The Australian Federal Court revisits the discretion not to remove a mark for non-use

The Australian Federal Court revisits the discretion not to remove a mark for non-use - Griffith Hack

24 April 2012

Background



The Australian Full Court of the Federal Court, in Austin, Nichols & Co Inc v Lodestar Anstalt [2012] FCAFC 8 has heard an appeal from a decision involving the exercise of the discretion to not remove a mark for non-use. The original trial judge’s decision was reported in our Trade Marks: Need to Know of 3 June 2011

Austin Nichols filed an application to remove the “Wild Geese” trade mark owned by Lodestar for wines. The mark had in fact not been used in the relevant 3 year non-use period, but Lodestar convinced the trial judge that the mark should not be removed in the exercise of the Registrar’s or the Court’s discretion. The trial judge chose not to remove the mark on the basis that: Lodestar had used the Wild Geese mark internationally; it had used the mark in Australia recently (post commencement of the non-use action); it had acquired a reputation in the mark in Australia; and use of the same mark by any other person would now cause confusion in the Australian marketplace.

The decision



However, the Full Court reversed the decision, and ordered that the mark be removed from the Register as there was no basis for relying on the discretion. The Court held that for the discretion to operate in favour of a registered owner, the Court must be positively satisfied that it is reasonable that the trade mark should not be removed, with the registered owner bearing the onus of proof. The Court found that the evidence of Lodestar’s reputation in the mark in Australia was weak and unimpressive, and there were no details of the alleged confusion that would result if the mark was removed. The Court was critical of Lodestar’s mere reliance on international publicity and overseas sales, without evidence of what the mark’s profile in Australia was and how it had reached Australia. The Court also considered other examples of use of the mark in Australia as being too insignificant or not supported by any evidence that anyone in Australia had seen them.

The case serves as a warning that trade mark owners should not be complacent, as the discretion to not remove a trade mark (where non-use is established) is only exercised in exceptional circumstances. The exercise of the discretion involves looking at, and balancing, a variety of interests and factors (both public/consumer and private/commercial). Importantly, the trade mark owner needs to prove positively that these interests and factors favour non-removal of the mark. Given the uncertainty involved in relying on the discretion, and the heavy evidentiary burden trade mark owners, trade mark owners should ensure that their marks are used in Australia or they may well be cancelled for non-use.


For further information, please contact:


Chris Sgourakis, Principal
Email Chris