CUB defends unused trade marks – the registrar’s discretion

CUB defends unused trade marks – the registrar’s discretion

CUB defends unused trade marks – the registrar’s discretion

CUB Pty Ltd v Elixir Signature Pty Ltd [2013] ATMO 74
Intellectual Property Development Corporation Pty Ltd v CUB Pty Ltd [2013] ATMO 73
 

Nature of the removal and opposition proceedings against CUB trade marks

The decisions concern highly-publicised removal proceedings filed by Elixir Signature Pty Ltd on grounds of non-use against 53 registered trade marks owned by CUB Pty Ltd (formerly Fosters Australia Limited) and on grounds of lack of intention to use against one trade mark registration (registration No.1121877).  The removal proceedings were heard concurrently with five related oppositions lodged by Intellectual Property Development Corporation Pty Ltd (“IPDC”) against five trade mark applications filed by CUB.

History of the trade mark dispute between Elixir and CUB

Elixir is a member of the ICB Group of companies operating an import/export business in Australia, New Zealand, Europe, the USA, South Africa and throughout Asia including in the brewing industry.  IPDC is an IP holding company within the ICB Group.

A history of the dispute between Elixir and CUB is provided below

  • 9 February 2009 – Elixir was incorporated in order to bring some ‘historical beers’ back to life.  Shortly thereafter, Elixir made an approach to CUB to discuss acquiring or licensing the marks used for certain beers on the basis that they no longer formed part of the CUB’s core business.
  • 25 August 2010 – CUB confirmed that it did not wish to sell or licence its historical brands to Elixir.
  • 7 September 2010 – Elixir applied to remove 50 of CUB’s registrations.
  • Latter part of 2010 and early 2011 – Further negotiations took place in relation to possible licence or acquisition of the marks.
  • May 2011 – CUB refused to consent and indicated that CUB would defend its brands should Elixir continue its attempt to appropriate its marks.
  • 20 June 2011 –  Elixir then filed two further removal applications against CUB marks.
  • 23 December 2011 – Elixir filed a further two removal applications against marks owned by CUB.
  • 25 August 2011 – CUB filed eleven new applications for registration of some of its historically significant brands.  IPDC opposed five of these applications on the basis that CUB did not intend to use the marks (section 59) and that they had been filed in bad faith (section 62A).

Both the removal proceedings and opposition matter were heard together over 2 days before the Deputy Registrar Michael Arblaster assisted by Hearing Officers Christy Condon and Alison Windsor.  Delegate Condon issued the decision in the opposition proceedings and Delegate Windsor issued the decision in the removal proceedings.

CUB’s challenged trade marks and evidence

The parties filed substantial evidence in both proceedings.  CUB led 25 Declarations to support its opposition to removal of its registrations.  The evidence sought to demonstrate a basis for maintaining the trade marks by reference to different ‘families’ of marks.  Broadly each registration covered beer and related goods in class 32 and the various families are as follows:

The related opposition proceedings concerned the following five marks filed by CUB which similarly covered beer or beer and related goods in class 32.

The Delegates’ summaries of the evidence in both proceedings reads like a history of brewing in Australia and the expansionary business path of CUB and its predecessors in acquiring various competing businesses and their brands.  For example, the Ballarat Bitter marks were acquired by CUB’s predecessors in 1958, the Tooth’s marks were acquired in 1983, the Bulimba marks were acquired in 1960 and so on.

The evidence showed that the majority of the marks have long since fallen into disuse.  Where marks had not been used for some time, CUB’s evidence sought to show that the relevant marks retained a residual reputation or that CUB had a continuing intention to use the marks, in particular highlighting that some of the marks had previously been used by CUB to commemorate various events and that it had plans to use some of the trade marks in a similar way in the future.

CUB and Elixir’s arguments

The decisions detail at length the arguments of the parties.  In summary, Elixir’s core submission in the non-use proceedings was that

…CUB maintains a trade mark portfolio not because it is using or intends to use each mark, but because it fears the use of trade marks by others in a highly competitive market and hopes to stymie such competition… CUB is engaged in a systematic approach of trade mark banking.

Accordingly, the trade marks should be “set free” for third parties to use.

IPDC made similar submissions in the related opposition proceedings asserting that the lack of use of the marks supported a view that CUB did not have the requisite intention to use the marks of its new applications and, further, that the strategy of refiling its applications was in bad faith

because it filed the applications with the knowledge that its heritage trade marks would otherwise be vulnerable to non-use proceedings

and as the Opponent had an interest in licensing, or securing the intellectual property rights in some of the challenged marks.

By contrast, CUB argued in the removal proceedings that where its evidence did not show use of marks in the relevant periods, the evidence nevertheless demonstrated an ongoing interest in the trade marks and a substantial reputation suggesting that use of the marks by a third party would be likely to mislead consumers into considering the relevant beer products originate with CUB or its predecessor-in-title.

Of note, CUB asserted a continuing intention to use its marks and that it was in the planning phase for release of several new heritage brands.

Elixir responded that CUB, a publically listed company with stringent record keeping obligations, should have done more to substantiate future plans for release of heritage beers by tendering evidence in the proceedings.  CUB responded by highlighting that the Registrar did not have the power to compel confidentiality and/or penalise a breach of such confidentiality and would tender such plans in court if necessary.

The Delegates in both proceedings noted that this concern was credible after details of CUB’s confidential plans for future heritage releases was published in the press on the second day of the Hearing.

The delegates’ decision 

Removal Proceedings On Grounds Of No Intention Of Use Against Cubs Trade Marks

The Delegate first considered the removal proceeding on the basis that CUB did not have an intention to use the mark the subject of registration No.1121877 NQ Lager & Device. 

Elixir submitted that its belief was that the application for registration of this mark was filed to strengthen CUB’s position in “negotiations with interested parties”, although no evidence of this was provided.  However, CUB provided a sworn statement that it intended to use the mark at the time of filing and this was considered sufficient to shift the onus to Elixir to demonstrate that this was not the case.  In the absence of any evidence to the contrary, the Delegate concluded the grounds for removal were not made out.

Removal proceeding on grounds of non-use against CUB’s trade marks

Turning to the removal proceedings on grounds of non-use, the Delegate concluded that the evidence only showed use of the Kent Old Brown Logo trade mark (registration No. 457529) and a variation of the Tooth’s K.B. trade mark (registration No. 173634) in the relevant periods.

Accordingly, the Delegate considered whether to exercise the registrar’s discretion to maintain each of the remaining 51 challenged registrations.  The Delegate first considered whether there had been abandonment of any of the trade marks.  After weighing the relevant cases, the Delegate confirmed that abandonment is not to be inferred from mere non-use, and that in order for a trade mark not to be taken as abandoned there would need to be some residual reputation, some documented intention for future use or at least some slight use during the relevant period.

Residual Reputation

The discussion then turned in detail to submissions made by CUB as to the residual reputations of the various marks.  Interestingly, CUB had not led any evidence of its sales, advertising and promotional expenditure in relation to product bearing the challenged marks.  It sought to substantiate the existence of the residual reputation by highlighting:

  1. the reflective reputation such as in ‘pub-art’;
  2. a document entitled an ‘Oral History of the Kent Brewery’;
  3. historic signs painted on walls in Melbourne and Sydney;
  4. the KENT Brewery site having been redeveloped as a housing estate which pays  respect to the heritage of the site; and
  5. numerous advertisements for Tooths’ products and other beers being available on  the You Tube website.

Significance Of Geographical Names In Trade Marks

Interestingly, Elixir submitted that as many of CUB’s trade marks incorporated a geographical place name there is a stronger rationale for removal as a core element in the mark is non-distinctive.

On this point the Delegate noted that

unlike almost any other product, beer branding is dominated by geographically significant terms.  Historically, the relative ease of production of beer combined with slow transportation meant local production of beers was prolific… beers lovers can be notoriously partisan about their beers and, in this context, once the geographically based beer brand has established a reputation, its geographical significance is likely to serve to maintain a reputation longer than would otherwise be expected.

Private Interest Considerations

The Delegate then weighed the private interests of the parties, noting firstly that IPBC had applied for several trade marks which were substantially identical with or deceptively similar to many of the challenged marks and it had a significant ‘bank‘ of 100 trade marks which appeared incongruent with Elixir’s criticisms of CUB’s purported banking of trade marks.  Further, the Delegate was not convinced by the argument that the marks should necessarily be ‘set-free’ where those marks had not been used, particularly where the marks consist of a complex grouping of words and images as compared with, say, a word mark that other traders are likely to think of and want to use .

The Delegate then weighed Elixir’s desire to use the mark against CUB’s claim that removal of the challenged marks was likely to lead to widespread confusion and damage to the goodwill of CUB’s business.  Noting that Elixir has its own sizeable portfolio of marks and that Elixir had previously been in negotiations with CUB, she concluded (quoting from P & T Basile Imports Pty Ltd v Societe Des Produits Nestle SA [2002] ATMO 16) that there is “nothing before me to suggest that at the time of filing these applications, there was any reasonable possibility of [Elixir] being “appreciably disadvantaged in a legal or practical sense” by the presence on the Register of either of [CUB’s] registrations in class [32].””

Public Interest Considerations

The Delegate then turned her mind to public interest considerations.  Noting the public interest in maintaining the integrity of the Registrar by removing unused trade marks, the Delegate nevertheless considered that if CUB released a heritage beer, the buying public would expect that beer to be made in accordance with the original historical recipe to the extent possible and failure to meet this requirement would be somewhat misleading.

Further, some of the marks were endorsed with ‘claims to vary’ which foreshadowed descriptive elements in those marks changing (such as in respect of the words VICTORIA LAGER in the mark of registration No.67579 which may be varied to VICTORIA BITTER).  Moreover, the Delegate considered that if some of the marks within a brand family are used for goods which originate with different manufacturers then there is a significant risk of consumer confusion.

The Delegate then considered which marks in the various families of marks should be maintained.  Applying the relevant factors discussed above, the Delegate maintained the majority of the registrations.  The Delegate removed ten of the challenged marks, where there was no evidence to support a residual reputation on a clear continuing intention to use those marks.  CUB’s mere desire to maintain these registrations was not considered a sufficient reason to exercise the Registrar’s discretion.

Neither party received a cost order as neither achieved its objective in full.

Opposition Proceedings against CUB’s trade marks 

The Delegate’s Section 62A Decision

After consideration of the submissions and evidence, the Delegate was satisfied of two important facts:

  1. that CUB was aware Elixir had an interest in using the Trade Marks; and
  2. that there was at no time a business relationship between either Mr Withers,  Elixir or IPDC  and CUB

The Delegate was not prepared to draw an adverse inference that the filing of the applications was merely a defensive tactic in response to IPDC ‘s interest in using the marks, but rather considered the inference to be drawn was that IPDC knew that CUB was the owner of the marks as it had approached CUB to acquire or license use of the marks.  Further, the Delegate noted that no evidence had been provided as to why CUB should not have applied for the marks and, accordingly, concluded that CUB was justified in applying for registration of the marks.

The Delegate’s Section 59 Decision

IPDC’s submissions on this point relied heavily on email communications between the parties in relation to the failed negotiations to licence the use of the marks, arguing that the Applicant had no intention to her the marks, but rather merely intended to prevent others from using the trade marks should the earlier registrations be removed on grounds of non-use.

By contrast, CUB described its plans for future beer releases and the Delegate accepted that these were truthful.

Accordingly, the Delegate was not satisfied that the onus had shifted to the Applicant to demonstrate an intention to use the mark, as a prima facie case of a lack of intention had not been made out by IPDC, only mere allegations.  Notwithstanding this finding,  the Delegate considered that CUB’s review of its heritage brands in 2010, past and planned special releases of its heritage beers and its existing registrations all demonstrated that it had an intention to use the marks.

The Delegate dismissed the opposition and awarded costs against IPDC.

Lessons for trade mark owners

  • A residual reputation in a trade mark may provide a basis for exercising the Registrar’s discretion to maintain a trade mark in spite of non-use.
  • A risk of consumer confusion is an important public interest consideration when exercising the Registrar’s discretion to maintain a trade mark in spite of non-use.
  • Trade marks containing geographical place names used for beer may have greater residual reputation in light of the partisan nature of beer drinkers.
  • A removal applicant’s private interest in using a trade mark may be weighed against risk of confusion and potential loss of goodwill.
  • Use of marks within a family of trade marks may provide a basis for maintain registrations for other marks in that family which are not in use if consumer confusion may arise.
  • A mere desire to maintain a registration is not considered a sufficient reason to exercise the Registrar’s discretion.
  • The onus is with an opponent to demonstrate why an application has been filed in bad faith or that the applicant does not have an intention to use the relevant mark.