T.J.P.D. Nominees v Davenport Industries Pty Ltd

[1996] ATMO 40

TRADE MARKS ACT 1955

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

Re:Opposition by DAVENPORT INDUSTRIES PTY LTD to applications by T.J.P.D. NOMINEES for extensions of time to serve, evidence in support of their opposition to registration of trade mark application no 594171, and evidence in answer to opposition by DAVENPORT INDUSTRIES PTY LTD to registration of trade mark application nos 619247 and 619248.

Background
The trade mark applications at issue here are:
Application no 594171, in the name of Davenport Industries Pty Ltd (“Davenport”), for “sleepwear, socks and underwear” in class 25, for the trade mark:

Application nos 619247 and 619248 in the name of T.J.P.D. Nominees Pty Limited (“TJPD”), for “ladies clothing manufactured in Australia, excluding boxer shorts and socks” and “retailing and wholesaling of women’s clothing in Australia, excluding boxer shorts and socks” in classes 25 and 42 respectively, for the series of trade marks:

All three applications have been accepted under the provisions of subsections 34(1) and 24(2) of the Trade Marks Act 1955, indicating recognition by the Trade Marks Office that the trade marks have been used extensively, and that the use has been honest concurrent use in the face of use of a substantially identical or deceptively similar trade mark by another party. The acceptances were predated by a settlement agreement reached between Davenport and TJPD in the Federal Court of Australia in 1993. The subsequent breakdown of that agreement has, prima facie, directly contributed to the state of opposition of the subject applications. Application no 594171 would otherwise not have been opposed, and application nos 619247 and 619248 would not have been filed, according to the terms of the agreement.

Breach of contract proceedings have now been instituted by Davenport against TJPD in the Supreme Court of Victoria. The proceedings refer, inter alia, to the withdrawal by TJPD of Application nos 619247 and 619248.

Trade mark application no 594171 was advertised accepted on 25 May 1995. After an extension of time to lodge a notice of opposition was granted to 25 November 1995, the notice was duly lodged by TJPD. At the end of the three month period allowed by the regulations, an extension of time for three months until 24 May 1996 to serve evidence in support was requested and granted. A further request for three months to 24 August 1996 was objected to by the applicant, Davenport, and is now the subject of this hearing

Trade mark application nos 619247 and 619248 were advertised accepted on 9 June 1994 and 7 July 1994 respectively. Notices of opposition to both applications, and corresponding evidence in support were lodged within time by the opponent, Davenport. Extensions of time to serve evidence in answer were then sought and granted in four three-month lots from 8 March 1995 until 30 April 1996. Requests by TJPD for further three month extensions on both applications to 30 July 1996 were opposed by Davenport, and are now also the subject of this hearing.

The matters were set down for hearing before me as the Registrar’s delegate in Canberra on 18 June 1996. T.J.P.D. Nominees Pty Limited was represented by Mr Peter Pearson of H.R. Hodgkinson & Co, and Davenport Industries Pty Ltd was represented by Mr Ben Fitzpatrick of Davies Collison Cave. Both parties were heard by telephone.

The evidence
Both parties submitted written evidence for my consideration in conjunction with their submissions made at the hearing. This evidence comprised:
Evidence relied on by the objector

• Statutory declaration by Benjamin J. Fitzpatrick dated 17 June 1996 and exhibit BJF1, being a true copy of the settlement agreement reached between the parties in relation to the previous Federal Court proceedings.

• Affidavit by Mark Montieth Dobbie, partner in the firm Middletons Moore & Bevins, solicitors representing Davenport Industries Pty Ltd, and exhibits MMD1 to MMD17, being mainly copies of correspondence between Messrs Middletons Moore & Bevins and the solicitors representing T.J.P.D. Nominees Pty Limited, Messrs Lane & Lane.

Evidence relied on by the applicant for the extensions

• Statutory declaration by Peter Lesley Pearson, date 18 June 1996, and exhibits PLP1 to PLP3, being copies of correspondence between Messrs Middletons Moore & Bevins and Lane & Lane, and copies of correspondence between H.R. Hodgkinson & Co and Davies Collison Cave, and between Lane & Lane and H.R. Hodgkinson & Co.

Submissions by Davenport Industries Pty Ltd opposing the extensions of time
Mr Fitzpatrick’s submissions dealt firstly with applications no 619247 and 619248, for which the opposed extensions of time relate to the provision of evidence in answer by TJPD. He argued that, when the duration of the extensions sought on those applications is taken into account, together with the reasons provided by the applicant, the onus upon the applicant to show what progress has been made has not been satisfied.

Mr Fitzpatrick took particular issue with the specific references, in all but the first extension of time application, to proceedings in the Supreme Court of Victoria, seeking orders that the applicant withdraw the opposed applications, and with references to ensuring consistency of evidence within both the Supreme Court and the Trade Mark Office forums. He argued that the issue of whether TJPD’s conduct in lodging the applications represents a breach of contract between the parties does not bear upon issues of registrability under the Trade Marks Act 1955. Therefore, there is no requirement for consistency between TJPD’s evidence in answer and its defence to a claim for breach of contract.

Mr Fitzpatrick also referred to the correspondence annexed to the declaration by Montieth Dobbie, which he said clearly shows that the negotiations referred to in the last two applications for extensions of time, dated 30 January and 30 April 1996, in fact ceased by 29 January 1996. Further correspondence after that date, copies of which are also annexed to the declaration, relates only to the Supreme Court proceedings.

Mr Fitzpatrick concluded his submissions upon applications no 619247 and 619248 by quoting the principle noted in Universal City Studio Inc v Frankenstein Pty Ltd (1993) 28 IPR 139, that if the applicant for the extension of time fails to satisfy the threshold onus of justifying the extension, then the issues of public interest and inconvenience to the applicant or opponent are not required to be considered. Notwithstanding this, he submitted that the TJPD’s “lack of diligence” outweighs any consideration of public interest, and that Davenport is suffering “considerable prejudice” as a result of TJPD’s “failure to prosecute the oppositions with any diligence”.

The submissions by Mr Fitzpatrick in relation to application no 594171 also related to the pattern of delay in TJPD’s actions, and pointed out that it has given no indication as to the nature of the evidence it proposes to submit, nor of the steps required to be undertaken to complete this process.

In general, Mr Fitzpatrick concluded that the pattern of delay, in relation to all the subject oppositions, clearly evidenced a lack of intention by TJPD to progress any of the oppositions.

Submissions by T.J.P.D. Nominees Pty Limited in support of the extensions of time
Like Mr Fitzpatrick, Mr Pearson also provided evidence of correspondence between the parties (as described above) in support of his submissions. His submissions dealt mainly with the history of the dispute between the parties and the consequent very close relationship between all the matters currently between the parties. He noted that evidence that has been provided by Davenport in respect of all three subject applications is the same evidence that was considered by the Federal Court during the proceedings in 1993. This was a factor in the need for consistency in the approach to be taken by TJPD in respect of those oppositions currently under consideration, but also with various other disputed applications both in Australia and overseas.

Mr Pearson submitted that his client also wished to avoid protracted negotiations on a number of fronts. Instead, his client hoped for the lines of communication to remain open so that, in the interests of both parties, a “global settlement” might finally be reached. In the interim, although his client was interested in its applications no 619247 and 619248 progressing, it had delayed producing the evidence in answer to support them while the negotiations in progress might ultimately result in their withdrawal.

Similarly, the evidence in support of TJPD’s opposition to application no 594171 had been delayed. This was in part because of consideration of the results of a Freedom of Information request which had established the significant consistency of Davenport’s trade mark and Federal Court evidence described above, but mainly because the opposition itself had been filed simply to protect a negotiating position. TJPD felt that the filing of evidence in support of that opposition might affect the success of negotiations between the parties.

Mr Pearson referred to a letter, annexed as Exhibit “PLP2” to his statutory declaration, from Davenport’s solicitors to TJPD’s solicitors. Although this deals with Supreme Court matters, he said that its contents represent a shift in the nature of the case before the Supreme Court which will also have a bearing on proceedings before the Trade Marks Office. He submitted that, given the intertwined nature of the proceedings, and the fact that, in his understanding, negotiations were still continuing between the parties, the applications for extensions of time were all fully justified.

Mr Pearson concluded his submissions by undertaking to file all the evidence in question within the time sought under the disputed extensions of time.

Discussion
As a delegate of the Registrar, before exercising my discretion under section 130 of the old Act, I must weigh up the relative merits of the arguments presented by the parties for and against the granting of the extensions of time. The issues to be determined are: whether a proper case had been made out justifying the extension, whether sufficient reasons have been provided, the relative inconvenience to the parties concerned, and the public interest.

The reasons given by TJPD in respect to the applications for extensions of time to serve evidence in answer for applications no. 619247 and 619248 are as follows:

“The present Applicant and the present Opponent are also litigants in proceedings commenced by the Opponent in the Supreme Court of Victoria seeking, inter alia, an order that the Applicant withdraw the above referenced application, and that they be restrained from taking any step or doing any act or thing to procure or obtain pursuant to the Trade Marks Act registration of the trade mark “DAVENPORT” alone in respect of articles of clothing. The Applicant intends to vigorously defend against this action by the Opponent.

“The Applicant’s solicitors, Messrs Lane & Lane, and the Opponent’s solicitors, Messrs Middleton Moore Bevins, have been involved in negotiations on behalf of their respective clients in an attempt to resolve disputes between the parties, including the opposition to registration of the above referenced application. However, to date, and following an exchange of correspondence in March 1996, the parties have not been able to resolve their differences or to reach an agreement. We are informed by the Applicant’s solicitors that following a hearing of the matter in the Supreme Court of Victoria on 15 February 1996, they have been instructed by the Applicant to proceed to a final hearing of the matter in that court, which it is hoped will take place during the course of this year.

“Likewise, the Applicant’s patent attorneys have been instructed to proceed with a defence of the present Opposition by preparing Evidence-in-Answer to the Opposition, but further time is required to enable the applicant to consult with their counsel, solicitors and patent attorneys, as appropriate, to coordinate their evidence and ensure consistency with the Applicant’s defence to the abovementioned proceedings in the Supreme Court of Victoria.

“It is anticipated that Evidence-in-Answer to the Opposition will be completed and served within the extended period now sought.”

The reasons given by TJPD in respect to the application for extension of time to serve evidence in support of the opposition to application no 594171 are as follows:

“The opponent is still considering the evidence that is required to be collated for its Evidence in Support of the Opposition. The Opponent has sought, under provisions for Freedom of Information, copies of any material filed by the Applicant in support of their contention that the trade mark the subject of this opposition had become distinctive in fact for the goods for which it was accepted, and that the said mark had gained such a reputation that there was unlikely to be any deception or confusion in view of trade marks used and/or registered by the Opponent. In response to this request for information, and a similar request in respect of the Applicant’s co-pending and now accepted application No. 594170 the Opponent’s patent attorneys have been informed by AIPO that the evidence filed by the Applicant was the same for both of application Nos 594170 and 594171. A copy of the material relied upon by the Applicant has now been obtained, but further time is required to consider this material and for the Opponent to coordinate its separate oppositions to application Nos. 594170 and 594171, and for the opponent to consult with its counsel, solicitors and patent attorneys as may be appropriate to this end. Additional time is therefore required to collate and serve Evidence-in Support on the Applicant.”

In both cases, the reasons given compare favourably with the Lyons case, supra, where the grounds for a request for an extension of time were “Evidence in support of the opposition is in the course of preparation but it is desired to have additional time to prepare that evidence and to serve a copy thereof on the applicant”. In that case, Beaumont J said at page 420:

“Although a more detailed explanation of the position may have been desirable, I think that it is possible to construe the rather bald statement of the ground for the request (supra) as indicating that, although efforts had been made in that behalf, it was not possible to finalise the form of the evidence sought to be adduced in the time allowed by the regulation.  I accept that, on one view, it is possible to read the stated ground as being little more than an assertion that more time is required.  However, the statement of the ground does at least attempt some explication of the position.  Further, I think that the delegate was entitled to have regard to the notorious fact that opposition proceedings usually involve the gathering of evidence from third parties and this usually takes considerable time.  Given that background, and given the construction of the statement of the ground which was open, I am of the opinion that the delegate did not exercise his discretion in any improper way.”

Both statements of reasons also discharge the rising onus upon the party seeking an extension, as discussed in Lord Bloody Wog Rolo v United Artists Corporation, 11 IPR 516. In neither case are they mere re-statements of reasons given in support of previous applications, but do “at least attempt some explication of the position”, to use Justice Beaumont’s description.

The times involved in all cases, being fifteen months in the cases of the evidence in answer, and six months in the case of evidence in support are also relatively short times, particularly when compared to other extension of time cases, such as Bundy American Corp v Rent-A-Wreck (Vic) Pty Ltd (1985) 5 IPR 307 (Reg.) where negotiations had been on foot between the parties, and 33 months was allowed. In that case, it was held that “negotiations between the parties is an indication that neither party will suffer inconvenience if the extension is granted, and should be taken into account by the Registrar”.

The Bundy case seems to me to have many parallels with the situation between the parties being dealt with here. In that case, as with this, the circumstances reduced to conflict between the parties and their failure to come to a final agreement over use of the trade mark in question. While negotiations were proceeding, in that case, as in this, preparation of evidence was suspended, and most of the extensions sought, and agreed to by the other party, were for the mutual convenience of both.

The Bundy case also refers to the principle that “an extension of time may not be granted simply in order to make good a careless oversight or a mere casual regard for the times prescribed by the Act and Regulations”. Mr Fitzpatrick has cited this principle as applying to the present cases, similarly as to Parkhurst Pines Pty Ltd & Ors v Truefeet Pty Ltd, 31 IPR 157, and the decision of the Registrar (2 December 1993) in the objection by Zardo’s Furniture Pty Ltd to an application for extension of time by Lyons Tetley Limited in respect to trade mark application no 535090. I do not agree with this assessment, as I believe the cases at issue here can be clearly differentiated from the cases cited by Mr Fitzpatrick. The cited cases seem to me to represent clearcut examples of the type encompassed by the above descriptions of “careless oversights”, or “casual regard for prescribed times”, and extensions of time were validly denied in those circumstances.

The present circumstances, like those of the Bundy case, supra, are far from being so clearly definable. The crux of the differences between the parties in the present cases is to be found in the issues of whether negotiations were actually still continuing at the time that the disputed extensions of time were applied for, and whether the results of the pending court case will be directly relevant to the fate of the three subject oppositions. I have carefully considered the submissions by both Mr Pearson and Mr Fitzpatrick on these issues, and have examined the correspondence produced in support of their arguments. The correspondence shows that explicit negotiations between the parties in regard to the trade mark oppositions dwindled away at the time in January 1996 suggested by Mr Fitzpatrick, and the further negotiations that occurred beyond that time did in fact relate to the pending Supreme Court proceedings.

However, the time frame under consideration here is a matter of three to four months only, between the time that active negotiations specifically relating to the subject trade marks apparently ceased, and when the present disputed extensions of time were applied for. Furthermore, the correspondence between the parties’ solicitors annexed to the declaration by Mr Mark Dobbie shows that as far as both firms of solicitors were concerned, the two matters were inextricably linked. Renewal of negotiations relating to Supreme Court proceedings occurred when negotiations relating to the proposed withdrawal by TJPD of application nos 619247 and 619248, and reinstatement of the settlement agreement (which would have resulted in them also withdrawing opposition to application no 594171) did not progress with the speed considered desirable by Davenport’s solicitors.

It is important to note that both types of negotiations were initiated by Davenport’s solicitors, and that at no time did TJPD’s solicitors formally acknowledge the implications made by the other party that their slowness in responding to its letters represented a deliberate decision to cease negotiations on the original front. Davenport’s solicitors had simply changed the focus of their letters, and correspondence between the parties continued to be exchanged in relation to matters of evidence to be presented to the Supreme Court.

In general, it appears that TJPD’ solicitors and attorneys, having in mind their client’s trade mark applications in the United States and New Zealand as well as Australia, and matters pending in the Supreme Court of Victoria, had no desire to file evidence in relation to any of the subject oppositions that might inflame the situation, and thereby sabotage any possibility of an amicable settlement being reached between the parties. This is the nature of the “consistency” referred to in their applications for extensions of time for trade mark nos 619247 and 619248, and alluded to in the reference to the need fore TJPD to “consult with its counsel, solicitors and patent attorneys” in the application for extension on trade mark no 594171. During the hearing, Mr Pearson confirmed this to be the case, and expressed hope that settlement may yet be possible. Despite Mr Fitzpatrick’s assertions that he has no instructions to negotiate, I do not think it unreasonable that TJPD’s attorneys continued to believe this to be a possibility at the time the extensions in question were applied for. This is particularly understandable since a settlement had previously been negotiated between the parties, and correspondence was still being exchanged in relation to closely related matters.

Mr Fitzpatrick has argued that the matters to be considered by the Victorian Supreme Court are breach of contact issues, relating only to contract law, and therefore entirely separate from the issues of registrability of trade marks required to be assessed by the Registrar in the case of the subject oppositions. However, having considered the settlement agreement reached between the parties in May 1993, a copy of which is annexed to Mr Fitzpatrick’s declaration, I am satisfied that the issue of the breaching of that contract is inextricably linked to the fate of the trade marks in question. The terms of the contract specifically prevent opposition by TJPD to registration of application no. 574171, and application by TJPD for any such trade marks as those that are the subject of applications no 619247 and 619248.

Taking all these factors into consideration, I am satisfied that the applicant for the extensions of time has discharged the onus upon it, in all cases, to make out a proper case justifying each application, and has provided sufficient reasons in support of each.

I must now consider the question of the relative inconvenience to the parties, and the public interest in the granting of these extensions.

Mr Fitzpatrick has submitted that Davenport is suffering considerable prejudice as a result of TJPD’s failure to prosecute the subject oppositions with diligence, including the increased legal costs incurred by Davenport in the preparing for and attending the hearing on the extension of time matters. Notwithstanding this, he has not elaborated further as to the extent or nature of the prejudice suffered by his client, beyond the costs associated with the hearing. I am therefore not able to find that the relative inconvenience to Davenport in my allowing the three subject extensions will be anything but outweighed by the inconvenience to TJPD if I do not. As a result of their belief, right up to this point, that negotiations were still possible between the parties, no evidence has been submitted to date in respect of any of the subject oppositions. Therefore, a refusal to grant the extensions will exclude TJPD from filing any of the relevant evidence at all.

Mr Fitzpatrick commented at the hearing that the lack of information given by TJPD in its applications for extensions of time about the nature of the evidence intended to be provided, together with the arguments presented by Mr Pearson in support of his client’s case at the hearing, suggested that what was actually being proposed by TJPD was an “indefinite stay of proceedings” until the Supreme Court matter was decided. Mr Pearson has vehemently denied this, and has undertaken, if the extensions are granted, (and subject to an absence of any further negotiations, which he is clearly still hopeful may resume at any time) to serve the relevant evidence in answer and evidence in support in respect of all the subject oppositions.

The last issue to be considered here is that of the public interest. The question of whether or not an additional extension of time should be granted to allow evidence to be disclosed is discussed by D.R. Shanahan at page 70 of Australian Law of Trade Marks and Passing Off (Second Edition). He states that, “every effort should be made to enable the Registrar to consider the circumstances with the assistance of as much documentary evidence as possible.”

In Rollbits Pty. Ltd. v Rowntree Macintosh plc (1986) AIPC 90-291, it was held that the public interest is paramount in matters in which deception is likely, and that this is best served if both parties are able to present their evidence and arguments fully. I think that, given the circumstances of these cases, the public interest will best be served by a full and open disclosure of the facts and evidence from both sides. As TJPD has undertaken to complete service of its evidence within the time allowed by the respective extensions, I am convinced that it is in the public interest that all of that relevant material be available to the Registrar when the matters are fully tested at a hearing.

Decision
Having considered all the facts surrounding these cases, I have decided to grant the applications by TJPD for an extension of time of three months to finalise the evidence in support of their opposition to trade mark application no. 594171. Accordingly, the final date for serving the evidence in support is now 24 August 1996. I have also decided to grant their applications for extensions of time to finalise their evidence in answer to the oppositions in respect of applications no. 619247 and 619248. The final date for service of the evidence in answer in respect of those cases is therefore 30 July 1996.

A significant factor in my coming to the decision to allow TJPD its extensions of time has been its undertaking to serve the necessary evidence within the time now allowed. I note that Mr Pearson remains hopeful of settlement between the parties and, given their previous willingness to negotiate, this may yet prove possible. However, for the present I put TJPD on notice that the extensions granted are for the express purpose of service of evidence, as specified in the Trade Mark Regulations. Notwithstanding the other matters on foot relating to the subject trade marks, Davenport’s objections to the delays in relation to the relevant oppositions should clearly indicate to TJPD that it is in both parties’ interests, as well as the Registrar’s interests in operating the opposition system efficiently, that the fate of these oppositions is now decided as expeditiously as possible.

Although it is usual for an award of costs to follow the result, I consider that in the present case it is appropriate for each party to bear its own costs. This hearing was apparently the result of a breakdown in communication to which both parties equally contributed, and which both could have overcome without the necessity to resort to the hearing process in advance of the culmination of the opposition proceedings.

Claudia Murray
Senior Examiner

9 August 1996