Minimal Historical Evidence of Use Results in Shredded Specification
The recent Assistant Commissioner’s decision Nitro AG v Nitro Circus IP Holdings LP 2020 NZIPOTM 23 is the first non-use decision to take into account the Supreme Court’s recent decision in International Consolidated Business Pty Ltd v SC Johnson & Sons Ltd 2020 NZSC 110.
Nitro AG has three registrations for NITRO with broad specifications covering clothing including sports-clothing; footwear and headgear (class 25); skis and skiing equipment, snowboards; gymnastic and sporting articles not included in other classes excluding golf balls and other golf equipment (class 28). In consolidated revocation proceedings Nitro Circus sought to restrict Nitro AG to snowboard boots in class 25 and snowboards and snowboard bindings in class 28.
Nitro AG contested Nitro Circus’s status as an aggrieved person on the basis that Nitro AG’s marks are not the only NITRO marks blocking Nitro Circus’s applications for NITRO CIRCUS in classes 9, 12, 14, 16, 25, 28, 32, 38. However, the Assistant Commissioner readily dismissed that contention finding that it is sufficient for aggrieved person status that Nitro AG’s marks were cited against the NITRO CIRCUS applications and that it was not necessary for Nitro Circus to concurrently contest all the marks cited against its applications.
The pleadings and hearing for the case were made after the Court of Appeal decision and before the Supreme Court decision (summarised here) in the ZIPLOC ownership and non-use litigation between International Consolidated and SC Johnson. While the Court of Appeal had held that the date of entry onto the register is the only relevant date for determining ownership, given that the interpretation of section 68(2) was before the Supreme Court Nitro Circus also maintained its alternative revocation actions, which sought revocation to be back-dated to dates preceding their own applications. Consequently, Nitro AG had two sets of non-use periods to defend. The first set involved three-year periods one-month before Nitro Circus filed its revocation actions and the second set involved three-year periods ending the day before Nitro Circus filed its applications for NITRO CIRCUS. However, given that Nitro AG had not pled any special circumstances for its non-use, the subsequent Supreme Court decision made the first set of non-use periods irrelevant. The Supreme Court held that applications for registration can only precede applications for revocation of blocking marks either where a section 26 exception applies or where the revocation applications are back-dated to or before the date of application for registration.
Pleading the back-dated revocation dates further assisted Nitro Circus’s cause as Nitro AG had difficulty establishing use to the satisfaction of the Assistant Commissioner in respect of a wider range of snowboarding related goods in classes 25 and 28 for that earlier period. The back-dated three-year non-use period ended on 31st March 2015 for the class 25 registrations and on 8th April 2015 for the class 28 registration. Nitro AG was founded in 1989 and began supplying the New Zealand market via a distributor in mid-2014. Nitro AG did not supply a copy of the distribution agreement, but relied upon its brand featuring in New Zealand Snow Sports Industries Federation Inc. (NZSIF) publications and various NZSIF Snow Sports Trade Fairs. Given the back-dated revocation dates only the catalogue for the 2014 NZSIF Trade Fair qualified as evidence. This listed the NITRO brand in relation to the following products: Snowboards, Snowboard Boots, Snowboard Bindings, Clothing, Luggage / Travel Gear, and Accessories. Nitro AG also sought to rely upon its products featuring on the website of a New Zealand retailer, but was unable to satisfy the Assistant Commissioner that its products were on the website during the relevant period.
In relation to Nitro AG’s registration in relation to clothing, including sports clothing, the Assistant Commissioner held on the basis of the evidence that the specification should be limited to jackets and pants for snow sports.
In relation to Nitro AG’s class 28 registration in addition to its accepted use in relation to snowboards and snowboard bindings Nitro AG also sought protection for gear bags and gloves. The 2014 NZSIF Trade Fair catalogue listed luggage as a product for the NITRO brand and the product index lists NITRO as a brand under headings for Bags and Travel Gear. However, the Assistant Commissioner found those classifications to be too broad as they could have referred to bags in general which belong in class 18 and not to bags for snowboards which belong in class 28. In the absence of further evidence from the relevant period the request to include gear bags in the revised specification was refused. Similarly, Nitro AG’s assertion that the inclusion of the NITRO brand in the 2014 catalogue’s listing for accessories likely referred to gloves was not accepted by the Assistant Commissioner, who also noted that the distributor’s invoices from the relevant period did not specify any such accessories. Perhaps it would have been better to argue that gloves fell within the class 25 specification which included sports clothing. Gloves are an essential item of clothing for skiing or snowboarding rather than an ‘accessory’. In the explanatory note for class 28 in the 4th edition of the Nice Classification it states that sports clothing is in class 25. It was only from the 10th edition (2011) of the Nice Classification that ski gloves were specifically listed and classified under class 25. Nitro AG’s other class 25 registration in relation to footwear and headgear was limited to boots for snowboarding as again Nitro AG was found to have fallen short of discharging its onus of establishing, on the balance of probabilities, that there was genuine use on other goods.
This represents yet another non-use revocation decision in which the Assistant Commissioner rigidly applies the evidential standards showing that registered owners should be proactive in recording and retaining records of their (or their licensee’s) use of their marks. Had this decision issued before the Supreme Court’s decision it seems likely that Nitro AG would have been able to demonstrate use on a wider range of goods.
Author: Quinn Miller