The recent decision by the Australian Trade Marks Office in CUB Pty Ltd v Elixir Signature Pty Ltd
serves as a useful reminder to trade mark owners regarding the potential for third party attacks on their registered rights. In particular, the decision raises some important points for brand owners with extensive trade mark portfolios in Australia comprising historic brands which may not be in current use but remain important to the heritage and possible future use of the business:
1. the non-use actions brought by Elixir, which have attracted quite a lot of press attention, indicate there may be an increased risk of non-use removal actions by third parties against historic brands no longer in use, particularly in competitive industries such as the food and beverage industry;
2. brand owners should regularly review their trade mark portfolios to identify any registrations which are potentially at risk of a non-use action;
3. for registrations identified to be at risk, strategies should be considered to help protect them against a removal action by a third party, such as:
regular limited releases of products under the relevant brands (with care taken to ensure that evidence of such releases is retained in case required and that the brands are used as registered); and
re-filing of marks that have not been used in order to benefit from the 5 year period post filing in which non-use actions cannot be brought;
4. brand owners may wish to consider appropriate licensing programs for their historic brands if they are unable to exploit those brands themselves; and
5. the potential to use online distribution of products to reduce the cost of protective use exercises and the difficulty in securing retail outlets for short product runs. The use must still have a good faith commercial rationale, but online distribution is increasingly used to support new business models and has a real role to play in this area.
Under the Trade Marks Act 1995
, a trade mark registration can be removed from the Register for non-use on two separate grounds - first, if, at the time of filing, the proprietor had no intention in good faith to use or authorise the use of the mark in Australia and, second, if the proprietor has not used the mark in good faith for a continuous period of 3 years ending 1 month before the date of filing of the non-use application and the mark has been registered for 5 or more years.
In this case, CUB, a large Australian brewer and part of the Fosters group, sought to defend non-use removal actions brought by Elixir against 54 of its registrations for historic beer brands, some of which were over 100 years old. Elixir claims to have been established to run one or more micro-breweries with the aim of bringing historical beers back to life. One of the main reasons for Elixir bringing the removal actions appears to have been CUB's refusal to license certain of its historical brands to Elixir.
CUB filed a significant amount of evidence setting out the history of the use of the marks the subject of the removal actions, including evidence of limited releases of beers under the marks once commercial production had ceased and of confidential plans for future releases of the brands. CUB argued that its evidence demonstrated that the trade marks had retained strong residual reputations amongst Australian consumers.
The Hearing Officer found that the removal actions were made out in respect of 10 of CUB's registrations. The removal actions were rejected for 3 of the registrations. In the case of the remaining 41 registrations, the Hearing Officer found that grounds for removal had been established but decided to exercise the Registrar's discretion to allow the trade marks to remain on the Register (although only in respect of beer and related goods). The Registrar has a broad discretion to decide not to remove a trade mark even if grounds for removal have been made out if satisfied that it is reasonable to do so. Factors that the Registrar may take into account in considering the exercise of the discretion include the existence of a residual reputation in the trade mark, and sales that post-date the relevant period for which use must be shown.
The Hearing Officer decided to exercise the Registrar's discretion in this case on the basis of the public interest in avoiding the confusion or deception of consumers if beers were supplied under the trade marks by a different company, and the evidence that CUB provided of its proposed future use of the marks. The Hearing Officer found that CUB's history of limited releases of beers under the trade marks, even though not sufficient to show use of the marks in the relevant period, did demonstrate a residual reputation in the marks.
Elixir has not sought to appeal the Hearing Officer's decision.