International Consolidated Business Pty Ltd v S C Johnson & Son Inc.

• Jurisdiction: New Zealand
• Judge: Brown J
• Judgment Date: 19 March 2019
• Neutral Citation: [2019] NZCA 61
• Court: Court of Appeal
• Docket Number: CA72/2018
• Date: 19 March 2019

Between

International Consolidated Business Pty Ltd

Appellant

and

S C Johnson & Son Inc

Respondent

[2019] NZCA 61

Court:

Kós P, French and Brown JJ

CA72/2018

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

Intellectual Property — ownership pf trade mark — application for registration of trade mark was made before the opponent's trade mark was revoked — how anomaly's in dates treated

Counsel:

G C Williams and L E Mannis for Appellant

G F Arthur and L Carter for Respondent

• A The appeal against the order quashing the Assistant Commissioner's finding that ICB is the owner of the ZIPLOC trade mark is dismissed.

• B The direction that the proceeding be referred back to the Assistant Commissioner for a new hearing of the issues at [159] of the High Court judgment is quashed.

• C Trade mark application 975954 for ZIPLOC is to proceed to registration.

• D The appellant must pay the respondent costs for a standard appeal on a band A basis and usual disbursements.

JUDGMENT OF THE COURT

Table of Contents

	Para No
Introduction	[1]
Obtaining and removing registered trade marks	[7]
Applying for registration	[8]
Revocation of registration of trade mark	[13]
Relevant background	[19]
The Assistant Commissioner's decision	[23]
The High Court judgment	[26]
Issues on appeal	[34]
Did the High Court err in treating 19 April 2013 as the effective revocation date of RTM 648953?	[36]
Was the presence on the register of ICB's RTM 648953 on 19 April 2013 a bar to Johnson's application for registration?	[46]
The position prior to 2002	[49]
Section 68(2)	[55]
The legislative history	[62]
The implications of s 66(3) and (4)	[69]
The technique for backdating the effective date of removal	[79]
Conclusion	[83]
Does first use of a trade mark determine ownership in perpetuity or can an initial entitlement to ownership be lost through cessation of use?	[86]
Was a reference back of the ownership question erroneous?	[92]
Result	[96]
Costs	[99]

REASONS OF THE COURT

(Given by Brown J)

Introduction

1 Both the appellant, International Consolidated Business Pty Ltd (ICB) and the respondent, S C Johnson & Son Inc (Johnson) aspire to be the registered owner in New Zealand of the trade mark ZIPLOC in class 16. 1

2 On 26 June 2014 ICB's previous registered trade mark (RTM) number 648953 for ZIPLOC was removed from the trade mark register with effect from the date of Johnson's application for removal of 22 April 2013. ICB filed a further application for registration of ZIPLOC under application number 1005952 on 26 September 2014.

3 On 19 April 2013, three days prior to its application for removal of ICB's RTM 648953, Johnson filed its own application to register ZIPLOC under application number 975954. Being first in time Johnson's application had priority over ICB's further application.

4 ICB's opposition to Johnson's application was upheld by the Assistant Commissioner of Trade Marks on two grounds: 2

• (a) On the date of Johnson's application, 19 April 2013, ICB was the owner of the ZIPLOC trade mark by virtue of its RTM 648953. Hence Johnson was precluded from filing an application for registration prior to the effective date of the removal of RTM 648953 on 22 April 2013.

• (b) Johnson failed to establish that there was no use by ICB of the ZIPLOC trade mark either prior to any use by Johnson or prior to Johnson's application for registration on 19 April 2013.

5 On appeal to the High Court Cull J ruled that the effective revocation date of ICB's RTM 648953 was 19 April 2013. 3 The Judge quashed the Assistant Commissioner's finding that ICB was the owner of the ZIPLOC trade mark on that date ie, ground (a) above. She referred the proceeding back to the Commissioner for determination of the issue whether ICB or Johnson is the true owner of the trade mark ZIPLOC. 4 ICB appeals from that judgment.

6 The primary issue on the appeal concerns the validity of Johnson's application for registration on 19 April 2013. It raises significant issues as to the interpretation of the Trade Marks Act 2002 (the Act).

Obtaining and removing registered trade marks

7 Registration of a trade mark confers on the registered owner various exclusive rights including the use of the RTM. 5 It is not a prerequisite of registration that the applicant is using the trade mark, provided that at the date of application it has the intention to use it. However the underlying philosophy of the Act is that a registered owner must use the trade mark or risk losing the registration.

Applying for registration

8 Application is to be made in accordance with s 32(1) of the Act:

32 Application: how made

(1) A person claiming to be the owner of a trade mark or series of trade marks may, on payment of the prescribed fee (if any), apply in the prescribed manner (if any) for the registration of the trade mark or series of trade marks used or proposed to be used in respect of the following:

• (a) particular goods or services within 1 or more classes:

• (b) particular goods and services within 1 or more classes.

9 The definition of “owner” in s 5(1) distinguishes between ownership of a trade mark and ownership of a registered trade mark:

owner,–

(a) in relation to a registered trade mark that is not a certification trade mark or a collective trade mark, means the person in whose name the trade mark is registered; and

…

(d) in relation to an unregistered trade mark, means the person who owns all of the rights in the mark

10 The Commissioner must accept an application that complies with the requirements of the Act. 6 If different persons separately apply for registration of

identical or similar trade marks in respect of identical or similar goods or services, the first application received by the Commissioner has priority and may proceed. 7

11 Section 25(1)(a) provides that the Commissioner must not register a trade mark (trade mark A) in respect of any goods or services if it is identical to a trade mark (trade mark B) belonging to a different owner that is registered or has priority in respect of either the same goods or services, or goods or services that are similar to those goods and services and its use is likely to deceive or confuse.

12 The Commissioner must not register a trade mark until six months after the date of application for registration. 8 However on registration the trade mark is deemed to have been registered as at the date of application. 9 The registered owner may bring proceedings for infringement of the registered trade mark if the infringement occurred on or after the deemed date of registration. 10

Revocation of registration of trade mark

13 Registered trade marks which were not registrable under Part 2 at the deemed date of registration may be declared invalid under s 73. Validly registered trade marks may be revoked on various grounds prescribed in s 66. One such ground is that at no time during a continuous period of three years or more was the trade mark put to genuine use in the course of trade in New Zealand, by the owner for the time being, in relation to goods or services in respect of which it is registered. 11

14 In Crocodile International Pte Ltd v Lacoste the Supreme Court drew attention to the purpose of the non-use provision, 12 often referred to as the “use it or lose it” provision, as explained by Jacob J in Laboratoire de la Mer Trade Marks: 13

There is an obvious strong public interest in unused trade marks not being retained on the registers of national trade mark offices. They simply clog up the register and constitute a pointless hazard or obstacle for later traders who

are trying actually to trade with the same or similar marks. They are abandoned vessels in the shipping lanes of trade.

15 Section 66(1A) provides a definition of “continuous period”:

(1A) For the purposes of subsection (1)(a), continuous period means a period that commences from a date after the actual date of registration and continues uninterrupted up to the date 1 month before the application for revocation.

16 Section 66 further provides:

(3) The registration of a trade mark must not be revoked on the ground in subsection (1)(a) 14 if that use is commenced or resumed after the expiry of the 3-year period and before the application for revocation in made.

(4) Any commencement or resumption of use referred to in subsection (3) after the expiry of the 3-year period but within the period of 1 month before the making of the application for revocation must be disregarded unless preparation for the commencement or resumption began before the owner became aware that the application may be made.

17 In contrast to the other grounds of revocation in s 66, in respect of which the applicant for removal bears the onus of proof, on an application for removal for non-use under s 66(1)(a) the owner must provide proof of the use of the trade mark if the owner intends to oppose the application. 15

18 Of particular significance for the issues on this appeal is s 68(2) which backdates the effective date of revocation in similar fashion to applications for registration:

68 Revocation of registration of trade mark

(1) If grounds for revocation exist in respect of only some of the goods or services in respect of which the trade mark is registered, revocation relates only to those goods or services.

(2) If the registration of a trade mark is revoked to any extent, the rights of the owner, to that extent, cease on–

• (a) the date of the application for revocation of the registration of the trade mark; or

• (b) if the Commissioner or the court is satisfied that the grounds for revocation of the registration of the trade mark existed at an earlier date, that date.

Relevant background

19 Over...