Trek Bicycle Corporation v Red Hawk Holdings Pty Ltd
[2019] ATMO 88
•11 June 2019
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by Trek Bicycle Corporation to registration of trade mark application number 1860522 (classes 3, 12, 35) - PROTREK - in the name of Red Hawk Holdings Pty Ltd
– and –
Application by Trek Bicycle Corporation for an extension of time to file evidence in support
| Delegate: | Adrian Richards |
| Representation: | Opponent: Zhi Ling Zeng of Lord and Company Applicant: Dr Robert Burrell of Go Trademarks (written submissions) |
| Decision: | 2019 ATMO 88 Trade Marks Act 1995 (Cth) – opposition under section 52 – application for extension of time to file evidence under regulation 5.15 – grounds for extension of time under regulation 5.15(a) and (b) considered – no grounds established – application for extension of time refused – request to admit late filed evidence under regulation 21.19 – no power to admit late evidence in regulation 21.19 – consideration of discretion to admit late filed evidence under regulation 21.15(4) – discretion not exercised |
Background
Registration of trade mark application number 1860522 in the name of Red Hawk Holdings Pty Ltd (‘Applicant’) had been opposed by Trek Bicycle Corporation (‘Opponent’).
Regulation 5.14(3) of the Trade Marks Regulations 1995 (Cth) (‘Regulations’), provides that evidence in support of this opposition was to be filed by the Opponent by 19 July 2018. On 19 July 2018, the Opponent sought an extension of time of two months within which to file its evidence in support (‘Request’).
A delegate of the Registrar of Trade Marks (‘Registrar’) wrote to the Opponent on 23 July 2018 intending to refuse the Request. A copy of the Request and the delegate’s letter were sent to the Applicant at the same time.
The Opponent responded on 10 August 2018 with a declaration supplementing the Request. A delegate of the Registrar wrote again to the Opponent on 21 August 2018 expressing an intention to refuse the Request, but also giving the Opponent some extra time to seek a hearing. The Opponent’s declaration and the delegate’s second letter were also forwarded to the Applicant at that time.
The Opponent applied to be heard in relation to the Request on 3 September 2018. This office issued formal hearing notices to both parties setting the Request to be heard on 7 December 2018.
I was allocated to hear the Request in my capacity as a delegate of the Registrar. I wrote to the parties on 7 November 2018 informing the Applicant that it could elect to attend the upcoming hearing and directing that each of the parties provide an outline of its submissions on the Request in the lead up to the hearing.
The Applicant elected not to attend the hearing but did file its written submissions in line with my direction. The Opponent also filed its written submissions as directed, and Zhi Ling Zeng of Lord & Company appeared on its behalf at the hearing on 7 December 2018.
The Request
In its initial form, the Request was supported with the following unsworn statement :
Our client, Trek Bicycle Corproation [sic] (“Trek”) is intending [sic] to settle this opposition, and has been in commercial negotiations with the Applicant of Australian Trade Mark Application No. 1865022 [sic], Red Hawk Holdings Pty Ltd (“Red hawk”) since [sic] beginning of May 2018, immediately after receipt of the Notification of Intention to Defend filed by Red Hawk. On 3 May 2018, Trek’s US agent advised us that Trek is considering withdrawing this opposition if Red Hawk is able to amend their [sic] Statements of Goods and Services for Classes 3, 12 and 35 to exclude bicycle related goods and services. On 10 May 2018, proposed amendments to the Statements of Goods and Services were forwarded to Red Hawk’s Australian represntative [sic] for consideration. Since then, there have [sic] been back and forth correspondence to refine the proposed amendments. We now have a set of draft amendments which appear to be accpetable [sic] by both sides. However, despite acting promptly and diligently at all times, more time is required to finalise the conditions relating to the use of the “PROTREK” trade mark by Red Hawk in Australia. It should be noted that as this opposition involves multiple parties located in various cities across the globe (and across Australia), considerable time is required to communicate the matters between the parties. Until Trek and Red Hawk can reach full agreement, we hereby request an extension of time of two (2) months to file Evidence in Support, to reserve our client Trek’s rights to continue with this opposition.
The declaration supplementing the Request was executed by Zhi Ling Zeng, Trade Mark Attorney at Lord and Company. It provides a timeline of events which Ms Zeng denotes ‘privileged and confidential’. While I have done my best to respect the Opponent’s claims to privilege and confidence, I am required to outline the crucial aspects of this material in my discussion below.[1]
[1] Acts Interpretation Act 1901 (Cth) s 25D.
The Opponent’s timeline
The timeline begins with an event that is neither privileged nor confidential. This office sent a letter to the Opponent’s address for service, Lord and Company (‘Lord’), on 19 April 2018. The letter informed the Opponent that the Applicant had filed a Notice of Intention to Defend its application against opposition. The exact date of delivery of this letter is not disclosed. Based on the ordinary standard mail delivery time from Canberra to Perth this would have been about Tuesday 24 April 2018.[2]
[2] Acts Interpretation Act 1901 (Cth) s 29.
On Monday 30 April 2019, Lord informed the Opponent’s agent in the United States of America (‘US Agent’) of the receipt of this letter. No explanation for this brief delay on Lord’s part has been offered, though I note that Wednesday 25 April 2018 was the ANZAC Day public holiday.
The US Agent replied on Saturday 4 May 2018 with instructions to attempt settlement, and providing Lord with some amendments to the Applicant’s goods and services that the Opponent considered would allow for coexistence. Lord sent on the settlement proposal to the Applicant’s representative on Thursday 10 May 2018. The timeline continues in this way for a little under two months, detailing correspondence on possible settlement back and forth between the US Agent and the Applicant’s representative with Lord acting as conduit. It is unnecessary to retell this aspect of the Opponent’s timeline.
On Thursday 5 July 2018 Lord reminded the US Agent that evidence in support was due to be filed by 19 July 2018. It was on Friday 6 July 2018 that Lord began collating evidence in support on behalf of the Opponent. This work initially consisted for reviewing evidence previously gathered by Lord on behalf of the Opponent.
On Monday 16 July 2018 Lord sought instructions from the US Agent to make the Request. The instructions arrived the next day, and the Request was filed two days later.
The Opponent’s timeline continues beyond the 19 July 2018 deadline. This later aspect of the timeline concerns further efforts to reach a negotiated outcome, the parties’ failure to agree to a cooling-off period under reg 5.16, and the details the preparation of the Opponent’s evidence in support. It finally concludes with the submission of the Opponent’s evidence in support to this office on 17 and 18 September 2018.
Throughout its timeline the Opponent mentions two disruptions to its ability to gather evidence: the person with carriage of the opposition at Lord attended a conference in the United States of America from 19-23 May 2018, and management of the Opponent was ‘under intense preparation’ for the Tour de France in the lead up to the beginning of the race on 7 July 2018. Precisely how, or how long, this pre-race preparation occupied staff of the Opponent has not been put to me.
The Applicant’s written submissions highlight a crucial aspect of the Opponent’s case: the Opponent has twice stated in writing that it did not begin collating evidence in support until 6 July 2018—less than two weeks from the original statutory deadline for filing that evidence. At the hearing, the Opponent made submissions in rebuttal that it had in fact prepared evidence of use of the Opponent’s TREK trade mark in at least May 2018, in preparation for other opposition matters.
The extension of time provision
Regulation 5.15 is reproduced in full below:
5.15Extension of time for filing
(1)A party may request the Registrar to extend a period for filing evidence mentioned in regulation 5.14.
(2)The Registrar may extend the period only if the Registrar is satisfied that:
(a)the party:
(i)has made all reasonable efforts to comply with all relevant filing requirements of this Part; and
(ii)despite acting promptly and diligently at all times to ensure the filing of the evidence within the period, is unable to do so; or
(b)there are exceptional circumstances that justify the extension.
(3)The Registrar:
(a)must decide the length of the extended period having regard to what is reasonable in the circumstances; and
(b)may do so on terms that the Registrar considers appropriate.
(4)In this regulation:
exceptional circumstances includes the following:
(a)a circumstance beyond the control of a party that prevents the party from complying with a filing requirement under this Part;
(b)an error or omission by the Registrar or an employee that prevents a party from complying with a filing requirement under this Part;
(c)an order of a court or a direction by the Registrar that the opposition be stayed.
Sub-regulation (2) provides two alternative grounds. I must first be satisfied that at least one of those grounds has been established before my discretions to grant an extension of time, and the length of the extended period, are enlivened. The Opponent has made submissions each ground, which I consider in turn below.
Discussion of the grounds for an extension of time
Regulation 5.15(2)(a)
The Opponent referred me to a decision of a delegate of the Commissioner of Patents as standing for the proposition that I must consider its conduct over the ‘whole of the opposition’. Bearing in mind that reg 5.9(2)(a) of the Patents Regulations 1991 (Cth) is in very similar terms to reg 5.15(2)(a) of the Regulations, the relevant aspect of that decision reads:
Question 3: Do the two legs of the test relate to different things
There are two requirements in paragraph 5.9(2)(a). Those requirements are "has made all reasonable efforts to comply with all relevant filing requirements under this Chapter" and "acting promptly and diligently at all times to ensure the appropriate evidence is filed within the period". The attorney for TRED made a submissions [sic] as follows:“Subparagraph 5.9(2)(a)(ii) is subservient to subparagraph 5.9(2)(a)(i) so ‘acting promptly and diligently at all times’ cannot impose a greater burden on a party or on an attorney than does ‘made all reasonable efforts to comply’”
While the two legs are similar, the "reasonable" leg relates to "all relevant filing requirements", whereas the "promptly and diligently" leg relates to the period for filing "the appropriate evidence". Reasonableness appears to relate to conduct over the whole of the opposition, and not just the current evidence stage. I would expect that often where a person has acted reasonably, they will also have acted promptly and diligently (an exception might be where a person was diligently preparing evidence that was unnecessary for the opposition). The question posed by the regulation is whether the person seeking the extension satisfies each leg of the test. Where they fail to satisfy one of the legs, then an extension will not be available (in the absence of exceptional circumstances).[3]
[3] Julie-Anne McCarthy and Bradley McCarthy v TRED Design Pty Ltd [2013] APO 57, [27]-[28] (citations omitted).
To borrow from the delegate’s terminology above, whether the Opponent meets the ‘reasonable leg’ of this ground requires that I consider the Opponent’s conduct for the whole of the opposition process. In that regard, it submits that the evidence in support deadline was the only one that it has missed. It also submits that it took regular and frequent actions ‘to move this opposition forward’. This is correct in a very general sense. As regards this ‘reasonable leg’, the Opponent has on balance provided enough to show me that it made reasonable efforts to comply with the opposition process generally.
But the Opponent’s focus in submissions and evidence on the ‘reasonable leg’ is to the detriment of addressing the apparent deficit in its behaviour in relation to the ‘promptly and diligently leg’. In broad terms this second limb of the ground requires that the Opponent made its best efforts to ensure the filing of evidence by the 19 July 2018 deadline, but those efforts were cruelled in some way.
For this ‘promptly and diligently leg’, the Opponent’s case rests in large part on the assertion that it was misled by the Applicant that negotiations would settle the dispute before its evidence fell due. This in turn took the Opponent’s focus away from evidence gathering for two and a half months and it did not return to it until less than two weeks from deadline. The Opponent submits that only at that very late stage did it become clear that negotiations would not be fruitful and with that seeks to lay a large portion of the blame for its failure to file at the feet of the Applicant. Unsurprisingly, the Applicant denies much of this. Moreover, the Applicant submits this was plainly not behaviour that could reasonably be characterised as ‘acting promptly and diligently at all times to ensure the filing of the evidence within the period’. I accept the Opponent’s attempts at arriving at a negotiated outcome were attempts at bringing the opposition to an early close. But seeking an early ending to proceedings is not the same as ensuring the filing of evidence. On the terms of reg 5.15(2)(a), time spent in settlement negotiations cannot be used to justify an extension of time.
As for the Opponent’s claim that it had started gathering evidence of use of its TREK mark in May 2018 for other oppositions, I make two observations. Firstly, by implication, that evidence gathering was not necessarily for the present opposition. Secondly, if that evidence was relevant to this opposition, and had been gathered as early as May 2018, it should have been a mere formality to file it by the 19 July 2018 deadline. The Opponent has not offered, at very least, any explanation why the evidence it claims it already had on hand was not filed by the statutory deadline. There is no requirement that all evidence in support be filed together. Evidence can and often is filed as it becomes ready. That no evidence was filed by 19 July 2018 indicates one of two things: either the Opponent did not have any of its evidence ready by that date or the Opponent was unaware it was able to file part of its evidence by that date. Given the circumstances, the former appears more likely.
The Opponent has not satisfied me that the ground for extension of the period for filing evidence in support found in reg 5.15(2)(a) has been established.
Regulation 5.15(2)(b)
The Opponent points to several aspects of the factual setting as exceptional circumstances which it says justify an extension of time. These fall into two categories, which I will address in turn. The first category relates to the parties’ attempts to settle the opposition, namely:
- The Opponent’s initial intention to settle the dispute.
- Behaviour of the Applicant in relation to settlement negotiations that it says was unreasonable.
The Opponent has referred me to Rotary International v Interact Australia (Victoria) Ltd,[4] in which the delegate found that nothing in reg 5.15 can be used ‘to facilitate settlement negotiations and there is no legal basis for the Registrar to grant an extension for that purpose.’[5] The Opponent contends that the delegate did not expressly rule out settlement negotiations from being an exceptional circumstance that can justify an extension of time on the basis of the following passage:
As to whether the settlement negotiations are an exceptional circumstance which justifies the delay in the opponent filing its evidence, the opponent’s submissions make no mention about the opponent’s progress, if any, in preparing its evidence. Indeed, it appears from its submissions that the opponent wishes to avoid the need to file evidence.[6]
[4] [2015] ATMO 44.
[5] Ibid [14].
[6] Ibid.
Here the delegate was noting that the opponent in those proceedings had not attempted to justify a delay in filing its evidence. It seems that opponent wanted an extension of time under reg 5.15 to continue its settlement negotiations, not to file evidence. In contrast, in the present case the Opponent did eventually file its evidence in support.
Nevertheless, to grant an extension of time based on either the Opponent’s earlier intention to settle the dispute or because of some aspect of the conduct of the Applicant in those settlement negotiations would not be appropriate. This is because the Opponent used two and a half months of the three-month period that the Regulations provided to exclusively conduct settlement negotiations. It is telling that once the Opponent finally began the process of evidence gathering, the process took from 6 July 2018 to 18 September 2018, which is roughly two and a half months. To grant an extension of time in this circumstance would effectively allow the Opponent to recoup the time it spent during the statutory evidence period conducting settlement negotiations. This is not how the law envisages that period be used—it is for gathering evidence.
Turning to the second category, the Opponent submits the following were exceptional circumstances that justify an extension of time:
- The US Agent’s role as an intermediary between the Opponent and Lord.
- The time difference between the United States of America and Australia.
- The complexity of gathering evidence from several points in both countries.
When the two-and-a-half-month symmetry discussed above is considered further, these three circumstances nominated by the Opponent also fall away. The US Agent’s role, the time zone difference and the claimed complexity of the evidence gathering process did not disappear when it finally began to gather its evidence on 6 July 2018. Despite these handicaps persisting, the Opponent managed to gather and file its evidence in just under two and a half months. This indicates that none of those factors materially contributed to the Opponent’s failure to meet its deadline.
The story that emerges from the facts as put is that the Opponent took a risk. It chose to focus on its settlement negotiations for two and a half months. It also elected not to hedge that strategy by gathering its evidence in support. Only once it became clear the negotiations would not bear fruit did the Opponent start to get its evidence together. Apart from its own decision not to do so, there was nothing preventing the Opponent from gathering its evidence whilst it sought a negotiated outcome.
The Opponent has not satisfied me that the ground for extension of the period for filing evidence in support found in reg 5.15(2)(b) has been established.
Residual discretion to admit late filed evidence
The Opponent further submits that, should I decide not to grant it an extension of time, its late filed evidence should nevertheless be considered when deciding the opposition. It provides Fed Square Pty Ltd v Federations IP Pty Ltd[7] as authority for the proposition that late filed evidence can be admitted to an opposition in certain circumstances and draws a number of analogies between that case and this one.
[7] [2015] ATMO 42 (‘Fed Square’).
The Opponent submits that a discretion to admit late filed evidence is found in reg 21.19, which I have extracted below:
21.19Registrar may use information available
(1)If:
(a)information that is available to the Registrar is relevant to proceedings before the Registrar; and
(b)the Registrar has reason to believe that the information is not known to a party to the proceedings; and
(c)the Registrar proposes to take the information into account in making a decision in the proceedings;
before making the decision the Registrar must:
(d)provide the information to the party; and
(e)give the party a reasonable opportunity to make representations about the information.
(2)For the purposes of paragraph (1)(e), the representations may be made in writing or at a hearing or by such other means as the Registrar reasonably allows.
The terms of this provision do not confer any positive power. This regulation places an obligation of procedural fairness on the Registrar. While this is a solemn duty, and one that is at the heart of justice in administrative decision making, neither the giving of certain information to a party nor subsequently providing an opportunity to make representations on that information is at issue here.
But, at least in the context of hearing proceedings before the Registrar, there indeed exists ‘some latitude as to what matters she may take into account in reaching decisions’.[8] The statutory basis for this discretion is in reg 21.15(4):
21.15Opportunity to be heard by Registrar
(4)The Registrar is not bound by the rules of evidence, but may be informed on any matter that is before the Registrar in a way that the Registrar reasonably believes to be appropriate.
[8] Horizons (Asia) Pty Ltd v Enagic Australia Pty Ltd and Enagic Co., Ltd [2016] ATMO 26.
There are published guidelines from the Registrar to help a party in putting its case for the exercise of this discretion:
The delegate will not consider out of time evidence as a matter of routine. The party filing the evidence must make a compelling case in favour of it being considered. The issues the filing party needs to address in its submissions include:
· Why the evidence was filed after the due date
· If the evidence stage in proceedings has concluded and the matter is ready for determination, why the evidence was not filed earlier
· What the evidence shows
· Why that information is crucial to the delegate’s decision
· Why it is in the public interest to have the information considered
· What is the balance of convenience for the parties if the information is considered.[9]
[9] Trade Marks Office Manual of Practice & Procedure, Part 51.2.6.
As alluded to earlier, in putting its alternative case the Opponent sought to draw several analogies with Fed Square and as a result has neglected to directly deal with each of the points above. I have, however, been able to garner some information from both the Opponent and Applicant’s submissions.
Why the Opponent’s evidence was late has been discussed at length above. It need not be restated here save to say it weighs against an exercise of the discretion.
The Opponent says that its late evidence shows ‘strong [prior] use’, and ‘shows the following in Australia:’
i.prior registration for TREK and related marks;
ii.Very high levels of marketing and sales figures under the TREK brand;
iii.Extensive advertising and promotion of the TREK brand and associated goods
iv.Goodwill/reputation associated with the TREK brand
Turning to whether the Opponent’s late evidence will be crucial, the Applicant draws attention to the Opponent’s reliance in these proceedings on s 44 of the Act, for which the above is either irrelevant (ii. to iv.) or repeats information already filed (i.). I note that the Opponent also relies on ss 42(b), 58 and 60 for which much of the above would be relevant. But the Opponent has not offered me a reason as to why any one of those latter three grounds are likely to be crucial to the ultimate decision in the opposition proceedings. Indeed, at the hearing, Ms Zeng stated that all four grounds were ‘interrelated’. The Opponent has registered marks that will be considered when the time comes to decide this opposition under s 44 regardless of whether its late evidence is admitted. As the Applicant has highlighted in its submissions, the Opponent makes no mention of, for example, a ‘substantially identical’ trade mark with earlier use in respect of the ‘same kind of thing’, nor is there a submission that reputation for the purposes of s 60 is likely to be the deciding factor, over and above the protections that s 44 affords a prior trade mark registrant. Instead the Opponent submits that its late evidence would be ‘critical for substantiating’ all four grounds. As I have explained, not only is this assertion is plainly wrong for s 44, this does not provide me with any reason why the other three grounds will be crucial to the ultimate decision to be made under s 55. That is, to reject or register the mark.
The Opponent also indicates that it will be forced to appeal an adverse opposition decision if its late evidence is not considered by the decision-maker, referring to the following passages from Fed Square:
[T]he likely eventuality of not allowing the material to be considered in the proceedings is that the opposition proceeds under the section 44 ground of opposition, and in the event the Opponent is unsuccessful, it must appeal to the Federal Court to have the matter decided on whatever grounds and evidence it then formally relies on. Alternatively, the opposition may be withdrawn and the Opponent is still forced to prosecute the matter through the courts. Of course this is a risk that all parties take if they fail to submit their evidence by the due date. On these facts not allowing the material to be considered seems to be at odds with the broader purpose of the relevant ‘Raising the Bar’ amendments, which were to “reduce delays in the resolution of patent and trade marks applications” and to “streamline the opposition process”.[10]
Although each case is decided on its own circumstances, in this matter the public interest in hearing the opposition on its merits and the intent of the legislative changes in resolving oppositions efficiently outweighs the inconvenience to the party and the danger of circumventing the conventional evidence process.[11]
[10] [2015] ATMO 42, [44] (citations omitted).
[11] Ibid [53].
It is useful to recall certain facts from Fed Square. Firstly, the inconvenience was at the lower end of the scale—evidence had been filed seven days late, whereas in the present case it was 61 days after the statutory deadline. Secondly, the late evidence was found to be ‘the primary basis for the oppositions’,[12] which contrasts with my findings in paragraph 42 above. With those differences in mind, the delegate’s considerations toward the end of the first excerpt above are to the point. Allowing the Opponent to file its evidence in support two months late, without an extension of time, just so it can seek to establish three grounds of opposition that it had not said are any stronger than its ground under s 44, cannot be in line with this ‘broader purpose…to “reduce delays in the resolution of…trade marks applications” and to “streamline the opposition process”.’[13]
[12] Ibid [51].
[13] Ibid [44].
For completeness, there were no submissions on the public interest or the balance of convenience, and the substantive matter is not yet ready for determination. Based on all the above, I do not consider it appropriate to exercise my residual discretion to admit the Opponent’s late evidence.
Decisions
I refuse the Request and decline to exercise any residual discretion to admit the Opponent’s late evidence.
Adrian Richards
Hearing Officer
Oppositions and Hearings
Trade Marks and Designs
11 June 2019
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