The Federal Court of Australia has refused an application by US golf company King Par LLC (King Par) for summary judgment against its Australian rival Brosnan Golf Pty Ltd (Brosnan), in a case involving competing ownership claims for the ORLIMAR trade mark in relation to golf equipment.

While the decision represents a setback for King Par, the case is ongoing and it remains to be seen whether King Par or Brosnan has the better claim to ownership of the ORLIMAR trade mark.

Key lessons

For trade mark owners generally, the court’s decision highlights some key lessons about the concept of trade mark abandonment:

  • Trade mark abandonment can cause a trade mark owner to lose ownership rights in their trade mark. It occurs when a trade mark owner intentionally abandons their trade mark.
  • An intention to abandon can be established by drawing inferences from the facts of a given case. However, abandonment cannot be inferred merely from the fact that an owner does not use a trade mark, or fails to renew a trade mark registration.
  • Conversely, actual use of a trade mark will not necessarily preclude a finding of abandonment, as it may be possible to infer from other evidence that an owner intended to abandon their trade mark. This particular point was a key reason for the court’s decision in the King Par case.
  • The issue of abandonment commonly arises in cases where the validity of a registered trade mark is in dispute. In particular, abandonment can be argued as a “defence” to invalidity by a party who registers a trade mark that was originally owned by another party.

Background facts of the case

The Orlimar group of companies (Orlimar Group) was established in the 1970s by three Americans, who conceived of the word ORLIMAR as their trade mark by combining the initial letters from each of their surnames: Lou Ortiz, Pedro Liendo and Emilio Martinez.

The brand achieved notoriety in the late 1990s after Orlimar Group released a fairway wood known as the “Orlimar Trimetal”. The product went on to become the number one played fairway wood on the PGA Tour from 1998 to 2001.

At the same time, in 1998, the Orlimar Group obtained trade mark registrations in Australia for the words ORLIMAR and ORLIMAR TRIMETAL in respect of sporting equipment including golf equipment and golf clubs (being goods in class 28).

Despite the commercial success of the Orlimar Trimetal fairway wood, Orlimar Group fell into major financial difficulty in 2002 and its business was eventually wound-up. As a part of the winding-up process Orlimar Group’s remaining assets, including its two Australian trade mark registrations, were sold to a company that on-sold them to King Par.

King Par’s registrations fall by the wayside: Enter Brosnan

The ORLIMAR and ORLIMAR TRIMETAL trade mark registrations came up for renewal in 2008. However, despite several years having passed since King Par acquired the registrations, the registration details had not been updated. This resulted in the official renewal notices being sent to Orlimar Group and its trade mark attorneys, rather than King Par.

The precise events following the renewal notices being sent are not yet clear. Suffice it to say, King Par failed to take any official action to renew either registration which led to both registrations being cancelled by IP Australia in early 2009.

In the following year, Brosnan decided to adopt and use the ORLIMAR trade mark for its own commercial purposes. According to evidence submitted by Brosnan in the court proceeding, Brosnan believed at the time that the trade mark had not been used in Australia since the early 2000s, and that Brosnan was entitled to adopt the mark in 2010 because Australian golfers did not, at that time, relate to or identify with the brand ORLIMAR.

Based on this belief, Brosnan applied to register ORLIMAR as a trade mark in relation to various goods in classes 25 and 28 including golf clubs and golf equipment. The application was subsequently accepted and registration granted.

In early 2013, King Par commenced court proceedings seeking cancellation of Brosnan’s registration.

King Par’s summary judgment application

In the ongoing court proceeding, King Par’s primary claim is that Brosnan’s trade mark registration should be cancelled on the basis that King Par, and not Brosnan, was the owner of the ORLIMAR trade mark at the time Brosnan applied for registration in 2010.

This was the same claim that King Par relied on in its application for summary judgment against Brosnan which, as noted above, was recently refused by the court in a decision handed down by Justice Greenwood on 30 July 2014.1

In considering King Par’s application, the court accepted that evidence submitted by King Par suggested that the ORLIMAR trade mark had been used in Australia by King Par and its predecessors continuously from to 1998 to 2013. This included use after the cancellation of King Par’s two trade mark registrations in 2009.

However, the court did not consider this evidence was enough in all the circumstances to support a finding that Brosnan had no reasonable prospects of successfully defending the proceeding in order to warrant pre-trial summary judgment being entered against Brosnan.

Abandonment by King Par a real possibility

In reaching its decision, the court has implicitly accepted that Brosnan has “some” reasonable prospects of proving a claim of trade mark abandonment against King Par, which, if found, would mean that King Par lost its ownership rights in the ORLIMAR trade mark by the time Brosnan applied for registration in 2010. This would in turn undermine King Par’s primary basis for seeking cancellation of Brosnan’s registration.

According to the court, Brosnan’s claim of abandonment could potentially be established by further evidence becoming available before the trial. Such further evidence could support Brosnan’s claim if it indicates that King Par intended to abandon the ORLIMAR trade mark prior to Brosnan applying for registration in 2010.

The court was particularly mindful of the possibility for further evidence coming to light regarding communications between Orlimar Group’s trade mark attorneys and King Par in the lead up to King Par’s two trade mark registrations being cancelled in 2009.

The case between King Par and Brosnan now continues, with the court recently making orders on 20 August 2014 for both parties to give discovery and attend mediation in November 2014. Interestingly, the court has also granted leave for Brosnan to have a subpoena issued to Orlimar Group’s trade mark attorneys.