The Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth) (RTB Act) and the associated Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No 1) (Cth) commence 15 April 2013 and will bring a number of significant changes to Australian IP law, particularly in relation to trade mark oppositions.
Trade mark oppositions
New trade mark opposition procedures commencing on 15 April 2013 will substantially change the trade mark opposition system in Australia. Trade mark owners will need to take steps to prepare for these.
Problems with the current opposition system
- Time and cost: Under the current opposition system, trade mark oppositions are time consuming, with a typical opposition often taking well over 18 months to resolve (in fact, some oppositions have been known to run for four years or more). This can lead to unexpected cost blowouts. A large part of the time taken in a typical opposition is due to the ready availability of extensions of time – to oppose an application in the first place, and to file evidence (in support, answer and reply). Prolonged waiting times for a hearing can also be a factor. Under the current system, it can often take longer to resolve a trade mark opposition than to finalise court proceedings.
- All grounds pursued initially: At the same time, because there is no requirement under the current system for an opponent to narrow down the opposition grounds relied upon until the actual hearing of the matter, the issues in dispute between the parties can be completely unclear until the opposition is all but concluded. This can be especially difficult for unrepresented applicants. The real issues may become more clear from the evidence in support, but such evidence may be lengthy, consisting of several volumes, and may not be readily understood.
- Full cost & delay even if unopposed: Finally, under the current system, even if applicants take no steps to defend an application, the opponent will still be put to the full costs and delay of an opposition. A trade mark opposition may take 12 months or more to finalise even if it is unopposed.
When do the new changes apply?
Some of the new changes apply to current oppositions (see below for more details).
What are the changes under the new system?
In order to address these concerns, the new opposition system seeks to streamline and speed up trade mark opposition proceedings (and harmonise them with patent oppositions). The major changes are set out below:
- Notice of intention to oppose – two months not three: To initiate an opposition, the opponent must file a notice of intention to oppose an application within 2 months of the date of advertisement of acceptance of the application (Regulation 5.6), instead of three months for filing a notice of opposition under the current system. The current 3 month opposition period will be retained for applications advertised prior to 15 April 2013 with opposition deadlines after 15 April 2013 (regulation 22.9).
- Extensions of time – harder to secure: Contrary to the current system, it will be very difficult to secure an extension of time to file a notice of intention to oppose, with extension grounds under regulation 5.9 limited to delays based on error or omission, or other circumstances beyond the control of the opponent. These grounds have not been interpreted generously in the past. It remains to be seen whether they will be interpreted more liberally in the future.
Currently it is relatively easy to obtain an extension of time on grounds based on negotiations between the parties and research to determine whether a notice of opposition is justified. Extensions of time to oppose will not be available on these grounds post-15 April 2013.
- Statement of grounds and particulars – narrowing issues – adequacy assessed: The opponent must then file a statement of grounds and particulars within one month of filing the notice of intention to oppose (regulation 5.7). This is a new procedural step which is aimed at narrowing down the issues in dispute in the opposition at the outset. For example, in oppositions based on prior trade mark rights, opponents will need to detail the exact prior trade mark rights relied on in the opposition (and if these are based on use rather than registration, provide some details regarding the use of the mark).
Failure to adequately particularise opposition grounds may result in the opposition being dismissed outright if all grounds are inadequately particularised, or in some grounds being struck out (regulation 5.8).
- Two documents: The notice of intention to oppose and the statement of grounds and particulars together form the opposition (regulation 5.5).
- Amendment – limited grounds: Amendment of the notice of intention to oppose will only be permitted for clerical error or obvious mistake (regulation 5.11). Similar conditions apply to a statement of grounds and particulars, which can also be amended to add a new opposition ground or further particulars, but only if the Registrar is satisfied that the amendment or addition relates to information of which the opponent could not reasonably have been aware at the time of filing the statement (regulation 5.12).
- Notice of intention to defend – new: The applicant must file a notice of intention to defend the opposition within one month of being provided the notice of opposition and statement of grounds and particulars by IP Australia (s 52A(2); regulation 5.13), failing which the application will automatically lapse. This is a new measure which seeks to avoid the problem of cost and delay to opponents under the present system, where some applicants do not defend trade mark applications or take any active role in the opposition, but the opponent must nevertheless make out at least one opposition ground to succeed in the opposition.
There will be no fees associated with this new notice, and it will not be hard to file. It is still possible for an applicant to file a notice of intention to defend and then fail to mount any substantive defence. However this requirement creates an extra hurdle designed to resolve at least some undefended oppositions.
- Time limits for evidence – new trigger – shorter time for evidence in reply: The usual three month time periods for evidence in support and reply will also apply under the new regime, but the deadline for evidence in support will be triggered in the first instance by IP Australia providing the opponent with a copy of the notice of intention to defend, and in the case of evidence in answer by IP Australia providing the applicant with a copy of the evidence in support. Evidence in reply will now be a shorter 2 month time period running from the day on which IP Australia provides the opponent with a copy of the evidence in answer (regulation 5.14).
- Extensions – harder to secure – apply to existing oppositions: Extensions of time for the filing of evidence will only be available in limited circumstances, where either the party requiring further time has taken all reasonable steps to comply with evidence filing requirements, and acted promptly and diligently at all times to ensure the filing of the evidence within the period; or where there are exceptional circumstances (regulation 5.15). This differs markedly from the position under the current opposition regime, where evidence deadlines for evidence in support and answer can readily be extended by at least 6 months and for evidence in reply by at least 3 months. It will be interesting to observe how this unfolds in practice, given that earlier cases have commented that 3 months may not be sufficient for the filing of evidence.2
Importantly, the restricted extension of time provisions for evidence are intended to apply to oppositions commenced prior to 15 April 2013, in which an extension of time is requested for a period for filing evidence that commences on or after 15 April 2013 (regulation 22.9) so the new provisions will apply to existing oppositions.
- Cooling off period – max 12 months – once only: A cooling off/suspension period is available once an opposition has commenced if both parties agree (regulation 5.16). The cooling off period is 6 months, and can be extended to a maximum of 12 months. Only one cooling off period is allowed. Again, this differs to the current system where parties can by agreement suspend an opposition for longer periods of time, and suspend it multiple times.
- Hearing – oral or written: Either party can request a hearing of the matter, or the Registrar may on the Registrar’s own initiative set the matter down for a hearing, but the Registrar retains a discretion as to whether the matter is set down for an oral hearing or decision on the written record (regulation 5.17). Under the current system, the Registrar will in practice set the matter down for an oral hearing where a party requests this, and it is not clear whether the Registrar will take a different approach under the new system.
- Hearing – submissions in advance – not substantial change: For a hearing in person, both parties need to file submissions in advance and failure to do so may have costs consequences (regulation 5.17). Since IP Australia has been requesting submissions to be filed in advance of a hearing for some time, this does not represent a substantial change. The potential impact on costs is unlikely to be significant given that these are intended only to apply to an adjustment of any costs awarded between the parties, which in accordance with the Sch 8 scale are low.
- Active case management – IP Australia’s resources – future online system: The new system will include a variety of measures to give IP Australia a more active case management role, including replacing the current requirement for service of documents on the other party with a filing requirement with IP Australia. IP Australia will then pass the documents on to the other party, and it is this action that will trigger the running of time periods and deadlines for the next phase in the opposition as noted above. It remains unclear how IP Australia will manage this additional workload in a timely fashion and whether this will itself result in additional delays. The intention is ultimately that this will be a largely online process but systems are not yet in place to cater for this.
The notice of objection system allows trade mark and copyright owners to put Customs on notice of their rights so that suspected infringing shipments can be seized by Customs on entry to Australia. Under the current system for notices of objection, the onus is on the trade mark owner to take action once Customs identifies infringing shipments. Failure to do so generally results in the release of the seized goods to the importer. Action by rights owners can be complicated by importers intentionally using inaccurate contact information.
Under the new system, once goods are seized by Customs under a customs notice, the onus for action will be on the importer of the goods rather than the brand owner. The importer must make a claim for return of the goods, and when doing so will be required to provide accurate contact details so the brand owner can make further enquiries or institute proceedings for infringement as necessary. If the importer fails to make a claim for the return of the goods, the goods will be forfeited to the Commonwealth and can then be disposed of. This default position removes the previous onus on the brand owner to commence proceedings within a very short timeframe and also overcomes the problem of importers providing inaccurate contact information to stymie legal action.
The changes should substantially increase the enforcement power of notices of objection. Given that rights owners no longer need to provide a cash bond to Customs, and need only agree to meet Customs’ expenses associated with storage and destruction of seized goods (which are typically only charged for unusual expenses such as particularly large seized shipments or goods requiring unusual destruction methods), rights owners should consider filing notices of objection wherever possible, particularly where infringing goods are known to be imported.
Under these reforms, the jurisdiction of the Federal Magistrates Court (soon to be the Federal Circuit Court) has been expanded. Brand owners will now be able to:
- sue for trade mark infringement alone in the Federal Magistrates Court, which should significantly reduce litigation costs for pure trade mark infringement claims. Previously trade mark infringement proceedings could only be heard in the Federal Magistrates Court where these claims were brought in conjunction with Australian Consumer Law claims such as an action for misleading or deceptive conduct or false representations under s 18 and 29 of the Australian Consumer Law, Sch 2 of the Competition and Consumer Act 2010 (Cth).
- seek additional damages for flagrant infringement (as is the case for copyright and patents infringement). Damages awards for trade mark infringement cases have generally been quite low (including a token award of $10 to Nokia for trade mark infringement in a recent case of eBay piracy3), and the additional damages provisions will improve this in relevant cases;
- appeal opposition decisions to the Federal Magistrates Court as well as to the Federal Court, which will also reduce the costs of appeal.
Presumption of registrability and s 41
Section 33 of the Trade Marks Act includes a “presumption of registrability”, whereby the Registrar must register a trade mark application unless the Registrar has decided a ground of objection applies – that is, any uncertainty as to registrability is to be resolved in favour of the applicant. This applies to s 44 comparisons of prior trade marks: Registrar of Trade Marks v Woolworths Ltd4.
However, because the current wording of the s 41 assessment of distinctiveness requires the Registrar to adopt a particular decision making process, it was decided in Blount Inc v Registrar of Trade Marks5 (OREGON) that the presumption of registrability did not apply to s 41 determinations. This meant that if the Registrar was uncertain as to distinctiveness the Registrar would raise a s 41 objection rather than accept the application for registration. The RTB Act revises s 41 to remove references to the Registrar’s decision-making process, as follows:
"(1) An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant’s goods or services in respect of which the trade mark is sought to be registered (the designated goods or services) from the goods or services of other persons.
Note: For goods of a person and services of a person see section 6.
(2) A trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons only if either subsection (3) or (4) applies to the trade mark.
(3) This subsection applies to a trade mark if:
(a) the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons; and
(b) the applicant has not used the trade mark before the filing date in respect of the application to such an extent that the trade mark does in fact distinguish the designated goods or services as being those of the applicant.
(4) This subsection applies to a trade mark if:
(a) the trade mark is, to some extent, but not sufficiently, inherently adapted to distinguish the designated goods or services from the goods or services of other persons; and
(b) the trade mark does not and will not distinguish the designated goods or services as being those of the applicant having regard to the combined effect of the following:
(i) the extent to which the trade mark is inherently adapted to distinguish the goods or services from the goods or services of other persons;
(ii) the use, or intended use, of the trade mark by the applicant;
(iii) any other circumstances.”
The intention of the amendments is to bring s 41 within the rubric of the s 33 presumption of registrability while preserving the large body of case law built up around the assessment of distinctiveness in accordance with the terminology of s 41. It is unclear if IP Australia will make any changes to examination practice on the basis of this amendment.
The RTB Act and Regulations make significant changes to trade mark opposition procedures and will involve substantial changes to the practice of trade mark law. It may be that due to shorter opposition deadlines and the reduced availability of extensions of time to oppose, oppositions may need to be filed where a negotiated solution with the applicant might otherwise have been possible and the need to file the opposition therefore avoided. On the other hand, “tactical” oppositions which may previously have been filed for ancillary reasons (such as to obtain consent to the registration of a subsequent trade mark application) may be substantially restricted due to the requirement for filing a statement of grounds and particulars. Teething difficulties are expected during the transition period while the new opposition systems are being bedded down. However, it is hoped that over time, the new opposition provisions will ensure swifter and more efficient resolution of oppositions.
This paper has been published by CCH Australia in its Australian Intellectual Property Law Tracker and Australian Industrial & Intellectual Property. Lauren Eade will be reviewing the amendments made to the commentary on trade marks in CCH’s Australian Industrial & Intellectual Property, in light of the Raising the Bar amendments.