Mesoblast, Inc v UCP Gen Pharma AG [2012] FCA 509

The Federal Court has recently refused Mesoblast's application for leave to appeal against Justice Jessup's decision to allow, on discretionary grounds, UCP Gen Pharma's "Revasc" pharmaceutical trade mark to remain on the Register of Trade Marks, despite Mesoblast Inc's, opposition, and the fact that the mark had not been used in Australia during the statutory three year "non use" period.  

As a result, Mesoblast is precluded from bringing an appeal against Justice Jessup's decision, and UCP's "Revasc" trade mark will remain on the Australian Register of Trade Marks.

In refusing leave to appeal, Justice Middleton has once again confirmed that private commercial interests are relevant to and indeed "the very point of" the discretion to allow "unused" marks to remain on the Register under section 101 (3) of the Trade Marks Act.

Why did Mesoblast require "leave to appeal"?

Leave, or permission to appeal against Justice Jessup's decision was required under the Trade Marks Act1 (the Act), as the matter had previously been the subject of proceedings before the Trade Marks Office (where UCP was unsuccessful) and the Federal Court of Australia (where UCP succeeded).

When will leave to appeal be granted? – the test

In general, leave to appeal will be granted if:

  • in all the circumstances, the decision appealed from is attended by sufficient doubt to warrant its reconsideration by the Appeal Court; and
  • substantial injustice would result if leave were refused, supposing the decision to be wrong.  

Was Justice Jessup's decision attended by sufficient doubt?

Justice Middleton concluded that Justice Jessup's decision was "attended by no doubt to warrant any reconsideration by the Full Court" for the following reasons:

  • the key issue in dispute, namely the proper exercise of the Court's discretion to allow "unused" trade marks to remain on the Register under section 101 (3) of the Act was recently authoritatively considered by the Full Court in Austin, Nichols & Co Inc v Lodestar Anstalt3;
  • in Austin Nichols, the Full Court confirmed that the Court's discretion under section 101 (3) of the Act was "broad" and limited only be the subject matter, scope and purpose of the Act (and, in particular, the non-use sections of the Act);
  • contrary to Mesoblast's submissions, Justice Jessup:  
  • clearly analysed the principles approved by the Full Court in Austin Nichols, and applied them to the specific and peculiar facts before him;
  • clearly considered and balanced the competing public and private interests relevant to the circumstances of the case before him; and
  • was not wrong to take into account the fact that Mesoblast (or any other person) could apply to have the "Revasc" mark removed from the Register in the future, should it transpire that the "Revasc" mark is not ultimately used in Australia; and  
  • there was no principle of law that needed to be determined by a Full Court.

Having found that Mesoblast failed to establish that Justice Jessup's decision was attended by sufficient doubt to warrant reconsideration, it was not necessary for Justice Middleton to consider the potential for substantial injustice.

Lessons for trade mark owners and applicants: the relevance of private commercial interests

The Full Court's explicit confirmation of the relevance of private interests to the exercise of the discretion under section 101 (3) of the Act in Austin Nichols, means that the private interests of the parties must be taken into account. In fact, in the UCP and Mesoblast proceedings:

  1. both Justices Jessup and Middleton confirmed that private commercial interests are relevant to and indeed "the very point of" the discretion arising under section 101 (3) of the Trade Marks Act.4; and
  2. the presence or absence of evidence relating to the private commercial interests of the parties clearly influenced the Court's decision to allow the "Revasc" mark to remain on the Register.  

Accordingly, parties to trade mark removal proceedings should seek to adduce evidence of their respective private interests. Such evidence may include evidence of:

  1. the financial losses the trade mark owner may suffer if the mark is removed (including the additional promotional, re-branding and regulatory expenses the owner will be forced to incur if the mark is removed, and any unwarranted derogation from obtaining world-wide "trade mark unity");
  2. the benefits the trade mark owner stands to gain should the mark be retained on the Register (including the ability to bring products or services bearing the mark into the market sooner);
  3. the fact that the trade mark owner's "unused" mark is impeding or adversely affecting the commercial activities of the applicant for removal (including evidence establishing that the unused mark is preventing the applicant for removal from using the same or a similar trade mark in respect of its products and / or services); and
  4. the efforts made by the trade mark owner or its agents to use the mark, including such efforts up to the time of the hearing of the removal action.