Offer to sell not enough to keep trademark on register

In Bickford’s Trading Pty Ltd v Tata Sons Limited ([2013] NZIPOTM 5, January 30 2013), the Intellectual Property Office has ordered the revocation of three trademarks on the grounds of non-use.

Tata Sons Limited applied for revocation on the basis of non-use of three WATERPLUS trademarks in the name of Bickford’s Trading Pty Ltd.

It appeared that there were not any sales during the relevant non-use periods, but instead an open offer to a licensee in New Zealand to sell products. Bickford’s relied on Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) ([1984] HCA 73; (1984) 156 CLR 414 at 433-4) where an intention to offer or supply goods was sufficient.

In an earlier period, Bickford had made some sales to its licensee, but when the licensee failed to pay, Bickford stopped supply. The assistant commissioner ruled that there was not an intention to offer its products to its licensee when that licensee was on “stop supply” because it owed money to Bickford.

While Bickford claimed its dealings with its licensee constituted use, it also claimed that there were special circumstances beyond its control excusing the non-use. It also relied on the fact that there had been a global recession as a special circumstance. 

In terms of the problems with its licensee, the assistant commissioner ruled that how Bickford responded to the problems with its licensee involved a series of business decisions which were entirely within its control.

In terms of the recession, while that itself was outside of the control of Bickford, the assistant commissioner ruled that its response to it was not. She also ruled that Bickford had not proved a causal link between the non-use and the recession. The sales by Bickford in New Zealand were well before the recession, and it had sold other products under another trademark during the non-use period. Therefore, it appeared that Bickford had changed its focus away from the WATERPLUS product to another similar product.

The final point the assistant commissioner considered was whether there were any exceptional circumstances justifying the exercise of her discretion not to remove the WATERPLUS marks. The assistant commissioner rejected this argument without further elaboration.

Cases considering an offer or intention to supply, without actual sales, are relatively rare in New Zealand, as are cases considering special circumstances excusing non-use. It is very common for trademark owners to ask the assistant commissioner to exercise discretion and allow a trademark to remain on the register, although it is very rare that such a plea is successful. The intention of the regime is to remove trademarks that are not in use, and it seems that a trademark owner will have to demonstrate something quite extraordinary to keep a trademark on the register in the absence of use.

Kate Duckworth, Catalyst Intellectual Property, Wellington