CFG Coatings Ltd v Xella Deutschland GmbH [2013] NZIPOTM 26 (23 July 2013)

Recent changes to the New Zealand Trade Mark Regulations make it significantly easier to extend the initial deadline to lodge evidence in trade mark oppositions.  However, that reprieve is only for a maximum of three months, after which any further extensions need to satisfy the "genuine and exceptional circumstances" requirement which existed previously.  A recent IPONZ decision applying the older more stringent test demonstrates the difficultly in obtaining such an extension in New Zealand and the consequences if an extension is not granted.  The case serves as a timely reminder to progress evidence promptly in  New Zealand trade mark oppositions.

In this case Xella opposed registration of CFG's application to register the trade mark HEBEL in class 2.  In response CFG commenced revocation proceedings against some of Xella's prior registrations for related HEBEL trade marks.  Xella requested that the Commissioner halt the opposition proceedings whilst the revocation proceedings were finalised, and requested its first extension of time to serve evidence in support.

Dismissal of the Opponents' extension grounds in New Zealand

As Xella's extension application was made prior to the now more relaxed extension provisions contained in the 2013 Regulations, Xella needed to establish that there were "genuine and exceptional circumstances to justify the extension" applying Reg. 32 of the Trade Mark Regulations 2003.  Each of the grounds which Xella relied upon were dismissed by the Commissioner, namely:

  1. whether IPONZ would halt the opposition proceedings pursuant to the related revocation action.  The Commissioner held that this ground did not causally connect to the need for an extension of time to file evidence.  The Commissioner also noted that it must have been apparent to Xella that it was most unlikely that IPONZ would decide whether or not to halt the opposition proceedings prior to the existing opposition deadline.
  2. whilst Xella had been working diligently to cover voluminous and complex evidence dating back to the 1980's and that that process was delayed somewhat by the Christmas/New Year period, the Commissioner decided that these grounds were genuine and reasonable but were not exceptional, as required under the Regulation.

The consequences of the extension refusal for a New Zealand trade mark opposition

As the Commissioner denied Xella's extension and also refused to halt the opposition proceedings, Xella's opposition was deemed "discontinued"  as Xella had not lodged its evidence in support of the Opposition.

This demonstrates how severe the consequences are in a New Zealand trade mark opposition if an extension is denied.  It also confirms that IPONZ interpret the extension provisions very narrowly and that extensions applications considered under this criterion will be granted only in exceptional circumstances.

Fortunately for trade mark owners and practitioners, a recent change to the Regulations has relaxed the grant of an initial extension of up to three months.  Regulation 32 now permits one three month extension of time to serve evidence if it is reasonable to do so, rather than needing to demonstrate exceptional circumstances. If those provisions were applicable in Xella's case it is much more likely that its extension of time would have been granted.

Lessons for trade mark opponents in New Zealand

This decision demonstrates the importance of progressing evidence in support of a New Zealand trade mark opposition promptly and highlights the pitfalls if an extension of time is not granted. It is also worth emphasising that the "relaxed" extension test only applies for the first three months, after which the genuine and exceptional test will apply. As such, an opponent to a New Zealand opposition must still be very diligent in the preparation of its evidence or else it may find itself in the same situation as that encountered by Xella, with the consequent risk that the opposition proceedings are discontinued.