A brand owner has successfully relied upon online sales of its products into New Zealand to defeat a non-use revocation action, in Bonobos, Inc v Beaumanoir Asia Holding Singapore Pte. Limited [2022] NZIPOTM 17 (22 August 2022).
Beaumanoir Asia Holding Singapore Pte. Limited (Beaumanoir) applied to revoke Bonobos, Inc's registrations of the trade mark BONOBOS in classes 25 and 35, on the grounds that neither registration had been used during a three year period prior to 11 June 2018. The decision is the latest in numerous proceedings between the parties, including in the European Union, China, India and Mexico.
Is Beaumanoir an "aggrieved person"?
Beaumanoir needed to demonstrate that it is an "aggrieved person", in order to establish standing. Usually this is easily proven by referring to the fact that IPONZ has cited the subject trade mark registration against registration of the Revocation Applicant's subsequent trade mark, and that is exactly what had happened here. However Bonobos claimed that the relevant status was not established, as Beaumanoir had not filed evidence of the relevant compliance reports, nor established that revocation of the relevant registrations would clear the path for Beaumanoir's own application to register the trade mark BONOBO in class 25.
The Assistant Commissioner dismissed Bonobos' claim, noting that multiple New Zealand cases "have found that the aggrieved person test is met despite the Applicant for revocation not filing evidence of IPONZ Compliance Reports".
The Assistant Commissioner went much further, citing numerous other factors which support a view that Bonobos' claim should not be upheld, including the Assistant Commissioner's ability to take judicial notice of the Compliance Reports, the status of Beaumanoir's trade mark applications and Bonobos' omission to cross-examine one of the Beaumanoir Declarants.
Do overseas online sales into New Zealand constitute "use" of a trade mark in New Zealand?
Bonobos' key evidence regarding its use of the BONOBOS mark in Aotearoa New Zealand involved its global website www.bonobos.com and sales evidence relating to New Zealand. Its evidence included:
1. Printouts from the Wayback Machine showing use of BONOBOS on
clothing labels on the website;
2. A website reference that Bonobos "currently ship to
Canada, Mexico, Australia, New Zealand, Japan and Peru".
3. A statement that there were over 1660 unique visits to the
Bonobos website from New Zealand, which the Assistant Commissioner
viewed as "not insignificant" (even after discounting a
portion of those visits which were after the relevant non-use
period).
4. Confidential sales figures for BONOBOS-branded products into
New Zealand during the non-use period, accompanied by invoices and
shipping documentation.
5. DHL shipping documents.
A useful case for foreign brand owners and Australian IP Attorneys
The Assistant Commissioner concluded that Bonobos' evidence was sufficient to establish genuine use of the BONOBOS trade mark in New Zealand and to defeat the revocation action, with the succinct conclusion that "Bonobos' registered marks are not abandoned vessels in the shipping lanes of trade" (expressly adopting the analogy of Jacob J in Laboratoire De La Mer Laboratoire De La Mer Trade Marks [2002] FSR 51 (Ch) 790).
The case is a particularly helpful one for Australian IP attorneys, as the Assistant Commissioner ran through a range of relevant Australian and New Zealand decisions regarding online sales, including:
1. Ansul BV v Ajax Brandbeveiliging BV [2003] RPC 717
2. Next Retail Limited v Nexcorp Australia Proprietary Limited
[2016] NZIPOTM 16
3. Knickerbox Ltd v Pedita Australia Pty Ltd (1995) 31 IPR
108
4. Deckers Outdoor Corp v B&B McDougall [2006] ATMO 5
5. Ward Group Pty Ltd v Brodie & Stone Plc [2005] FCA
471
6. Target Australia Pty Ltd v Target New Zealand Ltd (2018) 134
IPR 431; [2018] NZIPOTM 16 [Target Australia (IPONZ)]
7. Sambbasivam v Chetty [2011] NZHC 489; (2011) 94 IPR 214
(HC)
8. VinoMofo Holdings Pty Ltd v Blackmarket.com.au Pty Ltd (2018) 134 IPR 431;
[2018] ATMO 14
Furthermore, Beaumanoir threw absolutely everything at Bonobos' evidence to try and discredit its veracity and reliability. The Assistant Commissioner demonstrated a high level of precision and patience in examining Bonobos' evidence very closely and likewise giving appropriate weight and consideration to the numerous assertions made by Beaumanoir. Consequently, the case stands as a helpful guide for Australian IP lawyers and foreign brand owners in particular, when assessing whether online sales constitute use of a trade mark in New Zealand.
General Principles regarding online sales and trade mark use
As in the Fight Club movie, the first principle from this case is that "there are no rules". That is, IPONZ and a New Zealand court are likely to consider evidence of use with a high degree of scrutiny. As has been noted many times before, the evidentiary requirements in an IPONZ revocation case are much higher than their Australian equivalent, particularly in relation to compliance with the rules of evidence. That said, the case does provide some good guidance, including:
1. Revocation allegations require solid evidence - Beaumanoir asserted with evidence that New Zealanders could not purchase from the Bonobos website as the relevant shipping page required entry of a "state" from the drop down menu and did not include options to select New Zealand. However the Assistant Commissioner noted that Beaumanoir's evidence occurred outside the relevant non-use period and was not consistent with the brand owners evidence within the relevant period. In other words, if challenging a website's accessibility, the evidence would need to be reasonably strong to mount a reasonable challenge.
2. Exclusive online brand promotion is helpful - In this case there was no evidence that Bonobos was using brands other than BONOBOS in relation to its goods, on its website. This contrasts with the Next Retail case, in which the brand owner sold various third party branded goods through its Next website and thus it could not be assumed that any products were physically labelled with the brand NEXT.
3. Specifically targeting New Zealand - The Assistant Commissioner put it best when she observed that "owners of trade marks where their primary business is based overseas would be well advised to be careful to take active steps to offer their goods to New Zealand consumers and to encourage purchases from that territory. The more active steps the owner takes directed toward New Zealand consumers, the greater likelihood of genuine use being found."
In this case it was particularly helpful that the Bonobos website only targeted five countries/regions. Most people familiar with online transactions will be aware that it is quite common for a global website to offer sales in almost any country in the world, literally from Argentina through to Zimbabwe and every country in-between. Such websites can also often convert the price of goods into the local currency (i.e., $NZD). Consequently, the mere fact that a global website references New Zealand and can provide figures in $NZD is unlikely of itself to be sufficient to establish sales into New Zealand.
What about class 35 services?
The Assistant Commissioner restricted the class 35 services which were the subject of a revocation action as follows:
Retail of clothing for men; online retail of clothing for men
This conclusion was based upon the observation that the evidence of use of the mark only related to the remaining services shown above.
It is worth noting that the Assistant Commissioner struck out "retail store services". Although she left open scope for a counter claim to be made, her interpretation of "retail store services" lent strongly to those services requiring a physical store as opposed to an online store. That said, the specification already had coverage for online retail services. If the class 35 specification only related to retail store services" it is unclear whether or not the Assistant Commissioner would have allowed that term to be amended to refer to online retail store services.
This case is a comprehensive and solid guide in relation to online sales and revocation actions in New Zealand and is thus helpful for both brand owners and IP attorneys - particularly those based in Australia.
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.
