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Thursday, May 16, 2013

Use it or lose it – lessons in how to use a trade mark in the course of trade

By Lawyer Tessa Meyrick

It pays for owners of registered trade marks to remember that the golden rule in maintaining a healthy portfolio is 'use it or lose it'.

A trade mark can be removed from the register if the trade mark has not, at any time during the last three years (ending one month before the non-use application) been used, or been used in good faith, by its registered owner or licensee. Since you can't prove a negative (well, maybe you can, but that's a subject for another blog), where an allegation of non-use is made, section 100 of the Trade Marks Act 1995 places the burden on the party opposing the removal of the trade mark to prove the positive. That is, it is the opposing party's job to establish that the mark has in fact been used, or used in good faith, by its registered owner or licensee in relation to the goods and/or services in respect of which the mark is registered. 

Much can be said – both from a commercial and public policy point of view – about the strategy of registering a trade mark pre-emptively (because you anticipate that you'll want to use the mark at some point in the future), defensively (to prevent someone else from using the trade mark), or even 'just-in-case' (throwing a wide net over the goods and services in respect of which a mark is registered, 'just in case' you might want to broaden or shift the focus of your business later).  Unless you are in a position to establish that the mark has been used as a trade mark (as a 'badge of origin') in the course of trade, however, these strategies may ultimately disappoint.

A recent decision of the Australian Trade Marks Office gives some clarity to what's required in order to establish use in the course of trade by providing a handy warning of what kind of use will not constitute use in that sense. (There's that positive/negative thing again).

US-based children's apparel company, The Gymboree Corporation, and its Australian subsidiary applied to have the GYMBAROO trade mark partially removed from the register on the ground of non-use. In opposing the application, child development centre franchisor Toddler Kindy Gymbaroo Pty Ltd in effect conceded that the GYMBAROO mark had indeed not been used on the goods or (with a few exceptions) in relation to the services the subject of the application, but submitted that it 'commonly' used those goods in connection with many of the goods and services in relation to which it did use the trade mark. For example: Kindy sends newsletters to the parents of the children attending its classes; the newsletters are presumably made of 'paper, cardboard and goods made from these materials' (Class 16), constitute 'printed matter' (Class 16) and feature 'photographs' (also, Class 16); the newsletter is ancillary to the service Kindy provides. Kindy uses the trade mark in relation to the service of providing child development classes. Kindy therefore argued that it uses the trade mark in relation not only to 'newsletters', but also to 'paper, cardboard and goods made from these materials', 'printed matter' and 'photographs', in the course of trade.

The Delegate responded delicately: 'at the heart of Kindy's arguments … lie certain misconceptions about what constitutes use of the trade mark in the course of trade'; namely, using your trade mark on or in relation to a good that you 'make use' of in the course of operating your business is not the same as using your trade mark in relation to those goods 'in the course of trade'. So, for example, emblazoning your trade mark on a company car does not constitute use of the trade mark in relation to motor vehicles in the course of trade. Likewise, a book might be composed of paper, glue etc, but the publisher is not dealing in those materials in the course of trade – it is dealing in books.

Ultimately, where the evidence showed that Kindy had been a mere consumer of a particular good (as part of the manufacture of another), the Delegate determined that the registration for that good be removed: newsletters were in; 'paper, cardboard and goods made from these materials', 'printed matter' and 'photographs' were out.

Kindy's submissions may well have been driven by the realisation that it had made absolutely no relevant use of – to use another example – 'plastic materials for packaging' (Class 16) in the course of trading as a child development centre business, but that it was still keen to protect its 'just-in-case' registrations and thought it was worth a shot. That said, and to be fair to Kindy, the concept of 'use in the course of trade' underpinning those submissions is not entirely fanciful; we have elsewhere commented on the Federal Court's willingness to take a broad reading of the expression, finding even a small amount of promotional conduct in Australia to constitute use in the course of trade. Still, it is consistent even with that broad reading that the goods or services in question must bear a close connection to the particular trade in which the trade mark owner is engaged.

Opponents to a non-use application cannot rely on an established use in the course of trade in relation to one good in order to make a claim that the trade mark is also used in relation to the goods that have been consumed as part of the manufacture of the first good.

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