Manhaas Industries (2000) Limited v Fresha Export Limited [2012] NZHC 1815 (24 July 2012)

Last Updated: 31 July 2012

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2011-485-001255 [2012] NZHC 1815

UNDER the Trade Marks Act 2002

IN THE MATTER OF an appeal from the decision of the Assistant

Commissioner of Trade Marks dated 12

November 2010

BETWEEN MANHAAS INDUSTRIES (2000) LIMITED

Appellant

AND FRESHA EXPORT LIMITED Respondent

Hearing: 23 July 2012

Counsel: N J Robb for Appellant

K J Duckworth and A J MacKenzie for Respondent

Judgment: 24 July 2012

In accordance with r 11.5 I direct the Registrar to endorse this judgment with the delivery time of 4.00pm on the 24th day of July 2012.

_{RESERVED JUDGMENT OF COLLINS J}

Introduction

[1] Manhaas Industries Ltd (2000) Ltd (MIL) appeals a decision of an Assistant

Trade Marks Commissioner (Assistant Commissioner) dated 31 May 2011. In her decision the Assistant Commissioner allowed an application by Fresha International

MANHAAS INDUSTRIES (2000) LIMITED V FRESHA EXPORT LIMITED HC WN CIV-2011-485-001255 [24 July 2012]

(Import/Export) Co Ltd (FI)1 to revoke the trade mark OCEAN QUEEN owned by

MIL.

[2] The decision appealed from was made pursuant to s 66 of the Trade Marks

Act 2002 (the Act). The relevant portions of that section provided:2

66 Grounds for revoking registration of trade mark

(1) The registration of a trade mark may be revoked on any of the following grounds:

(a) that, up to the date 1 month before the date of the application for the revocation of the registration of the trade mark, a continuous period of 3 years or more elapsed following the actual date of registration during which the trade mark was not put to genuine use in the course of trade in New Zealand, by any owner for the time being, in relation to the goods or services in respect of which it is registered:

...

(2) However, despite subsection (1), a trade mark may not be revoked for its non-use if its non-use is due to special circumstances that are outside the control of the owner of the trade mark.

[3] The gravamen of the issue on appeal is whether MIL has established special circumstances that are outside its control for not using the trade mark OCEAN QUEEN during the relevant period, or whether there are other reasons why the Court should exercise its discretion in favour of MIL.

[4] In this case, the application for revocation was filed on 26 August 2009. The relevant period is therefore the three year period from 26 July 2006 to 26 July 2009. FI asks that the revocation take effect from 27 July 2009 if this Court should dismiss

_{the appeal.}

1 On 4 May 2012 Fresha Export Ltd changed its name to Fresha International (Import/Export) Co

_Ltd.

2. Section 66 of the Act was amended in 2011. This judgment concerns s 66 as it was prior to the amendment.

Background

[5] MIL is a New Zealand based manufacturer, importer and wholesale merchant dealing in a wide range of food and beverage products. Canned fish are among the products that MIL imports into New Zealand and distributes through its wholesale business.

[6] On 21 January 2005 MIL filed its application to the trade mark OCEAN QUEEN. That trade mark was registered on 21 July 2005.

[7] In an affidavit sworn on 6 March 2010, Mr Manhaas, a director of MIL

explained:

(1) In February 2008 MIL placed an order for OCEAN QUEEN branded canned mackerel from a company in Peru called AFA Export Import Ltd (AFA).

(2) On 28 May 2008 AFA advised MIL that no mackerel had been caught

because of the effects of the climatic condition known as “La Nina”.

(3) On 3 October 2008 MIL made an inquiry of a Thai company, Positive Exports Co Ltd (PEL) as to whether that company could supply MIL with OCEAN QUEEN branded canned mackerel and sardine.

(4) On 25 January 2009 AFA advised MIL that they had located a manufacturer who could supply canned fish using the OCEAN QUEEN label. However, further investigations revealed the fish product was not up to standard. At the same time MIL was advised that OCEAN QUEEN was “a registered brand” in Thailand and this was causing difficulties in accessing OCEAN QUEEN products in Thailand for MIL.

(5) In August 2009 further communications were exchanged between

MIL and AFA which resulted in AFA offering to supply another fish

product under a different label supposedly because the OCEAN QUEEN brand was registered to FI in New Zealand.

[8] In fact, FI had applied for the OCEAN QUEEN trade mark on 26 July 2009, one month before FI applied to have MIL’s OCEAN QUEEN trade mark revoked.

The decision of the Assistant Commissioner

[9] In determining what constitutes “special circumstances” under s 66(2) of the Act, the Assistant Commissioner derived considerable assistance from Woolly Bull Enterprises Pty Ltd v Reynolds,3 a judgment of Drummond J of the Federal Court of Australia. That case concerned s 100 of the Trade Marks Act 1995 (Cth). That section is the Australian Commonwealth’s approximate equivalent to s 66 of the Act. The Australian provision states that a trade mark may not be deregistered if the trade mark has not been used during the relevant period “... because of circumstances (whether affecting traders generally or only the registered owner of the trade mark) that were an obstacle to the use of the trade mark during that period”.4

[10] The Assistant Commissioner extracted the following criteria for determining

“special circumstances” from Woolly Bull Enterprises Pty Ltd v Reynolds:

(1) The special circumstances must be of a duration that effectively prevents the applicable continuous three year period of non-use from elapsing.5

(2) That it was not necessary for MIL to establish that the special circumstances existed throughout the entire relevant period.6

(3) The special circumstances must be of a trading nature, but need not necessarily affect other traders in the same sphere of trade as MIL.7

3 _{Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261, (2001) 51 IPR 149.}

4 _{At [43].}

5 Manhaas Industries (2000) Ltd v Fresha Export Ltd [2011] NZIPOTM 12 at [24.2].

(4) Special circumstances are circumstances that are out of the ordinary and do not arise from the voluntary actions of MIL.8

(5) The special circumstances must rule it impractical in a business sense for MIL to use the trade mark.9

(6) There must be a causal connection between the special circumstances relied upon by MIL and its non-use of the trade mark.10

[11] In her decision the Assistant Commissioner:

(1) Determined that MIL’s reasons for not using the OCEAN QUEEN

trade mark did not constitute special circumstances because:

(a) sourcing fish products is part of the normal course of trade undertaken by MIL;

(b) determining the timing and sourcing of fish products was something within MIL’s control;

(c) there was no connection between the unavailability of fish product and the use of the trade mark OCEAN QUEEN; and

(d) MIL was using another trade mark (KARA) during the relevant period in relation to canned fish.

(2) Absent special circumstances the Assistant Commissioner ruled that FI’s application to have the OCEAN QUEEN trade mark were established.

[12] The Assistant Commissioner directed in accordance with s 66(2)(b) of the Act that the trade mark for OCEAN QUEEN be revoked as at 27 July 2009.

8 At [24.4].

Summary of MIL’s case on appeal

[13] In his submissions for MIL, Mr Robb succinctly explained:

Special circumstances

(1) The environmental factors affecting the catch off the west coast of South America were not within the control of MIL. Those environmental factors were not ordinary day to day fishing events that affect business.

(2) MIL was told and accepted that the problem with fish catch off the west coast of South America was a widespread problem. Mr Robb specifically drew the Court’s attention to the following evidence:

(a) Mr Manhaas said in his declaration that in February 2008 he paid a deposit for Mackerel fish with AFA in Peru.11

(b) In May 2008 MIL were advised by AFA that “the situation in Peru is critical. Captures of jack mackerel still nil” and “the capture is still terrible, nothing. We can’t do anything without raw material, La Nina is affecting all the Pacific

coast from Chile to Ecuador. Same situation”.12

(c) Mr Manhaas said in his declaration “I had no reason to doubt our Peruvian contact’s advice that mackerel was not being caught in Peru. I still believe this to be the position and attach and mark ... an article about the ‘Production of canned and frozen products fall’ for Peru. This refers to ‘the absence of jack mackerel in the Peruvian coasts is causing one of the

_{greatest crises faced by the sector ...’”.}13

11 _{M Manhaas Declaration, 6 March 2010 at [4].}

12 M Manhaas Declaration, 6 March 2010, Exhibit MSM 1.

(d) On 25 January 2009 MIL was advised by PEL in Thailand that “OCEAN QUEEN is a registered brand” in Thailand and that this was causing difficulties in finding a Thai supplier to use the OCEAN QUEEN brand.14 Mr Robb submitted this was a further problem beyond the control of MIL.

(e) On 25 August 2009 MIL was advised by AFA in Peru that the OCEAN QUEEN brand was registered to FI in New Zealand.15 Mr Robb submitted this erroneous information was an example of another external factor conspiring against MIL’s ability to make use of the OCEAN QUEEN trade mark.

(f) Mr Robb advised that MIL accepted the evidence filed on behalf of FI that showed FI was able to access large quantities of mackerel from Chile during the relevant period. Mr Robb submitted however that this did not affect the fact that at the relevant time MIL genuinely believed fish stocks from South America had effectively dried up because of environmental influences.

(3) Mr Robb submitted there was no intent on the part of MIL to abandon the OCEAN QUEEN trade mark. He urged the Court to accept that MIL’S understanding of the lack of fish supplies from South America, the problems over the ownership of OCEAN QUEEN in Thailand and other external “misinformation” conspired against MIL’s ability to use the OCEAN QUEEN trade mark.

(4) Mr Robb also submitted that the Assistant Commissioner erred when she said in her decision:16

its (sic) appears that MIL was using its KARA mark in relation to canned fish during the relevant periods, which, in

14 _{M Manhaas Declaration, 6 March 2010, Exhibit MSM E.}

15 _{M Manhaas Declaration, 6 March 2010, Exhibit MSM D.}

16 Manhaas Industries (2000) Ltd v Fresha Export Ltd [2011] NZIPOTM 12 at [26.5].

my view, seriously undermines the special circumstances (of fish product that was not available and that was unsatisfactory) relied on by MIL because this evidence shows that MIL could have sourced satisfactory canned fish for its OCEAN QUEEN trade mark.

MIL has two objections to this conclusion:

(a) It submits that the evidence relied upon by the Assistant Commissioner to support her conclusion was not legitimate evidence in reply, and that MIL never had a chance to address it;

(b) In any event the Assistant Commissioner’s conclusions are wrong. MIL says there was no evidence that it was using the KARA trade mark in relation to canned fish during the relevant period.

(5) It was also part of MIL’s case that the Assistant Commissioner had misdirected herself when she said that “special circumstances must be of a trade nature”.17 Mr Robb submitted that the legislature’s decision to no longer employ the words “in trade” in the Act meant that special circumstances no longer needed to be linked directly to trade circumstances.

General discretion

(6) MIL also submitted that if it does not succeed in establishing special circumstances for its non-use of OCEAN QUEEN the Court should nevertheless exercise its discretion in favour of MIL.

Summary of FI’s case on appeal

[14] In her careful submissions, Ms Duckworth emphasised this Court should dismiss the appeal. She firmly submitted that MIL had not established special

17 At [24.3].

circumstances within the meaning of s 66(2) of the Act, or any other reason for upholding MIL’s claim. Ms Duckworth challenged the position taken by MIL when she pointed out:

(1) The communications between MIL and AFA in Peru (emails attached to Mr Manhaas’ declaration of 6 March 2010) referred to MIL’s KARA trade mark, not OCEAN QUEEN.

(2) The communications between MIL and AFA about OCEAN QUEEN being registered in the name of FI occurred in August 2009, outside the relevant period.

(3) There was no information submitted by MIL which explained why the alternative supplies of fish stocks from PEL in Thailand were considered to be unsatisfactory.

(4) FI were able to source significant supplies of mackerel from Chile during the relevant period. Mr Mundy, the sales manager of FI explained in his declaration that:

(a) FI shipped over 3.5 million cans of mackerel to South

Pacific islands between January 2006 to June 2007.

(b) Between July 2007 and December 2009 FI made 130 shipments of canned mackerel to Pacific Island markets. Each shipment contained at least one 20 ft container of canned mackerel.

(c) These exports were of Chilean mackerel. These supplies were made using the OCEAN QUEEN label which FI had been using in the Pacific region for a number of years.

(d) AFA is a relatively small broker.18

(5) Punjas (NZ) Ltd, a company trading in the same spheres of business as MIL and FI supplied a declaration from Mr Punjas, one of its directors. Mr Punjas explained:

(a) He was familiar with MIL and that he was “... aware that it supplied canned fish under the KARA trade mark”. He said “While I am not certain, I believe MIL first sold KARA canned mackerel in New Zealand within the last one to two years”.19

(b) During the relevant period Punjas (NZ) Ltd continued to have its requirements for canned fish met, including canned mackerel and tuna, and that other canned fish brands remained available on the New Zealand market

during this period.20

(6) There was evidence that MIL may have been sourcing fish supplies under its KARA trade mark during the relevant period. Ms Duckworth pointed to a declaration signed by Mr Manhaas in other proceedings in which he said the “trade mark KARA ... [has] been used by [MIL] in New Zealand since at least 1990” and that in New Zealand MIL “... continued to use the KARA brand for coconut oil, snack food, samosas, dried coconut, Gee tea, canned fish and

spices”.21

[15] Ms Duckworth submitted there was no merit in the complaint that the

information about MIL’s use of the KARA trade mark was not evidence in reply.

_{Ms Duckworth pointed out that if MIL believed it was prejudiced by the introduction}

18 _{T Mundy Declaration, 16 April 2010.}

19 _{W Punjas Declaration, 8 December 2010 at [7].}

20 _{W Punjas Declaration, 8 December 2010 at [8].}

21 K Craig Declaration, 3 December 2010 at [3].

of this information it could have sought leave to file rebuttal evidence if such evidence were available.

[16] Ms Duckworth summarised FI’s case by pointing out that FI had applied for the OCEAN QUEEN trade mark on 27 July 2009, and that it was being frustrated in pursuing its legitimate desire to trade on its OCEAN QUEEN reputation acquired in Pacific markets.

[17] Ms Duckworth supported all aspects of the Assistant Commissioner’s reasoning in relation to her conclusion that MIL had not established special circumstances. Ms Duckworth also submitted that there was no sound basis for the Court to exercise its general discretion in favour of MIL.

Principles governing the hearing of an appeal

[18] An appeal of this nature is conducted as a rehearing pursuant to s 173 of the Act and r 20.18 of the High Court Rules. The Court is not bound to accept the Assistant Commissioner’s findings of fact and is entitled to exercise any power or discretion available to the Assistant Commissioner at first instance. The Court must exercise its own judgement but, where appropriate, the Court may give weight to the expressions of opinion of the Assistant Commissioner.

[19] In Austin, Nichols & Co Inc v Stichting Lodestar, the Supreme Court said that when considering a general appeal the High Court is required to:22

... come to its own view on the merits. The weight it gives to the decision of the Commissioner is a matter of judgment [sic]. If the High Court is of a

different view from the Commissioner and is, therefore, of opinion that the

Commissioner’s decision is wrong, it must act on its own view.

[20] The Court went on to say:23

Those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate court, even where that opinion is an assessment of fact and degree and entails a value judgment [sic]. If the

22 _{Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [3].}

23 At [16] – [17].

appellate court’s opinion is different from the conclusion of the tribunal appealed from, then the decision under appeal is wrong in the only sense that matters, even if it was a conclusion on which minds might reasonably differ. In such circumstances it is an error for the High Court to defer to the lower Court’s assessment of the acceptability and weight to be accorded to the evidence, rather than forming its own opinion.

In the present appeal there was no basis for caution in differing from the assessment of the tribunal appealed from. The case entailed no question of credibility. It turned on a judgment [sic] of fact and degree, not the exercise of discretion entrusted to the tribunal. We are of the view that the Court of Appeal was not correct to suggest that, because the decision turned on a value judgment [sic] apparently open to the Assistant Commissioner, “the High Court Judge ought not to have embarked on a reconsideration of the issue without considering, and giving weight to, the Assistant Commissioner’s conclusion”. The High Court Judge was obliged to reconsider the issue. He was entitled to use the reasons of the Assistant Commissioner to assist him in reaching his own conclusion, but the weight he placed on them was a matter for him.

Analysis

Status of FI

[21] It is not disputed that FI meets the criteria of being an “aggrieved person” for the purposes of s 65(1) of the Act.24 However, both parties were concerned that the Assistant Commissioner misdirected herself as to when an assessment is to be made as to whether or not an applicant has established that they meet the criteria of being an “aggrieved person”. To avoid any further doubt I record my agreement with both counsel, that the assessment as to whether an applicant satisfies the criteria of being an “aggrieved person” must be made by reference to the date of the application and not earlier dates.

The “use it or lose it” policy

[22] The policy underpinning ss 65 and 66 of the Act is that unused trade marks should not be permitted to clog up the Register of Trade Marks. This point was

24. “(1) An aggrieved person may apply to the Commissioner or the court for the revocation of the registration of a trade mark.”

made with customary adroitness by Jacob J in Laboratoire De La Mer Trade Marks

when his Honour said:25

There is an obvious strong public interest in unused trade marks not being retained on the Registers of national trade mark offices. They simply clog up the register and constitute a pointless hazard or obstruction for later traders who are trying actually to trade with the same or similar marks. They are abandoned vessels in the shipping lanes of trade.

Similar observations were made by Stevens J in Heinz Wattie’s Ltd v Goodman

Fielder Consumer Foods Pty Ltd.26

Special circumstances

[23] The ability of an owner of an unused trade mark to avoid revocation of registration on the basis of special circumstances can be traced to s 37 of the Trade Marks Act 1905 (UK). That section was substantially reproduced as s 26(3) of the Trade Marks Act 1938 (UK). Under that section, revocation of registration could be avoided if:

... any non-use of a trade mark [was] shown to have been due to special circumstances in the trade and not to any intention not to use or abandon the trade mark in relation to the goods in which the application relates.

[24] Almost identical words could be found in s 35(3)(a) of the New Zealand Trade Marks Act 1953 which is now repealed and s 23(4) of the Australian Trade Marks Act 1955 (Cth) which has also been repealed.

[25] Section 46 of the Trade Marks Act 1993 (UK) adopted a threshold for owners of unused trade marks to satisfy that was less onerous than the test found in the 1938

United Kingdom Act. The new test in the United Kingdom requires the trade mark owner to establish that there are proper reasons for non-use.

[26] Similarly, Australia has also adopted a less onerous test for owners of unused trade marks to satisfy in order to avoid deregistration of their trade marks. Section

25 _{Laboratoire De La Mer Trade Marks [2002] FSR 51 (Ch) 790 at [19].}

26 Heinz Wattie’s Ltd v Goodman Fielder Consumer Foods Pty Ltd HC Auckland CIV-2007-404-

6946, 10 December 2008 at [47].

100(3)(c) of the Trade Marks Act 1995 (Cth) requires the owner of the trade mark to prove the existence of:

... circumstances (whether affecting traders generally or only the registered owner of the trade mark) that were an obstacle to the use of the trade mark ...

[27] Thus, of the three jurisdictions referred to, New Zealand is the only one that continues to require proof of special circumstances if the owner of an unused trade mark is to avoid risking having their trade mark deregistered. New Zealand has however ceased to require proof of a direct link between the special circumstances relied upon and the trade in which the trade mark owner engages.

[28] The evolution of the statutory test for continuing to register an unused trade mark means that not all of the jurisprudence which had developed in this area continues to be relevant. However, the following key points continue to be pertinent:

(1) For circumstances to be special they must be “peculiar or abnormal” and arise through “external forces as distinct from the voluntary acts of ...” the registered owner of the trade mark in question.27

(2) It is not necessary to show that the “special circumstances” made use of the trade mark impossible. It is enough to show that those circumstances made it impracticable in a business sense to use trade mark.28

(3) There must be a causal link between any special circumstances and the non-use of the trade mark.29

[29] It will be observed that these three factors have been extracted from the judgment of Drummond J in Woolly Bull Enterprises Pty Ltd v Reynolds.30

27 Aktiebolaget Manus v R J Fullwood and Bland Ltd [1949] Ch 208 (CA) at 211-212 per

_{Evershed LJ.}

28 _{Berlei (UK) Ltd v Bali Brassiere Co Inc (No. 1) [1966] FSR 8 at 25.}

29 _{Re James Crean & Sons Ltd’s Trademark (1921) 38 RPC 155.}

30 Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261, (2001) 51 IPR 149.

[30] These authorities make it clear that the threshold that a registered owner of an unused trade mark must meet is particularly high. The phrase “special circumstances” in a statute invariably involves the need to establish rare and highly unusual factors that are beyond the control of the person who seeks to reply upon those special circumstances. The inquiry in this context is very fact specific.

Has MIL established special circumstances for not using the OCEAN QUEEN trade mark?

[31] In my assessment the Assistant Commissioner was correct when she concluded that MIL has not established special circumstances for failing to use the OCEAN QUEEN trade mark during the relevant period.

[32] In reaching this conclusion I have put to one side the suggestions that MIL was using the KARA trade mark in relation to canned fish during the relevant period. I agree with MIL that the evidence on this point is equivocal.

[33] However, in my assessment, the following matters very clearly demonstrate that MIL’s failure to use the OCEAN QUEEN trade mark was not attributable to special circumstances:

(1) The evidence before the Court establishes that MIL first placed its order for fish stock with AFA in Peru in February 2008. Surprisingly few communications between MIL and AFA have been disclosed. The communications that have been disclosed show that the last exchange of correspondence during the relevant period was on 30

May 2008. Thus, MIL’s attempts to source fish products from South America during the three year relevant period spanned just four months.

(2) Bearing in mind that the onus of establishing special circumstances rests with MIL the Court finds it surprising that MIL:

(a) appears to have relied on just one small supplier in

Peru to access fish stock from South America; and

(b) did not pursue its inquiries over a greater period of time.

(3) These concerns are reinforced when regard is had to the fact that FI and Punjas (NZ) Ltd appear to have had no difficulty in acquiring significant quantities of fish stock from South America during the relevant period. Furthermore, Mr Punjas’ unchallenged evidence was that canned mackerel was available through mainstream outlets in New Zealand throughout this period.

(4) MIL’s efforts to access canned sardine and mackerel from PEL in Thailand were very casual. The evidence is that there was a “conversation” between MIL and PEL in October 2008, followed up by a letter from MIL to PEL on 2 February 2009 and then apparently one reply from PEL to MIL on 25 February 2009. In that letter PEL said:

(1) We have been informed that “OCEAN QUEEN” is a

registered brand in Thailand.

(2) The manufacturer can only start working on this provided you have the brand registered in your name in New Zealand, and have the proof to back it up, without which they will not work as copyright law is becoming very strict in Thailand.

(3) The other issue we are facing here is that since “OCEAN QUEEN” is a registered brand here, local manufacturers are reluctant to produce under this band, as they fear they might be accused of breaching copyright law, and this can be seen as passing off the trade mark.

Surprisingly, MIL have not provided any evidence of them responding to PEL. A response, confirming MIL’s ownership of the trade mark OCEAN QUEEN in New Zealand should have been sent immediately. Instead of addressing this issue promptly MIL have simply asserted that it investigated the fish product from PEL and

_{found that the fish product was unsatisfactory.}31

31 M Manhaas Declaration, 6 March 2010 at [12].

(5) MIL’s complaints that AFA had been told that FI was the registered owner of the OCEAN QUEEN trade mark in New Zealand does not advance MIL’s case. Those communications occurred in August

2009, after the expiration of the relevant period.

(6) I assess MIL’s efforts to access canned fish using its OCEAN QUEEN label to have been far from convincing, particularly as other traders were experiencing little difficulty in accessing fish stock for their use during the relevant period. In my assessment, MIL has made occasional attempts to use its trade mark but it has fallen well short of establishing the existence of special circumstances as to why it was not able to use its trade mark. In particular I agree with the Assistant Commissioner’s conclusions:

(a) Sourcing fish products is part of MIL’s regular business. Encountering difficulties with supply and quality are routine challenges for businesses such as MIL. They are not special circumstances.

(b) It was well within MIL’s ability to seek fish stock from other sources and over a greater period of time that it appears to have taken to try and find fish supplies.

(c) MIL could have promptly addressed PEL’s concerns about ownership of the OCEAN QUEEN trade mark in New Zealand. It appears MIL failed to answer PEL’s questions.

[34] A useful comparison can be made between the circumstances relied upon by MIL and those disclosed in Aktiebolaget Manus v R J Fullwood and Bland Ltd.32 In that case the plaintiff was unable to import its milking machines from Sweden

_{because of the restrictions imposed during the Second World War. Unsurprisingly,}

32 Aktiebolaget Manus v R J Fullwood and Bland Ltd [1949] Ch 208 (CA) at 211-212 per Evershed

LJ.

the Court of Appeal found those circumstances constituted special circumstances. The circumstances in that case were far removed from those which MIL attempts to rely upon in this case.

Discretion

[35] MIL asks the Court to exercise its discretion to continue to own the trade mark OCEAN QUEEN even if it does not establish special circumstances.

[36] In my assessment the following three factors weigh heavily against MIL’s

plea that the Court exercise its discretion in its favour: (1) Integrity of the Register

The OCEAN QUEEN trade mark has been owned by MIL since

21 July 2005. There is no evidence that it has ever been used. The Registrar of Trade Marks is being unnecessarily clogged by MIL’s failure to use its trade mark.

(2) Absence of any use of the trade mark

The absence of any evidence of use of the trade mark by MIL is a feature that counts heavily against MIL.

(3) Competition

MIL’s continued ownership of the trade mark is blocking FI’s legitimate desire to use the trade mark to capitalise upon its reputation for OCEAN QUEEN acquired through using that trade mark in the Pacific for the past 15 to 20 years.

Conclusion

[37] MIL has failed to establish that there are special circumstances which explain why it has failed to use the OCEAN QUEEN trade mark during the relevant period.

[38] There are no sound reasons why the Court should exercise its discretion in favour of MIL.

[39] The appeal is dismissed. The decision of the Assistant Commissioner

revoking registration of the appellant’s trade mark is upheld.

[40] Costs are reserved. The parties are invited to submit memoranda to the Court within 15 working days explaining their position in relation to costs.

_{D B Collins J}

Solicitors:

A J Park Law, Wellington for Appellant

Baldwins Law Limited, Wellington for Respondent