Case: EOS (Aust) Pty Ltd v Expo Tomei Pty Ltd (1998) 42 IPR 277
Outcome: cited
Section 87(1) confers a discretion on the Court to order cancellation of the registration of the trade mark. That discretion is to be exercised according to its terms and, where appropriate, settled principle. The discretion is to be exercised subject to s 87(2) which identifies circumstances in which the Court might decide not to make an order. Similarly, the Court might by s 89 of the Act decide 'not to grant an application under s 87' and therefore refuse to make an order which, is itself, an exercise of the discretion, if the registered owner satisfies the Court that the ground relied on by the applicant 'has not arisen through any act or fault of the registered owner'. In terms, the discretion must not only be exercised taking account of s 87(2) and s 89 but having regard to the effect of s 25 on the right of the registered owner of the trade mark. It seems to me that all these matters must be weighed carefully in the balance to determine whether the Court ought to cancel the registration of a trade mark and, in consequence, extinguish rights conferred by the Act on the registered owner. The discretion is a true discretion in the sense that all the matters going to s 25 (the circumstances of this case) must be considered, the particular circumstances of the applicant, any relevant s 87(2) factors, the conduct of the registered owner and the effect upon the rights of the registered owner brought about by the operation of s 25. Some of these factors will weigh heavily as s 25, for example, has the applied effect of declaring that the registered owner has no exclusive rights. In that sense, the discretion may seem facultative only ( EOS (Aust) Pty Ltd v Expo Tomei Pty Ltd (1998) 42 IPR 277, per Branson J). However, the Court is required to determine whether an order ought to be made or refused taking account of the identified considerations. Although those considerations are more limited than the reference in s 22(1)(b) of the 1955 Act which conditioned the discretion as 'subject to the Act', s 87(1) requires the Court to consider particular matters or circumstances by drawing within s 87(1) the specific matters, facts and circumstances contained in s 87(2) and s 89. Moreover, an order for cancellation of the registration of a trade mark is one of and perhaps the most significant intervention a Court might make in granting remedial orders inter-parties or on the application of the Registrar. That suggests that the Court is required to consider and weigh (within the bounds identified by the section) whether an order ought to be made in all the relevant circumstances. Accordingly, the term 'may' in s 87(1) ought not to be read as 'must upon the application of s 25 but subject to subsection (2) and section 89, order' etc. The power conferred on the Court in respect of cancellation under s 87(1) involves the exercise of a discretion as much as s 22 of the 1955 Act involved the exercise of a discretion in relation to expungement ( Campomar v Nike (supra) [87], p 80, the Court). 76 Section 87(2) like s 87(1) contemplates the application of either s 24 or s 25 in relation to a trade mark and uses the language 'because the trade mark contains a sign' and then sets out alternatives that fulfil the content of the application of either s 24 or s 25. The first alternative relates to the circumstances engaging s 24, namely, 'because the trade mark contains a sign that (a) has become generally accepted within the relevant trade as the sign that describes or is the name of an article ...'. The second relates to the circumstances engaging s 25, namely 'because the trade mark contains a sign that describes or is the name of an article that was formerly exploited under a patent'. In either case, the Court may decide not to make an order under s 87(1) and allow the trade mark to remain on the Register in respect of the article or goods of the same description subject to any condition or limitation the Court may impose. Section 25 of the 1995 Act maintains the distinction evident in s 56 of the 1955 Act between a trade mark that contains subject matter (a word or words in s 56) and one that consists of that subject matter. Differential consequences arise for each. Section 87(1) is predicated upon the application of s 25 which applies in the circumstances set out in s 25(1). Section 87(2) so far as s 25 is concerned, addresses a circumstance where s 25 applies because the trade mark contains a sign rather than consists of the sign and secondly, because the trade mark describes or is the name of an article. Section 87(2) does not also require for its operation that the sign is the only commonly known way to describe or identify the article. Once s 25 applies according to its terms, the discretion in s 87(1) is enlivened. Subject to its terms, the exercise of the discretion must take into account whether an order ought not to be made in the case of a trade mark containing a sign that describes or is the name of an article formerly exploited under a patent. Since the trade mark in this case consists of the sign rather than 'contains' a sign (among other elements) s 87(2) has no operation for the purposes of s 87(1). 77 Are the elements of s 25(1)(a), (b) and (c) satisfied? 78 The trade mark's legislation of the Commonwealth has been evolving over time and now comprehends any shape, colour, sound or scent as a possible trade mark. Section 25 must be given a purposive construction consistent with the evolution of the Act to contemporary circumstances. The elements of s 25(1) on the facts of this case, are these. 79 The trade mark consists of the sign as it is the entirety of the trade mark. 80 The sign is a shape.