Evidence Threshold for Evidence of Use over the Internet Considered
In the recent revocation decision Target Australia Pty Ltd v Target New Zealand Ltd the Assistant Commissioner applied a high standard in determining what can constitute evidence of use, particularly in relation to claimed use over the internet...
From 2004 until 2015 Target NZ used the following blue and red device mark in relation to the wholesaling and retailing of furniture and furniture accessories and also has a registration for that mark in relation to those services dating from 2004. In 2015 they changed the branding on their website to the following white and red device mark, following which Target AU notified Target NZ of their consumer confusion concerns that they considered would arise.
Target AU has New Zealand trade mark registrations for the word mark TARGET and the following word and device and device only marks in relation to goods covered by the class headings for classes 24 and 25. Two-weeks after receiving Target AU’s letter, Target NZ applied to revoke Target AU’s registrations on the basis of non-use. A little over a month after that they applied to register the word mark TARGET and the following white and red device mark in classes 20, 21, 24, 35, 37, 39, which subsequently had Target AU’s six registrations covering classes 24 and 25 cited against them.
Target AU does not operate a sales outlet in New Zealand, but claims use in New Zealand on the basis of: (a) Target AU’s website and sales via that site; (b) Sales of sheets through Kmart stores in New Zealand; (c) Use on newsletters sent to customers with .nz email addresses; and (d) Negotiations with TradeMe to sell goods in New Zealand.
In outlining the principles that apply to non-use cases the Assistant Commissioner noted the principle that advertisements placed in foreign publications will not be sufficient to constitute local trade mark use if those publications are not aimed at consumers in the local market. Similarly, using a trade mark on a website that can be accessed worldwide does not amount to use of the mark in every jurisdiction in which the site can be accessed. Rather, to amount to trade mark use in a foreign jurisdiction, the websites need to be specifically directed to or targeted at that jurisdiction and allow successful completion of orders placed through it. Regarding preparatory use the owner will not be considered to have used the mark unless its actions go beyond investigating whether to use the mark to the point where it objectively can be seen to have committed to using the mark.
Given that Target AU’s website included the statement “We only accept orders from mainland Australia and Tasmania”, the Assistant Commissioner held that it could not be used to establish use in New Zealand. Nonetheless, there was evidence of sales via the website to customers with New Zealand IP addresses. While noting that it is possible for a New Zealand IP address to be used outside New Zealand, the Assistant Commissioner accepted that some orders would have been placed by people within New Zealand. However, the Assistant Commissioner found that those orders either would have had an Australian address as a final destination, or would have been on-forwarded to New Zealand from a friend’s or relative’s address in Australia. In the former case they did not enter the New Zealand market, while in the latter case they were not ‘in-trade’ when the entered the New Zealand market. The Assistant Commissioner also went on to note that it would be a perverse result if Target AU could claim the benefit of unauthorised use in New Zealand while also not being held liable for any infringements resulting from such unauthorised use. Evidence that there were several thousand subscribers to Target AU’s emailed newsletters having email addresses ending in .nz was similarly found not to amount to use of Target AU’s marks in New Zealand. The emails were found not to be targeted at New Zealand consumers and would again lead to perverse infringement findings.
However, the Assistant Commissioner was satisfied that Target AU had used its brand in relation to bed sheets through sales in New Zealand Kmart stores, which are also owned by Target AU’s owner.
During the relevant non-use period Target AU was in negotiations with TradeMe regarding sales of goods through the TradeMe website. However, on the evidence available, the Assistant Commissioner found that Target AU had only established that it was going to sell third party rather than its own branded goods. At best, Target AU had only established preparatory use of the word mark TARGET in relation to retail services, but even that was only at an investigatory level rather than being a commitment to do so.
Consequently, the Assistant Commissioner ordered that Target AU’s class 25 trade marks be revoked in full and that their class 24 trade marks have their specifications restricted to bed sheets.