Guess Europe SAGL v Nick Zisimopoulis & Mary Tuccericimini
[2010] ATMO 24
•30 March 2010
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Dismissal of opposition and late application by opponent for extension of time to provide security for costs in opposition by GUESS EUROPE SAGL to registration of trade mark application 1240640(18, 25) - MARA CINO - filed in the name of NICK ZISIMOPOULIS and MARY TUCCERI-CIMINI.
Delegate: Claudia Murray Representation: Opponent: Carmen Champion of Counsel, instructed by FB Rice & Co, Patent and Trade Mark Attorneys, Sydney.
Applicant: Written submissions by EKM Patent, Patent and Trade Mark Attorneys, South Yarra.Decision: 2010 ATMO 24
Section 222 decision by Registrar to dismiss opposition not properly made and therefore set aside – discretion not properly exercised and natural justice not afforded to the opponent, in the form of an opportunity to be heard. Section 224 extension of time no longer relevant.Background
This is a decision with reasons in the matter of the dismissal by the Registrar of an opposition, and the refusal of a late application for an extension of the time to provide security for costs in opposition to registration proceedings.
Nick Zisimopoulis and Mary Tucceri-Cimini (‘the applicants’) filed trade mark application number 1240640 on 15 May 2008, in classes 18 and 25, for the trade mark:
MARA CINO
No grounds for rejection were raised during examination, and the application was advertised as accepted for possible registration in the Australian Official Journal of Trade Marks on 18 September 2008.
Guess Europe Sagl, of Switzerland (‘the opponent’) filed notice of opposition on 18 December 2008. It filed its evidence in support of the opposition on 17 March 2009, but served it on the applicants one day out of time, on 19 March. On 14 April 2009, the opponent successfully applied for an extension of time from 18 March to 18 April, in order to cover the outstanding period. Then, on 27 April 2009, proceedings took a less pedestrian turn, as the Registrar received a request from the applicants to issue an order compelling the opponent, as a company not residing or carrying on business in Australia, to provide security for the costs of the opposition. The amount of security claimed, calculated as per Schedule 8 of the 1995 Trade Marks Regulations, was $4,035. The applicant then followed its request with its evidence in answer, filed and served on 28 May 2009.
On 4 May, the Trade Marks Office (TMO) provided the opponent with a copy of the applicant’s request for security for costs, and invited it to comment within one month. This it did, citing the opponent’s significant global profile, as recorded in the online encyclopedia Wikipedia, and the reasons for its opposition to registration of the trade mark as demonstrated in its evidence, in support of its own request that the Registrar dismiss as ‘inappropriate’ the applicant’s request for the security for costs order.
The TMO responded on 15 June, explaining the rationale for the security for costs process, and indicating that the Registrar would be making a decision on the applicants’ request shortly. This was followed on 30 June 2009 by an order from the Deputy Registrar, that the opponent pay security for costs in the sum of $4,035. The letter required that the money was to be paid, within 2 months of its 30 June date, directly to the TMO.
The next correspondence from the opponent did not relate to the Deputy Registrar’s order, as might have been expected. Instead, on 9 July, the opponent indicated that it did not intend to serve evidence in reply, and requested to be heard on the opposition. By letter of 7 September 2009, the opponent was advised that, as it had failed to provide security for costs within the time allowed for this, the opposition had been dismissed.
The opponent responded promptly to that letter, filing on 10 September an application for extension of time under section 224 of the Act, together with the requisite security for costs. The TMO initially indicated that it considered grounds for the extension under paragraph 224(2)(a) (see below) had been made out. However, after the applicant had made submissions upon the matter, as it was invited to do, the Office advised the opponent, by letter of 28 October, that it no longer considered it appropriate to grant the extension. The reasons given for this reversal of position were:
Section 222 does not relate to ‘a relevant act that a person is required by the Act to do within a certain time’. No time frame is prescribed in the Act or regulations for complying with a direction to give security for costs. Therefore section 224 cannot be used to extend the time allowed by the Registrar to provide security for costs.
The opposition was dismissed by a delegate of the Registrar under section 222 of the Trade Marks Act 1995 on 07 September 2009 (three days prior to your extension of time request of 10 September 2009). The Registrar does have discretion to extend time for giving security for costs prior to dismissing the opposition. However, the Act does not appear to allow reinstatement of an opposition that has been dismissed by the Registrar, even if the Registrar feels it would be fair and reasonable to do so.
The opponent was invited to request a hearing on the matter, which it duly did, and the matter came before me, as a delegate of the Registrar of Trade Marks, for hearing in Canberra on 16 December 2009. Carmen Champion of Counsel, instructed by Joanne Martin of FB Rice & Co, Patent and Trade Mark Attorneys, Sydney represented the opponent via video link. The applicants were not represented at the hearing, but written submissions by Florence McFarlane of EKM Patent, Patent and Trade Mark Attorneys, South Yarra were submitted on their behalf.
The legislation
The relevant provisions of the Act at issue here are:
203 Exercise of power by Registrar
The Registrar may not exercise a power under this Act in any way that adversely affects a person applying for the exercise of that power without first giving that person a reasonable opportunity of being heard.
222 Security for costs
If a person who neither resides nor carries on business in Australia:
(a) gives notice of opposition under section 52 or subsection 224(6); or
(b) applies to the Registrar under Part 9 for a trade mark to be removed from the Register;
the Registrar may require the person to give security for the costs of the proceeding and may, if security is not given, dismiss the proceeding.
224 Extension of time
…
(2) If, because of:
(a) an error or omission by the person concerned or by his or her agent; or
(b) circumstances beyond the control of the person concerned;
a relevant act that is required by this Act to be done within a certain time is not, or cannot be, done within that time, the Registrar may, on application made by the person concerned in accordance with the regulations, extend the time for doing the act.
…
(4) The time allowed for doing a relevant act may be extended, whether before or after that time has expired.
…
(7) An application may be made to the Administrative Appeals Tribunal for the review of a decision of the Registrar not to extend the time for the doing of a relevant act.
(8) In this section:
relevant act means:
(a) any act (other than a prescribed act) done in relation to a trade mark; or
(b) the filing of any document (other than a prescribed document); or
(c) any proceedings (other than court proceedings).
Evidence
The opponent’s application for extension of time under subsection 224(2) (‘error or omission by the person concerned or by his or her agent’), was accompanied by a statutory declaration, dated 11 September 2009, by Larissa Astrid Wayne, solicitor, of FB Rice & Co, Patent and Trade Mark Attorneys. Ms Wayne has annexed to her declaration a copy of a covering letter, signed by her and dated 3 August 2009, intended to give effect to the opponent’s payment of $4,035 in response to the Registrar’s Order for Security for Costs. She explains that:
On 8 July 2009 I received an email from Guess? Inc, the instructor for the Opponent, providing instructions to pay the Security for Costs levied in these Opposition proceedings." A copy is attached as Annexure A. On 3 August 2009 the instructor provided a completed Memorandum of Costs & Disbursements form providing their credit card details for payment of the Security for Costs in the sum of $4,035.
On 3 August 2009 I prepared an IP Australia Payment Form for Credit Cards, Cheques and Money Orders ("the Form") and a covering letter addressed to IP Australia authorising IP Australia to debit the nominated credit card in the amount of $4,035 for the Security for Costs. A copy of my letter of3 August 2009, the Form and the Credit Card details are attached as Annexure B.
It is my firm's policy to keep a copy of all correspondence and the Confirmation of Facsimile Transmission pages after faxing correspondence, on our files. A copy of my letter and the Form are on my file for this matter, by [sic] inexplicably a Confirmation of Facsimile Transmission page is not on my file. The log of facsimiles sent via our facsimile machines is kept electronically for six days and therefore no records is [sic] available of correspondence faxed to IP Australia on 3 August 2009. In addition, the content of the facsimiled correspondence is not electronically retained. Therefore there is no electronic or paper record of my letter of 3 August 2009 being sent to IP Australia by facsimile.
Ms Wayne goes on to describe the various investigations made in the FB Rice offices, and also at IP Australia, which have now led her to conclude that, ‘due to human error’, her letter was not dispatched from her office.
Submissions and discussion
Ms Champion began her hearing submissions by setting out the opponent’s contentions in the following manner:
The opponent submits that for the reasons set out below:
a) Section 224 of the Act does apply;
b) The extension of time should have been granted as foreshadowed in the letter from IP Australia of 22 September 2009 in light of the contents of the declaration of Ms Wayne;
c) That the decision maker in exercising the discretion under section 222 of the Act:
i. Wrongly treated the power to dismiss the opposition as mandatory;
ii. Failed to perform his duty to make inquiry before exercising the discretion; and
iii. Failed to respect the opponent's entitlement to natural justice.
d) That the failures identified in c) above require the setting aside of the decision to dismiss the opposition.
Ms McFarlane’s written submissions for the applicant also took multiple tacks. She referred to the official letter on the matter of 28 October 2009, which I have quoted above. She reiterated that, because section 222 does not require the provision of security for costs to be done within a certain time, it cannot be a relevant act in terms of section 224, which only deals with acts required by the Act to be done within a certain time. Then, she continued:
We further submit that, in the eventuality where the Hearing officer would disagree with our view (and the Registrar's) and would decide that the provision of security for costs is a relevant act under S.224, this Section could no longer apply at the time when the Opponent requested a late extension of time. Indeed, by that time the opposition had already officially been dismissed.
To allow the extension of time would mean to reinstate the opposition, which cannot be done under the Act.
The unfortunate series of events that occurred at FB Rice in August 2009, resulting in FB Rice failing to notice that the security for costs had not been received by the Trade Marks Office within the time allocated by Mr Arblaster, may amount to an error or omission on the part of the Opponent's agent and may have been a valid reason to justify an extension of time to provide security for costs had it been made prior to 30 August 2009. As it happens, this extension of time was not only made after the above date, but also after the opposition was officially dismissed. At that time, there was no longer a pending opposition procedure and therefore no ground to request an extension of time to do any act that was required to be done during the opposition procedure.
To deal with the tightly interrelated issues at play here in as logical and expedient a manner as possible, I will begin by considering the Registrar’s decision to dismiss the opposition under section 222. Ms Champion indicated that the opponent did not wish, at this point, to challenge the initial exercise of the Registrar’s discretion to order that security for costs be provided. However, it was the opponent’s position that, having decided to make that order, a further exercise of discretion was required of the Registrar, in order to decide to dismiss the opposition. The opponent contended that the Deputy Registrar had made a fundamental error in his letter of 30 June, and in his actions thereafter, by treating the process to be followed under section 222 as one of simple cause and effect, such that failure by a party to pay security for costs would result automatically in dismissal of the opposition. Because they very effectively cover the relevant issues, it is convenient here to reproduce Ms Champion’s words verbatim. She argued:
This approach ignored the requirement that the decision to dismiss the opposition called for a quite separate exercise of the power under section 222 of the Act. That fact is reflected in the wording of the section which clearly differentiates between the exercise of the discretion:
a) To order the provision of security;
b) To dismiss the opposition if the requisite security is not provided within the time-frame stipulated.
The factors for consideration in the exercise of each power will inevitably overlap in the circumstances under consideration.
The factors that should have been considered in making that decision are factors that would have become apparent if the decision maker had complied with the duty and obligations identified below.
Courts have given significant consideration to the extent that an official must investigate facts when making a decision in the exercise of his/her discretion. The dominant view imposes on the decision maker an active duty to make inquiry before exercising the discretion where it is required by the nature of the statutory provision or by, inter alia, the importance of the decision to be made or by the consequences for the person to whom the decision relates: "Federal Administrative Law" C Enright at pages 91 -93, [7.61]- [7.64].
The alternate view is that the decision must be made in an inquisitorial manner in that the decision maker must act diligently and properly. He/she cannot do so without first finding the facts by making inquiry of the relevant people.
Here the decision maker failed to comply with either version of his duty. The duty to investigate the relevant facts arose from the importance of the decision he was proposing to make or as a result of the consequences for the opponent of that decision.
The decision maker simply determined to dismiss the opposition on the opponent's failure to provide the security by the time stipulated. He ignored his duty to investigate further the parties entitlement tohave the opportunity toplace relevant information and arguments before him: Darke v L Debal [2006] NSWCA 86 where Mason J said:
Mr Robertson correctly pointed out that a person with authority to decide a matter does not deny procedural fairness simply because he or she rejects the propositions advanced by those who seek the decision. Those parties are entitled to have the opportunity to place relevant information and arguments before the decision-maker, which is very different from saying they have a right to a favourable decision. Procedural fairness is concerned with process, not outcomes. (My underlining)
The importance of providing the adversely affected party with a forum for being heard on the issue under consideration is reflected in the way the courts have approached, for example, the ordering of the provision of security.
In exercising the discretion to order the provision of security, the decision maker has to take·into consideration that "to make or refuse to make an order for security for costs involves the exercise of a discretionary judgment. That means that the court exercising the discretion must weigh all the circumstances of the case. The weight to be given to any circumstance depends not only upon its own intrinsic persuasiveness but upon the impact of the other circumstances which have to be weighed: P S Chellaram & Co Ltd v China Ocean Shipping Co [1991] HCA 36; (1991) 102 ALR 321 per McHugh J. In Energy Drilling Inc v Petroz NL (1989) 11 ATPR 40-954, where Gummow J reiterated the discretionary nature of the power to order security, and noted at 50,422 that an applicant's residence outside the jurisdiction "does not necessarily invite an exercise of discretion in favour of ordering security, the question being how justice will best be served in the particular case."
The approach identified [above] stresses the importance of weighing all the circumstances of the case and determining the question how justice will best be served in the particular case. One can only consider all the circumstances if one is aware of what those circumstances comprise. Here, the decision maker was clearly not aware of all relevant circumstances and made no effort to apprise himself of them.
The primary question how justice will best be served in the particular case should have led the decision maker to, firstly, consider the following context:
a) That the right to oppose an application proceeding to registration is an important one in that it contributes to the integrity of the Trade Marks Register. The lack of such a right would result in the Trade Marks Register being littered with trade mark registrations relating to marks, the use of which are likely to confuse consumers or, even more seriously, actively deceive or mislead consumers or which are, in fact, the property of another party or relate to an application made in bad faith;
b) That the opposition mechanism has become even more important with the passing of the Act because of the introduction of the presumption of registrability so that any doubt about the registrability of a mark must now be resolved in favour of the applicant: “Shanahan's Australian Law of Trade Marks and Passing Off” 4th ed at p.195 [25.05].
c) That the opponent is a company of substance.
Having put the issue into context and identified the importance of his decision both to the opponent and IP Australia, the decision maker clearly had a duty to make inquiry as to why the security was not provided by the opponent within the time allowed, especially as it is not unknown to IP Australia that such failures are often the result of system failure and therefore inadvertent.
Such an approach is also necessitated by the fact that the rules relating to natural justice apply to the making of a decision that has significant consequences to the person affected. Natural justice requires that the decision maker to do two things: he/she must make a proper inquiry and, secondly, must give parties who are affected by the decision an opportunity to be heard: "Federal Administrative Law' C Enright at page 462, [31.2] - [31.3].
There is no doubt that natural justice at common law applies to the bare discretion created by section 222 of the Act: "Federal Administrative Law' C Enright at page 465, [32.11] - [32.14]; see also p.490, [33.53].
In summary, natural justice requires the decision maker to give persons who are affected by the decision a hearing, meaning a fair and sufficient opportunity to present their case.
By letter dated 22 September 2009, IP Australia informed the opponent that grounds for granting an extension of time had been made out by the opponent but that a final decision would not be made until it had received the comments of the applicant on the application for an extension of time.
The opponent was not copied on the comments received from the applicant. Yet those comments clearly raised matters of significance going beyond the merits of the application and going to the threshold issue of the applicability of section 224 of the Act to what had occurred. The opponent was given no opportunity to respond to the applicant's comments and it heard nothing further from IP Australia until it received IP Australia's letter of 2 November 2009.
In light of the aforesaid, the opponent submits that the decision to:
a) dismiss the opposition was tainted in that the decision maker failed to exercise his discretion:
i. By treating the power to dismiss the opposition as mandatory;
ii. By failing to perform his duty to make inquiry before exercising the discretion; and
iii. By his failure to respect the opponent's entitlement to natural justice.
b) dismiss the application under section 224 of the Act in that the decision maker failed to exercise his discretion by his failure to respect the opponent's entitlement to natural justice, that is to respond to the issues raised by applicant in its comments.
In his letter of 28 October 2009, [the TMO officer] suggests that the dismissal of the opposition could not be reversed since the Act "does not appear to allow reinstatement of an opposition that has been dismissed by the Registrar, even if the Registrar feels it would be fair and reasonable to do so". That approach misconstrues what the opponent is seeking to achieve and that is the setting aside of the decision to dismiss the opposition on the basis that the decision was deeply flawed for the reasons set out [above].
I find these arguments persuasive. I believe that the Registrar’s approach to the implementation of section 222 in this matter was fundamentally flawed, and the decision to dismiss the opposition which resulted from that flawed process can only be viewed in that light. At the very least, the opponent should have been notified prior to the point of dismissal and, in accordance with section 203, (‘Exercise of power by the Registrar’, quoted above), it should have been offered an opportunity to be heard on the matter. In this case, simple notice of the overdue payment and the impending consequences would have been more than sufficient to alert the opponent’s representatives to their oversight.
Decision
Taking into account all the circumstances of this case, as well as relevant case law, in particular Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597, I believe I am entitled to find that the safest and most appropriate course here is to set aside the delegate’s decision of 7 September 2009. This I now do. I conclude that, despite the clear requirements of section 222, the Registrar’s discretion was not separately exercised in relation to the decision to dismiss the opposition, after the opponent’s apparent failure to provide security for costs. Further, procedural fairness and natural justice was not afforded to the opponent, as it was neither notified about, nor (most importantly) given an opportunity to be heard upon the dismissal, prior to its coming into effect. As a result of these critical omissions from the decision-making process, I find that the decision in dispute was simply not properly made under section 222 of the Act.
It will be remembered that the opponent paid the ordered amount of security for costs at same time as it made its late application for extension of time to pay. The dismissal of the opposition being now effectively reversed, and the security for costs now having been given, the circumstances under which the question of dismissal arose earlier no longer exist. In addition, the need for me to make further enquiry into whether the provisions of section 224 properly apply to the non-statutory time period set down by the Deputy Registrar for compliance with his costs order, (either before or after an opposition has been dismissed), has been obviated. The situation now is straightforward: security for costs has been given by the opponent in compliance with the Deputy Registrar’s order. The evidence stages being already concluded, it follows that, absent any successful appeal from my decision here, the opposition may duly proceed to a hearing and decision on its substantive issues.
Claudia Murray
Hearing Officer
Trade Marks Hearings
30 March 2010
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