Dick Smith Investments Pty Ltd v Ramsey [2016]

Australian entrepreneur Dick Smith has been successful in a trade mark dispute between his brand OzEmite, and family owned brand AussieMite, which have competed in the Australian marketplace since 2012.

Mr. Smith lodged a trade mark application for the mark OzEmite in October of 1999 before its phonetic namesake, but did not launch the mark for the sale of goods for eight (8) years, long after AussieMite had made its way in to the market. AussieMite owner Roger Ramsey sought to have OzEmite struck from the trademark register to protect his company from its belated launch.

In 2014 the Australian Trade Marks Office removed the OzEmite trademark from the Register of Trade Marks following an application for removal to IP Australia on the basis of non-use. An applicant can remove a trade mark from the Register if the trademark has not been used for a continuous period of three years ending one month before the day on which the non-use application is filed. Mr. Ramsay filed an application for removal under section 92(4)(b) of the Act.

Under this section of the Act, the party opposing removal bears the onus of establishing that the trade mark was used in good faith in Australia during the relevant period. In a practical sense, this translates to a genuine intent to use the mark for commercial purposes.

Dick Smith Investments Pty Ltd provided evidence of actively publishing an intention to produce goods for sale using the trade mark since it was registered, but IP Australia found the delay between registration of the trademark and launch of the product was too great.

Dick Smith Investments appealed the decision to have the OzEmite mark removed from the Register of Trade Marks. The issues argued on appeal were these:

  1. Whether at any time during the statutory period (a continuous period of three years ending one month before the day on which the non-use application is filed) the OzEmite mark was used in relation to the goods;
  2. If not, whether there were circumstances that were an obstacle to the use of the mark during the statutory period; and
  3. Whether the court was satisfied that it is reasonable that the trade mark should not be removed.

The Registrar and the Court have a discretionary power not to remove a trade mark from the register even where the grounds for an application are made out. One basis for this is that obstacles preventing the use of a trade mark can legitimize its non-use, if these obstacles are not brought about by the voluntary act of the owner.

Dick Smith Investments claimed sales were delayed by complications sourcing yeast, and that yeast substitutes had limited success. This argument was advanced at first instance, but it was there held that the obstacle was not sufficiently established to overcome the application. On appeal, the Court held that although there were development problems, these related to the appellant's desire for a particular flavour to the product: a delay that was internal, rather than caused by external sources.

Despite this, the court accepted that publications relating to OzEmite were undoubtedly made with the intent to promote interest in the product after the registration date. It was held that the trademark, at the time of particular publications, was being used as a trademark to distinguish the prospective product from others, and therefore satisfied use of the trademark in good faith under the Act.

The Court used its discretion to order that the mark remain on the register, giving consideration to the notion that more confusion would be caused if the OzEmite mark were removed. Effectively, this means that both products will continue to coexist, with the party applying for the initial removal bearing the costs. This case accordingly demonstrates some of the dangers in aggressively filing to deregister marks on the basis of non-use.

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