Can a mark be expunged but still be deemed relevant for registration purposes?

What happens when an applicant for registration encounters a blocking registration for a mark that has not been used for several years, but still faces procedural hurdles that arguably prevent it from challenging the registered mark or otherwise removing it as a blocking citation? That was the issue in the case of Invicta Watch Company of America Inc v Sector Group SpA.

On November 10 2011 the petitioner, Invicta Watch Company of America Inc, filed a non-use cancellation action against the mark INVICTA, registered in the name of Sector Group SpA in respect of watch products and accessories. The petitioner had filed on November 8 2010 an application for registration of a mark including the word 'invicta' for various watch-related products. However, the application was blocked by Sector Group's registration.

Sector Group's mark was registered on September 10 1962 and had been periodically renewed in accordance with the Trademarks Ordinance (New Version) 5732-1972. However, the registrant failed to renew the registration for the most recent renewal period, with the result that the registration was no longer valid as of September 10 2011. The petitioner filed a statement of claim and a supporting affidavit in favour of the non-use cancellation petition; the registrant did not respond to the statement of claim nor did it file any evidence.

The issue before the adjudicator was the applicability of Sections 33-35 of the Trademark Ordinance to this set of facts. Section 33 of the ordinance provides that, if the renewal fee is not paid within six months after the expiration date, the registrar shall remove the trademark from the register. Section 34 provides that "a trademark that is removed for failure to pay the renewal fee will nevertheless, for a period of one year, be deemed as if the mark is still registered in respect of any trademark application". In other words, even if the registration has been removed, the mark may still be cited against a pending application for a period of one year.

Section 35 of the ordinance states that:

"[t]he provisions of Section 34 shall not apply where the registrar is satisfied either - (1) that there has been no bona fide trade use of the trademark during the two years preceding its removal; or (2) that no deception or confusion would be likely to arise from the use of the trademark which is the subject of the application for registration by reason of any previous use of the trademark which has been removed."

When the cancellation petition was filed, Sector Group's registration had not yet been removed from the register due to failure to pay the renewal fee. Thereafter, more time passed from the date of expiry, such that renewal was no longer possible. This meant that that the adjudicator was not authorised to order cancellation for non-use because there was no longer any registration to be cancelled. 

Pointing to differences in the language of Sections 35 and 41 (governing a non-use cancellation petition), respectively, the adjudicator concluded that the two sections addressed different issues. Sections 34 and 35 are directed to protecting the public from confusion arising from registration of the new mark, while Section 41 protects the proprietary interests of the trademark registrant. Against this backdrop, the adjudicator concluded that non-use in the period prior to removal from the register dispelled any fear of confusion of the public. The adjudicator pointed to the testimony of the private investigator on behalf of the petitioner, who testified that the registrant had made no use of the mark for at least seven years.

In light of the foregoing, the adjudicator ruled that, based on the exceptions set out in Section 35, the provisions of Section 34 would not apply to the examination of the pending application filed by the petitioner. She reasoned that the evidence showed that there had been no good-faith commercial use of the registered mark for the two years prior to its removal from the register. Thus, the registration would not be taken into account in examining the pending application filed by the petitioner.

Neil Wilkof, Dr Eyal Bressler and Co, Ramat-Gan