Feeling useless in Australia? There may be a cure

Photo by Everett Bartels on Unsplash

Use it or lose it is the oft-used succinct expression to describe the fragile nature of registered trade mark rights. The basic position is that if a trade mark owner does not actively use its trade mark in the course of trade, it can be removed (in full or in part) on the ground of non-use. In other words, trade mark protection is only justified insofar as a trade mark is in use.

However, this expression of the basic position does not capture the complete position in Australia as there is a very broad discretion for the Registrar not to remove a registration even if the non-use application grounds have been established according to s101(3) of the Trade Marks Act 1995 (Cth) (the Act).

The position in Australia is somewhat at odds with use-based trade mark systems, such as that in the U.S.. In Australia, the trade mark applicants:

  • are not required to lodge evidence of use;
  • are not routinely required to file a declaration that they intend to use their marks;
  • frequently describe their products using very broad generic terms in preference to a narrower, more precise description; for example, "toys and playthings" is more frequently used than say "dolls, action figures and model cars".  “Clothing” is more frequently used than say “jeans, pants, trousers, short trousers, shorts, skirts and dresses”.

The Australian practice of filing broad specifications might be justifiable if the use it or lose it post-registration policing impacts on the broader filing later down the line.

However, a broad goods/services claims may be pared back to the precise goods/services in use but only if challenged by a third party. Therefore, the trade mark owner is not in a worse position than if they had filed for those narrow goods/services initially. Consequently, broad specifications are attractive for enforcement and to establish broad protection on the Register, where trade mark applications are examined on relative grounds.

Additionally, broad trade mark protection is arguably bolstered by the Australia statutory discretion to preserve a registration, even if non-use is established.

The Discretion to Preserve a Registration

The trade mark owner bears the onus of satisfying the Registrar that the discretion under section 101(3) of the Act ought to be exercised.

However, the discretion provided by this section is very broad, indeed "unlimited."[1]

Broadly there are three factors to take into consideration in assessing if it is reasonable to preserve a trade mark in such a proceeding:

  • the interest of the owner of the trade marks;
  • the interests of the applicant for removal; and
  • the public interest.

There is no requirement that the trade mark owner must establish exceptional circumstances for the discretion to be exercised in favour of mark remaining on the Register. [2]

The circumstances which will justify the exercise are best illustrated by cases where the following factors also relevant to the exercise of the discretion:[3]

  1. the trade mark owner had not abandoned the trade mark
  2. the trade mark enjoyed some residual reputation
  3. there had been sales of goods under the mark after the relevant period had ended
  4. the removal applicant did not take steps to determine if anyone had prior rights in the trade mark, and
  5. the trade mark owner was not aware of the removal applicant’s sales under the mark.

In addition to these factors, s101(4) allows the Registrar to consider use of the attacked mark on similar or closely related goods or services.

Some examples of the power to preserve

Pioneer Computers Austl. Pty Ltd. v. Pioneer KK (2009) 176 FCR 300:

The court exercised its discretion to preserve a goods specification for a wide range of computer-related goods (including computers, computer keyboards and computer software) where the trade mark owner filed evidence of use on audio-visual products and a narrow range of “computer peripheral devices.”

The Judge considered that that Pioneer KK’s strong reputation in relation to products for the home, car and business (including computer related products and services related to those products) coupled with the concepts of brand extension and convergence would be highly likely to cause consumers to believe that there was an association with Pioneer KK and other goods sold under the name PIONEER.

There was no convergence when the trade mark owner had filed the broad specification prior to convergence but the judge also accepted that the rights arising from the registration of a trade mark should not be confined to the stage of technological development of goods specified when the mark was registered.

Vaishi Enterprises Pty Ltd v GSM Food and Spices Pty Ltd [2018] ATMO 7

GSM applied to remove a trade mark registration for a trade mark covering milk products in class 29 and spices in class 30 on the ground of non-use during the three-year period.

Evidence of use of the mark for yoghurt was sufficient to save the mark for milk products.

Goodman Fielder Pte Ltd v Conga Foods Pty Ltd [2020] FCA 1808.

In relation to Conga Foods’ non-use action, Justice Burley found that Goodman Fielder had demonstrated the requisite use and intention to use its marks in relation to “bread and bread products” (and pizza bases and pizza dough as they are sufficiently similar to the “bread products” for which the marks were used).  However, the general foodstuffs category was removed from Goodman Fielder’s registrations.

In light of the broad discretion provided by the Act, “use it or lose it” overstates the vulnerability of a trade mark registration. Consequently, a trade mark owner should carefully scrutinise an allegation of non-use as there may be scope to preserve a registration, even if the position initially appears hopeless.

For further information, please contact Lance Scott.

[1] The Full Court of the Federal Court in Austin, Nichols & Co Inc v Lodestar Anstalt [2012] FCAFC 8; 202 FCR 490 at [35].

[2] Pioneer Computers Australia Pty Limited v Pioneer KK [2009] FCA 135 at [168] per Bennett J.

[3] Hermes Trade Mark [1982] RPC 425 and E. & J. Gallo Winery v Lion Nathan Australia Pty Limited [2008] FCA 934.

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