Re: Opposition by Glug Pty Ltd to application under section 92 of the Trade Marks Act 1995 (Cth) by Little Wonders Wine Company Pty Ltd to remove trade mark number 1296292 (class 33) Tumbleweed in the name of..
[2020] ATMO 130
•31 July 2020
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by Glug Pty Ltd to application under section 92 of the Trade Marks Act 1995 (Cth) by Little Wonders Wine Company Pty Ltd to remove trade mark number 1296292 (class 33) - TUMBLEWEED - in the name of Glug Management Company Pty Ltd
| Delegate: | Adrian Richards |
| Representation: | Opponent: No submissions filed Applicant: Written submissions |
| Decision: | 2020 ATMO 130 Trade Marks Act 1995 (Cth) – application for removal under section 92 – evidence of use considered – whether use was authorised use – whether use was in good faith – use of the trade mark established – application for removal unsuccessful |
Background
This matter is an application for removal of a trade mark under s 92 of the Trade Marks Act 1995 (Cth).[1] The application was filed on 17 November 2017 by Little Wonders Wine Company Pty Ltd (‘Applicant’), seeking removal of trade mark registration 1296292 (‘Trade Mark’) in respect of all goods (being wine in class 33). Unusually, the procedural history relating to this application arguably began over six months earlier.
[1] All references to a section in these reasons is a reference to a section of the Trade Marks Act 1995 (Cth).
The Applicant filed an earlier application for removal of the Trade Mark on 26 April 2017. That application was taken to have been unsuccessful for procedural reasons, the Applicant having failed to meet a filing deadline for its notice of intention to defend.[2] This earlier filing by the Applicant is relevant to the discussion since, between the filing of the two applications for removal, use of the Trade Mark apparently began.
[2] Trade Marks Regulations 1995 (Cth) reg 9.15(3).
The present application for removal was advertised for opposition purposes on 30 November 2017 and an opposition was commenced by Glug Pty Ltd (‘Glug’) by the filing of a notice of intention to oppose on 22 January 2018 and a statement of grounds and particulars on 20 February 2018. The Applicant filed notice of intention to defend the application for removal on 16 April 2018 and Glug filed evidence in support of its opposition on 19 July 2018. The Applicant sought and was refused an extension of time to file evidence in answer. It nevertheless filed evidentiary material after its evidence in answer due date and asked that it be considered when deciding this opposition.
This office invited the parties to request to be heard in person. Neither took up the option. The parties were then given time to file written submissions to be considered when deciding this opposition. The Applicant filed submissions and Glug did not. The opposition was allocated to me to decide in my capacity as a delegate of the Registrar of Trade Marks.
Before I move on to the substance of this opposition, there is one other background item of relevance to aspects of what is to follow. Early in these proceedings Glug was the registered proprietor of the Trade Mark. This office recorded an assignment of the Trade Mark in favour of Glug Management Company Pty Ltd (‘GMC’) following a request dated 24 July 2018. While GMC has subsequently asked that it be recorded as the address for service in these proceedings, it has not also requested that the opposition proceed in its name. As such the opponent of record remains Glug.
Evidence and late evidence
The only properly filed evidence in this opposition is a declaration of Benjamin James Parker, General Manager of Glug, made 19 July 2018 with exhibits BP-1 to BP-9. After outlining the corporate structure and history of Glug and GMC, it reads into evidence documents showing preparations to use the Trade Mark beginning on 12 April 2017 and what purports to be use of the Trade Mark from around 1 to 28 June 2017.
The evidentiary material filed late by the Applicant consists of a declaration by James Omond, attorney for the Applicant in this matter, made 21 November 2018 with annexures JLO-1 to JLO-6. Mr Omond details the Applicant’s rationale for filing the earlier application for removal, annexing copies of correspondence between the parties in early 2017. Also attached are some searches of Glug’s website at around that time. The declaration ends with mention of the ‘Relevant Period’ of the Applicant’s earlier application for removal and annexes the statement of grounds and particulars filed by Glug in relation to that earlier removal application.
The Applicant’s submissions as to why any of its late filed material is crucial to the outcome of these proceedings are repeated below:
The Removal Applicant’s case will be based on a lack of good faith on the part of the Opponent, and the evidence shows that the documents provided by the Opponent have been misleading as to the claimed use and its timeframes.
For the Delegate to make a decision that the Opponent’s use was not in good faith, he or she will need to make reference to evidence of such lack of good faith use.
Glug’s evidence of use covers a very short period indeed, none of it during the times of Mr Omond’s searches of its website. Those searches are of little if any relevance to the Applicant’s allegations as they now stand. According to the Applicant’s substantive submissions, the alleged lack of good faith use of the Trade Mark stems substantially from the fact that the earlier application for removal was filed before that use occurred.
The earlier removal application is on the official file, as is the associated statement of grounds and particulars. Both parties necessarily have access to this information, and this aspect of the history between the parties and of the Trade Mark has clearly always been an aspect of the present dispute. I see no bar to taking those things into account, but nor do I see any need to have reference to the Applicant’s late filed material to do that—these are both aspects of the record already before me. As such, there is nothing the Applicant’s late filed material that would be crucial to the outcome of these proceedings and I give it no weight.
Grounds, relevant period, onus and standard
The Applicant has applied for removal of the Trade Mark with respect to both of the available grounds for removal, ss 92(4)(a)-(b).[3] Sufficient time has passed for s 92(4)(b) to be alleged.[4] Since s 92(4)(b) has been alleged, it is unnecessary to consider s 92(4)(a) in any detail.[5]
[3] All references to sections in these reasons are to the Trade Marks Act 1995 (Cth).
[4] Trade Marks Act 1995 (Cth) s 93(2), as at 17 November 2017.
[5] Live Entertainment Investments III Pty Ltd v The Education Group Pty Ltd (2018) 132 IPR 131, 136-7 [21]-[22] (Hearing Officer Richards).
Insofar as the Applicant has made submissions in relation to s 92(4)(a), they relate to who was the ‘true owner’ of the Trade Mark back when it was filed and whether any subsequent assignments have therefore been effective, referring to Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd.[6] This is not the forum for testing a question that squarely arises under s 58: ‘an action under section 92 of the Act is not the correct forum in which to argue a ground more appropriate to rectification or opposition to registration.[7]
[6] (2017) 251 FCR 379 (Greenwood, Jagot & Beach JJ).
[7] Schneider Electric (Australia) Pty Ltd v Arlec Australia Pty Ltd (as Trustee for the Arlec Unit Trust) (2015) 111 IPR 544, 550 [16] (Hearing Officer Wilson). See also Edwards v Liquid Engineering 2003 Pty Ltd (2008) 77 IPR 115, 119 [11] (Gordon J).
Section s 92(4)(b) is reproduced below:
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 three-year period mentioned in the excerpt above ended on 17 October 2017 (‘Relevant Period’). This is an allegation that Glug must rebut.[8] Glug relies on use of the Trade Mark in good faith during the Relevant Period for its rebuttal,[9] and has requested that, should use not be established that the Registrar exercise her discretion not to remove it from the register.[10] Any findings of fact are based on the ordinary civil standard of the balance of probabilities.
[8] Trade Marks Act 1995 (Cth) s 100(1)(c).
[9] Ibid s 100(3)(a).
[10] Ibid s 101(3).
Discussion
Glug has shown that use of the Trade Mark with respect to wine occurred toward the end of the Relevant Period, in June 2017. The Applicant concedes that point but raises two issues with respect to that use: whether it was use by Glug (or use authorised by Glug) and whether that use was in good faith.
Authorised use
To put the Applicant’s case with respect to the first issue at its highest, I assume that all use of the Trade Mark shown in evidence is directly attributable only to GMC. This is significant since it will be recalled that GMC was not recorded as the registered proprietor of the Trade Mark at the time of this use. The registered proprietor of the Trade Marks was instead, at all relevant times, Glug. The question resolves as: was GMC’s use in 2017 ‘authorised’ by Glug?[11]
[11] See Trade Marks Act 1995 (Cth) ss 7-8.
The Applicant correctly points out that actual control is required.[12] It then submits that no control is present between these two entities because their respective memberships are differently constituted. Shareholding of a corporation may indeed be relevant to resolving a question of control. For example, where company A was both registered proprietor of a trade mark and also wholly owned company B, and it has been company B that has used the mark, then company A at least arguably exerted control over company B’s use of the mark. But that is not the present situation.
[12] Lodestar Anstalt v Campari America LLC (2016) 244 FCR 557, 581 [97] (Besanko J, Allsop CJ agreeing at 559 [1], Greenwood J agreeing 560 [3], Nicholas J agreeing at 584 [112]).
Glug’s evidence includes records from the Australian Securities and Investments Commission for both Glug and GMC. Those records show that the directorship of both companies have always been the same. As such they have always operated with the same ‘controlling mind’ or, to put it another way, ‘it must be inferred from the evidence that the two companies operated with a unity of purpose.’[13] As such, the use of the Trade Mark by GMC that appears in the evidence was authorised by Glug.
[13] Trident Seafoods Corp v Trident Foods Pty Ltd (2019) 369 ALR 367, 380 [45] (Reeves, Jagot and Rangiah JJ).
Use in good faith
The second issue concerns use in good faith. It is here that the earlier removal application comes into play. The Applicant’s position is that all of the use of the Trade Mark in evidence is ‘pretend or token use’. The basis for this appears in the Applicant’s written submissions:
After the Removal Applicant wrote to it on 30 March 2017, the Opponent rushed to get labels printed in mid-April 2017, on a batch of wine it had sitting around from 2013, selling at $5.99 per bottle. Enough labels were printed for just 108 cases, and evidence provided of sales of less than 16 cases.
…the one-off use on a small parcel of wine was designed to defeat the Removal Applicant’s action.
While the meaning of good faith for the purposes of trade mark removals has previously been subject to broader interpretations, the law has settled on use that is real or genuine in a commercial sense, and not fictitious or token.[14] The thing that must be real or genuine by ordinary commercial standards is the use itself, not the motives that led to that use. For example in a situation where, in its preparations before beginning enforcement action against a competitor, the registered proprietor of a mark commenced using it to render it less vulnerable to removal action, that motive was not an impediment to a finding that that use was in good faith.[15] In the present matter, the Applicant seeks to colour GMC (and Glug) as having decided to commence use because the Applicant’s actions had alerted the registered proprietor that the Trade Mark was vulnerable to removal for non-use. That motive was very likely a strong contributor to the commencement of use of the Trade Mark, but as a matter of law this is not a relevant consideration.
[14] Liquideng Farm Supplies Pty Ltd v Liquid Engineering 2003 Pty Ltd (2009) 175 FCR 26, 36-7 [52]-[55] (Tamberlin, Sundberg & Besanko JJ).
[15] Electrolux Ltd v Electrix Ltd (1954) 71 RPC 23, 35-7 (Sir Evershed MR, Jenkins LJ agreeing at 41, Morris LJ agreeing at 42).
Where use has been dedicated to some cause other than deriving profit and establishing goodwill in the mark, that use will not have been in good faith. In Imperial Group Ltd v Phillip Morris & Co Ltd[16] a company, having failed to register ‘Merit’ for cigarettes (for want of capacity to distinguish), registered a ‘ghost mark’ ‘Nerit’—as similar a word as possible. All use of the ghost mark was in aid of protecting the unregistered trade mark ‘Merit’, and as such was held to not be genuine commercial use of ‘Nerit’. Despite reference to this case appearing in the Applicant’s submissions, I see little analogy to the present situation.
[16] [1982] FSR 72 (Lawton, Shaw and Brightman LJJ).
As I have already mentioned, it is the nature of the use of the mark that is crucial. In Concord Trade Mark,[17] the party put to showing use in good faith (a very large tobacco company) had rushed to launch a new cigarette brand to market without the usual preliminary research, with no advertising, and had always intended to sell the goods for about a year.[18] The findings in that case were, due to those circumstances, that the mark ‘quite plainly was not intended…to establish itself on the market as a going brand. There was not a course of trading…embarked upon as an end in itself.’[19] There are more differences to that case in the present set of facts than there are similarities.
[17] [1987] FSR 209 (Falconer J).
[18] Ibid 226.
[19] Ibid 226-7.
GMC has, during the Relevant Period, advertised wine bearing the Trade Mark for sale on its website and via email to its existing customer base. While some of the representations from Glug suggest that use is intended to be periodic, nothing suggests that it is temporary. Indeed, the wine was still on offer on 19 July 2018, over a year after use commenced. The only aspect of the present matter that is of any potential similarity with Concord Trade Mark is with the Applicant’s characterisation that use of the Trade Mark was ‘rushed’. There is a paucity of evidence as to what might be the normal approach to launch of a small wine label by GMC or Glug, or operators of their size. The only information at all appears in a website advertisement of wine bearing the Trade Mark:
…of great help is a special parcel of red we purchased from a grower down in Langhorne Creek…We find you can make tasty interesting wines and sell at great prices if the volumes are small though we feel for those who have to gear up and make say 1000,000 cases as you have to turn to the Riverland to get the base volume making the job very hard.
This is suggestive both of a small run, and that such runs are profitable to Glug/GMC. According to the back label of the bottles 98 cases were produced. According to the sales data in evidence trade appeared reasonably brisk, with around 16% of that run sold between 8-28 June 2017. From this, on balance it appears that the advertising and sales of wine under the Trade Mark was done for ordinary commercial reasons—profit and goodwill.
Quantum of sales is another relevant aspect of the good faith enquiry, for the higher the sales the easier it would be to infer a profit motive. The numbers do not support the Applicant’s position. 144 bottles (to put it in the same terms as the Applicant has here, 12 cases) has been characterised by the High Court as a ‘commercial quantity of wine’.[20] The Applicant has counted the cases sold during the Relevant Period ‘as less than 16’ (the evidence mentions 191 bottles were sold). Providing evidence of sales in numbers larger than the High Court’s reckoning of a commercial quantity for precisely the same goods, provide me with a compelling basis to find that sufficient sales have occurred here.
[20] E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144, 169 [65] (French CJ, Gummow, Crennan and Bell JJ, Heydon J agreeing at 175 [87]).
Had I been in a position to decide on the Applicant’s earlier removal application, none of the evidence of use I have considered above could have qualified as use of the Trade Mark during the Relevant Period. This is because the period of non-use relevant to an application under s 92(4)(b) only looks back in time. Use in June 2017 would have been too late for a removal application made in April the same year. That is not to say that the Applicant necessarily would have been successful. I express no view on that. The reason I mention this is because the earlier removal application forms a major part of the Applicant’s submissions in this proceeding, and in some ways those arguments seem intuitive. That said, I would also have held reservations deciding the present application by reference to a non-use period set under another, earlier application for removal. Such an approach would lend itself to criticism of being unjust and open to abuse. At any rate, as I have explained the law does not invite me to undertake that enquiry. The evidence of use of the Trade Mark within the Relevant Period shows that use occurred in good faith within the meaning of s 92(4)(b)(ii).
Decision and costs
By showing use of the Trade Mark within the Relevant Period, Glug has rebutted the allegation made by the Applicant.[21] I therefore decide that the Trade Mark shall remain registered.
[21] Trade Marks Act 1995 (Cth) s 100(2)(a).
Both parties requested an award of costs. The usual rule is that costs follow the event, and there is no reason to deviate from that here. I award costs against the Applicant.
Adrian Richards
Hearing Officer
Oppositions and Hearings
Trade Marks and Designs
31 July 2020
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