JB Hi-Fi and “STACK” – A rare case of revocation of a trade mark registration

By David Stewart

29 August 2019

On 31 July 2019 the Australian Registrar of Trade Marks published the decision of JB Hi-Fi Limited [2019] ATMO 115. It is a decision on revocation – a rare matter for determination by a delegate of the Registrar, no doubt because the omission giving rise to the hearing was so obvious.

Section 84A of the Trade Marks Act 1995 grants the Registrar the power to revoke an application in the following terms:

The Registrar may revoke the registration of a trade mark if he or she is satisfied that:

(a) the trade mark should not have been registered, taking account of all the circumstances that existed when the trade mark became registered (whether or not the Registrar knew then of their existence); and

(b) it is reasonable to revoke the registration, taking account of all the circumstances

The Registrar sought to revoke registration of the mark “STACK”, on the basis that there was a mark, “STACKS/“, registered in respect of very similar types of goods and services.

JB Hi-Fi, the well-known electronics goods retail chain, was the applicant. It sought to be heard on the decision to revoke registration, and filed evidence. During the hearing of the matter before a delegate of the Registrar, JB Hi-Fi’s counsel made reference to the decision of Mr Lorne Bobart [2010] ATMO 43, wherein the Deputy Registrar observed:

But an owner can quite properly assume that the Registrar will only register trade marks where there are no prior rights and, short of bad faith, can quite properly expect that their registration is valid. Thus, following revocation, the rights, which a good faith owner could justly assume were presumptively valid, are undone. This is not a step that the Registrar can take lightly.…Thus the structure of the section itself, its context within the Act, the nature of the rights affected, and the effect of revocation all require that great caution be used in the Registrar’s exercise of this discretion.

The Registrar almost never revokes acceptance. Requests to do so are almost always rebuffed, often on the basis that revocation should not be a second bite at the cherry if the opposition period has passed without a notice of opposition being filed. As the delegate of the Registrar noted in his decision:

[the] gravity of the matter is well founded. The magnitude of revoking registration and potential repercussions stemming from it are significant. Having navigated the examination and opposition stages of the registration process, revocation divests the Registrant of their statutory rights attained and, through no fault of their own, leaves them in a compromised position. This is because revocation of registration retrospectively extinguishes the statutory rights of the Registrant.

The delegate of the Registrar, “in the interest of transparency”, put the failure of the examiner not to cite the prior mark as an “administrative oversight”.

The delegate consequently put himself in the position of assessing the application de novo, as if he was in the position of the examiner. The delegate determined that the mark would not have successfully negotiated the examination process if the prior mark had been correctly cited, and that the evidence filed by JB Hi-Fi was not enough to establish honest concurrent use.

But JB Hi-Fi filed additional material, evidencing that, “[t]he Registrant [JB Hi-Fi] has invested heavily in the promotion of the Trade Mark and adapted its business based on the assumption that the Trade Mark was validly registered. Since registration, the Registrant has used the Trade Mark in relation to an expanded scope of services and has instituted steps towards future expansion. Further, the Registrant has also waived certain contractual options it had at its disposal because it assumed the Trade Mark was validly registered and would remain so.”

This material carried the day. We are of the view that the evidence of the contractual rights which were not exercised by JB Hi-Fi as a consequence of the registration of the mark was perhaps the most compelling factor. The delegate concluded, “A registered trade mark is a valuable intellectual property right and depriving a registered owner of this right must be reasonable given all the circumstances. Considering all of the circumstances, I am satisfied that it would be unreasonable to revoke the registration given the Registrant’s substantial investment in and widespread use of the Trade Mark to date.”

It is not clear from the decision whether it was the owner of “STACKS/“ which alerted the Registrar to the oversight by the examiner. Regardless, the cited mark owner has no right to be heard in a revocation hearing – the right to object to the application ended when the opposition period expired. Unless the issue ends up in court, that concludes the matter.

Disclaimer: The information published in this article is of a general nature and should not be construed as legal advice. Whilst we aim to provide timely, relevant and accurate information, the law may change and circumstances may differ. You should not therefore act in reliance on it without first obtaining specific legal advice.