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Use it or lose it... what's the law?

Date: 04 August 2010
Author: Gail Hill
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All mature trade mark registration systems have provision for removal or limitation of a registration for non use.  In Australia, the removal provisions have traditionally been strictly applied.  Recent decisions indicate a trend towards more active exercise of the Registrar's discretion in favour of the registered owner, as illustrated by the Trade Marks Office decision involving an application for removal of the SORBENT trade mark for non use: AB SCA Finans and SCA Hygiene Australasia Pty Limited v Sorbies Pty Ltd [2010] ATMO 19.
 
The Action:
This action was for removal of the SORBENT trade mark registration on two grounds: 
i)  That there had been no use of the trade mark by the registered owner or an authorised user; and
ii) That there had been no use for some or all of the goods in class 16 for which SORBENT was registered.
The Outcome:

The decision confirmed that the Registrar has a broad, general discretion to allow a trade mark to remain registered for goods and services.  This discretion may be applied where there has been little or no use of the trade mark for certain goods or services, if it is “reasonable” to do so.

Application to cancel a trade mark registration is likely to be unsuccessful where the trade mark owner can show use of the trade mark for some of the goods or services because of a trade mark owner's right to register a trade mark for “classes of goods/services".
 
“Authorised use” of a trade mark can be established where the trade mark owner and the trade mark user are related entities via a shared parent company, even where there is no evidence of a formal licence arrangement or exercise of “control” over the trade mark use.
 
Where the trade mark owner’s evidence of use or authorised use is inadequate, the removal applicant should test the evidence by filing evidence-in-answer and/or seeking further and better evidence.
 
If a trade mark registration is more than five years old and has not been used for three years, best practice is to refile a new application, to reset the use period, and avoid the risk of cancellation for non use for a further five years.
 
Background
 
In August 2008, Sorbies Pty Ltd (Sorbies) filed an application for the removal of  trade mark registration 907074 SORBENT, alleging that the trade mark had not been used during the relevant three year period in relation to the goods for which the trade mark is registered, namely:

Class: 3 Tissues impregnated with cosmetic lotions;
Class: 16 Articles made of paper and cardboard, tissues, toilet paper, wet wipes; and
Class: 21 Wet wipes, dispensers for wet wipes.
 
AB SCA Finans (SCA Finans) is the owner of the SORBENT registration and SCA Hygiene Australasia Pty Limited (SCA Australasia) is the authorised user and both companies opposed the removal action.  Evidence was provided that SCA Australasia and SCA Finans were both wholly owned subsidiaries of Svenska Cellulosa AB, and that SCA Australasia manufactured and marketed products under the trade mark under licence from SCA Finans.  Evidence was provided of use and promotion of SORBENT in magazine advertisements and in-store displays, television commercials, for SORBENT branded tissues, paper napkins, paper towels and toilet paper.
 
Removal or Limitation for non use for some or all of the goods
 
The Hearing Officer refused to restrict the goods of the registration notwithstanding that there was minimal or no use of SORBENT on goods such as “dispensers for wet wipes” and “articles made of paper and cardboard” and determined that it was reasonable to exercise the Registrar’s discretion in favour of the owner of the SORBENT trade mark which was extensively used on toilet tissue, paper towels and tissues.
 
What is Authorised Use?
 
Sorbies argued that use of SORBENT by SCA Australasia was not “authorised use” as there was insufficient proof of the registered owner's exercise of quality control over SCA Australasia’s use of the trade mark. This claim was rejected because Sorbies had not filed evidence refuting the opponent's claims of control by the registered trade mark owner, nor requested further or better evidence of the relationship.

The Hearing Officer stated that the examples of control described in sections 8(3) (quality control) and 8(4) (financial control) are non-exhaustive. The Hearing Officer concluded: “I need only take notice of the everyday notoriety of the trade mark to be assured that intra-group ownership, use and control of the trade mark would be regulated in a way satisfying section 8.”

If you have any questions or require any assistance in relation to protection of your trade marks, please email Gail Hill or call on 02 8231 1017.
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