What cost Australian trade mark opposition reform?

What cost Australian trade mark opposition reform?

What cost Australian trade mark opposition reform?

Times are changing for Australia’s opposition process, and it may cost more than small change for those involved in future cases. This article was published in the October/November edition of the ITMA Review.

In the coming weeks, the Australian Senate is expected to pass the Intellectual Property Laws Amendment (Raising the Bar) Bill 2011 (“the Bill”), which proposes several substantial changes to Australian trade mark oppositions. Based on IP Australia’s consultation process, the main anticipated changes to the opposition procedure are as follows:

  1. the opposition period will be shortened to two months;
  2. the opponent will no longer serve the notice of opposition and it may no longer include the grounds;
  3. the scope to seek an extension of time to oppose or serve evidence will be restricted;
  4. a statement of grounds and particulars and notice of intention to defend will be introduced;
  5. the Registrar will be given power to dismiss oppositions or cause an opposed application to lapse; and
  6. the Registrar will have broader powers to regulate opposition proceedings.

Once the regulations are released we will know exactly how the new opposition proceedings will play out. However, some aspects of the changes are already proving controversial.

Limited scope to seek an extension to oppose

It is currently possible to seek an extension of time to oppose where negotiations are on foot or if the opponent is undertaking research to identify opposition grounds or assess whether opposition is warranted. In practice, extensions on this basis often arise where the parties are already negotiating and there is scope for the matter to settle without entering formal opposition proceedings. These grounds are to be removed, leaving only grounds to extend the deadline where it has been inadvertently missed or the opposition was not lodged as a result of circumstances beyond the opponent’s control.

The concern over removal of these grounds may be addressed somewhat as a six-month “cooling off” period, with joint consent, to be introduced after the notice of opposition has been lodged. However, by this point, an opponent will have already incurred significant cost in the opposition as it will need to have particularised its grounds of opposition.

Grounds and particulars

Under the present system, the notice of opposition commonly incorporates all potential grounds of opposition rather than only those that will be relied on. The explanatory memorandum states that applicants are often uncertain as to the grounds that will be pressed in the opposition until late in the proceedings. It is claimed that this increases the costs to the applicant, who must prepare to defend all grounds of opposition. This does not bear out under current practice except for self-represented applicants.

Under the new system, the opponent must lodge a statement of grounds and particulars (“the statement”) one month after the notice of opposition is lodged. It is unclear whether it will be possible to extend this deadline. It is proposed that the statement will be able to be amended only under “tightly controlled circumstances”, potentially limited to situations in which information has come to the opponent’s attention later in the proceedings. The timing of this and potential need to amend the statement presents issues that are likely to lead to higher costs.

It is apparent that an opponent will have to complete its enquiries into the applicant’s activities at the outset to ensure that all relevant grounds are particularised. However, grounds of opposition are often disclosed only after the opponent has obtained and reviewed a copy of the official file for the application from IP Australia under the Freedom of Information Act 1980 (Cth). The time frame to obtain these documents is much longer than the one-month period by which the opponent must prepare and lodge the statement and, accordingly, a request to amend may need to be filed.

Amendments may also arise once the applicant has served its evidence-in-answer, which could disclose further grounds. Where there is an amendment at this point, it would be inequitable to allow additional grounds to be led without allowing the applicant an opportunity to lodge further evidence. This presents issues, as we understand that the regulations permitting further evidence will be repealed.

Finally, the Bill provides the Registrar with the power to dismiss opposition proceedings in prescribed circumstances, such as where an opponent does not comply with its obligation to file the statement. It is unclear as to what will constitute complying with this obligation. An opposition may be dismissed where the opponent fails to include sufficient detail in the statement and, moreover, applicants may actively seek dismissal where the statement is considered insufficient. This suggests additional cost for the parties.

Intention to defend

The notice of intention to defend is intended to reduce the number of undefended oppositions. Where the notice of intention to defend is not lodged, the Registrar will have the power to lapse the application.

However, this notice is proposed as a tick box form and the applicant can apply for a retrospective extension of the deadline for lodging the notice if it is inadvertently not lodged. This is contrasted with the apparent fatal effect of not lodging the statement.

Further, no fee will be payable when the notice is lodged and the notice will not include a counter-statement. Moreover, we are uncertain whether the notice must be filed by an Australian address for service.

Accordingly, there does not appear to be any disincentive to an applicant simply lodging the notice. Without some effort, fee or cost attached, it is difficult to see how this step will weed out anything but the most speculative applications.

Evidence deadlines

Presently, the Registrar grants an extension of time for serving evidence on reasonable terms. This test is applied leniently and IP Australia’s current benchmark for serving evidence in support or answer is nine months (usually three periods of three months).

The present provisions governing extensions are proposed to be repealed, and extensions will now only be available under the Registrar’s general power to issue directions in relation to opposition proceedings. The initial period for serving evidence will still be three months, but extensions will only be available where there has been substantial progress and it may be that only one extension of three months will be granted.

Broadening of powers

The Bill increases the capacity for regulations to govern the operation of any matters relating to opposition and removal applications including in relation to:

  1. rules about serving and filing opposition documents;
  2. amendments to opposition documents;
  3. dismissal of an opposition; and
  4. provision for review by the Administrative Appeals Tribunal of decisions of the Registrar.

This constitutes a significant change in the capacity of IP Australia to influence the operation of opposition proceedings. Amendments to regulations only require tabling of the new regulations in Parliament and they do not undergo the same rigour as passing legislation. Accordingly, we could see further developments in Australian opposition proceedings as IP Australia attempts to fine-tune the procedure.

They say the devil is in the detail, but if the opposition proceedings proposed are adopted there may be significant cost ramifications for both parties and it would appear there is a significant bias against opponents under the proposed procedure.

This article was first published in the October/November edition of the ITMA Review and is republished here with permission.