Laboratoire Garnier & Cie v Neutrogena Corporation

[2000] ATMO 50

TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS,

WITH REASONS

Re: Application by LABORATOIRE GARNIER & CIE for an extension of time to serve evidence in support of its opposition to an application by NEUTROGENA CORPORATION to remove trade mark registration number 512991(3) - NEUTRALIA GARNIER- under section 92 of the 1995 Act.

Background

Trade mark registration 512991 is for the words NEUTRALIA GARNIER.  The trade mark is registered in class 3, in respect of goods that I will simply call soaps, essential oils, cosmetics, perfumery and beauty preparations.

On 17 October 1996, F H Faulding & Co Limited ("Faulding") filed an application to remove this registration under the terms of s 92 of the Trade Marks Act 1995 ("the act"). The application specified both legs of s 92 - in brief:

• not intended to be used at filing and never used since then

• no use in the last three years.

Laboratoire Garnier & Cie, ("Garnier") the registered owner of the trade mark, opposes removal.  It filed a notice opposing the removal on 17 October 1996.

The history of this application has been complicated by the fact that, as the relevant attorney put it "the Neutrogena business of the former applicant for removal, F H Faulding & Co Limited, has been sold to the Neutrogena Corporation". This was in or before July 1997. The attorney asked that, as allowed for under the terms of s 92(5), Faulding's former interest in the non-use application be transferred to Neutrogena Corporation ("Neutrogena"). This was done and the opposed application is now proceeding in the name of Neutrogena.

What is at issue in this proceeding, however, is not the opposition itself.  It is a preliminary matter, that of the due date for evidence to support the opposition.  Such evidence is at the heart of the matter, which is being dealt with under the 1995 legislation.  That legislation places an onus on any opponent.  The onus is the one stated in s 100, to rebut any allegation on which the application was grounded.  Thus, the evidence is of paramount importance to Garnier.  Without it, the opposition will crumble and the registration, in the lack of any evidence at all as to why it should remain, will inevitably be removed unless Neutrogena fails to show that it is a person aggrieved[1].

[1] The latter is a qualification laid out in s 92 and challenged in Garnier's notice of opposition.

Garnier, however, has at no stage been prepared to finalise its evidence.  Instead, it has made repeated application for extension of time to do so.  It is the third-last of these, which a delegate of the Registrar of Trade Marks has so far not been prepared to grant, that is the subject of this decision.  However Garnier has sought further extensions of time, beyond what is now in dispute, until 17 June 2000. 

What makes this case particularly unusual is that the applicant for extension has entirely failed to heed the repeated and escalating warnings that are given in any such case.  In many opposition matters since the implementation of the 1995 Trade Mark Regulations, the registrar has had to remind the parties that time is passing, apparently without result, but few are the cases where the registrar's resolve to refuse the extension is tested to this extent.

Applicable legislation

The service of evidence in support of an opposition to an application under s 92 is governed by Trade Mark Regulation 5.15. That regulation is one that relates directly to the more common opposition proceedings, where registration is opposed. It is imported into non-use matters by regulation 9.4(1). The upshot of this is that an opponent is allowed an initial 3 months, after filing a notice of opposition with the Trade Marks Office ("TMO"), to serve the opponent with a copy of its evidence.

The relevant parts of Regulation 5.15 provides that:

Extension of period to serve evidence and service of further evidence

5.15 (1) A party to the opposition proceedings may apply to the Registrar:

(a) for an extension of the period for serving a copy of the evidence under regulation 5.7, 5.10 or 5.12;      …

(2) The Registrar may grant an application on reasonable terms specified by the Registrar.
(3) The Registrar must not grant an application unless the Registrar:

(a) is reasonably satisfied that the applicant has served a copy of the application, and of any documents accompanying the application, on the other party; and
(b) has given the parties a reasonable opportunity to make representations concerning the application; and
(c) is reasonably satisfied that:

(i) in the case of an application to which paragraph (1) (a) applies—the extension of the period for serving a copy of the evidence;    …

is appropriate.

There is no dispute that Garnier has complied with sub-regulation 3(a), and that 3(b) has been satisfied.  Neutrogena supports the grant of the present extension.  It is an officer of the TMO who has raised an objection to the grant of this extension.

Extensions of time - history:

Garnier was initially due to serve a copy of its evidence in support of the opposition on Neutrogena on 17 January 1997.  However, on that date, Garnier sought an extension of time.  As is usual in matters of this type, the TMO required Garnier to set out the relevant circumstances in a declaration supporting the case for the extension.  Anthony Ward, a patent attorney of the attorney firm of Griffith Hack, filed a declaration, as follows:

We are still awaiting further information from the local declarant with regard to use of the mark in this country.  Further time is required to collate declaratory evidence in support.

At three-monthly intervals, Garnier filed three further requests on the identical ground.  A senior examiner in the Hearings section of the TMO has assessed each of these applications. 

In October 1997, the TMO wrote:

Allowance of the previous extension until 17 October 1997 means a total of 12 months[2] or more … have now been allowed for the preparation of this evidence.

[2]  This period includes the three months initially allowed in the regulations.

You are respectfully reminded that if this extension is allowed, any further application for time will need to be supported by compelling reasons which should include a timetable indicating either completion of service of evidence or for when settlement negotiations may be finalised.

On 18 January 1998, Garnier applied for a further extension of time, for reasons as follows:

My firm represents the proprietor and opponent, Laboratoire Garnier & Cie.

This matter is also associated with two related matters, namely opposition to Application 588201 NEUTRALIA label by F H Faulding & Co Limited and Application 670763 NEUTRAGEL by Neutrogena Corporation (formerly F H Faulding & Co Limited).

The conflict between the paries is active in an international forum.  The parties have for some months been negotiating a worldwide settlement.  These negotiations have been delayed by the recent purchase of one party F H Faulding & Co Limited by the US company, Neutrogena Corporation.

Since the last application for extension of time of 14 October, the parties are still actively engaged in negotiations and it is hoped that these negotiations will provide a worldwide settlement.

The opponent, Laboratoire Garnier & Cie, thus wishes to defer preparation of Evidence-in -Support until the outcome of negotiations is known.

Garnier requested further extensions of time each three months thereafter.  The only change in the grounding of the later requests was the omission of the entire of the third of the paragraphs I have quoted. 

On 17 January 2000, Garnier again applied for an extension based on these circumstances.  Again a senior examiner in the Hearings section of the TMO assessed the application.  In view of the fact that, including the original statutory three, a total of 39 months had by then been allowed, the Senior Examiner raised an objection.  The TMO wrote to Garnier in the following terms (upper case present in original)

Nine months or more (6 months or more if it is for evidence in reply) have been allowed for the service of evidence and it is considered that the reasons given for the present extension, as stated, do not warrant the allowance of further time.

YOU ARE ALLOWED 14 DAYS FROM THE DATE OF THIS NOTICE TO PROVIDE A MORE COMPELLING EXPLANATION IN SUPPORT OF THE GROUNDS FOR THE REQUEST FOR THE FURTHER TIME SOUGHT, OR THE REQUEST A HEARING OF THE MATTER, ACCOMPANIED BY THE PRESCRIBED FEE.  IN THE ABSENCE OF EITHER OF THOSE ACTIONS THE EXTENSION WILL BE REFUSED.

In reply to this, Mr Ward responded that the negotiations to which Garnier referred were a consequence of litigation in the United Kingdom, that these were ongoing, and that the extension was necessary to "keep the matters alive".  Mr Ward further stated, "we believe that it is hoped that the matter would be resolved in the not too distant future".

The Senior Examiner, in response, asserted that these reasons had little if anything to do with demonstrating use of the subject mark in Australia during the relevant period.  "The requirements here are simple - the owner of the trade mark needs to supply evidence showing its use in the Australian market during the relevant period.  The time allowed here has been more than ample for the purpose".

To this Mr Ward responded: 

Whilst it is true that this matter concerns the conflict between the marks NEUTROGENA and NEUTRALIA, it is of course important during any negotiations regarding settlement that the parties come to the table with a full hand. Thus to lose this registration means that the client loses one card in its hand and thus the client obviously does not wish for any erosion of its rights whilst the negotiations are ongoing.

Whilst it is conceded that it may be in the public interest to bring these matters to a head as soon as possible, it is worth mentioning that a registration of a trade mark that may not have been used in Australia is a perfectly valid registration.  The Registrar has no right to attack or remove such registration unless an interested third party intervenes.  If that third party chooses to withdraw its removal application, or for tactical reasons, chooses to delay the procedure of the removal application then it is submitted that the Registrar should respect those wishes.  The only reason that a Registrar should remove a registration that has not been used is when a third party seeks removal.  If that party has a change of heart then the mark should remain on the register.

I will note that the attorneys for Neutrogena have also written to support the grant of this extension.  To quote:

(Neutrogena and Garnier) have been involved in litigation in the United Kingdom involving the NEUTRALIA GARNIER trade mark, and have also entered into various Trade Mark disputes throughout the world.  The present case represents one of these disputes.

Following the outcome of the United Kingdom litigation the two parties have sought a negotiated settlement of the matter.  Whilst settlement negotiations are on-going an agreement has not yet been reached. We have been informed that the two parties are to hold a meeting in relation to this matter some time in March 2000.  We have been informed that it is possible that the matter may be finally settled at this meeting, although that is not yet certain.

As the party seeking removal…Neutrogena… could be presumed to have a significant interest in the outcome of proceedings in relation to this Trade Mark.  However, in view of the on-going negotiations the Neutrogena Corporation would have no objection to the opponent's suggestion that they keep the matter alive by applying for appropriate extensions of time pending a resolution of the matter.

The final submission was made by Mr Ward after he had requested a hearing on the matter of the extension of time.  This was in lieu of appearing at the hearing.  I have reproduced them verbatim:

1)     Trade mark registration 512991 exists legitimately on the Australian register. The Registrar has no authority to remove the registration unless a third party seeks to have it removed under the non-use provisions. If that third party seeks to withdraw the removal procedure or delay the proceedings then, it is respectfully submitted, the registration should remain on the register.

2)     The effect of the Registrar refusing the latest extension of time means that the application for removal will proceed due to the opponent failing to lodge evidence of use of the mark in Australia.  This will result in the registration being removed from the register notwithstanding the fact that the party seeking removal was prepared to delay the proceedings.  This means that the Registrar is acting outside his/her authority and effectively means that the Registrar is driving the vehicle for removal and not the third party.

3)     The fact that the registration remains on the register causes no public detriment.  The fact that these proceedings are on going and the outcome is uncertain is again, it is respectfully submitted, causing no detriment to the public.  The registration remains in force until it is removed.  There is no uncertainty.

4)     There are sincere and earnest ongoing negotiations between the parties.  The complicated nature of conducting such negotiations on a worldwide forum has caused lengthy delays.  It is our understanding a meeting was to take place in March during which it was hoped that the negotiations could be completed.  We have been told that this meeting has been postponed until 28 April 2000 due to the unavailability of one of the parties.

5)     It is logical that both parties when conducting negotiations of this kind wish to attend the negotiating table armed with a "full hand of cards".  The Registrar appears to be jeopardising this wish.

6)     Each party has made it quite clear in this proceeding and in the proceedings against trade mark application 670763 that it is content for the other party to obtain whatever extensions of time are necessary.

7)     The inconvenience to the office in actioning the extensions of time is compensated by the official fee of $65.00 a month.

Since the Registrar has no good reason to refuse the extension of time and the refusal of the extension of time is not in the public interest, it is requested that the extension and a further extension up to 17 May (application attached) be allowed.

Issues and decision

To take issue with Mr Ward's last point first, it is not true to say that I am required to show that I have a good reason for not allowing the protraction of this matter.  It is a truism of such matters that extensions may not be granted simply because nobody has shown exceptional circumstances why they should not.  (Vangedal-Nielsen v Commissioner of Patents - (1980) 1A IPR 731, 33 ALR 144. Rather, I must be reasonably satisfied that this extension is appropriate.

The question of the appropriateness of the extension cannot be decided in a vacuum.  Nor can it necessarily be answered by analogy with other provisions, such as those relating to an opposition to the sealing of a patent.  The proper starting point is the statutory purpose of the non-use provisions relating to a registered trade mark.  What is that process meant to achieve?  This is easily answered.  The entire thrust of the legislation and law relating to non-use applications is that an unused trade mark should be removed unless there is "sufficient reason" for leaving it there.  See, for instance, Ritz Hotel v Charles of the Ritz Ltd (1988) 12 IPR 417 at 482, and the authorities there referred to. The current legislation is set up so that, in the lack of a case, such marks will be removed.

I think this has a corollary that, unless the allegation that the trade mark is unused is withdrawn, it is, in principle, the responsibility of the registrar to ensure that the allegation is investigated once reasonable scope for compromise and negotiation is exhausted.  Some peripheral support for such a corollary also comes from the existence of s 204.  This reads:

204

. If:
(a) the Registrar is required under this Act to do any act or thing; and

(b) no time or period is provided within which the act or thing is to be done;
the Registrar is to do the act or thing as soon as practicable

The registrar is generally required, when an extension is in dispute, to try and strike a fair balance between the competing and opposed interests of the parties.  However, in the present case both of the parties agree that the extension should be granted.  Both parties agree, in effect, that the statutory purpose of the provision should be put on hold, a thing that, in the present case, a delegate of the registrar declines to do.

Mr Ward asserts that this amounts to the registrar, rather than the non-use applicant, driving the vehicle.  That is a not an appropriate analogy.  I think the correct view is that the registrar should not abdicate his statutory responsibility to get to the bottom of matters that are brought before him. 

The non-use opponent has had more than ample time to establish the extent of use of its trade mark in Australia.  I also note the comments Mr Ward has directed to the validity of the registration of an unused trade mark, and to the usefulness of the registration as, more or less, a bargaining chip.

Neutrogena, the removal applicant, has suggested, in careful terms, that it is not adverse to this extension of time to maintain the status quo.  It even submits that more delay is in the public interest, though it, like Mr Ward's final submission, does not explain how this is so.  In my view, despite these assertions, there is no question of public interest in the continuance of an unused registration on the register.  The interests at stake are entirely those of the parties.

As to that balance, Neutrogena filed the non-use application in the first place.  Mr Ward, in his written submissions, sought to portray it as now "seeking to delay" and being "prepared to delay" the proceedings.  There is no evidence of the former.  On the contrary, it is arguable that Neutrogena is content to see Garnier put to the inquisition, as it were.  This is because Neutrogena started the current proceeding and can withdraw it at any time.  It is now arguably content to see the process grinding slowly onwards.  I think, therefore, that it can also be said that Neutrogena is, to at least a limited degree, "not adverse" to seeing Garnier lose what its attorney has effectively portrayed as a bargaining chip.  Clearly, either way, Neutrogena's desire to maintain the status quo has, for the moment, stopped short of actually restoring it.

Neutrogena may, however, be sincere in wanting this extension to be granted.  Neutrogena is well aware that it, in its turn, is in line for some additional scrutiny should the extension not be granted in this case.  Neutrogena was originally due to serve evidence in support of its opposition to one of Garnier's trade mark applications - 670763, to which Mr Ward has referred - in February 1997.  It too has relied on repeated extensions of time ever since, and been warned to show diligent prosecution. 

The TMO has always recognised that the registration and use of trade marks is only part of what may sometimes be complex commercial dealings between parties.  The TMO tries to accommodate the need of the parties to come to a business settlement but I think that, here, the parties have taken our preparedness to be flexible beyond anything that can be justified. Equally, it is hard to comment on the seriousness of the international negotiations.  In the time passed little has, apparently, been achieved.  If the parties are seriously working towards a settlement then it may well be that the matters they are discussing are so complex that one localised bargaining chip more or less can make no difference.  Since the issues at stake in this opposition are of only local consequence, it seems to me that it is time to draw a curtain on the view outwards onto the world stage and to get on with the issue in this jurisdiction.

Finally, I note Mr Ward's point that the inconvenience to the TMO, in actioning this extension, is recompensed by the extension of time fees paid.  It is true that these fees are set on what is roughly a cost-recovery basis.  However, I very much doubt that fees of this level do in fact cover all of our costs in administering protracted and difficult opposition matters.  More to the point, the fact that our costs may have been compensated does not remove my responsibility to ensure that matters are dealt with in an appropriate way.  In non-use matters, that amounts to a requirement for due attention to the passage of time.

I regret that I have to conclude that this matter is no more than an abuse of the extension of time process.  The delaying tactics of the opponent, with the support of the applicant, should be seen for what they are and dealt with accordingly.  To do so is not, with due respect to Mr Ward's argument to the contrary, to exceed my statutory authority so much as to exercise it as I am required.

Conclusion

I have decided that no further extension of this evidence stage is appropriate.  I therefore refuse to extend the time for service of evidence in support of the non-use opposition.  The TMO will now, as required by regulation 5.10(2)(b), nominate a date on which the period for serving evidence in answer to the non-use opposition will commence.

Terry Williams
Hearing Officer
25 May 2000