Case No: CH/2001/APP/010497
 
Neutral Citation No: [2002] EWHC 428 (Ch)

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

On Appeal from the Trade Mark Registry

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 18th March 2002

Before :

THE VICE-CHANCELLOR
- - - - - - - - - - - - - - - - - - - - -
Between :

	GERBER PRODUCTS COMPANY	Appellant	
	- and -		
	GERBER FOODS INTERNATIONAL LTD	Respondent	

- - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - -

Mr Michael Edenborough (instructed by Bird and Bird) for the Appellant
Mr Colin Birss (instructed by Laytons) for the Respondant

Hearing dates : 17th January and 7th March 2002
- - - - - - - - - - - - - - - - - - - - -

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

.............................
The Vice Chancellor

The Vice Chancellor  : 
1.	Gerber Products Company (“Products”) was incorporated in the State of Michigan in 1901.  For many years it marketed and sold baby foods under the brand name Gerber with or without an accompanying device of a baby’s head.   It was registered as proprietor of such marks in respect of class 5 in 1968 and 1973.   From 1965 to 1979 its baby foods were sold in the United Kingdom through its licensee, Brown & Polson Ltd.   In the latter year the licensee withdrew from the UK market.   Products was unable to terminate the licence and, because it was exclusive, could not continue to market its products in the UK either.
2.	Gerber Foods International Ltd (“Foods”) is the principal trading company in the Gerber Foods Group which, since 1925, has carried on business in the UK buying and selling food and drink under the brand names Gerber and Gerber Foods.   In July 1988 and July 1992 Foods sought the registration of GERBER PRIDE and GERBER in respect of classes 29, 30 and 32 and class 5 respectively.   The marks registered in the name of Products, GERBER and GERBER with device, were cited against the application.    Accordingly, on 23rd July 1990, Foods applied for the removal of the marks registered in the name of Products on grounds of non-use pursuant to s.26(1)(b) Trade Marks Act 1938.
3.	The application was opposed by Products.  It relied on two classes of use.  The first was a test marketing carried out at Haywards Heath, Sussex in August 1989.   The second was sales of its products to USAF bases in England at Lakenheath in Norfolk, Upper Heyford in Oxfordshire, Mildenhall in Suffolk, Menworth Hills in North Yorkshire and Fairford in Gloucestershire.
4.	The application came before the Hearing Officer (Mr Reynolds).  For the reasons given in his decision made on 6th June 2001 he rectified the register so as to delete the marks of Products.    In summary he concluded that (1) the test marketing was not sufficiently substantial to constitute use within the subsection, (2) use within the USAF bases was not use within s.26(1)(b), (3) alternatively, if such use came within the subsection, then the registration might be retained but only subject to limitations which confined its effect to that specialist market and (4) there were no grounds on which to exercise the discretion conferred by s.26(1) by refusing rectification.
5.	This is the appeal of Products from the order of the Registrar rectifying the register by the deletion of Products marks.   Products claims that the Hearing Officer was wrong on the first, second and fourth issues.   Foods contends that the Hearing Officer was right on each of them.  If, contrary to that primary submission, he was wrong on the second issue, then, so Foods contends but seemingly Products disputes, he was right on the third issue.   In that event the order for rectification will require modification in accordance with the respondent’s notice served by Foods for which I gave permission at the hearing.
6.	So far as relevant s.26(1) provides that
“...a registered mark may be taken off the register....on the ground...– 
[(a)]
(b) that up to the date one month before the date of the application a continuous period of five years or longer elapsed during which the trade mark was a registered trade mark and during which there was no bona fide use thereof in relation to those goods by any proprietor thereof for the time being:
[provided that..]”
Thus the issue is whether, notwithstanding either or both the uses on which Products relies, there was no bona fide use of Products marks between 23rd June 1985 and 22nd June 1990.
7.	There are a number of reported decisions in which what was and was not sufficient bona fide use has been considered.   Counsel for Products suggests that there are two streams of authority one of which requires the use to be real and commercial and on a substantial scale the other of which recognises that there is no de minimis rule in this context so that a single transaction may suffice.  He contends that the Hearing Officer wrongly directed himself by reference to the first thereby imposing too high a test when considering whether the test marketing at Haywards Heath in August 1989 was enough to prevent rectification. 
8.	I propose to consider the authorities to which I was referred in chronological order.  But before doing so it is appropriate to note their limited value.   The question is whether or not “there was bona fide use” of the marks in the relevant period.  These are, including the anglicised latin phrase, ordinary English words to be applied to the facts of the case.   Whilst decided cases may cast light on their meaning they cannot provide a substitute for them. 
9.	In the Notes of Official Rulings 1944 reported in 61 RPC 148 it is recorded that the Registrar, Sir Frank Lindley, considered that the use of the mark in relation to samples supplied by the proprietor of the mark to others through whom he sought an outlet for his goods could constitute bona fide use within s.26(1).   In my view this note is of little, if any, value.   It merely illustrates an application of the statutory test to facts which are incompletely summarised.
10.	In Electrolux Ltd v Electrix Ltd (1954) 71 RPC 23 the plaintiff, Electrolux, had two marks ELECTROLUX and ELECTRUX.   The former had been in substantial use but the latter had not.   It wished to take proceedings for infringement by a competitor who used the mark ELECTRIX.   As there was a greater similarity between that mark and ELECTRUX than between that mark and ELECTROLUX the plaintiff delayed proceeding against the defendant until it had made some or greater use of ELECTRUX.   In an application to rectify the register by deleting ELECTRUX it was contended that such use was not bona fide because it had only occurred after the plaintiffs had become aware of the defendant’s use of its mark ELECTRIX.  This submission was rejected by the judge before whom the application came and by the Court of Appeal.   Sir Raymond Evershed MR, at page 36, concluded that though the motive for the use was to gain an advantage in the proceedings then contemplated it was nonetheless bona fide.  He added

“..I attempt no definition, but the use here shown does not seem to me in any real sense capable of being described as a pretended use.   There is I think no evidence which would justify the conclusion that the use was merely spasmodic or temporary.  Commercially speaking it is not shown that the use made by the Plaintiffs of this mark was not an ordinary and genuine use, and it certainly was substantial.”
Both Jenkins and Morris LJJ reached similar conclusions.  The former referred to the fact that “such use was perfectly genuine and was substantial in amount” and was “a real commercial use on a substantial scale and in that sense genuine” (at page 41).   The latter concluded that “judged by ordinary commercial standards, there was a genuine use” (at page 42).
11.	Counsel for Products accepts that this case shows that a doubt about whether the use under consideration was bona fide may be dispelled by use which comes within the descriptions used by the members of the Court of Appeal.  But, he submits, the case is no authority for the proposition that only use falling within those descriptions can amount to use for the purpose of s.26(1)(b).  In other words, as he submits, there is no reason to gloss the statute by adding to the word “use” the requirement that it be real commercial use on a substantial scale.   This submission is challenged by counsel for Foods.  He submits that the decision of the Court of Appeal, as exemplified in the subsequent cases of Levi Strauss v Shah [1985] RPC 371 and BON MATIN Trade Mark [1989] RPC 537, is binding authority for the proposition that the test of real commercial use on a substantial scale is applicable in all cases.
12.	In NODOZ Trade Mark [1962] RPC 1 an application for the deletion of a mark on the ground that it had not been used for five years was opposed on the basis of a single sale of a pharmaceutical product to an American traveller in England.   The evidence indicated that the preparation had been despatched in the US but there was no evidence of receipt in England.   The Hearing Officer considered [page 4] that the single sale was enough to constitute use for the purposes of s.26(1)(b).   On appeal Wilberforce J accepted [page 7] that “in a suitable case one single act of user of the trade mark may be sufficient”.   But he considered that in such a case the use should be established by “overwhelmingly convincing proof”.   Accordingly he allowed the appeal on the ground that use had not been proved.
13.	Counsel for Products relies on NODOZ for the proposition that a single transaction may constitute use so as to avoid deletion of a mark on the grounds of non-use.   It is true that such a possibility was recognised by Wilberforce J but the case establishes no more than the obvious proposition that the use relied on must be proved by sufficient evidence.
14.	VAC-U-FLEX Trade Mark [1965] FSR 176 was a decision of the Hearing Officer.  The mark concerned was registered in respect of “flexible tubing wholly or principally of metal”.    In resisting an application for deletion of the mark on the grounds of non-use the proprietor relied on the despatch from the US to a potential customer in England of a sample length of flexible tubing bearing the mark.    In reliance on the Official Ruling to which I have referred in paragraph 9 above the Hearing Officer accepted that the use of the mark in respect of a single sample was capable of constituting use for the purposes of s.26(1)(b).   But he allowed the application on the ground that the single use relied on was not in respect of goods to which the registration applied because the tubing in question, though flexible, was not wholly or principally of metal.  Counsel for Products relies on this case as demonstrating that use for the purposes of s.26(1)(b) does not have to be substantial to be sufficient.
15.	In Levi Strauss v Shah [1985] RPC 371 the court was concerned with a trade mark for five plain coloured tabs sewn into the rear pocket of jeans.   Though the plaintiffs mark was for plain tabs it invariably added the word  LEVI’S for which it also had a registered mark.   The defendant used plain tabs on its own jeans but added to them the word KING.   The plaintiffs sued for infringement of their mark for the tab.  The defendants counterclaimed for deletion of the mark for the plain tab on the ground of non-use.   The claim was successful on the basis that the addition of the word KING did not avoid infringement of the mark for the plain tab.  The counterclaim failed on the ground that the mark for the plain tab had been used notwithstanding the addition of the word LEVI’S.
16.	Whitford J also dealt with another argument the basis for which and his conclusion thereon is clear from the following passage in his judgment [p. 378]
“At some stage, as I have already indicated, the plaintiffs obviously were a little worried about the question of non-use.  At least in the United States and the United Kingdom, programmes were initiated, dropped and taken up again, with a view to securing that a certain number of plain tags would be used in the course of manufacture.  The plaintiffs have, however, wholly failed to satisfy me that by the relevant date these blank tab programmes, whether initiated in the United States or over here, had reached a stage at which, whether by importation or manufacture, it could sensibly be said that there was in this country a real commercial use on a substantial scale.  I cannot accept either that the use of what might appear to be, even if it was not so in fact, white tabs in their advertisements or in certain swatch and pattern books can assist them in this regard.”
Counsel for Products submits that the judge was applying the test formulated by the Court of Appeal in Electrolux Ltd v Electrix Ltd (1954) 71 RPC 23 for the purpose of deciding whether the use of the plain tabs to which he referred was bona fide.   He contends that that is no justification for requiring use to be real commercial use on a substantial scale.
17.	In BON MATIN Trade Mark [1989] RPC 537 an application to delete the mark for a range of cosmetics for non-use between April 1979 and April 1984 was opposed on the basis of its use on two occasions, one in relation to a price list and the other in respect of promotional literature.  After the end of the relevant period the French proprietor appointed an agent and, thereafter sold cosmetics under the mark on a regular basis.   The application was refused by the Registrar on the ground that the mark had not been registered for five years.  As an alternative he held that the use within the period was sufficient.  The Applicant appealed.
18.	On appeal Whitford J upheld the decision of the Registrar on the first point.   He also agreed with him on the second, considering the use to have been in the course of trade and bona fide.  At page 543 he said
“The main argument on the appeal centred around the question as to the extent to which one must consider the substantiality of the use.  Various authorities can be cited, pointing in different directions.  I suppose in the interest of Mr. Morcom’s clients perhaps one of the earliest and most favourable approaches is that which is to be found in Official Ruling 61 R.P.C. which was concerned with the question of a despatch to the United Kingdom of a sample of the product to be sold under the registered trade which it was held might be regarded as a use of the trade mark in the United Kingdom.  I was not taken to the Official Ruling as such but it is to be found referred to in a judgment which was given by Dr. R.G. Atkinson, then acting for the Registrar in VAC-U-FLEX Trade Mark [1965] F.S.R. 176.  There is no doubt that Dr. Atkinson did consider a number of earlier authorities.  To my mind what plainly emerges from the authorities is this, and Mr. Morcom did not attempt to shirk the point, the substantiality of the use is undoubtedly a relevant factor to be considered and at the end of the day one has got to consider every relevant factor.  It must always be remembered that what one is directed to by section 26 of the Act is the question as to whether there has been bona fide use.  Although the extent of the use is one factor which may be of significance, some of those factors may lead to the conclusion that although the use could not in the commercial sense be described as anything other than slight, nonetheless it may be appropriate to reach a conclusion, in the light of the circumstances as a whole, that the use ought to be regarded as bona fide.”
19.	Counsel for Products submits that it is clear from this decision that there is no requirement where there is no issue of bona fides for the relevant use to be real commercial use on a substantial scale.   In those circumstaances any actual use suffices.
20.	Finally I should refer to the decision of Jacob J in La Mer Technology Inc. v Laboratoires Goemar SA (19th December 2001 unreported).   The case concerned non-use under Trade Marks Act 1994.   In paragraphs 26 and 27 Jacob J summarised the law under the 1938 Act in these terms:
“26.	In other English cases, where there was no question of a hidden motive behind the use, the courts were prepared to regard even small quantities of sales under the mark as sufficient to constitute bona fide use.  A little use coupled with genuine intention to establish a market in goods under the mark would suffice (Bon Matin [TM 1989] RPC 538).
27.	Thus under our old law there was no rule of de minimis.  If a use was only slight, that might, depending on other circumstances, show that the trader was not genuine in his activities, as for instance in the Nerit case or another similar case, Concord TM [1987] RPC 209.  One would compare the use actually made with the size of the organisation, how it and similar entities normally went about marketing and so on.  A big trader who had made only limited sales would particularly have to explain what was going on.  If the main or a principal motive was trade mark protection rather than simply making sales under the mark, then the use was not “bona fide”.
21.	I do not think that these cases demonstrate two streams of authority as counsel for Products suggested so much as a single stream showing the problems of application in the different circumstances which arise.   In particular I do not read the decision of the Court of Appeal in Electrolux Ltd v Electrix Ltd (1954) 71 RPC 23 as laying down a principle that to constitute “use” within s.26(1)(b) it must be shown to be real commercial use on a substantial scale.    The issue in that case was not whether there had been any use but whether such use was bona fide.   In my view in all these cases there are two questions (1) Has there been a use of the mark within the relevant period? and, if so, (2) Was such use bona fide? 
22.	In paragraph 25 of his decision the Hearing Officer mentioned each of the cases to which I have referred except La Mer Technology Inc. v Laboratoires Goemar SA (19th December 2001 unreported) which had not by then been decided.   In paragraph 26 he quoted from the judgment of Whitford J in Bon Matin Trade Mark.   In paragraph 27 he said
“27.	Having regard to the above authorities it seems to me that I should approach the matter on the basis that bona fide use must be real or genuine and not “fictitious or colourable”, it must be considered in a commercial context; substantiality is a factor but …….; it does not necessarily have to be large scale use; and all relevant factors must be taken into account.  I note particularly Morris L J’s words in the Electrolux case “It is of course clear that when the phrase `bona fide’ is used, its context must be considered when deciding what is its meaning”.  That comment may have had particular application in that case in the context of considering the difference between genuine and artificial use but it is, I think, equally relevant to consider the overall context in cases where (as here) there is no real suggestion that the use passes the honesty of use test but still has to be considered against the other criteria identified by the Courts.  Thus it might be argued that modest sales linked to the establishment of a longer term basis for trade (an agency or distributorship arrangement for instance) may count for more than a larger opportunistic or isolated trade that is not intended to give the proprietor an ongoing commercial presence in the UK market (the sort of `spasmodic and temporary’ trade alluded to in Electrolux).  But generalisations of any kind are fraught with difficulties.  I do not for instance read the above reference in Electrolux to mean that occasional sales are incapable of constituting bona fide use.  Clearly some items of capital equipment are occasional purchases only and an irregular pattern of sales will result.  At the other extreme spasmodic sales of, say, low value consumer goods (where a more regular trade might be expected) may face a rather stiffer test if such use is to be regarded as bona fide.  No doubt Whitford J had such considerations in mind when he said BON MATIN that “at the end of the day one has got to consider every relevant factor”.
Counsel for Products submits that the Hearing Officer did not apply the correct test.   I did not understand him to suggest that the error occurred at this stage;  rather he challenged a later passage in which the Hearing Officer sought to apply the law to the facts.
23.	I will deal first with the facts relating to the test marketing carried out at Haywards Heath in August 1989.  The test marketing was undertaken in the context, as described by Mr Fitzpatrick, of Products’ efforts to re-enter the UK baby food market.   In May 1989 Products applied for the registration of the mark GERBER in respect of classes 29, 30 and 32.  On 18th August 1989 it applied for the registration of the mark FIRST FOODS in respect of class 5.   The products involved in the test marketing were seven different baby foods.   The labels proclaimed the products as FIRST FOODS, but also included the word GERBER.  Six stores in the Haywards Heath area were involved.  100 dozen jars of baby food were sold for a little under $300 in all, the invoices being dated 8th September 1989.
24.	The Hearing Officer concluded that the test marketing was geographically limited, involved insubstantial sums and was likely to have been directed mainly to testing the First Foods range notwithstanding that the mark Gerber also appeared on it.  He observed that there was no evidence, except the label, to show how the product was presented to the public, nor of any follow up, nor of any concurrent attempts to establish any longer term basis for trade.  He bore in mind the importance in the case of such products of establishing a continuing presence in the market.   He concluded (paragraph 30)
“I do not mean to suggest by this that the test marketing was ‘fictitious or colourable’ use to protect registration.  I do not think that was the case.  I have, however, come to the view that the low level of sales taken together with the one-off nature of the trade and absence of follow-up activity either at the time or in the intervening years must mean that it cannot be held to be bona fide use.” 
25.	Counsel for Products submits that this passage contains a contradiction in terms and is wrong in law.   I agree.   The conclusion that the test marketing was neither ‘fictitious or colourable’, which was clearly justified by the facts, is a conclusion that it was bona fide.   The Hearing Officer did not, and on the evidence could not, find that there had been no use because the mark GERBER was plainly on the label and 1200 jars of baby food had been sold in the Haywards Heath area.    The conclusion of the Hearing Officer can only be justified if “use” for the purpose of s.26(1)(b) must be not only bona fide but real commercial use on a substantial scale.   In my judgment there is no such requirement.   The wording of the subsection does not warrant such an implication, I do not understand the Court of Appeal in Electrolux Ltd v Electrix Ltd (1954) 71 RPC 23 to have decided otherwise and the first instance decisions to which I have referred recognise the opposite.   
26.	Accordingly in my judgment the Hearing Officer was wrong to conclude that the test marketing was not bona fide use within s.26(1)(b).   That is sufficient ground on which to allow this appeal.  But the other use relied on gives rise to points of some importance.  They were fully argued before me and should be decided.   Accordingly I approach the issues relating to the sales within the USAF bases to which I have referred on the assumption that, contrary to my conclusion, the test marketing at Haywards Heath was not use within s.26(1)(b).
27.	Mr Fitzpatrick described how for many years Products had been selling its GERBER brand baby foods to the USAF bases in England.   Shipments were sent through US exporters to the Commissaries in the various bases whence they were available not only to US military personnel but also to their dependents.   From the various documents produced by Mr Fitzpatrick the Hearing Officer concluded that the only sales on which he could safely rely were those for 1988 and 1989 comprising 4918 units to a value of US$1,940 and 4553 to a value of US$2,050 respectively.  He noted that comparable figures for 1990 and 1991 of 6845 to a value of US$3,260 and 5,009 to a value of US$2,446 might be relevant depending on what was meant by “Fiscal 1990” and “Fiscal 1991”.  In respect of this use the Hearing Officer commented that 
“On that basis and bearing in mind the guidance contained in the authorities referred to above it seems to me that even so far as this limited trade with US military bases in the UK is concerned, the proprietors’ position is not overwhelmingly secure but I bear in mind that the narrower the target market the greater impact a modest level of sales is likely to have.”
Thus the Hearing Officer concluded that there was some bona fide use of the mark in the USAF bases.   This is not disputed.
28.	However the Hearing Officer considered that by analogy with the decision of the Court of Appeal in Anheuser-Busch Inc. v Budejovicky Budvar NP [1984] FSR 413 and the decision of the Hearing Officer BUD Trade Mark [1988] RPC 535
“..the registered proprietors’ sales to US military bases in the UK does not avail them in their defence against this rectification action.”
Thus, it is necessary to consider what those cases concerned though I note at this stage that counsel for Foods did not seek to support the decision of the Hearing Officer by reference to them.
29.	Both cases concerned Budweiser beer.   Beer had been sold under the name Budweiser for many years in the US by the plaintiffs and in Europe by the defendants.  Such use was regulated by agreements made between them in 1911 and 1939, neither of which dealt with the use of the name in the UK.   At all material times the defendants sold significant quantities of their beer in the UK.  From 1962 to 1973 the plaintiffs sold significant quantities in US military and diplomatic establishments in the UK to serving US personnel and the British subjects employed there.   From 1974 onwards the plaintiffs sold their beer generally in the UK market in ever increasing quantities.   In 1979 the plaintiffs sued the defendants for passing off and sought an injunction to prevent them continuing to sell their beer in the UK.   The defendants counterclaimed for equivalent relief against the plaintiffs.    Whitford J dismissed both the claim and counterclaim and the Court of Appeal dismissed the plaintiffs' appeal.
30.	Oliver LJ asked (p.469) what goodwill was generated by the sales of beer in the PX stores.   The answer he gave (p.470) was
“It cannot, in my judgment, be right to treat the sale in this separate, artificial and special market, as the foundation for a business goodwill in the market at large into which the plaintiffs had never ventured.”
With regard to certain authorities which might have suggested the contrary conclusion he said (p.470)
“None was concerned with what we have here, namely, sales on a closed and separate market to a particular section of the public only, having the qualification of belonging to or being employed by the United States Services.”
31.	Dillon LJ expressed similar views.  He considered (p.476) that 
“....the special arrangements with regard to sales in the American bases make them, as it seems to me, essentially an extension of the plaintiffs' American market, and not a market with the public in this country.   The public cannot buy in the bases.   As I see it, the position in 1973 was that there were two separate markets.   There was the limited market in the PX stores and canteens in the American bases, which was the plaintiffs' market which the first defendants could not and did not seek to enter, and conversely there was the general market with the general public in the country which the first defendants entered, and the plaintiffs, at that stage, deliberately kept out of.”
32.	The Hearing Officer recognised that such principles did not necessarily apply to the different questions of bona fide use for the purpose of s.26(1)(b).   In that context he considered BUD Trade Mark [1988] RPC 535 which arose out of the same circumstances but in a trade mark context.  The Czech brewers, the defendants in the passing off case, sought to register the mark BUD.  This was opposed by the American brewers, the plaintiffs in the passing off action.   It was common ground, having been so decided in the passing off action, that BUD was an abbreviation for Budweiser.  The American brewer opposed the application under s.11 on the ground that the mark if registered would be likely to deceive or cause confusion.   
33.	The nature of the opponents' case was described by the Hearing Officer (p.538 line 36) as seeking to demonstrate enough use at the material date to justify their entering the s.11 ground of opposition that a substantial number of persons would be likely to be deceived if the mark were registered.   After considering the judgments of Oliver LJ at some length and the evidence adduced on the hearing of the application the Hearing Officer continued (p.543 line 3)
“The majority view of the Court of Appeal was that those sales (sc. in military bases and diplomatic establishments) were effectively made in an enclave of the United States and, in passing off terms, did not constitute the carrying on of a business and establishment of goodwill in the United Kingdom.   By the same token, it seems to me, they did not contribute to the opponents' trade mark user in the United Kingdom.”
In the result he rejected the opposition based on s.11.
34.	On appeal to Walton J counsel for the applicant made it clear that he would not object to a limitation on the registration so as to exclude use of the mark in US PXs or Embassies.  Walton J dismissed the appeal on the ground that if both sides were entitled to use the mark when spelled out in full there could be no justified opposition to an equivalent use of its diminutive but added the limitation to which I have referred.
35.	In my judgment the exclusion of the sales to USAF bases in this case cannot be justified by reference to the Budweiser litigation.   The question here is use or non-use, not confusion or liability to deceive.   Thus, the justification for the decision of the Hearing Officer in this case must be justified, if at all, on other grounds.
36.	It was common ground that all the USAF bases in question were in the UK for all purposes.   It was not suggested that the fact that they were occupied by visiting foreign forces made any material difference.  It was also common ground that the State Immunity Act 1978 could not apply because of s.16(2).   The effect of s.16(2) is to exclude the provisions of s.7 relating to infringement of trade marks as well.
37.	The submission of counsel for Foods, from which counsel for Products did not dissent, was that a given use was only relevant for the purposes of s.26(1)(b) if it was also capable of constituting an infringement.  He submitted that sales in the USAF bases could not constitute infringements because they would be covered by sovereign immunity at common law.    So, he submitted, the corresponding use of the mark could not be relevant for the purpose of s.26(1)(b).   I am by no means satisfied that the conclusion follows from the premise but I need not pursue that point because I am satisfied that the premise is wrong.
38.	There is no doubt that sovereign immunity at common law continues to exist in fields to which the State Immunity Act 1978 does not apply.  Holland v Lampen-Wolfe [2000] 3 AER 833.   It will apply to activities jure imperii but not jure gestionis, in the vernacular activities of a sovereign rather than commercial nature.   Thus it is capable of applying to such activities relating to anything done by or in relation to the armed forces of the USA while present in the UK.   But it would be surprising, to say the least, if the sale of baby food was one of them.
39.	Nevertheless the dividing line between the two classes of activity is not as clear cut as might be supposed.    Thus a claim for damages for personal injuries sustained by a serviceman when treated in a US Military hospital, Littrell v USA No.2 [1995] 1 WLR 82, or a claim for defamation for statements made concerning educational services provided in US bases in the UK, Holland v Lampen-Wolfe [2000] 3 AER 833, were both covered by sovereign immunity.    The reason is clear from the speech of Lord Millett in the latter case (p.846h) where comparing the two cases to which I have referred he said
“It is, of course, true that the action is an action for defamation, not for the negligent provision of professional services.  Littrell’s case is clearly distinguishable on this ground.   But I do not regard the distinction as material.   The respondent was responsible for supervising the provision of educational services to members of the United States armed forces in the United Kingdom and their families.  He published the material alleged to be defamatory in the course of his duties.  If the provision of the services in question was an official or governmental act of the United States, then so was its supervision by the respondent.   I would hold that he was acting as an official of the United States in the course of the performance of its sovereign function of maintaining its armed forces in this country.”
40.	I remain unconvinced that the sale in a USAF base of baby food under a registered mark without the authority of the proprietor in circumstances which would otherwise amount to an infringement is covered by sovereign immunity at common law.  Even if the maintenance of the armed forces of the United States extends to feeding their infant dependents there is no need to do so under a registered trade mark to which the United States is not entitled.   It follows that in my judgment the sales of baby food in the USAF bases on which Products relies are relevant to the question of bona fide use for the purposes of s.26(1)(b).
41.	The Hearing Officer then considered the position on the basis that he was wrong to ignore such sales.   He considered that in that event he should do as Walton J did in BUD Trade Mark [1988] RPC 535 and limit the registration of Products’ marks to a specification of goods which reflected the particular and very specialist market served.   Counsel for Products contended that the Hearing Officer had no jurisdiction to do so.   This point was not foreshadowed in any notice or skeleton argument, as counsel for Foods pointed out.  But he dealt with the point just the same on a basis which appears to me to be clearly correct.
42.	The jurisdiction to impose a limitation such as that which appealed to the Hearing Officer is conferred by s.26(2).   The subsection imposes two conditions precedent in paragraphs (a) and (b).   The first condition precedent is that on an application to delete a mark use in a particular place or market is established.  This condition was satisfied by the Hearing Officer’s alternative conclusion.   The two paragraphs are linked by the word “and”.  It is common ground that both conditions must be satisfied.
43.	The second condition is imposed in paragraph (b) in these terms
“(b) a person has been permitted under subsection (2) of section 12 of this Act to register an identical or nearly resembling trade mark in respect of those goods under a registration extending to use in relation to goods to be sold, or otherwise traded in, in that place (otherwise than for export from the United Kingdom), or in relation to goods to be exported to that market, or the tribunal is of opinion that he might properly be permitted so to register such a mark.”
44.	The initial submission for Products was that as there had been no such registration under s.12(2) the second condition was not satisfied.   Counsel for Food pointed out that the concluding two lines provide an alternative to registration under s.12(2).   Counsel for Products rejoinder was that there was no evidence of the marks under which the extensive sales by Foods in the UK had been made.   I cannot accept this last submission.  The whole dispute arises from the fact that Foods has carried on an extensive business in selling food and drink under the name or mark of GERBER.   That is the mark they now seek to register.  It is because of the citation in opposition of the marks of Products that the application to delete the latter was made.   In my view it is clear that the jurisdiction which the Hearing Officer professed to exercise did exist.   In view of my conclusion in relation to the test marketing I do not think that he was right to exercise it, but that is another matter.
45.	The fourth issue to which I referred in paragraph 4 above arises from the terms of s.26(1) which provide that in the given circumstances a registered mark “may be taken off the register”.    Thus there is a discretion to permit a mark to remain on the register even if non-use has been established and even if the non-use is shown not to be due to special circumstances in the trade within s.26(3).  The Hearing Officer did not consider that the further circumstances on which Products relied justified the exercise of the discretion to permit the marks to remain on the register.   In the light of my conclusions on the first three issues the question whether the Hearing Officer was right on the fourth issue does not arise.   I see no reason to deal with it.   
46.	For all these reasons I consider that the Hearing Officer was wrong in respect of the first three issues.   Accordingly I allow this appeal.  Given my conclusion on the first issue the appropriate order, subject to any further argument on that point, is to dismiss Foods’ application for the rectification of the register.