ABW Australia Pty Ltd v Sears Roebuck and Co

[1998] ATMO 42

TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS,

WITH REASONS

Re:   Objection by ABW AUSTRALIA PTY LTD to application by SEARS, ROEBUCK AND CO for an extension of time to serve evidence in support of the opposition to  registration of trade mark application 702459.

Background

Application number 702459 was filed on 14 February 1996 in the name of ABW AUSTRALIA PTY LTD, (the applicant).  The trade mark was the word CRAFTSMAN and the applicant sought registration in respect of a wide range of hand tools in class 8.  The application  was advertised as accepted on 10 April 1997.  Sears, Roebuck  and Co, (the opponent),  filed a Notice of Opposition on 1 July 1997.  Evidence in support of the opposition was due on 1 October 1997.

On 29 September 1997 the opponent sought an extension of time to  1 January 1998 to serve evidence in support. This was granted.  The opponent sought a further extension of time to 1 April 1998 to serve evidence in support on the grounds that the opponent was still in the process of collecting information.  Again the applicant did not object and the extension was granted.  On 1 April 1998 the opponent made a third application for an extension of time to 1 July 1998.  In the Statutory Declaration, the opponent stated they were still collecting evidence and they had been instructed to commence negotiations with the applicant to resolve the opposition on a commercial basis.  These negotiations had commenced.  Again the applicant did not object and the extension was granted. 

The attorneys for the applicant notified the opponent and the Office on 19 June 1998, that they had been instructed to object to any further extensions of time.  The opponent lodged another application for an extension of time on 1 July 1998, the applicant objected to the extension and requested a Hearing on the matter.  The opponent also asked to appear at the Hearing.  The attorney for the opponent  lodged a supplementary declaration by Geoffrey Philip Levy and annexures with the Office and the applicant on 13 August 1998.  The matter came before me on the 14 August 1998.

The applicant was represented by Mr Helmut Eichberger of Cullen & Co, Brisbane.  Dr Geoffrey Levy of Griffith Hack, Melbourne, represented the opponent.  The hearing was conducted by telephone.

Submissions

Mr Eichberger submitted that  there are five factors to be taken into account in determining whether an extension of time should be allowed:-

The length of time already allowed

The reasons put forward to justify the granting or otherwise of the extension

The seriousness of the opposition

The inconvenience suffered by both parties

And the public interest.

He went through the chronology of the opposition, detailing the various extensions and the fact that until the most recent application the applicant had decided not to object to the various applications for extensions of time.  He also mentioned that the opponent has made an offer of settlement, promptly rejected, on 19 December 1997 and there had been further negotiations from April to June 1998. 

He regarded the reasons given for the extension as inadequate as the opponent should have up-to-date records of sales in Australia for some time before the filing date of the opposition.  The opponent seemed to rely heavily on the efforts of the distributor  for Sears, Roebuck who was appointed in April 1998.  Any records he had since then were irrelevant as the opponent was seeking to establish use of the trade mark long before that date.  The only use he could see had been on tools brought into Australia by private people or the advertising associated with the Indy Car race in Queensland.  This did not amount to  serious opposition.

The applicant was severely disadvantaged in this process, as they had planned not to produce their CRAFTSMAN products until the opposition was decided.  The applicant had decided, however, that the delay in the proceedings could not be endured and re-commenced their plans for selling goods under that label, but they were still uncertain of their rights.

The public was surely disadvantaged in that the public did not know who owned the trade mark and had a right to expect these matters to be settled expeditiously.

Dr Levy commenced his submissions by agreeing with Mr Eichberger as to his account of the relevant factors.  Dr Levy also agreed with the time frames mentioned in the  submissions of Mr Eichberger .

Dr Levy relied on various decisions to support his case for the extension of time.  He referred me  to many cases including Brennan & Anor v Australian Olympic Committee Incorporated (1994) AIPC 91-081 at 38,468, establishing the fact that the statutory period of three months for serving evidence  was inadequate, and in many cases, extensions of time were granted for the purpose of gathering evidence.  He referred particularly to the words of Justice Beaumont in the Lyons and Another (trading as Mitty's Authorized Newsagency v Registrar of Trade Marks and Another 1983 1 IPR 416 at 420 where Justice Beaumont referred to the notorious fact that gathering of evidence involves third parties and this takes considerable time. Dr Levy stated that this extension, if granted, would bring the total time allowed to 15 months which was not excessive.

Dr Levy submitted that the opponent had established sufficient grounds for the delay in serving evidence in support.  Firstly the evidence was hard to obtain, but the opponent had been trying hard to find evidence in Australia.  At the same time they had been in the process of negotiations with the applicant, which had taken time and had meant that they devoted time to negotiations which might have otherwise been used for gathering evidence.  Dr Levy drew my attention to the fact that the Registrar has expressed the view that, as a general rule, if negotiations are taking place then parties are justified in exercising some restraint in preparation of evidence-Stafford Miller Ltd v Cosco Holdings Pty Ltd 1989 15 IPR 199.

.

Dr Levy stated that the opposition was a serious one.  The issues raised in the Notice of Opposition were far from frivolous.  While the main grounds would be the claim of ownership of the CRAFTSMAN trade mark, the opponent was not abandoning the other grounds.

Dr Levy pointed out that the issues of inconvenience weighed most heavily on the opponent.  The applicant had started making goods under the CRAFTSMAN trade mark, even though the mark was not registered, but if the extension was not granted, it was likely that the opponent would lose their chance to oppose.  Until the letter dated 19 June 1998, the applicant had been prepared to wait for the process to be completed.  Until that date their commercial decision had been to wait for the opposition process to run its course- decision of Hearing Officer Williams in the Universal City Studios and Frankenstien 1993 28 IPR 137 at 139-140.

As far as the public interest was concerned, the applicant must have known of the earlier registration of the trade mark CRAFTSMAN in the name of Sears,  Roebuck for goods in class 9.  The public interest would demand that the Registrar should be allowed to consider any available evidence that would assist in providing a clearer picture of the ownership of the trade mark and the likelihood of any deception and confusion.

Having heard the matter, I advised Mr Eichberger and Dr Levy that I would reserve my decision.  In a letter of 20 August 1998, I informed both parties that I would grant the extension by briefly setting out the reasons for doing so.  I indicated that I would issue detailed reasons for my decision in due course.

Discussion

The submissions made by both sides agreed on a number of points, the factors which should influence my decision and the chronology of the case.   Both parties agreed that the applicant had been prepared to wait until the opposition was decided on its merits.  The applicant had put its plans for production of tools on hold and was  prepared, if not happy, to wait until it had secured rights to the trade mark CRAFTSMAN.

Dr Levy and Mr Eichberger agreed that the parties had been in consultation until the early part of June 1998 when the applicant had apparently  changed its mind about opposing any further extensions of time.  The opponent had been granted the extension of time dated 1 April 1998, partly on the grounds that they were negotiating with the applicant.  Those negotiations had continued and the applicant's letter of 19 June 1998, effectively meant that the opponent had to finalise its evidence and serve the evidence within a period of two weeks. 

To my mind, that did not seem reasonable.  Both parties admitted they had been negotiating a commercial agreement, and the precedent established by case law means that the opponent was entitled to exercise some restraint in the gathering of evidence during that period -Brennan  v Australian Olympic Committee, supra p. 38,471.

Mr Eichberger referred to the draft evidence provided as part of Dr Levy's supplementary declaration which was provided on 13 August, 1998 and was critical of the fact that the material was made available on the day before the Hearing.  However, the supplementary declaration, with annexures, by Dr Levy lodged on 13 August 1998 supported the fact that the opponent had been actively involved in gathering their evidence.  The extra material did not affect my decision that the opponent was entitled to the extra time.  Where negotiations have been taking place, an opponent has long been allowed extra time for serving evidence, as stated in Brennan v Australian Olympic Committee, supra, at p.38,471:

The Registrar's view is that as a general rule, if negotiations are taking place, parties are justified in exercising some restraint in the collection and preparation of evidence.  Should those negotiations come to nought, and in the absence of any counterbalancing circumstances, an extension is generally warranted to make good time lost during negotiations.

Mr Eichberger drew my attention to the precedent established in the matter of Pearle Inc (1998) AIPC 91-404 which apparently contradicts this principles. The Hearing Officer in making his decision on Pearle Inc. said that the purpose of extensions of time was the preparation and service of evidence. The decision in that case related to an application for an extension of time where the opponent relied solely on the ground that negotiations had been taking place. This was denied by the other party. This case does not correspond with the Pearle decision as both sides agreed that negotiations had been taking place.

Decision

I have found that extension of time is justified in this case.  The two parties were in active negotiation until a fortnight before the previous extension of time was due to expire.  Case law supports the granting of  extra time to serve evidence to an opponent if negotiations fail, as noted preciously.

The opponent has foreshadowed a serious opposition and the public interest must lie in allowing the extension of time so that the Registrar has all the information on which to make a decision- Bundy American Corp v Rent-a-Wreck (vic) Pty Ltd (1985) 5 IPR 307.

Having considered the relevant factors, I allow the opponent the requested extension of time to 1 October 1998 within which to serve the evidence in support.  Should the opponent seek further time for the same purpose, then they will have to provide very persuasive reasons to justify such additional time.

I award costs in this matter to the opponent.

Coral Henry
Acting Senior Examiner

16 September 1998