Momaworld Sdn Bhd v Cesari Srl - [2022] ATMO 147

TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by Momaworld Sdn Bhd to an application under section 92 of the Trade Marks Act 1995 (Cth) by Cesari SRL to remove trade mark number 1647184 (classes 30, 32) – MOMA - in the name of Momaworld Sdn Bhd

Delegate: M. Cooper

Representation: Opponent: Samuel Hallahan of counsel instructed by Foundry Intellectual Property
Applicant: Natasha Burns of Burns IP

Decision: 2022 ATMO 147
Trade Marks Act 1995 (Cth) – s 96 opposition: application under s 92(4)(b) to remove trade mark from Register in respect of all goods – use demonstrated for some goods - s 92(4)(b) grounds partially established – discretion not exercised - Trade Mark to be removed for some goods.
Background

Momaworld Sdn Bhd (‘Opponent’) is the registered owner of the following trade mark:
Registration:  1647184
Trade mark:   MOMA (‘Trade Mark’)
Filing date:  16 September 2014
Specification:  Class 30: Herbal beverages (non medicinal)
Class 32: Beverages, namely drinking water, flavoured non-alcoholic water; aerated and mineral waters; fruit drinks and fruit juices; soft drinks; energy drink; soft beverages; carbonated drink; non-carbonated drink, namely soft drinks and non-alcoholic frozen flavoured beverages; concentrated syrups and powders for making drink; lithia waters; seltzer water; isotonic beverages; table water; soda beverages
(‘Goods’)
On 21 July 2020, Cesari SRL (‘Applicant’) applied under s 92(4)(b) of the Trade Marks Act 1995 (‘the Act’) to remove the Trade Mark from the Register for non-use in relation to the Goods for which it is registered.
A Notice of Intention to Oppose the removal application was filed by the Opponent on 22 September 2020. On 22 October 2020 it filed its Statement of Grounds and Particulars. A Notice of Intention to Defend was filed by the Applicant on 18 December 2020.
The evidence filed in this removal opposition comprises:
Evidence in Support
Declaration of Samuel James Tai Huei, General Manager of the Opponent, dated 22 March 2021, with Annexures ST-1 to ST-9 (‘Huei 1’); and
Declaration of Hezi Refael, Managing Director of Natuur Pty Ltd., dated 22 March 2021, with Annexures HR-1 to HR-8 (‘Refael’).
Evidence in Answer
Declaration of Elena Marangoni, Authorised Legal Representative of Cesari SRL, dated 22 June 2021, with Exhibits EM-1 to EM-4 (‘Marangoni’).
Evidence in Reply
Declaration of Samuel James Tai Huei, dated 24 August 2021, with Annexures ST-10 to ST-15 (‘Huei 2’).
Following the evidence stages, the parties requested a hearing. The Opponent and Applicant filed written submissions on 18 May 2022 and 25 May 2022, respectively.
On 30 May 2022, the Opponent filed a further declaration of Samuel James Tai Huei dated 25 May 2022 with Exhibits ST-16 to ST-21 (‘Huei 3’), discussed further below.
On 1 June 2022, I heard the matter by videoconference as delegate of the Registrar. Samuel Hallahan of counsel, instructed by Dr Andrew Jones of Foundry Intellectual Property, appeared…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] ATMO 147
Decision Date: 30 August 2022

CaseChat Overview and Summary

Momaworld Sdn Bhd (the Opponent) opposed an application by Cesari Srl (the Applicant) to remove its Australian trade mark number 1647184, registered for goods in classes 30 and 32, from the register under section 92 of the *Trade Marks Act 1995* (Cth). The Applicant sought removal on the grounds of non-use of the trade mark. The matter was heard by M. Cooper, delegate of the Registrar.

The primary legal issue before the delegate was whether the Opponent had made out a case for the discretion under section 101(3) of the Act to be exercised to prevent the removal of the trade mark from the register, despite evidence of non-use. This required determining whether the use of the trade mark by Momawater Sdn Bhd, a related entity, could be considered authorised use by the Opponent under section 8 of the Act, and therefore use by the Opponent itself under section 7(3).

The delegate considered the relationship between Momaworld Sdn Bhd and Momawater Sdn Bhd, noting that both were wholly owned subsidiaries of the same parent company, Subur Tiasa Holdings Berhad. They shared the same registered address, auditor, and directors. Drawing on the principles from *Trident Seafoods Corporation v Trident Foods Pty Ltd*, the delegate inferred that the two companies operated with a unity of purpose and that the Opponent controlled Momawater's use of the trade mark. Consequently, Momawater's use was deemed to be use by the Opponent for the purposes of the Act, rebutting the allegation of non-use for "Beverages, namely drinking water; table water" in class 32. However, the Opponent failed to satisfy the delegate that it was reasonable to exercise the discretion not to remove the trade mark for the remaining goods.

Accordingly, the delegate directed that the trade mark be removed from the register for all goods in Class 30 and for specific goods in Class 32, including flavoured non-alcoholic water, aerated and mineral waters, fruit drinks and juices, soft drinks, energy drinks, and various other beverages and drink-related products. No orders were made as to costs, as both parties had been partially successful.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

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Evidence

Evidence Before The Court

On 1 June 2022, I heard the matter by videoconference as delegate of the Registrar. Samuel Hallahan of counsel, instructed by Dr Andrew Jones of Foundry Intellectual Property, appeared for the Opponent. Natasha Burns of Burns IP appeared for the Applicant.Summary of Evidence The Opponent’s declarations outline the circumstances of Huei’s dealings (through Momawater Sdn Bhd, (‘Momawater’)) with Hezi Refael, Managing Director of Australian company Natuur Pty Ltd. (‘Natuur’) regarding the sale and distribution of MOMA branded bottled water (‘MOMA water’) in Australia. In 2016 Refael, an existing client of the Opponent, visited its Malaysian factory to purchase charcoal but also discussed with Huei the Opponent’s production of bottled water. A ‘test shipment’ of MOMA water was sent to Natuur in October 2016 which Refael states he distributed in Victoria. In November 2016 Refael says he undertook a pricing analysis to assess his profit and assign a wholesale price to the MOMA water. He states he visited the factory again in June 2017 and continued negotiations to purchase the MOMA water at this time. Both Huei and Refael acknowledge the lengthy discussions. In 2019 the Applicant sought to register its International Trade Mark 942559[1] for ‘MOMA’ for Goods in classes 32 and 33 in Australia however the examiner raised a s 44 ground for rejection, citing the Trade Mark.[2] On 25 March 2020 the Applicant’s representative emailed the Opponent’s representative seeking to explore a coexistence agreement, adding ‘[i]n the contrary my client shall have to consider conflictual solutions, in view of the lack of factual use of your client’s mark our investigation retrieved in Australia.’ (Marangoni, Exhibit EM-2). Negotiations concerning an agreement commenced. [1] Australian trade mark no. 1937278.[2] The examiner also cited the Opponent’s trade mark LIVE MOMA, TM 1658515. The Opponent did not oppose its removal from the register following the Applicant’s application. Annexures to both Huei 1 and Huei 2 and Refael (ST-10, HR-7) show WhatsApp discussions between them in April 2020 regarding the sale and transport of MOMA water to Australia. On 4 May 2020 Momawater and Natuur entered into a Distribution Agreement for MOMA water in Australia, including use of the Trade Mark (Huei 1, ST-6). On 5 May 2020 Natuur placed a Purchase Order for over 1200 cartons of MOMA water (Huei 1, ST-7) to be delivered to it in Australia. Refael states he requested a delay of the shipment in June 2020 because of business uncertainty caused by the COVID lockdown. After several communications, on 17 July 2020, the Opponent advised the Applicant that it had decided not to pursue a coexistence agreement. On 21 July 2020, this removal application was filed. Evidence shows that on 27 October 2020, a WhatsApp conversation between Huei and Refael discussed Australian labelling requirements. These discussions continued in February 2021 (Huei 2, ST-10). In August 2021 the Opponent contracted a Chinese company to produce labels for the Australian MOMA water bottles (Huei 2, ST-11).

Decision

Reasons for decision

As noted above, it is the Opponent which bears the onus of satisfying the Registrar that the discretion under s 101 ought to be exercised. While acknowledging the broad discretion available under s 101(3), having carefully considered all the claims and material before me, the Opponent has failed to satisfy me that it is reasonable to exercise the discretion not to remove the Trade Mark in respect of the Remaining Goods.Decision Section 101 of the Act relevantly provides:101 Determination of opposed application--general (1) Subject to subsection (3) and to section 102, if: (a) the proceedings relating to an opposed application have not been discontinued or dismissed; and (b) the Registrar is satisfied that the grounds on which the application was made have been established; the Registrar may decide to remove the trade mark from the Register in respect of any or all of the goods and/or services to which the application relates. The Opponent has rebutted the allegation of non-use only for ‘Beverages, namely drinking water; table water’ in class 32. It follows that the ground for removal in respect of the Remaining Goods has been established. I direct that the Trade Mark be removed from the Register after one month from the date of this decision for all the Goods in Class 30. I further direct that the Trade Mark be removed from the Register after one month from the date of this decision for the following Goods in class 32:flavoured non-alcoholic water; aerated and mineral waters; fruit drinks and fruit juices; soft drinks; energy drink; soft beverages; carbonated drink; non-carbonated drink, namely soft drinks and non-alcoholic frozen flavoured beverages; concentrated syrups and powders for making drink; lithia waters; seltzer water; isotonic beverages; soda beverages If the Registrar is served with a notice of appeal on or before that time, the registration will not be amended or removed unless the appeal is withdrawn or discontinued. Otherwise, the registration will be subject to the decision of the Court. Costs Both parties sought costs. Given that both parties have been partially successful, I make no orders in this regard. Mary-Ann CooperHearing OfficerDelegate of the Registrar of Trade Marks30 August 2022

Ratio Decidendi

Legal Principle Established

Alternatively, if the ground for removal are established, s 101(3) of the Act provides that, if the Registrar or the court is ‘satisfied that it is reasonable to do so’, it may decide the Trade Mark should not be removed from the Register.Consideration There is no evidence of any action concerning the Trade Mark pending in a court (s 92(3)). Based on the available records, the Trade Mark has been registered since 16 September 2014, that is, it has remained registered for a continuous period of 3 years ending one month before the day on which the non-use application was filed (s 92(4)(b)). Self-evidently, it is over 5 years since the filing date of the application for registration (s 93(2))[7].[7] Section 93(2) of the Act prior to the amendments made by the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018 (Cth). As noted above, the Applicant sought that the Trade Mark be removed under s 92(4)(b) for all the Goods for which it is registered. The period of non-use was asserted to be from 21 June 2017 to 21 June 2020, that is, the three years ending one month prior to the filing of the non-use application on 21 July 2020 (‘the relevant period’).Was the use authorised? The Opponent, the owner of the Trade Mark, is Momaworld Sdn Bhd however Momawater Sdn Bhd is the entity that manufactures the products and, as the evidence indicates, uses the Trade Mark. I therefore need to determine whether the Opponent relevantly authorised Momawater’s use within the meaning of s 8 of the Act such that its use might be taken as use by the Opponent (s 7(3)). In this regard I note the decision in Trident Seafoods Corporation v Trident Foods Pty Ltd,[8] where the Full Court found that authorised use could be established in circumstances where two companies shared the same directors:It must be inferred from the evidence that the two companies operated with a unity of purpose. … As directors of Trident Foods, the directors had obligations to ensure the maintenance of the value in the marks. To that end Trident Foods necessarily controlled Manassen’s use of the marks by reason of the simple fact that it owned the marks and its directors, who were also Manassen’s directors, must have had one common purpose, being to maximise sales and to enhance the value of the brand. …it is commercially unrealistic in the circumstances of the present case not to infer that the owner of the marks controlled the use of the marks because the common directors necessarily wished to ensure the maintenance and enhancement of the value of the brand.[9] [8] [2019] FCAFC 100. [9] Ibid [45]. The Opponent’s evidence demonstrates a similar relationship between it and Momawater. Documents from the Companies Commission of Malaysia attached to Huei 1 (ST-1) show that Momaworld Sdn Bhd is a company whose business is in part ‘to carry on business related to soft drinks, and other drinks of bottles, can etc’. Its shares are owned solely by Subur Tiasa Holdings Berhad. The entry for Momawater states its business is the ‘manufacture and trading of drinking water’ and its sole shareholder is also Subur Tiasa Holdings Berhad. That is, the Opponent and the user of the Trade Mark are both wholly owned subsidiaries of Subur Tiasa Holdings Berhad. The evidence also demonstrates that they share the same registered address, the same auditor and the same directors. On this basis I am satisfied that the material supports an inference that the two companies were operating in the relevant period with a unity of purpose such that, for practical purposes, the Opponent controlled the use of the Trade Mark by Momawater within the meaning of s 8 of the Act and Momawater’s use of it can be regarded as use by the Opponent (s 7(3)). Use of the Trade Mark

Delegate:	M. Cooper
Representation:	Opponent: Samuel Hallahan of counsel instructed by Foundry Intellectual Property Applicant: Natasha Burns of Burns IP
Decision:	2022 ATMO 147 Trade Marks Act 1995 (Cth) – s 96 opposition: application under s 92(4)(b) to remove trade mark from Register in respect of all goods – use demonstrated for some goods - s 92(4)(b) grounds partially established – discretion not exercised - Trade Mark to be removed for some goods.