Peerless Industrial Systems Pty Ltd v Parchem Construction Products Pty Ltd
[2003] ATMO 75
•2 December 2003
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Application by Parchem Construction Products Pty Ltd for an extension of time to serve evidence in support of its opposition to registration of trade mark application 894658(1,2,19) - CHEMPROOF - in the name of Peerless Industrial Systems Pty Ltd.
Delegate: Deirdre O'Brien Representation: Opponent: Richard McCormack of counsel instructed by Wray & Associates
Applicant: Chris Bevitt of Acuiti LegalDecision: Extension of time to 3 January 2004 granted.
Costs awarded against applicant.Background
1. Peerless Industrial Systems Pty Ltd (the applicant) is applying to register the trade mark chemproof per application 894658. Registration is opposed by Parchem Constructions Products Pty Ltd (the opponent). Notice of Opposition was filed on 3 January 2003. Since then Registrar has granted two extensions of time, each of three months, under the provisions of subregulation 5.15 of the Trade Marks Regulations 1995 for the service of evidence in support of the opposition. Those extensions were granted on the basis of settlement negotiations between the parties. On 3 October 2003 the opponent applied for a third extension of time until 3 January 2004. It gives as reason that it requires more time to prepare and serve its evidence as settlement negotiations had recently broken down. The applicant objected to the extension being granted and asked to be heard in the matter.
The hearing was held by teleconference on 11 November 2003 before me, as the Registrar's delegate. Mr Richard McCormack of counsel, instructed by Wray & Associates, represented the applicant. Mr Christ Bevitt of Acuiti Legal represented the opponent.
Submissions
In his submissions on behalf of the applicant, Mr McCormack points to what he says are deficiencies in the opponent's supporting declaration, being a declaration made by Mr Chris Bevitt of the opponent's agent. Mr McCormack cites Kimberley-Clark Ltd v Commissioner of Patents (No. 3)[1] as establishing the opponent must provide proof of the facts on which its extension application is based. Mr McCormack says the opponent is requesting the Registrar's indulgence and such indulgence cannot be granted unless there has been full and frank disclosure of all the circumstances leading to the opponent's decision to delay preparing and serving its evidence. In Agro-K v Ag Direct Sales Pty Ltd[2] the Registrar's delegate was not satisfied as to the intentions of the party applying for the extension and Mr McCormack says a similar situation applies here. He believes the Bevitt declaration has limited probative value, not having been made by an authorised officer of the opponent. He alleges some of the facts in the declaration are open to a different interpretation than that given them by Mr Bevitt and that Mr Bevitt has failed to disclose other pertinent information. Mr McCormack submits the opponent has a collateral purpose in delaying the preparation of its evidence, perhaps for commercial reasons or in order to gain an advantage in the other opposition proceedings in which the applicant and opponent are involved. He says it has not established that it is serious in its intention to oppose.
[1] 13 IPR 569
[2] [2001] ATMO 101
Mr McCormack further submits that, although settlement negotiations were for a time taking place between the parties, that did not absolve the opponent from the obligation to prepare and serve its evidence. He refers to the Registrar's guidelines for extensions of time in the Trade Marks Office Manual of Practice and Procedure (the Manual), in particular the following passage from Part 51.3.2 which relates to extensions when the parties are negotiating:
Such negotiations may take time and it is likely to be in the interest of both parties to delay finalising and serving evidence until the negotiations are complete.
Mr McCormack says this means negotiations between the parties per se do not entitle one party to arbitrarily delay preparing its evidence. He submits it is only when it is 'in the interest of both parties', that is, when both parties have agreed to suspend time, that such delay is warranted. In this case there was no such agreement. The opponent made a deliberate choice not to prepare its evidence although it was in a position to do so. Mr McCormack submits it must now bear the consequences of that decision as per Agro-K v Ag Direct Sales Pty Ltd supra.
For the opponent, Mr Bevitt relies on the facts contained in his declaration, namely that genuine negotiations had been taking place until two days before the extension application was filed. He says the time already allowed has not been excessive and, given the Registrar's published guidelines for extensions of time, it was reasonable for the opponent to place a low priority on finalising its evidence while negotiations were taking place. He denies that the opponent is attempting to gain collateral advantage. He says in order to prepare its evidence as thoroughly as possible, it is sensible for the opponent to take into account the evidence filed and served by the applicant in related proceedings. He says the matter is not on all fours with Agro-K v Ag Direct Sales Pty Ltd supra which concerned an extension of time to oppose. Since the breakdown of negotiations, Mr Bevitt says the opponent has been directing its resources to preparing its evidence and he does not envisage that it will require any further extension of time.
Reasons
Subregulation 5.15(1)(a) provides that the period for serving evidence may be extended upon application. Subreg 5.15(2) provides that the Registrar may grant an extension application which has been made on reasonable terms that he has specified. Those terms are contained in the Manual, specifically at Parts 51.3.0 to 51.3.3[3]. They were derived from the matters considered in Vangedal-Nielsen v Commissioner of Patents[4] and Lyons (trading as Mitty's Authorised Newsagency) v Registrar of Trade Marks[5] in relation to the grant of an extension of time[6].
[3] They were also published in the Australian Official Journal of Trade Marks of 18 November 1999.
[4] (1980) 3 ALR 144
[5] 1 IPR 416
[6] Those matters were summarised by the Registrar's delegate in Australian Olympic Committee v Brennan 30 IPR 44 at 46 as:
· the length of time already allowed;
· the reason put forward to justify the extension
· the seriousness of the opposition
· the inconvenience likely to be suffered by the two parties; and
· the public interest in the matter
During the early evidence stages, the Registrar may grant an extension application based on settlement negotiations between the parties. For the first extension of time the party applying does not have to provide any information other than genuine settlement negotiations are taking place[7]. Indeed applications for extensions of up to 12 months for the preparation of evidence in support or evidence in answer may be granted without the need for more compelling reasons than the fact that bona fide settlement negotiations are being actively pursued.
[7] It is only if the other party disputes that negotiations are taking place that the Registrar will require further information in support of the extension.
Here the Registrar has already allowed extensions of 6 months on the basis of negotiations. The parties do not dispute that those negotiations were bona fide and that they took place in the period between April and late September 2003. Mr McCormack for the applicant argues strongly that, notwithstanding the negotiations, the opponent should have been preparing its evidence. He says that the preparation of evidence during settlement negotiations can only be suspended if both parties agree.
I find that is placing a gloss on the Registrar's guidelines that was not intended. The Registrar's general position is that, in the early evidence stages, 'parties should not be obliged to proceed with costly and time consuming exercises to prepare evidence when they are working towards a real prospect of alternative resolution'[8]. He does not require that both parties agree to delay preparation of the evidence. Indeed, such agreement may carry little weight in the Registrar's decision whether or not to grant an extension[9]. The Registrar needs to take into account other matters than the wishes of the parties. If negotiations have been taking place for an excessive length of time and there is no 'real prospect of alternative resolution' in the near future, the public interest in the efficient and timely administration of the trade mark register[10] carries greater weight. In such cases, notwithstanding the parties' agreement to suspend evidence preparation, the Registrar may insist on the evidence being served.
[8] ibid at 48
[9] Subreg 5.15(3)(c) provides that the Registrar must not grant an extension of time unless he is satisfied it is appropriate.
[10]See Vangedal-Nielsen v Commissioner of Patents, supra, at 150; Re Application by Jonathan Sceats Design Pty Ltd 15 IPR 59; Kimberly-Clark Corp v Procter & Gamble Co, supra, at 428
Mr McCormack argues that the Bevitt declaration in support of the extension lacks probative value. However this extension application differs in its legislative basis from the extension cases which Mr McCormack cites in his submissions. The latter involve extensions of time to oppose. In order to grant such an extension under the Trade Marks Regulations 1995, the Registrar must be satisfied as to certain facts[11]. As Mr McCormack submits, such satisfaction cannot be reached on the basis of 'inexact proofs'. With an extension of time to serve evidence, however, the Registrar must be satisfied it is appropriate to grant the extension. In coming to his decision he takes into account the matters noted earlier. The probative value of the supporting declaration is one of the issues to be considered. Nevertheless, it is conceivable that the Registrar may find a party applying for an extension has provided insufficient evidence to make out certain facts but still be satisfied it is appropriate to grant the extension because all the evidence had been filed and served in the meantime.
[11] Subreg 5.4(1) requires the Registrar to be reasonably satisfied as to the grounds on which the application is made. Those grounds are contained in subreg 5.2(2) and for them to be made out, the onus is on the party applying for the extension to establish certain facts through the submission of probative evidence.
The following facts are not in dispute. Nine months have passed since Notice of Opposition was filed. Bona fide negotiations did take place between the parties. The opponent delayed the preparation of its evidence while the negotiations were afoot. The negotiations failed shortly before this extension application was filed. The opponent is preparing its evidence in support and requires an extension until 3 January 2004 in which to serve it.
The Registrar has considered similar cases on other occasions[12]. He has generally found that, if the evidence is likely to be served within the extension period applied for, or has already been served, it would not be in the public interest to refuse the extension and thereby exclude that evidence from proceedings, particularly when issues of deception and confusion are involved. A refusal in such cases would also unfairly disadvantage the party applying for the extension.
[12] See, for example, Rollbits Pty Ltd v Rowntree Mackintosh Plc 6 IPR 292; Australian Olympic Committee v Brennan supra; ABW Australia Pty Ltd v Sears, Roebuck and Co 42 IPR 468; Turner Entertainment Company v Yo-Merry Todd 52 IPR 257
As the Registrar's delegate, I am satisfied it is appropriate to grant this extension for the following reasons:
· The opponent has had 9 months in which to serve its evidence. It is well accepted that the statutory three month period is often insufficient for the preparation of evidence[13]. In cases where there are no negotiations between the parties, the Registrar considers nine months to be a reasonable period. In cases where there are negotiations between the parties, a period of fifteen months is deemed to be reasonable. Given that negotiations broke down only a few days before the extension application was filed, an extension to twelve months is not an excessive length of time.
· In its Notice of Opposition the opponent cites its own application 851535 to register the same trade mark, chemproof[14]. The opposition thus deals with the important issues of trade mark ownership and public deception and/or confusion.
· The opponent has made out a proper case for the extension being granted. Notwithstanding Mr McCormack's submissions, I find the supporting declaration by Mr Bevitt to be a full and frank disclosure of what has happened since his firm became the opponent's representative. He says the opponent was hopeful negotiations would end in settlement and so did not give priority to the preparation of its evidence. At this stage of proceedings I find this to be a reasonable course of action in light of the Registrar's published guidelines and the finding in Australian Olympic Committee v Brennan supra. Mr Bevitt outlines the things the opponent has done in evidence preparation including making a request for information on the official file for this trade mark application under the FOI Act. The opponent is also evaluating the applicant's evidence in support of its opposition to registration of the opponent's application 851535. Again I find that to be a reasonable approach to take. When there are two oppositions in train involving the same parties and the same trade mark, it can be an efficient use of the time and resources of the parties involved, and of the Registrar, if the evidence prepared in support of one opposition also constitutes the evidence in answer to the other and vice versa. Mr McCormack points out the applicant's approach has been different with respect to its evidence in the aforementioned proceedings but that does not mean the opponent is obliged to do the same.
Mr Bevitt declares that it is unlikely a further extension will be required. He is in a position to say this as his firm is responsible for putting the opponent's evidence in an appropriate form for service.
· The consequences for the opponent if the extension were to be refused outweigh those for the trade mark applicant if it were to be allowed. Refusal would mean the opponent could not rely on any evidence in these proceedings.
· The public interest at this stage of proceedings is that the Registrar has all relevant material before him when he comes to decide the matter[15].
[13] Lyons (trading as Mitty's Authorised Newsagency) v Registrar of Trade Marks, supra
[14] Registration of that application has been opposed by Peerless Industrial Systems Pty Ltd, the applicant in this case.
[15] Bundy American Corp v Rent-A-Wreck (Vic) Pty Ltd 5 IPR 307
Decision
I hereby grant the opponent an extension of time until 3 January 2004 in which to serve its evidence in support.
Costs
The applicant has sought its costs, however, as it is the unsuccessful party, I award costs against it and direct that it pay the costs of the opponent in accordance with the official scale. Moreover, I note that even if the applicant had been successful, I would not have awarded costs in its favour.
Subregulation 5.15(3)(b) provides that the Registrar must not grant an extension of time without having given both parties a reasonable opportunity to make representations. The Registrar considers that, in the majority of cases, the submission of written representations will be 'reasonable opportunity'[16]. It is only where matters are exceptionally complex that a hearing will be the more appropriate way of making representations. I find the circumstances of this extension of time are not at all complex and did not justify a hearing in the matter.
[16] Part 50.4 of the Manual
Deirdre O'Brien
Senior Examiner
Trade Marks Hearings & Legislation2 December 2003
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