Opposition by Pendel Group Pty Ltd to application by FMTM Distribution Ltd for removal of trade mark 749333 (14) – MARINER AQUATIC (figurative) - in the name of Pendel Group Pty Ltd

[2021] ATMO 38

TRADE MARKS ACT 1995

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

ReOpposition by Pendel Group Pty Ltd to application by FMTM Distribution Ltd for removal of trade mark 749333 (14) – MARINER AQUATIC (figurative) - in the name of Pendel Group Pty Ltd

Delegate:                 Robert Wilson

Representation:       Opponent: Norton Rose Fulbright Australia

Applicant: AJ Park

Decision:                   2021 ATMO 38

Trade Marks Act 1995 (Cth) - Section 96 opposition: opposition to application for removal pursuant to s 92(4)(b) unsuccessful – no use of trade mark during relevant period – discretion not exercised in favour of opponent – trade mark to be removed from Register

Background

1. Pendel Group Pty Ltd (‘the Opponent’) is the registered owner of trade mark registration 749333, relevant details of which are as follows:

Trade Mark Number:

749333

Filing Date:

24 November 1997

Goods:

Class 14: Watch bands, watches and associated parts, chronological instruments

(‘the Challenged Goods’) [1]

Trade Mark:

(‘the Challenged Trade Mark’)

[1] The Challenged Goods are all of the goods and services for which the trade mark is registered.

2. Any references to parts, sections or regulations, below, are references to parts, sections or regulations of the Trade Marks Act 1995 (Cth) or the Trade Marks Regulations 1995 (Cth), respectively, unless otherwise indicated.

3. On 22 May 2019, FMTM Distribution Ltd (‘the Applicant’) filed an application (‘the Application’) based on s 92(4)(b) seeking removal of the Challenged Trade Mark from the Register, alleging that the Challenged Trade Mark was not used in good faith in relation to the Challenged Goods during the three year period ending on 22 April 2019 (‘the Relevant Period’). The Opponent filed a Notice of Opposition consisting of a Notice of Intention to Oppose filed on 24 July 2019 and a Statement of Grounds and Particulars which was filed on 23 August 2019. The Removal Applicant filed a Notice of Intention to Defend on 1 October 2019.

Evidence

4. The Opponent filed Evidence in Support of its opposition (‘EIS’) being:

• Declaration made on 27 December 2019 by Mark Soderberg, a Director of the Opponent, with Annexures A to F (‘the Soderberg declaration’).

5. The Applicant filed Evidence in Answer being:

• Declaration made on 6 April 2020 by Eloise Mary Toner, a solicitor at A J Park, the representative of the Applicant, with Exhibit EMT-1 (‘the Toner declaration’).

6. The Opponent filed Evidence in Reply (‘EIR’) being:

• Declaration made on 9 June 2020 by Anne Marie Allen, a Director of the Opponent, with Annexures A to D (‘the Allen declaration’).

7. Once the time allowed for filing evidence had ended the parties were given an opportunity to request an oral hearing or to file written submissions. In the end each party elected to be heard by way of written submissions. The Opponent’s submissions were prepared by its representative Norton Rose Fulbright Australia. The Applicant’s submissions were prepared by T A Huthwaite of Counsel.

8. It has fallen to me as a delegate of the Registrar of Trade Marks to decide the matter on the materials described in the previous paragraphs.

Legal Framework

9. Part 9 governs the removal of trade marks from the Register for non‑use. The sections of Part 9 which are most relevant to the case in hand are ss 92, 96, 100 and 101. The removal application specified that it was made according to the provisions of s 92(4)(b). Section 92 relevantly provides:

Section 92.  Application for removal of trade mark from Register etc

(1)  … a person may apply to the Registrar to have a trade mark that is … registered removed from the Register.

(2)  The application: 

(a) must be in accordance with the regulations; and

(b) may be made in respect of any or all of the goods and/or services in respect of which the trade mark may be, or is, registered.

…

(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. 

Note 1: For file and month see section 6.

1. An application under s 92(4)(b) may only be made after a period of three years beginning from the date the particulars of the trade mark were entered into the Register under s 69. I confirm that period has passed.

2. Sections 100(1)(c) and 100(3) indicate that the Opponent bears the onus of rebutting the allegation made under s 92(4)(b), either by establishing that the Challenged Trade Mark (or the Challenged Trade Mark with additions or alterations which do not substantially affect its identity) was used in good faith in Australia during the Relevant Period, or that there was a relevant obstacle to use. The Opponent has not asserted that there was a relevant obstacle to use, so that question need not be considered further. I proceed on the basis that the standard of proof required is on the balance of probabilities.[2]

   [2] Following Gyles J’s approach in Pfizer Products Inc v Karam (2006) 70 IPR 599 with respect to oppositions under s 52 of the Act. See also the recent decision of the Full Federal Court in Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [132]-[133] affirming Gyles J’s approach.

3. Section 101(1) provides the Registrar with the discretion to remove the Challenged Trade Mark from the Register ‘in respect of any or all of the goods … to which the [removal] application relates’. Section 101(3) explicitly provides that the Registrar has the discretion not to remove the Challenged Trade Mark (if the Registrar is satisfied that it is reasonable to do so), even if the grounds on which the application was made have been established.

Discussion

Objection to Evidence in Reply

1. The Applicant objected to the EIR, submitting:

   [T]he Applicant objects to the Opponent’s evidence in reply on the basis that it does not comply with the requirements for ‘evidence in reply’. In particular, the Allen declaration from paragraph 4 (including all of the Confidential Exhibits A, B, C and D) are not evidence ‘in reply’ and therefore not admissible.

   By definition, ‘evidence in reply’ must be limited to issues raised in the Applicant’s evidence. Only paragraphs 3.6–3.7 of the Allen declaration respond directly or indirectly to matters raised in the Toner declaration. The remainder is not ‘in reply’ to anything that has been raised in the Applicant’s evidence.

   The Applicant’s evidence, filed on 6 April 2020, was limited to one annexure which contained the current and historical company extracts for Soderberg Group Pty Ltd and Watch Works Australia Pty Ltd. The Allen declaration deals with this at paragraph 3.6, referring to the external administration of the Previous Owner, and arguably paragraph 3.7, referring to the purchase of the Previous Owner by the Opponent.

   The remaining ‘evidence in reply’ within the Allen declaration contains fresh, new evidence …

   This evidence is in no way relevant to the current and historical company extracts provided in the Toner declaration.

   On this basis alone, admission of the Opponent’s evidence (other than paragraphs 3.6–3.7 at best) should be declined.

   Further, the Opponent’s evidence is also inadmissible on the basis that:

   a)There is no reason why, with reasonable diligence, this evidence could not have been obtained earlier and filed as part of the Opponent’s evidence in chief; and

   b)The new evidence is not of probative value and is not likely to have an important effect on the outcome of the proceedings …

2. I agree with the Applicant’s submissions that the parts of the Allen declaration objected to do not constitute evidence in reply. However, it is to be noted that the Registrar is not bound by the rules of evidence but may be informed on any matter that is before the Registrar in a way that the Registrar reasonably believes to be appropriate.[3] The declaration includes four annexures which exhibit a number of documents. There is no explanation as to why these documents were not filed during the EIS stage. Further, the evidence has little if any probative value and is unlikely to have an important effect on the outcome of these proceedings. For these reasons it is not appropriate that the parts of the Allen declaration objected to by the Applicant be considered in these proceedings.

   [3] Trade Mark Regulations reg 21.15(4).

Applicant’s criticism of Soderberg declaration

1. The Applicant submitted that the evidence contained in the Soderberg declaration is ‘hearsay and speculative only’ on the basis that:

   It is unclear how the deponent, Mr Soderberg, is able to provide any cogent evidence relating to the Previous Owner [(Soderberg Group Pty Ltd)]. No evidence has been provided that links Mr Soderberg to the Previous Owner, knowledge of the Previous Owner’s trade, or the records of the Previous Owner. …

   [The Soderberg declaration contains] bald statements that use of a trade mark has allegedly occurred since 1997, continuously, and through in-store sales by ‘Watch Works’ stores across Australia. These statements are not corroborated or evidenced in any way …

2. The Toner declaration exhibits historical extracts obtained from the Australian Securities and Investments Commission (‘ASIC’) for the Soderberg Group Pty Ltd (‘Soderberg Group’) and Watch Works Australia Pty Ltd (‘Watch Works’). Both extracts are dated 12 March 2020. Although the extracts show that there were office holders of both companies with, amongst other surnames, the surname ‘Soderberg’, Mark Soderberg is not amongst them. Mr Soderberg declared that he is ‘the Director’ of the Opponent; however, he makes no statements as to his connection with either Soderberg Group or Watch Works. The appearance of the name Soderberg in ‘Soderberg Group’ and amongst the office holders and shareholders of both Soderberg Group and Watch Works suggests that these companies might, at least to some extent, be family companies. However, the Soderberg declaration does not indicate that this is so, or that Mr Soderberg has, or had, any involvement with either Soderberg Group or Watch Works. I note for completeness that Mark Soderberg is not listed as a past or present shareholder of either company. These circumstances cast serious doubt on the ability of Mr Soderberg to provide cogent evidence of use of the Challenged Trade Mark by either of those companies.

The Assignment

1. The Allen declaration states:

   During the Relevant Period, IP Australia listed the registered owner of [the Challenged Trade Mark] as Soderberg Group Pty Ltd (Soderberg Group). Soderberg Group entered external administration in August 2018.

   [The Opponent] purchased Soderberg Group from the liquidators of that company on 11 September 2018. Included in that purchase were rights to [the Challenged Trade Mark] together with all usage of related stock. The assignment of [the Challenged Trade Mark] was subsequently recorded with IP Australia on 7 August 2019.

I note that:

• the purchase referred to above is said to have occurred during the Relevant Period and before the Application was made; and

• recordal of the assignment of the Challenged Trade Mark was requested by the Opponent shortly following its filing of the Notice of Intention to Oppose the Application.

1. The Soderberg declaration states:

   During the Relevant Period the registered owner of [the Challenged Trade Mark] was Soderberg Group Pty Ltd (Soderberg Group). [The Challenged Trade Mark] was subsequently assigned to [the Opponent], and that assignment was recorded with IP Australia on 7 August 2019.

2. The Applicant submitted that the ‘bald statements of assignment and ownership’ contained in the Soderberg declaration ‘are not corroborated or evidenced in any way’ and that ‘[a]ll these statements indicate is that the Opponent could not have used the trade mark during the Relevant Period’. The asserted consequence being, ‘[a]ny evidence of use would have to be provided by [Soderberg Group]. No such evidence has been provided’.

3. The company extract for Soderberg Group indicates that the company was put under +external administration on 17 August 2018. This corroborates that part of Mr Soderberg’s statement. However, in respect of the purchase of ‘Soderberg Group from the liquidators of that company on 11 September 2018’ there is no supporting evidence.

4. The request for recordal of assignment of the Challenged Trade Mark to the Opponent was filed with the Office on 5 August 2019.  The request included a copy of a document entitled Deed of Assignment of Trade Marks (‘the Deed’). The Deed does not form part of the evidence filed by either party in this matter; nevertheless, assignment of ownership of the Challenged Trade Mark is referred to in the Soderberg declaration, as is the request that the assignment be recorded. Mr Soderberg, as a signatory, is familiar with the Deed. The Deed contains information relevant to this matter. On this basis, I consider it reasonable that the document be considered here pursuant to reg 21.15(4).

5. The Deed purports to assign ownership of three trade marks from ‘Soderberg Group Pty Ltd (In Liquidation) ACN 009 393 177’ to the Opponent. The Deed is dated 30 July 2019 (after the Relevant Period). The Deed contains the explicit statement that ‘The Assignor [(Soderberg Group)] is the legal and beneficial owner of the Assigned Marks’. ‘Assigned Marks’ is defined in the Deed to include the Challenged Trade Mark. The Deed was executed on behalf of Soderberg Group by Andrew Smith of KPMG who was acting in his capacity as liquidator. The Deed was executed on behalf of the Opponent by Mr Soderberg.

6. The Deed appears to contradict the statements in both the Soderberg declaration and the Allen declaration that ownership of the Challenged Trade Mark passed to the Opponent in September 2018. There is no documentary evidence provided to support the statements that ownership passed at that time. On the other hand, the Deed clearly indicates that Soderberg Group owned the Challenged Trade Mark as at 30 July 2019 and that:

   With effect on and from the date of this Deed and in consideration of [a sum of money] now paid to by [sic] [the Opponent] to [Soderberg Group] (receipt of which is acknowledged), [Soderberg Group] hereby absolutely and irrevocably assigns to [the Opponent] all of its rights, title and interest in and to the Assigned Marks …

7. Further, the ASIC extract for Soderberg Group provided in the Toner declaration also appears to contradict the statement made in the Allen declaration that the Opponent ‘purchased Soderberg Group from the liquidators of that company on 11 September 2018’. As indicated by the extract, Soderberg Group is an Australian Proprietary Company Limited by Shares. The owners of such companies are the shareholders. A person cannot purchase such a company from the liquidators of that company, although it is possible to purchase assets of the company. To purchase the company a person needs to purchase the shares of the company. As at the date of the extract the Opponent is not listed as a shareholder, past or present.

8. Because of the above circumstances, I am not satisfied that ownership of the Challenged Trade Mark passed from Soderberg Group to the Opponent on the date indicated in the Soderberg declaration, or at any time during the Relevant Period. Rather, it appears that ownership of the Challenged Trade Mark did not pass to the Opponent until 30 July 2019. Of course, to discharge its burden under s 100 it is not necessary that the Opponent establish that it used the Challenged Trade Mark during the Relevant Period, rather that it was used by the registered owner, being Soderberg Group. There is no suggestion that the Opponent used the Challenged Trade Mark, at any time, under licence from Soderberg Group. For these reasons it is only use of the Challenged Trade Mark by Soderberg Group which can assist the Opponent in establishing use during the Relevant Period.

9. For the sake of completeness, s 100(3)(b) specifically addresses the situation where a trade mark ‘has been assigned but a record of the assignment has not been entered in the Register’. This provision does not assist the Opponent because, as was seen above, assignment did not occur until after the Relevant Period.

Consideration of the evidence of use

1. The Relevant Period is crucial in a non-use matter. It is incumbent upon the Opponent to provide clearly dated evidence showing use of the Challenged Trade Mark upon, or in physical or other relation to, the Challenged Goods[4] within that period in order to rebut the allegation of non-use. Undated examples are afforded little, if any, weight.

   [4] See s 7.

2. It is stated in the Soderberg declaration that the Challenged Trade Mark has been used continuously in Australia in connection with the Challenged Goods since at least 1997. Further, it is declared that during the Relevant Period the Challenged Goods were sold through Watch Works retail stores, ‘a chain of small kiosk-style watch repair stores located throughout Australia, predominantly in retail shopping malls’.

3. The evidence of use provided by the Opponent all suffers from the shortcoming that it is undated. There is no assertion that any of the photographic examples which appear in the annexures to the Soderberg declaration were taken during the Relevant Period.  It is typically declared in connection with the examples that ‘the manner of use depicted in this Annexure is consistent with how the products were provided and sold in Australia during the Relevant Period’. This lack of evidence which is clearly dated during the Relevant Period, combined with the doubts as to Mr Soderberg’s credentials to attest to how the Challenged Trade Mark was used by Soderberg Group means that I am not satisfied that that the Challenged Trade Mark was used by Soderberg Group during the Relevant Period. The Opponent has therefore failed to discharge its burden under s 100. However, that is not the end of the matter as determination of the outcome of the application falls under s 101.

Determination of the opposed application

1. Section 101 deals with the determination of the opposition to the Application. Section 101(1) states, essentially:

   If the Registrar is satisfied that the grounds on which the application was made have been established the Registrar may decide to remove the trade mark from the Register in respect of any or all of the goods and/or services to which the application relates.

2. The inclusion of ‘may decide to remove’ in s 101(1) indicates that the decision of the Registrar to remove a trade mark from the Register is discretionary. Section 101(2) provides a similar discretion to ‘the court’. Section 101(3) explicitly states, seemingly redundantly, that there is a discretion available to the Registrar; although the discretion under s 101(1) is expressed as a discretion to remove, whereas the discretion under s 101(3) is expressed as a discretion not to remove. Both parties have made submissions regarding the exercise of the discretion in the present matter.

Consideration of the Registrar’s Discretion  

1. The discretion available to the Registrar is ‘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 Act’.[5] ‘[T]he discretion is broad and exceptional circumstances need not be shown’ before it is invoked in favour of an opponent.[6] Nevertheless, the subject-matter, scope and purpose of Part 9 is the removal of unused trade marks from the Register and this should be the starting point of any consideration of the exercise of the discretion. Where an opponent has not established that a challenged trade mark was used during the relevant period, the exercise of the discretion in favour of the opponent is not one which should be exercised lightly: there must be good reason to do so. As stated by Jacob J in Laboratoire De La Mer Trade Marks:

   There is an obvious strong public interest in unused trade marks not being retained on the registers of national trade mark offices. They simply clog up the register and constitute a pointless hazard or obstacle for later traders who are trying actually to trade with the same or similar marks. They are abandoned vessels in the shipping lanes of trade.[7]

   [5] Austin Nichols & Co Inc v Lodestar Anstalt [2012] FCAFC 8, [35].

   [6] Ibid [69].

   [7] [2002] FSR 51 (Ch) 790, [19].

1. While considering the discretion in E & J Gallo Winery v Lion Nathan Australia Pty Limited,[8] Flick J stated:

   Although the ‘guiding principle behind the discretion is public interest, particularly in the integrity of the register’,[9] the private commercial interests of both [parties] remain matters which may be taken into account when exercising the discretion. Trade mark law, it has been recognised, is more complex than is suggested by the proposition that the supreme—or at least—a predominant interest is the maintenance of the integrity of the Register.[10] Speaking of the 1955 Act, Gleeson CJ, Gaudron, McHugh, Kirby, Hayne and Callinan JJ there pointed out the balance struck by the legislation between various interests. Both the interests of the consuming public and the interests of traders have to be recognised.[11]

   [8] E & J Gallo Winery v Lion Nathan Australia Pty Limited [2008] FCA 934.

   [9] Kowa Co Ltd v Organon [2005] FCA 1282, [92].

   [10] Campomar Sociedad Limitada v Nike International Ltd [2000] HCA 12, [40].

   [11] E & J Gallo Winery v Lion Nathan Australia Pty Limited [2008] FCA 934, [210]. (Note that Flick J’s decision was overturned on appeal to the Full Federal Court, although not on this point.)

2. The Opponent bears the onus of establishing that the discretion should be exercised in its favour: it is not for the Applicant to establish that it should not.[12]

   [12] Austin Nichols & Co Inc v Lodestar Anstalt [2012] FCAFC 8, [44].

3. Flick J also referred to a non-exhaustive list of factors which may provide some assistance in considering the discretion, they are:

• whether there has been abandonment of the trade mark;

• whether the registered proprietors of the mark still had a residual reputation in the mark;

• whether there had been sales by the registered proprietors of goods for which removal was sought since the relevant period ended;

• whether the applicant for removal had entered the market without having taking steps to ascertain from the Register whether anyone had a right to exclude their use of the mark.[13]

  [13] Ibid, [202]–[203].

1. The Opponent’s submissions with respect to the discretion focussed on an asserted reputation acquired by the Challenged Trade Mark and the likely confusion which would arise out by another trader of a trade mark similar to the Challenged Trade Mark. The Opponent submitted, in part:

   As to the reputation in [the Challenged Trade Mark], the evidence is that [the Challenged Trade Mark] has been continuously used since 1997, with watches and watch bands sold under and by reference to [the Challenged Trade Mark] as well as the essential element MARINER via retail outlets across Australia at that time, which includes [the Relevant Period]: Soderberg [4.2] and [4.3]; Allen [4.1] and Annexure D. All …

Both of the paragraphs of the Soderberg declaration referred to above are statements which are largely unsupported by any evidence. Any evidence that there might be also suffers from the general problem with the Soderberg declaration and Mr Soderberg’s lack of credentials to attest to any use of the Challenged Trade Mark by the Soderberg Group. As discussed earlier in this decision, the Allen declaration does not form part of the evidence which is to be considered in this matter. Due to the serious shortcomings of the Soderberg declaration referred to I am not satisfied that the Challenged Trade Mark ever acquired a reputation, let alone that it continues to hold a residual reputation.

1. I am also not satisfied that there have been any sales of the Challenged Goods bearing the Challenged Trade Mark since the end of the Relevant Period. Nor am I satisfied that the Challenged Trade Mark has not been abandoned—while the Opponent’s evidence does include photographs of what appears to be goods on sale and stock in a warehouse, there is no statement as to when those photographs were taken.

2. As to whether the Applicant had entered the market without having taking steps to ascertain from the Register (or anywhere else) whether anyone had a right to exclude their use of the mark, there is no evidence or submissions before me.

3. On balance, I am not satisfied that it is appropriate to exercise the discretion in favour of the Opponent.

Decision

1. The ground on which the Application was made has been established. As it is not appropriate to exercise the discretion available to the Registrar I decide that the Challenged Trade Mark is to be removed from the Register after one month from the date of this decision. In the event of an appeal from this decision, the Challenged Trade Mark will not be removed from the Register 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

1. The Applicant sought an award of costs in its favour. I see no reason to depart from the general rule that costs follow the event. Accordingly, I award costs against the Opponent under s 221 in line with the amounts in Schedule 8 of the Trade Mark Regulations 1995.

Robert Wilson
Hearing Officer
Delegate of the Registrar of Trade Marks
12 May 2021