Trade mark revocation for non-use: Australia and New Zealand compared

This article outlines three major differences between requirements for revocation of a registered trade mark for non-use in Australia and New Zealand:

1. the required standing to be the applicant in a removal action (“applicant for removal”) of an allegedly unused trade mark;

2. the discretion of the Hearing Officer or Court (“decision maker”) to allow a trade mark, that has not been used in relation to goods or services specified in the registration for the relevant period, to remain on the register; and

3. the time for making an application for removal.

Standing to File for Revocation

Australia

Legislative Framework

Section 92(1) of the Trade Marks Act 1995, provides that “a person may apply to the Registrar to have a trade mark that is or may be registered removed from the Register.”

Implications

There are no conditions that an applicant for removal must satisfy to have standing to bring a non-use action[1].

Once the application for revocation has been filed, and the necessary fee has been paid, the onus is upon the owner of the registrations (“the owner”) to rebut the allegation that the trade mark has not been used. Therefore, the owner may incur significant expense:

- demonstrating use of the registered trade mark/s; and/or

- making submissions that the decision maker should exercise discretion to preserve the registration/s despite a finding that there has been no use of the trade mark/s in relation to the specified goods or services during the relevant period.

New Zealand

Legislative Framework

Section 65(1) of the Trade Marks Act 2002 provides that:

An aggrieved person may apply to the Commissioner or the court for the revocation of the registration of a trade mark.

Implications

In New Zealand, the applicant for removal must demonstrate that, on the balance of probabilities, it is an “aggrieved person”.

The New Zealand Courts have held that “aggrieved person” should be given a wide interpretation. Whether a person is aggrieved is a question of fact, although the following classes of persons are presumed to be aggrieved persons:

- an applicant of a trade mark application, whose path to registration is barred by the registered trade mark (for example, if the registered trade mark has been cited against the applicant for removal’s application to register its own trade mark);

- an alleged infringer of the registration;

- a person with a real or substantial interest in the removal of the registration.

A person who operates in the same industry as the owner will usually be presumed to be aggrieved, because the registration limits its rights to use that trade mark, or a similar trade mark, for similar goods/services.

In most cases an application for revocation is filed because the registered trade mark has been cited against the applicant for removal’s trade mark application. As this information is on the Commissioner’s file, the applicant for removal does not incur significant costs in demonstrating that it is an aggrieved person.

Discretion to Remove or Preserve the Registration

Australia

Legislative Framework

Section 101(1) provides the decision maker “may decide to remove the trade mark from the Register” if s/he is “satisfied that the grounds on which the application was made have been established”.

The legislation then goes further and provides for a discretion not to remove the trade mark from the Register if the decision maker is “satisfied that it is reasonable to do so” even if the grounds on which the application for removal was made have been established (section 101(3)). Some guidance is provided in the Act as to the matters the Registrar may take into account when determining whether to remove the trade mark or not (section 101(4)).

Implications

The decision maker has discretion to preserve a registration, in relation to any or all of the goods and/or services specified, despite a finding that the trade mark has not been used during the relevant period.

Early jurisprudence in relation to this discretion suggested that the discretion should be exercised only if there were special facts or circumstances, or an overriding question of public interest, to warrant leaving an unused trade mark on the Register.

Recent case law has now made clear, however, that no such precondition exists. The Full Federal Court, in Austin, Nichols & Co Inc v Lodestar Anstalt,[2] stated:

it is a discretion limited only by… the subject-matter, scope and purpose of Pt 9 of the Act… The purpose of Pt 9 is to…protect the integrity of the register, and in this way, the interests of the consumer. At the same time, however, it seeks to accommodate, where reasonable, the interests of the registered trade mark owners. Otherwise there would be no need for the discretion.

For the discretion to operate in favour of an owner, the decision maker must be satisfied that it is reasonable that the registration of the unused trade mark not be removed. The owner bears the onus of proof.

The discretion is most frequently exercised where:

- the unused trade mark has residual reputation from earlier use;

- the unused trade mark has significant reputation overseas;

- removal of the unused trade mark could lead to public confusion; or

- the trade mark has been used in relation to “similar goods or closely-related services”, or “similar services or closely-related goods” (section 101(4)).

Those principles were applied in General Mills, Inc v Maria & Nikitas Christofis[3]. In that case, the Hearings Officer held that the discretion should be exercised, and that the specification of the registration should be preserved as “all goods in [class 30]”, despite the owner demonstrating use of its trade marks only in relation to “breakfast cereal”, “muesli bars”, “health foodsnacks”, “nut clusters” “trail mix”, and “yoghurt-dipped snack bars”. In exercising his discretion in the owner’s favour, the Hearings Officer stated:

…it seems that leaving the registration unamended could be in both the [owner’s] interest and the public interest, if this meant possibly confusing use of a similar mark by another party would be less likely. When the foregoing matters are weighed up I believe it is reasonable in the circumstances of this case to exercise the Registrar’s discretion under s 101(3) in the [owner’s] favour and to leave registration 347155 unamended.

The Hearings Officer based his decision on the following points.

- the owner demonstrated use of the trade mark in relation to goods which were held to be similar to the goods that would be included in class 30;

- the owner demonstrated a substantial reputation of the trade mark in relation to goods which were held to be similar to the goods that would be included in class 30;

- the owner demonstrated a substantial reputation of the trade mark internationally for a broad variety of goods;

- the applicant for removal had not made submissions, or submitted evidence, that the discretion should not be exercised in the owner’s favour.

There is no obligation on an applicant for removal to make submissions, file evidence, or appear at a hearing. Where the owner’s submissions and evidence in favour of exercising the discretion are uncontested by the applicant for removal, the decision maker is more likely to exercise discretion in favour of the owner.

New Zealand

Legislative Framework

Under section 66 it would appear that the New Zealand Commissioner also has discretion whether to remove a registration for non-use. Section 66(1) provides that:

(1) The registration of a trade mark may be revoked on any of the following grounds:

(a)that at no time during a continuous period of 3 years or more was the trade mark put to genuine use in the course of trade in New Zealand, by the owner for the time being, in relation to goods or services in respect of which it is registered:

(2)However, despite subsection (1), a trade mark may not be revoked for its non-use if its non-use is due to special circumstances that are outside the control of the owner of the trade mark.

Implications

The New Zealand position in relation to discretion is not as clear-cut as in Australia.

Hearings Officers have frequently asserted that the wording “may be revoked”implies that there remains discretion to preserve a registration (most recently in Number 1 Shoes Limited v Ballet Makers, Inc[4]). Hearing Officershave relied on Friskies Ltd v Heinz-Wattie Ltd[5] – a decision heard under the previous Trade Marks Act (1953) – to support this assertion. Unlike Australia, however, and in accordance with Friskies, New Zealand Hearings Officers will only exercise discretion in “exceptionalcircumstances”.

Although this interpretation has not yet been fully scrutinised in the New Zealand Courts, the Courts appear to have accepted that the decision maker has discretion, see for example Manhaas Industries (2000) Limited v Fresha Export Limited[6]; Sky Network Television Limited v Skyfiber Inc[7].

The New Zealand position that discretion is available is inconsistent with United Kingdom and Singaporean jurisprudence – the legislation in both jurisdictions uses the language “may be revoked”, and in both jurisdictions, the Courts have held that, despite that language, the decision maker has no discretion.

Back in New Zealand, neither the Courts, nor the Hearings Officers, have commented as to what will constitute “specialcircumstances” that justify the exercise of discretion. In Kittrich Corporation v Tasman Industries Limited[8], the Hearing Officer held that the following circumstances did not constitute “specialcircumstances”:

- prior long-standing use and goodwill in the mark (50+ years);

- registrations of the trade mark in 88 countries;

- a recent “global brand expansion campaign”, which included promotion of the trade mark at trade shows in New Zealand and elsewhere;

- negotiations with potential distributors of the goods during the relevant period in New Zealand; and

- alleged sale of the relevant products bearing the trade mark during the relevant period (all documentary evidence was allegedly destroyed in a fire).

Whether the decision maker will find that “specialcircumstances” exist sufficient to justify the exercise of discretion will depend on all of the facts of each case. However, the threshold justifying the exercise of discretion appears to be higher in New Zealand than in Australia.

Time for making an application for removal

The non-use period is three years for both Australia (section 92(4)(b)) and New Zealand (section 66(1)(a)).

However, the timing for making an application for removal is different. The Australian legislation provides a five-year grace period as the application “may not be made before a period of 5 years has passed from the filing date in respect of the application for the registration of the trade mark” (section 93(2)).

In New Zealand, the timing is tied to the actual date of registration, being the date the trade mark was entered on the Register by the Commissioner (sections 5(1), 51(1)(a) and 66(1A)). An application for removal for non-use cannot be filed until there has been continuous period of three (3) years or more was the trade mark put to genuine use with that “continuous period” commencing “from a date after the actual date of registration” (section 66(1) and (1A)).

Our take away

While the same parties may be involved in non-use proceedings on both sides of the Tasman Sea, it is important to note the key differences in standing, discretion and timing that may be relevant.

Elena Szentivanyi – January 2014



[1] Prior to 23 October 2006, regulation 9.1 required a removal application to be accompanied by a declaration stating that an inquiry into the use of the trade mark had been conducted, and the findings of that inquiry.

[2] (2012) 287 ALR 221

[3][2013] ATMO 18 (14 March 2013).

[4] [2013] NZIPOTM 43 (12 November 2013).

[5] [2003] 2 NZLR 663.

[6] [2012] NZHC 1815

[7] [2012] NZHC 3559

[8] [2009] NZIPOTM 3 (12 January 2009).

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