Slamming the brakes on trade mark trafficking

The ATMO has recently commented on the pattern of a ‘trafficking in trade marks’, in the decision of Scotch Whisky Association v Jin Ho Lee and Myong Gil Lee: [2013] ATMO 1 (9 January 2013).

The Hearings Officer found in favour of Scotch Whisky Association (‘SWA’), who challenged registration of two applications, no. 1425923 for the image of McDowells Celebrations label, pictured right, and no 1425925 for the word mark BAGPIPER. Both marks were well-known marks of SWA in other territories, but were filed in Australia by two individuals, Jin Ho Lee and Myong Gil Lee.

SWA’s opposition was based on s59, so SWA had to establish that the applicants were not intending to use the trade mark.

Notably, the applicants appeared to be filing marks which were well-known in other countries, but doing very little in the way of progressing them. A lack of intention to use was inferred from the totality of the circumstances, including:

  • the number of applications filed by the Applicants;
  • the proportion of such applications which never proceeded to registration (the Opponent’s evidence referred to 31 applications, most of which were never registered);
  • the fact that many of the marks filed were identical to well-known marks in other territories; and,
  • the inherent unlikelihood that the Applicants engaged (or were likely to engage) in fields of commercial corresponding to the marks, in areas as disparate as distilling spirituous liquors, manufacture of fruit juices or cosmetics, running of wineries, or the provision of entertainment, sports, telecommunications, transportation or coffee house services.

The fact that the opposed marks were identical to well-known marks in other countries was not fatal in itself. Rather, this was simply a relevant factor as it showed ‘part of a pattern’ of the applicants and their applications.

Notably, the decision contrasted the model of ‘sharp business practice’ (where a local company adopts and uses a mark with overseas repute), and the model established on these facts, where the applicants’ only purpose of filing was to traffic in the trade marks themselves.

The Hearings Officer referred to evidence which the applicants could easily have relied upon to show an intention to use. This included documentation setting out business plans, registered business names, and website development, or witness declarations attesting to the applicants’ negotiations in relation to premises, supply, manufacture or distribution. In the absence of such ‘straight-forward’ evidence, it was inferred that the Applicants were intending to do nothing further to filing applications.

Perhaps this decision will persuade other ‘trade mark traffickers’ to think twice before filing applications with an intent to trade in them. On the other hand, for parties wishing to engage in ‘sharp business practice’, it is possible to easily show an ‘intention to use’ in s59 oppositions, and applicants should keep details of relevant documents and witnesses to assist in mounting a defence.