Springhill Winery Pty Ltd v Big Shed Brewing Concern Pty Ltd

[2023] ATMO 145

TRADE MARKS ACT 1995

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

Re:Opposition by Springhill Winery Pty Ltd to application under section 92 of the Trade Marks Act 1995 (Cth) by Big Shed Brewing Concern Pty Ltd to remove trade mark number 1096136 (class 33) – Big Shed Wines - in the name of Springhill Winery Pty Ltd

Delegate:	Tracey Berger
Representation:	Opponent: Not represented Applicant: Madderns Pty Ltd
Decision:	2023 ATMO 145 Trade Marks Act 1995 (Cth) – application under section 92 – no use of the trade mark established – discretion not exercised – trade mark to be removed from the Register

Background

1. On 7 December 2021, Big Shed Brewing Concern Pty Ltd (‘Removal Applicant’) filed an application under ss 92(4)(a) and 92(4)(b) of the Trade Marks Act 1995 (Cth)[1] (‘Removal Application’) for the complete removal of the following registered trade mark:

   [1] Unless otherwise stated, each reference to a section or regulation in these reasons is a reference to the Trade Marks Act 1995 (the ‘Act’) or the Trade Marks Regulations 1995 (Cth) (the ‘Regulations’), respectively.

Registration Number:	1096136
Filing Date:	30 January 2006
Trade Mark:	Big Shed Wines (‘Trade Mark’)
Goods:	Class 33: Wine (‘Registered Goods’)
Owner:	Springhill Winery Pty Ltd (‘Removal Opponent’)

1. The Removal Opponent filed a Notice of Intention to oppose removal of the Trade Mark on 26 January 2022 and a Statement of Grounds and Particulars (‘SGP’) on 17 February 2022.  The Removal Applicant filed a Notice of Intention to Defend on 17 May 2022.

2. In accordance with the timetable set out in reg 9.16, the Removal Opponent then filed Evidence in Support (‘EIS’) of its opposition on 16 August 2022 consisting of a declaration of Rachel Liu, director of the Removal Opponent, made on 14 August 2022 with attachments.  The Removal Applicant chose not to file any Evidence in Answer.

3. Once the time allowed for filing evidence had ended, the parties were given an opportunity to request a hearing.  The Removal Applicant initially requested an oral hearing and this matter was set down for a hearing by me in my capacity as a delegate of the Registrar of Trade Marks.  The Removal Opponent did not pay the hearing fee or file written submissions.  The Removal Applicant filed written submissions on 13 September 2023.  As the Removal Opponent had not elected to participate in the hearing, the Removal Applicant requested that the mater be decided based on written submissions.  I make my decision based on the material filed during the proceeding as outlined above.

   Legal Framework

4. Part 9 of the Act deals with removal of trade marks from the Register for 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;

   (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.

5. Sections 92(4)(a) and 92(4)(b) provide distinct and alternative grounds for removal. Because of the specifics of these provisions, paragraph (a) is considered to effectively merge with paragraph (b) once a trade mark has been registered for five years.[2] As the Trade Mark had been registered for more than five years as at the date of the application, I need only consider the application for removal under s 92(4)(b) in this case.

   [2] M Davison and I Horak Shanahan’s Australian Law of Trade Marks and Passing Off 6th edition, 2016 Thomson Reuters, [70.510].

6. I note that an application under s 92(4)(b) may not be made before a period of five years has passed from the filing date of the application,[3] and I confirm that five years since filing the Trade Mark have in fact passed.

   [3] Per s 93(2) prior to the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018 (sch 1, pt 3) as applies in the present matter. The updated s 93(2) applies to trade marks filed from 24 February 2019 onwards.

7. Under s 92(4)(b), the relevant period during which the Removal Opponent must establish use of the Trade Mark is the three year period ending on 7 November 2021 (‘Relevant Period’).

8. The Removal Opponent bears the onus of rebutting an allegation of non-use[4] by establishing, on the balance of probabilities,[5] that it has used the Trade Mark for the Registered Goods during the Relevant Period or that there were circumstances that were an obstacle to use in the Relevant Period.[6]

   [4] Act s 100(1)(c).

   [5] Pfizer Products Inc. v Karam [2006] FCA 1663 (Gyles J); Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [133] (Besanko, Jagot and Edelman JJ), albeit in respect of an action opposing registration rather than removal.

   [6] Act s 100(3)(c).

9. In Woolly Bull Enterprises Pty Ltd v Reynolds,[7] Drummond J observed that the expression ‘use in good faith’ has a well understood meaning in terms of s 92, namely it is ‘real, as opposed to token, use in a commercial sense’. Provided the use is in good faith, ‘a single bona fide use of the mark’ may be enough to rebut an allegation of non-use,[8] but if a single act of use is relied upon then it should be established by ‘if not conclusive proof, at any rate overwhelmingly convincing proof’.[9]

   [7] [2001] FCA 261, [16].

   [8] Ibid [17].

   [9] Nodoz Trade Mark (1962) RPC 1, 7 (Wilberforce J).

10. In accordance with s 101, the Registrar 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.

    Discussion

    Use During the Relevant Period

11. I must first decide whether there has been use of the Trade Mark in good faith during the Relevant Period in relation to the Registered Goods. If I am satisfied there has been such use, the opposition will succeed. If I am not satisfied there has been use, I must then decide whether to exercise discretion to allow the Trade Mark to remain registered.

12. The ‘use’ in good faith required to be demonstrated by the Removal Opponent is ‘use as a trade mark’. ‘Use as a trade mark’ is use of the sign as a badge of origin in the sense that it indicates a connection in the course of trade between the goods and the person who applies the sign to or in relation to those goods.[10]  Use in the course of trade means an actual dealing in the goods, an offer for sale of goods, or an intention to offer goods for sale manifested through preparatory steps showing an objective commitment to use the trade mark.[11]

    [10] Coca-Cola Co v All-Fect Distributors Ltd [1999] FCA 1721, [19] (Black CJ, Sundberg and Finkelstein JJ).

    [11] Angela Christou v Tonch Pty Ltd [2008] ATMO 24; see also Dick Smith Investments Pty Ltd v Ramsey [2016] FCA 939 (Katzmann J).

13. In the SGP, the Removal Opponent claimed:

    Big Shed is our landmark, it's a feature of our property. Our property is approx. 20 ha in size including a vineyard, a pond, a house, a factory, a tasting room and we have a big shed on site for more than 70 meters in length and approx. 7m in height. We have intention to keep this landmark as this trademark is reflecting our land features. We are located in VIC, we have no intention to use this trade mark/name in a different state.

    Although we going through difficult time during Covid, we are recovering now. We still have the producing licence (sic) and we have intention to produce wines with BIG SHED WINES trade mark label on. Our marketing strategy is good, better, best on price point, with BIG SHED WINES brand be our every day entry level, showing our land mark "big shed" on the label, and "Springhill" being our better range. We are planning on marketing "win a trip to BIG SHED" when purchase "BIG SHED WINES".

    Our BIG SHED WINES label wines is targeting overseas export market and cellar door entry level wines. We plan to use this label to advertising our landmark, also encourage tourists to come visit our vineyard, which currently also provide accommodation service.

    Every company would have some financial difficult time, it is not our choice that soon after we bought this place Covid hit the world. We haven't been able to use this trademark does not mean we do not want to use, this should not be the reason to force us give up on our intangible assets. Our previous owner has registered this trade mark since 2006 and made good use of it. This is also one of the reasons why we bought this place.

14. In the EIS, the Removal Opponent claims that “Big Shed Wines were activing [sic] trading and won several awards, wine photos attached”.  I take this to mean the previous owner had used the Trade Mark and note that the photos attached show wines with “big shed 2009” labels.  There is also a SPRINGHILL 2008 Pinot Noir pictured but this does not appear to feature the Trade Mark.  The other pictures are of labels for wines from 2014, 2016 and 2017 vintages but these are not affixed to bottles and there is no evidence that wines bearing these labels were sold.  Further, the business plan discussed below indicates that these other pictures are new wine labels that had not been used for the sale of wine during the Relevant Period.

15. Ms Liu declares that a new business plan and new partnership agreement has been entered into to trade as Big Shed Wines.  New wine labels have also been prepared.  A copy of “Springhill Winery Business plan” dated 5 March 2022 is attached (‘Plan’) but there are no further details about the partnership agreement.

16. The Plan refers to the purchase of the property (presumably by the Removal Opponent) in 2017 with the premises being renovated after the purchase settled in 2018.  The Plan states that pinot noir grapes were first planted on the property 23 years ago and the production of other wine varieties from locally sourced grapes were sold from 2001. 

17. In addition, the Plan specifies different varieties of wine vintages ranging from 2004-2013 as stock that the Removal Opponent has on hand for sale and which was presumably acquired as part of the purchase from the previous owner of the property.

18. It is clear from the Plan that the Removal Opponent has not used the Trade Mark during the Relevant Period for the Registered Goods.  Furthermore, there is no evidence of the sale of wines under the Trade Mark by the prior owner during the Relevant Period even though settlement of the sale of the property did not occur until 2018.  Moreover, other than the creation of the Plan and creation of new labels, there is no evidence of the Removal Opponent taking preparatory steps during the Relevant Period to use the Trade Mark.  Also, it is not clear from the Plan when the Removal Opponent will actually commence selling the Registered Goods under the Trade Mark.  As Hill J noted in Unilever Australia Limited v George Karounos and Sabre International Limited:

    Evidence of intended use is not evidence of use where the intention is not implemented. Nor is a proposal to grant licences. … In any case, mere entry into a licence agreement is not evidence of use whether under the authority of the registered owner or at all.[12]

    [12] [2001] FCA 1132, [62].

19. Accordingly, the preparation of the Plan, creation of new wine labels and entry into a partnership agreement (particularly in the absence of supporting documentation) is not use of the Trade Mark for the Registered Goods but merely suggests an intention to use the Trade Mark at some undefined point in the future.

20. I am not satisfied that the Trade Mark was used for the Registered Goods during the Relevant Period.    

    Obstacles to Use

21. A removal opponent may rebut an allegation of non-use by establishing that a failure to use the mark in the relevant three-year period was ‘because of circumstances (whether affecting traders generally or only the registered owner of the trade mark) that were an obstacle to the use of the trade mark during that period’. The circumstances must be ‘an obstacle to the use of the trade mark by the registered owner’.[13]

    [13] Woolly Bull Enterprises Pty Ltd v. Reynolds [2001] FCA 261, [47] (Drummond J).

22. Both the SGP and EIS make reference to Covid-19 pandemic having an adverse impact on the Removal Opponent’s business.  However, there are no details about why the Removal Opponent could not have sold the wine in stock either locally or over the Internet.  There is no evidence that upon acquiring the property in 2018 that the Removal Opponent would have used the Trade Mark but for the Covid-19 pandemic.  Accordingly, I am not satisfied that the pandemic constituted an obstacle to the Removal Opponent’s use of the Trade Mark in the Relevant Period.  It is therefore necessary to consider whether I should exercise my discretion to allow the Trade Mark to remain on the Register for the Registered Goods.

    Registrar’s Discretion

23. The policy of the Act is to facilitate the removal of an unused trade mark and the public interest in the integrity of the Register will generally demand the removal of an unused trade mark.[14] In PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd, the Full Court of the Federal Court provided the following observations regarding the discretion under s 101(3):

    [14] M Davison, I Horak Shanahan’s Australian Law of Trade Marks and Passing Off online edition, 2022 Thomson Reuters, [70.2505].

    The following propositions are relevant to the exercise of this discretion:
    
    

    (1) It is broad and is unfettered in the sense that there are no express limits on it. It is to be understood as limited only by the subject-matter, scope and purpose of the legislation and, in particular, by the subject-matter scope and purpose of Part 9 of the Trade Marks Act.

    (2) The scope and purpose of the Trade Marks Act strikes a balance between various disparate interests. On the one hand there is the interest of consumers in recognising a trade mark as a badge of origin of goods or services and in avoiding deception or confusion as to that origin. On the other is the interest of traders, both in protecting their goodwill through the creation of a statutory species of property protected by the action against infringement, and in turning the property to valuable account by licensing or assignment. ...

    (3) The particular purpose of Part 9, within which s 101 falls, is to provide for the removal of unused trade marks from the Register. It is designed to protect the integrity of the Register and in that way the interests of consumers. At the same time, it seeks to accommodate, where reasonable to do so, the interests of registered trade mark owners. Accordingly, the Court must be positively satisfied that it is reasonable that the trade mark should not be removed. The onus in this respect lies on the trade mark owner to persuade the Court that it is reasonable to exercise the discretion in favour of the owner. ...

    (4) The discretion in s 101(3) is expressed in the present tense. It requires consideration of whether, at the time that the Court is called upon to make its decision, it is reasonable not to remove the mark.

    (5) The range of factors considered in the exercise of the discretion has included whether or not:

    (a) there has been abandonment of the mark;

    (b) the registered proprietor of the mark still has a residual reputation in the mark;

    (c) there have been sales by the registered owner of the mark of the goods for which removal was sought since the relevant period ended;

    (d) the applicant for removal had entered the market in knowledge of the registered mark;

    (e) the registered proprietors were aware of the applicant’s sales under the mark;

    (f) A further factor, explicitly noted in s 101(4), but which falls within the scope of the discretion in s 101(3), is whether or not the trade mark under consideration has been used by its registered owner in respect of similar goods or closely related services.[15]

    [15] [2021] FCAFC 128, [153] (Jagot, Nicholas and Burley JJ) (emphasis altered) (citations omitted).

24. In the present case, there is no documentary evidence that the Removal Opponent has ever used the Trade Mark in Australia nor that the prior owner of the property made sales of the Registered Goods under the Trade Mark.  Whilst the EIS indicates that the Removal Opponent has some plans to use the Trade Mark in the future for the Registered Goods, it is not apparent when such use will commence.  Furthermore, the Removal Opponent has not made any submissions or attempted to persuade me that I should exercise my discretion.  In the circumstances, I am not satisfied that it is appropriate to exercise my discretion to allow the Trade Mark to remain on the Register.

    Decision

25. The Removal Opponent has not rebutted the allegation of non-use.  Accordingly, I direct that trade mark registration number 1096136 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.

26. The Removal Applicant has sought its costs. It is usual for costs to follow the event and I see no reason to depart from that principle in the present case. I award costs against the Removal Opponent under s 221 in the relevant amounts set out in Schedule 8 of the Regulations.

    Tracey Berger
    Hearing Officer
    Oppositions and Hearings
    Trade Marks and Designs
    28 September 2023