Australian Trade Marks Law Blog : Australian Trademarks Lawyer & Attorneys : Nicholas Weston Law Firm : Copyrights, Intellectual Property

The Full Federal Court Decision

Health World appealed the Trial Judge’s finding by contesting that it lacked standing both under Section 88(1) and Section 92(1) of the Act.

The Full Federal Court dismissed the appeal and held that a person is aggrieved ‘if there is a reasonable possibility of the applicant being appreciably disadvantaged in a legal or practical sense by the Register remaining unrectified’ (Ritz Hotel Ltd  v Charles of the Ritz Ltd (1988) 15 NSWLR 158 (the Ritz Hotel case).

In arriving at this decision the Full Court was bound by an earlier decision in Kraft Foods Inc v Gaines Pet Foods Corporation (1996) 65 FCR 104(the Kraft case) where it was held that the Ritz Hotel case provides an exhaustive test for determining whether an applicant is ‘aggrieved’.

Health World successfully sought special leave to appeal to the High Court on the issue of standing to seek revocation of a trade mark.

The High Court Case

French CJ, Gummow, Heydon and Bell JJ commenced their joint judgement outlining that the meaning of ‘aggrieved’ varies depending on which statute it appears. The Justices emphasised that the Register of Trade Marks must have ‘integrity’ and should be maintained as ‘an accurate record of marks’. However, this purpose must be balanced with the need to prevent ‘the security of the Register from being eroded by applications for rectification or removal by busybodies’. In this light the Court found that the authorities favour a liberal construction of the word ‘aggrieved’.

Overturning the earlier decision the High Court found that the Full Federal Court should not have followed its predecessor in the Kraft case because that case was ‘plainly wrong’ and in fact, no exhaustive test had been set; meaning the Kraft case should be overruled.

Turning to the Ritz case, the High Court held that McLelland J in that case had not been offering a complete account of what the legislation meant and was not ‘marking the outer boundary of the words aggrieved person’ but rather he had been deciding ‘the particular controversy before him’.

The High Court preferred the finding in Daiquiri Rum [1969] RPC 600 where Lord Pearce stipulates no requirement that the applicant for revocation desires or intends to use or could use the mark rather ‘all that mattered was that they were rivals in relation to the goods to which the mark applied’. In the present case the parties were certainly rivals ‘who have lost no opportunity to attack each other’s attempts to register trade marks both before the Registrar and in four sets of court proceedings which have so far been heard by 10 judges’.

So What?

The High Court case clarifies the standing requirement of ‘aggrieved’ which today remains relevant with respect to applicants seeking revocation under Section 88 of the Act. As to non-use proceedings under Section 92 of the Act the standing requirement has already been removed.

The matter has now been referred back to the Full Federal Court and based on the Trial Judge’s decision Shin-Sun’s mark will be removed since it did not intend to use the mark and had allowed it to become deceptive or confusing. 

We wonder if Shin-Sun is kicking itself for not similarly appealing the decision at first instance where its application on precisely the same standing issue was rejected.

Lea Lewin

In December 2001, Health World opposed the registration of the ‘HealthPlus’ mark relying on the s60 ground. The Registrar dismissed the opposition and Health World failed on appeal to the Federal Court: Health World Limited v Shin-Sun Australia Pty Ltd [2005] FCA 5; (2005) 64 IPR 495. Following that, in Health World Limited v Shin-Sun Australia Pty Ltd [2006] FCA 647 it was held that the ‘HealthPlus’ mark was not deceptively similar to the ‘Inner Health Plus’ mark.

The Decision

In this proceeding, there were three separate applications before the court:

1.         a rectification proceeding by Health World that sought expungement by Shin-Sun of the HealthPlus mark under ss 88(2)(a) and (c) of the Act; 

2.         a non-use proceeding by Health World that sought removal of Shin-Sun’s HealthPlus trade mark from the register on the grounds of non-use in s 92(4)(a) and s 92(4)(b) of the Act; and

3.         a non-use application by Shin-Sun against Health World’s ‘Inner Health Plus’  mark, also relying on the grounds stated in s 92(4)(a) and s 92(4)(b) of the Act.

The rectification proceeding

By s 88(2)(a) an application for cancellation or removal of a mark may be made on any of the grounds on which the registration of the trade mark could have been opposed. The grounds relied on by Health World, as well as the Courts finding on each, are summarised below:

Under s 42 Health World argued that use of the ‘HealthPlus’ mark was contrary to law because it was misleading or deceptive under s 52 of the Trade Practices Act 1974 (Cth). Health World relied on their reputation under the ‘Inner Health Plus’ brand to establish this ground. The Court acknowledged that at the crux of this question was whether the reputation of the ‘Inner Health Plus’ Capsule was separate and distinct from the reputation of the Inner Health Powder. After a detailed analysis of Health World’s marketing and promotion of the Capsules the Court rejected their submissions on this point:

“the entire thrust of Health World ’s launch of the Inner Health Plus Capsules was to take advantage of the reputation of the Inner Health Powder and the goodwill attaching to it” and “the essential message and reputation of Inner Health Plus remained constant”.

Since Health World’s reputation was specifically linked back to their initial product, the Powder, there could be no misleading or deceptive behaviour by Shin Sun.

Under s 59 Health World argued that on filing Shin Sun did not intend to use, or authorize to use, the 'HealthPlus' mark in Australia. Health World’s evidence pointed to Shin-Sun’s, as well an associated company, Nature’s Hive Pty Ltd, failure to distinguish between the separate identities of those corporations. The Court accepted their submissions on this point and found that the relevant intention for a connection in the course of trade was between Nature’s Hive and the goods, as opposed to with Shin-Sun. As such, the requisite intention was not present.

However, this ground proceeded to fail since Health World were found not to have standing as a ‘person aggrieved’ as required by s 88(1).  The Court said  “the applicant [must] have a desire to use the mark, or be likely to be hampered in some other way by the registration of the mark that the applicant seeks to have expunged”. The court did not find any intention on behalf of Health World to use the ‘HealthPlus’ mark other than as part of its existing ‘Inner Health Plus’ mark. A finding of no deceptive similarity between ‘Inner Health Plus’ and HealthPlus’ meant that Health World had no standing. 

Health World also relied on s 60 as a basis for removal of Shin-Suns “HealthPlus’ mark. On this point, there was a dispute between the parties as to whether s 60 applied in its form as at May 2001 (the relevant date for which the application could have been opposed) or in the form in which it stands at present (as amended on 23 October 2006). Shin-Sun argued that the pre-amended provision applied thus requiring Health World to establish that the marks in question were “substantially identical or deceptively similar”. Health World made submissions to the contrary arguing that the Amendment Act, contains no transitional provision for the application of the amendment to s 60.

The Court found that s 60 applied in its pre-amended form: “it would seem to me to be wrong to suggest that the Act contemplates that an expungement application may be brought upon the basis of a ground of opposition expressed in different terms from those that were applicable when the opposition was, or could have been, brought”.

Regardless, this ground proceeded to fail due to a lack of requisite reputation, as well as a finding against deceptive similarity between “Inner Health Plus’ and ‘HealthPlus’.

Health World’s non-use proceeding

Health World’s non-use application relied principally on the failure of Shin-Sun to use the HealthPlus trade mark in Australia during the three year period following its filing. 

The court found in favour of Health World predominantly on the basis that it was Nature’s Hive that used the mark during the relevant period and at all other times.

However, s 92 in the form in which it stood when Health World filed its non-use application required a person bringing a non-use application be a person aggrieved. For the same reasons mentioned above the Court did not consider that Heath World was such a person. The application failed.

Shin-Sun’s non-use proceeding

Shin-Sun sought partial removal of Health World’s ‘Inner Health Plus’ mark.

The Court did not agree with Shin-Sun that on the day on which the application was made that Health World had no intention to use the mark in relation to all the goods covered in the application (Shin-Sun’s application under s 92(4)(a) failed)

Shin-Sun were successful under s 92(4)(b)in establishing that during at least a three year period, Heath World had only used the trade mark in relation to some of the goods claimed, the Capsules.

However, again, at the time Shin-Sun filed their non-use application,s 92 required the applicant be a person aggrieved. On this point the Court said;

“Shin-Sun does not suggest that it intends to use the Inner Health Plus mark to identify any of its goods. Nor has Shin-Sun established that if Health World were to use the Inner Health Plus mark to identify goods in class 5, other than probiotic products, the mark would be deceptively similar to the Health Plus mark"

Accordingly, it was held that Shin-Sun was not a person aggrieved and that the application must fail.

Interestingly, under the law as it currently stands the non-use applications brought by both parties under s 92 of the Act in this case may well have succeeded. On that basis, non-use applications may well become more popular.