It has been 15 months since the “Raising the Bar” Act was implemented, overhauling aspects of trade mark opposition practice. A fundamental question is whether the Office’s administration of the new legislation is striking the right balance between the efficient conduct of opposition proceedings and the parties’ interest in having matters fairly and fully determined at the Office level. This article offers a preliminary assessment of the impact of the reforms and evaluates the Office’s approach to the efficiency/fairness balancing exercise.
NEW PROCEDURES FOR OPPOSING APPLICATIONS
Contraction of advertisement period and Notice of Intention to Oppose
The introduction of a two month advertisement period benefits applicants by putting them on notice of a potential opposition earlier. It does not overly inconvenience opponents, who are afforded a further month before committing to the grounds upon which they will rely and providing particulars of those grounds.
Statement of Grounds and Particulars (SGP)
Opponents were always notionally required to specify the grounds upon which they intended to rely, but the general practice was to simply reproduce all grounds of opposition contained in the Act regardless of their applicability. The introduction of the SGP is as much a change of practice as one of law. The requirement for particulars means that opponents must now provide some level of substantiation for the grounds asserted. In doing so, the SGP helps focus the issues in dispute and gives applicants a clearer picture of the case to answer before the evidence rounds commence.
The SGP may be especially useful to applicants who were unaware at the time of filing of the existence or extent of the opponent’s prior rights. In such cases, the applicant’s review of the SGP might prompt an informed commercial call as to the viability of their application and brand more generally. Pre Raising the Bar, applicants may not have been in a position to make that assessment until six months into the proceedings when they received a copy of the Evidence in Support. To the extent that the SGP informs applicants of the existence or extent of an opponent’s prior rights, it may also prompt timely settlement discussions.
Concerns have been expressed that the Registrar’s power to delete inadequately particularised grounds or (where all grounds are inadequately particularised) to dismiss an opposition in its entirety could be exercised inconsistently or unfairly. Early experience suggests that the Registrar is likely to commence with a “further and better particulars” direction before exercising other powers.
While the Office is still finding its way on the level of specificity required for particulars, and is yet to publish guidelines on the drafting of SGPs, it appears to be taking quite a moderate approach to the assessment of the adequacy of particulars. The minimum requirements for the more commonly specified grounds are as follows:
- section 41: explanation of why the mark is not capable of distinguishing;
- section 59: identification of information that leads the opponent to believe that the applicant lacks an intention to use;
- section 60: identification of the mark that is said to have a prior reputation and the goods or services in relation to which that mark has been used; and
- section 44: the official number of the application or registration upon which reliance is placed.
If the main purpose of the SGP is to place applicants in a position of being able to make an informed decision (based on any necessary further enquiries) as to whether to file a Notice of Intention to Defend, the Office could probably raise the bar a little higher in the context of oppositions under sections 44 and 60. It would not be overly burdensome to require opponents to identify even in broad and inclusive terms the goods or services specified in the application which are subject to objection and, in the section 60 context, the goods or services in relation to which the prior mark has been used. This would enable applicants to identify the boundaries of the opponent’s objection and to make an informed decision as to whether to file a Notice of Intention to Defend. It might even facilitate settlement discussions in cases where the goods or services the subject of the objection are not of primary interest to the applicant.
Reduced availability of extensions for filing a Notice of Opposition
The abolition of the “genuine negotiations” and “undertaking of research” bases for extending the period for filing a Notice of Opposition has been a positive development. It was always curious that the Office permitted opponents to invoke the “negotiations” ground unilaterally, and the “research” ground seemed more an expedient for buying time, given that the Notice of Opposition required no particulars and the general practice was to nominate all grounds contained in the Act. The abolition of these grounds is consistent with the policy of the Raising the Bar legislation, which identified tactical use of opposition procedures as a key target for reform.
Notice of Intention to Defend
From a practical standpoint, the simple Notice of Intention to Defend is the most significant reform to trade mark opposition practice. Pre Raising the Bar, many oppositions progressed to a hearing without any participation on the part of the applicant. Opponents in such proceedings were required to establish a ground of opposition without knowing whether the applicant maintained any interest in its application. The Notice of Intention to Defend at least requires the applicant to take a positive step to signal their continued interest in securing registration.
Data obtained from IP Australia indicates that the Notice of Intention to Defend is having a profound effect on the opposition attrition rate. Between 15 April 2013 and 31 May 2014, approximately 750 opposed applications (around 45% of all oppositions filed in that period) were refused for failure to file a Notice of Intention to Defend.
SUBSTITUTION OF SUSPENSION WITH COOLING-OFF PERIOD
The cooling-off provisions operate in a manner similar to the former suspension provisions and the change has had little effect on the conduct of opposition proceedings.
ABOLITION OF SERVICE REQUIREMENT
The removal of the service requirement has been a welcome development. The Office’s assumption of responsibility for making documents and evidence available inter partes avoids disputes regarding the timing of receipt of documents and evidence.
The cloud-based file sharing tool utilised by the Office (Objective Connect) appears to be working well, although the Office’s designation of Objective Connect as the sole means of filing documents for all but exceptional circumstances does not sit well with section 213 of the Act, which contemplates filing via post and personal delivery in addition to prescribed means.
NEW EVIDENCE PROVISIONS
Contraction of Evidence in Reply period
A two month Evidence in Reply period may be sufficient where the Evidence in Answer raises no unanticipated issues. However, in cases where the adequacy of the applicant’s evidence under s 41(4) is in issue, or where the Evidence in Answer is voluminous or complex, the opponent’s case may not crystallise before the reply stage. In such cases, the “efficiency win” obtained by shaving one month from the final evidence period seems to be overshadowed by the prejudice caused to opponents by reason of the asymmetry in the periods allowed for filing Evidence in Answer and Evidence in Reply.
Repeal of Further Evidence provisions
The repeal of the Further Evidence provisions was never comprehensively justified nor, for that matter, widely supported. There were always legitimate circumstances in which Further Evidence was entirely appropriate. The “mischief” to which the repeal was presumably directed (reliance on Further Evidence as a means to include material contemplated at an earlier stage but not obtained) could have been addressed without doing away with Further Evidence. For example, the Office could have tightened up its application of the provisions in a manner that placed greater emphasis on the prior unavailability of the evidence and less weight on probative value and the reduction of appeals.
Where genuinely new evidence comes to light after the evidence period closes, it is conceivable that a party may obtain an extension in which to file evidence on the basis of exceptional circumstances (although depending on the timing of the discovery of the evidence, the associated fees might be prohibitive). However, where a party is simply unable to access relevant evidence until after the close of the prescribed period, or a trade witness puts their hand up to provide vital supporting evidence late in the piece, it is less likely that an extension would be available.
The Office has flagged reg 21.19(1) as a de facto means of filing further evidence. That regulation reads as follows:
- information that is available to the Registrar is relevant to proceedings before the Registrar; and
- the Registrar has reason to believe that the information is not known to a party to the proceedings; and
- the Registrar proposes to take the information into account in making a decision in the proceedings;
before making the decision the Registrar must:
- provide the information to the party; and
- give the party a reasonable opportunity to make representations about the information.
To operate as a de facto Further Evidence provision, reg 21.19 requires a contorted interpretation. The regulation seems to have been invoked more commonly by Hearing Officers to justify their reliance on materials extraneous to the evidence or on evidence which was not properly declared or served. The regulation refers to “information” which, unless it is in declaratory form, will not be considered “evidence” (reg 21.17). Further, the regulation presupposes that the information is “available to the Registrar”, and it is unclear whether the self-serving act of filing information with the Office was contemplated by the legislature as a means of making it “available to the Registrar”.
Availability of extensions for filing evidence
Extensions of time for filing evidence are only available in cases of “exceptional circumstances” or where the extension applicant can demonstrate that it had made all reasonable efforts to comply with filing requirements and has acted promptly and diligently at all times.
Read together, Part 51 of the Examiner’s Manual and the Office’s first reported decision on the new extension provisions indicate that extensions of time will be extremely difficult to secure, particularly under the “promptness and diligence” ground. Parties and their legal representatives are effectively required to recount to the Office the steps they have taken throughout the evidence period to prepare and finalise their evidence. Any gaps in activity will tend to indicate that the party has not acted promptly and diligently “at all times”, as will:
- delays caused by the unexplained delay of expert witnesses;
- a party’s decision to adopt an “inherently lengthy process of evidence preparation” such as may be involved in a consumer survey; and
- unavailability of declarants due to involvement of other matters where the extension applicant had not “exhausted all efforts to find alternative declarants”.
Natural justice, the probative value of the evidence, the length of the delay in filing evidence and the parties’ private interests are considered irrelevant to the assessment of the extension provisions. Thus a party who files highly probative evidence just one day late would be held to the same evidentiary standard – in terms of establishing prompt and diligent conduct – as parties who file evidence of questionable significance one month out of time.
It may be thought that the Office’s hardline stance on extension requests is a product of the stringent wording of the amended legislation, which reflects Parliament’s intention to avoid protracted opposition proceedings. However, the standard of conduct required to establish promptness and diligence is always a question of degree, and the Office has set that standard very high by adopting a microscopic approach that does not reflect the realities of business practice. Fixation with the length of the evidence periods also carries the potential for injustice, particularly where the extension, if granted, would have pushed out the overall opposition timeline out by a small fraction or not at all.
So far, the amended legislation is operating with mixed success. On one hand, the Notice of Intention to Defend is proving immensely effective in reducing the number and length of disputes before the Office. On the other hand, the elimination of the Further Evidence provisions and the Office’s tough stance on extension requests risks denying parties their right to procedural fairness. In the “neutral” category is the SGP, which is a welcome development but which could be administered in a manner that capitalises on its full potential.
The Trade Marks Office’s administration of the amended legislation in the context of opposition proceedings should reflect a clear policy on the efficiency/fairness trade-off. Initial experience suggests that the Office is yet to reach a clear position, with the bar for extension requests being set too high and the bar for SGPs being set too low.