Nordstrom Inc v Starite Distributors Inc

[2008] ATMO 11

TRADE MARKS ACT 1995

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

Re:Opposition by NORDSTROM INC to application under section 92 of the Act by STARITE DISTRIBUTORS INC to remove trade mark number 852814(35) - NORDSTROM - in the name of NORDSTROM INC

Delegate:	Don Nancarrow
Representation:	Opponent: Tom Cordiner of Counsel instructed by Davies Collison Cave, Patent and Trade Mark Attorneys, Melbourne Applicant: Stephen Wilson of Griffith Hack, Patent and Trade Mark Attorneys, Melbourne.
Decision:	2008 ATMO 11 s. 92 opposition – s.92(4)(b) – applicant is a ‘person aggrieved’ – trade mark not used in Australia in the relevant three year period – s.101(3) – no reason to retain registration under Registrar’s discretion – removal of trade mark from Register. Costs – awarded against opponent.

Background

1. Starite Distributors Inc. (‘the applicant’) filed an application on 8 April 2005 under section 92 of the Trade Marks Act 1995 (‘the Act’) to remove registered trade mark 852814 from the Register. The application was advertised in the Official Journal of Trade Marks (‘the Journal’) of 28 April 2005. The registered owner, Nordstrom Inc. (‘the opponent’), filed a Notice of Opposition to the removal action on 20 July 2005.

2. Details of the registered trade mark are as follows:

   Trade mark:              NORDSTROM

   Number:  852814

   Services (class 35):    Retailing services, mail order and Internet ordering services for apparel, hats, gloves, scarves, shawls, belts, hosiery, socks, footwear, headgear, small leather accessories, cosmetics, personal care products, jewellery, gifts, candy, confectionery, hair accessories, and sunglasses

3. The applicant framed its claim for removal in terms of paragraph 92(4)(b) of the Act, alleging that the registered trade mark had not been used for the three year period beginning from 8 March 2002 and ending on 8 March 2005.

4. Thereafter, evidence was filed and served by both parties (see table below) in accord with the Trade Marks Regulations 1995 (‘the Regulations’) and the opponent requested to be heard. The matter came before me, as the Registrar’s delegate, in Melbourne on 21 September 2007.

5. Tom Cordiner of Counsel, instructed by Davies Collison Cave, Patent and Trade Mark Attorneys of Melbourne, represented the opponent whilst Stephen Wilson of Griffith Hack, Patent and Trade Mark Attorneys of Melbourne, represented the applicant for removal.

   The Evidence

6. The evidence as filed and served in accord with the legislation is shown below.

Declarant	Status	Date, Known as	Exhibits
Evidence in Support
David L. Mackie	Corporate Secretary of opponent	11 October 2006, Mackie	‘DLM- 1’ to ‘DLM-11’ inclusive
Evidence in Answer
Stephen H. Wilson	Attorney for applicant	8 January 2007, Wilson	‘SHW-1’ and ‘SHW-2’

1. The evidence goes to show that the opponent is a multi-billion dollar family corporation with extensive use of the NORDSTROM trade mark in the United States from as early as 1901. The early business interests were in shoes but in 1963 the interests diversified into apparel. The fourth generation of the Nordstrom family now manages the company. The company operates 156 stores, principally in the United States and Europe, but has no physical presence in Australia.

2. The opponent operates a website that allows international consumers to order on-line for shipping to an address in the United States. Mr. Mackie avers at ¶9 that purchasers who live outside the United States “can use the website to select products and then place telephone orders through the telephone number shown on the website for delivery anywhere in the world”.

3. Attached to the Mackie declaration are exhibits ‘DLM-3’ and ‘DLM-4’. The first lists a summary ‘of orders placed and US dollars spent by Australian residents for merchandise purchased from the Nordstrom website by telephone for each year from 1996-2006’. The second ‘is a summary of goods under the NORDSTROM trade mark shipped to Australia between 28 December 1998 and May 2005 in response to telephone orders from Australians’. Other evidence from the opponent outlines publicity of the NORDSTROM trade mark in Australia via international publications and Australian media references as well as the worldwide use of Nordstrom credit cards.

4. The non-use applicant’s evidence shows that it has a registered NORDSTROM trade mark, number 745906, filed on 9 October 1997. The goods specified for this registration are: ‘Manchester’ in class 24 and ‘Mens shirts, mens jackets’ in class 25. The applicant has also exhibited some individual uses made of this trade mark by the applicant from June 2000 to mid-2004. 

   Discussion

5. Mr. Cordiner, for the opponent, opened his submissions with the claim that the applicant is not ‘a person aggrieved’. The legislation relevant to this issue reads:

   Application for removal of trade mark from Register etc.

   92.(1)  A person aggrieved by the fact that a trade mark is or may be registered may, subject to subsection (3), apply to the Registrar for the trade mark to be removed from the Register.

   (a) The matter of ‘person aggrieved’

6. Changes to section 92 of the Act involving this sub-section occurred in 2006. However, for all non-use actions filed before 19 December 2006 (the present application was made on 8 April 2005) the ‘person aggrieved’ pre-condition remains relevant.

7. Mr. Cordiner argued that the applicant needed to demonstrate standing as ‘a person aggrieved’ in respect of each element of the opponent’s registered services specification as a threshold question before the opponent’s evidence of actual use need be assessed. For this submission the opponent relied on the words of Sackville J in Kraft Foods Inc. v Gaines Pet FoodsCorporation, 34 IPR 198 at 209 where he commented:

   In Lever Brothers, Port Sunlight Limited v Sunniwhite Products Limited (1949) 66 RPC 84 at (Ch D, Romer J) the manufacturers of a soapless detergent powder cross-claimed in an infringement suit to remove registration of a mark registered in respect of soap, detergents and cosmetic goods. Romer J held that the cross-claimants were not persons aggrieved by the registration of the mark in respect of cosmetics. His Lordship commented (at 101) that if the cross-claimants:

   …. entertain, or have at any time entertained, any notion of embarking upon an enterprise so far removed from their present one, I cannot but think that it was incumbent upon them to call evidence to that effect. This they were singularly coy about doing.

8. Mr. Cordiner claimed that this was on point with the present matter because the applicant could only show, at best, an interest in the NORDSTROM trade mark in respect of ‘mens shirts, mens jackets’ (DZ-1 an exhibit to SHW-2), ‘men’s boots, polo shirts, t-shirts’ (DZ-2 an exhibit to SHW-2) and a claim for ‘Manchester items, clothing in the form of jackets and shirts’ (¶9 of Zapelli 1 declaration in SHW-2). He stressed that the applicant has shown no interest in respect of ‘leather accessories, cosmetics, personal care products, jewellery, gifts, candy, confectionery, hair accessories and sunglasses’ – items listed within the opponent’s specification for retailing services for the present registration. He also submitted that the applicant has not shown an interest in the field of retailing services at all. Mr. Cordiner further claimed that ‘while the applicant does appear to be a wholesaler, it is not clear that it has traded under the Nordstrom trade mark’.

9. Mr. Wilson, for the removal applicant, sought to counter this claim with the comment that the term ‘person aggrieved’ was defined by McLelland J in Ritz Hotel Limited v Charles of the Ritz, (1987) 12 IPR 417, at 454 in the words:

   It is sufficient for present purposes to hold that the expression would embrace any person having a real interest in having the register rectified, or the trade mark removed in respect of any goods, as the case may be, in the manner claimed, and thus would include any person who would be, or in respect of whom there is a reasonable possibility of his being, appreciably disadvantaged in a legal or practical sense by the register remaining unrectified, or by the trade mark remaining unremoved in respect of any goods, as the case may be, in the manner claimed. In my opinion, the concept does not admit of further refinement.

10. From this statement Mr. Wilson highlighted that it was an interest in the ‘trade mark’ that needed to be demonstrated rather than an interest in particular goods or services to qualify as ‘a person aggrieved’. He pointed to the use shown in the evidence of the NORDSTROM trade mark by the non-use applicant (exhibit SHW-2) and indicated that because such use could be seen to overlap with the opponent’s registration this enabled the applicant standing as ‘a person aggrieved’ by being disadvantaged in either a legal or practical sense.

11. I do not totally accept the position of either party on this issue.

12. I do not accept that to be disadvantaged ‘in a legal or practical sense’ a party simply needs to show an interest in a trade mark in respect of any goods or services whatsoever under that trade mark (as the applicant had implied) – but, equally, I do not accept that a party would have to demonstrate an interest in every single item listed in the opponent’s specification to bring about removal of an unused registration (as the opponent submitted). A practical view must be taken, one that looks at the implications from the evidence provided by both parties.

13. In the present matter I believe that the non-use applicant is trading in at least some goods that are the focus of the opponent’s specified retailing services and also has a registration to clearly support its stated interest. It also has a separate pending NORDSTROM application in respect of goods in classes 24 and 25 – some of which are listed as being obtainable by means of the opponent’s retail services in the present registration.

14. I also note that in the Ritz case, supra, Justice McLelland’s comments at 455 on a similar issue to that for decision here in the words:

    The question whether an applicant for relief is a “person aggrieved” cannot be divorced from the nature and extent of the relief claimed. For example, the relief available under s 23(1) is expressly defined in terms of removal of a trade mark “in respect of any goods or services in respect of which it is registered”, which in its context means “in respect of any category of goods or services specified in the registration”. If a mark were registered in respect of goods in specified categories A and B, and an applicant for relief under s 23(1) were to show that he was a “person aggrieved” in respect of registration of the mark in relation to goods in category A, but not in relation to goods in category B, then he would have standing to claim removal of the mark in respect of goods in category A, but not in respect of goods in category B: Lever Brothers, Port Sunlight Ltd v Sunniwhite Products Limited (1949) 66 RPC 84. If, however, the mark were registered only in respect of goods in specified category C and the applicant were to show he was a “person aggrieved” in respect of the registration of the mark in relation to some kinds of goods in category C but not other kinds in that category, he would nevertheless have standing to claim removal of the mark in respect of goods in category C without distinction: “Kodiak” Trade Mark [1987] RPC 269.

15. The present registration is not in respect of goods – but in respect of services. The actual details have been set out in ¶2. The specification begins with the statement: ‘Retailing services, mail order and Internet ordering services for …’. The actual items of goods available via the opponent’s services are then described. The goods are wide-ranging. They vary from clothing and accessories to gifts and confectionery. However, what cannot be overlooked is that they are delivered by the same means – this is not a registration for the goods across a variety of classes, but a registration for the ‘retailing’, ‘mail order’ and ‘Internet ordering’ services by which the goods are obtained. This places the opponent’s registration, I believe, within those broadly described by category C of Justice McLelland’s synopsis, notwithstanding that the present registration specifies services whereas the Ritz judgment is in terms of goods.  

    This leads me to conclude that the applicant does have standing as a person aggrieved in this matter in respect of all of the services nominated in this registration.

    (b) the opponent’s use under the trade mark

16. The opponent submitted that it had used the NORDSTROM trade mark in Australia by means of a number of channels. These include sales from a website, sales by means of telephone calls to the opponent in the United States and sales from a brochure that had been received when an order had been filled after employing one of the two previous means.

17. Insofar as the opponent’s on-line presence is concerned I note that the website is hosted in the United States of America (the address being and on the website that there is neither evidence of specific advertising designed to appeal to Australian consumers nor any evidence of information on Internet sales specific to Australian customers.

18. I also note that the opponent’s evidence (Mackie at ¶9) points out that it is not possible to have goods delivered to an address in Australia by means of the opponent’s services by ordering directly from the Internet. The relevant passage reads:

    Although Nordstrom products ordered on-line cannot be shipped to customers outside the United States of America, purchasers outside the United States of America can use the website to select products and then place telephone orders through the telephone number shown on the website for delivery anywhere in the world.

19. I am inclined to accept the applicant’s submission on this issue – that is, that Justice Merkel commented on an extremely similar scenario in Ward Group Pty Limited v Brodie & Stone PLC and others, 64 IPR 1 at 12, in the words:

    [43] In summary, the use of a trade mark on the internet, uploaded on a website outside of Australia, without more, is not use by the website proprietor of the mark in each jurisdiction where the mark is downloaded. However, as explained above, if there is evidence that the use was specifically intended to be made in, or directed or targeted at, a particular jurisdiction then there is likely to be a use in that jurisdiction when the mark is downloaded.

20. I do not accept the opponent’s evidence in respect of Internet sales from Australia delivered into the United States as establishing use under the trade mark in Australia.

21. What of the telephone sales described by the opponent? Two sets of sales summaries of the opponent are shown in exhibits ‘DLM-3’ and ‘DLM-4’ to the Mackie declaration with the explanation that they are summaries of orders placed by Australian residents by telephone. This claim was challenged by the applicant with the submission that the ‘1-800’ telephone number shown on printouts from the website could not be accessed from Australia (a matter that I have dealt with more fully in ¶30 below) and with the implication that any orders that had been filled were from Australians visiting the United States.

22. It is for the opponent to establish its claim of use. The opponent’s evidence, however, leaves some crucial questions unanswered. It is critical that the opponent demonstrate a trade channel has been established into Australia. The Mackie declaration at ¶11 states:

    Attached hereto and marked Exhibit “DLM-4” is a summary of goods under the NORDSTROM trade mark shipped to Australia between 28 December 1998 and May 2005 in response to direct telephone orders from Australians.

23. This statement does little to counter the claim made by the applicant that the number on the website could not be accessed from Australia and that these orders may have been made by Australians visiting the United States. Mr. Cordiner submitted that because the list in exhibit ‘DLM-4’ showed that the goods were dispatched to addresses in Australia that this was proof that the ordering was by telephone rather than over the Internet. However, this does not establish the order was made from Australia – it does not overturn the applicant’s claim that the order may have been a telephone order from within the United States by a visiting Australian who requested that the goods (obtained by means of the opponent’s services) be posted directly to his or her home in Australia.

24. Another difficulty also exists here in relation to the telephone ordering. I am of the opinion that the opponent’s evidence with regard to direct ordering by telephone from Australia (as a result of finding a telephone number on the opponent’s website) suffers a very similar problem to the claim for use made in Ward v Brodie & Stone, supra. This view is brought about, in part, because the website telephone numbers shown in the evidence (exhibits ‘DLM-2’ and ‘DLM-5’), a set of ‘1-800’ numbers and a separate ‘1-888’ number, are clearly aimed at the domestic United States market[1]. Had these numbers been set up to target Australian consumers living in Australia they would have shown, at least, the International telephone dialling code required to access the United States telephone network from Australia. The other part that shapes my view here is the fact that the starting point for such telephone ordering is the Internet site hosted in the United States that, itself, does not exist to target Australian consumers. There is no material before me here to indicate that the opponent has deliberately aimed at Australian consumers as a target market.

    [1] Structureco Inc. v Starite Distributors Pty Limited, 49 IPR 209, at 215

25. I am also mindful that the opponent is a world-wide multi-billion dollar enterprise yet an analysis of exhibit ‘DLM-4’ only yields a claim of nine instances of sales from telephone orders by Australians in the period from 8 March 2002 to 8 March 2005 (the relevant dates for the non-use action). These are:

    (1)   printed top – 16 November 2004, (2) pant – 17 September 2003, (3) ribbed sweater – 7 January 2003, (4) women’s sweater – 24 March 2004, (5) straight collar shirt – 4 October 2002, (6) briefs – 23 April 2002, (7) coat front pyjama – 1 August 2002, (8) dress shirt – 23 March 2003, (9) pocketed shirt – 6 February 2004.

26. There were a further small number of items listed but with insufficient detail to accurately determine the goods involved.

27. Mr. Wilson claimed that this evidence and the statement at ¶9 of the Mackie declaration (quoted below) did not demonstrate use of the trade mark in the Australian market. He said that the Mackie statement does not unambiguously establish the source of purchase of the opponent’s services. He went on to add that it could just as easily be interpreted as a small number of telephone purchases by Australian residents visiting the United States as by purchases via a telephone calls from Australia. The statement in the Mackie declaration to which Mr. Wilson refers is:

    …. Australian purchasers have been able to purchase Nordstrom’s products and have them shipped to Australia. Attached hereto and marked Exhibit “DLM-3” is a summary of the number of orders placed and US dollars spent by Australian residents for merchandise purchased from the Nordstrom website by telephone for each year from 1996-2006.

28. This statement and the quotation at ¶11 of the Mackie declaration (see ¶28 in this decision above) can be read in the way Mr. Wilson alleges. This situation parallels the circumstances in Structureco Inc. v Starite Distributors Pty Limited, 49 IPR 209, where at 217 Hearing Officer Forno commented:

    I think it is clear that, without specific proof that the subject goods were ordered from within Australia, the purchases said to be made by the seven identified Australian residents cannot be inferred as use in this country within the relevant period.

1. Similarly, here, I am not convinced that this evidence shows use by the opponent in the Australian market. There are, however, other surrounding circumstances here that raise additional questions.

2. The first is – did these sales actually take place in Australia? The sales values in the evidence are given in US dollars and, given that the opponent apparently does not have any physical presence in Australia (such as any address of a store or of an office) it would appear that all activity in respect of the opponent’s services is actually completed in the United States. This is not necessarily fatal to the opponent’s claim, it simply adds to the necessity of transparency in showing the circumstances surrounding the claimed use in the course of trade in Australia.

3. A second question in relation to the surrounding circumstances in this matter may also be posed. It is – do the circumstances in this matter match those outlined in Carnival Cruise Lines Inc. v Sitmar Cruises Limited, 31 IPR 375. In that case, although the services were provided overseas they qualified as use in Australia as discussed by Justice Gummow at 390 where he states:

   Thus, whilst the course of trade involved the provision of the services contracted for by steps taken outside Australia (i.e. the cruise itself) crucial integers in that course of trade took place in Australia.

4. The ‘crucial integers’ in Carnival v Sitmar included the facts that agents in Australia acting for the plaintiff accepted payment for the cruises after having negotiated and concluded the cruise contracts.

5. Nothing similar, that could qualify as ‘crucial integers’ in Australia, has been demonstrated in the evidence here.

6. As a third leg of its argument for use of the trade mark in the Australian market the opponent sought to rely on brochures that it had placed with the orders posted to Australian addresses (from earlier telephone orders). These brochures are apparently sent with all outgoing orders as a means of advertising. I note from exhibit ‘DLM-5’ that the telephone numbers on the brochures are ‘1-800’ numbers without any reference to the International dialling code that would enable access from Australia. The exhibit also contains a copy of a page headed ‘Return Envelope Information (USA only)’. This page gives details of how to return items to the opponent provided the purchaser is within the United States – but no information for return of items is provided for customers in Australia. These factors argue against this material being use of the trade mark in the Australian market.

7. From the foregoing I find that the opponent has not shown use on a trade in Australia.

   (c) the matter of the Registrar’s discretion

8. In his submission concerning the Registrar’s discretion Mr. Cordiner claimed that the changes in section 101 of the Act, via the Trade Marks Amendments Act 2006, ought to apply. The changes in the legislation became law from 27 March 2007. Mr. Cordiner argued that because there is no application provision for the section it should be applied as soon as it achieved Royal Assent.

9. A similar matter was dealt with in Apple Computer Inc. v Todaytech Group Limited, [2007] ATMO 40, by the Registrar’s delegate Debrett Lyons. In that matter Royal Assent occurred on 23 October 2006 for changes to section 60 of the Act and Counsel for the opponent argued that because there was no application provision it should be applied from that date. Mr. Lyons considered the Acts Interpretation Act 1901 in great detail and concluded that because the opposition action was already underway before 23 October 2006 that section 60 should be applied in its unamended form. The reason for such a position follows from [48] where the delegate states:

   Therefore, I find that the repeal of section 60 did have the capacity to affect rights or privileges that the applicant had acquired and, but for a contrary intention in the Amendment Act, the impact of section 8(c) of the AIA is to preserve those rights and privileges.

10. For the same reasons, in the present matter, I believe that section 101 ought to be applied in its unamended form, given that the Notice of Opposition was filed on 20 July 2005 and Royal Assent was achieved on 27 March 2007. The unamended form of Section 101 reads:

    Determination of opposed application—general

    101.(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.

    (2) Subject to subsection (3) and to section 102, if, at the end of the proceedings relating to an opposed application, the court is satisfied that the grounds on which the application was made have been established, the court may order the Registrar 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.

    (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.

11. The opponent seeks to rely on sub-section 101(3). In the present matter I have found that there has been no use of the trade mark by the opponent in Australia. To be able to apply the sub-section beneficially for the opponent would require the opponent to convince me that ‘it is reasonable to do so’.

12. Mr. Cordiner sought to convince me that such ‘reasonableness’ could be shown in a number of ways – from the size of the opponent’s business, the international reputation, the fact that NORDSTROM is the family name and also by means of the number of other registrations for the trade mark in the name of the opponent.

    Concerning the size of the opponent’s business and magnitude of reputation internationally, I believe that these factors would tend to diminish the opponent’s argument. It would be expected that a successful, sizeable multinational business would find entry into another foreign market, assuming the will to do so existed, far easier than for a comparatively smaller operation – yet the evidence of such intent, specific to the Australian market, is unconvincing based on the volume of use claimed in the opponent’s evidence as discussed in ¶31 above.

13. The fact that the opponent has other NORDSTROM trade marks on the Australian Register must be considered in the context that the non-use applicant also has NORDSTROM trade marks on the Register together with an interest in removing the present registration. I am of the opinion that the opponent’s other NORDSTROM trade marks add little to the opponent’s position in the matter.

14. I have earlier found that there has been no use shown of the trade mark in Australia during the relevant three year period. I further find that there are no circumstances before me to consider it reasonable for the trade mark to remain on the Register.  

    Decision

15. I direct that registration number 852814 for the NORDSTROM trade mark be removed from the Register one month from the date of this decision.  If the Registrar has been served with a notice of appeal before that time, I direct that removal shall not occur until the appeal has been discontinued or, in the event of a decision from the Court, the registration be made subject to that order.

    Costs

16. Both parties requested their costs. As the non-use applicant has been successful in the matter I award costs against the opponent in accord with the Official scale set out at Schedule 8 of the Regulations.

    Don Nancarrow
    Hearing Officer
    Trade Marks Hearings
    24 January 2008