Sansai Japan Australia PTY. Ltd v SMD Technologies Australia Pty Ltd

[2023] ATMO 61

TRADE MARKS ACT 1995

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

Re:Opposition by SANSAI JAPAN AUSTRALIA PTY. LTD. to an application under section 92 of the Trade Marks Act 1995 (Cth) by SMD Technologies Australia Pty Ltd for removal of trade mark number 2109242 (9) – volkano – in the name of SANSAI JAPAN AUSTRALIA PTY. LTD

Delegate:

Nicholas Smith

Representation:

Opponent: Cooper IP Pty Ltd

Applicant: Drayton Sher Lawyers Pty Ltd

Decision:

2023 ATMO 61

Trade Marks Act 1995 (Cth) – section 96 opposition to s 92(4)(a) application for removal – Opponent’s evidence does not show intention to use the Trade Mark for the Registered Goods or actual use of the Trade Mark for the Registered Goods – Exercise of discretion not appropriate – Trade Mark to be removed from the Register

Background

1. This decision is pursuant to an application made on 15 June 2021 under s 92(4)(a) of the Trade Marks Act 1995 (Cth) by SMD Technologies Australia Pty Ltd (‘Applicant’) to remove the trade mark detailed below from the Register of Trade Marks.  The application is made in respect of all the goods for which the trade mark is registered, that is, the application is for complete removal of the trade mark.

Registration No.

2109242

Lodgement date

5 August 2020

Goods

Class 9: Stereo headphones; Audio transmitter units; Portable transmitters; Wireless transmitters; Earphones (other than hearing aids for the deaf); Battery chargers; Mobile phone chargers; Audio cable; Audio cable connectors; Coaxial cables; Computer cables; Optical cables; Printer cables; Telecommunications cable

 (‘Registered Goods’)

Owner

SANSAI JAPAN AUSTRALIA PTY. LTD

Trade Mark

volkano

(‘Trade Mark’)

2.  Unless otherwise indicated, any references to sections or regulations in this decision are references to sections or regulations of the Trade Marks Act 1995 (Cth) (‘Act’) or the Trade Marks Regulations 1995 (Cth) (‘Regulations’), respectively.

3.  SANSAI JAPAN AUSTRALIA PTY. LTD. (‘Opponent’) have opposed the application to remove the Trade Mark, filing a Notice of Intention to Oppose removal on 21 June 2021 and a Statement of Grounds and Particulars (‘SGP’) on 24 June 2021.  The Applicant filed a Notice of Intention to Defend on 11 October 2021.

1. The Opponent subsequently filed evidence in support of its opposition to removal (‘EIS’).  The Applicant filed evidence in answer (‘EIA’).  The Opponent chose not to file evidence in reply (‘EIR’).  This material will be discussed in more detail below.

   5.  On 27 May 2022 the Applicant requested a hearing by video-conference.  The matter was set down for a hearing by video-conference on 16 March 2023 and the matter was allocated to me.  In line with usual practice, an email was sent to the parties on 1 March 2023 which contained a schedule for the provision of written summaries of submissions to be filed prior to the hearing.  The Opponent filed written submissions on 23 February 2023 (‘Opponent’s Submissions’).  The Applicant filed written submissions on 9 March 2023 (‘Applicant’s Submissions’).  At the hearing Stephen Sher represented the Applicant.

   6.  I am a delegate of the Registrar and the matter has been allocated to me to decide, which I have done, on the basis of the material referred to above and the evidence listed below:

   EIS

   • Declaration by Bob Zheng General Manager of the Opponent, dated 22 December 2021 (‘Zheng declaration’) together with Exhibits BZ-1 to BZ-5.

   EIA

   • Declaration by Alam Meskin, director of the Applicant, dated 5 April 2022 (‘Meskin declaration’) together with Annexures AM1 to AM2.
   • Declaration by Clive Sacks, founder of SMD Global Group and Director of SMD Technologies South Africa (Pty Ltd), related entities of the Applicant, dated 5 April 2022 (‘Sacks declaration’) together with Annexures A to J.

   The Relevant Provisions

   7. Part 9 of the Act deals with removal of trade marks from the Register on account of non-use. In respect of this matter s 92 relevantly provides:

   92  Application for removal of trade mark from Register etc.

   (4)An application under subsection (1) or (3) (non‑use application) may be made on either or both of the following grounds, and on no other grounds:

      (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;

2. The onus of rebutting an allegation of non-use lies with the Opponent. This onus is articulated in s 100 which provides, relevantly to this matter:

   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) any allegation made under paragraph 92(4)(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 opposed application relates (relevant goods and/or services ); or
   (b)  any allegation made under paragraph 92(4)(a) that the trade mark has not, at any time before the period of one month ending on 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; or

   […]

   (3) For the purposes of paragraph 1(b), the opponent is taken to have rebutted the allegation that the trade mark has not, at any time before 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

   [...]

3. I proceed on the basis that the standard of proof is the ordinary civil standard being on the balance of probabilities.[1]

   [1] Pfizer Products Inc. v Karam [2006] FCA 1663 (Gyles J) and more recently: Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [133] (Besanko, Jagot and Edelman JJ) in respect of oppositions under s 52 of the Act.

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

   Opponent’s Evidence

5. The relevant claims/statements in Zheng are summarised below:

   ·     The Opponent is an Australian company, established in 1995, that supplies electrical and electronics products. Amongst other things it is the holder of Trade Mark 2195990 Volkano, filed on 20 July 2021 for goods in classes 7, 9 and 11[2].

   ·     In 2020 the Opponent decided to launch a range for electrical products and electronics under the VOLCANO brand, later changed to VOLKANO due to trade mark availability issues.

   ·     The first shipments of VOLKANO branded speakers arrived in Australia on 21 December 2021 and the speakers are scheduled to be available for sale in Australia in early 2022.

   ·      As at the time the Trade Mark application was filed (5 August 2020 being the (‘relevant date’)), the Opponent did have the intention to both use and authorise the use of the Trade Mark in relation to the Registered Goods as well as assign the Trade Mark to a body corporate for use in Australia.

   [2] This is incorrect.  The trade mark application was made but has now lapsed.

6. The Annexures to the Zheng declaration contain photos of the Opponent’s portable wireless speakers bearing the Trade Mark, packaging for the same product bearing the Trade Mark and a packing list showing 1200 wireless speakers being shipped to the Opponent in Australia on 30 November 2021.

   Applicant’s Evidence

7. The Sacks declaration contains information relating to the SMD Global Group, a South African company incorporated in 2005 and its decision, in 2019, to set up a subsidiary, the Applicant, to sell its products under the VOLKANO mark in Australia.  The Applicant is the applicant for two trade marks under the VOLKANO mark for goods in class 9 which are currently being blocked by the present registration.  It is apparent that the SMD Global Group sells products similar to the Registered Goods under the VOLKANO mark. The remainder of the material in the Sacks declaration, including the annexures, relates to the SMD Global Group’s use of the VOLKANO mark and the establishment of the Applicant.[3]

   [3] Other then potentially in respect of the exercise of the Registrar’s discretion however it has not been necessary to refer to this evidence in deciding this matter.

8. The Meskin declaration states that the declarant, who is also a director at a related company, entered into a partnership with the SMD Group in 2019 for the purposes of selling their VOLKANO products in Australia.  On 11 March 2020 the declarant had discussions with a retailer about the retail of the SMD Group’s VOLKANO products.

   Discussion

9. Though the onus is, in terms of s 100, on the Opponent in this matter, that onus is not particularly arduous.  In Aston v Harlee Manufacturing Co[4] Fullagar J observed:

   […] the making of the application itself is, I think, to be regarded as prima facie evidence of intention to use. I cannot think that the Registrar is called upon to institute an inquiry as to the intention of any applicant, and I think that, on … a motion to expunge, the burden must rest on … the person aggrieved, of proving the absence of intention. Again, I do not think that “intention” in this connexion ought to be regarded as meaning an intention to use immediately or within any limited time.

   [4] [1960] HCA 47; (1960) 103 CLR 391; [1960] ALR 605; 34 ALJR 242, [21].

10. While this observation was made in proceedings under the Trade Marks Act 1955 (Cth), where the onus was on ‘the person aggrieved’ (that is, an applicant for removal), the principle has been held to be sound under the Act. In Structureco Inc v Starite Distributors Pty Ltd[5] the Registrar’s delegate Mr Forno said:

    Although the opponent to removal does bear the initial onus, in accordance with the legislation, I think that, in the case of applications for removal under s.92(4)(a), where the primary allegation regards the state of mind of an applicant for registration about whether it intends to use a mark in good faith, then that onus is not high. I believe that it is so low that it can be overcome if the opponent or its agent states that it was the case that the applicant for registration had an intention to use the mark in good faith. The onus should then shift to the removal applicant to support its case - perhaps by the production of some evidence which might support a circumstantial case of a lack of good faith, or by some other means.

    [5] [2000] ATMO 31.

11. Justice Wilcox went further in Nikken Wellness Pty Ltd v van Voorst:[6]

    I do not think [the Opponent] bears any onus in relation to the application for removal. It is for the applicant for removal […] to persuade the Court that the requirements of s 92(4) are satisfied.

    [6] [2003] FCA 816, [59].

12. The Opponent is an active trading corporation that sells electronic products under a variety of brand names.  Its evidence includes the sworn statement from Mr Zheng that at the relevant date the Opponent intended to use the Trade Mark for the Registered Goods and authorise the use of the Trade Mark for the Registered Goods and assign the Trade Mark to a body corporate for use in Australia.  However this statement is not supported in any way by the remainder of the Zheng declaration, including both the documentary evidence attached to the Zheng declaration and the statements about the actual use of the Trade Mark.  The Zheng declaration indicates that the Opponent has used and intends to use the Trade Mark for wireless speakers, which are not the Registered Goods; indeed the Opponent’s now lapsed trade mark application 2195990 (for a mark identical to the Trade Mark) was for goods that included audio speakers.  

    19. The Opponent, who is legally represented in this proceeding, has clearly been put on notice that a lack of intention to use for the Registered Goods is an issue in these proceedings. The bare assertion of intention to use/authorize use and assign to a body corporate appears to simply be a restatement of the requirements of s 92(4)(a) since it is unlikely that a party would, in respect of a trade mark, both intend to use a mark, intend to authorise the use of a trade mark and also simultaneously intend to assign a trade mark to a body corporate. A party that held a genuine intention to use/authorize/assign a trade mark should at the minimum be able to express what its actual intention was rather than simply restate the requirements of s 92(4)(a), and if it actually held a genuine intention to use, authorize and assign the Trade Mark, explain what its business plan was so that it could do all three things.

    20.     The Opponent has put on no such evidence.  Rather it simply contains the bare assertion, accompanied by evidence of use and intention to use the Trade Mark for goods which are not the Registered Goods.  It would have been within the Opponent’s power to either draft the declaration and/or provide supporting evidence showing an intention to use (and/or actual use) of the Trade Mark for the Registered Goods, were that to be the case.   This has not been done. 

    21.     The case of Brenda Lomas v WM Productions[7] is an example of a case where, notwithstanding the removal opponent making a bare statement of intention to use, such an intention was not found. The Delegate noted that, while the onus was not high, the evidence of the removal opponent fell short of that standard, notwithstanding the bare statement. The present case is similar; the Opponent has made a bare assertion which simply (and somewhat implausibly) restates the requirements of s 92(4)(a) and accompanies it by evidence that suggests that the Opponent actually intended to use the Trade Mark (and indeed did use the Trade Mark) for goods that are not the Registered Goods.

    [7] 2005 ATMO 57 (Hearing Officer Williams).  I note that the removal application was ultimately unsuccessful due to the removal applicant failing to establish standing, notwithstanding the Delegate’s statements as to the outcome had standing been established.

    22.     While noting the relatively low bar placed on the Opponent to shift the onus on the Applicant to show that it lacked the intention to use the Trade Mark, I find that, due to the issues outlined above, the Zheng declaration is insufficient to shift that onus.  I find that the Opponent has failed to satisfy the onus under s 100(1)(a) to show and intention to use or actual use of the Registered Goods.    

    Registrar’s Discretion

    23.   To exercise the discretion in s 101(3) I must be positively satisfied that, despite the lack of use or obstacles to use, it is reasonable to not remove the Trade Mark in respect of the Remaining Goods.[8] The burden of persuasion falls in this regard falls on the Opponent.[9]

    [8] Austin Nichols & Co Inc v Lodestar Anstalt [2012] FCAFC 8, [44] (Jacobson, Yates and Katzmann JJ).

    [9] Ibid.

    24.   The Opponent has made no submissions in respect of the discretion. I therefore do not consider it appropriate to exercise my discretion not to remove the Trade Mark in respect of any of the Registered Goods.  Specifically, there is no evidence that the Opponent has ever used the Trade Mark or intends to use the Trade Mark in the future in Australia for any of Registered Goods.  If it wishes to obtain protection for the Trade Mark for its use for wireless speakers, it may apply for such a registration and indeed the Opponent has made such an application.  Given the importance of the integrity of the Registrar I do not consider it appropriate to exercise my discretion not to remove the Trade Mark in respect of any of the Registered Goods.

    Decision

    25.     The Opponent has not established its opposition to removal. Accordingly, I direct that registration 2109242 be removed from the Register one month from the date of this decision.  If the Registrar is served with a notice of appeal before then I direct that removal shall not occur until the appeal has either been discontinued or, in the event of a decision from the Court, that the registration be dealt with as the Court sees fit.

    Costs

    26. The Applicant has been successful in relation to the application for removal of the Trade Mark and has requested its costs. I accordingly award costs against the Opponent under section 221 in the relevant amounts under Schedule 8 of the Regulations.

    Nicholas Smith

    Hearing Officer

    Delegate of the Registrar of Trade Marks

    16 May 2023