Did The Warehouse Get a Bargain from its Revocation Application?

In Haydn Brush Company Ltd v The Warehouse Limited [2021] NZIPOTM 30 the Assistant Commissioner held that preparatory use had not been sufficiently evidenced from the use of a mark on letterhead.

In November 2010 Haydn achieved registration of its device mark consisting of a map of New Zealand composed of different sized koru devices in classes 2, 3, 8, 16, 21 and 37. It claimed to have used the mark since at least September 2011, although at the hearing it conceded that it had not used the mark in relation to the class 3 goods. The August 2014 applications by The Warehouse Limited (TWL) cover a wide range of goods and services in 26 of the 34 goods classes and 6 of the 11 services classes, including all of the classes in which Haydn’s mark was registered. Particular areas of overlap are for hand tools and implements in class 8 and paint brushes in class 16.
    
Haydn’s Registration       /       TWL Application 1       /       TWL Application 2

The claimed non-use period was for a period of 3 or more years up to 2nd March 2015. TWL considered Haydn had only established use of the device mark during that time on paint brushes, but contended that even that use was not use as a trade mark. While acknowledging that more than one mark can be used as a badge of origin in relation to particular goods or services, TWL considered Haydn’s device was not used as a trade mark as it was not used in close proximity to its primary trade marks of HAYDN and LEEDA. Instead, on account of the way the image is used, TWL considered that it merely communicates a New Zealand connection. However, the Assistant Commissioner found Haydn’s device mark to be inherently distinctive and unlikely to be seen by consumers as merely signifying New Zealand. Although the device appeared on the side of the paint brush packaging and not on the paint brushes themselves, this did not count against its ability to perform the trade mark function of communicating origin. While the HAYDN and LEEDA marks were each clearly used with the ® symbol, the evidence did not clearly establish any such use of the ® symbol with the device. However, the Assistant Commissioner observed that use of the ® symbol in not required. After likewise rejecting other arguments by TWL the Assistant Commissioner found the device mark to be genuinely used during the relevant period in relation to paint brushes.

Regarding the other goods and services (excluding class 3) Haydn claimed it had made preparations to extend use of the device mark to those goods and services and emphasised that integrating the new brand was being undertaken as a gradual process given the extent of Haydn’s goods and services. The Assistant Commissioner noted that preparatory use can constitute genuine use if the owner has committed to using the mark and there is objective evidence in the form of the mark being communicated to a third party as part of the preparations during the relevant period. Haydn’s own evidence showed that they had not committed the using the device mark in relation to the various cosmetic utensils constituting their class 21 goods.

However, Haydn’s letterhead contained the device mark and it was also on the reverse side as a watermark. Haydn asserted that it used the letterhead when corresponding with customers and industry partners regarding the various goods it trades in. Yet the Assistant Commissioner was not satisfied that this was sufficient to evidence preparatory use, despite Haydn trading in relevant goods covered by the class 2, 8 and 16 specifications. As justification for that finding the Assistant Commissioner stated that there were no examples of use of the letterhead on actual correspondence and it was unclear what the letterhead was used for during the relevant period. With respect, these justifications have little force. Haydn’s asserted use of the letterhead is highly plausible and so should not require examples of actual correspondence. Little in the way of inference is required to conclude in line with Haydn’s assertion that they used the letterhead to correspond with customers and industry partners regarding the goods they trade in. This appears to be another example where a pleading has been rejected on a tenuous basis that favours the possible over the probable.

While not mentioned, a more plausible and relevant basis for rejecting the preparatory use pleading could have been that the claimed period of preparatory use was too long to qualify as such. Haydn’s evidence was that the letterhead had been used since at least September 2011. While integrating a new brand can be a gradual process, if by March 2015 Haydn hadn’t integrated the device mark into some of their other goods or provided further evidence of their on-going preparations for such use, then that would be a strong basis for rejection of the preparatory use pleading. Being a well-established company Haydn should be aware of the 3-year non-use period and the onus being on the owner to evidence discretion being applied in their favour if they cannot establish use during that period.

Having found that genuine use was only established in respect of paint brushes, the Assistant Commissioner considered that a fair specification would not extend beyond that, and so rejected Haydn’s contention that the other painting related goods and services should be maintained. The Assistant Commissioner then found that there was no basis from TWL’s pleadings to revoke Haydn’s registration from a date earlier than the end of the 3-year non-use period, being 2nd March 2015. It was considered that to hold otherwise would go against the principles of natural justice as Haydn was effectively only put on notice that it had to establish use for the 3-year period ending on that date.

Author: Quinn Miller

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