Monster Energy Company v USA Nutraceuticals Group, Inc

[2015] ATMO 1

TRADE MARKS ACT 1995

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

Re:Opposition by Monster Energy Company to extension of protection to international registration designating Australia 1531146 (IRDA 1139097)  BEAST held by USA Nutraceuticals Group, Inc – Request by USA Nutraceuticals Group, Inc for extension of time to file evidence in answer, and objection by Monster Energy Company.

Delegate:	Hearing Officer: Bianca Irgang
Representation:	Opponent: Siobhan Ryan of counsel instructed by Davies Collison Cave Holder: Tracey Berger of Spruson and Ferguson
Decision:	2015 ATMO 1 Regulation 5.15 – extension of time to file evidence in answer – no exceptional circumstances – not making all reasonable efforts to comply – not acting promptly and diligently at all times – request for extension of time refused.

Background

1. This decision concerns an application for an extension of time to file evidence in answer under regulation 5.15 of the Trade Mark Regulations 1995 (‘the Regulations’).

2. The substantive matter concerns an application (an ‘IRDA’) by USA Nutraceuticals Group, Inc (‘the holder’) for extension of protection to Australia of the trade mark BEAST, and opposition to the extension of protection by Monster Energy Company (‘the opponent’). Those proceedings began in June 2013 which is when changes to the Regulations brought about by the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No. 1), (‘RTB’), was already in effect having commenced on 15 April 2013.

3. The trade mark application was accepted for possible extension of protection and the official notice of acceptance was published in the Australian Official Journal of Trade Marks dated 14 February 2013.

4. The opponent filed its Notice of Intention to Oppose the extension of protection on 14 May 2013 and then filed its Statement of Grounds and Particulars on 14 June 2013. The holder filed its Notice of Intention to Defend the opposition on 4 July 2013. Thereafter, the opponent filed its Evidence in Support on 11 September 2013. The Office then advised the holder that its Evidence in Answer was due to be filed on 16 December 2013.

5. The holder did not file its evidence on the 16 December 2013 but applied, under regulation 5.15 of the Regulations for a one month extension of time until 16 January 2014. The holder’s reasons for requesting the one month extension of time were as follows:

   The Applicant’s Evidence in Answer is underway. A draft declaration has been prepared and has been sent to the Applicant, who is based in the United States to be reviewed. While some additional information is required to finalise the Declaration, it is anticipated that the Applicant’s Evidence in Answer will be filed within the requested period of time.

   The Applicant has made all reasonable efforts to comply with its filing requirements, but despite acting promptly and diligently it has been unable to file its Evidence in Answer. 

6. The Senior Examiner was not satisfied that the reasons provided justified an extension of time and she intended to refuse the extension request stating:

   It is essential that the party seeking the extension presents sufficient information to justify the extension…parties need to provide an explanation of why it was not possible to complete the evidence on time. This focusses attention on the actions that the applicant has taken throughout the preparation of their evidence.

   A timeline outlining the steps taken in the preparation of evidence during the statutory timeframe would assist in demonstrating whether the extension applicant has acted promptly and diligently at all times.

7. The Senior Examiner gave the holder additional time in which to provide additional written reasons or to request and pay for a hearing in the matter. The holder provided its evidence on 8 January 2014 along with written submissions in support of its extension of time which stated that:

• The applicant was delayed in finalizing its Evidence in Answer because Mr Altieri, the President of the Applicant, had been travelling extensively throughout the United States, Canada, Japan and the United Kingdom for business; and

• The applicant was engaged in litigation proceedings in the United States which had demanded a substantial amount of Mr Altieri’s time and attention; and

• The applicant experienced further delay when collecting information specific to Australia, as the applicant was required to search extensively through physical historical data which date back over 10 years. Much of the material and information required retrieving and searching through old archived files and boxes which had been kept in storage; and

• A lot of information and documentation of sales in Australian were obtained from third party retailers and distributors, which are based outside of the United States.

1. Initially the Senior Examiner was persuaded by these written submissions and intended to grant the extension of time. As could be expected, the opponent objected to the granting of the extension. The Registrar considered that the opponent’s objection had merit and allowed the holder to respond to the objection either by making written submissions or by requesting and paying for a hearing in the matter. The holder requested a hearing.

2. I was delegated to hear and decide the matter. The parties came before me in Sydney on Wednesday 13 August 2014. The holder was represented by Tracey Berger of Spruson and Ferguson. The opponent was represented by Siobhan Ryan of counsel, instructed by Davies Collison Cave. I note here that this matter is strictly between the Registrar and the holder but the opponent is afforded the opportunity to represent its interests.

3. I must now decide whether to grant the current extension of time application, the consequence of which will be that the statutory declaration of Anthony Altieri (filed 8 January 2014) will have been served and filed within the allowed time. If I decide not to grant the extension of time, the holder will have lost its chance to provide any evidence in answer.

Legislative background and procedural framework

1. Provisions for the service and filing of evidence in answer of an opposition are governed by the Regulations.  Regulation 5.14 provides:

   Evidence in answer

   (4) If the opponent files evidence in support of the opposition, the applicant must file any evidence in answer to the evidence in support within 3 months from the day the Registrar:

   (a) gives the applicant:

   (i) all the evidence in support; or

   (ii) if the opponent files the evidence in support in instalments—the final instalment of the evidence in support; and

   (b) notifies the applicant that all the evidence in support has been filed.

   (5) If the opponent does not file any evidence in support of the opposition, the applicant must file any evidence in answer to the statement of grounds and particulars within 3 months from the day the Registrar notifies the applicant that no evidence in support was filed.

2. Regulation 5:15 provides:

   5.15 Extension of time for filing

   (1) A party may request the Registrar to extend a period for filing evidence mentioned in regulation 5.14.

   (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 that justify the extension.

   (3) The Registrar:

   (a) must decide the length of the extended period having regard to what is reasonable in the circumstances; and

   (b) may do so on terms that the Registrar considers appropriate.

   (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.

3. As stated previously, the RTB came into effect on 15 April 2013. It repealed existing extension of time provisions and replaced them with, among other provisions, regulation 5.15 as reproduced above. The Explanatory Statement to the RTB (‘the Explanatory Statement’) states:

   A second purpose of the Regulation is to amend the Patents Regulations and the Trade Marks Regulations 1995 (the Trade Marks Regulations) to reduce delays in the resolution of patent and trade marks applications.

   …

   Schedule 3 to the Regulation amends both the Patent Regulations and Trade Mark Regulations to streamline the opposition process by reducing time frames and introducing a more rigorous test for granting extensions of time to file evidence.[1]

   [1] Explanatory Statement to the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No. 1), p 1.

4. The Explanatory Statement goes on to state that the intention is that all substantive proceedings before the Registrar be conducted in a similar manner[2] (substantive proceedings being those that focus on registrability and use issues[3]). In respect of provisions relating to opposition to registration it says:

   New regulation 5.15 [relating to extensions of time for filing evidence] narrows the circumstances in which the Registrar will grant an extension of time to provide evidence. Extension of the evidentiary periods is at the discretion of the Registrar and only where the Registrar is satisfied that the party entitled to file 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 the 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.[4]

   [2] Explanatory Statement, p 32.

   [3] Explanatory Statement, p 24.

   [4] Explanatory Statement, p 29.

Discussion and Reasons

1. Clearly an intention of the RTB is to reduce delays in opposition proceedings by narrowing the circumstances in which an extension of time will be available. There is a published decision of the Registrar in respect of extensions of time to file evidence under the new provisions being Caprice Australia Pty Ltd v MG Icon LLC [2014] ATMO 34 (‘MG Icon’). The Commissioner of Patents has also published a number of decisions including Julie-Anne McCarthy and Bradley McCarthy v TRED Design Pty Ltd (‘TRED’)[5].

   [5] [2013] APO 57 (11 November 2013), at [34]-[35].

2. In relation to the extension of time provisions the Hearing Officer in MG Icon affirmed the statements made by the delegate in TRED stating:

   In relation to equivalent extension of time provisions in the Patents regulations the delegate observed in TRED that:

   [I] need to ask myself the following questions:

   1. Has the party (and their attorney or agent) made all reasonable efforts to comply with all relevant filing requirements?

   2. Was the failure to file the evidence in time despite the party (and their attorney or agent) acting promptly and diligently at all times to ensure the evidence is filed in time?

   3. Were there exceptional circumstances that warrant the extension?

   I can extend the time for filing evidence only if I am satisfied that the answer to questions 1 and 2 is YES, or if I am satisfied that the answer to question 3 is YES. If I am so satisfied, then I must consider whether there are any discretionary reasons why the extension should not be granted.

   I accept that the same principles apply to the matter before me: questions 1 and 2 relating to the provisions of paragraph (a) of subregulation 9.18(2), and question 3 relating to the provisions of paragraph (b).

3. While the Hearing Officer in MG Icon was making a decision on the basis of regulation 9.18, it is clear that these principles are also to apply to the application of regulation 5.15. This being the case, I may extend the period if I am satisfied that the holder has made all reasonable efforts to comply with the relevant filing requirements and that despite having acting promptly and diligently at all times to ensure the filing of the evidence within the period, has been unable to do so. I may also grant the extension request if I am satisfied that there are exceptional circumstances which warrant it. The holder bears the onus to convince the Registrar that the criteria in Regulation 5.15(2)(a) or (b) have been met. This is an onerous test: Fonterra Co-Operative Group Ltd v Meiji Dairies Corporation [2014] APO 11 at [10].

Subregulation 5.15(2)(a)

1. The main thrust of the applicant’s submissions regarding its request for an extension of time was the argument that the applicant has made all reasonable efforts to comply with the relevant filing requirements and that despite having acting promptly and diligently at all times to ensure the filing of the evidence within the period, it has been unable to do so.

2. In coming to a decision on this matter I will consider the first two questions in light from TRED of the holder’s submissions. The holder has provided a time line of events which I have reproduced below:

Date	Event
30 October 2012	The Applicant files an International Registration designating Australia,  Switzerland, China, Cuba, Egypt, European Community, Israel, Iceland, Korea, Norway, Phillipines, Russia, Singapore, Syria, Turkey and Vietnam for the trade mark BEAST in respect of "dietary and nutritional  supplements" in Class 5.
14 February 2013	The Australian designation of the International Registration, allocated Application No. 1531146, is advertised as accepted in the Australian Official Journal of Trade Marks.
14 May 2013	Monster Energy Company ("Opponent") files a Notice of Intention to Oppose the registration of Application No. 1531146.
14 June 2013	The Opponent files a Statement of Grounds and Particulars.
20 June 2013	The Applicant's US instructors ("Amin Talati") are advised by the Australian Trade Marks Office that the Opponent has filed a Statement of Grounds and Particulars
28 June 2013	Amin Talati instructs Spruson & Ferguson ("S&F") to file a Notice of Intention to Defend.
9 July 2013	S&F files a Notice of Intention to Defend on behalf of the Applicant.
11 September 2013	The Opponent files its Evidence in Support.
30 September 2013	S&F received official correspondence from the Office advising that the Opponent had filed its Evidence in Support.
8 October 2013	S&F downloads the Opponent's Evidence in Support from Objective Connect.  Subsequently reports by email to Amin Talati enclosing the Opponent's Evidence in Support and provides questionnaire to commence preparation of Applicant's Evidence in Answer.
November/ December 2013	S&F sends multiple reminder emails to Amin Talati regarding Evidence in Answer.
14-15 December 2013	Amin Talati sends emails to S&F enclosing Applicant's evidence of use to be filed as Evidence in Answer
16 December 2013	S&F prepares a draft Statutory Declaration, which is sent to Amin Talati for review. An application for a 1 month extension of time is filed with the Office.
19 December 2013	The Office informs S&F that it intends to refuse the Applicant's request for an extension of time.
23 December 2013	S&F sends an email to Amin Talati advising that the Office intends to refuse the Applicant's application for an extension of time and reminds Applicant to finalise its Evidence in Answer.
24 January 2013 - 2 January 2014	S&F is closed over the Christmas/New Year period
7 January 2014	S&F call Amin Talati regarding Applicant's Evidence in Answer. Amin Talati and S&F correspond regarding Applicant's Evidence in Answer.
8 January 2014	S&F files the Applicant's Evidence in Answer and further reasons to support the Applicant's application for an extension of time.
4 March 2014	The Office informs S&F that it intends to grant the Applicant's application for an extension of time.
14 March 2014	The Opponent informs the Office that it objects to the Applicant's application for a 1 month extension of time.
23 July 2014	The Office informs S&F that the Opponent has objected to the granting of the application for an extension of time
6 August 2014	S&F requests a Hearing on the matter of the application for an extension of time.

1. The holder has sought to argue the extension of time should be granted on the basis of subregulation 5.15(2)(a) by stating that the applicant is based in Florida, USA and is a closely held family business consisting primarily of Mr Altieri and his wife and a small group of employees (less than 10) dedicated to sales, marketing and shipping. Counsel for the holder went on to explain that despite its small size and limited employees it is one of the fastest growing companies in the sports nutrition industry with distribution of its products across six continents. It was also explained that a small business like this did not have in-house counsel and that the holder experienced delays in finalizing its Evidence in Answer for the following reasons:

• The applicant has been involved in several unrelated litigation proceedings in the United States, which has demanded a substantial amount of Mr Altieri’s time and attention; and

• The applicant was required to search extensively through physical historical data to compile information relating to the sales of its goods, globally and in Australia. This information was retrieved from old archived files and boxes kept in off-site facilities; and

• The applicant obtained information and documentation of sales for goods sold under the BEAST trade mark from third party distributors and retailers based outside of the USA; and

• Mr Altieri travelled extensively throughout the United States, Canada, the United Kingdom and Japan during the evidence in answer period. During this period Mr Altieri was away from the office on business, still involved in the running of the business and Mr Altieri’s focus was unable to be directed to the evidence in the present proceedings.

1. Counsel for the holder has drawn my attention to events subsequent to the evidence in answer deadline, being the 16 December 2013. Ms Berger states:

   “Following the initial deadline to file its Evidence in Answer, the Applicant continued to finalise its evidence. Nevertheless, the Applicant experienced further delays due to the closure of its US Attorney firm, Amin Talati, and S&F over the Christmas/New Year period. Amin Talati, which is based in Chicago, was also affected by extreme weather conditions which forced the office to shut down intermittently during this period and limited communication.

   Mr Altieri has had to balance a significant number of additional business matters on top of his usual day to day running of the business, as well as the present opposition. At all available times, Mr Altieri has acted promptly and diligently to prepare and finalise his evidence. The fact that he was required to attend to other more pressing matters does not detract from the fact that he made all reasonable efforts to act promptly and diligently in the preparation of his evidence.”

2. It is on the basis of the above information that the holder has claimed to have acted promptly and diligently at all times in gathering its evidence but has been unable to do so within the required timeframe. However, I am not persuaded by this reasoning.

3. The time line provided indicates a period between the 8 October 2013 and 14/15 December 2013 where there is very little information as to what the holder was doing. There is some discussion of Mr Altieri being deposed twice in September for an ongoing suit in the Federal Court but there are no specific dates given so these events may very well have occurred before the evidence in answer period even began. I note from the holder’s submissions that Mr Altieri was involved in formal mediation in early December 2013 but once again dates are lacking. Ms Berger has stated that this litigation took up most of Mr Altieri’s time from September through to December 2013. However, the facts provided do not support this. 

1. This two month period between the 8 October and 14/15 December 2013 appears to be a black hole when it comes to action from the holder. There is no indication of unusual events or new litigation commencing during this time but rather broad statements that the litigation was ongoing and that Mr Altieri engaged in business travel. If and how long that business travel occurred during this period is unknown.

2. I note that this two month period also forms the majority of the holder’s time to gather together its evidence in answer. It is clear that the holder’s Australian representatives, Spruson and Ferguson, sent emails to the holder’s US Attorneys during this time. However, there is no information regarding any responses or anything which may indicate that this correspondence elicited any action from the holder. Based upon this lack of information I do not consider that I could be satisfied that theholder had made all reasonable efforts to act promptly and diligently at all times.

3. While I can appreciate Ms Berger’s statements regarding the holder being a small business with limited staff and Mr Altieri’s business travel and other ongoing litigation, there are strong indications that Mr Altieri did not give much attention to the preparation of his evidence in this matter. The lack of information as to the specifics that occurred during the majority of the evidence stage and the lack of Mr Altieri’s focus could not be described as acting promptly and diligently at all times. I note that the word ‘diligent’ is defined in the Macquaried Dictionary as:

   Adjective 1. Constant and persistent in an effort to accomplish something. 2. Pursued with persevering attention; painstaking.

4. Ms Berger drew my attention to the definition of ‘reasonable efforts’ and I note that the Oxford Online Dictionary defines reasonable as:

   Adjective i. having sound judgement; fair and sensible: ii. Based on good sense: iii. Able to reason logically: iv. As much as is appropriate or fair; moderate: v. fairly good; average.

5. While the holder is a small business with limited staff, has ongoing litigation and Mr Altieri has engaged in business travel during this time, I am not satisfied that these are sufficient reasons for the holder to suggest that its evidence preparation was prompt and diligent because all ‘reasonable efforts’ were made by Mr Altieri under the circumstances.

6. The fact that the holder is a small business and that Mr Altieri was engaged in ongoing litigation and business travel, although perhaps contributing to delays in finalizing the evidence, cannot be used to excuse it. Whilst Mr Altieri was understandably busy during this period of time, he was also closely involved and aware of the ongoing litigation faced by the holder. These were not new and unforeseen events any more than his business travel.

7. Given that Mr Altieri would have been aware of his ongoing litigation and plans for business travel, the holder ought to have been mindful, given the emails sent by its Australian legal representatives, that his evidence was due on the 16 December 2013. A period of around two months passed without any comment from the holder until the 14/15 December 2013 when the holder sent its evidence of use to its legal representatives via email. On the 16 December 2013, Spruson and Ferguson sent the draft statutory declaration to the holder for signing and applied for an extension of time. It seems that the gathering of the holder’s evidence has been left until very late in the period (namely the day before the evidence was due) and this allowed very little time for the evidence to be finalized or declarations to be returned for signing.

8. I also note that despite the prompt action of the holder’s Australian legal representatives, it took until the 8 January 2014 for the holder to return the signed declaration. While the busy circumstances surrounding the holder provide a clearer picture of events that occurred before and after the evidence in answer period, those events and circumstances do not establish prompt and diligent action at all times to ensure the filing of evidence within the period.

9. Since I am not satisfied that the holder has acted promptly and diligently at all times, on the basis of its submissions, subregulation 5.15(2)(a) may not be applied to extend the period for filing evidence in answer.

Subregulation 5.15(2)(b)

1. There have been limited submissions made that the extension may be granted on the basis of exceptional circumstances. Indeed, I say now that none of the preceding submissions made by the holder would amount to exceptional circumstances for the following reasons:

• Business travel, like annual leave, is not an unforeseen event: See MG Icon

• Ongoing involvement in litigation, like other business disruptions, can be managed and should have been accommodated: see Sportingbet Australia v Tabcorp International Pty Ltd [2014] APO 21 at [68]

• Searching through physical historical data and obtaining information/documentation from third parties is not unusual in the gathering together of evidence and should be allotted time and resources with sufficient consideration. This is not something outside of the normal evidentiary process: see TRED

1. Ms Berger did point out that the Applicant experienced further delays due to the closure of its US Attorney firm, Amin Talati, and Spruson and Ferguson over the Christmas/New Year period. However, this Christmas/New Year shut down occurred after the period for filing the holder’s evidence in answer. I note also that Amin Talati, which is based in Chicago, is stated to have been affected by extreme weather conditions which forced the office to shut down intermittently. However, details of these shut downs have not been provided in the holder’s submissions. It is unclear if these shut downs affected the holder’s gathering of evidence during the evidence period or the month after the evidence in answer period had passed.

2. Research provided indicates that the 2013-14 North American cold wave consisted of two episodes, the first from 6-10 of December 2013 and the second one in early January 2014. I note that the first incident of record breaking cold air was in early December 2013 and therefore, was during the evidence in answer period. However, not much is mentioned of this initial cold wave and there is no statement that Amin Talati was forced to shut down during this time. Indeed, it is the cold wave which started on 2 January 2014 (and outside of the evidence in answer period) which is stated to have resulted in heavy snowfall which closed down businesses, schools and roads. Without the holder clarifying when Amin Talati was forced to shut down due to the weather, I am unable to be satisfied that exceptional circumstances exist which would justify the granting of the extension of time request. Since I am not satisfied on the basis of the holder’s submissions, subregulation 5.15(2)(b) may not be applied to extend the period for filing evidence in answer.

Decision and costs

1. I am not satisfied that there are exceptional circumstances that justify extending the period in which the holder may file evidence in reply. Nor am I satisfied that the evidence was not filed despite the holder acting promptly and diligently at all times during the period.

2. Accordingly, I refuse to grant the extension of time. As a consequence, the period for filing evidence in answer ended on 16 December 2013 and the declaration filed after that date does not constitute evidence in answer. Therefore, there is no evidence in reply period.

3. Both parties made submissions regarding costs. I am in agreement with the Hearing Officer in MG Icon when it comes to determining costs. The general rule is that costs follow the event. However, I consider it appropriate that an award of costs should await the conclusion of the substantive proceedings, the outcome of which may assist in the determination of the proper result.

Bianca Irgang

Hearing Officer

Trade Marks Hearings

9 January 2015