PR Sports Pty Ltd v The Service Course (International) Limited

[2023] ATMO 166

TRADE MARKS ACT 1995

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

Re:Opposition by PR Sports Pty Ltd to application under section 92 of the Trade Marks Act 1995 (Cth) by The Service Course (International) Limited to remove trade mark number 1834831 (class 35) – SERVICE COURSE – in the name of PR Sports Pty Ltd

Delegate:

Tracey Berger

Representation:

Opponent: Macpherson Kelley

Applicant: James & Wells

Decision:

2023 ATMO 166

Trade Marks Act 1995 (Cth) – application under section 92 – no use of the trade mark established – discretion not exercised – trade mark to be removed from the Register

Background

1. On 28 June 2022, The Service Course (International) Limited (‘Removal Applicant’) filed an application under s 92(4)(b) of the Trade Marks Act 1995 (Cth)[1] (‘Removal Application’) for the complete removal of the following registered trade mark:

   [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.

Registration Number:	1834831
Filing Date:	29 March 2017
Trade Mark:	SERVICE COURSE (‘Trade Mark’)
Services:	Class 35: Bicycle retail and wholesale shops (‘Registered Services’)
Owner:	PR Sports Pty Ltd (‘Removal Opponent’)

1. The Removal Opponent filed a Notice of Intention to oppose removal of the Trade Mark on 31 August 2022 and a Statement of Grounds and Particulars (‘SGP’) on 29 September 2022.  The Removal Applicant filed a Notice of Intention to Defend on 18 October 2022.

2. In accordance with the timetable set out in reg 9.16, the Removal Opponent then filed Evidence in Support (‘EIS’) of its opposition on 25 January 2023.  The Removal Applicant filed evidence in answer (‘EIA’) on 2 May 2023 and the Removal Opponent’s evidence in reply (‘EIR’) was filed on 3 July 2023.

3. Once the time allowed for filing evidence had ended, the parties were given an opportunity to request a hearing.  The Removal Opponent requested a decision without a hearing.  This matter has been allocated to me as a delegate of the Registrar of Trade Marks and I make my decision based on the material filed during the proceeding as outlined above.

   Legal Framework

4. Part 9 of the Act deals with removal of trade marks from the Register for non-use. In respect of this matter, s 92 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:

   …

   (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. The Removal Application has been made under s 92(4)(b). I note that an application under s 92(4)(b) may not be made before a period of five years has passed from the filing date of the application,[2] and I confirm that five years since filing the Trade Mark have in fact passed.

   [2] Per s 93(2) prior to the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018 (sch 1, pt 3) as applies in the present matter. The updated s 93(2) applies to trade marks filed from 24 February 2019 onwards.

6. Under s 92(4)(b), the relevant period during which the Removal Opponent must establish use of the Trade Mark is the three year period ending on 28 May 2022 (‘Relevant Period’).

7. The Removal Opponent bears the onus of rebutting an allegation of non-use[3] by establishing, on the balance of probabilities,[4] that it has used the Trade Mark (or a mark with additions or alterations not substantially affecting its identity[5]) in good faith for the Registered Services during the Relevant Period or that there were circumstances constituting an obstacle to use in the Relevant Period.[6]

   [3] s 100(1)(c).

   [4] Pfizer Products Inc. v Karam [2006] FCA 1663 (Gyles J); Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [133] (Besanko, Jagot and Edelman JJ), albeit in respect of an action opposing registration rather than removal.

   [5] s 7(1)

   [6] s 100(3)(c).

8. In Woolly Bull Enterprises Pty Ltd v Reynolds,[7] Drummond J observed that the expression ‘use in good faith’ has a well understood meaning in terms of s 92, namely it is ‘real, as opposed to token, use in a commercial sense’. 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,[8] but 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’.[9]

   [7] [2001] FCA 261, [16].

   [8] Ibid [17].

   [9] Nodoz Trade Mark (1962) RPC 1, 7 (Wilberforce J).

9. In accordance with s 101, the Registrar may decide to remove the Trade Mark from the Register for all or some of the goods identified in the application for removal, or if satisfied it is reasonable to do so, decide not to remove the Trade Mark even if the grounds under which the application for removal was made are established.

   Evidence

   Removal Opponent’s Evidence

10. The Removal Opponent filed the following evidence:

    ·     EIS: Declaration of Paul Redenbach, director of the Removal Opponent, made on 1 May 2023 with Exhibits PR-1 to PR-15; and

    ·     EIR: Declaration of Paul Redenbach made on 3 July 2023 with Exhibit PR-1.

11. Mr Redenbach attests that the Removal Opponent was incorporated in November 2013 and is well known for selling and distributing bikes and bike wheels, repairing bikes and conducting bike tours.

12. In 2017, the Removal Opponent selected the Trade Mark and since September 2021, the Removal Opponent claims to have continuously used the Trade Mark for bicycle retail related services and closely related goods.  I note that it is not apparent from the Removal Opponent’s evidence whether Mr Redenbach is drawing a distinction between the services provided and the Registered Services.  For the purposes of this decision, I have assumed that the services provided by the Removal Opponent are the same as the Registered Services    

13. Mr Redenbach attests that during the Relevant Period, the Registered Services have been provided to about 150 customers and those customers were issued an invoice bearing the Trade Mark for those services (‘Invoice’).  Copies of Invoices and a list of the Removal Opponent’s top customers by revenue are provided. The Invoices are discussed later in this decision.

14. The Removal Opponent manufactures the FLANDERS range of road, gravel and mountain bikes which are sold in the United Kingdom and Australia.  Mr Redenbach claims that in Australia these bikes are made ’by reference to’ the Trade Mark.  The FLANDERS bikes have been sold from the Removal Opponent’s premises in Melbourne and Bright, Victoria, which have been listed on the contact page of its Flanders Cycles website at (‘Website’) since December 2021.  The Removal Opponent also operates websites at selling Duke Wheels and fmb.prsports.com.au selling FMB bicycle tyres.

15. Mr Redenbach claims that the Trade Mark has been promoted on the Removal Opponent’s social media accounts including on the Removal Opponent’s Instagram accounts @servicecoursebright and @flanders_service_course.  In addition, since January 2014, the Removal Opponent’s FLANDERS bikes have been promoted on its Facebook account at Extracts from these accounts are in evidence.  Collectively, these accounts are referred to as the ‘Social Media Accounts’.

16. Details of income generated from the provision of the Registered Services from September 2021 to November 2022 are provided with financial activity statements for 1 October 2021 to 31 December 2021 and a receivable invoice summary for the period 1 September 2021 to 30 November 2022.

17. The EIR predominantly comprises submissions that the Removal Applicant’s EIA is not relevant to the Removal Application.

    Removal Applicant’s Evidence

18. The Removal Applicant’s evidence consists of a Statutory Declaration of Simon Gerrans, CEO of the Removal Applicant, made on 1 May 2023 with Exhibit SG-01 to SG-27.

19. Much of the Removal Applicant’s EIA is directed to its own use of THE SERVICE COURSE for retail, rental, repair and maintenance of bicycles, cycling tours/experiences and cafes as well as establishing that the Removal Opponent filed the Trade Mark in bad faith.  The evidence of both parties shows that the Removal Opponent was aware of the Removal Applicant’s trade mark and its business ‘since early 2017’ and the parties engaged in negotiations for the Removal Applicant to buy the Removal Opponent’s applications for the Trade Mark from November 2019 until May 2022.  However, whether the Removal Opponent filed the Trade Mark in bad faith or is not the first user of the Trade Mark in Australia are not relevant considerations in determining whether the Removal Opponent has  used the Trade Mark during the Relevant Period for the Registered Services. 

    Discussion

    Use During the Relevant Period

20. I must first decide whether there has been use of the Trade Mark (or a mark with additions or alterations not substantially affecting its identity) in good faith during the Relevant Period in relation to the Registered Services, or whether there has been an obstacle to use per
    s 100(3)(c). If I am satisfied there has been such use, or a relevant obstacle to use, the opposition will succeed. If I am not satisfied there has been use, I will then decide whether to exercise the Registrar’s discretion to allow the Trade Mark to remain registered in favour of the Removal Opponent.

21. The ‘use’ in good faith required to be demonstrated by the Removal Opponent is ‘use as a trade mark’ for the Registered Services. ‘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 or services provided and the person who applies the sign to or in relation to those goods or services.[10]  Use in the course of trade means an actual dealing in the services, an offer to provide the services, or an intention to offer the Registered Services manifested through preparatory steps showing an objective commitment to use the Trade Mark.[11]

    [10] Coca-Cola Co v All-Fect Distributors Ltd [1999] FCA 1721, [19] (Black CJ, Sundberg and Finkelstein JJ).

    [11] Angela Christou v Tonch Pty Ltd [2008] ATMO 24; see also Dick Smith Investments Pty Ltd v Ramsey [2016] FCA 939 (Katzmann J).

22. In the EIS, the Removal Opponent claims to have used the Trade Mark since September 2021 for the Registered Services.  In support of this claim, the Removal Opponent relies on use of the Trade Mark on:

    i.the Invoices;

    ii.the Website; and

    iii.the Social Media Accounts.

23. Turning to the Invoices, I note that the logo used on each of the invoices is .  Beneath this logo appears ‘SERVICE COURSE BRIGHT (PR Sports Pty Ltd)’ and an address.  In the ‘Payment Advice’ section, the Invoices specify that payment should be made to ‘SERVICE COURSE BRIGHT (PR Sports Pty Ltd)’ although the bank account details are in the name of PR Sports Pty Ltd.  Customers are invoiced for goods in this manner regardless of whether they purchase goods or services from Flanders Cycles or the Removal Opponent’s other websites at or fmb.prsports.com.au. 

24. Section 9 relevantly provides:

    9  Definition of applied to and applied in relation to

    (1)  For the purposes of this Act:

    …

    (c)  a trade mark is taken also to be applied in relation to goods or services if it is used:

    (i)  on a signboard or in an advertisement (including a televised advertisement); or

    (ii)  in an invoice, wine list, catalogue, business letter, business paper, price list or other commercial document;

    and goods are delivered, or services provided (as the case may be) to a person following a request or order made by referring to the trade mark as so used.

25. Hence, whilst a trade mark may be taken to be used in relation to services if the mark is used on an invoice, this is only the case if the services are requested or ordered ‘by referring to the trade mark’.  In the case of bicycle retail shops, such services offered ‘by referring to the trade mark’ would usually involve the sale of bikes in a physical store or offered at an online store branded with the Trade Mark.  In the present case, the Removal Opponent has not provided evidence that they offered bicycles for sale in a SERVICE COURSE store or online shop but instead it appears that the goods were sold by reference to Flanders Cycles, FMB or ‘handbuilt’.  In the circumstances, the uses of the term ‘Service Course’ on the Invoices are not conclusive proof of use of the Trade Mark as a badge of origin in relation to the Registered Services. 

26. The EIS includes an extract of the Website dated 3 December 2021 obtained using the Wayback Machine.  This extract shows that the relevant portion of the Contact page of the Website at the time appeared as:

1. In my opinion, use of Service Course Melbourne and Services Course Bright on the Website contact page is not evidence of use of the Trade Mark for the Registered Services.  These extracts do not establish that bicycle retail and wholesale shops are operating under Service Course Melbourne and Services Course Bright.  There is no evidence that these businesses are offering bicycle retail or wholesale shops under the Trade Mark such as having signage at the locations bearing the Trade Mark or operating a website branded with the Trade Mark or are businesses providing the Registered Services under the Trade Mark.

2. In relation to the Social Media Accounts, the Instagram extracts at Exhibit PR-5 of the EIS are undated and the examples provided do not promote the Registered Services. 

3. Extracts from the Facebook account Flanders Service Course are included at Exhibit PR-7 of the EIS.  Two of the posts contained in this exhibit have a ‘Shop’ section where it appears that consumers may have been able to purchase bikes or bicycle wheels.  The earliest of these posts is 29 May 2022, one day outside the Relevant Period but nevertheless, I will consider whether this use constitutes use of the Trade Mark with additions or alterations not substantially affecting its identity for the Registered Services.

4. The question of whether use of Flanders Service Course (‘Facebook Mark’) is use of the Trade Mark turns on whether the two marks are substantially identical.[12]  When considering ‘substantial identity’ in Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd, Windeyer J said:

   In considering whether marks are substantially identical 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.[13]

   [12] PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd [2021] FCAFC 128, [161] (Jagot, Nicholas and Burley JJ).

   [13] [1963] HCA 66, [12].

5. On a side by side comparison, the marks to be compared are:

Trade Mark	Facebook Mark
SERVICE COURSE	FLANDERS SERVICE COURSE

1. It is immediately apparent that the Facebook Mark contains the additional word ‘FLANDERS’ which is distinctive in relation to the Registered Services and an essential element of the Facebook Mark.  This additional element makes the Facebook Mark different from the Trade Mark and substantially affects the identity of the Trade Mark.  Consequently, use of the Facebook Mark by the Removal Opponent does not assist it in rebutting the allegation of non-use.

2. Finally I do not regard the sales figures and financial activity statements[14] as conclusive evidence of use of the Trade Mark for the Registered Services.  Given the Removal Opponent’s evidence shows use of SERVICE COURSE as part of various contact names and other marks with additions or alterations affecting the identity of the Trade Mark, it is not possible to conclude that these sales and purchases relate to use of the Trade Mark for the Registered Services.

   [14] Exhibit PR-15 EIS.

3. The Removal Opponent also claims in the EIS that it took preparatory steps to use the Trade Mark by registering the business name Service Course Bright in November 2021, entering into a Contract for the Sale of a Business in April 2022 (‘Contract’), engaging a building designer and arranging a Bushfire Management Statement as well as filing additional trade mark applications in January 2021 and August 2021 for the Trade Mark in classes 41 and 12 respectively, and SERVICED COURSE in class 39 also in August 2021.   

4. The Removal Opponent claims that it entered into the Contract ‘purchasing the premise intended to be the facility for the Opponent’s Mark’.  Although the Removal Opponent claims to have purchased the premises, the documents exhibited to the EIS indicate that the Removal Opponent purchased the business named Punkah Pantry and leased the premises from which that business had previously operated.  Further, the Contract is dated 26 April 2022 but the Invoices show that the Removal Opponent was using the address of the leased premises as early as November 2021.  There is no evidence to support the Removal Opponent’s claim that the business to be operated from the premises was or is a bicycle retail and wholesale store under the Trade Mark.  For example, it would be usual to order signage, business cards and/or packaging (branded paper bags for small items) and register a ‘Service Course’ domain name.

5. The registration of a business name is not evidence of an intention to use that business name as a trade mark.  Whilst often a business name is also used as a trade mark, this is not always the case.  Further, the filing of additional trade mark applications for the Trade Mark and SERVICED COURSE for different goods and services are also not evidence of an intention to use the Trade Mark for the Registered Services.

6. On my assessment of the evidence, I am not satisfied that the Trade Mark, or a mark with additions or alterations not substantially affecting the mark, was used as a trade mark for the Registered Services during the Relevant Period.

   Obstacles to Use

7. A removal opponent may rebut an allegation of non-use by establishing that a failure to use the mark in the relevant three-year period was ‘because of circumstances (whether affecting traders generally or only the registered owner of the trade mark) that were an obstacle to the use of the trade mark during that period’. The circumstances must be ‘an obstacle to the use of the trade mark by the registered owner’.[15]

   [15] Woolly Bull Enterprises Pty Ltd v. Reynolds [2001] FCA 261, [47] (Drummond J).

8. The Removal Opponent claims that the delays in manufacture and supply of goods and in the ability to open retail stores during the COVID-19 pandemic ‘may have led to a time during the Relevant Period where the (Removal) Opponent was unable to use’ the Trade Mark and that the Removal Opponent would otherwise have further exposed Australian consumers to the Registered Services under the Trade Mark.

9. The Removal Opponent has not provided any details about the stock it intended to sell or had available or the delays it experienced in the manufacture or supply of goods and whether it could have established an online retail business (similar to its websites for Duke Tyres and FMB Wheels).  

10. I am not satisfied by the bare statement in the Removal Opponent’s evidence that the existence of the COVID-19 pandemic amounted to a matter that was an obstacle to the use of the Trade Mark for the Registered Services in the relevant period, pursuant to s 100(3)(c).  As there is no obstacle to use of the Trade Mark, it is therefore necessary to consider whether I should exercise the discretion to allow the Trade Mark to remain on the Register for any of the Registered Services.  

    Registrar’s Discretion

1. The policy of the Act is to facilitate the removal of an unused trade mark and the public interest in the integrity of the Register will generally demand the removal of an unused trade mark.[16] In PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd, the Full Court of the Federal Court provided the following observations regarding the discretion under s 101(3):

   [16] M Davison, I Horak Shanahan’s Australian Law of Trade Marks and Passing Off online edition, 2022 Thomson Reuters, [70.2505].

   The following propositions are relevant to the exercise of this discretion:
   
   

   (1) It is broad and is unfettered in the sense that there are no express limits on it. It is to be understood as 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 Trade Marks Act.

   (2) The scope and purpose of the Trade Marks Act strikes a balance between various disparate interests. On the one hand there is the interest of consumers in recognising a trade mark as a badge of origin of goods or services and in avoiding deception or confusion as to that origin. On the other is the interest of traders, both in protecting their goodwill through the creation of a statutory species of property protected by the action against infringement, and in turning the property to valuable account by licensing or assignment. ...

   (3) The particular purpose of Part 9, within which s 101 falls, is to provide for the removal of unused trade marks from the Register. It is designed to protect the integrity of the Register and in that way the interests of consumers. At the same time, it seeks to accommodate, where reasonable to do so, the interests of registered trade mark owners. Accordingly, the Court must be positively satisfied that it is reasonable that the trade mark should not be removed. The onus in this respect lies on the trade mark owner to persuade the Court that it is reasonable to exercise the discretion in favour of the owner. ...

   (4) The discretion in s 101(3) is expressed in the present tense. It requires consideration of whether, at the time that the Court is called upon to make its decision, it is reasonable not to remove the mark.

   (5) The range of factors considered in the exercise of the discretion has included whether or not:

   (a) there has been abandonment of the mark;

   (b) the registered proprietor of the mark still has a residual reputation in the mark;

   (c) there have been sales by the registered owner of the mark of the goods for which removal was sought since the relevant period ended;

   (d) the applicant for removal had entered the market in knowledge of the registered mark;

   (e) the registered proprietor was aware of the applicant’s sales under the mark;

   (f) A further factor, explicitly noted in s 101(4), but which falls within the scope of the discretion in s 101(3), is whether or not the trade mark under consideration has been used by its registered owner in respect of similar goods or closely related services.[17]

   [17] [2021] FCAFC 128, [153] (Jagot, Nicholas and Burley JJ) (emphasis altered) (citations omitted).

2. In the present case, there is no unequivocal evidence that the Removal Opponent has used the words SERVICE COURSE in Australia as a Trade Mark, that is as a badge of origin in respect of ‘bicycle retail and wholesale shops’ being the Registered Services. The Removal Opponent suggests in the EIS that I should consider the extent of use of the Trade Mark including the preparatory steps claimed to use the mark, the obstacles posed by the COVID-19 pandemic and other applications to register the Trade Mark or SERVICED COURSE outlined at [35]. I have already found that the Removal Opponent’s evidence does not discharge the allegation of non-use or establish that there were obstacles which prevented the Removal Opponent from using the Trade Mark. In the circumstances, I am not satisfied that it is appropriate to exercise my discretion to allow the Trade Mark to remain on the Register.

   Decision

3. The Removal Opponent has not rebutted the allegation of non-use.  Accordingly, I direct that trade mark registration number 1834831 be removed from the Register one month from the date of this decision.  If the Registrar is served with a notice of appeal before then, I direct that removal shall not occur until the appeal has either been discontinued or in the event of a decision from the Court, that the registration be dealt with as the Court sees fit.

4. The Removal Applicant has sought its costs in the Notice of Intention to Defend. It is usual for costs to follow the event and I see no reason to depart from that principle in the present case. I award costs against the Removal Opponent under s 221 in the relevant amounts set out in Schedule 8 of the Regulations.

   Tracey Berger

   Hearing Officer

   Oppositions and Hearings

   Trade Marks and Designs

   26 October 2023