SurfStitch Pty Ltd v One Day Bridal Pty Ltd

[2022] ATMO 120

TRADE MARKS ACT 1995

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

Re:Opposition by SurfStitch Pty Ltd to an application under section 92 of the Trade Marks Act 1995 (Cth) by One Day Bridal Pty Ltd for removal of trade mark number 1418250 (classes 25, 35) – CHOSEN LABELS – in the name SurfStitch Pty Ltd.

Delegate:

Nicholas Barbey

Representation:

Opponent: Ben Fitzpatrick of counsel instructed by Spruson & Ferguson

Applicant: Ryan Maguire of counsel instructed by Studio Legal

Decision:

2022 ATMO 120

Trade Marks Act 1995 (Cth) – application under section 92 – removal sought for entire registration – no use demonstrated in relevant period – discretion not exercised – registration to be removed.

Background

1. SurfStitch Pty Ltd (‘Opponent’) is the owner of the following Australian trade mark registration:

   Trade Mark:  (‘Trade Mark’)

   Registration Number:                   1418250

   Filing Date:  5 April 2011

   Specification:  Class 25: clothing including casual clothing, surf wear and clothing for surfing, swimwear, body suits, waterproof and water-resistant clothing, windproof clothing, sports clothing, thermal clothing, jerseys, jackets, hoods, raincoats, jumpers, shirts and T-shirts, blouses, camisoles and tank tops, singlets, shorts, pants, trousers, jeans and denims, belts, bandanas, scarves, wristbands; footwear including casual footwear, footwear for surfing, beach footwear, thongs, flip-flops, sandals, rubber shoes, sporting footwear, trainers, sneakers, canvas shoes, deck shoes, non-slip footwear, boots, socks; headgear including surfing headgear, sports headgear, waterproof headgear, caps, hats, beach and sun hats, visors (hats), headbands, headscarves, eye shields; surf wear accessories in this class

   Class 35: retailing and wholesaling services including retailing services provided online

   (‘Registered GS’)

2. On 24 June 2019, One Day Bridal Pty Ltd (‘Applicant’) filed a non-use application based on s 92(4)(a) and s 92(4)(b) of the Trade Marks Act 1995 (Cth) (‘Act’) seeking complete removal of the Trade Mark from the Australian Register of Trade Marks (‘Register’).

3. The Opponent filed a notice of intention to oppose the non-use application followed by a Statement of Grounds and Particulars (‘SGP’). In turn, the Applicant filed a notice of intention to defend the non-use application.

4. The evidence stages followed and only the Opponent filed evidence. This evidence consisted of a declaration made on 10 February 2020 by Justin Hillberg, Managing Director of the Opponent, with Exhibits 1 to 5 (‘Hillberg Declaration’).

5. The parties requested to be heard by way of written submissions and a nominal hearing date was scheduled. The Opponent filed submissions prepared by Ben Fitzpatrick of counsel on 7 April 2022 (‘Opponent’s Submissions’) and the Applicant filed submissions prepared by Ryan Maguire of counsel on 14 April 2022 (‘Applicant’s Submissions’). The matter has now been allocated to me for determination as a delegate of the Registrar of Trade Marks (‘Registrar’). In doing so I take account of the above detailed material.

Legal framework

1. Section 92 of the Act relevantly provides:

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.

1. The non-use application was filed on 24 June 2019 and complies with s 93(2) of the Act.[1] Section 92(4)(a) and s 92(4)(b) provide alternative grounds for removal. However, given the manner in which s 92(4)(a) is expressed, it has been accepted that this provision essentially merges with s 92(4)(b) once a trade mark has been registered for 5 years.[2] Accordingly, I will consider the matter under s 92(4)(b) of the Act.

   [1] See Act s 93(2) prior to amendments to that section brought about by the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018 (Cth) sch 1 pt 3. The amended s 93(2) applies to trade marks filed from 24 February 2019 onwards.

   [2] See, eg, Matthew Clark v Hyper Bicycles, Inc [2022] ATMO 58, [13]; Orientis Gourmet v ABCDEX Pty Ltd and Burkhard Geiger [2020] ATMO 134, [17]; Live Entertainment Investments III Pty Ltd v The Education Group Pty Ltd [2018] ATMO 3, [22].

Relevant period and onus

1. The period in which the Opponent must establish use of the Trade Mark in Australia in good faith is the 3 year period ending on 24 May 2019 (‘Relevant Period’).

2. The burden lies with the Opponent to rebut the non-use allegation made under s 92(4)(b) of the Act.[3] Section 101 of the Act provides the Registrar with the discretion to remove the Trade Mark from the Register in respect of any, or all, of the Registered GS. If satisfied that it is reasonable to do so, the Registrar may decline to remove the Trade Mark from the Register even if the grounds on which the non-use application was made have been established.[4]

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

   [4] Ibid s 101(3).

3. I proceed on the basis that the standard of proof required is the ordinary civil standard based on the balance of probabilities.[5]

   [5] Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [133] (Besanko, Jagot and Edelman JJ) in respect of oppositions under s 52 of the Act.

Evidence

1. The Hillberg Declaration describes the Opponent as being ‘one of Australia's most innovative e-commerce businesses’ that ‘offers a selection of over 300 brands throughout Australia and internationally’.[6] Mr Hillberg declares that the Opponent undertook significant and genuine commercial steps to launch the Trade Mark during the Relevant Period. Such steps included planning the budget and resources required to launch the products under the Trade Mark as well as formulating a product launch timeline. Other steps involved ‘the creation of a website for products bearing the [Trade Mark]’ and designing how the website ‘will look once it goes live’.[7] To this end, the Opponent registered the domain name (‘Domain’) in September 2018.

   [6] Hillberg Declaration, [8]–[9].

   [7] Ibid [16].

2. According to the Hillberg Declaration, Alceon Retail Bidco Pty Ltd (‘Alceon’) is the parent company of the Opponent. Between February 2019 to January 2020, Alceon engaged various entities ‘to assist with the creation and eventual launch’[8] of the website that would be accessible from the Domain. Mr Hillberg states that significant expense has been incurred to progress the project and he anticipates that the website ‘will go live in September 2020’.[9]

   [8] Ibid [19].

   [9] Ibid [22].

Discussion

1. The primary issue for determination is whether the Opponent (or an authorised user) has used the Trade Mark in Australia in relation to the Registered GS during the Relevant Period. If the evidence establishes that the Opponent (or an authorised user) has, the non-use allegation is taken to have been rebutted and the Trade Mark will remain registered. If the evidence fails to establish use of the Trade Mark for all of the Registered GS, consideration will turn to whether it is reasonable to invoke the Registrar’s discretion to preserve the Trade Mark for any goods or services that the Trade Mark has not been used in relation to.

2. The evidence of use required to be demonstrated is ‘use as a trade mark’. That is, the Opponent must show that the Trade Mark has been used as a badge of origin[10] and not in a descriptive manner. The extent of use required is not onerous and a ‘relatively small amount of use’ may be sufficient to rebut a non-use application.[11] Potentially, a single bona fide use of a trade mark during the relevant period may suffice to prevent removal.[12] However, if reliance is placed on a solitary example of use, it should be established by ‘overwhelmingly convincing proof’.[13]

Use of the Trade Mark during the Relevant Period

[10] See Coca-Cola Co v All-Fect Distributors Ltd [1999] FCA 1721, [19] (Black CJ, Sundberg and Finkelstein JJ) wherein it was observed that ‘[u]se “as a trade mark” is use of the mark as a “badge of origin” in the sense that it indicates a connection in the course of trade between goods and the person who applies the mark to the goods’.

[11] E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2010] HCA 15, [64] (French CJ, Gummow, Crennan and Bell JJ).

[12] Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261, [17] (Drummond J).

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

1. The SGP states that the Trade Mark ‘has been used in the relevant period in relation to the goods and services subject of the registration’. The Opponent submits that this is established by the registration of the Domain in combination with the documentation illustrating the preparatory steps undertaken for the website’s commercial launch. In the Opponent’s view, ‘considerable time and money’ has been invested in these pre-launch activities such that the Opponent ‘can be seen objectively to have committed itself to using the [Trade Mark]’.[14]

   [14] Opponent’s Submissions, [28].

2. The Applicant contends that the Trade Mark has not been used during the Relevant Period. It submits that there is not a ‘single document that was, on its face or by Mr Hillberg’s statements, created within the relevant period’[15] and there ‘is no evidence of any website having been made accessible at the [Domain]’.[16] To the extent that Alceon is asserted to be an authorised user of the Trade Mark, the Opponent rejects this assertion pointing out that ‘there is no basis upon which Alceon can be found to be an authorised user of the impugned trade mark’.[17]

   [15] Applicant’s Submissions, [20].

   [16] Ibid [9].

   [17] Ibid [39].

3. In my assessment, the evidence relied on by the Opponent fails to rebut the non-use allegation. Exhibit 1 to the Hillberg Declaration contains material relating to the creation of the website. This includes mock-ups of its intended appearance, a timeline of its anticipated development as well as documents outlining the technical and resource requirements for its launch. A common theme of this material is that it is either undated or dated after the Relevant Period. Indeed, Mr Hillberg states that the exhibited material was ‘prepared in June 2019’.[18] As such this material is of no assistance in establishing use of the Trade Mark during the Relevant Period.

   [18] Hillberg Declaration, [16]. I note Mr Hillberg states that the estimates for the CHOSEN LABELS project was ‘created on or before 14 June 2019’. The only identifiable date on this specific document to which Mr Hillberg refers shows it as being ‘Last updated Jun 14, 2019’.

4. Exhibit 2 to the Hillberg Declaration consists of a WHOIS search result of the Domain which lists the Opponent as its registrant. This document does no more than demonstrate registration of a domain name containing the Trade Mark. It does not in itself amount to use of the Trade Mark during the Relevant Period.[19] Meanwhile, Exhibits 3 and 4 to the Hillberg Declaration consists of Register extracts of 7 trade marks[20] owned by the Opponent and examples of these trade marks appearing on the website This material is irrelevant because it does not demonstrate use of the Trade Mark and, in any event, is dated after the Relevant Period.

   [19] Sports Warehouse Inc v Fry Consulting Pty Ltd [2010] FCA 664, [153] (Kenny J).

   [20] See Australian trade mark numbers 1248976 (‘SURFSTITCH’), 1312749 (‘SURFSTITCH’), 1334142 (‘SWELL’), 1780596 (‘THE HIDDEN WAY’), 1820402 (‘NO NEWS’), 1851249 (‘TROUBLE LOVES COMPANY’) and 1859876 (‘NINE ISLANDS’).

5. Exhibit 5 to the Hillberg Declaration contains 8 tax invoices. Whether considered individually or collectively, these invoices do not establish use of the Trade Mark during the Relevant Period. The reasons for this are twofold. First, the invoices are all dated after the Relevant Period[21] and it is clear from their contents that only one invoice relates to services rendered during the Relevant Period.[22] This solitary invoice itemises various transport expenses incurred by the issuer between February 2019 to June 2019 but it does not disclose what project (or projects) these expenses are related to. Second, each invoice has been issued to Alceon and not the Opponent. Aside from Mr Hillberg’s bare statement that Alceon is the parent company of the Opponent, no particulars have been disclosed regarding, for example, the directorship and level of control exercised between these entities. Consequently, even if the invoices were probative, there is no cogent basis to find that Alceon was an authorised user within the meaning of the Act such that its use should inure to the Opponent.[23]

Obstacles to use

[21] The invoice dates range from 24 June 2019 to 29 January 2020.

[22] Hillberg Declaration, Exhibit 5. ‘Tax Invoice’ issued by Be Frank Group Pty Ltd dated 25 June 2019.

[23] Act ss 7, 8.

1. The Opponent has not asserted that there was an obstacle to the use of the Trade Mark during the Relevant Period.[24] For completeness, I confirm that there is nothing in the material before me to suggest that an obstacle prevented use of the Trade Mark in relation to the Registered GS during the Relevant Period.

   [24] Ibid s 100(3)(c).

Registrar’s discretion

1. Pursuant to s 101 of the Act, the Registrar has a broad discretion not to remove an unused trade mark if it is satisfied that it is reasonable to do so.

2. 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) of the Act:

   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.[25]

   [25] [2021] FCAFC 128, [153] (Jagot, Nicholas and Burley JJ) (emphasis altered) (citations omitted).

3. The Opponent identified the following factors which it contends weighs in favour of the discretion being exercised to retain the Trade Mark on the Register. The Opponent asserts that it has an ongoing commercial interest in the Trade Mark and there has been no abandonment of same.[26] Further, the Opponent claims that the Applicant has ‘failed to establish any legitimate interest in the CHOSEN LABELS mark’ and emphasises that there is no evidence to indicate that the public interest would be served by allowing the Trade Mark to be removed.[27]  

   [26] Opponent’s Submissions, [39]–[40].

   [27] Ibid [41]–[42].

4. The Applicant asserts that the discretion should not be exercised in the Opponent’s favour. It submits that the Trade Mark has never been used in relation to the registered goods[28] and, at its highest, the evidence only demonstrates preliminary steps were taken to use the Trade Mark in relation to the registered services around or after the Relevant Period.[29] In response to the Opponent’s purported ongoing commercial interest in the Trade Mark, the Applicant says that this is inconsistent with the Opponent’s decision not to oppose related non-use applications against 2 similar trade marks which were also filed on 24 June 2019.[30] Similarly, the Applicant highlights that it has an interest in the removal of the Trade Mark given it is also the applicant of a pending Australian trade mark application for the word ‘CHOSEN’.[31]

   [28] Applicant’s Submissions, [56].

   [29] Ibid [60].

   [30] See Australian trade mark numbers 1418246 (‘CHOSEN LABELS’ above a horizontal line of 5 stars) and 1418248 (‘CHOSEN LABELS’ encircled by stars).

   [31] See Australian trade mark number 1902001 (‘CHOSEN’) made in respect of classes 25, 35 and 42.

5. The position advanced by the Applicant has considerable force. The Trade Mark has been registered since 2011 yet the evidence reveals that, at best, steps towards use of the Trade Mark only commenced in September 2018 when the Opponent registered the Domain. No explanation has been provided for this 7 year period of idleness since registration. The paucity of evidence filed makes it difficult to ascertain what, if any, ongoing commercial interest the Opponent (as opposed to Alceon) has in the Trade Mark. Put another way, it is apparent that the development of the website was in its infancy immediately after the Relevant Period ended[32] and, as of April 2022, the website has still not been launched.[33] It follows that there have been no sales of the Registered GS under the Trade Mark after the Relevant Period ended and hence no residual reputation in the Trade Mark at the time of this decision. Likewise, the allegation that the Applicant has failed to establish a legitimate interest in the Trade Mark distorts the fact that it is the Opponent who bears the burden of positively satisfying the Registrar to exercise the discretion. In my view, the reasons put forward by the Opponent do not outweigh the public interest in removing the unused Trade Mark from the Register.

   [32] Hillberg Declaration, Exhibit 1. The documents describe their content as being ‘high level’ or ‘very high level estimates’ and the proposed timeline is listed as being contingent on certain resources being ‘in place by 26 Jun 2019 at the latest’.  

   [33] Opponent’s Submissions, [27] which state that ‘the launch [of the website] has been delayed due to the adverse

   impact of covid on the Applicant’s [sic] business’.

1. Accordingly, I am not satisfied that it is reasonable to exercise the discretion available under s 101(1) of the Act in favour of the Opponent to allow the Trade Mark to remain on the Register. As such, I decline to exercise the discretion.

Decision

1. The ground for removal under s 92(4)(b) of the Act has been established in respect of all the Registered GS. As such, I direct that trade mark registration 1418250 be removed from the Register one month from the date of this decision. In the event of an appeal from this decision, trade mark registration 1418250 shall not be removed from the Register until the appeal has been discontinued or dismissed, or in the event of a decision from the court, the registration will be subject to that decision.

Costs

1. Both parties have sought an award of costs. Costs usually follow the event. Accordingly, I award costs against the Opponent per s 221 of the Act in the amounts set out in Schedule 8 of the Trade Mark Regulations 1995 (Cth).

Nicholas Barbey

Hearing Officer

Delegate of the Registrar of Trade Marks

20 July 2022