15 December 2006
Key Points:
It will be easier for the Registrar to remove a trade mark from the Register, or to have a trade mark removed for non-use. But there are still some problems in opposing trade marks.
Trade marks law is undergoing something of a shake-up with two new pieces of legislation.
The Intellectual Property Laws Amendments Act 2006 ("IPLA") has, amongst other things, made some important changes to the Trade Marks Act 1995 regarding the powers of the Registrar to revoke the acceptance of a trade mark application prior to registration, and even after registration to revoke the registration. At the same time, the Trade Marks Amendment Act 2006 ("TMAA") makes further significant changes to the Act, in respect of oppositions.
In this article we’ll look at some of the more significant reforms.
Expanding the Registrar’s power to revoke acceptance
Section 38 of the 1995 Act permitted the Registrar to revoke acceptance of an application on the grounds of "an error or omission in the course of examination" or "special circumstances of the case", grounds which have been very narrowly applied in some cases, virtually limiting their application to cases where, by virtue of some procedural or other mistake of the examiner, the examiner did not have all the relevant materials before him or her at the time of making the decision to accept the application. They would not apply, for example, if the examiner had all the relevant information but misunderstood or failed to correctly apply the law.
The IPLA will replace section 38 altogether with another provision greatly expanding the Registrar’s power to revoke acceptance, on the basis that it should not have been accepted taking into account circumstances which prevailed at the date of acceptance, or it is otherwise reasonable to do so.
Revoking the grant of a trade mark
At present, upon registration of a trade mark, there are very limited circumstances in which the registration may be cancelled and all, with the exception of removal at the request of the registered owner, may only be invoked before the prescribed court. The IPLA introduces new powers and obligations on the Registrar in sections 84A – D. Under section 84A, the Registrar will be entitled to revoke the registration of a trade mark, at any time within 12 months after registration (section 84A(4)), if the Registrar believes "the trade mark should not have been registered" and it is reasonable to do so.
The Registrar can do this on any ground whatsoever, although section 84A(2) provides some possible grounds. In effect, the Registrar has greater powers than the Court, and there are at present no guidelines at all as to how this power will be exercised. If the Registrar decides to revoke, she must give notice to the registered owner and follow a prescribed procedure allowing an opportunity to make submissions.
Additional processes?
It is plain from the legislation that there is no right of review in respect of either of these changes, and the Registrar has indicated that it is not intended to provide for any formal processes in addition to the opposition process. However, it is equally clear that the Registrar will have to take into account any correspondence received, and this may trigger the administrative action.
Are these changes a good thing? It is hard to say whether these additional problems may alleviate or exacerbate the current problems in the Office of occasionally unjustifiable, even inexplicable, decisions. Furthermore, it is argued that this merely gives a further advantage to interested parties who have competent legal advice, over those who are unrepresented, as represented parties will be aware of the additional opportunities presented by these powers.
Opposing a trade mark: first use of the mark
Under the TMAA, a number of changes are made to the rights to oppose an application for registration of a trade mark. Some of the more significant in practice are:
A new section 58A: at present, an applicant may overcome a prior registered mark if the applicant can show that it has in fact used the mark the subject of the application from a date which preceded the priority date (usually the date of application) of the earlier registered mark (section 44(4)). Under this amendment, an opponent who owns that earlier registered mark will be entitled to oppose registration to the extent relying on section 44(4) by establishing that its use of its earlier registered mark commenced before that of the applicant. This removes a vexing anomaly in the drafting of the legislation.
"Substantial identity or deceptive similarity"
A new section 60(a): this amendment removes the requirement in an opposition based on a prior mark that has "acquired a reputation in Australia" that the mark opposed be "substantially identical with, or deceptively similar to" the prior well-known mark. It is argued that even an opposed mark not meeting this test may be likely to deceive in use – such as a mark with substantial other verbal or graphical material as well as the element complained of. However, this ground of opposition still requires the opposed application to be in respect of the same goods or services as those on which the prior well-known mark has acquired reputation. The amendment does not provide a ground for opposition based on a "famous" mark, in respect of which it could be argued that use on any goods or services would be deceptive – such as "PENTIUM" the subject of an application for motor oils and lubricants.
"Bad faith" applications
A new section 62A: A registered trade mark may be removed on the grounds that there was never any intention in good faith on the part of the owner to use it (or license or assign it). This new section will be added making for a slightly wider ground of opposition, namely that "the application was made in bad faith". Examples are given in the explanatory memorandum as to what is meant by this, including registration by a local trader of a mark copied from a successful foreign business. No doubt this is a ground which will be often asserted, but rarely argued, due to the difficulties of the burden of proof being on the opponent, even (especially when!) when the opposition is undefended.
Removing an unused trade mark
At present, in order to apply for removal of a registered trade mark, it is necessary to show that the applicant is an "aggrieved person". This requirement has led to some arcane judicial exegesis, and has sometimes led to somewhat artificial arrangements to ensure an applicant is "aggrieved". The TMAA removes this requirement so that anyone can make this application in future.
Currently, if an application for removal on the grounds of non-use is made, the registered owner can only defeat it by showing use of the trade mark on the goods or services in respect of which the mark is registered. Occasionally, this can lead to a somewhat unfair outcome, for example if a trade mark owner has used the mark on soap or toothpaste, when it is registered only for perfumes and essential oils (although the court usually exercised its discretion to save the trade mark). The TMAA’s changes mean that the Registrar may now take into account use on similar or closely related goods or services.
Of course, this may present a converse problem. Imagine a registered owner of a mark in respect of organising musical performances who argues that creating an internet website featuring music should be taken into account in defence of a registration. In that case, the Registrar will have to consider exercising a discretion not to take this into account, which is rather more difficult to do that to exercise a discretion to permit a registration to remain!
Procedural changes
There are other changes – a change in respect of divisional applications which does nothing to fix the current vice that divisional applications are created solely to extend otherwise indefensible applications indefinitely, and a change which shortens the period during which a lapsed registration will remain on the Register from 12 months to six months.
However, when reviewing these changes and the reasons for them it becomes evident that the majority of problems which have been encountered are not problems with the legislation so much as very variable practices within IP Australia in dealing with contentious trade mark applications and registrations. With a view to addressing some of these and other issues, the Registrar has proposed the introduction of more sophisticated case management procedures in respect of disputes being conducted in the Office. Some of these have already been discussed in IPAustralia’s Review Paper 3, such as:
An inherent difficulty in some of these proposals in that the Registrar has very limited powers as to orders as to costs in the event of misuse of the procedures or non-compliance, and the present scales of costs involved are so small as not to be any deterrent.
In addition, there was mentioned a possible change to the process for removal for non-use
Overall, these amendments are expected to bring about significant changes to the practice of trade mark prosecution in Australia over coming years.
