FKP Sojuzpodoimport v Spirits International NV
[2007] ATMO 42
•27 July 2007
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Directions suspending opposition by FKP Sojuzpodoimport to protection of International Registrations Designating Australia 932465, 932471 and 934031 - STOLICHNAYA ELIT trade marks - in the name of Spirits International NV te Rotterdam.
Delegate: | Terry Williams |
Representation: | Opponent: Written subs by Allens Arthur Robinson Applicant: Written subs by Mallesons Stephen Jaques |
Decision: | 2007 ATMO 42 Suspension of opposition: Relevance of court case going to ownership of earlier registrations, length of proceedings, balance of convenience, opposition suspended |
Background
In this matter, various trade marks have been registered, under the Madrid Protocol, on the International Register at the International Bureau. These Madrid registrations designate, and thus seek protection in, Australia. In respect of Australia, the currently recorded holder of the international registrations is Spirits International NV te Rotterdam (“Spirit”). That name was duly recorded at the Trade Marks Office in March 2007 on the basis of relevant instruction coming from the International Bureau. Because the database at the Trade Marks Office is dependant on notification from the International Bureau, it should be appreciated that being recorded as the holder of an International Registration Designating Australia can be something of a moveable feast.
In what follows, it will be convenient to use the term Spirit somewhat loosely, in order to designate either the holder of the relevant trade marks or the related, similarly-named entity that is active in Federal Court proceedings to which I will come in due course.
The process under the Madrid Protocol has resulted in the following Australian records of International Registrations Designating Australia (“IRDAs”). In the terminology of the Madrid Protocol, an IRDA is very much analogous to a domestically-filed application to register a trade mark. The trade marks the subject of these IRDAs are all variations on the theme of STOLICHNAYA ELIT, in class 33. :
| IRDA number | Trade Mark |
| 932465 | STOLICHNAYA ELIT |
| 932471 | |
| 934031 | (as label on bottle device, not fully show) |
The IRDAs have been examined, and accepted for possible protection of the trade mark in Australia. This is now opposed by FKP Sojuzplodoimport (“FKP”). Opposition to protection is the Madrid analogue of opposition to registration under s 52 of the Trade Marks Act 1995 (“the Act”). Part 17A of the Act authorises reg 17A to make the necessary adaptations of the Act but these are, for present purposes, immaterial.
The present dispute is about an administrative decision taken as part of this opposition process. It is necessary to set out some of the legislative framework that supports and governs the dispute, which I will further describe in due course. Section 54 of the Act provides:
54 Opposition proceedings
(1) The Registrar must give to the opponent and to the applicant an opportunity of being heard on the opposition.
Note: For opponent and applicant see section 6. [For present purposes, ‘applicant’ and ‘holder’ are therefore analogous. See reg 17A.2]
(2) Subject to subsection (1), the proceedings for dealing with the opposition must be in accordance with the regulations.
The Registrar of Trade Marks is thus required to conduct oppositions within the broad framework provided by the regulations. These (regs 5.7 and 5.8) allow an initial period of three months for the service and filing of evidence in support by an opponent. Thereafter, regs 5.12 and 5.13 allow for the service and filing of evidence in answer by the holder/applicant and of evidence in reply by the opponent (regs 5.9 - 5.11) respectively. The process of those evidence stages is itself subject to regulation 5.15, which governs how a party may apply for an extension of time for the service and filing of evidence and how the registrar may deal with that request.
In other matters, FKP has, by way of a cross-claim currently before the Federal Court and made against Spirit, challenged the terms of existing trade mark registrations that stand now in the name of Spirit.
The trade marks the subject of FKP’s cross-claim, which I will refer to below as “the existing registrations”, are also in class 33 for trade marks involving essentially the word STOLICHNAYA. They were entered in the Australian (rather than the Madrid) register at various times between 1976 and 1996. In the Federal Court proceedings, FKP seeks an order that it, rather than Spirit, be recorded as the owner of the existing registrations.
Suspension of oppositions
On 4 December 2006 the lawyers for FKP sought a direction from the Registrar of Trade Marks that would suspend the opposition proceedings while the Court proceedings were resolved. Specifically, the direction has the effect of suspending all three of the present matters at a stage where FKP has yet to file or serve evidence in support.
A suspension of the opposition involves a direction under reg 5.16. This provides as follows:
5.16 Conduct of opposition proceedings generally
(1) The Registrar may, at the request of a party to the opposition proceedings or on the initiative of the Registrar, give a direction in relation to the procedure in the proceedings.
(2) A direction given under subregulation (1) must not be inconsistent with these regulations.
(3) The Registrar must not give a direction unless the Registrar:
(a) is reasonably satisfied that parties to the proceedings have been notified of the proposed direction; and
(b) has given the parties a reasonable opportunity to make representations concerning the proposed direction; and
(c) is reasonably satisfied that the proposed direction 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.
This power allows the registrar’s delegates to ensure that, within the broad framework set by the regulations that I have previously referred to, efficiency and procedural fairness are both ensured in the management of opposition cases. At its most mundane level, reg 5.16 would allow the registrar to propose and make directions that would compensate a party for undue delays in deciding an extension of time application. These delays can range from the simplest, such as the loss of a letter or some other unfortunate circumstance arising at the Trade Marks Office.
The delay, however, need not be a matter of days or even weeks. A case in point would be British Sky Broadcasting Ltd v Skynetglobal Limited[1], where a review, under the Administrative Decision (Judicial Review) Act, of the decision to register the trade mark delayed the consideration of a somewhat analogous request for an extension of time, made under reg 5.2, to oppose the registration in question.
[1] (2003) 57 IPR 93
Thus, directions of a quite substantial effect can also be given under this provision where a sufficient case is made. The provision can thus be used to suspend an opposition - in other words, to defer, to a date to be fixed, the due date for evidence or for determination on the merits - where it appears that there is good reason to do so. The registrar’s experience is that, used in this way, a suspension can be an efficient alternative to repeated applications under reg 5.15 for extensions of time for serving evidence[2].
[2] Illustratively, in the present matter, FKP’s request for suspension actually incorporated also an application for an extension of time to serve evidence in support and both the suspension and the extension request draw their documentary support from common material.
It should be noted that the power to give directions suspending an opposition, like the power to extend time for serving evidence, arises only under the regulations, not the Act. This is because the general extension of time provision, s 224 of the Act, is excluded from nearly all aspects of opposition proceedings by the action of various parts of reg 21.28. Actions under regs 5.7 and 5.8 are thus “prescribed acts” under regulation 21.28. They are therefore not, under s 224(8), “relevant acts”, and the logic of the legislation is such that they are not within the scope of s 224.
Registrar’s practice in suspending
If a prima facie case is made for suspension, the registrar’s practice is to suspend where both sides agree that suspension is appropriate. The main administrative decisions in this regard[3] acknowledge that it is undesirable to have the same or a very similar issue dealt with both administratively and in the Court, particularly on the basis of different evidence. It is also clear that adversarial examination of evidence in Court proceedings will generally produce a more accurate factual basis for any administrative decision, and is accordingly to be preferred.
[3] Beyond Properties Pty Ltd v Andrew Knight [2006] ATMO 87, Silhouette International Schmied AG v Aust Opthalmic Supplies Pty Ltd [2001] ATMO 124, Ayrton Senna Promocoes v Senna Racing (1998) 41 IPR 395, Outrigger Hotels v Evangelista (2000) 49 IPR 164
Where one party disputes the need to suspend, it is necessary, having allowed the parties to make representations on the question, to take into account the balance of convenience[4] as between the parties. Regard must also be had to administrative convenience and to the public interest. The latter will tend to lie with the efficient running of the intellectual property system, as manifested both at the Trade Marks Office and in the Courts, though regard may also need to be had to the interests of third parties (if any). Further, as Hearing Officer Thompson pointed out in Beyond Properties, supra, delay in finalizing an opposition at the Trade Marks Office is prejudicial to an applicant only where, firstly, the opposition decision is likely to favour the applicant, secondly, it can be assumed that the decision will not itself be appealed by the unsuccessful opponent; and, thirdly, and in the absence of such an appeal, a significant further delay would be caused by awaiting the decision of the Court.
[4] Or, as it was put in Re Applications by Yamazaki Mazak Corp (1992) 24 IPR 321, causing “minimal prejudice”. Delay in such matters is, in fact, more often a balance of inconvenience.
Reasons for suspensions
FKP provided a brief account of the cross-claim. It is alleged by FKP, in this, that the ownership of the existing registrations was obtained in various ways that are all, very loosely, contrary to law. The cross-claim goes to who can appropriately claim to be the successor in title of the true and original owner of the first of the existing registrations, which, as I have said, dates back to 1976.
There were some irregularities that needed to be resolved with the opposition proceedings as they then stood at the Trade Marks Office but, when this was done, on 15 January 2007 a delegate of the registrar wrote to both parties, proposing to suspend the oppositions and allowing the parties 21 days to make representations on that issue. On 15 February, in the lack of any representation from Spirit, a delegate of the Registrar of Trade Marks made the decision (“the first decision”) to suspend the oppositions.
Immediately they received the letter advising of the first decision, the lawyers for Spirit wrote to the Trade Marks Office, asking for additional time to address the issue. The relevant submissions on which Spirit relied were subsequently filed, on 16 March. On 16 April, another delegate, having considered these submissions, made a decision (“the second decision”), refusing to lift the suspension.
Spirit has now requested that the registrar issue written reasons for the two decisions. This request is made under both reg 21.20 of the Trade Mark Regulations 1995 and under s 13 of the Administrative Decisions (Judicial Review) Act. I now provide those reasons, drawing on the records on the official file and the material that was available to the two delegates when they made their respective decisions, and setting out, below, the arguments put by Spirit against the making of the second decision.
Reasons for first decision
In the lack of any adverse comment from Spirit, the delegate had regard to the simplified explanation of the cross-claim in the Court proceeding. It was obvious that the Court proceedings, which impinge directly on the terms of the existing registrations, could go to the very heart of s 44, one of the grounds in the present opposition proceedings. If FKP is successful in the cross-claim, the opposition at the Trade Marks Office would then need to be decided on a very different basis to that which FKP now encounters. In the lack of any objection by Spirit, the delegate had regard to the apparent seriousness of the cross-claim, its potential to have an impact on the oppositions and the apparent lack of disadvantage to Spirit. The balance of convenience thus favoured suspending the oppositions, which would also be administratively convenient and avoid the potential for any decision at the Trade Marks Office to be brought into dubious standing by a subsequent decision of the Court.
Reasons for second decision
In reaching the second decision, the delegate had the benefit of detailed submissions from the lawyers for Spirit. The lawyers for FKP have yet to have an opportunity to respond to these and it may be helpful if I set out the kernel of them now, as part of the process of setting out reasons for the second decision.
In the present case, Spirit argues there is no true commonality of issues between the Federal Court proceedings and the oppositions. The Federal Court is being asked to make a determination on the ownership or validity of the existing registrations, which are presently owned by Spirit. This determination will not itself dispose of any issue required to be considered in the oppositions.
Spirit’s lawyers have asserted that FKP does not presently have a valid ground of opposition. This is said to be “clear” from the O’Brien declaration[5] and from the application for suspension, though the most that can fairly be said is that this is an inference that might be drawn. The lawyers did, however, assert that Spirit has 14 years of use of the STOLICHNAYA trade marks. This is something on which the delegate was aware that Spirit might rely.
[5] This declaration was filed by FKP to support suspension of the opposition, and also to support an application for an extension of time to serve and file evidence in support.
Spirit argues that the present oppositions would not, in large part, turn upon the same facts, circumstances and issues of law as are alleged in the Federal Court proceedings. It was not the case that "determination of the oppositions would ultimately be subject to the outcome of the Federal Court Proceedings" as the lawyers for FKP had put it.
Spirit argues that FKP’s only prospect of successfully opposing registration of the ELIT Trade Marks is if FKP (rather than Spirit) is found, in the Federal Court proceedings, to be the lawful owner of the existing registrations. Without the Federal Court making such a finding, Spirit argues that FKP has no ground on which to oppose the registration of the ELIT trade marks. This is said to be the only nexus which lies between the oppositions and the Federal Court proceedings.
This is, as Spirit points out, not a case in which the parties are engaged in concurrent litigation relating to the particular trade mark which is the subject of the opposition. This circumstance, as Spirit argued, distinguishes the present case from cases in which the discretion to grant a suspension is more commonly exercised. The Federal Court proceedings will not determine if the use of the ELIT trade marks (or any other trade mark) infringes any trade mark owned by FKP, or if such use is misleading or deceptive in breach of the Trade Practices Act 1974, which would be relevant to s 42.
This is, therefore, not a case in which the Court will be deciding a legal issue which also falls for consideration in the oppositions. Nor is it open to FKP to attack the validity of the existing registrations in the context of the oppositions. In the present case, there is no actual commonality of issues between the Court proceedings and the oppositions.
Spirit asserts that, if the Federal Court decision provides FKP with a basis on which to challenge registration of the opposed trade marks and FKP wishes to do so, the appropriate course is that FKP apply for cancellation of those trade marks under s 88 of the Act. This is partially right, in that this would be a strategy that FKP might adopt. What, ultimately, is at the heart of the second decision is the delegate’s assessment of other courses which FKP might follow.
Spirit has asserted, as has FKP, that the Court proceedings will be complex. Spirit has estimated that a Court decision before 2009 is not likely, that an appeal of any decision at first instance cannot be ruled out and that, overall, it is efficient if the proceedings at the Trade Marks Office are allowed to continue.
It is clear from the submissions of Spirit, from which I have quoted extensively, that there will not be a great deal of overlap in either the evidence or the subject matter of the opposition and Court proceedings, with one critical exception.
At paragraph 28 of the written submissions, Spirit cautiously circumnavigates the full relevance of s 44 of the Act to the current matter. It is said, not surprisingly, that the STOLICHNAYA ELIT trade marks, the subject of the presently-suspended oppositions, are not substantially identical to the STOLICHNAYA trade marks that make up the substance of the existing registrations. However, Spirit has not brought attention to bear on the question of those trade marks being “deceptively similar” for the purpose of the same legislative provision.
If it be accepted that, for the purposes of s 44, a delegate of the registrar may well find that the STOLICHNAYA ELIT and STOLICHNAYA trade marks are deceptively similar, it is clear that the terms of s 44(3) and (4) might well come into play in the present opposition. Spirit would, in such a case, and if FKP is successful in its cross-claim, be able to obtain registration of the presently opposed IRDAs only by relying on what is said, by Spirit, to be 14 years of its own use in Australia. In other words, given the clear and predictable relevance of s 44 to the present matter, it is equally clear that the present oppositions would be decidable on one basis if FKP is successful in its cross-claim, but on another, and more complex one, if it is not.
The delegate accepted the point made by Spirit, that in the absence of an end to the opposition, it will be denied access to the protection of registration for its ELIT trade marks until the oppositions are decided at the Trade Marks Office. It appears that Spirit is sincere in this desire, and clearly it needs relevant registrations in order to activate the Customs seizure provisions of s 132. What is not at all clear is how Spirit sees this need for expedition in the opposition as affecting the case that it (and FKP in consequence) might be entitled to conduct at the Trade Marks Office.
In seeking the lifting of the suspension, Spirit has argued that the opposition proceedings may well finish before the Court matter is concluded. However, if that proves not to be so, it is very arguable, given the relevance of s 44 to FKP’s case, that Spirit itself may need to bring in extensive evidence of use. Critically, Spirit has not said that it would be quick upon this course were FKP successful in the cross-claim. In other words, Spirit appears to lack the courage of its convictions, wishing to preserve its own options in full, should its predictions of the future Court matter be wide of the mark.
There is no indication that FKP, for its part, will fast-track its own role in the present opposition. If Spirit’s lawyers are correct in the assertions they make about the case on which FKP might rely, FKP faces an uphill battle. Certainly, it does not appear to be able to make out even the beginning of a ground under s 44 as the Australian register now stands. Presumably, therefore, it will wish to search widely and diligently for other potential grounds, since to do otherwise would be to fast-track its own failure. That is not to say that the registrar would allow FKP, under cover of the process in the regulations, to delay the inevitable, ad nauseum. However, simple fairness would say that, absent some resolution in the Federal Court, FKP is entitled to a fair time to gather its own evidence to support its uphill struggle.
It would have been open to Spirit’s lawyers to give undertakings as to Spirit’s own case in the event that the opposition was overtaken by a speedy resolution in the Federal Court. That would have given it an equitable base from which Spirit might also ask the Registrar of Trade Marks to give directions rigorously constraining the time available to FKP, or to otherwise prevent it relying on the existence of the Court proceedings as a ground for extending time.
With neither of those things in place, speculation about the length of the opposition timetable is more conjectural than Spirit’s lawyers assert. The lawyers for Spirit, apparently wishing to preserve Spirit’s own options while forcing FKP to battle on an uphill slope, have simply invited the registrar’s delegate to speculate on the what-ifs of the present opposition and the what-ifs of the Court matter. The registrar’s delegate concluded that there was not sufficient likelihood that the Court proceedings would entail a significant delay over and above the potential delays of a seriously-contested opposition. The registrar’s delegate therefore concluded that the proper course was to leave the opposition suspended until the Court proceedings were resolved.
Terry Williams
Hearing Officer
Trade Marks Hearings
27 July 2007