Opposition by Simon Burke to an application under section 92 of the Act by Factor Holdings Ltd to remove trade mark registration 1483535 FACTOR (11, 12) in the name of Simon Burke

[2019] ATMO 69

TRADE MARKS ACT 1995

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

Re: Opposition by Simon Burke to an application under section 92 of the Act by Factor Holdings Ltd to remove trade mark registration 1483535 – FACTOR (11, 12) – in the name of Simon Burke 

Delegate:	Katrina Brown
Representation:	Removal Applicant:	Martin Earley of Baxter IP Patent and Trade Mark Attorneys
	Removal Opponent:	Norman Morcom of Morcom Pernat Patent and Trade Mark Attorneys
Decision:	2019 ATMO 69 Trade Marks Act 1995 – opposed application for removal under s 92(4)(a) and 92(4)(b) – no use demonstrated in relevant period – discretion not exercised – registration to be removed.

Background

1. Simon Burke (‘the Removal Opponent’) is the registered owner of the following trade mark:

Registration No:

1483535

Trade Mark:

FACTOR (‘the Trade Mark’)

Filing Date:

13 March 2012

Entered on Register: 

Specification:

12 May 2014

Class 11: Bicycle lights

Class 12: Mountain bikes

(‘the Registered Goods’)

1. On 21 April 2017 Factor Design Limited filed an application seeking removal of the Trade Mark from the Register for non-use. The removal application was made in respect of all the goods for which the Trade Mark is registered; that is for complete removal of the Trade Mark from the Register.

2. The Removal Opponent filed a Notice of Intention to Oppose the removal application on 4 July 2017, followed by a Statement of Grounds and Particulars (‘SGP’) on 4 August 2017. 

3. On 28 September 2017 a Notice of Intention to Defend the removal application was filed.

4. In due course the Removal Opponent filed the following declarations as evidence in support and evidence in reply:

• Declaration of Simon Burke (Removal Opponent) made on 9 January 2018 with annexures G-1 to G-10 (‘Burke 1’);

• Declaration of Simon Burke made on 19 June 2018 with annexures G-101 to G-104 (‘Burke 2’).

1. On 13 April 2018 a request was made to amend the name of the entity applying for removal of the Trade Mark. This substitution is allowable under s 93(2) of the Trade Marks Act 1995 (‘the Act’) and accordingly the name of the entity seeking removal was amended to Factor Holdings Ltd (‘the Removal Applicant’).

2. The Removal Applicant filed the following declarations as evidence in answer:

• Declaration of Baden Cooke (Professional Cyclist and part owner of the Removal Applicant) made on 12 April 2018 with Exhibits BC-1 to BC-7;

• Declaration of Warren Chandler (Baxter IP Patent Attorneys Pty Ltd) made on 13 April 2018 with Exhibit WGC-1.

1. The matter came before me, a delegate of the Registrar of Trade Marks, on 18 February 2019. The Removal Opponent was represented by Norman Morcom of Morcom Pernat Patent and Trade Mark Attorneys.  Martin Earley of Baxter IP Patent and Trade Mark Attorneys represented the Removal Applicant.

The relevant provisions

1. Part 9 of the Act deals with removal of trade marks from the Register due to non-use.

2. In the removal application, the Removal Applicant nominated both s 92(4)(a) and s 92(4)(b) of the Act as the grounds under which removal was sought. However, at the hearing the Removal Applicant only pressed s 92(4)(b).

3. I note that a removal application under s 92(4)(b) may not be made before a period of five years has passed from the filing date of the trade mark application.[1] I confirm that the filing date of the Trade Mark application predates the removal application by more than five years.

   [1] Section 93(2) of the Act prior to the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018.

4. Section 92(4)(b) provides:

   (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.

5. In this matter, the Removal Applicant alleges that the Removal Opponent did not use the Trade Mark in Australia in relation to the Registered Goods at any time in the three-year period ending on 21 March 2017 (‘the Relevant Period’).

6. Pursuant to s 100(1)(c) of the Act, the Removal Opponent bears the onus of rebutting an allegation made under s 92(4)(b) by establishing that it, or an authorised user, used the Trade Mark in the course of trade in Australia during the Relevant Period in relation to the Registered Goods. The relevant standard of proof is on the balance of probabilities.[2]

   [2] Telstra Corporation Ltd v Phone Directories Co Pty Ltd [2015] FCAFC 156 [132].

7. In accordance with s 101 of the Act, I may decide to remove the Trade Mark for all or some of the goods identified in the removal application, or if satisfied it is reasonable to do so, decide not to remove the Trade Mark from the Register.

Removal Opponent’s evidence to rebut the allegation of non-use

1. The Removal Opponent is the Managing Director of Apollo Bicycle Co Pty Ltd (‘Apollo’). Burke 1 contains the following information about Apollo and the history of the Trade Mark:

   I purchased the Company [Apollo] from its previous owners in December 2009. At that time I became the sole shareholder and took the position of Managing Director and have remained the Managing Director since then.

   In 2008 or early 2009 I decided to launch a new brand of bicycles, bicycle parts and wearing apparel under the trade mark FACTOR. I decided to own the trade mark FACTOR personally but allow the Company [Apollo] to use it.

   …

   Under authorisation from myself the trade mark FACTOR has been used continuously by the Company [Apollo] since at least 2009 in relation to bicycles and bicycle components and accessories.

2. Annexures G-1 to G-4 to Burke 1 consist of flyers deposed to show the Trade Mark in use by Apollo under the authorisation of the Removal Opponent. It is further deposed that these flyers were distributed by Apollo in January 2014, August 2014 and January 2015.

3. Annexure G-5 to Burke 1 consists of an invoice from Apollo to a delivery address in Victoria, Australia. The invoice is dated 26 November 2015 and is for a ‘Factor Giro Dis Hi Viz L GI Org-Blk-Blu’.

4. Annexure G-6 to Burke 1 consists of a photograph of a bicycle deposed to be an ‘Apollo Factor Elite bicycle’ marketed by Apollo from 2012 until at least late 2014.

5. Annexures G-7 to G-10 to Burke 1 consist of photographs of head stems and saddles bearing the word ‘factor’. It is deposed that Apollo sold mountain bikes featuring these saddles and head stems between 2015 and 2016.

6. Annexure G-101 and G-103 to Burke 2 are copies of pages deposed to be from Apollo’s 2016 Catalogue showing the Aspire 50 and Aspire 60 model mountain bikes. It is further deposed that the Trade Mark was applied to the seat post, head stem and saddle of the Aspire 50 model. Annexure G-102 and G-104 consist of enlarged images showing how the Trade Mark was applied to the seat post, head stem and saddle of the Aspire 50 model and to the seat post and head stem of the Aspire 60 model.

7. It is further deposed that Apollo sold approximately 300 Aspire 50 mountain bikes and 200 Aspire 60 mountain bikes between July 2015 and March 2017 and that ‘since 2012 the FACTOR trade mark has appeared as such a secondary trade mark on every bicycle sold by [Apollo] above an identified price point’.

Discussion

1. As this is a removal action, it is crucial that the Removal Opponent demonstrates that it, or an authorised user as contemplated by s 8 of the Act, used the Trade Mark in Australia in relation to the Registered Goods within the Relevant Period.

2. The evidence put forward by the Removal Opponent has deficiencies such that it does not satisfy me that the Trade Mark was used in Australia in relation to the Registered Goods in the Relevant Period. Bald statements such as, ‘since 2012 the FACTOR trade mark has appeared as such a secondary trade mark on every bicycle sold by [Apollo] above an identified price point’, are not of themselves sufficient to establish use within the Relevant Period. Similarly, examples of use that do not relate to the Registered Goods, are undated or are unclear as to whether they relate to use in Australia are also of little assistance to the Removal Opponent. For example:

• Annexures G-1 to G-4 of Burke 1 do not show the Trade Mark being used in relation to the Registered Goods. Rather, these annexures demonstrate the Trade Mark being used in relation to bicycle tyres and tubes, bicycle locks and car racks, bicycle pumps and bicycle pods. Additionally, there is no indication that the flyers, which constitute Annexures G-1 to G-4, were distributed in Australia.

• Annexure G-5 of Burke 1 relates to the sale of what is described as ‘Factor Giro Dis Hi Viz L GI Org-Blk-Blu’. From the invoice it is not apparent what this item is. In Burke 1 it is deposed that this invoice relates to a ‘Factor branded bicycle’. Notably, the Registered Goods do not contain a claim for bicycles but rather a very specific claim for mountain bikes. Despite the additional information in Burke 1 it remains unclear whether this invoice relates to a mountain bike or a road bike.

• Annexures G-6 to G-10 of Burke 1 and Annexures G-101 to G-104 of Burke 2 are undated. In Ion Asset Management Ltd v Ion Trading UK Limited the Hearing Officer pointed out that:

  It is incumbent upon the Opponent to provide clearly dated evidence showing use of the Trade Mark in physical or other relation to, the Opponent’s [Goods]. Undated examples of use carry little, if any, weight in support of a claim of use of a trade mark within the Relevant Period.[3]

  Although the Removal Opponent endeavors to depose additional information to firmly place the marketing and sale of the goods featured in these annexures within the Relevant Period, the information is at times imprecise and most notably it is silent as to whether the use occurred in Australia. In addition, the Removal Applicant asserts, and provides supporting documentation by a professional cyclist of some repute, that the bicycle photographed in Annexure G-6 is not a mountain bike.  The Removal Opponent elected not to directly address this assertion.

  [3] [2015] ATMO 124 [21].

1. Additionally, each of the above examples is deposed to be use by Apollo, an entity that is not the registered owner of the Trade Mark. As such, even if the examples of use did not suffer from the deficiencies set out above, the Removal Opponent would need to establish that Apollo is an authorised user of the Trade Mark.

2. Section 8 of the Act relevantly provides:

   (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 useof 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.

3. It is evident that ‘control’ is a fundamental aspect of authorised use and the courts have made it abundantly clear that ‘it is the exercise of control that matters not merely the right to do so’.[4] That is, the Removal Opponent must demonstrate that they exercised actual control over Apollo’s use of the Trade Mark.

   [4] Lodestar Anstalt v Campari America LLC [2016] FCAFC 92 [169].

4. In Burke 1 it is deposed that Apollo’s use of the Trade Mark within the Relevant Period was under the authority of the Removal Opponent. However, the Removal Opponent has not explained how it exercised control over Apollo’s use of the Trade Mark. It is further deposed that the Removal Opponent is the Managing Director of Apollo and was its sole shareholder in 2009 (it is unclear as to whether the Removal Opponent was the sole shareholder in Apollo during the Relevant Period). Whilst this information establishes that there is a relationship between the Removal Opponent and Apollo, it is not sufficient to satisfy me that the relationship during the Relevant Period was so ‘instinctive and complete that instruction was not necessary’.[5] There is not enough information before me to be satisfied that Apollo was an authorised user of the Trade Mark during the Relevant Period. As such use of the Trade Mark by Apollo cannot be relied upon for the purposes of rebutting the allegation of non-use.

   [5] Ibid [98].

5. For the reasons above I am not satisfied that the Removal Opponent, or an authorised user as contemplated by s 8 of the Act, used the Trade Mark in Australia during the Relevant period in relation to the Registered Goods. As such the ground for removal under s 92(4)(b) of the Act has been made out.

Discretion

1. Section 101 relevantly provides:

   (3) If satisfied that it is reasonable to do so, the Registrar or the court may decide that the trade mark should not be removed from the Register even if the grounds on which the application was made have been established.

   (4) Without limiting the matters the Registrar may take into account in deciding under subsection (3) not to remove a trade mark from the Register, the Registrar may take into account whether the trade mark has been used by its registered owner in respect of:

   (a) similar goods or closely related services; or

   (b) similar services or closely related goods;

   to those to which the application relates. 

2. In this matter, the question is whether it is reasonable not to remove the Trade Mark, even though the Removal Opponent did not demonstrate that it, or an authorised user, had used the Trade Mark during the Relevant Period in relation to the Registered Goods.[6]

   [6] Austin, Nichols & Co Inc v Lodestar Anstalt [2012] FCAFC 8 [28] (‘Austin’).

3. Section 101 confers a broad discretion which ‘is limited only by the subject matter, scope and purpose of Part 9 of the Act’.[7] In Austin, the purpose of Part 9 of the Act was expressed as follows:

   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.[8]

   [7] Austin [35].

   [8] Ibid [38].

4. A range of circumstances may be considered in exercising this discretion. The circumstances do not need to be exceptional, but they need to be sufficient to satisfy me that it is reasonable to exercise the discretion.[9]

   [9] E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2008] FCA 1005 [198].

5. In Tivo Inc v Vivo International Corporation Pty Ltd Dodds-Streeton J summarised some relevant considerations for the exercise of the discretion:

   In Austin, the Full Court affirmed that Flick J’s view that while public interest, particularly in the integrity of the Register, was the guiding principle behind the discretion, the private commercial interests of parties could be taken into account and the interests of both consumers and traders must be recognised (at [33]-[34]).

   In E&J Gallo, Flick J identified (at [202]) the following factors additional to that in s 101(4) which, while not exhaustive, were also relevant to the exercise of the discretion: whether there has been no abandonment of the trade mark; whether the registered proprietor still had a residual reputation in the mark; whether there had been sales by the registered proprietor in relation to the goods for which removal was sought since the relevant period ended; whether the applicants for removal had entered the market without having taken steps to ascertain from the Register whether anyone had a right to exclude their use of the mark; and whether the registered proprietors were aware of the applicants’ sales under the mark.[10]

   [10] [2012] FCA 252 [467].

6. The Removal Opponent bears the onus of satisfying me that it is reasonable not to remove the Trade Mark.[11]

   [11] Optical 88 Ltd v Optical 88 Pty Ltd (No 2) [2010] FCA 1380 [273].

7. In this matter, the Removal Opponent did not provide any submissions in relation to the discretion under s 101 of the Act. Additionally, I note that the evidence does not establish that the Removal Opponent made any sales of the Registered Goods under the Trade Mark either before, during or after the Relevant Period. Furthermore, whilst it deposed that Apollo sold approximately 500 ‘Aspire’ mountain bikes with the Trade Mark on the head stem, seat post and or saddle from July 2015 to March 2017, this has not been substantiated by the provision of supporting documentation such as invoices, sales figures or order records. Nor does the evidence substantiate that the Removal Opponent or Apollo has a reputation in the Trade Mark in respect of similar goods to the extent that consumers, when seeing the Trade Mark, would think of the Removal Opponent. In these circumstances it is not reasonable to exercise the Registrar’s discretion.

Decision

1. The application for removal under s 92(4)(b) of the Act is successful in respect of all the Registered Goods.

2. I am not satisfied that it is reasonable to exercise the Registrar’s discretion to allow the Trade Mark to remain on the Register.

3. Therefore, I direct that one month from the date of this decision registration number 1483535 be removed from the Register.

4. If the Registrar is served with a notice of appeal within the relevant timeframe, the disposition of this removal application will instead be subject to the decision made by the court.

Costs

1. The general rule is that costs follow the event. As the Removal Applicant has been successful, I award costs against the Removal Opponent in accordance with the amounts set out in Schedule 8 to the Trade Marks Regulations 1995.

Katrina Brown
Hearing Officer
Oppositions & Hearings
Trade Marks & Designs
9 May 2019