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[2003] FCA 816
plaintiff. The Court declared the infringement threats groundless, restrained further threats and specified representations, ordered the trade mark removed, dismissed van Voorst’s counterclaim, and ordered...
Wilcox J held that van Voorst's registration covered the activities described in the Register, not a broader category reconstructed from his past business. Nikken Wellness's magnetised products were not simply 'magnets' as described, and its sales to independent distributors were not a distribution service. As a result, infringement was not proved and van Voorst's threats had no proper basis. The Court also found the evidence established that van Voorst lacked the required good-faith intention when applying for registration and had not used the mark in the relevant period. The registration was removed, the threats were restrained, and the counterclaim was dismissed.
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In Nikken Wellness Pty Ltd v van Voorst [2003] FCA 816, Nikken Wellness asked the Federal Court to restrain Nicolaas van Voorst from making claims that its products and related activities infringed his registered NIKKEN trade mark. It also sought removal of the registration on non-use grounds under s 92 of the (Cth) (the Act) ([1]-[3]).
2 cited instruments linked from this judgment.
The registration, effected on 10 May 2001, recorded two categories: “The manufacture of magnets for medical purposes including pain relief being goods in class 10”, and “The distribution of maganets [sic] for medical, health and wellness purposes including pain and discomfort relief and sleep improvement being services in class 35” ([20]). The first description was unusual because it referred to an activity, manufacture, while being recorded as goods. Class 10 covered medical and related apparatus and instruments; class 35 included advertising, business management, business administration and office functions ([21]-[22]).
Nikken Wellness imported products manufactured in the United States and sold them through a network of independent distributors. Its range included some products with magnetic technology, but the evidence described a range of goods such as bedding, furniture and massage equipment, rather than products consisting simply of magnets ([7]-[9]). Van Voorst asserted that the use of NIKKEN in connection with these products infringed his mark. He sent correspondence to Nikken Wellness and to its distributors, including threats of legal action and demands that distribution cease ([27]-[31]).
The Court considered two distinct questions. First, did Nikken Wellness's conduct infringe the recorded specifications, such that the threats could be justified under s 129? Second, had Nikken Wellness established the two grounds for removal permitted by s 92(4): absence of good-faith intention to use the mark at the application date, and non-use during the relevant period? The Court answered the first question against van Voorst and the second in Nikken Wellness's favour.
The orders declared that van Voorst had no grounds for making the identified threats, restrained him from continuing them and from making specified representations to distributors and others, removed Australian registered trade mark no. 837953 from the Register, dismissed his counterclaim, and ordered him to pay Nikken Wellness's costs. The Court noted that no evidence of damage had been adduced ([71]).
The infringement issue turned on the wording recorded in the Register. Van Voorst argued that the first description should be read as covering magnets for medical purposes, rather than the activity of manufacturing magnets. He relied on his previous business activities, asserting that he had bought rather than manufactured magnets. Nikken Wellness argued that the registered owner was bound by the words in the specification and that the Court should not adjust them by reference to the owner's commercial history ([36]-[43]).
Wilcox J accepted the latter approach. Sections 209 to 211 of the Act made the Register a public, inspectable record, prima facie evidence of matters entered on it, with certified extracts admissible in proceedings. His Honour reasoned that the Register must be capable of being read and acted on without requiring a search into the registered owner's business background ([44]). The decisive point was that the first category said “manufacture of magnets”, rather than identifying magnets themselves as the registered goods. The selection of class 10 did not overcome the description, which “clearly does not cover the goods themselves” ([45]).
The Court then addressed whether the products and services fell within either category. Although some Nikken Wellness products had magnetic properties, they also had other characteristics and were designed for particular functions. They were not properly described simply as “magnets” ([46]). This finding applied equally to the second category, which referred to distribution of magnets. Further, Nikken Wellness did not use NIKKEN for the service of distribution. It sold its own goods to purchasers. The relationship between Nikken Wellness and the people it called “distributors” was that of vendor and purchaser, not provision of a distribution service ([47]-[50]). The Court therefore found that the evidence did not establish infringement ([51]).
That conclusion resolved the s 129 issue. Section 129 allows a person aggrieved by threats of infringement proceedings to seek a declaration and an injunction. But s 129(4) prevents a finding for the person bringing the action if the person making the threats establishes both registration and infringement ([33]). Van Voorst's letters to the distributors fell within s 129(1), but the second requirement, infringement, was not established ([34], [51]). The threats were therefore not justified on the facts found by the Court.
The removal application required separate proof. Section 92(4), as set out in the reasons, required Nikken Wellness to establish that, on the filing date, van Voorst lacked a good-faith intention to use, authorise use of, or assign the mark for use in relation to the relevant goods or services, and that the mark was not used in the prescribed period ([52]-[54]). The Court stated that the relevant intention had to be definite and present: a settled resolve to use the mark in the immediate future, not a speculative or uncertain possibility ([55]).
The Court expressly placed the legal onus on Nikken Wellness, not van Voorst. However, it could consider the absence of evidence of use and evidence suggesting an extraneous purpose in making the application ([59]). Van Voorst gave no evidence explaining his intention at the time of filing, despite the removal claim. That absence was not conclusive by itself, but it could assist an inference if other evidence supported it ([60]-[61]).
The other evidence included the timing of the application, van Voorst's earlier awareness of the international Nikken Group, his correspondence with that group, and his later attempts to sell or exploit the registration. The Court was not persuaded by his explanation for choosing the word NIKKEN and had doubts about the accuracy of several of his statements ([62]-[63]). His knowledge of the international group and the timing of the 2000 application supported the inference that he sought leverage rather than intending in good faith to undertake the activities described in the application. Wilcox J found the first requirement established ([63]-[64]).
For non-use, the relevant period ran from the 6 June 2000 filing date to 23 July 2001, as identified by the Court ([53], [65]). Van Voorst provided no evidence that he used the mark during that period. The products and brochures in evidence did not display NIKKEN apart from later-added labels, and no claimed magazine advertisements were produced ([65]). Evidence about workshops in 1999 and 2000 also supported the conclusion that the name was not used in the associated materials or presentations ([66]-[69]). The Court found the second requirement established ([70]).
The judgment does not give a comprehensive account of trade mark law before 2003, and this analysis is confined to the propositions it states and applies. As the Court framed the governing provisions, s 129 provided a remedy against threats of infringement proceedings, subject to the statutory defence that the threatened conduct actually infringed a registered mark ([33]-[34]). Section 92(4) provided two cumulative factual requirements in this case: lack of qualifying good-faith intention at filing and non-use in the relevant period ([52]-[55]).
The judgment's contribution in applying those provisions is practical and interpretive. For specifications, it emphasised that the words on the Register define the scope at issue, and that a class label cannot replace or rewrite the description ([44]-[45]). For removal, it clarified the evidential approach in the proceeding: the removal applicant retained the burden, but the Court could assess silence by the registered owner alongside other evidence, rather than treating silence as either irrelevant or independently conclusive ([59]-[61]).
The decision's effect in this case was to deny the claimed infringement basis for the threats and to remove the registration. The judgment does not state that the Act's provisions were amended or that it changed the statutory text. Nor does the supplied judgment establish the present state of Australian law or how later courts have applied these propositions.
At [44], Wilcox J said: “Parliament must have intended the Register to speak for itself.” In plain English, people examining the public register should be able to understand the registered scope from the record, rather than needing to investigate what the owner did in business before or after registration.
At [45], his Honour said the first description “clearly does not cover the goods themselves.” The practical distinction was between a claim directed to manufacturing magnets and a claim to magnets as goods. The Court treated the recorded wording as controlling even though the category appeared under a goods class.
At [46], the Court explained that products with magnetic properties are not automatically “magnets” for the specification. The relevant question was how the products were properly described, taking account of their other characteristics and designed functions.
At [50], the Court said the relationship between the company and its distributors “is one of vendor and purchaser.” The word “distributor” used in the business did not establish that Nikken Wellness supplied a distribution service within the registered description. The Court looked at the commercial relationship and the activity actually performed.
At [59], Wilcox J said: “I do not think Mr van Voorst bears any onus in relation to the application for removal.” This means Nikken Wellness had to prove the removal grounds. The Court could still take account of the absence of evidence from van Voorst, but only as part of the wider evidential assessment ([59]-[61]).
At [61], the Court cautioned that the lack of evidence about intention did not itself establish that intention was absent. It could, however, facilitate an inference when other evidence made that inference available. This is an important limit on how the Court treated the evidential omission.
The reasoning is most directly relevant where a trade mark registration uses a description that appears ambiguous, unusual, or narrower than the category of goods or services the owner later asserts. The case supports close attention to the actual words on the Register, especially where an applicant or owner asks a court to infer a broader specification from the owner's past business conduct ([36]-[45]).
It is also relevant where a business sells products with a particular technical characteristic and the registration describes a more specific kind of good. Here, the presence of magnetic properties did not make multifunctional products “magnets” as a matter of the Court's description of the evidence ([46]). The case does not establish that all magnetised products fall outside a specification for magnets. Its conclusion depended on the products in evidence and their functions.
The service analysis may be relevant where a business calls buyers “distributors”. The judgment distinguishes a service supplied to another person from the sale of one's own goods to independent purchasers ([48]-[50]). The label used in a commercial arrangement was not decisive; the Court considered what the parties actually did.
For s 92(4), the case concerns an application where the asserted registration purpose and the evidence of actual use were in issue. It illustrates a fact-sensitive assessment involving the applicant's timing, prior knowledge, correspondence, evidence of use, and the registered owner's explanation or lack of explanation ([59]-[70]). It does not mean that failure to give evidence automatically proves a lack of intention. The Court expressly rejected that as a standalone basis at [61].
The supplied judgment contains no decisions from later courts and no account of subsequent treatment of Nikken Wellness. It therefore cannot establish whether later courts followed, distinguished, applied, or limited its reasoning. It would be unsafe to infer a later precedent history from this judgment alone.
The reasons refer to earlier authorities, including Re J Batt & Co and Re Ducker's Trade Mark for the required quality of intention ([55]). They also record authorities raised in submissions about construing specifications and legal descriptions ([40]-[43]). Those references show the sources considered in this proceeding, but they do not supply evidence about how later courts treated Nikken Wellness itself.
For professional research purposes, the judgment can be used as a source for Wilcox J's reasoning in this 2003 dispute. Any claim about its current precedential status or later judicial reception would require sources beyond the text supplied here.
The judgment decided the meaning and effect of these particular specifications on the evidence before it. It did not set out a general test for distinguishing every product with magnetic features from a “magnet”. The reasoning at [46] turns on the evidence that the products had other characteristics and specific functions. How a different product should be classified would depend on its own evidence and the wording of the relevant registration.
The decision also does not determine how every arrangement described commercially as “distribution” should be classified. The Court found that these parties' relationship was a seller-buyer relationship and that Nikken Wellness sold its own goods ([49]-[50]). The judgment does not address other arrangements involving agency, wholesale supply, logistics, or services provided for third-party goods.
On non-use, the judgment states that lack of evidence from the registered owner may support an inference only where other evidence permits it ([61]). It does not give a comprehensive account of every kind of evidence that could establish use or good-faith intention in another case. Nor does it address the outcome where the evidence of use is more extensive or the registered owner's evidence of intention is different.
Finally, the judgment does not determine the current law, later judicial treatment, or the application of any statutory amendments after 2003. Those questions cannot be answered from the supplied reasons alone.
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REASONS FOR JUDGMENT WILCOX J: 1 This proceeding arises under the Trade Marks Act 1995 (Cth) ('the Act'). The applicant, Nikken Wellness Pty Ltd ('Nikken Wellness'), alleges the respondent, Nicolaas van Voorst, made groundless claims that it infringed Mr van Voorst's registered trade mark, NIKKEN. Nikken Wellness denies infringement and seeks declaratory and injunctive relief in relation to the threats. 2 Nikken Wellness also makes a non-use application, pursuant to s 92(3) of the Act. It seeks an order directing the Registrar of Trade Marks ('the Registrar') to remove the trade mark from the Register of Trade Marks ('the Register'). 3 Mr van Voorst admits making allegations of infringement; but he claims these allegations were justified as Nikken Wellness infringed, and continues to infringe, his trade mark. He resists the claim for a removal order. By a counter-claim, Mr van Voorst seeks a declaration of the validity of the trade mark registration; an injunction restraining Nikken Wellness from using the mark, in the course of trade, in respect of the products and services for which it is registered; and either damages or an account of profits. The facts 4 Both parties adduced extensive evidence; excessively extensive in my opinion. The salient facts are relatively brief and substantially uncontroversial. 5 Nikken Wellness is an Australian corporation. It was registered on 20 March 2000. The company is a subsidiary of an American company, Nikken International. That company is owned by Nikken Inc, also an American corporation. It was established in 1989 and has conducted business since then from premises in Irvine, California. Nikken Inc is connected with a Japanese company, Nikkenkenkozoshinkenkyukai Co Limited ('the Japanese company'), that was established in 1975 by Isamu Masuda. The Japanese company and its affiliates market products built upon a concept of 'total wellness' devised by Mr Masuda. 6 In the years since 1975, the Nikken Group has expanded to comprise companies in some 30 countries. 7 Nikken Wellness commenced business in September 2000. Since that time, it has been the exclusive distributor in Australia of Nikken products. These products are manufactured in the United States by Nikken International and imported, fully packaged, into Australia by Nikken Wellness. 8 Nikken Wellness does not sell products directly to the public. It has a network of 'distributors', people who are given information about the company's products, purchase stock from Nikken Wellness and on-sell the products to members of the public. Nikken Wellness publishes brochures extolling its products, but it does not engage in large-scale advertising. Rather, it relies on sales being generated by small-scale activities by its distributors, such as classes and demonstrations, and word-of-mouth promotion. 9 Nikken Wellness markets a wide range of products: nutritional and health supplements, furniture, bedding, massage equipment and similar items. Most of the products are irrelevant to this case. However, some products contain magnetic technology. It was those products that attracted the claims made by Mr van Voorst. 10 Mr van Voorst was born in South Africa, apparently in 1954. He was brought up in Australia. He claims to have become interested in natural therapies and self healing methods in the 1970s and to have first encountered the use of magnets for health purposes in 1980. At that time, he said in his affidavit, he designed wrist bands which were marketed under the trademark MAGNA. Mr van Voorst said he opened a naturopathic clinic on the Sunshine Coast in Queensland in 1981. He said he used magnets in the clinic and, since that time, has sold and distributed many types of magnets. 11 In his affidavit, Mr van Voorst said: 'I have been self employed since about 1980. I am also an entertainer and I am known variously as Nikkie Singer, Nikkie, Elvis Pavarotti, Pav, Elvis Einstein Pavarotti and Abner Mality. When I say "self employed", I mean that I have not worked for anybody for a wage. I have, however, incorporated three companies and I conducted my businesses though two of them, Quiet Charisma Pty Ltd and Bluegold Metabiology Health Trading Services Pty Ltd, for a short time during the late 1990s'. 12 In oral evidence, Mr van Voorst acknowledged additional aliases: Hart Jefferson, Hart Jefferson Hart, HH Hart, Reece (or Rhys) Hart and Dr Elvis Pavarotti Caruso. Although Mr van Voorst said he used some of these aliases primarily in connection with his entertainment activities, he agreed he also used many of them in relation to health teaching. During the course of cross-examination, Mr D M Yates SC, senior counsel for Nikken Wellness, questioned Mr van Voorst about the name Dr Elvis Pavarotti Caruso. Mr van Voorst acknowledged the name but denied using the title 'doctor'. Mr Yates referred him to a document purportedly published by Bluegold Health Teaching Services Pty Ltd in 1998. It was entitled 'Lesson Three' and contained instructions as to how people might improve their circulation. The document referred to 'Dr Elvis Pavarotti Caruso'. Mr van Voorst admitted he wrote the document but said he could not remember having done so. Although he said he would never pass himself off as a medical doctor, he was unable to offer an explanation for the use of the title 'Dr' in this document. When Mr Yates asked Mr van Voorst why he used all these names, Mr van Voorst responded: 'Yes, it's very simple. I have found that I really hate people pronouncing my name in English and so I prefer to have people call me something else, just like many Asians do, than call myself by a name that I don't like them to call me because it grates on my ears.' 13 Mr van Voorst denied that he adopted pseudonyms in order to make it difficult for people to trace him. However, there was evidence that the solicitors for Nikken Wellness had experienced difficulty in contacting Mr van Voorst. 14 In his affidavit, Mr van Voorst described how he came to use the mark NIKKEN. He said: 'I adopted the trade mark NIKKEN in good faith. The process occurred in five stages. In the early 1980s my father, and then others, called my magnets Nikkie's after my nickname Nikkie. In 1985 my typist in Noosa Junction suggested that I use my stage name Nikkie Singer in both my entertainment career and my natural health business. In 1987 I invented a health inducing device and patented it. In 1988 my patent attorney, John Pizzey of Brisbane, advised me that my name, as a common name, could be used by others called by that same name, in a trade mark sense. This led me to exploring different endings for the Nikkie name. I settled on NIKKEN and commenced using the trade mark in 1988. During 1989 sales of my NIKKEN magnetic products increased. I attributed this, at least partially, to my adoption of the NIKKEN trademark so I decided to use it long term.' 15 In oral evidence, in response to a question asked (by leave) by his own counsel, Mr A C Smith, Mr van Voorst elaborated on this explanation. His evidence was as follows: 'Why did you choose the word Nikken? --- My name is Nikkie. I know your name is Nicolaas, yes, and it could be shortened to Nikkie, but why Nikken? --- I've used the word Nikkie all my life and then Nikkie Singer has Nik in it and Nicolaas Van Voorst has Nik in it and my mother used to sing me a song called Dear [sic - D'ye] ken John Peel, she was Scottish background, Dear [sic - D'ye] ken John Peel at the break of day, etcetera, and in Scottish that means knowledge, so it's Nikkie's knowledge system. And I think that's sort of where it came from. That's how I made it up. My father used to call them Nikkie's magnets and he's responsible for that back in the early 1980s and it came out of my father and my mother basically. So it's just coincidence that that happened to be the same name as the overseas companies which are connected with the present applicant, is that right? --- It's a complete coincidence. Pure coincidence? --- Yes, it is. And you didn't know about the overseas ---? --- I didn't know about them until 1991.' 16 Mr Yates asked Mr van Voorst why he did not refer in his affidavit to his mother singing 'D'ye ken John Peel'. He replied: 'No. I think at the time that was a subconscious thing but it is something that I've reflected on and remembered.' He said he did not remember it when he made his affidavit. He made the affidavit on 24 June 2003, one month before giving oral evidence. 17 At some stage prior to 3 December 1991, Mr van Voorst wrote to Tom Watanabe, Chief Executive Officer of Nikken Inc. He said he did so in the 'hope that we could work together'. On 3 December 1991, not having received a reply, Mr van Voorst applied to the Registrar to register the trade mark NIKKEN in respect of magnets including biomagnets. The application was eventually granted, the registration being effective for seven years from 3 December 1991. It was not renewed. Mr van Voorst said he failed to renew the trade mark because he had forgotten about the registration. 18 On 6 June 2000, Mr van Voorst made another application for registration of the trade mark NIKKEN. This occurred shortly after registration of Nikken Wellness as a company, and before it commenced business. Mr van Voorst denied, in cross-examination, that he made the application because he had 'got wind of the fact … that steps were being taken to expand the Nikken business into Australia'. 19 In his affidavit, Mr van Voorst said that, in about November 2000, it came to his attention 'that NIKKEN magnets which were not like mine were available in Australia'. He saw the products and telephoned the Chief Executive Officer of Nikken Wellness, Christopher Rochester. Mr van Voorst claimed that, until this time, he was unaware of the existence of Nikken Wellness. 20 On 4 December 2000, Mr van Voorst requested the Registrar to expedite examination of his trade mark application. Expedition was granted and registration was effected on 10 May 2001. The certificate of registration identifies the trade mark as NIKKEN. It states that the trade mark 'is registered for the following goods and/or services': 'The manufacture of magnets for medical purposes including pain relief being goods in class 10 The distribution of maganets [sic] for medical, health and wellness purposes including pain and discomfort relief and sleep improvement being services in class 35.' 21 Part 1 of Schedule 1 of the Trade Marks Regulations 1995 (Cth) ('the Regulations') identifies the classes of goods in respect of which registration may be achieved. Class 10 comprises: 'Surgical, medical, dental and veterinary apparatus and instruments, artificial limbs, eyes and teeth; orthopaedic articles; suture materials.' 22 Part 2 of Schedule 1 indicates classes of services. Class 35 is for: 'Advertising; business management; business administration; office functions.' 23 Mr Rochester denied having contact with Mr van Voorst in November 2000. He said his first contact with Mr van Voorst was on or about 9 May 2001. Mr van Voorst telephoned him. After introducing himself as Nikki Singer and regaling Mr Rochester with 'an Elvis song' and then 'a Pavarotti song', Mr van Voorst told Mr Rochester he had 'an offer that you may find irresistible. Nikken may be interested in purchasing my range of beauty magnets'. Mr Rochester asked Mr van Voorst to resend some 'literature', which Mr van Voorst claimed to have previously sent to him, but which Mr Rochester had not received. 24 Within days of that conversation, Mr Rochester received from Mr van Voorst a faxed letter, written under his true name, which commenced: 'You have magnets for pain relief. You may lose the court battle with Amway. We have an offer that you may find irresistible. We have a range of magnets for beauty. They are unipolar, so they cannot be patented. But they can give you a leading edge in the market place, because we have the price and the knowledge to go with them. Best of all, we have the name. As Claude Hopkins once said, the name is everything. In marketing, that is. And we have that name. It's irresistible in the current, competitive climate!' (Original emphasis) 25 The letter went on to list the names, and functions, of 21 magnets allegedly marketed by Mr van Voorst. After some laudatory self-description, Mr van Voorst said: 'And the price for this amazing concept? US $333,000,000. That's US $300,000,000 for the beauty range, US $30,000,000 for the relevant cautions and US $3,000,000 for the name. Plus US $30,000,000 per year for consultancy and designer fees. You may think this excessive, but imagine all of those distributors - 2000,000 of them - without a product. And all of those from Amway coming over to you! Why? Because the beauty market is bigger than the pain relief market. A woman might be walking around with a sore hip, but she still wants to look good. Of course, I know the cautions on the products (for some of them , remarkably few). Of course, I can have books out on the products. With pictures. Such as "How to look five years younger in 15 minutes, or your money back on the spot." Of course, I can train seminar leaders who can train your people. And create video. And audio. It's all about price per package. What package do you want? Let's talk about it.' (Original emphasis) 26 Mr Rochester did not respond to this letter, although he apparently passed it on to Nikken International. However, Mr van Voorst did not allow the offer to rest. He telephoned Mr Rochester on several occasions and sent him material to be forwarded to Mr Masuda. 27 On 1 June 2001, Mr Rochester received from Mr van Voorst a 22 page letter dealing with many topics. The letter enclosed a copy of the certificate of registration of the trade mark. It discussed the 'value of the market' by reference to assumed turnover for the next 20 to 50 years. The letter went on to state: 'Chris, some facts are obvious. Firstly, the company that yours is a subsidiary of signs cheques each month for substantial amounts to its top distributors, and they don't even own a Registered Trade Mark and probably have spent far less time in the field of magnets and humans than I have. Secondly, it would cost you enormous amounts to recall, reprint and return to the market place with another trade mark. As well, shipping of new products like your insoles and magnetism meters, which have the mark built into them, would be expensive. Thirdly, the damage in the market place adds up to $1.5 million per month, which is $12 million (my estimate of your turnover to this point). Fourthly, a recall and reprint would cost you distributor faith, and the opportunity cost of taking, say, two months to recall, reprint and return to the market place is around $3 million (turnover). Fifth, the maximum fines under sub section 146-151 of the Trade Marks Act, 1995 are $2,750,000 + $33,000 + $33,000, for a company. As well, you face a minimum of two years' imprisonment. Therefore it seems to me that the total you could lose if we go to court could be as much as $18,000,000 plus two years imprisonment. You may, of course, do your own estimates. In these circumstances, I think my offer to sell you the ® at US$3,000,000 is most reasonable. It includes changing my stage and professional name, never to use "Nikkie Singer" again, in connection with magnet production. I am happy to give you seven days to decide what you want to do. After this I will be sending a letter to your top Distributors to inform them of the situation as well as asking customs to stop the importation of your goods, and so on. In other words, please stop all distribution of goods from your warehouse within seven days. Alternatively, I enclose a Trade Mark transfer form from IP Australia for you to fill out, sign and return to me with the enclosed Trade Mark Sale Agreement.' 28 After various other threats, Mr van Voorst repeated his offer to sell his beauty range to Nikken Wellness for US$333,000,000. 29 Mr Rochester did not accept this offer. Mr van Voorst made some more telephone calls and sent more letters, but no agreement was reached. 30 In July and August 2001, Mr Rochester received from Nikken Wellness distributors copies of two different standard form letters they had received from Mr van Voorst. Each of the letters referred to Mr van Voorst's certificate of registration of the trade mark NIKKEN. One of them contained a request 'that you refrain from dealing with or associating yourself with such products [that is, Nikken Wellness products] forthwith … failing which I will, you may be assured, feel free to exercise my legal rights, including a claim to damages without further notice. 31 The other letter was more oblique. After alleging the unlawfulness of the distributor's sale of Nikken Wellness products, Mr van Voorst concluded: 'Please consider your standing in, and the implications of, this matter, and reply to me within 14 days.' 32 On 23 August 2001, Nikken Wellness commenced this proceeding by filing an Application and Statement of Claim. Threats of legal proceedings 33 Section 129 of the Act relevantly provides: '(1) If a person threatens to bring an action against another person (threatened person) on the ground that the threatened person has infringed: (a) a registered trade mark; or (b) a trade mark alleged by the person to be registered; any person aggrieved by the threat (plaintiff) may bring an action (either in a prescribed court or in any other court having jurisdiction) against the person making the threat (defendant). (2) The purpose of the action is to obtain from the court: (a) a declaration that the defendant has no grounds for making the threat; and (b) an injunction restraining the defendant from continuing to make the threat. The plaintiff may also recover any damages that he or she has sustained because of the defendant's conduct. (3) The action may be brought whether or not the defendant is the registered owner, or an authorised user, of the trade mark alleged to have been infringed. (4) The court may not find in favour of the plaintiff if the defendant satisfies the court that: (a) the trade mark is registered; and (b) the acts of the threatened person in respect of which the defendant threatened to bring an action constitute an infringement of the trade mark.' (Original highlighting) 34 There is no dispute, and I am satisfied, that the activity of Mr van Voorst in sending letters to Nikken Wellness' distributors was activity that fell within s 129(1). The issue in relation to s 129 is whether or not there was justification for the threats. That depends upon the question whether Nikken Wellness has infringed Mr van Voorst's registered trade mark. Infringement 35 I set out the text of the certificate of registration of the trade mark at para 20 above. It will be recalled the mark was registered in respect of two described categories of 'goods and/or services'. 36 The first described category of registration is '(t)he manufacture of magnets for medical purposes including pain relief being goods in class 10'. The wording of this category is curious. Although the registration is made in respect of a class of goods, the description is not a specification of goods but an activity or process: 'manufacture of magnets'. 37 Mr Smith argues the reference to goods, in the clause preceding the first description, and the fact that registration was made in respect of a class of goods, rather than services, combine to indicate it was intended to effect registration in relation to goods; namely, 'magnets for medical purposes'. 38 Mr Smith contends the description in the certificate of registration has to be read in the light of his client's previous business activities. He said the evidence shows Mr van Voorst has never manufactured magnets; he has always purchased them from others. Mr van Voorst's business has always been the conduct of classes and clinics and the sale of magnets for promoting wellness and alleviating pain. Accordingly, anyone would understand that the application for registration was intended to obtain a trade mark in respect of the goods themselves, not their manufacture. 39 Mr Smith says Nikken Wellness sells magnets intended to be used for medical purposes, including pain relief; therefore, it infringes Mr van Voorst's trade mark. 40 Counsel for Nikken Wellness argue Mr van Voorst is not entitled to have the Court read the certificate in the way suggested by Mr Smith. They point out that s 27 of the Act governs the making of an application for registration of a trade mark. Section 27(3)(b) requires that the application 'specify, in accordance with the regulations, the goods and/or services in respect of which it is sought to register the trade mark'. It is for the applicant to nominate the class number that is appropriate to the goods or services in each group: see reg 4.4(4) of the Regulations. Counsel refer to authority supporting the proposition that a description is strictly construed: 'Daiquiri Rum' Trade Mark [1969] RPC 600, Ind Cooper Ltd v Paine & Co Ltd [1983] RPC 326 and Unilever Plc v Johnson Wax Ltd [1987] FCR 145. 41 In Décor Corporation Pty Ltd v Dart Industries Inc (1988) 13 IPR 385 at 400, Sheppard J set out rules of construction of a patent specification. They include a rule that 'the claims, since they define the monopoly, will be scrutinised with as much care as is used in construing other documents defining a legal right'. Counsel say the same principle must apply to an applicant's description of the goods or services in relation to which he or she seeks a trade mark registration. 42 Counsel for Nikken Wellness submit it is not permissible for the Court to have regard to the previous conduct of the trade mark holder. They draw an analogy with the conduct of an alleged infringer and cite the rule that the certificate of registration must be construed 'as if the infringer had never been born': see Nobel's Explosives Co Ltd v Anderson (1894) 11 RPC 519 at 523. Counsel contend: 'Whether or not the trade mark owner has specified appropriately or comprehensively the use or proposed use for which he or she claims a monopoly is not to the point. The trade mark owner is bound by the statement he or she has made in the application and the rights arising upon registration are defined accordingly. It would not be appropriate, for example, to construe the specification so as to make it useful for the trade mark owner; still less would it appropriate to construe the specification "with an eye to infringement" in a given case. Similarly, it should not be assumed that the specification does describe an actual activity in trade. The meaning and scope of the specification are to be determined by the words actually used by [the]trade mark owner.' 43 Counsel also argue it does not matter that the wrong class is claimed. They quote the statement in Kerly's Law of Trade Marks and Trade Names (12th ed) at para 5-05: 'Classification is primarily a matter of convenience in administration … What is of real importance in determining the rights of the parties, as has been pointed out, is the specification of goods or services entered on the Register and the validity of the registration.' 44 The submissions made by counsel for Nikken Wellness must be accepted. The Register is an official record open to inspection by members of the public: see s 209 of the Act. The Register is prima facie evidence of any particular matter entered in it: see s 210. A certified extract from the Register is admissible in legal proceedings: see s 211(2). Parliament must have intended the Register to speak for itself. People who peruse the Register, or an extract from it, must be able to act on the basis of what it says, without being obliged to make inquiries about the business history or previous conduct of the registered owner of the trade mark. 45 Although it is incongruous that class 10 was chosen, as the relevant class for the first category for which the subject trade mark was to be registered, this category must be construed according to its description. So construed, it clearly does not cover the goods themselves. 46 In any event, it seems to me that none of Nikken Wellness' products are 'magnets for medical purposes'. Perhaps the use of some of the products can be said to be for 'medical purposes', extending the meaning of that term to include 'pain relief' due to the use of that phrase in the certificate of registration. But none of Nikken Wellness' products are properly described as 'magnets'. Some products have magnetic properties but they also have other characteristics. They are each designed for their own specific function; they are not merely magnets. 47 This last observation applies equally to the second category of registration: '(t)he distribution of maganets [magnets] for medical, health and wellness purposes'. In any event, Nikken Wellness does not use the word 'Nikken' in respect of the 'service' of distribution. 48 The Act does not define the word 'service'. However, s 6 contains a definition of 'services of a person' - 'services dealt with or provided in the course of trade by the person' - that brings out a fundamental point about the use of the word 'service' in the Act: it must be an activity directed towards, or provided to, some other person. The classes of services listed in Part 2 of Schedule 1 of the Regulations illustrate the point; see, for example, class 35 quoted at para 22 above. Counsel for Nikken Wellness cite other examples: book distributors, who obtain material from various publishing houses for supply to retailers; and grocery or tobacco distributors, who obtain items from various manufacturers and supply them to retailers. 49 Counsel for Nikken Wellness go on: 'The significant point to bear in mind [is] that a person providing a distribution service is not selling his own goods (that is, his own trade mark goods) but the goods of other people, normally to retailers who supply that range of goods. In the present case, the applicant sells its own brand of goods to appointed buyers (referred to as "distributors") who in turn sell those products to their own customers. Each so-called "distributor" is an independent business. The "distributor" does not carry on business for the applicant, nor does the applicant carry on business for the "distributor". Although called a "distributor", there is nothing in the word "distributor" which fixes it with a meaning other than a nominated person who is given the right to sell certain goods. The applicant does not provide a distribution service to the "distributors"; nor do the "distributors" supply a distribution service to the applicant or to their respective customers. The relationship down the chain is simply that of seller and buyer.' 50 It is true that Nikken Wellness distributes magnetised goods. But it does not provide a distribution service; it sells the goods. The relationship between the company and its distributors is one of vendor and purchaser. 51 The evidence does not establish that Nikken Wellness has infringed the registered trade mark. Removal from the Register 52 Section 92 of the Act relevantly provides: '(1) A person aggrieved by the fact that a trade mark is or may be registered may, subject to subsection (3), apply to the Registrar for the trade mark to be removed from the Register. … (3) An application may not be made to the Registrar under subsection (1) if an action concerning the trade mark is pending in a prescribed court, but the person aggrieved may apply to the court for an order directing the Registrar to remove the trade mark from the Register. (4) An application under subsection (1) or (3) (non-use application) may be made on either or both of the following grounds, and on no other grounds: (a) that, on the day on which the application for the registration of the trade mark was filed, the applicant for registration had no intention in good faith: (i) to use the trade mark in Australia; or (ii) to authorise the use of the trade mark in Australia; or (iii) to assign the trade mark to a body corporate for use by the body corporate in Australia; in relation to the goods and/or services to which the non-use application relates and that the registered owner: (iv) has not used the trade mark in Australia; or (v) has not used the trade mark in good faith in Australia; in relation to those goods and/or services at any time before the period of one month ending on the day on which the non-use application is filed; (b) that 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.' (Original highlighting) 53 There is no dispute about the entitlement of Nikken Wellness to seek an order under s 92 in this proceeding. It is common ground that Nikken Wellness' entitlement to obtain such an order depends upon it establishing that: (i) on 6 June 2000 (the day he applied for registration), Mr van Voorst had no intention in good faith to use the trade mark in Australia, to authorise its use in Australia or to assign the trade mark to a body corporate for use by the body corporate in relation to the relevant goods and services; and (ii) Mr van Voorst did not use the trade mark in Australia in relation to those goods and/or services, at any time before 23 July 2001 (the day one month before Nikken Wellness commenced this proceeding). 54 In relation to (i), it should be noted there is no suggestion that Mr van Voorst has ever had any intention of authorising anyone else to use the trade mark or of assigning the trade mark to anyone else. The issue is whether Nikken Wellness has established, upon the balance of probabilities, that Mr van Voorst did not have the intention, on the relevant day, of using the mark himself. 55 The case-law establishes that the relevant intention is a 'definite and present intention' to deal in the goods, or provide the services: see Re J Batt & Co (1898) 15 RPC 534 at 538. There must be 'a resolve to use it in the immediate future … and real intention to use, not a mere problematical intention, not an uncertain or indeterminate possibility, but it means a resolve or settled purpose which has been reached at the time when the mark is to be registered': see Re Ducker's Trade Mark (1928) 45 RPC 397 at 402. 56 Counsel for Nikken Wellness submit the evidence establishes that, as at 7 June 2000, Mr van Voorst did not have an intention in good faith to use the mark. They say: 'It is submitted that his purpose in applying for the mark sprang from nothing more than an intention to deal in the mark. This motive is laid bare by (a) the absence of complaint by the respondent of an alleged injury to his trade or the infringement of an alleged right except when the applicant would not entertain his overtures to pay him money; (b) the correspondence … by which the respondent clearly demanded an extortionate sum; (c) the respondent's statement to Robynn Morro that "I am very happy, I have just registered a trademark of a company from overseas" and which included reference to his knowledge that the company was coming to Australia and that if this company wanted to operate in Australia it would have to pay him out and that he would be a very wealthy man.' 57 Counsel for Nikken Wellness also say: 'In any event, it is clear that he respondent did not have an intention (whether in good faith or otherwise) to provide the service of manufacturing magnets nor of operating a distribution service; he did not have an intention to engage in the very activities in respect of which the mark was applied for.' (Original emphasis) 58 In putting argument on behalf of Mr van Voorst, Mr Smith limited himself to the submission that his client 'has used his mark in good faith prior to the one month period before these proceedings were launched and has discharged the onus in that regard'. 59 I do not think Mr van Voorst bears any onus in relation to the application for removal. It is for the applicant for removal - in this case Nikken Wellness - to persuade the Court that the requirements of s 92(4) are satisfied. However, in determining whether it is persuaded, the Court is entitled to take into account any absence of evidence of use, as well as any evidence that suggests the applicant for registration had an extraneous intention in applying for registration. 60 Mr van Voorst filed a lengthy affidavit in which he referred to the application for registration and his subsequent request for an expedited examination. But he made no reference to his intention in making the application for registration, and this despite the fact that he was facing a s 92 claim by his opponent. Although I permitted Mr Smith to supplement Mr van Voorst's affidavit evidence by oral evidence in chief, he did not ask Mr van Voorst any question about his intention in applying for registration of the trade mark. 61 The fact that Mr van Voorst has given no evidence as to his intention in applying for registration of the trade mark does not itself establish that he lacked the requisite intention on the day he applied for registration. But it is a circumstance facilitating the drawing of an inference to that effect, if that inference is available from other evidence. 62 I think the circumstances mentioned by counsel for Nikken Wellness point in the direction of Mr van Voorst having lacked the relevant intention. I am not prepared to accept the John Peel explanation of his choice of the word Nikken. It is ingenious, but I think it is significant that Mr van Voorst 'forgot' this explanation when he prepared his affidavit, only weeks before the trial. Mr van Voorst impressed me as an intelligent and self-confident man, with a degree of charm. However, I had doubts about the accuracy of many of his statements. 63 I doubt Mr van Voorst's assertion that he was unaware of the Nikken Group until 1991. Given the Group's predominance in the industry in which Mr van Voorst had then been engaged for about 10 years, this seems inherently unlikely. However, whatever the earlier position, Mr van Voorst was certainly aware of the existence of the international Nikken Group in 1991. He knew the Group did not yet operate in Australia and thought registration of the name 'Nikken' would give him leverage with the Group. Consequently, he registered the trade mark NIKKEN and wrote to Mr Watanabe in the 'hope that we could work together'. But Mr Watanabe was not interested. So Mr van Voorst took no further action - he literally forgot he had registered the mark - until after registration of an Australian company. The timing of the application for registration of the present trade mark is telling. 64 The first requisite of s 92(4) is established. 65 The second requisite of s 92(4), in this case, is non-use of the mark between 6 June 2000 and 23 July 2001. Mr van Voorst failed to adduce any evidence about use of the mark during this period. In his affidavit evidence, Mr van Voorst frequently referred to 'NIKKEN magnets' and the 'NIKKEN system', but nowhere did he say he used this name before 2002. The items that he tendered in evidence, as indications of the products he offered for sale, were accompanied by brochures that made no reference to NIKKEN, except on separately printed labels which were obviously affixed at a later time. Although Mr van Voorst claimed to have advertised his products in magazines from time to time, no advertisements were tendered in evidence. 66 There is positive evidence of non-use during 1999. Ms Robynn Morro described Mr van Voorst's conduct of a workshop in November 1999, in a room in her clinic that he rented for the purpose. She referred to a bundle of brochures distributed by Mr van Voorst, none of which used the word 'Nikken'. She said that, to the best of her recollection, Mr van Voorst made no mention of the word 'Nikken' during the workshop. 67 Ms Morro said Mr van Voorst repeated the workshop in November 2000. During that time, Mr van Voorst told her he was 'very happy' that he 'just registered a trademark of a company from overseas'. Ms Morro's affidavit proceeded: 'He went on to tell me that the company sold magnets and that they were coming to Australia. He further advised that he did not want them to operate in Australia and that he would monopolize the magnets in this country. He advised me that if this company wanted to operate in Australia, they would have to pay him out and that he would be a wealthy man. He advised me that he "wouldn't have to worry about money ever again". Although I am unable to precisely isolate the occurrence, at some point in the conversation the respondent mentioned the name "Nikken", which at the time meant nothing to me.' 68 I infer from the last sentence that Mr van Voorst had not used the name 'Nikken' in his workshop or any brochures or products he had distributed at it. 69 Ms Morro was cross-examined by Mr Smith, but he asked no questions about the evidence I have mentioned. The evidence was not contradicted by Mr van Voorst. 70 The second element of the non-use claim is also established. Disposition 71 It is appropriate for me to make a declaration and injunctions in relation to claims and threats by Mr van Voorst. I am content to follow the form of orders proposed by Nikken Wellness in paras 1 to 3 of its Amended Application. I will also make an order for removal in accordance with para 4. No evidence of damage has been adduced. However, Nikken Wellness should have an order for payment of its costs. I certify that the preceding seventy-one (71) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox.
Associate: Dated: 8 August 2003 Counsel for the Applicant: Mr D M Yates SC, Ms A H Bowne
Solicitor for the Respondent: O'Reilly & Stevens Lawyers
Nikken Wellness Pty Ltd
van Voorst
(1988) 13 IPR 385
The Court declared the infringement threats groundless, restrained further threats and specified representations, ordered the trade mark removed, dismissed van Voorst’s counterclaim, and ordered him to pay Nikken Wellness’s costs; no damages were awarded.