Mannella Designs Pty Ltd v SSY Holdings Pty Ltd
[2011] ATMO 38
•11 May 2011
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Objection by Mannella Designs Pty Ltd (as Trustee for the Mannella Designs Trust) to Record of Assignment of Trade mark nos. 582504, 1085654, 1085655, 1297046 and 1340464 to SSY Holdings Pty Ltd.
Delegate: Heath Wilson Representation: Decision on the Written Record Decision: 2011 ATMO 38
Application to record assignment of trade marks – prescribed document invalid - Register corrected under section 81 of the Trade Marks Act 1995 – No award of costs.Background
By virtue of a Heads of Agreement document (‘the Heads’) entered into on 24 February 2010, a consortium comprising fourteen parties entered into a commercial arrangement whereby the company SSY Holdings Pty. Limited (‘SSY’) was to be established as a holding company for all assets and intellectual property of a new business. As part of that arrangement, Soda Kids Holdings Pty. Limited (‘Soda Kids’) agreed to transfer to SSY the ownership of its established retail children’s clothing business together with existing “SODA KIDS” trade marks and labels.
On 25 June 2010, SSY filed an Application to Record Assignment of a Trade Mark with IP Australia (‘the Application’). The Application was to record the assignment of trade mark nos. 567403, 582504, 1085654, 1085655, 1268980, 1297046 and 1340464 (collectively the ‘Soda Kids trade marks’) to SSY. At that date, those trade marks were recorded as being held the name of Mannella Designs Pty Ltd as Trustee for the Mannella Designs Trust (‘Mannella’). The Application was filed together with a document entitled ‘Trade Mark Assignment Agreement’ between Mannella and SSY (hereafter referred to as ‘the Assignment document’).
The assignment of trade mark nos 582504, 1085654, 1085655, 1297046 and 1340464 to SSY was recorded by IP Australia on 6 July 2010. As trade mark 567403 had been removed from the Register on 18 June 2009 and 1268980 lapsed on 13 May 2010, those trade marks could not be assigned.
On 27 July 2010, Mannella wrote to IP Australia objecting to the recording of the assignment and requesting that the ownership details be corrected. A delegate of the Registrar reviewed the material on file at the time and was satisfied that it had been appropriate to record the assignment. However, as a matter of natural justice, the delegate gave Mannella and SSY an opportunity to file and serve evidence in the matter and to be heard.
IP Australia received another application to record assignment for the Soda Kids trade marks on 14 September 2010. The application was submitted by Ms Mannella as Director of SSY Holdings Pty Ltd and it purported to assign the trade marks back to Mannella.[1] Needless to say, this assignment was not recorded pending a determination of this matter. Ms Mannella’s attempt to circumvent the Hearing process, while clearly aware of this ongoing dispute, does not cast subsequent arguments from Mannella in the most favourable light.
[1] Exhibit K, Zheng declaration.
The parties later filed and served the following evidence:
Evidence in Support of Opposition to the Assignment
·Statutory declaration of Rocco Mannella dated 25 October 2010 with exhibits A to C. (‘Rocco 1’).
·Statutory declaration of Josephine Mannella dated 25 October 2010 with exhibits A to E (‘Josephine 1’).
Evidence in Answer
·Statutory declaration of Ya Fang Zheng dated 19 November 2010 with exhibits A to K (‘Zheng’).
- Statutory declaration of Wilton Yao dated 19 November 2010 with exhibits A & B (‘Yao’).
- Statutory declaration of Stefano Del Monaco dated 30 November 2010 with exhibits A to C (‘Stefano’).
Evidence in Reply
- Statutory declaration of Rocco Mannella dated 21 December 2010.
- Statutory declaration of Josephine Mannella dated 21 December 2010.
Both parties relied upon written submissions in lieu of requesting a formal hearing. As a delegate of the Registrar of Trade Marks, I will now decide the matter on the above material.
The Law
In relation to the recording of the assignment of trade marks, sections 107 and 109 of the Trade Marks Act 1995 (‘the Act’) provide:
Section 107: Applications for record to be made of assignment etc. of trade mark whose registration is sought
(1)If a trade mark whose registration is being sought is assigned or transmitted:
(a)the applicant for the registration of the trade mark; or
(b)the person to whom it has been assigned or transmitted;
must apply to the Registrar for the assignment or transmission to be recorded.
(2)The application must:
(a)be in an approved form; and
(b)be filed, together with any prescribed document, in accordance with the regulations.
Note:For approved form and file see section 6.
Section 109: Application for record of assignment etc. of registered trade mark to be entered in Register
(1)If a registered trade mark is assigned or transmitted:
(a)the person registered as the owner of the trade mark; or
(b)the person to whom the trade mark has been assigned or transmitted;
must apply to the Registrar for a record of the assignment or transmission to be entered in the Register.
(2)The application must:
(a)be in an approved form; and
(b)be filed, together with any prescribed document, in accordance with the regulations.
Note:For approved form and file see section 6.
If an application to record assignment meets the legislative requirements, then pursuant to sections 108 and 110, the Registrar does not have a discretion whether or not to record the details on the Register. She:
…must…record…the particulars of the assignment or transmission and (b) publish the particulars of the assignment or transmission in accordance with the regulations. (Emphasis added)
On this point, the Full Bench of the Federal Court of Australia in Transport Tyre Sales Pty Ltd v Montana Tyres Rims and Tubes Pty Ltd[2] commented:
…Neither the registrar, nor anybody searching the register, would reasonably conclude that the bare fact of assignment indicated that no person other than the owner held any rights in respect of the trade marks.
The registrar was given notice of the present proceeding, including a copy of the statement of claim, but did not seek to intervene. That fact in itself confirms the conclusion that non-disclosure of the option agreement was not a matter which materially affected the recordal of the assignment. The assignment was the document which established the title of Transport Tyre, and that had been disclosed, as required by s.109(2)(b) and reg. 10.1(a). In such a setting the registrar “must” record the assignment: s.110(1).
[2] Transport Tyre Sales Pty Ltd v Montana Tyres Rims and Tubes Pty Ltd (1999) 43 IPR 481 at 491.
If the Registrar subsequently finds that the assignment was recorded in error, section 81 of the Act allows the Registrar the discretion to correct the record.
Section 81: Correction of Register
The Registrar may, on his or her own initiative, correct any error or omission made in entering in the Register any particular in respect of the registration of a trade mark.
Note:For Register see section 6.
The Application
Pursuant to sections 107 and 109 of the Act, the person applying to the Registrar for recording of an assignment can be either the applicant for registration/registered owner of the trade mark or the person to whom the trade mark has been assigned. In this case, it was the assignee SSY who applied for the assignment to be recorded.
The application must be in an approved form. Section 6 of the Act defines an approved form as one ‘approved by the Registrar for the purposes of the provision in which the expression appears.’ Part 43.3.1 of the Trade Marks Office Manual of Practice & Procedure (‘the Manual’) states what the Registrar requires for an application to record assignment to be in an approved form:
· the application or registration number of the trade mark which has been assigned
· the name and address of the assignee or the person to whom the trade mark has been transmitted
· the address for service of the assignee or the person to whom the trade mark has been transmitted, or
· if the assignor or the person transmitting the trade mark makes the application to record the assignment, the address and address for service of that person,
· in the case of a partial assignment or transmission, a list of the goods or services for which assignment or transmission is to be recorded,
· the nature of the proof of title, (deed of assignment, merger document, statutory declaration etc).
The Application was accepted by the Registrar’s delegate as being in the approved form.
The legislation also requires that an application to record assignment is filed together with a prescribed document. Regulation 10.1 of the Trade Mark Regulations 1995 indicates that a prescribed document ‘…establishes the title to a trade mark of the assignee, or of the person to whom the trade mark has been transmitted’. A prescribed document may comprise an original or a copy of a[3]:
· deed of assignment;
· merger document;
· simple letter of assignment;
· probate document in the case of a deceased owner, or death certificate and copy of last will and testament;
· legislative instrument of transmission;
· declaration.
and
The proof of title document should show the full name and address of both parties, the trade mark(s) being transferred (except in the case of merger documents) and should be signed and dated at least by the current owner.
[3] See Part 43.3.2 of the Manual.
In this case, the prescribed document was the Assignment document dated “the ……. day of February 2010” (sic) and purported to assign all seven Soda Kids trade marks specified in the schedule attached to the document.
In the Assignment document, Mannella purportedly acknowledged having received good and valuable consideration from SSY in return for assigning its entire interest in the trade marks to SSY. The document was executed for and on behalf of Mannella by Josie Mannella (described therein as the Assignor Officer) and witnessed by Daniela Bussolaro. It was also signed for and on behalf of SSY by Ya Fang Zheng (the assignee officer) and witnessed by Wilton Yao.
On its face, this prescribed document was accepted by a delegate of the Registrar as establishing title to the trade mark of the assignee and satisfying section 107 and 109 of the Act.
Submissions
Mannella argues that the prescribed document is invalid for a number of reasons: firstly, that Ms Mannella is not a director of Mannella and did not have authority to execute any documents on its behalf; second, that the prescribed document was undated. Finally, it is submitted that the Heads (and also the Assignment document) between the parties was in-principle only, or had subsequently terminated due to actions or omissions by SSY.
Reasons
In relation to the first argument, Ms Mannella explains the events surrounding the signing of the Assignment document.[4] Ms Mannella suggests that she was coerced by Ms Zheng, Mr Yao and Monaco Lawyers into signing said document not in February, but on 29 March 2010. Additionally, she declares the document was prepared by SSY’s legal representative Stefano Del Monaco. However, it is revealed in SSY’s declarations (and later confirmed by Ms Mannella) that the Assignment document was actually prepared by another legal firm IP Wealth, Patent and Trade Marks Attorneys acting under Ms Mannella’s instructions.
[4] Josephine 1, paragraphs 9-11.
Ms Mannella then refers to the “Heads of Agreement” executed on 24 February 2010. The Heads does not mention Mannella but is signed by Ms Mannella in her capacity as the director of, inter alia, Soda Kids. The Heads also refers to the Soda Kids Trade marks as follows:
Soda Kids Labels means the “Soda Kids” and “Sissi.g” fashion labels owned by Soda Kids.
Soda Kids Trademarks means the registered, applied for or contemplated Trademarks in Australia with respect to the Soda Kids Labels.
Clause 3.1 states:
In consideration of the matters agreed to herein, Soda Kids will transfer to SSYH the Soda Kids Trademarks for Australia.
The trade marks which are the subject of this dispute were recorded on the Register as owned by Mannella, a company of which Ms Mannella’s husband Rocco Mannella is the sole director. Ms Mannella owns 50% of the shares in Mannella[5] and Soda Kids had been licensed by Mannella to use the trade marks.[6] By signing the Heads, Ms Mannella has indicated her consent to its terms despite the fact that at the time of doing so she would presumably have been aware of the fact that Soda Kids was not the recorded owner of the Soda Kids Trade marks.
[5] Zheng Declaration, exhibit C.
[6] Rocco 1, paragraph 17.
Similarly, Ms Mannella agreed to the contents of the Assignment Document and signed it “on behalf of the company.”[7] There is no evidence that Ms Mannella was misled or mistaken regarding the intention of the Assignment Document or regarding the parties involved. The document simply refers to the transfer of rights in the trade marks and states that the Assignor “acknowledges receipt of good and valuable consideration from the Assignee”.
[7] Josephine 1, Paragraph 10.
On the strength of the above events, SSY made the assumption that Ms Mannella had the authority to effect the transfer of the Soda Kids trade marks to SSY, perhaps in her capacity as the director of Soda Kids. Ms Mannella now admits that she had no authority to do so and therefore the representation that she was an officer of Mannella by signing the document, was false. So there is an apparent holding out on Ms Mannella’s part. However, the primary question is whether the assignment was effected in spite of this discrepancy.
From the contents of Rocco 1, it is also evident that Mr Mannella was aware of the arrangement to transfer the trade marks at the time when the Heads was entered into in February and he states[8]:
In or about February 2010 Josie (Ms Mannella) asked me if I would agree to the transfer of the Trademarks by the Company to SSYH. I told Josie that I would consider same if and only if the formal agreements were prepared and executed by the parties and each party complied with their respective obligations under the agreement.
[8] Rocco 1, paragraph 8.
Mr Mannella’s above statement may have lent some support to the contention that Ms Mannella was authorised to act on behalf of Mannella were it not for his clear denial of any authorisation in relation to the Assignment document[9]:
I was not aware of this document. No one requested that I execute it as the sole director of the Company. I did not give Josie or anyone else authority to execute it on behalf of the Company.
[9] Rocco 1, paragraph 14(b).
Putting aside any possible misrepresentations, Ms Mannella did not have the authority to assign the trade marks. This factor weighs against the validity of the Assignment document.
The day on which the Assignment Document was signed in February 2010 is not stated and the opponent contends that the absence of a precise date renders the Agreement informal and invalid. I do not agree. While it is undeniable that the precise date does not appear in the Assignment document, that omission (by itself) should not be fatal to the enforceability of the Assignment document when considered as a whole. On its face the document was signed, the intention of the parties was clear, and the year and the month are shown. It can only be one of twenty-eight days which is omitted. At the very least, the Assignment document in its present form would be effective to bring about an equitable assignment.
There is also dispute over whether Ms Mannella signed the Assignment document on 24 February or on 29 March 2010. By way of email to Mr Del Monaco dated 11 November 2010, IP Wealth confirmed that they prepared the document under instruction from Ms Mannella and sent it to her via email on 19 February 2010. Therefore, it is likely that Ms Mannella would have had in her possession the unsigned Assignment document at the time the Heads document was signed by the parties on 24 February 2010. This fact, combined with the unequivocal statements of Zheng and Yao that the Assignment document was signed on 24 February 2010 with Zheng further detailing that the Assignment was executed at the offices of Soda Kids leads me to the conclusion that both documents were actually signed on the same date, being 24 February 2010.
SSY disputes that the agreement was conditional and declares its belief that the terms in the Heads were final. The evidence from SSY regarding the actions of Mannella and SSY after these documents were signed supports the fact that the parties considered the agreement to be in effect. Accordingly, Mr Del Monaco acting on behalf of SSY wrote to Ms Mannella on 29 March 2010:
Both agreements are in order. There needs to be a form lodged with IP Australia. Whoever has prepared the documents can submit to IP Australia. I just need certificate shopping (sic) the new owner as registered owner of trade marks.
Ms Mannella replied via email on 30 March 2010, saying:
OK I will ask IP to transfer.
Following a meeting of SSY and Mannella on Wednesday 5 May 2010, Mr Del Monaco provided minutes of matters that had been resolved between the parties including a reference to the agreement of the Soda Kids trade marks[10]:
All trade marks that are now the property of SSY Holdings be transferred to it and IP Australia is notified of the change.
[10] Zheng declaration, exhibit I.
I am satisfied that Ms Mannella and SSY believed the Heads to be in effect, but there is a further difficulty in this regard. The provisions of the Assignment document fail to state whether they are subject to compliance with the terms contained within the Heads and there is no express correlation or relationship between the two documents.
Ms Mannella declares that she retained the original Assignment document after signing and did not file it with IP Australia. Ms Mannella refused to file the Assignment Document as she considered that the terms of the Heads had not been fulfilled by SSY. The original was retained, and SSY was unable to produce the original of the Assignment Document to IP Australia.
On 21 May 2010 a letter was sent by Mannella’s legal representative Alliance Legal to Monaco Lawyers, stating that it considered the Heads of Agreement was at an end. Accordingly, Mannella’s argument that the Heads was in-principle carries little weight. If there was no agreement in place, it would have been unnecessary for Mannella to send this letter. On the contrary, Alliance Legal alleges several breaches of the terms in the Heads by SSY.
By email dated June 11 2010, Mr Del Monaco responded to Alliance Legal also alleging breaches of the Heads by Mannella including, inter alia:
We further note that your clients were to transfer Trade marks into the SSY business model and have otherwise refused to lodge with IP Australia the relevant executed agreement.
Following this correspondence where both parties allege breaches of the Heads, SSY filed the Application with IP Australia attaching a copy of the Assignment document.
I recognise the potential issues and difficulties in relation to the alleged termination of the Agreement. I also note that there are currently Court proceedings afoot regarding monies paid by SSY under the Heads. In the main, I find those issues are incidental to the essential matter, being the issue of the purported assignment of the relevant trade marks. The resolution of those issues would involve the application of contract law and equitable principles which is outside the scope of my authority. Findings of that nature are properly made by an appropriate prescribed Court exercising equitable jurisdiction.
Other factors raised by Mannella were that SSY had not to date used the above trade marks and Mannella has gone to considerable expense in promoting its trade marks and is now frustrated by this assignment from continuing its trade. However, it would seem that the intention of Ms Mannella at least was always to assign the trade marks to SSY for valuable consideration, and that company would have taken steps to record the assignment, but for the alleged breaches of the Heads by SSY. As they have only recently been recorded under its name it is not surprising that SSY has not used the trade marks. This lack of use has little relevance to the issue of whether the trade marks have been assigned.
I can only reach my decision in this matter on the materials before me. I am provided with a document which purports to be an Assignment agreement together with a request by the assignee for that assignment to be recorded. Now I am asked to set aside the recording of the assignment taking into account all the evidence before me.
In order to make this determination I will highlight a number of pertinent issues affecting the validity of the Assignment that have been revealed by the evidence. Viewed singly, these reasons would be insufficient to satisfy me that the Register should be corrected. However, it is now apparent that the Assignment document on which SSY seeks to rely in establishing its entitlement to ownership of the Soda Kids trade marks has particular flaws:
· Ms. Mannella has signed the Assignment document purportedly for and on behalf of Mannella and in the capacity as “Assignor Officer”. However Ms Mannella was neither an officer of the company nor authorised to sign on that party’s behalf, a fact of which she was presumably aware as at the time of signing. Arguably that step constitutes the making of a false representation on the part of Ms. Mannella.
· By signing the Heads, Ms Mannella has agreed to the assignment of the relevant trade marks from Soda Kids to SSY, despite her personal knowledge at the time that the relevant trade marks were held in the name of Mannella.
· The Heads proceeds on the assumption that Soda Kids is the owner of the “SODA KIDS” labels and trade marks (as indicated in Clause 3.1) when it is clear that has never been the true position and Mannella was actually recorded as the owner of the trade marks.
· There is nothing contained or expressed in the respective documents to show that the Assignment document and the Heads are interrelated or that the Assignment document ought to be dealt with other than as a discrete item and in its own right. In addition, neither document contains a reversionary right or holding-back provision.
· The Assignment document is undated, an aspect which I have dealt with above.
· Recital B of the Assignment document states that the assignor “has assigned’ and in Clause 2.1 it is provided that “The Assignor confirms assignment of its entire interest in the trade marks”. So, this document is arguably in the nature of a confirmation of a transaction that has already taken place rather than the transaction itself.
· In relation to the conduct of SSY, the evidence of both Ms Mannella and Mr Mannella alleges that the request for the recording of the assignment was made after the point in time when the assignee had been made aware that the proposed business relationship between the parties had broken down.
I am satisfied that the initial recordal of the assignment by the Registrar’s delegate was appropriate on the available information. However, the subsequent evidence highlights the many flaws in the prescribed document and the exceptional circumstances surrounding it. As a result, I find that the title to the trade marks has not been adequately established as belonging to SSY. The Assignment is therefore in error and I am satisfied on the balance of probabilities that the Register should be corrected.
Decision
On the basis of the material comprising the written record, I am now satisfied that the recording of the assignment was invalid. I find that there has been an error as defined under section 81 of the Act requiring the Registrar’s initiative to be exercised in correcting the Register.
Until such time as rights and interests of the parties are otherwise determined by the Courts, I direct that the recorded ownership of trade mark nos. 582504, 1085654, 1085655, 1297046 and 1340464 revert to the name of Mannella Designs Pty Ltd as Trustee for the Mannella Designs Trust (i.e. the recorded owner before the assignment) after one month from the date of this decision.
If the Registrar is served with a notice of appeal on or before that time, I direct that the correction to the Register shall not occur until the appeal has been discontinued, or in the event of a decision from the court, that the application be subject to that order.
In relation to the issue of costs, I find that each party should bear its own and therefore I decline to make an award.
Heath Wilson
Hearing Officer
Trade Marks Hearings
11 May 2011
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