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The risks associated with the non-use of a registered trade mark
are highlighted in a recent decision of the Full Court of the
Federal Court of Australia in Austin, Nichols & Co Inc v
Lodestar Anstalt [2012] FCAFC8.
The statutory framework
In Australia, following a period of five years from the filing
date, a trade mark can be cancelled on grounds of non-use if it is
not being used and has not been used in the preceding three year
period ending one month prior to an application for removal for
non-use being filed. If a non-use application is filed, the
registered owner will generally need to demonstrate relevant use of
the mark in Australia in order to maintain the registration.
However, in circumstances where the registered owner is unable to
demonstrate relevant use of the mark or that the non-use was due to
obstacles which prevented use of the mark, the Registrar (or a
Court on referral or appeal) may exercise the discretion
not to remove the mark from the Register if satisfied that it is
reasonable to do so.
The facts and legal findings
Lodestar Anstalt was the owner of the registered mark 'WILD
GEESE', covering various alcoholic and non-alcoholic drinks,
which had been registered since 8 December 2000. Austin, Nichols
& Co Inc (who made and sold bourbon whiskey under the 'WILD
TURKEY' mark) and another third party filed applications
seeking removal of the 'WILD GEESE' mark from the Trade
Marks Register on the basis of non-use. It was accepted by the
parties that there had been no use of the mark in Australia during
the relevant three year non-use period. The issue for determination
by the Federal Court was whether the registered owner had
demonstrated that reasonable grounds existed for retaining the
registration, despite the non-use.
At first instance, a single judge of the Federal Court found
that no causal link had been demonstrated between the obstacles
preventing use relied upon by Lodestar and the non-use of the mark
in Australia. However, His Honour exercised the discretion to allow
the mark to remain on the Register on the basis that the 'WILD
GEESE' product had attained "some degree of reputation
and profile" in Australia and that removal of the mark
from the Register "may cause a degree of confusion to the
public". Austin Nichols challenged the exercise of the
discretion on appeal.
On appeal, the Full Court of the Federal Court accepted that the
discretion to retain a registration in circumstances where relevant
use has not been demonstrated is broad and that exceptional
circumstances did not need to be shown before it could be invoked.
However, the Full Federal Court found that the exercise of the
discretion by the judge at first instance had miscarried as it was
based on a finding of fact (namely that the 'WILD GEESE'
mark had acquired a reputation in Australia) that was unsupported
by the evidence. In deciding to remove the registration the Full
Federal Court relied on the following:
Lodestar had not commenced use of the 'WILD GEESE' mark
in Australia until three years after the non-use applications had
been filed (which was almost eight years after it had been
registered);
Use of the mark in Australia had been limited (comprising few
sales and no extensive promotion); and
Lodestar had not filed evidence which demonstrated that
confusion would, or at least, could result from removal of the
mark.
Discussion
This decision demonstrates the importance of making use of a
trade mark in Australia in respect of the goods and/or services
covered by a registration in order to maintain the registration. If
a trade mark has been registered for a period of five years from
the filing date but has not been used in Australia, the
registration may provide false security for the registered
owner.
If faced with a non-use removal action, the owner may be able to
defend the action by demonstrating that it is reasonable in the
circumstances not to remove the mark from the Register. However, as
this recent Full Federal Court decision clearly highlights, the
exercise of the discretion needs to be justifiable on the facts and
by reference to the position in Australia. Relying on the exercise
of the discretion in favour of retaining the mark on the Register
(where relevant use cannot be demonstrated) is a risky
strategy.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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