Structureco Inc v Starite Distributors Pty Ltd

[2000] ATMO 31

TRADE MARKS ACT 1995

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

Re:Opposition by Structureco, Inc. to applications under section 92 of the Act by Starite Distributors Pty Ltd to remove from the Register trade mark registration numbers 597725, 597726 and 681020.

Background

Applications, under s.92(4)(b) of the Trade Marks Act 1995, for the removal from the Register of registration numbers 597725 (25), covering "all goods in this class" and 597726 (42) for "services in this class in relation to the retailing of men's clothing, and men's clothing accessories; services in relation to the retailing of toiletry products for men, namely, colognes; scented soap; scented talc; scented hand and body lotions; shaving cream; after shave; after shave lotion, bath, shower and body gel", both for the word trade mark STRUCTURE were filed by Starite Distributors Pty Ltd (the applicant) on 29 June 1998 and 29 September 1998 respectively. Accordingly, the relevant three year periods of alleged non-use under s.92(4)(b) were, in the case of registration 597725, 29 May 1995 to 29 May 1998; and for 597726, was 29 August 1995 to 29 August 1998. Another application, this time for the removal of registration number 681020 (25) under s.92(4)(a), alleged a lack of intention to use the trade mark at the date of filing - for the mark as shown below:

had previously been filed by the same applicant on 23 January 1998.  The applications for removal were all accompanied by statutory declarations by Douglas Zappelli dated 18 June 1998 (597725), 17 September 1998 (597726) and 19 January 1998 (681020), respectively.  These applications for removal were advertised in the Australian Official Journal of Trade Marks (the Journal) of 23 July 1998 (597725), 22 October 1998 (507726) and 28 January 1999 (681020).  Notices of opposition to these applications were filed, under s.96 of the Act, on 22 October 1998 (597725), 22 January 1999 (597726) and 27 April 1999 (681020), respectively, by the owner of the subject trade marks, Structureco, Inc (the opponent).  The evidence in support of the oppositions to remove registrations 597725 and 597726 comprised an affidavit by Edward Jones, the opponent's Secretary, sworn on 26 April 1999.  The applicant did not serve any evidence in answer.  Similarly, the opponent did not serve any evidence in support of its notice of opposition to the removal of registration number 681020.

The applicant requested a hearing in the matter and it came before me, as a delegate of the Registrar, in Melbourne.  Mr Jeffrey Ryder of Callinan Lawrie represented the opponent.  Mr Stephen Wilson of Griffith Hack appeared on behalf of the applicant.

Submissions
I propose to briefly summarise what I believe were the main arguments presented by Messrs Ryder and Wilson, which are relative to the matter being decided here.  I will then discuss the relevant issues and evidence, and finally give my decision with reasons.

Mr Ryder made separate submissions on the s.92(4)(a) and s.92(4)(b) grounds for removal. He said that the application to remove registration 681020 under s.92(4)(a) was clearly a different matter to that of registrations 597725 and 597726 under s.92(4)(b) and that they should be considered separately.

In relation to the case for leaving registration number 681020 on the Register he said that, for an application to remove a registration made under s.92(4)(a) to be successful, it should be shown that not only did the applicant for that registration file the trade mark with no intention to use it or authorise its use but that it should also be the case that the mark had not been used, or used in good faith in respect of the goods or services for which it was registered.  He said further that the legislation is clear that any application for removal must be in accordance with reg.9(1).  This requires that a declaration be included with the application stating that an inquiry has been made into the use, or otherwise, of the subject mark and which also sets out the findings that support the ground relied upon.  He said that, as the onus under the 1995 Act is on the opponent to removal to rebut allegations under s.92, it is important that any application be completely in accord with that Act.  He submitted that this was not the case here as the declaration accompanying the application for removal had not addressed the grounds under s.92(4)(a) and had merely stated that use of the mark could not be found or identified.  He said that in a previous similar situation, in relation to registration 597725, I made, as the delegate of the Registrar, a decision not to remove the mark under that paragraph but that I used the wrong reasoning in arriving at this conclusion.

On the matter of the applications to remove registrations 597725 and 597726 under s.92(4)(b), Mr Ryder said Mr Jones had stated in his uncontested affidavit that the opponent had records which indicated that seven Australian resident credit card holders had made purchases from it within the last three years. However, he said that the actual purchase records, which would have included offers for sale and other sale inducing information, were not available and that this was understandable given the size of the opponent company. He submitted that the account holders referred to had already purchased STRUCTURE brand clothing and that they would have made their original purchases by use of credit cards.  He said that the offers for sale of goods in Australia to these card holders and the availability of these goods to those customers amounted to use of the goods sufficient to defeat removal action under s.92.  He referred to the decision in Amalgamated Tobacco Corporation Limited (1951) 82 CLR 199 (the Yanx case), to support his submissions here and also that any use shown, no matter how small, was sufficient to defeat a removal application under s.92.  He said that the opponent's offers to sell by mail order, which accompanied its customers' credit card statements, equated to use of the mark on the goods covered by registration number 597725 and on the retailing services covered by registration number 597726.

Mr Wilson, in his submissions on behalf of the applicant, said that that party was shown by the evidence to be a person aggrieved. He first addressed the opponent's case against the removal of registration numbers 597725 and 597726 under s.92(4)(b), by saying that the credit cards, referred to by the opponent in its evidence, in fact appeared to be instore cards for use in stores owned by that party in the USA. He said that there was no evidence of exactly what literature was sent to customers in Australia, whether it referred to clothing at all and whether such action could be regarded as use in the course of trade in the relevant goods. He referred to the Yanx case, supra, and also Thunderbird Products Corp v Thunderbird Marine Products Pty Limited 131 CLR 592 (the Thunderbird case) in relation to the meaning of the latter term.  He further referred to Shanahan's book, Australian Law of Trade Marks and Passing Off (Second Edition) and the cases mentioned there at pp.29 and 30.  There, the author discussed the issue of whether advertisements alone constituted use of a trade mark and concluded that they did not imply and neither were they inferred as an invitation to treat.  Mr Wilson said that, here, any advertising material which might have been included with credit card statements intended for Australian residents, was incidental to the main purpose of the statements and was not an invitation to trade.  He further relied upon the W.D. & H.O. Wills (Aust) Ltd v Rothmans Ltd case at (1956) 94 CLR 182, to support his submissions here. He said that it was debatable whether that material even referred to the subject goods and also that any purchases which might have been made by the recipients were imported for their own consumption and did not represent use of the trade mark STRUCTURE in the course of trade, and on the relevant goods or services, in Australia.

In the matter of the application under s.92(4)(a) to remove registration number 681020, Mr Wilson said that the same issues had been argued in conjunction with the previous application to remove registration 597725 from the Register under that ground.  He said that, notwithstanding the adverse decision (to the removal applicant) in that case, in the present matter the Jones affidavit did not establish any intention by the owner of this mark to use it.  He said that I should decide that the mark was not filed with an intention to use the mark because there had been no use shown in the past three years.  He said that, despite the opponent's claim that brochures had been placed in envelopes addressed to seven credit card holders in Australia, this did not equate to an intention to use it as at the time of filing.

Discussion
The sections of Part 9 of the Trade Marks Act 1995 which are relevant here read as follows:

Application for removal of trade mark from Register etc.

92.(1)  A person aggrieved by the fact that a trade mark is or may be registered may, subject to subsection (3), apply to the Registrar for the trade mark to be removed from the Register.

...

(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.

Person aggrieved

The threshold question, which needs to be resolved in a matter of an application under s.92 for removal of a registered mark, is whether the applicant is a "person aggrieved" in terms of that section of the Act. Only such a person can make an application for removal. The criteria for determining whether the applicant is such a person under the present Act has not altered from that considered in relation to s.23 of the Trade Marks Act 1955.  The meaning of the term was defined, for the purposes of that section, by McLelland J in The Ritz Hotel Ltd v Charles of the Ritz and Another 12 IPR 417 at p.454:

It is sufficient for present purposes to hold that the expression would embrace any person having a real interest in having the Register rectified, or the trade mark removed in respect of any goods, as the case may be, in the manner claimed, and thus would include any person who would be, or in respect of whom there is a reasonable possibility of his being, appreciably disadvantaged in a legal or practical sense by the Register remaining unrectified, or by the trade mark remaining unremoved in respect of any goods, as the case may be, in the manner claimed.

The applicant here has applied for the registration of trade marks which include the word STRUCTURE in Classes 25 and 14.  Either one or all registration numbers 597725, 597726 and 681020 have been cited as covering prior registered marks which preclude the applied for marks' acceptance.  This is, in my opinion, enough to show that the applicant for removal has sufficient interest in the proceedings to be a “person aggrieved”.  Accordingly, I find that the applicant is such a person and qualifies to apply for removal of the present trade marks from the Register.

Opposition

Notice of opposition

96.(1) Any person may oppose an application under section 92 by filing a notice of opposition with the Registrar or the court, as the case requires.

Unlike s.92.(1), where only an aggrieved person may apply to have a mark removed from the Register, s.96.(1) allows any person to oppose that application.  In this instance, as with the majority of oppositions to removal, it is the registered owner of the registrations involved which has opposed the action sought.

Onus

Burden on opponent to establish use of trade mark etc.

100.(1) In any proceedings relating to an opposed application, it is for the opponent to rebut:

...

(c)any allegation made under paragraph 92(4)(b) that the trade mark has not, at any time during the period of 3 years ending one month before 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.

...

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

...

(c)the opponent has established that the trade mark was not used by its registered owner in relation to those goods and/or services during that period 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.

Under s.100, the onus is clearly upon the opponent to establish that, on the day that the subject application for registration was filed, the owner did have an intention in good faith to use the trade mark, use the mark in good faith during the s.92 period, or that circumstances existed that were an obstacle to that use.  I must decide, as the Registrar’s delegate, whether the opponent has met that onus sufficiently by clearly showing that a registered trade mark has been used in the course of trade, or that there existed circumstances which prevented use.

Opposition to the removal of registration number 681020
As I said before, removal from the Register of the trade mark covered by registration number 681020 has been sought under a different ground to that of registration numbers 597725 and 597726.  Accordingly, I will first deal with the former case, where removal has been sought because, allegedly, the applicant had no intention in good faith, on the day that the application for registration was filed, to use the trade mark in Australia and also that it had not used the mark at all in good faith in this country.  I agree with Mr Ryder that, after the initial onus has been met by the opponent, both parts of this section need to be shown in order for the mark to be validly removed under its provisions.  I note here that I dealt with these same matters in my decision as the delegate of the Registrar, dated 13 April 1999, in relation to registration number 597725.  Here, as was done by Mr John Hawker of Callinan Lawrie in the latter case, Mr Ryder has attacked the validity of the application for removal, alleging that it is defective because it does not comply with the regulations.  This is because, allegedly, the declaration (that of Mr Zappelli) accompanying it does not address the all of the grounds relied upon.

The declaration(s) accompanying the application for removal

9.1For the purposes of paragraph 92(2)(a) of the Act (which deals with applications), an application for the removal of a trade mark from the Register:

(a)   must be in an approved form; and

(b)must be accompanied by a declaration made by, or on behalf of, the applicant:

(i)stating that an inquiry into the use of the trade mark has been conducted by, or on behalf of, the applicant; and

(ii)setting out the findings of that inquiry that support either or both of the grounds for the application referred to in subsection 92(4) of the Act.

There is no requirement, under reg.9, that a convincing argument of non-use be included in the declaration (or declarations, as here) accompanying the application for removal.  The only necessity is that the declaration must state that an inquiry has been made by, or on behalf of, the applicant into the use of the mark in question, and that the findings that support either or both of the grounds relied should be set out.  I am of the opinion that this has been the case in the present instance.

Mr Zappelli has, in his declaration, made identical claims to those which he made in relation to the mark which is the subject of registration number 597725.  These are that, from his own knowledge and from information provided by his staff, he believes that the trade mark STRUCTURE has never been used by its owner in Australia.  Having again considered the matter, I advise that still retain the opinion that I expressed in the case of my previous decision regarding the opposition to removal of registration number 597725.  There I said:

I think that the declaration called for in regulation 9.1 can only contain material which the declarant truly believes to be the case.  It is impossible, at this point of human evolution, for one person to know what is happening inside the mind of another.  Therefore, although a party might draw an inference from surrounding circumstances about someone's intentions, they cannot know definitely what these may have been at a particular time.  Mr Zappelli did say, in his declaration, that he believed that the mark in question had never been used by its owner in Australia.  Therefore, he did address the second part of the grounds under paragraph 92(4)(a).  He could have said that he believed that it was not the intention of the applicant for registration to use the mark in good faith in Australia when it applied for its registration - but he did not.  However, given my reservations about mankind's mind reading capabilities, I believe that Mr Zappelli has done as much as he reasonably could, in the present circumstances, in declaring his belief about the actual use of the mark by the registered proprietor.

Consequently, I have decided that the non-use application was properly made and that it was correctly advertised in the Official Journal.

I may, of course, be wrong in that conclusion but that decision has not been overturned by the Federal Court on appeal.  Therefore, I still believe it to be the correct interpretation of that section of the Act.  Mr Zappelli has once more declared what he truly believes and has not addressed what he could not possibly know - without the ability to read minds.  I think that he has done all he honestly can by saying that he believes the mark has never been used by its owner in Australia.  Therefore, I have decided that the non-use application was properly made and that it was correctly advertised in the Official Journal.

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.  As I also said in the decision of 13 April 1999, relating to the opposition to the removal of registration number 597725:

…the opposed removal of a trade mark from the Register should not be done lightly, especially if the applicant's case is apparently based on an assumption.

In the present case, the opponent has asserted that it filed the mark with a bona fide intention to use it in good faith and it has also filed an affidavit from Mr Jones, where he has claimed that offers for the sale of goods bearing the mark STRUCTURE were made to Australian residents.  In answer, the applicant has filed no evidence to support its case of the opponent's lack of its good intentions to use the mark.  Mr Wilson said at the hearing that he believed that the application had not been lodged with the due intention to use the mark in good faith and that the affidavit of Mr Jones did not establish any such intention.  However, as I have said, I think that the applicant needs to do more than that to prove its case in respect of this ground.

I therefore find that the applicant has not been successful in its case to remove registration number 681020 from the Register on the s.92(4)(a) ground.

Opposition to the removal of registration numbers 597725 and 597726
Here, the applicant has alleged under s.92(4)(b) that there has been no use at all of the trade marks involved during the respective critical periods. The opponent has claimed the opposite and clearly has the onus upon it to show that this is the case. This onus to show use is, I believe, heavier than that discussed in relation to an action involving "intention to use" under s.92(4)(a), such as that above for registration number 681020.

Use

Section 7 of the Act says:

Use of trade mark

7.(1) If the Registrar or a prescribed court, having regard to the circumstances of a particular case, thinks fit, the Registrar or the court may decide that a person has used a trade mark if it is established that the person has used the trade mark with additions or alterations that do not substantially affect the identity of the trade mark.

Note:For prescribed court see section 190.

(2) To avoid any doubt, it is stated that, if a trade mark consists of the following, or any combination of the following, namely, any letter, word, name or numeral, any aural representation of the trade mark is, for the purposes of this Act, a use of the trade mark.

(3) An authorised use of a trade mark by a person (see section 8) is taken, for the purposes of this Act, to be a use of the trade mark by the owner of the trade mark.

(4) In this Act:

use of a trade mark in relation to goods means use of the trade mark upon, or in physical or other relation to, the goods (including second-hand goods).

(5) In this Act:

use of a trade mark in relation to services means use of the trade mark in physical or other relation to the services.

Mr Ryder has relied, in saying that use has occurred of the mark STRUCTURE during the critical periods under s.92, upon the undisputed affidavit of Mr Jones.  Mr Ryder has also said that the brochures, which were said by Mr Jones to have been sent to seven Australian resident credit card holders, equated to an offer for sale as contemplated by the Yanx case, supra.  Indeed, as Williams J said in that case, at 204:

On principle and as a matter of common sense, however, it would seem that a mark is used as a trade mark in Australia if it is used here to designate the goods of a particular trader which are offered for sale in Australia under that mark whether the goods themselves are actually in Australia or not.  The goods are put upon the Australian market whether they are in Australia awaiting delivery upon sale or they may have to be imported for delivery after sale.

Also of relevance here, is the Thunderbird case - Thunderbird Products Corp v Thunderbird Marine Products Pty Limited 131 CLR 592, the facts there being that the use relied upon consisted of correspondence between Australia and the US over the relevant period, brochures, an invoice, shipping documents and the goods (a boat) sent from the US. Mr. Justice Jacobs found there that the single instance of a sale and its supporting documentation was indeed a use in Australia and sufficient to establish proprietorship in the mark.

In the present case, the opponent is relying upon the affidavit of Mr Jones relating to sales to Australian residents and the "promotional inserts" included with credit card statements, said to be sent to credit holders by the owner of the trade mark, in an attempt to substantiate use of the mark on the goods and services contained in the schedules of the disputed registrations.  Mr Jones says that he has identified seven Australian credit card holders "who have made purchases within the last three years" (presumably, in this context, of the opponent's goods).  However, he also says that these purchases "were not necessarily made from Australia, and may have been made in one of the Corporation's retail stores in North America…".  Notwithstanding this, he says that credit card statements (recording those purchases) would have been sent to these customers at their Australian addresses and that these would have included the inserts offering goods for sale.

I think it is clear that, without specific proof that the subject goods were ordered from within Australia, the purchases said to be made by the seven identified Australian residents cannot be inferred as use in this country within the relevant period.  Therefore, what I must now decide is whether the brochures, said by Mr Jones to be sent to those customers with their credit card statements, constituted offers for sale, as contemplated by the precedent case law.  I should first note that Mr Jones does not say in his affidavit which brochures were sent to which customers.  Despite this, I have given careful consideration to all of the material.  Many of the opponent's inserts do contain offers of discounts on clothing and are valid for use on dates within the critical period for s.92 purposes.  However, closer inspection reveals that most of these must be physically presented at a store, or are "valid at Structure stores only".  These stores appear only to be located within the USA.  This indicates to me that they are for personal shoppers only and are not targeted at mail order customers.  Three of the brochures include "1800" telephone numbers for use by purchasers, although only one of these relates to clothing.  In any event, none of these telephone numbers is accessible from outside the USA.  Some other brochures do contain information about certain clothing ranges but there is no information included on how to order, or how to obtain the goods.  Some brochures also make the statement that the goods featured are FOR THE AMERICAN MAN, or are CLOTHING DESIGNED FOR AMERICAN MEN, implying that the goods are intended for US residents only.  Still others carry discount offers for bunches of flowers, make offers of "Rewards" certificates linked to an in-house card, announce a competition for underwear models, or can be used to receive free gifts.  None of these are related to the goods or services of the registrations under attack.

Taking all of the foregoing into consideration, I do not believe that it has been convincingly shown that the trade mark, the subject of registration numbers 597725 and 597726, was used in Australia during the period of claimed non-use on the goods and services included in the specifications.  Accordingly, I find that this is the case.

Registrar’s discretion

Determination of opposed application—general

101.(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.

In deciding an opposed removal application, the Registrar (or a court) is called on to exercise a discretion.  The Registrar or a court "may" remove a registration.  The proper exercise of that discretion by the Registrar will generally be as per Ritz Hotel v Charles of the Ritz, supra, at 482:

If the condition of exercise of the court's power has been established, the entry of the mark should be expunged, or the mark should be removed, as the case may be, "unless sufficient reason appears for leaving it there: cf Application by Carl Zeiss Pty Ltd (1969) 122 CLR 1 at 11 and Astronaut trade mark [1972] RPC 655 at 672.

However, the decision of the Registrar is an administrative one, unlike the decision of a court in what may otherwise be the same matter - see the decision of Jacobs J in The Queen v Quinn, ex parte Consolidated Food Corporation 138 CLR 1 at 10. Thus, there may be matters which affect the exercise of the discretion by a court but which are beyond the Registrar’s competence to decide.

Nevertheless, as was said by Deputy Registrar Hardie in the (unreported) Office decision, Beltrami SpA v Figgins Holdings Limited issued on 1 July 1998:

Under subsection 101(3) the Registrar needs to be "satisfied that it is reasonable" to leave a mark on the Register even when the grounds on which the removal application is made have been established.  This requires the Registrar to be satisfied that there is sufficient reason for leaving it there.  The reason would need to be based on special facts and circumstances, or an overriding question of public interest.  The onus for showing that those circumstances exist, is on the opponent to the removal application.

I have had regard to the evidence served in this matter and to the submissions made by the attorneys from both sides at the hearing in deciding, as the delegate of the Registrar, whether there is sufficient reason to leave the mark covered by registration numbers 597725 and 597726 on the Register.  In that respect, nothing was put to me as to why the Registrar's discretion should be exercised in favour of the opponent in this case.  The opponent did not point to any circumstances which might have prevented use.  It merely stated that it did use the mark but then produced nothing convincing to support that assertion.  I cannot see any public interest in leaving a trade mark on the Register which appears, on the evidence and submissions before me, not to have been used in Australia during the critical period.  That interest would appear to be better served by the mark's removal to avoid any possible misconceptions as to ownership of any deceptively similar trade marks.

Conclusion
In relation to registration number 681020, I find that the opponent has been successful in overcoming the claim of non-use made by the applicant on the grounds contained in paragraph 92(4)(a) of the Act.  I therefore refuse to remove the trade mark, the subject of that registration, from the Register in the present instance.

However, in the case of registration numbers 597725 and 597726, The opponent has not, to my satisfaction, discharged the onus placed on it under the Trade Marks Act 1995 of showing why the mark, the subject of those registrations, should not be removed from the Register on the grounds of non-use during the period in question.  Accordingly, I find that the opponent has been unsuccessful in its opposition to the applicant's action under s.92.

Having so found, I direct, subject to any appeal from this decision, that the trade marks covered by registration numbers 597725 and 597726 should be removed for all the goods and services for which they are registered.

Costs
No submissions were made as to costs but I think it is appropriate, given that both sides have been partially successful in their cases, that each party should bear its own costs in the matter, and this I so direct.

Ian Forno
Hearing Officer

10 April 2000