Noshu Foods Pty Ltd v Torquay Beverage Company Pty Ltd
[2022] ATMO 221
•15 December 2022
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by Noshu Foods Pty Ltd to an application under section 92 of the Trade Marks Act 1995 (Cth) by Torquay Beverage Company Pty Ltd for removal of trade mark number 1585336 (classes 29, 30, 32, 33, 43) – NOSHU – in the name of Noshu IP Pty Ltd
Delegate: | Nicholas Barbey |
Representation: | Opponent: Edward Thompson of counsel instructed by Marque Lawyers Pty Ltd Applicant: Marcus Fleming of counsel instructed by By George Legal |
Decision: | 2022 ATMO 221 Trade Marks Act 1995 (Cth) – application under section 92 – partial removal sought – evidence does not show use of the Trade Mark during the relevant period or obstacle to use – discretion not exercised – registration to be partially removed. |
Background
Noshu IP Pty Ltd is the owner of the following Australian trade mark registration (‘Registration’):
Trade Mark: NOSHU (‘Trade Mark’)
Registration Number: 1585336
Filing Date: 10 October 2013
Specification: Class 29: egg-based foodstuffs; food made principally from milk; food preparations having a base of milk; food products made from cooked vegetables; food products made from eggs; foods made from milk products; aerated beverages (predominantly of milk); beverages having a milk base; beverages made from milk; beverages made from yoghurt; dairy based beverages and powders; yoghurt beverages
Class 30: cereal based food bars; cereal based snack food; food dressings (sauces); food flavourings (other than essential oils); food mixes for making bakery products; food pastes (seasonings); food preparations for making puddings; food products having a pastry base; foods with a chocolate base; foods with a cocoa base; snack food products made from soya flour; snack foods consisting principally of confectionery; natural sweeteners; aerated beverages (with coffee, cocoa or chocolate base); beverages made from chocolate; beverages made from cocoa; beverages made from coffee; beverages made of tea; beverages with a chocolate base; beverages with a cocoa base; beverages with coffee base; beverages with tea base; chocolate beverages; chocolate beverages with milk; chocolate flavoured beverages; chocolate syrups for the preparation of chocolate based beverages; chocolate-based beverages; cocoa beverages; cocoa beverages with milk; cocoa-based beverages; coffee beverages; coffee beverages with milk; coffee-based beverages; flavourings, other than essential oils, for beverages; frozen beverages (edible ices); ice beverages with a chocolate base; ice beverages with a cocoa base; ice beverages with a coffee base; iced coffee (coffee based beverages); tea-based beverages
Class 32: aerated beverages (non-alcoholic); alcohol free beverages; beverages containing not more than 1.15% (by volume) of alcohol; coconut milk (beverages); preparations for making beverages; sherbets (beverages); sorbets (beverages); syrup for making beverages; syrups for beverages; vegetable juice concentrates (beverages); vegetable juices (beverages)
Class 33: alcoholic beverages (except beer); alcoholic beverages (except beer) containing more than 1.15% of alcohol by volume; alcoholic beverages containing fruit; alcoholic preparations for making beverages; pre-mixed alcoholic beverages, other than beer-based; preparations for making alcoholic beverages; punches (beverage) having an alcohol content of 1.15% or more (by volume)
Class 43: arranging for the provision of food; food and drink catering; food preparation; take away food services; take out food and beverage services; takeaway food and drink services
(‘Registered GS’)
On 11 November 2020, Torquay Beverage Company Pty Ltd (‘Applicant’) filed a non-use application based on s 92(4)(a) and s 92(4)(b) of the Trade Marks Act 1995 (Cth) (‘Act’) seeking partial removal of the Trade Mark from the Australian Register of Trade Marks (‘Register’). The non-use application sought removal of all the Registered GS except for the following items (‘Undisputed Goods’):
Class 30: cereal based food bars; cereal based snack food; food mixes for making bakery products; food preparations for making puddings; food products having a pastry base; foods with a chocolate base; foods with a cocoa base; snack food products made from soya flour; snack foods consisting principally of confectionery
In the following discussion, the goods and services sought to be removed from the Registration will be referred to as the ‘Disputed GS’.[1]
[1] For the avoidance of doubt, the Registered GS have been reproduced in Annexure A to this decision with the Disputed GS depicted in strikethrough.
Noshu Foods Pty Ltd (‘Opponent’) filed a notice of intention to oppose the non-use application followed by a statement of grounds and particulars. In response, the Applicant filed a notice of intention to defend the non-use application.
Evidence in Support (‘EIS’) was filed by the Opponent and the Applicant filed Evidence in Answer (‘EIA’). In turn, the Opponent filed Evidence in Reply (‘EIR’). On 16 September 2022, the Opponent filed additional evidence (‘Late Evidence’) which will be addressed below.
An oral hearing was requested and submissions were filed by the Opponent on 21 September 2022 (‘Opponent’s Submissions’) and by the Applicant on 28 September 2022 (‘Applicant’s Submissions’). As a delegate of the Registrar of Trade Marks (‘Registrar’), I heard this matter by video conference on 5 October 2022. Edward Thompson of counsel presented submissions on behalf of the Opponent and Marcus Fleming of counsel presented submissions on the Applicant’s behalf.
Legal framework
Section 92 of the Act relevantly provides:
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.
The non-use application was filed on 11 November 2020 and complies with s 93(2) of the Act.[2] Section 92(4)(a) and s 92(4)(b) provide alternative grounds for removal. However, given the manner in which s 92(4)(a) is expressed, it has been accepted that this provision essentially merges with s 92(4)(b) once a trade mark has been registered for 5 years.[3] Accordingly, this matter will be considered under s 92(4)(b) of the Act.
[2] See Act 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 mark applications filed from 24 February 2019 onwards.
[3] See, eg, Auswool Products Pty Ltd v Source Co International Pty Ltd [2022] ATMO 173, [9]; Bangkok Broadcasting & T.V. Co Ltd v Seven Network (Operations) Limited [2021] ATMO 78, [21]; Orientis Gourmet v ABCDEX Pty Ltd and Burkhard Geiger [2020] ATMO 134, [17]; Live Entertainment Investments III Pty Ltd v The Education Group Pty Ltd [2018] ATMO 3, [22].
Relevant period and onus
The period in which the Opponent must establish use of the Trade Mark in Australia in good faith is the 3 year period ending on 11 October 2020 (‘Relevant Period’).
The burden lies with the Opponent to rebut the non-use allegation made under s 92(4)(b) of the Act.[4] The Registrar retains the discretion to remove the Trade Mark from the Register in respect of any, or all, of the goods and services for which partial removal has been sought. 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.[5]
[4] Act s 100(1)(c).
[5] Ibid s 101(3).
I proceed on the basis that the standard of proof required is the ordinary civil standard based on the balance of probabilities.[6]
[6] 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 of the Act.
Evidence
The following declarations were filed:
| EIS |
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| EIA |
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| EIR |
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| Late Evidence |
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As a preliminary observation, Bajada 1 contains a blanket statement that its contents are confidential.[7] This statement is clearly incompatible with the parts of Bajada 1 that discuss publicly available records from the Register and information that is freely accessible on public websites. I acknowledge the Opponent’s interests in preserving its confidential information. However, the Registrar must provide reasons for her findings. In discharging this duty, information claimed to be confidential may require discussion. This is particularly relevant when the Opponent has made little effort to specify the allegedly confidential information. Accordingly, where such discussion is unavoidable, broad statements will be used to minimise the potential risk of divulging any commercially sensitive information.
EIS
[7] Bajada 1, [4]–[5].
Bajada 1 describes the Opponent as ‘an Australian-owned sugar free foods company’ that offers products which are ‘healthy alternatives to a sugar-based diet’ because they utilise natural ingredients.[8] The Opponent first launched ‘a small range of sugar-free food products’ in 2014 and ‘currently sells a variety of sugar-free cake mixes, pancake mixes, baking chips, cakes, donuts, and snacking products’.[9] Bajada 1 claims that the Trade Mark has been used continuously since 10 October 2013 and that it has featured prominently on the packaging of the Opponent’s products. These products are ‘currently available for sale at Coles and Woolworths in Australia, Countdown Supermarket in New Zealand and at over 700 independent retailers’.[10]
[8] Ibid [7]–[8].
[9] Ibid [8]–[9].
[10] Ibid [16].
Bajada 1 states that the Trade Mark is currently used in relation to the following goods:
Class 29: dairy based powders; egg-based foodstuffs; food preparations having a base of milk; food products made from eggs; foods made from milk products
Class 30: cereal based food bars; cereal based snack food; food mixes for making bakery products; foods with a chocolate base; foods with a cocoa base; snack food products made from soya flour; snack foods consisting principally of confectionery; natural sweeteners
The above underlined goods are said to ‘make up several key ingredients of [the Opponent’s] products, which display the Noshu Mark’.[11] Bajada 1 provides observations on the sugar-free marketplace. Specifically, Ms Bajada believes that the marketplace ‘typically allows for brand expansion and product diversification’ because purchasers of low-sugar snacks are likely to purchase ‘low-sugar beverages or low-sugar dairy products’.[12] Bajada 1 asserts that it ‘is commonplace in the food and beverage industry for a confectionery company to combine with a beverage company to provide flavoured beverages which carry both trade marks’.[13] In Ms Bajada’s opinion, there has been a ‘rise in popularity of low-sugar, gluten-free, and low-carbohydrate beverages’ and these are interchangeable with their alcoholic counterparts.[14]
[11] Ibid [19].
[12] Ibid [22].
[13] Ibid [23].
[14] Ibid [24]–[27].
Bajada 1 details Australian trade mark application number 2146653 which is for the word ‘NOSHU’ as a defensive trade mark in respect of goods in classes 30 and 32 (‘Defensive Application’).[15] Ms Bajada understands that the Defensive Application was accepted[16] because consumers would be ‘highly likely’ to infer a connection between beverages bearing the word ‘NOSHU’ and the Opponent’s ‘NOSHU’ branded snack foods.[17] The expenditure required to develop, manufacture and commercialise products bearing the Trade Mark is also touched on in Bajada 1. In Ms Bajada’s view, the ‘substantial costs’ involved with product development have curtailed the Opponent’s capacity ‘to mass produce and release each of their products into the Australian market concurrently’.[18]
EIA
[15] Act s 185(1) provides that ‘If, because of the extent to which a registered trade mark has been used in relation to all or any of the goods or services in respect of which it is registered, it is likely that its use in relation to other goods or services will be taken to indicate that there is a connection between those other goods or services and the registered owner of the trade mark, the trade mark may, on the application of the registered owner, be registered as a defensive trade mark in respect of any or all of those other goods or services’.
[16] The registration of this defensive trade mark has been opposed by the Applicant.
[17] Bajada 1, [25].
[18] Ibid [31].
The Applicant owns Australian trade mark 2112916 for the words ‘No Sh BOOZY SELTZER’ which is registered in respect of alcoholic goods in class 33. It also owns the following Australian trade mark application which is currently opposed (‘Pending Application’):
Trade Mark:
Application Number: 2088710
Filing Date: 15 May 2020
Specification: Class 33: alcohol for drinking; alcoholic beverages (except beer); alcoholic beverages containing fruit; alcoholic essences; alcoholic extracts; alcoholic extracts of fruits; alcoholic mixed drinks; alcoholic preparations for making beverages; alcoholic punches; carbonated beverages (alcoholic, except beers); fruit based alcoholic beverages; fruit extracts (alcoholic); low alcohol cider; low alcohol cocktails; low alcohol spirits; low alcohol wine; pre-mixed alcoholic beverages, other than beer-based; sparkling cider (alcoholic); grain-based distilled alcoholic beverages; sugarcane-based alcoholic beverages
Mr Cogger states that ‘No Sh’/‘NO.SH’ is an abbreviation of ‘no shit’ and reflects ‘that the brand itself is no nonsense and that the products sold under and by reference to the NO.SH Brand do not contain sugar or carbohydrates’.[19] The ‘NO.SH branded seltzer’ was launched in September 2020 and it has been sold nationwide via beverage retailers such as Dan Murphy’s and Liquorland.
[19] Cogger Declaration, [6].
Mr Cogger explains that the non-use application was filed because the Registration underpins the opposition filed in respect of the Pending Application. In short, Mr Cogger believes that partial removal of the Registration will improve the Applicant’s prospects of registering the Pending Application. The Applicant thus claims to have a ‘strong private commercial interest’ for the Registration to be removed in respect of any goods and services for which there has been no use of the Trade Mark.[20]
[20] Ibid [18].
The Grujovski Declaration annexes search results obtained from the websites of Woolworths and Coles (together ‘Websites’). Mr Grujovski searched the Websites to identify third party brands used in connection with the sale of ‘cake mixes, pancake mixes, baking chips, cakes, doughnuts and snack products’ which are ‘sugar-free or reduced-sugar’ or ‘advertised as being gluten-free, dairy-free, wheat-free and/or vegan-friendly’.[21] Several third party brands, such as ‘Mt. Elephant’ and ‘Freedom Foods’, were identified as providing goods possessing the aforementioned characteristics. With the exception of one brand, Mr Grujovski’s searches revealed that these third party brands do not have any beverage offerings on the Websites.
[21] Grujovski Declaration, [4].
Mr Grujovski declares that he conducted further searches of the third party brands identified on the Websites. This included reviewing the corporate website of each brand as well as searching the websites of Dan Murphy’s, BWS and Liquorland. The search results detailed in the Grujovski Declaration indicate that the third party brands generally do not offer alcoholic or non-alcoholic beverages as part of their product range.[22] Of the brands which do offer beverages, the products available were limited to items such as ‘oat mylk’ and protein shakes.[23]
[22] Ibid [7]–[8].
[23] Ibid Annexure TG-2.
The remainder of the Grujovski Declaration responds to Bajada 1. Mr Grujovski contends that alcoholic beverages are not typically sold in the supermarket area where other grocery items can be purchased. Instead, they are usually sold in ‘separate stores with separate shopfronts and branding’.[24] Reference is made to the ‘significant regulatory regimes applying to the sale of alcoholic products in Australia’ as reinforcing ‘the separation of the physical retailing of grocery items from alcoholic products’.[25] On this basis, Mr Grujovski declares that it would be unlikely for alcoholic beverages and general grocery items to be sold ‘in close proximity to one another under the same retailing brand or shopfront’.[26]
EIR
[24] Ibid [11(a)].
[25] Ibid [14].
[26] Ibid [18].
Bajada 2 addresses allegations made in the EIA. Relevantly, the Pending Application was opposed by the Opponent because Ms Bajada considers the word ‘NO.SH’ to be ‘substantially identical and deceptively similar to the Noshu Mark’.[27] Ms Bajada declares that Mr Cogger has previously acknowledged this similarity and references a message she received from Mr Cogger wherein he wrote ‘I have developed a new product and whilst looking for a name, I found that yours was similar’.[28]
[27] Bajada 2, [2.5].
[28] Ibid Annexure A.
Bajada 2 disputes that supermarkets and liquor stores are physically separated. Specifically, Ms Bajada opines that liquor stores are ‘typically positioned adjacent to Coles and Woolworths supermarket stores’ and often the liquor store is ‘accessible through the supermarket itself’.[29] Contrary to Mr Grujovski’s deductions, Ms Bajada contends that there are third party brands which provide both food and beverages. Reference is made to the ‘Naked Life’ and the ‘Famous Soda Co’ as illustrating brands that provide sugar-free food and beverage products.[30]
[29] Ibid [2.10].
[30] Ibid [2.13]–[2.14].
Bajada 2 reiterates that the Trade Mark is currently used in connection with a subset of the Registered GS. Likewise, it reaffirms the Opponent’s intention to use the Trade Mark in relation to all the Registered GS when it is ‘commercially and financially viable for the Noshu business’ to do so.[31]
Late Evidence
[31] Ibid [3.1].
Bajada 3 clarifies statements made in Bajada 1 and provides dated examples of the Opponent’s website. The examples show the Trade Mark (or iterations thereof) used in relation to a subset of the Registered GS and many are reproductions of the undated material annexed to Bajada 1. Bajada 3 states that ingredients such as eggs, dairy powders and sweeteners are base ingredients for low sugar food products and constitute ‘a significant proportion of the total composition of Noshu’s products’.[32] A copy of the Opponent’s ‘sales records and advertising and promotional spend’ for products bearing the Trade Mark between 2015 to 2022 is also annexed to Bajada 3.
[32] Bajada 3, [6].
The Opponent submits that the Late Evidence should be considered pursuant to reg 21.15(4) of the Trade Mark Regulations 1995 (Cth) (‘Regulations’). It characterises Bajada 3 as providing ‘temporal clarifications’ to statements made in Bajada 1 and explains that the evidence was filed late ‘because of an oversight by the legal practitioners’. [33] In the Opponent’s opinion, Bajada 3 is ‘highly probative’ and ‘is of a confined nature, corrects potential ambiguity and does not expand the scope of the materials in evidence or issues in dispute’.[34]
[33] Correspondence received from Marque Lawyers Pty Ltd dated 15 September 2022.
[34] Ibid.
At the hearing, Mr Thompson emphasised that filing delay is only one factor for determining whether the Late Evidence should be considered. Here, the delay is said to be offset by the probative value of the Late Evidence which shows use of the Trade Mark during the Relevant Period. Mr Thompson opined that there was a public interest in the opposition being decided on the merits of all the relevant information and argued that the balance of convenience favours the Opponent given the Late Evidence does not expand the scope of the issues nor has it derailed the hearing date.
Unsurprisingly, the Applicant argued that the Late Evidence should not be considered because the Opponent has failed to make a compelling case for its inclusion. The Applicant rightly observed that the Registrar’s ordinary practice is not to ‘consider evidence that is filed out of time in proceedings’.[35] Attention was also drawn to Fed Square Pty Ltd v Federation IP Pty Ltd wherein the delegate commented that ‘it is not sufficient to simply show that such evidence is relevant and there is a possibility that the opposition may fail without it’.[36] In the Applicant’s view, no valid reason had been put forward as to why the Late Evidence could not have been filed earlier and, in any case, it fails to demonstrate use of the Trade Mark in relation to the Disputed GS.[37]
[35] Applicant’s Submissions, [13] citing Part 51.2.5 of the Australian Trade Marks Manual of Practice and Procedures.
[36] [2015] ATMO 42, [55].
[37] Applicant’s Submissions, [16].
I find the Applicant’s position persuasive. The Late Evidence is mainly comprised of dated reproductions, sourced from an internet archiving service, of the material annexed to Bajada 1. Broadly speaking, the material shows use of the Trade Mark during the Relevant Period in relation to sugar-free donuts, biscuit mixes, baking chips, cakes and pancake mixes (‘Used Goods’). That is, use in relation to a subset of the Undisputed Goods and not the Disputed GS. Meanwhile, the financial figures disclosed span from 1 January 2015 to 31 August 2022. Whilst this includes the Relevant Period, it also includes approximately 4 years of use that falls outside of same. The figures for each product have been provided in a lump sum form. As such, it is impossible to discern what proportion of the disclosed figures falls within the Relevant Period. The Late Evidence therefore has limited probative value.
The delay in filing the Late Evidence is said to have resulted from an oversight by the Opponent’s legal representation. No further explanation is provided. As the Applicant pointed out, this is far from satisfactory given the Late Evidence was filed 9 months after the evidence stages had ended and approximately 3 weeks prior to the hearing date. Tellingly, there is nothing to suggest that the material disclosed in Bajada 3 was not available to the Opponent during the evidentiary stages. Consequently, the Opponent has failed to establish a compelling case for the inclusion of the Late Evidence and, in any event, I am not satisfied that it is crucial to the outcome of this opposition. As such, this decision will only have regard to the evidence which has been properly filed during the evidence stages.
Discussion
The main issue for determination is whether the Opponent (or an authorised user) has used the Trade Mark in Australia in relation to the Disputed GS during the Relevant Period. If the evidence establishes that the Opponent (or an authorised user) has, then the non-use allegation is taken to have been rebutted and the Trade Mark will remain registered in respect of the Disputed GS. If the evidence fails to establish use of the Trade Mark for all of the Disputed GS, then consideration will turn to whether it is reasonable to invoke the Registrar’s discretion to preserve the Trade Mark for any goods or services for which it has not been used.
The evidence of use required to be demonstrated is ‘use as a trade mark’. That is, the Trade Mark must have been used as a badge of origin.[38] The extent of use required is not onerous and a ‘relatively small amount of use’ may be sufficient to rebut a non-use application.[39] Indeed, a single bona fide use of a trade mark during the relevant period may suffice to prevent removal.[40] However, if reliance is placed on a solitary example of use, it should be established by ‘overwhelmingly convincing proof’.[41]
Use of the Trade Mark during the Relevant Period
[38] See Coca-Cola Co v All-Fect Distributors Ltd [1999] FCA 1721, [19] (Black CJ, Sundberg and Finkelstein JJ) wherein it was observed that ‘[u]se “as a trade mark” is use of the mark as a “badge of origin” in the sense that it indicates a connection in the course of trade between goods and the person who applies the mark to the goods’.
[39] E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2010] HCA 15, [64] (French CJ, Gummow, Crennan and Bell JJ).
[40] Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261, [17] (Drummond J).
[41] Nodoz Trade Mark [1962] RPC 1, 7 (Wilberforce J).
The Opponent asserts that the Trade Mark has been used during the Relevant Period in relation to the following:[42]
Class 29: dairy based powders; egg-based foodstuffs; food preparations having a base of milk; food products made from eggs; foods made from milk products
Class 30: cereal based food bars; cereal based snack food; food mixes for making bakery products; food preparations for making puddings; food products having a pastry base; foods with a chocolate base; foods with a cocoa base; snack food products made from soya flour; snack foods consisting principally of confectionery; natural sweeteners
[42] Opponent’s Submissions, [28]; Bajada 1, [18].
Unhelpfully, this assertion conflates items from the Undisputed Goods with those of the Disputed GS. It is only the latter that is the subject of the non-use application and which the Opponent is required to demonstrate use of the Trade Mark in relation to. Be that as it may, the Opponent’s assertion implicitly concedes that the Trade Mark has not been used in relation to any of the goods or services in classes 32, 33 and 43 of the Disputed GS. It is also evident that the Trade Mark has not been used in relation to all the goods in classes 29 and 30 of the Disputed GS. Rather, of the Disputed GS, the assertion is that the Trade Mark has been used in relation to the following goods (‘Claimed Use Goods’):[43]
Class 29: dairy based powders; egg-based foodstuffs; food preparations having a base of milk; food products made from eggs; foods made from milk products
Class 30: natural sweeteners
[43] Ibid.
The EIS and EIR are devoid of any dated examples of the Trade Mark being used in relation to the Claimed Use Goods or, for completeness, the Disputed GS. Instead, the evidence is comprised of undated examples of the Trade Mark (or iterations thereof) being used in relation to the Used Goods which are a subset of the Undisputed Goods.[44] Naturally, evidence of this nature does not assist the Opponent’s rebuttal of the non-use allegation. Bajada 1 also contains statements that the Trade Mark has been used in relation to a variety of sugar-free products and that additional products have been launched by the Opponent since 2014. In the absence of any dated corroborative material, these bare statements are insufficient to rebut the non-use allegation. Consequently, I am not satisfied that the Opponent has used the Trade Mark in relation to any of the Disputed GS during the Relevant Period.
Obstacles to use
[44] Bajada 1, Annexures C to D.
Section 100(3)(c) of the Act provides that an opponent is taken to have rebutted the allegation of non-use made under s 92(4)(b) during the relevant period if:
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.
Circumstances that may constitute an obstacle to the use of a trade mark within the meaning of the Act were considered in Woolly Bull Enterprises Pty Ltd v Reynolds (‘Woolly’)[45] wherein Drummond J said:
In the context of s 100(3)(c), there are, however, good grounds for reading “circumstances” as not embracing any event of any kind. The circumstances must be “an obstacle to the use of the trade mark by the registered owner”. This suggests that they must arise from or comprise events external to the registered owner in the sense of not having been brought about by the voluntary act of the owner.[46]
[45] [2001] FCA 261 (‘Woolly’).
[46] Ibid [47] (emphasis added).
The Opponent alleged that financial and timing obstacles prevented use of the Trade Mark in relation to the Disputed GS during the Relevant Period.[47] The financial obstacles are said to arise from the fact that the Opponent is a small start-up business which lacked the financial resources ‘to mass produce and release each of their products into the Australian market concurrently’.[48] Meanwhile, the timing obstacles purportedly stem from the numerous ‘steps involved in taking a product from concept to commercialisation’ which has hampered the Opponent’s ability to exploit the full scope of items that fall within the Disputed GS.[49]
[47] Bajada 1, [29]–[33].
[48] Ibid [31].
[49] Ibid [33].
The Applicant argued that the alleged obstacles do not fall within the ambit of s 100(3)(c) of the Act. It described the alleged obstacles as simply being ‘the reality of any business operating in the same industry as the [Opponent]’ and submitted that the Opponent ‘should not be permitted to rely upon a broadly framed specification as giving rise to an obstacle to use’.[50] Attention was also drawn to the Opponent’s launch of further products since the Trade Mark was registered. In the Applicant’s opinion, this illustrates that the Opponent had ample capacity to develop products and its decision to pursue products within the range of the Undisputed Goods instead of the Disputed GS was therefore ‘entirely voluntary’.[51]
[50] Applicant’s Submissions, [38]–[39].
[51] Ibid [38].
In my view, neither of the alleged obstacles constitute a relevant obstacle for the purposes of the Act. In Woolly, Drummond J expressed the view that s 100(3)(c) of the Act did not envisage circumstances such as ‘financial impecuniosity’ or ‘illness’ as being relevant obstacles.[52] Rather, the obstacle must be external to the trade mark owner and ‘must also be circumstances of a trading nature’ to fall within the meaning of the provision.[53] I agree with the Applicant insofar as the Opponent’s use of the Trade Mark in relation to the Undisputed Goods, as opposed to the Disputed GS, appears to have been a voluntary decision unaffected by external factors. Aside from a passing reference to the ‘substantial costs’ involved in bringing a product to market,[54] the Opponent has not highlighted any circumstances it faced that amount to a relevant obstacle and differentiate it from the usual circumstances experienced by similar traders. In other words, simply being a start-up business does not justify non-use of the Trade Mark and the circumstances raised are already accommodated for by the non-use grace period built into the Act.
[52] Woolly (n 45) [48].
[53] Ibid [49].
[54] Bajada 1, [31].
Accordingly, the Opponent has not rebutted the s 92(4)(b) ground for removal in respect of the Disputed GS.
Registrar’s discretion
Pursuant to s 101 of the Act, the Registrar has a broad discretion not to remove an unused trade mark if it is satisfied that it is reasonable to do so. In PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd, the Full Federal Court provided the following insights regarding the discretion under s 101(3) of the Act:
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.[55]
[55] [2021] FCAFC 128, [153] (Jagot, Nicholas and Burley JJ) (emphasis altered) (citations omitted).
The Opponent advanced several reasons as to why the discretion should be exercised to preserve the registration in respect of the Disputed GS. It submits that there has been extensive use of the Trade Mark in relation to sugar-free confectionery, baking and snack food products. Many of these products are asserted to be the same, similar or closely related to the Disputed GS. The Opponent also claims that the Trade Mark has a reputation in Australia in relation to ‘low sugar products’ which the Applicant was aware of. In its view, there ‘is a public interest in the Trade Mark remaining on the Register to prevent the risk of confusion or deception occurring should a third party commence using that mark as badge of origin for their own goods and services’.[56]
[56] Opponent’s Submissions, [41].
The Applicant emphasised that the Opponent bears the onus of positively satisfying the Registrar that it is reasonable to exercise the discretion. It contends that the discretion should not be exercised because the Opponent’s evidence shows use in relation to the Used Goods which are neither similar nor closely related to any of the Disputed GS. The Applicant points out that the Opponent has focused its business on sugar-free snack foods and has operated exclusively within this field since the Trade Mark was registered. As such, any reputation it may have would be confined to sugar-free snack foods and not ‘low sugar products’ in general. The Applicant reiterated its private interest in having the Disputed GS removed given the Pending Application and stressed that there is a public interest in removing unused trade marks from the Register.
I am not satisfied that the discretion should be exercised to maintain the Registration in respect of the Disputed GS. The evidence demonstrates that the Trade Mark (or iterations thereof) has been used in relation to the Used Goods, which is a subset of the Undisputed Goods. Despite being undated, I accept that such use is likely to have occurred during and after the Relevant Period. However, I do not accept that the Used Goods are the same, similar or closely related to any of the Disputed GS. Detailed written and oral submissions were provided on this issue. In short, the Opponent claimed that the evidence showed use in respect of the Claimed Use Goods because egg, dairy and/or natural sweeteners form ‘key ingredients’ of the Used Goods.[57] Put simply, this argument leads nowhere. Even if I were to accept that use of the Used Goods constituted use of the Claimed Use Goods, the latter is drafted so broadly that it would need to be limited to reflect what is demonstrated by the evidence – namely, goods that already fall within the Undisputed Goods. The Registration will continue to be registered for the Undisputed Goods irrespective of the outcome of this opposition. As such, leaving to one side the classification incongruities that would ensue,[58] it would be futile to exercise the discretion to preserve the Registration in respect goods such as, for example, ‘dairy based powders being pancake mixes’.
[57] Ibid [28].
[58] By way of example, ‘dairy based powders’ are correctly classified in class 29 whereas ‘pancake mixes’ are correctly classified in class 30.
Meanwhile, the Opponent asserted that the Used Goods are similar or closely related to a number of the Disputed GS. However, it provided no submissions in support of this contention other than baldly asserting that they are. On its face, there is no obvious relationship between the goods other than the baseline that they are sold for human consumption. I agree with the Applicant’s observation that the fact that some of the Used Goods may contain dairy, egg or natural sweetener as a raw ingredient is not, without more, sufficient to establish similarity for the purposes of the Act. Given the Opponent bears the onus and in the absence of submissions, I am not satisfied the Used Goods constitute use of goods that are similar or closely related to the items in classes 29, 30 and 43 of the Disputed GS.
The Opponent further argued that classes 32 and 33 of the Disputed GS were similar to the Used Goods because some manufacturers provide sugar-free snack foods and beverages and other manufacturers of the respective goods engage in collaborations. The Opponent also remarked that it is not uncommon for ‘snacks/confectionary’ and non-alcoholic beverages ‘to be displayed in the same aisle or location within a supermarket’.[59] The Applicant contested this. It highlighted that the respective goods have a dissimilar nature and have different uses and trade channels. In my assessment, the Applicant’s position is more compelling. The evidence filed indicates that some third party brands provide snack products and beverages. However, when considered in its entirety, the evidence indicates that this is the exception rather than the rule. It follows that the Applicant’s observation that the ‘evidence is insufficient to establish a likelihood that consumers would assume a common trade source’ between beverages and the Used Goods has merit.[60] Further, I do not accept that it is common for beverages and the Used Goods to be displayed in the same location of a supermarket. These goods are invariably located in separate aisles of a supermarket or, in the case of alcoholic beverages, usually in an entirely different premise. Consequently, I am not satisfied that the Used Goods are similar to the items in classes 32 and 33 of the Disputed GS.
[59] Opponent’s Submissions, [40].
[60] Applicant’s Submissions, [72].
Turning to the alleged reputation, the evidence does not provide an adequate basis to conclude that the Trade Mark enjoys a general reputation in relation to ‘low sugar products’. Whilst I accept that use of the Trade Mark has occurred, the evidence contains insufficient particulars regarding the extent, duration and overall use of the Trade Mark to discern the true nature of any reputation that may exist. For example, the evidence is devoid of standard metrics such as annual turnover and marketing expenditure figures as well as examples of promotional material that may have been distributed. Although neither party specifically raised it, I acknowledge that the existence of the Defensive Application suggests that the Trade Mark enjoys some form of reputation. However, I am not privy to the circumstances which led to the acceptance of the Defensive Application and the Opponent has chosen not to file the evidence used to achieve its acceptance in the current opposition. As such, the mere existence of the Defensive Application does not assist the Opponent’s case. This is particularly so given the Defensive Application is currently opposed and may never achieve registration.
Finally, I do not consider the public interest is served by maintaining the Registration in respect of the Disputed GS when the Trade Mark has never been used in relation to same. The Opponent drew my attention to Ms Bajada’s declared intent to use the Trade Mark in respect of all the Disputed GS. This statement carries little weight. Moreover, it is difficult to reconcile with the fact that approximately 9 years have passed since the Trade Mark was registered and there is no evidence that the Trade Mark has or ever will be used in relation to the Disputed GS. For example, the Opponent has not disclosed any business plans, product timelines or an indication of any preliminary steps being undertaken to diversify its offerings to include the Disputed GS. This public interest weighing in favour of partial removal is complemented by the Applicant’s private interest in the Pending Application. That is, there is the potential for the Applicant to be adversely affected if the registration of the Disputed GS is maintained.
In light of the above, I am not satisfied that it is reasonable to exercise the discretion available under s 101(1) of the Act in favour of the Opponent to allow the Trade Mark to remain on the Register in respect of the Disputed GS. As such, I decline to exercise the discretion.
Decision
The ground for removal under s 92(4)(b) of the Act has been established in respect of the Disputed GS. I direct that trade mark registration 1585336 be partially removed from the Register. The partial removal is to be effected by amending the Registered GS to:
Class 30: cereal based food bars; cereal based snack food; food mixes for making bakery products; food preparations for making puddings; food products having a pastry base; foods with a chocolate base; foods with a cocoa base; snack food products made from soya flour; snack foods consisting principally of confectionery
Given this decision may be appealed, the partial removal shall not take place until at least one month from the date of this decision. In the event of an appeal, the partial removal of trade mark registration 1585336 shall not be occur until the appeal has been discontinued or dismissed, or in the event of a decision from the court, the registration will be subject to that decision.
Costs
The Applicant has sought an award of costs. Costs usually follow the event. Accordingly, I award costs against the Opponent per s 221 of the Act in the amounts set out in Schedule 8 of the Regulations.
Nicholas Barbey
Hearing Officer
Delegate of the Registrar of Trade Marks
15 December 2022
Annexure A
Class 29: egg-based foodstuffs; food made principally from milk; food preparations having a base of milk; food products made from cooked vegetables; food products made from eggs; foods made from milk products; aerated beverages (predominantly of milk); beverages having a milk base; beverages made from milk; beverages made from yoghurt; dairy based beverages and powders; yoghurt beverages
Class 30: cereal based food bars; cereal based snack food; food dressings (sauces); food flavourings (other than essential oils); food mixes for making bakery products; food pastes (seasonings); food preparations for making puddings; food products having a pastry base; foods with a chocolate base; foods with a cocoa base; snack food products made from soya flour; snack foods consisting principally of confectionery; natural sweeteners; aerated beverages (with coffee, cocoa or chocolate base); beverages made from chocolate; beverages made from cocoa; beverages made from coffee; beverages made of tea; beverages with a chocolate base; beverages with a cocoa base; beverages with coffee base; beverages with tea base; chocolate beverages; chocolate beverages with milk; chocolate flavoured beverages; chocolate syrups for the preparation of chocolate based beverages; chocolate-based beverages; cocoa beverages; cocoa beverages with milk; cocoa-based beverages; coffee beverages; coffee beverages with milk; coffee-based beverages; flavourings, other than essential oils, for beverages; frozen beverages (edible ices); ice beverages with a chocolate base; ice beverages with a cocoa base; ice beverages with a coffee base; iced coffee (coffee based beverages); tea-based beverages
Class 32: aerated beverages (non-alcoholic); alcohol free beverages; beverages containing not more than 1.15% (by volume) of alcohol; coconut milk (beverages); preparations for making beverages; sherbets (beverages); sorbets (beverages); syrup for making beverages; syrups for beverages; vegetable juice concentrates (beverages); vegetable juices (beverages)
Class 33: alcoholic beverages (except beer); alcoholic beverages (except beer) containing more than 1.15% of alcohol by volume; alcoholic beverages containing fruit; alcoholic preparations for making beverages; pre-mixed alcoholic beverages, other than beer-based; preparations for making alcoholic beverages; punches (beverage) having an alcohol content of 1.15% or more (by volume)
Class 43: arranging for the provision of food; food and drink catering; food preparation; take away food services; take out food and beverage services; takeaway food and drink services
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