Mario Vesely and Vajda Australia Pty Ltd vVajda Group S.r.o.

[2016] ATMO 117

TRADE MARKS ACT 1995

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

Re:Opposition by Mario Vesely and Vajda Australia Pty Ltd to application under section 92 of the Trade Marks Act 1995 by Vajda Group s.r.o. to remove trade mark number 1354681(12) - VAJDA - in the name of Mario Vesely

Delegate:

Nicole Worth

Representation:

Opponent: Kenneth McInnes of IP Solved (ANZ) Pty Ltd

Applicant: Did not attend hearing or file written submissions

Decision:

2016 ATMO 117

Trade Marks Act 1995 – s 92 removal – s 92(4)(a) – use of trade mark inures to removal applicant – no relevant intention or use by trade mark owner – ground for removal established – registration to be removed.

Background

1. This decision is pursuant to an application to remove the below trade mark registration from the Register of Trade Marks for all of the goods in respect of which it is registered.

   Trade Mark:                   VAJDA (‘the Trade Mark’)

   Filing Date:  6 April 2010

   Owner:  Mario Vesely

   Goods:  Class 12: Kayaks; canoes; paddles for canoes

2. The application was made by Vajda Group s.r.o. (‘the Removal Applicant’) on 2 February 2015. It nominated one ground for removal under s 92(4)(a) of the Trade Marks Act 1995 (‘the Act’).

3. The owner of the registration, Mario Vesely, and another entity, Vajda Australia Pty Ltd, (collectively referred to as ‘the Removal Opponents’) filed a Notice of Intention to Oppose removal on 2 March 2015 and a Statement of Grounds and Particulars (‘SGP’) on 2 April 2015. The SGP asserts ‘Trade Mark is in use for the sale of paddles and has been in use ongoing’.

4. The Removal Opponents filed evidence in support of their opposition to removal on 29 July 2015. The Removal Applicant filed partial evidence in answer on 15 October 2015, and subsequently advised it would not file any further evidence in answer. The Removal Opponent did not file evidence in reply and has taken no further part in the removal proceedings.

5. Thereafter the Removal Applicant requested a hearing which took place before me, a delegate of the Registrar of Trade Marks, on 20 September 2016. Kenneth McInnes of IP Solved (ANZ) Pty Ltd represented the Removal Applicant.

Evidence

1. The evidence filed in this matter comprises declarations by the following persons (or, as discussed shortly, claimed to be by the following persons):

Evidence in support

Mario Vesely, ‘Sales Manager of Vajda Australia Pty Ltd’ and ‘Registered Trade Mark Owner’, with exhibits 1 to 10, dated 28 July 2015.

Evidence in answer

Christopher John Lee, trade mark attorney with Hodgkinson McInnes Patents [and now with IP Solved (ANZ) Pty Ltd], representatives of the Removal Applicant, with exhibits CJL-1 to CJL-11, dated 15 October 2015.

1. As a preliminary matter the Removal Applicant alleges that Mr Vesely’s declaration, although declared to be by him, is not actually by him. The signature is different to that shown in exhibits wherein his signature is present, and it is alleged appears to be that of Ms Porscha Epiha, the sole director and shareholder of Vajda Australia Pty Ltd and apparently Mr Vesely’s former de facto partner.

2. Having observed the signatures of Mr Vesely and Ms Epiha, both within the evidence and upon various documents within the Trade Mark’s file at IP Australia, I agree that it does appear Mr Vesely’s declaration was not made by him but rather Ms Epiha. I note further that his supposed declaration, dated 2015, states he is the sales manager of Vajda Australia Pty Ltd but according to an affidavit he filed in discontinued Federal Court proceedings he ceased that employment in September 2012.

3. There is therefore some merit to the Removal Applicant’s submission that the declaration purportedly by Mr Vesely ought to be given no weight. Nonetheless I have considered its contents in the interests of fully airing and determining the matter, and as will become apparent the declaration does not in any event establish that registration of the Trade Mark ought to be maintained.

4. The relevant facts and events outlined in the evidence are summarised below.

Removal Opponent’s evidence

1. The statements allegedly declared by Mario Vesely are:

   From 2010 I first used the Vajda trade mark for the sale of Sprint Kayaks, Canoes, Ocean Surfskis, Paddles, plus all related merchandise, accessories, events and sponsorships.

   Evidence attached to this declaration supporting the continued use of the trade mark is as follows:

   For evidence showing the purchase of products under the trade mark for the period 27/10/14 to 12/02/15 see exhibits 1-6.

   For evidence showing the sale of goods under the trade mark for the period 03/07/14 to 10/10/14 refer to exhibits 7-10.

2. Exhibits 1 to 6 comprise six separate invoices from the entity HANGZHOU KANGHUA BOATS CO., LTD, which is located in Hangzhou, China, issued to ‘Vajda canoes&kayaks Australia’. They are dated between 11 June 2014 and 12 February 2015. Two of them are dated after 2 January 2015 and are therefore not relevant.[1] All of the invoices are for ‘kayak paddles’, and they variously list also ‘logo version cost’, ‘logo version cost (stickers)’ and ‘small logo on shaft’. There is however no mention of what that logo is, nor any mention of the Trade Mark.

   [1] It is only use prior to one month before the date of the removal application which is relevant, to be explained shortly under the heading ‘Section 92(4)(a)’.

3. Exhibits 7 to 10 comprise four invoices issued by Vajda Australia Pty Ltd (headed ‘Vajda Canoes & Kayaks’) to four of its customers. All of the invoices list the item sold as ‘Vajda paddle’. They are dated between 3 July 2014 and 10 October 2014.

The Removal Applicant’s evidence

1. Firstly Mr Lee exhibits affidavits by Mario Vesely and Porscha Epiha that were filed in respect of now discontinued Federal Court proceedings brought by Vajda Australia Pty Ltd against the Removal Applicant’s current distributor (Australian Paddle Sports Pty Ltd) and others. A summary of the information contained in those affidavits is as follows.

2. Porscha Epiha is the sole director and shareholder of Vajda Australia Pty Ltd and incorporated the company on 12 April 2010. Mario Vesely was employed at the company as General Manager.

3. In 2010 Vajda Australia Pty Ltd commenced purchasing and importing VAJDA goods from the Removal Applicant, located in Slovakia, on what Ms Epiha declares was an exclusive basis. Ms Epiha declares that she was aware that the Removal Applicant was ‘the sole manufacturer of kayaks, crafts, surf skis and accessories marked with the word VAJDA’ and that her company was ‘the sole importer of those goods into Australia’. Commission rates were apparently agreed to informally via a telephone conversation between Mr Vesely and Marcel Vajda, one of the founders of the Removal Applicant.

4. In February 2011 Mr Vesely became aware that another person, Mr Justin Hocevar, owned the registered trade mark VAJDA in Australia (being the subject registration). He allegedly had a conversation with Mr Hocevar to the effect that Mr Hocevar would sell the trade mark for a certain sum of money. Mr Vesely declares that Mr Hocevar stated ‘I registered the trade mark ‘Vajda’ in Australia. I was a former importer of Vajda surf skis and kayaks from Vajda Group s.r.o. I am aware you are now the Australian exclusive importer of Vajda goods from Vajda Group s.r.o. As I own the trade mark I can assign it to you for [a certain monetary amount]’. Mr Vesely informed Ms Epiha and Ms Epiha negotiated the assignment of the Trade Mark from Justin Hocevar to Mario Vesely in return for monetary payment. Neither declarant states why the registration was put in Mr Vesely’s own name. The assignment eventually took place on 14 December 2011.

5. During 2011 Mr Vesely travelled to Slovakia for various meetings with representatives of the Removal Applicant, including for the purpose of negotiating and documenting the terms of an exclusive agreement.

6. Ms Epiha sent a written exclusive trading agreement to the Removal Applicant in February 2012, which was returned in March 2012 unsigned but with comments for amendments to be made to it. During March there were various communications with the Removal Applicant regarding the signing of the contract, however this never eventuated. Both Ms Epiha and Mr Vesely attest that they formed the view that the terms of the agreement were accepted by the Removal Applicant.

7. In May 2012 Mr Vesely commenced negotiations with two individuals - Messrs. Blundell and Greenwood, now of the Removal Applicant’s current distributor, Australian Paddle Sports Pty Ltd (‘APS’) - for them to purchase the business of Vajda Australia Pty Ltd. Due to these negotiations Mr Vesely did not cause Vajda Australia Pty Ltd to order any further shipments of goods from Vajda Group s.r.o. He declares he provided consent for Mr Blundell to contact Vajda Group s.r.o. for the purpose of determining whether Vajda Group s.r.o. would allow Messrs. Blundell and Greenwood to work with them if the business of Vajda Group Pty Ltd was sold. Mr Vesely also declares that he was led to believe by his discussions with Messrs. Blundell and Greenwood that they would purchase the business for $720,000.

8. In September 2012, according to Ms Epiha, the Removal Applicant ceased any further supply of goods without notice or reasons.

9. Mr Vesely also apparently ceased his employment with Vajda Australia in September 2012, although he attests that during that month he discovered he was locked out of ‘Vajda’s facebook account’, apparently having inadvertently supplied the passwords to Mr Blundell, and that during October 2012 he discovered that the website ‘vajdacanoes.com’ and ‘facebook’ page now displayed the logo of APS as the dealer for VAJDA branded products.

10. In October 2012 Mr Vesely telephoned the Removal Applicant to ask whether the Removal Applicant had signed an agreement with APS, which the Removal Applicant confirmed. Mr Vesely informed the Removal Applicant that he did not receive any payment from Messrs. Blundell and Greenwood for the purchase of the Vajda Australia Pty Ltd business, however the Removal Applicant responded that it was a matter for him to sort out with them The Removal Applicant further confirmed that APS were now the distributors of its goods.

11. In November 2012 Mr Vesely was involved in a serious traffic accident and sustained a number of injuries. On account of this he was unable to seek legal advice regarding ‘the trade mark and other issues’ until March 2013, when he commenced communications with lawyers to represent his interests. Additionally in April 2013 his de facto relationship with Ms Epiha ended, although they remained associated as professionally and as friends.

12. On 3 September 2014, Messrs. Blundell and Greenwood commenced proceedings against Mr Vesely in the Local Court of New South Wales (Waverly registry). Messrs. Blundell and Greenwood alleged that in about August and September 2012 they had entered into a contract with Mr Vesely to purchase the website ‘ and the rights to sell Vajda craft in Australia in return for monetary payment. According to them, they paid Mr Vesely three amounts of money which they evidenced by receipts signed by Mr Vesely, but he failed, neglected or refused to transfer the website and sale rights.

13. The outcome of the local court action is not stated, nor is the reason for the discontinuation of the Federal Court proceedings brought by Vajda Australia Pty Ltd against APS.

14. Lastly, in February 2015 Mr Vesely attended the ‘Manly Warringah club in Narrabeen’ for a club championship event of kayaks. He attests to seeing more than 100 kayaks and surf skis marked with the word VAJDA, and upon enquiries with various persons present found that some of them had been purchased from either Mr Blundell or Mr Greenwood.

15. The remainder of the Removal Applicant’s evidence is declared by its legal representative, Chris Lee of [then] Hodkinson McInnes Patents. He declares that the Removal Applicant first used the trade mark VAJDA in Australia as early as 2003 when the Removal Applicant’s predecessor, Vajda M&R, commenced supply of its goods to various canoe retailers and organisations, including the Australian Sports Commission and the Australian Institute of Sport. Invoices issued by the Removal Applicant to various Australian customers (including those just mentioned) are exhibited, dated between 2003 and 2009. (A number of purchase orders are also said to be exhibited, however the exhibit is illegible). One of the invoices, of 2007, is made out to Justin Hocevar for what appears to be a commercial amount of kayaks. Mr Hocevar subsequently applied to register the Trade Mark on 6 April 2010.

16. An archived website extract from the website ‘ shows that as at 2009 that website advertised the Removal Applicant’s goods available for hire and provided a link to the Removal Applicant’s website. A 2015 letter from the National Performance Director of Australian Canoeing Inc. states that ‘Australian Canoeing (AC) has had a long association with Vajda Canoes and Kayaks which dates back more than 10 years. Since 2004, through the Australian Government agency, the Australian Institute of Sport, or independently, Australian Canoeing or its athletes have purchased Vajda craft annually’.

17. In respect of Mr Vesely, Mr Lee declares that at the date the subject registration was assigned to Mr Vesely he was an undischarged bankrupt, having entered bankruptcy around January 2011. A Trustee was appointed on 31 January 2011 and pursuant to s 58 of the Bankruptcy Act 1966, the assets of the bankrupt vests with the Trustee. (In this regard I note that on 16 October 2014 the Australian Financial Security Authority wrote to IP Australia informing that the ‘Official Trustee in Bankruptcy’ wished to record a claimed interest or right in the Trade Mark, and that per s 58(1) of the Bankruptcy Act 1966 Mr Vesely’s interest in the Trade Mark was vested in the Official Trustee as an asset of the bankrupt estate. Subsequently, a Mr Juratowitch of Cor Cordis Chartered Accountants was nominated and appointed Trustee of the bankrupt estate, and his interest or right in the registration was recorded).

Section 92(4)(a)

1. Section 92(4)(a) of the Act relevantly provides:

   (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 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

2. Thus the allegation is that at the date registration of the Trade Mark was applied for, being 6 April 2010, the applicant had no intention in good faith to use, authorise use of, or assign the Trade Mark and at no time during the period of 6 April 2010 to 2 January 2015 (being one month before the non-use application was filed) did the registered owner use the trade mark in good faith in Australia.

3. Section 101 of the Act places the burden of rebutting the allegation upon the Opponent, and I proceed on the basis that the relevant standard of proof is the ordinary civil standard of the balance of probabilities.[2] There is also a discretion conferred by s 101 of the Act under which the Registrar may decide to remove a trade mark for all or only some of the goods and/or services identified in an application for removal, or to decide not to remove a trade mark even if the grounds for removal are established. If exercise of the Registrar’s discretion is sought, it is for the party seeking the exercise of the discretion to positively satisfy the Registrar that it is reasonable to do so.[3]

   [2] See for example Pfizer Products Inc v Karam [2006] FCA 1663, [6] to [26] and Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [132] to [133], albeit decided in relation to matters under s 52 of the Act.

   [3] Austin, Nichols & Co Inc v Lodestar Anstalt [2012] FCAFC 8, [44].

4. In relation to actions under s 92(4)(a), it has also been confirmed by the Full Federal Court of Australia that ‘s 92(4) of the Act requires no more than a genuine intent to use the mark for commercial purposes’ (as opposed to, for example, token use to defeat a non-use application) and does not involve any element of honesty or subjective good intention.[4] Accordingly, the question before me does not require an assessment of whether the applicant applied for the Trade Mark honestly and the Trade Mark has since been used with good intention. Rather, it requires an assessment of whether the Trade Mark has been genuinely used by its registered owner for commercial purposes.

   [4] Liquideng Farm Supplies Pty Ltd v Liquid Engineering 2003 Pty Ltd [2009] FCAFC 7, [51]-[57].

5. The Removal Applicant submits that it has used the Trade Mark in Australia continuously since 2003 and both the original applicant, Mr Hocevar, and the subsequent registered owner, Mr Vesely, acted as mere importers/distributors of the Removal Applicant’s goods (consequently the benefit of their use inures to the Removal Applicant). The Removal Applicant also submits that use has only been asserted by the Removal Opponents in respect of paddles, and that the Removal Opponents appear to claim actual use by Mr Vesely himself (although none is shown) and no claim to authorised use has been made.

6. With regard to the question of to whom does the benefit of use inure, I agree that the use of the Trade Mark in Australia by Mr Hocevar and Vajda Australia Pty Ltd (apparently also trading as ‘Vajda Canoes & Kayaks’) inured to the Removal Applicant. There is no statement directly from Mr Hocevar, however Mr Vesely declared that Mr Hocevar described himself as a former distributor of the Removal Applicant’s goods and was willing to sell the trade mark registration upon learning that another distributor had been appointed. I consider that at least a prima facie case has been established that Mr Hocevar’s intention on the day he filed the application for registration was merely to act as distributor of the Removal Applicant’s goods, as did Mr Vesely (discussed below), rather than as the actual source of the goods. To that end I consider the prima facie case required a response from the Removal Opponents to disprove the allegation, but none has been given (the Removal Opponents electing not to participate in proceedings beyond the evidence in support stage).

7. For his part Mr Vesely appears only to have ever sought distribution rights and the transfer of distribution rights (apparent from his conversations with Vajda Group s.r.o. in attempting to obtain a signed exclusive trade agreement, and from his subsequent consent for Messrs. Blundell and Greenwood to approach Vajda Group s.r.o to see if they could act as distributors). Nor does he ever appear to have attempted to use the Trade Mark in his personal capacity (as registered owner), but rather on behalf of Vajda Australia Pty Ltd. Ms Epiha also acknowledges that she was aware the Removal Applicant was the sole manufacturer of kayaks, crafts, surf skis and accessories marked with the word VAJDA and her company was the (allegedly) sole importer of those goods into Australia. The Removal Opponents have not made any assertions that they applied the Trade Mark to goods, that goods were manufactured on their instruction or on their behalf, or indeed that the Trade Mark identified Mr Vesely (or even Vajda Australia Pty Ltd) as the origin of the goods. Rather, the evidence demonstrates that what they have sought to protect is distribution rights and the Trade Mark identifies Vajda Group s.r.o. as the origin of the goods.

1. I refer in this regard to Estex Clothing Manufacturers Pty Ltd v Ellis & Goldstein Ltd[5] which states:

   The manufacturer who sells goods, marked with his mark, to a warehouseman, wholesaler or retailer does not, in my view, thereupon cease to use the mark in respect of those goods. The mark is his property although the goods are not; and the mark is being used by him so long as the goods are in the course of trade and it is indicative of their origin, that is as his products. Goods remain in the course of trade so long as they are upon a market for sale. Only when they are bought for consumption do they cease to be in the course of trade.

I note also that a similar finding was made under s 92(4)(a) in Sato Computers Pty Ltd v Shuttle Inc,[6] wherein the delegate stated:

I am not satisfied that the opponent has used the trade mark for the purposes of the Act. I refer to Estex Clothing Manufacturers Pty Ltd v Ellis and Goldstein Ltd (1967) 116 CLR 254, as authority for the proposition that sales by an Australian distributor of a foreign manufacturer’s goods and bearing the latter’s mark do not amount to use of the mark by the distributor for the purposes of a non-use opposition proceeding.

[5] [1967] HCA 51, [36]; confirmed by the High Court in E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2010] HCA 15.

[6] [2008] ATMO 89.

1. Accordingly I consider that the use that has been shown in Australia is not use as a trade mark by either the original applicant or the registered owner (or Vajda Australia Pty Ltd). To that end I am not satisfied that relevant use of the Trade Mark in Australia by has been established, other than by the Removal Applicant. It is therefore unnecessary for me to answer the questions of whether authorised use of the Trade Mark has been established (although I mention that I would be most unlikely to find on the evidence before me that it was) and whether use upon paddles was use upon goods similar to those of the registration.

2. The Removal Opponents have not made any submissions regarding the exercise of the Registrar’s discretion and there are no reasons apparent to me that would warrant it.

Decision and costs

1. I am not satisfied that the Trade Mark has been used in Australia in a relevant sense by the registered owner. Accordingly, the ground for removal under s 92(4)(a) is established and I direct that trade mark registration 1354681 be removed from the register in its entirety one month from the date of this decision. If the Registrar has been served with a notice of appeal before that time, I direct that removal of the registration shall not occur until the appeal has been discontinued or, in the event of a decision from the court, the registration be subject to its orders.

2. Costs usually follow the event and I see no reason to depart from that principle here. The Removal Applicant additionally asked that costs be awarded against the Removal Opponents jointly and severally, on account of Mr Vesely being bankrupt and therefore unable to meet debts upon him and these proceedings probably being directed by Vajda Australia Pty Ltd. The Removal Applicant also requested that costs be awarded at more than scale, on account of alleged reprehensible behavior by whichever entity has directed the opposition to the removal.

3. In respect of the second proposition, the Registrar only has powers to award costs within Schedule 8 of the Trade Marks Regulations 1995 and so I am accordingly bound by that scale. In respect of the first proposition, I am not aware of any precedent of the Registrar awarding costs jointly and severally, although I note that the Deputy Commissioner of Patents did so in George Stack v Davies Shephard Pty Ltd and GSA Industries (Aust) Pty Ltd [1996] APO 14 and a delegate of the Commissioner of Patents did so in Kingsford Ross Heylen v Davies Collison Cave [1994] APO 50. There does appear to be sufficient reason to doubt Mr Vesely’s capacity to pay costs. There also appears to be good reason to believe that the entity Vajda Australia Pty Ltd has been a directing influence, if not the directing influence, on these proceedings here. To that end I award costs against the Removal Opponents, being Mario Vesely and Vajda Australia Pty Ltd, jointly and severally in accordance with Schedule 8 of the Trade Marks Regulations 1995.

Nicole Worth

Hearings Officer

Trade Marks Hearings

15 December 2016