The MITE-y battle of Australian breakfast condiments
Dick Smith Investments Pty Ltd v Ramsey  FCA 939 (12 August 2016)
These appeal proceedings are the latest battle in a long-running war between two Australian businessmen, Dick Smith and Roger Ramsey, to secure a place on the Australian breakfast menu with their competing condiments OZEMITE and AUSSIE MITE.
Since the creation of the iconic yeast spread (VEGEMITE®) in 1922, Australians have acquired a serious taste for salty yeast based extracts able to be slathered over their morning toast. With VEGEMITE® now owned by an American company, various other Australian-owned manufacturers have entered the market to satisfy the appetite for an Australian yeast based breakfast condiment. The OZEMITE and AUSSIE MITE products are but two examples.
Mr Ramsey sought to remove Dick Smith's OZEMITE mark from the Register on the basis that the spread had not yet made it to Australian breakfast tables and the mark had not been used. In allowing Dick Smith's OZEMITE registration to remain on the Register, Justice Katzmann of the Federal Court found that certain instances of 'pre-launch publicity', such as use of a mark in the course of production and preparation for the market can constitute use 'as a trade mark' for the purposes of defeating a removal application.
Australian Trade Marks Office decision
In the initial action before the Australian Trade Marks Office, a delegate of the Registrar allowed Ramsey's application for removal of Dick Smith's OZEMITE registration on the basis of there being no use of the trade mark in the relevant statutory non-use period (see Dick Smith Investments Pty Ltd v Roger John Ramsey  ATMO 16 (26 February 2014)).
Federal Court Appeal
Dick Smith appealed the Trade Marks Office decision on the basis that:
(a) evidence of 'pre-launch publicity' should be considered use of the trade mark in the course of trade. In particular, Dick Smith pointed to two occasions of 'pre-launch publicity', which he contended constituted use of the OZEMITE trade mark during the statutory non-use period (1 May 2008 - 1 May 2011). The first instance was a skit on ABC's TV program "The Chaser" in August 2010, which featured Dick Smith wearing a t-shirt with the OZEMITE trade mark on it. The second instance was a lengthy interview on 5AA radio station in March 2011, in which Dick Smith announced that he would be expanding his food product line, which included the release of the OZEMITE product over the coming 6 months; or
(b) in the alternative, Dick Smith claimed that various difficulties experienced in production of his OZEMITE product, such as lack of access to brewer's yeast (being a key product ingredient) and the difficulties in developing a formula which produced a product similar in taste and texture to its competitor product Vegemite®, amounted to 'obstacles', which delayed the launch of the product and therefore amounted to a defence to the non-use action in accordance with section 100(3)(c) of the Trade Marks Act 1995; finally
(c) if he failed on both counts, Dick Smith argued that given the above factors, the Court should exercise its discretion to allow the OZEMITE registration to remain on the Register.
(1) 'Vendible Articles' in the Course of Trade
Ramsey sought to rebut the instances of pre-launch use on the basis that there must be an actual sale of goods, in order for there to be "use" of a trade mark in the course of trade. Mr Ramsey relied on the words "vendible articles" used by the High Court in the leading case of E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144. In discussing the requirement for the trade mark to be used 'in the course of trade', Ramsey argued that unless there is at least a single act of sale in Australia, there is no use as a trade mark in accordance with section 92(4)(b).
Justice Katzmann dismissed Ramsey's argument. She held that the term "vendible articles" meant goods which are marketable and capable of being sold. Her Honour clarified that "use as a trade mark" could include all steps prior to the sale or the offering for sale of the goods. Accordingly, both instances of 'pre-launch publicity' were held to constitute use of the OZEMITE mark as a trade mark, and therefore Ramsey's non-use action failed.
(2) Were There 'Obstacles' Preventing the OZEMITE Launch?
Notwithstanding already having found there to be appropriate use of the OZEMITE mark, to permit it to remain on the Register, her Honour nevertheless considered the various 'obstacles' to the launch of the OZEMITE product proposed by Dick Smith. She ultimately found that although Dick Smith had encountered difficulties in bringing the OZEMITE product to market, the voluntary search for perfection was not an external obstacle warranting a defence to the non-use action.
(3) Exercise of Discretion
Her Honour also considered whether she would have exercised her discretion to allow the trade mark to remain on the Register, if there had not been adequate use of the OZEMITE mark during the statutory non-use period. Her Honour acknowledged that Dick Smith had not been idle since the OZEMITE trade mark registration and that there was a credible explanation for much, if not all, of Dick Smith's delay. Her Honour concluded that even though the circumstances might not have amounted to 'obstacles' for the purposes of section 100(3)(c), the various difficulties experienced along the way contributed to the lengthy time it took to get the product to the market. Her Honour also stated that at all relevant times, Dick Smith had a genuine intention to use the OZEMITE mark, evidenced through the commitment of his resources over the years.
Take-away "menu" items
This decision highlights the court's appetite for refining the law and clarifies that the reference to "vendible articles" by the High Court in Gallo, does not necessarily require actual sales of goods or for the goods to be offered for sale, provided there is a "subjective intention to use the trade mark in relation to the goods."
Accordingly, pre-launch publicity could be sufficient to demonstrate use of the trade mark, if it can be shown that the publicity was intended to "revive, if not maintain, interest in the product."
Therefore, parties seeking to remove a trade mark registration should be mindful of the actions that "mite" have been taken by the trade mark owner prior to the sale of any actual goods and services…
… or risk being left at the breakfast table with only crumbs.
IMAGE SOURCE – VEGEMITE BREAKFAST BY JANEEN: CC-BY 2.0 HTTPS://WWW.FLICKR.COM/PHOTOS/NOODLE/2421453415
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