Certsy Pty Ltd v Certn Holdings Inc

TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Registrar’s refusal to suspend opposition by Certsy Pty Ltd to registration of trade mark application 2155460 – CERTN – in the name of Certn Holdings Inc.

Delegate:

Nicole Worth

Representation:

Certsy Pty Ltd: written submissions prepared by David Larish, counsel, instructed by King & Wood Mallesons.

Certn Holdings Inc: written submissions prepared by Andrew Sykes, counsel, instructed by Blueprint Law.

Decision:

2023 ATMO 138

Trade Marks Regulations 1995 (Cth) – reg 5.19 Registrar may give a direction – request for direction to suspend opposition – Federal Court proceedings afoot – alleged commonality of issues before Registrar and Federal Court – alleged deprivation of defence if opposition not decided – balance of convenience – refuse to give direction to suspend.

Background

This decision is in respect of the Registrar’s refusal to direct, under reg 5.19 of the Trade Marks Regulations 1995 (Cth) (‘Regulations’),[1] to suspend an opposition mounted by Certsy Pty Ltd (‘Certsy’) to registration of the trade mark the subject of application number 2155460, filed in the name of Certn Holdings Inc (‘Certn’).
[1] All references in this decision to a regulation are references to the Trade Marks Regulations 1995 (Cth), and all references to a section of an act are references to sections of the Trade Marks Act 1995 (Cth) (‘Act’).
Certn filed its application for registration of the trade mark CERTN on 11 February 2021. In due course it was accepted, and after advertisement of the acceptance Certsy opposed registration by filing a Notice of Intention to Oppose followed by a Statement of Grounds and Particulars, relying in part upon its own trade marks CERTSY and CERTSY with a device.
Certsy filed its evidence in support of the opposition on 9 January 2023. Certn filed its evidence in answer on 11 April 2023. In the meantime, Certsy initiated proceedings in the Federal Court on 2 April 2023 alleging trade mark infringement, breaches of the Australian Consumer Law and passing off at common law. On this basis Certsy wrote to the Registrar on 13 June 2023 requesting a direction pursuant to reg 5.19 that the opposition be suspended pending the determination of the Federal Court proceedings. A delegate of the Registrar wrote to the parties indicating an intention to make such a direction but sought the comments of Certn given the request had been made unilaterally by Certsy.
Certn responded on 4 July 2023 that it objected to the suspension of the opposition for reasons including that doing so would prejudice its position in the proceedings before the Federal Court. The Registrar’s delegate then wrote to the parties declining the request to suspend the opposition in view of Certn’s objection and setting a due date for evidence in reply from Certsy.
Certsy filed evidence in reply on 17 July 2023, and on 19 July 2023 filed a request for a hearing in respect of the refusal to suspend the opposition.
Shortly afterwards Certn requested and paid for a hearing in respect of the opposition, and on 25 July 2023 objected to the scheduling of a hearing in respect of the suspension request for reasons including that it would cause undue delay.
I wrote to the parties on 2 August 2023, as a delegate of the Registrar of Trade Marks, stating that it was reasonable for the hearing to proceed and that a hearing by written submissions would be scheduled for 23 August 2023. In the end a short extension was granted to Certn[2] in respect of the filing of submissions, such that the hearing took place on 25 August 2023 (that is, all submissions from the parties were filed by that date).
[2] A short extension was granted on account of Certn being unable to access Certsy’s submissions via IP Australia’s systems.
Certsy’s original request was for the opposition to be suspended until after the first instance decision had been handed down by the Federal Court. Certsy’s request as it now stands is that the opposition should be suspended until after a first instance decision is handed down by the Federal Court, or as a secondary position that the opposition should be suspended for 12 months, or otherwise 6 months.
This is my decision, with reasons, in respect of the request to direct under reg 5.19 that the opposition be suspended.
The regulatory framework
Under s 55 the Registrar has a statutory duty to decide oppositions, and pursuant to s 204 must do so ‘as soon as practicable’.
Part 5 of the Regulations provides a broad framework for the conduct of opposition proceedings. This includes the specification of time periods for filing of opposition documents, the rules governing a cooling-off period, the conduct of hearings, and the giving of directions.
In respect of directions reg 5.19 provides:
5.19 Registrar may give direction
(1) The Registrar may give a direction in relation to an opposition to which this Part applies:
(a) if requested by a party in writing; or
(b) on the Registrar’s own initiative.
(2) If the Registrar proposes to give a direction, the Registrar must give the parties an opportunity to make representations about the direction.
(3) A direction must not be inconsistent with the Act or these Regulations.
(4) The Registrar must notify the parties of the direction as soon as practicable.
This provision allows the Registrar a degree of latitude in the management of opposition proceedings, so long as she remains consistent with the Act and Regulations and procedural fairness is observed. There is no express power to suspend opposition proceedings, although it has been observed by the Federal Court (see below) that because the Registrar has control over the procedures of opposition proceedings, she may presumably suspend or temporarily stay proceedings for proper reasons (although in order to accord with s 204 an opposition cannot be suspended indefinitely).
Federal Court authority
In 2008 Finkelstein J handed down his judgment Cadbury UK Ltd v Registrar of Trade Marks (‘Cadbury’).[3] The decision discussed the appropriateness of suspending oppositions before the Registrar where similar issues were before a court, until such time as the court determined the matter. Ultimately the decision was to set aside the Registrar’s direction to suspend opposition proceedings before her. In doing so Finkelstein J noted that:
[T]he direction should not have been given for at least two reasons. The first is that to delay opposition proceedings for an indeterminate period, a period that could stretch out to three, four or even more years, amounts to a refusal by the delegate to hear those proceedings. The second reason is that the delegate was asked (and appears to have been prepared) to give too much significance to findings of fact made by the Federal Court.[4]
[3] [2008] FCA 1126, (‘Cadbury’).
[4] Ibid [9].
After discussing the provisions of the Act and Regulations, his Honour continued:
In my view the effect of the Trade Marks Act and the Regulations is that the Registrar must take all necessary steps to get opposition proceedings ready for hearing as soon as practicable and thereafter hold the hearing. The merits are determined on the evidence before the Registrar and on the law as it is when the hearing takes place…
Sometimes the law is unclear. In that event, it may be appropriate to adjourn proceedings to await the law’s clarification…
But the authorities establish that a case should not be adjourned for an indefinite period to await clarification of the law…[5]
[5] Ibid [13]-[15].
His Honour also observed that administrative tribunals have a duty to determine matters themselves, although they may have regard to a judge’s findings. In this regard his Honour stated:
[I]f the tribunal takes the approach that it should not disagree with findings made by the judge then the tribunal has fallen into error. The general rule is that a tribunal that is required to decide an issue will be in breach of that obligation if it merely adopts the decision of the judge on the same issue.[6]
[6] Ibid [18].
Lastly, his Honour acknowledged that:
Sometimes there will be circumstances in which it is appropriate to delay opposition proceedings and await a court’s resolution of disputed facts that may be relevant in opposition proceedings. It is not possible to say with any precision what those circumstances might be. They would include (a) the degree of similarity of the issues involved, (b) the significance of the issues to the opposition proceeding, (c) whether the Registrar has more evidence than the trial judge, (d) the likelihood of the judge’s findings being challenged, and (e) whether it may be unfair (ie a breach of the rules of natural justice) to rely on the judge’s findings or the evidence on which those findings were based. In particular cases other matters will be taken into account.[7]
[7] Ibid [21].
The application of these principles is the subject of few decisions of the Registrar, although one that is referred to by both parties is FKP Sojuzplodoimport v Spirits International B.V.[8] The delegate in that decision discussed the effect of Cadbury, noting that ‘Where one party disputes the need to suspend, and within the limits set out in Cadbury, it becomes necessary to take into account the balance of convenience between the parties’.[9] The delegate further stated:
[A] suspension … does not necessarily amount to a denial of justice; this must be determined on the facts of each case, where various offsetting factors require careful weighting and balancing.[10]
[8] [2010] ATMO 62, (Hearing Officer Williams) (citation omitted).
[9] Ibid [12].
[10] Ibid [23].
It is with these principles in mind that I turn to Certsy’s request for a direction to suspend opposition proceedings.
The positions of the parties
Certsy asserts that there is a commonality of critical issues before the Federal Court and the Registrar. In the Federal Court proceedings Certsy alleges trade mark infringement under ss 120(1) and/or 120(2), misleading and deceptive conduct by Certn under s 18 of the Australian Consumer Law (‘ACL’), false or misleading representations by Certn under s 29 of the ACL and passing off by Certn under common law. In the opposition Certsy paricularises grounds of opposition under ss 60, 42(b), 59 and 62A. It argues that it is against the public interest and the private interests of the parties to have such matters dealt with both administratively and before the court, on account of the allegedly unnecessary duplication of effort and expense in dealing with such similar matters. It also asserts that should the opposition be determined before the Federal Court proceedings, the losing party (whichever it may be) is very likely to appeal the decision.
Certn on the other hand asserts that the Federal Court proceedings only increase the need for prompt determination of the opposition. It submits that with regard to infringement, Certn relies upon the defence under s 122(1)(e) (namely, that a person does not infringe if it uses a trade mark given to them under the Act). The defence operates retrospectively, such that it allegedly provides a complete answer to infringement regardless of when the status of ‘registered’ is achieved (provided it is reached before, or at, judgment). Accordingly, Certn submits, Certsy seeks to deprive it of this defence by seeking a suspension until after the first instance decision of the Federal Court. Certn also submits that the alternative suspensions of 12 or 6 months ought to be regarded as an attempt to achieve the same outcome. In respect of the allegations regarding commonality of matters before the Registrar and Federal Court, Certn argues that the considerations before the Court will not be the same as those before the Registrar and will not necessarily be determinative.
Reasons
I note firstly that the opposition is in its latest stages. All evidence has been filed and a hearing has been requested. On the other hand, the Federal Court proceedings are in their infancy. A scheduled case management hearing has been vacated to allow for mediation, as discussed below.
The Federal Court has made consent orders for the parties to attend mediation, which is scheduled for 26 September 2023. Certsy submits that matters relating to the potential resolution of the opposition and the Federal Court proceedings will no doubt be canvassed at the mediation. Certn expresses pessimism, alleging that there has been no attempt up to this point to settle the matter and the parties have been in dispute for more than a year.
I do not consider the mediation a reason to suspend the opposition. It is scheduled to take place shortly and it is not foreseeable that the hearing of the opposition would occur before then. That being so, should mediation settle the matter then the opposition may be withdrawn in accordance with the terms of the settlement. Should mediation not settle the matter, then the opposition remains afoot and the parties are in the same position as they would be had mediation not taken place.
In respect of the commonality of issues before the Federal Court and the Registrar, Certsy asserts there are two critical issues before both forums: (a) the similarity or otherwise between the parties’ trade marks and (b) the reputation of Certsy’s trade marks.
Unlike infringement under s 120, there is no particular degree of similarity required for any of the nominated grounds of opposition to be considered by the Registrar. Whilst I acknowledge that a finding of substantial identity or deceptive similarity may inform some of the grounds of opposition, such a finding would not be determinative because other matters must also be satisfied. The grounds of opposition under ss 42(b) and 60 rely upon whether a reputation existed as at the priority date; the ground of opposition under s 62A depends upon whether a reasonable person standing in the shoes of Certn would consider the decision to apply for registration of the trade mark as in bad faith; and the ground of opposition under s 59 is generally entirely independent of any similarity with another party’s trade mark.
As to reputation, a positive finding of reputation by the Court may well be given weight before the Registrar. However, this would depend on how closely the evidence in each forum aligns, and at this stage there is no basis upon which to make that assessment given no evidence has been filed in the Federal Court. Additionally, the date at which any reputation was found to exist would not necessarily align – before the Registrar this must be at the priority date, however before the Court it may be at a later time (or a much earlier time, depending upon the claim and/or the defence).
A finding by the Court that there was no relevant reputation will not necessarily assist the Registrar. The Federal Court is bound by the rules of evidence whereas the Registrar is not. It is therefore possible that evidence before the Registrar is inadmissible in the Federal Court, leading to different determinations. I note also that the threshold for breaches of the ACL is higher than that in respect of s 60.
The unavailability of the defence under s 120(1)(e) has the potential to prejudice Certn in the Federal Court proceedings. I note that Certsy indicates it is very likely to appeal should it fail in its opposition, so that it is not necessarily the case that Certn will have achieved registration of its trade mark by the time the Federal Court comes to make its decision. At the same time, Certn submits that given the opposition is ready to be heard and the Federal Court proceedings are in their infancy, it is expected that any such appeal could be heard concurrently with the Federal Court proceedings without causing any undue delay (and Certn would seek to have them heard together).
In weighing the balance of convenience between the parties, I consider that the potential for prejudice to Certn, along with the capacity to have any appeal heard together with the Federal Court proceedings already afoot, weighs against suspension. Bearing in mind also that the opposition is ready to be heard, on grounds only somewhat corresponding to those in the Federal Court proceedings which are in their early stages, I consider that the better course is to proceed with the opposition.
I therefore refuse to direct under reg 5.19 that the opposition be suspended. Rather, I direct that the oral hearing of the opposition proceed and the Registrar will schedule the hearing in due course in accordance with its usual practice.
Both parties sought their costs in contesting the request for a direction to suspend the opposition. However, although Certn has been given the opportunity to participate in the hearing, the request for the direction to suspend the opposition is a matter between the Registrar and Certsy. Therefore, although I have decided against suspending the opposition, Certn does not have standing to request costs.
Nicole Worth
Hearing Officer
Delegate of the Registrar of Trade Marks
13 September 2023

[2023] ATMO 138

13 September 2023