Jane Glover Barrister – Mediator – Adjudicator

IS YOUR WIDELY-USED TRADE MARK VULNERABLE TO REMOVAL FOR NON-USE?

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Applications for non-use are all about making sure that the owner has crossed every t and dotted every i.  The owner’s evidence is put under the microscope.  Has it shown evidence of use that relates unequivocally to the right period?  The right jurisdiction?  The right goods and services?  Is the mark used in the same form as the mark that is on the register?  And, significantly, has the use been by the right party? If not, even a mark that is being used extensively might be vulnerable.

There are a number of ways in which the precise identity of the party using the mark might be an issue in non-use proceedings.  For example, in the case of a small company, the mark might have been registered in the name of one of the directors, especially if the mark was registered before the company was incorporated.  Or perhaps the mark was registered in the name of a shell company or a law firm in order to protect the identity of the true owner prior to launch, and this position was never regularised.  (In fact, there is a question mark as to whether it is even possible to regularise the position, but that is a post for another day.)  In the case of larger groups of companies, it is common for trade marks to be registered in the name of an IP holding company that does not trade.

Australian cases

Over the last few years, I have watched with growing unease as Australian decisions took an extremely narrow view of what constitutes “use” by the trade mark owner.  For example, the Full Court of the Federal Court of Australia has held that use of a mark by the owner’s licensee was not enough unless the owner could show that it actually exercised its rights of control (Lodestar Anstalt v Campari America LLC [2016] FCAFC 92).  And last year, the Federal Court of Australia said that it wasn’t good enough for the managing director of the relevant companies to own the mark in his personal capacity (Calico Global Pty Ltd v Calico LLC [2018] FCA 2096.)

But at IPSANZ this year Kellie Stonier from Griffith Hack provided a case round-up which seemed to indicate that the Australian position is thawing a little.  For example, in Hells Angels Motorcycle Corporation (Australia Pty Ltd) v Redbubble Ltd [2019] FCA 355, the Australian limb of Hells Angels (a US group) was held to be an authorised user of the HELLS ANGELS marks for the purposes of bringing infringement proceedings.  The analysis on control was still pretty traditional though.  For example, the US organisation controlled the use of the patch, including the size, placement, and style of stitching.  The Australian organisation also provided reports to the US about the use and protection of the marks in Australia.  (!!!!!!  So unhip!)

More encouraging was the decision in Trident Seafoods Corporation v Trident Foods Pty Ltd [2019] FCAFC 100, in which the Full Court accepted that even though the trade mark was owned by a subsidiary company, not the parent trading company, the fact that they had the same directors gave rise to an inference that the two companies operated with a unity of purpose.

Thank goodness for that sudden blast of common sense.  I just hope that it is contagious.  I mean, when you think about the purpose of the non-use provisions, surely they were just intended to get marks off the register that were no longer being used, or in which the owner no longer had any proper interest.  It seems crazy to me that valuable marks that are being used in a genuine way should be vulnerable to removal because of the niceties of the particular corporate structure or other technicalities.

I believe that, so far as is possible, trade mark law should be straightforward and accessible.  It should serve the interests of traders in a pragmatic way, especially as it affects many sole traders and small businesses as well as sophisticated companies.

New Zealand position

And what about New Zealand?  Well, the issue was raised in Liang v Condon [2017] NZIPOTM 7 and was resolved on the particular facts in favour of the owner.  It was also considered in detail in NZME Publishing Ltd v Trade Me Ltd [2017] NZIPOTM 22, but was ultimately left open.

So at the moment, parties just don’t know where they stand.  There are potentially many marks on the register that are being used every day but – unbeknownst to their owners – are potentially vulnerable to non-use applications.  If IPONZ believes that such marks are vulnerable as a matter of law, this needs to be signalled much more clearly.  And, in particular, when trade marks are being filed, the applicant should be put on notice (preferably in red flashing lights) of the risks of removal if the mark is held by an entity associated with the trader, not the trader itself.

I don’t mind telling you that I have had disagreements with senior IPONZ staff about this topic.  Some people think that it is up to an applicant to make sure that it does everything right and to live with the consequences if it doesn’t manage that, even if what is “right” is not easy to figure out.  I also appreciate that the issue is ultimately one of statutory interpretation, not some amorphous idea of “fairness” that might differ from person to person.  But I can’t get away from the idea that if the law is going to be interpreted in a strict manner, which might not be apparent on the face of the legislation and which arguably departs from established practice, then there is a duty to let the public know about that.

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Jane Glover

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By Jane Glover
Jane Glover Barrister – Mediator – Adjudicator

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