Network Clothing Company v Reiss Holdings Ltd

[2008] ATMO 35

TRADE MARKS ACT 1995

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

Re:Oppositions by Network Clothing Corporation Pty Ltd to applications under section 92 of the Act by Reiss (Holdings) Ltd to remove trade mark number 761579(25) - REISS - in the name of Network Clothing Corporation Pty Ltd and the matter of an extension of time to serve evidence in support of the opposition

Delegate:	Rowena Beal
Representation:	2008 ATMO 35 Opponent: Ms Leneen Forde of Cornwall Stodart Applicant: Ms Janice Luck of Counsel, assisted by DLA Phillips Fox
Decision:	Regulation 5.16 direction not allowable, Registrar to grant extension of time under section 224(1) for filing notice of opposition. Direction under 5.16 regarding service of evidence in support No award of costs

Background

1. On the 8^th May 1998 Network Clothing Corporation Pty Ltd (‘Network’) obtained registration of the word REISS under trade mark number 761579. The trade mark was registered for goods in class 25 being ‘All articles of mens, womens and childrens clothing excluding footwear’.

2. On the 28^th March 2007 Reiss (Holdings) Ltd (‘Reiss’), a company unrelated to the trade mark owner, filed an application pursuant to section 92(4)(b) of the Trade Marks Act 1995 (“the Act”). This application sought the removal of the trade mark registration for “all articles of women’s and children’s clothing excluding footwear”.

3. On the 29^th March 2007 the same company filed a second application under the provisions of section 92(4)(b). This second application sought the removal of the trade mark registration for “all articles of mens clothing excluding footwear”. On the 13^th April 2007 IP Australia sent out standard notices advising that two applications to remove a trade mark for non use had been received and provided details of the advertisement date in the Australian Official Journal of Trade Marks. The journal was dated 3^rd May 2007.

4. The owner of the registered trade mark, in a faxed letter to the Office dated 26^th April, stated that ‘notice is hereby given to oppose the removal of this trade mark’. A fee of $250 was also paid. The Office accepted the fee and issued a receipt dated 1^st May 2007. A mailed copy of Network’s letter was received in the Office on the 1^st May 2007. Attached to the letter were some documents that appeared to be evidence of use of the trade mark. These were a purchase order and other attachments bearing the trade mark. No further correspondence was received or sent in relation to the matter until late August 2007 when the matter was brought to the Deputy Registrar’s attention.

5. The three month period for filing a notice of opposition to the removal of the trade mark began on the 3^rd May and expired on the 3^rd August 2007. IP Australia wrote to Network on the 29^th August 2007 and advised that the filing fee for opposing the two removal applications was $300 in total and not $250 as initially paid by Network. In addition, it was noted that regulation 21.8 of the Act regarding notification of service of a copy of the notice of opposition had not been complied with, nor had there been any indication that a copy of the evidence in support had been served on the agent for the non use applicant. The fact that the evidence filed with the notice of opposition was not in declaratory form was also raised as a matter requiring attention. The Deputy Registrar proposed making a direction under regulation 5.16 of the Act to extend the timeframe allowing the potential opponent to serve its notice of opposition and evidence in support.

6. At this stage, Network was represented by Coadys solicitors. On receipt of IP Australia’s letter the solicitor sent to IP Australia two notices of opposition, compiled in standard format, and a further filing fee of $150 on the 11^th September. Copies of these notices were dispatched to DLA Phillips Fox representing the non use applicant on the same date.

7. DLA Phillips Fox responded in a letter also dated 11^th September 2007 and asserted that the proposed direction under regulation 5.16 should not be given and that Network’s trade mark registration should be removed from the Register pursuant to section 97 of the Act. The Deputy Registrar wrote to Phillips Fox again on the 15^th October and advised that the office error which had resulted in the breakdown of procedure was the failure of IP Australia to notify Network that it had filed its notices of opposition prior to the commencement of the opposition period.  The failure of IP Australia to notify Network of shortcomings in the filed documents had not allowed Network an opportunity to rectify the problems.

8. Phillips Fox responded on the 23^rd October and again requested that Network’s trade mark be removed. The basis of the request was that the removal applicant had not been served with a copy of the letter of the 29^th April being a ‘copy of what constitutes the opposition notice’ as the Deputy Registrar had requested in her letter of 29^th August. The agent indicated that they had received a copy of the later set of notices of opposition on the 11^th September.

9. A copy of Network’s notice of opposition dated the 29^th April was provided to Phillips Fox by IP Australia on response to a phone enquiry on the 31^st October. Phillips Fox again requested removal of the registered trade mark in letters dated the 2^nd November and 3^rd December 2007. The latter contained a request to be heard should the matter not be resolved in their favour. On the 7^th December the Deputy Registrar agreed with Phillips Fox’s proposal that they be heard in relation to the proposed regulation 5.16 direction and the Registrar’s failure to remove the registered trade mark from the Register. The matter was set down to be heard and the agent for the potential opponent advised that they also wished to attend and make submissions in the matter.

10. The matter came before me as a delegate of the Registrar on the 9^th April 2008 in Canberra. The non use applicant was represented by Ms Janice Luck of Counsel. The potential opponent was represented by Ms Leneen Forde of Cornwall Stodart Lawyers. Both sides filed written submissions the day before the hearing for my consideration.

    Submissions and the Law

11. There are essentially three issues to be considered in this matter. The first relates to the proposed direction under regulation 5.16 to set a new date for the filing of evidence in support of the opposition. The second deals with Network’s request that the Registrar invoke the provisions of s224(1) and s224(3) due to an office error. The third issue relates to the current status of the registered trade mark and what the removal applicant claims is the Registrar’s failure to remove trade mark registration 761579 from the Register pursuant to section 97 of the Act.

12. Dealing firstly with the regulation 5.16 direction proposed by the Deputy Registrar in her letter of 29^th August 2007, the non use applicant has submitted that this provision cannot be invoked in the current circumstances. The agent has asserted that the words ‘a party to these proceedings’ appearing in the regulation indicates that Regulation 5.16 can only apply in circumstances where the opposition proceedings have already commenced. As the potential opponent in the non use action had not filed a valid notice of opposition then the proceedings cannot be said to have commenced. The agent has referred me to Darrell Lea Chocolate Shops Pty Ltd v Cadbury Limited (2008) ATMO 6 in this regard.

13. Reiss also argued that if Network’s letter of the 26th April 2007 could be taken as a valid notice of opposition then Network had failed to follow the requirements laid down in the Act for the service of evidence in support in an opposition. The failure of the Office to notify Network that its notice was filed too early was not relevant to the fact that it failed to serve its evidence within the timeframe specified under regulation 5.7. Reiss also claimed that Network had not proceeded with due diligence in relation to its opposition as it had failed to comply with the direction set out in the Deputy Registrar’s letter of the 29^th August requesting that a copy of the initial notice of opposition filed on the 26^th April 2007 be served on the non use applicant. Further, Network had not served evidence in support in the form specified in that same letter.

14. Network responded to this latter claim with a statement at the hearing that once the Deputy Registrar’s letter with the proposed direction regarding service of evidence had been contested by the non use applicant, it had assumed the matter was in abeyance pending a decision regarding the regulation 5.16 matter and the setting of a date for service of evidence.

15. Network made no submissions with regard to the validity of Deputy Registrar’s proposed direction.

16. In its submissions Network relied on section 224(1) and (3) to support its claim for an extension of time to allow the later filed notices of opposition to be considered as validly filed. Section 224(1) states that the Registrar must extend the time for doing a relevant act where the act is not done within the time because of an error or omission by the Registrar or an employee or a person providing services for the benefit of the trade marks office. Network has submitted that the failure of the Trade Marks Office to notify of an irregularity in the filing of the notice of opposition, that is filing before the non use applications were advertised and lack of notification of service on the non use applicant, is an omission for the purpose of this section.

17. Network also relied on the provisions of section 224(3). This section provides that if a relevant act that is required by this Act to be done within a certain time is not done within the at time allowed, on application made by that person the Registrar is of the opinion that special circumstances exist to justify an extension of that time, the Registrar may extend the time for doing the act. Network has claimed that special circumstances exist by way of the fact that Network is the registered owner of the mark and should be allowed to demonstrate their use of the mark in the requisite time frame specified under section 92. They have also argued that the public interest is not served by the rightful owner of the trade mark being defeated by an easily remedied technicality.

18. With regard to Network’s request that the Registrar invoke the provisions of section 224 Reiss claimed that there was not any act or omission of the part of IP Australia that had prevented Network from complying with its obligation to serve its evidence in support. Whilst it was the practice of the Registrar to notify an opponent that its evidence should be served on the other party Reiss alleged that such notifications fell outside the duties and functions imposed upon the Registrar by the Act and Regulations. On this point Reiss relied on Lyons and another (Trading as Mitty’s Authorized Newsagency) v Registrar of Trade Marks (1983) 1IPR 416 where a distinction is drawn between voluntary acts and necessary acts under the legislation.

19. In the event that the initial notice of opposition is considered ‘not filed’ and the trade mark consequently removed under section 97, Network submitted that the Registrar ought to extend the period within which the notice must be filed to at least 11 September 2007, being the filing date of the second notice of opposition. In this event the provisions of section 98 can then be invoked.

20. The third issue raised at the hearing was in relation to the Registrar’s failure to comply with section 97 of the Act. Section 97(1) of the Act provides that ‘If there is no opposition to an application to the Registrar under subsection 92(1), the Registrar must remove the trade mark from the Register in respect of the goods specified in the application”. As a notice of opposition was not lodged within the requisite timeframe Reiss argued that the Registrar had no discretion and must remove the trade mark from the Register.

    Discussion

21. Regulation 5.16, under the heading of ‘Conduct of opposition proceedings generally’, states:

(1) The Registrar may, at the request of a party to the opposition proceedings or on the initiative of the Registrar, give a direction in relation to the procedure in the proceedings.

(2) A direction given under subregulation (1) must not be inconsistent with these regulations.

(3) The Registrar must not give a direction unless the Registrar:

(a) is reasonably satisfied that parties to the proceedings have been notified of the proposed direction; and

(b) has given the parties a reasonable opportunity to make representations concerning the proposed direction; and

(c) is reasonably satisfied that the proposed direction is appropriate.

22.  Reiss has submitted that the opposition proceedings had not commenced as a valid notice of opposition had not been filed and the wording of the regulation makes it clear that the opposition proceedings must have commenced. This view was also supported by Hearing Officer McDonagh in AKT Consultants v Alfa Laval Lund AB [2006] ATMO 56, in relation to a review of taxation of costs. In order to determine if the opposition proceedings under section 99 have commenced it is necessary to determine if Network’s filing on the 26^th April 2007 constituted a valid notice of opposition in terms of Part 5 of the Regulations. Regulation 5.1, under the heading of ‘Time for filing notice of opposition’, states ‘For the purposes of subsection 52(2) of the Act (which deals with notice of opposition), the period for filing a notice of opposition is 3 months from the day on which the acceptance of the application is advertised in the Official Journal’.

1. The opposition period is clearly stated as commencing from the date of advertisement, in this case, of the non use applications. Network’s letter to the office indicating their intention to oppose was faxed to IP Australia on the 29^th April and the mailed copy bearing the exhibits was date stamped on the 1^st May 2007, being some days before the advertisement on the 3^rd May 2007. The notice did therefore not comply with regulation 5.1 as it was not filed within the relevant 3 month period and I consider that Reiss’ submission therefore has merit. That being the case, regulation 5.16 cannot come into play at this stage as the direction was inconsistent with the regulations.

2. The Office has two courses of action in a situation where documents are filed too early. Regulation 21(4) covers the filing of documents and the treatment of non complying documents:

   If a document received for filing at the Trade Marks Office fails to comply with the Act or these Regulations, the Registrar may:

   treat the document as not having been filed at the Trade Marks Office; or

   treat the document as having been filed, but require the person who filed the document to make, or cause to be made, any alterations to the document that are necessary to enable the document to so comply

3. A literal reading of regulation 21(4)(a) does not require any action from the Registrar once a non complying document is filed but deemed ‘not filed’. Such a circumstance would mean that the sender would assume their document did comply and that their action had been successfully commenced when in fact it had not. Clearly this cannot be an intention of the Act, and so I must conclude that the Registrar has some responsibility to notify the sender of any shortcomings in their filed documents.

4. It is current practice within the Office to treat documents filed under such circumstances as ‘not filed’ (although the term used in Office is ‘not receivable’, as the opposition period has not commenced and so the Office is not in a position to receive them) and return them to the sender in accordance with the above provision with an explanation as to why they are being returned. Whilst the explanation for non compliance is not specifically stated as being a requirement of the Act at 21(4)(a) I believe it would be only reasonable to assume that informing the sender of the non compliance is intended on the basis of procedural fairness.

5. A review of the file and history of actions taken after the non use applications were filed shows that neither of the options open to the Registrar under regulation 21.4 were taken. The notice filed was not deemed as having been filed and actioned accordingly, and neither was it deemed ‘not receivable’ and returned to the sender. The correspondence was logged into the Office as having been received by the mailroom but the matter was not passed on to the Opposition area for action despite the correspondence being clearly indicated as for the attention of trade marks hearings area. As there was material filed with the notice of opposition which the writer had described as ‘evidence’ it would have been the usual practice to return this material with the advice that only material presented in the form of a statutory declaration would be given full weight in an opposition proceeding, and a request for notification of service in accordance with regulation 21.8. Where a private applicant is a party to an opposition proceeding it would also be common to ascertain their level of understanding of terms such as ‘service’, the form of a statutory declaration and an explanation of the discrepancy in the fees. The potential opponent was not advised of any of these issues.

6. In the absence of any information from the Office to the contrary it is most likely that Network believed that it had, in fact, complied with the requirements specified in the standard notice dated 13^th April 2007. It is likely that they would have assumed that they had indicated their intention to oppose, had provided evidence of use of the trade mark within the timeframe where use was being assessed and had paid the requested fee of $250.  

7. The letter from the Deputy Registrar dated 29^th August took the place of the notification that should have been issued under regulation 21(4) advising of the deficiencies in the original notice of opposition and the fee. Until such times as Network received this notification there was no reason for them to suspect that they had not complied with the Act. However, as the original filing of the notice did not comply with the regulations in that it was not filed within the requirements specified under regulation 9.3(1) and (2), the first set of notices can not be considered valid for the purposes of section 96.

8. Network has requested that the Registrar under section 224 of the Act. These provisions allow:

   Extension of time

   224.(1) If, because of an error or omission by a trade marks officer, a relevant act that is required by this Act to be done within a certain time is not, or cannot be, done within that time, the Registrar must extend the time for doing the act.

   Note:  For trade marks officer see section 6.

   (2) If, because of:

   (a) an error or omission by the person concerned or by his or her agent; or
   (b) circumstances beyond the control of the person concerned;

   a relevant act that is required by this Act to be done within a certain time is not, or cannot be, done within that time, the Registrar may, on application made by the person concerned in accordance with the regulations, extend the time for doing the act.

   (3) If:

   (a) a relevant act that a person is required by this Act to do within a certain time is not, or cannot be, done within that time; and
   (b) on application made by that person in accordance with the regulations, the Registrar is of the opinion that special circumstances exist that justify an extension of that time;

   the Registrar may extend the time for doing the act.

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

   (5) If an application is made under subsection (2) or (3) for an extension of time for more than 3 months, the Registrar must advertise the application in the Official Journal.

   (6) A person may, as prescribed, oppose the granting of the application.

   (7) An application may be made to the Administrative Appeals Tribunal for the review of a decision of the Registrar not to extend the time for the doing of an act.

   (8) In this section:

   relevant act means:

   (a) any act (other than a prescribed act) done in relation to a trade mark; or
   (b) the filing of any document (other than a prescribed document); or
   (c) any proceedings (other than court proceedings).

1. Sub-section 224(1) opens with the words ‘If: a relevant act that a person is required by this Act to do within a certain time is not, or cannot be, done within that time’. Sub-section 224(8) defines ‘relevant act’ as being an act (other than a prescribed act) done in relation to a trade mark. The list of prescribed acts is found at Regulation 21.28. Turning to a consideration of s224(1), this provision states that the Registrar must extend the time for doing a relevant act where the act is not done within the time because of an error or omission by the Registrar or an employee or a person providing services for the benefit of the trade marks office. Reiss has referred me to Lyons, supra, and submitted that IP Australia’s failure to notify Network of the shortcomings of its notice of opposition does not constitute ‘error or omission’ as any such notification is voluntary in the sense that it falls outside the duties and functions imposed on the Registrar by the Act.

2. I cannot agree with this view. Regulation 21.4 imposes a clear obligation on the Registrar with respect to responding to the filing of non complying documents. The word ‘may’ allows either of two courses of action with respect to the documents; in the first instance the Registrar considers the documents not filed and in the second the documents are taken as filed and the sender notified of the necessary changes in order to rectify the documents. In the current circumstances, where the incoming correspondence from Network was not actioned and therefore not treated as being ‘filed’ or ‘not filed’, the Registrar has failed to comply with regulation 21.4 and therefore failed to meet an obligation imposed under the Act.

3. However, I also find that under the Act the Registrar has the responsibility to inform parties of the non compliance of documentation with filing requirements and allow time for the rectification of those issues. This is an established and routine practice in dealing with all parties regardless of their level of previous experience with the Act and Office and based on the principals of procedural fairness.

4. Where it is the usual practice for the Registrar to so advise this can be differentiated from Lyons where a staff member provided an ad hoc and unsubstantiated opinion of an event. Rather, the circumstances here are more akin to the latter ‘error or omission’ in Lyons where the regular sending of updates to the State Office was delayed and so an established and routine practice, a requirement in the administration of the Act, was disrupted.

5. This situation can also be likened to Sefton’s Trade Mark (1987) 11 IPR 424. This case involved the grant of an extension of time under the provisions of section 131(1)(a) of the Trade Marks Act 1955, within which to request renewal of a trade mark registration. The registration was not renewed because of the loss or non delivery of correspondence from the Office in response to requests from the registered owner. The extension of time was sought and granted on the basis that, ‘by reason of’ an error at the Trade Marks Office, the trade mark registration was not renewed and thus there was sufficient causal connection between the failure in the Office contributing materially to the failure of the applicant to renew their registration.

6. I am therefore satisfied that the failure to comply with subregulation 21(4) constitutes an ‘error or omission’ in the context of subsection 224(1). Under the terms of this provision the Registrar has no discretion but ‘must’ grant an extension of time for the filing of the notice of opposition. This extension can be actioned immediately as advertisement under subsection 224(5) is not required. This extension is granted until the 11^th September 2007 when the second notice of opposition was filed and service was notified as required under regulation 9.3(2). As the period for filing a notice of opposition has been extended and the notice now deemed to have been filed in time, the action of s97 cannot come into play at this time as the proceedings are not taken to have ended as stipulated under subregulation 9.4(4). It is also not necessary for me to consider an extension under section 224(3).

7. The early filing of a copy of Network’s notice of opposition and evidence has established that it was Network’s clear intention to oppose the removal of its trade mark. I have come to the conclusion that had Network been informed of the shortcomings of their opposition, such notification being the normal course of events, then the owner would most likely have filed again in the correct timeframe and have served the documents as required. Indeed, when notified by letter dated the 29^th August 2007, a letter which effectively took the place of the notification that should have been sent in May 2007, they quickly took steps to meet all requirements within the specified timeframe. This again demonstrated Network’s intention of mounting a serious opposition.

8. I note Reiss’ argument that Network had failed to serve evidence in support and therefore failed to meet the requirements of regulation 5.15 and had not proceeded with due diligence in relation to its oppositions. I have already referred to Network’s expectations with regard to the first notice of opposition in light of IP Australia’s lack of response, and on the occasion of the filing of the second set of notices, the direction proposed under regulation 5.16 by the Deputy Registrar was to set a date for the filing and service of such evidence. Once the direction was contested there was no confirmation of a date for the service of evidence in support set and the matter was therefore held in abeyance. Network had requested confirmation of the date for evidence in support in their letter of 11 September, being the covering sheet for the notices of opposition, however, no response to either side was issued in this regard.

9. As the lapse in time between 11^th September and the date of this decision should not be used to compound the initial error made by IP Australia, I propose a direction under regulation 5.16 to allow the opponent 3 months from the date of this decision to file and serve their evidence in support in accordance with regulation 5.7. Such an exercise requires that both parties be allowed to make representations in the matter prior to giving the direction.

I have considered interests of both parties in this matter. Where a trade mark is already registered then the owner should be permitted an opportunity to defend that trade mark registration before the owner’s rights are affected by a removal action. The removal applicant will now be permitted an opportunity to challenge the trade mark registration and scrutinize and respond to evidence of use, and the public interest will be best served if the matter is finally resolved on the basis of evidence in the substantive matter rather than a technicality. Certainly a failing in procedure on the part of the Trade Marks Office should not be used to justify a denial of natural justice to either party to these proceedings.

Decision

1. The initial direction under regulation 5.16, as proposed in the Deputy Registrar’s letter of 29^th August 2007, is not valid as the opposition proceedings had not begun. However, an error or omission on the part of IP Australia has resulted in the failure of Network to lodge a valid notice of opposition within the timeframe allowed under section 96. Consequently, I have granted an extension of time under the provisions of s224(1) until the 11^th September 2007 being the date that Network did in fact comply with the requirements of section 96.

   Proposed actions:

   • If either party wishes to make representations on the matter of the regulation 5.16 direction with regard to setting a date three months hence for the filing of evidence in support in the matter then I will allow twenty one days for the receipt of such a request.
   • In the event that a hearing is requested, it will be set down and both parties will be permitted to attend and make submissions.
   • If no request to be heard is received in the next twenty one days then the regulation 5.16 direction will be actioned and the status of the opposition will be that evidence in support is due to be served three months from the date of this decision.

   Costs

2. On the issue of costs Reiss claimed its costs regardless of the outcome of this hearing. The basis of this claim is that the non use applicant had complied with the provisions of the Act and so had met all their obligations in the matter. I certainly acknowledge that it was the failing of the Office that has led to this situation where both parties have been disadvantaged. However, I note the letter from an officer of the Hearings and Legislation Section to Reiss dated 31^st October 2007 advising that the ‘Registrar would be very reluctant to shut out this opposition, since it is clear there is an opposition of at least arguable merit. Moreover, the main cause of the failure of procedure was the failure of the Trade Marks Office to deal with a notice of opposition’. Reiss was therefore put on notice that it was unlikely their request that the trade mark be removed under s97 would be granted. Network asked for the matter of costs to be held over to the final determination of the substantive matter. In the circumstances I will accede to this request and make no determination on the matter of costs at this time..

   Rowena Beal
   Senior Examiner
   Trade Marks Hearings
   27^th  May 2008