Sato Computers Pty Ltd v Shuttle Inc

[2008] ATMO 89

TRADE MARKS ACT 1995

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

Re:Opposition by Sato Computers Pty Ltd to application under section 92 of the Act by Shuttle Inc to remove trade mark number 1018506(9) – XPC (stylized) - in the name of Sato Computers Pty Ltd

Delegate:

Jock McDonagh

Representation:

Opponent: Siobhan Ryan of counsel instructed by Lewenberg & Lewenberg Lawyers

Applicant: Robert Kelson of Callinans Patent & Trade Mark Attorneys

Decision:

2008 ATMO 89

1. Section 92 removal application – ‘person aggrieved’, use of foreign trade mark by distributor, trade mark not relevantly used, opposition unsuccessful.

2. Costs ordered against opponent.

Background

1. Sato Computers Pty Ltd (‘the opponent’) is the registered owner of trade mark registration 1018506 in class 9. The trade mark was registered on 2 September 2004. The trade mark (“XPC mark”) is as follows:

1. On 8 March 2006 Shuttle Inc (‘the applicant’) filed an application under section 92(4)(a) of the Trade Marks Act 1995 (the Act) for removal of registration 1018506 from the register alleging lack of the requisite intention to use, authorize the use of, or assign the trade mark, or non-use of, or non-use in good faith of the mark..

2. The application was supported by a statutory declaration of Robert Charles Kelson in accordance with Regulation 9.1 of the Trade Mark Regulations 1995.

3. On 26 June 2006 the opponent filed a Notice of Opposition to the removal application. The grounds of opposition referred to in the notice were:

a.The applicant is not a person aggrieved.

b.The application for registration of the trade mark was made with intention in good faith to use the trade mark in relation to the goods of the registration, and the trade mark has been so used.

c.If there has been no use of the trade mark, any failure to use was due solely to circumstances that were an obstacle to the use of the mark and not due to an intention to abandon the mark or to an intention not to use it in relation to the goods for which the mark is registered.

d.The Registrar should refuse to remove the mark in the exercise of her discretion.

1. The matter came before me, as a delegate of the Registrar of Trade Marks, for hearing in Melbourne on 17 June 2008.  The opponent was represented by Siobhan Ryan of counsel instructed by Lewenberg & Lewenberg Lawyers. The applicant was represented by Robert Kelson of Callinans Patent & Trade Mark Attorneys.

Evidence

1. The following evidence was filed and served pursuant to legislation:

Declarant	Status	Date, Known as	Exhibits
Evidence in Support
Albert Lok	Sole Director of opponent	23 November 2006, Lok 1	AL-1 to AL-3
Shiau Tsuyuan	Purchasing officer, MSY Technology	13 January 2007, Tsuyuan
George Lee	Purchasing officer, IT Computer Supermarket	18 January 2007, Lee
Lin Zhong Cheng	Manufacture officer, Coltech Electronics Co Ltd (China)	23 January 2007, Cheng
Declarant	Status	Date, Known as	Exhibits
Evidence in Answer
Florence McFarlane	Trade Mark attorney	22 May 2007, McFarlane	FMF-1
Lina Yu	Vice President, Shuttle Inc	15 May 2007, Lu1	LY-1 to LY-15
Evidence in Reply
Albert Lok	Sole Director of opponent	23 October 2007, Lok 2	AL-4 to AL-5
Kirenjit Cheema	Solicitor	23 October 2007, Cheema	KC-1 to KC-4
Applicant’s Further Evidence
Lina Yu	Vice President, Shuttle Inc	28 January 2008, Lu2	LY-16 to LY-18
Michael Jan	Designer employed by Shuttle Inc	8 January 2008, Jan	MJ-1 & MJ-2
Opponent’s Further Evidence
Albert Lok	Sole Director of opponent	28 February 2008  Lok 3	AL-6 & AL-8
Yu Hang Liu	General Manager Sato	29 February 2008 Liu

1. The evidence in support that is not in dispute in these proceedings establishes that the opponent has been selling and distributing computer products and accessories in Australia since late 1998. The director of the opponent, Mr Lok, states in Lok1 that the opponent has been applying the XPC mark to its external hard drives and ‘bare bone systems’ since March 2004 and to computer accessories since September 2005.

2. The remaining evidence in support, which declarations are identical in their content, state that purchasing officers Tsuyuan and Lee have purchased goods bearing the trade mark from the opponent, and manufacturing officer Cheng has sold to the opponent goods bearing the mark.

3. Evidence in answer that is not disputed establishes that the applicant is a Taiwanese manufacturer of small form factor computers and these have been sold in Australia since 2001. The applicant distributed its goods through the opponent since 2001, and under a distributorship agreement since 18 December 2003 for class 9 goods bearing either the “old XPC” mark or the “Shuttle XPC” mark as shown as (a) and (b) respectively:

(a) (b)

1. The distributorship agreement was terminated at some stage in 2004.

2. As well as the XPC mark, the opponent sought to register the “Shuttle XPC” mark on 15 September 2004; however, this was withdrawn on 19 February 2007 (see opponent’s evidence in reply, Cheema declaration exhibit KC-2).

3. After the hearing was conducted, the opponent’s legal representatives wrote to me to bring to my attention the recent decision of Edwards v Liquid Engineering 2003 Pty Ltd [2008] FCA 970 (“Edwards”). I sought submissions from the parties, and responses to each other’s submissions before deciding on a course of action.

4. The decision, with regard to its expressing the law applicable to these proceedings, is binding on me and I have taken it into account in my decision-making process.

Discussion

1. The opponent sought to impeach the applicant’s person aggrieved status. The removal application was made before amendments to the Act removed the requirement for an applicant being aggrieved. It is, therefore, a threshold question to be addressed before the opponent’s evidence of actual use need be assessed.

2. The opponent argued that the only clear statement in evidence that the applicant used or intended to use the 1018506 trade mark in Australia at the time of lodgment of the removal application was in the Kelson declaration; however, the Kelson declaration was not from first hand knowledge.

3. The applicant submitted that the evidence clearly demonstrated that the applicant had been using the trade mark since 2004 and was clearly a person aggrieved.

4. The principles to be applied are well established and are summarised in Unilever Australia Limited v George Karounos & Anor (2001) 52 IPR 361 at 371. Additionally, in Edwards, at paragraph [64], Gordon J states that with regard to a trade mark that is registered by other than the owner or successor-in-interest “[A]ny person who can demonstrate a reasonable possibility of being the true owner or successor-in-interest … is a person aggrieved by that registration within the meaning of s 88 of [the Act]”.

5. The gist of the applicant’s evidence is that it is the true owner of the XPC mark and that the opponent was merely the applicant’s distributor. On that basis, the applicant is arguably in the same circumstances as those described in Edwards. I am therefore satisfied that the applicant is a person aggrieved.

6. The opponent claims a superior interest in the trade mark to that of the applicant. The opponent claims to be the author of the trade mark.  It says that at the time of registration it intended to use the mark in a real commercial sense and has done so continuously since that time.

7. The opponent acknowledges that there was a distributorship agreement with the applicant; however, states that the agreement was with respect to Shuttle XPC branded (see paragraph 9) barebones and motherboards only. The opponent appears to concede that the old XPC and Shuttle XPC marks are the applicant’s trade marks; however, the opponent argues that they are not the same as the XPC mark.

8. The applicant argued that the opponent lacked good faith at the time of application and during use of the trade mark. Further, the opponent was not the owner of the trade mark and knew, or should have known, that the applicant was the true owner.

9. The applicant submitted that the applicant had commenced selling computer products bearing the old XPC mark in Australia in 2001, and that the opponent commenced distributing such products in Australia by the end of 2001. In 2004, and during the life of the distributorship agreement, the applicant submits that it updated its mark to that subsequently registered by the opponent.

10. The applicant submitted that the updated XPC mark is substantially identical to the old XPC mark in any event, and that the applicant remains the true owner of it. The applicant rejects the claim that Mr Lok was the original author of the updated mark. In any event, the applicant claims, the intellectual property in the mark is covered by the distributorship agreement.

11. On the question of ‘good faith’, the applicant submitted that the term meant more than merely ‘use of the mark in a real and commercial sense’. The applicant cited the decision of Hearing Officer Williams in K.D. Rausch Pty Ltd v Oettinger Brauerei [2003] ATMO 69, who found that ‘sharp business practices’ where an applicant knew that a mark belonged to another amounted to ‘bad faith’ and was sufficient to authorize removal.

12. However, this approach, while logical, has been contradicted in the Edwards case cited earlier. It specifically provides (at paragraph [8]) that “[G]ood faith for the purposes of s 92 (4) requires no more than genuine intent to use a mark for commercial purposes; it does not involve any element of honesty or subjective good intentions”. I am bound by this judgment.

13. However, having considered the evidence and submissions, I am not satisfied that the opponent has used the trade mark for the purposes of the Act. I refer to Estex Clothing Manufacturers Pty Ltd v Ellis and Goldstein Ltd (1967) 116 CLR 254, as authority for the proposition that sales by an Australian distributor of a foreign manufacturer’s goods and bearing the latter’s mark do not amount to use of the mark by the distributor for the purposes of a non-use opposition proceeding.

14. I am satisfied that the applicant has been using the old XPC mark shown in paragraph 9 above in Australia from 2001 to at least the time registration 1018506 was filed, through distributors including the opponent. I am further satisfied that the old XPC mark and the XPC mark are substantially identical, in that they both consist of the letters XPC in the same order in a fancy script involving a measure of three-dimensional rendering; see Opala Pty Ltd v Infosys Technologies Limited [2007] ATMO 12.

15. Even if the two marks were not substantially identical, I am satisfied that the applicant created and used the XPC mark on its goods during the period of the distributorship agreement and that the relevant use of the XPC mark in Australia was by the manufacturer, not the distributor. Mr Lok contended in Lok2 that the agreement only covered the Shuttle XPC mark and in respect of barebones and motherboards. However, my interpretation of the agreement is at odds with Mr Lok’s and I am satisfied that the agreement was relevant to the trade mark in question and the opponent had no authority to register it in its own name. I note in passing that the opponent had sought to register the Shuttle XPC mark on 12 September 2004; see Cheema declaration in the applicant’s evidence in reply.

16. I therefore find that the opponent has not established to my satisfaction that it has used the trade mark and direct that trade mark registration 1018506 be removed from the Register one month from the date of this decision.  If the Registrar has been served with a notice of appeal before that time, I direct that removal of the registration shall not occur until the appeal has been discontinued or, in the event of a decision from the Court, the registration be subject to its orders.

Costs

1. The applicant, having been successful in these proceedings, is entitled to its costs which I order against the opponent at the official scale.

Jock McDonagh

Hearing Officer

Trade Marks Hearings

31 October 2008