Baxter IP Supports Successful Outcome in Federal Court Trade Mark Non-Use Appeal

In a significant victory for trade mark owners navigating non-use challenges, Baxter IP has successfully supported client Jaimon Thomas in defending the registration status of Australian Trade Mark No. 2003430 for "KAYAL" following an Appeal to the Federal Court from the Trade Mark Registrar's decision to remove the Trade Mark for non-use. This shows the value of preparing effective evidence of use, which the Federal Court has reassessed and considered having met the threshold for use, and for applying discretion.

The Federal Court of Australia, in the decision Thomas v Monsoon Group Pty Ltd [2025] FCA 911, overturned the Registrar's decision to remove the mark, allowing it to remain registered for all covered services putting weight on the evidence Baxter IP prepared during opposition to the non-use removal action.

Case Background

The dispute arose when Monsoon Group Australia Pty Ltd filed an application to remove Mr. Thomas's "KAYAL" trade mark from the register under section 92(4)(b) of the Trade Marks Act 1995 (Cth), alleging non-use during the relevant three-year period (the "Relevant Period"). The mark, registered for restaurant services, faced scrutiny over whether it had been actively used in Australia.

Baxter IP represented Mr. Thomas in opposing the removal. Our team prepared comprehensive evidence-in-support, including statutory declarations detailing Mr. Thomas's international restaurant operations under the "KAYAL" brand and franchise agreements entered into for Australian locations. No evidence-in-answer was filed by the removal applicant, and Baxter IP submitted detailed written arguments. Despite this, the Trade Marks Office Hearing Officer ruled in favor of removal, declining to exercise discretion under section 101(3) to retain the mark.

The Federal Court Appeal and Baxter IP's Pivotal Role

Mr. Thomas appealed to the Federal Court, where the matter was heard de novo—meaning the Court conducted a fresh review without deference to the Registrar's findings. Justice Hespe's judgment, delivered on 11 August 2025, directly referenced and relied upon the evidence prepared by Baxter IP in the initial opposition (see paragraphs 20-24 of the decision).

The Court emphasized that non-use allegations can be rebutted even without active operations in Australia during the Relevant Period. Key findings included:

• Commitment to Use the Mark: Drawing on precedents such as Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) [1984] HCA 73, the Court noted that evidence of preparatory activities—such as operating restaurants abroad under the brand and entering franchise agreements in Australia—demonstrated an objective commitment to using the mark. This "opened a channel" for establishing operations, as per Conquip Holdings Pty Ltd v S & A Restaurant Corp [2000] FCA 256.
• Obstacles to Use: Under section 100(3)(c), the Court accepted that the COVID-19 pandemic and associated government restrictions constituted circumstances beyond Mr. Thomas's control that hindered use. Baxter IP's evidence highlighted how these disruptions affected franchisees' ability to commence operations.
• Exercise of Discretion: Even if non-use were established, the Court found compelling reasons to retain the registration under section 101(3). Factors included the pandemic's impact, the franchise agreements, and post-Relevant Period developments, such as a "KAYAL" restaurant opening in Victoria under a franchise arrangement.

The Court's orders were clear: the appeal was allowed, the Registrar's decision set aside, and the mark permitted to remain registered in full. This reversal was achieved without the need for an extension of time to appeal, as the respondent filed a submitting notice and the Registrar did not intervene.

Strategic Insights from the Decision

This case illustrates several critical principles for trade mark owners facing non-use actions:

• Evidence of Intent and Preparation: Activities like franchise agreements and international branding can establish a commitment to use, even absent physical operations in Australia (Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261).
• Impact of External Circumstances: Disruptions such as pandemics can serve as valid obstacles, provided they are substantiated with targeted evidence.
• Discretionary Factors: Courts and the Registrar have broad discretion to preserve registrations where removal would be unjust, emphasizing the value of proactive evidence gathering.

Baxter IP's preparation of the evidence-in-support was instrumental in providing the factual foundation for these findings, demonstrating our firm's expertise in crafting compelling submissions that withstand scrutiny at both administrative and judicial levels.

Why This Matters for Businesses

Trade mark non-use proceedings can pose significant risks to valuable brand assets, especially for international operators expanding into Australia. This successful appeal highlights how early strategic intervention—through thorough evidence and informed advocacy—can protect registrations and support long-term commercial goals. At Baxter IP, we specialize in these contentious matters, helping clients from startups to multinational enterprises maintain their IP portfolios amid challenges like market disruptions or competitive threats.

Our track record in oppositions and appeals reflects our commitment to delivering practical, business-focused outcomes. As one of Australia's leading boutique IP firms, we combine technical precision with commercial acumen to protect client brands.

If you're facing a trade mark dispute or need advice on protecting your brand, contact Baxter IP today. Our team is ready to provide the expert trade mark attorney guidance.