“Use” of a trade mark is a very important concept in trade marks law.  In particular, it is relevant to ownership (first user or first registrant is the deemed first owner of a mark) and, of course, it is relevant in applications for removal for non-use.

Use by someone other than the registered owner is sufficient as long as that use is “authorised” in the requisite sense: s 7(3) TMA.

So, what is “authorised use”?

Section 8 of the Trade Marks Act 1995 (Cth) provides a statutory definition:

Definitions of authorised user and authorised use

(1)  A person is an authorised user of a trade mark if the person uses the trade mark in relation to goods or services under the control of the owner of the trade mark.

(2)  The use of a trade mark by an authorised user of the trade mark is an authorised use of the trade mark to the extent only that the user uses the trade mark under the control of the owner of the trade mark.

(3)  If the owner of a trade mark exercises quality control over goods or services:

(a)  dealt with or provided in the course of trade by another person; and

(b)  in relation to which the trade mark is used;

the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.

(4)  If:

(a)  a person deals with or provides, in the course of trade, goods or services in relation to which a trade mark is used; and

(b)  the owner of the trade mark exercises financial control over the other person’s relevant trading activities;

the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.

(5)  Subsections (3) and (4) do not limit the meaning of the expression under the control of in subsections (1) and (2).

It is clear from this definition that for use to be “authorised use” it must be under the control of the owner of the mark.

It is now clear that “authorised use” requires actual control by the registered owner. Theoretical or potential control is insufficient.

In Skyy Spirits LLC v Lodestar (2015) 112 IPR 328, a removal for non-use case, it was uncontroversial that the registered owner had not used the mark.  The issue was whether a licensee had used the mark in the non-use period.    The facts are slightly complicated but essentially are as follows:

  • In 2000, A registered WILD GEESE as a TM.  Around the same time, unaware of A, B began selling WILD GEESE wines in small quantities.
  • Later, in 2005, B applied to register WILD GEESE as a TM and discovered the already registered WILD GEESE mark which was an obstacle to his registration.
  • B applied to have the registered mark removed for non-use.  Around this time, B also discovered that someone else, C, had also applied to have the registered mark removed for non-use.
  • B and C eventually figured that the enemy of my enemy is my friend and joined forces on the following terms.
    • B, having the earlier use, assigned his rights in the (unregistered) WILD GEESE mark to C.
    • C licensed the mark back to B for $1 in perpetuity.
    • C took over B’s non-use removal application.
  • In 2012, C finally succeeded in removing A’s mark from the Register.
  • C then secured its own registration of WILD GEESE and WILD GEESE WINES.
  • Subsequently, A sought removal of C’s hard-won registration on grounds of non-use.
  • B was the only party using the WILD GEESE mark in the relevant non-use period.
  • The critical question was whether B’s use was “authorised” by C.

Perram J, at first instance, considered that C exercised no actual control over B’s use of its mark but held that a mere theoretical possibility of contractual control was sufficient to constitute authorised use for the purposes of s 8 of the TMA.

Note that Perram J did not consider that this was the proper reading of s 8 – he considered that actual control was necessary – but considered himself bound by earlier Full Court authority (Asia TV v Yau (No 2) (2000) 49 IPR 264) that theoretical control was enough.

Hence, he ordered that the mark had been used in the requisite sense and would remain on  the Register.

A appealed.

The Full Court (Allsop CJ, Greenwood, Besanko, Nicholas and Katzmann JJ) allowed the appeal.

The Full Court considered that B’s use was not controlled by C and therefore was not authorised.  It said that the use of a TM under a  bare licence is insufficient to establish the necessary connection between the registered owner and the relevant goods.  Some form of control has to be established and the mere ability or potential to control is not enough.

The Full Court did not overrule Yau.  It said that Yau didn’t stand to the contrary and that, in fact, that case involved a high degree of control by the registered owner.

 

 

 

 

 

 

 

 

 

 

Advertisements