Paragon Pharmaceuticals Pty Ltd v Estee Lauder Cosmetics Ltd

[1997] ATMO 59

TRADE MARKS ACT 1955

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

Re:Opposition by Estee Lauder Cosmetics Ltd to an application by Paragon Pharmaceuticals Pty Ltd to register a trade mark comprising the words i’m beautiful, application number 599462(3) - and a late application for an extension of time to serve evidence in answer

On 1 April 1993, Paragon Pharmaceuticals Pty Ltd (hereafter Paragon) applied to register the following trade mark for all goods in class 3.  Class 3 goods encompass laundry preparations, cleaning and polishing preparations, toiletries, perfumery, cosmetics, hair preparations and dentifrices.
The trade mark was examined and, on 22 September 1994, it was advertised for acceptance subject to the disclaimer: registration gives no right to the exclusive use of the word BEAUTIFUL. The mark was accepted under the provisions of section 44 of the now repealed Trade Marks Act 1955. Section 241 of the Trade Marks Act 1995, specifies that the provisions of the Trade Marks Act 1955 continue to govern these opposition proceedings.  All references from here on will be to the 1955 Act.
Trade mark application number 599462(3) is now opposed by Estee Lauder Cosmetics Ltd (hereafter Estee Lauder).
As per Part VII of the 1955 Regulations, Estee Lauder served evidence to support its opposition.  Paragon did not respond.  The Trade Marks Office thereafter sent a series of notices and reminders to both sides indicating that proceedings must be finalised and ultimately warning that, if neither party acted, the Registrar would decide the opposition on the written record.  Estee Lauder responded with a request for a hearing.  Nothing was heard from the applicant.  The Registrar therefore set the opposition down to be heard on 1 October 1997 in Sydney. I conducted the hearing. Mr Richard Cobden of Counsel attended on behalf of the opponent, Estee Lauder. Mr Paul McGirr of McGirr James Hall & Associates - attorneys at law and solicitors of Sydney - attended on behalf of the applicant, Paragon.
Mr Cobden opened with information that he had material from Mr McGirr concerning an application for additional time. This, it emerged, was to be the issue of the day.  Having heard both sides in respect of this belated application, I adjourned the hearing. The following are my reasons and decision in respect of this application for an extension of time.
Mr McGirr relies on section 130 and regulation 69 and he depends to some extent on the history of the opposition and Estee Lauder’s successive applications for extending the time to serve its evidence. It is convenient at this point to review that full history.

History

The period for filing notice of opposition is 3 months.  For 599462, this time ran out on 22 December 1994.  Before that time elapsed, Estee Lauder applied for and achieved an extension.  It then lodged opposition on 22 March 1995.  There follows another statutory 3 months, this time for Estee Lauder to serve and file evidence to support its opposition.  Estee Lauder sought a series of extensions of this time - all of them filed within the time allowed.  The trade mark applicant did not comment on, or object to, any one of these. In all, Estee Lauder obtained extensions from 22 June 1995 to 22 August 1996 - a total of 14 months.  At that point the Trade Marks Office told Estee Lauder that no further time would be allowed unless it produced compelling reasons and a binding timetable for collecting and serving outstanding evidence. Estee Lauder then lodged its evidence in support on 30 July 1996 and served it on Paragon on 22 August 1996.
Service of the evidence in support brings regulation 44 into operation and the trade mark applicant has three months to serve its evidence in answer. This time elapsed on 22 November 1996 by which time Paragon had neither served evidence nor requested an extension. The Trade Marks Office, as per standard practice, advised both Paragon and Estee Lauder that the evidence in answer was overdue.  It issued this notice on 10 December 1996. It then issued a  further notice on 15 January 1997 which advised that:

...  the Registrar will allow one month from the date of this letter within which either the applicant or the opponent may request a hearing of this opposition.  Failing any such request for a hearing, the Registrar will decide the matter on the basis of any evidence which has been properly served, and any submissions on the file.

The agent for Estee Lauder responded to this letter and asked that matters be held over because negotiations for settlement were being considered, and it wished to preserve its right to be heard.  Nothing was heard from Paragon.
On 24 February 1997, the Office wrote again to both sides.  This letter said:

We do not wish to take further action in the matter if there are genuine negotiations taking place which are likely to lead to a settlement in the near future.  On the other hand the Registrar does not wish the matter to drag on indefinitely and will, after giving due notice and giving both the applicant and the opponent the opportunity to seek a hearing, take steps to decide the matter.

Again, Estee Lauder’s agent responded saying it was still hopeful of resolution, and asking that the matters continued to be held over.  Again, Paragon did not reply.
On 3 July 1997 the Office wrote briefly to each side, this time saying that although the Registrar had understood there was a possibility of settlement, no advice of progress had been forthcoming and if, within a month, neither party requested a hearing, the opposition would be decided on the written record.
On 1 August 1997 Estee Lauder’s agent formally applied for a hearing. This was duly scheduled for Sydney in October 1997. 
On 8 August 1997 both sides were issued with a preliminary hearing notice advising that the hearing would be conducted in Sydney in October. Paragon was silent.
On 9 September 1997, the Office sent  both sides the formal notice as per regulation 72. It said the hearing was fixed for 1 October 1997, and gave location and time.
Summing up this situation the following points emerge.

The conduct of Estee Lauder’s opposition

·     Estee Lauder did not meet specified time limits, achieving three additional months for filing opposition and 14 additional months for serving evidence.

·     This is an appreciable record of extensions and is at the upper level of time which, under the provisions of the Trade Marks Act 1955, the Registrar has been prepared to allow.

·     Each of these applications, however, was sought within the time allowed.

·     Paragon was informed of each extension of time application.  It did not object to any one.

The conduct of Paragon’s response to the opposition

·     From Estee Lauder’s initial extension, to completion of its evidence, the Trade Marks Office kept Paragon informed with at least 16 notices.

·     The last of these notices said that Estee Lauder’s supporting evidence was now lodged, and Paragon had 3 months to serve evidence in answer.

·     In December 1996, when this time had elapsed, the Office wrote to Paragon to say that the evidence was overdue.

·     Between December 1996 and July 1997 the Office wrote three more times to Paragon reminding it of the need for progress and that if there was none, the Registrar would move to decide the opposition.

·     Then, the Office wrote twice more, once in August and again in September 1997, with details of the appointed hearing time.

·     No response of any kind was received from Paragon, until 30 September 1997 - the day before the Sydney hearing.  Paragon then sent a facsimile message to the Canberra Trade Marks Office saying it intended to seek an extension of time.

·     Paragon now seeks to extend the time provided by regulation 44 for the three months for serving its evidence in answer. That time expired on 22 November 1996.  The request is thus more than 10 months out of time.  The extension requested runs from 22 November 1996 to 22 October 1997.

·     This additional time, 11 months, would bring the total time for serving evidence in answer to 14 months.

·     Even if applied for within the time allowed, the Registrar would regard this length of time as approaching the upper limit of time that could ordinarily be allowed for serving evidence in answer.

·     The present circumstances, however, are out of the ordinary.  The application is late, and not a little late. It is 10 months out of time and emerges without warning, after a long period of total silence, on the day before a hearing scheduled to decide the opposition.

Issues

As I have mentioned, Mr McGirr relies on section 130 which provides:

Where, by this Act, a time is specified within which an act or thing is to be done, the Registrar may, unless otherwise expressly provided, extend the time either before or after its expiration.

and regulation 69 which provides: 

An application for an extension of time under these Regulations shall be in writing and shall be lodged at the Trade Marks Office -

(a)       before the expiration of the time sought to be extended; or

(b)if the Registrar is satisfied that special circumstances existed which prevented the application being made before that time, within such time as the Registrar allows.

To succeed under these terms, Paragon must establish that special circumstances existed which prevented the application being made before 22 November 1996.  In order to be satisfied that the extension in the circumstances of this application is warranted, I also need good reason as to why the application was made some 10 months after the due date.

Against this background I turn to the submissions

Submissions

Mr McGirr first drew my attention to a declaration by Marina Domingo (1 October 1997) which supports the extension application. Ms Domingo is a director of  Paragon.  She does not say how long she has held this position or how long she has been with the company. She says, however (paragraph 3):

Due to staff changes the correspondence and files relating to this matter and in particular correspondence and notices from A.I.P.O. have [not] been brought to my attention.  The files apparently were lost and were not kept in a readily locatable manner. It was not until Friday 26 September 1997 that a letter dated 9 September 1997 from A.I.P.O. to Paragon Pharmaceuticals was brought to my attention.  At the time this letter was brought to my attention the company had changed  its solicitors and on that date I instructed McGirr James Hall & Associates to act on my behalf in respect of this matter.

Mr McGirr submits that the special circumstance of this application for additional time is the failure of employees to advise Ms Domingo of the ‘pending opposition’. Further factors, he says, are Paragon’s inexperience in dealing with trade mark matters, and its change in solicitors.  He says that in weighing up these circumstances I should have regard to the long time which Estee Lauder took to file its evidence in support. He then points out that, as established by the Domingo declaration, Paragon has used the i’m  beautiful trade mark on hair products for 13 years and, he says, this validates Paragon’s claim that it has a serious interest in defending the opposition.
In support of these submissions, Mr McGirr refers me to D’Urban Inc v Canpio Pty Ltd (1989) 17 IPR 486, and Genentech Inc v Wellcome Foundation Ltd (1988) 11 IPR 401. The finding in D’Urban he submits, confirms that the provisions of regulation 69 govern the extension application.  The directives of Genentech show that the expression ‘special circumstances’ should be given a broad meaning and comprehends circumstances ‘where the person concerned has failed to comply in time owing to circumstances which have prevented the knowledge of the need to apply coming to that person’s attention.’

Decision

As per D’Urban,  I agree that regulation 69 governs this extension of time application.
Turning then to the Genentech case. This is a patents case, but it concerns regulation 82 of the Patents Act 1952 and the wording of that regulation is generally the same as regulation 69 of the Trade Marks Act 1955.  The application for time in Genentech was made late: the time expired on 25 December 1987 - the application was lodged on 15 February 1988 - and the extension was for 3 months to 25 March 1988. The delegate, Mr Roveta, referring to cases in the UK and Australian Courts, says at 405:

... both courts appeared to take the view that the particular expression with which we are here concerned - [special circumstances] ... ought to be liberally interpreted by the Tribunal so as not to let an appellant suffer unfairly. 

...        

As to the word ‘prevented’ in para (b) of the regulation, both parties submitted that it would be a harsh interpretation to consider that the intention was that there had to be some positive hindrance, eg in the nature of force majeure, before the Commissioner would be satisfied.  I agree.  In my view the word ‘prevented’ ought to be given a broad meaning so as to give effect to the regulation in situations where the person concerned has failed to apply on time owing to some circumstance which has prevented the knowledge of the need to apply coming to that person’s attention. ...

In addition, I note that there has been no undue delay overall in Wellcome’s actions in this matter and certainly its agent, Dr Horner, acted with despatch as soon as he became aware of the problem.

Mr Roveta finds that ‘special circumstances’ ought to be liberally interpreted by the Tribunal and should not be limited to the operation of force majeure. Special circumstances is a broader test than force majeure and comprehends errors.  In both Genentech  and D’Urban, errors by an agent (including lack of knowledge) were held to be special circumstances.  Clearly these same findings will apply if the failure to act has been a failure on the part of the applicant itself, rather than an agent. The point of this liberal interpretation, as Mr Roveta says, is so that the applicant for the late extension will not suffer unfairly.  Thus, failure to comply with strict requirements of time limits will not necessarily preclude an opposition, or the defence of an opposition, if the failure resulted simply from a lack of understanding of how the time limits operated or a misadventure in the applicant’s or the agent’s office,  and the error or misadventure is shown to have prevented the party from seeking an extension within the time allowed.  The avoidance of unfair suffering, however,  is the yardstick - and I must assess the question of what is fair or unfair in the context of the applicant’s conduct and, in particular, whether it has acted without undue delay.  I must weigh the relative inconvenience to the other party and I must consider the general public interest. Bound up in the question of the public interest is the need for the Registrar to maintain a Register system which is not subject to unreasonable delays.
The current position, I think, can be summed up as follows. Paragon’s extension of time request is seriously out of time (10 months) and it is for a significant period (11 months).  In the three years leading up to this point, the Trade Marks Office has sent many letters and reminders.  Paragon did not act on any of them. Now, on the eve of the final hearing, and with no prior warning, it seeks this long and very late extension. I am surprised that Mr Cobden did not raise the question of ambush. 
To justify this application, Mr McGirr points to a current director of Paragon not being kept informed, to Paragon’s inexperience and to a change in Paragon’s solicitor.   He then cites various mitigating factors - that Estee Lauder achieved repeated extensions for serving its evidence, that there is public interest in allowing the extension so that the Registrar may be made aware of all the facts and a claim that Paragon has a real interest in the application.
These are relevant factors, and may have carried weight in circumstances comparable to those addressed in the Genentech case. But these are not. Wellcome’s extension request was less than 2 months late and for a total of 3 months extra time. Paragon’s extension request is 10 months late and is for 11 months of additional time.
Moreover, the evidence supporting Paragon’s application is not strong. Principally, Ms Domingo does not say how long she has been employed by Paragon or how long she has held a directorship. I do not know when the disruption caused by the changes in staff, mismanagement of files and so forth started, or when (or if) it ended. What I do know is that from December 1994 (when Estee Lauder applied to extend the opposition period) the Trade Marks Office sent more than 20 letters to Ms Domingo’s company in order to keep it informed of progress in the opposition process. This year alone, five letters were sent to them - three letters warning that the opposition had to be concluded, and two giving notice of the hearing time and venue. Ms Domingo does not adequately explain why, on receiving these notices, Paragon persistently took no action. There may have been circumstances which could be considered special if they were explained. But they are not. It may be that Ms Domingo only recently joined Paragon - in which case the fact that matters were not brought to her attention is barely relevant.  It may be that she has been there for many years, in which case it is likely that Paragon simply never took the trouble to manage its trade mark application.  But whether the facts are at one extreme or the other, or somewhere in between, I find that the evidence of the Domingo declaration does not show special circumstances. In particular it fails to show that any special circumstances existed and prevented the application for the additional time being made within the time that the regulations provide (that is, between 22 August 1996 - 22 November 1996).  There is certainly no evidence that the management failure which impacted on Ms Domingo, is the circumstance which prevented the application being made before 22 November 1996. The change in solicitor occurred in September 1997. This then had no role in preventing the extension request being made before 22 November 1996. There may have been confusion and it may have contributed to the application not being made in time, but there is no evidence that this was the state of affairs before 22 November 1996.
As Paragon has failed to show that special circumstances prevented it from applying within the time allowed,  I find that the provisions of regulation 69 have not been met.  The mitigating factors which may otherwise operate to affect the exercise of the discretion in allowing an extension, are not relevant.  However, for the sake of completeness I will briefly comment on them.
I agree that the evidence of the Estee Lauder extensions indicates that a further delay is not likely to seriously disadvantage the opponent.  Therefore, had it been relevant, I would have found that the comparative disadvantage weighed in favour of the extension. 
In the circumstances of this application, however, the question of public interest would predominate.  As often observed (by the Courts and the Registrar) it is generally in the public interest for the Registrar to be given access to all the facts of an opposition.  This weighs in favour of allowing extensions of time. The concern behind this view is that the Registrar ought not to register a mark if it is likely to deceive or cause confusion. An opponent should therefore not be denied an extension if, other things being equal, the time will allow such facts to be put in evidence. Here, however, it is not the opponent, but the trade mark applicant, who seeks the extensions, and I do not see that any significant public interest will be served by ensuring that the applicant presents its evidence. If Paragon has 13 years of use of its mark (as per an unsupported statement in the Domingo declaration) it may have a serious interest in defending this opposition.  The history of this trade mark application, however, testifies to a decided lack of interest.  After considering this history, the evidence and the submissions, I am left with no real information on the use that Paragon has made of its mark; I am unconvinced of Paragon’s interest in defending  the opposition; and I have been given little if any reason to suppose that any public interest would be served by Paragon achieving registration of this mark. On the other hand, there is indeed a public interest in the Registrar managing the opposition process in accordance with the regulations, and ensuring that opposition is not subject to any further undue delays.

If an applicant relies on the special circumstance provisions of regulation 69, it has to be prepared to establish, as per Genentech, that on the evidence and in the prevailing circumstances, refusal of the extension would cause the applicant to suffer unfairly. Paragon has not done this. It has failed to show any special circumstances prevented it applying within the time allowed. Further, in the wake of a history showing Paragon took no part in the opposition proceedings from December 1994 to October 1997, did not object to any of extensions sought by Estee Lauder, did not respond to any of the many letters sent to them by the Office, and then allowed some 10 months before seeking its extension, only compelling evidence could succeed in showing that an extension was justified. There is no such evidence.  I cannot find that Paragon has acted with despatch.  On the contrary, I conclude that Paragon has acted neglectfully and that a refusal of the extension request would not cause it to suffer unfairly. 
Even if special circumstances had been established, I consider that on these findings it is most unlikely that I could have found the extension of time was allowable.
The public interest, I find,  is clearly against allowing this much delayed and out of time extension request.
I refuse Paragon’s late application for further time for serving evidence in answer.
Subject to any appeal against my refusal of this extension application, I will appoint a time for the resumption of the hearing of the opposition to trade mark application number 599462. 

Helen R. Hardie
Deputy Registrar
29 October, 1997