On 12 August 2016, the Federal Court overturned a decision by the Trade Marks Office to remove Dick Smith’s OzEmite trademark as a result of “non-use”. The action was brought by market competitor and Founder of Aussiemite, Roger Ramsey. (See Dick Smith Investments v Ramsey FCA 939 )
Dick Smith lodged a trademark application for OZEMITE in 1999, which was subsequently approved in 2003. However, the product was not launched until 2012. Mr Ramsey, whose Aussiemite had been successfully registered and trading since 2006, argued that Mr Smith’s OzEmite should be removed from the Registrar pursuant to s 92(4)(b) of the Trade Marks Act 1995 (“The Act”).
Section 92(4)(b) stipulates that a trademark may be removed from the Registrar if it has been registered but not “used” for a continuous period of three years.
Issues before the court
The three main issues before the court were as follows:
- Whether, during the statutory non-use period, the OZEMITE trademark had in fact been used,
- Whether, there were any obstacles that excused non-use; and
- Whether, the court felt that the trademark should not be removed.
Had the trademark had been used?
In relation to the first point, Katzmann J stated that there was no rule requiring “a single act of sale” to establish use of a trademark. [at 132]
Furthermore, steps taken before any sale of goods could constitute use, so long as there was an existing intention to offer or supply the goods in trade.’ [at 138]
Consequently, it was found that reference to the OzEmite trademark in pre-launch media appearances constituted “use” for the purposes of s 92(4)(b). Justice Katzmann made specific reference to two instances of “use”. The first being Mr Smith’s appearance on the television programme, The Chaser, in which he wore a promotional t-shirt for the OzEmite brand.
The second, his appearance on an Adelaide radio show, during which time he spoke at length about OzEmite and its upcoming launch. These examples sufficiently evidenced Mr Smith’s “genuine intention” to use the mark and refuted any suggestion that he “abandoned” the OzEmite brand.
Were there any obstacles preventing use?
The second question facing the court was whether there were any obstacles that would have excused “non-use” as stipulated in s 100(3)(c).
Justice Katzmann clarified the term “obstacle” as “circumstances arising independently of the will of the trademark owner.” [at 175]
Mr Smith made two submissions in relation to the above, arguing that during production, Dick Smith Investments (“DSI”) suffered difficulties in sourcing the desired yeast and creating a satisfactory flavour, which ultimately led to the launch delay. Mr Smith failed on both of the above submissions as it was held that neither constituted an “obstacle” for the purposes of s 100(3)(c).
Did the court feel the trademark should not be removed?
Justice Katzmann reiterated the courts broad discretionary power pursuant to s 101(3). This states that if the court is satisfied that it is reasonable to do so, they may retain the trademark on the Registrar, even if the grounds for removal have been satisfied.
In accordance with the above section, Katzmann J stated that even if the OzEmite trademark had failed on the “use” provision outlined in s 92(4)(b), she would have ordered that it remain on the Registrar in order to minimize public confusion. It was felt that due to its highly publicised history, the OzEmite brand had a “residual reputation” and its removal would have likely led consumers to confuse it with its competitor, Aussiemite. Accordingly, it was decided that there would be less confusion if both brands were to remain on the shelves.
What does this mean?
This case provided insightful clarification of the term “use” in the context of s 92(4)(b). It highlighted that tangible sales were not necessary in proving use but more relevant were the party’s intentions regarding the trademark.
Furthermore, it was evidenced that in cases such as this, the court will use its discretion to minimize public confusion.