NSW Ultra Violet Pty Limited v Insect-O-Cutor Limited

[1994] ATMO 68

TRADE MARKS ACT 1955

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

Re:Opposition by INSECT-O-CUTOR LIMITED to an application under section 23 of the Act by NSW ULTRA VIOLET PTY LIMITED to remove trade mark registration number 174457 from the Register

An application under s.23 of the Act to remove trade mark registration number 174457 from the Register was lodged on 15 May 1990 by NSW ULTRA VIOLET PTY LIMITED (the applicant).  The application was opposed on 2 November 1990 by the registered proprietor of the mark, INSECT-O-CUTOR LIMITED (the opponent).  The mark comprises the words INSECT-O-CUTOR and is registered for "Electrical apparatus for attracting and electrocuting winged insects" in Class 9.

The grounds relied upon by the applicant are that the mark was registered without an intention to use it in good faith by the proprietor and also that, up to one month before the date of the s.23 application, a period of three years had elapsed during which time the mark had not been used in relation to the goods included in the specification

The opponent's grounds against removal were that the mark had been used in good faith during the period in question - 15 April 1987 to 15 April 1990 - in respect of the goods for which it was lodged.  Alternatively, failing to satisfy the above, any failure to use the mark was due to special circumstances existing in the trade and not to any intention not to use the mark.

Lodgment of the applicant's evidence in support was completed on 25 November 1992.  This evidence comprised Statutory Declarations by:

Claire Fitzpatrick

Peter Edwin Staley
  Maxwell John Squires
  Norman Young Mackay
  Garth Whyte
  Dennis Pomeroy
  William John Jackson
  Michael Williams
  Geoff Balsillie

The opponent's evidence in answer was completely lodged by 22 April 1993 and comprised a Statutory Declaration by:

Pat M. Martin

The evidence in reply from the applicant was lodged on 21 December 1993 and comprised Statutory Declarations by:

Andrew Scott Lockhart

Con Kapellos

The applicant subsequently applied for a hearing and the matter came before me, as the Registrar's delegate, in Canberra on 9 June 1994.  Representing the applicant was Mr Ken McInnes of Spruson & Ferguson.  Appearing for the opponent was Mr Stephen Plymin of Watermark.

Submissions

At the hearing, Mr McInnes began his submissions by claiming that the applicant was an aggrieved person as envisaged by s.23 of the Act by virtue of the present mark having been cited by an examiner as an objection under s.33 against the registration of its own application, number 575809, for the mark, INSECT-O-CUTOR and a lightning device.

Mr McInnes said that the applicant had discharged its initial onus of establishing a prima facie case of non-use of the mark by the opponent in the sense set forth in the legislation.  It had done this through the material contained in the Fitzpatrick, Staley, Squires and other Declarations lodged as evidence in support which attested to such non-use during the relevant period.  Although he said that there might be small discrepancies in the proforma type Declarations included in the evidence in support, this did not detract from the applicant's allegations of non-use.  There had been no attempt to ask leading questions or to manipulate the responses.  He refuted any suggestion that any Declarants who worked in the lighting or electrical appliance industries would not know of the non-use of the insect control devices included in the specification as these goods were seen as sub-sets of electrical devices and the ultra-violet tubes used in them were also sold in lighting outlets.  He said that, although the Declaration by Ms Fitzpatrick did contain what could be called hearsay, it was properly set forth, was unchallenged by the opponent and was quite allowable in such proceedings.  Referring to the opponent's evidence in answer, he disputed that the exhibit to the Martin Declaration, purporting to be a copy of the 1987 Sydney Yellow Pages, constituted use of the mark by the registered proprietor during the critical period under s.23.  He said that the photocopy was hand-dated, contained an advertisement for a different mark - "SUPREME" INSECT-O-CUTOR with a lightning flash device, offered goods for sale by Supreme Services International Pty Ltd and not the opponent, and did not indicate any link with the registered proprietor.  He said that other exhibits to the Martin Declaration which purported to be copies of export directories suffered similar shortcomings - with the additional doubt that these did not indicate whether they were distributed in Australia and so constitute an offer to trade in this country.  He referred for support here to the Moorgate Tobacco Co Ltd v Philip Morris Ltd (1984) 156 CLR 414 case. He cited the words of Lord Wright in Aristoc Ltd v Rysta Ltd (1945) 62 RPC 65 - on appeal to the House of Lords - where His Lordship said that there must be actual trade in the goods, and to p.33 of Australian Law of Trade Marks and Passing Off (Second Edition) by D.R.Shanahan to the effect that, for use to have occurred of a mark, there must have been actual trade in the goods concerned.  He said that in the correspondence and other material exhibited with the Declaration, nothing pointed to actual use during the s.23 period.  Additionally, all of the research carried out by the applicant had failed to uncover evidence of any use of the mark by the opponent or a properly registered user - in this case Henry Simon (Australia) Limited.  No evidence at all had been produced as to the alleged licensing agreement between the opponent and the entity called Supreme Services International Pty Ltd, or as to whether the latter company had continued to trade after being wound up.  This was the company which had advertised in the Yellow Pages and which the opponent claimed was its licensee during the relevant period.

Mr McInnes said that the opponent had not shown any special circumstances in the trade as mentioned in ss.23(4) which may have prevented use of the mark by the opponent during the relevant period .  In ss.23(1), the Registrar had a discretion to remove the mark from the Register and that option should be exercised in the present instance.  He said Gummow J in New South Wales Dairy Corp v Murray Goulbourn Co-op Co Ltd (No 2) (1989) 14 IPR 75 at 78-79 quoted Carl Zeiss Pty Ltd's Appn (1969) 122 CLR 1, where it was said that exceptional circumstances could arise where a mark, given sufficient reason, could be left on the Register. Gummow J had also held that the public interest lay in removing a mark from the Register if it was unused unless there were exceptional circumstances not to. He said that all the relevant case law pointed to the removal of a mark if it was not being used as it was clearly in the public interest to do so. He said that the applicant had used its own similar mark since 1987 and the mark in question would be more likely to be identified with his client than the opponent which had hardly used the mark since registration and not at all in the s.23 period. Any recent use had only followed the lodgment of the removal application. He concluded his submissions by seeking costs in favour of the applicant.

In reply, Mr Plymin disputed whether the evidence lodged in support of the s.23 application constituted a prima facie case for removal.  He said that it was understood that it was difficult for a negative to be shown in the case of s.23 matters and the Registrar understandably allowed some leeway.  However, given that latitude, the applicant still had not established a proper case.  He said that there were deficiencies in several of the Declarations relied upon, including that by Mr Williams, in that no details were given of when goods were allegedly sold by the opponent within the critical period.  He questioned the Declaration of Ms Fitzpatrick in relation to her qualifications to carry out research and telephone queries regarding the matter, saying also that much of her statement in that document amounted to hearsay evidence from unreliable sources.  He said that the material contained in her Declaration amounted to survey evidence and, in such instances, the methodology adopted should be explained.  This had not been done.  He further criticised the proforma type Declarations in the evidence which he said should be afforded little weight.  He referred to what he said were similar circumstances in the case of the Econovent Trade Mark 6 IPR 92 at 95, where the Senior Assistant Registrar was critical of certain aspects of questionnaire type Declarations. He said that the Mackay, Whyte, Pomeroy, Balsillie and Squires Declarations should all be given little weight because they suffered various deficiencies which included a lack of information on their knowledge about the goods in question and the market for them. He said that persons in the electrical industry were not necessarily experts in insect control devices. In contrast, the opponent's evidence in answer clearly showed that it had used the mark during the relevant period through its licensee, Supreme Services International Pty Ltd. Mr Martin had asserted that there was such a relationship between the opponent and that company in his Declaration. The use by the licensee was evident because of the mark's use in the Sydney Yellow Pages ,where the word SUPREME, used with the mark, only indicated the licensee's name and did not form part of the mark. He said that, although the mark was slightly different in the advertisement from that registered, the differences were minor and still equated to use of the mark. Although the applicant's evidence in reply purported to show that the licensee had gone into liquidation before the relevant period, it had failed to produce any evidence to show that the licensee did not exist or sell goods under the mark during that time. Mr Plymin maintained that the goods were clearly available during the critical period and could have been obtained through mail orders which constituted use. Despite Mr McInnes' claim that the applicant had used the mark since 1987, the evidence only showed use by it for the past two years and this was outside the s.23 period. He said that the balance of convenience did not lie with removing the mark and he asked that the Registrar's discretion be exercised in favour of the opponent to retain the mark on the Registrar. He concluded his submissions by seeking costs in the matter in favour of the opponent.

Discussion

Person aggrieved

The threshold question which needs to be resolved in a matter of an application under s.23 for removal of a registered mark is whether the applicant is a "person aggrieved" in terms of that section of the Act.  In my estimation, the applicant has established its status in this regard by also being the applicant for registration of another trade mark for the word INSECT-O-CUTOR and lightning bolt device, against which the present mark has been cited as a bar to registration:  see Ritz Hotel Ltd v Charles of the Ritz & Anor (1988) 12 IPR 417 at 454.

Onus

It is well established that the onus of proof of the non-use of a trade mark rests with the applicant for removal: see Estex Clothing Manufacturers Pty Limited v Ellis & Goldstein Limited (1967) 116 CLR 254 per Windeyer J at 258:

It is for the applicant who seeks to have a mark removed to prove his case.  The onus is on him to show an absence of use in good faith during the period. ... slight evidence may suffice at this stage for the applicant has the task of proving a negative ... but ... when all the evidence is complete, the question is still, has the applicant proved his case?

However, if the applicant does succeed in establishing a prima facie case of non-use, the onus in the matter shifts to the opponent to demonstrate that it has used its mark on the appropriate goods during the specified period, or that there are grounds for the favourable exercise of the Registrar's discretion under s.23 on the grounds that special circumstances prevented it from using the mark, despite a bona fide intention to do so.

The applicant's prima facie case in this matter includes a leading Declaration from Ms Claire Fitzpatrick who telephoned several businesses around Australia to ascertain whether the mark INSECT-O-CUTOR was known to the persons contacted.  Mr Plymin criticised this Declaration, alleging Ms Fitzpatrick's credentials for conducting such research were not established, that much of the information included was hearsay from people who were not clearly identified and he submitted that I should therefore give this no weight.  However, I feel that she is as competent to carry out such inquiries as any investigator and has properly set out the results of her investigation - which is refreshing, given the standard of presentation of such research in some other, similar, cases.  I think that the Declaration is sufficient to indicate that there is little of knowledge of the opponent's use of the mark in the appropriate market place and that is a factor to which I should give some weight in deciding the matter.  Mr Plymin said that the proforma type Declarations were also unacceptable because they led the declarants to desired responses.  I find that, to the contrary, these Declarations are quite straight-forward and do not appear to be designed to elicit a particular result.  Mr Plymin further criticised the Williams, Mackay, Whyte, Pomeroy, Jackson, Balsillie and Squires Declarations for various reasons based mainly on each allegedly not having a complete knowledge of the trade.  Mr Plymin alleged that some of the declarants would not have a wide knowledge of the goods in question if their expertise lay with the lighting industry.  However, I have personally seen such electrocution devices in lighting shops and the replacement ultra-violet tubes are certainly available in such outlets.  There would seem to be no reason why persons in such a trade would not have a good working knowledge of such devices and the way they are marketed and so I attach some significance to their responses.  Another criticism of the evidence in support raised by Mr Plymin was that the spread of an individual declarant's knowledge was unlikely to cover both industrial and domestic applications of the goods.  This may be so, but the market would not appear to be so large that a person involved in one particular branch of electronic insect control would not know something about the circumstances of another.  Overall, I am of the opinion that these declarants, although each might be deficient in some way, when taken together, represent a cross-section of traders who would either deal in the subject goods or have a good working knowledge of the appropriate market place.

The rules regarding evidence in such matters is not as strict as in a court of law and, as the applicant has the difficult task of proving a negative, I am satisfied that the information assembled is sufficient to comprise a prima facie case which shifts the onus to the opponent to demonstrate use of its mark for the subject goods during the s.23 period.  Alternatively, that party could show that there are grounds for the favourable exercise of the Registrar's discretion under s.23 on the grounds that special circumstances prevented it from using the mark, despite a bona fide intention to do so.  To decide whether it has shown if either of these circumstances to be the case, I will turn to the arguments put forward by Mr Plymin at the hearing and the evidence in answer submitted by the opponent.

Use

Under s.23, the thing which must be used is a trade mark, and that term is defined in section 6(1) of the Act as:

(a) except in relation to Part XI, a mark used or proposed to be used in relation to goods or services for the purpose of indicating, or so as to indicate, a connexion in the course of trade between the goods or services and a person who has the right, either as proprietor or as registered user, to use the mark, whether with or without an indication of the identity of that person;

The foregoing must be taken in context with the comments of Deane J in the High Court in Moorgate Tobacco, supra, at 433:

The cases establish that it is not necessary that there be an actual dealing in goods bearing the trade mark before there can be a local use of the mark as a trade mark.  It may suffice that imported goods which have not actually reached Australia have been offered for sale in Australia under the mark (Re Registered Trade Mark "Yanx"; Ex parte Amalgamated Tobacco Corporation Ltd, supra, at 204-5) or that the mark has been used in an advertisement of the goods in the course of trade (Shell Co of Australia v Esso Standard Oil (Australia) Ltd, 109 CLR 407 at 422). In such cases, however, it is possible to identify an actual trade or offer to trade in the goods bearing the mark in trade.

Again, McGarvie J said in Settef S.p.A. v Riv-Oland Marble Co (Vic) Pty Ltd (10 IPR 402 at 417):

[A] mark is used as a trade mark only if it is used with a view to facilitating or promoting the operation of a trading channel which in a business sense had already been opened in Australia.  The mark must be used for the purpose of trade: WD & HO Wills (Australia) Ltd v Rothmans Ltd (1956) 94 CLR 182 at 191. The forwarding of samples and brochures is not sufficient to indicate that Settef was ready and willing to fulfil such orders as it received from Australia.

Further, the High Court has made it clear that the finding of trade mark use is a matter of context.  In the case of The Shell Co of Australia v Esso Standard Oil (Australia) Ltd, 109 CLR 407, Kitto J., with the concurrence of the other members of the Full High Court, found at pp 425 to 426 that the context in which a particular use of an animated oil drop was used precluded a finding that there was use as a trade mark - "Did they appear to be thrown on to the screen as being marks for distinguishing Shell petrol from other petrol?". This can only be decided by making inferences about how a particular advertisement or whatever would be perceived, and Kitto J. referred to the cases of J. B. Stone and Co v Steelace Manufacturing Co Ltd. (46 RPC 406) and the Yeast Vite Case (50 RPC 139, 51 RPC 110) as giving examples of similar conclusions under English law. He described the latter as "a striking example of a context precluding a conclusion that a use complained of as an infringement was use as a trade mark". He went on to refer to Edward Young and Co Ltd v Grierson Oldham and Co Ltd 41 RPC 548 as an appropriate example of how the "purpose and nature" of the use must be considered. The above means then, that the use to be established must be use which, on an objective test, is as a badge of origin. This is illustrated in the Johnson and Johnson Australia Pty Ltd v SterlingPharmaceuticals Pty Ltd 21 IPR 1 (the Caplets case).

Mr Plymin said that the appearance of the mark in the photocopy of what was alleged to be the 1987 Sydney Yellow Pages constituted use during the relevant period.  The opponent's licensee offered goods for sale and they were available, at the least, through mail order.  However, no evidence at all has been produced to show to me that Supreme Services International Pty Ltd, the entity shown in the advertisement, was the authorised licensee of either the opponent or its registered user, Henry Simon (Australia) Limited.  No copy of an agreement was produced to show any relationship at all between the parties and the only reference to such an arrangement is in Mr Martin's Declaration, at paragraph 5, where he refers to, "...our then licensee, SUPREME SERVICES INTERNATIONAL PTY LTD...".  However, even if the alleged licensee did have an agreement with the opponent to market its goods, I fail to see how it could have fulfilled any orders it might have received in response to the advertisement, as it appears to have ceased trading before the s.23 period commenced.  Additionally, the photocopy of the Yellow Pages is hand-dated and, although I have no reason to doubt the veracity of the opponent's claim, it would have been helpful if the date of the publication, which is always printed at the top of the page, had been included to confirm the matter.  The mark shown in the advertisement, although containing the words INSECT-O-CUTOR, also contains other material, including a lightning flash device through the O and the word SUPREME with a mountain and cloud device.  This would not, in itself, be fatal to the opponent's case except that, when considered with the fact that no evidence has been submitted showing the relationship between the advertiser and the opponent, it appears to indicate that another entity, which was not under the control of the registered proprietor, was using the mark in the Yellow Pages.  The appearance of the mark in what is purported to be photocopies of U.K. export business directories of the years 1988 to 1990 which were available in Australia does not, in my opinion, amount to use of the mark in this country during the relevant period.  Again, the pages are hand-dated and there are no details of the Australian distribution of these publications or any mention of Australian licensees, registered or otherwise, for the goods.  This is despite the fact that such entities from the Netherlands, Portugal, Spain and West Germany are listed in one of them for 1988 - right in the middle of the s.23 period.

Mr Plymin further said that correspondence which related to Pacific Trading Co (Aust) Pty Ltd seeking to become a distributor of the opponent's goods, exhibited with the Martin Declaration, was important in showing that the opponent had not abandoned its mark in Australia.  He said that this and other correspondence, although it was outside the period under s.23, demonstrated that goods were available before, and after, the relevant period and that the mark was in use in this country.  However, a reading of these exchanges seems to indicate that the opponent had no representative in Australia in early 1987, the very time when Mr Martin declared that his company's goods were being distributed by Supreme Services International Pty Ltd.  Additionally, a letter from Mr Martin to Mr Andrew Morris of Taylor HPL Pty Ltd on 26 November 1990 says that "...we have not been represented in Australia for a number of years...".  In my opinion, this correspondence shows that the opponent was not using the mark in this country, in the sense set out in the legislation, during the period 15 April 1987 to 15 April 1990.

Special circumstances

The opponent has not produced any evidence relating to special circumstances which prevented it from using its mark during the s.23 period in Australia and Mr Plymin did not make any submissions regarding such a possibility.  I therefore cannot find that any such state of affairs existed which prevented it from using the mark.

Discretion of the Registrar

In cases such as I have to decide in the present instance, it is the public interest which is the main determinant for the exercise of the Registrar's discretion to remove or retain a trade mark on the Register.  On one hand, the opponent has said that it was using the mark during the period by offering the goods for sale in the Yellow Pages through its licensee.  However, the evidence is not clear in this regard and it would seem to me that there was a period during which the opponent was not in control of the use of its mark in this country and that this period coincides with the period laid down under s.23 of the Act.  Conversely, the applicant says that it has been using the mark for some time on the Australian market with no interference whatever from the opponent and that the Australian public identifies the mark with the applicant.  This raises issues of the potential deception or confusion of the public as to the ownership of the mark if it remains registered in the name of the opponent.  I think that the latter concern is the more relevant in safeguarding the public interest which I feel would be best served by the removal of the mark from the Register.

Decision

The opponent has not, to my satisfaction, discharged its onus of showing why the mark should not be removed on the grounds of non-use during the period in question.  In my opinion, the opponent has not shown to me sufficient reason why I should exercise the Registrar's discretion to retain the mark in the present instance.

Accordingly, subject to any appeal from this decision, I direct that the registration be removed for all the goods for which it is registered.  Having been successful in its application, the applicant is entitled to its costs and I so award them.

Ian Forno
Hearing Officer

31 August 1994