Michelle Herbert and Paul Staunton v Jo Schmid

[2023] ATMO 18

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 1738976 (42) – Salties – in the name of Michelle Herbert and Paul Staunton

Delegate:	Nicholas Smith
Representation:	Opponent: Self-represented Applicant: Self-represented
Decision:	2023 ATMO 18 Trade Marks Act 1995 (Cth) - section 96 opposition: ss 92(4)(a) and (b) application for removal - Removal Opponent’s evidence does not show use of the Trade Mark during the relevant period or obstacle to use – exercise of Registrar’s discretion not appropriate – Trade Mark to be removed from the Register

Background

1. This decision is pursuant to an application made on 23 September 2021 under ss 92(4)(a) and (b) 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 services for which the trade mark is registered, that is, the application is for complete removal of the trade mark.

Registration No.	1738976
Lodgement date	4 December 2015
Services	Class 42: Clothing and fashion designing; Design of fashion accessories; Fashion design  (‘Registered Services’)
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 22 November 2021 and a Statement of Grounds and Particulars (‘SGP’) on 8 December 2021.  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
   EIR

   • Declaration by Joanna Schmid, the Applicant and also director and owner of Salti Australia Pty Ltd, dated 20 August 2022 (‘Schmid declaration’) together with Annexures A to P.
   • Declaration by Michelle Herbert and Paul Staunton, dated 24 September 2022 (‘Herbert/Staunton 2’) together with Annexures A to G.

   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;

   (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.

   Note 1:For file and month see section 6.

   Note 2:If non‑use of a trade mark has been established in a particular place or export market, then instead of the trade mark being removed from the Register, conditions or limitations may be imposed under section 102 on the registration of the trade mark so that its registration does not extend to that place or export market.

   8. Under s 92(4)(b) the relevant period during which the Opponent must establish use of the Trade Mark is the three year period ending on 23 August 2021 (‘relevant period’).

   9. I note that an application under s 92(4)(b) may not be made before a period of five years has passed from the filing date of the application,[1] and I confirm that five years since filing the application have in fact passed. 

   [1] Per s 93(2) of the Act prior to the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018 (sch 1, pt 3) as applies in the present matter. The updated s 93(2) of the Act applies to trade marks filed from 24 February 2019 onwards.

   10.     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
   (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.

   […]

   (3) For the purposes of paragraph 1(c), the opponent is taken to have rebutted the allegation that the trade mark has not, at any time during 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
    (b)  in a case where the trade mark has been assigned but a record of the assignment has not been entered in the Register:

   (i)  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 the assignee of the trade mark in relation to those goods or services during that period and that that use was in accordance with the terms of the assignment; and
   (ii)  the Registrar or the court is of the opinion that it is reasonable, having regard to all the circumstances of the case, to treat the use of the trade mark by the assignee during that period as having been a use of the trade mark in relation to those goods or services by the registered owner; or

   (c) the opponent has established that the trade mark was not used by its registered owner in relation to those goods and/or services during that period because of circumstances (whether affecting traders generally or only the registered owner of the trade mark) that were an obstacle to the use of the trade mark during that period.

   11.     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.

   12.     In accordance with s 101, I may decide to remove the Trade Mark from the Register for all or some of the services 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.

   13. I further note that a single bona fide use of the Trade Mark in the course of trade during the relevant period may be sufficient to rebut the allegation under s 92(4)(b),[3] but if a single act of use is relied upon then it should be established by ‘if not conclusive proof, at any rate overwhelmingly convincing proof’.[4] Use of the Trade Mark by an authorised user (as defined by s 8) is taken to be use of the Trade Mark by the Opponent.[5] 

   [3] Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261, [17] (Drummond J).

   [4] Nodoz Trade Mark (1962) RPC 1, 7 (Wilberforce J).

   [5] Act s 7(3).

   Discussion

2. Sections 92(4)(a) and 92(4)(b) provide distinct and alternative grounds for removal. Because of the specifics of these provisions paragraph (a) is considered to effectively merge with paragraph (b) once a trade mark has been registered for five years.[6] As the Trade Mark had been registered for more than five years as at the date of the application I need only consider the application for removal under s 92(4)(b) in this case. Therefore, to successfully oppose the application the Opponent must establish that it has used the Trade Mark (or a substantially identical trade mark[7]) pursuant to s 100 (either through use or that there were circumstances that were an obstacle to use in the relevant period (per s 100(3)(c)).  

   [6] M Davison Shanahan’s Australian Law of Trade Marks and Passing Off online edition, 2022 Thomson Reuters, [70.510].

   [7] s 100(3)(a) of the Act and discussed in AgCare Biotech Pty Ltd v Crop Smart Pty Ltd [2009] ATMO 41, [10]-[21] (Hearing Officer Kirov).

3. If the Opponent fails to establish such use or an obstacle to use, I have discretion under s 101(3) to decide that the Trade Mark should not be removed from the Register.

   Use of the Trade Mark in the relevant period

4. The Opponent’s evidence in this matter consists of two declarations by Michelle Herbert and Paul Staunton. Some of the material in the declarations appears to have been prepared in connection with a removal application for the related trade mark 1878383 (also for SALTIES), however I only summarise the evidence relevant to the current matter, namely the application for removal under s 92(4)(b) for the Trade Mark.

5. Herbert/Staunton 1 contains the following key points:

   ·     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.

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

   ·     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. Much of the Schmid declaration consists of criticism of the veracity of the information contained in Herbert/Staunton 1 and submissions that the evidence in Herbert/Staunton 1 does not show use of the Trade Mark in the relevant period as well as other criticisms of the Opponent’s conduct that are not necessary to summarise here.  Herbert/Staunton 2 responds to the criticisms and submissions in the Schmid declaration.

   19.     In assessing the evidence of the Opponent, one principle is worth keeping in mind.  The Trade Mark is registered for the Registered Services, namely ‘Clothing and fashion designing; Design of fashion accessories; Fashion design’.  In order to use the Trade Mark for the Registered Services it necessary for the Opponent to have offered those services under the Trade Mark in the course of trade.  Indeed, s 17 defines a trade mark as:

   What is a trade mark?

   A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.

7. There is no evidence before me that the Opponent offers or has ever offered fashion design services in the course of trade.  Rather, taking the Opponent’s evidence at its highest, it is in the apparel business (which is what trade mark 1878383 is registered for).  The provision of apparel requires many inputs including, for example, the design of the apparel, the manufacturing of the apparel, the delivery of the apparel to retailers and the advertising of the apparel.  The Opponent gives evidence that it has designed its own apparel for its apparel business but this does not amount to use of the Trade Mark for the Registered Services.  The fact that a company may design, manufacture, deliver and advertise a piece of apparel bearing a Trade Mark does not mean that it has used the Trade Mark in respect of design services, clothing manufacturing services, delivery services and advertising services; rather it has simply performed these services in order to offer apparel under the Trade Mark.  The Trade Mark is being used as a trade mark for the apparel, not for the inputs.

8. The Opponent has provided no evidence that it has ever offered the Registered Services under the Trade Mark, nor that it ever intends to offer the Registered Services under the Trade Mark; to the extent it designs fashion it is in the service of its own apparel business.  I am not satisfied that the Opponent has used the Trade Mark for the Registered Services during the relevant period. 

   Obstacles to use

   22.     The Opponent suggests that the ability to use the Trade Mark has been limited by the coronavirus pandemic and the government imposed lockdowns and travel restrictions.  In circumstances where the Trade Mark has never been used for the Registered Services and there is no evidence of any intention to use the Trade Mark for the Registered Services, I am not satisfied that the coronavirus pandemic and the government imposed lockdowns and travel restrictions amount to an obstacle to the use of the Trade Mark for the Registered Services in the relevant period, pursuant to s 100(3)(c).  As there is no obstacle to use of the Trade Mark, it is therefore necessary to consider whether I should exercise the discretion to allow the Trade Mark to remain on the Register for any of the Registered Services.

   Registrar’s Discretion

   23.   As noted in Shanahan’s Australian Law of Trade Marks and Passing Off, the policy of the Act is to facilitate the removal of an unused trade mark, and the public interest in the integrity of the Register will generally demand the removal of an unused trade mark.[8]  In PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd, the Full Court of the Federal Court provided the following observations regarding the discretion under s 101(3):

   [8] M Davison, I Horak Shanahan’s Australian Law of Trade Marks and Passing Off online edition, 2022 Thomson Reuters, [70.2505].

   The following propositions are relevant to the exercise of this discretion:

   (1) It is broad and is unfettered in the sense that there are no express limits on it. It is to be understood as limited only by the subject-matter, scope and purpose of the legislation and, in particular, by the subject-matter scope and purpose of Part 9 of the Trade Marks Act.

   (2) The scope and purpose of the Trade Marks Act strikes a balance between various disparate interests. On the one hand there is the interest of consumers in recognising a trade mark as a badge of origin of goods or services and in avoiding deception or confusion as to that origin. On the other is the interest of traders, both in protecting their goodwill through the creation of a statutory species of property protected by the action against infringement, and in turning the property to valuable account by licensing or assignment. …

   (3) The particular purpose of Part 9, within which s 101 falls, is to provide for the removal of unused trade marks from the Register. It is designed to protect the integrity of the Register and in that way the interests of consumers. At the same time, it seeks to accommodate, where reasonable to do so, the interests of registered trade mark owners. Accordingly, the Court must be positively satisfied that it is reasonable that the trade mark should not be removed. The onus in this respect lies on the trade mark owner to persuade the Court that it is reasonable to exercise the discretion in favour of the owner. …

   (4) The discretion in s 101(3) is expressed in the present tense. It requires consideration of whether, at the time that the Court is called upon to make its decision, it is reasonable not to remove the mark.

   (5) The range of factors considered in the exercise of the discretion has included whether or not:

   (a) there has been abandonment of the mark;

   (b) the registered proprietor of the mark still has a residual reputation in the mark;

   (c) there have been sales by the registered owner of the mark of the goods for which removal was sought since the relevant period ended;

   (d) the applicant for removal had entered the market in knowledge of the registered mark;

   (e) the registered proprietors were aware of the applicant’s sales under the mark;

   (f) A further factor, explicitly noted in s 101(4), but which falls within the scope of the discretion in s 101(3), is whether or not the trade mark under consideration has been used by its registered owner in respect of similar goods or closely related services.[9]

   [9] [2021] FCAFC 128, [153] (Jagot, Nicholas and Burley JJ) (emphasis altered) (citations omitted).

   24.     While considering the discretion in E & J Gallo Winery v Lion Nathan Australia Pty Limited Flick J stated:

   Although the ‘guiding principle behind the discretion is public interest, particularly in the integrity of the register’,[10] the private commercial interests of both [parties] remain matters which may be taken into account when exercising the discretion. Trade mark law, it has been recognised, is more complex than is suggested by the proposition that the supreme — or, at least — a predominant interest is the maintenance of the integrity of the Register.[11] Speaking of the 1955 Act, Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ there pointed out the balance struck by the legislation between various interests. Both the interests of the consuming public and the interests of traders have to be recognised.[12]

   [10] Kowa Co Ltd v Organon [2005] FCA 1282, [92] (Lander J).

   [11] Campomar Sociedad Limitada v Nike International Ltd [2000] HCA 12, [40].

   [12] E & J Gallo Winery v Lion Nathan Australia Pty Limited [2008] FCA 934, [210].

   25.     In the present case, there is no evidence that the Opponent has ever used the Trade Mark or intends to use the Trade Mark in the future in Australia for any of the Registered Services.  While I note that there may be some use of the Trade Mark for apparel, I do not consider that such use would result in any consumer confusion, given the market for the Registered Services is very different to the market for apparel broadly.  Given the above factors, I am unpersuaded that the removal of the Trade Mark for the Registered Services would result in consumer confusion or practically impact on the interests of the Opponent in any way.  Given the importance of the integrity of the Registrar I do not consider it appropriate to exercise my discretion not to remove the Trade Mark in respect of any of the Registered Services.

   Decision

   26.     The Opponent has not established its opposition to removal. Accordingly, I direct that registration 1738976 be removed from the Register one month from the date of this decision.  If the Registrar is served with a notice of appeal before then I direct that removal shall not occur until the appeal has either been discontinued or, in the event of a decision from the Court, that the registration be dealt with as the Court sees fit.

   Costs

   27. The Applicant has been successful in relation to the application for removal of the Trade Mark and has requested its costs. I accordingly award costs against the Opponent under s 221 in the relevant amounts under Schedule 8 of the Regulations.

   Nicholas Smith
   Hearing Officer
   Delegate of the Registrar of Trade Marks
   14 February 2023