Kmart Australia Limited

[2011] ADO 2

DESIGNS ACT 2003

DECISION OF A DELEGATE OF THE REGISTRAR OF DESIGNS WITH REASONS

Re:Opposition by Kmart Australia Limited to registration of design applications no 11120/2010 and 11121/2010 for CHOPPING BOARDS and BOWLS - filed in the name of Joseph Joseph Limited.

Delegate:	Heath Wilson
Representation:	Decision on the written record.
Decision:	2011 ADO 2 Section 137(2)(a) of the Designs Act 2003 - Application for extension of time to file design applications – Convention priority claim – whether error or omission – application for extension of time refused.

Background

1. On 24 March 2010, Joseph Joseph Limited (‘the Applicant’) filed design applications 11120/2010 and 11121/2011 (“the design applications”) for, respectively, Chopping Boards and Bowls. The Applicant is also the owner of Community Design Registration 886965 filed on 20 February 2008 for Bowls and Chopping Boards.

2. The Applicant concurrently filed an application for a twenty (20) month extension of time (“the EOT”) on 24 March 2010 under section 137(2)(a) of the Designs Act 2003 (‘the Act’). The purpose of the EOT is to allow the registration of the above design applications in Australia on the basis of a priority date derived from an overseas application for the protection of a design. If granted, the time period would be extended from the 20 August 2008 until 20 April 2010. Attached to the application for the EOT is the statutory declaration of Sara Delpopolo of Axis Legal Pty Ltd sworn on 24 March 2010. That declaration sets out the reasons for applying for this extension.

3. To claim priority from the overseas application, section 27(1)(b) of the Act sets out the requirements:

   (1)The priority date of a design disclosed in a design application that meets the minimum filing requirements is:

   (a)the filing date of the design application; or

   (b)if, before the design application was filed, an application for protection in respect of the design had been made in a convention country in accordance with the regulations—the date prescribed by the regulations; or

   (c)if the regulations provide for a different date as the priority date—the date prescribed by the regulations.

4. In addition, regulation 3.06 of the Design Regulations 2004 relevantly provides:

   (1)In this regulation:

   basic application, in respect of a design, means an application for protection of the design, being an application that is made in a convention country in accordance with these Regulations.

   (2)For paragraph 27 (1) (b) of the Act, if the design application is filed, within 6 months after the date on which the basic application was made, by:

   (a)the applicant in the basic application; or

   (b)the applicant’s assignee; or

   (c)the legal personal representative of the applicant or of the applicant’s assignee;

   the prescribed date is the day when the basic application was made.

   ...

   (4)For paragraph 27 (1) (b) of the Act, if subregulation (2) does not apply to the design, the prescribed date is the filing date of the design application.

5. The Applicant did not file the design applications within the sixth month period allowed in which to claim Convention priority. The EOT is an attempt by the Applicant to rectify that situation and claim Convention priority in Australia on the basis of its Community Design registration.

6. If the Registrar is satisfied that the extension under section 137(2) would not be granted, the Registrar need not advertise the application in accordance with subsection 4, the application cannot be opposed and the Registrar must refuse the application for extension.[1] In the absence of a prima facie objection to the extension application that application must be advertised in the Journal.

   [1] See section 137(6) of the Act (extracted below).

7. The EOT was advertised on 15 April 2010 in the Australian Official Journal of Designs (‘the Journal’) pursuant to section 137(4) of the Act and Regulation 11.13(2).

8. Kmart Australia Ltd (‘the Opponent’) filed a notice of opposition to the EOT under section 137(5) of the Act on 14 May 2010. The Opponent’s evidence in support was filed and served, comprising the statutory declaration of Juan Garcia dated 12 August 2010 with exhibits JG1 - JG3. The Applicant did not file any evidence in answer.

9. By letter from IP Australia dated 14 February 2011, the parties were given until 15 March 2011 to request a hearing on the matter. On 16 February, IP Australia was informed that the Applicant was no longer represented in Australia by Axis Legal and, to date, the Applicant does not have an Australian address for service.

10. Neither party requested a hearing. However, a decision still remains to be made on the issue of the extension of time. The Opponent filed written submissions to be considered by me in the determination of that issue. The following constitutes my reasons as a delegate of the Registrar of Designs.

    Reasons

11. Section 137 of the Act relevantly provides:

    (2) The Registrar may, on application by a person concerned in accordance with the regulations, extend the time for doing a relevant act if, because of:

    (a)an error or omission by the person, or by the person’s agent; or

    (b)circumstances beyond the control of the person;

    the relevant act that is required to be done within a certain time is not, or cannot be, done within that time.

    (3)The time for doing a relevant act may be extended, whether before or after that time has expired.

    (4)The Registrar must advertise an application for an extension of time of more than 3 months in the manner prescribed by the regulations.

    (5)Subject to subsection (6), a person may, as prescribed, oppose the granting of the application.

    (6)If the Registrar is satisfied that an application under subsection (2) would not be granted, even in the absence of opposition under subsection (5):

    (a)the Registrar need not advertise the application in accordance with subsection (4); and

    (b)the application cannot be opposed; and

    (c)the Registrar must refuse the application.

    (7)In this section:

    relevant act means an action (other than a prescribed action) in relation to:

    (a)a registered design; or

    (b)an application for registration or publication of a design; or

    (c)any proceedings under this Act (other than court proceedings).

12. As can be seen, section 137 defines and uses the phrase “relevant act”. In the decision of the Administrative Appeals Tribunal in Gracey and Registrar of Trade Marks[2] the meaning of the phrase, “relevant act”, which is also found in Regulation 21.28 of the Trade Marks Regulations 1995, was crucial to the outcome.

    [2] Gracey and Registrar of Trade Marks and Unilever Australia Ltd (party joined) [2000] AATA 354.

13. In that case, the claim to a right of Convention priority was a “prescribed act” and the Registrar of Trade Marks therefore had no power to extend the time to the Applicant to claim that right. There is no equivalent provision to regulation 21.28 of the Trade Mark Regulations contained within the Designs Regulations.

14. While section 27(1)(b) of the Act defines the Convention priority date as a “date prescribed by the regulations” there is no provision specifically defining a claim for priority as a “prescribed action” as mentioned under section 137(7). In the case of Scaniainventor v Commissioner of Patents[3], the Full Bench of the Federal Court found that the extension of time provision in section 160(2) of the Patents Act 1952 was applicable to an extension of time for making a Convention application for a patent. The discussion therein of an “act or step in relation to an application of a patent…” is analogous to section 137(7) of the Act which refers to “an action…in relation to an application for registration or publication of a design”.

    [3] Scaniainventor v Commissioner of Patents 36 ALR 101

15. Claiming a right of priority when applying for the registration of a design is therefore a “relevant act” under section 137(7)(b) and the time allowed for claiming that right may be extended.

16. Section 137 of the Act, similar to other legislative provisions providing for the exercise of discretion to extend time, is beneficial in nature and should be applied beneficially.[4] Under that section, the relevant considerations are whether an error or omission on the part of the Applicant (or its agent) has occurred, whether the failure to do the relevant act was because of that error or omission, and then whether it is appropriate for the Registrar of Designs to extend the time and consequently allow the claim for Convention priority.

    [4] Sanyo Electric Co Ltd and the Commissioner of Patents (1996) 36 IPR 470 at 480; Davies J in Chalk v Commissioner for Superannuation [1994] FCA 1063; (1994) 50 FCR 150 at 155.

    ‘Error or Omission’

17. The Applicant has provided some explanation for the purported omissions leading up to the late filing of its Australian design applications. In the Delpopolo declaration[5]:

    The Applicant commenced discussions with Australian distributors to sell the products in Australia believing that the designs were properly protected in Australia. However, no applications to protect the designs in Australia were made by the Applicant’s UK legal advisers during the six (6) months convention Priority Period following the date of the Community Design application.

    …

    At all material times, the Applicant believed in good faith, that its designs were in fact protected by either copyright law or the law of registered designs in Australia by virtue of its Community Design registration as they had not been advised otherwise.

    As a result of due diligence conducted by our firm, it became immediately apparent that the Applicant’s design was not in fact protected in Australia and there had been an omission to apply for a convention design registration.

    …

    At no time did the Applicant intend to loose (sic) its intellectual property rights in and to the designs. At all times, the Applicant was under the misapprehension that the designs were protected by its EU Design Registrations and under copyright in Australia. It was never made aware of the implications of the design/copyright overlap issues until our firm advised them that this was the case.

    [5] Delpopolo declaration (Paragraphs 4, 6, 7 and 13 respectively).

18. A plain reading of the above statements does not lead me to the conclusion that the Applicant was relying on any advice from its legal advisors regarding whether it had protection in Australia or even that the Applicant asked the question of its then advisors. While it is evident that the Applicant was under a mistaken belief regarding the extent of the protection arising from its Community Design registration, it appears more likely that the Applicant made these assumptions on its own.

19. While the Applicant indicated that it always planned to distribute its products worldwide, it does not state that it intended to specifically distribute to Australia, especially during the 6 month period ending in August 2008. It is also unclear when (or if) that intention was communicated to its UK legal advisors. On these facts, I am not satisfied that there had been any error or omission by the Applicant’s agent.

20. In any event, proceeding on the assumption that its designs were protected, the Applicant states that product distribution did commence later in Australia from around February 2009 (for the Chopping Board) and September 2009 (Bowls).

21. Ms Delpopolo also declares that the Applicant’s plans to distribute in Australia indicate an intention to maintain its overseas design registrations here. However, no dated evidence of sales or shipping orders has been provided by the Applicant to support these assertions so I am unable to determine whether any sales that may have occurred were close to the 6 month period for claiming Convention priority. 

22. Subsequently, and after becoming aware of possible infringement of its client’s Designs in Australia, Axis Legal (acting on behalf of the Applicant) sent a ‘cease and desist’ letter to the Opponent via its legal representatives Allens Arthur Robinson (Patent and Trade Marks Attorneys). The Garcia declaration annexes the correspondence from Axis Legal on 9 February 2010 to the Opponent and the Opponent’s response dated 23 February 2010 which comments:

    In section 2 of your letter you cite two European Union design registrations. Your client has failed to identify how EU designs are relevant in the context of our client selling goods in Australia.

23. On 9 March 2010, Axis Legal made enquiries with the Australian Designs Office on the Applicant’s behalf regarding the extension of time provisions and applied for this extension on the 24^th of that month.  

24. Despite the dearth of decisions under section 137 of the Act, some guidance may be garnered from precedent arising under the trade marks and patents legislation containing similarly worded provisions. Relevant case law indicates that an “error or omission” needs to be something more than a mere failure to do the relevant act.[6] While ‘error or omission’ should not be given a restrictive definition, the failure to file a notice of opposition in time (for example) is not in itself “an error or omission”.[7]

    [6] Kimberley Clark Ltd v Commissioner of Patents [1988] FCA 421; (1988) 13 IPR 569.

    [7] See Chiron Corp v Registrar of Trade Marks (1998) 85 FCR 480; 42 IPR 75.

25. From the material before me, it appears that a misunderstanding of the protection that would arise from a Community Design registration is the main reason for failing, initially, to apply for the registration of the designs in Australia. In addition, a misapprehension or ignorance of Designs legislation does not constitute an error by itself.[8] The failure to file a Design application must be “by reason of” the error or omission. In the current circumstances, I cannot be satisfied that there was an “error or omission” that resulted in the Applicant’s failure to file its design applications at the correct time.   

    [8] In the context of trade marks, see RMG Call Centres Pty Ltd v Department of Contract and Management Services (WA) (2001) 53 IPR 197.

    Decision

26. I refuse the extension of time application to claim priority for the filing of Design applications 1120/2010 (Chopping Boards) and 1121/2010 (Bowls). In the absence of a request for a review of this decision, the design applications will proceed to registration with the original lodgment date of 24 March 2010 after one month from the date of this decision.

1. Pursuant to section 136(g) of the Designs Act 2003, an application for a review of this decision can be made to the Administrative Appeals Tribunal under the Administrative Appeals Tribunal Act 1975. If an application to review the decision is made on or before one month from this decision, the fate of the EOT will be subject to a determination by the relevant body. 

   Costs

2. The Opponent to the Applicant’s extension of time has requested its costs in this matter. As costs follow the event, I award costs against the Applicant in accordance with Schedule 3 of the Designs Regulations 2004.

Heath Wilson
Hearing Officer
Trade Marks and Designs Hearings
21 April 2011