Hansen Beverage Company v Bickford's Australia Pty Ltd

[2008] ATMO 92

TRADE MARKS ACT 1995

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

Re:Opposition by Hansen Beverage Company to registration of trade mark applications 1073748(32), 1073749(32), 1099909(32), 1099914(32) and 1099915(32) filed in the name of Bickford's Australia Pty Ltd and application by the opponent to suspend opposition proceedings

Delegate:

Frances Aarnio

Representation:

Opponent

Mr Adrian Ryan of counsel instructed by Davies Collison & Cave

Applicant

Mr Ed Heerey of counsel instructed by Pipers Alderman and

Collison & Co

Decision:

2008 ATMO 92

No direction under reg 5.16 to suspend opposition;

Costs awarded against opponent

Background

1. During 2005 and 2006 Bickford’s Australia Pty Ltd (‘Bickford’) filed trade mark applications 1073748, 1073749, 1099909, 1099914 and 1099915 for the following goods in class 32:. Mineral and aerated waters; energy drinks; isotonic beverages (non-medicated; fruit drinks, fruit juices and syrups for preparing beverages. Each application has been accepted for registration and advertised in the Official Journal of Trade Marks.  The relevant trade mark details are:

   Trade Mark No: 1073748

   Priority date:                    5 September 2005

   Trade mark:  MONSTER

   
   

   Trade Mark No: 1073749

   Priority date:  5 September 2005

   Trade mark:  MONSTER ENERGY

   Trade Mark No: 1099909

   Priority date:  21 February 2006

   Trade mark:  

   Trade Mark No: 1099914

   Priority date:                    21 February 2006

   Trade mark:  

   Trade Mark No: 1099915

   Priority date:                    21 February 2006

   Trade mark:        

   For convenience I will refer to these trade marks as ‘the Monster marks’.

2. Hansen Beverage Company (‘Hansen’) has opposed each of these trade mark applications, relaying on ss 41, 42, 43, 44, 58, 59, 60 62 of the Trade Marks Act 1995 (‘the TMA’). 

3. On 5 May 2008 Hansen wrote to the Registrar of Trade Marks (‘the registrar’) seeking a direction that the opposition proceedings be suspended pending the determination of Federal Court proceeding VID 241 of 2008.  Bickford does not agree with the proposed direction and requested to be heard.  Accordingly, the issue was set down for a hearing.

4. As a delegate of the registrar in Canberra I heard the issue by video conference on     22 August 2008.  Hansen was represented by Mr Adrian Ryan on the instructions of its attorneys, Davies Collison & Cave.  Bickford was represented by Mr Ed Heerey on the instructions of its solicitors, Piper Alderman (in respect of trade mark 1073749) and attorneys, Collison & Co (in respect of trade mark applications 1073748, 1099919, 1099914 and 1099915).  Immediately prior to the hearing Bickford advised that it objected to the proposed suspension of opposition on all of the applications but sought only to be heard on the proposed suspension in relation to applications 1073748 and 1073749, the two filings with the earliest priority dates.  For the remaining three applications, it would rely on its written submissions, a copy of which had already been provided to Davies Collison and Cave.

   The law and principles

   5. Section 54 of the Act provides:

   Opposition proceedings

   54.(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.

   (2) Subject to subsection (1), the proceedings for dealing with the opposition must be in accordance with the regulations.

5. Regulation 5.16 provides:

   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 the 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 hearing or by such other means as the Registrar reasonably     allows.

6. Further, regulation 21.15 provides:

   21.15Hearings by Registrar

   (1)This regulation applies if the Act or these regulations provide for a person to be heard by the Registrar.

   (2)A request for a hearing by the Registrar must be in an approved form.

   (3)On request, or on his or her own initiative, the Registrar may:

   (a)fix a time, date and place for the hearing; and

   (b)give the parties to the hearing at least 10 days’ notice in writing of the hearing and of the time, date and place fixed for the hearing.

   (4)A party must, as soon as practicable after being notified of a hearing, inform the Registrar in writing whether the party wants to be heard.

   (5)A party may attend a hearing in person or by such means as the Registrar reasonably allows.

   (6)A party may make representations in writing before or during a hearing.

   (7)A hearing must be conducted with as little formality and technicality, and with as much expedition, as the requirements of the Act and these regulations and a proper consideration of the matters before the Registrar, allow.

   (8)The Registrar is not bound by the rules of evidence but may inform himself or herself on any matter that is before him or her in any way that the Registrar reasonably believes to be appropriate.

   (9)The Registrar may adjourn a hearing by notifying each party to the hearing accordingly.

   (10)Subject to these regulations, the Registrar may give a direction that is reasonably necessary for the conduct of the hearing.

   8.     The registrar has, from time to time, issued directions under reg 5.16 to suspend opposition proceedings.  Recently, in Cadbury UK Ltd v Registrar of Trade Marks[1] Finkelstein J at [12] affirmed the Registrar’s power to suspend or temporarily stay proceedings for proper reasons.  At [21] His Honour set out some factors which it may be appropriate to consider in deciding such a matter:

   Sometimes there will be circumstances in which it is appropriate to delay opposition proceedings and await a court’s resolution of disputed facts that may be relevant in opposition proceedings.  It is not possible to say with any precision what those circumstances might be.  They would include (a) the degree of similarity of the issues involved (b) the significance of the issues to    the opposition proceedings (c) whether the Registrar has more evidence that the trial judge (d) the likelihood of the judge’s findings being challenged, and (e) whether it may be unfair (ie a breach of the rules of natural justice) to rely on the judge’s findings or the evidence on which those findings were based.  In particular cases other matters will be taken into account.

   Submissions

   [1] [2008] FCA 1126 (1 August 2008) (‘Cadbury’).

   Hansen

   9. Mr Ryan provided a summary of the Federal Court matter (VID 241 of 2008) between the parties. Hansen had sought injunctions and damages against Bickford on the grounds that use by Bickford of the Monster marks amounted to passing off and contravention of s 52 of the Trade Practices Act 1974 (Cth) (‘the TPA’). Bickford cross-claimed. Middleton J dismissed both Hansen’s claim and the cross-claim on the basis that neither party had established a sufficient reputation to succeed in passing off or under s 52 of the TPA. Hansen subsequently appealed to the Full Federal Court (‘the Full Court’) seeking that the judgment of the primary judge be set aside and that there be an injunction preventing use of the Monster marks by Bickford. The appeal was heard on 4 and 5 August 2008 and the Full Court reserved its decision.

   10.     Hansen considers that the appeal provides a compelling basis for suspending the oppositions for the following reasons.

   11. A key ground of opposition is under s 42(b) of the TMA, that use of the trade marks would be contrary to law. If Hansen is successful in its appeal, use of the marks by Bickford would be contrary to law because it would amount to passing off, and would contravene both s 52 of the TPA and the injunction granted by the Full Court.

   12. In support of this submission Hansen argues that the relevant date from which s 42(b) should be applied in an opposition proceeding is the date of mounting of the opposition. Here the dates of filing of the notices of opposition are 11 August 2006, 12 April 2006 and 22 September 2006, and are all after the date of any passing off and s52 of the TPA, which is April/May 2006.

   13.   Hansen acknowledges that in Time Warner v Stepsam Investments[2] Wilcox J agreed the priority date of the application is the relevant date for consideration of s 42(b) evidence, but submits that decision was not correct. Rather, Hansen contends, s 42(b) should be construed as having a continuing operation, similar to s 59 as construed by delegates of the Registrar in Sapient Australia Pty Ltd and Sapient Corporation v SAP Aktiengesellschaft[3] and McDonalds Corporation v McBratney ServicesPty Ltd[4].

   [2] 59 IPR 343 (‘Harry Potter’).

   [3] [2002] ATMO 31 (‘Sapient’).

   [4] 71 IPR 380 (‘McBrat’).

   14.   Nothing in Southern CrossRefrigerating Co v Toowoomba Foundry Pty Ltd[5] detracts from this proposition, Hansen argues, because the decision in Southern Cross[6] was made under previous legislation and does not turn on the particular words of s 42(b). In the current legislation where Parliament wished to confine consideration to a particular date, the precise expression ‘priority date’ is used. Section 42 does not contain a specific reference to ‘priority date’ and should therefore be construed as having a continuing operation.

   [5] [1954] HCA 82; (1954) 91 CLR 592 (15 December 1954) (‘Southern Cross’).

   [6] Ibid.

   15. Further, Hansen contends, the appeal decision would be highly relevant to the s 60 ground as, if it is successful in establishing the required reputation for the purposes of passing off and s 52 of the TPA as at April/May 2006, it would be a short step to conclude that it had the required reputation at the application priority dates of September 2005 and February 2006. Mr Ryan indicated there is evidence in the appeal case which demonstrates use of the Monster marks by Hansen prior to September 2005. He advised that, rather than go through the appeal case evidence in detail, he would provide me with a copy of a chronology of events which had been prepared by Hansen for the proceedings in the Full Court. The document details Hansen’s promotional activities before the priority date of the earliest of the opposed marks.

   16.   As the hearing and resolution of the opposition will directly depend on the outcome of the appeal, the present opposition is the type of case envisaged by Ormiston JA in Geelong Football Club Ltd v Clifford[7] where it would be preferable to await the expected outcome.  Hansen seeks only that the oppositions be suspended until the Full Court gives judgment on the appeal.  In the unlikely event the case is remitted, Hansen would have to make whatever further application it thought best in the light of the status quo at that time. 

   [7] [2002]VSCA 212 at [6].

   17.   If the suspension is not allowed, Hansen will suffer the prejudice of having to incur the cost, time and effort of a hearing which might otherwise be substantially or entirely avoided if the appeal succeeds.  If the registrar were to determine the opposition ahead of any decision by the Full Court, then the decision reached might be inappropriate in view of the subsequent findings. 

   18.   Following the hearing, attorneys for Hansen provided a copy of the document mentioned by Mr Ryan in submissions and referred to in paragraph 15 above.   Bickfords already had been provided with this material as part of the Full Court proceedings and I am satisfied there is no breach of procedural fairness.

   Bickford

   19.   Bickford agrees that the evidence before the court and the registrar is the same but does not agree that the Full Court's findings will be relevant to the opposition.  In brief its reasons for this are: 

   ØThe relevant dates in the opposition proceedings are earlier than the relevant date in the court proceedings.  As per Southern Cross[8], the registrar must consider evidence in relation to the date of application. Here, the dates of application are 5 September 2005 and 2 February 2006. The likely date of any finding of passing off or breach of s 52 of the TPA, however, is April/May 2006, the time from which Bickford's product became available to consumers.

   ØIt would be erroneous for the registrar to rely on the court's findings of fact as on the reasoning of Finkelstein J in Cadbury[9] the delegate has to look at the evidence and make up his or her own mind.

   [8] [1954] HCA 82; (1954) 91 CLR 592 (15 December 1954).

   [9] [2008] FCA 1126 (1 August 2008).

   20.   It would be unjust, Bickford argues, to indefinitely suspend the opposition proceedings.  Again referring to Cadbury[10], Mr Heerey said the registrar has a statutory duty to get opposition proceedings ready for hearing as soon as practicable and thereafter hold the hearing.   All of the evidence has been served, the matters are ready to be heard and the majority of the opposition costs have been incurred.  On 13 May 2008 Hansen gave written notice that it intends to commence using the Monster trade marks in Australia.  Bickford wishes to secure and enforce its trade mark rights and, it contends, is prejudiced by indefinite delays to determination of the opposition proceedings. 

   [10] Ibid.

   21.   Mr Heerey argued there was no utility in a partial suspension because there is no indication when the Full Court will deliver its decision and any such decision is subject to an appeal by special leave to the High Court.  An appeal, he said, would cause more delay and may result in another suspension request.  Further, the Full Court may remit the matter to the judge in first instance and this would cause further delays. 

   Reasons

   22.   I have considered the parties' arguments in terms of the relevant criteria set out in Cadbury[11].

   [11] [2008] FCA 1126 (1 August 2008).

   23. The grounds of opposition before the registrar are multiple but those which are relevant to the suspensions request are under s 42(b), s 60. The parties agree that the principal issue to be decided in the appeal is whether there has been a passing off or a contravention of the TPA by Bickford. The parties also agree that the evidence before the court is the same as that filed in the opposition proceedings, with the exception of some additional evidence which Hansen says shows its use of the contested marks pre September 2005.

   24. Hansen argues that the issues before the Full Court are relevant to the opposition proceedings because if it is successful in its appeal it will have established its opposition case under s 42(b). It bases this argument on the application of a continuing operation to s 42(b). Bickford disputes this proposition, arguing that the relevant dates for consideration of opposition grounds are the priority dates of the applications.

   25. Hansen also contends that the findings of the Full Court will be relevant, although not determinative, of the s 60 ground.

   26. Although I acknowledge Hansen's assessment of the interpretation applied to s 59 in Sapient[12] and McBrat[13], I do not think the same considerations apply to s 42. As use, or at the very least, an intention to use, is the basis of trade mark registration, an applicant's intention must be ongoing and not limited to the date of application. Interlocking with s 58, where intention and facts at the date of filing are relevant, s 59 looks at an applicant's current intention.

   [12] [2002] ATMO 31.

   [13] 71 IPR 380.

   27. However, it is not a continuing state of mind of the applicant, but illegality arising from use of the mark itself that it is at the heart of s 42. To construe s 42 as having a continuing operation as suggested by Hansen, would in practice require the application of different priority dates to the operation of that section – the priority date of the application during the course of examination, and the date of mounting an opposition should s 42(b) be an opposition ground. This would, in my opinion, lead to confusion and uncertainty for both users and administrators of the trade marks registration system.

   28.   I accept Bickford’s submissions that, in applications for registration the rights of the parties are to be determined as at the date of application[14].  That is not to say, however, that later events cannot be taken into account in determining the position at that date.  In Harry Potter[15], Wilcox J in giving specific consideration to the application of s 42(b), said at [47]:

   Mr Burley’s submissions on this point should be accepted. I think he is correct to say that the application of s 42(b) of the Act should be considered as at the priority date, although looking forward to prospective conduct after registration was effected.

   [14] Southern Cross. [1954] HCA 82; (1954) 91 CLR 592 (15 December 1954)

   [15] 59 IPR 343.

   29.   In Conde Nast Publications Pty Ltd v Virginia Taylor[16] Burchett J said: But it is commonplace of the law of evidence that later events may cast light upon the true position at an earlier date.

   [16][1998] FCA 864 (24 July 2998.

   30.   See also the findings of Hearing Officer Nancarrow in Osgaig Pty Limited v Shigemitsu Industry Pty Ltd.[17]

   [17] [2006] ATMO 41 (26 May 2006).

   31. I do not consider the court's findings will be determinative of either the s 42(b) or s 60 ground of opposition. The registrar has an obligation to decide the issue on the evidence before the registrar and on the law as it is when the hearing takes place[18].  This does not preclude the registrar from taking account of a court's finding, accepting it into evidence and attributing to it whatever weight the registrar considers appropriate.   In this case, there is a degree of similarity between the issues and evidence involved, and it may be that the findings of the Full Court would be relevant to the opposition.  But I think this case falls short of being one where the hearing and the resolution of the case will directly depend on the outcome of the appeal as envisaged in Geelong Football Club Ltd v Clifford.[19]

   [18] Cadbury [2007] FCA 1126 (1 August 2008).

   [19] [2002]VSCA 212 at [6].

   32.   There are possible disadvantages in a decision of the registrar preceding that of the Full Court.   The outcome of the hearing may lead to a registration that is in some doubt, at least until the decision of the court.  The court may issue an injunction preventing Bickford from using the contested marks and the hearing may turn out to be an expensive waste of time.  However, I do not consider those possible disadvantages weigh sufficiently in favour of a suspension.

   33.   It seems to me that whatever the outcome of the court proceedings it is not impossible that either party will exercise its appeal rights, adding to the delays in resolving the court matter.  This may in turn result in a further request for a suspension of the opposition proceedings.  In the meantime, if the suspension is allowed, Bickford's attempts to register the marks will be delayed as will any benefit which may flow from any registration it may achieve, including the right to take infringement action against use of the Monster marks by Hansen.

   34.   The registrar must take all necessary steps to get opposition proceedings ready for hearing as soon as practicable and thereafter hold the hearing[20].  Should the subsequent decision result in an improper registration, there are legislative provisions under which the register can be rectified.  Here the matters are ready to be heard and, in the absence of appropriate reasons to the contrary, I consider Bickford is entitled to pursue registration of its marks and enjoy any benefits which may ensue.

   [20] Cadbury [2007] FCA 1126 (1 August 2008).

   Decision

   35.     I am not satisfied that Hansen has established it is appropriate to suspend the opposition proceedings.  I direct that the opposition proceedings in relation to trade mark applications 1073748, 1073749, 1099909, 1099914 and 1099915 be set down for hearing in the normal course. 

   Costs

   36.     Both parties sought costs in these proceedings.  As Bickford has been successful, I award costs against Hansen at the usual scale.

   Full Federal Court judgment

   37.   Hansen sought a suspension of opposition proceedings only until the Full Federal Court judgment in the appeal VID 241 of 2008.  I note the Full Court judgment[21] was issued on 14 November 2008.  That decision, however, does not alter the basis of my decision or the direction I have made.

   [21] Hansen Beverage Company v Bickfords (Australia) Pty Ltd [2008] FCAFC 181 (14 November 2008)

   Frances Aarnio

   Hearing Officer

   Trade Marks Hearings

   19 November 2008