Mr Bruce Larter
[2010] ATMO 103
•7 October 2010
TRADE MARKS ACT 1995
DECISION OF A DEPUTY REGISTRAR OF TRADE MARKS
WITH REASONS
Re:Proposed Revocation of Registration of Trade Mark number 1057434 SUMMIT for Peak Performance and device, in the name of Mr Bruce Larter.
DEPUTY REGISTRAR: | Michael Arblaster |
Representation: | Party with a claim to an Interest: Summit Refrigeration Products Pty Ltd, represented by: Ms. Jane Owen and Ms Shehana Wijesena, Solicitors, of Middletons, Lawyers. |
Decision: | 2010 ATMO 103 Section 84A: Registrar not satisfied that the trade mark should not have been registered in light of use of the trade mark. Extensive recent use, complex ownership issues, the impact on an authorised user and the nature of other proceedings also mean that revocation would not be reasonable. |
Background
On 27 May 2005, Mr Bruce Larter lodged an application for registration of the composite mark shown below which I will hereafter refer to as “the Trade Mark”. The application was allocated number 1057434.
The application related to “Refrigerated 'water chiller'; [and] refrigerating equipment” in Class 11.
The application was examined and on 11 August 2005 the examiner issued a first adverse report raising two citations, numbers 583757 & 583758, in the name of Mountain Fountain Co. Pty Ltd, (“Mountain Fountain”) as possible grounds of objection under s 44 of the Trade Marks Act 1995 (“the Act”). These trade marks which I will refer to as “the Prior Trade Marks” were both entered on the Register on 12 August 1994, with a priority date of 4 August 1992.
583757 583758
The specification of both trade marks is “Refrigeration and air conditioning apparatus; water supply products; parts and accessories for these goods; all being goods included in this class.”
On 20 September 2005 Mr Larter (the Assignee) lodged an application to record the assignment of the Prior Trade Marks. Accompanying this application was a letter of assignment purporting to transfer the rights from Mountain Fountain to Mr Larter. That document was on paper which bore the letterhead of the company, was signed by Mr Larter in his capacity as director of the company and the company seal was affixed to it. The assignment was duly recorded on 28 September 2009.
After a substantial delay in which nothing more was heard from Mr Larter, the application for registration lapsed. It was eventually revived and on the basis of the assignment, the objections to registration of the Trade Mark were withdrawn. Accordingly, it was accepted, advertised for opposition and there being no opposition, it was entered on the Register on 11 February 2008.
On 15 December 2008, the Registrar received a request to record a claimed interest in relation to the Trade Mark. The claim was made by Middletons Lawyers on behalf of Summit Refrigeration Products Pty Ltd (“the Claimant”) and which was duly recorded.
Earlier, on 29 July 2008, HWL Ebsworth had written to the Registrar on behalf of their client Chill Refrigeration and Air Conditioning Pty Ltd (“Chill Refrigeration”) asserting that ownership of the Prior Trade Marks had passed to them and in any case that assignment of the Prior Trade Marks had been invalid. Chill Refrigeration has subsequently lodged three further applications (nos. 12190218, 1290219 and 1290220), for essentially the same trade marks. Chill Refrigeration provided documentation to the Registrar which showed that Mountain Fountain had been dissolved some eleven years before the date of the purported assignment. A delegate of the Registrar duly proposed to exercise his discretion under s 81 of the Act, to amend the Register to “undo” the recordal of assignment and properly reflect Mountain Fountain as the registered owner of the Prior Trade Marks. Mr Larter was offered, and accepted, an opportunity to be heard on the matter.
The resulting decision by Hearing Officer Spence[1], was very critical of Mr Larter, expressing doubts about the adequacy of the assignment document. It also noted that Mr Larter had signed the document as Director of Mountain Fountain Pty Ltd, on the letterhead of the company, and that the document bore “the common seal of that company at a time when the company had long since ceased to exist, a fact of which Mr Larter was well-aware”.[2] The Hearing Officer concluded that there was “no choice but to cancel the assignment”.[3] He also drew attention to the fact that the Trade Mark had been registered on the basis of this false assignment of the Prior Trade Marks.
[1] Bruce Larter v Chill Refrigeration and Air Conditioning Pty Ltd [2009]ATMO 14
[2].Paragraph 24
[3] Paragraph 24.
On 10 February 2009, Deputy Registrar Braybrooks wrote to Middletons Lawyers, who were recorded as the address for service in relation to the Trade Mark, proposing revocation of registration of that mark under s 84A of the Act. The basis of the proposal was that the Trade Mark should not have been accepted or registered in the face of the Prior Trade Marks which would have, but for the false assignment, resulted in a barrier to registration of the Trade Mark under s 44 of the Act.
Representation
There followed a series of further delays while the issue of representation was resolved.
Although Middletons Lawyers were recorded as the Address for Service for Mr Larter, he was an undischarged bankrupt, requiring the consent of the Official Trustee in order to participate in proceedings. The Trustee declined consent, indicated that it did not authorise Middletons “to appear for or in the interests of the Bankrupt Estate” and that “it did not consent to Summit Refrigeration Products Pty Ltd doing so”.
Nevertheless, s 84A of the Act, which empowers the Registrar to revoke the registration of a trade mark, also provides, in subsection (5) that the Registrar must not do so without first giving an opportunity to be heard to “any person recorded under Part 11 as claiming …. an interest in, the trade mark.”. On behalf of The Claimant, Middletons requested a hearing.
As Deputy Registrar I have the statutory power under s 205 of the Act to determine the matter and it was brought before me at Hearing in Sydney on 14 May. The Claimant was represented by Ms Jane Owen and Ms Shehana Wijesena of Middletons, Lawyers.
Evidence
Ms Owen lodged evidence comprising a statutory declaration of Mr Bruce Larter, dated 21 November 2008, together with exhibits BL-1 to BL-11.
The declaration sheds light on the history of Mr Larter’s business activities in the manufacture and sale of refrigeration and air conditioning equipment, refrigerated water chillers, water coolers and associated parts.
Mr Larter attests to conducting this business since 1976, through the auspices at one time or another of at least seven different companies. He attests that his use of the Trade Mark first commenced in 1976 “by applying it to goods manufactured and sold through the business”. From that time onwards “under the various company structures a core part of the business was the manufacture of water coolers, water chillers, refrigeration units and air conditioning systems under the SUMMIT trade mark. Each unit manufactured by the business had affixed to it the Summit Composite Mark.” In 1985 Mr Larter incorporated Summit Refrigeration Products (Aust) Pty Ltd (“Summit Refrigeration”[4]) and applied for the composite mark in 1989. This too was accepted but again lapsed when the registration fee was not paid within the prescribed time.
[4] Despite the similarity in name, this company was dissolved before the incorporation of the Claimant.
In 1992/93 “Summit Refrigeration” was wound up and Mr Larter transferred his energy and business activities to Mountain Fountain which was incorporated in August 1989, and also to Summit International Products Pty Ltd (“Summit International”) which was incorporated in October 1992. In the mean time, in August of that year Mr Larter had “caused Mountain Fountain to apply to register” the Prior Trade Marks. On this occasion the fee was paid and the marks were registered. For several years until Mountain Fountain was deregistered in 1994 both Mountain Fountain and Summit International used the composite Summit mark simultaneously. Summit International continued to do so after Mountain Fountain was deregistered.
In 1996, Mr Larter sold the plant and equipment belonging to Summit International to January Industries Pty Ltd. It is at this point that Chill Refrigeration claim that the rights in the trade mark passed to January Industries and hence to them. However, Mr Larter attests that this transaction did not include the business or its intellectual property, and through Summit International he continued “to import chillers from Jordan and label them with the Summit Composite Mark”. Between 1998 and 2004 Mr Larter continued to operate this business as Electra Electrical Products Pty Ltd (“Electra”). The documentation available to me on the issue of the sale and on what was included in the transaction is not conclusive.[5] In his hearing on the question of the assignment Hearing Officer Spence could only conclude that “On one argument, that sale included the trade marks”. This, despite the generally critical nature of that decision in relation to Mr Larter’s conduct. I am no better placed to resolve the issue on the evidence before me.
[5] I note that although Mr Larter believes he was the owner of this trade mark, and Summit International continued using it under his control, the registered owner continued to be the deregistered company Mountain Fountain. Summit International and or Mr Larter may however have had a claim in common law through use. It is therefore not at all clear what rights were, or indeed could have been vested in January Industries at that point in time.
From 1999 Mr Larter authorised use of the mark by Gold Tower Investments Pty Ltd (“Gold Tower”). On 27 May 2005 Mr Larter lodged his application for the Trade Mark. Mr Larter attests that he “has always considered himself the owner of these trade marks” and that he “authorised use of the Summit Composite Mark by Summit Refrigeration, and Gold Tower”. Gold Tower began trading as Matsu Chilling Systems in 2004 until 2006 when Summit Refrigeration, the Claimant, was incorporated and began trading under that name instead.
The Exhibits BL-1 and BL-2 contain ASIC historical company extracts setting out details of the various company structures referred to. Exhibit BL 3 is an undated flyer showing a range of the Claimant’s (current) products demonstrating the Trade Mark in use. Exhibit BL-4 evidences orders for the printing of labels to be applied to the products together with an unsworn statement from the supplier stating that the first such order (from Matsu) was in October 2001.
Exhibit BL-5 evidences marketing plans for the years 2006, 2007 and 2008 showing turnover rising to several million dollars and a marketing budget in the order of some $100,000. There is no evidence setting out the actual value of sales of the product to which the Trade Mark has been applied. However, Exhibit BL-6 adduces invoices for advertising, together with examples of the advertising purchased. It covers each of the three years, demonstrates the marks in use in relation to the relevant goods and in sufficient quantity to be consistent with the marketing plans outlined above. The advertising demonstrates that equipment badged with the Trade Mark has been marketed through magazines targeted to the refrigeration industry, the building and engineering industries, the restaurant trade, food and technology magazines, and to the mining and plastics industries. These have typically been Australia-wide publications.
Exhibits BL-7 and BL-8 contain further information attesting to the breadth of company advertising using the Trade Mark, copies of company brochures, company profile and product specification brochures all bearing the Trade Mark. Exhibits BL-9 and BL-10 demonstrate use of the Trade Mark through sponsorship of and participation in a range of industry conferences and conventions. BL-11 includes copies of the company’s web site bearing the Trade Mark in 2007 and 2008.
Statutory Framework
The relevant provisions of the Act giving the Registrar the power to revoke registration of a trade mark are set out in s 84A. These provide that she be satisfied that the trade mark should not have been registered[6] and that it is reasonable to revoke the registration[7]. In each case subsections (2) & (3) respectively set out some of the circumstances of which the Registrar must take account in reaching her decision.
[6] s 84A(1)(a)
[7] s 84A(1)(b)
Subsections 84A (4) & (5) stipulate that the Registrar may only revoke registration of a trade mark if she has notified both the owner and any person listed on the Register as claiming an interest in the trade mark within twelve months of the trade mark being entered on the register, and given them an opportunity to be heard on the matter. For completeness, I note that this was not in contention.
In his notice proposing revocation of registration Deputy Registrar Braybrooks cited the existence of the Prior Trade Marks and the invalid recordal of assignment as circumstances in light of which the Trade Mark should not have been accepted or registered.
Section 44(2) relevantly provides that an application for registration must be rejected if it is substantially identical or deceptively similar to another person’s registered trade mark with an earlier priority date for similar goods or services. It is not in dispute that the Trade Mark is substantially identical to trade mark 583758 and deceptively similar to trade mark 583757, and the goods are similar.
Subsections 44(3) and (4) relevantly provide the following important exceptions to subsections 44(1) and (2):
(3) If the Registrar in either case is satisfied:
(a) that there has been honest concurrent use of the 2 trade marks; or
(b) that, because of other circumstances, it is proper to do so;
the Registrar may accept the application for the registration of the applicant’s trade mark subject to any conditions or limitations that the Registrar thinks fit to impose. If the applicant’s trade mark has been used only in a particular area, the limitations may include that the use of the trade mark is to be restricted to that particular area.
Note: For limitations see section 6.
(4) If the Registrar in either case is satisfied that the applicant, or the applicant and the predecessor in title of the applicant, have continuously used the applicant’s trade mark for a period:
(a) beginning before the priority date for the registration of the other trade mark in respect of:
(i) the similar goods or closely related services; or
(ii) the similar services or closely related goods; and
(b) ending on the priority date for the registration of the applicant’s trade mark;
the Registrar may not reject the application because of the existence of the other trade mark.
Note 1: An authorised use of the trade mark by a person is taken to be a use of the trade mark by the owner of the trade mark (see subsection 7(3)).
Note 2: For predecessor in title see section 6.
Note 3: For priority date see section 12.
Submissions
In submissions for the Claimant, Ms Owen argued that it would not be reasonable in the circumstances to revoke registration of the Trade Mark. The submissions:
Highlighted the extensive use of the Trade Mark, including by Matsu Chilling Systems under license from Mr Larter since at least 2001, and by Mr Larter or associated companies dating back perhaps as far as 1976;
Argued that, even if the registration was revoked, then by virtue of s 44(3) Mr Larter would be able to successfully reapply for registration;
Maintained that revocation of registration of the Trade Mark would disadvantage the Claimant, the licensed user who has incurred significant expense in developing the brand;
Contended that the impact of the registration on other owners would be minimal. It would be Mr Larter’s first use that would be decisive in any infringement case and although Chill Refrigeration has pending trade marks they need first to overcome the registration of both the Prior Trade Marks. Moreover, any use they can submit to overcome the citation of those marks will also be sufficient to overcome any citation of the Trade Mark;
Argued that the findings of the Hearing Officer in relation to the invalid assignment should not be circumstances that bear on the question of revocation.
Discussion
I note that the Claimant did not contest the delegate’s basic assertion that the Prior Trade Marks should have formed a barrier to registration of the Trade Mark. Nor did they contest that the assignment which resulted in the objection being overcome was invalid. Accordingly, the Claimant did not argue that the Trade Mark should have been registered.
However before considering whether it is reasonable to revoke a registered mark, I am required by the Act to satisfy myself that:
(a)the trade mark should not have been registered, taking account of all the circumstances that existed when the trade mark became registered (whether or not the Registrar knew then of their existence);
Clearly, the assignment should not have been recorded and should not have provided the basis for overcoming the objections, and this is not in contention. However, if Mr Larter had been represented in relation to the application, a competent attorney would have sought to overcome the objection on the basis of Mr Larter’s use of the Trade Mark under s 44(3) or (4).
It is clear that Summit Refrigeration can demonstrate significant use of the Trade Mark between 2006 and 2008. It is also clear that at least from 2001, some 4 years before the application for the Trade Mark, Summit/Matsu were applying compliance labels bearing the Trade Mark to equipment that they were manufacturing or importing. Both uses were authorised by Mr Larter and for this purpose count as use by him (s 7(3)). I am satisfied that there was very substantial use at least between 2006 and 2008 and that some use of the Trade mark had commenced at least on or before October 2001.
It may be also be that there is a continuous trail of use dating back through Electra, to its predecessor organisation Summit International, to Mountain Fountain and thus right back to 1976. However, this is a matter of dispute, with Chill Refrigeration arguing that it acquired rights in the composite mark, in 1996, by sale from Summit International to January Industries. However, as mentioned earlier, the evidence before me is inconclusive and I am in no better position to resolve the matter than was the delegate.
Mr Larter declares that it was plant and equipment that was sold and not the business or its intellectual property. In support of this there is an ATSIC extract recording the change of name from Summit International to Electra some 2 years after the January sale is said to have taken place in 1996. It is also clear that Summit International continued operating for a further two years after the sale of its plant and equipment by importing refrigeration equipment and re-badging it with the Summit trade mark. Thus there is at least a trail of use through the Claimant, Matsu, and Electra to Summit International in 1996. This use all post dates the sale to January Industries. If this sale included the intellectual property then, depending on the terms of the sale, the use may be infringing or at least in bad faith as Chill Refrigeration assert. However, the evidence before me is not sufficient to conclude that the sale did include the Trade Mark. Mr Larter attests to a belief that through all this period from 1976 to present, he was the owner of the Trade Mark, that he authorised its use for the various companies under his control and that he never relinquished control of the Trade Mark. This is his explanation for the ill-conceived attempt to record assignment of the Prior Trade Marks. He believed that he was the true owner of the Trade Mark who had authorised Mountain Fountain to use it, and that he had authorised them to apply for the Trade Mark. Although the company had been deregistered, Mr Larter believed that as the owner, all he was doing in signing the letter of assignment, was correcting an error in the record that had occurred as a result of an administrative oversight. He did not appreciate that the letter of assignment was invalid.
Although that ill-conceived attempt at assignment raises doubts about Mr Larter’s veracity, I have sworn evidence that his action was well intended and honest. On the other hand I have Chill Refrigeration asserting that Mr Larter sold the Trade Mark in 1996, and by implication that his application and any use since that time was in bad faith. However, short of evidence that the assets, including the Trade Mark were in fact transferred in 1996, which is not established on the basis of the evidence before me, I can conclude nothing more than that Mr Larter’s actions have been mis-guided, ill-informed, and ill-conceived. I cannot be satisfied that Mr Larter’s actions in continuing to use and authorise use of the Trade Mark lacked honesty.
I am therefore satisfied that there has been substantial recent use of the Trade Mark and that there has been quite lengthy use of it, although this is un-quantified. I am inclined to the belief that the use of the Trade Mark for at least some 9 years before filing would be sufficient to justify a finding of honest concurrent use.
Under these circumstances I am not satisfied, that the Trade Mark should not have been registered. However, if I am wrong that the quantum and distribution of use warrants an exception being made under s44(3) of the Act I would be forced to consider whether it is reasonable to revoke the registration. For the sake of completeness, I note that I also consider that it would not be reasonable to revoke the registration of the Trade Mark.
Subsection 84A(3) sets out a range of non-exhaustive circumstances to be taken into account in determining whether it would be reasonable to revoke.
(3)The circumstances to be taken into account under paragraph (1)(b) include the following:
(a)any use that has been made of the trade mark;
(b)any past, current or proposed legal proceedings relating to the trade mark as a registered trade mark or to the registration of the trade mark;
(c)other action taken in relation to the trade mark as a registered trade mark;
(d)any special circumstances making it appropriate:
(i)to revoke the registration; or
(ii)not to revoke the registration.
Even if the use of the Trade Mark prior to the priority date was not considered to be sufficient to justify an exception under s 44(3) or (4), section 84A requires that any use be taken into account. Use by the authorised user since the registration of the Trade Mark has been significant. It would certainly be sufficient to justify an exception under 44(3) or (4) for a new application for registration made now, providing the use is honest, and as I have said in paragraphs 34 – 37 above, I cannot conclude otherwise. That, taken together with the impact of revocation on the authorised user, whose honesty has never been in question before me also lend support to a conclusion that revocation would be unreasonable.
Moreover, the complex history of use and ownership bring this matter into the realm of “a determination of existing rights” and a category which the Explanatory Memorandum relating to the introduction of this provision[8] expressly identifies as circumstances where the power of section 84A is not intended to be used. That document indicates that the power should not be regarded as an alternative to the dispute settlement mechanisms otherwise provided by the Act for resolving competing claims to ownership. This is particularly apposite in the present case given the inconclusive nature of the documents relating to the transfer of ownership, the fact that these are ex parte proceedings, in which the rules of evidence do not apply and the fact that the Trade Mark was advertised for Opposition at the time it was accepted for possible registration. The conclusion that it would be unreasonable to revoke is reinforced by the extent of other matters in dispute between the parties which need to be resolved in inter-parties proceedings where evidence can be properly tested, and which will not be resolved by revocation in the present matter.[9]
[8] The Intellectual Property Laws Amendment Bill, 2006; Explanatory Memorandum.
[9] There is the matter of the Prior Trade Marks, registered to a dissolved company, the title of which is claimed by Chill Refrigeration by virtue of a sale from a third company. There is a new application by another company (Jazz Pty Ltd) with some connection to Mr Larter and three further applications by Chill Refrigeration. Although Mountain Fountain was dissolved in 1994 the Prior Trade Marks have recently been renewed for a second time. Chill Refrigeration has indicated that they are considering a non-use action.
Decision
Under the circumstances, outlined in paragraphs 32 – 37 above, I am not satisfied that the Trade Mark should not have been registered, nor could I be satisfied that it is reasonable to revoke registration. As each is a necessary condition of revocation, Section 84A(1) of the Act does not permit me to do it and I refuse to do so.
Michael Arblaster
Deputy Registrar of Trade Marks
7 October 2010
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