Removal For Non-Use
65 The Dunlop Parties contend that, insofar as they are registered in respect of aircraft tyres and related goods and services (as described in [1] above), the Registrar of Trade Marks ("Registrar") should be ordered to remove the Registered Marks from the Register pursuant to s 101(2) of the Act. For convenience, I will refer to the goods as "aircraft tyres". As to the services, I will refer to these as "re-treading services".
66 The ground on which the Dunlop Parties rely is that provided by s 92(4)(b) of the Act; namely that each of the Registered Marks has remained registered for a continuous period of 3 years, ending one month before the day on which the Cross-Claim was filed and, at no time during that period, did Goodyear US use the Registered Marks in Australia or use them in good faith in Australia, in relation to aircraft tyres and related goods and services.
67 The Goodyear Parties admit that the ground for removal for non-use is established for each of the Other Registered Marks save for the '865 mark. However, they deny that it is established for any of the Non-Use Marks.
68 Section 7(3) of the Act provides that an "authorised use" of a trade mark is taken to be a use of the trade mark by the owner. This is important when one comes to s 92(4)(b) of the Act. It provides that an application may be made to remove a trade mark for non-use if:
… the trade mark has remained registered for a continuous period of 3 years ending one month before the day on which the non-use application is filed, and, at no time during that period, the person who was then the registered owner:
(i) used the trade mark in Australia; or
(ii) used the trade mark in good faith in Australia;
in relation to the goods and/or services to which the application relates.
Section 7(4) of the Act defines "use of a trade mark in relation to goods" to mean "use of the trade mark upon, or in physical or other relation, to the goods…".
69 Section 100(1)(c) of the Act provides that it is for the Goodyear Parties to rebut the allegation made under s 92(4)(b). Section 100(3)(a) further provides that they will be taken to have done this if they establish that the relevant Non-Use Marks, or that a mark with additions or alterations not substantially affecting its identity, was used in good faith by Goodyear US in Australia in relation to aircraft tyres and related goods and services during the non-use period.
70 The concept of "authorised use" is of some importance in this case because the only use in the non-use period relied upon by Goodyear US to defeat the application for removal of the Non-Use Marks is what is said to be trade mark use of those marks by Goodyear Australia. Goodyear US contends that during the non-use period, Goodyear Australia, its wholly owned subsidiary, was an authorised user that engaged in authorised use of the Non-Use Marks.
71 Section 8 of the Act provides:
8 Definitions of authorised user and authorised use
(1) A person is an authorised user of a trade mark if the person uses the trade mark in relation to goods or services under the control of the owner of the trade mark.
(2) The use of a trade mark by an authorised user of the trade mark is an authorised use of the trade mark to the extent only that the user uses the trade mark under the control of the owner of the trade mark.
(3) If the owner of a trade mark exercises quality control over goods or services:
(a) dealt with or provided in the course of trade by another person; and
(b) in relation to which the trade mark is used;
the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.
(4) If:
(a) a person deals with or provides, in the course of trade, goods or services in relation to which a trade mark is used; and
(b) the owner of the trade mark exercises financial control over the other person's relevant trading activities;
the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.
(5) Subsections (3) and (4) do not limit the meaning of the expression under the control of in subsections (1) and (2).
72 Section 8(1) defines "authorised user" and s 8(2) defines "authorised use". There are a number of points to make about these terms.
73 First, a person cannot be an authorised user unless the person uses the registered mark under the control of the registered owner. In this context, "control" means actual control: Lodestar Anstalt v Campari America LLC (2016) 244 FCR 557 at [97] per Besanko J (Allsop CJ, Greenwood and Nicholas JJ agreeing).
74 Secondly, not every use of a trade mark by an authorised user need be an "authorised use" as defined. For a use of a mark by the authorised user to constitute an "authorised use" it must occur under the control of the registered owner. The words "to the extent only" in s 8(2) make clear that not all use of trade mark engaged in by an authorised user is necessarily authorised. An authorised user may engage in some use of a mark that is under the control of the owner, and some use that is not.
75 Thirdly, s 8(3) and (4) are deeming provisions that identify a number of situations in which a person will be taken to use a registered mark under the control of the owner. But they are expressed to operate on the definition of "authorised user" in s 8(1) and not the definition of "authorised use" in s 8(2). Hence, a person may be deemed to be an authorised user by reason of the matters referred to in either s 8(3) or s 8(4) but may also engage in use that is not "authorised use" for the purposes of s 8(2).
76 There is an issue between the parties as to whether the use of the Non-Use Marks by Goodyear Australia was trade mark use. I will return to that issue shortly. Assuming for the moment that it was, there is also an issue as to whether the use relied upon was authorised use. It is convenient to deal with this question first.
77 It is necessary when addressing the matter of authorised use to distinguish between use of registered marks in relation to aircraft tyres and use in relation to re-treading services.
78 Goodyear US and Goodyear Australia were party to a number of licence agreements. The agreement in force through-out the non-use period is dated 1 January 2012 ("the Licence Agreement").
79 The Licence Agreement contains recitals which note that Goodyear US is the owner of the various marks in Australia and that Goodyear US desires to give Goodyear Australia a licence to use such marks in respect of all the products and services for which they are registered. The marks the subject of the licence include the Non-Use Marks.
80 Article 2.1 of the Licence Agreement provided:
Grant. Licensor hereby grants to Licensee a non-exclusive and non-transferable right and license to: (a) use the Goodyear Dunlop Name in its company, trade and/or business name(s): (b) hold itself out to the consuming public and trade and to conduct business under the Goodyear Dunlop Name and the Beaurepaires name, and (c) hold itself out to the consuming public and trade as a Goodyear affiliate and (d) use the Licensed Trademarks on and in connection with the manufacture, marketing, distribution and sale of the products and provision of the services in the Territory and elsewhere as approved by Licensor, all upon the terms and conditions set forth herein and so long as such products are manufactured by or for Licensee in accordance with Licensor's quality standards and the services are provided in a manner prescribed by Licensor. No other rights or licenses are granted to Licensee hereunder except those rights and licenses expressly set forth in this Agreement.
81 Article 4.1 of the Licence Agreement provided:
Production Standards. Licensee will manufacture or have manufactured or will offer in the Territory the products and the services covered by the Licensed Trademarks herein in compliance with the formulae, specifications and directions from time to time supplied to it by Licensor, and not otherwise, and will only use such materials as will have been approved by Licensor and will generally comply with all directions and standards that may from time to time be given to it by Licensor relating to the manufacture of the products or the offering of the services, or to the methods in which the same will be marked, marketed or packaged. Licensor will be the sole judge of whether Licensee is complying with the directions or standards provided by Licensor. In particular, Licensee will always use the Licensed Trademarks upon or in relation to the products and the services in such manner as may from time to time be required or approved by Licensor. Licensee will not commit or permit any acts that might invalidate the Licensed Trademarks or their registration in the name of Licensor.
82 In their written submissions the Goodyear Parties contended that the removal application must fail because Goodyear US had used the Non-Use Marks in relation to aircraft tyres and related goods and services during the non-use period. Reliance was placed on s 7(3) and s 8(3) of the Act on the basis that Goodyear Australia was a wholly owned subsidiary of Goodyear US during the non-use period and that its use of the Non-Use Marks was to be taken to be use of those marks by Goodyear US.
83 The evidence establishes that throughout the non-use period Goodyear Australia acted as a reseller of aircraft tyres that were made by DATL in accordance with DATL's manufacturing and quality control standards. There was no evidence that the aircraft tyres to which the Non-Use Marks had been applied by DATL were made in accordance with the manufacturing or quality standards of Goodyear US. In his oral submissions Mr Golvan QC made clear that the Goodyear Parties did not rely on quality control for the purpose of establishing that Goodyear Australia used the Non-Use Marks under the control of Goodyear US.
84 Mr Darke SC for the Dunlop Parties submitted that any use of the Non-Use Marks on aircraft tyres imported and sold by Goodyear Australia was not a use permitted under the terms of the Licence Agreement and that any such use was necessarily outside the scope of the grant of rights. It was on that basis he submitted that any use of the Non-Use Marks by Goodyear Australia on aircraft tyres could not constitute authorised use.
85 The difficulty I have with Mr Darke SC's submission is that its entire focus is on the Licence Agreement. Even if it is true to say that the Licence Agreement did not authorise Goodyear Australia to use the Non-Use Marks in relation to the aircraft tyres it acquired from DATL, it does not follow that any such use did not occur under the control of Goodyear US. In my opinion the submission has insufficient regard to the financial and managerial control exercised by Goodyear US over Goodyear Australia's entire business operation.
86 One inference that is open is that Goodyear US did not see the Licence Agreement as extending to aircraft tyres made by DATL because it had no control over the manufacturing or quality control standards of DATL. In any event, Goodyear US must have been aware that the aircraft tyres supplied by Goodyear Australia were manufactured by DATL to DATL's manufacturing and quality control standards, which were matters over which neither Goodyear US nor Goodyear Australia had any control.
87 Goodyear US acquired the Non-Use Marks from Ansell together with Ansell's interest in SPT in 2006. Goodyear Australia (which remained known as SPT until March 2009) continued to acquire its supplies of Dunlop branded aircraft tyres from DATL until March 2015. The idea that Goodyear US did not know and approve of Goodyear Australia's importation and sale of aircraft tyres that Goodyear Australia continued to acquire from DATL is contrary to the objective facts.
88 In the circumstances, the inference I draw is that any use Goodyear Australia made of the Non-Use Marks in the non-use period was a use by Goodyear Australia that Goodyear US knew of and approved. Given that fact, and notwithstanding the terms of the Licence Agreement, I am satisfied that Goodyear Australia's use of the Non-Use Marks was under the control of Goodyear US.
89 The more difficult question is, I think, whether the use made of the Non-Use Marks by Goodyear Australia was trade mark use.
90 An essential feature of a trade mark is that it distinguishes the goods of the registered owner from the goods of other traders and that it indicates a connexion in the course of trade between the registered owner and the goods in relation to which the mark is used: E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144 ("E & J Gallo") at [41]-[42] per the plurality, French CJ, Gummow, Crennan and Bell JJ. Their Honours said at [41]-[43]:
[41] The concept of "use" of a trade mark which informs ss 92(4)(b), 100(1)(c) and 100(3)(a) of the Trade Marks Act must be understood in the context of s 17, which describes a trade mark as a sign used, or intended to be used, to "distinguish" the goods of one person from the goods of others.
[42] Whilst that definition contains no express reference to the requirement, to be found in s 6(1) of the Trade Marks Act 1955 (Cth), that a trade mark indicate "a connexion in the course of trade" between the goods and the owner, the requirement that a trade mark "distinguish" goods encompasses the orthodox understanding that one function of a trade mark is to indicate the origin of "goods to which the mark is applied". Distinguishing goods of a registered owner from the goods of others and indicating a connection in the course of trade between the goods and the registered owner are essential characteristics of a trade mark. There is nothing in the relevant Explanatory Memorandum to suggest that s 17 was to effect any change in the orthodox understanding of the function or essential characteristics of a trade mark.
[43] In Coca-Cola Co v All-Fect Distributors Ltd [(1999) 96 FCR 107 at 115 [19] per Black CJ, Sundberg and Finkelstein JJ] a Full Court of the Federal Court of Australia said:
""Use 'as a trade mark' is use of the mark as a 'badge of origin' in the sense that it indicates a connection in the course of trade between goods and the person who applies the mark to the goods … That is the concept embodied in the definition of 'trade mark' in s 17 - a sign used to distinguish goods dealt with in the course of trade by a person from goods so dealt with by someone else."
That statement should be approved.
(some footnotes omitted)
91 It is important to note that the plurality's observations were expressly concerned with the nature of the use that may be relied upon to defeat an application to remove a trade mark for non-use under the relevant provisions of the Act.
92 In the present case the question is whether Goodyear Australia as an authorised user used the Non-Use Marks as trade marks during the non-use period by using them to indicate a connexion in the course of trade between goods or services in relation to which they were used and the trade mark owner or its authorised user.
93 Whether there has been trade mark use indicating a connexion in the course of trade between the relevant goods or services and an authorised user (whose use is taken to be that of the owner) or the owner depends on the context in which the use occurs.
94 In determining whether there has been trade mark use, it is useful to recall the test that was applied by Kitto J (with whom Dixon CJ, McTiernan, Taylor and Owen JJ agreed) in Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 ("Shell"). The facts in that case were very different from the present case but the test postulated by his Honour for determining whether there was trade mark use remains relevant in so far as it identifies the nature of the connexion that the use of the mark is required to convey in order to constitute trade mark use.
95 In Shell, the appellant was the owner of a number of registered trade marks for the caricature of a man in the shape of an oil drop. The respondent was alleged to have infringed the registered marks by using a substantially identical or deceptively similar mark in a television commercial. The question was whether the display of moving depictions of the caricature infringed the registered marks. The High Court held that it did not.
96 Kitto J said at 422:
The question, then, is whether such a user of the oil drop figure as takes place by the exhibition of the films on television involves infringement of the trade marks. It is a question not to be answered in favour of the appellant merely by pointing to the brevity of the occasions when substantial identity is achieved. The assumption I have made means, of course, that if the oil drop figure as appearing in some of the individual frames of the films were transferred as separate pictures to another context the use of the pictures in that context could be an infringement. But the context is all-important, because not every use of a mark which is identical with or deceptively similar to a registered trade mark infringes the right of property which the proprietor of the mark possesses in virtue of the registration.
97 Kitto J also said at 425:
With the aid of the definition of "trade mark" in s 6 of the Act, the adverbial expression may be expanded so that the question becomes whether, in the setting in which the particular pictures referred to were presented, they would have appeared to the television viewer as possessing the character of devices, or brands, which the appellant was using or proposing to use in relation to petrol for the purpose of indicating, or so as to indicate, a connexion in the course of trade between the petrol and the appellant. Did they appear to be thrown on to the screen as being marks for distinguishing Shell petrol from other petrol in the course of trade?
[emphasis added]
98 It is now necessary to look at the actual use that is relied upon by the Goodyear Parties. There are a number of different categories of use to be considered.
99 The first category of use involves what is said to be the Goodyear Parties' use of the Non-Use Marks on aircraft tyres that Goodyear Australia acquired from DATL which were imported and sold in Australia. It is common ground that that those marks had been applied by DATL to the goods at the time of manufacture when DATL was the owner of the corresponding UK trade mark registrations. There is no doubt that DATL was applying its trade marks in the United Kingdom as a badge of origin.
100 Mr Darke SC submitted that throughout the non-use period, the marks affixed to aircraft tyres acquired by Goodyear Australia from DATL, which were imported and sold in Australia, were never used to signify a connexion in the course of trade between those goods and Goodyear Australia.
101 Mr Golvan QC submitted that Goodyear Australia used the Non-Use Marks to indicate a relevant trade connexion between the goods to which those marks had been applied by DATL and Goodyear Australia. He submitted that the relevant trade connexion had been achieved through the use of the Non-Use Marks over many decades by the trading activities of SPT (Goodyear Australia's immediate predecessor in title to SPT's business) and Ansell (Goodyear US's immediate predecessor in title to the Non-Use Marks). He placed considerable reliance on Burchett J's analysis in Fender Australia Pty Ltd v Bevk (1989) 25 FCR 161 ("Fender").
102 The nature of the trade connexion necessary to qualify use of a trade mark as trade mark use was considered by the House of Lords in Aristoc Limited v Rysta Limited [1945] AC 68 ("Aristoc"). That was a case decided at a time when trade mark registrations were not available for services. The respondents were engaged in the business of repairing silk stockings, which they neither made nor sold. They were in effect providing consumers with an after sale service for products made and sold by other traders. They applied for a trade mark registration for "Rysta" in respect of stockings, which was ultimately refused. In considering the meaning of the words "connexion in the course of trade" in the definition of "trade mark" in s 68 of the Trade Marks Act 1938 (UK) ("the 1938 UK Act") (which was in the same terms as s 4 of the Trade Marks Act 1905 (Cth)) Viscount Maugham said at 89:
My Lords, it seems to me beyond doubt that hitherto a registered trade mark has been understood as being used in relation to goods for the purpose of indicating the origin of the goods, in other words, for the purpose of indicating either manufacture or some other dealing with the goods in the process of manufacture or in the course of business before they are offered for sale to the public. It must be remembered that in the early days when trade mark law was being slowly laid down, chiefly in Chancery Courts (where alone an injunction could be obtained), a trade mark was inevitably taken as indicating the origin of the goods. It was used for the purpose of indicating that the goods were those of the manufacturer or the merchant of the goods. It was closely connected with the goodwill of his business, of which it was often a valuable item, for the mark represented a quality or character on which the purchaser could place reliance. The cases mentioned in the introductory chapters of Sebastian on Trade Marks (5th ed.) and Kerly on Trade Marks (6th ed.), which are too numerous to be cited here, are conclusive in my opinion to show that, until at any rate the recent Act, trade marks were always taken as indicative of the origin of the goods.
His Lordship concluded (at 93) that changes made to the statutory definition did not extend its reach to a mark used to indicate "a mere temporary connexion with goods after they have come into the hands of the public".
103 Lord McMillian, also referring to the statutory definition of trade mark, said at 96-97:
The Act of 1938 in s. 68, sub-s. 1, defines a trade mark as "a mark used or proposed to be used in relation to goods for the purpose of indicating or so as to indicate a connexion in the course of trade between the goods" and the person having the right to use the mark. In construing this definition it is essential to bear in mind what is the function of a trade mark. If there is one thing that may be described as fundamental in this branch of law it is that the function of a trade mark is to indicate the origin of the goods to which it is applied. As it was expressed by Bowen L.J. in In re Powell's Trade Mark [[1893] 2 Ch. 388, 403, 404]: "The function of a trade mark is to give an indication to the purchaser or possible purchaser as to the manufacture or quality of the goods - to give an indication to his eye of the trade source from which the goods come, or the trade hands through which they pass on their way to the market." I could multiply quotations to the same effect. I was merely repeating a commonplace when on a former occasion I said in this House that it is "of the essence of a trade mark that it should indicate origin and be used as indicative of origin": Bass, Ratcliff & Gretton, Ld. v. Nicholson & Sons, Ld.[[1932] AC 130 154, 144]. […] A trade mark must still be registered in respect of goods, it must be used in relation to goods, it must indicate a connexion in the course of trade between goods and the user of the trade mark. […] A connexion with goods in the course of trade in my opinion means, in the definition section, an association with the goods in the course of their production and preparation for the market. After goods have reached the consumer they are no longer in the course of trade. The trading in them has reached its objective and its conclusion in their acquisition by the consumer.
104 Lord Wright, after referring to the changes made to the statutory definition, said at 101-102:
The question must now be approached on the basis of the definition in s. 68, sub-s. 1, of the Act of 1938, and in particular the words "used or proposed to be used. ... so as to indicate a connexion in the course of trade between the goods" and the proposed proprietor of the mark. These are indeed very general words, which replaced the catalogue of specific kinds of connexion contained in s. 3 of the Act of 1905. They undoubtedly changed the law to some extent, but they did not in my opinion change the fundamental idea of the function of a trade mark, which was to indicate the origin of the goods. […] The word "origin" is no doubt used in a special and almost technical sense in this connexion, but it denotes at least that the goods are issued as vendible goods under the aegis of the proprietor of the trade mark, who thus assumes responsibility for them, even though the responsibility is limited to selection like that of the salesman of carrots on commission in Major Brothers v. Franklin & Son [[1908] 1 KB 712]. By putting them on the market under his trade mark he vouched his responsibility, and the carrots were "his goods" by selection, though he was neither the owner nor grower of them. The limitation in the Act of 1938, "in the course of trade," sufficiently, in my opinion, preserves the essential and characteristic function of the mark. The proprietor is required to be a trader who places the goods before the public as being his goods.
105 It could be argued that the case turned on whether there would be any use of the respondents' mark on stockings "in the course of trade" given that these were goods that had already been supplied to consumers who later made them available to the respondents for repair. However, that would reflect too narrow a view of what was decided. I think this is apparent from the reliance placed on the decision by the plurality in E & J Gallo which specifically referred at [42] to the decision in Aristoc when describing the function of a trade mark. What is essential is that the use of the trade mark act as a badge of origin by providing an indication of the source or quality of the goods to which it is applied.
106 It is also necessary to refer to the judgment of Aickin J in Pioneer Kabushiki Kaisha v Registrar of Trade Marks (1977) 137 CLR 670 ("Pioneer"). His Honour's exposition of the law with respect to trade mark use informed the structure and content of the Act in so far as it concerns authorised use. Aickin J said at 683:
… the essential requirement for the maintenance of the validity of a trade mark is that it must indicate a connexion in the course of trade with the registered proprietor, even though the connexion may be slight, such as selection or quality control or control of the user in the sense in which a parent company controls a subsidiary. Use by either the registered proprietor or a licensee (whether registered or otherwise) will protect the mark from attack on the ground of non-user, but it is essential both that the user maintains the connexion of the registered proprietor with the goods and that the use of the mark does not become otherwise deceptive. Conversely registration of a registered user will not save the mark if there ceases to be the relevant connexion in the course of trade with the proprietor or the mark otherwise becomes deceptive.
107 His Honour considered that maintenance of the relevant connexion between the registered proprietor of the mark and the goods to which it was applied as essential, not only to ensure that the mark did not become deceptive, but also to protect the mark from an application for removal for non-use. This is consistent with what the plurality later said in E & J Gallo at [41] when describing the concept of trade mark use which informs ss 92(4)(b), 100(1)(c) and 100(3)(a) of the Act. A mark is not used in the sense that word is used in those provisions of the Act unless it indicates a relevant connexion in the course of trade between the relevant goods or services and the owner or authorised user of the mark. However, it does not follow that a registered trade mark cannot be used by the registered owner as a trade mark in the absence of a relevant trade connexion between the goods and the registered owner. Aickin J's observations in Pioneer at 683 were not directed to a situation in which the use relied upon was that of either the trade mark owner or a registered user. They were directed to the use of a mark by a licensee whose use, in the absence of a sufficient connexion, would not qualify as use of the trade mark owner.
108 If a trade mark owner supplies goods by reference to a registered mark applied to those goods by a third party manufacturer in circumstances where the trade mark owner exercises no control over the manufacture or the quality of the goods to which the mark was applied, the mark will still have been used as a trade mark even though there may be no relevant connexion between the owner and the goods. The absence of any relevant (or using Aickin J's word "sufficient") connexion may have implications for the validity of the mark, but it does not preclude a finding that the trade mark owner has used the mark.