Harvey Comics, Inc

[2001] ATMO 77

TRADE MARKS ACT 1995

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

Re:A delegate's intention to refuse an application by Harvey Comics, Inc. to extend the final date for lapsing of application number 737180 for the trade mark HOT STUFF in Class 25

Background

An application for the registration of the word trade mark HOT STUFF, covering the statement of goods, "Clothing, footwear, headgear" in Class 25, by way of application number 737180, was filed on 18 June 1997 by Harvey Comics, Inc. (the applicant).  An Examiner of Trade Marks examined the application and on 25 September 1997, she issued an adverse report citing three prior registered trade marks as being impediments to the present mark's registration, under s.44 of the Act.  In accordance with reg. 4.12, the application therefore became liable for lapsing on 25 December 1998.  No submissions were filed in answer to the examiner's objections but the applicant sought repeated extensions of time to defer lapsing, under the provisions of s.224, by Davies Collison Cave, the applicant's attorneys.  The Registrar's delegate subsequently allowed these applications.

From 25 June 1999, the grounds, upon which the applications for these extensions were made, were given as "special circumstances".  These applications were accompanied by statutory declarations from the applicant's attorneys, giving details of what these circumstances were alleged to be.  The Registrar's delegate, in the Trade Mark Client Services and Support Section, continued to grant these extensions until 25 June 2001.  However, on two occasions, the applicant was warned that it would be necessary to give more details on the special circumstances, relied upon for seeking the extension, before future extensions could be granted.  The applicant's attorneys duly outlined these circumstances in a series of statutory declarations forwarded in conjunction with further applications to extend the date of lapsing.

On 25 June 2001, the applicant's attorneys filed yet another application under s.224, this time for an extension of time of three months, from 25 June 2001 to 25 September 2001.  This application was also based on the grounds of "special circumstances" under paragraph (3).  It was accompanied by a declaration by Mr Trevor Stevens, a solicitor in the employ of Davies Collison Cave, dated 25 June 2001.  Mr Stevens declared as to some delays which the applicant's instructing U.S. attorneys had experienced in receiving instructions because of an "in-house transition" experienced by the applicant.  He said that, as far as he was aware, it remained the applicant's intention to initiate legal proceedings against the owner of the cited registrations.  He said that he was not aware of what progress had been made in relation to those proceedings but that, to his knowledge, the applicant retained its interest in the present trade mark and had every intention of pursuing its application for registration.

On 29 June 2001, Mr Malcolm Lomasney, the Assistant Director of Trade Marks Administration, sent a letter to Davies Collison Cave saying that he did not consider that it was appropriate to exercise his discretion, as the Registrar's delegate, in favour of allowing the extension and that he intended to refuse the application.  The applicant then sought a hearing in the matter and this was duly set down in Canberra before me, as the delegate of the Registrar, on 2 August 2001.  In a letter filed on 27 July 2001, Mr Stevens advised that the applicant would not appear at the hearing but he requested that the Registrar take into account his attached written submissions.

Submissions and discussion

The relevant provisions of the Trade Marks Act 1995 are:

Lapsing of application

37.(1) Subject to subsection (2), an application lapses if it is not accepted within the prescribed period or within that period as extended in accordance with the regulations.

(2) If, after the prescribed period or the prescribed period as extended (as the case may be) has expired, the Registrar extends under section 224 the period within which the application may be accepted, the application:

(a)is taken not to have lapsed when the prescribed period expired; and

(b)lapses if it is not accepted within the extended period.

224  Extension of time

...

(3) If:

(a)a relevant act that a person is required by this Act to do within a certain time is not, or cannot be, done within that time; and

(b)on application made by that person in accordance with the regulations, the Registrar is of the opinion that special circumstances exist that justify an extension of that time;

the Registrar may extend the time for doing the act.

Here, the applicant has claimed that "special circumstances" have prevented it from responding to the objections in the examiner's first report. It has outlined these circumstances in various statutory declarations attached to previous applications for extension and Mr Stevens has further expanded on them in his written submissions. The circumstances are said to centre on complex negotiations which the applicant has been conducting with the owner of two of the prior registered marks, cited by the examiner as a bar to registration. These circumstances are said to include the option of setting up licensing arrangements; the possibility of Federal Court proceedings against the owner of the cited marks, including issues of alleged breach of copyright; rectification under the Trade Marks Act; and proceedings under the Trade Practices Act. Mr Stevens further said that changes in the ownership of the applicant in the interim, have also served to further delay matters. He then went into some detail on these matters in his submissions, and he attached letters from various parties in support, dated 10 March 1999 and 21 December 1999. He also included, in his submissions, an excerpt from a letter, dated 9 July 2001, regarding the ownership of the applicant and its trade marks, and a possible decision regarding the new owner's possible actions "within four weeks".

Mr Stevens submitted that, despite the lengthy delay in addressing the examiner's objections, the applicant and its U.S. attorney have been conscientiously pursuing various options to resolve the matter.  He said that the circumstances outlined: the complex negotiations, possible court action and the applicant's ownership changes, together, equated to the "special circumstances", as contemplated in s.224.

Certainly, the length of time so far elapsed is far beyond what might be regarded as reasonable, in finalising an application for registration.  As I said before, the first examiner's report issued on 25 September 1997 - almost four years before the writing of these reasons for my decision.  However, it is obvious that this application has endured a tortuous course.  From my reading of the file, it would seem to me that the applicant came late to the option of negotiating with the owner of the cited marks.  Certainly, the first mention of dialogue between the parties was not until 23 June 1999 - almost two years after the examiner's first report.  Of course, these talks may have commenced well before then but there is no mention, that I can find, of when that was.  Notwithstanding this, from the material on file, it would appear that when negotiations did commence, they immediately became bogged down with the involvement of third parties associated with the cited mark's proprietor; the involvement of overseas attorneys; the cited proprietor's uncommercial expectations in respect of royalties and the transfer of the ownership of trade marks; the consideration of legal proceedings - a situation which was exacerbated by the departure of the Australian solicitor handling negotiations on behalf of the applicant; and more latterly, the corporate acquisition of the applicant by a third party.

In considering what might equate to special circumstances in relation to such cases, I have already said, as the Registrar's delegate, in Australian Professional Rodeo Association Inc v Wrangler Apparel Corp 36 IPR 282 at 288:

In Genentech v WellcomeFoundation Ltd, (1987-88) 11 IPR 401, Supervising Examiner Roveta referred to Jess v Scott (1986) 70 ALR 185 as establishing that the modern interpretation of the expression "special circumstances" in the Patents regulations should be a liberal one. Mr Roveta noted, at p 405, after he had looked at relevant court decisions:

The point is that both courts appeared to take the view that the particular expression with which we are here concerned - even though, apparently, a somewhat more stringent requirement than that of the court rule - ought to be liberally interpreted by a tribunal so as not to let an appellant suffer unfairly.

The Trade Marks Office Draft Manual of Practice and Procedure does briefly discuss the words "special circumstances" in the section on the revocation of acceptance.  However, the reference there is not to be taken to be a limit to the state of affairs which could be considered "special".  It should be considered as a guide only and used with some caution.

Taking all of the foregoing into consideration, I believe that the circumstances outlined in the declarations previously filed and expanded upon by Mr Stevens in his submissions, are exceptional enough to be considered as "special" - as contemplated in para. 224(3).

The exercise of the Registrar's discretion
Having arrived at the conclusion that the application for extension qualifies under s.224, I must turn my attention to the question of the appropriate exercise of the Registrar's discretion, allowed for in that part of the Act.  In Sanyo Electric Co. Limited v Commissioner of Patents (1996) AIPC 91-283, which was a determination by the Deputy President of the Administrative Appeals Tribunal, the issues to be considered in such a matter are summarised concisely, at page 37,844, and with reference to other relevant law:

The decisions of the courts concerning the approach to be taken to the exercise of a discretion to extend time are now well established and include:

§  in the absence of nominated factors against which the discretion is to be exercised, regard should be had to the "subject-matter, scope and purpose of the Act" - per Mr Justice Mason (as he then was) in Minister for Aboriginal Affairs and Another v Peko-Wallsend Limited and Others (1986) 162 CLR 24 at 39-40. A further exposition of this is provided by the comments of Mr Justice Davies in Chalk v Commissioner for Superannuation ( 1994) 50 FCR 150 at 154 where he said "...the discretion should be exercised by reference to the words of the statute and the context within which the discretion is conferred";...

§  it is "more important to consider the consequences of extending or refusing to extend time than to debate the reasons why the act was not done in time" (per Davies J in Chalk's case, at 156, with whom Chief Justice Black and Mr Justice Cooper agreed. Similar comments are to be found in Comcare v Ahearn (1993) 119 ALR 85, particularly at 88);...

§  a legislative provision providing for the exercise of a discretion to extend time is beneficial in nature and should be applied beneficially ( Davies J in Chalk's case at 155).

Additionally, I have had regard to D.R. Shanahan's comments on the topic.  In Australian Law of Trade Marks and Passing Off, at page 81, he says:

Where the Registrar does exercise a discretionary power under the Act, the primary concern will be the public interest, but other circumstances may be relevant, including the bona fides of the parties, the position in other jurisdictions and the balance of convenience. It has been said that the Registrar's discretion should be exercised "upon judicial principles and affected neither by caprice nor over-caution" and that an application which is bona fide should not be refused on a ground which is "fanciful" or "in a business sense, unsubstantial".

This is in accordance with the guidelines given in such precedent cases as Vangedal-Nielsen and Others v Commissioner of Patents and Another (1980) 33 ALR 144, and Lyons (trading as Mitty's Authorised Newsagency) v Registrar of Trade Marks (1983) 1 IPR 416. These cases have been cited and relied upon in many delegates' decisions regarding extensions of time, such as Australian Professional Rodeo Association v Wrangler Apparel, supra.  It is also in line with Re Ausorb Pty Limited (1996) AIPC 91-286. That decision, by Hearing Officer Homann, dealt with the revival of a lapsed trade mark application under the new Act, although the transitional provisions of section 240 and 248 applied in that case, as the trade mark application had lapsed prior to the commencement of the new Act. Mr Homann found, at page 37,869, that he was required to decide whether revival of the trade mark application in question, was fair and reasonable, taking into account all the circumstances of the case. These are the terms which apply to the exercise of the Registrar's discretion to revive an application under the transitional provision of section 248, but they seem to me to provide valuable guidance as to the proper exercise of the similar discretion given to the Registrar under section 224.

In coming to a "fair and reasonable" decision in this matter, I have given regard to: the inconvenience to any parties concerned if the extension was denied, including whether the application for registration has been prosecuted with due diligence; the public interest; and the desirability of operating the trade mark system efficiently and without unreasonable delays - Vangedal-Nielsen, supra, at page 150.

On the first of these considerations, the applicant here would be severely inconvenienced, in relation to its application, if the extension was not granted.  The application would immediately lapse, forcing it to reapply for registration if it wished to pursue the matter.  Significantly, no other party would appear to be disadvantaged if I found for the applicant here.  Additionally, Mr Stevens has done enough to convince me that, despite the length of time which has so far elapsed, the applicant has been actively seeking to resolve the matter, either by negotiation or through legal processes.

In relation to the public interest, Kitto J in Kaiser Aluminium and Chemical Corporation v The Reynolds Metal Company (1969) 120 CLR 136 said:

…[it was in] the public interest that [a serious matter] should be dealt with on the merits, rather than that it should be shut out in consequence of a failure of procedure, lamentable though the failure may be.

Given an examiner has raised an objection to this trade mark's registration on the grounds that there are marks on the Register which are at least deceptively similar to it for similar goods, it would seem possible that some members of the public might be deceived or confused by a situation where a trade mark that they identify as being used by one trader was registered in the name of another.  It would seem more constructive to have this matter properly reviewed and resolved by the Registrar.  As such, it would be in the public interest that the Register reflects the actual state of affairs - Re Ausorb, supra, page 37,869.  It would, I believe, also be conducive to the efficient operation of the trade mark registration system,

Decision
Having taken all of the foregoing into account, together with the imminent resolution of the deadlock in the matter - as reported by Mr Stevens in his submissions - I have come to the conclusion that I should exercise the Registrar's discretion to grant the extension sought until 25 September 2001.

However, I should add, at this point, that any further applications for extension of time will come under as much scrutiny as the present one has undergone and that any claims of "special circumstances" would be considered de novo, as would any failure to resolve the impasse referred to above.

Ian Forno
Hearing Officer

17 August 2001