Stafford-Miller Limited v R & C Products Pty Limited

[1993] ATMO 98

TRADE MARKS ACT 1955

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS

Re:    Opposition by R & C PRODUCTS PTY LIMITED to an application by STAFFORD-MILLER LIMITED for an extension of time to lodge evidence in support of its application under section 23 to remove trade mark registration numbers 345139 and 357244 from the Register.

An application for the removal under section 23 of the Act of trade mark registration  numbers 345139 and 357244, registered for the marks EZI-CLEAN and device in class 3 and EZI-CLEAN in class 3 respectively, was lodged on 5 April 1993 by STAFFORD-MILLER LIMITED (the applicant).  The application was advertised on 27 May 1993 and was opposed by the registered proprietor, R& C PRODUCTS PTY LIMITED (the opponent), by notice of opposition lodged on 27 August 1993, such notice having been served on the applicant on that same date.

On 10 September 1993, the applicant lodged an application for an extension of time of three months to 10 December 1993 in which to serve evidence in support.  The opponent advised of its objection to the allowance of the extension in its letter of 1 October 1993.  A hearing to determine the matter of the allowance, or not, of the extension was accordingly set down before me as the Registrar's delegate in Canberra on 22 October 1993.  The applicant's attorney, Spruson & Ferguson, patent & trade mark attorneys of Sydney, was not represented at the hearing but relied instead on written submissions from Ms Annette Freeman, legal practitioner.  The opponent was represented by Mr Paul Whenman of  F.B. Rice & Co., patent & trade mark attorneys of Sydney.

The original reason given by the applicant for seeking the extension was stated in the application as follows:

The applicant requires further time within which to formalise and

serve the evidence.

In her written submissions, Ms Freeman enumerated several reasons for requesting an extension of time:  firstly, Ms Freeman states, that after some initial enquiries, "the applicant fully expected that the trade marks in question were no longer of interest to the proprietor, and that the Section 23 applications would either be settled or uncontested.  Thus, the expense of collecting evidence of non-use in formal form was delayed";  secondly, the time expended in prosecuting these applications had been lengthened by the fact that the applicant is being instructed by its parent company in the United States of America;  thirdly, the collection of formal evidence was time- intensive;  and fourthly, tentative negotiations had been opened with a view to possible settlement of this matter.

Ms Freeman included in her submissions copies of three exchanges which were stated to be evidence of the enquiries which had been carried out and the results.

Mr Whenman, in reply, drew my attention to pages 286 and 287 of Mr D.R. Shanahan's book, Australian Law of Trade Marks and Passing Off (Second Edition).  In short, Mr Shanahan states that if a section 23 action goes unopposed, there is still a heavy onus on the section 23 applicant to establish a prima facie case for removal.  On the other hand, if the section 23 action is opposed, the section 23 applicant should, according to procedures laid out in Trade Mark Regulations 53 to 59, submit the prepared evidence of non-use not later than 14 days after the notice of opposition to the opponent.  However, Mr Shanahan goes on to state that strict adherence to this timetable could cause considerable inconvenience to the applicant and, in practice, extensions have been granted in appropriate circumstances.  Such circumstances, Mr Whenman purports, have not been made out here.  

Mr Whenman stated that even if this case had been unopposed, the applicant would have had to have made out a prima facie case for removal and this has not been done.  He queried the significance of the three exchanges submitted by Ms Freeman saying that they gave no indication of the time frame being considered and two of the three exchanges seemed to be just internal memoranda.  Moreover, the original reason given for requesting the extension gave no indication as to what sort of evidence was at hand or what the words "needs to be formalised" mean.

Mr Whenman cited Estex Clothing Manufacturers Pty Ltd v. Ellis and Goldstein Ltd (1966) 116 CLR 254 at 257-258 as an example of the undesirability of delay in proceedings for removal for non-use of a trade mark. He also stated that A Royale & Co. (Aust.) Pty Ltd v Maxims Ltd (1987) 9 IPR 237, although having some factual differences, was on all fours with this present case; and those factual differences would point to the denial of an extension in this present instance.

As to the tentative negotiations mentioned by Ms Freeman in her submissions, Mr Whenman explained that the opponent had initiated a settlement but the applicant had not met the time limit imposed by the opponent.  Mr Whenman expressed the view that failure to accept the offer was an indication that the applicant was not interested and that negotiations had terminated.

Although stating that this was not a matter directly related to the extension of time, Mr Whenman queried whether, in fact, the applicant qualified as an aggrieved party .  I agree with Mr Whenman on this count, that this is not a matter relating to this hearing.  .Discussion of that matter is not appropriate here and will, if necessary, be dealt with at the main opposition hearing, should the matter proceed to that stage.

DISCUSSION

Regulation 54 of the Trade Marks Regulations reads, inter alia:

54.  An applicant shall-

(a) serve on the opponent, within fourteen days after the notice of opposition has been served on him, a copy of each of the declarations and other evidence which he has lodged in support of his application.

This short period of only 14 days seems based on the presumption that the applicant for removal will have prepared all of its evidence in support prior to lodging the s.23 application.  However, the reality of the situation is that many applicants for removal have not yet gone through the potentially expensive process of preparing evidence at the time of application until it is certain that the application will be opposed or that negotiations prove fruitless.

As Mr D.R. Shanahan states in his book, at pages 286-287 (supra):

...reg.54 could cause considerable inconvenience, as an applicant for removal will not usually know when lodging the application whether opposition will be met and (bearing in mind the short period of one month allowed by s.23(1) for amicable resolution) may not by then have exhausted all possibilities of settlement.  Thus, in practice, the Registrar has never insisted that evidence actually accompany the application for removal, and in appropriate circumstances extensions have been granted for service of evidence in support.

Relevant questions facing me in this matter are:

1.  Has the applicant established why the time thus far allowed is insufficient? -  Lyons v Registrar of Trade Marks (1983) 1 IPR 416

2.  Is the delay caused by bona fide negotiations? - Bundy American Corp v Rent-A-Wreck (Vic) Pty Ltd 5 IPR 307

3.  Will the opponent's interests be jeopardised by an extension for the applicant? - Lyons v Registrar of Trade Marks (supra)

4.  Is the applicant local or overseas? - Lyons v Registrar of Trade Marks (supra)

5.  Is there a question of public interest involved for which the Registrar is responsible? - Pioneer High-Bred Corn Co v Hy-Line Chicks Pty Ltd (1979) RPC 410

In relation to whether a proper case has been made out, I agree that the reason given in the original application fails to give adequate detail and the opponent can be understood in objecting if it felt that the extension was merely a delaying tactic.  The reasons given in Ms Freeman's submissions to the hearing do little to redress this matter.  I agree with Mr Whenman's observation that the exchanges, marked Exhibit A in the submissions, fall far short of establishing that the trade marks had not been in use for the appropriate length of time.  Such exhibits would not have satisfied the Registrar that a case for removal for non-use had been established if this action had gone unopposed.

In answer to my second question whether bona fide negotiations are in train, I must answer in the affirmative.  Although the applicant did not meet the time deadline imposed by the opponent, I understand from both Ms Freeman and Mr Whenman that the overseas parent company had to instruct the applicant as to what course to pursue.  I do not agree with Mr Whenman that failure to meet this deadline must mean termination of negotiations.  Although the opponent initiated the negotiations, these negotiations were not commenced until 19 October 1993, 3 days before this hearing.  To require final acceptance of an offer by the 21 October 1993, where overseas principals are involved is somewhat severe and does not afford them reasonable time to consider the offer.  Whether or not the opponent withdrew the offers because the applicant did not meet the deadline was not addressed by Mr Whenman.  The whole question of negotiation was the major factor that distinguishes this present case from the circumstances of the Royale case (supra).

I do not see how the allowance of an extension could be unfair to the opponent or jeopardise its prospects in the matter.  As Assistant Registrar Williams noted in the Royale case (supra):

The opponent will if the extension is granted, perhaps be faced with a sound prima facie case such as the established case law shows would require an answer.  However, this should not be an onerous task if the mark has in fact been used.

I have already noted above that the applicant, although a local firm, has to await instructions from its overseas parent company so time delays are common and frequent. 

Lastly, I must consider the question of the public interest.  It has been accepted that it is in the public interest that unused marks should be removed from the Register.  As the present allegations of non-use have yet to be supported with evidence, it would seem in the public interest that any such evidence should be allowed to be presented to allow the matter to be tested fully at a hearing.  In the words of Richards J in Pioneer High-Bred Corn Co v Hy-Line Chicks Pty Ltd (supra) at 435:

...within reasonable limits it furthers that public interest to allow consideration of any available evidence that will assist in providing a clearer picture of the awareness of rival marks as affecting the likelihood of deception and confusion.

DECISION

On the basis of the above factors, I consider that the applicant has established a case that an extension of time should be allowed.  I therefore allow the extension sought, that is to 10 December 1993, in which to serve the evidence in support.

COSTS

Mr Whenman sought costs in the matter.  The usual course is that costs should follow result.  However, I feel that the applicant contributed to the situation which led to the hearing by not contacting the opponent to indicate whether or not it was interested in negotiating some sort of arrangement.  In the circumstances, I find that the fairest course is that both sides should be responsible for their own costs

Sharyn Sullivan
(Senior Examiner)
22 November 1993