C&S Investments Pty Ltd v Klinic Solutions Australasia Pty Ltd  FCCA 1741 (24 June 2019)
Unsuccessful trademark infringement claim by C&S and successful cross-claim by Klinic.
C&S owned a trademark registration for MDerma dating from 29 September 2015 and covering therapeutic cosmetic treatment apparatus in class 10 and cosmetic treatment services in class 44.
Klinic cross-claimed for cancellation of the MDerma registration under s88(1)(a). Klinic claimed that, since at least June 2015, it has been the exclusive Australian distributor of MDerma micro-needling skin treatment products manufactured by Dermapen LLC of the USA. Cancellation may be made on any of the grounds on which registration of the MDerma mark could have been opposed. Here, Judge Street was satisfied Klinic had established grounds of opposition under s58 ownership, s59 intention to use and s62A bad faith.
Significantly, C&S failed in its application for adjournment. Further, it was not represented at the hearing and an affidavit it previously filed was not read.
Under the ownership ground, the court found that Klinic was a prior user of the MDerma mark and had a prior claim of ownership through such use which is superior to, and defeats, the claim to ownership by C&S arising from the act of filing its trademark registration. There was no evidence of any earlier use by C&S.
Under the lack of intention to use ground, the court accepted that Klinic had demonstrated a prima facie case of a lack of intention by C&S to use the MDerma mark, and C&S failed to discharge the onus upon it in respect of demonstrating its intention to use the mark. That prima facie case was supported by the fact that, as at the 29 September 2015 priority date, C&S or an authorised user had not used the MDerma Trade Mark in Australia and had not at any time used in Australia MDerma as a trade mark.
Under the bad faith ground, there was no explanation before the Court as to the circumstances in which C&S obtained registration of the MDerma mark. Given the prior use by Klinic, the the court inferred that the conduct by C&S in obtaining the registration falls short of the standard of acceptable commercial behaviour by a reasonable and experienced person. The court made this finding having taken into account the publicity and other activities surrounding the promotion of MDerma products by Klinic in Australia before the priority date of the MDerma trademark registration by C&S. The court found that C&S must have been aware of that use.
Consequently, the court ordered cancellation of the MDerma trade mark from the date of its registration and it followed that the infringement claim by C&S could not succeed.
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