INTERNATIONAL CONSOLIDATED BUSINESS PTY LTD V  S C JOHNSON & SON INC

Court of Appeal of New Zealand, Kós P, French and Brown JJ

23 August 2018,19 March 2019

[2019] NZCA 61

Trade marks – registrability – ownership – whether an application for a trade mark may be made on a date when an identical, pre-existing registration for that trade mark exists on the register

Facts:

International Consolidated Business Pty Ltd (“ICB”) owned trade mark registration 648953 ZIPLOC in class 16 (the “ICB registration”). The ICB registration was removed from the register on 26 June 2014 after S C Johnson & Son Inc (“Johnson”) applied for its removal for non-use. The effective date for the registration’s removal was 22 April 2013, being the date on which Johnson’s application was made.

 

On 19 April 2013, three days before it made its application to remove registration 648953, Johnson filed trade mark application 975954 for ZIPLOC in class 16 (the “Johnson application). On 26 September 2014, three months after registration 648953 was removed, ICB filed its own, new application for ZIPLOC in class 16 (the “ICB application”). ICB then opposed the Johnson application on the grounds that Johnson could not own the trade mark under s.32(1) of the Trade Marks Act 2002 (the “Act”) given ICB’s existing registration.

The Assistant Commissioner of Trade Marks (the “Assistant Commissioner”) upheld the opposition on two grounds.

First, when Johnson applied for the Johnson application on 19 April 2013, the ICB registration was still on the register. ICB was accordingly the “owner” of the ZIPLOC trade mark in class 16 (even though its registration had subsequently been removed three days later).

Secondly, ICB pointed to its use the ZIPLOC trade mark prior to any use by Johnson and prior to Johnson’s application for registration on 19 April 2013.

On appeal to the High Court of New Zealand (the “High Court”), Cull J ruled that the effective revocation date of ICB’s registration 648953 was 19 April 2013: S C Johnson & Son Inc v International Consolidated Business Pty Ltd [2017] NZHC 3238. Her Honour considered that holding ICB to be the true owner of the ZIPLOC mark as at 19 April 2013 when its registration would be revoked three days later for non-use “defies logic, common sense and the purpose of the Act” [124]. The Judge therefore quashed the Assistant Commissioner’s finding that ICB was the owner of the ZIPLOC trade mark on 19 April 2013, i.e., the first ground referred to above. Her Honour referred the proceeding back to the Commissioner of Trade Marks (the “Commissioner”) for determination of the second issue, whether in light of that finding whether ICB or Johnson was the true owner of the trade mark ZIPLOC.

ICB appealed.

Held (dismissing the appeal):  

  1. Did the High Court err in treating 19 April 2013 as the effective revocation date of the ICB registration?

(i)         The Judge was wrong to treat 19 April 2013 as the effective revocation date of the ICB registration [45]. There was no factual foundation for the exercise of the discretion under s.68(2)(b) of the Act to deem an earlier revocation date than the date for the application for revocation [44]. Further, there was not even jurisdiction to consider that question, which would have been properly considered in the context of the revocation decision, not the existing opposition [44].

  1. Was the presence on the register of the ICB registration on 19 April 2013 a bar to Johnson’s application for registration on 22 April 2013?

(i)         This issue turned on whether in 2002 the Act changed the law, which had previously permitted the filing of an application to register a trade mark prior to an application for removal of the same or similar pre-existing trade mark registration [48]. Before the 2002 Act, it was established that a trade mark registration was not revoked until the order for its revocation was made [49]. It was an established practice that an aspiring owner of a trade mark would apply for that trade mark in anticipation of a successful application for revocation [51]. If it were otherwise, the applicant would have to re-apply after being advised during the examination process that its application was blocked by an existing registration that was later removed for non-use [52].

            Re Trade Mark “Palmolive” (1932) 49(8) RPC 269, E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2009] FCAFC 27, (2009) 175 FCR 386, Unilever plc v Cussons (New Zealand) Pty Ltd [1997] 1 NZLR 433 (CA), Kambly SA Specialities de Biscuits Suisses v Intersnack Knabber-Gebäck GMBH & Co KG [2004] EWHC 943 (Ch) referred to.

          (ii)          Section 68(2) of the Act now provides that the rights of an owner whose trade mark is revoked cease either (a) on the date of the revocation application or (b) an earlier date if the Commissioner or court is satisfied grounds for revocation exist at that earlier date. The effect of s.68(2) is to advance the effective date of the removal of a registered trade mark from the actual date of the removal order that had previously applied at common law [55]. It thereby deprives the owner of rights which it would otherwise have had in the period between the dates of the application for removal and the order for removal, or even earlier if s.68(2)(b) is invoked [55].

            (iii)       Section 68(2) is an ameliorative provision to prevent the prospect of infringement proceedings being pursued by trade mark owners whose registrations have been revoked for infringements occurring in the period up to revocation [61]. It does not operate to prevent the making of a trade mark application until a pre-existing trade mark registration that blocks that application from proceeding to registration [61]. If Parliament had intended to change the law so as to prohibit the previous practice of filing a trade mark application in anticipation of a successful revocation application being made, it would have done so by more direct means than s.68(2) [68].

                        Although s.68(2) enables the effective date of removal to be earlier than the date of the actual order for removal, it has no bearing on the date on which an applicant for revocation may file its own application for registration. [83]. Accordingly, the fact that Johnson’s application for registration was filed three days prior to the effective date of removal of registered trade mark 648953 had no bearing on the validity of Johnson’s application [85].

                        RIVERIA Trade Mark [2003] RPC 50 (Trade Marks Registry), Campomar SL v Nike International Ltd [2011] SGCA 6, [2011] 2 SLR 846 not followed.

C.        Does first use of a trade mark determine ownership in perpetuity or can an initial entitlement to ownership be lost through cessation of use?

(i)        The applicant for registration carries the onus of proving ownership. As a matter of interpretation, a person “claiming to be the owner” must justify its claim and establish its right [86]. Accordingly, the applicant should be in possession of a proprietary right which if questioned can be substantiated [86]. In order to establish ownership, the applicant must establish that it is the first person to use the mark in New Zealand; and that, if challenged, there is no prior use by another party such as an opponent [86]. Subject to considerations such as honest concurrent user and special circumstances within the scope of s.26(b), prior genuine use of a trade mark by an opponent to an application would preclude an applicant’s legitimate claim to ownership [87].

            The North Face Apparel Corp v Sanyang Industry Co Ltd [2014] NZCA 398 referred to.

(ii)       If a person whose registered trade mark is removed for non-use wishes to make a fresh application to register the trade mark, that person can only rely on their use in support of a claim to ownership which occurs subsequent to the continuous period of three years non-use [91]. While earlier use which pre-dates the continuous period of non-use may remain relevant in the context of the consideration of issues of deception or confusion under s.17(1)(a), such earlier use may not be invoked in support of an assertion of ownership. [91]. Accordingly, the November 2009 use upon which ICB sought to rely could not be prayed in aid of ICB’s opposition on the grounds of prior ownership to Johnson’s application [91].

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