Vamuta Pty Ltd v Sogo Co Ltd

[1996] FCA 651

CATCHWORDS

TRADE MARKS - removal of marks from register for non-use - marks not registered - whether proceedings may be commenced before registration effected but after application for registration - effect of ss. 23 and 53 Trade Marks Act.

PRACTICE AND PROCEDURE - summary dismissal of proceedings - where cause of action has not accrued at the date of commencement of the proceeding.

Trade Marks Act 1955, ss.23, 53

Hunter Douglas Australia Pty. Limited v Perma Blinds (1970) 122 CLR 49
Oh Ho v Minister for Immigration and Ethnic Affairs (1987) 72 ALR 43
Chu Kheng Lim v The Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1
Wigan v Edwards (1973) 1 ALR 497
In re Keystone Knitting Mills' Trade Mark [1929] 1 Ch. 92
Baldry v Jackson [1976] 2 NSWLR 415

VAMUTA PTY LIMITED -V- SOGO CO LIMITED

NG 276 of 1995

Burchett J.
Sydney
19 July 1996

IN THE FEDERAL COURT OF AUSTRALIA )  
  )
NEW SOUTH WALES DISTRICT REGISTRY )    NG 276 of 1995
  )
GENERAL DIVISION                 )

BETWEEN:VAMUTA PTY LIMITED

Applicant

AND:SOGO CO LIMITED

Respondent

CORAM:    Burchett J.
PLACE:    Sydney
DATE:     19 July 1996

MINUTE OF ORDER OF THE COURT

THE COURT ORDERS THAT the application be dismissed with costs.

NOTE:     Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA )  
  )
NEW SOUTH WALES DISTRICT REGISTRY )    NG 276 of 1995
  )
GENERAL DIVISION                 )

BETWEEN:VAMUTA PTY LIMITED

Applicant

AND:SOGO CO LIMITED

Respondent

CORAM:    Burchett J.
PLACE:    Sydney
DATE:     19 July 1996

REASONS FOR JUDGMENT

BURCHETT J.:

This is an application under s.23 of the Trade Marks Act 1955 filed on 26 April 1995, by which the substantial relief sought is:

1. An order that trade mark registration 504 071 be expunged and removed from the Register of Trade Marks.

1. An order that trade mark registration 504 073 be expunged and removed from the Register of Trade Marks."

By motion on notice, the respondent seeks summary dismissal of the proceeding pursuant to order 20 rule 2 of the Federal Court Rules.

Whether the application is capable of being maintained or has clearly no hope of success depends entirely on the true effect of s.23 in circumstances which are not in dispute. On 2 February 1989, applications were lodged in the Trade Marks Office on behalf of the respondent, bearing the numbers mentioned in the prayers for relief, for registration of two marks involving the word "SOGO". Notices of opposition were lodged by the applicant, with the result that neither application has proceeded to registration. However, if an appeal filed in this court is dismissed, and subject to any further appeal, registration will ensue and, in that event, will have effect, by reason of s.53(2) of the Act, from 2 February 1989. It is in this situation that the application with which I am concerned was filed, together with a statement of claim alleging, on the basis I have just indicated, that the respondent "will be registered under the Trade Marks Act 1955 as proprietor" of the marks, and going on to allege that there is an absence of intention in good faith to use the marks, that there has been no use in good faith of the marks, and that "up to one month before the date of this application, a continuous period of not less than three years has elapsed during which the Respondent's Trade Marks were registered trade marks and during which there was not any use by the Respondent of the Respondent's Trade Marks in good faith in relation to the Services or by any registered user of the Respondent's Trade Marks for the time being".

Section 23(1) contains the following provisions:

"Subject to this section and to section 93, a prescribed court or the Registrar may, on application by a person aggrieved, order a trade mark to be removed from the Register in respect of any of the goods or services in respect of which it is registered, on the ground:

(a)that the trade mark was registered without an intention in good faith on the part of the applicant for registration that it should be used in relation to those goods or services by him ...  and that there has, in fact, been no use in good faith of the trade mark in relation to those goods or services by the registered proprietor or a registered user of the trade mark for the time being earlier than 1 month before the application; or

(b)that, up to 1 month before the date of the application, a continuous period of not less than 3 years had elapsed during which the trade mark was a registered trade mark and during which there was no use in good faith of the trade mark in relation to those goods or services by the registered proprietor or a registered user of the trade mark for the time being."

Section 53(2) provides:

"Subject to this Act, a trade mark shall be registered as of the date of the lodging of the application for registration and that date shall be deemed for the purposes of this Act to be the date of registration."

It is the applicant's contention that, assuming the trade marks will be registered, the moment that happens the registration will, by virtue of s.53, be for all the purposes of the Act a registration from 2 February 1989, and the applicant expects to prove that during the relevant period of three years prior to the filing of the application to the court on 26 April 1995 there was no use in good faith of the trade marks within the meaning of s.23(1)(b).

Counsel for the respondent says this approach is fundamentally flawed. He points to the principle that an applicant must, at the time of initiating proceedings, have a complete cause of action, and to the irrefutable fact that at the date of commencement of this proceeding no cause of action existed. For at that date the respondent was not the registered proprietor of either mark, and it was entirely possible that it might never become the registered proprietor of either mark. Apart from the technical force of this proposition, the respondent also points to the substantial effect that would be achieved by the procedure here adopted, if it be permissible. It would deprive the respondent, upon registration, of the benefit of any use which may have been made, or may be made, of the mark between the date being one month before 26 April 1995 and the date upon which the act of registration may take place in the future. He submits that s.23 cannot have been intended to produce such an effect.

The court is not without guidance concerning the meaning of s.23. It was the subject of elaborate analysis by Kitto J. and by the Full High Court in Hunter Douglas Australia Pty. Limited v. Perma Blinds (1970) 122 CLR 49. What was there held was that, once a mark is registered, ss.23 and 53 have the effect of requiring a period of non-use, after the date of the application for registration and before the occurrence of the act of registration, to be taken into account for the purposes of s.23. However, nothing in any of the judgments suggests that proceedings may be commenced under s.23 at a time when no registration has been effected. Indeed, it seems to me that the judgment of Barwick C.J. (with whom Menzies and Walsh JJ agreed) contains a clear indication to the contrary. For Barwick C.J. said (at 60) that counsel for the appellant, the proprietor of the mark, had "but one point, namely, that none of the period which elapses between the application for registration of a mark and its registration occurs at a time when the mark viewed from the date of the application for its removal was a registered trade mark. Unless that proposition", he added, "is accepted, the appellant must, in my opinion, fail in these appeals." The Chief Justice then gave the answer to this sole argument which might have favoured the appellant. He said:

"Section 23 as a whole operates as of a time subsequent to the actual registration of a trade mark.   Thus the tense of the expression 'during which the trade mark was a registered trade mark' is appropriate whichever date is taken as the commencement of the period of the registration of the mark."

It was because the tense employed by the draftsman was appropriate on either construction that Barwick C.J. could find no reason to deny s.53 its full application to s.23. But it will be observed that this reasoning depends upon the assertion (which is consistent with the location of s.23 in that part of the Act headed "The Register of Trade Marks", a part concerned with the features and consequences of the register; and with the fact that s.23 authorizes removal from the register, thus implying that it only operates after registration) that "[s]ection 23 as a whole operates as of a time subsequent to the actual registration of a trade mark".  The Chief Justice could not have said this if he had contemplated a cause of action being in existence prior to that actual registration.

Furthermore, his Honour's judgment concluded (at 61) as follows:

"I see no escape from the conclusion to be drawn from both sections read together that, viewed as of a date subsequent to registration, a mark once registered must by reason of what to my mind are the unequivocal words of s.53(2) be regarded as having been a registered trade mark as on and from the date of the application for its registration. Nor do I find that consequence in any sense disconformable to what I consider to be the scheme of the Act. On the other hand, I would find it inconsistent with the Act to deny to the registered proprietor of a registered trade mark in an application made under s.23(1)(a) to remove his mark, the benefit of his use of the mark during the period elapsing between the date of his application for the registration of the mark and the time of its registration. Yet, that according to the appellant must follow if the language of s.53(2) is not given its full and natural meaning."

It seems to me that this passage is a direct answer to so much of the statement of claim as relies on s.23(1)(a), that is, so much of the statement of claim as alleges that the marks "will have been registered without an intention in good faith on the part of the Respondent that they should be used in relation to the services in respect of which they were registered ('the Services') and there has been no use in good faith of the Respondent's Trade Marks in relation to the Services by the Respondent or by any registered user of the Respondent's Trade Marks earlier than one month before this application". But the logic of the passage is also a complete answer to the applicant's reliance on s.23(1)(b). For it would be incongruous to accept the Chief Justice's view about s.23(1)(a) and yet deny the applicant for registration the benefit of his use of the mark during the same period for the purpose of s.23(1)(b).

If the law generally permitted actions to be commenced before any cause of action had accrued, it might be that nevertheless some plausible argument could be mounted on the basis of the literal effect of reading s.23 with s.53. But the authorities are to the contrary. If they were not, of course, contrary to what Barwick C.J. said in the passage I have quoted, s.23(1)(a) would be available to support a proceeding one month after the lodgment of an application for registration. This consequence is pointed out in Shanahan on Australian Law of Trade Marks and Passing Off 2nd ed. (1990) at 271.  In Oh Ho v Minister for Immigration and Ethnic Affairs (1987) 72 ALR 43, I discussed a number of authorities in support of the proposition that a cause of action asserted in a proceeding must exist at the date of the commencement of the proceeding, and rejected an attempt to include in an application under the Administrative Decisions (Judicial Review) Act 1977 a challenge to a decision which had only been made after the date of commencement of the proceeding in the court. Without examining the authorities, Toohey J. expressed the same view in Chu Kheng Lim v The Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 47. A general statement of the principle may be found, in particular, in the judgment of Mason J. in Wigan v Edwards (1973) 1 ALR 497 at 515 and in the judgments of the Court of Appeal in In re Keystone Knitting Mills' Trade Mark [1929] 1 Ch. 92. There Lawrence L.J. said (at 105):

"It is an almost universal rule that the Court sits to determine the rights of parties as existing at the time of the institution of the legal proceedings, whatever form such proceedings may take."

In the same case, Russell L.J. (at 107-108) applied this rule to the construction of a section of the Trade Marks Act 1905 (U.K.).  His Lordship said:

"The general rule is, I think, clear - namely, that rights are not altered as between parties after the commencement of litigation between them.  In my opinion (whether the section confers rights or only relates to a question of procedure or evidence) the section should, if it be possible, be construed so as to make it consistent with that general rule.  It is in my opinion possible so to construe s.41, by confining the words 'all legal proceedings' to legal proceedings commenced after the relevant period of seven years has expired."

In my opinion, the same approach should be adopted to the construction of ss.23 and 53 of the Act. They should not be understood as conferring a right to commence proceedings at a time when no cause of action could exist, since no registration of a relevant trade mark had been effected. As was held by the Court of Appeal of New South Wales in Baldry v. Jackson [1976] 2 NSWLR 415 at 419-420, a merely "inchoate" claim cannot support initiating process until it is "consummate". There, the plaintiff failed because, "[a]t the date of the statement of claim there were no facts in existence which entitled [him] to seek a declaration. All that existed was an hypothesis." So too here.

In answer to the motion, the applicant placed some reliance on Roban Jig & Tool Co Ltd v Taylor [1979] FSR 130 and Acorn Computers Ltd v MCS Microcomputer Systems Pty Ltd (1984) 4 IPR 214. See also Tavener Rutledge Ltd v Specters Ltd [1959] RPC 355. But none of these cases is relevant to the construction of ss.23 and 53, and none of them denies the general principle to which I have referred. In my opinion, the sections should not be construed as permitting an action for the removal of a mark from the Register to be commenced at a time when the mark is not a registered mark. Since the point seems to me to be quite clear, I consider that the motion must succeed, notwithstanding the stringency of the test (which is stated in General Steel Industries Inc. v. Commissioner for Railways  (NSW) (1964) 112 CLR 125) for the

summary dismissal of a proceeding.  The applicant's application is dismissed with costs.

I certify that this and the preceding 9 pages are a true copy of the Reasons for Judgment herein of his Honour Justice Burchett.

Associate:

Date: 19 July 1996

Counsel for the Applicant:       Mr R. Cobden

Solicitors for the Applicant:        Baker & McKenzie

Counsel for the Respondent:      Mr D.M. Yates

Solicitors for the Respondent:    Corrs Chambers Westgarth

Date of hearing:                 19 September 1995