Orthotech Research & Development Pty Ltd v Maxx Orthopedics, Inc

TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by Orthotech Research & Development Pty Ltd to application under section 92 of the Trade Marks Act 1995 (Cth) by Maxx Orthopedics, Inc for removal of trade mark number 1217830 (Class 10) – FREEDOM PKR, in the name of Orthotech Research & Development Pty Ltd.

Delegate:

Blake Knowles

Representation:

Opponent: Patrick Spelman of RGB Lawyers.

Applicant: Vincent Powell of AJ Pietras & Co.

Decision:

2022 ATMO 65

Trade Marks Act 1995 (Cth) – application for removal under s 92(4)(b) – no use during relevant period – circumstances established that were an obstacle to use for some goods – discretion not exercised – trade mark to be partially removed.

Background

Maxx Orthopedics, Inc. (‘Removal Applicant’) on 21 April 2020 filed an application under s 92(4)(b) of the Trade Marks Act 1995 (Cth)0F[1] (‘Removal Application’) for the complete removal of the following registered trade mark (‘Registration’):
[1] Unless otherwise stated, each reference to a section or regulation in these reasons is a reference to the Trade Marks Act 1995(the ‘Act’) or the Trade Marks Regulations 1995 (Cth) (the ‘Regulations’), respectively.
Trade Mark Number: 1217830
Trade Mark: FREEDOM PKR
(‘Trade Mark’)
Class 10: Orthopaedic articles; orthopaedic implants and orthopaedic implant components; instruments for implantation of orthopaedic implants
(‘Goods’)
Orthotech Research & Development Pty Ltd (‘Removal Opponent’) is the owner of the Registration. The Removal Opponent filed a notice of intention to oppose the Removal Application on 19 June 2020, followed by a statement of grounds and particulars (‘SGP’) on 18 July 2020. The Removal Applicant filed a notice of intention to defend the opposition to the Removal Application on 1 September 2020.
The parties were given the opportunity to file evidence in accordance with the timetable set out in reg 9.16. The Removal Opponent filed Evidence in Support (‘EIS’) on 8 December 2020. The Removal Applicant did not file Evidence in Answer, and as such, the Removal Opponent did not file Evidence in Reply.
Both parties requested to be heard by videoconference. The matter was heard before me, as a delegate of the Registrar, on 7 March 2022. The Removal Opponent was represented by Mr Patrick Spelman of RBG Lawyers. The Removal Applicant was represented by Mr Vincent Powell of AJ Pietras & Co. I have decided the matter based on the particulars set out in the SGP, the EIS, and the submissions of the parties.
As the Removal Application was filed on 21 April 2020, for the purposes of deciding the opposition, the relevant three-year is the period ending on 21 March 2020 (‘Relevant Period’).
Evidence
The EIS consists of a declaration by Mr Samuel Scott-Young, sole director of the Removal Opponent, made on 8 December 2020 with Exhibits SSY-1 to SSY-11.
Mr Scott-Young declares that the Trade Mark has been predominantly used in respect of unicompartmental knee prosthesis (‘Prosthesis’). Mr Scott-Young explains that the Prosthesis was designed and implanted by some of Australia’s word-renowned knee surgeons and was purchased predominantly by orthopaedic surgeons and hospitals across Australia. Mr Scott-Young declares that that the letters PKR in the Trade Mark are a reference to ‘partial knee replacement’ and this is common knowledge amongst usual customers of the Prosthesis.
Mr Scott-Young declares that the Removal Opponent licensed the Trade Mark to a related entity, Orthotech Pty Ltd (‘Orthotech’). Mr Scott-Young states that the Removal Opponent is a wholly owned subsidiary of Orthotech, and that he is the sole director of both companies. Mr Scott-Young explains that both companies ‘acted with the same objective of maximising the sales of the Prosthesis and enhance the value of the Prosthesis and its associated Mark’.
Mr Scott-Young declares that Orthotech sold the Prosthesis bearing the Trade Mark in Australia regularly from 2011 through to the most recent sale to St Vincents Private Hospital in Sydney on 17 February 2017. Mr Scott-Young declares that the Prosthesis has remained advertised for sale on Orthotech’s website (‘Website’), during the Relevant Period. Mr Scott-Young annexes a copy of an Internet Archive Wayback Machine extract dated 12 August 2017 which displays the following product:
(‘Wayback Extract’)
Mr Scott-Young declares that between 5 October 2016 and 30 June 2018, the Removal Opponent granted distribution rights in respect of the Prosthesis to PurePlay Orthopaedics Pty Ltd (‘PurePlay’). Mr Scott-Young annexes copies of a sub-distributor agreement and amendment letter. Mr Scott-Young notes that the agreement remains on foot and that it places restrictions on PurePlay altering or modifying the Prosthesis.
Mr Scott-Young declares that the Removal Opponent and Orthotech were unable to source an appropriately qualified and licensed manufacturer of the Prosthesis during the Relevant Period. Mr Scott-Young states that after acquiring the Trade Mark and associated rights from Stryker Australia Pty Ltd in 2010, the Removal Opponent engaged an Italian company, Samo S.p.A (‘Samo’) to manufacture the Prosthesis and sell it to the Removal Opponent and Orthotech for distribution in Australia and New Zealand (with the last sale of the Prosthesis occurring in Australia in February 2017). Mr Scott-Young states:
‘Samo experienced financial difficulties and various intellectual property rights in the Prosthesis were sold to BeijingFitoMedicalCo. Ltd (which I understand traded as FitSamo).’
…
‘Following Samo’s sale of the intellectual property rights in the Prosthesis, Samo S.p.A ceased manufacturing the Prosthesis and neither [the Opponent] nor Orthotech were able to acquire further Products from Samo S.p.A.’
Mr Scott-Young declares that the Removal Opponent sought alternative manufacturers of the Prosthesis, and annexes copies of email correspondence with various parties between 2017-2019. This correspondence is discussed in further detail below. Mr Scott-Young states that materials regarding the Prosthesis, and samples of the Prosthesis itself, bearing the Trade Mark were sent to prospective manufacturers during the Relevant Period. Mr Scott-Young explains that the failure to reach an agreement with prospective manufacturers was due to onerous laws regarding the manufacture of orthopaedic articles in both Australia and other jurisdictions. Mr Scott-Young refers in particular to changes during the Relevant Period to the European Union Medical Devices Regulation, which made prospective European manufacturers hesitant to incur costs to manufacture the Prosthesis. Further, Mr Scott-Young refers to a lack of technical file and design dossiers as also being a relevant concern to prospective manufacturers.
Mr Scott-Young declares that the Removal Opponent has not abandoned the Trade Mark, and that it still retains a reputation amongst orthopaedic surgeons and hospitals. Further, the Prosthesis is still listed on the Australian government prosthesis list for the purpose of private health insurance rebates.
Grounds, onus and standard
The Removal Application nominates grounds for removal under 92(4)(b), which states:
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.
The allegation of non-use during the Relevant Period is for the Removal Opponent to rebut.1F[2]
[2] Trade Marks Act 1995 (Cth) s 100(1)(c).
The Removal Opponent relies on evidence of use of the Trade Mark during the Relevant Period.2F[3] Further, the Removal Opponent also refers in the SGP to circumstances which were an obstacle to use of the Trade Mark during the Relevant Period. Finally, I also have a general discretion to allow the Trade Mark to remain registered even if there has been no use or limited use of the Trade Mark during the Relevant Period.
[3] Ibid s 100(3)(a).
I note that as the Trade Mark was filed prior to 24 February 2019, the ground for removal under s 92(4)(b) may only be relied on by the Removal Applicant once a period of five years has passed since the filing date of the Trade Mark.3F[4] As the Trade Mark was filed on 4 January 2008, this requirement is met.
[4] Ibid, s 93 (pre amendments commencing 24 February 2019); Intellectual Property Laws Amendment (Prosthesisivity Commission Response Part 1 and Other Measures) Act 2018 (Cth) s 46.
Findings of fact in this decision are based on the civil standard of the balance of probabilities.
Discussion
Use of the trade mark during the Relevant Period
I must first decide whether there has been use of the Trade Mark in good faith during the Relevant Period in relation to the Goods. If I am satisfied there has been such use, the opposition will succeed. If I am not satisfied there has been use, or if there has only been use in relation to some of the Goods, I must then decide whether there are circumstances which were an obstacle to use of the Trade Mark, or whether to otherwise exercise discretion to allow the Trade Mark to remain registered, for any of the Goods for which use during the Relevant Period is not established.
The ‘use’ in good faith required to be demonstrated by the Removal Opponent is ‘use as a trade mark’. ‘Use as a trade mark’ is use of the sign as a badge of origin in the sense that it indicates a connection in the course of trade between the goods and the person who applies the sign to or in relation to those goods.4F[5] Use in the course of trade means an actual dealing in the goods, an offer for sale of goods, or an intention to offer for goods for sale manifested through preparatory steps showing an objective commitment to use the trade mark.5F[6]
[5] Coca-Cola Co v All-Fect Distributors Ltd [1999] FCA 1721, [19] (Black CJ, Sundberg and Finkelstein JJ).
[6] Angela Christou v Tonch Pty Ltd [2008] ATMO 24; see also Dick Smith Investments Pty Ltd v Ramsey[2001] FCA 261 (Katzmann J).
In Woolly Bull Enterprises Pty Ltd v Reynolds (‘Woolly Bull’), Drummond J observed that the expression ‘use in good faith’ has a well understood meaning in terms of s 92 of the Act, namely it is ‘real, as opposed to token, use in a commercial sense’. 6F[7] Provided the use is in good faith, ‘a single bona fide use of the mark’ may be enough to rebut an allegation of non-use. 7F[8] However, if a single act of use is relied upon then it should be established by ‘if not conclusive proof, at any rate overwhelmingly convincing proof’.8F[9]
[7] [2001] FCA 261, [16].
[8] Ibid, [17].
[9] Nodoz Trade Mark (1962) RPC 1, 7 (Wilberforce J).
The advertising of goods and other activities such as distribution of samples where goods are not available for sale may not suffice to constitute use in the course of trade. In Settef SpA v Riv-Oland Marble Co (Vic) Pty Ltd, McGarvie J said:
[A] mark is used as a trade mark only if it is used with a view to facilitating or promoting the operation of a trading channel which in a business sense had already been opened to Australia. The mark must be used for the purpose of trade…The forwarding of samples and brochures is not sufficient to indicate that Settef was ready and willing to fulfil such orders as it received from Australia. The purpose of these items may well have been to ascertain whether there was a market in Australia sufficient for it to be worthwhile for Settef to export here. Use of the mark in such preliminary activities would not be a use in the course of trade.9F[10]
[10] (1987) 10 IPR 402, 417-418.
In John Toh v Paris Croissant Co. Ltd, Hearing Officer Wilson said:
While advertising preceding the launch of a product may constitute preparations for use of the trade mark, this is true only when the purpose of advertising is to immediately encourage orders of the product. As previously mentioned, the statements made by the removal opponent indicate that the services were not available at the time of the advertisements. I have no positive evidence before me that these services were available at that time, and little evidence that they would be in the future. Therefore, an advertisement which displays a trade mark but without any information about the availability of the goods or services, is not use of the mark in the course of business. In this case, the promotion of “Paris Baguette” via the car advertisement would, at best, amount to a “mere puff” and not use in the marketplace.10F[11]
[11] [2010] ATMO 34.
However, in Dick Smith Investments Pty Ltd v Ramsey (‘Dick Smith’),[12] Katzmann J held that in the circumstances of that case that certain promotional activities by the registered owner (against the background of a significant amount spent on product development) were sufficient to constitute use of the trade mark OZEMITE, stating:
It may not be strictly correct to describe the broadcasts in 2010 and 2011 as “pre-launch publicity”, as the launch of the product was not then imminent. But that is beside the point. What matters is whether the mark was being used as a trade mark to distinguish the prospective product from the products of others. The references to Ozemite in the two promotional pieces answer this description. To adopt Lord Macmillan’s language in Aristoc, they reveal uses of the mark in “association with the goods in the course of their production and preparation for the market” and in this way were uses of the mark in connection with goods in the course of trade. Their objective purpose was to revive, if not maintain, interest in the OzEmite product amongst potential purchasers so that there would be a viable market for the product once it was released. I do not doubt that in each of these appearances, and notwithstanding the humour in The Chaser skit, Mr Smith’s promotion of OzEmite was an expression of a genuine intent to use the mark for commercial purposes. Consequently, each involved a use of the mark in good faith for the purposes of s 94(1)(b)(ii). I find that at the time of the broadcasts Mr Smith (the controlling mind and will of DSI, the then owner of the mark) had a genuine expectation that his intentions would shortly be realised. It just took longer than he predicted.[13]
[12] [2016] FCA 939.
[13] Ibid, [157].
Use of a trade mark for goods includes use in relation to the goods and is not limited to a direct application of the mark to the goods or their packaging.11F[14] A trade mark may be used in relation to goods where it is included on an invoice or some other document (including a webpage) associated with the sale or promotion of goods.12F[15]
[14] Trade Marks Act 1995 (Cth) ss 7(4), 92(4)(b).
[15] Ibid s 9. See also Thunderbird Prosthesiss Corp v Thunderbird Marine Prosthesiss P/L [1974] HCA 51 (Jacobs J).
The trade mark must be used by the registered owner or an authorised user within the meaning of s 8. Use of a trade mark by an authorised user is taken to be use by the registered owner if such use is under the control of the latter.13F[16] Control includes an exercise of quality control over goods or services by the registered owner, or the exercise of financial control by the registered owner over the trading activities of the authorised user.14F[17] In Trident Seafoods Corporation v Trident Foods Pty Ltd, the Full Federal Court held that practical control sufficient to give rise to authorised use may exist in circumstances where the owner and user of the trade mark operate with a ‘unity of purpose’, stating:
It must be inferred from the evidence that the two companies operated with a unity of purpose. Trident Foods held the trade marks. Manassen sold the products under the TRIDENT brand and thereby used the trade marks. In the primary judge’s view these arrangements showed nothing more than that Trident Foods acquiesced in Manassen’s use of the marks. In the present case, where there were common directors, the concept of mere acquiescence by the one company to the use by the other company (albeit that Manassen is the parent company) appears alien. As directors of Trident Foods, the directors had obligations to ensure the maintenance of the value in the marks. To that end Trident Foods necessarily controlled Manassen’s use of the marks by reason of the simple fact that it owned the marks and its directors, who were also Manassen’s directors, must have had one common purpose, being to maximise sales and to enhance the value of the brand.15F[18]
[16] Ibid, s 8(2).
[17] Ibid, ss 8(3) and 8(4).
[18] [2019] FCAFC 10, [45] (Reeves, Jagot and Rangiah JJ).
Use of a trade mark may be established by use of the mark with alterations or additions that do not substantially affect its identity, i.e. by the use of a ‘substantially identical’ mark.16F[19] The test for whether two marks are substantially identical requires that they be assessed as follows:
they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison.17F[20]
[19] Trade Marks Act 1995, s 7.
[20] The Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407, 414 (Windeyer J).
In Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd (‘Pham’), the court held that a comparison of marks for determining whether they are substantially identical is to be carried out cognisant of the essential elements of the trade marks, noting that essential elements are unlikely to be found in mere descriptive elements.18F[21] The court went on to find that the following two trade marks were substantially identical, based on the common presence of the word INSIGHT and a similar device, and notwithstanding differences in font, stylisation, and descriptive material:
[21] [2017] FCAFC 83, [51]-[52] (Greenwood, Jagot, and Beach JJ).
Turning to the present facts, I accept that the Prosthesis falls under the definition of ‘orthopaedic articles’ and ‘orthopaedic implants’ which are listed in the Goods. As such, it now falls to determine three things, namely, (i) whether the trade mark used is the same or substantially identical to the Trade Mark as registered, (iii) whether the use was by or under the control of the Removal Opponent, and (iii) whether the use relied on by the Removal Opponent was ‘in the course of trade’.
The Removal Opponent claims that the last sale of the Prosthesis took place on 17 February 2017. The invoice was issued by ‘Orthotech Orthopaedic Group’ with an ABN of 92 134 812 507, which is consistent with the ACN of Orthotech (134 812 507). However, the sale is outside of the Relevant Period, and the Trade Mark does not appear on the invoice. As such, the invoice is not sufficient to rebut the claim of the non-use.
The Removal Opponent also claims that the Prosthesis remained advertised for sale on the Website during the Relevant Period and relies on the Wayback Extract as evidence of this use. The Wayback Machine extract refers to the Prosthesis as ‘FREEDOM KNEE’. I consider that use of FREEDOM KNEE constitutes use of the Trade Mark with an alteration not substantially affecting its identity, given the Opponent’s declaration that ‘PKR’ in the Trade Mark stands for ‘partial knee replacement’ (a definition which is supported by a brochure included in the EIS), and given that the Prosthesis is a knee implant.
I also consider that any use of the Trade Mark by Orthotech (including on the Website) constitutes use under the control of the Removal Opponent, given the Removal Opponent’s evidence regarding the corporate relationship and the common directorship. Although the Removal Opponent has not provided ASIC extracts which confirm the relationship, I note that the entities have very similar names and an identical address. In the circumstances, and given the clear explanation of the relationship between the entities provided by Mr Scott-Young (and the lack of any contrary evidence by the Removal Applicant), I consider it more likely than not that the entities are closely related, under common control, and act with the requisite unity of purpose.

However, I am not satisfied based on the evidence that the use of the Trade Mark relied on by the Removal Opponent is use in the course of trade. The Wayback Extract is the sole example put forward of a possible offer for sale during the Relevant Period. It is debatable whether this single example constitutes ‘overwhelmingly convincing proof’ that FREEDOM KNEE appeared on the Website at this time, although I acknowledge there is no evidence to the contrary. There is also a further significant issue with the Removal Opponent’s evidence, namely, that it is unclear whether the Prosthesis was still available for purchase as at the date of the Wayback Extract or at any other point during the Relevant Period. The evidence indicates that the final sale was made in February 2017, and thereafter, Orthotech sought alternative manufacturers. However, while the Removal Opponent states that Orthotech still had some stock remaining (which was subsequently used as samples to send to prospective manufacturers), the evidence is silent on whether that stock was available for purchase. I infer from the lack of any sales after February 2017, and in the absence of any positive statement to the contrary, that this stock was not available for purchase.
I also do not consider that the sub-distributor agreement with PurePlay constitutes a relevant use of the Trade Mark. The agreement does not even mention the Trade Mark, and instead in defining ‘Products’ refers to the ‘KLS Martin’ and ‘Neosteo’ ranges, including ‘Linos, IXOS, and Dynafit’. While it may have been the intention of the parties that the agreement also cover goods to be sold under the Trade Mark, the agreement does not establish this. A letter amending the agreement dated 5 October 2016 also does not refer to the Trade Mark, but refers to ‘Samo Knee Range’, which may impliedly include the Trade Mark. However, even if the agreement is taken by implication to refer to the Trade Mark, this does not suffice to constitute a use in the course of trade in the relevant sense for the purposes of the Act, given it is merely a commercial arrangement between two parties and not a sale or offer for sale of the Prosthesis. Further, it does not carry the necessary degree of certainty and imminence with regards to future sale of the Prosthesis under the Trade Mark to constitute ‘preparatory steps showing an objective commitment to use the trade mark’.
I also do not consider discussions and correspondence with potential manufacturers is sufficient to constitute use of the Trade Mark in the course of trade. These dealings are not a sale of the Prosthesis, or an offer for sale. They are commercial negotiations regarding possible manufacture of the Prosthesis in future. These negotiations also do not suffice to constitute preparatory steps showing an objective commitment to use the trade mark. As no agreements were reached, and the Opponent therefore could not obtain any new Prosthesis, use of the Trade Mark can only be characterised as a possibility, and not something that the Opponent had objectively committed to.
I also note the Removal Applicant’s submissions that evidence indicates that Samo, rather than the Removal Opponent, is the true owner of the Trade Mark. However, I am only concerned whether the Removal Opponent has used or authorised the use of the Trade Mark. I am not concerned whether some other entity may have a claim to proprietorship. That is a question for determination under other provisions of the Act. In any event, it appears to me more likely than not that the Removal Opponent and Orthotech controlled use of the Trade Mark, while at the same time promoting that Samo was the manufacturer of the Prosthesis. This situation is not inconsistent with the Removal Opponent being the owner of the Trade Mark. Often trade marks are used and controlled by parties other than the manufacturer.
For the reasons given above, I am not satisfied that the Removal Opponent has used the Trade Mark for the Prosthesis, or any of the Goods, during the Relevant Period.
Circumstances that were an obstacle to use
Section 100(3)(c) states that the Removal Opponent will have rebutted the allegation of non-use during the Relevant Period if:
The Opponent has established that the trade mark was not used by its registered owner in relation to those goods and/or services during that period because of circumstances (whether affecting traders generally or only the registered owner of the trade mark) that were an obstacle to use of the trade mark during that period.
Circumstances that may constitute an obstacle to the use of a trade mark within the meaning of s 100(3)(c) of the Act were considered by Drummond J in Woolly Bull, where his Honour said:
It is apparent from these extrinsic materials that s 100(3)(c) was not intended by the Parliament to provide a defence to an attack on a registered trade mark for non‑use on any grounds, including grounds entirely personal to the trade mark owner that do not bear any trading character, so long only as they do not arise from the voluntary actions of the owner.
In my opinion, circumstances within s 100(3)(c) will only exist when events arise that are capable of disrupting trade in the area of commercial activity in which goods bearing the registered owner’s mark are traded. For the statutory excuse to be made out, those circumstances must cause (in a practical business sense) non-use of the particular mark by the owner, whether or not they have an impact on any persons other than the owner of that mark who are also involved in that same area of commercial activity. There must be a causal link shown between the relevant circumstances and the mark’s non-use. This requirement arises from the fact that s 100(3)(c) creates an excuse only where the mark has not been used by the registered owner “because of” circumstances etc. It will not assist the opponent to removal to show the existence of an impediment to use of the kind referred to in s 100(3)(c) if he does not also establish that, but for that impediment, he would have used the mark.
Circumstances that do not have a trade character but which only affect a mark owner in his personal character, such as illness afflicting the owner of the mark that is sufficiently disabling to prevent the owner using the mark, can never therefore found an answer within s 100(3)(c) to an application for removal of the mark for non-use.19F[22]
[22] Woolly Bull (n 7), [54]-[56].
Justice Drummond also considered whether circumstances constituting an obstacle to use must exist throughout the whole of the Relevant Period, or whether it is sufficient the circumstance existed during only a part (being more than a de minimis part), of the Relevant Period. His Honour preferred the latter view, provided that the opponent establishes that the mark would have been used during that part of the relevant period but for the existence of the obstacle.20F[23]
[23] Ibid, [58].
In UCP Gen Pharma AG v Mesoblast, Inc (‘UCP’), Jessup J did not consider that the inability to source an alternative manufacturer for a pharmaceutical preparation was sufficient to establish grounds of opposition under s 100(3)(c) in relation to removal of the trade mark REVASC. His Honour said:
Counsel for the applicant next submitted that it took until the end of 2006 to find an alternative manufacturer for desirudin, and from then until 2009 to transfer the manufacturing know-how from Novartis to Boehringer, to develop a suitable manufacturing facility and improved manufacturing processes, and to register Boehringer with the relevant authorities in Europe. It will be apparent that these submissions really take the matter no further for the applicant. Essentially, they involve no more than an identification of the steps inevitably required to produce a new pharmaceutical product. The position in which the applicant found itself was, on one view, the inevitable result of its decision, many years previously, to secure trade mark registration in Australia well in advance of it having the wherewithal to manufacture the product to which the mark would be applied. These matters are not, in my view, circumstances of the kind referred to in s 100(3)(c).[24]
[24] [2012] FCA 210, [29].
However, Jessup J eventually concluded that it was appropriate to exercise discretion to allow REVASC to remain registered, considering that the product was in the course of development and that such development had not been without its challenges. His Honour also considered that there had been lines of communication opened with the specialised market for the REVASC goods, namely medical professionals, and that such professionals would be ‘keeping an eye out for it with a view to considering the incorporation of it into their various practices’. On balance, his Honour considered that the balance of convenience favoured the private interests of the registered owner, and that REVASC should remain registered.[25]
[25] Ibid, [35]-[43].
In Dick Smith, Katzmann J considered whether the inability of the registered owner to source a particular type of brewers yeast and inability to develop a formula for its ‘OzEmite’ spread were obstacles to use of the trade mark during the Relevant Period. Her Honour said:
In the result, I cannot conclude that, understandable though they may be, the concerns of the Dick Smith companies to achieve a particular taste were “circumstances … that were an obstacle to the use of the trade mark during [the statutory] period”. To the extent that the objective of capturing the old Vegemite flavour caused or even contributed to the non-use of the mark during this period, it did not arise from or comprise events external to the registered owner or independent of its will.[26]
[26] Dick Smith (n 12), [177].
Turning to the present case, the Removal Applicant submits that s 100(3)(c) was not particularised by the Removal Opponent in the SGP, and as such, it would be inappropriate to consider it. However, I note that the SGP states “the Customer [i.e. Removal Opponent] and licensee have faced obstacles in using the Freedom PKR trade mark to the full extent due to the difficulties in having the manufacturer of the Freedom PKR product manufacture the product. This is despite the licensee’s efforts to source an authorised manufacturer to manufacture the products during the alleged non-use period.” I consider this statement is sufficient to constitute reliance on s 100(3)(c) notwithstanding that the section itself is not mentioned.
The Removal Opponent refers to evidence of five specific sets of communications as evidence of its attempts and subsequent failure to obtain a new manufacturer for the Prosthesis during the Relevant Period. It relies on this failure as a relevant circumstance that was an obstacle to use. I note that the correspondence is in parts somewhat confusing and not always arranged chronologically. Further, Orthotech, and not the Removal Opponent, is the relevant party to this correspondence. However, as I have determined that Orthotech is an authorised user acting in unity of purpose with the Removal Opponent, I consider that the efforts and failure of Orthotech with regards to the Trade Mark and the Prosthesis are circumstances that can be relied on by the Removal Opponent.
The first set of communications begins with email correspondence dated 23 March 2017 from Orthotech to Gianluca Trantini (CEO of Innovative Medical Devices Srl) and Enrico Sandrini (General Manager of Nanosurfaces Industries Srl, a Coorstek Medical Company). The email attaches a draft Manufacturing Agreement between the Removal Opponent and Innovative Medical Devices Srl. Subsequent related correspondence is provided dated between May 2017 and June 2018 between variously Orthotech, Valter Annibaldi (a representative of Samo), Enrico Sandrini, and Gianluca Trantini. The final email from Orthotech dated 15 June 2018 requests further information from Samo to move forward with the project. The correspondence does not indicate why an agreement between the parties was not reached.
The second communication dated 23 May 2017 is between Orthotech and Jenny Swain of Allegro Orthopaedics, NSW. The third communication is between Orthotech and Federico Perego and Roberto Ferrario of Permedica Orthopaedics, Italy dated 10 November 2017. In both cases, the evidence merely contains an email from Orthotech attaching a brochure on the Prosthesis, which includes the Trade Mark. There is no evidence of the responses given by either Allegro Orthopaedics or Permedica Orthopaedics.
The fourth set of communications dated from April 2019 to August 2019 is between Orthotech and variously Lorenzo Riva, Gian Guido Riva, and Davide Masoni of ReJoint Srl. The correspondence indicates that ReJoint Srl was interested in reaching an agreement with Orthotech to manufacture the Prosthesis, as shown in an email of 29 April 2019 which states “We clearly believe that Freedom UniKnee is the right product to be part of the REJOINT platform as partial knee replacement system”. Subsequent emails in August 2019 indicate that technical issues with the Prosthesis were raised by ReJoint Srl. Also included amongst the correspondence is an email dated 6 August 2019 from an Australian knee surgeon, which expresses his views on the technical issues. The correspondence is inconclusive as to why an agreement between the parties was not reached.
The fifth set of communications dated from 22 May 2019 to 11 June 2019 is between Orthotech and BeijingFitoMedical Co Ltd. The correspondence includes an unsigned confidentiality agreement and discussions around modification of the Prosthesis. The correspondence does not indicate why an agreement between the parties was not reached.
Overall, I consider that the evidence indicates that the Removal Opponent, via its authorised user Orthotech, made significant efforts during the Relevant Period to obtain a new manufacturer of the Prosthesis that would allow it to recommence use of the Trade Mark during the Relevant Period. While the evidence of communications between Orthotech and various parties does not expressly state why Orthotech failed to reach a manufacturing agreement with each of the various entities, I accept the Removal Opponent’s evidence that this failure was principally caused by costs associated with the laws regulating the manufacture and distribution of the Prosthesis in Europe and Australia.
In reaching my finding, I note the Removal Applicant’s submission that:
3 years is more than enough time to obtain a manufacturer if a trader is serious about it. So in this sense the failure does not arise from events external to the Removal Opponent but is from a lack of sustained effort. We submit that in a practical business sense, it is unbelievable that no suitable manufacturer could be engaged over a 3-year period.
If the failure to find a manufacturer over a 3-year period is considered sufficient to defend a removal application in terms of s 100(3)(c), then this would set a dangerous precedent. It could be argued that almost every application for revocation for non-use could be defended if this was allowed.
I disagree with these submissions, for several reasons. Firstly, I consider that the Removal Opponent made sustained efforts over the Relevant Period to engage a new manufacturer. Secondly, the goods in question are not cheap fast moving consumer products such as t-shirts or confectionery for which it would be relatively easy to source a manufacturer. They are advanced medical devices that are implanted into the human body. There are important commercial and technical issues that must be considered before a company agrees to manufacture these products on behalf of another. The consequences of a defect in the product would have significant ramifications for both the health of the patient and the legal liability of the manufacturer and brand owner. Thirdly, the Removal Opponent’s evidence indicates that regulatory change also significantly contributed to the failure to find a manufacturer.
I also consider that the current circumstances are not directly analogous to those considered in Dick Smith and UCP. In Dick Smith, the registered owner’s desire to only use a particular yeast was not an external circumstance. In UCP, the court held that the failure to manufacture was the inevitable result of the decision to secure registration in Australia well in advance of it having the wherewithal to manufacture the goods. In this case, the decision of the Removal Opponent is not based on personal preference, but rather, genuine inability to secure an appropriate manufacturer of a highly specialised product, despite repeated attempts. Further, this is not a case where the Removal Opponent secured registration before having the wherewithal to have the goods manufactured. The Prosthesis was in fact being manufactured, and the Trade Mark being used, just prior to the Relevant Period, before an external event intervened.
On balance, I consider the relevant circumstances relied on by the Removal Opponent are sufficiently of a trade character that were external to the Removal Opponent and posed a genuine obstacle to use during the Relevant Period. I am therefore satisfied that a ground of opposition to removal of the Trade Mark under s 100(3)(c) has been made out in relation to some of the Goods, namely, orthopaedic articles and implants being knee prostheses. I am not satisfied that a ground of opposition under s 100(3)(c) has been made out for the remainder of the Goods.
Further, even if I were not satisfied that a ground under s 100(3)(c) had been established, I would likely exercise discretion not to remove the Trade Mark for orthopaedic articles and implants being knee prostheses.
Discretion
As I have decided that it is appropriate that the Trade Mark not be removed for orthopaedic articles and implants being knee prostheses, I must consider whether it is appropriate to otherwise exercise discretion to not remove the Trade Mark for the remainder of the Goods.
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’.21F[27] ‘[T]he discretion is broad and exceptional circumstances need not be shown’ before it is invoked in favour of an opponent.22F[28] 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.23F[29]
[27] Austin Nichols & Co Inc v Lodestar Anstalt [2012] FCAFC 8, [35] (Jacobson, Yates and Katzmann JJ).
[28] Ibid [69].
[29] [2002] FSR 51 (Ch) 790, [19].
While considering the discretion in E & J Gallo Winery v Lion Nathan Australia Pty Limited (‘Gallo’), Flick J stated:
Although the ‘guiding principle behind the discretion is public interest, particularly in the integrity of the register’, 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. 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.24F[30]
[30] [2008] FCA 934, [210] (citations omitted).

The Removal Opponent bears the onus of establishing that the discretion should be exercised in its favour: it is not for the Removal Applicant to establish that it should not.25F[31]
[31] Austin Nichols & Co Inc v Lodestar Anstalt [2012] (n 13) [44].
Justice Flick in Gallo 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 proprietor of the mark still had a residual reputation in the mark;
·     whether there had been sales by the registered proprietors of goods or services for which removal was sought since the relevant period ended; and
·     whether the applicant 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.26F[32]
[32] ‘Gallo’ (n 16) [202]–[203].
The Registrar may also take into account whether the trade mark has been used for similar or closely related goods or services.27F[33]
[33] Trade Marks Act 1995 (Cth) s101(4).
The Removal Opponent has not made any arguments as to why discretion should be exercised to not remove the Trade Mark for goods other than orthopaedic articles and implants being knee prostheses. Further, there is no evidence on which to conclude that the Trade Mark has any residual reputation, or whether there was ever any intention to use the Trade Mark for products other than those for knee replacement purposes.
Given that the Goods in their present form include a broad range of orthopaedic articles and implants, including for purposes very different than knee replacement, I do not consider it is in the public interest to allow the Trade Mark to remain registered for goods other than orthopaedic articles and implants being knee prostheses.
As such, I decline to exercise discretion in favour of the Removal Opponent.
Decision
The Removal Opponent has established a ground of opposition to removal of the Trade Mark in relation to orthopaedic articles and implants being knee prostheses. As such, the Trade Mark should be partially removed, with removal to be effected by the specification of Goods being amended to:
Class 10: Orthopaedic articles and implants being knee prostheses
Given it is the right of both parties to appeal this decision to the courts, the partial removal shall not take place until at least one month from today. If the Registrar is served with a notice of appeal before then, the removal shall not occur until the appeal has either been discontinued or otherwise dealt with as the Court sees fit.
Both parties sought an award of costs. As both parties have had a measure of success, I decline to award costs.
Blake Knowles
Hearing Officer
Delegate of the Registrar of Trade Marks
29 April 2022

[2022] ATMO 65

29 April 2022