantly researching the development of new products”. The preparations for the KYPHI range may, or may not, have taken place during the relevant s.23 period. It is not possible for me to easily decide on this, given the paucity of material available. Notwithstanding this, I think that the opponent has done just enough to show that, more likely than not, it made some sales of KYPHI hand and body gel during the critical s.23 period. As I have previously said, this gel is claimed to have other qualities - as a skin conditioner, moisturiser and shampoo - which means that it is possible that the relevant public might infer that the makers of KYPHI hand and body gel might also produce a complementary range of cosmetics, toiletries, et al. I am of the opinion that the opponent would have gained a reputation for sales of cosmetics and skin care products under different marks. As Mr McLean has declared, each product involves significant preparation for the market and this is time consuming. He says that such preparation has been in train, with respect to KYPHI skin care products, since 1990. Given the evidence that the company group, to which the opponent belongs, has a history and reputation for research, production and distribution of other skin care products, such preparations might have been taking place for goods under the KYPHI label.

As I have previously said, I am not totally convinced by the applicant’s prima facie case in showing non-use of the mark on all of the goods by the opponent.  Additionally, if, as Mr McLean has declared, KYPHI hand and body gel has been in the market place since the 1980s, then I think that, if it were to then appear on other products intended for use on the body, the relevant public might expect that these other items bearing the KYPHI mark would emanate from the opponent.  This could, in my opinion, lead to deception and confusion in the minds of purchasers, as to the origin of the goods, if the source was not the opponent.

Another factor which I have considered in coming to a decision in the matter is that the removal of a mark from the Register is something which should not be done lightly.  The opponent has clearly not abandoned its mark.  In my opinion, to deprive it of its registration when, according to its undisputed evidence, it has made extensive preparations for the release of more KYPHI body care goods, would disadvantage it to a greater degree than it would the applicant.  I have considered Mr Fisher’s claim made, at the hearing, that the applicant had started to export its own KYPHI goods to Singapore about 18 months ago.  However, the fact remains that, at that time, as at the present, the opponent had the word KYPHI registered as a trade mark for Class 3 goods.  Although it may have been unaware of the opponent’s mark in the “usual” market place, it would have been a relatively simple exercise for the applicant to first check the Register for conflicting marks before launching goods for export sales and thus possibly carrying out infringing use.

Decision

I have decided that, although the opponent has only shown that it has used the mark on some of the goods in the specification, the public interest would best be served by the mark remaining on the Register for all the goods for which it is registered.  I have therefore decided to exercise the Registrar’s discretion to refuse the application to remove the trade mark from the Register

Having so decided, I award costs in the matter to the opponent.

Ian Forno

Hearing Officer

18 December 1996