Morzone Pharmaceuticals Pty Ltd v Avidity Biosciences Inc

[2024] ATMO 197

TRADE MARKS ACT 1995

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

Re:Opposition by Morzone Pharmaceuticals Pty Ltd to application under section 92 of the Trade Marks Act 1995 (Cth) by Avidity Biosciences Inc to partially remove trade mark number 1025238 (class 5) - Marina - in the name of Morzone Pharmaceuticals Pty Ltd

Delegate:

Tracey Berger

Representation:

Opponent: Davies Collison Cave Pty Ltd

Applicant: O’Reilly Stevens Lawyers Pty Ltd

Decision:

2024 ATMO 197

Trade Marks Act 1995 (Cth) – opposition under s 96 to application under section 92(4)(b) for partial removal of registration – no use of the trade mark for relevant goods – no circumstances that were an obstacle to use – discretion not exercised – trade mark to be partially removed

Background

1.     Morzone Pharmaceuticals Pty Ltd (‘Opponent’) is the owner of the following trade mark registration:

Number:  1025238             (‘Registration’)

Trade Mark:  Marina (‘Trade Mark’)

Filing Date:  18 October 2004

Specification:               Class 5: Pharmaceutical preparations, dietetic substances adapted for medical use and food for babies (‘Registered Goods’)

2. On 16 January 2023, Avidity Biosciences Inc (‘Applicant’) filed an application under s 92(4)(b) of the Trade Marks Act 1995 (Cth)[1] (‘Removal Application’) seeking the partial removal of the Trade Mark from the Australian Register of Trade Mark (‘Register’) on the grounds of non-use to restrict the Registered Goods to:

dietetic substances adapted for medical use and food for babies.

[1] 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. The Opponent filed a Notice of Intention to Oppose the Removal Application on 21 February 2023 followed by a Statement of Grounds and Particulars (‘SGP’) on 20 March 2023. The Applicant filed a Notice of Intention to Defend on 6 June 2023.

4.     The Opponent then filed its evidence in support (‘EIS’) of the opposition consisting of the following declarations:

5.     Declarant and Position	Date	Annexures or Exhibits
Evidence in support
Dean Patrick Morzone, director of the Opponent (Morzone 1’)	17 March 2023	DM-1 to DM-10
Dean Patrick Morzone (‘Morzone 2’)	12 September 2023	DPM-1
Marina Therese Anthony, director of the Opponent (‘Anthony 1’)	17 March 2023	N/A
Marina Therese Anthony (‘Anthony 2’)	13 September 2023	MTA-1 to MTA-4
Irma Maria Morzone, director of the Opponent (‘Irma’)	19 March 2023	N/A

6. After the EIS had been filed, the Applicant requested amendment of the Removal Application to remove the Registration for all pharmaceutical preparations except homeopathic preparations for infants and adults. In the absence of any objection from the Opponent, the amendment was allowed and if the Removal Application is successful, the Registration will be restricted to the following goods:

pharmaceutical preparations, namely homoeopathic preparations for infants and adults; dietetic substances adapted for medical use and food for babies

7.     The Applicant did not file any evidence in answer and the parties were given the opportunity to request a hearing.  The Opponent requested a hearing by written submissions and the Applicant did not ask to be heard.  The Opponent’s submissions were prepared and filed by O’Reilly Stevens Lawyers Pty Ltd on 5 September 2024.  This matter has been allocated to me to determine as a delegate of the Registrar of Trade Marks and I do so based on the aforementioned materials.     

Legislative Framework

8. Section 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)  …

(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.

9. Pursuant to s 93(2), a non-use application under s 92(4)(b) may not be made before a period of five years has passed from the filing date in respect of the application for the registration of the trade mark.[2] I confirm that the Removal Application complies with this requirement.

[2] See s 93(2) prior to amendments to that section brought about by the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018 (Cth) sch 1, pt 3. The amended s 93(2) applies to trade marks filed from 24 February 2019 onwards.

10.     The Opponent bears the onus of establishing on the balance of probabilities[3] that it has used the Trade Mark in good faith in Australia for the Registered Goods in the period 16 December 2019 to 16 December 2022 (‘Relevant Period’).

[3] 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.

11.     In Woolly Bull Enterprises Pty Ltd v Reynolds,[4] Drummond J observed that the expression ‘use in good faith’ has a well understood meaning in terms of s 92, namely it is ‘real, as opposed to token, use in a commercial sense’. Little weight is to be given to assertions of use which are not supported by documentary evidence[5] but provided the use is in good faith, ‘a single bona fide use of the mark’ may be enough to rebut an allegation of non-use.[6]   However, if a registered owner relies on one single act of use of the trade mark, then that single act ought to be established by ‘if not conclusive proof, at any rate overwhelmingly convincing proof’.[7]

[4] [2001] FCA 261, [16].

[5] Great White Shark Enterprises Inc v Joose Apparel Pty Ltd [1998] ATMO 8 (Delegate Forno).

[6]  Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261, [17].

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

12.     Section 101 provides the Registrar with the discretion to remove the Trade Mrak from the Register in respect of any, or all, of the goods. If satisfied that it is reasonable to do so, the Registrar may decline to remove the Trade Mark from the Register even if the grounds on which the non-use application was made have been established.[8]

[8] Act s 101(3).

Opponent’s evidence

13.     Morzone 1 declares that the Opponent is a boutique manufacturer of pharmaceuticals and naturopathic medicines and treatments.  According to Morzone 1, the Opponent has used the Trade Mark during the Relevant Period for its Infant Mixture, Reformulated Infant Mixture, Heartburn Mixture, and Mineral and Herb Complex Range (‘Opponent’s Goods’). 

14.     The Opponent’s Goods were sold in pharmacies and according to Morzone 1 would be considered pharmaceutical preparations.  The Opponent’s Goods (except the Mineral and Herb Complex Range which product is exempt from registration) were each listed on the Australian Register of Therapeutic Goods (‘ARTG’) whilst they were available for sale.  However, on 6 May 2019, the Infant Mixture and Heartburn Mixture were deregistered as a result of regulatory changes.

15.     The Opponent’s Marina Infant Mixture and Reformulated Infant Mixture were manufactured by Brauer Natural Medicine Pty Ltd pursuant to a manufacturing agreement which expired on 18 October 2021.  A copy of that agreement is exhibited to Morzone 1.

16.     In April 2021, the manufacture of the Reformulated Infant Mixture was disrupted due to ‘the decommission of let pieces of manufacturing equipment’.

17.     To save costs and because of the disruption caused by the Covid-19 pandemic, at the Opponent’s request, the Reformulated Infant Mixture was deregistered with the ARTG on 29 June 2022.  Existing stock of the Opponent’s Marina Reformulated Infant Mixture was available for sale until this time and copies of invoices for the sale of these goods are provided.  Morzone 1 claims that the Opponent has been marketing the sale of the Reformulated Infant Mixture to an investor.

18.     During the Relevant Period, the Opponent manufactured thirty different Marina Mineral and Herb Bio-Complexes which were sold via the Opponent’s website at (‘Opponent’s Website’) and wholesale to pharmacies and health food stores.  Copies of the labels, invoices for the sale of these goods during the Relevant Period and a screenshot of the Opponent’s Website are provided.

19.     Morzone 1 declares that the Opponent’s Goods were advertised on the Opponent’s Website, the websites of third party pharmacies and on social media.  Extracts from the Opponent’s Facebook account for Morzone’s Marina Infant Mixture and a copy of a social media post on a wholesaler’s account featuring the Marina Mineral and Herb Bio-Complex is annexed to Morzone 1.

20.     Morzone 2 outlines the history of the Opponent, adoption of the Trade Mark and indicates that the Opponent’s Infant Mixture is for the treatment of colic in babies.  Irma and Anthony 1 confirm the contents of Morzone 2 as correct.

21.     Anthony 1 declares that the Opponent’s Infant Mixture was named after her and developed in 1965 when Marina Anthony suffered from colic, although it was not made commercially available until the 1980s.  Much of Anthony 1 restates the information contained in Morzone 1.

22.     Anthony 1 confirms that the Marina Infant Mixture has not been available for sale since before the end of the 2021 financial year but declares that other products bearing the Trade Mark have continued to be sold to doctors, pharmacies and private buyers.  Anthony 1 provides the annual turnover figures for goods bearing the Trade Mark from 2018-2023.

Discussion

23. On my assessment of the Opponent’s evidence, it is apparent that the Opponent has used the Trade Mark in good faith in Australia during the Relevant Period for goods covered by the Registration. The evidence demonstrates that the Opponent sold homeopathic preparations under the Trade Mark during the Relevant Period, including such preparations registered on the ARTG. The Applicant does not appear to dispute that the Trade Mark was used in the Relevant Period for pharmaceuticals namely homeopathic preparations in that it amended its Removal Application after the filing of the EIS.

24.     The Opponent argues that there is no need to distinguish between pharmaceutical preparations generally and pharmaceutical preparations being homeopathic preparations because the class 5 heading of the Nice classification of goods and services refers only to ‘pharmaceutical preparations.’  The Opponent submits that as the Nice Classification makes no distinction between pharmaceuticals and homeopathic preparations, the Opponent has used its mark for pharmaceuticals and the registration should be retained without amendment to the goods.  I do not find this contention persuasive.  The Nice class headings are a general description providing an indication of the sorts of goods (or services) falling into a particular class.  The fact that a trade mark may have been used for a subset of goods specified in a class heading is not conclusive that in a non-use action, a trade mark should be retained for that general description rather than the subset of goods.  Rather, in my view, this is a matter to be decided on a case by case basis based on the breadth of different goods within the general description and range of different goods falling within the general description for which the mark has been used.

25. Whilst the Opponent has demonstrated use of the Trade Mark during the Relevant Period for ‘pharmaceuticals namely homeopathic preparations for infants and adults’, it has not demonstrated use of the Trade Mark for any other pharmaceutical preparations. Pharmaceutical preparations is a broad term encompassing a range of different medicinal products. There has not been use of the Trade Mark for different types of pharmaceuticals but rather all of the Opponent’s different products are homeopathic preparations. There are numerous cases where registrations have been restricted to the specific goods for which a mark has been used which is in accordance with the policy of Part 9 of the Act that a registration be maintained only for the goods or services for which the trade mark is used.[9]  Given that use of the Trade Mark has been limited to ‘pharmaceuticals namely homeopathic preparations for infants and adults’, I am not satisfied that it is appropriate to retain the Registration for pharmaceutical preparations generally.

[9] M Davison, I Horak Shanahan’s Australian Law of Trade Marks & Passing Off (7^th ed online, 2022, Thomson Reuters) [70.1600].

26.     The Opponent has not submitted that there were any obstacles to use of the Trade Mark for other pharmaceuticals but argues that discretion should be exercised under s 101(3) not to restrict the registration.

Registrar’s Discretion

27.     Section 101(3) provides:

(3) If satisfied that it is reasonable to do so, the Registrar or the court may decide that the trade mark should not be removed from the Register even if the grounds on which the application was made have been established.

28.     The question to be asked is whether it is reasonable to retain the Registration for all pharmaceutical preparations even though the Opponent has only established use of the mark for homeopathic preparations. 

29.     The Opponent bears the onus of establishing that the discretion under s 101(3) ought to be exercised in its favour.[10]

[10] Dr August Wolff GmbH & Co. KG Arzneimittel v Combe International Ltd [2020] FCA 39, [188] (Stewart J) (appeal allowed), [2021] FCAFC 8, but appeal did not concern this point.

1. The discretion provided by this section is very broad. In PDP Capital Pty Ltd vGrasshopper Ventures Pty Ltd,[11] the Court made the following observations regarding the discretion under s 101(3):

   [11] [2021] FCAFC 128 (Jagot, Nicholas and Burley JJ).

   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.[12]

   [12] Ibid [153] (emphasis altered) (citations omitted).

2. The discretion factors broadly fall under 3 headings:

   • the interests of the owner of the trade mark;
   • the interests of the applicant for removal; and
   • the public interest.[13]

   [13] Societe Anonyme des Eaux Minerales d’Evian v The Yogurt Co Pty Ltd [2012] ATMO 53, [33] (Hearing Officer Thompson).

   32.     The Opponent contends that the discretion should be exercised for the following reasons:

   a.   the Trade Mark has a reputation in Australia for ‘pharmaceutical preparations’ as a result of its use of the mark for over 30 years;

   b.   the Opponent has not abandoned the Trade Mark in respect of ‘pharmaceutical preparations’;

   c.   the Opponent has sold and advertised ‘pharmaceutical preparations’ in Australia during the Relevant Period under the Trade Mark;

   d.   restricting the goods of the Registration is likely to deceive or cause confusion; and

   e.   the Opponent’s private interests favour retaining the Registration without amendment.

   33.     Whilst the Opponent’s Goods bearing the Trade Mark have been available for many years, the turnover figures for 2018-2023 are very modest.  Moreover, whilst the Opponent’s Goods may have received some publicity in the early 1990s as a result of featuring on the Midday Show hosted by Ray Martin, the advertising and promotion undertaken more recently seems to be very limited.  I am not satisfied based on the EIS that the Opponent has a widespread reputation in the Trade Mark for pharmaceutical preparations.  However, I am satisfied that the Opponent has not abandoned the Trade Mark.   The partial removal of the Trade Mark as requested by the Applicant will not affect the Opponent’s trading or business as the Opponent will still have protection of the Trade Mark for the homeopathic preparations for which the mark has been used.

   34.     The Applicant has not provided any information regarding its private interests but the Opponent’s submissions refer to the Applicant’s trade mark applications 2276153 MARINA in class 5 for ‘Oligonucleotide-conjugate based therapies; oligonucleotide-antibody conjugate based therapies; oligonucleotide-antibody fragment conjugate based therapies’ and 2276141 MARINA-OLE also in class 5 for ‘Oligonucleotide-conjugate based therapies; oligonucleotide-antibody conjugate based therapies; oligonucleotide-antibody fragment conjugate based therapies; synthetic oligonucleotides; antibodies; monoclonal antibodies for medical use; immunological products; oligonucleotide compounds for use in the delivery of RNA therapy; drug delivery agents comprising oligonucleotide compounds that facilitate the delivery of pharmaceutical based therapies.’

   35.     There is a public interest in maintaining the integrity of the Register which generally demands that unused trade marks be removed from the Register.  The interest in maintaining the purity of the Register is to be balanced against the likelihood of the public being deceived or confused as to the origin of goods bearing a trade mark.  As already noted, the range of products falling within the general description pharmaceutical preparations is broad.  Registration of the Trade Mark for ‘pharmaceutical preparations, namely homoeopathic preparations for infants and adults; dietetic substances adapted for medical use and food for babies’ will provide the Opponent with protection for its Trade Mark for the goods for which it has been used and similar goods.  In my view, the public interest does not favour further extending protection to other pharmaceutical preparations.  Furthermore, I do consider it unlikely that a consumer would assume that oligonucleotide based therapies emanate from the same source as the Opponent’s homeopathic preparations.  In my opinion, there is not a real risk of deception or confusion to the public if the Registration is restricted to exclude pharmaceutical preparations other than homeopathic preparations.

   36.     In all the circumstances, I am not persuaded that it is appropriate to exercise discretion to retain the Registration for pharmaceutical preparations other than the homeopathic preparations for adults and children for which the Opponent has used the Trade Mark.

   Decision

   37.     The Opponent has not established its opposition to the partial removal of the Registration.  Accordingly, the application for partial removal of registration 1025238 is successful and I direct that, not less than one month from the date of this decision, the specification of goods of registration 1025238 be amended to:

   pharmaceutical preparations, namely homoeopathic preparations for infants and adults; dietetic substances adapted for medical use and food for babies.

   38. Whilst costs generally follow the event, given that the Removal Application was amended after the filing of the EIS, I do not consider it appropriate to award costs in this matter.

   Tracey Berger

   Hearing Officer

   Oppositions and Hearings

   Trade Marks and Designs

   10 October 2024