In 1999, Dick Smith Foods registered the Ozemite trade mark to compete with the iconic Australian spread, Vegemite, owned by Kraft. Ozemite, however, only hit the shelves in 2012 by which time, Adelaide businessman Roger Ramsey was already successfully selling a similar spread called AussieMite which he registered in 2006.
Although Ozemite was registered seven years before the phonetically similar ‘AussieMite’, Ramsey sought to have Dick Smith’s trade mark removed for non-use in 2011. The Federal Court ruled in favour of Dick Smith to keep the Ozemite trade mark on the Register allowing it to co-exist with Roger Ramsey’s AussieMite trade mark. This case highlights what it means to “use” a trade mark.
The Non-Use Application
The initial trade mark registration lasts ten years. However, there is no limit to the number of times an owner can renew a trade mark. Unlike other countries, there is no requirement under Australian law to provide evidence of the use of the mark to renew registration. Nevertheless, a registered but unused trade mark is vulnerable to removal from the Register under the non-use provisions of the Trade Marks Act 1995 (Cth) (Trade Marks Act).
Under section 92(4) of the Trade Marks Act, a person may apply for the removal of a trade mark for non-use on either or both of the following grounds:
- That the applicant had no intention in good faith to use the trade mark in Australia and that the registered owner had not used the trade mark before the period of one month ending on the day on which the non-use application was filed;
- That the trade mark owner had not used the registered trade mark in Australia for a continuous period of three years ending one month before the day on which the non-use application was filed (statutory period).
The trade mark owner can oppose an application for removal and defend its registration. They bear the onus to establish they have used the mark and prevent its removal from the Register.
At first instance, Ramsay was successful in his application to remove Ozemite from the Register. However, Dick Smith appealed the Registrar’s decision. On appeal, the Federal Court considered the following:
1. Whether, at any time during the statutory period, the Ozemite trade mark was used in relation to the goods
There was no argument against Ramsey that Ozemite was not offered for sale at any time during the statutory period. However, Justice Katzmann found that extensive media promotion and marketing of Ozemite during this time was sufficient to establish trade mark use.
In the High Court case of E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144, the Court referred to section 17 of the Trade Marks Act to establish the meaning of use of a trade mark. Section 17 defines a trade mark as a sign used, or intended to be used in the course of trade. The court in Gallo observed that the reference to “in the course of trade” relates to use regarding “vendible articles”.
Justice Katzmann referred to Gallo and found that “vendible articles” did not limit the scope of trade mark use to being sold, rather that it has the capability of being sold. Therefore, it was sufficient that Dick Smith had promoted Ozemite and continued to develop the spread during the statutory period to prepare for the use of a marketable product.
2. If the trade mark had not been used, were there any obstacles that excused the non-use
Despite finding that the trade mark had been ‘used’, Justice Katzmann went on to consider whether there were any obstacles encountered, which would excuse or prevent the non-use. Dick Smith had argued that the difficulties in sourcing brewers’ yeast to match the taste of Vegemite amounted to an obstacle to launching his product on the market. On this point, the Federal Court agreed with the Registrar’s finding. Case law has demonstrated that an obstacle in development must be the result of external events that are out of the control of the trade mark owner. In this case, however, the setbacks in development were merely attributed to Dick Smith’s quest for perfection, rather than external trading factors.
3. Whether the court should exercise its discretion to allow the trade mark to remain on the Register
The Court has a discretionary power to decide not to remove a trade mark even where the grounds for an application are satisfied. In consideration of the facts and evidence of the case, the Federal Court exercised its discretion to order that Ozemite remain on the register. Notably, Justice Katzmann commented that even if there had been no trade mark ‘use’, she would still come to the decision to leave the trade mark on the register for the following reasons:
- Dick Smith demonstrated a clear, unwavering intention to use the trade mark;
- Since Ozemite has been on the market, Dick Smith has been extremely successful in selling the product;
- Dick Smith has developed a substantial reputation of the Ozemite trade mark;
- Removal of the trade mark from the Register would cause public confusion.
Justice Katzmann paid particular attention to the last point and commented that the extent of publicity generated by Dick Smith’s quest to develop a similar product to the iconic Vegemite, may cause consumers to perceive an association between Dick Smith and AussieMite, if Ozemite was removed from the Register. There was already evidence of confusion by an AussieMite advertisement, which customers thought was associated with Dick Smith. For this reason, the Federal Court held that it would be less confusing if the Ozemite trade mark remained on the Register and out on the market shelves.
The outcome of this decision means that both products will continue to coexist and Ramsay will bear the burden of the legal costs of both parties.
- Use it or lose it: registering or renewing your registration may not be enough to maintain your trade mark. Lack of use, such as commercial sales, advertisement or promotion makes your registered trade mark vulnerable to removal for non-use.
- Pay big to play big: this case highlights the dangers of going up against a better-known brand. Dick Smith’s reputation and promotion of the Ozemite brand played a major role in the decision of the Federal Court, which resulted in extensive legal costs for Ramsay.
If you have any questions or concerns about the use of your trade mark or whether your trade mark may be vulnerable to removal from the Register, get in touch with our trade mark lawyers on 1300 544 755.