Dematech Laboratories Pty Ltd v Johnson & Johnson

[2000] ATMO 13

TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS

Re:An objection by Dermatech Laboratories Pty Limited to an application for an extension of time by Johnson & Johnson, in which to serve evidence in answer, in the matter of an opposition to registration for trade mark application number 736666(5) - DERMABOND.

Background

On 12 June 1997, Johnson & Johnson (the applicant) filed an application to register the trade mark DERMABOND in class 5. The trade mark was advertised as accepted in the Australian Official Journal of Trade Marks (the Journal) on 2 October 1997. Thereafter, Dermatech Laboratories Pty Limited (the opponent) filed a notice of opposition on 2 January 1998. The Registrar granted an extension of the time for service of the evidence in support to 2 October 1998 and the opponent filed and served the evidence on that date. Since that time, the applicant has already requested (and been granted) extensions of the time for service of the evidence in answer from 2 January 1999 to 2 November 1999. On 2 November 1999, the trade mark applicant made a further application for an extension of time, in which to serve its evidence in answer, to 2 December 1999. A duty officer in the Trade Marks Office took the view that this application did not provide sufficient information for the extension to be granted, without 'a more compelling explanation'.

Official letters were dispatched, on 11 November 1999 to both parties, indicating that the applicant had fourteen days, to either 'provide a more compelling explanation' to support the request for further time, or to request to be heard in the matter. Failure to choose one of these two options would lead to refusal of the request for the extension of time. The applicant, on 25 November 1999, requested to be heard in the matter. In a letter from this Office dated 9 December 1999, the opponent was also offered the opportunity to attend the hearing and present submissions. It accepted the offer.

Some difficulty was encountered in settling on a hearing date over the Christmas/New Year holiday period. In the meantime the applicant had made two further applications for extensions of time, each for the duration of one month. Altogether, these extensions of time covered the time period from 2 December 1999 to 2 February 2000. The opponent, in letters to this Office, raised objection to the last two applications despite a lack of Official notification (because the earlier undecided application remains in a status of pending). In order to expedite the matter, a duty officer wrote to both parties indicating that, at the request of the opponent, this Office intended to decide all three requests for extension of the time period for serving the evidence in answer at the hearing set down for 28 January 2000.

The hearing was conducted by means of teleconference. Mr Wayne Muddle of Counsel, instructed by Catherine Carney & Associates, Solicitors and Intellectual Property Consultants appeared for the opponent. Mr Sean McManis of Baldwin Shelston Waters, appeared for the applicant.

Submissions

Mr Muddle began the opponent's submissions with a history of the applicant's applications for extensions of time in which to serve evidence in answer. He queried the intention of the applicant to serve its evidence on or before 2 February 2000, the time period covered by the latest application for extension of the time. Mr Muddle also submitted that the reasons given by the applicant, throughout the applications for extensions of time, lacked both information regarding progress being made on gathering the evidence and any expected timetable for serving it. He said that mere assertions that 'substantial efforts' were being made by an applicant to collate the evidence were not good enough to gain such a lengthy extension of time, as in the present case. Mr Muddle also drew my attention to what he claimed were deficiencies in the final application made for an extension of time covering the time period from 2 January to 2 February 2000. Specifically, he claimed that no indication was provided to say who the applicant's agents were, what steps in gathering the evidence the applicant still needed to complete, why a period in excess of 15 months was needed to complete the evidence, what present state of advancement the applicant had achieved in preparing its evidence, or if the names of the 'third parties' referred to in the applicant's extension of time applications would be revealed. He also stated that the opponent should not be penalised for what amounted to internal problems in communication between the applicant's various agents or representatives. Mr Muddle also stated that the delay was causing the opponent severe financial disadvantage, because other independent parties were unsure of the outcome of the perceived challenge to the opponent's property rights. This had led to difficulties for the opponent in supply of certain items, he said.

Mr McManis opened the case for the applicant with the comment that it should be noted that the bulk of the evidence had already been served on the opponent on 27 January - a fact that must change the status of the claim from the opponent that 'no evidence had been put on'. He went on to compare the present situation with a case that was decided in the Federal Court by Justice Burchett. The case referred to, Ferocem Pty Limited v Commissioner of Patents, is reported at 28 IPR 243. Mr McManis drew several parallels between this decided case and the present circumstances, including the wording in Regulation 5.15 concerning the need for the Registrar to be 'reasonably satisfied that … the extension … is appropriate'. Mr McManis also submitted that the present circumstances are quite unusual because the applicant is located in the United States of America, the present proceedings are taking place in Australia and the third parties, who are voluntarily supplying material, are situated in Canada. This has led to a much more convoluted process to obtain the evidence, he said. In addition, Mr McManis claimed that because the third parties are providing their information voluntarily and it is likely that court action on a related matter will commence shortly, it was decided that the material should be constructed so that it could be used for both proceedings. This led to more time being needed than would be required under normal circumstances, he said. In any event, Mr McManis stated, it was highly likely that all of the applicant's evidence in answer would be served by 2 February 2000, within the present time requested. Mr McManis provided answers in some detail, in relation to the latest extension of time request, to questions that had been raised by Mr Muddle at the hearing. Mr McManis also argued that the present opposition matter was not one where the present opponent's property rights were under challenge but that this was the case for the applicant.

In reply to the applicant's case, Mr Muddle argued that the applicant could not hide behind a claim of privilege and confidentiality of information, to support the request for an extension of time, where an assertion had been made concerning undisclosed third parties. He said that the Trade Marks Office needed complete information if the claim was to carry any weight. Mr Muddle also claimed that the Ferocem case (supra), referred to by the applicant, merely showed that a person vested with a discretionary power must not simply exercise it in a mechanical way, but should consider all relevant circumstances. Mr Muddle concluded his submissions with a request for me to refuse the applicant the extension of time that it had requested. He argued that, if I did so, it was not fatal to the applicant's position because it was still open to the applicant to lodge an appeal against the Registrar's decision in the courts.

Discussion

The matter for my decision here concerns three separate requests for extending the time in which the trade mark applicant may serve its evidence in answer in this opposition matter. The applications each requested one month of time - taking the time allowed from 2 November 1999 to 2 February 2000. I intend to deal with this matter as though one request had been made, because the substance of the claim for the need of further time did not vary over the three requests. The relevant part of the legislation, under which my decision is made, concerns the administration of Regulation 5.15 of the Trade Marks Regulations 1995.

The relevant paragraphs of the regulation read:

Extension of period to serve evidence and service of further evidence

5.15 (1) A party to the opposition proceedings may apply to the Registrar:

(a) for an extension of the period for serving a copy of the evidence under regulation 5.7, 5.10 or 5.12; or

(b) for permission to serve a copy of further evidence on the other party.

(2) The Registrar may grant an application on reasonable terms specified by the Registrar.

(3) The Registrar must not grant an application unless the Registrar:

(a) is reasonably satisfied that the applicant has served a copy of the application, and of any documents accompanying the application, on the other party; and

(b) has given the parties a reasonable opportunity to make representations concerning the application; and

(c) is reasonably satisfied that:

(i) in the case of an application to which paragraph (1) (a) applies—the extension of the period for serving a copy of the evidence; and

(ii) in the case of an application to which paragraph (1) (b) applies—permission to serve a copy of further evidence;

is appropriate.

It is not in dispute that the present circumstances of reg. 5.15(1) involve an extension of the time period allowed under reg. 5.10 for serving evidence in answer. Insofar as reg. 5.15(2) is concerned, an Official Notice appeared in the Journal of 8 May 1997 to inform applicants using the extension of time provisions, among other requirements, what constituted 'reasonable terms specified by the Registrar'.

A notice appearing in the Journal of both 18 and 25 November 1999 has since superseded this notice. However, for the purposes of this decision the relevant information is virtually identical. The notices indicate (in part) that:

• All applicants for an extension of time are required to give a full explanation of why additional time is required.

• Declaratory support for an extension of time in which to serve evidence in answer is not required until the total time allowed reaches nine months (that is, the extensions allowed total six months). [It should be noted that these provisions have been revised for instances where the reason is based on negotiations, but they are not applicable here.]

• After six months of extension has been allowed all such applications require a declaration which sets out, (1) progress to date, (2) an expected timetable for completion of the evidence and (3) compelling reasons why the additional time should be allowed.

The opponent (as objector to the application for the extension of time) claimed that these requirements had not been met. Mr Muddle submitted that the information was not sufficiently detailed to support the allowance of further time.

The Office intended to facilitate the service of evidence during opposition proceedings following the introduction of the 1995 Act. To assist in producing this result the above examples of requirements, advertised in an Official Notice in the Journal of 8 May 1997, were put in place as being 'reasonable terms specified by the Registrar' for extensions of time made under reg. 5.15. The explicit detail in the Notice is not only so that applicants can benefit from a clear picture on the type of information that will be likely to produce a favourable outcome for their application, but to provide a more transparent and efficient administrative procedure for all parties. Before the Notice provided information on the type of detail required, some applications merely stated that 'more time is required to serve the evidence', without any further explanation. The Notice also enabled persons working in this Office to direct applicants to the type of detail that is required to justify a request for an extension of time, to enable matters to progress more quickly. On another level, this procedure enabled earlier identification of cases where one party was merely using the opposition process to delay progress by another party.

In applying the requirements of reg. 5.15, several principles arise. Two of these, which share some common ground, are the 'rising onus on the applicant for the extension with the passage of time' and the need for 'greater detail of the circumstances' as the time extended accrues. To this end, a variety of automatically generated standard Official letters are used to provide information to both parties when an extension of time application is made. The letters may simply acknowledge receipt of the application (a clear indication that the application is deemed to have met requirements), or may request greater detail (an indication that the application requires some further clarification), or may even direct the applicant to request to be heard concerning the application (a clear indication that it has a major difficulty). The amount of information required and the level of detail concerning future action on the part of the applicant will, therefore, vary because of all kinds of factors. These may include such items as the time already allowed, the number of hands through which the evidence must pass to be finalised, whether any of the parties providing material are geographically distant from each other and, of course, the particular circumstances as described by the applicant that it claims apply to the case.

At the hearing, the opponent attacked the first application for an extension of time from the applicant, for which declaratory support was required. This application was made on 1 July 1999 to cover a time period from 2 July to 2 October. The application is not in dispute here but the opponent desired to set the background scene. However, this declaration did, in my opinion, meet the requirements set out in the Official Notice of the Journal of 8 May 1997. The standard Official letters dispatched to both parties at the time also confirmed this point of view. In general, claims from an applicant that indicate delays have been caused by some form of prior inter-relationship between the opponent, the applicant and the applicant's predecessor provide a sufficient reason for the need for further time -especially where it is the first time that a declaration is required. In the present circumstances, the applicant claimed a tyranny of distance and of time-zones between the parties also led to delays. As I mentioned earlier, with the passage of time, there is a rising onus on the applicant for the extension to justify the need for further time. The level of detail that is required to justify any extension of time is, of course, a subjective decision. However, an over-riding factor can be seen in reg. 5.15(3). That entire paragraph of the legislation is quoted above, but the relevant portion to my above comment reads:

(3) The Registrar must not grant an application unless the Registrar:

…

(c) is reasonably satisfied that:

(i) in the case of an application to which paragraph (1) (a) applies—the extension of the period for serving a copy of the evidence;

…

is appropriate.

The over-riding factor here concerns reasonableness. The Registrar must be reasonably satisfied that the requested extension is appropriate. There could be concern that the other party may suffer some disadvantage, or that some other factor weighed against allowing the application - but such factors would need to be quite significant to deny the applicant the extension of time requested and shut out the evidence completely. On this score, I have some sympathy for the opponent. I can readily understand their position that the collection and collation of the applicant's evidence cannot be left, indefinitely, to the whim of a voluntary third party. Certainly, the applicant needs to provide a convincing reason, usually accompanied by greater detail of the situation, as time passes. In the present situation, I need to be persuaded that the applicant is making real efforts to bring the service of the evidence to a conclusion. To do this, the applicant needs to show that, it recognises that its reliance on the need for extra time because voluntary deponents are involved is not an open-ended arrangement. The service of the Blacklock affidavit, as evidence in support, provides confirmation, in my view, that this is the case. Given this factor, I am of the opinion that a claim - in declaratory form- that further time was required because of the difficulties produced by the geographical separation of the applicant and the voluntary declarants and also because of the number of parties to be kept informed, is a persuasive one.

The applicant had submitted that voluntary third parties residing in Canada were providing evidence to Blake, Cassells & Graydon, agents for the applicant in Canada. The applicant's Australian attorneys, Baldwin Shelston Waters, and local solicitors, Michell Sillar needed to liaise with the Canadian agents to ensure that the evidence put on contained all of the relevant information. By relevant information, the applicant stated that it should be relevant, not only to the present opposition matter, but also relevant to possible Federal Court action on a mark registered in the name of the present opponent. The opponent rejected this claim.

It seems to me, however, that if the Federal Court matter is not relevant, then the only challenge in the present opposition concerns the applicant's intellectual property rights and the applicant has a more than arguable case for further time to defend its rights. If, however, the Federal Court matter is relevant then the applicant's desire to serve the evidence as a single item for both matters is also persuasive. In this regard, I have taken notice of the judgement of Burchett J in Ferocem, supra. Justice Burchett commented on a similar circumstance to that outlined above. The delegate of the Commissioner of Patents, in refusing an extension of time application, had found that the reason outlined by the applicant for the extension of time was 'laudable but not relevant' to the issue of granting the extension. The applicant in that case had claimed that it wished to lodge substantially identical evidence in both the opposition proceedings and in the Federal Court proceedings. Justice Burchett comments, at 247:

An error was accordingly involved in the delegate's conclusion that the objective in pursuit of which the application for an extension was made was 'laudable but not relevant … to the present issue', that is, to the proper explanation and justification of the delay. If the objective of the extension was 'laudable', as the delegate said it was, or if the application was made 'with good reason', as he later suggested it was, that was certainly a relevant consideration; it bore on the discretion involved in the regulation's requirement of reasonable satisfaction that the extension 'is appropriate in all the circumstances'.

I am of the opinion that the applicant's desire to maintain consistent documents for both the present opposition matter and the possible future court matter is also laudable - it could substantially reduce the work required by all parties in the longer term. As such, I also accept that it is a relevant consideration to the present situation.

The amount of detail provided by the applicant is sufficient, in my opinion; to justify the time sought. I also accept that, where independent third parties are involved, that the time taken to obtain, and therefore serve, the evidence is likely to be longer than where these circumstances have not occurred.

A further issue developed by the opponent, concerned the claim that the applicant could not hide behind any claim for 'confidentiality' concerning third parties, where the request for time had been made on that basis. The opponent claimed that the applicant must provide full details of the third parties and information in respect of dealings of the applicant's agents with them to allegedly complete the evidence because of the applicant's claim that such third parties provided a major cause of the delay.

Mr Muddle has claimed that the applicant forfeited the right that this information should remain undisclosed. He has said that once the applicant had made such a claim then it must be prepared to disclose all of the details. The applicant had claimed that these third parties were to provide the evidence voluntarily in their own time and the applicant had little leverage to progress the process more quickly.

Although I can sympathise with the opponent's frustration at the delay, I cannot agree with Mr Muddle on this point. I believe that the applicant may legitimately request further time based on the claim concerning the third parties who are not directly involved, without the necessity to divulge names or all details at that stage. If these unnamed third parties decide at a later time not to proceed with providing the evidence, then such early naming in an opposition matter may be to their own detriment in later business dealings. Certainly, I find agreement with Mr Muddle's position when the process is at an end. At that stage, the third parties must be named if they are to provide evidence in the matter. The applicant's desire for confidentiality of these persons cannot continue once the evidence is actually submitted.

At the hearing, the applicant did provide the names of two individuals, who were resident in Canada, who Mr McManis claimed were the third parties referred to in the declarations submitted to support the extension of time applications. It is not usual for this Office to go behind a claim made in declaratory form for such detail - unless information of some substance is available that contradicts the declared claim. I am satisfied that the applicant has discharged its onus to give a 'full explanation', with 'progress to date', 'an expected timetable for completion' (to 2 February 2000) and sufficiently 'compelling reasons' to allow all three extension of time applications.

The relevant issues in dealing with an extension of time objection have been set out in the case of Lyons (trading as Mitty's Authorised Newsagency) v Registrar of Trade Marks (1983) 1 IPR 416. These issues are whether or not a proper case has been made out; the relative inconvenience to both parties of the allowance, or otherwise, of the extension; and the public interest.

From the foregoing, I accept that the applicant has made out a proper case. In general, the public interest also falls in favour of the applicant for the extension of time where it is apparent that that party has a clear intention of providing evidentiary material for the opposition matter. It is advantageous to a fair decision if the Registrar has all of the facts of the matter available. In circumstances where the evidence is presently available, little advantage can be achieved by refusing an extension of time for a period of time that has almost already elapsed. Neither the public interest nor the interests of the applicant are served by shutting out evidence that is presently available.

In relation to the relative inconvenience of the parties, the only issue for which I do have some concern is the claim made by the opponent of financial disadvantage if the extensions are granted. From the above discussion I am of the opinion that all of the other considerations lie in favour of allowing the extensions of time to 2 February 2000. I am also aware that the applicant has expended a deal of time, money and effort to bring the matter to the present stage. However, because of the specific submissions made by the opponent concerning its financial disadvantage, including those in relation to the on-going dilemma of its suppliers, any further time requested by the applicant may require a more compelling justification than that provided for the present three applications.

Conclusion

From the foregoing, I have found that the applicant has met the requirements laid out under reg. 5.15 in relation to the three applications for extensions of time. On balance, I have found that the relevant criteria discussed in Lyons (supra) fall in favour of allowing the extensions of time. Therefore, as a delegate of the Registrar, I hereby allow the three extensions of time covering the time period from 2 November 1999 to 2 February 2000 in which the applicant may serve the evidence in answer in this opposition matter.

Costs

The applicant for the extensions of time requested costs in the matter. The original contention over the allowance of the extension of time concerned the applicant and this Office only - the opponent did not have the opportunity to raise any concerns regarding the application prior to the hearing. The opponent was invited to attend the hearing only after the applicant had requested to be heard. The applicant could have chosen to respond to the Official request for 'more compelling reasons' with a letter rather than through a hearing. In the particular circumstances of this decision I direct that the parties should bear their own costs in the matter.

Don Nancarrow

Acting Hearing Officer
Trade Mark Hearings
7 February 2000.