Use it or lose it - decision provides lessons in how to use a mark in the course of trade

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

A trademark can be removed from the register if it 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 a negative cannot be proven, where an allegation of non-use is made, Section 100 of the Trademarks Act 1995 places the burden on the party opposing the removal of the trademark 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 trademark pre-emptively (because a party anticipates that it will want to use the mark at some point in the future), defensively (to prevent someone else from using the trademark), 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' one might want to broaden or shift the focus of the business later). Unless the owner is in a position to establish that the mark has been used as a trademark (as a 'badge of origin') in the course of trade, however, these strategies may ultimately disappoint.

A recent decision of the Australian Trademarks Office gives some clarity as to what is 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.

US-based children's apparel company The Gymboree Corporation and its Australian subsidiary applied to have the GYMBAROO trademark 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 trademark. 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 trademark in relation to the service of providing child development classes. Kindy therefore argued that it uses the trademark 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 trademark in the course of trade"; namely, using a trademark on, or in relation to, a good that one 'makes use' of in the course of operating its business is not the same as using a trademark in relation to those goods 'in the course of trade'. For example, emblazoning a trademark on a company car does not constitute use of the trademark 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; a previous case has shown 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 trademark 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 trademark is also used in relation to the goods that have been consumed as part of the manufacture of the first good.

Tessa Meyrick, Allens, Melbourne