What you need to know
- Neutron Holdings applied to remove Taxiprop's word mark, LIME (the Lime Mark), from the Trade Marks Register, alleging that Taxiprop had not used the mark for a three year period (First Non-Use Period). In response, Taxiprop revived its retired Lime Taxis fleet by rebranding two Toyota Camrys with the Lime Mark.
- During proceedings, Neutron conceded that Taxiprop had used the Lime Mark in good faith during the First Non-Use Period.
- A second non-use application, covering a later three year period than the first was also filed (Second Non-Use Period). The only established evidence of use in the Second Non-Use Period was that on the Lime Toyota Camrys which had been rebranded in response to Neutron's first non-use application.
- Taxiprop's use of the Lime Mark on the Toyota Camrys was found sufficient to prevent complete removal of the Lime Mark for non-use. Taxiprop's motive (to protect the Lime Mark from Neutron's non-use offensive) was irrelevant. However, the services for which the Lime Mark was registered were limited to taxi services as this was the only use demonstrated.
What you need to do
- Trade mark owners should review their portfolios to ensure their marks are being used in respect of all services for which they are registered.
- Owners who have some use in the non-use period being asserted, should consider restarting good faith use once they receive notice of an actual or potential non-use application. If the owner is able to prove use in the initial non-use period asserted such that an applicant is forced to rely on a later non-use period this new use may save the registration for the mark.
Neutron owns one of the largest scooter and bicycle share schemes in the world, "Lime" (formerly known as "LimeBike"). Prior to launching in Australia, Neutron applied for a trade mark for the word LIME in class 39. Neutron's trade mark application was blocked by a mark owned by Taxiprop for the word LIME, registered in class 39 in respect of transport and taxi services (Lime Mark).
Neutron filed a non-use application alleging that Taxiprop had not used the Lime Mark for a three year period between 21 August 2015 and 21 August 2018 (First Non-Use Period).
Despite the First Non-Use Period ending one month before the non-use application was filed, Taxiprop nevertheless rebranded two Toyota Camrys with Lime branding and the Camrys proceeded to operate as taxis.
At trial, Neutron conceded that Taxiprop had used the Lime Mark during the First Non-Use Period. Neutron had, however, filed a second non-use application, which alleged that the Lime Mark had not been used in good faith between 16 March 2017 and 16 March 2020 (Second Non-Use Period). The only evidence of use that the Judge accepted in the Second Non-Use Period was that on the Lime Toyota Camrys which had been rebranded in response to Neutron's first non-use application.
Rebranding the Camrys was in good faith
Where a non-use application is filed, the Trade Marks Act 1995 provides that the required period of non-use is a continuous period of three years ending one month before the non-use application is filed. The intent of ending the non-use period one month before a non-use application is filed is to prevent trade mark owners from defeating non-use applications by commencing use shortly before, or after, an application is filed.
In this case, Neutron accepted that there had been genuine use in the First Non-Use Period. However, Neutron alleged that Taxiprop's use of the Lime Mark during the Second Non-Use Period was not use in good faith.
Australian courts require use of a trade mark to be real commercial use or ordinary and genuine use. That is, the use cannot be fictitious or colourable.
Notwithstanding this, the judge, Justice O'Callaghan, held that the motives of the registered owner for their use are largely irrelevant. That is, use may still be in good faith even if the purpose of the use is to protect the owner's mark from a non-use attack.
Justice O'Callaghan noted that the Lime branded Camrys earned significant revenue, operated over a considerable time period and made a large number of trips. On this basis, Justice O'Callaghan found that Taxiprop had used the Lime Mark in good faith, albeit only in respect of taxi services.
Close, but no cigar. Federal Court limits the Lime Mark to taxi services
As Taxiprop had only established use of the Lime Mark in relation to taxi services, the Court was empowered to remove the mark from the Register in respect of all other registered services, subject to s 101(3) of the Trade Marks Act.
Taxiprop argued that the Court should exercise its discretion not to interfere with the Lime Mark primarily because of the convergence of personal transport services. Taxiprop argued that recent changes to the transport industry showed multiple transport options being provided by a single service providers such that the use of the Lime Mark on bicycles would be a natural extension of the use of the Lime Mark on taxis. Taxiprop also argued that it had residual reputation in the Lime Mark, and the Court should not split up the Lime Mark between two or more personal transport service providers as this could lead to confusion.
Justice O'Callaghan did not agree. Justice O'Callaghan noted that the Lime Mark had only ever been used in respect of taxi services. Further, there was no evidence that Taxiprop intended to enter the market for micro-mobility services. Also, since almost all Lime Taxis were rebranded under "13CABS", Taxiprop only had negligible residual reputation in the Lime Mark.
On this basis, the specification for the Lime Mark was limited to taxi services.
Taxiprop also loses on trade mark infringement, misleading and deceptive conduct and passing off
Justice O'Callaghan also rejected Taxiprop's case on trade mark infringement, on the basis that electric bicycle and scooter services are not services of the same description as taxi services. Justice O'Callaghan did not accept that a consumer would possibly wonder whether the two services had the same trade origin.
Having earlier found that Taxiprop had only negligible residual reputation in the Lime Mark, it followed that Taxiprop's misleading or deceptive conduct and passing off claims were also rejected.
Final note
The Federal Court's judgment is a useful reminder for trade mark owners to ensure their marks are being used in respect of all goods and/or services for which they are registered. A failure to use a mark means that the mark may be completely removed, or, as in this case, limited to particular goods or services for which good faith use can be demonstrated.
The Trade Marks Act does prevent very recent use (that is, use in the month prior to a non-use application being filed) from defeating a non-use application. However, owners should consider commencing good faith use once they receive notice of an actual or potential non-use application particularly if the owner has had some use of the mark in the non-use period being asserted against them. If the owner is successful in establishing use such that an applicant is forced to rely on a later non-use period, this new use may ultimately defeat the second non-use application and save the registration for the mark.
Authors: Stephen Klimis, Lawyer; and Nina Fitzgerald, Partner.
