Julie Tarte v Snowflake Designs, Inc - [2019] ATMO 24

TRADE MARKS ACT 1995

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

Re: Opposition to removal of trade mark registration 1306114 SNOWFLAKE (25) – request by Julie Tarte for extension of time to file evidence in support, objection by Snowflake Designs, Inc.

Delegate:	Katrina Brown
Representation:	Removal Applicant:	Blake Knowles of Spruson & Ferguson
	Removal Opponent:	Sam Wilson of CCS Legal Pty Ltd
Decision:	2019 ATMO 24 Trade Marks Regulations 1995 – regulation 9.18 – extension of time to file evidence in support – exceptional circumstances not established – extension of time refused.

Background

This matter concerns a formal objection by Snowflake Designs, Inc. (‘the Removal Applicant’) to an application in the name of Julie Tarte (‘the Removal Opponent’) for an extension of time (‘EOT’) to file evidence in support (‘EIS’) of the opposition to the removal of trade mark registration 1306114 SNOWFLAKE (‘the Trade Mark’).
The Removal Opponent’s EIS was due to be filed by 26 June 2018.
On 26 July 2018 the Removal Opponent applied for an EOT of two months to file the EIS. The reasons provided with the EOT request were as follows:
We had started the process with one solicitor, and that didn’t go anywhere, I then applied for a court hearing to show my evidence but didn’t realise I was meant to do this after submitting my evidence, I then had Greg spend 1 day and $600 to do this, only to find out this was the incorrect process, he then met with a new solicitor who wanted $5000 to help me apply for an extension, which I just can’t afford…I was overseas the last week of June and unable to attend to this from there…my extension application is late as I was having trouble getting help with how to apply for an extension, til my daughter helped me, as I am not that tech savvy, and had already applied for a court case instead. We are a small family business, and don’t have a large amount of resources.
On 30 July 2018 a delegate of the Registrar of Trade Marks issued a notice of intention to refuse the EOT. The delegate was not satisfied that there was enough information to justify the extension being granted.
On 13 August 2018 the Removal Opponent provided the delegate with additional information including:
Our solicitor called 4 days before our evidence was due to let us know she would no longer be acting for us, this gave us little time to compile what we had already given her.

Karina from Blue Print suggested I file for a hearing, which is what we then did within the time period. Clearly this was incorrect advice from her. At which time we applied for a hearing, not realizing we had to forward the evidence at the same time as applying.
…
From the time of the first letter we commence[d] collecting information on our trade mark usage and continuously forward[ed] this to our lawyers.

The following timeline of the steps taken by the Removal Opponent (or on her behalf) was also provided:
25.10.16 - Discussions with Karina: snowflake with an estimated legal cost of $2,500.
2.2.17 - Confirmation sent to Karina, notice to oppose.
23.2.17 - Evidence sent to Karina 8.30am.
2.3.17 - Evidence sent to Karina.
29.3.17 - Snowflake removal application.
11.4.17 - Evidence sent to Karina.
12.5.17 - Discussion re evidence.
29.5.17- Talks with Karina re our investments made in snowflake.
23.7.17 - Evidence sent to Karina, including timeline of snowflakes use.
29.8.17 – Email Checklist of evidence in addition to what we already sent, forwarded to Karina.
29.8.17 - Lawyers for Snowflake Inc. contacts asking for more time, to liaise with their client at 3.05pm.
30.8.17 - We received an investigation report, into Snowflake Inc.
7.9.17 - Several folders of evidence was sent to Karina. Also discussed investigation report. Settlement resolution was offered to and rejected by Snowflake Inc.
18.9.17 - Again we submitted a further settlement proposal. No reply was received from Snowflake Inc.
13.2.18 - Email sent to Marcus, regarding settlement discussions. No response received.
15.3.18 - We offered to settle with Snowflake Inc. but no reply to our email.
22.6.18- Karina said they will no longer work on snowflake.
24.6-1.7.18 - Julie was overseas.
26.6.18 - Applied for change of address for change of notification for services with IP Australia.
28.6.18 - Greg tried to file for extension but filed for court hearing with IP Aust.
4.7.18 - Greg met with new lawyer- Nina Rossi from [sic] and they wanted $5000 to file for extension, which was unaffordable.
On 21 August 2018 a delegate of the Registrar issued a notice of intention to grant the EOT. The delegate was satisfied that there were exceptional circumstances justifying the EOT. The Removal Applicant was given 14 days to object to the EOT. It did so by requesting a hearing.
Written submissions for the hearing were filed on behalf of both parties. The submissions on behalf of the Removal Opponent contained a declaration of Gregory Tarte dated 4 December 2018 (‘the Tarte Declaration’). This declaration sought to provide additional information in relation to the events set out in earlier correspondence from the Removal Opponent and included:
At about 4:35pm on Friday, 22 June 2018, I received a phone [call] from Karina Vassili of Blue Print Law. Blue Print Law were representing my wife, Julie Tarte, as the owner of the Snowflake Trademark.
…
Vassilli: You have not settled our account for our work on the Snowflake matter and we are not in a position to act on your behalf in the matter. The evidence is due to be filed early next week.
Tarte: What should we do?
Vassili: You could go to the IP Australia website and apply for a court hearing. That will give you more time to collect evidence and otherwise deal with the matter. We will not be providing any further support.
…
I then rang my wife who was on holidays in Bali and recounted the conversation with Vassili, specifically the advice that seeking a hearing would provide some time, which we would need to re-compile the information – the evidentiary material that we had provided to Blue Print Law over the previous 18 months.
…
I was trying to identify another trademark attorney to act in the matter…I was advised by Navado Lawyers & Solicitors that the earliest appointment was 9:00am on 2 July 2018.
…
Julie and I met with Ms Rossi [Navado Lawyers] during the morning of 3 July 2018…On 6 July 2019, we received a fee agreement…After receiving the fee agreement, from 7 to 12 July 2018, I took part in a number of phone calls in which I asked Navado to simply submit a request for an extension of time which would provide Julie with time to think about how to proceed.
…
At the time of these events, I was extremely busy with other business matters, including running my construction company. Julie was under a lot of pressure and was rather unwell…which affected her ability to properly focus on the Snowflake trademark dispute.
I heard the matter, as a delegate of the Registrar of Trade Marks, on 7 December 2018. The Removal Applicant was represented by Blake Knowles of Spruson & Ferguson. The Removal Opponent was represented by Sam Wilson of CCS Legal Pty Ltd.

Regulation 9.18

Regulation 9.18 relevantly provides:
(1) A party may request the Registrar to extend a period for filing evidence mentioned in regulation 9.16.
(2) The Registrar may extend the period only if the Registrar is satisfied that:
(a) the party:
(i) has made all reasonable efforts to comply with all   relevant filing          requirements of this Part; and
(ii) despite acting promptly and diligently at all times to   ensure the filing of the evidence within the period, is unable               to do so; or
(b) there are exceptional circumstances justifying the extension.
…
(4) In this regulation:
“exceptional circumstances” includes the following:
(a) a circumstance beyond the control of a party that prevents the         party from complying with a filing requirement under this Part;
(b) an error or omission by the Registrar or an employee that     prevents a party from complying with a filing requirement under          this Part;
(c) an order of a court or a direction by the Registrar that the     opposition be    stayed.
Regulation 9.18(2) directs that the period may be extended only if the party requesting the EOT satisfies the Registrar that they have made all reasonable efforts to comply with the filing requirements and despite acting prominently and diligently at all times have been unable to file the evidence within the time period, or that there are exceptional circumstances. If you will, these are the pre-requisites for the Registrar exercising the discretion to extend the period.
Once the requirements of reg 9.18(2)(a) or (b) have been met, the Registrar then has the discretion to consider whether it is appropriate to grant the EOT. If the party cannot establish one of the pre-requisites the discretionary aspect is not enlivened; the Registrar simply cannot extend the period.
In my opinion, the words of reg 9.18 make it very clear that the provision operates in the manner described above. However if there was any remaining doubt, this is resolved by the Explanatory Statement to the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No. 1) which provides:
Extension of the evidentiary periods is at the discretion of the Registrar and only where the Registrar is satisfied that the party entitled to filed evidence in that period has acted promptly and diligently at all times since the opposition proceedings began, but despite that, or because of some other exceptional circumstances, cannot file evidence in that period. Once the conditions are met the Registrar has the discretion to consider whether or not it is appropriate that an extension of time be granted.[1]
[1] p 29 (stated in relation to reg 5.15 which is an identical EOT provision to reg 9.18). See Andando Pty Ltd v DDT Liners (Australia) Pty Ltd now Teneo Group Pty Ltd [2016] ATMO 43 [19].

Discussion

The Removal Opponent submits that the EOT should be granted because the withdrawal of her then legal representative (Blueprint Law) four days prior to the deadline for filing the EIS constitutes exceptional circumstances.
The Removal Applicant reminds me that the Removal Opponent bears the onus in this matter and asserts that not enough information has been provided about the circumstances surrounding the withdrawal of Blueprint Law to conclude that it constitutes exceptional circumstances.
As reproduced above, reg 9.18(4) provides that exceptional circumstances include circumstances beyond the control of a party, or an error or omission by the Registrar or an employee, that prevents a party from complying with the filing requirement, an order of a court or a direction by the Registrar that the opposition be stayed.
The exceptional circumstances listed in reg 9.18(4) are not exhaustive; they are examples that:
give some guidance to the other situations that would be regarded as exceptional circumstances: matters outside the normal evidentiary process, and outside the control of the party, where it would be unreasonable to insist on the party filing the evidence.[2]
[2] Julie-Anne McCarthy and Bradley McCarthy v TRED Design Pty Ltd [2013] APO 57 [64].
In its hearing submissions the Removal Opponent disclosed that Blueprint Law withdrew from the matter because of non-payment of outstanding legal costs. Prior to this, the Removal Opponent had not provided any reason for the withdrawal of Blueprint Law. The withdrawal of Blueprint Law was not outside of the control of the party; put simply had the Removal Opponent paid the outstanding legal costs Blueprint Law would not have withdrawn from the matter. Furthermore, withdrawal of Blueprint Law seems to me to be an obvious and predictable consequence of non-payment.
Notwithstanding, the Removal Opponent asserts that the timing of the withdrawal of Blueprint Law, immediately before a critical deadline, of itself constitutes exceptional circumstances. The Removal Opponent asserts that it is highly unusual and contrary to normal practice for an experienced IP practitioner to terminate an engagement at such a critical time and as such, doing so, is exceptional. In this respect, the Removal Opponent seized upon the bolded portion of the following submissions made by the Removal Applicant:
It is uncommon for engagements to be terminated with paying clients, in the absence of a professional conflict. It is also highly unusual for an experienced IP practitioner to terminate an engagement at such a critical time. Even if a professional conflict had emerged, it would be normal practice (given the proximity of the evidence deadline and the extreme difficulty in obtaining extensions of time) for the practitioner to complete and file evidence prior to the deadline, before terminating the engagement.
The most likely explanation for Blueprint Law ceasing to act is a disagreement regarding costs.
It is worth noting that when the Removal Applicant made these submissions, the Removal Opponent had not yet disclosed the reason for the withdrawal of Blueprint Law. In these submissions, the Removal Applicant makes a distinction between paying and non-paying clients and the normal practice when there is a professional conflict as opposed to where there has been some disagreement regarding fees or costs including non-payment. The information before me does not establish what the normal practice is amongst IP professionals with regards to non-paying clients and the termination of services in close proximity to a deadline.
Notwithstanding, it seems to me that if the Removal Opponent was ambushed by the withdrawal of Blueprint Law four days prior to the critical deadline, then the withdrawal of Blueprint Law in such close proximity to the deadline for filing EIS may amount to exceptional circumstances. If the Removal Opponent was not ambushed - for example there had been communication between Blueprint Law and the Removal Opponent prior to the telephone conversation on 22 June 2018 in relation to Blueprint Law’s intention to cease to act for the Removal Opponent if the fees were not paid – the withdrawal of Blueprint Law in such close proximity to the deadline for filing EIS would be less likely to amount to exceptional circumstances. In the latter situation, the Removal Opponent would have been aware of the consequences of non-payment. The consequences, being the termination of the services, are a predictable result of non-payment in most industries not just the legal profession. Having been forewarned of the consequences of non-payment, and knowing that it would not be making the payment, the Removal Opponent elected not to make arrangements to ensure that the EIS was filed by the deadline.
I reiterate that the Removal Opponent has provided very little information about the circumstances surrounding the actual withdrawal of Blueprint Law. The Removal Applicant’s submissions clearly put the Removal Opponent on notice about this deficiency. Those submissions did not go unnoticed by the Removal Opponent; this is clear from the content of the Tarte Declaration which responds to perceived deficiencies identified by the Removal Applicant in its hearing submissions. Despite this, the Removal Opponent elected not to provide any information regarding communication between it and Blueprint Law between 26 March 2018 and 26 June 2018 (period to file the EIS), other than the telephone call on 22 June 2018. Most notably, the Removal Opponent was silent as to whether the telephone call on 22 June 2018 was the first they were aware of Blueprint Law’s intention to withdraw from the matter. The Removal Applicant urges me to draw an adverse inference as to the reasons why the Removal Opponent did not provide this information. I do not find it necessary to do so. The information before me is simply not sufficient to establish that the Removal Opponent was ambushed by the withdrawal of Blueprint Law. In the absence of this, there is not enough information for me to be satisfied that the withdrawal of Blueprint Law amounts to an exceptional circumstance.
At the hearing, Mr Wilson made it clear that the Removal Opponent was not arguing that the alleged advice given by Blueprint Law to request a hearing, or any actions taken by Mr Tarte in response to that alleged advice, constitutes exceptional circumstances.
Additionally, at the hearing both parties made reference to the following factors that were listed by the Registrar’s delegate in the intention to grant the EOT:

The extension request and the statement of grounds and particulars indicate the trade mark has been used;
The failure to file in time means opposition proceedings come to an end and the trade mark will be removed from the register;
There is a public interest in ensuring the register reflects the marketplace;
Trade mark ownership is established at common law by use;
There is likely to be confusion if the party which owns the trade mark at common law is not recorded as the registered owner.

In my opinion these factors are not of the same nature as the examples of exceptional circumstances listed in reg 9.18(4). Furthermore, to allow factors such as ‘the failure to file in time means oppositions proceedings come to an end and the trade mark will be removed from the register’ to constitute an exceptional circumstance, or even to be a relevant consideration in establishing an exceptional circumstance, effectively circumvents the very clear intention that is set out in reg 9.17(2). As pointed out by the Removal Applicant’s representative ‘all legal and administrative proceedings are subject to procedural rules, and these cannot be simply circumvented when convenient’.
In my opinion, the factors listed in the intention to grant the EOT (reproduced above) go to the discretionary aspect of reg 9.18. As I explained above at [11] to [13] of this decision, the discretionary aspect of reg 9.18 is not enlivened until the requirements of reg 9.18(2) have been met. For the reasons detailed above I am not satisfied that the Removal Opponent has established that there were exceptional circumstances. Accordingly, factors going toward the discretionary aspect of reg 9.18 are not relevant to my decision.

Reasonable efforts to comply and acting prominently and diligently at all times

At the hearing, Mr Wilson made it clear that the Removal Opponent was not pursuing the argument that she had made all reasonable efforts to comply with the filing requirements and despite acting prominently and diligently at all times to ensure the filing of the evidence was unable to comply with those requirements.
Nonetheless, for the sake of completeness I note that the information before me is not sufficient to establish that the Removal Opponent acted prominently and diligently at all times. The timeline put forward by the Removal Opponent details steps taken in relation to gathering and compiling evidence in the first period set down for the Removal Opponent to file her EIS. A cooling-off period was agreed to by both parties prior to the end of the first period. Consequently, once the cooling-off period expired the period in which to file EIS restarted (‘second period’). The second period was from 26 March 2018 to 26 June 2018.
The Removal Opponent has only provided information in relation to actions taken from 22 June 2018 onwards. No information has been provided in relation to any actions made by, or on behalf of, the Removal Opponent between 26 March 2018 and 21 June 2018. Furthermore, if no steps were taken during this period, the Removal Opponent has failed to explain why such inaction did not negatively impact upon the prompt and diligent aspects of reg 9.18(2)(a)(ii). In the absence of this information I cannot be satisfied that the Removal Opponent acted promptly and diligently at all times to ensure the filing of the EIS.

Decision

The information is not sufficient to satisfy me that there are exceptional circumstances that justify extending the period in which the Removal Opponent may file EIS. Nor am I satisfied that the EIS was not filed despite the Removal Opponent acting promptly and diligently at all times during the period.

Accordingly, I refuse to grant the EOT. As a consequence the period for filing EIS ended on 26 June 2018. Any evidence filed after that date does not constitute EIS.
I award costs against the Removal Opponent in relation to the fee for requesting a hearing, preparation of the case for hearing and appearance at the hearing by a registered trade mark attorney in accordance with Schedule 8 of the Regulations.

Katrina Brown
Hearing Officer
Oppositions & Hearings
14 February 2019