Opposition by Australian Chiropractors Association Limited to an application under section 92 of the Trade Marks Act 1995 (Cth) by Chiro Care Mattresses Pty Ltd for removal of trade mark number 427635 (class 20) –...
[2021] ATMO 28
•26 March 2021
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by Australian Chiropractors Association Limited to an application under section 92 of the Trade Marks Act 1995 (Cth) by Chiro Care Mattresses Pty Ltd for removal of trade mark number 427635 (class 20) – CHIRO – in the name Australian Chiropractors Association Limited.
| Delegate: | Nicholas Barbey |
| Representation: | Opponent: Spruson & Ferguson Applicant: Andrew Sykes of counsel instructed by Y Intellectual Property |
| Decision: | 2021 ATMO 28 Trade Marks Act 1995 (Cth) – s 92(4)(b) application for complete removal – s 92(4)(b) successful – no use in relevant period – exercise of Registrar’s discretion appropriate in relation to limited goods – trade mark to remain on Register for restricted specification |
Background
Australian Chiropractors Association Limited (‘Opponent’) is the owner of the following Australian trade mark registration:
Trade Mark: CHIRO (‘Trade Mark’)
Registration Number: 427635
Filing Date: 30 May 1985
Specification: Class 20: Beds; chairs; all other goods in class 20 (‘Registered Goods’)
On 17 July 2019, Chiro Care Mattresses Pty Ltd (‘Applicant’) filed an application based on s 92(4)(b) of the Trade Marks Act 1995 (Cth) (‘Act’) seeking complete removal of the Trade Mark from the Australian Register of Trade Marks (‘Register’).
The Opponent filed a Notice of Intention to Oppose removal on 17 September 2019 and a Statement of Grounds and Particulars (‘SGP’) on 16 October 2019. A Notice of Intention to Defend was filed by the Applicant on 22 November 2019.
The evidence stages followed and they comprised of:
| Evidence in Support (‘EIS’) |
|
| Evidence in Answer |
|
The Opponent requested to be heard and filed submissions on 4 November 2020 (‘Opponent’s Submissions’). In turn, the Applicant filed submissions on 11 November 2020 (‘Applicant’s Submissions’). As a delegate of the Registrar of Trade Marks, I heard the matter by video conference on 18 November 2020. Daniel Wilson and Jacqueline Chelebian, both of Spruson & Ferguson, appeared on behalf of the Opponent. The Applicant was represented by Andrew Sykes of counsel instructed by Andrew Petale of Y Intellectual Property.
The relevant provisions
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:
…
(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 onus rests with the Opponent to rebut the non-use allegation made under s 92(4)(b). This is set out in s 100 of the Act which relevantly provides:
Burden on opponent to establish use of trade mark etc.
(1) In any proceedings relating to an opposed application, it is for the opponent to rebut:
…
(c) any allegation made under paragraph 92(4)(b) that the trade mark has not, at any time during the period of 3 years ending one month before the day on which the opposed application was filed, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services.
Note 1: If the registered owner of the trade mark has authorised another person to use it, any authorised use of the trade mark by that person is taken to be a use of the trade mark by the registered owner (see subsection 7(3)).
Section 101 provides the Registrar with the discretion to remove the Trade Mark from the Register in respect of any, or all, of the Registered Goods. This includes the option to decline removal of the Trade Mark from the Register even if the grounds on which the non-use application was made are established.[1]
[1] The Act s 101(3).
Grounds and relevant period
The non-use application was filed on 17 July 2019 and complies with s 93(2) of the Act.[2] Pursuant to s 92(4)(b), the period in which the Opponent must establish use of the Trade Mark in good faith is the three-year period ending on 17 June 2019 (‘Relevant Period’).
[2] See The Act s 93(2) as it stood prior to amendments to that section brought about by the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018 (Schedule 1, Part 3).
I proceed on the basis that the standard of proof required is the ordinary civil standard based on the balance of probabilities.[3]
[3] Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [133] in respect of oppositions under s 52 of the Act.
Evidence
The Opponent’s evidence
The Fisher Declaration describes the Opponent as being the peak body representing chiropractors in Australia. The Opponent has over 4,000 members nationwide and its overarching purpose is to promote, improve and protect the practice of chiropractic. The Opponent’s initiatives include the ‘ACA Endorsed Product’ program whereby it endorses products that ‘exhibit good orthopaedic and ergonomic design’.[4] To receive endorsement, manufacturers submit product samples to the Opponent for appraisal. Upon being assessed as acceptable, the product is subsequently endorsed and can be sold under the Opponent’s portfolio of marks which includes the Trade Mark.
[4] Fisher Declaration, [14].
According to the Fisher Declaration, the Opponent has a long-standing commercial relationship with ‘Sleepmaker’.[5] Relevantly, Sleepmaker’s chiropractic bedding range has received the Opponent’s endorsement and the Trade Mark is used in relation to same. This bedding range is offered exclusively through the retail stores of Sleepy’s Pty Ltd (‘SPL’). Mr Fisher confirms that the Opponent has ‘a trade mark licence agreement with Sleepmaker that dates from 2009’[6] (‘Licence Agreement’) but claims that its terms are confidential. Nevertheless, he observes that under the Licence Agreement the Opponent ‘grants Sleepmaker a licence to use certain ACA marks’[7] in relation to products which have received endorsement in exchange for ongoing licence fees. Mr Fisher mentions that the Opponent arranges for store inspections of Sleepmaker’s products and ‘regularly meets’ with Sleepmaker and SPL to coordinate use of its portfolio of marks (which includes the Trade Mark) in marketing materials.
[5] According to the McKernan Declaration, ‘Sleepmaker’ is the trading name of Australian Comfort Group Pty Ltd.
[6] Fisher Declaration, [26]. Mr Fisher states that Sleepmaker was owned by ‘Pacific Brands’ in 2009 but, as at the time of his declaration, Australian Comfort Group Pty Ltd was the owner of Sleepmaker.
[7] Ibid.
In Mr Fisher’s view, the Trade Mark is also used in the domain name, which links to the Opponent’s website (‘Website’). The Website lists products endorsed by the Opponent and it receives approximately 62,000 visitors per year. Given the Trade Mark is used as part of the Opponent’s endorsement program and under licence by Sleepmaker and SPL, Mr Fisher contends that it has recognition and value.
The McKernan Declaration confirms that Australian Comfort Group Pty Ltd (‘ACG’) has a commercial relationship with the Opponent whereby ACG’s bedding products are assessed and endorsed by the Opponent. ACG pays endorsement fees to the Opponent in return for a licence to use the Opponent’s portfolio of marks (including the Trade Mark) in connection with endorsed products. Mr McKernan declares that ‘ACG supplied approximately 19,200 mattresses (and other products)’ to SPL under the Trade Mark during the three-year period ending on 17 August 2019.
According to the Buckley Declaration, SPL is the ‘leading Australian retailer of mattresses and other bedding products’.[8] Mr Buckley states that SPL is licensed by the Opponent to use the Trade Mark in connection with ‘Sleepmaker’s Chiropractic bedding range’[9] and it has been used in relation to mattresses and mattress/base ensembles. The Trade Mark has featured in SPL’s nationally distributed brochures. Various textual extracts mentioning the word ‘chiro’ from SPL’s website ( are also reproduced in the Buckley Declaration. Mr Buckley confirms that SPL sold ‘approximately 19,000 products’ under the Trade Mark during the three-year period ending on 17 August 2019.
The Applicant’s evidence
[8] Buckley Declaration, [3].
[9] Ibid [5].
The definition of ‘chiropractic’[10] as well as the term ‘chiro’ are discussed in the Petale Declaration. In Mr Petale’s view, ‘chiro’ is frequently used in Australia to refer to either a chiropractor or any product having chiropractic benefit. Specifically, ‘chiro’ is a commonly used prefix in relation to mattress and bedding products. Reference is made to trade marks appearing on the Register which, in Mr Petale’s opinion, illustrate a pattern of coexistence between the Trade Mark and other ‘chiro-’ trade marks registered in respect of mattress products.[11] Internet searches undertaken by Mr Petale also indicate that ‘chiro’ is used by mattress manufacturers and retailers seemingly unrelated to the Opponent.
[10] Macquarie Dictionary (6th ed, 2013) defines ‘chiropractic’ (def 1) as ‘a therapeutic system based upon the premise that disease is caused by interference with nerve function, the method being to restore normal condition by adjusting the segments of the spinal column’.
[11] See, eg, ‘CHIRO-TECH’ (trade mark registration 725108); ‘CHIROFLEX’ (trade mark registration 1129758); ‘CHIRO PURE SERIES’ (trade mark registration 1549629); ‘CHIROGENIX’ (trade mark registration 1651148); ‘CHIRO OSTEO’ in a stylised font (trade mark registration 1832212) and ‘CHIRO OSTEO’ (trade mark registration 1832213).
The Petale Declaration also responds to specific aspects of the EIS. Relevantly, it is asserted that the materials contained in the Attachments to the Fisher Declaration do not demonstrate use of the Trade Mark as registered. Instead, they demonstrate use of ‘chiro’ in combination with additional elements, such as ‘align’ or ‘retreat’, depending on the mattress style. Mr Petale highlights that these mattress styles are collectively referred to as the ‘Chiropractic Collection’ or the ‘Chiro Collection’ in both the Fisher and Buckley Declarations. He believes that this interchangeable name for the same collection reinforces the Trade Mark’s descriptive reference to the chiropractic benefits of the products.
Mr Petale points out that the Licence Agreement does not form part of the EIS. As such, it is impossible to verify what, if any, control the Opponent may have exerted over the Trade Mark’s use under the Licence Agreement. Mr Petale further submits that, even if the Trade Mark was removed from the Register, the Opponent would still be able to use ‘chiro’ to ‘describe mattresses with chiropractic benefits as it is by other [sic] many other mattress manufacturers’.[12]
[12] Petale Declaration, [18].
Discussion
Preliminary matter
The Applicant’s evidence has the potential to be construed as covertly seeking a determination of the Trade Mark’s inherent capacity to distinguish the Registered Goods. This arises from the Applicant’s position that the Trade Mark is descriptive and has not been ‘used as a trade mark’.[13] The Opponent contends that a non-use application does not involve an assessment of the Trade Mark’s distinctiveness and it is irrelevant to a s 92(4) proceeding.[14] Conversely, the Applicant asserts that it is directly relevant to answering whether the Trade Mark has been ‘used as a trade mark’ in the sense that it indicates a connection between the Opponent and the Registered Goods.
[13] See Coca-Cola Co v All-Fect Distributors Ltd [1999] FCA 1721, [19] 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’.
[14] Opponent’s Submissions, [44(c)].
For clarity, I note the Act expressly provides that a non-use application may only be based on s 92(4)(a) and/or s 92(4)(b) grounds. Central to each ground is the question of whether the trade mark has been used in the relevant period.[15] In this context, my role as the Registrar’s delegate is to decide whether the Opponent has used the Trade Mark in good faith as a trade mark in the Relevant Period. It is not open to me to assess the inherent registrability of the Trade Mark in the current proceeding and it has been recognised that a non-use application should not be used to ‘bring inapposite claims’.[16] To this end, the Trade Mark was registered under the Trade Marks Act 1955 (Cth) in Part A of the old Register and it is therefore entitled to presumptive validity.[17] Whatever concern the Applicant may harbour regarding the Trade Mark’s registrability, it is more appropriately pursued via an application under ss 87 or 88 of the Act.
[15] A ground based on s 92(4)(a) includes an additional consideration regarding an applicant’s intention to use the trade mark at the time of filing.
[16] Edwards v Liquid Engineering 2003 Pty Ltd [2008] FCA 970, [11].
[17] The Act s 234(2).
With that said, it does not follow that the Opponent’s use of the Trade Mark automatically qualifies as ‘use as a trade mark’. It is well established that what constitutes ‘use as a trade mark’ must be assessed objectively in terms of its nature and purpose. In Anchorage Capital Partners Pty Limited v ACPA Pty Ltd, the Full Court observed:
For present purposes we would emphasise the following two related points that emerge from the authorities: first, whether or not the use of a mark constitutes trade mark use depends on the context in which such use occurs; secondly, a mark may be used as a trade mark even though it simultaneously performs a number of functions only one of which is to act as a badge of origin.[18]
[18] [2018] FCAFC 6, [56].
With the above in mind, I turn now to consider whether the EIS demonstrates that the Trade Mark has been used as a trade mark in the Relevant Period.
Use of the Trade Mark in the Relevant Period
The SGP states:
The trade mark (including the trade mark with additions or alterations not substantially affecting its identity) has been used with the authorisation of the registered owner in relation bedding during the relevant three-year period.
To the extent that the Registrar determines that the trade mark has not been used in relation to some or all goods covered by the registration, the Registrar should exercise discretion to maintain the registered trade mark, having regard to the usual relevant factors, including use in relation to similar goods, lack of abandonment by the registered owner, ongoing commercial interest and reputation in the mark by the registered owner and its authorised users, and potential for confusion if a similar mark were used or registered by a person not authorised by the registered owner.
The Opponent’s Submissions emphasise that the Trade Mark has been used in good faith before, during and after the Relevant Period in Australia by the Opponent itself as well as through its licensees – namely, ACG and SPL (together ‘Licensees’). The Opponent’s direct use of the Trade Mark is allegedly illustrated via its inclusion in the domain name Reliance is also placed on the Opponent’s endorsement program as well as the endorsed products detailed on the Website. As regards to the Licensees’ use, the Opponent’s Submissions contend that the mattress products promoted and sold under the Trade Mark during the Relevant Period was authorised use within the meaning of the Act. As such, the Opponent submits that the benefit of such use should inure to it.
The Applicant’s Submissions highlight that the Opponent does not manufacture mattresses. Instead, it is simply a body which represents and promotes the interests of chiropractors. In the Applicant’s view, the examples of use of Trade Mark contained in the EIS do not demonstrate use as a trade mark nor do they demonstrate use in relation to the Registered Goods or use of the Trade Mark as registered. Moreover, the Applicant submits that insufficient particulars have been provided regarding the endorsement program operated by the Opponent. Furthermore, the examples of use in evidence fail to demonstrate direct use by the Opponent or authorised use within the meaning of the Act.
Did the Opponent use the Trade Mark?
The Opponent contends that use of the domain name, constitutes direct use of the Trade Mark as a trade mark. Three screenshots of the Website have been provided to support this contention.[19] It is true that incorporating the Trade Mark as part of a domain name may constitute use as a trade mark, however, this depends on the content of the website to which it resolves.[20] A significant difficulty faced by the Opponent is that the screenshots, which are undated, do not demonstrate use of the Trade Mark in connection with the Registered Goods. Their content merely discloses that the Website contains a ‘chiropractic classifieds’ and a search function to locate chiropractors affiliated with the Opponent. As the Applicant correctly highlights, the only use of ‘chiro’ appearing in the screenshots is descriptive use whereby the Trade Mark is plainly used as an abbreviation for ‘chiropractor’.[21]
[19] See Attachment 6 to the Fisher Declaration.
[20] See, eg, Sports Warehouse, Inc v Fry Consulting Pty Ltd [2010] FCA 664, [153]; Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd [2015] FCA 554, [187].
[21] See Attachment 6 to the Fisher Declaration, the relevant part being ‘Are you a Chiro who is open minded?’ appearing in the first screenshot under the heading ‘Snowy Mountains’.
As regards to the endorsement program, I am not satisfied that its mere existence demonstrates the Opponent's use of the Trade Mark. The Fisher Declaration fails to disclose with any specificity how the Trade Mark is directly used by the Opponent, in the role of an endorser, as opposed to use by third-party endorsees. Also, the Fisher Declaration states that ‘[e]ndorsed products may be sold under certain ACA trade marks’[22] but fails to detail which of the Opponent’s trade marks are being referred to as well as the requisite criteria for use of each trade mark. Instead, products currently endorsed by the Opponent are listed with no reference to which trade mark(s) in the Opponent’s portfolio these products are sold under. Reference was also made to a ‘certificate of endorsement’ issued in relation to Sleepmaker’s ‘ACA range’.[23] Again, it is unclear how this demonstrates use of the Trade Mark given the certificate is undated and does not mention the Trade Mark or the products endorsed. Accordingly, I am not satisfied that the Opponent has directly used the Trade Mark.
Did the Licensees use the Trade Mark?
[22] Fisher Declaration, [15] (emphasis added).
[23] See Attachment 1 to the Fisher Declaration.
The EIS contains numerous examples of the Trade Mark purportedly in use by the Licensees. The Applicant argues that these examples have several deficiencies. First, the examples of use are exclusively in relation to mattresses and do not demonstrate use in connection with other products that fall within the scope of the Registered Goods. Second, attention is drawn to relics of the drafting process, such as colour palette charts and watermarked images, which are visible in some of the examples. The presence of these drafting features cast doubt on whether the material was circulated to consumers or, at the very least, circulated in the form shown. Third, the Applicant points out that the EIS does not demonstrate use of ‘chiro’ solus. Rather, the examples demonstrate that the Trade Mark has been consistently used with additions or alterations that substantially affect its identity. Finally, the Applicant contends that the demonstrated use is descriptive because it would be interpreted as referring to the chiropractic benefits of the product. Thus, the Trade Mark has not been used as a badge of origin.
In my view, there is merit in certain criticisms levelled at the evidence. It is apparent from the EIS that the Trade Mark has only been used in relation to mattresses. Likewise, some materials in evidence clearly display the image supplier’s watermark as well as other indicia suggesting the materials may not be finalised versions. Meanwhile, parts of the EIS contain material which is either undated[24] or falls outside the Relevant Period.[25] Self-evidently, these do not assist in establishing use of the Trade Mark within the Relevant Period. Similarly, the EIS reveals use of ‘chiro’ in combination with other terms such as ‘chiro align’, ‘chiro retreat’, ‘chiro escape’ and ‘chiro endurance’. In these examples, the additional term retains equal emphasis to ‘chiro’ given the identical font type, size and adjacent positioning. Terms such as ‘align’, ‘retreat’, ‘escape’ and ‘endurance’ possess no directly descriptive significance in relation to mattresses and thus cannot be discounted. It follows that such examples do not constitute use of the Trade Mark given the additional terms substantially affect its identity.
[24] See Attachment 4 to the Fisher Declaration which contains, for example, the undated SPL publication ‘Your Guide to Better Sleep Health and Wellbeing’.
[25] See Attachment 4 to the Fisher Declaration which contains, for example, SPL’s ‘Sleep Healthy Sale’ catalogue which stipulates the sale as starting on 1 June 2012 and ending on 30 June 2012.
Nevertheless, the EIS contains examples of the Trade Mark in use by the Licensees which do not suffer from the abovementioned deficiencies. In these instances, when viewed objectively, the Trade Mark is being used as badge of origin given its prominent positioning, bolded depiction and the juxtaposition of colours whereby ‘chiro’ is accentuated. A consumer viewing the advertisement would readily appreciate that ‘chiro’ is being used to distinguish this mattress collection from other collections offered by the retailer. In this regard, the presence of ‘Sleepy’s’ with the by-line ‘The Mattress Experts’ does not, in the context of the whole advertisement, dilute the Trade Mark’s branding function. This is because these elements are situated in the bottom banner of the advertisement where a retailer’s brand conventionally appears. Examples of this use appear below:[26]
[26] The absence of the relevant SPL store details is not fatal to these examples given their pro forma nature and intended purpose is for circulation in different state locations. Mr Buckley declares that this material was ‘used and distributed nationally in various marketing campaigns’ by SPL during the three-year period ending on 17 August 2019.
Despite the various shortcomings of the EIS, I am satisfied that it contains a subset of examples which demonstrate that the Trade Mark has been used ‘as a trade mark’ during the Relevant Period by the Licensees. However, the demonstrated use is confined to mattresses. For completeness, although neither party raised this issue, I am satisfied that the Opponent’s use was in good faith given the Trade Mark was clearly used for commercial purposes and not simply token use.
Was the Licensees’ use authorised by the Opponent?
The simple fact that the Trade Mark was used during the Relevant Period does not mean that it automatically inures to the Opponent’s benefit. This turns on whether the Opponent can establish that the Licensees were authorised users within the meaning of the Act.
Section 7(3) of the Act provides:
An authorised use of a trade mark by a person (see section 8) is taken, for the purposes of this Act, to be a use of the trade mark by the owner of the trade mark.
Section 8 of the Act provides:
Definitions of authorised user and authorised use
(1) A person is an authorised user of a trade mark if the person uses the trade mark in relation to goods or services under the control of the owner of the trade mark.
(2) The use of a trade mark by an authorised user of the trade mark is an authorised use of the trade mark to the extent only that the user uses the trade mark under the control of the owner of the trade mark.
(3) If the owner of a trade mark exercises quality control over goods or services:
(a) dealt with or provided in the course of trade by another person; and
(b) in relation to which the trade mark is used;
the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.
(4) If:
(a) a person deals with or provides, in the course of trade, goods or services in relation to which a trade mark is used; and
(b) the owner of the trade mark exercises financial control over the other person's relevant trading activities;
the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.
(5) Subsections (3) and (4) do not limit the meaning of the expression under the control of in subsections (1) and (2).
The degree of control required to satisfy s 8 of the Act was considered in Lodestar Anstalt v Campari America LLC wherein Besanko J stated:
control in s 8 means actual control in relation to the use of the trade mark and it means actual control in relation to the trade mark from time to time … Control involves questions of fact and degree as does the notion of a sufficient connection. There must be control as a matter of substance. For example, I do not think that it could be suggested that the mere fact that the registered owner granted a licence or revocable authority to use the trade mark would be sufficient without more established control within s 8.[27]
[27] [2016] FCAFC 92, [97] (emphasis added).
Here, the Opponent asserts that ACG and SPL’s use of the Trade Mark was subject to licensing arrangements. Specifically, the Opponent and Sleepmaker were parties to the Licence Agreement and it is claimed that SPL’s use of the Trade Mark was licensed by the Opponent.[28] The EIS does not contain a licence agreement between the Opponent and either of the parties. Unsurprisingly, the Applicant takes issue with this. Their main point of contention being that it is impossible to verify the terms of the licence(s) including whether the Trade Mark was subject to the alleged agreement(s) as well as what control the Opponent could exercise over ACG or SPL’s use of the Trade Mark. In relation to the Licence Agreement, a further issue arises as to whether it was binding on successors in title given ‘Pacific Brands’, not ACG, owned Sleepmaker in 2009.
[28] Both the Fisher Declaration and the Buckley Declaration fail to directly address whether a written licence agreement exists between Opponent and SPL.
In my view, the Applicant’s concerns regarding the failure to disclose the Licence Agreement or, at a minimum, the relevant clauses of same are well founded. The Opponent sought to controvert this by claiming the parties are competitors and the Licence Agreement is confidential. The Opponent reiterated that it ‘meets regularly’ with the Licensees and relied on its endorsement program and store inspections to demonstrate it had control over the Trade Mark’s use. It is problematic to place complete reliance on these statements made in the Fisher Declaration because they are devoid of particulars and not supported by any documentary evidence. The Fisher Declaration mentions that the Opponent could ‘exercise its rights under the [L]icence [A]greement’[29] but does not expand on the nature of these rights and is left ambiguous. Likewise, the frequency and nature of the store inspections arranged by the Opponent and meetings with the Licensees are not elaborated upon. Indeed, there is no explicit confirmation from Mr Fisher that these activities took place during the Relevant Period. Meanwhile, the evidence demonstrating the Opponent’s involvement with product approvals in the endorsement program does not mention the Trade Mark. To this end, while this evidence may be illustrative of the Opponent exercising control in relation to a different trade mark, I am unable to simply assume that such conduct also occurred in relation to the Trade Mark.
[29] Fisher Declaration, [30].
Several of the Applicant’s concerns could have been mitigated by including the relevant clauses of the Licence Agreement and/or expanding upon the information disclosed in the Fisher Declaration. As Mr Sykes pointed out at the hearing, it is common for a party adopting the Opponent’s position to manage its confidential information via suitable redactions or by disclosing it in a confidential annexure. The Opponent had an opportunity to file evidence in reply to address the absence of the Licence Agreement but it declined to do so. In these circumstances, the alleged existence of licensing arrangements, supplemented by what are essentially bare statements about meetings and inspections, are insufficient to satisfy me that control as a matter of substance existed.
The Opponent further opined that its relationship with the Licensees shared parallels to the relationship of obedience considered in Hells Angels Motorcycle Corporation (Australia) Pty Limited v Redbubble Limited (‘Hells Angels’).[30] I do not accept this line of argument. The present circumstances are plainly distinguishable from Hells Angels wherein Hells Angels Motorcycle Corporation (Australia) Pty Limited was found to be an authorised user for the purposes of the Act because ‘obedience to the trade mark owner was so intuitive and so complete that no formal instruction was necessary’.[31] First, the level of information and evidence before Greenwood J concerning the relationship between the parties extends far beyond what has been provided by the Opponent in the current matter. Second, Hells Angels considered the context of the authorised use between two chapters of the same motorcycle club whose core undertaking was to support its members.[32] In contrast, the context of the present matter involves completely unrelated entities who are dedicated to the commercial production of bedding products that meet a certain orthopaedic standard. It follows that Hells Angels is not all fours with the present matter.
[30] [2019] FCA 355 (‘Hells Angels’).
[31] Ibid [401] (emphasis in original).
[32] Ibid [398].
Accordingly, I cannot be satisfied that the use of the Trade Mark by the Licensees amounts to authorised use within the meaning of the Act. Consequently, the ground for removal under s 92(4)(b) of the Act has been established in respect of all the Registered Goods.
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. This discretion ‘is limited only by the subject matter, scope and purpose of Part 9 of the Act’.[33] In this regard, the Full Court observed:
The purpose of Part 9 is to provide for the removal of unused trade marks from the Register. In that regard it is plainly designed to protect the integrity of the Register, and in this way, the interests of the consumer. At the same time, however, it seeks to accommodate, where reasonable, the interests of the registered trade mark owners. Otherwise, there would be no need for the discretion.[34]
[33] Austin, Nichols & Co Inc v Lodestar Anstalt [2012] FCAFC 8, [35].
[34] Ibid [38].
The Opponent asserts that the discretion should be exercised in its favour to preserve the registration of the Trade Mark in respect of all the Registered Goods. Broadly, the following considerations were advanced:
i. The Trade Mark has not been abandoned and there has been genuine commercial use of the Trade Mark such that it has acquired a reputation;
The Trade Mark is an important asset which is the subject of licence agreements with third parties. Removal of the Trade Mark would cause loss of endorsement and ongoing licence fees;
Removal of the Trade Mark would adversely impact the Opponent’s endorsement program because it would restrict the range of products capable of being endorsed; and
A real risk of consumer confusion would ensue if registration of the Trade Mark is not preserved.
The Applicant submits that the EIS, at its highest, indicates that the Trade Mark has been used in relation to mattresses and there is no compelling basis for preserving the registration as it currently stands. In the Applicant’s view, no documentary evidence of any potential loss of endorsements or licensing opportunities have been put in evidence. It contends that the Opponent’s assertions as to reputation in the Trade Mark are flawed given its descriptive nature and the absence of any cogent evidence to conclude that a secondary meaning exists in the minds of relevant consumers.
The submissions advanced by the Applicant have merit. Considered in its entirety, the EIS demonstrates that the Trade Mark and various marks incorporating the word ‘chiro’ have only been used in relation to mattresses. As such, it would not be reasonable to exercise the discretion to preserve the registration in respect of what is essentially all goods in class 20. I acknowledge the Opponent’s private interests as detailed at [42] of this decision. However, there is insufficient information and evidence before me to accurately gauge how integral the Trade Mark, as opposed to the Opponent’s portfolio of marks, is to the Opponent’s endorsement program and licensing arrangements. For similar reasons, I am not satisfied that the Trade Mark has acquired a reputation such that there is a tangible risk of consumer confusion occurring if the registration is removed.
Be that as it may, the evidence indicates that the Trade Mark has been used in relation to mattresses, albeit by entities that do not fall within the meaning of authorised users as contemplated by the Act. Demonstrated use occurred within the Relevant Period and there is nothing before me to indicate that the Trade Mark has been abandoned. The Buckley Declaration states that approximately 19,000 products were sold under the Trade Mark in the three-year period ending on 17 August 2019. Even when this number is adjusted to account for the fact that this includes two months of sales post the Relevant Period and inevitably includes sales not under the Trade Mark as registered, it remains apparent that the Opponent is continuing to use the Trade Mark. While it is unclear how integral the Trade Mark is to the Opponent’s endorsement program and licensing arrangements, the EIS provides a reasonable basis to infer that it is not insignificant. In these circumstances, I consider it reasonable to exercise the discretion and preserve the registration in respect of mattresses.
Decision
The ground for removal under s 92(4)(b) of the Act has been established. However, I am satisfied that it is reasonable to exercise the Registrar’s discretion and allow the Trade Mark to remain registered for the following class 20 goods: mattresses.
Accordingly, I direct that, one month from the date of this decision, trade mark registration number 427635 be amended as follows:
Class 20:
Beds; chairs; all other goods in class 20mattressesIf the Registrar is served with a notice of appeal within the relevant timeframe, trade mark registration number 427635 shall not be amended 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
Both parties have sought an award of costs. The general rule is that costs follow the event. However, as each party has been partially successful, I believe it is appropriate in this case that each party bears its own costs.
Nicholas Barbey
Hearing Officer
Oppositions and Hearings
Trade Marks and Designs
26 March 2021
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