Calvin Klein Trademark Trust v Balanced Essential Holdings Pty Limited

[1998] ATMO 51

Trade marks act 1995

decision of a delegate of the registrar of trade marks with reasons

Re:Objection by BALANCED ESSENTIAL HOLDINGS PTY LIMITED to an application by CALVIN KLEIN TRADEMARK TRUST for an extension of time to file notice of opposition to trade mark application number 747255

Background

Trade mark application number 747255 was filed on 27 October 1997 by BALANCED ESSENTIAL HOLDINGS PTY LIMITED (hereafter BEH) for the trade mark as shown:

and was advertised accepted in the Official Journal of Trade Marks on 26 March 1998, in respect of, "Soaps; perfumery; essential oils; cosmetics; toiletries; skin care preparations" in class 3.

The three months within which any person might file a notice of opposition to the registration of the trade mark under the provisions of subsection 52(2) of the Trade Marks Act 1995 (the Act) and regulation 5.1 of the 1995 Trade Marks Regulations (the Regulations) expired on 26 June 1998.  On 8 July 1998, a late application for an extension of time for filing a notice of opposition was made by CALVIN KLEIN TRADEMARK TRUST (hereafter CKTT) to cover the period from 26 June 1998 to 8 July 1998.  The subject notice of opposition was filed on the latter date.  The application for the extension was made under the provisions of paragraph 5.2(2)(b) of the Regulations and nominated the ground of, "an error or omission by the person applying for the extension of time, or by the person’s agent."  The application was accompanied by a statutory declaration by John Andrew Waters, a member of Phillips Ormonde & Fitzpatrick (hereafter POF), the attorney firm which was stated to be, "…instructed by associates within the Legal Department of the Calvin Klein organisation in relation to trade marks owned by the Calvin Klein Trademark Trust and related companies".

In his supporting declaration, Mr Waters outlined the circumstances surrounding the late filing of the notice of opposition which necessitated seeking the extension.  On 5 June 1998, his firm had received a letter from Ms Melissa Falk, Trademark Paralegal of Calvin Klein Cosmetics Company (hereafter CKCC), with a watch notice and a copy of the acceptance notice of the subject mark, and which sought advice in relation to possible opposition action.  He replied to this letter by fax on the same day, stressing that the application was only open to opposition until 26 June 1998 and requesting acknowledgment.  When this had not been received by 10 June 1998, Mr Waters sent a confirmatory copy of the 5 June letter to CKCC by fax.  He reviewed the file on 17 June 1998 and, noting that no reply had been received, wrote again by fax to Ms Falk, saying that, unless positive instructions were received, the opportunity to oppose the application would pass.  He further said that no further reminders were proposed, and that Ms Falk should ensure that her instructions were received and acknowledged by the due date if opposition was intended.  Given the circumstances of the tentative nature of the original request for advice and the reminders which had been unanswered, the file had not been marked for review by POF before the due date.  On 30 June 1998, Mr Waters reviewed the file and sent a letter by air mail to Ms Falk, confirming that no instructions had been received.  Ms Falk sent a fax to POF on 7 July 1998, enclosing a copy of Mr Waters' letter of 5 June 1998 on which was endorsed a message from Ms Falk, dated 17 June 1998, in which POF was asked to investigate the possible use of the subject mark and authorising that firm to file notice of opposition.  POF's incoming fax records were then reviewed and the one with the endorsed instructions from Ms Falk was discovered as having being received on 18 June 1998.  It was also discovered that the subject fax had been marked for Mr Waters' attention and given to him, although he did not recall seeing it at the time. Mr Waters said that the fax had been found with other papers relating to another matter for the Calvin Klein organisation.  He said that he now believed that he had then considered it related to that other matter and had placed it with those other papers for later attention.

On 12 August 1998, Mr Peter Hansen of Freehills Patent Attorneys (hereafter Freehills), the firm representing BEH, filed a letter objecting to the grant of the extension of time.  Mr Hansen raised some arguments in his letter supporting the objection, including allegations that POF was not CKTT's agent for the purposes of regulation 5.2(2), disputed which party, if any, had an intention to file notice of opposition, and whether any instructions to oppose could rightly be received from CKCC instead of CKTT.  He said that BEH wished to reply to any submissions by CKTT.

A Duty Officer of the Trade Marks Hearings Section sent a copy of Mr Hansen's letter to POF on 17 August 1998, allowing 14 days for that firm's further comment.  Mr Waters of POF replied on 27 August 1998, attaching a statutory declaration by himself with several exhibits, including a copy of a letter from himself to Ms Falk of CKCC dated 5 June 1998 and from Ms Falk on 4 June 1998 and 25 August 1998.  These all went towards arguing that POF was indeed an agent of CKTT in this matter and requested the opportunity to reply to any further submissions made by BEH.  The Duty Officer considered Mr Waters' letter and material, and then advised Freehills by letter on 8 September 1998 that she proposed to grant the extension but was allowing that firm a period of 14 days for further submissions.  Mr Hansen of Freehills replied on 3 September 1998, requesting confirmation that further submissions by BEH would be accepted and considered before a decision in relation to the application for the extension was made.  He then wrote again on 21 September 1998 seeking a hearing to determine the matter.

As a consequence, a hearing was set down before me, as a delegate of the Registrar, in Canberra on 13 October 1998.  BEH was represented by telephone by Mr Hansen of Freehills.  Appearing at the hearing on behalf of CKTT was Ms Margaret Ryan of POF.  Both parties made extensive submissions at the hearing, much of which had already been canvassed in their letters to the Office when requesting or objecting to the extension.  I therefore will only give here what I believe to be the most relevant points not previously reported.

Submissions
Initially, the responsible Duty Officer of the Trade Marks Hearings Section had proposed to grant the requested extension of time, on the basis that it was appropriate to do so, following the prima facie case put forward by CKTT.  She was of the opinion that CKTT had discharged its initial onus of showing why the extension was allowable.  Mr Hansen, on behalf of BEH, the objector to the extension, said in his letter of 3 September 1998, that the further declaration from Mr Waters raised, "… further issues upon which our client wishes to make submissions".  Under such circumstances, I felt that it was appropriate that Mr Hansen should be the first to speak at the hearing in order that he could make those submissions.  Mr Hansen disagreed, saying that such a course was "odd" and arguing that Ms Ryan should be the first to put submissions because he did not know what the applicant's case was going to be that he would arguing against.  Ms Ryan said that she had no problem with putting her submissions first, although the prima facie case for the extension had been initially accepted as sufficient by the Office.  She said that POF had already filed three statutory declarations outlining the case for the extension and that it was only on the insistence of BEH that the matter had now come to a hearing.

Given Mr Hansen's expressed attitude that his client's case might be disadvantaged in some way by him being first to make submissions in the matter and Ms Ryan's accommodating attitude as to the order of speaking, I ruled that she should lead off in putting her client's case.  However, I wish to state my belief here that the fairest course to follow, where a prima facie case has already been established for the exercise of the Registrar's discretion and an objection is made by another party, is for the objector to be the first to make submissions at a hearing as to why that discretion not be exercised in favour of the applicant for it.

In her submissions on behalf of CKTT, Ms Ryan said that the application for the extension had been made on the grounds that there had been an error or omission made by CKTT's agent, POF, which resulted in that firm not filing the subject notice of opposition by the due date.  She said that it had been CKTT's intention to file the notice correctly but that an error had been made by that party's agent which meant that it had not.  She handed to me another statutory declaration from Mr Waters, this one dated 12 October 1998, to which was exhibited a copy of a facsimile from Ms Falk of CKCC allegedly giving instructions to oppose, and which had been served on Freehills.  Ms Ryan went through the sequence of events outlined in the three declarations made by Mr Waters, including the instructions by Ms Falk and the alleged error by Mr Waters.  She said that the words "error or omission" should be given their plain or ordinary meaning - Crown & Andrews Pty Ltd v All American Fremantle International Inc (1997) 38 IPR 595 at 602 and also Kimberley-Clark v Commissioner of Patents (No 3) (1988) 13 IPR 569. She said that the misreading by Mr Waters of Ms Falk's fax and his lack of action with respect to its contents constituted such errors or omissions. She said that although there were other instructions contained in the fax, the riding instruction had been to file a notice of opposition. This demonstrated, she said, an intent to oppose by CKTT, and this intention had been thwarted due to the failure of its agent to carry out its intentions. She cited for support here several cases, including Stork Pompen BV v Weir Pumps Ltd (1988) 11 IPR 542 at 546, where it was said that, "…an error or omission has been considered to have occurred where there has been a breakdown in procedure in effecting a party's intention". She said further that, in the latter case, no one had formed an intention to oppose, whereas here Ms Falk had certainly intended that a notice of opposition should be filed, or at least that CKTT should be in a position to oppose. Ms Ryan further said that it was permissible to look at the intentions of the agent in such matters as had been shown in ReApplication by Working Systems Software Pty Ltd 39 IPR 387 at 391 (decision affirmed by Chiron Corporation v The Register of Trade Marks (unreported) Federal Court Branson J 7 August 1998).  She said that, in that case, an incorrect entry in a diary had resulted in a second application being made for an extension of time to file a notice of opposition and, because of that diary entry, it had been found that the responsible person's intention at the relevant time had been in relation to the extension application and not the opposition itself.  She said that, here, the evidence shows that the responsible person always had an intention to oppose the application.

Ms Ryan submitted that POF was an agent of CKTT for the purposes of reg. 5.2(2)(b), saying that the attorney firm was entered in the records of IP Australia as the agent for CKTT's registration number 705526 which it considered to be in conflict with the present application.  She said that CKCC was licensed by CKTT to use the present mark.  She said further that CKCC handled the day-to-day prosecution and maintenance of CKTT's trade mark applications - including registration number 705526 - and that CKCC was therefore authorised to prosecute and maintain CKTT's intentions in relation to the present application.  Ms Ryan said that CKCC was therefore effectively an agent of CKTT in relation to the present matter and Ms Falk of CKCC had always intended that the notice of opposition be filed in the name of CKTT.  Ms Ryan pointed to the letter from Ms Falk to Mr Waters of 25 August 1998, where that person had expressed that intent and had also explained the relationship between the Calvin Klein group of companies with regard to trade mark matters.  Ms Ryan said that this case could be distinguished from that of Crown & Andrews, supra, because in that instance, no instruction had been given with respect to a watch of acceptances - something which was the case here.  This was the state of affairs which had been understood by Mr Waters - as shown in his declarations.  Ms Ryan said that an instruction had been transmitted to POF which was, and always had been, acting as the agent of CKTT through the instructions of CKTT's other agent CKCC.  She said that BEH had admitted that POF was an agent of CKTT, with respect to the extension application, in Mr Hansen's submissions of 12 August.

Ms Ryan closed her submissions by saying that, once the Registrar was reasonably satisfied of the grounds set out in an application under reg 5.2, he must grant the application - there was no discretion.  Factors such as the inconvenience to the parties concerned or the public interest, she said, were not relevant - Application by Meath (1998) 40 IPR 150 at 158-159.

In his submissions in reply, Mr Hansen said that the applicant for an extension of time must have formed a definite intention to oppose in order to justify the grant of such an extension, referring to Biosys v Ecogen Australia Pty Ltd (1992) 26 IPR 668 at 671 and also Crown & Andrews, supra.  The establishment of this criterion, he said, was the essential first step in analysing the merits of such a matter as the present case.  He further referred to the words of Jenkinson J in Kimberley-Clark v Commissioner of Patents, supra, as a demonstration of the standard of disclosure required in relation to make out a proper case for an extension following an alleged error or omission by an agent.  He said that a similar candid and complete disclosure of the processes involved was lacking in the present case.

Mr Hansen said that I had no evidence before me upon which I could form a view that there was an intention by CKTT to oppose the present application at the relevant time.  He said that the intention of CKCC in the matter was irrelevant as there was also no evidence that it was CKTT's agent at the relevant time.  He questioned the weight I should give to the letter from Ms Falk to Mr Waters of 25 August 1998.  He said that Ms Falk's letter was in response to a letter from Mr Waters of 21 August 1998 who could well have coached her answers.  He said that there was nothing in the letter regarding the scope of CKCC's agency, meaning that it could well be an agent for filings and renewals but not for filing notices of opposition.  He said further that the handwritten instruction from Ms Falk on the fax returned to Mr Waters on 18 June 1998 was ambiguous and conditional on other actions, and said nothing at this stage about filing a notice of opposition.

Mr Hansen said further that CKCC was not shown to be the agent for CKTT.  He said that, if it was the case that the Calvin Klein organisation handled its trade mark affairs in the manner described by Ms Falk, then evidence should have been produced as to these arrangements.   However, even if it was, there was no evidence to show that CKCC had a definite intention to oppose at the relevant time.  He said that the handwritten notation received by Mr Waters from Ms Falk on 18 June 1998 was insufficient in this regard.  He said that putting a party into a position to oppose a mark's registration was not the law - there must be present a definite intention to oppose.  He said that there may well have been an error by someone on the other side but, if there was no real intention formed to oppose the present mark's registration, then any such mistake was irrelevant.  Mr Hansen said that it did not matter what the intentions of the attorney in the matter were.  He said that attorneys could only act when they had the authority to do so and this authorisation was not obvious in this instance.

Discussion
Regulations 5.2 and 5.4, as are relevant here, read as follows:

5.2      (1)   A person may apply to the Registrar for an extension of time in which to file a notice of opposition.

(2)   An application for an extension of time may be made within the period for filing a notice of opposition referred to in regulation 5.1 on 1, or more than 1, of the following grounds and on no other ground:

(a)   an error or omission by a trade marks officer;

(b)   an error or omission by the person applying for the extension of time, or by the person's agent;
(c)   circumstances beyond the control of the person applying for the extension of time;
(d)   the conduct of genuine negotiations between that person and the applicant for registration;

(e)   the undertaking of genuine research to decide:

(i)   whether opposition is justified; or

(ii)  on the grounds of opposition.

5.4(4)   If an application for extension of time is made after the period for filing a notice of opposition has ended, the Registrar must not grant the extension unless the Registrar is reasonably satisfied that there is sufficient reason for the application not being made before the end of that period.

Under these regulations, before granting an application for extension of time, the Registrar must be reasonably satisfied as to the validity of the grounds set out in the extension application.  If the application is late, the Registrar must not grant the extension unless he or she is reasonably satisfied that there is sufficient reason for the application not being made before the end of the opposition period.

In its application for the extension, CKTT identified its grounds for making application under paragraph 5.2(2)(b), “an error or omission by the person applying for the extension of time, or by the person’s agent”.  In the Crown and Andrews case, supra, Hearing Officer Homann drew a parallel between the relatively new and untried concept (in terms of trade marks legislation) which appeared in paragraph 5.2(2)(b), and the similar concept in patents legislation.  At pages 599-600 of that decision, he remarked:

The concept of “error or omission” on the part of an applicant or its agent appears for the first time in Australian trade marks legislation in the 1995 Act. It has a long history, however, in patents legislation and its meaning has been refined by a series of decisions of the courts and the Commissioner. The words “error or omission” in reg 5.2(2)(b) must, I think, be given the same meaning as in s224(2) of the Act which is the equivalent of s223(2) of the Patents Act 1990, the successor to s160(2) of the Patents Act 1952. The decided cases under the latter provisions are therefore directly in point in determining the meaning of the same words in the Act.

Mr Homann went on to examine the significance to that case of several of the patents decisions, which were also cited by both Ms Ryan and Mr Hansen in relation to the present proceedings.  He concluded, at pages 603-604 that:

In the absence of evidence to the contrary I consider that I must adopt the reasoning in the Weir Pumps case and that of the Federal Court in Kimberly-Clark and Danby v Commissioner, all supra.  The effect of those decisions is that the person applying for the extension of time must have formed the intention to oppose the application on or before the expiry of the prescribed period and that that intention must have somehow been thwarted or frustrated by an error or omission.  That was not the case in the present circumstances in which no person either within AMFI or in the offices of its agents had formed such an intention until after the time for filing notice of opposition had passed.  There was therefore no relevant error or omission to file the notice in that time. The mere failure to file the notice on time is not in itself an error or omission and the failure to conduct a search of the relevant records or to keep a watch on the Journal is not in itself to be considered as an error or omission.

I concur with Mr Homann's findings, that those cases do establish the need to demonstrate a causal link between an error or omission which somehow thwarts an intention to file a notice of opposition.

In the present case, the Duty Officer in the Trade Marks Hearings Section had already formed the view that a convincing prima facie case had been made out for the allowance of the extension.  Mr Hansen, on behalf of BEH, objected to the grant of this extension on the grounds that there had been no definite intention formed by the responsible person at the relevant time to oppose the application and that CKCC had not been convincingly shown to be the agent for CKTT in the matter.  He did not seem to be questioning that some sort of error did occur in relation to the matter, but rather that the instruction was ambiguous and was given by the wrong person or organisation.  As has been said in other decisions of the Registrar regarding the similar situations, the mere failure to file the notice on time is not, in itself, an error or omission.  There must be something which can be defined as an error or omission which caused that non-filing.  Mr Waters has declared that he did not see or act on Ms Falk's endorsement on the incoming fax on 18 June 1998 because he wrongly considered that the fax referred to another Calvin Klein matter.  Consequently, he did nothing in relation to Ms Falk's intentions regarding the present case.  I think that it is correct then to infer that an error or omission took place because Mr Waters made a mistake in relation to what Ms Falk had wanted him to do.  The matter of the ambiguity of those directions is another matter.

On the matter of whether CKCC was the agent of CKTT at the relevant time, I have considered the material put before me by POF.  This includes the statutory declaration made by Mr Waters on 12 October 1998, where he gave the history of his firm having previously received instructions from CKCC in relation to marks filed in the name of CKTT.  Exhibited to that declaration was a copy of the handwritten notation by Ms Falk on the fax returned to Mr Waters on 18 June 1998.  Next is Mr Waters' declaration of 27 August 1998 where he declared that CKCC was authorised to instruct POF on behalf of CKTT in relation to the present opposition proceedings, and to which was exhibited, inter alia, a copy of the letter from Ms Falk of 4 June 1998, where she said that "(w)e have been conducting sales…", "…if we were to oppose…" "and our registration has not issued yet (of 705226)" - my emphasis.  Another exhibit comprised a copy of a letter by Ms Falk of 25 August 1998 which outlined the trade mark arrangements between CKCC and CKTT.  There, Ms Falk used the words "…I authorize you to file the opposition".  Also relevant here is the other statutory declaration by Mr Waters made on 7 July 1998, where he declared as to the dealings between Ms Falk of CKCC and POF in relation to the proposed opposition.  From all of this material, it would appear that CKCC was, and still is, acting as agent for CKTT in its trade mark dealings in this case.  Mr Hansen has argued that I should go beyond this and seek to know more about the processes involved to ascertain the authenticity of the agency of CKCC on behalf of CKTT.  I disagree that that is necessary in this instance.  From the foregoing, Mr Waters clearly believed that CKCC was authorised to instruct his firm on behalf of CKTT in relation to the present opposition proceedings.  It follows that the actions performed by Mr Waters in this matter, including the error in not seeing and carrying out Ms Falk's instructions, were on behalf of CKTT.

The second leg of Mr Hansen's objections is with respect to whether CKTT or its agent had formed an intention to oppose the application at the relevant time.  To ascertain this, I think the main indication is the annotation on the fax returned by Ms Falk to Mr Waters on 18 June 1998.  It reads, inter alia, "I would first try to ascertain whether the applicant was selling their product prior to our registration issuing.  If not, I authorize (sic) you to file the opposition".  I agree that there is some degree of ambiguity here.  Mr Hansen has said that Ms Falk's instruction to Mr Waters to file the opposition was unclear, as it could be inferred that any action was conditional upon the results of investigations that were to be made about the applicant's sales.  On the other hand, Ms Ryan has submitted that Ms Falk was asking Mr Waters to "try" to ascertain the situation as to sales and that, realising that the investigations referred to were unlikely to be carried out by the due date, she had added the rider unambiguously authorising the filing of the notice of opposition.  I think that the use of the word "try", in the context of the present situation, is absolutely crucial.  Ms Falk did not say that Mr Waters should definitely ascertain the sales situation before he did anything else but that he should attempt to.  It is unclear what the words "(i)f not" refer to, but there is enough, I think, in the last phrase to indicate a definite intention.  Therefore, despite any double meanings which could be inferred from Ms Falk's annotation, I think it is the case that Ms Falk did intend Mr Waters to file an opposition before the due date in order to preserve CKTT's interests.  I think that the present case can be distinguished from the patents case Stork Pompen BV v Weir Pumps Ltd (supra).  In that case, where the extension of time application was not allowed, the prospective opponent, a company familiar with the patents system, had made a deliberate decision not to maintain a watching service for possible infringing patents.  That decision had resulted in the prospective opponent not being aware of the existence of just such a patent application until after the opposition period had expired.  Here, not only was a watching service in place but instructions in relation to the opposition were given - albeit thwarted by an error or omission committed by the potential opponent's attorney.  It is, I think, more like the situation in Danby Pty Ltd v Commissioner of Patents (1987) 12 IPR 151. In that case, instructions to oppose were given but, through an error, not carried out.

Decision
In summary, I have found that Mr Waters of POF was the agent of CKTT at the appropriate time, via Ms Falk of CKCC; and that there was a definite intention by CKTT to oppose the present application which was frustrated by an error or omission by Mr Waters in not seeing and acting upon an instruction by Ms Falk to do so.

I am therefore reasonably satisfied as to the grounds set out in the application for the extension of time and, under the regulations, I must accordingly grant the extension of time to 8 July 1998 within which to file Notice of Opposition to trade mark application 747255.

On the question of costs, I can see no reason for me to depart from the normal course that costs should follow the result.  I therefore award costs in the matter to CKTT.

Ian Forno
Hearing Officer

4 November 1998