Sunsmart Products (Pty) Ltd v Kimen International Pty Ltd

[2008] ATMO 94

TRADE MARKS ACT 1995

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

Re: Opposition by Kimen International Pty Ltd to an application under section 92 of the Act by Sunsmart Products (Pty) Ltd to remove trade mark number 817129(19) – EXPANDA SIGN - in the name of Kimen International Pty Ltd.

Delegate:

Debrett Lyons

Representation:

Applicant: Ben Fitzpatrick of counsel, instructed by Pizzeys, Patent and Trade Marks Attorneys

Opponent: No representation

Decision:

2008 ATMO 94

Section 92 opposition : use acknowledged but bad faith alleged; bad faith use not shown. Opposition successful and trade mark to remain on the register.

Applicant to pay Opponent’s costs.

Background

1. Kimen International Pty Ltd (‘Kimen’) is the owner of the trade mark registration 817129, shown below, registered in class 19 in respect of “advertising signs”.

2. The application leading to registration 817129 was filed on 10 December 1999 and the trade mark was registered on 31 July 2000.

3. On 13 October 2005, Sunsmart Products (Pty) Ltd (‘Sunsmart’), a South African company, filed an application for removal of the trade mark from the register for non-use under section 92 of the Trade Marks Act 1995 (‘the Act’).

4. Section 92 of the Act was amended by the Trade Marks Amendment Act 2006. The amendments to section 92 are effective only in relation to those removal applications filed on or after 23 October 2006. At the date on which the removal application in this case was filed, section 92 of the Act provided:

   92 Application for removal of trade mark from Register etc.

   (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.

   (2) The application:

   (a) must be in accordance with the regulations; and

   (b) may be made in respect of any or all of the goods and/or services in

   respect of which the trade mark may be, or is, registered.

   (3) An application may not be made to the Registrar under subsection (1) if an

   action concerning the trade mark is pending in a prescribed court, but the person

   aggrieved may apply to the court for an order directing the Registrar to remove

   the trade mark from the Register.

   Note: For prescribed court see section 190.

   (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.

   Note: For file see section 6.

1. The removal application was grounded on sections 92(4)(a) and 92(4)(b) and supported by a statutory declaration of Jennifer Ann Mackie in accordance with Regulation 9.1 of the Trade Mark Regulations 1995.

2. On 10 February 2006 Kimen filed a Notice of Opposition to the removal application under section 96 of the Act. The grounds of opposition are:

   (a)that the trade mark had been used by the registered proprietor in respect of the goods in the relevant three year period; and

   (b)the discretion of the Registrar should be exercised in favour of the registered proprietor on the grounds of the circumstances surrounding the use and registration of the trade mark.

3. The parties served and filed evidence after which the matter came before me, Debrett Lyons, a delegate of the Registrar of Trade Marks, for hearing in Brisbane on 4 September 2008.  Kimen was not represented but relied on the written submissions of its patent and trade mark attorneys, Fisher Adams Kelly.  Sunsmart was represented by Ben Fitzpatrick of counsel, instructed by Pizzeys, Patent and Trade Marks Attorneys.

4. Sunsmart’s submissions were directed exclusively to section 92(4)(b) of the Act. Moreover, as can be seen above, Kimen’s grounds of opposition did not fully address the section 92(4)(a) claim and so for these reasons I treat the dispute as limited to matters arising under section 92(4)(b). I also note here that there was no allegation that Sunsmart was not a person aggrieved within the meaning of section 92.

5. A final preliminary point is that Kimen’s written submissions devoted some space to argument that whilst the trade mark in use differed from the registered trade mark, the differences were not alterations or additions to the registered trade mark which substantially affected its identity within the meaning of section 100(3)(a) of the Act. Sunsmart had nothing to say on that matter and so I treat the issue as free from contest and the decision does not turn on that point in any way.

   The Evidence

6. The parties relied on the following declaratory statements:

   For Kimen

   vLarissa Meyer made 8 May 2006 together with Exhibits LM-1 to LM-16;

   vGary Thrane Cobb made on 2 September 2007;

   vSynda Rose Turnbull made on 5 September 2007 together with Exhibits SRT-1 and SRT-2;

   vAngelina Peta Behan made on 21 July 2008;

   vJoanne Elizabeth Dunn made on 14 April 2008 together with Annexure JED-1;

   vLarissa Meyer made on 7 September 2007 together with Exhibits LM-1 to LM-14;

   For Sunsmart

   vJohn Walter Bailey made on 13 February 2007 together with Exhibits JWB-1 to JWB-23.

   Discussion and Reasoning 

7. Section 100 places the onus on the trade mark owner to rebut an allegation of non-use.   Kimen must therefore show that the trade mark has been used in Australia in respect of the registered goods during the relevant period.

8. For the purposes of section 92(4)(b), the relevant three year period is 13 September 2002 to 13 September 2005.

9. The written submissions made on behalf of Kimen are principally directed towards that evidence which shows use of the trade mark on advertising signs between those dates. At the hearing, Sunsmart did not contest that the trade mark had been used in Australia on the registered goods during that period but submitted, on a proper reading of the Act, that use inured to the benefit of Sunsmart, with the consequence that there has been no use of the trade mark by Kimen and so the trade mark should be removed from the register.

10. Mr Fitzpatrick stated that section 100 requires that the use be by the registered owner, or authorised by the registered owner.  He reasoned that section 7(3) states that authorised use of a trade mark is use of a trade mark by the owner of the trade mark.  Section 8(1) goes on to state that a person is an authorised user of a trade mark if the person uses the trade mark under the control of the owner of the trade mark.  Section 8(2) provides that use of a trade mark by an authorised user is an authorised use to the extent only that the use of the trade mark is under the control of the owner of the trade mark.  In turn, sections 8(3) and (4) are non-exhaustive examples of when a person uses a trade mark under the control of its owner and include the exercise of quality or financial control by the trade mark owner over that other person’s goods or trading activities.  Sunsmart’s submission was that there was no control of the use of the trade mark by Kimen in the requisite sense.

11. Section 100(1)(c) reads:

    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:

    …

    (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.

    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 file, month and registered owner see section 6.

12. Section 6 defines the registered owner, in relation to a registered trade mark, as the person in whose name the trade mark is registered.

13. On a simple reading of the Act, one might have difficulty in seeing anything other than use of the trade mark by its registered owner, Kimen, in satisfaction of section 100. Nevertheless, whilst Mr Fitzpatrick conceded that Kimen has used the trade mark, he argued that only good faith use qualifies for section 100 and, in this case, Kimen’s use had not been in good faith.

14. In short, Mr Fitzpatrick’s submission was that the evidence established that the goods were made by Sunsmart in South Africa and that the trade mark was affixed to the goods by Sunsmart before they were sent to Kimen.  Mr Fitpatrick submitted that the relationship of Sunsmart to Kimen was that of manufacturer and distributor and that the filing of a trade mark by a distributor and subsequent ‘use’ by that distributor does not constitute use in good faith for its own benefit.

15. Those arguments have been heard in other cases.  In K D Rausch Pty Ltd v Oettinger Brauerie [2003] ATMO 69 (19 November 2003), Hearing Officer Williams noted that:

    [T]he Act contemplates "use" of a trade mark in a number of senses. Not everyone who uses a trade mark need be its owner. Authorised use is one case in point. At the other end of the scale, an infringer is also someone who uses a trade mark - that is the essence of the action.

16. So, amongst other things, there can be authorised use, or infringing (unauthorised) use, or if I have understood Mr Fitzpatrick properly, bad faith use even when that use is by the registered proprietor of a trade mark if that person can not be fairly characterised as the true owner of the trade mark.

17. In K D Rausch Pty Ltd v Oettinger Brauerie, an application for removal was brought under section 92(4)(a). The facts were that Rausch (the registered proprietor of the trade mark) had approached a German beer brewer, Oettinger, with a proposal to purchase beer from them for export to Rausch in Australia where Rausch would resell it to the local German community. The beer was exported and Australian sales made by Rausch. When Rausch later learned that another party had been formally appointed as Oettinger’s Australian distributor, Rausch filed an application to register the trade mark OETTINGER BEERS in its own name.

18. At the hearing, Oettinger relied on Estex Clothing Manufactures Pty Ltd v Ellis and Goldstein Ltd (1967) 116 CLR 254 for the proposition that Rausch had not used the trade mark in a requisite trade mark sense and cited Windeyer J. who had reasoned that:

    The manufacturer who sells goods, marked with his mark, to a warehouseman, wholesaler or retailer does not, in my view, thereupon cease to use the mark in respect of those goods. The mark is his property although the goods are not; and the mark is being used by him so long as the goods are in the course of trade and it is indicative of their origin, that is as his products.

    On appeal to the Full High Court, Windeyer J.’s thinking was affirmed in these words:

    By the Act a trade mark means "a mark used or proposed to be used in relation to goods for the purpose of indicating, or so as to indicate, a connexion in the course of trade between the goods and a person who has the right, either as proprietor or as registered user to use the mark, whether with or without an indication of the identity of that person" and "use" in s.23 must be understood in this context. Its denotation is not limited by any concept of the physical use of a tangible object and we have no doubt that when an overseas manufacturer projects into the course of trade in this country by means of sales to Australian retail houses, goods bearing his mark and the goods, bearing his mark, are displayed or offered for sale or sold in this country, the use of the Mark is that of the manufacturer. Indeed, in this case, the respondent [the manufacturer] is the only person who has the right to use the mark and the retailer to whom the goods have been sold for re-sale does not, in any relevant sense, use it.

19. In K D Rausch, Hearing Officer Williams said of the High Court’s decision as it related to the facts before him:

    If the importer has gone further (as here) and has misappropriated the right to be registered as the owner, I do not see how it thereby ceases to be a user of the trade mark. It cannot be said that the actions that would ordinarily amount to use of a trade mark in commerce somehow cease to be use either because the goods originate from the true owner and are thus genuine goods or because the actions were taken by someone who has misappropriated the right to be registered as the owner.

    … …

    As a general statement of principle it is doubtless directed to the correct ends, but cannot be applied to the present facts. Estex was a case where the right of the foreign exporter of the goods to be registered as the owner was under attack. The principle in the present case is an inverted reflection [of that]… ...

    I conclude, therefore, that there has been use by Rausch. However, at and subsequent to the date of filing of the application for registration, it has been use in bad faith. In saying this, I realise that I am giving the words "good faith" in s 92 significant work to do. It is generally said that they are used in s 92, as in s 23 of the previous legislation, in a restricted sense, to filter out bogus or non-commercial use that might otherwise save a registration. There is no doubt that is their primary function. However, there is no reason that this must be the only function. The words have a plain meaning that seems to me to be somewhat broader than "genuine commercial" use. … …

    This is clearly a case where the evidence demonstrates that the registered owner has done more than misinterpret, perhaps innocently, the laws of ownership. It has been guilty of more than what the courts often call "sharp business practice". The timing of the application for registration, together with the history of similar applications, satisfy me that Raush was acting to frustrate the operations of the owner in law of the trade mark. That owner was the brewery, whose rights Rausch itself had already recognised and, indeed, created, by importing the goods in question and putting them into trade in Australia.

    In an opposed non-use matter, what was formerly the onus to establish non-use has been reversed (s 100) when compared to the former s 23 of the 1955 legislation. In the event that an opponent shows use of the trade mark, it is then the applicant who bears the onus of establishing lack of good faith attending that use. In this case, the evidence negates any presumption that the relevant actions were blameless. While Rausch has used the trade mark as an importer and distributor, its actions at the time it filed the application for registration require me to find that, at that time, it set out to take up rights that it already knew belonged to another. Therefore, the only reasonable interpretation open to me is one of filing, and subsequent use, in bad faith, sufficient to authorise removal.

1. Later, in the case of William M Edwards v Liquid Engineering 2003 Pty Ltd [2006] ATMO 70 (31 July 2006), Hearing Officer Thompson heard another application bought under section 92(4)(a) and applied similar reasoning. The facts were that Liquid Engineering used the trade marks EXIT RUST and FUEL SET at a time when Edwards was employed as its national sales manager. Edwards later left the company in dispute with management over unrecovered personal expenses and it was alleged that, within the context of that dispute, he filed applications for registration of the trade marks in his own name.

2. In that case Hearing Officer Thompson wrote :

   Mr Edwards’ motives, whatever they were, at the time of filing the applications, are, in my consideration, ‘fog’ sent to cloud the essential question which is, ‘given Mr Edwards relationship with his employer, at the time that Mr Edwards filed the applications, who in the circumstances of the applications should have been understood to be the true owner of the trade marks?’ Mr Edwards apparently adopts the viewpoint that ownership arises through registration of a trade mark: this is only true, however, in as far as it goes. The other way in which ownership can arise is through use at common-law and such common-law use by a rightful owner is extensively recognized under the Act as a means of establishing or opposing entitlement to registration – see, for example, sections 41, 58 and 60 of the Act. In the circumstances which then prevailed, if Mr Edwards understood, or should have understood, on the day he applied to register the trade marks that he was not the owner of the trade marks, he could not have intended to use them in good faith.

   The early discussion of the general principles of trade mark ownership were discussed in re Hicks' Case (1897) 22 VLR 636, by Holroyd J:

   A person cannot be properly registered unless he is the proprietor. Proprietor is the person who at the moment he makes application to be registered is entitled to the exclusive use of the name, whether he then or before publicly adopted it. A man cannot be said to have adopted a name if someone else has done so before him. Section 19 merely says that the act of applying is to be deemed equivalent to public user. No one could otherwise be entitled to registration as proprietor unless he had publicly used the trade name before. The section does not affect the fact that another person used the name first. The difficulty here is that although Hicks may have by virtue of his application publicly used the name, someone else publicly used it before him.

   For the reasons given by us in the course of the argument, we think this application to expunge Hicks’s name from the register of trade marks as the proprietor of the word "Empress" as a trade mark applied to stoves ought to be granted. In order to substantiate his application to be placed on the register for this word he must have claimed to be the proprietor, and the word "proprietor" must be taken to mean the person entitled to the exclusive use of that name. If there is anyone else who would be interfered with by the registration of the word "Empress" in the exercise of a right which such person has already acquired to use the same word in application to the same kind of thing, then Hicks ought not to have been put on the register for that trade mark, and his name will be properly removed on the application of the person whose right of user was thereby disturbed.

   The first user of the trade marks in question was Liquid Engineering Ltd and/or its predecessor in business, Liquid Engineering International Pty Ltd. The assets (including the intellectual property which includes the trade marks FUEL SET and EXIT RUST) of Liquid Engineering Ltd (receiver and manager appointed) were purchased by the applicant for removal – thus the applicant for removal is now the owner of the trade marks.

   It seems apparent that Mr Edwards tacitly acknowledged at the time of making the applications that his employer had at least some interest in the trade marks FUEL SET and EXIT RUST as he declares that he mentioned to two of the directors at the time he applied to register the trade marks (on or around 3 February 2003) that he had applied to register them as trade marks. If Mr Edwards did not think that Liquid Engineering Ltd had a claim to the ownership of the trade marks, such a conversation with the two directors, (Paul Andrews and Peter Spry), would appear to be pointless.

   … …

   Whether or not Mr Edwards sought to improve his bargaining position with his employer appears to me to be irrelevant: the point is, rather, the trade marks were not those of Mr Edwards, they were owned by his employer at that time. He could not apply for registration intending to use the trade marks in good faith as he obviously knew or should have known (given his relationship with his employer) that the trade marks were not used by his employer and, given the circumstances under which he applied to register them, he could have intended to use them in good faith and neither, subsequently, have used the trade marks in good faith.

   …

   In terms of Hearing Officer Williams’ decision in Bunter v Hobarama LLC [2005] ATMO 49; (2005) 67 IPR 216; (2005) AIPC 92-135, it is (in the circumstances of these matters) for Mr Edwards to convincingly rebut the allegations of lack of good faith. Mr Edwards has not rebutted the allegation that, on the day he filed the applications, he had no intention to use the trade marks in good faith; neither has he rebutted the allegation that any use that he has made of the trade marks has not been use in good faith.

1. That case was appealed to the Federal Court where Gordon J. noted in the preface to her decision that “the issues have not been framed in a way that accurately identifies the dispute between the parties”.  In that case, her honour said:

   The "appeal" came on for hearing on 3 May and again on 12 September 2007. The principal question presented in those hearings was whether evidence of a bona fide intention to use a mark for trading purposes is sufficient to demonstrate good faith even where the applicant for registration gained knowledge of the mark as an employee of the owner of the unregistered mark and in circumstances tending to suggest a breach of fiduciary duties or even (malicious) intent to block a competitor.

   Having considered the evidence led, and submissions made, I was poised to answer that question in the affirmative and uphold the appeal, on the basis that "good 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: see generally E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2008] FCA 934 at [187]-[192] (examining the meaning of "good faith" under related provisions of the TMA). However, during the course of the hearings it became apparent that what LE 2003 really wanted, and should have applied for in the first place, was the expungement of the registrations by Edwards under s 88 of the TMA on the basis that Edwards was not the owner of the unregistered marks: ss 52 and 58 of the TMA. I therefore delayed giving judgment in VID 934 of 2006 so that a separate application could be brought on that basis and the matters resolved together.

2. Her Honour’s words have a clear resonance here but, in any event, that is as much of the prior case law as deserves attention in my view. Leaving to one side the question of whether or not Sunsmart’s cause is in fact a section 88 rectification claim masquerading as a non-use action, the cases make it clear at least that bad faith use within the meaning of section 92 requires proof that it is more probable than not that someone other than the rights holder is the true owner of the trade mark, I would add, in a section 58 sense.

3. Testing that against the facts of this case, Mr Fitzpatrick asks me to observe that the evidence establishes that the goods were manufactured by Sunsmart and the trade mark was applied to the goods by Sunsmart at the time of manufacture.   Moreover, Sunsmart’s relationship with Larissa Meyer predated the incorporation of Kimen to a time when she was an employee of another Australian company which dealt with Sunsmart’s products.    

4. There is little room for doubt that the evidence does support those facts, however they are not necessary and sufficient facts in the determination of who might be the true owner of the trade mark.  What is plain is that Sunsmart appears to have a successful business as a manufacturer of portable signs and has an international client base.  It manufactured various outdoor signs which it sold to Kimen.  At least some of Sunsmart’s products are protected by patent or registered design rights.  What is missing is a proper understanding of the trade marks rights, decoupled from any easy inferences that might be drawn from the ownership of other intellectual property rights, and separated from speculation about the character of the relationship between the parties which, to borrow Hearing Officer’s Thompson’s language, I would be tempted to label as the “fog” in this case.

5. It is common ground that the trade mark SNAP A AD was applied to goods manufactured and sold by Sunsmart and there is no suggestion that trade mark is not the property of Sunsmart.  Kimen provided evidence that Sunsmart continued to use the trade mark SNAP A AD until at least as late as August 2000 but that does not of itself tell whether Sunsmart also had an interest in the trade mark at issue.

6. John Bailey, a director of Sunsmart, declares that his company commenced use of the trade mark in November 1999 in South Africa, Australia, New Zealand and in December 1999 in the United Kingdom.  He states that the trade mark has been used continuously in Australia since 1999.  In more detail, Bailey states that:

   In about September 1999, I was advised by various distributors … particularly in the Australian and European markets, that the trade mark SNAP A AD had little market appeal and did not appear to be appropriate for all of [Sunsmart’s] range of products.

   At the time I discussed the matter with Larissa Meyer.  Having had a long standing business relationship with Larissa Meyer, I requested her assistance in developing a new more appropriate trade mark for adoption by [Sunsmart] in Australia and Internationally.  We consulted with each other throughout the subsequent development of a new trade mark.

   With [Sunsmart’s] consent, Larissa Meyer engaged the services of her sister, Synda Turnbull, who was employed at Copywizz Graphics, to create a new name and image in relation to the products manufactured by [Sunsmart]. …

   The EXPAND A SIGN trade mark was one of a number suggested by the design graphics studio in Australia.  Larissa Meyer and I, in consultation with each other, chose the EXPAND A SIGN trade mark as the appropriate mark to adopt.

   …

   [Sunsmart] started to manufacture and supply its sign products under the EXPANDA A SIGN trade mark as soon as the graphics were settled.  The date of first use of the new EXPAND A SIGN trade mark in South Africa and Australia by [Sunsmart] was in November 1999.  In particular on 8 December 1999, [Sunsmart] invoiced and shipped banner goods to [Kimen] for sale in Australia which bore the EXPAND A SIGN trade mark.  Exhibited hereto and marked JWB-23 is a copy of the invoice showing the same.

   Without [Sunsmart’s] knowledge or authority, on 10 December 1999, Larissa Meyer proceeded with the filing of an application for registration of the trade mark in Australia in the name of [Kimen].

7. Meyer has given her own account of those matters.  Her evidence includes a copy of an affidavit she swore in May 2000, prepared in relation to a High Court action in South Africa between Sunsmart (as respondent) and Expand International AB, Expand Portable Systems Africa CC, and Madhouse Group (Pty) Ltd (as applicants).  In the 2000 affidavit, Meyer stated that:

   In 1999 I was appointed the Sales & Marketing Manager for Kimen International. Kimen International (Pty) Ltd was appointed as the distributor of indoor and portable advertising systems manufactured by Sunsmart Products (Pty) Ltd since early 1999.  At the time, the portable advertising systems were marketed under the trade mark SNAP A AD.

   As Sales and Marketing Manager, my research and surveys conducted in the advertising and marketing industry revealed that the trade mark  SNAP A AD had very little market appeal and that it was inappropriate to be used in relation to the entire range of products manufactured by Sunsmart Products (Pty) Ltd.

   I discussed my findings with John Bailey of Sunsmart Products and the possibility of adopting a trade mark that would have more market appeal  … …

   Subsequent to my discussion with JB I engaged the services [of Copywizz].

   … …

   From a suggestion list of approximately twenty five names supplied by COPYWIZZ GRAPHICS, I managed to shortlist the names to three options namely, POP SIGNS, EXPAND A SIGN and QUICKSIGN.

   … …

   Of the preferred names, my first choice was POP SIGNS, which was unacceptable to our local business name registration authority but EXPAND A SIGN, as the second choice was acceptable.  I immediately proceeded to register the name with the business name authority

   … …

   I immediately proceeded with the filing of an application for registration of the trade mark EXPAND A SIGN in Australia and notified John Bailey to proceed with filing of applications  to register the trade mark in markets of interest to Sunsmart Products Pty Ltd.

   I am able to state that at the time the mark was originated, I was unaware of any trade mark that incorporated the word EXPAND in respect of portable advertising systems and that the design team acted in a bona fide and honest manner in creating the trade mark EXPAND A SIGN.

8. The circumstances under which Meyer made the affidavit are not explained however the tone of the statements suggest they were made in support of Sunsmart’s position in those proceedings.  That assumption is borne out by the evidence of Synda Turnbull, a graphic designer employed by Copywizz during the period January 1998 to March 2000.  She declares that in September 1999 Copywizz was approached by Meyer with a brief to create a new name and logo for the SNAP A AD goods.  She declares that Copywizz only worked with Meyer and her husband in developing the new name for use in Australia and that Sunsmart was content in using the existing name.  She confirms that the first chosen name was POP SIGNS and the logo devised for it was reworked after the choice of a new trade mark settled on EXPAND A SIGN.  Turnbull declares to and exhibits a copy of an affidavit she swore in April 2002.  She describes that affidavit as “support of the Applicant for Removal (named as “the Respondent” in the Affidavit) in respect of an infringement action brought against the Applicant for Removal in the High Court of South Africa … in 2002”.  Reference to that affidavit shows that it carries the same named parties and same plaint number as the affidavit sworn by Meyer.

9. My preliminary remarks on this evidence are these.  First, I attach no weight to statements by Turnbull about the intentions of Sunsmart with respect to the use of trade marks.  Second, it is plain from the evidence as a whole that the affidavit sworn by Meyer was made in more harmonious times in her relationship with Sunsmart and contains statements of fact from which Kimen attempts to distance itself in these proceedings.  Third, the account of the genesis of the trade mark given by Bailey tends towards a slavish reproduction of the earlier affidavit evidence given in the South African proceedings and adds nothing to my understanding of the true ownership of the trade mark other than by way of repeated suggestion that the selection of the trade mark was a consensual process, of which, I say, there is no further corroboratory evidence.

10. Bailey’s evidence requires further critical assessment.  He states that Sunsmart’s first use of the trade mark in Australia was in November 1999.  In support he refers to his Exhibit JWB-4 which he describes as a copy of Sunsmart’s brochure for the period 1999 to 2001.  Exhibit JWB-4 is a double sided colour photocopy of an undated A4 sized flyer.  It carries the trade mark in its registered logo form and against which the symbol ‘TM’ appears.  Underneath the trade mark is the text :

    FOR FUTHER INFORMATION PLEASE CONTACT:

    Expanda Sign

    PO Box 675 Palmwoods Queensland Australia 4555

    Phone: [phone] Fax: [phone] Mobile: [phone]

    Email: sales @expandasign.com

    and below that is a section of the flyer devoted to makers and distributors details in which “Distributed by:” remains blank and “Manufactured by:” carries Sunsmart’s name.

11. That undated exhibit does not of itself prove first use of the trade mark in Australia in November 1999 and it does not establish Sunsmart as the owner of the trade mark.

12. Bailey states that on 8 December 1999, Sunsmart invoiced and shipped banner goods to Kimen for sale in Australia which bore the EXPAND A SIGN trade mark. In that respect, he relies on his Exhibit JWB-23 which is a copy of the invoice.  Exhibit JWB-23 is an invoice dated 8 December 1999 issued by Sunsmart to “EXPANDA SIGN – Australia”.  It carries a “Your Ref” of TRIATHLON and is in relation to goods described as TOWER 3 PANEL 1.25 x 3M HIGH, followed by the further description:

    TRIATHLON AUSTRALIA

    ORDER NO. EXPO1

    LABEL – EXPANDASIGN LABEL ON THE INSIDE OF ALL SIGNS ( AS PER TOP OF PAGE, BUT BLACK & WHITE OKAY, LET ME KNOW IF YOU WANT ME TO EMAIL THE LOGO AS I HAVE IT ON MY SYSTEM) AND PHONE NUMBER 07 5478 9455, AND COUNTRY OF ORIGIN  IE. SOUTH AFRICA

13. The invoice amount, for the goods and for what is described as “REPRO COSTS – Fastprint”, is nil.  The delivery address is 106 McKees Road, Palmwoods, Queenlands (sic.) Australia 4555, Kimen’s address at the time.

14. Amongst the exhibits to Meyer’s declaration I note an email dated 6 December 1999 from Meyer to Bailey.  She wrote:

    I was hoping that you could make a couple of extra’s of the Triathlon Australia signs to use as samples?  If so, I was going to have the consignment shipped to me as per the order form, by the 13th.  This would enable me to unpack my samples, add an invoice to their delivery, to be shipped to overnight to the customer in Canberra

    … …

    Now onto the samples and the agreement.  These two almost go hand in hand.  As you know we are prepared to pay for a licence agreement from you, however what we are not prepared to do is pay for a licence, and then have sales clauses in it like it is an agency agreement.  …  If you want a licence agreement, it should be an exclusive licensing agreement that we are paying for which entitles us to sell your product, exclusively in Australia.

    … …

    Our full trading name is Expandasign, a division of Kimen International Pty Ltd, however this may not always be the case, so I would suggest that you stick to just using Expandasign c/- our address.

1. Meyer’s evidence is that Sunsmart manufactured signs for Kimen for sale in Australia only on order from Kimen and in accordance with order instructions, concerning amongst other matters, use of the trade mark.  She declares that Sunsmart only manufactured signs upon receipt of an order from Kimen and, initially, only affixed the trade mark EXPAND A SIGN to the goods if instructions to do so were given by Kimen.  She states “it was not until some time later that Sunsmart would automatically attach such a label without a specific request to do so”.

2. Kimen’s standard order form carries a section, “Artwork & Special Requests”.  Meyer exhibits a copy of an order form dated 2 December 1999 (Order No. EXP01) in which Kimen requests that a label bearing the EXPAND A SIGN trade mark be attached to the ordered signs and offers to email a copy of the logo. 

3. Based on this evidence, Bailey’s Exhibit JWB-23 is clearer to me and I judge it to no more than reproduce the order instructions from Kimen on 2 December 1999.  Moreover, the pattern of later orders and invoices in evidence shows me that the reference to “EXP01” is most likely a reference to the very first order from Kimen fulfilled by Sunsmart in relation to the EXPAND A SIGN trade mark.

4. There is nothing else in Bailey’s evidence which shows use of the trade mark in Australia in late 1999 or early 2000.  Some of the advertising material in magazines said by Bailey to have been placed by Sunsmart would appear on closer study to be advertisements placed by Kimen.  Other material which links the trade mark and Sunsmart’s name is of unknown vintage and it is unclear whether the material was published outside South Africa.  None of that evidence assists me.

5. In short, I can find nothing in the evidence which suggests to me that Sunsmart first used the trade mark in Australia in 1999, other than on a single invoice which was addressed to Kimen under its assumed dba, Expandasign Australia, and which was responsive to an order placed by Kimen.

6. The remaining evidence is less impressive.  There is no evidence of trade mark applications or registrations in South Africa or elsewhere for EXPAND A SIGN filed or owned by Sunsmart which predate Kimen’s registration.  Sunsmart’s two pending Australian applications, for example, were only filed in 2005.  Kimen has a website at I note that the corresponding domain name was registered on 28 January 2000.  Sunsmart uses the website I note that the corresponding domain name was registered on 28 August 2001. 

7. On 17 October 2003, Sunsmart emailed Kimen two agreements.  There is no evidence that either was signed however the first is called an “Assignment of Intellectual Property Agreement” and names Kimen as the assignor and Sunsmart as the assignee.  The definitions state that the “trade mark” means the trade mark and the trading style “Expandasign” and that the “domain name” means expandasign.com and/or any other domain name, which incorporated expandasign.  In the recitals to the agreement, it is said that the assignor is the proprietor of the trade mark and/or the domain name.  The recitals go on to state that the assignor has agreed to assign the trade mark and the domain name to the assignee in consideration for which the assignee has granted the assignor the “right” (defined as the exclusive right to distribute the products in Australia and some other Asia Pacific countries).  There is a “whole agreement” clause.  The second agreement is called a “Distribution Agreement” and reflects the grant of “right” just described.

8. The principles governing a claim to ownership of an unused trade mark were established by Dixon J in Shell Co of Australia Ltd v Rohm & Haas Co (1949) 78  

   CLR 601, where his Honour stated at 627:

   The basis of a claim to proprietorship in a trade mark so far unused has

   been found in the combined effect of authorship of the mark, the intention

   to use it upon or in connection with the goods and the applying for

   registration.

9. The analysis is different for a trade mark which has been used. In Moorgate Tobacco Co Ltd v. Phillip Morris Ltd (1984) 156 CLR 414 - 432, Deane J. said that:

   the prior use of a trade mark which may suffice, at least if combined with

   local authorship, to establish that a person has acquired in Australia the

   statutory status of "proprietor" of the mark, is public use in Australia of

   the mark as a trade mark, that is to say, a use of the mark in relation to

   goods for the purpose of indicating or so as to indicate a connection in the

   course of trade between the goods with respect to which the mark is used

   and that person.

10. I need not decide in this case whether on the application date of the trade mark, 10 December 1999, Kimen had already used the trade mark in trade in Australia since it is clear to me that on either of these tests it was the owner of the trade mark.

11. This case is only superficially akin to the earlier decisions of the Office and the Federal Court to which I have referred. There is unambiguous use of the trade mark in Australia by its registered proprietor. There is no clear agreement, written or oral, regulating the relationship between the parties with respect to use or ownership of the trade mark. On the evidence, Meyer and Kimen were not and had never been, in a fiduciary relationship with Sunsmart. Broadly, the evidence shows only that Kimen was a reseller of Sunsmart’s goods in Australia and was inclined towards formalization of that agreement on terms which were by no means settled at the relevant time. Sunsmart’s intellectual property rights were in patents and designs relating to the products. There was no claim that it was not the owner of the trade mark, SNAP A AD, but critically, there is no foundation for Sunsmart’s claim that it should properly be seen as the owner of the trade mark EXPAND A SIGN. In summary, I do not consider that on a construction of the Act as argued, or based on my interpretation of the case law, the use of the trade mark by Kimen inured to the benefit of Sunsmart. Nor do I find the use to have been in bad faith.

    Decision

12. Trade mark 817129 is to remain on the register.  In the event of an appeal from this decision, removal shall not occur until a court might make an order to that effect.

    Costs

13. I order that the applicant for removal pay the opponent’s costs according to the official scale.

    Debrett Lyons

    Hearing Officer

    Trade Marks Hearings

    3 December 2008