RFSR Pty Limited v Heatwave Shoes Pte Ltd

[2011] ATMO 69

TRADE MARKS ACT 1995

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

Re:Opposition by RFSR Pty Limited to application under section 92 by Heatwave Shoes Pte Ltd to remove trade mark number 339766(25) - HEATWAVE & device - and 404742(25) -  HEATWAVE - in the name of RFSR Pty Limited.

Delegate:

Debrett Lyons

Representation:

Opponent: Hodgkinson McInnes Patents, Patent and Trade Mark     Attorneys (written submissions only)

Applicant:    Margaret Shearer, Solicitor, of Banki Haddock Fiora, Lawyers.

Decision:

2011 ATMO 69

Section 96 oppositions unsuccessful.  No proven use of the trade marks. 

Costs awarded against Opponent.

Background

1. RFSR Pty Limited (“the Opponent”) is the owner of the following two registrations:

• 339766 HEATWAVE & device, as depicted below, covering “all goods in C1.25 including clothing” in class 25.

• 404742 HEATWAVE covering “clothing, footwear, headgear” in class 25.

  (together, ‘ the HEATWAVE trade marks’)

1. On 27 May 2009, Heatwave Shoes Pte Ltd (“the Applicant”) filed applications to remove the HEATWAVE trade marks from the register (“the Removal Applications”) for all the goods for which the marks are registered.

2. On 17 September 2009, the name of the owner of the HEATWAVE trade marks was changed from Reuben F Scarf (Retail) Pty Limited to the Opponent. The legal entity was unchanged.

3. On 18 September 2009, the Opponent filed Notices of Opposition against the removal applications.

4. The parties served and filed their evidence after which I heard the matter as a delegate of the Registrar of Trade Marks in Sydney on 6 April 2011.  At the hearing the Opponent was unrepresented but it relied on the written submissions of its attorneys.  The Applicant was represented by Margaret Shearer of Banki Haddock Fiora, Lawyers.

Preliminary Issue

1. At the time of the hearing, the status of Registration 339766 HEATWAVE & device was ‘Expired – Renewal Possible’.  It has now been removed from the register of trade marks.

2. On April 4, 2011 the attorneys for the Opponent wrote to the Office in the following terms:

   We regret the last minute nature of this communication but have only this morning had the opportunity to receive our client's instructions in this matter.
   
   As is noted in the public record, the above-identified registration expired some months ago. However, it is appreciated that it remains within the 6 month grace period.

   
   The registration was deemed unnecessary in the light of the existence and ongoing use of registration 404742 HEATWAVE. In relation to that registration, and in response to Ms Shearer's emailed enquiry yesterday, we confirm that we will be submitting written submissions for the Hearing tomorrow morning.

   
   Meantime, our client has confirmed and undertaken that it will not seek restoration and renewal of 339766. It considers that registration fully expired. Please note your file accordingly.

   
   We will communicate in respect of 404742 under separate cover shortly.

1. The Applicant submitted that it would have been more appropriate for the Opponent to have surrendered registration 339766 prior to the hearing if this had been its position.  I agree.  The Registrar is not empowered to police or enforce undertakings of the kind offered by the Opponent.  This decision therefore applies to both registrations.

The Evidence

1. On 19 April 2009 the Opponent served and filed evidence in support of the oppositions to the Removal Applications.  The evidence consisted of two statutory declarations of Damien Scarf made 19 April 2010.  Damien Scarf is the director of the Opponent.

2. On 19 July 2009, the Applicant served and filed evidence in answer consisting of a statutory declaration of Catherine Marie Sedgley made 19 July 2009 and a statutory declaration of Justin Ashley Koprivniak made 19 July 2009.  Both declarants are employees of the Applicant’s firm of solicitors.

3. On 16 November 2010, the Opponent served and filed evidence in reply consisting of a statutory declaration of Damien Scarf made 16 November 2010.

Legal framework

1. Section 92(4) of the Trade Marks Act 1995 (‘the Act’) states that:

   (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) that, 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: 

   (i) to use the trade mark in Australia; or

   (ii) to authorise the use of the trade mark in Australia; or

   (iii) to assign the trade mark to a body corporate for use by the body corporate in Australia;

   in relation to the goods and/or services to which the non-use application relates and that the registered owner: 

   (iv) has not used the trade mark in Australia; or

   (v) has not used the trade mark in good faith in Australia;

   in relation to those goods and/or services at any time before the period of one month ending on the day on which the non-use application is filed;

   (b) that the trade mark has remained registered for a continuous period of 3 years ending one month before the day on which the non-use application is filed, and, at no time during that period, the person who was then the registered owner: 

   (i) used the trade mark in Australia; or

   (ii) used the trade mark in good faith in Australia;

   in relation to the goods and/or services to which the application relates. 

   Note 1: For file and month see section 6.

   Note 2: If non-use of a trade mark has been established in a particular place or export market, then instead of the trade mark being removed from the Register, conditions or limitations may be imposed under section 102 on the registration of the trade mark so that its registration does not extend to that place or export market. 

1. The Removal Applications rely on section 92(4)(b) and seek removal of the HEATWAVE trade marks for all the goods for which the trade marks are registered.

2. Section 100 of the Act specifies that the onus is on the Opponent to rebut any allegations made under section 92. In particular, the Opponent must, on the balance of probabilities, prove that it used the HEATWAVE trade marks in good faith and in respect of the registered goods during the period of three years ending one month before the day on which the removal applications were filed. As the removal applications were filed on 27 May 2009, the period for the purposes of section 92(4)(b) is the three year period ending on 27 April 2009 (“the Relevant Period”)

3. The pertinent case law can be summarized by the following propositions.  Use relied upon by the Opponent must be genuine commercial use: Imperial Group Ltd v Philip Morris & Co [1982] FSR 72. That said, a single instance of bona fide use of the HEATWAVE trade marks during the Relevant Period is sufficient to resist the Removal Applications: Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261 (2001) 51 IPR 149 at paragraph 17. However, if the Opponent relies on a single act of use, that act ought to be established by “if not conclusive proof, at any rate overwhelmingly convincing proof”: Nodoz Trade Mark (1962) RPC 1 at 7, per Wilberforce J. Finally, the Act requires use of the HEATWAVE trade marks in good faith and Drummond J said in Woolly Bull Enterprises Pty Ltd v Reynolds that good faith entailed “real, as opposed to token, use in a commercial sense”.

Submissions and reasoning

1. The Notices of Opposition are in virtually identical terms and state that the Opponent had used the HEATWAVE trade marks during the Relevant Period; any failure to use the HEATWAVE marks was due to “special circumstances”; and the Registrar should exercise her discretion and refuse to remove the HEATWAVE trade marks.

2. The Applicant’s submissions are that during the Relevant Period neither of the HEATWAVE trade marks was used, or used in good faith, by the Opponent, or by anyone authorised by the Opponent, in relation to the registered goods and since there are no reasons why the Registrar should in this case exercise her discretion in favour of the Opponent, the HEATWAVE trade marks should be removed from the register in their entirety.  In the alternative, it is submitted that if, on the evidence, I find relevant use of the trade marks on, merely, T-shirts, then the registrations should be so limited.

Registration 339766 - HEATWAVE & device

1. The evidence filed in support of the claimed use of the HEATWAVE trade marks is contained in the two statutory declarations of Damien Scarf made 19 April 2010.  The declarations differ only in inessential detail of the respective registrations. The exhibits are identical.  For convenience, I will refer to this evidence as “the Scarf Declaration”.

2. The further declaration made by Damien Scarf on 16 November 2010 is simply argumentative and provides no further proof of use of the HEATWAVE trade marks.

3. There is no proof of use whatsoever of the device trade mark of Registration 339766. Nonetheless, section 100(3)(a) states that an opponent is taken to have rebutted the allegation that the trade mark has not been used if it can establish that the trade mark, or the trade mark with additions or alterations not substantially affecting its identity, was used at the relevant time.

4. Exhibit DS-1 to the Scarf Declaration is a photograph of a T-shirt with the word HEATWAVE in fancy script on the front.  The script is nothing like the script of the word as represented in Registration 339766.  Moreover, the word HEATWAVE appears on the T-shirt in close conjunction with a stylised image of a youth which might be regarded as forming part of a composite logo with the word.  There is no reasonable argument (and none was made) that use of that sign was use of a trade mark with additions or alterations not substantially affecting the identity of the registered mark.

5. I find that there is no use of the trade mark of Registration 339766 or of a trade mark comprehended by section 100(3)(a).

Registration 404742 - HEATWAVE ( word)

1. The Scarf Declaration states that the HEATWAVE trade marks have been continually used since 1987.  It states that the marks have been used on a range of surf wear and casual wear items and that they are applied to the clothing with a woven label as well as a swing tag.  It goes on to state that the Opponent is currently using the marks in Australia in relation to its clothing and it currently has over 1,000 garments in stock bearing the HEATWAVE marks.

2. I have described Exhibit DS-1.  Mr. Scarf states that over 4,000 of the illustrated T-shirts were sold by the Opponent in the summer of 2008-9.  

3. Exhibit DS-2 to the Scarf Declaration is an email dated 14 August 2009 from Mr. Scarf to the Opponent’s attorneys.  It reads:

   “hi Ken

   this is an exported report out of our dos point of sale system as you can see there are heaps of heatwave skus and item numbers as well as decrioptions.

   estimated sales at retail are around 400K p/a

   hope this helps

   damien”

4. Exhibit DS-3 is a copy of an invoice dated 12 February 2009. The invoice appears on the letterhead of “Reuben F Scarf”. The ‘Supplier’ on the invoice is RFSR and the “Customer” is Reuben F Scarf. The invoice appears to be for 13,000 units of “HEATWAVE COTTON T-SHIRTS”.

5. Exhibit DS-4 contains photographs of T-shirts carrying the word HEATWAVE which the Opponent claims to “currently hold in stock”.

6. The evidence is lacking in many ways.  Apart from Mr. Scarf’s declaratory statement, there is nothing to substantiate firmly use of the HEATWAVE trade marks either during the Relevant Period or at any time since 1987.  There is no single sales invoice.

7. The report in DS-2 is fraught with difficulties.  It is not clear on what date the report was generated. Even if it is assumed that the report was produced on the day of the email sending it, there is no adequate explanation given as to the content of the report.  The covering comments from Mr. Scarf are of no real assistance and the Applicant characterizes the report itself as “generally incomprehensible”, a comment with which I must concur.  No explanation is given of units or of terms and shorthand unrecognizable to the uninitiated.  At best, the word HEATWAVE appears on the report from time to time.  When it does, it is accompanied by shorthand terms such “LONG” or “SHORT” or “CAMO” or “DENIM” or “BOARD” or “S/S SHIRT” or “POLO”.  Although there is no evidence of the matter, it might with reasonable intelligence be assumed that these terms relate to surf wear or casual wear.  Nevertheless, there is no unambiguous indication of the time frame in which these goods might have been sold.  Mr. Scarf states that the report is for the financial year 2008/9 but one column heading is “Sell YTD”.  Based on the date of the email, that might be 14 August 2008 to 14 August 2009.  More likely, it refers to the financial year to date.

8. As the Applicant rightly argues, it “therefore appears that at best the period of this report traverses the relevant period (which ends on 27 April 2009) or is outside it and therefore irrelevant. If it traverses the period then it cannot be presumed that any sale fell within the relevant period without additional primary evidence.”  I fully agree and without further explanation I cannot accord the report any weight.

9. The invoice of DS-3 is from RFSR to Reuben F Scarf, the Opponent’s registered business name.  This invoice appears to be a purely internal document and is not proof of ultimate sale to an end consumer.  It does not establish genuine commercial use in good faith.  It does not assist me.

10. Likewise, DS-4 can be given little or no weight since there is no primary evidence of use of the HEATWAVE marks in the course of trade nor, more importantly, within the Relevant Period.

11. The Applicant’s Evidence in Answer is comprised largely of the report of a commercial inquiry agent briefed by the Applicant’s solicitors to investigate use of the HEATWAVE trade marks during the Relevant Period.  The report shows that the Opponent operates a number of retail stores in New South Wales.  The report indicates that of the three stores visited by the agent and of the five stores called by the agent, none was able to confirm exactly when products bearing the HEATWAVE marks were sold last or if and when they expected to sell them again.  The store staff questioned either showed no recognition whatsoever of the HEATWAVE name, or had vague imperfect recollections of clothing bearing that name from an imprecise time now past.

12. The Opponent made a forlorn attempt interpret this report in ways which might benefit it but which in my decision are not deserving of attention here.  The declaration made by Mr. Scarf in reply and other declarations made on behalf of the Applicant take me no further.  In short, the evidence in support is insufficient to demonstrate to me on the balance of probabilities that the Opponent made genuine commercial use of the HEATWAVE trade marks (in word or device form) during the Relevant Period.

Registrar’s discretion

1. Section 101 of the Act gives the Registrar the discretion to allow a trade mark to remain on the register even when there has been no use for the purposes of section 92. Various matters may be taken into account in the exercise of that discretion.

2. The Opponent has asserted in the Notices of Opposition that there were reasons for the non-use because of circumstances persisting in the trade. No evidence or argument has been presented in support of that claim and I cannot give it any weight. There being no other exceptional circumstances argued by the Opponent, nor anything emerging from the evidence to engage my attention under section 101, I find that there is no case for exercise of the Registrar’s discretion in favour of the Opponent.

Decision

1. The Applicant has been successful.  I direct that Registration 404742 be removed from the Register in their entirety after one month from the date of this decision.  Registration 339766 has now been removed from the Register.  Had it remained extant at the time of this decision, I would have also directed its removal for the reasons given herein.

2. If the Registrar has been served with a notice of appeal before then I direct that removal shall not occur until the appeal has been discontinued or, in the event of a decision from the Court, that the registration be dealt with as the Court sees fit.

Costs

1. The Applicant has been successful in this action and is entitled to its costs.  I award costs against the Opponent according to the Official scale.  Since the Removal Applications proceeded on essentially common evidence against both registrations, I see no reason to duplicate the award and costs are to be calculated as if the action was against a single registration.

Debrett Lyons

Hearing Officer

Trade Marks Hearings

26 July 2011