Michelle Herbert and Paul Staunton v Jo Schmid

[2023] ATMO 19

TRADE MARKS ACT 1995

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

Re:Opposition by Michelle Herbert and Paul Staunton to an application under section 92 of the Trade Marks Act 1995 (Cth) by Jo Schmid for removal of trade mark number 1878383 (25) – SALTIES – in the name of Michelle Herbert and Paul Staunton

Delegate:

Nicholas Smith

Representation:

Opponent: Self-represented

Applicant: Self-represented

Decision:

2023 ATMO 19

Trade Marks Act 1995 (Cth) - section 96 opposition to s 92(4)(a) application for removal – intent to use inherent in filing of Trade Mark application – opponent asserts its intention at the filing date to use the Trade Mark – evidence of actual use of the Trade Mark for the Registered Goods – Trade Mark to remain on Register in its current form

Background

1. This decision is pursuant to an application made on 23 September 2021 under s 92(4)(a)[1] of the Trade Marks Act 1995 (Cth) by Jo Schmid (‘Applicant’) to remove the trade mark detailed below from the Register of Trade Marks.  The application is made in respect of all the goods for which the trade mark is registered, that is, the application is for complete removal of the trade mark.

   [1] The application was initially made under ss 92(4)(a) and (b) of the Act however the application was subsequently amended to remove reference to s 92(4)(b).

Registration No.

1878383

Lodgement date

11 October 2017

Goods

Class 25: Apparel (clothing, footwear, headgear)

 (‘Registered Goods’)

Owner

Michelle Herbert and Paul Staunton

Trade Mark

SALTIES

(‘Trade Mark’)

2.  Unless otherwise indicated, any references to sections or regulations in this decision are references to sections or regulations of the Trade Marks Act 1995 (Cth) (‘Act’) or the Trade Marks Regulations 1995 (Cth) (‘Regulations’), respectively.

3.  Michelle Herbert and Paul Staunton (collectively ‘Opponent’) have opposed the application to remove the Trade Mark, filing a Notice of Intention to Oppose removal on 17 December 2021 and a Statement of Grounds and Particulars (‘SGP’) on the same day.  The Applicant filed a Notice of Intention to Defend on 21 March 2022.

1. The Opponent subsequently filed evidence in support of its opposition to removal (‘EIS’).  The Applicant filed evidence in answer (‘EIA’) and the Opponent filed evidence in reply (‘EIR’).  This material will be discussed in more detail below.

   5.  Once the time allowed for filing evidence had ended the parties were given an opportunity to request a hearing in this matter or a decision without hearing.  The Opponent requested that the matter proceed to a decision without hearing and paid the appropriate fee.  As a result the matter has been allocated to a delegate of the Registrar for a decision based on the written record.

   6.  I am a delegate of the Registrar and the matter has been allocated to me to decide, which I have done, on the basis of the material referred to above and the evidence listed below:

   EIS

   • Declaration by Michelle Herbert and Paul Staunton, the Opponent and owners and directors of Salties AU Pty Ltd, dated 30 May 2022 (‘Herbert/Staunton 1’) together with Annexures A to S.

   EIA

   • Declaration by Joanna Schmid, the Applicant and also director and owner of Salti Australia Pty Ltd, dated 21 August 2022 (‘Schmid declaration’) together with Annexures A to P.

   EIR

   • Declaration by Michelle Herbert and Paul Staunton, dated 24 September 2022 (‘Herbert/Staunton 2’) together with Annexures A to D.

   The Relevant Provisions

   7. Part 9 of the Act deals with removal of trade marks from the Register on account of non-use. In respect of this matter s 92 relevantly provides:

   92  Application for removal of trade mark from Register etc.

   (4)An application under subsection (1) or (3) (non‑use application) may be made on either or both of the following grounds, and on no other grounds:

      (a)  that, on the day on which the application for the registration of the trade mark was filed, the applicant for registration had no intention in good faith:

   (i)  to use the trade mark in Australia; or

   (ii)  to authorise the use of the trade mark in Australia; or

   (iii)  to assign the trade mark to a body corporate for use by the body corporate in Australia;

   in relation to the goods and/or services to which the non-use application relates and that the registered owner:

   (iv)  has not used the trade mark in Australia; or

   (v)  has not used the trade mark in good faith in Australia;

   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. The onus of rebutting an allegation of non-use lies with the Opponent. This onus is articulated in s 100 which provides, relevantly to this matter:

   100  Burden on opponent to establish use of trade mark etc.

   (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; or

   […]

   (3) For the purposes of paragraph 1(b), the opponent is taken to have rebutted the allegation that the trade mark has not, at any time before the period referred to in that paragraph, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services if:

   (a) the opponent has established that the trade mark, or the trade mark with additions or alterations not substantially affecting its identity, was used in good faith by its registered owner in relation to those goods or services during that period; or

   [...]

3. I proceed on the basis that the standard of proof is the ordinary civil standard being on the balance of probabilities.[2]

   [2] Pfizer Products Inc. v Karam [2006] FCA 1663 (Gyles J) and more recently: Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [133] (Besanko, Jagot and Edelman JJ) in respect of oppositions under s 52 of the Act.

4. In accordance with s 101, I may decide to remove the Trade Mark from the Register for all or some of the goods identified in the application for removal, or if satisfied it is reasonable to do so, decide not to remove the Trade Mark even if the grounds under which the application for removal was made are established.

   Opponent’s Evidence

5. The relevant claims/statements in Herbert/Staunton 1 and Herbert/Staunton 2 are summarised below.  I note that much of Herbert/Staunton 2 consists of submissions in response to the statements and submissions made in the Applicant’s evidence and are not necessary to summarise here:

   ·     In 2015 the declarants entered into a business partnership and designed clothing bearing the Trade Mark.  In 2017 they registered the business name Salties Au.  A production order for their clothing was entered into in 2017.   On or around 16 February 2017 the Opponent established a website at the domain name salties.com.au.

   ·     On 9 October 2017 the declarants incorporated the company Salties Au Pty Ltd and entered into an informal oral licence arrangement for use of the Trade Mark with Salties Au Pty Ltd.  Salties Au Pty Ltd took over operation of the Facebook and Instagram pages set up by the declarants upon its incorporation.

   ·     As at the time the Trade Mark application was filed (11 October 2017 (‘relevant date’)), the declarants (Opponent) did have the intention to both use and authorise the use of the Trade Mark in relation to the Registered Goods.

   ·     Salties Au Pty Ltd designed clothing bearing both the Trade Mark and a separate logo (registered as trade marks 1762261 and 1915405) (‘Salties Nation Logo’) in 2017. 

   ·     The Opponent has sold items of clothing and apparel bearing the Trade Mark and the Salties Nation Logo, as evidenced through invoices dated March and April 2018.

   ·     The Opponent’s ability to use the Trade Mark has been limited by the coronavirus pandemic and the government imposed lockdowns and travel restrictions.

6. The Annexures to Herbert/Staunton 1 contain examples of the design of apparel bearing the Salties Nation Logo, photos of the finalised apparel (t-shirts) bearing the Salties Nation Logo, Facebook and Instagram pages bearing the Trade Mark and handwritten invoices dated 2018 to Salties Au Pty Ltd for the sale of t-shirts that are claimed to bear the Trade Mark (but may in fact bear the Salties Nation Logo).

   Applicant’s Evidence

7. The material in the Schmid declaration is difficult to summarise as much of it relates to issues that are not relevant to consideration of an application under s 92(4)(a). In particular the declaration canvasses the following issues in detail which I have not summarised as they are not relevant to my decision:

   ·     Whether or not the Opponent was using the Trade Mark at the date on which the application for removal was filed; and

   ·     The interaction between the Opponent and the Applicant including the decision of the Opponent not to provide consent for the Applicant’s trade mark application. 

8. The relevant claims/statements in the Schmid declaration can be summarised as follows:

   ·     The evidence of the Opponent’s use of the Trade Mark is limited as their evidence of sales is hand written and not certified and they have not filed detailed financial statements;

   ·     The Opponent has not set out a detailed business website, address or contact details which indicates that they were operating an active business;

   ·     The Opponent’s t-shirts were not designed using the Trade Mark – rather they displayed the Salties Nation Logo; and

   ·     Some of the Opponent’s evidence of use of the Trade Mark postdates the date on which the application for removal was filed.    

9. The Annexures to the Schmid declaration contain posts from the Opponent’s social media pages which the Applicant submits suggest that the Opponent is not actively offering any apparel for sale as well as further photos from the Opponent’s social media pages which indicate that the Opponent’s t-shirts in fact display the Salties Nation Logo and not the Trade Mark.

   Discussion

10. Though the onus is, in terms of s 100, on the Opponent in this matter, that onus is not particularly arduous.  In Aston v Harlee Manufacturing Co[3] Fullagar J observed:

    […] the making of the application itself is, I think, to be regarded as prima facie evidence of intention to use. I cannot think that the Registrar is called upon to institute an inquiry as to the intention of any applicant, and I think that, on … a motion to expunge, the burden must rest on … the person aggrieved, of proving the absence of intention. Again, I do not think that “intention” in this connexion ought to be regarded as meaning an intention to use immediately or within any limited time.

    [3] [1960] HCA 47; (1960) 103 CLR 391; [1960] ALR 605; 34 ALJR 242, [21].

11. While this observation was made in proceedings under the Trade Marks Act 1955 (Cth), where the onus was on ‘the person aggrieved’ (that is, an applicant for removal), the principle has been held to be sound under the Act. In Structureco Inc v Starite Distributors Pty Ltd[4] the Registrar’s delegate Mr Forno said:

    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. The onus should then shift to the removal applicant to support its case - perhaps by the production of some evidence which might support a circumstantial case of a lack of good faith, or by some other means.

    [4] [2000] ATMO 31.

12. Justice Wilcox went further in Nikken Wellness Pty Ltd v van Voorst:[5]

    I do not think [the Opponent] bears any onus in relation to the application for removal. It is for the applicant for removal […] to persuade the Court that the requirements of s 92(4) are satisfied.

    [5] [2003] FCA 816, [59].

13. I accept many of the criticisms made by the Applicant of the Opponent’s evidence, including that the Opponent’s business was very limited, and concerned apparel that bore the Salties Nation Logo rather than the Trade Mark.  Notwithstanding that, I am satisfied by the Opponent’s evidence of the following:

    ·     That from 2015 (and certainly at the relevant date) the Opponent intended to build an apparel business around the Trade Mark and took active steps to design and arrange the manufacture of clothing that was intended to be sold under the Trade Mark;

    ·     That the Opponent has given sworn evidence that at the relevant date it intended to use the Trade Mark for the Registered Goods and/or authorise the use of the Trade Mark for the Registered Goods; and

    ·     That there is evidence, albeit limited, of actual use of the Trade Mark on the Opponent’s social media pages (specifically Facebook) which I accept were set up to promote the Opponent’s apparel business.  

14. This evidence and specifically the second bullet point is sufficient to satisfy the limited onus placed on the Opponent under s 100. However, it is necessary to consider one additional issue.  At the relevant date, the Opponent’s business was being conducted by Salties Au Pty Ltd and the Opponent’s social media accounts had been transferred to that company.  The Opponent indicates that it had set up the company and had entered into an oral licence with the company but otherwise provides no details of the licence, the formal structure of the company or the degree of practical control the Opponent exercised over the use the Trade Mark by the company.

15. Under s 8, authorised use requires use under the control of the trade mark owner and the requirements of establishing authorised use have been set out in Lodestar Anstalt v Campari America LLC[6] and Trident Seafoods Corporation v Trident Foods Pty Ltd.[7] While the evidence before me does not establish that the Opponent maintained control over the use of the Trade Mark by the company and thus that the use of the Trade Mark by the company was use of the Trade Mark by the Opponent, s 92(4)(a) does not require the Opponent to show actual use only an intention to use.

    [6] [2016] FCAFC 92 (Allsop CJ, Greenwood, Besanko, Nicholas and Katzmann JJ).

    [7] [2019] FCAFC 100 (Reeves, Jagot and Rangiah JJ).

16. Noting that the Opponent had incorporated the company two days prior to the relevant date and had just transferred its business assets (social media pages) to the company, it is likely that what had occurred was that the Opponent intended that its existing business, previously conducted as a partnership, be conducted under a company structure but remain under the overall direction of the Opponent.  As such I am satisfied that at the time the Trade Mark was applied for the Opponent intended to authorise use of the Trade Mark by the company in the manner required under s 8.

17. I am satisfied that at the relevant date the Opponent intended to authorise the use the Trade Mark for the Registered Goods. The Opponent has established its opposition in relation to s 92(4)(a).

    Decision

18. I decide that the Opponent has established its opposition to removal in respect of the Registered Goods.  

    Costs

    25. The Opponent has been successful in relation to its opposition to the application for removal of the Trade Mark and has requested its costs. I direct that costs in relation to trade mark registration number 1878383 be awarded against the Applicant in accordance with Schedule 8 of the Regulations.

    Nicholas Smith

    Hearing Officer

    Delegate of the Registrar of Trade Marks

    14 February 2023