Sport Direct Holding BV v Reece Pty Ltd

[2015] ATMO 78

TRADE MARKS ACT 1995

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

Re:Opposition by Reece Pty Ltd to application under section 92 of the Act by Sport Direct Holding BV to remove trade mark number 1273317 (16, 18, 25 and 28) - - in the name of Reece Pty Ltd

Delegate:	Bianca Irgang
Representation:	Opponent: Mr Ed Heerey of Counsel, instructed by Allens Linklaters Non-use applicant: Ms Natalia Blecher of Corrs Chambers Westgarth
Decision:	2015 ATMO 78 S 96 opposition– no use shown for any of the goods in classes 18, 25 and 28– s101(3) - Registrar’s discretion not appropriate – non-use application successful – trade mark 1273317 to be removed from the Register for all goods listed classes 18, 25 and 28.

Background

1. This matter is an opposition proceeding under section 96 of the Trade Marks Act 1995 (‘the Act’) in which by an application under subsection 92(4)(b) filed on 20 December 2013, Sport Direct Holding BV (‘the non-use applicant’) has sought the partial removal from the Register of the trade mark (‘Trade Mark’) appearing below in respect of the goods in classes 18, 25 and 28 for which it is registered:

Trade mark:  

Trade mark number:           1273317

Date of registration:             20 November 2008

Goods:Class 16: Paper, cardboard and goods made from these materials, not included in other classes; printed matter; booklets; brochures; diaries; photographs; stationery; artists' materials; office requisites (except furniture); instructional and teaching material (except apparatus); plastic materials for packaging (not included in other classes)

Class 18:Bags including sports bags, travel bags; cases in this class; purses and wallets; backpacks; umbrellas

Class 25:Clothing, footwear, headgear

Class 28: Games and playthings; gymnastic and sporting articles not included in other classes

1. Reece Pty Ltd (‘the opponent’) filed a notice of intention to oppose removal on 17 March 2014. The statement of grounds and particulars filed on 8 April 2014 asserted that the ground on which the removal applicant relied was not relevant because the owner had used the trade mark in good faith for some or all of the relevant goods during the relevant three year period ending 20 November 2013. The opponent requested that in relation to any goods in respect of which the trade mark had not been used, the Registrar exercise her discretion to retain the registration in its entirety on the Register on the basis that the use or registration of the same or a similar mark on such goods by another party would be likely to lead to confusion of the public.

2. On 30 April 2014 the non-use applicant filed their Notice of Intention to Defend. The parties then commenced filing evidence in accordance with the Trade Mark Regulations 1995 (‘the regulations’).

3. The matter came before me, as a delegate of the Registrar of Trade Marks, at a hearing in Melbourne on 23 July 2015. Mr Ed Heerey of counsel instructed by Allens Linklaters appeared on behalf of the opponent. The non-use applicant was represented by Ms Natalia Blecher of Corrs Chamber Westgarth.

Legal Framework

1. Part 9 of the Act governs the removal of trade marks from the Register for non-use. The sections of that part which are most relevant to the case in hand are sections 92, 96, 100 and 101.

2. Section 92 provides that a person may apply to the Registrar to have a trade mark removed from the Register because it has not been used for a continuous period of three years and/or the original trade mark applicant did not intend to use it in good faith for relevant goods as at the date the application for registration was filed. The removal application must be in accordance with the Regulations[1] and may be made in respect of any or all of the goods and/or services in respect of which the trade mark is or may be registered. Subsection 92(4)(b) as it is relevant to this case provide the following:

   (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:

   [1] Regulations 9.1 to 9.4 of the Trade Marks Regulations 1995.

   …

   (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.

3. As the Registrar’s delegate observed in Courier Luggage Pty Ltd v Wenger SA Inc[2]:

   Section 100(1) of the Act provides that the opponent bears the onus of rebutting the allegation made against it under s92(4) which it may do by, inter alia, establishing that the trade mark, (or, per section 100(3)(a), the trade mark with additions or alterations not substantially affecting its identity), was used by the registered owner in good faith during the relevant period. I proceed on the basis that the relevant standard of proof is on the balance of probabilities.

   The required use is as a trade mark, that is to say it is as a badge of origin in that it indicates a connection in the course of trade between the goods and the person who applies the mark to the goods: for example see E&J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144 at [41] – [43].

   The use must be genuine commercial use in accordance with the test in Imperial Group Ltd v Philip Morris & Co [1982] FSR 72. A single bona fide use of the trade mark during the non-use period may be sufficient to resist an application for removal: Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261; (2001) 51 IPR 149 at [17]. However, Wilberforce J, in Nodoz Trade Mark (1962) RPC 1 (Nodoz) at 7, said that if a registered owner relies on one single act of use of the trade mark, then that single act ought to be established by “if not conclusive proof, at any rate overwhelmingly convincing proof.”

   The tribunal may not be persuaded by evidence that is solely from the internal files of the opponent: Nodoz, supra; or of a circumstantial nature: Trina Trade Mark [1977] RPC 131; although one invoice, if genuine, may suffice: Geo W McPherson v Remington (1999) 47 IPR 636.

   [2] [2015] ATMO 10

4. In the present matter the relevant period for the purposes of subsection 92(4)(b) is the three year period ending on 20 November 2013.

5. Further, section 101 of the Act deals, inter alia, with the Registrar’s discretion:

   Determination of opposed application—general

   (1) Subject to subsection (3) and to section 102, if:

   (a) the proceedings relating to an opposed application have not been discontinued or dismissed; and
   (b) the Registrar is satisfied that the grounds on which the application was made have been established;
   the Registrar may decide to remove the trade mark from the Register in respect of any or all of the goods and/or services to which the application relates.

   (2) Subject to subsection (3) and to section 102, if, at the end of the proceedings relating to an opposed application, the court is satisfied that the grounds on which the application was made have been established, the court may order the Registrar to remove the trade mark from the Register in respect of any or all of the goods and/or services to which the application relates.

   (3) If satisfied that it is reasonable to do so, the Registrar or the court may decide that the trade mark should not be removed from the Register even if the grounds on which the application was made have been established.

   (4) Without limiting the matters the Registrar may take into account in deciding under subsection (3) not to remove a trade mark from the Register, the Registrar may take into account whether the trade mark has been used by its registered owner in respect of:

   (a)  similar goods or closely related services; or
   (b)  similar services or closely related goods;

   to those to which the application relates.

   Note 1:       If the registered owner of the trade mark has authorised another person to use it, any authorised use of the trade mark by that person is taken to be a use of the trade mark by the registered owner (see subsection 7(3)).

   Note 2:       For registered owner see section 6.

6. In Pioneer Computers Australia Pty Ltd v Pioneer KK[3]  Bennett J made the following observations concerning the Registrar’s discretion:

   [167] The discretion under s 101(3) is a broad discretion to decide not to remove a trade mark from the Register or not to carve out some of the goods and services for which the mark is registered, even if s 92 grounds have been made out, if the Court is satisfied that it is reasonable to do so. Irrespective of the lack of use of the trade marks on the removal goods and the removal services in the relevant period, there is a discretion not to alter the registrations.

   [168] In Kowa Company at [98], Lander J rejected the submission that a party seeking the exercise of the discretion needs to show “exceptional circumstances”. In E & J Gallo at [198], Flick J agreed with Lander J that there is no requirement to establish exceptional circumstances. With respect, I also agree with Lander J that there is no warrant to read a requirement for exceptional circumstances into s 101(3).

   […]

   [171] By amendment in 2006, s 101(4) was added to provide that without limiting the matters that the Registrar may take into account in deciding under s 101(3) not to remove a trade mark from the Register, the Registrar may take into account whether the trade mark has been used by the registered proprietor in respect of (a) similar goods or closely related services; or (b) similar services or closely related goods. The parties disagree as to whether or not the matters now raised in s 101(4) are able to be taken into account for the purposes of the unamended section; that is, whether it was necessary to insert s 101(4) to add discretionary factors not previously available, or to clarify that they were always available to be taken into account.

   There is no limitation within s 101(3) on the discretion, nor any indication of the factors to be taken into account. In the Explanatory Memorandum to the Trade Marks Amendment Bill 2006 (Cth) by which s 101(4) was introduced, it is stated that ‘[c]urrently, it is not clear that the Registrar is able to take use on closely related goods or services into account, when deciding whether to exercise his or her discretion not to remove a trade mark from the Register’ and that the amendment was for the purposes of clarifying the Registrar’s discretion.

   [3] [2009] FCA 135; (2009) 176 FCR 300; (2009) 80 IPR 38; [2009] AIPC 92-354

Evidence

1. The declarations that the opponent will be relying on in these proceedings are:

• The declaration of Adrian Palumbo, Marketing and Supply Leader of Reece Pty Ltd accompanied by exhibits AP1 to AP5; and

• The declaration of Ebony Alexander, Employee Relations Co-Ordinator of Reece Pty Ltd accompanied by exhibits EA1 to EA4. 

1. The non-use applicant is not relying on any declarations in these proceedings.

2. The statutory declaration of Mr Adrian Palumbo (‘the Palumbo declaration’) states the opponent’s business began in 1919 when Harold Reece began selling plumbing products from a truck. The business grew and Reece Australian Limited (the opponent’s parent company) was listed on the Australian Stock exchange in 1954. In 2012, the opponent opened its 450^th store. Currently, Mr Palumbo declares that the opponent is a large company which generates revenue of over a billion dollars per annum.

3. Mr Palumbo states that by reason of its size and financial resources both the opponent and its major shareholders engage in extensive philanthropic, sponsorship and promotional activity which extends well beyond the core business. He states that this has included the support and sponsorship of a number of sporting teams including Bendigo Spirit Basketball team (Victoria), South Belgrave Football Club (Victoria), Wilson Grange Australian Football Club (Queensland), Wests Magpies Basketball Club (ACT) and Sportswood Cricket Club (Victoria).

4. Mr Palumbo asserts the Trade Mark has been used on the goods listed in the trade mark registration. He has supplied a number of exhibits which he claims demonstrate the owner’s continual use of the Trade Mark through the relevant period.

5. The Trade Mark is registered for goods in classes 16, 18, 25 and 28. The non-use application is only for removal of the Trade Mark for the goods listed in classes 18, 25 and 28. It is also clear from the statements made in the Palumbo declaration that the opponent’s main area of business has been in the retail of plumbing products and the provision of plumbing services. The point of contention the parties is whether or not the owner has used the Trade Mark on the goods listed in classes 18, 25 and 28 which include (briefly) bags, clothing, footwear and sporting articles.

6. Mr Palumbo states that the opponent has used the Trade Mark on its iconic blue t-shirts continuously from 1980 to date. He also asserts that the opponent has used the Trade Mark on bags, umbrellas, hats, golf balls and clothing which is made available by the opponent to its staff, customers and suppliers. However, the opponent’s evidence does not fully support this statement.

7. Contained in the attachments AP2 and AP4 accompanying the Palumbo declaration are undated photographs t-shirts, vests, sweaters, a cap, a hat, an umbrella, a re-useable shopping bag and golf balls and an undated design mock-ups of t-shirts and a beanie. The non-use applicant submits that the opponent has not used its REECE trade mark during the relevant period on the goods listed in classes 18, 25 and 28. It also contends that any use of the REECE trade mark on t-shirts and the other goods was merely ancillary to the plumbing services which the opponent provides.

8. The non-use applicant directed me to the case of Siberquelle GmBH v Maselli-Strickmode GmBH[4], where the European Court of Justice (‘ECJ’) held that there is not genuine use of a registered trade mark where promotional items (alcohol-free drinks) bearing a registered trade mark are handed out as a gift to those who purchased the clothing of the registered proprietor. In the judgment, the ECJ held that such use was not genuine use. The ECJ also held that where items are not distributed “with the aim of penetrating the market for those goods”, there is no genuine use.

   [4] [2009] ECR 1 – 137

9. This is a persuasive argument. Based upon the opponent’s evidence it is clear that the opponent has used the Trade Mark on t-shirt, sweat shirts, vests, caps, hats, umbrellas, reusable shopping bags and golf balls. However, it is also equally clear that the Trade Mark has been used on a number of these items to denote ownership of the ‘REECE plumbing services’ as indicated below:

T-shirt design (exhibit AP2) Reusable shopping bag (exhibit AP2)

1. The opponent has not provided dates when these reusable shopping bags and t-shirts were provided to the public so it is not even clear if this asserted use falls within the relevant period. Quantities of the goods and when they may have been offered to the Australian public have also not been provided.

2. While the High Court in E. & J. Gallo Winery v Lion Nathan Australia Pty Limited[5] reiterated that a “relatively small amount of use may be sufficient” to maintain a registration, in CSL Ltd v Hong Kong CSL Ltd[6] held that promotional items are marketing instrument and that the use of a trade mark on goods for the purpose of marketing other goods or services did not amount to use of the trade mark in connection with the goods for which the trade mark was registered.

   [5] [2010] HCA 15

   [6] [2008] ATMO 23

3. Given the evidence before me, I am satisfied that this situation is close to the CSL case. The opponent has used the Trade Mark on reusable shopping bags and some t-shirts which is evidenced by photographs in the opponent’s evidence. However, there is no evidence that these “REECE plumbing Centre” t-shirts and reusable shopping bags were actually provided to customers and suppliers by the opponent during the relevant period.

4. When I turn to the other undated photographs within the Palumbo exhibits I can see that the opponent has used the Trade Mark on golf balls and an umbrella. This use is as follows:

25.
Umbrella (exhibit AP2)	Golf ball (exhibit AP2)

1. Once again this use is undated and no specific details or evidence of when the trade mark was used on these goods has been provided by the opponent. Mr Palumbo makes bald assertions that the Trade Mark was used on umbrellas and golf balls which were provided to staff, customers and suppliers during the relevant period but the evidence fails to establish this. The declaration of Ebony Alexander (‘the Alexander declaration’) states that bags, umbrellas, hats and golf balls bearing the trade mark were provided to staff, customers and suppliers at no charge. There is no evidence before me to support either assertion as neither declarant provides details relating to quantities of umbrellas or golf balls ordered or gifted. Nor are any receipts or shipping details are provided in the evidence.

2. Confidential exhibit AP5 does contain a listing of the figures attributable to the sales of uniforms and corporate clothing. The Alexander declaration provides some clarification of what uniforms and corporate clothing some of these sales relate to. I note that the invoices which are provided in the exhibits accompanying the Alexander declaration concern the purchase of clothing, there is no mention of umbrellas or golf balls.

3. If an opponent intends to rely on only slight evidence of use of the registered trade mark, the evidence should be of high provenance and will carry more weight if it provides objective, preferably third party, corroboration of the claims: “Nodoz” Trade Mark[7]. While it is not necessary that the opponent demonstrate a large amount of use during the relevant period, only that the use be bona fide or genuine. 

   [7] [1962] RPC 1

4. It is clear from the opponent’s evidence that the reusable shopping bags and some t-shirts only exist to promote the opponent’s trade in its plumbing services. The use of the Trade Mark on these goods is not use in the course of trade in such goods.

5. The situation regarding the golf balls and umbrellas is slightly different. I note the opponent’s claims regarding use of the Trade Mark on the golf balls and umbrellas, however the evidence does not show such use occurring during the relevant period. The evidence of use before me is simply de minimus and insufficient to resist the application for removal of the Trade Mark for all those goods in classes 18 and 28.

6. I turn now to the evidence put forward by the opponent regarding its use on clothing and headgear. Mr Paulbo asserts that the opponent has used the Trade Mark on clothing and headgear through the relevant period. In particular, he states that the blue t-shirt bearing the Trade Mark which is exhibited in the electronic file contained in exhibit AP3 has been produced continuously from 1980 to date. He also asserts that the opponent has produced a range of corporate wear for its staff and these uniform items have been available for purchase by staff from approximately 1993 to date. Mr Palumbo states that the t-shirts are made for and worn by a broad cross-section of the general population.

7. The Alexander declaration states that since December 2012 and through the relevant period, the opponent has engaged the exclusive services of a third party licensee ‘Designs To You Pty Ltd’ (‘the Licensee’) for the manufacture and supply of staff uniforms, corporate clothing and caps branded with the Trade Mark. According to Ms Alexander, prior to this, a similar arrangement was in place with Yakka Pty Ltd.

8. Ms Alexander declares that the opponent’s employees are granted an annual allowance for the purchase of uniforms and corporate clothing which varies depending on their role within the organization. According to Ms Alexander, the Trade Mark is applied to all uniforms, corporate clothing and caps by the Licensee under the control and authorization of the opponent. She states:

• New employees are granted an initial allowed of $500 within which to place an order for uniforms, corporate clothing and caps through the Licensee.

• After the first six months of employment, the employee is then granted the balance of their $500 allowance for the next six months for purchase any further uniforms, corporate clothing and caps.

• The general range of the annual allowance granted by the opponent to its employees after the first 12 months of employment is $250 to $400 each year.

• The employee allowance does not accrue from one year to the next.

• Employees are able to order uniforms, corporate clothing and caps to a value exceeding their allowance but the employee is then required to cover the cost of any purchases exceeding that allowance through an employee contribution.

• Once the order is placed by one of the opponent’s employees, the goods are manufactured or collected from an existing stock-pile by the Licensee.

1. Exhibit EA4 accompanying the Alexander declaration contains copies of the first ten invoices which are listed without detail in confidential exhibit AP5 accompanying the Palumbo declaration. These invoices in exhibit EA4 provide the detail that was lacking in the earlier confidential exhibit. The invoices itemize the uniform goods purchased by the relevant employee. They show that REECE branded pants, shirts, jackets, cardigans, ties and vests were purchased by the opponent’s employees using their employee allowance and where that is exceeded, employees paid the balance. Examples of how the Trade Mark appears on the opponent’s clothing items is located in exhibits AP2 and AP4 and are as follows:

T-shirts, vests, sweatshirts, hats (exhibits AP2, AP4)

1. Mr Heerey, counsel for the opponent, confirmed at the hearing that it is mandatory for the opponent’s employees to wear the approved uniforms which are provided through the Licensee. The evidence demonstrates that only the opponent’s employees may have access to purchase these REECE branded uniform items. The opponent has pointed out that a number of employees have made purchases of the uniforms which exceeds their yearly allowance.

2. The evidence does demonstrate that a number of employees purchase multiples of uniform items which can then exceed the allowance provided by the opponent. While I do note that employees are purchasing REECE branded uniform items with their own funds during the course of their employment I believe it likely that the cost of the uniform items verses the employee allowance may encourage some staff to purchase additional uniform items in order to have more regular changes of clothing. I do not believe that the employees are purchasing additional REECE branded uniform items because the clothing is fashionable streetwear.

3. Ms Blecher, the non-use applicant’s representative, submitted that the opponent’s use of the Trade Mark on uniforms that its employees wore during the course of working in the opponent’s core business providing plumbing services establish that the use of the Trade Mark was ancillary to the primary activities of the opponent. She stated that the use of the Trade Mark on employee uniforms was a form of advertising or marketing the plumbing services. I concur with this characterization.

4. The opponent’s sale of mandatory REECE branded uniform items to its employees as part of their employment is NOT the opponent aiming to penetrate the clothing and headgear market. Indeed, the digital advertisement provided in exhibit AP3 demonstrates that the “navy blue REECE t-shirt” is instrumental to the opponent’s advertising and marketing of its primary services being plumbing services. This advertisement is tongue in cheek in attributing the success of the opponent’s plumbing services to the navy blue t-shirt. Again, this advertisement emphasizes the importance of the navy blue t-shirt as a marketing device for the opponent’s services and indicates the navy blue REECE branded t-shirts are provided incidental to the opponent’s plumbing services rather than a separate or distinct provision of goods in its own right. 

5. Having regard to the evidence and submissions, I am not satisfied that the Trade Mark has been used in respect of any of the goods listed in classes 18, 25 and 28 in registration 1273317 during the relevant period.

Registrar’s Discretion

1. There is a discretion embodied in subsection 101(3) of the Act. That particular part of the legislation reads as follows:

   (3) If satisfied that it is reasonable to do so, the Registrar or the court may decide that the trade mark should not be removed from the Register even if the grounds on which the application was made have been established.

1. The application for removal is for all goods within classes 18, 25 and 28. The opponent has requested the Registrar’s discretion to allow the Trade Mark to remain registered for those goods. However, the evidence of the opponent’s reputation in its plumbing business is sadly lacking in the exhibits before me. While the Palumbo declaration makes statements regarding the opponent’s reputation in its plumbing services these are not supported by any documentary evidence.

2. Therefore, the opponent has failed to show why I should exercise my discretion in relation to those goods in classes 18, 25 and 28 in terms of s101(3).

Decision

1. I find the opponent has not rebutted the allegation of non-use with regards to all the goods in classes 18, 25 and 28. I direct that trade mark registration no. 1273317 be removed for all goods in classes 18, 25 and 28 after one month from the date of this decision has expired.

Costs

1. The non-use applicant has requested its costs. Having been successful, it is so entitled.  I award costs against Reece Pty Ltd at the official scale.

Bianca Irgang
Hearing Officer
Trade Marks Hearings
25 August 2015