In Watson as Trustee for the Watson Family Trust v Cosmetic Warriors Ltd [2022] FCA 700, the Federal Court of Australia determined that the appellant’s entities which were “subject to the appellant’s absolute control of the use of the trade mark” were authorized users within ss 7 and 8 of the Trade Marks Act 1995 (Cth) and ordered the “Lush” trade mark to remain on the Register, thereby overturning the decision of the delegate of Registrar of Trade Marks.

Federal Court of Australia

Judge: Greenwood J

Date of Judgment: 17 June 2022

Appeal from: Austin John Watson ATF Watson Family Trust v Cosmetic Warriors Ltd [2020] ATMO 29

The present case is an appeal from the decision of the delegate of Registrar of Trade Marks from John Watson ATF Watson Family Trust v Cosmetic Warriors Ltd [2020] ATMO 29. Cosmetic Warriors Ltd (“respondent”) in the current case applied to have the trade mark registration no. 607740 for “LUSH”(“trade mark”) filed on the 26 July 1993 in class 35 for “clothing; footwear and headgear” (“the Goods”) removed under s 92(4)(b) of the Trade Marks Act 1995 (Cth)(“Act”) on the 22 May 2018. Austin John Watson (“appellant”)filed opposition to removal of the mark on the 30 July 2018. Austin John Watson is the registered owner of the trade mark in the capacity for the “Watson Family Trust”. The delegate of Registrar determined that the registered owner had failed to discharge the burden cast upon it by the Act and on the 26 February 2020 directed the removal of the mark after one month from the date of her decision subject to final determination of any appeal under the Act from her decision.

The relevant period of non-use for the trade mark is between 22 April 2015 to 22 April 2018 (“relevant period”).

The issue to be determined in this appeal was if the appellant has discharged the burden under s 100(1)(c) in relation to the question arising under s 92(4)(b) of the Act, and if there was use of the trade mark in Australia during the relevant period . 

The appellant was the sole director and shareholder of “HDFOPL” from 22 April 2015 to 17 July 2017 and HD Brands Pty Ltd (“HDBPL”) from 18 July 2017 to 22 April 2018 during the relevant period. The two entities engaged in retail of clothing in Surfers Paradise in Queensland. 

On three separate dates during the relevant period, some 2,497 garments[61] bearing the label “Lush” were imported from India to Australia in three transactions dated 10 November 2017 (“first transaction”), 24 November 2017 (“second transaction”) and 7 February 2018 (“third transaction”), with HDBPL labelled as the consignee.

Although the evidence tendered showed the garments bearing the “Lush” label were shipped to the HDBPL as the consignee, the appellant was not able to produce record of sales of the “Lush” label garments within Australia. His Honour was satisfied that the photographs in the evidence tendered showed garments bearing the “LUSH” labels in stylized form. Having considered the appellant’s pleadings, his Honour was also satisfied that because of the sheer number of garments imported and the fact that the appellant was operating the entities as clothing retailer, there was no other point or purpose to the importation of these garments other than for sale [89]. The appellant’s behaviour was supported by Mr. Bajaj, who gave evidence and Ms. Catherine Muscat, who was employed from 2012 till about April 2020 when the pandemic was in full swing in Australia. 

Ms Catherine Muscat’s evidence was accepted by the Court in which she testified that garment bearing the “Lush” label were often recorded for sales during the relevant period between the two stores that the appellant operated.

The final issues to be determined were if the use of “Lush” was use as a trade mark and if the entities were licensed to use the trade mark as an authorized user within s 8 of the Act. 

Greenwood J was satisfied that use of the trade mark “Lush” was use by the Watson entities as a trade mark because they were used to distinguished the garments bearing the “Lush” mark from the ones that were not, in the course of trade during the relevant period. 

As Austin John Watson was the sole director and shareholder of the entities that were in question during the relevant period as well as the registered owner of the trade mark, he was the “guiding mind for the entities” and exercised absolute control over HDFOPL and HDBPL, his Honour was satisfied that the both HDFOPL and HDBPL were authorized user of the “Lush” mark under s 8 of the Act and use of the trade mark was taken to be use by the owner under s 7 of the Act. 

It follows that the registered owner has established for the purpose of s 92(4)(b) of the Act and discharged the burden under s 100(1)(c) in relation to the question arising under s 92(4)(b) of the Act, and there was use of the trade mark in Australia during the relevant period. The decision of the delegate of Registrar was set aside and the trade mark was ordered to remain on the Register. 

Disclaimer: The above is provided to assist in the understanding of the decision by the Federal Court of Australia. It should not be relied upon as legal advice. Any errors or omissions are the author’s. For queries related to the article, please contact the author here.