The Benson & Hedges Co Pty Ltd v Phillip Morris Brands S.a.r.l
[2016] ATMO 31
•23 May 2016
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Oppositions by The Benson & Hedges Co Pty Ltd to applications under section 92 of the Act by Philip Morris Brands S.A.R.L. to remove trade mark numbers 109107, 396767, 747716, 1140953, 1209390 and 1282935 (34) - PARLIAMENT (VARIOUS) - in the name of The Benson & Hedges Co Pty Ltd
| Delegate: | Heath Wilson |
| Representation: | Opponent: Stephen Rebikoff of Counsel instructed by Davies Collison Cave. Applicant: Christian Dimitriadis of Senior Counsel instructed by Spruson & Ferguson. |
| Decision: | 2016 ATMO 31 Applications under paragraph 92(4)(b) of the Trade Marks Act 1995 (Cth) – No trade mark use in the relevant period – whether discretion under subsection 101(3) should be exercised – Trade Marks to be removed from the Register. |
Background
This is an opposition to an application for removal of registered trade marks made under section 92(4)(b) of the Trade Marks Act 1995 (Cth) (‘the Act’). On 4 April 2014 Philip Morris Brands S.A.R.L. (‘the Applicant’) applied for removal of the following trade marks (collectively, ‘the Trade Marks’) in respect of all goods in which they are registered:
| TM No. | Trade Mark | Specification of Goods |
| 109107 | PARLIAMENT | Class 34: Cigarettes, |
| 396767 | Class 34: All goods included in Class 34 | |
| 747716 | Class 34: Tobacco; smokers' articles; matches | |
| 1140953 | Class 34: Cigarettes, tobacco, tobacco products, smokers' articles, lighters, matches | |
| 1209390 | Class 34: Cigarettes, tobacco, tobacco products, smokers' articles, lighters, matches | |
| 1282935 | PARLIAMENT | Class 34: Cigarettes, tobacco, tobacco products, lighters; matches; smokers' articles |
A Notice of Intention to Oppose the removal of the Trade Marks was filed by the Benson & Hedges Co Pty Ltd (‘the Opponent’) followed by a Statement of Grounds and Particulars. The Particulars provided:
The Opponent has used the Trade Mark overseas since at least 2008. The Opponent also has pending applications and registrations for the Trade Mark in 60 countries. Given the Opponent’s global rights in the Trade Mark, its overseas use of the Trade Mark and the reputation acquired in the Trade Mark through such use, it is in the public interest that the Trade Mark is not removed from the Register.
The Opponent seeks an award of costs.
Notices of Intention to Defend were subsequently filed by the Applicant. The subsequently filed evidence in support of the opposition consisted of:
Declaration of Kevin Borges (Area Head of Brands for British American Tobacco Australia Limited) made 12 November 2014 with exhibits A to E (‘the Borges declaration’)
The evidence in answer from the Applicant comprised:
Declaration of Nicholas George Foot (Head of Marketing for Philip Morris Limited) made 27 April 2015 with exhibits NF-1 to NF-5 (‘the Foot declaration’)
Declaration of Dan Francome (Senior Counsel Trademarks, Asia of Philip Morris Asia Limited) made 27 April 2015 (‘the Francome declaration’)
The Opponent did not rely on any evidence in reply and both parties subsequently requested to be heard. The matter was listed for hearing in due course. Following the provision of written submissions by both parties, I heard the matter in my capacity as a delegate of the Registrar of Trade Marks in Canberra on 5 May 2016.
Stephen Rebikoff of Counsel instructed by Davies Collison Cave appeared for the Opponent and Christian Dimitriadis of Senior Counsel instructed by Spruson & Ferguson appeared on behalf of the Applicant.
On 27 April 2016 (a week before the hearing), the Opponent sought to file additional material under the provisions of Reg 21.19 of the Trade Marks Regulations 1995. One of the purposes of the additional material was to provide explanation for the sales figures in the Borges declaration. However, the Opponent did not convince me of the high probative value of the material, nor the reason why such an explanation had not been provided earlier in the proceedings.[1] Taking into account the public interest in having the material considered and the balance of inconvenience to the parties I found that it was not appropriate to apply the Registrar’s discretion and allow the material to be admitted. As a consequence, the hearing of the matter continued on the basis of the material set out in paragraphs 2 to 5 above.
[1] With reference to part 51.2.6 of the Trade Marks Office Manual of Practice and Procedure.
The Law
Paragraph 92(4)(b) of the Act provides:
92 Application for removal of trade mark from Register etc.
(4)An application under subsection (1) or (3) (non‑use application) may be made on either or both of the following grounds, and on no other grounds:
(a)…
(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 1:For file and month see section 6.
Note 2:If non‑use of a trade mark has been established in a particular place or export market, then instead of the trade mark being removed from the Register, conditions or limitations may be imposed under section 102 on the registration of the trade mark so that its registration does not extend to that place or export market.
Section 101 of the Act provides:
101 Determination of opposed application—general
(1)Subject to subsection (3) and to section 102, if:
(a)the proceedings relating to an opposed application have not been discontinued or dismissed; and
(b)the Registrar is satisfied that the grounds on which the application was made have been established;
the Registrar may decide to remove the trade mark from the Register in respect of any or all of the goods and/or services to which the application relates.
(2)Subject to subsection (3) and to section 102, if, at the end of the proceedings relating to an opposed application, the court is satisfied that the grounds on which the application was made have been established, the court may order the Registrar to remove the trade mark from the Register in respect of any or all of the goods and/or services to which the application relates.
(3)If satisfied that it is reasonable to do so, the Registrar or the court may decide that the trade mark should not be removed from the Register even if the grounds on which the application was made have been established.
(4)Without limiting the matters the Registrar may take into account in deciding under subsection (3) not to remove a trade mark from the Register, the Registrar may take into account whether the trade mark has been used by its registered owner in respect of:
(a)similar goods or closely related services; or
(b)similar services or closely related goods;
to those to which the application relates.
Note 1:If the registered owner of the trade mark has authorised another person to use it, any authorised use of the trade mark by that person is taken to be a use of the trade mark by the registered owner (see subsection 7(3)).
Note 2:For registered owner see section 6.
In accordance with section 100 of the Act, the Opponent bears the onus of establishing use of the Trade Marks and rebutting the allegation made by the Applicant under paragraph 92(4)(b).
However, the Opponent conceded that the Trade Marks had not been used in good faith in Australia in the three year period ending on 4 March 2014 (‘the relevant period’). The Opponent also did not contend that there were obstacles to the use of the Trade Marks in the relevant period (paragraph 100(3)(c)). That being the case, the allegation made under paragraph 92(4)(b) of the Act has been established.
Section 101(3):
The Opponent instead argued that the discretion available to the Registrar under subsection 101(3) of the Act should be exercised and the Trade Marks should nevertheless be allowed to remain on the Register.
The Opponent also bears the onus in the exercise of this discretion.[2] The position is assessed at the time the Registrar is called upon to make her decision. The circumstances supporting the exercise of the discretion need not be “exceptional circumstances”[3] and neither is the appropriate consideration whether the Opponent has demonstrated a “sufficient reason” for the Trade Mark to remain on the Register.[4] Rather:
The question to be asked is whether it was reasonable not to remove the trade mark from the Register, although the trade mark had not been used during the statutory period.[5]
[2] Optical 88 Ltd v Optical 88 Pty Ltd (No 2) [2010] FCA 1380; (2010) 275 ALR 526 [273].
[3] Kowa Company Ltd v NV Organon [2005] FCA 1282; (2005) 66 IPR 131, (Lander J) [98].
[4] Austin, Nichols & Co Inc v Lodestar Anstalt [2012] FCAFC 8 [28] (‘Austin Nichols’).
[5] Ibid.
The discretion under section 101(3) has been described as unlimited in previous authority but the Full Court in Austin Nichols qualified this, finding:
It is a discretion 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 Act.[6]
[6] Austin Nichols [35].
Some of the factors that may (as opposed to ‘must’) be taken into account in the exercise of the discretion were set out in Pioneer Computers Australia Pty Limited v Pioneer KK as follows:
In E & J Gallo at [202]-[203], Flick J stated that the following factors set out by Falconer J in Hermes Trade Mark [1982] RPC 425 [‘Hermes’] were of assistance in considering the exercise of the discretion:
·there had been no abandonment of the trade mark;
·the registered proprietors of the mark still had a residual reputation in the mark;
·there had been sales by the registered proprietors of goods for which removal was sought since the relevant period ended;
·the applicants for removal had entered the market without having taken steps to ascertain from the Register whether anyone had a right to exclude their use of the mark;
·the registered proprietors were not aware of the applicant’s sales under the mark.[7]
[7] Pioneer Computers Australia Pty Limited v Pioneer KK [2009] FCA 135 [169].
To support the exercise of the discretion, Mr Rebikoff argued that the Opponent enjoyed a residual reputation in the Trade Marks, highlighted the likelihood of deception or confusion if the Trade Marks were to be removed, the lack of abandonment of the Trade Marks, and the legislative intention to preserve the registration of trade marks the use of which are prohibited by the Tobacco Plain Packaging Act 2011 (‘the TPP Act’).
Discussion
Residual Reputation
The Opponent is a subsidiary of Wills (Pagewood) Pty Ltd, owned by W.D. & H.O Wills Holdings Limited which is in turn a wholly owned subsidiary of British American Tobacco Australasia Limited. The Borges declaration indicates that the Opponent’s products bearing the Trade Marks were sold in Australia in the first half of 2009. Mr Borges declares[8]:
Due to various internal business decisions, the sale of PARLIAMENT cigarettes was suspended from the Australian market in 2009. However there was no intention to abandon and/or relinquish Benson & Hedges’ interest in the PARLIAMENT trade marks in Australia and there is an intention to relaunch PARLIAMENT cigarettes.
Indeed it is common practice in the tobacco industry to launch a cigarette brand and temporarily “shelve” that brand for a period of time with a view to re-introducing the brand in the future.
[8] At [10–11].
There are sales figures provided in Confidential Exhibit A to the Borges declaration. During the hearing, there was much debate over what this exhibit actually demonstrated. While I cannot discuss the details here, I think it fair to say (Mr Rebikoff conceded this and Mr Dimitriadis relied upon it) that the actual amounts of the Opponents product sold in Australia in 2009 were open to some interpretation.
There is no other evidence of use of any of the Trade Marks in Australia since registration.[9] In addition, the Borges declaration does not indicate which of the Trade Marks was used in 2009 (preferring instead to use the generic expression “PARLIAMENT trade marks”) and it appears to have been used only in relation to cigarettes (and not in relation to other goods in the specification of goods such as smokers articles, matches and lighters).
[9] I note that Trade Mark 109107 (for example) was registered in 26 February 1952.
The Francome declaration points out the deficiencies in Confidential Exhibit A to the Borges declaration. Mr Francome also provides the total number of cigarette sticks sold by Australian retailers in 2009 and compares it to the Opponent’s figures in the Borges declaration.
There are similar difficulties with the Opponent’s sales figures of PARLIAMENT cigarettes to retailers in South Africa (Confidential Exhibits C and D to the Borges declaration). The figures generally indicate sales of the Opponents product in South Africa. The question before me is whether the combination of the sales figures in Australia in 2009 and the use in South Africa is sufficient to conclude that there remains a residual reputation in the Trade Marks in Australia today.
The Opponent’s evidence does not (for example) contain any examples of advertising of the products or advertising figures in Australia around 2009 (or at any time), nor am I provided with any evidence of consumer appreciation of the product. In addition, there are not any testimonials of customers demonstrating a continuing awareness of the Trade Marks in Australia which may have been of assistance in the consideration.
During the hearing, a number of parallels were drawn with Austin Nichols to support at different times the arguments of both the Opponent and the Applicant. However, each case is decided on its own merits and it is of no great assistance to point to one of the factors in the exercise of a discretionary power (such as the amount of whiskey bottles sold in Austin Nichols and compare it to the amount of cigarette sticks sold here) and reach a conclusion on that factor alone.
Finally, Exhibit E to the Borges declaration is a country profile of South Africa from the Department of Immigration and Border Protection website. The profile provides the number of South African born persons in Australia and indicating that they are the eighth largest migrant population in Australia. Once again, I am not satisfied that this information assists me to any significant extent in this decision.
Mr Rebikoff argued that if I were to find any amount of residual reputation of the Trade Marks I could not be satisfied that the removal of the Trade Marks would not deceive or cause confusion and therefore should allow the Trade Marks to remain on the Register. I am not convinced by that argument as the existence of a residual reputation is but one factor of many that may be taken into account in the application of the discretion.
I find on the strength of the evidence before me that any residual Australian reputation the Opponent may enjoy today in the Trade Marks is marginal (even taking a generous view of the sales figures provided in the Borges declaration). In light of that finding it is necessary to address the other relevant factors.
Likelihood of Deception or Confusion
Mr Rebikoff submitted that no particular consideration under section 101(3) of the Act was determinative, but that the likelihood of deception or confusion arising from the removal of the Trade Marks was “centrally relevant”[10] or “fundamental”[11]. It is equally clear that the public interest in the integrity of the Register[12] (and the removal of unused trade marks) balanced against the private commercial interests of the parties[13] may be taken into account in the exercise of the discretion.
[10] E. & J. Gallo Winery v Lion Nathan Australia Pty Limited [2008] FCA 934 (Flick J) [209].
[11] Austin Nichols [31].
[12] NSW Dairy Corporation v Murray Goulburn Co-operative Co Ltd (1989) 14 IPR 75 (Gummow J) [79].
[13] Austin Nichols [38].
The preferred view must be that all of these factors may be weighed in the consideration but in certain cases one factor may carry more weight.
The likelihood of deception or confusion is reliant on any established residual reputation in the Trade Marks. As set out above, that reputation in the current matter is negligible.
Furthermore, if the period of non-use is substantial that is another consideration that may be taken into account.[14] I note that the Trade Marks have not been used since the first half 2009 which is around seven years ago (calculated up to the date of this decision).
[14] Conquip Holdings Pty Ltd v S & A Restaurant Corp [2000] FCA 256 [90].
In relation to the private commercial interests of the parties, I turn now to the Applicant’s evidence. The Applicant is a subsidiary of the Philip Morris International Inc. (‘PMI’) group of companies. PMI owns seven of the top 15 international tobacco brands in the world. The Applicant uses and has registered the trade mark PARLIAMENT in relation to cigarettes in 40 markets around the world including Japan, Turkey, Taiwan, South Korea and Israel. The Applicant’s PARLIAMENT brand is the tenth largest cigarette brand in the world and the fourth largest international brand belonging to the PMI group.[15]
[15] Foot declaration at [6], [8-9].
On 14 February 2014, the Applicant applied for registration in Australia of the trade mark PARLIAMENT in class 34 (trade mark no. 1606063).[16] The application for this trade mark is, on its face, an intention to use that trade mark in Australia.
[16] Foot declaration [13].
Mr Rebikoff argued that as the Applicant’s trade mark is substantially identical to the Trade Marks the likelihood of deception or confusion should the Trade Marks be removed from the Register is high. That is, Australian consumers will mistakenly believe that the Applicant’s trade mark is part of the Opponent’s family of trade marks. No doubt these trade marks are substantially identical but since that argument is reliant on current consumer appreciation of the Opponent’s residual reputation in the Trade Marks I cannot agree with it on the strength of the evidence.
In addition, as any knowledge of the Trade Marks in Australia would be minimal, if there is any spillover reputation from foreign jurisdictions it is much more likely to originate from the Applicant’s much more substantial use and international reputation in its own PARLIAMENT brand rather than from the Opponent’s use in South Africa.
In relation to Australian consumers of these products, Mr Rebikoff referred to the notorious brand loyalty of smokers (but again there was no evidence of this assertion). However, accepting that such brand loyalty exists, a consumer of the Opponent’s products for a limited time in 2009 would have to remember that brand of cigarette from seven years ago and recall whether they preferred it. It is much more likely that even the most brand loyal Australian smokers would have long ago switched to another brand. Any deception or confusion that may result from the Applicant’s use of a substantially identical brand would therefore be minimal.
Abandonment
Under subsection 101(3), the absence of evidence of abandonment is not by itself determinative as the Registrar’s discretion only comes into operation once it has been established that within a relevant period of three years the trade mark has not been used. If it were determinative, the onus would too readily shift to the Applicant.
Mr Dimitriadis argued that all of the Opponent’s actions were consistent with abandonment and that I should not place any weight on Mr Borges statement that the Opponent has an “intention to relaunch PARLIAMENT cigarettes”. That said, there needs to be other evidence of abandonment in the face of a direct statement that there was no intention to abandon the Trade Marks. I cannot be satisfied on this information alone that the Trade Marks have been abandoned.
The effect of the Tobacco Plain Packaging Legislation
Mr Rebikoff also argued that this was an unusual case because of the retail context for the sale of tobacco products in Australia. He submitted that this context when viewed in combination with the substantially identical trade mark of the Applicant enhanced the likelihood of deception or confusion should the Trade Marks be removed.
For completeness, I note that the intent of section 28 of the TPP Act was that trade marks should not be removed from the Register of Trade Marks if they would have been used but for the operation of the TPP Act. In other words, the obstacle to use of the trade marks in the relevant period must be the operation of the TPP Act. On the facts, that cannot be the case here.
The Opponent ceased use of the Trade Marks in Australia in May 2009 due to “internal business decisions”[17] and not due to the provisions of the TPP Act which came into operation in December 2012. Furthermore, Mr Borges has not declared that the Opponent would have recommenced use but for the operation of the TPP Act. As mentioned earlier, paragraph 100(3)(c) of the Act was not pursued by the Opponent.
[17] Borges declaration [10].
I am not satisfied that any special considerations apply in this case simply due to the retail context that both parties must operate within. Nor am I convinced on the balance of probabilities that any likelihood of deception or confusion in this case would be enhanced by the operation of the TPP Act. Regardless, even if it did slightly enhance that likelihood, for the reasons provided earlier it would not be sufficient for the application of the discretion.
I do not intend to apply the Registrar’s discretion under s101(3) in relation to the Trade Marks.
Decision
The applications for removal in relation to trade mark registrations 109107, 396767, 747716, 1209390, 1140953 and 1282935 have been successful. I direct that those trade mark registrations be removed from the Register one month from the date of this decision. If the Registrar is served with a notice of appeal on or before that time, the registrations will not be removed until the appeal is withdrawn or discontinued. Otherwise, the fate of the trade mark registrations will be subject to the decision of the Court.
Costs
The Applicant has been successful in relation to the applications for removal of the Trade Marks. I direct that costs in relation to trade mark registration no. 109107 be awarded against the Opponent in accordance with Schedule 8 of the Trade Marks Regulations 1995. For the remaining five trade registrations, I direct that costs be awarded against the Opponent in accordance with the practice set out in Hume Industries (Malaysia) Berhad v James Hardie & Coy Pty Ltd.[18]
[18] [2001] ATMO 78; (2001) 53 IPR 591.
Heath Wilson
Hearing Officer
Trade Marks Hearings & Oppositions
23 May 2016
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