Re: Opposition by Silly Sollys Group Pty Ltd to applications under section 92 of the Trade Marks Act 1995 (Cth) by cc group investments pty ltd to remove trade mark numbers 803881 - Crazy Clark's stylised
[2021] ATMO 79
•5 August 2021
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by Silly Sollys Group Pty Ltd to applications under section 92 of the Trade Marks Act 1995 (Cth) by cc group investments pty ltd to remove trade mark numbers 803881 – CRAZY CLARK’S stylised; 905789 – CRAZY CLARK’S WAREHOUSE; and 905788 CRAZY CLARK’S WAREHOUSE “WHERE EVERYONE GETS A BARGAIN” – all in class 35 and all in the name of Silly Sollys Group Pty Ltd
Delegate:
Debrett Lyons
Representation:
Opponent: Sonia Stewart of counsel instructed by Legal Vision.
Applicant: Kerry Newcomb, Trade Mark Attorney.
Decision:
2021 ATMO 79
Trade Marks Act 1995 (Cth) – section 92(4)(b) considered – no use of any trade mark demonstrated – discretion not exercised – trade marks to be removed
Background
Silly Sollys Group Pty Ltd (‘Opponent’) is the owner of the following trade mark registrations:
Trade Mark:
Registration Number: 803881
Filing Date: 16 August 1999
Specification: Class 35: Retailing services in this class namely retail of confectionery and consumable food lines, kitchen and tableware, personal accessories, personal hygiene accessories, books and magazines, tools, hardware, sporting equipment, small furnishings, haberdashery, manchester, clothing, cassette tapes, video tapes (blank and prerecorded), stationery, small electrical and electronic goods, games an [sic] toys, office and home accessories, soaps and toiletries
Endorsement Registration of this trade mark is limited to the colours RED, WHITE and BLUE as shown in the representation attached to this application.
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Trade Mark: CRAZY CLARK’S WAREHOUSE
Registration Number: 905789
Filing Date: 11 March 2002
Specification: Class 35: Retailing and wholesaling, retailing and confectionery and consumable food lines, kitchen and tableware, personal accessories, personal hygiene accessories, books and magazines, tools, hardware, sporting equipment, small furnishings, haberdashery, manchester, clothing, cassette tapes, video tapes (blank and prerecorded), stationery, small electrical and electronic goods, games and toys, office and home accessories, soaps and toiletries
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Trade Mark: CRAZY CLARK’S WAREHOUSE “WHERE EVERYONE GETS A BARGAIN”
Registration Number: 905788
Filing Date: 11 March 2002
Specification: Class 35: Retailing and wholesaling, retailing and confectionery and consumable food lines, kitchen and tableware, personal accessories, personal hygiene accessories, books and magazines, tools, hardware, sporting equipment, small furnishings, haberdashery, manchester, clothing, cassette tapes, video tapes (blank and prerecorded), stationery, small electrical and electronic goods, games and toys, office and home accessories, soaps and toiletries
(together, ‘registrations’ or ‘trade marks’ as the context requires)
During August 2019, another company, cc group investments pty ltd (‘Applicant’), made applications under the Trade Marks Act 1995 (Cth) (‘Act’) seeking complete removal of the registrations from the Australian Register of Trade Marks.
The Opponent filed three Notices of Intention to Oppose in September 2019, followed by three Statements of Grounds and Particulars in October 2019. The Statements of Grounds and Particulars are essentially the same in material respects. The evidence stages followed, after which the parties requested to be heard. As a delegate of the Registrar of Trade Marks, I heard the matter via video link on 7 May 2021. The Opponent was represented by Sonia Stewart of Counsel, instructed by Legal Vision. The Applicant was represented by Kerry Newcomb, Trade Mark Attorney.
Evidence
The Opponent’s Evidence in Support comprises the declaration of Bradley John Walton made 2 March 2020, together with Annexures A – FF.
The Applicant’s Evidence in Answer comprises the declaration of Peter Jeffrey Clark made 28 July 2020, together with Annexures A to AAA.
The Opponent’s Evidence in Reply comprises the declarations of:
·Bradley John Walton made 6 October 2020, together with Annexures BJW-1 to BJW-12.
·Janet Heather Cameron made 2 October 2020.
·Darren Thomas Moore made 26 October 2020.
Legislative framework
Part 9 of the Act deals with removal of trade marks from the Register on account of non-use. Section 92 of the Act provides two bases for removal and all three removal applications relied on both. In essence, section 92(4)(a) provides for removal where, on the day on which the application for the registration of the trade mark was filed, the applicant for registration had no intention in good faith to use or authorise the use of the trade mark in Australia. Section 92(4)(b) is quite different, providing for removal for non-use over a three year period.
The Opponent submits that in these proceedings it is only 92(4)(b) which requires consideration, citing the case of Lidl Stiftung & Co. KG v Conga Foods Pty Ltd (‘Lidl’) where the Registrar’s delegate said:
Sections 92(4)(a) and 92(4)(b) provide distinct and alternative grounds for removal. Because of the specifics of these provisions paragraph (a) is considered to effectively merge with paragraph (b) once a trade mark has been registered for five years since 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. As the Trade Mark had been protected for more than five years as at the date of the Application I need only consider the application for removal under s 92(4)(b) in this case.[1]
[1] [2020] ATMO 54 at [12] (footnotes omitted).
The Opponent’s submission is that “the situation is the same here. As each of the Marks has been registered for more than 5 years as at the date of the Applicant’s filing of the Removal Applications, the Delegate need only consider the application for removal under s 92(4)(b) of the Act.”
Section 92(4)(b) 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.
As stated, the relevant period during which the Opponent must establish use of the trade marks is the three year period ending one month before the respective filing dates of the removal applications. Therefore, in the case of registration 803881 the relevant period is the three year period ending on 29 July 2019 and in the cases of registrations 905788 and 905789 the relevant period is the three year period ending on 19 July 2019. The relevant periods are close to each other and, when questioned by me at the commencement of the hearing as to whether anything turned on the different periods, the parties agreed that nothing did. In what follows I have therefore merely referred to the ‘Relevant Period’ where required.
Returning for one moment to Lidl, I note here that there is no reference to “five years” in s92(4)(b). As the Act currently stands, s 93(2) states that “[a] non-use application on the ground mentioned in paragraph 92(4)(b) may only be made after a period of 3 years beginning from the date the particulars of the trade mark were entered into the Register under section 69.” However, prior to amendments brought about by the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018, s 93(2) had provided that:
(2) An application on the ground referred to in paragraph 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.
The Act as previously worded applies. As the Opponent correctly states, amended s 93(2) only applies to trade marks filed from 29 February 2019 onwards[2] and, with regard to the relevant timing, five years have passed since the filing dates of the three registrations at issue.
[2] Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018 (Cth) sch 1 item 46.
The onus of rebutting an allegation of non-use lies with the Opponent, pursuant to s 100 of the Act and the standard of proof required is the ordinary civil standard—the balance of probabilities.[3] Section 100 provides, so far as relevant to this matter, that:
[3] Pfizer Products Inc. v Karam [2006] FCA 1663 and more recently: Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [133].
100 Burden on opponent to establish use of trade mark etc.
(1) In any proceedings relating to an opposed application, it is for the opponent to rebut:
(a) …; or
(b) …; or
(c) any allegation made under paragraph 92(4)(b) that the trade mark has not, at any time during the period of 3 years ending one month before the day on which the opposed application was filed, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services.[…]
(3) For the purposes of paragraph 1(c), the opponent is taken to have rebutted the allegation that the trade mark has not, at any time during the period referred to in that paragraph, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services if:
(a) the opponent has established that the trade mark, or the trade mark with additions or alterations not substantially affecting its identity, was used in good faith by its registered owner in relation to those goods or services during that period; or
(b) in a case where the trade mark has been assigned but a record of the assignment has not been entered in the Register:(i) the opponent has established that the trade mark, or the trade mark with additions or alterations not substantially affecting its identity, was used in good faith by the assignee of the trade mark in relation to those goods or services during that period and that that use was in accordance with the terms of the assignment; and
(ii) the Registrar or the court is of the opinion that it is reasonable, having regard to all the circumstances of the case, to treat the use of the trade mark by the assignee during that period as having been a use of the trade mark in relation to those goods or services by the registered owner; or(c) 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 the use of the trade mark during that period.
The Applicant’s position is that there has been no qualifying use of the trade marks in the Relevant Period. The Opponent’s primary reply is that there has been genuine, good faith use of the trade marks during the Relevant Period by the relevant registered owner, which includes the Opponent’s predecessor in title. In the alternative and reliant upon s 100(3)(c), the Opponent claims that an obstacle to use of the trade marks existed during the Relevant Period.
Section 101(3) provides the Registrar with the discretion to decline removal of the trade marks from the Register even if the ground on which the non-use application is made is established. The Opponent submits, finally, that even if a ground for removal is found to exist, the Registrar should exercise that discretionary power in favour of the Opponent and allow the trade marks to remain on the Register.
Consideration
Synoptically, the background to the present removal actions is that a discount retail store business trading under the name, CRAZY CLARK’S, was founded in 1999. Mr Peter Clark (‘Clark’), the Applicant’s declarant in these proceedings, was one of the founders of that business. The business was sold in or about 2002. Clark is now the sole director and shareholder of the Applicant which has applied to register a trade mark which incorporates the CRAZY CLARK’S name and has been frustrated in that effort by the existence of the at-issue trade marks already on the Register.
Mr Bradley Walton (‘Walton’), the Opponent’s primary declarant, has been a director of the Opponent since its incorporation on 14 February 2018. Whilst I may have first considered what, if any, actions were taken by the Opponent itself to use the trade marks between 14 February 2018 and the end of the Relevant Period some 18 months later, that became unnecessary since on the evidence there are only two actions of any kind that I need initially consider. They are no more than (i) the registration on 17 June 2019 of the business name “CRAZY CLARK’S NOTHING OVER $5”, and (ii) the filing of a trademark application on 25 June 2019 for a stylised version of the words, “Crazy Clarks nothing over $5”.[4] It has been held that a single bona fide use of a trade mark in the course of trade during a relevant period may be sufficient to rebut an allegation under s 92(4)(b) provided that proof of that use is compelling.[5] Neither piece of evidence assists the Opponent. Of themselves, the actions are manifestly not proof of use of a trade mark in the course of trade.
[4] Application 2016498 which lapsed after grounds of objection raised and fees not paid.
[5] Nodoz Trade Mark (1962) RPC 1, where it was said that single acts of use should be established by “if not conclusive proof, overwhelmingly convincing proof” (at 7).
What remains, in short, comprises asserted use by the Opponent outside the relevant period; assertions of authorised use of the trade marks by parties not the registered owner of the marks at the time; and use by what is said to be an unrecorded assignee of the trade marks.
In addition to what is written at [17], there emerges from the evidence another string of seemingly disconnected facts. On 4 November 2019 the Opponent was recorded with this Office as the registered owner of the registrations. The prior owner was DSG Holdings Pty Ltd (‘DSG’). The basis for the request to record the transfer of interest was a letter of assignment from DSG dated 17 September 2019. That letter was signed by a Janet Cameron (‘Cameron’), director of DSG. The evidence is that use of the trade marks by DSG ceased around mid-2014 and DSG went into administration on 30 June 2014 where it remained until 15 June 2017. It is said that from about July 2017, DSG allowed use of the trade marks by certain entities before formally assigning them to the Opponent.
Before coming to the arguments concerning assignment and authorisation, I find this to be a convenient place to deal with the Opponent’s subsidiary submission that if the trade marks are found not to have been used within the Relevant Period, there was an obstacle within the meaning of s 100(3)(c) in that the (then) registered owner of the marks, DSG, was in administration for a substantial part of that period.
In Woolly Bull Enterprises Pty Ltd v Reynolds[6], Drummond J discussed section 100(3)(c), noting that unlike its predecessor under the Trade Marks Act 1955:
It is now not necessary to show unusual or abnormal, as opposed to normal or usual, trading conditions (a difficult concept to comprehend and apply) before s 100(3)(c) can operate. Ordinary incidents of the trade cycle commonly encountered by traders, as well as abnormal ones, are now within the provision. Further, it is clear that a circumstance of a trading nature that has an impact only on the registered owner can also now be relied on to justify non-use of the mark. [46]
[6] [2001] FCA 261.
Drummond J considered that the circumstances relied upon “must arise from or comprise events external to the registered owner in the sense of not having been brought about by the voluntary act of the owner” (at [47]). Drummond J. went on to say that section 100(3)(c) did not contemplate circumstances such as “financial impecuniosity,” or “illness,” or a “falling out between joint registered owners” (as [48]), but only “circumstances of a trading nature.”
If the parliament intended any circumstance external to the owner to be capable of providing an excuse for non-use, little purpose would be served by the words in parenthesis in s 100(3)(c), viz, “whether affecting traders generally or only the registered owner of the trade mark”. The presence of these words is some indication that the circumstances comprising an obstacle to use of the mark must not only arise externally to the registered owner, but must also be circumstances of a trading nature. [49]
Cameron declares simply that:
In about July 2014, DSG went into administration and remained in the control of administrators for about 3 years, until July 2017. Throughout this time, DSG remained the registered owner of the CRAZY CLARK’S Marks. As the CRAZY CLARK’S stores had been running at a loss, I understand that the administrators did not reopen any CRAZY CLARK’S stores during the period of the administration and the CRAZY CLARK’S Marks were prevented from being used during the period July 2014 – July 2017.
The Opponent’s written submission is that the administration of DSG was a genuine obstacle to trading use of the trade marks and when that obstacle was removed, definite preparatory steps were then taken to use them. I am not persuaded by that submission. I follow Drummond J’s reasoning and find that non-use during the period of administration does not fall within the ambit of s 100(3)(c). The Opponent is accordingly unable to rely on the section and I now return to the arguments regarding authorised use.
Authorised use
Note 1 to s 100 states that if the registered owner of a trade mark has authorised another person to use it, any authorised use of the trade mark by that other person is taken to be a use of the trade mark by the registered owner. The Opponent claims that from about July 2017, DSG allowed use of the trade marks by certain entities before formally assigning them to the Opponent. The Opponent’s submissions include the statements that:
the Opponent (via relevant corporate entities) was an authorised user of the Marks (ie authorised by the then registered owner, DSG) and then an unrecorded assignee of the Marks from 17 September 2019 before their assignment to the Opponent, matters relevant to paragraphs 100(3)(a) and (b).
(then, in another place)
during the [Relevant Period] the CRAZY CLARK’S Marks were being used (as that term is understood by the authorities) by a user authorised by DSG, the registered owner at the time, with a view to formally assigning the marks to that party. The Opponent became an unregistered assignee on 17 September 2019 and the CRAZY CLARK’S Marks were then formally assigned to the Opponent in November 2019.
To put those assertions into context, the evidence from a retail magazine shows that in 2013 DSG purchased the CRAZY CLARK’S business from Retail Adventures Group (‘Retail Adventures’). On 21 March 2013 the trade marks were recorded by the Trade Marks Office as having been assigned from Retail Adventures to DSG. Further, what might be thought of as a third strand of information additional to that above [17, 20] includes evidence that a Mr Solly Stanton (‘Stanton’) founded a chain of discount retail stores under the name, SILLY SOLLY’S. Walton provides evidence that a trade mark registration for that name is owned by DSG. Stanton is a director of The QLD Consulting Group Pty Ltd (‘QCG’) which is a shareholder of the Opponent. It will be recalled that Walton is a director of the Opponent. The evidence further establishes that Walton is also a director of BHA Australia Pty Ltd (‘BHA’), incorporated on 3 August 2017 in order, it is said, to be the operating company to bring both SILLY SOLLY’S and CRAZY CLARK’S stores back to life after closure of those stores and the period of administration. It is asserted that QCG was an authorised user of the trade marks by virtue of a Consulting Agreement dated 16 August 2017 between BHA and QCG (‘Consulting Agreement’). The Consulting Agreement lays claim to ownership of the trade marks. Naturally the Applicant challenges how that could be so when DSG was the registered owner at that time. Walton and Cameron attempt to explain that Walton (as a director of the Opponent) and Stanton (as the director and shareholder of QCG) were authorised to use the trade marks by DSG and that, in turn, QCG, authorised BHA to use the trade marks.
I break here to review in brief the law relevant to these convoluted claims. The starting point is s 8 which defines an “authorised user” and “authorised use” as follows:
(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.
(3) If the owner of a trade mark exercises quality control over goods or services:
(a) dealt with or provided in the course of trade by another person; and
(b) in relation to which the trade mark is used;
the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.
(4) If:
(a) a person deals with or provides, in the course of trade, goods or services in relation to which a trade mark is used; and
(b) the owner of the trade mark exercises financial control over the other person’s relevant trading activities;
the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.
(1) Subsections (3) and (4) do not limit the meaning of the expression under the control of in subsections (1) and (2).
As s 8 makes clear, use of a registered trade mark by an authorised user will only be taken to be use by the registered proprietor of the mark if the registered proprietor exercises control over the use of the mark during the period in question so as to maintain a connection in the course of trade between the goods or services and the registered proprietor. In Star Television Productions Limited v Star Entertainment Group Limited,[7] Hearing Officer Richards wrote that:
It may be fair to observe that the past has seen a relaxed attitude to authorised use when assessing the relationship between the registered owner and the actual user of a trade mark. This was most recently exemplified by a (reluctant) Federal Court finding that ‘a mere theoretical possibility of contractual control is sufficient to constitute authorised use’.[8] The legal position significantly changed in 2016 when the Full Court of the Federal Court decided that a bare license was insufficient to establish control over, and therefore authorised use of, a trade mark.[9] For the three years that followed that judgment there has been a very high level of scrutiny of the relationship between a registered owner of a trade mark and the user of it. This year saw some reprieve, with the Full Court of the Federal Court deciding that two companies ‘operated with a unity of purpose’ and through that inferred that one company effectively exercised the requisite control over the other for the purposes of s 8 of the Act.[10] The facts in Lodestar and Trident were very different. In Lodestar there was only a contractual relationship between user and owner, and the owner was found to have no serious interest in the quality of the goods that the user was putting to market. In contrast, Trident involved two quite clearly related companies—one owned the trade mark and the other used it. It was also crucial to the reasoning in Trident that there was common directorship of the companies at all relevant times.
[7] [2019] ATMO 163.
[8] Skyy Spirits LLC v Lodestar Anstalt (2015) 325 ALR 718, 732 [55].
[9] Lodestar Anstalt v Campari America LLC (2016) 244 FCR 557 (‘Lodestar’).
[10] Trident Seafoods Corp v Trident Foods Pty Ltd (2019) 369 ALR 367, 380-1 [45]-[52] (‘Trident’).
Control by the owner will be assumed if either quality control or financial control is exercised, but other forms of control may be considered. In Lodestar Anstalt v Campari America LLC [2016] FCAFC 92, Basenko J stated that
actual control will be a question of fact and degree. … 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.
…
… I do not think that it could be suggested that the mere fact that the registered owner granted a licence or revocable authority to use the trade mark would be sufficient without more established control within s 8 ...” [98]
In the case of Scott-Dibben Pty Ltd v Canterbury District Health Board [11], Hearing Officer Kirov wrote:
... I am mindful of the fact that the Full Federal Court, (in the context of ss 58 and 59 of the Act, it must be said), in Food Channel Network Pty Ltd v Television Food Network GP (“Food Channel”) indicated one should not rush to reflect adversely on the claimed actions or intentions of a claimed user in circumstances where there are no formal arrangements in place between companies controlled by one individual. In this regard the Court advised at [61]:
The courts should be cautious to allow the legal fiction of the corporate veil to defeat registration in a case where one of a group of companies, all controlled by the same directing mind and will, used the mark prior to the other.
[11] 2016 ATMO 3.
In Food Channel the evidence before the Court was that a single person was “the founder and sole shareholder and director” of both of the companies concerned. The Federal Court accepted that person was the “directing mind” of both. Applying these principles to the present case, it is far from clear to me that during the Relevant Period some other person was an authorised user of the trade marks. There is no common directorship as between DSG and either of BHA or QCG. All the evidence shows is that Cameron, Walton and Stanton knew each other over some years. There is no case therefore for a single controlling mind. There is no other suggestion that obedience to Cameron, as director of DSG, was instinctive and complete. On the contrary, Cameron’s own evidence (below) would suggest the Walton and Stanton were given a long and loose rope:
Mr Stanton kept me updated on the overall progress of plans for both the SILLY SOLLY’S and CRAZY CLARK’S stores and I understood that it was the intention of Mr Stanton and Mr Walton to focus on the SILLY SOLLY’S discount stores first, as that brand had been out of use for a longer period of time and once they were up and running, to then re-open the CRAZY CLARK’S discount stores.
Further, to my mind the nature of the authorisation is in doubt. Walton and Cameron attempt to explain that Walton (as a director of the Opponent) and Stanton (as the director and shareholder of QCG) were authorised to use the trade marks by DSG and that, in turn, QCG, authorised BHA to use the trade marks. Cameron sets out her recollection of this conversation with Stanton as follows:
I recall that in around August 2017, shortly after control of DSG was returned to me as its director, Mr Stanton spoke with me. During this conversation, Mr Stanton requested and was granted DSG’s approval and authorisation to use the CRAZY CLARK’S Marks to bring back the CRAZY CLARK’S discount stores, as well as other trade marks related to the Silly Solly’s brand of discount stores (the SILLY SOLLY’S Marks) and to begin working with Mr Walton on these projects. … I verbally agreed to this proposal … with a view to assigning the marks in the future. In doing so, I understood that DSG was authorising and approving use of the CRAZY CLARK’S Marks and SILLY SOLLY’S Marks by the corporate entities used and intended to be used by Mr Stanton and Mr Walton, rather than to Mr Stanton or Mr Walton personally.
The alleged authorisation from Cameron was verbal. There is little corroborative evidence of it. Walton was not privy to the conversation and gives a second hand account of what he believes passed between Cameron and Stanton. Stanton, best placed to give evidence of these matters, is strangely silent giving no evidence in these proceedings and all Walton was able to say is that:
I understand from Mr Stanton that he did speak to Ms Cameron in around August 2017 and I believe that he obtained DSG’s approval and authorisation to use the SILLY SOLLY’S Marks and CRAZY CLARK’S Marks, with the intention of operating the SILLY SOLLY’S Stores and the CRAZY CLARK’S Stores. I understand that these approvals were given orally by Ms Cameron to Mr Stanton. Mr Stanton regularly speaks with Ms Cameron and I believe that he regularly updated her as to how matters were proceeding.
Control by the owner is placed in further doubt by the evidence that on 26 August 2019 Cameron emailed DSG’s lawyer, Mr Ben Swain, and Stanton, informing them that she was happy to transfer the trade marks to Stanton for free, but that she wanted Mr Swain’s legal fees to be paid.
As stated already, it is the Opponent who bears the onus. Section 101 provides that if ‘the Registrar is satisfied that the grounds on which the application [for removal] was made have been established, the Registrar may decide to remove the trade mark from the Register …’ [stress added]. In Blount Inc v Registrar of Trade Marks Branson J observed:
Where the Act requires the Registrar to be “satisfied” of any matter, it is to be understood as requiring that he or she be persuaded of the matter according to the balance of probabilities (Rejfeck v McElroy [1965] HCA 46; (1965) 112 CLR 517 at 521). That is, that the Registrar be persuaded, having given proper consideration to those factors and circumstances that the Act requires him or her to give consideration to, that such matter is more probable than not.[12]
[12] (1998) AIPC ¶91-408, FCA, 1 May 1998.
The Opponent has far from convinced me that DSG had authorised another to use the trade marks. There is no evidence of financial, quality or other control sufficient to meet s 8 of the Act. My finding therefore is that there has been no use of the trade marks by the Opponent, DSG or any authorised user within the Relevant Period. I have already found that there was no relevant obstacle to use and so, unless I exercise my discretion otherwise, my decision will be to remove the trade marks from the Register.
Registrar’s discretion
The Registrar has a discretion not to remove an unused trade mark if it is satisfied that it is reasonable to do so. The Opponent submits the Registrar should exercise that discretionary power in favour of the Opponent and allow the trade marks to remain on the Register. Again, the Opponent bears the onus.[13] The discretion ‘is limited only by the subject matter, scope and purpose of Part 9 of the Act’[14]. To this end, the Full Court has observed:
The purpose of Part 9 is to provide for the removal of unused trade marks from the Register. In that regard it is plainly designed to protect the integrity of the Register, and in this way, the interests of the consumer. At the same time, however, it seeks to accommodate, where reasonable, the interests of the registered trade mark owners. Otherwise, there would be no need for the discretion.[15]
[13] Optical 88 Ltd v Optical 88 Pty Ltd (No 2) [2010] FCA 1380 at [273].
[14] Austin, Nichols & Co Inc v Lodestar Anstalt [2012] FCAFC 8, [35].
[15] Ibid [38].
The Opponent relies on the honesty and energy it showed in its efforts to “reinvigorate the CRAZY CLARK’S brand” and the investment it would lose should the trade marks be removed from the Register. It drew my attention to factors additional to the interests of the consumer which the courts have considered relevant to the discretionary power, which include (for present purposes) consideration of:
· possible abandonment of the mark;
· residual reputation in the mark;
· sales after the non-use period; and
· whether the removal applicant 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[16].
[16] See, for example, E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2008) 77 IPR 69, [2008] FCA 934 (Gallo) at [202]-[203] per Flick J; Pioneer Computers Australia Pty Ltd v Pioneer KK (2009) 176 FCR 300, [2009] FCA 135 (Pioneer Computers) (at [169]), per Bennett.
Turning first to the question of the public interest of the consumer and to whether the removal of the mark might lead to deception or confusion in some way, I am reminded that it is the Applicant, or at least Clark, the Applicant’s sole director and declarant in these proceedings, who was one of the founders of the CRAZY CLARK’s business. Albeit that the business he founded was sold almost twenty years ago the use of the name continued up until 2014 when the last of the stores closed. Clark’s ambition was clearly to recover the business he once started and in that regard the evidence is that the Applicant conducted searches and surveyed the market, finding no use of the trade marks, consistent with its knowledge that the registered owner at the time had been in administration. Of course, the greater part of the public, not being inclined to keep abreast of such matters, was unlikely to be aware of any changes in ownership and is less likely to have cared, had it known. For them, there was the consistent presentation of the trade marks in connection with the same services over the years. However, trade mark law adopts a different perspective of such matters, generally recognising that the goodwill of the business follows with the assignment of a trade mark, and accordingly the question of deception or confusion would properly take account of the underlying transfer of ownership. Nevertheless, on this occasion my assessment is that there is no public interest to be satisfied since I have concluded for reasons given below that, by the time the Opponent had opened a new store on 30 November 2019, there was no residual reputation in the trade marks and thus no likelihood of confusion or deception. My finding is that there is nothing that weights in favour of retention of the marks on the Register in the name of the Opponent.
Taking the remaining factors into account, the high point of the evidence is that in 2013 DSG purchased the business from Retail Adventures for AUD59 million and that, by 2014, there were more than 140 CRAZY CLARK branded stores operating across Queensland, New South Wales, Victoria, Western Australia and South Australia. There is some evidence of a vestigial reputation in the CRAZY CLARK’S name; certainly Walton and Stanton make much of the fact that they wished to capitalize on that and they may have done so with the SILLY SOLLY’S mark (previously disused for 17 years) albeit that it is not, on the evidence, possible to know whether the reported success of the reinvented SILLY SOLLY’S business[17] was attributable to that leftover name recognition or to the public’s perennial attraction to low-cost goods.
[17] A September 2020 article in the Australian Financial Review described the business as currently Australia’s fastest growing discount retail chain.
I need not reach a decision on whether the trade marks had previously been abandoned. On one reading they may well have been since Cameron herself, director of the then owner, showed no real vitality towards their re-use after the administration and seemed content to let others run with a rejuvenation plan. Nonetheless I think the issue is moot since the fact of the matter is that Walton and Stanton did, in the end, put them to actual use again.
What I would otherwise describe in the context of the parties competing interests is little more than a scrabble to regain control or apparent control of the trade marks.The Opponent posits that at some unknown point in time the Applicant became aware of its plan to reinvigorate the business under the trade marks. It will be recalled that the non-use applications were filed against registrations 905788 and 905789 on 19 August 2019. I am not so convinced on the evidence that the non-use applications were filed as a reaction to discovery of intended re-use of the marks. The Applicant attests to a watch and see strategy and the fact that other marks of potential relevance once in the hands of the Opponent’s predecessors in title had fallen off the Register for non-renewal. It asserts that the non-use applications were motivated by an intention to tidy up the last apparent impediments to its freshly filed trade mark applications, with the thinking that those non-use actions would be undefended. In contrast, after 19 August 2019 there looks to have been a flurry of activity on the part of the Opponent. On 26 August 2019, a so-called Intellectual Property Licence Agreement (imperfect in essential respects) was executed, whereby the Opponent purported to license use of the trade marks to BHA. Walton’s statement that “I was trying to formalise the legal arrangements, because I did not fully understand what the non-use applications meant…”, coupled with the fact that the registrations were on 26 August 2019 still recorded in the name of DSG, cause me to think that a state of panic had set in. So, too, in September 2019 the domain name <crazyclarks.net> was registered by Walton “on behalf of BHA”, but it is telling that this name was taken because the domain name <crazyclarks.com.au> was unavailable, still registered to Sungate Pty Ltd, Clark’s trading entity when the stores were founded in 1999 and there is no evidence of earlier effort to secure that name. Facts like this, taken together with Walton’s own evidence that after the administration ended it was the SILLY SOLLY’S business that was front and centre of his and Stanton’s minds, lead me to conclude that very little attention had been given to the trade marks before the Opponent became aware of the non-use applications.
More action by the Opponent certainly followed, including as mentioned, the opening of a first store with seven employees before the end of 2019 but I would attribute almost all of this activity to the fact that the non-use actions were in train. Walton and Sutton both attest to their honesty but what they describe as honest is their open discussions with Cameron about bringing both the SILLY SOLLY’S and CRAZY CLARK’S marks back to life at a time when DSG was the owner; the honesty appears to have no meaning vis-à-vis the Applicant.
Considering these factors together, I am not satisfied that it is reasonable to exercise the discretion available under s 101(1) in favour of the Opponent to allow the trade marks to remain on the Register. As such, I decline to exercise the discretion.
Decision
The ground for removal under s 92(4)(b) of the Act has been established in respect of each non-use application. As such, I direct that all three trade mark registrations be removed from the Register one month from the date of this decision. In the event of an appeal from this decision, the registrations shall not be removed from the Register until the appeal has been discontinued or dismissed, or in the event of a decision from the court, the registrations will be subject to that decision.
Costs
Both parties have sought costs. I see no reason to depart from the general rule that costs follow the event. Accordingly, in respect of one registration, to be nominated by the Applicant, I award costs against the Opponent as per s 221 of the Act in accordance with the amounts set out in Schedule 8 of the Trade Mark Regulations 1995 (Cth). In respect of the other two registrations, I award reduced costs against the Opponent in the same manner as indicated in Hume Industries (Malaysia) Berhad v James Hardie & Coy Pty Ltd.[18]
[18] [2001] ATMO 78.
Debrett Lyons
Hearing Officer
Oppositions and Hearings
Trade Marks and Designs
5 August 2021
15
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