Chia Khim Lee Food Industries Pte Ltd v Red Bull GmbH

Solicitor for the Respondent: Davies Collison Cave Law

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 125 of 2012

JUDGE: DODDS-STREETON J DATE OF ORDER: 1 October 2012 WHERE MADE: MELBOURNE

1. The respondent's interlocutory application dated 10 September 2012 to strike out the applicant's second ground of appeal set out in its notice of appeal be dismissed.
2. The respondent pay the applicant's costs of and incidental to the interlocutory application dated 10 September 2012. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 125 of 2012

JUDGE: DODDS-STREETON J DATE: 1 october 2012 PLACE: MELBOURNE

Introduction 1 On 1 October 2012, I made the orders set out above and gave brief extemporary reasons which are amplified as set out below. 2 By an interlocutory application dated 10 September 2012, the respondent, Red Bull GMBH ("Red Bull"), applied pursuant to s 23 of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act") to strike out ground 2 of the notice of appeal pursuant to s 56 of the Trade Marks Act 1995 (Cth) ("the Act") filed on 15 February 2012 by the applicant, Chia Khim Lee Food Industries Pte Ltd ("Chia Khim"), on the basis that ground 2: (a) was likely to cause prejudice, embarrassment or delay in the proceeding; (b) failed to disclose a reasonable ground of appeal; or (c) was otherwise an abuse of the process of the Court. 3 The application was supported by: 1. Written submissions dated 18 September 2012. 2. A folder of documents as follows: (a) decision appealed from Red Bull GmbH v Chia Khim Lee Food Industries Pte Ltd [2012] ATMO 7 dated 25 January 2012; (b) applicant's application for removal of Australian Registered Trade Mark No. 668183 dated 8 February 2012; (c) applicant's notice of appeal dated 15 February 2012; (d) respondent's notice of contention dated 13 March 2012; (e) respondent's notice of opposition to application for removal of Australian Registered Trade Mark No. 668183 dated 23 May 2012; (f) applicant's application to have its application for removal of Australian Registered Trade Mark No. 668183 transferred to the Federal Court of Australia dated 13 June 2012; (g) statutory declaration of Anthony Norris (without annexures) dated 13 June 2012; (h) letter from the respondent's lawyers to the Registrar of Trade Marks regarding request to refer non-use action to the Federal Court dated 26 June 2012; (i) applicant's submissions filed with the Trade Marks Office in support of request to refer non-use action to the Federal Court dated 28 June 2012; (j) letter from the Deputy Registrar of Trade Marks to the parties informing them of the Registrar's decision to refer the non-use action to the Federal Court dated 2 July 2012; (k) Notice of Reference of Application for removal of Australian Registered Trade Mark No. 668183 dated 2 July 2012; and (l) Reference of Application for removal of Australian Registered Trade Mark No. 668183 dated 2 July 2012. 4 Chia Khim opposed the strike out application. The following were filed in opposition. 1. Written submissions dated 24 September 2012. 2. The affidavit of Anthony Norris, a trade marks attorney of Chia Khim, sworn on 24 September 2012.

Background 5 On 11 June 2008, Chia Khim applied to register the RED EAGLE device mark in relation to goods in Class 32, as follows: 6 By a notice of opposition dated 9 January 2009, Red Bull opposed the registration of Chia Khim's RED EAGLE trade mark on the grounds, inter alia, of s 44 of the Act (substantially identical or deceptively similar marks), s 60 (similarity to a mark with a reputation in Australia by reason of which the first mark would be likely to deceive or cause confusion) and s 62A (application made in bad faith). 7 Red Bull, at the date of the notice of opposition, was the registered owner of the registered trade mark RED HAWK in relation to goods in Class 32, with a priority date of 28 July 1995 which it acquired though an assignment dated May 2011. Red Bull also owned the trade marks Red Bull and "RED" registered in relation to Class 32 goods and services. 8 On 25 January 2012, the delegate of the Registrar of Trade Marks allowed the opposition by Red Bull under s 52 of the Act. 9 The delegate found that the RED EAGLE trade mark was not substantially identical but was deceptively similar to Red Bull's trade mark, and that there was a real or tangible danger of confusion. 10 The delegate did not consider the grounds of opposition under ss 60 and 62A on which Red Bull also relied, as it was unnecessary to do so. 11 On 8 February 2012, Chia Khim applied for the removal of Red Bull's RED HAWK trade mark from the Register pursuant to s 92(4) of the Act for non-use. Red Bull, by a notice dated 23 May 2012, opposed the non-use application on the ground that the Registrar's discretion should be exercised in its favour. 12 On 15 February 2012, Chia Khim appealed on the following grounds from the delegate's decision to refuse to register the RED EAGLE trade mark: 1. That the Registrar of Trade Marks erred in finding that the Respondent had made out the grounds of opposition against the Red Eagle Device Application under Section 44 of the Trade Marks Act 1995 (Cth) on the basis of Australian Trade Mark Registration No. 668183 for the word "RED HAWK" (the RED HAWK Mark). PARTICULARS 1.1 The Red Eagle Device Mark and the RED HAWK Mark are not deceptively similar at law. 1.2 The delegate erred in finding that there was a real and tangible danger of confusion between the Red Eagle Device Mark and the RED HAWK Mark. 1.3 The delegate erred in that he failed to give any, or sufficient, weight and consideration to the dissimilarities between the Red Eagle Device Mark and the RED HAWK Mark and when applying the test for deceptive similarity. 1.4 The delegate erred in that he failed to give any, or insufficient, weight and consideration to the fact that the Red Eagle Device Mark and the RED HAWK Mark and each have a significantly different sound and appearance when applying the test for deceptive similarity. 1.5 The delegate erred in that he gave any or excessive weight to what the delegate perceived was a similarity or association in the ideas of each of the Red Eagle Device Mark and the RED HAWK Mark when applying the test for deceptive similarity. 1.6 The delegate erred in that he gave any or excessive weight to the similarity of goods between the Red Eagle Device Mark and the RED HAWK Mark when applying the test for deceptive similarity. 2. Further and alternatively, the Applicant has filed an application for non-use removal pursuant to section 92 of the Trade Marks Act 1995 (Cth) against the RED HAWK Mark and contends that the registration should be removed from the Register and, in the circumstances of removal in whole or part, there is no citation against the Red Eagle Device Mark under section 44 of the Trade Marks Act and the appeal should succeed. PARTICULARS 2.1 The Applicant is not aware of any use of the Red Eagle Device Mark. The Applicant filed a non-use action with the Registrar of Trade Marks on 8 February 2012. 13 On 13 March 2012, Red Bull filed a notice of contention alleging that the delegate's decision should be affirmed on the grounds of ss 60 and 62A of the Act.

Application to refer non-use application 14 On 13 June 2012, Chia Khim applied to the Registrar of Trade Marks to refer the non-use application to the Federal Court of Australia, so that the appeal and non-use action could be heard together. 15 Chia Khim relied on the statutory declaration of its attorney, Anthony Norris, declared on 13 June 2012. It contended that if its non-use application succeeded, there would be no citation against the Red Eagle device under s 44 of the Act, and its appeal should succeed. Red Bull, by letter dated 26 June 2012, opposed referral to the Federal Court. 16 Red Bull contended that the relevant date for assessing an objection under s 44 of the Act to the RED EAGLE trade mark was the date of filing the application (11 June 2008) and the removal of the RED HAWK trade mark, if achieved, would not operate retrospectively. Thus, it could not be relevant to the appeal on s 44 of the Act or to the Registrar's discretion to register otherwise deceptively similar marks. Red Bull relied, in that context, principally on Hills Industries Ltd v Bitek Pty Ltd (2011) 90 IPR 337 ("Hills Industries"). 17 Red Bull also contended that the second ground of appeal was not properly the subject matter of the Federal Court appeal. It relied on the following discussion of Kiefel, Allsop and Crennan JJ in New England Biolabs v F Hoffmann-La Roche AG (2004) 62 IPR 510 ("New England Biolabs"), of the nature of appeals under s 104 of the Patents Act 1990 (Cth): [44] The use of the word "appeal" by parliament does not confer appellate jurisdiction. There is no doubt that the nature of the appeal provided for in s 104(7) of the Act is one such as to confer original jurisdiction upon the court. The court approaches the matter for the first time exercising the judicial power of the Commonwealth, not in order to decide whether the executive decision maker was right or wrong, or otherwise to correct error in the executive decision, but to deal with a subject matter, a controversy, for the first time: Jafferjee v Scarlett (1937) 57 CLR 115 at 119-20, 126; the Bayer case and Kaiser Aluminium & Chemical Corporation v Reynolds Metal Co (1969) 120 CLR 136 at 142. [45] Implicit, however, within the use of the word "appeal" and the phrase "appeal against the decision of the Commissioner", and without any other description of the controversy to be quelled by the exercise of judicial power, is the identification of the matter or controversy - the subject matter of the deployment of the respective powers - being the same in each case. The simplicity of the enunciation of what the court is doing: hearing an appeal against a decision of an administrator by exercising for the first time the judicial power of the Commonwealth in the original jurisdiction leads one to conclude that the court is dealing with the same subject matter as was dealt with by the Commissioner. [46] To the extent that the Act and regulations delimit the boundary of the subject matter for decision by the Commissioner by restricting the decision to certain criteria or grounds, or by limiting what is permitted to be raised by an opponent in the application, or by eliminating any element of discretion in the making of the decision, they plainly confine the controversy before the Commissioner. We are of the view that the notion of an appeal to the court in this context evinces a parliamentary intention that the same subject matter be dealt with by the court as was dealt with by the Commissioner (but this time by the deployment of judicial power).Thus, in order to conclude that the court has a wider task by reference to different or wider criteria than that undertaken by the Commissioner one would need to identify some factor either from the nature of the judicial power or from some statutory provision upon which to base such a conclusion. … [49] …the provision for an appeal to the court against a decision of an administrator in this statutory context is to confer judicial power on the court to hear and decide the same subject matter as was before the administrator. 18 Red Bull contended that consistently with that reasoning, in an appeal under s 56 of the Act, the Court had power (unless enlarged by a statutory provision or the nature of the judicial power) only to decide the same subject matter, with the same boundaries and limits, as was previously before the delegate. 19 Chia Khim, in reliance on Suyen Corporation v Americana International Ltd (2010) 187 FCR 169, and the cases referred to therein, submitted that the Court was not restricted to the same material or the way the case was conducted below, and ground 2 was the same essential subject-matter as the decision below. 20 Chia Khim gave notice that if it succeeded in the non-use application, it would seek that the appeal be allowed. 21 Chia Khim relied on an alleged settled practice in the Trade Marks Office and on authorities such as Takata Corporation v Britax Child Care Products Pty Ltd (1999) 44 IPR 425 ("Britax"), said to establish that if an action subsequently removed a citation, there was nothing on which s 44 of the Act could operate. It submitted that the non-use application was accordingly highly relevant to the determination of the appeal and to the discretion. 22 Chia Khim contended that it would suffer prejudice if the non-use action were not heard concurrently, as it might otherwise be determined after the appeal. 23 On 2 July 2012, the Registrar referred the matter to the Federal Court.

Red Bull's Submissions 24 Before me, both parties relied on and amplified their submissions made to the Registrar of Trade Marks. Red Bull identified the issue in ground 2 as a point of law, being whether Chia Khim's non-use application had any relevance to the determination of its appeal. 25 While conceding that an appeal pursuant to s 56 of the Act was a hearing de novo, Red Bull submitted that it was nevertheless limited to the same subject matter determined by the Registrar, which in this case excluded Chia Khim's non-use application. 26 Further, Red Bull submitted that the determination of the non-use application had no relevance to the appeal, because, by long settled practice in applications for registration, the parties' rights were determined as at the date of the application. It followed that whether a trade mark application satisfied s 44 of the Act was to be determined by the state of the Register as at the date of the application, rather than the date of the Registrar's decision, or at some other time. 27 Red Bull submitted that it was not reasonably arguable that future success in the non-use application could, by removing the cited mark, avail Chia Khim in its appeal against rejection of its application based on s 44. Binding authority unambiguously established that removal for non-use did not operate retrospectively, but rather, prospectively. In E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2009) 175 FCR 386 ("Gallo"), the Full Court stated that a retrospective order could not be made under s 101(2) of the Act (at [65]) and that the act of making the entry in the Register did not, apart from the effect of s 127, have a legal effect on events which occurred before it was made (at [66]). 28 Further, Red Bull submitted that an unbroken and longstanding chain of high authority expressly articulated an unqualified principle that for the purpose of s 44 (or its predecessors) the rights of the parties were to be determined as at the date of the application. Red Bull relied on statements to that effect in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1953) 91 CLR 592; Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 at [50] per French J and agreeing at [104] per Tamberlin J; Winton Shire Council v Lomas (2002) 56 IPR 72 at [7] per Spender J; McCormick & Co Inc v McCormick (2000) 51 IPR 102 at [31] per Kenny J; Hills Industries at [164] per Lander J and TiVo Inc v Vivo International Corporation Pty Ltd [2012] FCA 252 ("TiVo") at [94] per Dodds-Streeton J. That principle was also consistent with the Full Court's decision in Gallo. 29 Red Bull submitted that the relevant statements were of general application and did not suggest the existence of any exceptions. In so far as any authorities acknowledged the possible relevance of post priority date matters, it was limited to s 44(3) and (4), which involved discretions rather than rights. In the present case, ground 2 did not invoke subsection (3) or (4), but concerned the rights of the parties under s 44(1) or (2), which were squarely within the reiterated principle. 30 Red Bull submitted that the authoritative statements of principle necessarily overruled the decisions on which Chia Khim relied in support of ground 2, as they were largely of decisions of delegates rather than the court, were overtaken by later decisions and, or alternatively, related to different legislation. Polymat Trade Mark [1968] RPC 124 ("Polymat") was a decision of the Board of Trade involving an application under the Trade Marks Act 1938 (UK) ("the UK Act"), based on a construction of s 12 of that Act, which contained the wording "no trade mark shall be registered". Britax and Roll International Corp v Teleflora (Australia) Inc (1997) 40 IPR 318 ("Roll International") were dated decisions of a delegate of the Registrar in which, moreover, the deviation from the longstanding authority was not satisfactorily explained. 31 Red Bull submitted that Chia Khim's reliance on the Regulations to construe s 44 of the Act was contrary to established principle. In Chief Commissioner of State Revenue v Hayson Group of Companies Pty Ltd (2006) 68 NSWLR 254, Basten JA (with whom Hodgson JA and Tobias JA agreed) stated at [37]: It is trite law that, except in cases where the Act itself provides that its operation may be varied by regulation, the scope and operation of the statute cannot be determined by reference to regulations made under it. 32 Accordingly, the Regulations could not dictate or significantly affect the construction of s 44. 33 Further, to the extent to which Trade Marks Office Manual of Practice and Procedure ("the manual") or the practice of the Registry was relevant, more recent decisions (such as South Cone Inc v Stockline Pty Ltd (2001) 52 IPR 575) made clear that the Registrar's delegates consistently with binding authority, recognised that the rights of the parties under s 44 were to be determined as at the date of the application. 34 Red Bull submitted that its construction also accorded with policy and convenience. Section 44 would otherwise have an ambulatory operation, and the date for determination of rights would be inherently uncertain.

Chia Khim's Submissions 35 Chia Khim conceded that the Court had power to strike out a ground of appeal under s 23 of the Federal Court Act, but submitted that there was no basis on which to strike out ground 2. Chia Khim submitted that ground 2 was properly the subject matter of the appeal, as it related to s 44 of the Act on which the decision appealed from was based. There was no requirement that the arguments or materials on appeal must replicate those before the delegate. New England Biolabs and Airsense Technology Ltd v Vision Systems Ltd (2007) 73 IPR 65, on which Red Bull relied, were distinguishable, as the former involved the attempt to invoke on appeal a discretion to amend which did not exist at the date of the primary decision and the latter concerned an application to amend the claims of the patent on appeal. 36 Further, Chia Khim submitted that, contrary to Red Bull's submission, the correct date for the assessment of the parties' rights under s 44 was not the date of the application (in this case 11 June 2008), at least in circumstances where a non-use application resulted in the subsequent removal of the cited mark. 37 Chia Khim relied, in that context, on the wording of s 44, which did not expressly state that the date of filing the application was the date at which the parties' rights must be determined. Further, s 44 was expressed in the present tense, and directed a comparison between "a trade mark [currently] registered", or a "trade mark whose registration … [was currently] being sought". "Registered trade mark" was defined in s 6 of the Act to mean a "trade mark whose particulars are entered in the Register under this Act" (emphasis added). That definition thus supported the view that the comparison under s 44 was not to be conducted on the basis of a past state of the Register, but rather, at the time of the decision as to whether s 44 prevented registration. 38 Chia Khim also relied on reg 4.15A of the Trade Marks Regulations 1995 (Cth) (embodying the Madrid Protocol) which, like s 44, was expressed in the present tense. It submitted that the determination of the parties' rights as at the date of filing the application was inconsistent with Regulation 4.13 (made under s 36 of the Act) which expressly provided for deferral of the time for acceptance of a pending trade mark until the Register was cleared by the removal of a cited trade mark for non-use. Chia Khim submitted that the relevant Regulation and the routine practice under the manual deferring applications pending the removal of a citation (to which Mr Norris, an experienced trade marks attorney, deposed) were inconsistent with the assessment of citation marks only at the date of filing the application, which would render the regulation and practice otiose. 39 Chia Khim disputed that its construction was contrary to longstanding principle or in conflict with binding authority. It relied, in that context, on Britax, Roll International, Legal & General Life of Australia v Carlton-Jones & Associates Pty Ltd (1987) 9 IPR 447 and Polymat. 40 Chia Khim contended that the question whether a citation, once removed, continued to be a citation for the purposes of s 44 because it existed at the priority date had never been considered by the Federal Court or the High Court, but had been directly addressed in the decisions on which it relied. 41 In Polymat, Tookey QC allowed an appeal to the Board of Trade from the upholding of an objection to registration of an identical mark in circumstances where the registration of the cited earlier mark was deemed registered as at the date of application for registration pursuant to a provision equivalent to s 80 of the Act, but had then lapsed. The one year period had expired between the date of the opposition hearing before the Registrar and the date of the written decision. 42 Tookey QC (at 126) referred to Texas Company's Application (1915) 32 RPC 442, where it was accepted that "once a cited mark had been removed from the register, it no longer provided any basis for the operation of … [the provisions equivalent to s 44] against the pending application". 43 Tookey QC recognised that s 19 of the UK Act provided that a mark, when registered, should be registered as at the date of the application, which, for the purpose of the UK Act, would be deemed to be the date of registration. 44 Nevertheless, in Tookey QC's view, that did not mean that a s 12(1) objection under the UK Act must be determined as of the date of the application, as there was a similar provision in operation at the time of the Texas Company's case. Further, Tookey QC considered that s 12(1) dealt with actual circumstances and the act of registering (in the sense of entering a mark on the register) which was to be distinguished from other references to "registration" in the relevant UK Act. Tookey QC concluded that pursuant to the deeming provision, the residual effect of a mark which had been removed from the register for non-payment lasted only for a one year period and could disappear in the course of an application. Tookey QC noted that the Registrar's practice, justified by the terms of the Act, was to allow applications to go forward with the benefit of the original date of application by various means, in cases where an apparent conflict with the provision of s 12(1) had been resolved. 45 In Roll International, Hearing Officer T. Williams dismissed opposition to the registration of trade marks based on alleged substantive identicality or deceptive similarity under s 33 of the Trade Marks Act 1955 (Cth) ("the 1955 Act") (applied pursuant to the transitional provisions of the current Act). 46 By the time of the opposition hearing, the opponent's mark had been removed for non-use, on the application of a third party. 47 Hearing Officer Williams observed (at 321) that "[w]hile it is settled law that the rights of the parties are to be assessed and balanced at the date the disputed applications were made", the decision turned on s 33, which was written in the present tense, specifying when a trade mark "is" not capable of registration. Hearing Officer Williams concluded that under s 33, the decision "was best made on the state of the register at the time the opposition is to be decided" (at 321). 48 Hearing Officer Williams considered that a decision based on the state of the register when the non-use application had not been finalised would be premature. Once the register was freed of the mark in question, "that must be the end of the obstruction. Registration of a later application can then proceed without regard to the formerly conflicting registration" (at 321). 49 The Hearing Officer noted that if that construction were wrong, the provision in s 72 would be entirely unnecessary (at 321). (Section 72 deemed a mark removed for non-payment of fees to be a trade mark already registered for the purposes of an application for registration by another person lodged within 12 months after the expiration of the last registration). 50 The Hearing Officer stated: "[i]f the state of the register at the time the later application was filed was the critical thing then, fairly obviously, this deeming provision would be entirely redundant" (at 321). 51 The Hearing Officer also noted the settled practice permitting the later application to proceed once the 12 months referred to in s 72 had passed without renewal. The Hearing Officer referred to Polymat and concluded that no weight should be accorded to the now removed registration in the context of the opposition application. 52 In Britax, Britax's application to register a trade mark was opposed by Takata. The opponent, at the date of the filing of the application, was the proprietor of an identical registered trade mark, which was removed for non-use prior to the acceptance of the application. 53 Hearing Officer Williams rejected Takata's contention that it remained the proprietor of the mark through an ongoing right to registration consistent with the 12 month grace period in relation to cessation of registration for lack of renewal fees under ss 77 and 78 of the Act, and further, because removal for non-use was not equivalent to individual registration and did not back-date. 54 The Hearing Officer rejected the opponent's arguments that the grant of registration gave "perpetual proprietorship to the original registrant, to the permanent exclusion of all others even when the registration ceased to have effect", (at 429), because if that were so, there would be no need for a provision like s 80(b). 55 Hearing Officer Williams repeated his conclusion in Roll International that the removal of a registration under the non-use provisions of the 1995 Act acted to clear the way for registration of a later application. He concluded that the reasoning applied equally under the 1995 and 1955 Trade Mark Acts. 56 Chia Khim submitted that while some of the above decisions were decided under the 1955 Act, the relevant features of the current Act were not substantially different. It submitted that the decisions, which were directly on point, had never been overruled by a superior court and were to be preferred to merely general statements in decisions dealing with other questions arising under s 44. 57 Chia Khim acknowledged the holding in Gallo that removal for non-use operates prospectively, but submitted that it begged the question of the date at which rights under s 44 should be determined. If it were the date of the decision on the opposition, the prospective operation of removal of the citation mark would not be fatal to the success of ground 2. 58 Further, Chia Khim submitted that the issue in dispute was a significant point of law, which could not appropriately be determined in the context of a strike out application.

Whether power to strike out 59 Section 23 of the Federal Court Act provides: 23 Making of orders and issue of writs The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate. 60 In Bittmann v ASIC (No 2) [2006] FCA 1786 ("Bittmann"), Kenny J considered an application to have a notice of appeal pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act") (which can only be brought on questions of law) struck out because it failed to identify a question of law that might form the subject of the appeal. Her Honour held (at [12]): Whatever the correct analysis of the Rules, s 23 of the Federal Court Act confers broad power on the Court to make orders of such kinds as it thinks appropriate. I accept that, pursuant to s 23, the Court has power to strike out a notice of appeal in reliance on s 44 where the notice does not state a question of law. Compare also Lambroglou at 519-520. 61 In Australian Telecommunications Corporation v Lambroglou (1990) 12 AAR 515 ("Lambroglou"), which also concerned s 44 of the AAT Act, Ryan J held that the Court had (at 519): power to strike out either the whole or certain parts of a notice of appeal under s 44 of the AAT Act as not disclosing a question of law. The so- called appeal provided for by s 44 is a proceeding within the original jurisdiction of this Court which is accordingly empowered by s 23 of the Federal Court of Australia Act 1976 (Cth) to make in relation to it "orders of such kinds, including interlocutory orders…as the Court thinks appropriate. 62 Ryan J also considered s 38 of the Federal Court Act. His Honour then referred to the Federal Court Rules 1979 (Cth) to determine the applicable practice and procedure. He did not consider that the notice of appeal was a "pleading", but thought the Court's general power to permit a notice of appeal to be amended was broad enough to allow it to "direct that certain parts of a notice of appeal be struck out" (at 520). His Honour considered that, in any event, "such a power is conferred by s 23 of the Federal Court Act or exists as part of the inherent jurisdiction of the Court…" (at 520). 63 While Bittmann and Lambroglou concerned appeals under s 44 of the AAT Act, it was not disputed that in the present case, the Court had power to strike out a ground of appeal brought under s 56 of the Act. 64 It was also common ground that the exercise of the power to strike out was governed by the principles set out in Polar Aviation Pty Ltd v Civil Aviation Safety Authority [2012] FCAFC 97 ("Polar"), where the Full court approved Kenny J's discussion of relevant authorities in Polar Aviation Pty Ltd v Civil Aviation Safety Authority (No 4) [2011] FCA 1126 ("Polar (No 4)") and stated (at [41]-[49]): [41] [Kenny J] also noted that the rule governing strike out essentially related to the sufficiency of pleadings and (at [8]) set out the following extract from the Full Court's decision in Wride v Schulz [2004] FCAFC 216 at [25]: [T]he the pleadings must disclose a reasonable cause of action against the party against whom the cause of action is brought and must state all material facts necessary to establish that cause of action and the relief sought. A "reasonable cause of action" for this purpose means one which has some chance of success if regard is had only to the allegations and the pleadings relied on by the applicant. [42] Her Honour discussed authorities, including National Mutual Property Services (Aust) Pty Ltd v Citibank Savings Ltd (1995) 132 ALR 514 ("National Mutual") in which Lindgren J (at 529) approved a summary of general principles in Allstate Life Insurance Co v Australia & New Zealand Banking Group Ltd (Unreported, FCA, Beaumont J, 13 September 1994) ("Allstate") (at 24, distilled from the editorial note at (1992) 66 ALJ 47 in Lonrho plc v Tebbitt, The Times, 24 September 1991). The authorities indicated that a reasonable cause of action was one with some chance of success having regard to the allegations pleaded, even if weak; and that the strike out power should be exercised only in a plain and obvious case, where it was obvious that no reasonable amendment could cure the alleged defect and there was no reasonable question to be tried. [43] In Allstate, Beaumont J (at 24) cited the following principles: (1) A "reasonable cause of action" means one with some chance of success if regard be had only to the allegations in the pleadings relied upon by the claimant; in such a case, the claim cannot be struck out: Davey v Bentinck [1893] 1 QB 185. (2) The mere fact that the case appears to be a weak one is not of itself sufficient to justify the striking out of the action: cf Wenlock v Moloney [1965] 1 WLR 1238. (3) Normally, the power to strike out should be exercised only in plain and obvious cases, where no reasonable amendment could cure the alleged defect: cf Hodson v Pare [1899] 1 QB 455. (4) It goes without saying that if a substantial case is involved in the claim, the power to strike out cannot be exercised. (5) Where a point of law has to be decided, and the judge is satisfied that this can be done by him appropriately, thereby avoiding the necessity of, and expense in going to trial, he is entitled to determine the point: cf Williams & Humbert v W & H Trade Marks [1986] AC 368. [44] Accepting that the strike out power should be exercised with caution and only in a plain and obvious case, Kenny J stated at [12] of Polar (No 4): Notwithstanding the need for caution, where in a strike-out application, a point of law arises, which can appropriately be decided at the interlocutory stage, the judge is entitled to determine the point, thereby avoiding the need for and expense of a lengthy trial. For the reasons set out below, this is a case in which certain points of law should be decided at this stage, since their disposition does not depend on further evidence and findings of fact, and their resolution will limit any future trial. [45] Kenny J also discussed s 31A of the Federal Court Act, noting that the court can dismiss a proceeding (or part thereof) if it is satisfied that the relevant party has no reasonable prospect of success, which did not require that it be hopeless or bound to fail. [46] Her Honour referred to the High Court's discussion of s 31A in Spencer v Commonwealth (2010) 241 CLR 118 ("Spencer") where the applicant's pleading (while not fully formulated or particularised) left open a possibility which required factual exploration of an informal agreement. [47] In Spencer, French CJ and Gummow J, in a joint judgment (on which the appellants particularly relied both before the primary judge and on appeal) stated (at [25]) that the court must make "a practical judgment … as to whether the applicant has more than a 'fanciful' prospect of success [which] may be a judgment of law or of fact or of mixed law and fact". [48] French CJ and Gummow J stated at [25]: Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the court has formed the view that the applicant is unlikely to succeed on the factual issue. [49] French CJ and Gummow J also stated at [26]: Where an application under s 31A requires consideration of apparently complex questions of fact, then the caution uttered by Lord Hope is relevant. 65 It was not disputed that ground 2 constituted a point of law. 66 When strike out is sought in relation to a point of law: (a) first, there is an antecedent question whether it is appropriate to decide it at the interlocutory stage. The authorities referred to in Polar indicate that it may be appropriate to do so where the determination of the point of law does not depend on further evidence or fact finding and may avoid the necessity and expense of going to trial (Allstate and as in Polar (No 4)), or at least, reduce the length and expense of a trial. In such circumstances, a judge is entitled, but not necessarily obliged, to determine the point of law on a strike out application. In my opinion, the authorities indicate that a point of law should not ordinarily be dealt with on a strike out application, in advance of, and isolation from, the other issues, where there is no real prospect of saving the Court's and the parties' time and resources. The piecemeal determination of legal issues in a proceeding (including an appeal) which would foster, rather than avoid inefficiencies, could otherwise be routinely pursued; and (b) secondly, if it is appropriate to determine the point of law, the moving party must persuade the Court that the opposing party has no reasonable prospect of success. That is a higher hurdle than persuading the Court at trial (or on appeal) that the opponent's position should not prevail. 67 In the present case, I was not persuaded that time and resources could be saved by determining the relevant point of law on a strike out application. 68 In Polar (No 4), in which the applicant had repeatedly filed defective pleadings, Kenny J considered it appropriate to determine the point of law on the strike out application, as it had the potential to dispose of the entire proceeding. 69 In contrast, in this case, the strike out of ground 2 had no potential to dispose of the appeal. Chia Khim was entitled to proceed with the appeal irrespective of whether ground 2 was struck out, and as ground 2 was simply a question of law, its disposition was likely to absorb the same time and costs whether dealt with on appeal or on a strike out application. 70 Further, the striking out of ground 2 would not dispose of the non-use application, which is independent of the appeal (albeit they may ultimately be heard and determined together). The striking out of ground 2 would merely dispose of Chia Khim's argument based on the contingency of its future success in the non-use application. The effect would be to accelerate, rather than shorten the argument, and would not reduce the costs. Further, the argument was complex and a determination that it was unarguable in isolation from other issues, appeared inappropriate. 71 In the circumstances, while the parties had prepared quite detailed argument, which would assist in the ultimate disposition of the point of law, I was not satisfied that it was appropriate to determine it in the context of a strike out application.

whether reasonably arguable that ground 2 is valid subject matter of appeal 72 While it was unnecessary to do so, I briefly considered the above question. 73 Red Bull submitted that the non-use application which post-dated the opposition hearing and decision, could not properly form the subject matter of the appeal under s 56 of the Act, as it was a substantively new matter, and ground 2, which relied upon it, should be disallowed on that basis. 74 As Chia Khim submitted, an appeal under s 56 of the Act is an appeal de novo, involving a complete rehearing on the material before the Court. The extensive powers of the Federal Court on such an appeal include those set out in s 197 of the Act. The court may admit further evidence, whether oral, on affidavit or otherwise. The Court may order an issue of fact to be heard as it directs. 75 While the de novo nature of the appeal does not render its subject matter "at large", in the present case, the appeal is from the delegate's decision in the opposition proceedings to refuse to register, pursuant to s 55(1)(a), the RED EAGLE trade mark, having regard to the extent (if any) to which any ground on which the application was opposed has been established. 76 The application was opposed on "grounds of opposition under ss 44, 60 and 62A of the Act" Red Bull GmbH v Chia Khim Lee Food Industries Pte Ltd [2012] ATMO 7 at [5]. 77 Section 44 appears in Part 4 Division 2 of the Act, entitled "Grounds for Rejecting an Application". Subsections (1) and (2) contain a number of preconditions, (some of which are alternatives) which, if established, mandate rejection, subject to the possibility of acceptance (whether wholly or in part, or conditional or otherwise) under subsections (3) or (4). 78 In my opinion, it was arguable that a decision appealed from under s 56 of the Act should be characterised broadly (as a decision based on the establishment of opposition under s 44), rather than narrowly (as a decision based on the establishment of particular elements of, or arguments made in relation to, s 44). Viewed in that light, the subject matter of the appeal in this case could properly extend to a challenge, based on the removal of the cited mark (essential to the application of s 44) by a non-use application made after the decision of the delegate. 79 Accordingly, I concluded that ground 2 should not be struck out on the basis that it was not reasonably arguable that it constituted valid subject matter of the appeal.

Relevance of potential amendment 80 As recognised in Polar, a defective pleading should not be struck out where it may be cured by amendment. There was potential to amend the notice of appeal to rely on non-use for the purposes of s 44(3) or (4). The potential relevance of post priority date matters to those subsections could be arguable, as it was recognised (albeit not the preferred view), in Hills Industries and TiVo and was endorsed by Carr J in PB Foods v Malanda Dairy Foods Ltd (1999) 47 IPR 47 and in VB Distributors v Matsushita Electrical Industrial Co Ltd (1999) 53 IPR 466. 81 There was, however, no application to amend the notice of appeal, and any amendment would be likely to take the form of a new ground, rather than alteration of ground 2. The potential for amendment therefore did not assist Chia Khim.

whether reasonable prospect of success 82 The determination of the point of law in the context of the application was not on all fours with the determination of a separate question. It was necessary to determine, in essence, whether the opposed party's construction had no reasonable prospects of success. 83 As I considered that the determination of the point of law on a strike out application would not save time or costs and was otherwise inappropriate, it was unnecessary to determine whether the point of law embodied in ground 2 had no reasonable prospect of success. In recognition of the parties' submissions, however, I deal briefly with that question. 84 In my opinion, despite the apparently very powerful impediments to its success constituted by the clear, unqualified and authoritative general statements that the rights of the parties must be determined as at the date of the application, ground 2 was reasonably arguable. While the analysis advocated by Chia Khim appeared at odds with binding statements of principle, it was not logically untenable and was articulated in the authorities on which it relied. 85 As Red Bull submitted, the decisions on which Chia Khim relied were not recent, were principally decisions of delegates, in one case involved United Kingdom legislation and arguably disclosed other distinguishing features. Nor could construction of s 44 be dictated by the Regulations, manual or practices of the Trade Marks Office. 86 Nevertheless, in circumstances where: the authoritative statements are general; possible qualifications in relation to some subsections of s 44 are acknowledged; no Full Court or indeed single judge has comprehensively assessed and unequivocally rejected the detailed arguments now advanced by Chia Khim on the specific point; those arguments are not insubstantial and are supported by a number of decisions of hearing officers; I was not satisfied that the point of law on which ground 2 depended should be struck out.

Conclusion 87 I therefore concluded that the application should be refused. I certify that the preceding eighty-seven (87) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dodds-Streeton.