Proper use of registered trade marks: learning from the case, The Sunraysia Natural Beverage Co Pty Ltd v Honest Tea Inc [2019] ATMO 74

Trade mark registration provides trade mark owners with exclusive rights to use a trade mark. In the meantime, it brings the trade mark owners obligations to use their registered trade marks during the period of registration. Failure to meet this obligation may result in trade mark registrations becoming vulnerable to non-use removal. The decision of case The Sunraysia Natural Beverage Co Pty Ltd v Honest Tea Inc [2019] ATMO 74 provides trade mark owners with guidelines on what form of use of a trade mark is within the definition of the Trade Marks Act 1995 (Cth), and what evidence can help to rebut an allegation of non-use.

Background

Sunraysia Natural Beverage Co. Pty. Ltd (‘Sunraysia’) owns a trade mark, i.e. HONEST KIDS, Registration No. 1427322. Particulars of the Registration are:

Trade Mark: HONEST KIDS (‘the Trade Mark’)

Filing date: 26 May 2011

Goods: Class 32: Non-alcoholic drinks; carbonated and noncarbonated soft drinks; mineral and aerated waters; fruit juices, fruit flavoured beverages; syrups; water; preparations for making the aforesaid.

The Trade Mark was previously owned by another entity named Benver International Pty Ltd (‘Benver’).

Honest Tea, Inc. (the Removal Applicant) filed a non-use removal action against the above registration under s 92(4)(b) and alleged that the Trade Mark remained registered for a continuous period of 3 years but at no time during that period the mark was in use.

Benver opposed the non-use application. The Opponent was then amended to be Sunraysia. Both the Opponent and the Removal Applicant filed evidence.

Legislative provisions

As provided under section 92(4)(b), a non‑use application may be made on the grounds 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:

1. used the trade mark in Australia; or
2. used the trade mark in good faith in Australia;

in relation to the goods and/or services to which the application relates.

To rebut an allegation of non-use under section 92(4)(b), the Opponent must establish use of the subject trade mark in Australia, in relation to the goods and/or services, during a continuous 3 years ending one month before the day on which the non‑use application is filed.1 It is worth noting that the evidence of use must show that the use of the trade mark is made by the registered owner or an authorised user.

Alternatively, a registration may not be removed if the Opponent establishes that the use of the trade mark cannot be made because of an obstacle of using the trade mark during the relevant period.2

Opponent’s evidence

The Opponent (i.e Sunraysia) submitted a statutory declaration made by the Director of Sunraysia, Mr Dan Presser, wherein he stated Sunraysia, Benver, and Rosella are companies in the Sabrands Group (Sabrands). Along with the declaration, the Opponent submitted evidence including:

1. invoices, issued by a design company to Sabrands, in relation to the services for designing an artwork (which is alleged to be the design of outbox label of HONEST KID products);
2. email communications between Sabrands and design company in relation to the design work, a PDF document of designs of the outbox label of products;
3. email communications between Sabrands and a charitable foundation in relation to a discussion of replacing the package of Sunraysia branded juice products with a new package;
4. one invoice of the sale of Sunraysia Honest Kids Organic Multipack juice products.
5. one purchase order, undated but with a date of delivery, issued by a third party in relation to a purchase of Sunraysia Honest Kids Organic Multipack juice products; and
6. evidence of Rosella branded tomato sauces, bearing HONEST KIDS mark, which shows products are sold in supermarkets including Coles, Woolworths, and IGA.

Apparently, except for the Evidence No. 4 and 5, the rest of evidence indicates that the alleged use was not made by the Registered Owner (Sunraysia), or the previous owner Benver, but was made by other companies which claimed to be authorised users of the Trade Mark. In testing the authorised use, the Delegate referred to section 8 of the Act and the decisions of cases Trident Seafoods Corporation v Trident Foods Pty Limited3 and Lodestar Anstalt v Campari America LLC4 from which she extracted the following notes:

1. Use by a parent company of a trade mark owned by a subsidiary does not establish authorised use unless substantial quality control by the subsidiary over the parent company is shown; and
2. The mere possibility of control by virtue of a license agreement is not sufficient to establish authorised use under section 8, but an agreement containing a term that sets in detail a quality standard to be achieved suffices.

The Delegate noted that the Opponent’s evidence lacked the proof of connection between the Registered owner and the alleged authorised users. There was not any license agreement showing actual quality control in place. On those bases, she held authorised use not established.

The Delegate also commented on the Opponent’s alleged use based on her assessment of Evidence No. 4 and 5. She noted that the dates on the Invoice and the Purchase Order fell out of the Relevant Period. Although Mr Presser declared commitments of purchase were made within the relevant period, there was no evidence supporting his declaration. In light of that, the Delegate was not persuaded that the use of the Trade Mark was established.

Opponent did not declare other circumstances wherein it found obstacles of using the Trade Mark. Therefore, Delegate’s decision was made based on her consideration of evidence of both parties. She decided the Registration to be removed.

Notes and implications from the case

It is important for trade mark applicants and owners to note that

1. it is an obligation of registered owners to use their registered trade marks in respect of goods and/or services for which the registrations are sought.
2. when authorising other parties the rights to use a registered trade mark, actual quality control of the goods and services by the registered owner should be in place in order to support authorised use of the trade mark.

Periodical reviews of use of registered trade marks are recommended for trade mark owners in order to avoid the risks of registrations being removed for non-use.

Baxter IP provides post-registration maintenance for clients and timely reminds clients of reviews of trade mark registrations. Should your registration encounter an attack for alleged non-use, or you intend to remove a registration of others, Baxter IP is where you can seek professional advice and services from.

1. Trade Marks Act 1995 (Cth) sub-ss 100(3)(a)-(b).
2. Trade Marks Act 1995 (Cth) sub-s 100(3)(c).
3. [2018] FCA 1490.
4. [2016] FCAFC 92.