Neil Pryde Limited v Callaway Golf Company

[2018] ATMO 63

TRADE MARKS ACT 1995

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

Re:Opposition by Neil Pryde Limited to application under section 92 of the Act by Callaway Golf Company for partial removal of trade mark number 1055576 (25, 28) – RS:X (Fancy) - in the name of Neil Pryde Limited

Delegate:

Nicholas Smith

Representation:

Opponent: No appearance or written submissions

Applicant: Written Submissions by Spruson & Ferguson

Decision:

2018 ATMO 63

Trade Marks Act 1995 (Cth) - section 96 opposition: s 92(4)(a) and s 92(4)(b) application for partial 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 for some of the goods for which it is registered

Background

1. This decision is pursuant to an application made on 10 December 2015 under ss 92(4)(a) and (b) of the Trade Marks Act 1995 (‘Act’) by Callaway Golf Company (‘Applicant’) for partial removal of the trade mark detailed below from the Register of Trade Marks.  

Registration No.

1055576

Lodgement date

16 May 2005

Goods

Class 25: Clothing, headgear, footwear

Class 28: Games and playthings; gymnastics and sporting articles not included in other classes; decorations for Christmas trees; windsurfing boards; windsurfing sails; windsurfing masts; windsurfing booms

(‘Registered Goods)

Owner

Neil Pryde Limited

Trade Mark

(‘Trade Mark’)

2.  The goods that are sought to be removed from the above specification are:

Class 28: Games and playthings; gymnastics and sporting articles not included in other classes; decorations for Christmas trees; (‘Removal Goods’)

1. Neil Pryde Limited (‘Opponent’) has opposed the application to remove the Trade Mark, filing a Notice of Intention to Oppose removal on 17 February 2016 and a Statement of Grounds and Particulars (‘SGP’) on 17 March 2016.  The Applicant filed a Notice of Intention to Defend on 22 March 2016.

2. The Opponent subsequently filed evidence in support of its opposition to removal (‘EIS’).  The Applicant filed evidence in answer and the Opponent chose not to file any evidence in reply.  The parties’ evidence will be discussed in more detail below.  A cooling off period was requested, granted and expired without the matter being resolved.

   5.  Once the time allowed for filing evidence had ended the parties were given an opportunity to request a hearing or to file written submissions.  On 18 October 2017 the Applicant requested an oral hearing.  The matter was set down for a hearing in Canberra on 4 April 2018.  I was allocated to decide the matter as a delegate of the Registrar of Trade Marks.  In line with usual practice, an email was sent to the parties on 1 February 2018 which contained a schedule for the provision of written summaries of submissions to be filed prior to the hearing.  The Opponent chose not to file any submissions or appear at the hearing. On 27 March 2018, the Applicant filed written submissions (‘Applicant’s Submissions’) and indicated that, since the Opponent chose not to file submissions and appear at the hearing, the Applicant would rely on written submissions only. 

   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 following relevant material:

   ·The Application for Removal;

   ·The Notice of Intention to Oppose and SGP;

   ·The Opponent’s Evidence in Support;

   ·The Applicant’s Evidence in Answer; and

   ·The Applicant’s Submissions.  

   The Law

   7. Part 9 of the Act deals with removal of trade marks from the Register on account of non-use and lack of intention to use. In respect of the present matter s 92 of the Act 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 10 November 2015 (‘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. [2]

   [1] Per s 93(2) of the Act.

   [2] As will become apparent, it has not been necessary to consider the s 92(4)(a) ground for removal in this decision.

   10. The onus of rebutting an allegation of non-use lies with the Opponent. This onus is articulated in s 100 of the Act 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:
   [...]

   (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 of the balance of probabilities.[3]

   [3] Pfizer Products Inc. v Karam [2006] FCA 1663 and more recently: Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156.

   12.     In accordance with s 101 the Registrar 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.

   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),[4] but if a single act of use is relied upon then it should be established by ‘if not conclusive proof, overwhelmingly convincing proof’.[5]

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

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

   Opponent’s Evidence

3. The Opponent’s evidence in this matter consists of a declaration made on 21 June 2016 by Messiaen Donat Emmanuel, Sales and One Design Racing Manager of the Opponent  with Annexures 1 to 4 (‘Emmanuel Declaration’). 

4. The Emmanuel Declaration contains much evidence about the Opponent’s various products supplied under marks other than the Trade Mark, including NEIL PRYDE, CABRINHA, FLOW, and BAYAMO.  I limit my summary of the Opponent’s evidence to the use of the Trade Mark.  The Emmanuel Declaration contains the following claims/statements:

   ·The Opponent was founded in Hong Kong in 1970 as a sailmaker, supplying sails to yacht builders in Europe.  The Opponent has a growing portfolio of six high performance brands with annual sales approaching US$80 million.

   ·In 2004 the Opponent’s RS:X board and rig were accepted by the ISAF, the world governing body for the sport of sailing, as the official windsurfing rig for the 2008 Olympic Games.  This has continued for the 2012, 2016 and 2020 Olympic Games.

   ·The Trade Mark has been in continuous use in Australia since July 2005.  It is used on windsurfing bags, sails, extensions, power bases, booms, masts, fins, rig bags, board bags and on accessories such as trim locks, roller camps, downhaul, foot-straps, power bases and fin screw sets, t-shirts, hats, flags and banners and the like (‘Goods’).  It is used on packaging, on the Goods themselves, on brochures and on user manuals.  

   ·The Opponent has sold Goods bearing the Trade Mark in Australia during the relevant period and annexes invoices during the period showing the use of the Trade Mark. 

   ·The Declarant believes that the Trade Mark is strongly associated with the Opponent’s products and has a strong reputation, and that if the Trade Mark is removed from the Register, it is likely that such use would result in considerable deception or confusion.

5. I note that Annexure 1 and 2 of the Emmanuel Declaration contain examples of the use of the Trade Mark.  However these examples are not clearly use in Australia (being extracts from overseas websites which do not appear to be clearly targeted at the Australian market) and/or are dated outside the relevant period or undated.  Confidential Annexure 3 contains invoices showing what purport to be sales of goods bearing the Trade Mark.  The invoices appear only to be in respect of the sale of windsurfing equipment.  Finally, I note that the level of sales of goods bearing the Trade Mark in Australia during the relevant period is low, a factor that may be relevant if necessary in considering whether to exercise the Registrar’s discretion in the Opponent’s favour.

   Applicant’s Evidence

   17.     The Applicant’s evidence in answer consists of a declaration made on 9 October 2016 by Sonia Lari, Corporate Counsel for the Applicant  with Annexures A to E (‘Lari Declaration’) and a declaration made on 12 October 2016 by Kathryn Howard, a paralegal employed by Spruson & Ferguson, the Applicant’s representative with Annexures KH-1 to KH-11 (‘Howard Declaration’). 

6. The Lari Declaration indicates that the Applicant has applied to register the mark RSX in respect of ‘golf clubs’ in class 28 (application number 1728484).  The Applicant holds a similar mark in the United States.  The RSX mark has been used in Australia and the United States since at least 2016.  In Ms Lari’s experience, golf equipment is manufactured and sold via unique trade channels that do not overlap with the trade channels through which ‘windsurfing boards and related equipment’ are sold.  

7. The Howard Declaration gives evidence that golf and windsurfing equipment are sold through different trade channels.

   Discussion

8. 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] Accordingly, since the Trade Mark had been registered for more than five years as at the date of the removal application I need only consider the s 92(4)(b) ground in this case. Therefore, to successfully oppose the removal application the Opponent must establish that it has used the Trade Mark (or a substantially identical mark) for the Removal Goods during the relevant period (or per s100 of the Act that there were relevant circumstances that were an obstacle to use), failing which the Opponent would need to satisfy the Registrar that it was nevertheless “reasonable” to exercise her discretion under s 101(3) to decide that the Trade Mark should not be removed from the Register.

   [6] M Davison Shanahan’s Australian Law of Trade Marks and Passing Off online edition, 2016 Thomson Reuters, [70.510].

   Use of the Trade Mark in the relevant period

9. Having reviewed the EIS, I find no evidence of use of the Trade Mark by the Opponent during the relevant period for anything other than windsurfing equipment.  The Applicant is not seeking to remove the Trade Mark from the Register in respect of windsurfing equipment such as ‘windsurfing boards; windsurfing sails; windsurfing masts; windsurfing booms’. 

10. Given that the only use of the Trade Mark in Australia during the relevant period is for goods not sought to be removed from the Register, I find that the Opponent has failed to establish that the Trade Mark was used in Australia for the Removal Goods in the relevant period. The Opponent has failed to discharge its onus under s 100(3)(a) of the Act

    Obstacles to use

    23. The Opponent does not submit there were obstacles to use of the Trade Mark in the relevant period pursuant to s 100(3)(c) of the Act, nor does its evidence suggest this.

    Registrar’s Discretion

    24.     It is therefore necessary to consider whether the Registrar should exercise her discretion to allow the registration to retain its coverage of the Removal Goods.  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 of the integrity of the Register will generally demand the removal of an unused trade mark.[7] However s 101(3) provides the Registrar with a discretion, which, in the words of Bennett J, is:

    [7] M Davison, I Horak Shanahan’s Australian Law of Trade Marks and Passing Off online edition, 2016 Thomson Reuters, [70.2505].

    a broad discretion to decide not to remove a trade mark from the Register or not to carve out some of the goods and services for which the mark is registered, even if s 92 grounds have been made out, if the Court [or Registrar] is satisfied that it is reasonable to do so. Irrespective of the lack of use of the trade marks on the removal goods and the removal services in the relevant period, there is a discretion not to alter the registrations.[8]

    [8] Pioneer Computers Australia Pty Limited v Pioneer KK [2009] FCA 135, [167].

    Her Honour also noted:

    By amendment in 2006, s 101(4) was added to provide that without limiting the matters that the Registrar may take into account in deciding under s 101(3) not to remove a trade mark from the Register, the Registrar may take into account whether the trade mark has been used by the registered proprietor in respect of (a) similar goods or closely related services; or (b) similar services or closely related goods. …

    There is no limitation within s 101(3) on the discretion, nor any indication of the factors to be taken into account.[9]

    [9] Ibid [171]-[172].

11. 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, 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].

    [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].

    26.     Factors that have been found relevant to the consideration of whether to exercise the discretion include:

    ·There had been no abandonment of the trade mark;

    ·The registered owner of the mark still had a residual reputation in the mark;

    ·There had been sales by the registered owner of goods for which removal was sought since the relevant period ended;

    ·The applicant for removal had entered the market without having taken steps to ascertain from the Register whether anyone had a right to exclude their use of the mark;

    ·The registered owner was not aware of the applicant’s sales under the mark.[13]

    [13] Pioneer Computers Australia Pty Ltd v Pioneer KK [2009] FCA 135 at [169] citing E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2008] FCA 1005 [202]-[203].

12. In the present case the Trade Mark has been used in Australia during the relevant period for windsurfing equipment.  However on the evidence before me I find that the level of sales and marketing of goods featuring the Trade Mark, both during the relevant period and afterwards, to be very limited.  There is no evidence of the Trade Mark being used on the Removal Goods either before or after the relevant period.  Moreover, as the Trade Mark is not sought to be removed in respect of windsurfing equipment I consider the level of consumer confusion and disadvantage caused to the Opponent as a result of removal to be low.  I do accept that the Applicant’s private commercial interests would be affected adversely were I to allow the Trade Mark to remain on the Register for the Removal Goods.

13. While the Opponent may have a limited private commercial interest in maintaining the registration of the Trade Mark as it stands, given the likely very limited reputation of the Trade Mark in Australia apparent from its evidence, the Opponent’s private commercial interest is insufficient to outweigh the private commercial interest of the Applicant and the public interest in the integrity of the Register.  In those circumstances I do not consider it reasonable to exercise the Registrar’s discretion in the Opponent’s favour.

    Decision

    29.     I decide that the Opponent has not established its opposition to partial removal and the Trade Mark should be removed from the Register in respect of the Removal Goods, being ‘Games and playthings; gymnastics and sporting articles not included in other classes; decorations for Christmas trees’.

    30.     Accordingly, I direct that registration 1055576 be amended to remove the Removal Goods 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

    31. The Applicant has been successful in relation to the application for partial removal of the Trade Mark and has requested its costs. I direct that costs be awarded against the Opponent in accordance with Schedule 8 of the Trade Marks Regulations 1995.

    Nicholas Smith

    Hearing Officer

    Hearings and Oppositions

    2 May 2018