Eddie Bauer Inc v Canstar Sports Group Inc

[2000] ATMO 76

TRADE MARKS ACT 1955

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

Re:Application for an extension of time to serve evidence in support of an opposition by EDDIE BAUER INC to registration of trade mark application 576991(25) - BAUER- filed in the name of CANSTAR SPORTS GROUP INC (now BAUER INC).

Background

This matter concerns an extension of time in an opposition to the registration of the trade mark BAUER, the subject of application 576991 in class 25.  The trade mark applicant is now known as Bauer Inc.  However, for convenience and clarity I will generally refer to the applicant by reference to part of its former name, "Canstar".

Eddie Bauer Inc ("the opponent") has opposed the registration of the trade mark.  The opposition proceeding was put in train so long ago that it was caught by the transitional provisions of the Trade Marks Act 1995 and is still governed by the 1955 legislation.  Under regulation 43 of the regulations under that act, the opponent was due to serve its evidence in support on 16 August 1996. 

The opponent believes that, worldwide, there is a need to regulate the use of the trade mark BAUER.  Both parties use this trade mark in different jurisdictions for, apparently, a wide range of goods.  Over time, the opponent has served Canstar's Australian attorneys with a copy of each of the requests of further extension of time that have added to the official file on this matter.  Canstar has at no stage demurred with any of the opponent's assertions about why its extensions of time have been necessary.  Instead, it has specifically consented, via its Australian attorneys, to the extension of time that is now in dispute, and indeed to many others, particularly where these have been called into question by the Trade Marks Office.

I will proceed to decide this extension on the basis that, after this matter was negotiated by a corporate counsel of the parties virtually to a settlement, complex and detailed schedules of respective goods of the parties were documented.  What was believed to be a final version of the settlement was signed off by the opponent many months ago.  Apparently, this settlement has stalled somewhere within Canstar.  However, I accept at full face value the opponent's statement that there is no reason to suppose that Canstar will not eventually sign off an amicable settlement.

The Trade Marks Office ("TMO") has always been prepared to allow reasonable time for the parties to negotiate a settlement in an opposition matter. Even by those standards the TMO has, in the present case, taken a fairly benevolent view of the relevant provision that deals with the granting of extensions of time in such matters. That provision is s 130 of the Trade Marks Act 1955.

As I will set out below, a Senior Examiner in the Hearings Section, responsible for the guidance and direction of extension of time matters, has finally called on the opponent to show why the last extension of time requested in this matter should not be refused.  In view of this, the opponent ultimately requested to be heard on the matter.  John Terry, a patent attorney of the attorney firm of Griffith Hack, represented the opponent at that hearing, which I conducted under delegation from the Registrar of Trade Marks.

Detailed History

I will set out the detail of this matter to illustrate the protracted history and to emphasise that the administration of the due date for evidence in support has, over that time, occupied the time and other resources of the TMO and of both parties.  The expense of this must not be underestimated: each and every extension in the catalogue that follows has been copied to the attorneys for Canstar.  The TMO has recorded the doing of this as part of the application process, has notified both parties of the filing of each request and, subsequently, advised of the granting of the extensions.  Above this, Canstar has from time to time expressed concurrence with the extensions.

As I have said, the opponent was originally due to serve a copy of its evidence in support of its opposition in August 1996.  At that time, Mr Terry asserted that: "The final documentation involving many countries is under near final negotiations".  This state of near-fruition did not progress as anticipated but Mr Terry continued to express his client's satisfaction with the state of the matter.

In March 1997, a draft agreement was apparently ready, subject to the need for "certain minor amendments".  In June of that year the TMO wrote to the opponent.  Our letter was by way of a standard notice, of a form used when a Senior Examiner in the Hearings Section judges that a party needs to be directed to make progress.  Our letter said, in part:

Whilst the reasons provided for seeking an extension of time to serve evidence have satisfied the Registrar thus far, any further applications sought will need to be supported by more compelling reasons.

There was little apparent progress, and in August 1997 we wrote:

Allowance of the previous extension until 16 August 1997 means a total of 15 months or more has now been allowed for preparation of this evidence.  You are respectfully reminded that if this extension is allowed, any further application for time will need to be supported by compelling reasons which should include a timetable for completion of service of evidence or for when settlement negotiations may be finalised.

To this, Mr Terry provided a declaration that suggested that some of the earlier lack of progress had in fact been caused by other compelling legal matters that, at that time, beset the opponent.  The attorney instructing Mr Terry expressed the view that necessary comments would be provided to Canstar in the near future. 

This satisfied the Senior Examiner that matters would progress. They did not.  Therefore, in December 1997 the Senior Examiner repeated the last request, ie for an indication of when the matter would conclude.  Much protestation of good faith ensued, and subsequent extensions were granted but, again, with no progress.  In May 1998 I myself directed that a further letter in the same terms be sent.  This was despite the express concurrence of Canstar's attorneys with the extension. 

On the basis that the proposed final settlement was under review within Canstar, the TMO again granted an extension of time, warning, in November of that year, that "more compelling reasons" would be required next time.  That was in November 1998.

The opponent filed, at regular two-monthly intervals after this, further requests for extension of time.  In November 1999 a Senior Examiner directed, again, that "more compelling reasons" be shown for subsequent extensions.  I think it is fair to say that all that was being shown, to that point, was the diligence of the opponent's various levels of legal representation in recasting facts that, in essence, had not actually changed.  Speaking plainly, it might well be said that the TMO and the opponent's attorneys were engaged in elaborating a reason that translated, at its root, to "Canstar has gone to sleep on this.  We don't know why but we are sure they will get around to it eventually".

Finally, in February this year, an ultimate warning was given: (emphasis present in original)

Nine months or more (six months or more if it is for evidence in reply) have been allowed for the service of evidence and it is considered that the reasons given for the present extension, as stated, do not warrant the allowance of further time.

YOU ARE ALLOWED 14 DAYS FROM THE DATE OF THIS NOTICE TO PROVIDE A MORE COMPELLING EXPLANATION IN SUPPORT OF THE GROUNDS FOR THE REQUEST FOR THE FURTHER TIME SOUGHT, OR TO REQUEST A HEARING OF THE MATTER, ACCOMPANIED BY THE PRESCRIBED FEE.  IN THE ABSENCE OF EITHER OF THOSE ACTIONS THE EXTENSION WILL BE REFUSED.

This prompted a written submission from Mr Terry.  It became clear that most of the original material on which the opponent would rely was already on the files of the Trade Marks Office in relation to the opponent's own pending applications, which are blocked by the existence of Canstar's application, the subject of these proceedings.  All that was necessary, beyond this, was to update that material to the extent necessary.  This updating is not paramount, but is appropriate if events subsequent to filing are to be used to shed light on the probabilities that existed at the date of the opposed application.

I responded, writing to Mr Terry and offering a short extension of time simply to include and update the evidence that, quite plainly, already existed.  The bulk of the evidence has in fact been served, in April this year.  Mr Terry has, however, done this under protest.  He argues that, since his client's good faith is not in question, serving part of the evidence served very little real point.

I note that all that was achieved by actually filing the bulk of the evidence, and serving a copy, has been an illustration of the good faith of the opponent.  This is a thing that was never questioned once Mr Terry declared that the bulk of the evidence was already identified in detail and precisely located.  What is at issue, now, is time to complete the evidence stage, should it be necessary to do so.

Mr Terry and his client do not resile from the position that, if it chose to, the opponent could easily complete the service of a copy of the remainder of its evidence in support.  I therefore fully accept his additional comment that the opponent found it incomprehensible and frustrating that the matter had not progressed.  Mr Terry's strong point, however, is that the opponent should not be required to carry the opposition through the evidence stages if the TMO is in fact serious about allowing a settlement to be negotiated.  The parties must, he has said, arrive at a workable commercial settlement - eventually - if left to themselves. 

I will accept Mr Terry's statement that there is no application by any third party that could be prejudiced by delay in the matter.  Why, then, he argued, is the TMO so keen to force matters ahead - perhaps ultimately to a hearing?  Was the TMO so keen to arbitrate a settlement in a matter where, ultimately, the parties would, in all probability, negotiate one that suited all the needs of their positions both here and overseas?

Considerations and decision

Mr Terry had already referred to a relevant extension of time decision in a patents matter, Sanyo Electric v Commissioner of Patents, 36 IPR 470. This was under the general extension of time provisions of s 223 of the current Patents Act. It turned on the refusal of the Commissioner of Patents to grant an extension that was discretionary - just as it is under s 130. The case illustrates the undesirability of an official such as the Registrar of Trade Marks setting up artificial fetters in the exercise of his discretion, or of being overly swayed by simple benchmarks. I note that Section 130 of the Trade Marks Act 1955 is wider in scope than s 223 of the patents legislation.  Arguably, therefore, the discretion of the Registrar of Trade Marks should be exercised at least as broadly as that of the Commissioner of Patents.

Bringing together the relevant threads, the position under s 130 is this. Extensions of time are not a matter of right: they are "an indulgence" (to quote Jenkinson J in Kimberly-Clark Ltd v Commissioner of Patents, (1988) 13 IPR 569) and must be obtained on the making of a proper case. In saying this, I recognise that the factors set out by Jenkinson J are not to be applied rigorously to "general" extension of time provisions. (See Ferocem Pty Ltd v Commissioner of Patents (1994) 28 IPR 243.) None the less, the opponent is seeking an extension of time to meet its obligations under the Trade Mark Regulations, and it must make a case for this.

The factors to be considered in such a case are the balance of convenience as between the parties and the public interest.  This has been said to lie primarily in the avoiding of deception or confusion among the public but also in what Bowen CJ, in Vangedal-Nielsen v Commissioner of Patents, called the efficient running of the system[1].

[1]

It seems to me that, once it is clear that the two parties stand united in not wanting an application to mature into a registration, the public interest begins to lean toward meeting that requirement.  I do not lose sight, in saying this, of the fact that the opponent cannot evade the obligation it is under to serve its evidence.  That, ultimately, is its responsibility.  However, even so, both parties must accept some initial responsibility for the current delay.  Both parties clearly see greater merit in the longer-term prospects of a settlement, rather than in the shorter-term compliance with the regulations.  This, in the lack of any suggestion that the opposition is itself frivolous, argues strongly for an extension of time, provided that it can be done without adding excessively to the costs incurred by the TMO.

The TMO operates on a cost-recovery basis and there are fees for extensions of time in opposition matters.  However, these fees should not be seen as "compensation" for inconvenience, so much a recognition that there are costs to be covered and that, in the interests of all clients, these should be minimised by setting up processes that are efficient. 

With this in mind, Mr Terry cautioned me that "efficient" did not necessarily equate with what he called "administrative tidiness".  I have to agree with him that, in a case such as this, compliance with the regulations has required the opponent to expend considerable energy simply to maintain a status quo that it itself cannot particularly relish.

It is worth looking briefly at the overall context of the extensions of time in opposition matters.  As a Hearing Officer at the TMO, I am aware of a fair amount of relevant anecdotal evidence.  This suggests that, over time, applicants for extension of time have developed considerable expertise in recasting tired and unpalatable truths to make them appear newly changed and palatable.  Among this verbiage, it is often quite difficult to discern the genuine cases where an applicant for more time, while somewhat tardy, should still be granted an "indulgence" at the expense of its adversary.

Similarly, there is what was once described as the "notorious fact" - see Lyons v Registrar of Trade Marks 1 IPR 416 - that it takes time to gather evidence and that three months may be insufficient for this. This has been relied on for so long that it has apparently become part of the mindset of practitioners and their clients. The notorious fact in question is, in my experience, regularly misused by the delinquent to disadvantage the innocent.

It could be argued that the public interest lies in gaining evidence while it is fresh.  That is quite true, so far as it goes, and my experience is that evidence is very often reduced in effect because it has been collected later rather than sooner. 

Conversely, however, the Full Federal Court has noted, in Registrar of Trade Marks v Woolworths[2], a swing in legislative policy:

[2] [1999] FCA 1020 at 47

The policy of the 1995 Act can be said to some extent to have shifted the balance of the objectives of trade mark law more towards the identification and protection of commercial products and services than the protection of consumers, although the latter remains an objective.

Such policy shifts are of at least some relevance to the application of a discretionary provision under earlier legislation.  Additionally, the argument about a public interest in the admission of evidence can become somewhat circular.  In the absence of the evidence itself, its worth can only be measured by the effort that the party wishing to rely on it is expending in locating it.  But when both sides agree that it may, and should, be completed - eventually - I think this argues that the registrar's approach should be modified if, while meeting the needs of the parties, efficiency is to be served.

I very recently refused an application for an extension of time to serve a copy of evidence to oppose the removal of a trade mark on grounds of non-use[3].  I did so under the more or less comparable "general" extension of time provisions of regulation 5.15 under the Trade Marks Act 1995.  That extension also had the support of both parties.  It would seem that such a case should, prima facie, be dealt with comparably.  However, to quote again from Sanyo v Commissioner of Patents, supra,

[3] Re an application by Laboratoire Garnier & Cie for an extension of time to serve evidence in support of its opposition to an application by Neutrogena Corporation to remove trade mark registration number 512991(3).

In the absence of nominated factors against which the discretion is to be exercised, regard should be had to the “subject matter, scope and purpose of the Act”: per Mason J (as he then was) in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39–40 66 ALR 299. A further exposition of this is provided by the comments of Davies J in Chalk v Commissioner for Superannuation (1994) 50 FCR 150 at 154 where he said ‘‘… the discretion should be exercised by reference to the words of the statute and the context within which the discretion is conferred”.

As I said in that decision, the statutory purpose of the removal provisions under the Trade Marks Act 1995 is the expedient removal of unused registrations.  I rejected any suggestion that the regulations should be used to subvert this.  In the present case, on the contrary, no rights have been accrued by registration, so the desire of both parties to maintain this status-quo should have significant weight.

I therefore grant the opponent its extension of time for serving a copy of the balance of its evidence in support.

Future prospects

I think the time has come to clearly separate out cases like the present one from those where at least one party appears to be interested in a prompt outcome.  Such cases as the current one should not be part of the average against which disputed extensions are judged.  The factors that characterise this present matter are:

• the history of the matter is likely to be protracted

• the party seeking the extension is relying on evidence that is either readily attainable or already served, and yet it seeks to delay the proceedings.

• the extension is sought with the blessing of the other side - in this case, the trade mark applicant

• the current delay is attributable, initially if not ultimately, to the other side

• there is no third party with a filing that will be prejudiced by the delay

I therefore put the parties on notice that I intend to give a direction under the provisions of regulation 70 and section 130 of the 1955 act.

Regulation 70 is broadly comparable to current reg 5.16 of the current legislation.  It reads:

70. Where, in the opinion of the Registrar, it is necessary, for the proper prosecution or completion of any proceedings, for a person to perform an act, lodge a document, or produce evidence, which is not provided for by the Act or these Regulations, the Registrar may, by notice in writing, require the person to perform the act, lodge the document, or produce the evidence, specified in the notice.

I propose to direct, under section 130 and regulation 70, that:

·the due date for service of the evidence in support be deferred for up to one year, without further fee, subject to any request by the trade mark applicant that an earlier date be set 

·should the trade mark applicant make such a request, a new date for the service of the evidence in support will be set after giving the parties an opportunity to make representations on that question.  The new date will be set to one that is fair and reasonable in all the circumstances, but in any case no earlier than a month after the trade mark applicant files its request and the matter has been considered in the TMO

·should the opponent serve the balance of its evidence in support, the normal provisions for evidence in answer will apply

·this direction will be reviewed if the TMO becomes aware that concluding the examination of an application by a third party is being delayed by this present matter. 

I allow the parties one month from the date of this present document to make representations in writing about why the proposed directions may be inappropriate and/or what direction should be given in its stead.  I will give particular weight to any proposal that has the joint support of both parties.  Conversely, if the parties are of widely disparate views I will be likely to give no direction at all.  In such a case, I am unlikely to allow protracted further extensions of time to the opponent, and it should be prepared to complete its evidence in very short order.

I will write to the parties again after one month from now and, if appropriate, give them necessary directions.

Terry Williams
Hearing Officer
27 July 2000

A more full quote, in relation to an extension of time to oppose the sealing of a patent, reads as follows:

"It would be wrong if he granted an extension simply because no one had raised rather exceptional circumstances why it should not be granted. Reasons why this is so include the desirability of operating the system efficiently and without unreasonable delays and also the interests of the applicant for a patent which are also clearly involved. (1980) 33 ALR 144 at 150.