The Full Court decision in Trident Seafoods Corporation v Trident Foods Pty Ltd [2019] FCAFC 100 (‘Trident’; reported here) presented a first step in defining the parameters of authorised use as it applies to a corporate group. In Trident, the Court held that authorised use could be inferred where the owner of the trade mark and user of the trade mark share the same directors, a common registered address and common principal place of business.

The Australian Trade Marks Office (‘ATMO’) decision in Factory Direct Garage Doors Pty Ltd v Starship Australia Pty Ltd [2019] ATMO 106 (‘Factory Direct’) applies principles set out in Trident to a situation where a company director is the registered owner of the subject trade mark but the company is the using entity.

Starship Australia (‘Starship’) applied for removal of Australian No. 1035965 for GRYPHON GARAGE DOORS (figurative; ‘the Mark’) for all registered goods in Class 7 on the grounds that the Mark had not been used by the registered owner or an authorised user during the relevant period. The relevant non-use period is between 6 June 2014 and 6 June 2017, being three years and one month prior to the date of the removal application. The registered owner during the relevant non-use period was Marcus Cervi, who transferred ownership of the Mark to Factory Direct Garage Doors Pty Ltd on 20 June 2017. The registered goods relate broadly to garage doors, and various fittings for garage doors.

Starship contended that Marcus Cervi did not use the Mark during the non-use period, nor was the entity using the Mark during this period an authorised user.

At the time the Mark was adopted, Mr Cervi was the director and secretary of Gryphon Garage Doors Pty Ltd (‘GGD’), a manufacturer, supplier, and servicer of garage doors. In consultation with the other director of GGD, Mr Cervi was recorded as the registered owner of the Mark. GGD used the Mark, seemingly under the control of Mr Cervi (as the registered owner and director), in respect of the registered goods without a formal licensing agreement.

GGD was sold to Gryphon Home Improvements Pty Ltd (‘GHI’) in 2014. Mr Cervi was a director and secretary of this entity. The Mark was used by GHI until the company was placed into voluntary administration in March 2016. Not only was Mr Cervi a director of GGD and GHI, he also was employed at each entity during the relevant period as the manager of the Victorian-based operations of GGD and GHI.

It was clear based on the evidence that Mr Cervi did not directly use the Mark during the relevant non-use period. The question to be answered was whether use of the Mark by GGD and GHI was use under the control of Mr Cervi and thus qualifies as authorised use despite the absence of a written license agreement.

Starship contended that Mr Cervi’s conduct during the relevant period did not rise to exercise of actual control over use of the Mark since Mr Cervi was not the CEO, did not have any direct supervision of employees, and was not based in Perth, where the manufacturing of the goods was undertaken.

The Delegate rejected Starship’s arguments and held that Mr Cervi exercised sufficient quality control over the manner in which the Mark was used by GGD and GHI during the relevant period. In particular, Mr Cervi was a long-standing director of a small business that had at least some control over the operation of each business notwithstanding that he was not CEO.

The fact that Mr Cervi did not exercise day-to-day supervision of the manufacturing process in Perth was irrelevant to the delegate’s consideration. Critical to the delegate’s decision is that Mr Cervi worked for each using entity on a day-to-day basis and was in a position to monitor and inspect the goods (i.e., doors) upon which the Mark was applied, and the company’s operations, particularly given Mr Cervi’s technical expertise (and ability to remedy a technical error) and experience with the business.

The Delegate held that use by GGD and GHI of the Mark during the relevant period was authorised by Mr Cervi and as such the Mark was used by Mr Cervi during the relevant period. The application for removal of the Mark on the grounds of non-use was rejected and the Mark remains on the Register for all goods.

The decision in Factory Direct is distinguished from Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83 where the registered owner (also a director of the using entity) had no intention to authorise use of the registered trade mark to the owner’s corporate entity. It is heartening to see the ATMO apply a pragmatic and common sense approach to assessing authorised use in this ever evolving judicial landscape.