Emile Coue Pty Ltd v Victoria Principal Productions Inc

[2000] ATMO 6

TRADE MARKS ACT 1995

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

Re:Objection to an application for an extension of time to serve evidence in support of opposition by EMILE COUE to the application under section 92 of the 1995 Act by VICTORIA PRINCIPAL PRODUCTIONS INC to remove from the register trade mark registration numbers 605332(3) & 605333(5) - (PRINCIPAL'S SECRET)

Background

Trade marks 605332 and 605333 (PRINCIPAL'S SECRET) are registered in the name of Emile Coue Pty Ltd (Coue).  On 2 February 1999, an application was made to the Registrar by Victoria Principal Productions Inc (VPP) to remove the trade marks from the Register.  Notice of opposition to the removal application was filed by Coue on 25 May 1999. 

Evidence in support of the opposition was due for service on the applicant, in accordance with reg 5.7, on 25 August 1999.  On that date, Coue applied for an extension of time of three months to 25 November 1999 for service of the evidence.  The reasons were as follows:  "the opponent is compiling evidence of use and needs further time to complete the process, prepare a statutory declaration and serve it on the applicant for removal".

The extension of time was allowed.

On 25 November 1999, Coue applied for another extension of 3 months up until 25 February 2000.  This time, the reasons were given as "the opponent is continuing to gather evidence of use and needs further time to complete that process".

On 10 December 1999, the agent for VPP notified the Trade Marks Office that it had not received a copy of the latest application for extension.  The letter requested a copy of the extension application on the basis that there was "a possibility that the removal applicant will wish to oppose the extension".  The Office faxed a copy to VPP on 13 December 1999.

On 16 December 1999, VPP filed an objection to the extension which I shall quote in full:

"The objection is based on the grounds that a proper case justifying the extension has not been made out, and having regard to the interests of the two parties and the general public, the extension is not appropriate.  The opponent has already had a period of six months within which to furnish straightforward evidence in order to show that their trade mark has been used in Australia within the last three years, and is now seeking a further three month period within which to gather such evidence of use.  This is, in our view, totally unacceptable." 

The letter finished with a request for a hearing to be set down as soon as possible. 

The matter was set down for a Hearing in Canberra on 13 January 2000  Both parties made submissions by telephone.  VPP was represented by Mr Richard Catt of Madderns, Trade Mark Attorneys, with Mr Brian Elkington of Blake Dawson Waldron, Lawyers, appearing for Coue.  Both parties filed statutory declarations to support their submissions and upon which their submissions were based.

Submissions

Mr Catt began by detailing the history of the contact between the two parties leading up to and following the lodgement of the applications for removal of the trade marks.  VPP is the owner of trade mark application 753528 in class 3 for the words PRINCIPAL SECRET.  This application is currently under examination.  He said that, following receipt of an examiner's report which cited trade marks 605332 and 605333 against this application, VPP contacted Coue enquiring if Coue would voluntarily cancel its registrations to avoid non-use action, or else provide clear evidence showing use of the mark during the relevant period, in which case the removal application would not go ahead. 

Mr Catt then described a history of correspondence between the two parties over a period of months in which VPP requested evidence of use of the trade marks and Coue, while claiming to have the evidence, declined to supply it.  Included in this correspondence were suggestions by both parties that they were willing to explore ways of settling the matter amicably.  He said that the application for removal under s92 was filed on 2 February 1999, the letter notifying Coue including a comment that if an amicable agreement could be reached, the s92 application could be withdrawn.  Mr Catt said that there was no further correspondence with Coue until receipt of the Notice of Opposition to the removal, served on 25 May 1999. 

Mr Catt went on to describe the history of extensions of time, details of which are set out earlier.  Following the objection to the latest extension application, he said the next correspondence from Coue to VPP was a letter dated 11 January 2000 offering to withdraw the opposition to the removal applications on receipt of reimbursement for certain costs incurred in developing the brand.

Mr Catt then summarised the VPP position by observing that Coue claimed to have evidence of use in its possession as far back as 8 December 1998, that they have been asked for evidence more than once and have declined to provide it, and that they have effectively had 13 months in which to gather their evidence together. Though both sides have expressed interest in settling the matter, Coue has delayed pursuing the option until very recently.  He submitted that the application for extension of time should be refused for the following reasons:

• the time allowed by regulation 5.7 is sufficient when evidence of use in the market over the required 3 year period is all that is required and the applicant has specified it has this evidence already;

• the opponent has not been diligent in its attempts to provide this evidence.  Its real intentions (commercial gain) are shown by the letter dated 11 January 2000; and

• The reasons given for the latest extension are grossly inadequate, being a reiteration of the reasons for the first extension application without additional explanation of any problems or difficulties faced.

Mr Catt concluded by saying that an extension of time was a privilege which has to be justified.  He said Coue has not made out a proper case for allowing the extension, and its allowance would inconvenience VPP by protracting the case, and further interfering with acceptance of its own trade mark application, 753528.

Mr Elkington opened his submissions on behalf of Coue by stating that the opponent was taking the opposition seriously.  It had been diligently attempting to find the relevant evidence.  Mr Elkington expressed the belief that the trade mark was not a major brand within the applicant's business, and that there had been some discussion within the organisation on suitable actions in respect of it. 

However, he said he was not aware there was an objection to the application for extension of time until he saw the official hearing notice from the Trade Marks Office on 10 January 2000, on his return from holidays. The first exposure he had to the reasons for objection was while listening to Mr Catt's submissions during the Hearing.  He considered the extension of time should be granted because of lack of notice either of the objection, or of the Hearing.  He felt that the time constraints precluded him from preparing a detailed case, and subsequent difficulties contacting his client, which are mentioned below, made the situation worse.

Mr Elkington said that after reading the notice, he immediately called the client requesting instructions.  He was not able to contact them until 11 January 2000, and the principal of the company indicated a willingness to consider settlement on a monetary basis.  He authorised Mr Elkington to forward a letter offering settlement on this basis.  At that time the client also indicated that the company had recently discovered evidence of use pertaining to the relevant period which had been stored in boxes.  However, he said it would take some time to collate the material because of staff constraints and because the company was in the process of moving premises.

Mr Elkington said he has had difficulty in contacting his client since 11 January as the only telephone number he has for them went out of service, he presumes because of the move to new premises.  He is of the belief that Coue can provide the required evidence, but is unable to ascertain further information because of the difficulties in contacting the client.  If the extension request is denied, he believes Coue will suffer great prejudice because it will lose both of its trade mark registrations and the opportunity to obtain reimbursement for its costs.

Mr Elkington mentioned the change of Office procedures regarding extensions of time (Official notices appearing in the Australian Official Journal of Trade Marks (the Journal) on 18 and 25 November 1999).  These procedures, he said, waive the requirement for statutory declarations in support of extension applications until later than 6 months after the statutory 3 month period, when filing evidence in support.  He said that this suggested that two extensions of time is not at all an unusual occurrence at this stage in the process. 

On the balance of convenience, he considered that his client would be greatly inconvenienced if the extension was denied, whereas VPP would not suffer such a problem.  Because he only became aware of the hearing following his return from leave on 10 January, he said that Coue did not have time to prepare a case.  This problem was further exacerbated because the company was difficult to contact at present, and had been incommunicado for three days before the hearing.  He said that if the extension was denied, and the s92 applicant was successful, Coue would lose both its trade marks, even though it had information to show use. It would also lose the opportunity for settlement as set out in the letter of 11 January 2000.  He said that, while VPP feels frustration because its own application is being held up, they are aware that the application cannot be accepted at present, and waiting another five or six weeks could be too inconvenient.  Mr Elkington specified that Coue would be able to produce a statutory declaration with the required material by the end of the extension period if it is allowed. 

Mr Catt replied by noting that he had similarly had short notice of the hearing, and therefore suffered the same time constraints.  He was also not aware that he should have notified the opponent company of the objection.  He considered the letters from the Trade Marks Office set out procedures, and these do not mention service on the other party. He also believed the extension request is deficient and does not justify the requested extension of time.  He did not agree that two extensions of time are not uncommon at this stage in s92 proceedings.  While it may be common in s52 cases where third parties must be contacted, it should not be necessary in this case where the s96 opponent already has the material in its possession.  He stated that additional time to provide this material is not justified.

Mr Elkington referred to section 224 of the Act, and Regulations 21.26 and 5.15.  When speaking of notices of opposition, these all require notice to be given to the other party.  As Coue was unaware an objection had been filed, they had no way of preparing themselves.  He said that with earlier notice of the proceedings, it is possible that negotiations could have been initiated earlier, and the hearing could have been avoided altogether.  He referred again to the unfairness of proceedings because of lack of notice and lack of time to prepare.

Discussion

I accept the comments from both parties that this Hearing proceeded on very short notice.  However, this was necessitated by the disruption to the normal Trade Marks Office procedures over the Christmas break and the Registrar's desire to quickly resolve the matter.  Nevertheless, both parties opted to proceed and present submissions within that short time period, and I must now decide the matter of whether the extension of time application should be allowed.

The extension of time sought here is an extension of time to serve evidence of the use of the trade mark in Australia within the relevant three-year period.  If the extension is granted, the total time so far allowed for the service of evidence of the use of the trade mark in Australia will total 9 months. 

Extensions of time to serve evidence in support of either a s92 opposition or one proceeding under s52 are governed by the provisions of reg 5.15 which provides as follows:

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.

(4)   For the purposes of paragraph (3) (b), the representations may be made in writing or at a hearing or by such other means as the Registrar reasonably allows.

(5)   If the Registrar grants an application under paragraph (1) (b) on terms that include service of a copy of the further evidence within a specified period, a party to the opposition proceedings may apply to the Registrar for an extension of that period.

(6)   Subregulations (2), (3) and (4) apply to an application under subregulation (5).

Mr Catt referred to the law in respect of extensions of time as set in out in Ferocem Pty Ltd v Commissioner of Patents 1994 AIPC 91-057 and Vangedal-Nielson and others v Smith (Commissioner of Patents) and another, 33 ALR 144. I take due note of these decisions in the context of Mr Catt's submissions. However, I consider that the decision whether or not an extension of time is allowable depends on a consideration of the matter in light of the factors outlines in Lyons v Registrar of Trade Marks (1983) 1 IPR 416, namely:

(a) whether a proper case has been made out justifying the extension;

(b) whether sufficient reasons have been provided;

(c) the public interest, and

(d) the relative inconvenience to the parties concerned.

On the first two matters, Coue has submitted reasons, albeit brief ones supporting its request for additional time.  These were quoted earlier.  At this stage of proceedings, that is, the second request for a three month extension of time to serve evidence in support, a statutory declaration is not required.  This practice is set out in Official notices published in the Journal dated 18 and 25 November 1999.  While more detail in the reasons would have been welcome, it would appear that Coue claims to be in the process of gathering evidence and needs more time to complete this.  That is not to say that this particular reason can be relied on in the future without considerable additional explanation.  However, for the purposes of this extension of time, the application was properly made, and supported by reasons which, though brief, are acceptable.

VPP suggested the opponent's failure to gather the evidence quickly as evidence of lack of diligence.  I am unable to agree with this opinion. From personal experience, I believe it is possible to know you have a certain item when you are in the process of shifting business or residential addresses, but to be unable to say where it is. It may also take some time to find this item, once a search is instituted.  While this may not be efficient business practice, I believe this type of circumstance does occur, and I believe a certain amount of allowance can be made for it.  However, I also consider limits should be put on the time allowed when relying on this particular set of circumstances.  It cannot be relied on for a long period of time.  According to Mr Elkington's submissions, Coue has advised that relevant information was found whilst the company was moving to new premises, and collation and preparation for service should now be possible.

The remaining two matters are the public interest and the relative inconvenience to both parties.  Mr Elkington, in his submissions, suggested that Coue would suffer greater inconvenience if the extension was not allowed than would VPP, as Coue would not only lose its two trade marks, but also any chance for a financial settlement of the matter.  I am inclined to agree with Mr Elkington in this respect.  While the two trade marks subject of this removal action are undoubtedly interfering with acceptance of VPP's application 753528 and VPP suffers consequent inconvenience, I am of the opinion that the loss to Coue of two established trade marks and the possibility of a consequent commercial gain to VPP outweighs this inconvenience.  I consider the balance tips in favour of Coue at this stage.  If proceedings were to be further protracted however, the balance may well tip the other way.

As far as the public interest is concerned, I consider this is best served by allowing Coue to gather its evidence and submit it for appraisal.  Coue claims that the trade marks have been used during the relevant period, and if this is so, some part of the public has been exposed to these trade marks.  Eventually the opposition will be heard, and a decision will issue.  The Registrar or the Registrar's delegate should have in front of him(her) all relevant information to ensure the best possible decision issues.

VPP, in its submissions, refers to attempts it made to convince Coue to provide evidence of its use of the trade marks subject of the removal applications prior to the filing these applications. It expresses a belief that failure to provide this information shows a lack of diligence on the part of Coue, and that subsequent delays in submitting the evidence once the opposition was put in place, further attest to lack of diligence.

I am not aware that there is a requirement for a commercial entity to supply a business rival with evidence of its use of a trade mark.  Indeed, some of this type of material may be commercial-in-confidence.  The appropriate time for submission of this material is as part of evidence in support of an opposition, and I consider it not at all unreasonable for Coue to refuse to supply or attempt to gather this information until such time as the s92 removal applications were formally instituted. 

VPP has the right to object to an extension application at any stage of proceedings but given the comments made in decisions such as Lyons (supra) and The Australian Olympic Committee v Brennan (1994) 30 IPR 44, suggesting that the statutory 3 month period may be inadequate for gathering evidence, I consider that an extension of time for up to 9 months is not unreasonable. The comments that the s96 opponent does not have to contact third parties to elicit the information are unsubstantiated, as I am unaware of Coue's business arrangements and history. Given that decided cases point towards some leniency in allowing extensions at this stage, providing that adequate explanation is given, the normal Office practice has been to allow them providing the appropriate circumstances exist.

Both parties have referred to the lack of time to prepare cases for this hearing.  However, both sides suffered the same disadvantage and both made comprehensive submissions at the hearing.

Decision

On balance, I consider that Coue has met the requirements for allowance of the extension of time.  The time period requested is not unreasonable; the reasons are acceptable, if brief; the public interest is best served by allowing the evidence to be brought forth and the balance of inconvenience falls on the side of the applicant for the extension.  I therefore allow the extension, taking the date for submission of evidence in support up to 25 February 2000.

Costs

Both parties made submissions as to costs.  Mr Catt suggested that regardless of the outcome, the s96 opponent was not entitled to an award of costs because its application for extension was inadequate.  Mr Elkington specified his belief that, if successful, his client should be awarded costs because of the unfairness of the proceedings.  Given that I have decided the application for extension of time meets the requirements, Coue has been successful in its application.  Accordingly, I order that costs in the matter should be met by VPP.

Alison Windsor
Senior Examiner

18 January 2000