chiro

Australian Chiropractors Association Limited v Chiro Care Mattresses Pty Ltd [2021] ATMO 28

This matter involved an application for removal of the Australian Chiropractors Association (ACA)’s CHIRO trade mark by our client Chiro Care Mattresses (Chiro Care).

ACA has held this trade mark since 1985, covering beds, chairs and all other furniture products in class 20. Two previous unsuccessful attempts at removal of this mark had been made in 1989 and 1991 by other third party mattress makers (Brassmaker and Silent Night).

ACA contended that:

  1. Use of its trade mark had been made through a License Agreement with Sleepmaker and Australian Comfort Group (ACG), although this License Agreement was not produced in evidence;
  2. It had also used the trade mark in its own right through use of the domain name chiro.org.au and endorsement program.

Chiro Care’s primary contentions in response were:

  1. That any use of the term “chiro” by ACA was descriptive use of that term, as opposed to trade mark use;
  2. The examples of use relied upon by ACA demonstrated use of alternative marks, such as Chiro Align and Chiro Retreat, not CHIRO by itself;
  3. The failure of ACA to produce the License Agreement meant that it should not be able to rely upon that License Agreement in establishing use of its mark.

ACA was ultimately unsuccessful in establishing relevant use of its CHIRO trade mark, and Chiro Care was successful in establishing grounds for removal under section 92(4)(b). ACA was however successful in persuading the Registrar to exercise his discretion to allow registration to remain for a limited subset of goods, namely mattresses.

The decision otherwise provides a useful analysis of:

  • The importance of evidence of licensing arrangements in establishing licensed use of trade marks;
  • The determination of authorised user in non-use proceedings;
  • Exercise of the Registrar’s discretion in non-use proceedings.

The key statements by Hearing Officer Nicholas Barbey are summarised below:

Did ACA use the CHIRO Trade Mark?

Answer: No!

  1. Domain Name Use: www.chiro.org.au
  • The screenshots from ACA’s Chiro Website were undated, and did not demonstrate use of the CHIRO trade mark in connection with the registered goods covered by the trade mark.
  • The Hearing Officer accepted Chiro Care’s submissions that the only use of “chiro” on the Chiro Website was descriptive use, as an abbreviation for “chiropractor”.
  1. Endorsement Program
  • The mere existence of an endorsement program didn’t demonstrate use of the CHIRO trade mark.
  • ACA’s evidence failed to disclose how the CHIRO trade mark was directly used by ACA as the endorser.
  • ACA’s evidence failed to disclose which trade marks were covered by the program and the criteria for use of those marks.
  • ACA’s Certificate of Endorsement failed to mention the CHIRO trade mark or the endorsed products, and was undated.
  • Accordingly, neither the domain name use or endorsement program demonstrated any direct use of the CHIRO trade mark by ACA.

Did Licensee use the CHIRO Trade Mark?

Answer: Yes, but in relation to a limited subset of goods only

  • Chiro Care contended that there were several deficiencies in the evidence of licensed use by ACA:
  • The examples of use related only to mattresses, not the wider range of furniture products covered by the CHIRO mark. The Hearing Officer agreed that this was the case;
  • The evidence included draft materials, not necessarily the finalised versions of marketing materials circulated to consumers. Again, the Hearing Officer agreed that this was the case, and also identified that much of these materials were either undated or outside the relevant non-use period;
  • The marketing materials didn’t demonstrate use of CHIRO as a mark on its own, but with additions or alterations affecting its identity. The Hearing Officer agreed that the material did contain references to other marks such as Chiro Align, Chiro Retreat, Chiro Escape, Chiro Endurance, which could not be accepted as use of the trade mark CHIRO;
  • The use displayed in the marketing materials was descriptive use to refer to the chiropractic benefits of the product, not use as a trade mark or badge of origin.
  • The Hearing Officer did however identify that the evidence did contain some references to CHIRO as a badge of origin, especially in the context of referring to the Chiro Collection. However, these uses were limited to mattresses only.

Was Licensee’s Use Authorised by ACA?

Answer: No!

  • Notwithstanding that some use the CHIRO trade mark by the Licensee was established, such use must also have been authorised use by ACA in order for that use to be attributed to ACA.
  • The Hearing Officer considered whether ACA had exercised control as a matter of substance over use the CHIRO mark by the Licensee, Sleepmaker.
  • A copy of the relevant License Agreement was not produced in evidence by ACA. ACA claimed that it had not done so due to confidentiality of this agreement.
  • Chiro Care submitted that without seeing the License Agreement, the terms of the license could not be verified, including the terms on which use of the CHIRO trade mark was controlled by ACA. Chiro Care also contended that it was not clear if the License Agreement was binding upon Sleepmaker, given that the original License Agreement was contended to be with Pacific Brands, not Sleepmaker.
  • The Hearing Officer indicated that it was problematic to rely on mere statements by ACA’s CEO regarding those license arrangement without relevant particulars or documentary evidence to support those claims. In particular, the evidence:
    • Did not specify what the nature of the rights under the License Agreement were;
    • Did not specify the frequency and nature of any store inspections with the Licensee;
    • Did not confirm that those activities took place in the relevant non-use period;
    • Did not confirm that the product approvals in the endorsement program related to use of the CHIRO trade mark.
  • The Hearing Officer also confirmed that ACA’s concerns with production of the License Agreement could have been addressed by producing a redacted version of the agreement or disclosing the agreement in a confidential annexure. ACA had the opportunity to do this in its Evidence in Reply but did not take that opportunity.
  • Therefore, the Hearing Officer was not satisfied that substantive control had been established between ACA and its Licensee, and authorised use was not established.

Registrar’s Discretion

  • Notwithstanding that Chiro Care was successful in satisfying the grounds for its removal application, in non-use cases, the Registrar has a broad discretion to allow registrations to remain if it is satisfied that it is reasonable to do so.
  • In support of exercise of the discretion, ACA contended that:
    • There was genuine commercial use of the CHIRO mark;
    • The CHIRO mark was important to ACA’s license agreements;
    • Removal would restrict the products capable of being endorsed by ACA under the CHIRO mark;
    • Removal of the mark would risk consumer confusion.
  • Chiro Care contended in response that:
    • At best, use of the CHIRO mark was limited to mattresses;
    • No evidence of loss of endorsements or licensing opportunities had been produced;
    • There is no relevant reputation in CHIRO as a trade mark.
  • The Hearing Officer accepted that there was merit in all of Chiro Care’s contentions.
  • However, the Hearing Officer accepted that there had been some use of the CHIRO trade mark for mattresses, even if not by an authorised user of that mark. Whilst he was not satisfied that use of the CHIRO trade mark was integral to ACA’s endorsement program, there was reasonable basis to infer that it was not insignificant.
  • On that basis, the Hearing Officer exercised his discretion to allow the registration to remain for mattresses only, and for all remaining class 20 furniture goods to be removed.