Sitmar Cruises Ltd v Carnival Cruises Lines, Inc

[1994] ATMO 66

TRADE MARKS ACT 1955

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

Re:Opposition by CARNIVAL CRUISE LINES, INC. to an application by SITMAR CRUISES LTD. for an extension of time to serve evidence in answer to the opposition to registration of Trade Mark Applications Numbers 552247, 552248, 552249 and 552250

Applications numbers 552247, 552248, both for the mark FAIRSTAR THE FUNSHIP, and 552249 and 552250 for the mark FUNSHIP, were lodged on 18th March, 1991 in the name of SITMAR CRUISES LTD. (the applicant).  The marks were advertised as accepted in the Official Journal of 21st May, 1992.  On 20th August, 1992, a notice of opposition to registration of the marks, under section 49 of the Act, was lodged by CARNIVAL CRUISE LINES, INC. (the opponent).

The balance of the evidence in support of the opposition in respect of the applications was served on 20th April, 1993 in accordance with reg. 43, therefore the evidence in answer, under reg. 44, was due on 20th July, 1993, but the applicant requested and was allowed an extension of time to 20th October, 1993 (1st extension).    A further extension was allowed to 20th January, 1994 (2nd extension).  In a letter dated 19th January, 1994, the applicant advised the Registrar that, as agreed with the opponent, the applicant had served part of the evidence in answer basing it on the material previously served in opposition to the registration of applications Nos. B423111, B423114, B426422, B426424, B426541 and B426542.  A declaration which did not constitute part of  the earlier evidence was also served.  In the same letter the applicant requested an extension of time of one month, which was granted (3rd extension).  A further one month extension was again sought and allowed (4th extension).  Before the expiry of this extension period, the applicant applied successfully for a period of three months (5th extension).  On the last day of the extension period, however, three additional months were requested to 20th September, 1994 (6th extension) on the following grounds:

"Settlement of these proceedings is presently being discussed between the parties and further extension of time is required to finalise these discussions and reduce any agreement to writing."

As the opponent objected to this extension of time, a hearing was set down in Canberra on 16th August, 1994 before me as the Registrar's delegate.  Mr. John Walsh of H.R. Hodgkinson & Co., patent and trade mark attorneys of Sydney, represented the opponent.  The applicant elected to rely on written submissions.

Opponent's submissions
At the hearing, Mr. Walsh commented that, although the provisions of section 130 of the Act do not stipulate circumstances for allowing extensions of time, the principles are enshrined in the cases of Vangedal-Nielsen v. Commissioner of Patents (1980) 33 ALR 144 and Lyons and Another (Trading as Mitty's Authorized Newsagency) v. Registrar of Trade Marks and Another (1983) 1 IPR 416; namely, that consideration should be given to: the interests of the parties seeking the extension; public interest, ensuring that both parties can present their arguments fully; relative inconvenience if the extension is or is not granted, and the Registrar must be satisfied that a proper case be made out justifying the extension. As part of this the Registrar had to consider the desirability of operating the trade marks system efficiently and without unreasonable delay. These principles were reaffirmed in Tomlin Holdings Pty. Ltd. v. KT Technology (S) Pte. Ltd. 1991 AIPC 90-747, Mr. Walsh said, noting that in that case the desirability of resolving the question of proprietorship played an important role in having the extension granted. In this regard, he pointed out that the proprietorship issue concerning the present parties had been decided by an appeal to the Federal Court (see Carnival Cruise Lines Inc. v. Sitmar Cruises Ltd. (1994) AIPC 91-049).

The fact that the person requiring the extension of time must explain the delays which prevented a certain act being done, has been enunciated in Spiritual Sky Group Co. Pty. Ltd. v. Bernard Leser Publications Pty. Ltd. (1986) 7 IPR 318, he stated. Thus, extensions had been refused in Lord Bloody Wog Rolo v. United Artists Corp. (1988) 11 IPR 516, where the reasons were considered inadequate, in CGS Design Concepts Pty. Ltd. v. Effem Foods Pty. Ltd. (1991) AIPC 90-760, because the opponent had not been active in gathering the evidence and the public interest required that the matter be resolved speedily, and in an unpublished decision, Ampex Corporation v. Amper, S.A., issued on 26th May, 1994, having regard to the slow progress in settling the matter following negotiations and failure to produce evidence of a settlement proposal.  He also remarked that it was unusual for an applicant to frustrate its own application by inactivity on its part, and therefore the opponent had every reason to question the motives behind such delays.

Mr. Walsh then reviewed the chronological history of the present case, directing me to the long dispute between the two parties, which first led to the Federal Court proceeding G333 of 1986, based on trade practices issues, followed by an appeal to the Federal Court, Carnival v. Sitmar, supra, where a decision of the Registrar's delegate on applications B423111, B423114, B426422, B426424, B426541 and B426542 was reversed.  On 18th March, 1991, the applicant lodged the present applications for marks which bear close resemblance to the marks the subject of the court proceedings.  The purpose of relating back to the earlier applications was to press the point that a similar dispute had already been before the Registrar and that, in view of the dispute between the parties since the mid 1980's, and the acceptance date of the present applications, the applicant had had more than sufficient time to gather the evidence. 

Mr. Walsh turned to discussing the applicant's applications for extension of time.  His comments on each of the requests may be summerized as follows:

1st extension request: the opponent can rightfully query the necessity for this extension bearing in mind the applicant being aware of the facts of the dispute and the almost identical nature of the evidence.

2nd extension request: if the applicant was aware of the likelihood of duplication of the evidence, why was the previous request couched in terms that time was required "to collect and serve Evidence-in Answer", if on 20th (sic) October, 1993 the evidence was already in existence?

3rd extension request: no reference to the original evidence, but rather the applicant introduced a prospect of further evidence; no mention of why the earlier evidence already in existence was not served.

4th extension request: the applicant should have identified the nature of the evidence to be served; the applicant was still under obligation to serve the evidence in answer, even though it had planned simply to refer to the evidence in respect of the earlier proceedings; the opponent should have been advised why it was necessary to brief the Counsel, and why further time was required in view of the previous opposition proceedings. 

5th extension request: it took three weeks for the applicant to consider the court's decision following the appeal which was still being considered at the time of applying for the extension; the opponent has not been informed of the applicant's reaction to the court's decision and its position.

6th extension request: settlement negotiations introduced - a dramatic approach from the previous requests; no mention of the progression of events, but applicant had chosen to capitalize on the opponent's invitation to settle the matter. 

With respect to the settlement negotiations, Mr. Walsh submitted that, as revealed in the correspondence between the legal practitioners acting for the parties during the period from 8th June, 1994 to 15th June, 1994, the applicant could not base its 6th extension request, dated 20th June, 1994, on the settlement negotiations, because such negotiations took place following that date.  However, as far as the opponent was concerned, the negotiations had now broken down, and it would be in the public interest to deal with the present matter expeditiously, rather than to allow the applicant further time to gather the evidence.  He then tendered a copy of a letter from the opponent, dated 11th July, 1994, which reads: 

"To our knowledge, we are not conducting settlement proceedings, nor negotiating for settlement at this time.  In fact, we are not interested in knowing at this time whether Sitmar is amenable to settlement inasmuch as we have merely been exploring with you the available alternatives.  We believe that Sitmar's counsel has the wrong impression.  Please object to Sitmar's request for extension of time."

He also commented that the opponent appeared to be delaying the progress of its own applications for a period of at least 14 months, therefore at this stage it would be reasonable to identify the promised further evidence, as well as its source, and to explain the reasons for the delays.  Furthermore, he added, the outcome of the appeal to the Federal Court offered the applicant an opportunity either to file an appeal, or commence settlement negotiations. 

Mr. Walsh saw serious public interest considerations in the present opposition.  He expressed the view that the public could justifiably question why the Trade Marks Office entertained the present applications for opposition in light of the court ruling on the earlier applications; the public record of the court proceedings was inconsistent with the office records, which showed the applications as accepted but currently in opposition.  In his opinion, even granting of a short extension of time in the proceedings would be contrary to the public interest, having regard to the applicant's unwillingness to bring the matter to a speedy resolution.  Furthermore, in this regard it would be in the public interest to ensure that the prolonged deception and confusion of the marks in the market place be discontinued.  In conclusion, Mr. Walsh reguested that the costs be awarded to the opponent. 

Applicant's written submissions
These submissions were transmitted on the morning before the hearing by facsimile by the attorneys acting for the applicant, F.B. Rice & Co., patent and trade mark attorneys of Sydney.  In the applicant's opinion, the settlement negotiations were reasonable grounds for the extension request in line with the findings in Future Software Pty. Ltd. v. AWA Ltd. (1991) AIPC 90-752. In support of the settlement negotiations, the applicant forwarded exhibits "A" to "G", being copies of letters dated 6th May, 17th May, 8th June, 9th June, 15th June, 27th July and 10th August, all of 1994, comprising correspondence between Mr. Jonathan D'Arcy, the solicitor for the applicant, and the opponent's attorneys. The letter of 27th July, 1994, from Mr. D'Arcy, the attorney submits, clearly shows that the applicant was expecting a settlement concerning the present opposition, although from the opponent's response of 10th August, 1994, the prospects of settlement appeared to be remote. At the time of lodging the extension of time application, however, the applicant was under the impression that the settlement negotiations were still pending. The applicant argues that in such circumstances, the sought extension of time is warranted. In respect of the question of costs, it states that costs should follow the action, and be awarded in favour of the applicant.

Opponent's response
In response to the applicant's submissions, Mr. Walsh expressed doubts that the negotiations could overcome the grounds of opposition, particularly as issues such as proprietorship, had been dealt with during the appeal in the Federal Court, supra.  He also reiterated the earlier statement that no negotiations were in train at the time of the 6th extension request.  Only the matters raised in the letter of 27th July, 1994 from the applicant's solicitor could be regarded as seeking a settlement, but they were untenable and not the basis of a settlement; the only basis on which settlement negotiations could be commenced would be withdrawal of the applications in suit.

Discussion
Para. 44(a) of Trade Marks Regulations provides that:

44. An applicant shall:

(a)  serve on the opponent, within three months after the
     date on which the declarations of the opponent were
     served, a copy of each of the declarations on which
     he relies in answer to the opposition ...

The current extension of time is sought by the applicant under s. 130 of the Act, which gives the Registrar discretionary power to extend the time "within which an act or a thing is to be done".  As indicated by Mr. Walsh, the principles concerning factors to be taken into account when considering extension of time matters have been enunciated in the cases of Vangedal-Nielsen v. Commissioner and Lyons v. Registrar, both supra, and applied in a large number of decisions issued by delegates of the Registrar. 

Should the 6th extension of time be allowed, the applicant would have availed itself of 17th months, including the 3 months statutory period, within which to prepare and serve the evidence in answer on the present applications.  Part of the evidence in answer comprising evidence previously served in relation to the earlier opposition proceedings was served before the 3rd extension request.  I must determine whether that time had been sufficient in the circumstances, and whether the applicant had made out a proper case justifying the need for a further extension.

In the application for the current extension request, in support of its contention that settlement discussions of the proceedings were taking place, the applicant is relying on correspondence between the parties, the first letter being dated 6th May, 1994 and the last dated 10th August, 1994.  From the contents of the letters exchanged between the parties before the date of the extension application, 20th June, 1994, I am satisfied that the parties were considering settlement negotiations initiated by the opponent.  In a reminder letter of 8th June to Mr. D'Arcy, the opponent's attorneys requested a response by return fax as to whether the applicant was interested in negotiating a settlement, to which Mr. D'Arcy replies: "... You  will appreciate that prior to making any decision to enter into negotiations, some consideration would have to be given to the scope and ambit of any settlement that might be achieved and to that end, a number of senior personnel will need to be involved ...".  It appears therefore that the discussions were continuing at the time of the 6th extension request.  I have no evidence that at that time the applicant was aware  of the views expressed in the opponent's facsimile of 11th July, 1994, where the opponent denies that a settlement or negitiations towards a settlement were being conducted.  In fact, the applicant states in the letter of 27th July, 1994 that it had decided to agree to seeking a satisfactory settlement, even though, as admitted by both parties, subsequently the prospects for a settlement had collapsed.

From the history of the opposition proceedings relating to the present applications, a considerable period of six months elepsed before the applicant placed on record part of the evidence in answer which coomprises statutory declarations, all except one constituting evidence in answer prepared for the opposition in respect of the earlier applications.  Subsequently, in the 3rd extension request of one month, the applicant stated that it wished to serve "some further Evidence" to be completed in the near future, but this evidence was still outstanding two months later when the reason for the 5th extension was couched in terms of requiring three months to reconsider the applicant's position following the handing down of the Federal Court's decision and to finalise the evidence material.

It has been established that the Registrar views favourably extension of time applications in situations where the parties are negotiating a settlement (see Stafford-Miller Ltd. v. Cosco Holdings Pty. Ltd. 15 IPR 199 and Bundy American Corp. v. Rent-A-Wreck (Vic.) Pty. Ltd. 5 IPR 307). In the present proceedings, however, the 6th extension request should not be considered in isolation, but viewed in light of what progress had already been made in serving the evidence in answer having regard to the evidence lodged in respect of the applicant's previous applications for similar marks which have been refused after an appeal to the Federal Court, supra.

In the circumstances alluded to earlier, I think it would be reasonable to expect the evidence to be completed and served at least in the five months before the end of the 5th extension period.  In the extension request now being considered, the applicant omits any reference to the finalization of the evidence in answer, or any explanation as to why it was unable to do so, but refers to the matter of settlement discussions.  In the event of the settlement negotiations failing, which appears to have already occurred from the correspondence made available at the hearing, the Registrar would be requested to consider further extension requests to enable the applicant to complete the evidence, only prolonging the proceedings without reasonable cause.  In these circumstances, contrary to the findings in Future Software v. AWA, Stafford-Miller Ltd. v. Cosco and Bundy v. Rent-A-Wreck, all supra, I conclude that the applicant has had ample time within which to serve the remaining evidence in answer, that there is no reason to believe any further evidence may be served, and that the applicant has failed to provide justifiable reasons which warrant this further extension of time. 

In Re Application by Jonathan Sceats Design Pty. Ltd. 15 IPR 59, the Principal Assistant Registrar said at p. 61:

"The Registrar will be slow to limit a party to such proceedings by refusing further time in which to put in evidence, particularly where the other side does not object, and there is a real prospect of the matter being settled by negotiations.  Where the delay has become excessive, and there is no definite end in sight, the Registrar must give greater weight to the general public interest of effective, timely administration of these provisions of the Act."

As will be apparent, the applicant has not utilized beneficially the time at its disposal to serve the promised outstanding evidence.  Although, when determining an opposition, the Registrar should have all the available material before him to enable the issues to be considered properly, having regard to the recent court proceedings it would be in the public interest to deal with the proprietorship question in an expeditious fashion.  Similarly, the matter concerning the likelihood of deception and confusion should also be resolved to remove it from the minds of the public, as was argued by Mr. Walsh.  Accordingly, I consider that the public interest would best be served by refusing the sought extension to enable the opposition proceedings to be concluded.  

While I concede that by refusing the allowance of the present extension, the applicant might be deprived of an opportunity of presenting the balance of its evidence in answer which might affect the prospects of its success in the opposition proceedings, I have to take into account the fact that the applicant has been responsible for causing considerable delays not only in the progress of its own applications, but in the process it has disadvantaged the interests of the opponent. Such a situation cannot be excused in the particular circumstances of this case.   

Having considered the relevant factors, I find that the opponent was justified in objecting to the 6th extension application for additional time on each of the subject applications.  I refuse to grant that extension and therefore award costs against the applicant. 

Vija Zars
Acting Hearing Officer
26 August 1994