19A.3. Use 'in the course of trade'

The term use ‘in the course of trade’ is not limited to the actual selling of the goods or services. In Angela Christou v Tonch Pty Ltd [2008] ATMO 24 at 24, the delegate usefully set out the three ways in which the authorities establish that use in the course of trade can be demonstrated. These are:

1. use through an actual dealing in the goods and/or services
2. use through an offering for sale of the goods and/or services
3. use through an intention to offer the goods and/or services which is manifested through preparatory steps showing an objective commitment to using the trade mark

3.1  Dealings

A ‘dealing’ generally means a sale where the mark is used on, or in physical or other relation to, the goods or services in question. In Thunderbird Products Corp v Thunderbird Marine Products Pty Ltd [1974] HCA 51, a sale of a single boat as a prototype from an American company to an Australian importer was sufficient to constitute a dealing in the goods. The trade mark occurred in brochures, invoices and shipping documents relating to the sale. It was unclear whether the trade mark had been used on the boat itself, but Jacobs J did not need to be satisfied of this in order to conclude that the trade mark had been used in relation to the goods.

Similarly, in Blackadder v The Good Roads Machinery Co Inc [1926] HCA 57, an Australian company imported machinery from the United States bearing the American exporter’s trade mark but removed it and affixed its own trade mark on the goods prior to sale. Although purchasers never saw the exporter’s trade mark, the exporter was held to have used it in Australia.

The free distribution of a real estate magazine to the public was found to be use of the trade mark for the purposes of the repealed Act (“Realtor” decision, Re Application by Estate Agents Co-Operative Ltd, 20 IPR 547). Note that in this case the magazine was supplied to real estate agents on the basis of a subscription and was then made available by the subscribers to the public for no charge. The magazine was therefore sold in the marketplace to the subscribers. However, Hearing Officer Hardie commented that the fact that the magazines were offered to the public to promote the applicant’s business operations established that they were used in the course of trade. See also Hospital World trade mark [1967] RPC 595, Update trade mark [1979] RPC 166, Golden Pages trade mark [1985] FSR 27 and Visa trade mark [1985] RPC 323.

The hire purchase or leasing of a product is also a dealing that constitutes use ‘in the course of trade’ (see Caravillas Trade Mark [1982] RPC 425).

 

3.2  Offering for sale of goods and/or services

It is not necessary for goods or services to have actually been sold for use ‘in the course of trade’ to have occurred. The offering for sale of goods or services, if genuine, will suffice. In Moorgate Tobacco Co. Limited v Philip Morris Limited and Another, [1984] HCA 73 ('Moorgate'), Deane J stated at [23] that:

The cases establish that it is not necessary that there be an actual dealing in goods bearing the trade mark before there can be a local use of the mark as a trade mark.

His Honour went on to state that in the cases where a small amount of use had been found sufficient to determine that the trade mark had been used in the course of trade:

... it is possible to identify an actual trade or offer to trade in the goods bearing the mark...

In Moorgate it was found that there was no local use of the trade mark as a trade mark; there were merely preliminary discussions and negotiations about whether the trade mark would be used.

Use of a trade mark in advertising must be concurrent with the placing of the goods or services on the market. Advertisement where the goods/services are not immediately available for sale does not constitute use within the meaning of the Act (see the decision of the British Registrar in Radford & Co's Application (1951) 68 RPC 221 and John Toh v Paris Croissant Co. Ltd [2010] ATMO 34).  However, it is important to note that while advertising by itself will not constitute an offer for sale, it will be relevant in determining an objective commitment to use (see 3.3 below).

Similarly, the provision of brochures or samples will not by itself constitute use ‘in the course of trade’ where the goods are not concurrently available for order or purchase. In Settef SpA v Riv-Oland Marble Co (Vic) Pty Limited [1987] VicSC 348, McGarvie J said:

I consider that it follows from the authorities that a mark is used as a trade mark only if it is used with a view to facilitating or promoting the operation of a trading channel which in a business sense had already been opened to Australia. The mark must be used for the purposes of trade: W D & H O Wills (Australia) Ltd v Rothmans Ltd (1956) 94 CLR 182 at 191. The forwarding of samples and brochures is not sufficient to indicate that Settef was ready and willing to fulfil such orders as it received from Australia. The purpose of these items may well have been to ascertain whether there was a market in Australia sufficient for it to be worthwhile for Settef to export here.

 

3.3  Intention to use coupled with preparatory steps manifesting an objective commitment to use

This third category of use ‘in the course of trade’ encompasses situations where an owner has not dealt in goods or services or offered them for sale as at the priority date of the application, but has gone beyond mere preliminary activities.  In Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261 at 40, Drummond J held:

…the owner will not use its mark unless it has so acted to show that it has gone beyond investigating whether to use the mark and beyond planning to use the mark and has got to the stage where it can be seen objectively to have committed itself to using the mark, that is, to carrying its intention to use the mark into effect.

An example of conduct falling into this category can be found in the earlier decision of Gummow J in Buying Systems (Aust) Pty Ltd v Studio SrL [1995] FCA 1063. The case concerned the trade mark STUDIO for magazines. The opponent claimed to be the owner of the trade mark, and in support lodged evidence showing it had obtained business cards and letterheads bearing the mark. Crucially, it had also solicited third parties to advertise in the magazine. These activities could not constitute a dealing, as the application was in respect of magazines, not advertising services. However, the combination of activities indicated a clear intention, coupled with preparatory steps demonstrating an objective commitment to use, sufficient to ‘constitute a relevant use of the mark’ in respect of the relevant goods.

In Oakley, Inc v Franchise China Pty Ltd [2003] FCA 105, Drummond J observed at [29] that:  

where the owner of a mark is able to show that it is committed to supplying marked goods to persons prepared to purchase them, activities preliminary to the actual commencement of selling the goods, such as the distribution of marked samples and marked brochures to agents, so that they could show them to prospective customers in soliciting business will probably amount to the use of the mark in the course of the trade

In Rakman, Yates J at [537] commented that earlier cases:

helpful in understanding the breadth of circumstances in which trade mark use can occur, but they do not set the metes and bounds of the activities that might be sufficient to constitute trade mark use in a given case. Each case requires an evaluative judgment to be made as to whether the use in question can properly be seen to be in the course of trade 

Whether an objective commitment has been demonstrated will depend on all the relevant circumstances. A case for objective commitment to use the mark at a particular date may also be difficult to establish where the person claiming use has not subsequently sold or offered for sale the goods or services in question (see Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261).

 

3.4 Examples of preliminary activities found not to constitute use in the course of trade

The cases highlight a number of activities that will not by themselves constitute use ‘in the course of trade’. Many of the cases below turned on a single instance of bona fide trade mark use being established and should be viewed in that context.

• Registration of a business or domain name (see Angela Christou v Tonch Pty Ltd [2008] ATMO 24)
• Hiring a graphic designer to design a product label (P & T Basile Imports Pty Ltd v Societe Des Produits Nestle SA (2002) ATMO 16)
• Use on business cards or letterheads (Unilever Australia Limited v Karounos [2001] FCA 1923)
• Creation of a price list and order form without evidence pertaining to who has seen these documents and in what circumstances (Bang on the Door Ltd v Playgro Australia Pty Ltd [2004] ATMO 51)
• Use of the sign on an A-frame board followed by the words ‘Coming Soon’ (Shahin Enterprises Pty Ltd v Exxonmobil Oil Corporation [2005] FCA 1278)

3.5  Signs used by charitable organisations

Cases dealing with the question of whether there has been use ‘in the course of trade’ have generally addressed the issue in the context of commercial activities.  However, determining whether use ‘in the course of trade’ has occurred can be more difficult if the user provides its goods or services for charitable or philanthropic purposes.

In Bravehearts Inc v Brainstorm Productions Pty Ltd [2009] ATMO 25 at 32, the delegate said:

As a not for profit organization, the opponent provides charitable services. As it does not sell its services, or offer goods for sale for its personal profit, it is dependent on establishing a commercial reputation through exposure of its marks to the public by other means, for example, community announcements, business papers and advertising material, fund raising activities and educational material.

Even if a user does not trade for profit, they might still show that they receive a monetary benefit for providing their goods or services under a particular sign. Such benefits may be in the way of donations or sponsorships allowing them to carry out their activities. Activities conducted under a sign for the purpose of raising funds via donation or sponsorship, or activities funded by donations or sponsorship, may have a sufficiently commercial character to establish that use of the sign is use ‘in the course of trade’. Similarly, use of the sign for purposes ancillary to these activities (such as advertisements and education programs for raising awareness in relation to a particular issue) might also be use ‘in the course of trade’ in respect of charitable fundraising or other philanthropic services carried out by the user.