Opposition by The Sunraysia Natural Beverage Co. Pty Ltd to an application under section 92 of the Act by Honest Tea, Inc. to remove trade mark number 1427322 (class 32) - HONEST KIDS - in the name of The Sunraysia... - [2019] ATMO 74

TRADE MARKS ACT 1995

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

Re:Opposition by The Sunraysia Natural Beverage Co. Pty Ltd to an application under section 92 of the Act by Honest Tea, Inc. to remove trade mark number 1427322 (class 32) - HONEST KIDS - in the name of The Sunraysia Natural Beverage Co. Pty Ltd

Delegate:	Nicole Worth
Representation:	Opponent: Shauna Ross, counsel, instructed by Griffith Hack. Applicant: Gregory Chambers, Phillips Ormonde Fitzpatrick.
Decision:	2019 ATMO 74 Trade Marks Act 1995 (Cth) – application under s 92(4)(b) to remove trade mark from the Register - opposition to removal under s 96 – no authorised use within the meaning of s 8 – instances of alleged use not sufficiently documented in any event – no exercise of the Registrar’s discretion under s 101(3) – registration to be removed.

Background

The Sunraysia Natural Beverage Co. Pty. Ltd. (‘the Removal Opponent’) is the registered owner of the trade mark detailed below.
Trade Mark: HONEST KIDS (‘the Trade Mark’)
Filing date: 26 May 2011
Goods:Class 32: Non-alcoholic drinks; carbonated and non-carbonated soft drinks; mineral and aerated waters; fruit juices, fruit flavoured beverages; syrups; water; preparations for making the aforesaid.
Prior to 23 November 2017 another entity, Benver International Pty Ltd (‘Benver’), was the registered owner of the Trade Mark.
On 26 October 2017 Honest Tea, Inc. (‘the Removal Applicant’) filed an application to remove the Trade Mark from the Register for all of the goods in respect of which it was registered. The application for removal was made under s 92(4)(b) of the Trade Marks Act 1995 (‘the Act’), the allegation being that the Trade Mark was not used in good faith in relation to any of the Registered Goods in the three year period ending on 26 September 2017 (‘the Relevant Period’).
On 8 December 2017 Benver filed a Notice of Intention to Oppose the removal application, which was later to amended to show the Removal Opponent as the entity opposing removal. On 21 December 2017 the Removal Opponent filed a Statement of Grounds and Particulars (‘SGP’), alleging use of the Trade Mark by the registered owner or an authorised user and, in the event of use not being established, that the Registrar should exercise her discretion not to restrict or remove the Trade Mark.
Thereafter the parties filed evidence to support their positions, described in more detail below, and requested the matter be heard.
I heard the matter, as a delegate of the Registrar of Trade Marks, in Canberra on 4 March 2019. Shauna Ross of counsel, instructed by Griffith Hack, made verbal and written submissions on the Removal Opponent’s behalf. Gregory Chambers, of Phillips Ormonde Fitzpatrick, made verbal and written submissions on the Removal Applicant’s behalf.

The Legislative Framework

Section 92 of the Act relevantly provides:
92 Application for removal of trade mark from Register etc.
(4)An application under subsection (1) or (3) (non-use application) may be made on either or both of the following grounds, and on no other grounds:
(a) …
(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.
Note 2: If non-use of a trade mark has been established in a particular place or export market, then instead of the trade mark being removed from the Register, conditions or limitations may be imposed under s.102 on the registration of the trade mark so that its registration does not extend to that place or export market.
Section 92(4)(b) is subject to s 93(2), which at the time the Trade Mark was filed stipulated that applications made under s 92(4)(b) ‘may not be made before a period of 5 years has passed from the filing date in respect of the application for the registration of the trade mark.’ Given that the application to register the Trade Mark was filed on 26 May 2011, this requirement is satisfied.
Section 96 of the Act allows for a person to oppose an application for removal by filing a notice of opposition, and s 100(1)(c) places the onus to rebut an allegation made under s 92(4)(b) on an opponent. Section 100(3) further states, inter alia, that the opponent is taken to have rebutted the allegation if it establishes that the trade mark (without additions or alterations substantially affecting its identity) was used in good faith by the registered owner during the relevant period; or that there were circumstances that were an obstacle to use (the latter is not being pursued here). Note 1 to s 100(3) states ‘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)).’
Subsection 7(3) provides that ‘authorised use’ of a trade mark is taken to be a use of the trade mark by the owner of the trade mark, and s 8 defines ‘authorised user’ and ‘authorised use’ as follows:
8 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.
Sections 8(3) and 8(4) provide the examples of control, being quality control over goods or services or financial control over trading activities, while s 8(5) stipulates that the expression ‘under the control of’ is not limited to these examples.
Lastly section 101(1) of the Act provides that the Registrar may remove a trade mark for any or all of the goods or services to which the application for removal relates, if satisfied that the grounds for removal are established. Alternatively, s 101(3) bestows upon the Registrar the discretion not to remove a trade mark, even where the grounds for removal are established. Section 101(4) provides two examples of matters the Registrar may take into account in deciding whether to exercise the discretion, being use of a trade mark in respect of similar goods or closely related services, or vice versa, but does not limit the matters the Registrar may take into account.
I proceed on the basis that the standard of proof required of the Removal Opponent is on the balance of probabilities.[1]
[1] Per Pfizer Products Inc v Karam [2006] FCA 1663 with respect to oppositions under s 52 of the Act, affirmed by the Full Federal Court in Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [132]-[133].

Evidence

The evidence filed in this matter comprises the following declarations:

Evidence in support

Dan Presser, director of The Sunraysia Natural Beverage Co. Pty Ltd, with exhibits DP-1 to DP-8, dated 11 April 2018.

Evidence in answer

Gregory Morris Chambers, partner with the firm Phillips Ormonde Fitzpatrick, with exhibits GMC-1 to GMC-9, dated 10 July 2018.
Maria Esther Ramirez, Senior Global Brand Director of Tea of The Coca-Cola Company, with exhibits MER-1 to MER-11, dated 16 July 2018.

Evidence in reply

Dan Presser, with exhibit DP-1, dated 17 September 2018.

The Removal Opponent’s evidence

As stated previously, prior to 23 November 2017 (and therefore during the whole of the Relevant Period) Benver was the registered owner of the Trade Mark. On 23 November 2017 the Removal Opponent was entered as the registered owner of the Trade Mark, pursuant to the Trade Mark’s assignment to the Removal Opponent on 10 October 2017 (approximately two weeks after the end of the Relevant Period). Of the relationship between the two, Mr Presser states:
Sunraysia [being the Removal Opponent] is one of several companies in the Sabrands Group (“Sabrands”). The Sabrands Group also includes Rosella Brands Pty Ltd, Benver International Pty Ltd, Sabtel Pty Ltd, Sabcom Pty Ltd, Sabra International Pty Ltd, The Devondale Apple Juice Company Pty Ltd, Blue Banner Pickles Pty Ltd and O’Cedar Pty Ltd.
No other information is provided by Mr Presser as to the nature of the relationship(s) in the Sabrands Group of companies.
Mr Presser declares that he invented the trade mark HONEST KIDS, and that it was inspired by the phrase ‘Honest to Goodness’ as well as the target audience, being children. He considered ‘Honest to Goodness Kids’ to be too much of a mouthful and so shortened it to HONEST KIDS.
There is no evidence or assertion that the Trade Mark was used at any time between its filing for registration in 2011 and August 2017. The following activities are claimed to have taken place thereafter.
In August 2017 Sabrands Group[2] commissioned a design company to develop packaging for ‘the HONEST KIDS brand’. The packaging artwork was completed on 27 September 2017 and signed off by Sabrands Group on 5 October 2017. The evidence provided to substantiate this claim consists of two invoices dated 28 August 2017 for design services relating to ‘Honest Kids Juice Drink’ and ‘Sunraysia Honest Kids Pouches SRT’; an email dated 11 September 2017 from the design company to the Marketing Director of Sabrands Group attaching a PDF of the ‘Sunraysia Honest Kids Juice Carton’; and images of the packaging which appears to consist of outer boxes labelled with both HONEST KIDS and Sunraysia that are to contain pouches of juice (the pouches apparently not themselves labelled with HONEST KIDS but with Sunraysia).
[2] At several points in Mr Presser’s evidence he attributes an action or decision to the corporate group ‘Sabrands’ without nominating the particular entity with legal personality that performed the act or made the decision. I have used the term ‘Sabrands Group’ to flag those instances of vagueness.
On 31 August 2017 Sabrands Group commissioned a charitable foundation with a proposal for it to provide food packaging services for the ‘new HONEST KIDS multipack’. To substantiate this claim an email dated 31 August 2017 is adduced. It is from the Group Supply Chain Manager of Sabrands Group to two individuals stating that he had been asked to investigate a ‘multi pack option for one of our ranges’ and describes the work to be done by the foundation as a ‘1 off job for the moment’. The email itself does not mention the Trade Mark nor does a PowerPoint brief attached to the email (sent to assist with describing the work to be done). The PowerPoint brief describes the work to be done as ‘Looking to take existing products and create a multi variety multi pack’; and the images throughout the PowerPoint show cartons displaying the Sunraysia brand within which are pouches of Sunraysia branded juice. The process of packaging is described in the brief as essentially removal of the original outer carton and the repackaging of the contents into new outer cartons in new arrangements.
On 7 September 2017 confidential discussions were held between Mr Presser, a Sales Director of Sabrands Group and the Managing Director of a third party (which appears to be a food and beverage retailer or wholesaler). It is claimed that ‘the HONEST KIDS juice product and its packaging was discussed’. To substantiate this claim the Sales Director’s meeting notes are provided, in which ‘Honest kids’ is mentioned twice. The meeting notes do not appear to have been created for circulation but rather for the Sales Director’s own use, and he appears to have emailed them to himself on 16 March 2018 with the subject line ‘[third party] Meeting 7/9/17’.
On 10 September 2017 confidential discussions were held between a Business Development Manager of Sabrands Group and a representative of another third party (which also appears to be a food and beverage retailer or wholesaler). To substantiate this claim copies of emails are provided, two of which relate to the setting up of the third party’s sales account (and do not mention the Trade Mark at all), and one of which speaks of an ‘updated flyer’ for a ‘Variety Pack’. The latter email is dated 26 October 2017 and attaches an image of the flyer displaying the words HONEST KIDS and Sunraysia (incorporating also images of juice pouches, although they are labelled with Sunraysia and not HONEST KIDS).
On 26 September 2017, the last day of the Relevant Period, the first-mentioned third party ‘made a commitment’ (Mr Presser’s words) to Sunraysia to purchase HONEST KIDS branded juices. It is claimed that at this time orders were placed by the third party for 160 cartons, each carton containing 10 individual juice pouches. To substantiate this claim an invoice dated 29 November 2017 is provided, which refers to SUNRAYSIA HONEST KIDS ORGANIC MULTIPACK. This is the last of the activities claimed to have taken place during the Relevant Period, the remaining activities claimed to have taken place thereafter.
On 27 September 2017 the second-mentioned third party ‘made a commitment’ to Sunraysia to purchase HONEST KIDS branded juices. It is claimed that at this time orders were placed for 48 cartons, and the third party later ordered a further 112 cartons. The purchase order for the 48 cartons is not dated per se, but it provides a ‘delivery date’ of 27 October 2017. The tax invoice for the 48 cartons is dated 9 November 2017. The purchase order for the 112 cartons provides a delivery date of 25 January 2018 and the related tax invoice is dated 22 January 2018.
The packaging that had been designed in August 2017 (referred to in paragraph 17) was sent to another entity to produce an ‘art version’ and ‘stereo’ of packaging. A copy of the ‘art version’ is adduced which displays the words HONEST KIDS as well as Sunraysia. It was signed by the customer (presumably a person from within Sabrands Group) on 5 October 2017, and an invoice was raised on that date for a ‘Stereo for Sunraysia Honest Kids 10 Pack Carton’. On 12 October 2017 a purchase order was then raised for 500 cartons to be delivered by this entity to the charitable foundation (referred to in paragraph 18), who would repackage existing goods into the new cartons displaying the Trade Mark.
The Trade Mark has since been applied to a range of Rosella tomato sauce, it appears from some time in 2018. The tomato sauce is nationally available in Coles, Woolworths, IGA and other large supermarkets and has been advertised on radio, in national print publications and promoted on the websites of Rosella and Coles amongst others. Images from those websites and copies of advertisements from June and July 2018 are provided.
No further statements of use are made. Mr Presser declares that the goods (being those of the registration, not referring to the tomato sauce) are not yet available in the larger supermarkets in Australia and ‘the HONEST KIDS brand remains of significant ongoing commercial interest to Sunraysia in relation to beverages and in particular fruit juice’. Of the sales described above Mr Presser declares that they were genuine sales and were sales to test the brand in the Australian market. He further states that brand and product testing is normal practice for food manufacturers, wherein the product is tested in smaller markets and evaluated before the next steps of launching a brand Australia-wide in major supermarkets.

The Removal Applicant’s Evidence

The Removal Applicant was founded in the United States in 1998. It manufactures and sells a range of organic beverage products, the first of which was a ready-to-drink bottled tea under the name HONEST TEA in 1999.
An extract from the Removal Applicant’s website shows that it currently produces a range of sweetened and unsweetened bottled tea drinks, lemonade and juice pouches, the common theme of them being that all are made from organic ingredients. The packaging of the beverages carry names all of which include the word HONEST, such as HONEST TEA, HONEST LEMONADE, HONEST SPORT and, in respect of juice pouches, HONEST KIDS. The website also provides a ‘timeline’ of the Removal Applicant’s business, which states amongst other things: in 2002 HONEST TEA became the best settling bottled tea brand in the natural foods industry; by 2008 sales had grown to $38 million and The Coca-Cola Company invested 40% in the Removal Applicant; by 2009 the HONEST KIDS product became available nationally through Costco; in March 2011 The Coca-Cola Company purchased the Removal Applicant; and by 2014 sales had grown to $134 million and the Removal Applicant sold its 1,000,000,000^th beverage since being founded in 1998.
Ms Ramirez declares that the HONEST KIDS trade mark is used in relation to a range of organic juice drinks sold in pouches, which were launched by the Removal Applicant in 2007. In 2009 the Removal Applicant launched a variety pack featuring pouches of four different flavours of the HONEST KIDS range, which appear to be sold in cartons.
As at the time of Ms Ramirez’ declaration the HONEST KIDS juice products were also being sold in McDonalds, Subway, Chik-fil-A and Wendy’s restaurants throughout the United States. In relation to sales Ms Ramirez declares that by 2014, sales in Unites States of the Removal Applicant’s products were more than $100 million, nearly half of which were attributed to sales of HONEST KIDS organic fruit juices. To substantiate this claim two written articles are adduced. The first is from Beverage daily.com, dated 13 June 2013, in which one of the founders of the Removal Applicant states ‘The biggest innovation we’ve made in recent years has been Honest Kids, a drink pouch line for kids, which is now more than a third of our business’. The second is from the website of The Coca-Cola Company, entitled How Honest Tea is Making Parent-Approved Organic Kids’ Drinks Available in More Places, dated 12 October 2016. It states that ‘The Honest Kids line of organic juice drinks today accounts for 48% of Honest Tea’s total business and 71% of its growth’ and notes as a factor in this growth the partnership with the various restaurants named by Ms Ramirez.
As at the time of Ms Ramirez’ declaration, the Removal Applicant owned trade mark registrations for HONEST KIDS in the US, Canada, the European Union, Argentina, Chile, Peru and the Republic of Korea.
Ms Ramirez declares that by the filing date of the subject trade mark registration, the Removal Applicant’s HONEST KIDS trade mark was well established in the United States and was the highest selling organic fruit juice product in that country, which continues to be the case today (as at the time of declaration). To substantiate her claim she provides confidential sales, sales volume and advertising figures, all of which are substantial.
Mr Chambers responds to Mr Presser’s first declaration. On 6 July 2018 Mr Chambers conducted a number of online searches, and attests to them as follows. He examined the websites of both of the third parties named by Mr Presser as having purchased the Removal Opponent’s goods bearing the Trade Mark, but could find no reference to such goods. He exhibits the web pages resulting from those searches, none of which show them. He conducted a Google® search of the internet using the search term ‘Sunraysia Honest Kids’, the results page of which is exhibited. None of the entries identify a product of Sunraysia by reference to the Trade Mark, although the first result relates to ‘Sunraysia Organic 100% Juice’ at the website ‘ The pages of that website are exhibited, which discuss Sunraysia organic juice pouches but do not mention the Trade Mark. He conducted a search of the website ‘ including a page described as ‘+ Our Juices’ and video recordings of three separate television commercials, and although they referenced a range of organic juice pouches none used the Trade Mark. Lastly, he conducted a Google® search of the internet using the search term HONEST KIDS, the first page of results of which are exhibited as are the first page of the ‘images’ results. The only references to fruit juices or images of goods bearing the words HONEST KIDS are those of the Removal Applicant.

A further factor not raised in evidence but which was relevant to both parties’ submissions was that on 28 April 2017 the Removal Applicant filed its own application for registration of the words HONEST KIDS in relation to ‘non-alcoholic fruit drinks; fruit juices’.[3] Its organic juice pouches, if sold in Australia, would be in direct competition with the Removal Opponent’s organic juice pouches. The application has been deferred. The Removal Applicant has submitted that the timing of the subsequent alleged instances of use suggests use made merely to defeat a possible removal application and thwart any plans by the Removal Applicant to enter the Australian market, and not genuine use.

Reasons

[3] The original specification of goods was in relation to a broader range of beverages and beverage-related products, but this was restricted to ‘non-alcoholic fruit drinks; fruit juices’ on 9 October 2017.

Authorised use

During the whole of the Relevant Period the Trade Mark was owned by Benver. There is no evidence that Benver ever used the Trade Mark at any time during the Relevant Period, and the Removal Opponent has not submitted that it did so.
The Removal Opponent did submit, however, that the Trade Mark was used by both Sabrands Group and the Removal Opponent during and immediately after the Relevant Period and that such use was authorised use within the meaning of ss 7(3) and 8 of the Act. In submissions it stated that ‘Sabrands’ is the parent company of Benver (although it did not identify any company name or specific entity), and that they and the Removal Opponent all belong to the same corporate group (that is, Sabrands Group). It cited HS TM, LLC v Schein Orthopadie-Service KG (‘Schein’)[4] and Trident Seafoods Corporation v Trident Foods Pty Limited (‘Trident’)[5] in support of the alleged authorised use.
[4] [2016] ATMO 63.
[5] [2018] FCA 1490.
The Registrar’s delegate in Schein found:
[T]here is no requirement under the Act that a license agreement between the registered owner of a trade mark and an authorised user be in writing. As regards the alleged lack of evidence of quality control, in this case the registered owner (the Opponent) is a wholly owned subsidiary of the Company (the authorised user) and is thus under the control of the Company.
However the delegate’s decision was made without reference to the Full Court’s findings in Lodestar Anstalt v Campari America LLC (‘Lodestar’),[6] having been heard prior to it (although the decision was not issued until after it). In Lodestar the Full Court found that the mere possibility of control, in that case by virtue of a license agreement, was not sufficient to establish use under the control of the registered trade mark owner and therefore authorised use within the meaning of s 8 of the Act. Rather, actual control was required[7] and given the registered owner had exercised no actual control over the trade marks or the entity using them, there was no authorised use and the trade marks were removed for non-use.
[6] [2016] FCAFC 92
[7] The Full Court did recognise at [98] that ‘A license agreement may contain a term that sets in detail a quality standard to be achieved. The details in the agreement may be such that it is not necessary for the registered owner to give directions or instructions from time to time. The licensee, aware of its obligations, may faithfully comply with those obligations without any entreaties or demands from the licensor. The primary judge had such a situation in mind when he referred to cases where there was obedience to the trade mark owner “so instinctive and complete that instruction was not necessary”’.
In Trident Gleeson J noted the delegate’s decision in Schein but went on to state:
Following the reasoning of the Full Court in Lodestar, I concluded that authorised use involves use under the ‘actual’ control of the trade mark owner. There must be control ‘as a matter of substance’, although the connection with the registered owner indicated by the trade mark may be slight.
Her Honour also found that use by a parent company of a trade mark owned by a subsidiary was not authorised use within the meaning of s 8 of the Act where actual control by the subsidiary over the parent could not be shown.
As noted earlier in this decision, the only information relating to the nature of the relationship(s) between Sabrands Group, Benver and the Removal Opponent is Mr. Presser’s statement that the Removal Opponent is one of several companies ‘in the Sabrands Group’, and that the group also includes Benver (amongst other companies). There is no information as to whether they are wholly or partly owned subsidiaries (nor, in fact, is there any explicit statement by Mr Presser that any entity is a subsidiary of another), whether any license agreements were in place, or what form of control any of the entities may have had over any other of the entities in the group.
I do not consider that I could be satisfied, on the basis of the information provided, that any of the alleged use within the Relevant Period was authorised use within the meaning of s 8 of the Act. Mr Presser’s statements as to the corporate connection between Benver, the Removal Opponent and Sabrands Group are vague and certainly insufficient to indicate any form of control as a matter of substance. Although counsel for the Removal Opponent submits that Benver is a subsidiary of the parent company Sabrands (bearing in mind also that no such statement is actually made in the Removal Opponent’s evidence), the decisions discussed above (particularly Trident) indicate the mere existence of such a relationship is insufficient – a finding of authorised use requires actual control to be shown. Nor is there the assertion of the existence of any license agreement under which one entity might be said to be acting with such instinctive and complete obedience that instruction was unnecessary (per the observation of the primary judge in Lodestar).
I am not satisfied that any of the alleged use falls within the meaning of s 8 of the Act, and therefore I am not satisfied that any of the alleged use is authorised use. To that end it is not necessary to comment upon the specific instances of alleged use, however given significant submissions were made in respect of them I will comment briefly.

Instances of alleged use

I do not consider that any of the instances of alleged use during the Relevant Period are sufficiently documented, such that I could be satisfied that there had been public use of the Trade Mark[8] or objective proof of the owner’s intention to commit goods bearing the Trade Mark to actual trade.[9]
[8] In the sense discussed in Moorgate Tobacco Co Ltd v Phillip Morris Ltd [1984] HCA 73, [21]
[9] In the sense discussed in Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261, [40] and Shahin Enterprises Pty Ltd v Exxonmobil Oil Corporation [2005] FCA 1278, [70]-[72].
The documents relating to the commissioning by Sabrands Group of a design company to create new outer packaging and a charitable foundation to package goods, although dated within the Relevant Period, relate only to preparatory steps to use the Trade Mark. Additionally, given the goods to be repackaged do not appear to have borne the Trade Mark and the repackaging was described as a ‘1 off job for the moment’, there is little to suggest such rebranding via outer packaging was to be ongoing.
The documents relating to confidential discussions held on 7 and 10 September 2017 require significant inference to confirm the statements made about them in Mr Presser’s declaration. It is only internal documents from within Sabrands Group (being meeting notes apparently for the writer’s own use) that are alleged to confirm the date and content of the discussion held on 7 September 2017. Similarly the emails relating to the discussion held on 10 September 2017 do not mention the Trade Mark at all until 26 October 2017, one month after the Relevant Period, wherein an ‘updated flyer’ displaying the trade mark is attached to an email of that date. Prior to then it is only a ‘variety pack’ of juices that is referred to. I do not infer that the variety pack referred to is that under the Trade Mark: the only reference to the Trade Mark is that in the ‘updated flyer’ and it is not known when this flyer was updated to show it (bearing in mind also that it was not sent until one month after the Relevant Period).
The alleged ‘commitment’ from the first-mentioned third party to buy goods bearing the Trade Mark on 26 September 2017, being the last day of the Relevant Period, is evidenced only by an invoice dated 29 November 2017. There is no other evidence or statements as to why Mr Presser states that the date of the commitment made was 26 September 2017. The ‘commitment’ from the second-mentioned third party to purchase goods bearing the Trade mark did not occur until 27 September 2017, the day after the Relevant Period, and is evidenced only by undated purchase order which provides a delivery date of 27 October 2017. Where a trade mark owner relies upon only one, or few, instances of alleged use, such instances ought to be established by ‘if not conclusive proof, at any rate, overwhelmingly convincing proof’.[10] Neither of these instances is sufficiently documented to conclude they took place on the date alleged.
[10] Nodoz Trade Mark [1962] RPC 1, 7.

The Registrar’s Discretion

As already stated, s 101(3) bestows upon the Registrar the discretion not to remove a trade mark or to restrict its goods or services, even where the grounds for removal are established. The discretion is broad, limited only by the subject matter, scope and purpose of the Act (particularly Part 9).[11] Nonetheless, it is recognised by the courts that both the public interest and the private interests of the parties are relevant considerations in the exercise of the discretion. Flick J in E & J Gallo Winery v Lion Nathan Australia Pty Ltd (‘Gallo’) stated:
Although the ‘guiding principle behind the discretion is public interest, particularly in the integrity of the register’,[12] 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.[13] 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.[14]
[11] Austin, Nichols & Co v Lodestar Anstalt (No 2) (‘Austin’) [2012] FCAFC 8, [35].
[12] Kowa Co Ltd v Organon [2005] FCA 1282, [92].
[13] Campomar Sociedad Limitada v Nike International Ltd [2000] HCA 12, [40].
[14] [2008] FCA 934, [210].
This was confirmed by the Full Court in Austin wherein their Honours stated:
The purpose of Pt 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.[15]
[15] Austin, [38].
In order to exercise the discretion, the Registrar must be satisfied that it is reasonable to do so. The onus to positively satisfy the Registrar of that lies with the Removal Opponent.[16] Factors that may be relevant to the exercise of the discretion were articulated in Gallo (referring to Hermes Trade Mark[17]), which although not exhaustive provide some guidance:
·    There had been no abandonment of the trade mark;
·    The registered proprietors still had a residual reputation in the mark;
·    There had been sales by the registered proprietors of [the relevant goods] since the relevant period ended;
·    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
·    The registered proprietors were not aware of the applicant’s sales under the [trade mark].[18]
[16] Austin, [44].
[17] [1982] RPC 425.
[18] Gallo, [202].
As well as the above factors, the Removal Opponent contended the following further factors supported the exercise of the Registrar’s discretion:
·    The Trade Mark has been used by entities in the same corporate group, including the alleged parent company Sabrands (with reference to Trident[19]);
·    The Removal Applicant’s own trade mark application may never proceed to registration even if the Trade Mark is completely removed, as the Removal Opponent would have s 58 available to it with respect to opposing that application;
·    From 10 October 2017 the Removal Opponent was the registered owner of the Trade Mark and so any use from that date was use by the then registered owner;
·    The Removal Opponent’s name appeared on the packaging of goods during the Relevant Period;
·    The private interests of the Removal Opponent outweigh those of the Removal Applicant;
·    The Removal Applicant has not used HONEST KIDS in Australia;
·    The confusion that is likely to result if the Removal Opponent’s trade mark is registered; and
·    The Trade Mark is being used with respect to tomato sauce and has been extensively advertised and promoted in that context.
[19] Wherein the Registrar’s discretion was exercised on account of, inter alia, use of trade marks by entities in the same corporate group, where those entities subsequently entered into a licence agreement to formalise their relationship concerning the trade marks and with a view to ensuring that the user of the trade marks used them under the control of the registered owner of the trade marks.
For its part, the Removal Applicant argued in summary that:
·    What use that has been made of the Trade Mark by the Removal Opponent after the Relevant Period is very limited and there are reasonable grounds to suspect that any use that was made of the mark by the Removal Opponent was not bona fide commercial use;
·    There is no evidence, apart from three small sales at the end of 2017 and the beginning of 2018, that there has been any other use of the Trade Mark by the Removal Opponent;
·    It is not credible on the evidence that the Removal Opponent has any existing reputation in the Trade Mark in Australia;
·    There is no clear statement that the Removal Opponent has any plans to use the Trade Mark in the future. The best that can be said of this is the statement by Mr Presser that ‘the HONEST KIDS brand is and remains of significant ongoing commercial interest to Sunraysia in relation to beverages and in particular fruit juice’;
·    It is the Removal Applicant that has the international profile in the Trade Mark given its enormous reputation overseas. The continued ownership of the Trade Mark by the Removal Opponent presents a major commercial obstacle to the Removal Applicant entering the Australian market;
·    The Removal Opponent made no use of the Trade Mark in Australia prior to the Removal Applicant’s own application for registration, so it does not have a prior position under s 58 should the Trade Mark be removed; and
·    Evidence of use of the Trade Mark upon tomato sauce by Rosella is irrelevant to these considerations, and in any event is in respect of goods which are not similar to those here.
Bearing the above factors in mind (albeit I do not consider all of them relevant, in particular those in relation to a hypothetical opposition under s 58 and the Removal Applicant’s reputation overseas), and my own assessment of the evidence before me, I am not satisfied that it is reasonable for the Trade Mark to remain on the Register.
The Trade Mark was not used for more than six years after the application to register it was filed in 2011. Only in the latter half of 2017 did any activity in respect of the Trade Mark occur: the design of new outer cartons displaying the Trade Mark was commissioned, those cartons to contain existing juice pouches that apparently bore a different trade mark; and sales of goods under the Trade Mark were discussed and/or committed to by two third parties. The totality of sales appears to be confined to three sales to two customers which occurred in late 2017 and early 2018 for a total of 320 cartons of juice pouches. The only promotion or advertising that appears to have taken place is the sending of the ‘updated flyer’ by email to one of the third parties, although there is no information as to whether that third party distributed it or displayed it as point of sale material. There is no evidence of any further sales, promotion or indeed any activity involving the Trade Mark in respect of the registered goods since then. Nor is there any evidence of any evaluation of the success or otherwise of the product (given Mr Presser’s statement that it is common practice to test products in smaller markets), nor any indication of future plans for use of the Trade Mark in respect of the registered goods.
The kind and extent of activities that led to the adoption of HONEST KIDS in respect of tomato sauce by ‘Rosella’ is not clear. However it is clear that in a relatively short period of time (apparently in 2018) an entity within the same corporate group as the Removal Opponent has been able to have those goods distributed to all major supermarkets in Australia and have them promoted widely on radio, in national print publications and various websites. It appears therefore to be well within the power of the corporate group relied upon by the Removal Opponent to distribute and promote goods widely, but its reasons for refraining to do so in respect of the Trade Mark upon the registered goods are not explained.
Nor do I consider that the use of HONEST KIDS upon tomato sauce is use upon goods similar to the registered goods. In brief, the nature, use and trade channels[20] of the registered goods in class 32 are significantly different to those of tomato sauce. Tomato sauce is used to provide flavour and piquancy to food, whereas beverages are consumed to slake thirst. The makers of tomato sauce do not generally also produce beverages (as evidenced by the separate entities Sunraysia Natural Beverage Co. Pty Ltd and Rosella Brands Pty Ltd within Sabrands Group), and such goods are normally sold in separate sections of supermarkets and shops. For these reasons I am also not persuaded that, on account of the use of HONEST KIDS by Rosella upon tomato sauce, removal of the Trade Mark would lead to confusion.
[20] As described by Romer J in Jellinek’s Application 63 RPC 59, expanded upon in Beck, Koller & Company’s Application 64 RPC 76, 78.
Whilst I am inclined to believe that the seemingly hurried use of the Trade Mark was in response to the filing of the Removal Applicant’s own application to register the same trade mark and the potential for an attack on the grounds of non-use, of itself this would not be sufficient reason to remove the Trade Mark.[21] However when considered in light of the minimal and isolated instances of use of the Trade Mark and the lack of any indication of any subsequent or future use of the Trade Mark, I consider this a further factor weighing against the exercise of the discretion.
[21] Trident, [166]-[177].
I am accordingly not satisfied that it is reasonable to maintain the registration of the Trade Mark in respect of any of the registered goods (noting that the only registered goods in respect of which any use has been shown is ‘fruit juices’). I therefore refuse to exercise the Registrar’s discretion under s 101(3).

Decision

Subsection 101(1) of the Act provides:
101Determination of opposed application—general
(1)Subject to subsection (3) and to section 102, if:
(a)the proceedings relating to an opposed application have not been discontinued or dismissed; and
(b)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.

The Removal Opponent has not established its opposition to the application for removal. Accordingly I direct that the Trade Mark be removed from the Register in respect of all of the goods for which it is registered, one month from the date of this decision. If the Registrar is served with a notice of appeal before that time, I direct that the removal shall not occur until the appeal has been discontinued. Otherwise the disposition of the application should be in accordance with the Court’s order or direction.

Costs

The Removal Applicant has sought its costs. There is no apparent reason to depart from the principle that costs follow the event, therefore I award costs against the Removal Opponent at the official scale set out at Schedule 8 to the Trade Mark Regulations 1995.

Nicole Worth
Hearing Officer
Oppositions & Hearings

15 May 2019