Virgin International Pty Ltd v Virgin Enterprises Limited

[2010] ATMO 10

TRADE MARKS ACT 1995

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

Re:Opposition by Virgin International Pty Ltd to application under section 92 of the Act by Virgin Enterprises Limited to remove trade mark number 913329 (29) – VIRGIN (Stylised) - in the name of Virgin International Pty Ltd

Delegate:

Michael Kirov

Representation:

Opponent: Babak Arya, assisted by Santino Di Bella, Director of the Opponent

Removal Applicant: David Yates SC, instructed by Susan Darmopil of Addisons Lawyers

Decision:

2010 ATMO 10

Section 92(4)(b) opposition: No relevant use or relevant obstacles to use shown. No reason for exercise of discretion in Opponent’s favour. Trade Mark to be removed. Costs awarded against Opponent.

Background

1. Virgin International Pty Ltd (“the Opponent”) is the registered owner of trade mark registration 913329, relevant details of which are as follows:

Trade mark number:     913329

Registered from:  20 May 2002

Goods:Class: 29 Edible oils and oil products (“the Goods”)

Trade Mark:       (“the Trade Mark”)

1. On 21 May 2007 Virgin Enterprises Limited (“the Removal Applicant”) filed an application under section 92(4)(b) of the Trade Marks Act 1995 (“the Act”) for removal of the Trade Mark from the register, alleging the Trade Mark was not used in good faith in relation to the Goods during the three year period ending on 21 April 2007 (“the Non-use Period”).

2. The Removal Applicant, a UK company, is one of a number of companies collectively known as the “Virgin Group”, whose Chairman is the UK entrepreneur and businessman Sir Richard Branson.  It is the owner of more than 2,000 registrations around the world for trade marks featuring the word “virgin”, which it licences to other businesses within the Virgin Group for use in relation to a very wide range of goods and services including passenger and freight airline services, publishing services, financial services and mobile telephone services, to name but a few.

3. The Opponent was incorporated in Australia on 1 August 2000.  An historical extract from the records of the Australian Securities and Investments Commission (“ASIC”) included with the Opponent’s evidence indicates that from the date of incorporation until 31 December 2007 the company’s sole director, secretary and shareholder was Claudia Raffaelle Di Bella of 10 Macauley Street, Stanmore, NSW and that the company’s principal place of business during this period was nominated as being at this address.  Santino Di Bella, whose address is listed as 12 Macauley Street, Stanmore, is Ms Di Bella’s husband.  He was recorded as replacing his wife as sole director and shareholder of the company as from 1 January 2008, although his evidence is that he has been the Opponent’s “Manager” since 2000 and that he is “familiar with all aspects of [the Opponent’s] business”.  As from 1 January 2008 the ASIC record indicates the Opponent’s principal place of business also changed from 10 to 12 Macauley Street.

4. By way of background I mention that the Removal Applicant unsuccessfully opposed registration of the Trade Mark in 2005[1] (“the original opposition”).

   [1] Virgin Enterprises Ltd v Virgin International Pty Ltd (2006) 68 IPR 304

5. Insofar as relevant to this matter, section 92 of the Act as it stood at 21 May 2007 is reproduced below:

92 Application 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 aggrieved may apply to the court for an order directing the Registrar to remove the trade mark from the Register.

Note:  For prescribed court see section 190.

(4) An application under subsection (1) or (3) (non-use application) may be made on either or both of the following grounds, and on no other grounds:

(a) …

(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 s.102 on the registration of the trade mark so that its registration does not extend to that place or export market.

(5) …

1. Sections 100(1)(c) and 100(3) of the Act provide that the Opponent bears the onus of rebutting an allegation made against it under s.92(4)(b), by establishing that the Trade Mark (or the Trade Mark with additions or alterations not substantially affecting its identity) was used in good faith during the Non-use Period, or that there was an obstacle to use during that period. I proceed on the basis that the relevant standard of proof is on the balance of probabilities[2].

   [2] Following Gyles J in Pfizer Products Inc v Karam (2006) 70 IPR 599. See also Chocolaterie Guylian N.V. v Registrar of Trade Marks [2009] FCA 891 (18 August 2009) at [22] to [26].

The Opposition

1. On 5 September 2007 the Opponent filed a Notice of Opposition to the removal raising three grounds, namely that:

• The registered owner has actively used the trade mark in Australia within [the Non-use Period];

• The registered owner has used the trade mark in good faith in Australia within [the Non-use Period]; and

• There were obstacles to the registered owner using the trade mark within the [Non-use Period].

1. The Opponent’s evidence in support consists of statutory declarations by:

• Mirko Franjo Jakelic made on 31 July 2008, with Exhibits MFJ-1 to MFJ-3;

• Santino Di Bella made on 1 August 2008, with Exhibits SDB-1 to SDB-8[3].

  [3] Exhibit 8 was apparently “a sample of one of Virgin International’s bottles of olive oil featuring [a] label [bearing the Trade Mark]”, but this Exhibit was in fact damaged or lost in transport before the hearing took place.

1. The Removal Applicant’s evidence in answer consists of statutory declarations by:

• Larisa Vella-Xuereb made on 3 December 2008, with Annexures A to F;

• Michael Rumore made on 3 December 2008, with Annexures A to G;

• Karen Anne Hayne made on 3 December 2008, with Exhibits KAH-1 to KAH-9;

• Susan Louise Darmopil made on 3 December 2008, with Exhibit SLD-1.

1. The Opponent did not file any evidence in reply.

2. The matter was heard before me as delegate of the Registrar of Trade Marks in Sydney on 7 July 2009.  David Yates SC, instructed by Susan Darmopil of Addisons Lawyers, appeared for the Removal Applicant.  The Opponent was represented by Babak Arya, assisted by Santino Di Bella who, as indicated, is a current Director of the Opponent.  It is perhaps worth noting, in addition, that a firm of intellectual property lawyers did act for the Opponent from the time registration 913329 was first filed in 2002 until April 2009, including acting in the original opposition.  I understand that this firm prepared the Opponent’s evidence in support of its opposition to the present removal application and was presumably also involved in the decision not to file any evidence in reply.

The Evidence

1. As mentioned, Santino Di Bella has been the Opponent’s “Manager” since 2000 and a Director since 1 January 2008.  In his declaration he attests to the following matters relating to the Trade Mark:

• Since applying to register the Trade Mark in 2002 it has always been the Opponent’s intention to establish an olive oil business and to apply the Trade Mark to bottles of olive oil which would be sold throughout Australia.

• These plans were delayed by the original opposition but, following its success in that opposition, the Opponent “immediately commenced taking steps in 2006 to establish its olive oil business”.

• The Opponent located a supplier in 2006, Rosedale Park Olives based in South Australia (“Rosedale”), and subsequently placed two orders for 680 litres and 1050 litres of olive oil, which were apparently received by the Opponent on 5 October 2006 and 15 December 2007 respectively.

• The Opponent had labels designed in 2006 which featured the Trade Mark and which it intended to apply to the bottles of olive oil it was to sell (“the labels”).  The labels, which are exhibited with the declaration, bear the prominent words:

  PRODUCED & BOTTLED

  WINTON ROAD ROSEDALE

  BAROSSA VALLY SOUTH AUSTRALIA     (sic)

• The Opponent purchased from a bottle supplier small quantities of empty bottles intended for retailing the olive oil (in 40ml, 250ml, 500ml, 600ml, 750ml, 1 litre, 2 litre and 5 litre sizes), and/or larger (20 litre) metal containers and associated lids, seals and pouring spouts, on four different dates between 15 March 2007 and 2 January 2008, (the purchases on 15 March 2007 being the sole purchases made during the Non-use Period).

• At some unspecified time after 15 March 2007, Mr Di Santo says he personally filled the empty bottles with Rosedale’s olive oil and affixed the labels to the bottles.  He says that he did these things at premises located at 326 Stanmore Road, Petersham, NSW, from where the Opponent was then apparently “conducting its Virgin International business”[4]. 

• The Opponent then “commenced selling olive oil under and by reference to the Trade Mark in Australia”, as apparently evidenced by four invoices issued by the Opponent to “Olive Fantastiko”, “Peters Deli”, “Cucina Calabrese” and “Regatta Centre” dated 31 May 2007, 31 May 2007, 1 June 2007 and 1 June 2007 respectively, (all being dates falling after the Non-use Period).

• The Opponent established a website at “in or around October 2007” (that is, after the Non-use Period) through which bottles of olive oil bearing the label may apparently be purchased online.

  [4] Notwithstanding the Opponent had informed ASIC that its principal place of business was 10 Macauley Street, Stanmore until 31 December 2007 and was 12 Macauley Street thereafter.

1. The second declaration relied upon by the Opponent is by Mirko Franjo Jakelic, who has conducted an olive oil retailing business in NSW since 24 January 2007 under the name “Olive Fantastiko”.  Mr Jakelic says he purchases olive oil from a number of (named) suppliers, including the Opponent, which he sells both in bottles and in bulk “from a shop front” located in Earlwood in Sydney.  He says he first became aware of the Opponent as a possible supplier of olive oil “in early 2007” when Mr Di Bella contacted him and provided him with a sample bottle bearing the label.  After sampling the olive oil Mr Jakelic made his initial purchase from the Opponent on 31 May 2007 of five 1 litre bottles of olive oil bearing the label and of 78.35 litres of bulk olive oil.  Mr Jakelic indicates he intends to purchase olive oil from the Opponent again “in the future”, but apparently had not done so by the time he made his declaration on 31 July 2008.

2. The Removal Applicant’s evidence consists of four declarations, the essence of all of which is to cast doubt on the Opponent’s credibility.

3. Michael Rumore is a licensed private enquiry agent who conducted a number of enquiries in relation to the Opponent in or about October 2006.  He says he checked telephone records going back approximately three years from that date and found no listing for the Opponent in any State or Territory of Australia during that period.  He likewise found a GOOGLE search on the words “Virgin International” revealed no active website or other relevant listings.  He also visited the premises at 10 Macauley Street, Stanmore, then nominated in ASIC’s records as the Opponent’s principal place of business.  He annexes to his declaration a photograph of the premises, from which it is apparent this is a single storey residential dwelling.

4. Having noted the contents of the Di Bella declaration of 1 August 2008 and the changes to the Opponent’s office bearers and address made in ASIC’s records as from 1 January 2008, Mr Rumore undertook further enquiries in October 2008.  He visited the premises at 12 Macauley Street, Stanmore and 326 Stanmore Road, Petersham and annexes photographs of both premises to his declaration.  As with 10 Macauley Street, it is apparent number 12 is also a single storey residential dwelling in what appears to be a suburban residential street.  The photograph of 326 Stanmore Road indicates these are on the face of it commercial premises and Mr Rumore confirms that as at October 2008 they were occupied by a glass supplier and glass cutting business.  He spoke with the sole attendant there, who informed him that the glass business had operated from this site for approximately 12 months.

5. Larisa Vella-Xuereb is also a private enquiry agent, employed by Michael Rumore’s firm of private enquiry and commercial agents.  She says she visited the Opponent’s website at on 23 June 2008, (that is some 20 months after the Non-use Period), and “noted five olive oil products were being offered for sale at various price points”.  She ordered one 500ml bottle ($9.00) and one 1 litre tin ($16.00) of olive oil and was then taken to a website at where she made her $25.00 payment and recorded her delivery (PO Box) address.  Despite receiving written confirmation from the operators of the paypal website that her payment had been successfully sent and noting that the bank account she had used had had the $25.00 in question debited from it, Ms Vella-Xuereb had not received the goods she ordered by the time she made her declaration on 1 December 2008[6].

   [5] I understand that “Paypal” is a well established and reasonably well known third party business which facilitates payments from purchasers to vendors in transactions conducted over the Internet.

   [6] Mr Yates confirmed at the hearing that the goods were subsequently delivered.  However, he pointed out that this was some time after the Opponent had been served with a copy of Ms Vella-Xuereb’s declaration “when the import of that evidence would have been well appreciated by [the Opponent] and its advisers”.  I note delivery must in any event have been at least six months after Ms Vella-Xuereb’s order was placed, notwithstanding both parties are located in Sydney.

6. Noting a (mobile phone) contact number and a contact email address ([email protected]) on the Opponent’s website, Ms Vella-Xuereb telephoned the Opponent on 1 July, 13 July and 25 July 2008.  All calls were immediately diverted to a recorded message which did not identify any business, company or individual and which only allowed her to leave a number on which to be called back.  This she did on each occasion, but no-one had called her back by the time she made her declaration on 1 December 2008.  Nor had she received any response to emails she sent to [email protected] on 9 July, 17 July and 24 July 2008.

7. Karen Hayne is a solicitor acting for the Removal Applicant.  On 12 October 2006 she had online searches conducted of the Australia-wide electronic White and Yellow Pages on the name “Virgin International” which located no relevant listing[7].  On 20 April 2007, being the penultimate day of the Non-use Period, she had an online search conducted of the electronic White Pages for NSW only for the name “Virgin International” and this located no relevant listing.  She also had GOOGLE searches undertaken that day on the terms (1) “Virgin International Pty Ltd”, (2) “Virgin International” and “Stanmore” and (3) “Virgin International” and “Edible Oils”, each limited to pages from Australia.  No relevant results were found.  Ms Hayne also confirmed that the domain name “virgininternational.com.au” was available for registration as at 20 April 2007.  On 15 June 2007, 10 July 2007 and 12 February 2008 Ms Hayne had updated online searches of the electronic White and Yellow Pages conducted for the name “Virgin International” but, again, no relevant results were found.

   [7] Confirming the results of Mr Rumore’s similar enquiries of October 2006 mentioned earlier.

8. Susan Darmopil, too, is a solicitor and was, as mentioned, instructing Mr Yates at the hearing.  She says she also attended the hearing of the original opposition on 21 October 2005 as Mr Yate’s instructor.  She exhibits with her declaration a copy of a Statutory Declaration made by Santino Di Bello on the morning of the hearing of the original opposition and relied upon by the Opponent (that is, the applicant in the original opposition) in those proceedings.

Discussion

Actual use

1. Without, at this point, discussing the specific criticisms Mr Yates had of the Opponent’s evidence, and of the reliability of Mr Di Bella’s evidence in particular, I would simply say I agree with his submission that the evidence does not establish actual use of the Trade Mark during the Non-use Period in any event.  Taken at face value, Mr Di Bella’s own evidence, corroborated by that of Mr Jakelic, is that the first sale of olive oil bearing the Trade Mark was to Mr Jakelic on 31 May 2007.  This, of course, is more than a month after expiry of the Non-use Period and, indeed, very shortly after the Opponent presumably became aware the removal application had been filed.

2. It remains to consider whether the Opponent has made out a case that its claimed preparatory activities during the Non-use Period constitute “use” as contemplated by the Act.

Intended Use and Preparations for Use

1. Preparations in good faith for future use of a trade mark may in principle qualify as “use” for the purposes of the Act, provided it is shown the preparations are well advanced and the trader concerned can be seen objectively to be committed to using the trade mark[8].  In the present matter I have summarised the Opponent’s claimed preparatory activities during 2006 and early 2007 in paragraph 13 above.  They consist of the purchase of a small quantity of olive oil from Rosedale, the designing of the labels, the purchase of some empty bottles and metal containers, the filling of these with olive oil and the affixing of the labels.  Mr Yates was however very critical of the Opponent’s evidence concerning these claimed activities, as discussed below.

   [8] See for example Woolly Bull Enterprises Ltd and Anor v Reynolds (2001) 51 IPR 149 and Buying Systems (Australia) Pty Limited v Studio Srl (1995) 30 IPR 517

2. Mr Yates firstly pointed out that one of the grounds pressed in the original opposition was that the Opponent did not intend to use the Trade Mark.  Responding to this ground at the time in his declaration of 21 October 2005[9], Mr Di Bella had said it was and remained the Opponent’s intention to purchase an olive farm in Goulburn, NSW to produce the olive oil it was to sell, but that it had not thus far done so due to lack of finance.  Mr Di Bella now says that the Opponent would have commenced use of the Trade Mark in 2002, but decided to first await the outcome of the original opposition, a matter he did not raise at all in his 2005 declaration.  Mr Yates submitted that “This significant inconsistency casts real doubt on the veracity of the evidence now given by Mr Di Bella”.  This was particularly so, submitted Mr Yates, given the Applicant had effectively put the Opponent on notice of the discrepancy by including a copy of Mr Di Bella’s 2005 declaration in its evidence and yet the Opponent had failed to address the issue by way of evidence in reply.

   [9] A copy of which, as mentioned, was exhibited with the Darmopil declaration in the current proceedings.

1. Mr Yates also noted that the Opponent’s purchase of olive oil from Rosedale was inconsistent with the Opponent’s claim in the original opposition that it intended to purchase the Goulburn olive farm in order to produce olive oil under the Trade Mark on its own account.  This, too, was left unaddressed by way of evidence in reply.

2. Also casting doubt on Mr Di Bella’s veracity, submitted Mr Yates, was the statement in his 1 August 2008 declaration in the present proceedings that “All the steps referred to in paragraph 8, including the affixing of labels and the bottling of olive oil takes place at 326 Stanmore Road, Petersham, New South Wales”.  As Mr Yates argued, this statement implies the Opponent’s alleged business was ongoing from those premises as at 1 August 2008.  However, this was obviously at odds with Mr Rumore’s evidence that a glass supply and glass cutting business had, as at October 2008, been operating from the premises for some twelve months.  Again, it was telling that the Opponent had failed to address the apparent discrepancy by way of evidence in reply.

3. Moreover, Mr Yates pointed out, there is no explanation given as to why the labels the Opponent had designed indicated the olive oil was “produced & bottled”[10] at, or by, Rosedale in South Australia, when Mr Di Bella says he himself did the bottling in Petersham in Sydney.

   [10] See paragraph 13 above.

4. Exhibit SDB-3 to Mr Di Bella’s 2008 declaration purports to be copies of two invoices from Rosedale for the olive oil purchased by the Opponent, one dated 5 October 2006 and the other, well after the Non-use Period, dated 15 December 2007.  However, as Mr Yates noted, these invoices are on the face of it “suspicious” and, he submitted, have “all the hallmarks of being no more than a clumsy attempt to fabricate evidence”.  They are both handwritten on printed generic stationery such as might be purchased in any stationery shop and they are consecutively numbered notwithstanding having apparently been issued some 14 months apart.  Further, the invoice dated “5/10/06” purports to receipt payments made on “24/09/07”, “30/10/07” and “30/10/07”, all of which are outside the Non-use Period and all of which post-date the date of the invoice itself by some 12 months.  In any event, as Mr Yates highlighted, neither invoice shows use of the Trade Mark.

5. Mr Yates made several further adverse observations in relation to Mr Di Bella’s evidence which I do not believe it is necessary to detail here. I agree with Mr Yates that at the very least Mr Di Bella’s evidence is vague and inconclusive, quite possibly deliberately so. Taken as a whole, the Opponent’s evidence does not establish to my satisfaction that its preparations during the Non-use Period for use of the Trade Mark in good faith in the course of trade were well advanced, nor that it was, objectively speaking, then committed to using the Trade Mark. Indeed, the evidence before me indicates that more than six months after the Non-use Period the Opponent still had not taken even basic steps such as securing commercial premises or obtaining a dedicated telephone number, relevant telephone directory listing, or internet address. The Opponent’s claimed preparatory activities during the relevant period thus do not in my view amount to “use” of the Trade Mark as contemplated by s.100(3)(a).

Obstacles to Use

1. For the sake of completeness I note the Opponent has not provided evidence of any relevant circumstances prevailing during the Non-use Period which might have been an obstacle to use of the Trade Mark for any of the Goods.  Even taken at face value, Mr Di Bella’s claim in his 2008 declaration that the Opponent delayed commencing use until the original opposition was determined is not relevant since that opposition was determined in January 2006, some 15 months before expiry of the Non-use Period.  At the hearing itself Mr Di Bella did claim to have had a car accident during the relevant period, but there is no evidence before me providing any details of its possible relevance to the question of use of the Trade Mark.  I accordingly find no case under s.100(3)(c) has been established.

The Registrar’s Discretion

1. I have found that there was no relevant use of the Trade Mark during the Non-use Period.  In such circumstances s.101(1) gives the Registrar the discretion to remove the Trade Mark “in respect of any or all of the [registered goods]”, whilst s.101(3) explicitly provides discretion may be exercised in the Opponent’s favour if the Registrar is satisfied it is reasonable to do so.

2. In this regard early decisions considering exercise of the discretion under s.101(3) suggested an opponent would need to show special facts or circumstances, or an overriding question of public interest, to warrant leaving a mark on the Register in the absence of relevant use[11].  In the recent decision in Pioneer Computers Australia Pty Ltd v Pioneer KK (2009) 80 IPR 38, however, Bennett J said:

   167. The discretion under s.101(3) is a broad discretion to decide not to remove a trade mark from the Register or not to carve out some of the goods and services for which the mark is registered, even if s.92 grounds have been made out, if the Court is satisfied that it is reasonable to do so. Irrespective of the lack of use of the trade marks on the removal goods and the removal services in the relevant period, there is a discretion not to alter the registrations.

   168.      In Kowa Company[12] at [98], Lander J rejected the submission that a party seeking the exercise of the discretion needs to show “exceptional circumstances”. In E & J Gallo at [198], Flick J agreed with Lander J that there is no requirement to establish exceptional circumstances. With respect, I also agree with Lander J that there is no warrant to read a requirement for exceptional circumstances into s.101(3).

   [11] See for example Figgins Holdings Pty Ltd v Beltrami SpA (1998) 46 IPR 411 (at pp 418-9).

   [12] Kowa Co Ltd v NV Organon (2005) 66 IPR 131

3. While I accept that an opponent is not required to point to “exceptional circumstances”, in the present matter the Opponent has not satisfied me that any facts or circumstances exist, or that there is any relevant public interest, which would make it reasonable to exercise the Registrar’s discretion in its favour.  On the evidence before me the Trade Mark was not used to any significant extent even after expiry of the Non-use Period and the Opponent can obviously not claim the mark has garnered any kind of reputation in Australia.  This is thus not a case, in my view, which warrants exercise of the Registrar’s discretion pursuant to s.101(3) in the Opponent’s favour and I decline to do so.

Decision

1. I find that there was neither use of the Trade Mark in good faith in the course of trade in Australia for the Goods during the Non-Use Period, nor were there any relevant circumstances which were an obstacle to use.  Further, no circumstances have been shown which in my view warrant exercise of the Registrar’s discretion to not remove the Trade Mark in respect of all of the Goods.  I accordingly direct that registration 913329 be removed from the Register one month from the date of this decision.  If the Registrar has been served with a notice of appeal before then I direct that removal shall not occur until the appeal has been discontinued or, in the event of a decision from the Court, that the registration be dealt with as the Court sees fit.

Costs

1. In the event of a successful outcome Mr Yates requested an award of costs in the Removal Applicant’s favour.  As the successful party, the Removal Applicant is entitled to its costs and I accordingly award costs against the Opponent as per Schedule 8 of the Trade Marks Regulations 1995.

Michael Kirov

Hearing Officer

Trade Marks Hearings

29 January 2010