Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd (No 3)
[2015] FCA 1436
•17 December 2015
FEDERAL COURT OF AUSTRALIA
Anchorage Capital Partners Pty Limited v ACPA Pty Limited (No 3) [2015] FCA 1436
Citation: Anchorage Capital Partners Pty Limited v ACPA Pty Limited (No 3) [2015] FCA 1436 Parties: ANCHORAGE CAPITAL PARTNERS PTY LIMITED v ACPA PTY LIMITED and ANCHORAGE CAPITAL GROUP LLC; ACPA PTY LIMITED and ANCHORAGE CAPITAL GROUP LLC v ANCHORAGE CAPITAL PARTNERS PTY LIMITED File number: NSD 149 of 2014 Judge: PERRAM J Date of judgment: 17 December 2015 Catchwords: TRADE MARKS – whether power to remove trade marks from register under s 88 of the Trade Marks Act 1995 (Cth) discretionary – who bears the onus of proof under s 88 – manner of the exercise of the power to remove under s 88(1) – consideration of factors relevant to the exercise of the power to remove under s 88(1)
PRACTICE AND PROCEDURE – suppression orders – whether orders necessary under s 37AG of the Federal Court of Australia Act 1976 (Cth)
Legislation: Federal Court of Australia Act 1976 (Cth) ss 37AF, 37AG
Trade Marks Act 1955 (Cth) ss 22, 23
Trade Marks Act 1995 (Cth) ss 88, 89(1)
Federal Court Rules 2011 (Cth) r 2.32Cases cited: Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 cited
Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd (2004) 209 ALR 1 cited
Deckers Outdoor Corp v Farley (No 2) (2009) 176 FCR 33 cited
Health World Ltd v Shin-Sun Australia Pty Ltd (2010) 240 CLR 590 cited
Hearne v Street (2008) 235 CLR 125 cited
Jonathan Ross Sceats v Jonathan Sceats Design Pty Ltd (1990) 17 IPR 28 cited
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 cited
Re Carl Zeiss Pty Ltd’s Application (1969) 122 CLR 1 cited
Ritz Hotel Ltd v Charles of the Ritz Ltd (1988) 15 NSWLR 158 citedDavison M, Berger T, Freeman A, Shanahan’s Australian Law of Trade Marks and Passing Off (4th ed, Lawbook Co, 2008)
Date of hearing: Heard on the papers Date of last submissions: 23 November 2015 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 50 Counsel for the Applicant/Cross-Respondent: Mr A Leopold SC, Ms ST Chrysanthou and Ms SL Ross Solicitor for the Applicant/Cross-Respondent: Watson Mangioni Counsel for the Respondents/Cross-Claimants: Mr AJL Bannon SC, Mr C Dimitriadis SC and Mr R Clark Solicitor for the Respondents/ Cross-Claimants: Herbert Smith Freehills
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 149 of 2014
BETWEEN: ANCHORAGE CAPITAL PARTNERS PTY LIMITED
ApplicantAND: ACPA PTY LIMITED
First RespondentANCHORAGE CAPITAL GROUP LLC
Second RespondentAND BETWEEN: ACPA PTY LIMITED
First Cross-ClaimantANCHORAGE CAPITAL GROUP LLC
Second Cross-ClaimantAND: ANCHORAGE CAPITAL PARTNERS PTY LIMITED
Cross-Respondent
JUDGE:
PERRAM J
DATE OF ORDER:
17 DECEMBER 2015
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The register of trade marks be rectified so that the registrations of trade marks 1425924 and 1425929 be cancelled.
2.Direct that the exhibits be returned to the parties 29 days after the final disposition of the proceedings, including any appeals and applications for leave or special leave to appeal.
3.Direct that no access be granted to any third party under r 2.32(4) of the Federal Court Rules 2011 (Cth) to any of the exhibits without the leave of a judge of the Court.
4.Direct that the respondents’ closing submissions dated 2 February 2015, including annexure A thereto, be placed in a sealed envelope on the front of which is written ‘Not to be accessed without the leave of a judge of the Court: see Anchorage Capital Partners Pty Limited v ACPA Pty Limited (No 3) [2015] FCA 1436 at [48]’.
5.No order as to costs with respect to the issue of non-publication.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 149 of 2014
BETWEEN: ANCHORAGE CAPITAL PARTNERS PTY LIMITED
ApplicantAND: ACPA PTY LIMITED
First RespondentANCHORAGE CAPITAL GROUP LLC
Second RespondentAND BETWEEN: ACPA PTY LIMITED
First Cross-ClaimantANCHORAGE CAPITAL GROUP LLC
Second Cross-ClaimantAND: ANCHORAGE CAPITAL PARTNERS PTY LIMITED
Cross-Respondent
JUDGE:
PERRAM J
DATE:
17 DECEMBER 2015
PLACE:
SYDNEY
REASONS FOR JUDGMENT
On 21 August 2015 I concluded that the applicant’s trade mark infringement proceedings should be dismissed: Anchorage Capital Partners Pty Limited v ACPA Pty Ltd [2015] FCA 882 (‘the primary judgment’). At trial the respondents had pursued a cross-claim seeking removal of the applicant’s trade marks from the register on the basis, amongst others, that the applicant was not their owner. This latter contention I upheld: see [32]-[43] of the primary judgment. I concluded that the Court’s power to remove the marks under s 88(1) of the Trade Marks Act 1995 (Cth) (‘the Act’) was enlivened. The parties sought, however, to make further submissions on the question of how the discretion should be exercised in light of the facts found in the balance of the primary judgment. These reasons deal, first, with that issue. They then deal with the respondents’ application for non-publication orders with respect to some of the evidence led at trial. These reasons assume a familiarity with the primary judgment.
A. Should the registration of the trade marks be cancelled?
The power to cancel the registration of a trade mark is conferred by s 88 of the Act which provides:
‘88 Amendment or cancellation—other specified grounds
(1)Subject to subsection (2) and section 89, a prescribed court may, on the application of an aggrieved person or the Registrar, order that the Register be rectified by:
(a) cancelling the registration of a trade mark; or
(b) removing or amending an entry wrongly made or remaining on the Register; or
(c) entering any condition or limitation affecting the registration of a trade mark that ought to be entered.
(2)An application may be made on any of the following grounds, and on no other grounds:
(a)any of the grounds on which the registration of the trade mark could have been opposed under this Act;
(b)an amendment of the application for the registration of the trade mark was obtained as a result of fraud, false suggestion or misrepresentation;
(c)because of the circumstances applying at the time when the application for rectification is filed, the use of the trade mark is likely to deceive or cause confusion;
(e)if the application is in respect of an entry in the Register—the entry was made, or has been previously amended, as a result of fraud, false suggestion or misrepresentation.’
(Notes omitted)
Three initial issues arise between the parties about the meaning of s 88(1). The first of these is whether ‘may’ means ‘must’, so that there is, in truth, no discretion at all. I resolved this adversely to the respondents in the primary judgment at [48]. The second concerns who bears the onus of proof under the provision. The third is whether it is true that once the power under s 88(1) is enlivened only rarely or in exceptional circumstances is it to be exercised by not cancelling the registration of a mark.
So far as the question of onus is concerned it is established in relation to the predecessor provisions to s 88(1), viz ss 22(1) and 23(1) of the Trade Marks Act 1955 (Cth), that once the preconditions to the Court’s power have been established the mark should be expunged ‘unless sufficient reason appears for leaving it there’: Re Carl Zeiss Pty Ltd’s Application (1969) 122 CLR 1 at 11 per Kitto J (s 23); Ritz Hotel Ltd v Charles of the Ritz Ltd (1988) 15 NSWLR 158 at 221 per McLelland J (ss 22 and 23).
Of course, s 88(1) is not s 22 or s 23. Thus, so the applicant submits, these cases do not assist because this is not what s 88(1) says. Indeed, the applicant goes further and submits that, in fact, the onus is only reversed in the circumstances set out in s 89(1) of the Act. It provides:
‘89 Rectification may not be granted in certain cases if registered owner not at fault etc.
(1)The court may decide not to grant an application for rectification made:
(a) under section 87; or
(b) on the ground that the trade mark is liable to deceive or confuse (a ground on which its registration could have been opposed, see paragraph 88(2)(a)); or
(c) on the ground referred to in paragraph 88(2)(c);
if the registered owner of the trade mark satisfies the court that the ground relied on by the applicant has not arisen through any act or fault of the registered owner.
…’
Sections 22 and 23 of the Trade Marks Act 1955 (Cth), prior to that Act’s repeal, provided as follows:
‘Rectification of Register
22. (1)Subject to this Act, a prescribed court may, on the application of a person aggrieved or of the Registrar, order the rectification of the Register:
(a)by the making of an entry wrongly omitted to be made in the Register;
(b)by the expunging or amendment of an entry wrongly made in or remaining in the Register;
(c)by the insertion in the Register of a condition or limitation affecting the registration of a trade mark which ought to be inserted; or
(d)by the correction of an error or defect in the Register.
(2)On application to a prescribed court by a person aggrieved or by the Registrar, the prescribed court may make such order as it thinks fit for expunging or varying the registration of a trade mark, on the ground of a contravention of, or failure to observe, a condition or limitation entered in the Register in relation to the trade mark.
(3)The power to order the rectification of the Register conferred by this section includes power to order the removal of a registration in Part A of the Register to Part B of the Register.
(4)The Registrar shall not make application to a prescribed court under this section unless he considers the application desirable in the public interest.
(5)Notice of an application to a prescribed court under this section (other than an application by the Registrar) shall be given to the Registrar, who may appear and be heard and shall appear if so directed by the prescribed court.
(6)An office copy of an order under this section shall be served on the Registrar, who shall, upon receipt of the order, take such steps as are necessary to give effect to the order.
Provisions as to non-use of trade mark
23. (1) Subject to this section and to section 93, a prescribed court or the Registrar may, on application by a person aggrieved, order a trade mark to be removed from the Register in respect of any of the goods or services in respect of which it is registered, on the ground:
(a)that the trade mark was registered without an intention in good faith on the part of the applicant for registration that it should be used in relation to those goods or services by him or, if it was registered under subsection (1) of section 45, by the body corporate or registered user concerned, and that there has, in fact, been no use in good faith of the trade mark in relation to those goods or services by the registered proprietor or a registered user of the trade mark for the time being earlier than 1 month before the application; or
(b)that, up to 1 month before the date of the application, a continuous period of not less than 3 years had elapsed during which the trade mark was a registered trade mark and during which there was no use in good faith of the trade mark in relation to those goods or services by the registered proprietor or a registered user of the trade mark for the time being.
(2)Except where an applicant has been permitted under section 34 to register a substantially identical or deceptively similar trade mark in respect of the goods or services to which the application relates, or the prescribed court or the Registrar is of opinion that the applicant can properly be permitted to register such a trade mark, a prescribed court or the Registrar may refuse an application made under the last preceding subsection in relation to any goods or services if there has been, before the relevant date or during the relevant period, as the case may be, use in good faith of the trade mark by the registered proprietor or a registered user of the trade mark for the time being in relation to goods or services in respect of which the trade mark is registered, being:
(a)where the application relates to goods – goods of the same description as those goods or services that are closely related to those goods; or
(b)where the application relates to services – services of the same description as those services or goods that are closely related to those services.
(3) Where, in relation to goods in respect of which a trade mark is registered:
(a)the matters referred to in paragraph (b) of subsection (1) are shown as far as regards failure to use the trade mark in relation to goods to be sold, or otherwise traded in, in a particular place in Australia (otherwise than for export from Australia), or in relation to goods to be exported to a particular market outside Australia; and
(b)a person has been permitted under section 34 to register a substantially identical or deceptively similar 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 Australia), or in relation to goods to be exported to that market, or the prescribed court or the Registrar is of opinion that that person might properly be permitted to register such a trade mark;
a prescribed court or the Registrar may, on application by that person, direct that the registration of the first-mentioned trade mark shall be subject to such conditions or limitations as the prescribed court or the Registrar thinks proper for securing that that registration shall cease to extend to use of the trade mark in relation to goods to be sold, or otherwise traded in, in that place (otherwise than for export from Australia), or in relation to goods to be exported to that market.
(3A) Where, in relation to services in respect of which a trade mark is registered:
(a)the matters referred to in paragraph (b) of subsection (1) are shown as far as regards failure to use the trade mark in relation to services provided in a particular place in Australia; and
(b)a person has been permitted under section 34 to register a substantially identical or deceptively similar trade mark in respect of those services under a registration extending to use in relation to services provided in that place, or the prescribed court or the Registrar is of the opinion that that person may properly be permitted to register such a trade mark;
a prescribed court or the Registrar may, on application by that person, direct that the registration of the first-mentioned trade mark shall be subject to such conditions or limitations as the prescribed court or the Registrar thinks proper for securing that that registration shall cease to extend to use of the trade mark in relation to services provided in that place.
(4)An applicant is not entitled to rely, for the purposes of paragraph (b) of subsection (1), or for the purposes of subsection (3) or (3A), on failure to use a trade mark if the failure is shown to have been due to special circumstances in the trade and not to an intention not to use or to abandon the trade mark in relation to the goods or services to which the application relates.
(5)Where proceedings concerning a trade mark are pending in a court, an application under this section shall not be made except to the prescribed court.
(6)If the Registrar considers that an application made to him under this section ought to be decided by a prescribed court, he may refer the application to a prescribed court and the prescribed court may hear and determine the application as though it had been made to the prescribed court in the first instance.
(7)An appeal lies to the Federal Court from an order or direction of the Registrar under this section.
(8)An application to a prescribed court under this section and an application to the Registrar shall be made as prescribed by the regulations.
(9)An office copy of an order of a prescribed court under this section shall be served on the Registrar who shall take such steps as are necessary to give effect to the order.’
I do not think that s 89(1) of the Act assists the applicant. It is true that if the registered owner of a mark establishes the matter in s 89(1) then the Court may decide not to expunge the mark. But I do not read it as setting out the only circumstances in which the discretion under s 88(1) might be exercised against removal. And in those circumstances where s 89(1) is silent – and this case is one of them – it is difficult to think that its textual contents can bear upon the issue of onus under s 88(1).
I accept, of course, that the wording of s 88(1), on the one hand, and ss 22 and 23, on the other, is different. But the question is whether it is materially different. Accepting, as I must, that s 88(1), in fact, confers a discretion, it would be a strange state of affairs if the prima facie position was that a public register should be permitted to remain in an inaccurate state. It is much more likely that Parliament intended, at least as a starting position, that the register should be kept accurate (‘pure’) with exceptions from this to be permitted only for good cause shown. In those circumstances, I conclude that it is the applicant which bears the onus of demonstrating that the discretion in s 88(1) should not be exercised to cancel the registration of the marks. Since it is established that the applicant is not the owner of the marks it is for the applicant to establish that the marks should not be removed.
As for the respondents’ submission that the discretion to leave the registration of the marks in place was to be exercised only in rare or exceptional circumstances, the applicant submitted that was not a requirement that could be found in the text of s 88(1) itself and that the only requirement was that the discretion should be exercised judicially in accordance with the purposes of the Act, citing Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 374-375 [41] and 381 [69].
There is some authority in relation to the former Act for the proposition that the discretion not to expunge a mark from the register should only be exercised in exceptional circumstances: Jonathan Ross Sceats v Jonathan Sceats Design Pty Ltd (1990) 17 IPR 28 at 29-30 per Foster J.
Where the power to cancel the registration of a trade mark under s 88(1) has been enlivened it will be because it has been shown that the mark should not have been placed on the register in the first place. The question which arises is, therefore, when should a trade mark which should not have been registered nevertheless remain registered? Although it seems to me that such circumstances might be comparatively scarce, I would hesitate to say that they must inevitably be exceptional or always rare. For example, the learned authors of Shanahan’s Australian Law of Trade Marks and Passing Off (4th ed, Lawbook Co, 2008) at pp 489-490 list a number of examples where it might be appropriate to permit a registration to stand:
‘…However, if the registered owner has used a trademark without deception and will be able to continue to use it irrespective of the fate of the registration, it may well be in the public interest that such use continue to have the protection of registration, if only to prevent others from using it even more deceptively. The court might also decline to rectify in the following situations: where the defect in question has been cured; where the breach was of a technical or minor nature, such as some irregularity or omission in the recordal of an assignment; where the applicant for rectification’s own use is deceptive; where, on appeal from a decision to rectify, the plaintiff has withdrawn the objection; and where it appears likely that the owner would be able to obtain a fresh registration on the basis of honest concurrent use since the date of the first registration. The exercise of the discretion might also be affected by the antiquity of the registration.’
(footnotes omitted)
The timing issue may be of particular significance. A mark may well have been deceptive when registered so that it might be removed under s 88(1) but it may be that the circumstances which rendered it deceptive have dissipated. In such cases, removal may serve little purpose. I would hesitate to say, therefore, that the circumstances warranting a decision to leave the registration of a mark in place are inevitably to be described as exceptional or rare.
More is this so when attention is focussed, as it must be, on what the controlling discretionary considerations for the exercise of the power under s 88(1) include. These are, at least, the public interest and the respective contributions of the parties to the relevant state of affairs in which the parties are enmeshed. So much was established in relation to the former s 22 and the same approach has been taken to s 88(1). As to s 22 see Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 at 80 [87] – ‘it may be relevant to consider not only the public interest but also the respective contributions to the state of affairs made by the parties involved’ – although note that this statement is not on its face expressed to be exhaustive. As to the application of that principle to the terms of s 88(1) see Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd (2004) 209 ALR 1 at 29 [129] where the Court reasoned that Campomar’s conclusion that s 22 involved a discretion applied equally to s 88(1). Because the statement in Campomar is not itself an exhaustive statement this means that the matters it mentions are relevant matters but not necessarily the only matters. It follows that the discretion is at large, although it at least includes the Campomar matters.
In its survey of the operation of the Act in Health World Ltd v Shin-Sun Australia Pty Ltd (2010) 240 CLR 590 the High Court observed (at 597 [22]):
‘Secondly, the legislative scheme reveals a concern with the condition of the Register of Trade Marks. It is a concern that it have “integrity” and that it be “pure”. It is a “public mischief” if the Register is not pure, for there is “public interest in [its] purity”. The concern and the public interest, viewed from the angle of consumers, is to ensure that the Register is maintained as an accurate record of marks which perform their statutory function – to indicate the trade origins of the goods to which it is intended that they be applied.’
(Footnotes omitted)
On its face, the fact that the register currently records that the applicant is the owner of the marks when this is not correct would appear to detract from the accuracy of the register and hence, presumably, its ‘purity’ and ‘integrity’. The applicant’s answer to this was that the existence of the discretion under s 88(1) not to cancel a mark’s registration meant that the Act did not in every case require an inaccurate entry to be removed.
No doubt this is correct, but it is no answer to the general observation that, absent good reason to the contrary, a public register should be accurate. It is therefore necessary to identify some reason why it would be a good idea for the register to remain inaccurate.
The Exercise of the Discretion
The applicant put forward ten matters as being relevant to the exercise of the discretion.
1. No intention to use the marks
The applicant argues that the respondents do not have any intention of using the marks and hence that they would be unable to obtain registration of the marks in opposition proceedings under s 59.
I accept that this argument is theoretically conceivable. However, I do not think that it is open to me to conclude, as a matter of fact, that the respondents do not intend to use the marks in the future. In the primary judgment, it is true, I concluded that they had used the marks only twice in early 2007 prior to the applicant commencing business. Further, the evidence showed that they had not used them since. However, the case was not conducted on the basis that there was any contest as to whether the respondents had used the marks after about mid-2011. The respondents alleged in their cross-claim that they had used the marks from 2004 and the applicant admitted that this was true after about mid-2011. I concluded that the second respondent had not sought to raise funds using the marks after 2007 and hence that its use of the marks after 2007 had not been trade mark use. However, there was no debate before me as to what their future intentions were with respect to the marks. And, for the reasons just given, the contest between the parties had been conducted on the basis that the second respondent was using the marks after 2011 (even though I concluded this was not correct because the use which occurred was not trade mark use).
Indeed, the whole thrust of the applicant’s case was that the respondents were using the marks and should be restrained from doing so. I do not consider that the issue of whether the respondents had a future intention of using the marks was adequately flagged at trial, either as an issue between the parties or as one which I was called upon to decide.
No doubt, the finding I made that the marks were not used by the respondents after 2007 appears, on its face, at least to give some support to the idea that the respondents might not use them in the future. However, the evidentiary context for that argument is incomplete because the respondents have never been called upon squarely to deal with this issue.
It may be doubted, therefore, whether it would be procedurally fair now to consider the applicant’s arguments based upon an absence of any intention to use the marks. I need not decide that point, however. Even if the argument can be entertained, I do not think that the applicant has proved on the evidence which is before the Court that the respondents do not intend to use the marks in the future.
The evidence about this is as follows:
(a)a letter from the respondents’ solicitors to the applicant’s solicitors before the commencement of the litigation saying, inter alia, that they ‘do not use the name Anchorage or Anchorage Capital in Australia, save as for clarification purposes’;
(b)the admission by the applicant that the respondents were using the marks after 2011;
(c)my finding that the respondents’ use was not trade mark use;
(d)a trade mark application lodged by the respondents for the marks dated 23 May 2014;
(e)a deed poll executed by the second respondent which, pursuant to an ASIC class order, permits the second respondent to provide financial services without holding a licence, including, in particular, to conduct marketing activities aimed at wholesale customers, i.e., fund raising.
Each of (a)-(c) concerns the present. One might infer, if that were the only material, that future use was unlikely. But such an inference would be inconsistent with (d) and (e) which would, on that hypothesis, be pointless and empty. The class order and deed poll show that the second respondent has gone to some lengths to be in a legal position to conduct the business of raising wholesale funds in Australia. The trade mark application suggests that it wishes to use those names for that business. In those circumstances, I am not prepared to infer that the second respondent does not intend to use the marks; rather, having regard to the applicant’s onus of proof, it has failed to show that there is no such intention.
2. Delay
I do not accept that there has been delay of a kind which would disentitle the respondent from having the registration of the marks cancelled. It will be apparent from the primary judgment that the respondents sought to avoid having the current debate at all. It is the applicant which both provoked the circumstances and the instigation of this litigation. The cross-claim for cancellation was simply a defensive tactic. To have required the second respondent to have commenced unnecessary cancellation proceedings over a lobby sign and some football tickets would have been quite disproportionate.
3. Extent and nature of the respondents’ use
The applicant submitted that the prior use which the respondents had demonstrated in 2007 had been found to be ‘very slight’ and ‘isolated’. This is so. It was then put that the consequence of this was that there was no prejudice to the respondents in allowing the applicant’s registration to remain in place. That might be so if it was shown that the respondents had no intention of using the marks in the future. But I have already concluded that the applicant has not shown this. It follows that I do not accept that leaving the registration in place would not prejudice the respondents or the public interest.
4. The timing of the use
It was submitted that the slight prior use which had occurred had happened only a few months before the applicant’s first use in 2007. Why this was relevant was not expanded upon. It does not appear to me that it is relevant. The applicant was not the owner of the marks because they had been used beforehand. It is not to the point that it was nearly the owner: nearly the owner is not the owner.
5. No use since 2007
It was next submitted that the respondents had not used the marks since 2007. Again, this is correct. If I were persuaded that this meant that the respondents or the public were not prejudiced by the inaccurate state of the register one might consider this argument. But I am not persuaded of this. As explained above, the applicant has not proved that the respondents do not intend to use the marks in the future. If that be so, this reduces any relevance of their inactivity between 2007 and the present.
6. Different businesses
I concluded in the primary judgment that the businesses conducted by the applicant and the second respondent were different. The applicant raises funds from institutional investors for deployment in the turnaround business, whilst the second respondent raises funds from institutional investors (up until now from overseas with two limited local exceptions in 2007) for investment in distressed debt or equity positions. I do not accept that this means that the applicant’s registration should now be permitted to stand. As I have concluded above, it has not been shown that the respondents do not intend to use the marks to raise funds in Australia in the future. That being so, the fact that the businesses are different is not to the point.
7. Innocent adoption of the name
In the primary judgment I concluded, perhaps with some hesitation, that the applicant was unaware of the second respondent when it decided to use the ANCHORAGE names. I do not see that this matters. It was not the owner of the marks and it has not been shown that the owner does not wish to use them. Innocent though the initial decision may have been, this does not provide a reason for leaving the register in an inaccurate state, particularly where it is not shown that that inaccurate state is without prejudicial effect.
8. The applicant’s and respondents’ reputations
I accepted in the primary judgment that the applicant had a reputation in the private equity sphere in its name. The applicant submitted that I had found that the second respondent had no reputation in the names. This was not quite the finding. What I actually found was that it did not have a reputation in the names in respect of its fund raising activities.
I am not persuaded that the fact that a person who is not the owner of a mark is subsequently able to acquire good will around the name constitutes a reason not to correct the register. To reason in that way would be to reward the conduct which led to the situation in the first place.
9. No likelihood of confusion
I concluded in the primary judgment that there was no risk of the consumers in the relevant markets being deceived. No doubt, if there was a risk of confusion this might provide an independent basis for cancelling the registration of the marks. But its absence is not a reason to permit a person to remain on the register who is not the owner of the marks.
10. Failure to oppose registration
The applicant lodged its application to register the marks on 26 May 2011 and this was not opposed at that time by the respondents. The second respondent lodged an application to register the ‘ACPA’ only a month later. I do not think that this is material.
Respondents’ Discretionary Contentions
For completeness, I do not accept the respondents’ submission that the manner in which the applicant approached the litigation provides an additional reason for cancelling the marks (although, I accept the relevance of conduct, in a general sense, to the issue of discretion).
At [53] I said this:
‘In reaching that conclusion I have taken account of what I regard as the unsatisfactory nature of Mr Briggs’ and Mr Cave’s evidence as to when the meeting between Mr Briggs and Mr Howes occurred. I accept that the applicant and its witnesses made a concerted attempt to put before the Court a case that the applicant had applied for registration of the ANCHORAGE names in reliance upon what Mr Howes had allegedly told Mr Briggs. I am satisfied that the applicant, and here I mean at least Mr Cave and Mr Briggs, was perfectly aware that the decision to register the ANCHORAGE marks was made after the receipt of detailed advice from Minter Ellison, which advice referred to the possibility that the second respondent might seek to expunge the marks for prior use. That advice showed that the applicant knew all about the existence of the second respondent, what it was doing and the implications for its trademark application and that it was upon that advice that the applicant relied in pursuing the registration application. The evidence given by the applicant’s witnesses thereafter that they had acted because of what Mr Howes had told them cannot have been believed by them to have been true at that the time that they gave it. This reflects poorly on their credit but it does not cause me to alter my view of their reasons for choosing the ANCHORAGE name in 2007.’
This, then, is a situation in which an attempt has been made to fashion a false case that the marks had been registered in reliance upon statements made by Mr Howes. And it was done as part of an attempt to resist cancellation of the registration of the marks. If it had not been thwarted by the respondents’ attorneys, then the likely outcome is that the case would have been decided on the incorrect basis that the second respondent was estopped from seeking cancellation under s 88(1) by inducing the registration of the marks. This is certainly no way for trade mark litigation to be conducted, particularly by reputable businessmen. On the other hand, the dishonesty had no impact on the outcome of the case because it was thwarted. Had the tactic not been pursued, the parties would remain in the same situation in which they presently find themselves.
If it were relevant to cancellation, I would, in effect, be using s 88(1) to punish the applicant for conducting a false case where that falsity has had no impact on the outcome. It is true that the false case did have the consequence of increasing the duration and expense of the litigation. However, on balance, I am not persuaded that this provides an independent basis for cancellation. It is a costs issue.
The respondents submitted that the applicant had no intention of using the marks and that this was another reason to cancel their registration. The evidence certainly suggests that this is so. As part of its estoppel case, the applicant sought to demonstrate that it had acted to its detriment because of the conduct it alleged against the second respondent. I rejected that case. However, the applicant’s evidence about detrimental reliance was to the effect that it would never have used the marks in the past if it had known it was not entitled to do so. Further, Mr Cave gave evidence for the applicant that if ‘as a result of the outcome of the proceedings, Anchorage is not entitled to the exclusive use of the “Anchorage” names in Australia in connection with the provision of financial services, I will have to take immediate steps to cause Anchorage to change its name’ (my emphasis). If I accept that evidence then it would appear to follow, as the respondents submit, that the applicant does indeed have no intention of using the marks in the future (it now having been determined that it is not the owner of the marks).
I have rejected aspects of Mr Cave’s evidence in relation to the estoppel case; the question is whether I should reject this part too. This has been a difficult question to resolve. On balance, I have concluded that Mr Cave’s evidence on the estoppel case is unreliable and I do not think I should accept it. I therefore reject this aspect of the respondents’ submission. I think it quite possible that the applicant does intend to use the marks if it can in the future and to the extent that Mr Cave suggests otherwise I do not accept his evidence. However, this is a straw in the wind. The overall discretionary considerations warranting cancellation of the marks are, I think, much stronger than this isolated instance.
In all of those circumstances, I propose to order the cancellation of the marks.
Date of Cancellation.
There was a dispute between the parties as to when any cancellation of the registration of the marks would take effect. This dispute was relevant whilst the allegation of infringement was on foot. Since I have concluded that the respondents did not infringe the trade marks this debate is of no on-going relevance. Even if the cancellation is not retrospective this will have no impact on the liability of the respondents.
I propose not to deal with this issue for the following reason. The applicant submitted that the decision of Tracey J in Deckers Outdoor Corp v Farley (No 2) (2009) 176 FCR 33 at 43-44 [50]-[55] is authority for the proposition that cancellation of a mark is not retrospective in operation. It was said by the respondents that the decision was contrary to earlier authority. I do not think I should embark upon a consideration of whether a decision of another judge should not be followed unless it is necessary. Because the infringement case has failed, it is not necessary. The order I will make will refer only to cancellation and not to the date it takes effect upon. If the question of the timing of the cancellation ever arises between these parties in the future, and it is concluded at that time that the power may be exercised retrospectively, I will indicate that my disposition would have been that it should be exercised in a retrospective fashion.
B. Suppression orders
In the steps leading to the trial, the parties exchanged documents through various procedural mechanisms. The respondents, at that time, argued that some of this material was the subject of proper claims for confidentiality. In order to progress the preparations towards the trial, the parties sensibly agreed between them two separate confidentiality regimes, one dealing with documents which were to remain confidential as between the parties and the other providing for augmented confidentiality in which the material would only be shown to external legal counsel.
Some of this material was used at the trial. Early on it was flagged that some form of confidentiality order would eventually be sought with respect to the material. I agreed that I would not grant access to the exhibits to third parties before any such application was dealt with. As events have transpired, no such third party application has ever been made.
The respondents initially applied for orders pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) which would have prevented the publication or disclosure of a significant number of exhibits. After that application was made I indicated to the parties that I proposed not to deal with the application at this time but would, instead, approach the matter on the basis set out in the succeeding paragraphs. The parties were content with this. I set out now my reasons for taking this course, for future guidance.
No member of the public has applied to inspect the exhibits and I will, upon the final determination of the proceedings, immediately direct the return of all of the exhibits and the destruction of all copies of the exhibits held by the Court. This will leave extant the copies which are in the parties’ hands but these are adequately protected by the already existing confidentiality regimes between them. If, before that time, some third party applies for access to the exhibits under r 2.32 of the Federal Court Rules 2011 (Cth), it will then be appropriate to consider the respondents’ application. Until such time as that occurs I do not see that there is any present risk of publication which would warrant an order under s 37AF.
Separate to the exhibits is a paragraph of a written submission and three pages annexed to that submission which are also said to be confidential. The submissions form part of the record of the Court and it would not be appropriate to return them to the parties. On the other hand, third parties do not have a right under r 2.32 to gain access to submissions and must apply under that rule as submissions are not set out in the list of accessible materials in r 2.32(2). Until such an application is made with respect to the submissions, it does not seem to me that an order under s 37AF can be ‘necessary’ within the meaning of s 37AG. The parties are bound by their obligations under Hearne v Street (2008) 235 CLR 125 and the staff of the Court by ordinary confidentiality obligations arising as an incident of their employment. What I will do, however, is direct that the written submissions be placed in an envelope which has written on the front of it ‘Not to be accessed without the leave of a judge of the Court: see Anchorage Capital Partners Pty Limited v ACPA Pty Limited (No 3) [2015] FCA 1436 at [48]’.
C. Relief
I make the following orders:
1.The register of trade marks be rectified so that the registrations of trade marks 1425924 and 1425929 be cancelled.
2.Direct that the exhibits be returned to the parties 29 days after the final disposition of the proceedings, including any appeals and applications for leave or special leave to appeal.
3.Direct that no access be granted to any third party under r 2.32(4) of the Federal Court Rules 2011 (Cth) to any of the exhibits without the leave of a judge of the Court.
4.Direct that the respondents’ closing submissions dated 2 February 2015, including annexure A thereto, be placed in a sealed envelope on the front of which is written ‘Not to be accessed without the leave of a judge of the Court: see Anchorage Capital Partners Pty Limited v ACPA Pty Limited (No 3) [2015] FCA 1436 at [48]’.
5.No order as to costs with respect to the issue of non-publication.
There remains the question of costs. The parties, at my direction, have already provided submissions on costs in relation to the first part of the trial. They should now say anything further in writing by 1 February 2016. If correspondence is relevant it may be attached to the submissions. No affidavit will be necessary for that purpose.
I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram. Associate:
Dated: 17 December 2015
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