Fokker Brothers Inc. Ltd v Fokker Brothers Ltd
| Jurisdiction | New Zealand |
| Judge | Palmer J |
| Judgment Date | 11 May 2020 |
| Neutral Citation | [2020] NZHC 953 |
| Court | High Court |
| Docket Number | CIV-2019-404-548 |
| Date | 11 May 2020 |
UNDER the Trade Marks Act 2002
IN THE MATTER OF an appeal from the decision of the Assistant Commissioner of Trade Marks dated 28 February 2019, [2019] NZIPOTM 2
Palmer J
CIV-2019-404-548
IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA
TĀMAKI MAKAURAU ROHE
Intellectual Property — appeal against a decision of the Assistant Commission of Trade Marks which declined to revoke the respondent's trade mark because its non-use for three years was due to special circumstances beyond its control (breakdown of a personal relationship between a shareholder and a director of a company) — meaning of “special circumstances” as an exception to revocation — Trade Marks Act 2002
M C Hayes for the Appellant
C L Elliott QC for the Respondent
The judgment was delivered by me on Monday 11 May 2020 at 11.00 am. Pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar
Ms Ingrid Molloy was the sole shareholder, and her husband Mr Leo Molloy the sole director, of Fokker Brothers Ltd (FBL). FBL registered a trademark over “Fokker Brothers”. Ms and Mr Molloy separated, acrimoniously. Mr Molloy cut off Ms Molloy from involvement in aspects of their businesses. He assisted his sister, Ms Julie Christie, to set up a new business in a company called Fokker Brothers Inc Ltd (FBIL). Ms Molloy removed Mr Molloy as director of FBL and refused to allow FBL to sell the Fokker Brothers trademark to FBIL. FBIL applied to revoke FBL's trade mark on the basis it had not been used for three years, under s 66 of the Trade Marks Act 2002 (the Act). The Assistant Commissioner of Trade Marks declined the application on the basis the non-use of the trade mark was due to special circumstances outside the control of FBL. FBIL appeals.
The appeal is governed by the principles usually applicable to appeals by rehearing: I must make my own assessment of the merits. I find there was genuine use of the trade mark in the course of trade by the sale at Harry's Place, Parnell, Auckland, from February to November 2014, of “Fokker Bros gravy” on a roast of the day and duck-fat chips. Regarding the non-use otherwise, the threshold of “special circumstances” in s 66 is not particularly high. It simply requires that there are special circumstances, the non-use of a trade mark is due to those circumstances and the circumstances are outside the control of the owner of the trade mark. I accept that the breakdown of a personal relationship between a shareholder and a director of a company, leading to the director assisting another business to develop the same trade mark before being removed, is sufficiently unusual to qualify as special circumstances. I accept the non-use was due to those circumstances, which were outside the owner's control. I uphold the Assistant Commissioner's decision and dismiss the appeal.
Mr and Ms Molloy married in 2000. They operated a number of restaurants and bars. They intended to develop “Fokker Brothers” as a themed hospitality brand. In January 2006 they incorporated FBL for that purpose. In February 2006, FBL applied to register a trade mark for “Fokker Brothers”. It was registered over five classes of goods and services relating to foods and drinks, business services, transport and home delivery services and takeaway and restaurant services. 1
Apparently, the brand was envisaged to be used for pizza, complete with “big Fokkers”, and “little Fokkers”, “fat Fokkers” and “skinny Fokkers”. There was even to be a “Mother Fokker”, a “wee jockey Fokker” and a “12” lucky Fokker”. 2
By 2008 the concept had evolved into a Fokker Brothers steakhouse and sports bar. Mr Molloy would be the manager of a new company which would run out of Parnell premises leased by his sister, Ms Julie Christie. 3 Mr Molloy entered a Heads of Agreement regarding this but it did not proceed.
There was more planning for a Fokker Brothers business in 2013, with the development of a menu, a restaurant and bar operation, merchandising ideas and engagement of a graphic designer. 4
In 2014 to early 2015 gravy products and beer were sold under the Fokker Brothers brand in Harry's Place, a restaurant and bar which the Molloys operated in Parnell, Auckland. Fokker Brothers advertisements were also run on three television screens there from February to May 2014.
The Molloys' marriage ended in December 2014. Mr Molloy was the sole director of FBL. Ms Molloy was and still is the sole shareholder.
Ms Molloy made handwritten notes in April 2015 for ideas for the further development and use of the Fokker Brothers mark. She prepared a business plan for a Fokker Brothers burger bar as part of a proposed application to a bank for finance but it did not proceed.
The Molloys were also involved in Cowboys Bar in Queenstown. Ms Latu, the General Manager of Cowboys, gives evidence that Mr Molloy held meetings to discuss plans for a restaurant serving a Big Fokker steak and a Mother Fokker burger. In 2015, Mr Molloy was solely running Cowboys, and he instructed Ms Latu not to allow Ms Molloy into the bar and to trespass her if she turned up. From December 2014 to July 2015, Mr Molloy attempted to persuade Ms Molloy to sell the trade mark to his sister, Ms Christie. She refused, wanting FBL's assets, including the trade mark, to be dealt with as part of an overall settlement of their relationship property. 5
In July 2015, Ms Christie incorporated FBIL and is its sole director and shareholder. FBIL applied for a Fokkers Brothers trade mark. But FBL's trade mark was cited against FBIL's application and prevents FBIL's trade mark from being accepted and registered. On 24 July 2015, FBIL applied for revocation of the Fokker Brothers trade mark on the ground it had not been put to genuine use.
As director, Mr Molloy did not resist the application for revocation. But on 28 August 2015, as sole shareholder of FBL, Ms Molloy removed Mr Molloy as sole director of FBL and appointed herself in his place. Ms Molloy's evidence is that was because of his failure to properly protect the FBL's assets and act in its best interests. 6 She did resist FBIL's application. Lawyers' letters ensued.
Despite that, in September 2015, FBIL opened a Fokker Brothers hamburger restaurant in Market Square, Auckland. Ms Christie's evidence is that Mr Molloy helped with the interior design and menu. 7
On 19 February 2019 Jane Glover, an Assistant Commissioner of Trade Marks, declined the application to revoke FBL's trade mark. 8 She dealt with a variety of evidential objections. She found the relevant period for the alleged non-use of the
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(a) the preparatory steps in 2013 showed a subjective intention to use the mark but no objective commitment; 10
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(b) although the mark had been used for “beer” and “gravy” products at Harry's Place in 2014, these were not covered by the registration so FBL had not put it to use;
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(c) Ms Molloy's actions in 2015 were merely exploratory in nature; 11
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(d) Mr Molloy's actions in 2015 were not attributable to FBL as he was working to assist his sister to open a Fokker Brothers restaurant; 12 and
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(e) there is insufficient evidence to attribute use of the mark to either Mr or Ms Molloy, on behalf of FBL. 13
However, Assistant Commissioner Glover found that the non-use of the trade mark was due to special circumstances outside the control of FBL. She held that “special circumstances” must relate to external forces, as distinct from the voluntary acts of an owner, and do not need to be trade-related. 14 She found Mr Molloy's actions were external to FBL. 15 She held that “[f]rom December 2014 onwards, the company's actions were seriously hampered by the relationship breakdown between its sole shareholder and its sole director, and the actions that Mr Molloy took after the relationship ended”, in helping a third party competitor get there first. 16 She also found the ability of FBL to access funds and other resources was seriously restricted from
FBIL appeals the finding of special circumstances. Originally, FBIL had crossappealed the finding of non-use but it discontinued that before the hearing on 3 February 2020. During the hearing, I gave counsel leave to file further memoranda regarding whether, where only part of a judgment is under appeal, the Court is able to make a decision in respect of other aspects of it. In their further memoranda, counsel correctly agreed that the Court may decide aspects of a decision that are not the subject of appeal, under r 20.19 of the High Court Rules 2016 (the Rules) and s 173 of the Trade Marks Act 2002. They each sought leave to file further brief written submissions regarding the Assistant Commissioner's findings on non-use of the trade mark, which I granted.
I have considered the submissions. They are not directly relevant to the issue under appeal, which is whether there were special circumstances justifying non-use of the mark. But they do affect the pre-condition for that issue, which is whether there was non-use of the mark. I consider the Assistant Commissioner was wrong in one aspect of her findings of non-use. I consider there was genuine use of the mark in the course of trade by the sale at Harry's Place, from February to November 2014, of a roast of the day and duck-fat chips, both with “Fokker Bros gravy”....
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Fokker Brothers Inc Limited v Fokker Brothers Limited
...HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE CIV-2019-404-548 [2020] NZHC 953 UNDER the Trade Marks Act 2002 IN THE MATTER OF an appeal from the decision of the Assistant Commissioner of Trade Marks dated 28 February 2019, [2019] NZIPOTM 2 BETW......