Sabra International Pty Ltd v Rael Marcus

[1993] ATMO 62

trade marks act 1955

decision of a delegate of the registrar of trade marks

Re:Opposition by RAEL MARCUS to trade mark application number 528989 in the name of SABRA INTERNATIONAL PTY LTD

Application number 528989 was lodged on 9 February 1990 in the name of SABRA INTERNATIONAL PTY LTD (Sabra).  The application was for registration of the word GINSU and was advertised accepted in the Official Journal of 8 November 1990 for the statement of goods "Cutlery; knives and all other goods in this class" in Class 8.

Notice of opposition to the mark's registration was lodged on 7 February 1991 by RAEL MARCUS (Marcus).  The main grounds of opposition, as stated in the notice, may be summarised as being based on s.40 of the Act, regarding disputed claims of proprietorship of the mark; and on s.28, that the mark's use by the applicant would be likely to deceive or cause confusion, would be contrary to law and would not be entitled to protection in a court of justice.

The evidence
Service and lodgment of Marcus' and Sabra's respective evidence was completed by 30 March 1993 and consisted of:

Evidence in support

. Statutory Declaration by Paul Meier dated 20 November 1991, with Exhibit PM1;

. Affidavit of Marc Nagoshiner dated 3 February 1992;

. Statutory Declaration by David Hammer dated 13 August 1991 (first Hammer declaration);

. Statutory Declaration by Rael Marcus dated 28 January 1992, with Exhibits RM1 to RM10 (first Marcus declaration);

. Statutory Declaration by David V. Crocker dated 2 July 1991;

. Statutory Declaration by David Hammer dated 3 March 1992, with Exhibit DH1 (second Hammer declaration);

. Statutory Declaration by Timothy James Bodinnar dated 9 March 1992, with Exhibits TJB1 to TJB2.

Evidence in answer

. Statutory Declaration by Daniel Presser dated 4 September 1992, with Exhibits DP1 to DP3 (first Presser declaration);

. Statutory Declaration by Daniel Presser dated 19 November 1992, with Exhibit DP4 (second Presser declaration).

Evidence in reply 

. Statutory Declaration by Rael Marcus dated 8 March 1993, with Exhibits RM11 to RM14 (second Marcus declaration).

Submissions
Marcus requested a hearing in the matter and the case was set down before me, as the Registrar's delegate, in Canberra on 13 May 1993.  Representing Marcus was Mr David Yates of Counsel instructed by F.B.Rice & Co, Patent Attorneys of Sydney.  Appearing on behalf of Sabra was Mr Barry Hess of Counsel instructed by Mr David Andrews of Holding Redlich, Barristers and Solicitors of Melbourne.

Mr Yates said that, while the notice of opposition raised many grounds, his argument at the hearing would be directed toward the proposition that Sabra was not the proprietor in law of the mark in question.  Instead, Marcus was the common law owner by line of title from Ginsu Products Inc. (GPI), the proprietors of the now lapsed registration, A343563(8), for that mark.  However, it was not incumbent on Marcus to establish proprietorship, the onus being on Sabra to establish its entitlement to registration.  He said that Sabra had used the mark but as a licensee to GPI.  Details of that licence were now unknown and in dispute, but it was evident that even Sabra accepted that the authority and proprietorship of the mark had resided with GPI.  That company sold a number of GINSU products to Sabra for re-sale in Australia and its parent company in the USA, Dial Media Inc. supplied television commercials for Sabra's use.  However, this use was not exclusive and David Hammer has declared that he showed a copy of a GINSU commercial to television executives as early as 1980.  A copy of this commercial was shown to me by Mr Yates at the hearing.  This use amounted to the soliciting of business on behalf of GPI - and thus, ultimately, Marcus - and was sufficient use to justify his claims of proprietorship.  Mr Yates relied for support here on "Thunderbird" trade mark (1974) ALJR 456 and Moorgate Tobacco Co Ltd v Philip Morris Ltd (1984) 156 CLR 414. He said that, when an overseas proprietor, such as GPI, projected goods into the course of trade in Australia using a distributor, then that use was his - Estex Clothing Manufacturers Pty Ltd v Ellis and Goldstein Ltd (1966) 116 CLR 254 at 271 and Pioneer Kabushiki Kaisha and Anr v Registrar of Trade Marks (1977) 137 CLR 670 at 683. Sabra's use was generally as described in Daniel Presser's declaration, with GPI ensuring supply during the period of substantial use - from 1982 to 1987 - and Sabra acting as a licensee. He said that, during that time, responsibility for the product was never surrendered by GPI. The manufacturer of the goods at issue is Quikut Inc, a division of the Scott & Fetzer Company. Scott & Fetzer acquired the rights to the GINSU mark before GPI went into liquidation, and the ownership and goodwill of the mark then passed to Marcus through a lineage of transfers. He then cited a number of cases to support his contention that the present application for registration was misappropriation of this right of property. These included Seven Up Co v OT Ltd (1947) 75 CLR 203, Blackadder v Good Roads Machinery Co Inc (1926) 38 CLR 332, and Settef SpA v Riv-oland Marble Co (Vic) Pty Ltd 10 IPR 402, particularly where it was said that use by a licensee does not extinguish title. He said that Marcus or his predecessors in title had never abandoned proprietorship of the mark or acquiesced regarding its use and there was no evidence to support any claim to the contrary. He said that the appeal in the Riv-oland case, supra, had not overturned the finding by McGarvie J that the title to a trade mark is lost at common law by intentional abandonment but not by mere non-use.  He pointed to the declaration of Mr Meier to demonstrate that Marcus was active in exercising his proprietorship of the mark.

Mr Yates said that, in opposition proceedings where credentials of ownership were in dispute, the applicant bore the onus of proof.  Here he referred to Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592.

In reply, Mr Hess for Sabra submitted that his client had the prima facie entitlement to proprietorship of the mark under s.40(1) and the time for determination of such title was the date that the application was lodged, viz. 9 February 1990; Shell Co (Aust) Ltd v Rohm and Haas Co (1949) 78 CLR 601. He said that Sabra claimed proprietorship of the mark by its use in Australia; Aston v Harlee Manufacturing Co. (1960) 103 CLR 301 and Moorgate Tobacco Co Ltd v Philip Morris Ltd, supra.  The authorities drew a distinction between local authorship and prior use when there were competing claims of proprietorship between an Australian applicant and a foreign claimant.  He said that here there were two essential questions - firstly, whether Sabra was entitled to claim proprietorship of the mark given it was the person who made the first application and, secondly, whether Marcus could displace that claim on any basis.  He said that Marcus could not establish any use to which he could lay claim to displace Sabra's entitlement.  Mr Hess said that declarations by Daniel Presser and others described how Sabra had first adopted and then used the mark, and how the word GINSU had come to be associated with it.  When GPI had gone into liquidation and its registration of the mark had lapsed, Sabra had been the only selling presence in Australia using the GINSU mark.  The only claim of use that could be attributed to Marcus was in the declaration by Paul Meier where he said that he had used the mark in trade in Australia in 1989 under an agreement between him and Mr Marcus.  Mr Hess said that it was clear that Quikut Inc had proprietary rights to the mark in the USA and that it manufactured goods to order.  The evidence showed that, in Australia, Sabra ordered the goods, promoted the mark and sold the products in response to its own television advertising.  Copies of a television commercial originally produced by Dial Media Inc for GPI to advertise the goods and later versions, made on behalf of Sabra, which were almost identical save an Australian "voice-over" were screened by Mr Hess at the hearing.  There had been no use of the mark in Australia by GPI, from whom Marcus claimed lineal title of the mark, since the mid 1980s, or by any other entity associated with him, save the claimed use by Paul Meier in 1989 - which was after the continued use by Sabra.  Mr Hess said that the line of title of the mark in Australia claimed by Marcus was flawed because the mark had lapsed in 1987 and any reference to a trade mark registration was therefore not valid.  The only thing which could be said to disposed of was a common law proprietary claim.  However, there could be no goodwill attached to any such claim for the mark in Australia as it was not registered or used by GPI here after the date of lapsing despite mention of goodwill in the alleged documents of transfer.  Therefore, any alleged assignment of the common law rights to the mark was ineffective because of the absence of any presence of goodwill.  He referred for support here to Leather Cloth Co Ltd v American Leather Cloth Co Ltd (1865) 11 HLC 523; 11 ER 1435 and Pinto v Badman (1891) 8 RPC 181. Sabra had continued to trade in the goods using the mark in Australia post-1987 when the goodwill of the mark was "at large".

Mr Hess said that nothing had been done to restore the mark's registration once it had lapsed.  Despite Marcus declaring that he had acquired proprietorship of the mark in September 1988, he had not applied to register the mark on his own behalf until 7 March 1990 - some weeks after the present mark was lodged.  The inference which could be drawn from Marcus' evidence therefore was that he had abandoned the mark and any claims to proprietorship.

Decision
The provisions of s.40, so far as is relevant here, are that:

A person who claims to be the proprietor of a trade mark may make application to the Register for registration of that trade mark in Part A or Part B of the Register

Mr Justice McGarvie, at first instance in Riv-Oland, supra, at 413 explained what is meant by proprietorship of a mark in the following way:

The basic common law principle is that the first person who uses a trade mark of an appropriate type within a country becomes the proprietor of the mark there: Re Registered Trade Mark "Yanx"; Ex parte Amalgamated Tobacco Corp Ltd (1951) 82 CLR 199 at 203; Thunderbird Products Corp v Thunderbird Marine Products Pty Ltd (1974) 131 CLR 592 at 603; Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 59 ALJR 77 at 83. A person who becomes proprietor of a trade mark in this way is entitled at common law to restrain a person who later commences to use the trade mark.

...

In considering who, within s40(1) of the Act, was at the time of Settef's application for registration the proprietor of the trade mark, one considers who at common law was the proprietor in Australia: The Shell Co of Australia Ltd v Rohm & Haas Co (1949) 78 CLR 601 at 625 and 627. Settef claims to be the first person to have used the trade mark in Australia and therefore to have been proprietor at common law in Australia.

A successful claim to proprietorship in a mark (except where there has been no use at all of the mark) thus depends on the ability of the person to demonstrate first use in Australia.  Further, the use relied on must be shown to be for the purpose of indicating, or so as to indicate, a connection in the course of trade between the specified goods and that person: see section 6 of the Act and W D & H O Wills (Australia) Ltd v Rothmans Ltd (1956) 94 CLR 182 at 191; Estex Clothing Manufacturers Pty Ltd v Ellis & Goldstein Ltd, supra.

Mr Presser has declared that he believed that GPI was formed to market GINSU products - I take that to mean in Australia but it may also have carried on business in other countries.  All parties seem to concur that, from 1982, an arrangement or licensing agreement existed whereby Sabra was authorised by GPI to market the cutlery in television campaigns and through retail outlets.  Mr Presser's declaration talks of an "agreement" between the applicant and GPI to use the mark - although that document has not been produced.  However, it would appear that GPI retained control of the mark and the applicant operated as a dealer.  Sabra may have outlaid money to produce the advertising and market the goods, but it seems agreed by both parties that GPI was the undisputed proprietor of the mark between 1982 and 1987.  The missing agreement between Sabra and GPI may have contained details of what expenditure was expected of Sabra in exchange for its use of the mark but it seems obvious that Sabra accepted GPI as the controlling entity regarding its exploitation.  Mr Hammer has declared that he showed a direct-response style television commercial produced for GPI to executives of many television stations in Australia around 1980/81.  This was the version shown by Mr Yates at the hearing.  I feel that this amounted to an offer to trade and that this was use which could be attributed to GPI.  This equates to "first use" of the mark on behalf of that entity.  Thus, in my opinion, it is fair to say that any use of the mark GINSU before GPI went into receivership was use on behalf of that company and that GPI was therefore the proprietor of the mark at that time.  I also think it is accepted by both sides that Sabra did continue to use the subject mark after the registration of A343563(8) had lapsed on 21 May 1987.  GPI had already gone into receivership around June 1986 and the Australian trade mark was sold (although not assigned on the Register) to the Scott & Fetzer Company at about that time.  However, that company did nothing to renew the registration and the mark lapsed.  Marcus has claimed present rights to the mark GINSU in Australia on the basis of alleged transfers of right, title and interest in the mark which took place between several entities.  The last transfer of the rights to the mark was through an "assignment" from Charles C.F.Chen on 14 September 1988.  Sabra appears to have continued to use the mark GINSU in television advertising campaigns in the intervening period, obtaining the cutlery products for sale under the mark direct from the manufacturer in the US.  The only use of the mark which can be directly attributed to being on behalf of Marcus after he allegedly acquired the rights to the mark in Australia was declared to have taken place in Sydney in August 1989 and in Adelaide in October 1989 as outlined in Mr Meier's declaration.  However, as I have emphasized, this use is after that of Sabra's who continued to use the mark after the lapsing of GPI's registration.

The question to be answered, therefore, is whether the devolution of "title" in the mark in Australia to Marcus is valid, making him the Australian proprietor, or whether this ownership lapsed at the same time as the registration, leaving Sabra as the proprietor of the mark at common law in this country.  Certainly, Sabra appears to have been the only player exploiting the mark between its lapsing as a registered trade mark in May 1987 and Mr Meier's declared use in August and October 1989.  Mr Yates has submitted that Marcus and his predecessors in title never abandoned ownership of the mark, and that this was demonstrated by the evidence showing transfer of title which ultimately fell to Marcus and also the use of the mark on behalf of Marcus by Mr Meier.  On the other hand, Mr Hess has claimed that, following the lapsing of the registered mark 343563, the ownership of the mark was "at large" because it had been effectively abandoned and, in any case, the only reputation which attached itself to the mark in Australia was that of Sabra as the sole user.

I agree with Mr Hess that the date at which title is to be determined is the date of lodgment of the present application, ie 19 February 1990; Shell Co (Aust) Ltd v Rohm and Haas Co, supra.

I also agree with Mr Yates that, in accordance with the findings of McGarvie J in Riv-Oland, supra, at common law, proprietorship in a trade mark, having once been established, might be lost by intentional abandonment, estoppel or acquiescence, but not by mere disuse.  In that case, as the plaintiff had never formed or evinced an intention to abandon the mark, it had not ceased to be the proprietor.  However, in the present case, the issue of abandonment or otherwise is clouded by the alleged transfer of an Australian title to Marcus through at least three intermediate links.  The last two alleged changes in ownership of the Australian mark, that to Mr Chen and then to Marcus, were after the registration of the mark in Australia had lapsed and all of them had been after GPI had been placed in the hands of the receivers.  All of the "assignment " documents mention the transfer of the title of the Australian mark along with the goodwill but I cannot agree that any such goodwill in Australia could have been passed on from an entity which had ceased to trade here.  The Australian Trade Marks Act does not attempt to deal with the question of assignment without goodwill of unregistered trade marks.  Thus there is no remedy to the situation to be found in the legislation.  However, as Shanahan says in his book, Australian Law of Trade Marks and Passing Off (Second Edition) at p 303:

For the transaction to be viewed as a transfer of property, it must place the assignee in a position to protect the mark.  Without the relevant part of the assignor's business, the assignee will have received no more than a personal right, enforceable only against the assignor.  However, that may well be enough for practical purposes, for in due course, the assignee's own use (if not deceptive) may establish a sufficient reputation to found an action for passing off.

It would appear that the only use of the mark which could attach itself to Marcus was that under agreement with Mr Meier which that person declared he had made in August and October 1989.  However, as I have already said that I do not think that the Australian goodwill which existed with the registered mark survived the demise of GPI, I do not think that Mr Meier's 1989 use on Marcus' behalf was a continuance of use but merely a commencement.  Meanwhile, as Sabra had continued to use the mark after the registered mark 343563 had lapsed in 21 May 1987, I can only conclude that Sabra was the first user of the mark in Australia and thus the proprietor of the mark in this country.  It is not necessary for me to establish who is the "rightful" proprietor of the mark but merely whether Marcus can displace Sabra's claim to ownership by virtue of its application for registration.  As I am not convinced that he has achieved the latter, I dismiss the opposition as it has been based on this ground.

With respect to the grounds under s.28, I cannot concede that a case has been made out that the mark's use by Sabra would be likely to deceive or cause confusion, would be contrary to law or would not be entitled to protection in a court of justice.  Therefore, I also dismiss the opposition as it is based on these grounds.

Conclusion 

In summary, then, I find that the opposition fails on all the grounds relied upon and that, subject to any appeal from this decision, the application number 528989 for the mark GINSU should proceed to registration.  Both parties made submissions as to costs and I can see no reason why costs should not follow the result.  I therefore award costs in the matter to the applicant for the trade mark, Sabra International Pty Ltd.

Ian Forno
Hearing Officer

14 July 1993