Platypus Wear, Inc v Bad Boy Entertainment, Inc

[2001] ATMO 76

TRADE MARKS ACT 1995

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

Re:      Application by BAD BOY ENTERTAINMENT, INC for an extension of time to

serve evidence in answer to opposition by PLATYPUS WEAR, INC to registration of

trade mark application 663853

Background

On 13 June 1995 Bad Boy Entertainment, Inc (Bad Boy) applied to register the trade mark BAD BOY and device, as depicted below, for "Sound storage media, image storage media, and data storage media, all being pre-recorded" in class 9.

The application was duly examined under the Trade Marks Act 1995 (the Act) and, on 27 November 1997, was advertised accepted in the Official Journal of Trade Marks, under the provisions of subsection 44(4).

Following allowance of an extension of time under the provisions of subregulation 5.4 of the Trade Marks Regulations (the Regulations) in which to do so, Platypus Wear, Inc (Platypus) filed Notice of Opposition to registration of the application on 26 May 1998.  The opponent was granted three consecutive extensions of time under subregulation 5.15 in which to complete service of its evidence in support.  The reason put forward for needing each of those extensions was that the parties were involved in global settlement discussions which could resolve the opposition.  Following the breakdown of those negotiations, a further two extensions were allowed, and service of evidence in support was completed on 21 July 1999.

Taking into account the 3-month statutory period allowed by subregulation 5.10(1)(a), evidence in answer was due 21 October 1999.  Bad Boy applied for, and was granted three 3-month extensions of time, on the basis that it needed extra time to complete the preparation of its evidence which it had already commenced.  A fourth extension request was sought on the basis that court proceedings had commenced in the United States and that there was a likelihood of settlement between the parties.  This extension was not objected to by the opponent, and was granted.  The applicant then sought a fifth extension of time of three months, putting forward the submission that the court proceedings had progressed and that there was still a likely global settlement between the parties.  This extension was objected to by the opponent, who contended that the court proceedings in the United States had no bearing on the Australian opposition.  Further submissions were provided by the applicant, to the effect there was a real likelihood of settlement between the parties and, on that basis, the extension was subsequently allowed.  The applicant then sought a further 3-month extension of time for the same reasons.  There was no objection by the opponent, and again the application was granted. 

On 23 April 2001, Bad Boy requested a seventh 3-month extension of time, to 21 July 2001, again on the basis of pending court proceedings in the United States of America, which Bad Boy contended may lead to the opposition proceedings in Australia being settled.  The extension of time was initially processed.  Both parties were advised, and the opponent was afforded an opportunity to object.  Platypus did object to allowance of the extension, stating that the litigation proceedings in the United States would not lead to the dispute between the parties being settled, and, in any event, those proceedings would have no bearing on the outcome of the Australian opposition.

A delegate of the Registrar considered the opponent's objection.  He felt the balance of convenience had swung toward Platypus and advised both parties that he intended to refuse the extension of time.

Bad Boy requested to be heard.  Prior to the hearing, Bad Boy filed four statutory declarations, which it advised formed part of its evidence in answer.  Further details of those statutory declarations are provided, under the heading Submissions.

Bad Boy also indicated that a statutory declaration of Derek Ferguson, which would complete the applicant's evidence in answer, was expected to be executed by 21 July 2001.  I note that statutory declaration was filed with this office on 23 July 2001.

Platypus indicated it would attend the hearing.  Both parties filed and served declaratory evidence to support their claims in the extension of time proceedings.  For convenience, I have listed and summarised those statutory declarations, under the heading Evidence.

The hearing was held in Canberra on 18 July 2001, by way of a teleconference before me, as Registrar's delegate.  Ms Shelley Einfeld, of the Sydney office of Spruson & Ferguson, represented Bad Boy.  Ms Fiona Symons, of the Melbourne office of Davies Collison & Cave, represented Platypus.  Although he took no active part in the proceedings, Mr Kevin Cahill, of the United States law firm of Luce Forward Hamilton & Scripps, observed the teleconference, as the United States instructing attorney of Platypus.

Evidence

As mentioned under the heading Background, both parties filed and served statutory declarations in the extension of time proceedings.  For convenience, I have tabulated and summarised that evidence as follows.  Where necessary, I have provided appropriate references.

Evidence filed and served by Bad Boy

Declarant	Place/Date Declared	Exhibits	Reference
Amanda Caldwell	Sydney, 13 April 2001	Nil
Stephen Bigger	New York, 12 July 2001	Nil
Rochelle Deborah Einfeld	Sydney, 17 July 2001	RDE-1	Einfeld 3

In her statutory declaration, Ms Amanda Caldwell, an employee of Spruson & Ferguson who is responsible for assisting with this case, sets out Bad Boy's reasons for requesting the extension of time, namely that the extension of time is sought to allow further time for resolution of the dispute in the United States and therefore the present opposition, or alternatively to enable the applicant's evidence in answer to be finalised.  The declaration provides brief details of the status of the United States litigation.

The statutory declaration of Mr Stephen Bigger attests to his membership of the New York law firm of Fross, Zelnick, Lehrman & Zissu (Fross).  Mr Bigger states that Fross represent Bad Boy in international trade mark matters, whereas the firm of Proskauer Rose (Proskauer), who contact and liaise with Fross, are representing Bad Boy in the United States litigation.  Mr Bigger states that it is his belief that as a result of a court-mandated settlement conference between the parties in the United States scheduled for 29 August 2001, a settlement may emerge which could affect, or impact on, a world-wide settlement between the parties, including the pending conflict in Australia.  Such a world-wide settlement, he suggests, would be a usual and logical outgrowth of a settlement between the parties in the United States.

In Einfeld 3, Ms Einfeld declares she is a legal practitioner employed by Spruson & Ferguson, and responsible for assisting with the conduct of the case on behalf of the applicant.  She gives details of a facsimile dated 16 July 2001 from Fross, to the effect that the statutory declaration of Mr Derek Ferguson was expected to be executed the following day.  Exhibit RDE-1 attached to the declaration is a copy of the unsigned statutory declaration of Mr Derek Ferguson.

Evidence filed and served by Platypus

Declarant	Place/Date Declared	Exhibits	Reference
Laurens Offner	San Diego, 15 May 2001	Nil
Kevin Cahill	San Diego, 15 May 2001	Nil	Cahill 1
Brett Lewis	Melbourne, 17 May 2001	Nil
Kevin Cahill	San Diego, 17 July 2001	Nil	Cahill 2

In his declaration, Mr Laurens Offner, as Chairman of the Board of Platypus, says that nothing could be further from the truth than the statement in Ms Caldwell's declaration that "There is still some possibility that a settlement will be reached by the parties".  He gives some details of earlier settlement attempts between the parties, but states that no member of Platypus, or any of its representatives, has been engaged in settlement negotiations with Bad Boy for over 14 months.  Mr Offner declares Platypus is being inconvenienced by the delays in the preparation of evidence in answer and the extensions which have been granted under the false pretence that the parties have continued to engage in settlement negotiations. 

In Cahill 1, Mr Kevin Cahill declares that he is a partner of the United States law firm, Luce Forward Hamilton & Scripps, who represent Platypus in all of its intellectual property and business matters.  Providing a short summary of the United States litigation between the parties, he states that any judicial determination of the United States litigation will not have any effect whatsoever on the current opposition proceeding in Australia, or on any of the other opposition proceedings between the parties around the world.  Mr Cahill says settlement discussions occurred between the parties in either March or April 2000 but states that he was told at that time, by Bad Boy's then counsel, that she did not believe that settlement of the United States litigation concerning any of the global issues between the parties was likely along the lines at that time discussed.  He says the parties have not engaged in any settlement negotiations for almost 14 months.

Referring to Cahill 1, Mr Brett Lewis, partner of the Melbourne firm of Davies Collison Cave, declares that orders made in relation to the litigation between the applicant and opponent in the United States will not resolve the opposition proceedings between the parties in Australia and will not be binding on the Australian Trade Marks Office.  He says that litigation between the parties in the United States can only be relevant in the event that the parties successfully negotiate a settlement of the matter which encompasses the opposition proceedings in Australia, and his instructions are that the parties have not been engaged in any settlement negotiations directly or indirectly for almost 14 months. 

Cahill 2 reviews the evidence provided in the declaration of Mr Stephen Bigger.  Here Mr Cahill says that Mr Bigger's statements relating to a hypothetical settlement in the United States are completely suspect and pure conjecture, as Fross is not representing Bad Boy in the United States litigation.  Giving brief information of the mandatory settlement scheduled between the parties, Mr Cahill states that in his 17 years experience as a practising lawyer, he has never seen a settlement reached between parties to a litigation as a result of a conference where the parties had not been previously exploring settlement of the case beforehand.  He says it is highly unlikely that any settlement of the parties United States dispute will be reached at the conference, and settlement is even more remote with respect to issues outside the United States litigation.  Unless the parties have agreed on the material terms for a global resolution of all disputes before the conference, he declares, the judge who will preside over the conference will try only to broker a settlement of the United States litigation and will direct the parties to focus only on the issues involved in that litigation.  There have been no expressions of any willingness on the part of Bad Boy to discuss a potential settlement of the United States litigation, or worldwide settlement of all disputes, he states, and a member of Proskauer told his firm that Bad Boy intends to take the case all the way to trial.  Mr Cahill provides an updated status of the US litigation proceedings, and details of what he contends are dilatory tactics of Bad Boy in relation to those proceedings. 

Submissions

Bad Boy

Commencing her submissions on behalf of Bad Boy, Ms Einfeld advised that since receiving the letter from the Registrar's delegate to the effect that he intended to refuse the extension of time, considerable effort and time had been put into preparation of evidence in answer.  Four statutory declarations had now been filed as part of that evidence.  Those declarations are set out below. 

Declarant	Place, Date	Exhibits	Reference
Desmond Arthur Dubery	Sydney, 4 July 2001	DAD-1 to DAD-2
Gregory John Cox	Sydney, 4 July 2001	GJC1 to GJC-2
Rochelle Deborah Einfeld	Sydney, 5 July 2001	RDE-1 to RDE-6	Einfeld 1
Rochelle Deborah Einfeld	Sydney, 17 July 2001	RDE-1	Einfeld 2

She said the remainder of the applicant's evidence in answer, was the declaration of Mr Derek Ferguson, which the applicant intended to file and serve by 21 July 2001 - as per Einfeld 3.  I note the Ferguson declaration was filed with this office on 23 July.

Ms Einfeld then presented the applicant's arguments in support of extension application, in terms of the factors set out in Lyons (trading as Mitty's Authorised Newsagency) v Registrar of Trade Marks[1].

[1] 1 IPR 416 (Lyons)

She submitted that the applicant did not deny that considerable time had been taken to file evidence in answer. Although formal settlement negotiations between the parties had ceased, the applicant's instructing United States attorney, Mr Stephen Bigger, had provided instructions that the applicant should seek to obtain extensions of time in the Australian opposition proceedings as he believed the outcome of the United States proceedings, which included a mandatory settlement conference, could result in a worldwide settlement of the disputes between the parties. Six extensions had already been sought and granted.

An objection had been received to the fifth extension request, but that extension had been subsequently allowed.  A sixth extension request had been made, and allowed, without objection from the opponent.  Referring to the statutory declaration of Stephen Bigger, she submitted it was still the applicant's belief that settlement could be reached on a worldwide basis.

She contended the opponent was likely to suffer very little inconvenience if the extension were granted.  Both parties had continued to use their trade marks in connection with the respective sets of goods of interest and, as far as the applicant was aware, no actual confusion has arisen.  No evidence of actual confusion had been presented by the opponent.  On the other hand, the applicant would be caused great inconvenience and hardship if the extension were denied, as it would lose the opportunity of having the evidence in answer, which it has now filed, considered by the Registrar. 

Ms Einfeld submitted that the public interest would best be served if both parties were to present their arguments as fully as possible before the Registrar, and for the opposition to then be determined on the merits of the case and not on a mere technicality - as per Vangedal Nielsen and Others v Smith (Commissioner of Patents) and Another[2]. She compared the circumstances of the present case, where the applicant has a clear intention of providing evidentiary material in the opposition, to those existing in Dermetech Laboratories Pty Ltd v Johnson & Johnson[3], in which Hearing Officer Nancarrow remarked at page 13:

[2] (1980) 33 ALR 144 (Vangedal-Nielsen v Smith)

[3] [2000] ATMO 13 (7 February 2000)

In general, the public interest also falls in favour of the applicant for the extension of time where it is apparent that that party has a clear intention of providing evidentiary material for the opposition matter.  In circumstances where the evidence is presently available, little advantage can be achieved by refusing an extension of time for a period of time that has almost already elapsed.  Neither the public interest nor the interests of the applicant are served by shutting out evidence that is presently available.

Platypus

Ms Symons reminded me that the Registrar must not grant an application for an extension of time unless reasonably satisfied that the extension is appropriate[4], and referred me to practice requirements set out in the Official Notice published in the Australian Official Journal of Trade Marks on 25 November 1999 (the Official Notice).

[4] subreg 5.15

She argued that sufficiently compelling reasons had not been provided by Bad Boy to justify the extension of time.  Her submissions centred around the contention by Platypus that the outcome of the litigation proceedings, currently on foot in the United States, will have no bearing on the Australian trade marks opposition.  While acknowledging the practice of the Trade Marks Office to take settlement negotiations into account when considering extensions of time in opposition proceedings, she submitted that the parties had ceased negotiating 14 months ago, and that, although a court-mandated settlement conference has been scheduled to take place between the parties, global settlement is unlikely.  In this regard, she relied on the declarations filed and served by Platypus, in support of its arguments in this extension of time hearing.  She submitted that consistent with the view taken in Amper SA v Ampex Corporation[5] and Parkhurst Pines Pty Ltd v Truefeat Pty Ltd[6] , the US litigation should be disregarded as a justification for deferring preparation of evidence in answer.

[5] [1994] ATMO 40 (26 May 1994) (Amper v Ampex)

[6] 31 IPR 157 (Parkhurst Pines v Truefeat)

Ms Symons drew my attention to the time already allowed to Bad Boy, and the need for very careful scrutiny of the extension application - as per Imac Pty Ltd v Apple Computer Ltd[7].  She contended that Bad Boy has adopted a dilatory approach in the opposition proceedings both here and in overseas jurisdictions, and this dilatory approach is disadvantageous and inconvenient to Platypus.  Instead of preparing its evidence, she contended, Bad Boy had issued standing instructions to its agent to seek extensions of time.  Whereas, given the nature of the material contained in the statutory declarations now sought to be served, Bad Boy's evidence in answer could have been completed as early as July 2000.

[7] [2001] ATMO 28 (6 April 2001) (Imac v Apple)

Ms Symons further submitted that in view of the desirability of operating the system efficiently, as per Vangedal-Nielsen v Smith, supra, the public interest would best be served by refusing the extension application.  Analogous to the circumstances of Amper v Ampex, supra, she said, Bad Boy had failed to demonstrate its concern over its own interests in diligently preparing its evidence, and greater weight must be given to the general public interest of effective, timely administration of the Act - Re Application by Jonathan Sceats Design Pty Ltd[8]. 

[8] 15 IPR 59 (Sceats)

Bad Boy

In response, Ms Einfeld pointed out that as Cahill 2 had only been served on Bad Boy shortly before the hearing, she had not been able to take instructions on the comments of Mr Cahill.  She acknowledged that the outcome of the United States litigation was not binding on the Registrar, but submitted that the significance of the United States litigation might be seen as a matter of practice rather than as a matter of law.  She said what happens in the United States is likely to affect Bad Boy's commercial interests in other parts of the world and, for that reason, the United States litigation has relevance to the opposition proceedings.  The standing instructions to seek extensions of time were issued to enable a resolution of the matter in the United States, either by settlement or by determination of the court, before spending money and time on pursuing foreign oppositions, including the one in Australia.

She drew my attention to Southcorp Wines Pty Ltd v Elders Limited[9] where, in contrast to the situation in Parkhurst v Trufeat, supra, an applicant was allowed to suspend opposition proceedings until a matter in the Federal Court had been finalised. 

[9] [2001] ATMO 42 (24 May 2001)

Ms Einfeld urged me to consider not only the reasons put forward by Amanda Caldwell in support of Bad Boy's extension request, but also the submissions made at the hearing and the evidence in answer which has now been filed and served by Bad Boy - as per the approach adopted in Imac v Apple, supra.  She pointed out that, at the time the Registrar's delegate had formed his opinion to refuse the extension of time, he had not heard Bad Boy's full submissions, nor had he seen the evidence.

Platypus

In conclusion, Ms Symons reminded me that the relevant date of the extension request was 21 April 2001, and that I must be satisfied that the granting of the extension was appropriate as at that date.

Discussion

Regulation 5.10(1), which provides for the service of evidence in answer in opposition proceedings, reads as follows:

Period for service of a copy of the evidence in answer

5.10 (1) If the opponent complies with regulation 5.7 or 5.8, the period for service of a copy of the evidence in answer to the opposition is 3 months from the day on which the opponent serves on the applicant:

(a) the copy of the evidence in support referred to in subregulation 5.7 (1); or

(b) the copy of the notice referred to in subregulation 5.8 (1).

The 3-month statutory period thus allowed may be extended as provided by regulation 5.15.  In so far as it is relevant, regulation 5.15 reads:

Extension of period to serve evidence and service of further evidence

5.15 (1) A party to the opposition proceedings may apply to the Registrar:

(a) for an extension of the period for serving a copy of the evidence under regulation 5.7, 5.10 or 5.12; or

(2) The Registrar may grant an application on reasonable terms specified by the Registrar.

(3) The Registrar must not grant an application unless the Registrar:

(a) is reasonably satisfied that the applicant has served a copy of the application, and of any documents accompanying the application, on the other party; and

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

(c) is reasonably satisfied that:

(i) in the case of an application to which paragraph (1) (a) applies—the extension of the period for serving a copy of the evidence; and

is appropriate.

(4) For the purposes of paragraph (3) (b), the representations may be made in writing or at a hearing or by such other means as the Registrar reasonably allows.

(6) Subregulations (2), (3) and (4) apply to an application under subregulation (5).

The criteria to be applied, when deciding applications for extensions of time to serve evidence in opposition proceedings, have been established in Vangedal Nielsen and Lyons, both supra.The factors I must consider are whether Bad Boy has made out a proper case justifying the extension of time, the relative inconvenience to the parties, and the public interest.

I am also mindful of the practice of the Registrar to take into account the likelihood of negotiated settlement of the proceedings as per Sceats, supra, and the guidelines set out in the Official Notice.

Notice of Opposition was filed on 26 May 1998, and service of evidence in support completed on 21 July 1999.  Allowing for the 3-month statutory period, evidence in answer was originally due on 21 October 1999.  Six extensions of time have already been requested and allowed.  If the current extension request is granted, it will bring the total time allowed for preparation and service of evidence in answer to 24 months.  This is well past the benchmark limit of 12 months[10], and, in this regard, Ms Symons has reminded me of the need to give careful scrutiny to such an extension request.

[10] the Official Notice

However, the total amount of time must be construed in light of the reasons the applicant has provided for its previous three extension requests, which were allowed on the basis of a likely global settlement between the parties.  Where settlement is likely, it is not unusual for the Registrar to allow extensions beyond the 12 month stage, providing progress is demonstrated.  There is, however, an expectation that the evidence should be in the process of being prepared in anticipation of eventual service.

The reasons proffered by the applicant, in support of this extension application, are again that there is a possibility of settlement between the parties, resulting from the United States court proceedings. Ms Einfeld has submitted this is still the applicant's contention, and this is supported by the statutory declaration of Mr Stephen Bigger, who has instructed Ms Einfeld in this regard.

However, Mr Bigger's view is contested by the opponent.  Platypus, both via Ms Symons' submissions and the statutory declarations of Cahill, Offner and Lewis, argues that the court proceedings in the United States are unlikely to lead to any global settlement between the parties.  Indeed, Mr Bigger's belief has been strongly challenged in Cahill 2, where Mr Cahill outlines what he considers to be the likely course followed by the US litigation and his contention that, as Mr Bigger is not involved with the court proceedings, his (Mr Bigger's) belief in the likelihood of a settlement between the parties is mere conjecture.

As Cahill 2 was only served on Bad Boy shortly prior to the hearing, Mr Bigger has not had an opportunity to respond, and I have some sympathy with Bad Boy in this respect. Nevertheless, I think it is fair to say that Mr Bigger's declaration does not provide any positive evidence of any real likelihood of a settlement arising.  Whatever may have been Bad Boy's belief or the situation at the time of previous extension requests, the situation now appears to be that there is simply "a possibility" of settlement.  No formal negotiations are on foot, and, given the evidence put forward by Platypus, that possibility appears to be rather narrow.  While it is the Registrar's practice to take into account the likelihood of eventual settlement, unlimited time cannot be allowed on the basis of a slim chance, especially where the other party denies that settlement is possible.

Platypus objected to the applicant's fifth extension of time to no avail.  On this occasion, however, Platypus has provided information of more substance, which challenges Bad Boy's contention of likely settlement, and while Bad Boy has not had a full opportunity to respond to some of the evidence, overall the information provided by Platypus considerably diminishes Bad Boy's case.  In light of this, the case made out by Bad Boy is not, in my opinion, sufficiently compelling to justify this extension of time, and thus further delay finalisation of the Australian opposition proceedings.

I turn now to the relative inconvenience likely to be suffered by the parties.  At the time of indicating his intention to refuse the extension of time, the Registrar's delegate stated that he considered the balance of convenience had swung very much towards the opponent.  Since then, part of the applicant's evidence in answer has been served on the opponent, and the balance has at least been filed with this office.  In my view, this changes the situation.

I accept the contention of Platypus, as advanced both by Ms Symons, and in the statutory declaration of Laurens Offner, that it will be inconvenienced by the allowance of the extension.  Nevertheless, I cannot dismiss the fact that Bad Boy has now prepared and served evidence in this matter.  Should this extension be disallowed, that evidence will be shut out of consideration, and it will be denied the opportunity of bringing forward all of the reasons why it believes its trade mark should be allowed to co-exist with that of Platypus.  I find I agree with Ms Einfeld that, on balance, Bad Boy is likely to suffer greater inconvenience if the extension is refused, than Platypus is likely to suffer if the extension is allowed. 

As submitted by Ms Symons, the public interest lies to some extent in the desirability of operating the system efficiently.  However, as established in Bundy American Corp v Rent-A-Wreck (Vic) Pty Ltd[11] there is also a strong public interest in the Registrar being availed of all relevant material should the matter proceed to be decided.  That being so, the Registrar is reluctant to deny an extension of time where an extension applicant has demonstrated a clear intention to complete and serve its evidence.  Unlike the situation in Amper v Ampex, supra, where no evidence had come forward, Bad Boy's evidence is now filed.  I consider it would be inappropriate for me to ignore the presence of that material, and I see no advantage in doing so.  I find the public interest would best be served by allowing the extension of time.

[11] 5 IPR 307

Decision

Having considered the extension application in terms of the appropriate factors, I have found the case made out by Bad Boy is deficient.  The reasons put forward for needing the extension of time do not justify its allowance.  Nevertheless, I am reluctant to disallow an extension of time where the extension period has elapsed and the applicant has filed and served evidence.  In the circumstances, I am reasonably satisfied that it is appropriate to grant the application for an extension of time of three months to serve evidence in answer on the opponent.  I therefore grant the extension.

Costs

Platypus made submissions as to costs.  Although I have allowed the extension of time, I direct that, in the circumstances, each party bear its own costs in the matter.

Frances Aarnio
Senior Examiner

15 August 2001