Supreme Court Decision Strongly Encourages Searching Before Filing
In International Consolidated Business Pty Ltd v SC Johnson & Sons Ltd 2020 NZSC 110 the Supreme Court partially overturned the Court of Appeal judgment, but still upheld the Court of Appeal’s conclusion that SC Johnson’s mark can proceed to registration.
Three-days before applying to revoke International Consolidated’s ZIPLOC registration for plastic bags and cling wrap on the basis of non-use SC Johnson applied to register ZIPLOC for essentially the same goods on 19th April 2013. The ensuing litigation between the parties has reached the Supreme Court via a series of differing decisions – see here for more background. A critical element of the ensuing litigation was the Assistant Commissioner’s decision to revoke International Consolidated’s registration with effect from 22nd April 2013. Although SC Johnson’s revocation application included a non-specific invitation to revoke the registration from a date earlier than the revocation application date, as allowed under section 68(2)(b), the Assistant Commissioner only addressed that issue in a subsequent decision in which International Consolidated opposed SC Johnson’s application. In that subsequent decision the Assistant Commissioner held that in order to revoke a registration from a date earlier than the revocation application date the onus is on an applicant for back-dated revocation to request revocation from a specific date. That finding seems unduly harsh given that under section 68(2)(b) the Commissioner (or the Court) can revoke from an earlier date if satisfied that the grounds for revocation existed at an earlier date. The asserted justification for not exercising that inherent discretion was that the owner may have been able to prove use from an earlier date. However, given that the provision was effectively pled, the owner was on notice to additionally provide earlier evidence of use and knew that the date of SC Johnson’s application would be a relevant earlier date. Instead, the Assistant Commissioner held that the short period between the trade mark application and revocation application dates qualified as a special circumstance that allowed the application to proceed to registration.
Given that background, the key issues between the parties was whether SC Johnson’s application could proceed to registration given it was applied for when International Consolidated was still the owner of the ZIPLOC mark and whether special circumstances allow such registration. The Court of Appeal held that the date of revocation has no bearing on the date that an identical application can be filed in the name of another party. It noted that when the Trade Marks Act 2002 was being formulated and introduced there was no evidence that it was the intention of the legislature to prohibit the long-established practice of filing applications for registration in anticipation of and conditional upon a successful application for removal for non-use. As such, where prior use is not being relied upon, it is the date of being entered on the register (registered) that is important for determining the right to ownership, not the date of application. In arriving at that conclusion the Court of Appeal rejected the proposition, adopted in cases before both the UK Trade Mark Registry and the Singapore Court of Appeal, that an application for revocation must have an effective date prior to the date of an application for registration of a conflicting mark in order for the application for registration to proceed to registration.
The Supreme Court noted that the revocation provisions under the Trade Marks Act 2002 differed from those under the Trade Marks Act 1953 in that revocation took effect from the date of the revocation application (or earlier), whereas under the 1953 Act revocation took effect from the revocation decision date. The Supreme Court held that this difference does not unsettle the Court of Appeal’s holding that the state of the register is to be assessed as at the date of entry onto the register not the date of application, but differed from the Court of Appeal in holding that the date of application still has relevance.
Agreeing with the UK Trade Mark Registry and the Singapore Court of Appeal cases, the Supreme Court noted that a registered trade mark remains enforceable until the date at which it ceases to have effect and so the date of application is still of relevance since registration takes effect from the date of the application for registration. Hence, on the facts, there would in effect be two identical marks on the register at the same time in the names of different proprietors – which is contrary to section 25(1), unless the overriding provisions of section 26 apply. In order to avoid the effect of section 25(1) without the assistance of section 26 the new applicant can either file the non-use application before filing their own application or have the non-use application back-dated to a date prior to their application. The Supreme Court acknowledged that many trade mark applicants do not realise there is a prior relevant mark until it is cited against their mark, but considered that the searching facilities should be utilised prior to filing to reduce that risk.
However, while International Consolidated’s mark still had effect when SC Johnson’s mark was filed, it was not able to prevent registration of SC Johnson’s mark on account of the unchallenged finding that special circumstances applied. In the absence of qualifying prior use, the mere fact of registration is insufficient to prevent such subsequent registration, since if it could section 26 would have no application. The Supreme Court also noted that holding otherwise would make ineffective provisions such as sections 93, which provide a defence to infringement where an identical or similar registered trade mark is used, or section 96 which allows a continuously prior used identical or similar unregistered mark to be registered or used without infringing.
Author: Quinn Miller