Re Abalcheck Pty Ltd

[1993] ATMO 10

Trade Marks Act 1955
Decision of a Delegate of the Registrar of Trade Marks

Re:Restoration and Renewal of Trade Mark Registration 418592
in the name of Abalcheck Pty Ltd

Background.
Trade mark registration 418592 was recorded in the name of Abalcheck Pty Ltd.  That registration was due to expire on 22.11.91 and the provisions of the Act relevant to the renewal and expiration of a trade mark registration are as follows:

Renewal of registration

69. The Registrar shall, on application made by the registered proprietor of a trade mark within the prescribed period, renew the registration of the trade mark for a period of 14 years from the expiration of the last registration of the trade mark.

Procedure on expiry of period of registration

70. (1) At the prescribed time before the expiration of the last registration of a trade mark, the Registrar shall send notice to the registered proprietor or his agent in Australia of the date at which the existing registration will expire and the conditions as to payment of fees and otherwise upon which a renewal of the registration may be obtained.

(2) If, at the expiration of the time prescribed in that behalf, those conditions have not been complied with, the Registrar may remove the trade mark from the Register.

(For the purposes of section 70, regulation 24 prescribes that a renewal notice shall issue six months before the expiry of the registration.)

As required by the regulations, on 16.5.91 a renewal notice was sent to the attorney firm which at that time was designated the agent for renewal. 

On 23.5.91 the firm recorded as agent advised that it no longer had instruction to act to renew the registration, and returned the renewal notice, asking that it be sent direct to the registered proprietor.  This office erred in that, while the data base was amended to ensure that future correspondence went direct to the proprietor, the renewal notice was not re-sent. 

The re-sending of the notice was not obligatory under the Act, as the office had complied with the requirement under sub-section 70(1) by notifying the person who at that date was the agent for renewal under that section.  This office was none the less under an onus as a matter of fairness to re-send the notice when it was asked to.  Here I rely on the decision in Metropolitan Dairies Pty Ltd v Pura Natural Spring Waters Pty Ltd, 18 IPR 436. At page 442 of the decision the Hearing Officer states:

I also agree that on the return of the notices to the Trade Marks Office, it could normally be expected that the file should be checked to ensure that the correct address had been used, and if, as was here the case, advice in the interim had provided the Registrar with an address for renewal, those notices should have been redirected and redispatched.

In the present instance, it seems to me that if we should reasonably search the file for an appropriate address, then we should certainly act on a request made by the former agent at the time when that agency is renounced.

Section 23 application, then removal under section 70
On 24.5.91 an application was made to remove the mark from the register, on the grounds of non-use provided for in section 23 of the Trade Marks Act. That removal application was lodged by Appledore Holdings Pty Ltd.

When the registered proprietor did not pay the renewal fee the mark was removed from the register, under the provisions of sub-section 70(2), on 30.1.92.  The advice that this action had taken place was sent direct to the registered proprietor.

Assignment application
This was the state of play when, on 13.4.92, Messrs Bradly Munt and Co, solicitors, lodged an application to have Chemtech Industries Pty Ltd recorded as the subsequent proprietor of the by now removed registration.  That application was in the usual form.  It was supported by a deed of assignment to Chemtech from the State Bank of New South Wales Limited, which asserted that it was the mortgagee in possession of all the assets and undertakings of Abalcheck Pty Ltd.  That deed is dated 6.3.92, and I will revert, below, to its content.

This office accepts that there is no conflict between the recordal of an assignment and the existence of an application for removal under section 23. Section 20 of the trade marks act is mandatory and states that the Registrar "shall" record an assignment on provision of proof of title to his satisfaction. Sub-section 82(7) provides that the assignment will only be relevant to matters subsequent to the date on which the assignment is recorded in the register. As the section 23 removal application stands or falls on events in a period which ended one month before the removal application was lodged, the recordal of the assignment cannot interfere with the removal matter, which continues on foot.

Restoration application
As well as lodging an assignment application the solicitors lodged an application to restore the mark to the register.  The restoration application was made in the name of the State Bank, and dated 28.2.92 though it was not lodged by the assignee's solicitors until 13.4.92.

The provisions relevant to the restoration of a trade mark to the register are as follows:

Restoration of trade mark removed for non-payment of renewal fee

71. (1) Where a trade mark has been removed from the Register for non-payment of the prescribed fee, the Registrar may, within 12 months from the date of expiration of the registration of the trade mark, if satisfied that it is just so to do, restore the trade mark to the Register, and renew the registration of the trade mark, either generally or subject to such conditions or limitations as he sees fit to impose, for a period of 14 years from the expiration of the last registration.

The section 23 removal applicant, on being appraised of the restoration and assignment actions, requested a hearing at which it might dispute the propriety of the assignment and restoration requests.

It is quite clear in all the circumstances that the mortgagee, having appraised the assignee of the lapsing of the registration, has no further interest in the matter. The deed of assignment of the trade mark from State Bank to Chemtech Industries Pty Ltd contains a clause acknowledging that the trade mark is under attack under section 23, that the trade mark itself has been removed from the register and that "the Assignee shall make no objection, requisition or claim for compensation against the Assignor in relation to same".

The solicitors acting for the assignee in this matter advised that their client did not wish to either appear or make submissions, but Mr Thomas Ahearn, a patent attorney of the attorney firm Peter Maxwell and Associates appeared at the hearing to represent the section 23 removal applicant.

Decision

Standing of removal applicant at restoration hearing
At the outset, the section 23 removal applicant has standing at any hearing into the restoration question. This has previously been addressed in the Registrar's decision in Metropolitan Dairies Pty Ltd v Pura Natural Spring Waters Pty Ltd, supra.  At page 440 the Hearing Officer, Ms Hardie, notes that this is simply a question of natural justice, and as sub-section 71(1) notes, the Registrar can only restore the mark to the register where he is satisfied that "it is just to do so".

Restoration question
An applicant who seeks removal of the trade mark from the register on the grounds of non-use set out in section 23 may have standing in deciding the restoration question. However, a hearing into a restoration cannot substitute for the procedure set out in the Trade Marks Act and regulations for the systematic determination of the use or non-use of a trade mark. The restoration hearing can go no further than the questions of the abandonment of the trade mark and the circumstances in which restoration is sought. This present decision is limited to deciding if, for the purposes of sub-section 71(1), it is "just" to restore the registration.

In the first instance there is an onus on the person seeking restoration, or on an assignee who stands in that person's shoes, to show positively that there is a case for restoration.  The Act requires the Registrar to be satisfied that it is just to do so before he may, as a discretion, restore the mark.  The discretion is there to be used, and it should be exercised if a case is made.  It may be that onus is much reduced if there is no dispute as to the entitlement of the mark to be on the register, and in most instances the discretion can be applied benignly.

There may already be part of a good explanation and positive case on the official file, and it is possible that the error of this office in failing to redirect the renewal notice played some part in the lapsing of the registration.  Were the matter not complicated by the mortgage and by the application to remove the mark from the register on the ground of non-use, I think it would be just to restore the mark. 

However, in the present instance the firm recorded as the proprietor has suffered some misfortune; it appears that the business is in the hands of the mortgagee, and it was the mortgagee who sought restoration.  The mortgagee has then assigned the trade mark to another party on an "as is, where is" basis.  It was open to the assignee to obtain documentation of the mortgage arrangements if it wished, or to seek to appear and shed some light on where justice lies in this question, but it has made no appearance.

At the hearing the removal applicant's representative, Mr Thomas Ahearn, asserted that the firm registered as the proprietor, Abalcheck Pty Ltd, neither held an annual general meeting nor produced a company return for the years 1991 and 1992.  He did not produce any evidence of this.  He did however present material from the Australian Securities Commission which (he argued) suggests that the mortgagee may not be the only one with some claim to an interest in this trade mark by way of an outstanding charge.  That may be so, but the Registrar is not entitled to go behind the documents on file and conduct an exhaustive search for other earlier or better claims.  Were it clear that the State Bank was entitled to act as mortgagee in possession, their entitlement of the mortgagee to seek restoration would be clear. 

The Act itself does not indicate who can apply for the restoration of a trade mark to the register, as distinct from making a renewal application (which can, in the wording of the Act, only be done by the registered proprietor).  However even the renewal issue is not clear cut.  At page 76 of Australian Law of Trade Marks and Passing Off (1990 edition) the author, D.R. Shanahan, notes that:

It is doubtful that an application for renewal can properly be made by a person who, though currently registered as proprietor, has in fact assigned the trade mark.  In such a case the prudent course is for the application to be made by the assignee, and although the Registrar will not then renew the registration until the assignee is formally recorded as proprietor, the Registrar will generally grant such extensions of time for renewal as are required to enable the recordal to be completed.

The Registrar's practice on renewal matters is not quite as inflexible as this.  Where either recordal of an assignment or of an amendment to the name of the registered proprietor is pending, and the renewal is sought in the name of the new owner, or in the new name of the registered owner, the Registrar will renew the registration where the different name on the renewal application is supported by adequate documentation.  This is a somewhat pragmatic approach, but recognises that assignments in particular may be complicated by the requirements of section 37, which mean that no assignment of a group of associated trade marks may be recorded while a defect exists in the assignment documentation of any one of them. 

In relation to marks which have not been renewed and which have been removed from the register, sub-section 71(1) of the Act speaks of the two separate actions of restoring and renewing. The word "renew" in sub-section 71(1) is clearly a reference back to the limited terms of section 70, which provides for applications for renewal, but none the less I think that there is still scope for flexibility where, with the passing of time, an expired registration has been removed from the register and its restoration is later sought by someone other than the last recorded proprietor. The decision is in the final analysis a discretionary one, and the overriding requirement of the section is that the Registrar's action be just. The discretion is comparable to that exercised in the matter of Paragon Shoes v Paragini Distributors 13 IPR 323 at p. 345. As Woodward J there concluded, it can sometimes be proper to overlook technicalities and defects in legal formalities.

As matters presently stand, however, the restoration application is handicapped in that it is made by a person other than the registered proprietor, without a clear case for why such an application should proceed.  Had either the assignee or the mortgagee appeared I would at least have had the benefit of another assessment of the circumstances surrounding the passing of the business to the mortgagee.  In the lack of such an explanation, there is a strong prima facie inference that the mortgagee is in possession because the business of the person registered as the proprietor has failed.  In the lack of an appearance by anyone with a positive interest in the restoration it is not possible to know if that failure, rather than the failure of this office to redirect a letter, was the true cause of non-renewal.  Nor is it possible to see that there is any public interest in restoring the status quo by returning the mark to the register.

Accordingly, I am not satisfied that it would be just to restore the registration, and I refuse to do so.  I make no award of costs as none was sought and as, moreover, the appearance of the removal applicant in this matter was at its own behest.

T. Williams

Hearing Officer
8 February 1993