Toddler Kindy Gymbaroo Pty Ltd v Gym-Mark, Inc

[2013] ATMO 15

TRADE MARKS ACT 1995

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

Re:Opposition by Toddler Kindy Gymbaroo Pty Ltd to application under section 92 of the Act by Gym-Mark, Inc to remove trade mark number 1015490(16, 35, 41) - GYMBAROO - in the name of Toddler Kindy Gymbaroo Pty Ltd

Delegate:

Iain Thompson

Representation:

Removal Opponent: Peter Creighton-Selvay of Counsel instructed by Holley Nethercote, Lawyers.

Removal Applicant: Ms Gabriella Rubagotti of Counsel instructed by Ms Elisabeth White, a partner in Baker & McKenzie.

Decision:

2013 ATMO 15

s92 decision: discussion of use ‘in the course of trade’, exercise of Registrar’s discretion, Trade Mark to be partially removed from the Register of Trade Marks.

Background

1. In this matter Gym-Mark, Inc (‘the Removal Applicant’) applied on 20 April 2011 under paragraph 92(4)(b) of the Trade Marks Act 1995 (‘the Act’) for the partial removal from the Register of Trade Marks of the registration details of which appear below:

Registration No:              1015490

Owner:  Toddler Kindy Gymbaroo Pty Ltd (‘the Removal Opponent’)

Priority Date:  11 August 2004

Goods/Services:              Class 16: Paper, cardboard and goods made from these materials, not included in other classes; printed matter; bookbinding material; photographs; stationery; adhesives for stationery or household purposes; artists’ materials; paint brushes; instructional and teaching material (except apparatus); plastic materials for packaging (not included in other classes); printers’ type; printing blocks; personal organisers; children’s books; stickers; newsletters; party decorations of paper; pamphlets

Class 35: Advertising; business management; business administration; retailing services and mail order services in relation to goods for children, infants and parents including clothing, toys, footwear, games, soaps, cosmetics, toiletries, food products, audio and video tapes, digital versatile discs (DVD), compact discs, books, bags and accessories for each of these, as well as educational and teaching materials and apparatus, printed matter, furniture, play equipment and child safety products; business management assistance and consulting relating to education and play classes, gymnastics instruction classes, sensory-motor play programs for children and/or parents

Class 41: Education and training services, gymnasium and other education and training services for infants and preschool children, education and play classes; gymnastic instruction classes and sensory motor play programs, all being for children

Trade Mark:  GYMBAROO (‘the Trade Mark’)

Endorsement:                  Registration in Classes 35 and 41 does not extend to the local government areas of Brisbane, Logan, Ipswich, Cleveland/Redland Bay, Redcliffe and the Gold Coast.

1. Hereinafter, I will term the goods and services within Classes 16 and 35 as ‘the Specification’.

2. The Removal Applicant seeks the removal of the registration for all goods and services in the Specification except the following:

   Class 16

   Instructional and teaching material (except apparatus); children’s books; newsletters; pamphlets.

   Class 35

   Retailing services and mail order services in relation to goods for children, infants and parents namely audio and video tapes, digital versatile discs (DVD), compact discs, books, and accessories for each of these, as well as educational and teaching materials and apparatus, printed matter, furniture, play equipment and child safety products; business management assistance and consulting relating to education and play classes, gymnastics instruction classes, sensory-motor play programs for children and/or parents.

3. The Removal Opponent’s use of the Trade Mark in relation to services in Class 41 is not impugned.

4. On 27 July 2011 the Removal Opponent filed Notice of Opposition to the partial removal of the Trade Mark from the Register of Trade Marks alleging use of the Trade Mark in good faith in relation to the Specification during the three year period ending on 20 March 2011 (‘the relevant period’) and otherwise seeking the exercise of the Registrar’s discretion.

5. Both parties served and filed evidence as allowed by the Act and regulations thereto and the matter came before me as a delegate of the Registrar of Trade Marks to be heard in Sydney on 11 February 2013. Mr Peter Creighton-Selvay of Counsel accompanied by Mr Robert Sasse, Managing Director of the Removal Opponent, represented the Removal Opponent and Ms Gabriella Rubagotti of Counsel instructed by Ms Elisabeth White, a partner in the firm Baker & McKenzie, represented the Removal Applicant.

Onus

1. Section 100 of the Act relevantly provides:

   100Burden 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.

   […]

   (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;

   […]

   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.

Evidence

1. The evidence in support of the opposition is a statutory declaration by Mr Robert Sasse who is Managing Director of the Removal Opponent.  The evidence in answer is a statutory declaration by Ms Amy Milestone who is Regional Director of the Removal Applicant.

2. Mr Sasse explains that the Removal Opponent operates a franchised business of child development centres in Australia under the names GYMBAROO, TODDLER KINDY GYMBAROO, TODDLER KINDY ROO, KINDY ROO, KINDYROO, MINI GYMBAROO and BABY ROO.  These centres are dedicated to the intellectual, physical and emotional development of children.  The Removal Opponent has also operated centres itself and its head office is at 1173 Burke Road, Kew.

3. Mr Sasse states that the Removal Opponent’s business comprises seventy-three franchised centres established in Australia, five franchised centres in New Zealand, which are called “Gymbaroo” Centres. The business also includes centres in Germany, Turkey, the USA, Indonesia, Slovenia, France and China, which are called “Kindyroo” Centres because of potential conflict with the Removal Applicant’s GYMBOREE trade mark in those countries.

4. Mr Sasse exhibits to his declaration a variety of materials which carry the trade mark GYMBAROO which I will discuss as may be required under the heading Paragraph 92(4)(b).

5. Mr Sasse goes on to state:

   As at the date of this Statutory Declaration the Opponent has established substantial goodwill in the word “Gymbaroo”. This derived from:

   (a). the operation of the centres by the Opponent and its franchisees over a period of 28 years, and as at the date of this Declaration, over 14,000 students per week use the services promoted under the name “Gymbaroo” and in association with the company name of the Opponent, Toddler Kindy Gymbaroo Pty Ltd. Now produced and shown to me and marked with the letters RS 76 is a copy of the TKG franchise agreement, as at August 2011;

   (b). the operation of the centres by the Opponent and its franchisees over a period of three years ended 20 March 2008 with the following number of students in Australia using the services promoted under centres using the name “Gymbaroo”, during the following periods:

   (i)           From March 2008 to December 2008: 45,400 attendances;

   (ii)From January 2009 to December 2009: 49,300 attendances;

   (iii)From January 2010 to December 2010: 54,000 attendances; and

   (iv)        January 2011 to March 2011: 13,500 attendances;

   (c). the placement of advertisements in national publications including as set out in the Exhibits to this Statutory Declaration;

   (d). extensive promotional and advertising expenditure associated with the word “Gymbaroo” between 20 March 2008 and 20 March 2011, and also prior to that time period; and

   (e). the use of the internet domain name This was created on or about 1999.

   I believe that the Opponent has, in good faith, used the trade mark (“Gymbaroo”) in Australia and has authorised the use of the trade mark “Gymbaroo” in Australia, and in the course of trade in Australia, in relation to the goods and services which are the subject of the Applicant’s application for removal for non-use.

   The Opponent’s relevant markets include: parents-to-be, parents, carers, education and health providers to newborn children through to children aged 8 years; children from newborn to 8 years; existing and potential franchisees; academics and researchers in relation to early childhood development (“the Opponent’s relevant markets”).

6. And concerning the use of the GYMBAROO trade mark by the Removal Opponent and/or its franchisees Mr Sasse states:

   The Application has sought removal of the Gymbaroo trade mark from Class 16 and Class 35 in relation to the following goods and services:

   (a)[Class 16] paper, cardboard and goods made from these materials, not included in other classes; printed matter; bookbinding material; photographs; stationery; adhesives for stationery or household purposes; artists’ materials; paint brushes; plastic materials for packaging (not included in other classes); printers’ type; printing blocks; personal organisers; stickers; party decorations of paper; and

   (b)[Class 35] advertising; business management; business administration; retailing services and mail order services in relation to goods for children, infants and parents including clothing, toys, footwear, games, soaps, cosmetics, toiletries, food products, and bags.

   In relation to printed material, photographs, advertising, business management and business administration, the table of exhibits at paragraph 29 includes many examples of where the Opponent uses its Gymbaroo trade mark in relation to these goods and services.

   In relation to toys and games the Opponent has used its Gymbaroo trade mark in relation to its equipment, which has been available for purchase by the Opponent’s customers since 2001, and has throughout that time, until the present, been an integral part of the Opponent’s early learning development programs. While the equipment is used for serious educational and developmental purposes, children see them as toys and the relevant market is likely to view them as toys. The fact that children see them as toys enhances their educational effect. Similarly, the equipment is used extensively in exercises that children see as games, and thus they are viewed as games by the relevant market. Now produced and shown to me and marked with the letters RS 77 is a copy of the Opponent’s current list of equipment, including photos and descriptions of each piece of apparatus that it uses and markets to the relevant markets. Also now produced and shown to me and marked with the letters RS 78 is a copy of an actual invoice, with prices and customer details blanked out for confidentiality, for equipment sold during the period 20 March 2008 and 20 March 2011. This invoice is typical of invoices issued during that period where the Opponent sold equipment to customers.

   In relation to paper, cardboard and goods made from these materials, not included in other classes; printed matter; photographs; stationery; and stickers, the Opponent regularly uses, and regularly used between March 2008 and March 2011, the Gymbaroo trade mark in, on or related to these goods:

   (a) In producing and providing:

   (i)       instructional and teaching material (except equipment), children’s books, newsletters, pamphlets, advertising, retailing services in relation to goods for children infants and parents, DVDs, games, toys, compact discs, printed matter, books, educational and teaching materials and apparatus, party decorations of paper, business management materials, and business administration materials;

   (ii)      to the Opponent’s relevant markets; and

   (iii) via its learning centres, online store/website, direct mail and other direct marketing methods including business-to-business and business-to-consumer marketing, trade fairs and conferences which relate to baby and childhood development (“the trade channels”).

   In relation to bookbinding material, artists’ materials, paint brushes, adhesives for stationery or household purposes, printers’ type, printing blocks, while the Gymbaroo trade mark is not used on these goods, these goods are commonly used by the Opponent, and were commonly used by the Opponent between March 2008 and March 2011, in connection with or in relation to many of the goods in relation to which the Gymbaroo trade mark is used. These uses have included: the Opponent’s instructional and teaching material, children’s books, newsletters, pamphlets, advertising, party decorations of paper, retailing services and mail order services in relation to goods for children infants and parents, DVDs, compact discs, printed matter, business management materials, and business administration materials.

   In relation to plastic materials for packaging, personal organisers, clothing, toys, footwear, games, soaps, cosmetics, toiletries, food products and bags, the Opponent’s relevant markets and the trade channels used to market these goods are the same as the Opponent’s relevant markets and trade channels that the Opponent uses to market its goods and services using the Gymbaroo trade mark.

   Now produced and shown to me and marked with the letters RS 79 is the content of the Opponent’s website, as at October 2011. The content is materially the same as the website was as at February 2011. It contains many relevant pages of information, including pages that describe the merchandise the Opponent offers, as well as information regarding its philosophy and franchises and many examples of the use of the Gymbaroo trade mark. Each of the goods and services on the website are displayed in the same way as at February 2011.

7. Ms Milestone explains that the Removal Applicant, Gymboree Corporation and Gymboree Australia Pty Ltd, are all part of the Gymboree group of companies.  The Gymboree Corporation and Gymboree Australia Pty Ltd are authorised users of the trade marks owned by Removal Applicant, including the trade mark GYMBOREE.  The Gymboree Corporation entered the apparel business in the United States in 1986, designing, manufacturing and retailing unique, high-quality merchandise for children.  There are currently more than 638 Gymboree retail stores in the United States, Canada, Puerto Rico and Australia, as well as an online store at Gymboree Australia Pty Ltd operates the Australian business which currently consists of three Gymboree retail outlets in Australia, located in the Westfield Shopping Centres at Parramatta, Eastgardens and Penrith in New South Wales.  The Parramatta store opened on 22 April 2010; the Eastgardens store opened on 24 July 2010; and the Penrith store opened on 19 October 2011.  The Australian Gymboree stores operate under the name and trade mark GYMBOREE and retail a full range of merchandise for children, including clothing, footwear, toys, games, bags and accessories.

8. I note that the Removal Applicant’s trade mark registrations in Australia include the following:

Registration No:              427228

Priority Date:  22 May 1985

Services:Class 35: Business management assistance and consulting relating to education and play classes, gymnastic instruction classes, sensory-motor play programs for children and/or children and parents

Trade Mark:  

Registration No:              773961

Priority Date:  23 September 1998

Goods/Services:              Class 16: Personal organisers, children’s books, stickers, newsletters, party decorations of paper, pamphlets

Class 25: T-shirts, tank tops, leggings, leotards, sleep wear, swim wear, woven pants, jeans, polo shirts, blouses, shirts, sweaters, sweat shirts, sweat pants, skirts, shorts, overalls, jumpers, dresses, raincoats, jackets, underwear, undershirts, boxer shorts, long underwear, robes, athletic shoes, leather shoes, dress shoes, boots, lingerie, caps, knit hats, woven hats, straw hats, leather belts, cloth belts, socks, tights, panties, gloves, mittens, suspenders, smocks, exercise and warm-up suits, all being for men, women, children and infants

Class 28: Bath toys, plush toys, stuffed toys, inflatable chairs, dolls, puppets, play parachutes, balls, finger toys, party favour toys, toy music makers

Class 35: Business management assistance and consulting relating to education and play classes, gymnastic instruction classes, sensory-motor play programs for children and/or parents

Class 41: Education and play classes, gymnastic instruction classes and sensory motor play programs, all being for children and/or parents; organising and conducting birthday parties and other children’s entertainment events

Trade Mark:  GYMBOREE

Endorsement:                  Registration of this trade mark in Classes 35 and 41 is limited to Queensland and the Northern Territory.

Paragraph 92(4)(b)

1. Paragraph 92 provides, relevant to the ground under paragraph 92(4)(b):

   92Application for removal of trade mark from Register etc.

   (1)Subject to subsection (3), a person may apply to the Registrar to have a trade mark that is or may be registered 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 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:

   […]

   (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.

2. At the heart of the Removal Opponent arguments against the partial removal of its registration for certain goods and services lie certain misconceptions about what constitutes use of a trade mark in the course of trade and it is necessary to discuss these before more closely considering what the true extent of the Removal Opponent’s claims of use of the Trade Mark during the relevant period might be.

1. Section 17 of the Act provides:

   17What is a trade mark?

   A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.

   Note:For sign see section 6.

2. Section 6 provides:

   goods of a person means goods dealt with or provided in the course of trade by the person.

   services of a person means services dealt with or provided in the course of trade by the person.

   sign includes the following or any combination of the following, namely, any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent.

3. Concerning use of a trade mark, section 7 of the Act provides:

   7Use of trade mark

   (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.

4. In E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2008] FCA 934; (2008) 77 IPR 69; [2008] AIPC 92-293 Flick J explained at [19]:

   The function of a trade mark, it has repeatedly been said, is “to give an indication to the purchaser or possible purchaser as to the manufacture or quality of the goods -- to give an indication to his eye of the trade source from which the goods come, or the trade hands through which they pass on their way to the market”: In re Powell’s Trade Mark [1893] 2 Ch 388 at 403–4 per Bowen LJ. Use “as a trade mark” in s120(1) 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: Coca Cola Co v All-Fect Distributors Ltd [1999] FCA 1721 at [19], [1999] FCA 1721; 96 FCR 107 at 115 per Black CJ, Sundberg and Finkelstein JJ; Global Brand Marketing Inc v YD Pty Ltd [2008] FCA 605 at [45] per Sundberg J. See also: Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1964) 109 CLR 407 at 424–5 per Kitto J; Rothnie W, Gray Goods Billow onto the Open Main: Section 123 of the Trade Marks Act 1995 (1996) 7 AIPJ 87 at 89–90.

5. Accordingly, it is essential that, in order to found its opposition, the Removal Opponent establish to my satisfaction that the Trade Mark was used as a badge of origin in the course of trade on or in physical relation to at least one[1] bona fide dealing in, or provision of, the impugned goods and services during the relevant period.

   [1] Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261; (2001) 107 FCR 166; [2001] AIPC 91-713; (2001) 51 IPR 149 but compare with E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2010] HCA 15; (2010) 241 CLR 144; (2010) 265 ALR 645; (2010) 86 IPR 224; (2010) 84 ALJR 352; [2010] AIPC 92-381.

6. The expression ‘in the course of trade’ requires some discussion.  In Oakley Inc v Franchise China Pty Ltd [2003] FCA 105; (2003) 58 IPR 452; [2003] AIPC 91-868 Drummond J said at [29]:

   The term “trade” in the context of the phrase in s17 the Trade Marks Act 1955 (Cth) is undoubtedly a wide one. It encompasses a wider range of commercial transactions than the actual sale and purchase of marked goods. It has been held that “a use of a mark in an advertisement of goods is a use in the course of trade, and is of course a use in relation to the goods advertised”: The Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd [1961] HCA 75; (1963) 109 CLR 407 at 422. The use of a mark on goods in conducting investigations as to whether there might be a market for those goods is unlikely to be a use of the mark in the course of trade: that will generally be the use of a mark in activities preparatory to the commencement of a course of trade. See Settef SpA v Riv-Oland Marble Co (Vic) Pty Ltd (1987) 10 IPR 402 at 417 - 418. But where the owner of a mark is able to show that it is committed to supplying marked goods to persons prepared to purchase them, activities preliminary to the actual commencement of selling the goods, such as the distribution of marked samples and marked brochures to agents, so that they could show them to prospective customers in soliciting business will probably amount to the use of the mark in the course of the trade: see Settef at 439; Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261; (2001) 51 IPR 149 at 157 and cf Buying Systems (Australia) Pty Ltd v Studio Srl (1995) 30 IPR 517.

   That marked goods are supplied free of charge does not necessarily mean that the mark is not being used in the course of trade. That is shown by the free sample cases, such as Settef. The Irish Supreme Court, in Golden Pages Trade Mark [1985] FSR 27, held that marked classified telephone directories distributed by the Post Office free of charge to telephone subscribers involved use of the mark by the directory publisher “in the course of trade”: the publisher engaged in this activity to earn income from the sale to traders of advertising in the directory. Though in conflict with a UK Patent Office case (“ Hospital World “ Trade Mark (1967) 84 RPC 595 at 598 - 599) and a British Board of Trade case (“Update” Trade Mark (1979) 96 RPC 166), Golden Pages was referred to with approval in by Whitford J in “Visa” Trade Mark (1985) 102 RPC 323. I consider it correctly states the law.

7. With the above in mind, I consider the fallacies in the Removal Opponent’s arguments can be analogously illustrated by the following examples:

• Many businesses with no connection to the motor vehicle trade will have company vehicles with the trade mark of the business emblazoned upon them.  However, the fact that such cars have the trade mark emblazoned upon them does not make the cars goods in the course of trade – these businesses are not dealing in vehicles in the course of trade.

• A restaurant might use a considerable quantity of cleaning preparations in its food preparation area – but without an actual dealing in cleaning preparations by the restaurant, there is no use of a trade mark by the restaurant business in relation to the cleaning preparations.

• A newsletter might advertise anything under its banner from gardening services through to new motor vehicles but unless the publisher of the newsletter is offering those goods or services and the advertisements for those goods or services are, in fact, by third parties, there is no use of the trade mark under which the newsletter is provided in relation to those particular goods or services.

• A newsletter or book might be composed of paper, printing ink, bookbinding glue, staples, cloth (in a binding) and even gold leaf impressed thereon but the publisher is not dealing in these materials, it is dealing in newsletters or books.

• A motor vehicle is comprised of many materials which at some stage were raw materials such as plastics, leather, steel, aluminium, cloth, rubber, silica and so on.  It does not follow from this fact alone that the vehicle maker’s trade mark is used in the course of trade in relation to plastics, leather, steel, aluminium, cloth, rubber and silica per se when it sells one of its vehicles bearing its trade mark.

1. I consider the Removal Opponent’s claims to have used the Trade Mark in relation to paper, cardboard and goods made from these materials, not included in other classes; printed matter; photographs; stationery; and stickers not to be well based.  The entirety of this claim appears to me to be founded upon the Removal Opponent’s provision of newsletters to its client’s parents and it does not deal in bulk paper or cardboard, or all printed matter, photographs, stationary or stickers in the course of trade.  There is, for example, no evidence of the Removal Opponent dealing in photographs and its claims to have done so are apparently founded upon the appearance of photographs within its newsletter.

2. Further, the Removal Opponent has stated that, “In relation to bookbinding material, artists’ materials, paint brushes, adhesives for stationery or household purposes, printers’ type, printing blocks, while the Gymbaroo trade mark is not used on these goods, these goods are commonly used by the Opponent, and were commonly used by the Opponent between March 2008 and March 2011, in connection with or in relation to many of the goods in relation to which the Gymbaroo trade mark is used.”  However, the use claimed is not a use of the Trade Mark in the course of trade: the Removal Opponent appears rather to have been a consumer of these goods.  The use claimed is much like the example of the restaurant which uses cleaning preparations in order that it might serve food.

3. Additionally, the Removal Opponent has claimed, “In relation to plastic materials for packaging, personal organisers, clothing, toys, footwear, games, soaps, cosmetics, toiletries, food products and bags, the Opponent’s relevant markets and the trade channels used to market these goods are the same as the Opponent’s relevant markets and trade channels that the Opponent uses to market its goods and services using the Gymbaroo trade mark.”  This statement would only bear weight if the Removal Opponent had shown that it had sold plastic materials for packaging, personal organisers, clothing, toys, footwear, games, soaps, cosmetics, toiletries, food products and bags during the relevant period.  Absent any use of the Trade Mark in the course of trade in relation to these goods, the claim is irrelevant.

4. Further, (while the Removal Opponent has not established use in relation to the retail of the aforementioned goods) if this latter claim is that a use of the Trade Mark in relation to retail sales of goods establishes a use of the Trade Mark on the goods themselves (or vice versa) this claim does not hold: in Optical 88 Ltd v Optical 88 Pty Ltd (No 2) [2010] FCA 1380; (2010) 275 ALR 526; (2010) 89 IPR 457 Yates J stated at [221]:

   There is a suggestion in the literature that use of a mark in relation to retail services for goods is use equally in relation to the goods themselves. In my view that simply does not follow. Whether it be the case or not is a question of mixed fact and law having regard to the particular circumstances of the case. In dealing with the case of a retailer who sells goods of various manufacturers under the trade marks of those manufacturers, the authors of Shanahan’s Australian Law of Trade Marks  and Passing Off (4th Edition) at 63 cite Angoves Pty Ltd v Johnson [1982] FCA 108; (1982) 43 ALR 349 as authority for the proposition that, in such a case, the use of a retailer’s mark on invoices, advertisements and shopping bags is a use of the trade mark “in physical or other relation to goods” within the meaning of s7(4) of the Trade Marks Act. Angoves is not authority for that proposition. Indeed, in that case the question of trade mark use in relation to goods appears to have been conceded at trial: see 353, 361 and 368. It is perhaps sufficient for me to say that there is no principle of general application in Australian trade mark law that use of a mark in relation to retail services for goods is use in relation to the goods themselves.

5. Finally, I do not consider that exercise equipment can be construed as toys any more than, say, might be a sports car which, while it may be referred to jocularly as a ‘boy’s toy’, is in reality something else.  The Removal Opponent has not given any concrete examples of goods sold by it during the relevant period which are both obviously and simultaneously both toys and exercise equipment and which are goods in the course of trade.  Nevertheless if certain exercise equipment could be construed as being toys, the retention of the expression ‘exercise equipment’ within the Specification will adequately cater for this eventuality in respect of such goods – to go further would be to retain the Trade Mark on the register in respect of the retail of toys of any description and the Removal Opponent has plainly had no use of the Trade Mark in relation to such services within the relevant period – or, indeed, at all.

6. However, in regard to ‘Advertising; business management; business administration’ services in Class 35, I note that the Removal Opponent provides an advertising service in relation to its newsletter and in all likelihood provides business management and business administration services in relation to its franchise operations.  It is, nevertheless, appropriate that each of the foregoing descriptions of those services be limited accordingly.

7. Therefore, as far as the ground under paragraph 92(4)(b) is concerned, both parties have had a differing degree of success and I will give my direction concerning the appropriate restriction of the Specification after considering whether it is appropriate to exercise the Registrar’s discretion in relation to any of the impugned goods and services.

The Registrar’s Discretion

1. Section 101 of the Act relevantly provides:

   101Determination of opposed application—general

   […]

   (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.

2. In Tivo Inc v Vivo International Corporation Pty Ltd [2012] FCA 252 Dodds-Streeton J described the operation of the Registrar’s discretion at [463]:

   An applicant to remove a trade mark for non-use is entitled to have the mark removed “unless sufficient reason appears for leaving it there” (see Re Carl Zeiss Pty Ltd’ s Application [1969] HCA 17; (1969) 122 CLR 1 at 11). However, the respondent is not required to demonstrate “exceptional circumstances” in order to enliven the discretion in s101(3) to retain the registration (see E&J Gallo at [198]).

   In Austin, the Full Court (Jacobson, Yates and Katzmann JJ) recently considered s101(3). Their Honours stated at [28]:

   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.

   Their Honours noted that s101(3) was expressed in the present tense and the position must be assessed at the time the discretion is to be exercised (at [41]).

   In E&J Gallo at [210], Flick J described the exercise of the discretion in s101(3) as follows:

   Although the “guiding principle behind the discretion is public interest, particularly in the integrity of the register” (Kowa Co Ltd v Organon (2005) 223 ALR 27), the private commercial interests of both Gallo Winery and Lion Nathan remain matters which may be taken into account when exercising the discretion. Trade mark law, it has been recognised, is more complex than is suggested by the proposition that the supreme — or, at least — a predominant interest is the maintenance of the integrity of the register: Campomar Sociedad Limitada v Nike International Ltd [2000] HCA 12; (2000) 202 CLR 45 ... Speaking of the 1955 Act, Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ there pointed out the balance struck by the legislation between various interests. Both the interests of the consuming public and the interests of traders have to be recognised. Their Honours observed that (at [42]):

   [42] ... the Australian legislation has manifested from time to time a varying accommodation of commercial and the consuming public’s interests. 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. There 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 this property to valuable account by licensing or assignment. The provisions of the 1955 Act with respect to defensive registrations and certification marks were recognitions that the interests of the owners of registered trade marks may go beyond that of indicating trade origin. In Yale Electric Corporation v Robertson (1928) 26 F 2d 972 at 973, Judge Learned Hand said of this interest:

   “that one merchant shall not divert customers from another by representing what he sells as emanating from the second. This has been, and perhaps even more now is, the whole Law and the Prophets on the subject, though it assumes many guises.”

   In this decade, legislation in the United States, the United Kingdom, and now in Australia to varying degrees has extended the infringement action to restrain activities which are likely adversely to affect the interests of the owner of a “famous” or “well-known” trade mark by the “dilution” of its distinctive qualities or of its value to the owner.

   In Austin, the Full Court affirmed that Flick J’s view that while public interest, particularly in the integrity of the Register, was the guiding principle behind the discretion, the private commercial interests of parties could be taken into account and the interests of both consumers and traders must be recognised (at [33]-[34]).

   In E&J Gallo, Flick J identified (at [202]) the following factors additional to that in s101(4) which, while not exhaustive, were also relevant to the exercise of the discretion: whether there has been no abandonment of the trade mark; whether the registered proprietor still had a residual reputation in the mark; whether there had been sales by the registered proprietor in relation to the goods for which removal was sought since the relevant period ended; whether 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; and whether the registered proprietors were aware of the applicants’ sales under the mark .

   In Austin, the Full Court confirmed that the discretion under s101(3) was limited only by the statutory purposes and “whether the removal of the [relevant mark ] would lead to deception or confusion ... was plainly a relevant consideration to be taken into account” (at [31]). The Full Court also recognised that evidence showing a lack of deception or confusion should the mark remain on the Register was relevant to the exercise of the discretion, but it was not erroneous to find that circumstance an insufficient justification for its retention.

3. The trade marks GYMBOREE and GYMBAROO are deceptively similar in relation to the child development centres which the parties run: Toddler Kindy Gymbaroo Pty Ltd v Gymboree Pty Ltd [2000] FCA 618; 100 FCR 166; 51 IPR 1; [2000] AIPC 37-421. However, in balancing the interests of the parties, it is not the child development services which are here under consideration: it is in large part the retail services and goods and ancillary services for which the Trade Mark is registered for which use is impugned. In terms of subsection 101(4) I do not consider that the evidence establishes that the Removal Opponent has used its trade mark in trade on goods similar to ‘plastic materials for packaging, personal organisers, clothing, toys, footwear, games, soaps, cosmetics, toiletries, food products and bags’ or that, in fact, the evidence suggests that there is even any realistic prospect that the Removal Opponent will ever use the Trade Mark on such goods.

1. Further, the Removal Opponent explicitly concedes that it has not used the Trade Mark in the course of trade in relation to ‘bookbinding material, artists’ materials, paint brushes, adhesives for stationery or household purposes, printers’ type, printing blocks’ and does not suggest that future use in the course of trade in relation to these goods is likely.  Rather, its statement that ‘these goods are commonly used by the Opponent, and were commonly used by the Opponent between March 2008 and March 2011, in connection with or in relation to many of the goods in relation to which the Gymbaroo trade mark is used’ constitutes an implicit recognition that the Removal Opponent has been a mere consumer of such goods.

2. Under such circumstances it is difficult to understand how the removal of the Trade Mark from the register in respect of the goods and services in respect of which the trade mark has not been used would increase the likelihood of deception and confusion.  This is especially so since the Removal Applicant in fact runs three retail stores under its GYMBOREE trade mark und retention of the Trade Mark on the register for the impugned goods and services might increase the likelihood of deception or confusion.

3. Accordingly, I can see no good cause to exercise the Registrar’s discretion in relation to any of the goods or services in relation to which the Trade Mark has not been used.

Decision

1. Subsection 101 of the Act provides:

   101Determination 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. The Removal Opponent has established its opposition in relation to the following services in 35: business management and business administration in relation to the provision of franchise services.  I am therefore satisfied that the ground on which the application was made is established in relation to the balance of the goods and services in relation to which removal was sought.  An appropriate amendment to the Specification is therefore to that below:

   Class 16

   Instructional and teaching material (except apparatus); children’s books; newsletters; pamphlets.

   Class 35

   Retailing services and mail order services in relation to goods for children, infants and parents namely audio and video tapes, digital versatile discs (DVD), compact discs, books, and accessories for each of these, as well as educational and teaching materials and apparatus, printed matter, furniture, play equipment and child safety products; business management assistance and consulting relating to education and play classes, gymnastics instruction classes, sensory-motor play programs for children and/or parents; business management and business administration in relation to the provision of franchise services.

Direction

1. Absent an appeal from either party filed within the required time, I direct that the Specification be amended to that in the preceding paragraph.  If such an appeal is filed, the disposition of the application for removal should be in accordance with the Court’s order or direction.

Costs

1. The Removal Applicant has been in large measure successful and I order costs against the Removal Opponent at the official scale.

Iain Thompson

Hearing Officer

Trade Marks Hearings

01 March 2013