In Eurark LLC v Planet Health Pty Limited [2010] ATMO 75 Eurark successfully defended an action by Planet Health for removal of its trade mark FOREVER YOUNG on the basis of nonuse. The trade mark was registered in respect of “cosmetics, namely cellular moisturizing creams, lotions and gels”.
Eurark was a United States supplier of cosmetics bearing the FOREVER YOUNG trade mark through a referral marketing scheme. To purchase goods a customer had to become a member, which was done via referral from an existing member. Members were provided with catalogues and brochures and would purchase goods by mail, fax and telephone or via Eurark’s website. There appeared to be a system of compensation for members based on purchases made by the persons that they have referred to Eurark.
It was argued by Planet Health that there was no use of the FOREVER YOUNG trade mark during the non-use period because Eurark supplied its goods only for personal consumption direct to consumers and this was not trade mark use on the basis of the High Court case of WD & HO Wills (Aust) Limited v Rothmans Ltd (1955) 92 CLR 131, (1956) 94 CLR 182 (the “Pall Mall case”). The hearing officer distinguished this case on the basis that the supply by Eurark went beyond provision for personal use. The referral marketing scheme involved members promoting Eurark’s goods to obtain new members who would purchase goods. This earned compensation for the referring member. In addition, several hundred catalogues were sent to Australia each year in the non-use period.
More significantly, the hearing officer noted that the Pall Mall case was decided well before the electronic age of business transactions. He quoted with approval a passage from Ward Group Pty Ltd v Brodie & Stone Plc (2005) 64 IPR 1 which dealt with use of a trade mark over the internet. In relation to a case where an order had been placed for goods over the internet, the Court found that the first time that the trade mark would have been used in Australia was when the purchasers were informed that their orders had been accepted. A further use of the trade mark occurred in Australia when the goods were delivered. The hearing officer seems to be saying that, quite apart from the referral selling issue, orders over the internet, which are accepted and goods delivered, constitute use in Australia even if they are for personal use.
It was also argued by Planet Health that that there was no use in good faith because Eurark’s goods were therapeutic goods which should be registered pursuant to the Therapeutic Goods Act 1989 and the Therapeutic Goods Regulations 1990. As they were not so registered, it was argued that the goods could not be legally advertised or distributed in Australia. The hearing officer was not satisfied that use of a trade mark contrary to the Therapeutic Goods Act and Regulations was relevant to whether or not a trade mark is used in good faith (as is required by the non-use provisions) as this requirement is made out if there is a real use in a commercial sense. Even if it were relevant, the hearing officer considered that the goods were offered as cosmetic rather than therapeutic goods.
The decision is important because it suggests that the widespread practice of sales of goods to Australians by overseas entities over the internet will constitute trade mark use in Australia even though the goods are purchased by consumers for personal use. The decision is also significant in that it suggests that use of a trade mark contrary to the Therapeutic Goods legislation is not relevant in a non-use action.