Estate of Michael D Brailsford v Mediaquest Communications LLC

TRADE MARKS ACT 1995

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

Re:Trade Mark Registration Number 741047(3) - PEEL AWAY- in the name of Michael D Brailsford and disputed assignment to Mediaquest Communications LLC.

Delegate:

Alison Windsor

Representation:

Trade Mark Owner: Garry Wilson of Wilson & Young

Assignee: Kenneth McInnes of Hodgkinson McInnes Patents

Decision:

2011 ATMO 41

S109 – application to assign trade mark – trade mark assigned - application not supported by prescribed proof of title – assignment to be cancelled.

Background

Trade mark registration number 741047 was registered under the provisions of the Trade Marks Act 1995 (‘the Act’) in the name of the late Michael D Brailsford. Its priority date is 11 August 1997 and it is registered for ‘paint stripping preparations; chemicals for stripping paints, lacquers and varnishes; paint stripping kits comprising stripping pastes and solutions, applicators and blankets to assist removal’ in class 3. The trade mark consists of the words PEEL AWAY, shown on the application form as follows:

On 23 September 2010 IP Australia received a request to assign the trade mark from Mr Brailsford to Mediaquest Communications LLC (‘Mediaquest’). The assignment application was submitted on behalf of Mediaquest by Kenneth J McInnes, a patent and trade mark attorney and principal of Hodgkinson McInnes Patents of Sydney, Mediaquest’s Australian trade mark representative. The application was accompanied by documents described in the letter as follows:
- Copies of U.S. assignments lodged at the USPTO and pertaining to the transfer firstly from Pilgrim Trading Limited to Brailsford and then from Brailsford to Coating Removal Technology, Ltd (“CRT”);
- CRT Order of Bankruptcy dated 5 May 2008 approving sale of CRT’s assets and CRT’s entitlements in respect of Brailsford (President of CRT);
- CRT Bill of Sale dated 3 July 2008
- CRT Assignment of all assets dated 13 June 2008
- US court filing showing Brailsford as President of CRT;
- Edited extracts of CRT/Dumond License showing Brailsford’s signature on the document (4 pages) as President of CRT.
The accompanying letter dated 22 September 2010 contains the following explanation of the documents attached to the application:
The British/American inventor Michael D Brailsford held various patents and trade marks internationally in his British incorporated company Pilgrim Trading Limited until 1992 when he transferred them back to himself. Thereafter, in 1993 he transferred these rights again to his Jersey (Channel Islands) company Coating Removal Technology, Ltd. CRT operated its principal place of business in the USA and undertook activities, including the July 2003 licensing arrangements with Dumond Chemical Sales Inc.
CRT applied to the U.S. Bankruptcy Court in New York State for Chapter 11 protection while it worked out its bankruptcy problems in October 2001. This eventually led to a variety of legal proceedings by various parties that culminated [on] 13 June 2008 with the Court-approved Sale of all assets of CRT and those assets arising out of its president, Michael Brailsford. This was done to dispose of all claims against CRT and Brailsford.
Pursuant to the Court approved Sale, the Chapter 7 Trustee of CRT assigned all worldwide business assets of CRT and those arising from Brailsford to Mediaquest Communications, LLC (“Mediaquest”). The Assignment dated 13 June 2008 transferred the worldwide intellectual property held by CRT and Brailsford to Mediaquest, particularly to the “Trademarks” as defined in Clause 1 and by reference to Schedule 1 thereto.
At all times since 1993, CRT has been the owner and beneficial owner of the worldwide rights in the trade mark PEEL AWAY and the Court approved assignment gives effect to the transfer of the Australian registration 741047. For the sake of certainty we point to the attached copies of the Bill of Sale and the US Bankruptcy Court’s Order of 5 May 2008.
The assignment application was processed in due course, and on 8 October 2010 the ownership of the trade mark was transferred to Mediaquest. The subsequent owner was advertised in the Australian Official Journal of Trade Marks on 28 October 2010.
On 12 November 2010 IP Australia received a letter from Garry Wilson, a patent and trade mark attorney and principal of Wilson & Young, patent and trade mark attorneys, acting on behalf of Michael Brailsford in respect of registration 741047. The letter advised that the firm was the recorded address for service for the registered owner who had passed away in September 2008. It queried why the address for service had been changed without Wilson & Young being informed and why an assignment of the trade mark had been effected, again without Wilson & Young being informed. As well as notifying of the death of the original owner, the letter included an assignment application on behalf of the original owner’s heirs which would transfer the rights in the trade mark to a company incorporated under the laws of England and Wales, Peel Away Limited.
The letter also referred to Mediaquest’s application to remove the trade mark for non-use, an application which was filed on 15 September 2010 but withdrawn on 26 October 2010 after the assignment to Mediaquest was recorded. Mr Wilson advised that he had been in correspondence with the Brailsford heirs seeking instructions in respect of opposing the non-use application as well as effecting the assignment mentioned in the previous paragraph. The non-use application was to be opposed on the basis that the trade mark had been used in Australia for many years by an authorised distributor.
In respect of the assignment from Brailsford to Mediaquest, Mr Wilson stated his opinion that the documentation provided in support was not relevant in that it referred specifically to an insolvency action in the US in respect of CRT. He said the documents refer to specific trade marks registered in the US as well as certain patents which are no longer in force. The documents also refer to “all the assignor’s rights corresponding thereto throughout the world” but Mr Wilson queries what substantiation there is for this claim. He notes that the Bill of Sale included in the documents and dated 3 July 2008 refers to the estate of the Debtor, i.e. CRT, and “those claims that the debtor (ie CRT) may have against Michael Brailsford” but at no stage does the Bill specify what those claims are likely to be.
Following receipt of this letter, by letter dated 22 November 2010 IP Australia advised Mr McInnes of its intention to cancel the assignment to Mediaquest because of its belief that the assignment was recorded in error. The reasons for this belief were that the documentation received was inadequate as proof of a transfer of title. The letter also allowed Mediaquest 21 days in which to be heard in relation to the matter if he wished to do so.
Various letters ensued between the parties and by email on 7 December 2010, Mr McInnes advised that he wished to be heard and that his client was currently obtaining further documentation held in the USA and relevant to the ownership of the trade mark which he stated was previously held in trust for CRT by Mr Brailsford, ‘president and owner of CRT at all relevant times’.
By letter dated 14 December 2010 IP Australia advised Mr McInnes that his hearing request could not be considered further until appropriate fees were provided. The letter advised Mr McInnes that the matter could be decided on the basis of the material already on file, but if additional evidence was to be relied upon, it was imperative that this evidence be provided as soon as possible. Mr McInnes paid the hearing fee on 17 December 2011 and advised that extensive materials from the USA were in the process of being obtained, and that he would inform IP Australia as soon as possible when all these materials were available for submission, which he expected would be mid to late January.
IP Australia responded advising that Mediaquest’s need to obtain new evidence had little relevance to whether the assignment lodged on 21 September 2010 was valid, but allowing Mediaquest until 21 January 2011 in which to provide its supplementary documents.
On 25 January 2011, as no documents had been received from Mediaquest, IP Australia wrote again advising that the matter was set down to be heard on 22 February 2011, and providing a timetable for both parties to provide written submissions for the hearing. IP Australia also advised that the submissions should also address whether the previous removal application can be reinstated in the event that the assignment is found to be invalid.
Mr McInnes provided a detailed letter in response to this correspondence which requested an alternative date for the hearing because of the complexity of the matter under consideration and his view that it was necessary that all relevant documentation be before the delegate. Mr Wilson also provided a detailed letter in respect of the matter, reluctantly agreeing to a rescheduling of the hearing date and providing the relevant fees. He also asked for clarification of the subject of the hearing, stating his understanding that the hearing was to be in relation to Mediaquest’s application for assignment and that other matters were extraneous to that matter.
The Deputy Registrar of IP Australia’s Trade Marks and Designs Opposition and Hearings section responded allocating a hearing date, a hearing officer and specifying that the purpose of the hearing was to decide whether “the purported assignment/transmission from Michael D Brailsford to Mediaquest Communications LLC was valid”. Other issues, he said, may be relevant only to the extent that they bear on that question. In this respect he specified the requested transmission from the Brailsford heirs to a UK company and the question of whether Mediaquest’s previous removal application could be reinstated in the event that the assignment is found to be invalid.
On 1 March 2011 Mr McInnes filed a summary of his intended submissions accompanied by a large volume of documentation in support of Mediaquest’s arguments for ownership of the trade mark. Mr Wilson filed submissions in response to these on 4 March 2011.
I was delegated to hear the matter and the parties came before me in Canberra on 7 March 2011. Kenneth McInnes of Hodgkinson McInnes Patents appeared on behalf of Mediaquest and Garry Wilson of Wilson & Young appeared on behalf of the estate of Michael D Brailsford.

Legal Framework

Part 10 of both the Act and its Regulations deal with assignment and transmission of trade marks. The relevant sections of the Act and Regulations provide the following:
Section 106. Assignment etc. of trade mark
(1) A registered trade mark, or a trade mark whose registration is being sought, may be assigned or transmitted in accordance with this section.
(2) The assignment or transmission may be partial, that is, it may apply to some only of the goods and/or services in respect of which registration is sought or the trade mark is registered, but it may not be partial in relation to the use of a trade mark in a particular area.
(3) The assignment or transmission may be with or without the goodwill of the business concerned in the relevant goods and/or services.
Note: For assignment and transmission see section 6.
Section 109. Application for record of assignment etc. of registered trade mark to be entered in Register
(1) If a registered trade mark is assigned or transmitted:
(a) the person registered as the owner of the trade mark; or
(b) the person to whom the trade mark has been assigned or transmitted;
must apply to the Registrar for a record of the assignment or transmission to be entered in the Register.
(2) The application must:
(a) be in an approved form; and
(b) be filed, together with any prescribed document, in accordance with the regulations.
Note: For approved form and file see section 6.
Section 110. Recording of assignment etc. of registered trade mark
(1) If the application complies with this Act, the Registrar must, at, or within, the time provided for in the regulations:
(a) enter the particulars of the assignment or transmission in the Register; and
(b) register the person to whom the trade mark has been assigned or transmitted (beneficiary) as the owner of the trade mark in relation to the goods and/or services in respect of which the assignment or transmission has effect.
(2) The particulars are taken to have been entered in the Register on the day on which the application was filed, and the registration of the beneficiary as the owner of the trade mark is taken to have had effect from and including that day.
(3) The Registrar must advertise in the Official Journal:
(a) the recording of the assignment or transmission; and
(b) the registration of the beneficiary as the owner of the trade mark.
Reg 10.1. Applications for assignment etc to be recorded or entered
For the purposes of paragraphs 107 (2) (b) and 109 (2) (b) of the Act (which deal with assignment and transmission), the following documents are prescribed:
(a) a document that establishes the title to a trade mark of the assignee, or of the person to whom the trade mark has been transmitted
…
Reg 10.4. Recording of assignment etc of registered trade marks
(1) For the purposes of paragraph 110 (1) (a) of the Act (which deals with assignment and transmission), the Registrar must record particulars of the assignment or transmission of a trade mark in accordance with this regulation, unless:
(a) the application to assign or transmit the trade mark is withdrawn; or
(b) a prescribed court determines otherwise.
(2) If there is no record made under Part 11 of the Act of a person claiming an interest in, or a right in respect of, the trade mark, the Registrar must record the particulars in the Register after ascertaining that a claim has not been recorded.
Section 6 of the Act provides the definitions mentioned in the footnotes to the sections of the Act quoted above. The relevant definitions are as follows:
approved form means a form approved by the Registrar for the purposes of the provision in which the expression appears.
assignment, in relation to a trade mark, means an assignment by act of the parties concerned.
file means to file at the Trade Marks Office
transmission means:
(a) transmission by operation of law; or
(b) devolution on the personal representative of a deceased person; or
(c) any other kind of transfer except assignment.
Part 43 of the Trade Marks Office Manual of Practice and Procedure (‘the Manual’) provides guidance in respect of the relevant legislation. Paragraph 3.1 refers to the form of the application and states that the application to record an assignment or transmission must be in an approved form and should include certain details, including “the nature of the proof of title, (deed of assignment, merger document, statutory declaration etc)”. It also notes that if the owner wants the Certificate of Registration endorsed, that document should also be filed.
Paragraph 3.2 discusses proof of title, and specifies the following:
A prescribed document that must accompany every application is a document that establishes proof of title to the trade mark(s) (reg. 10.1). The document may be filed as an original or a copy. It may consist of a:
·     deed of assignment;
·     merger document;
·     simple letter of assignment;
·     probate document in the case of a deceased owner, or death certificate and copy of last will and testament;
·     legislative instrument of transmission;
·     declaration.
The proof of title document should show the full name and address of both parties, the trade mark(s) being transferred (except in the case of merger documents) and should be signed and dated at least by the current owner. (Emphasis in original.)

Discussion and Reasons

Prior to taking submissions from the parties at the hearing, I stated that it was my understanding that the hearing was being held to decide the question of whether the application for an assignment which Mediaquest had filed was in order. I considered it necessary to ensure that both parties were clear on the purpose of the hearing as there are other matters involved in this case, being Mediaquest’s application for removal for non-use which was withdrawn once the assignment proceeded, and a proposed assignment from the Brailsford estate to a UK company.
Neither party disagreed with this understanding. Mr McInnes contended that the large volume of documentation which he had provided just prior to the hearing was all relevant to the actual legal status of the trade mark and to its assignment from one party to another. I will come to those documents in due course.
However, I consider it important to make it clear that this decision does not make any specific reference or decision in the matter of the non-use application which Mediaquest filed (and subsequently withdrew) nor to the merits of the proposed assignment by the Brailsford heirs. These matters may be dealt with once the results of this decision are finalised.

The application

The application form itself contains very little information. It gives Mediaquest’s name, its address for service in Australia and a note that the assignment is to be in respect of all the goods for which the trade mark is registered. At the place on the form requesting proof of title to be attached, the box labelled ‘Other’ has been crossed.
The accompanying documents are earlier noted in this decision (at paragraph 2). The first page consists of a document labelled Trade Mark Assignment Abstract of Title. I understand this document to be the result of a search of the US trade mark register intended to show the history of ownership changes for US trade mark registration 1318744. The following particulars are highlighted in orange (though I do not know whether the highlights were applied before or after the document was received by IP Australia):
- Mark: PEEL AWAY
- Conveyance: Assigns the entire interest
- Assignor: Coating Removal Technology Ltd
Further to this document there is a copy of a deed of assignment signed by Michael D Brailsford on 30 November 1992 which transfers two US trade marks – registration 1318744 and application 74/139554 (which became registration 1735957) from Pilgrim Trading Limited to himself. Mr Brailsford executed the document in his capacity as President of Pilgrim Trading Ltd.
The next document chronologically is also a deed of assignment, this time from Mr Brailsford to CRT, assigning registrations 1318744 and 1735957. This instrument was signed on 30 August 1993.
Following on from these documents is a document dated 5 May 2008, and headed “Order Approving the Sale of the Debtors Assets and the Brailsford Claims to Mediaquest Communications LLC”. The debtor in this matter is CRT, and the order specifies the following:
Procedure: (i) authorizing the Trustee to enter into the asset purchase agreement with MediaQuest Communications, LLC (“Mediaquest”) and the sale of the Debtor’s right, title and interest in the name “Coating Removal Technology, Ltd.” and any trademarks or patents of the Debtor (the “Assets”), and those claims that the Debtor may have against Michael Brailsford (the “Brailsford Claims”), free and clear of all liens, claims and interests, ….
A Bill of Sale relevant to the order is the next document, and this document makes reference to CRT’s assets, any trade marks or patents which it owns, and “those claims the Debtor may have against Michael Brailsford”. An assignment document between Mediaquest (‘Assignor’) and CRT (‘Assignee’) is also included, and this document makes specific reference to the particular trade marks as follows:
Assignor hereby assigns to Assignee, all of Assignors right, title and interest in and to:
1.The trademarks listed on SCHEDULE 1 attached hereto, and (a) all registrations and renewals thereof, (b) all income, royalties, damages and payments now and hereafter due and/or payable with respect thereto, including, without limitation, damages and payments for past or future infringements thereof, (c) the right to sue for past, present and future infringements thereof, and (d) all the Assignor’s rights corresponding thereto throughout the world
…
7.Assignor hereby authorizes and requests the Patent and Trademark Office officials in the U.S. and any and all foreign countries to issue any and all of said Patents, Trademarks or Copyrights, when granted, to said Assignee of its entire right, title and interest in and to the same, for the sole use and enjoyment of said Assignee, its successors and assigns.

Schedule 1 as mentioned above lists the following trade marks:
US Trademark Registrations
1318744 Class 1 PEEL AWAY
1735957 Class 3 Peel AWAY

Unregistered Trademark

COATING REMOVAL TECHNOLOGY LTD

Other documents include an affidavit made by Michael D Brailsford as President of CRT referring to the bankruptcy proceedings originally initiated in respect of CRT, and portions of a licence agreement between CRT and Dumond Chemical Ltd in respect of use of the trade mark PEEL AWAY. These documents date from 2002 and 2003 respectively.
It is obvious from these documents that Mr Brailsford was president of CRT at the time of the bankruptcy actions in the US, and that CRT owned registrations for the trade mark PEEL AWAY under relevant US legislation. There is a suggestion that CRT may have had some claim against Mr Brailsford, though this matter is neither detailed nor particularised at any stage. Neither is the issue of CRT’s worldwide rights in PEEL AWAY clarified in any way.
The important matter in this context is whether this documentation clearly provides proof of Mediaquest’s title to the trade mark which was registered in Australia in Mr Brailsford’s name, not in the name of CRT. Mr McInnes argued that as Brailsford was president of CRT at the time when its assets were sold to Mediaquest, he must have held the Australian trade mark in trust for the company. Without evidence clearly supporting this claim, however, I am not prepared to accept it as an obvious fact.
I am not satisfied that the documents provided in support of the application for assignment clearly demonstrate a change of owner from the registered owner recorded on the Trade Marks Register in Australia at the time (namely, Michael D Brailsford) to Mediaquest. At best they demonstrate that Mr Brailsford and CRT had a business relationship. This demonstration of relationship is insufficient to provide proof that Mediaquest should be the owner of the Australian registration, purely on the basis that certain US trade mark registrations belonging to CRT were sold to Mediaquest. I am satisfied that the assignment application pertaining to registration 741047 was not properly made as the purported assignee did not provide any prescribed document clearly demonstrating proof of title.

Subsequent documentation

However, if it had been decided at the time that the supporting documentation was insufficient for the purpose, Mediaquest would have been informed that the application was not in order and it would have been given the opportunity to make up any shortfall in documentation. Once Mr McInnes was informed that IP Australia was considering cancelling the assignment because it was not in order, he provided a large volume of documentation just prior to the hearing which he asserted would clarify the relationship between Mr Brailsford and CRT, and in particular, Mr Brailsford’s state of mind at various stages, and therefore the right of Mediaquest to ownership of the trade mark.
The documentation provides historical detail of the dealings between various companies and Mr Brailsford over the years since the early 1980s. It also demonstrates that Mr Brailsford was, at various times, in dispute with more than one party over the licensing of the US registered trade marks and patents. It suggests that Mr Brailsford may have made business decisions which could best be described as ill-founded on more than one occasion. Significantly, however, none of the documentation makes any mention at any stage of Australia or an Australian trade mark registration.
From the information which he has provided Mr McInnes submitted that it should be recognized that Mr Brailsford intended at all times for the Australian trade mark registration to be held in trust for the company CRT and that this intention can be implied as a result of the fiduciary obligations which Mr Brailsford is said to have owed to that company as its managing director. He submitted that the information provided thus clearly documents that Mediaquest is entitled to ownership of the trade mark via its purchase of the assets of CRT.
I am not satisfied that the matter is as obvious as Mr McInnes suggests. The documentation provided gives historical information and, from some of it, inferences can be made about Mr Brailsford’s business acumen. There is no mention of the Australian registration at any stage, and nothing has been put before me that would persuade me to draw the inference about ownership that Mr McInnes has asked me to make. A registered trade mark is an item of personal property (section 21 of the Act). The fact that Mr Brailsford was a director of a company in one jurisdiction does not, to the best of my knowledge, preclude him from owning personal property in Australia, a completely different jurisdiction. On its face, the Register in Australia shows that in relation to registration 741047 that is precisely, and presumably intentionally, the course which Mr Brailsford took. I consider that the ownership of the registration could not be assigned to another party without a document which clearly establishes the assignee’s right to claim the title to the trade mark. Such a document has not been provided and I reiterate my acceptance of the fact that the assignment to Mediaquest is unsound and should be cancelled.

Decision

The assignment of registration 741047 to Mediaquest Communications LLC shall be cancelled one month from the date of this decision. If the Registrar is notified of an appeal from this decision before that time, the cancellation shall not proceed until the appeal is discontinued, or in the case of orders issuing from the Court, the registration will be subject to those orders.

Costs

Costs usually follow the event. I award costs against Mediaquest at the official scale as set out in Schedule 8 to the Regulations.

Alison Windsor

Hearing Officer

Trade Marks and Designs Hearings

26 May 2011

[2011] ATMO 41

26 May 2011

Key Legal Topics

Areas of Law

Commercial Law

Intellectual Property

Equity & Trusts

Legal Concepts

Jurisdiction