Skyn Pty Ltd v Ansell Limited

The nature of the appeal proceeding 6 The appeal is brought under s 56 of the Trade Marks Act 1995 (Cth). It proceeds as an exercise of original jurisdiction by the Court in which there is a judicial determination on the merits of the application. Whilst there is reference in the authorities to giving due weight to the opinion of the Registrar as a skilled and experienced person, ultimately the Court makes its own determination after considering the matter afresh: Registrar of Trade Marks v Woolworths [1999] FCA 1020; (1999) 93 FCR 365 at [32]. The Court hearing proceeds de novo: N.V. Sumatra Tobacco Trading Company v British American Tobacco Services Limited [2011] FCA 1051; (2011) 198 FCR 435 at [14] and Kaiser Aluminium and Chemical Corporation v The Reynolds Metal Co (1969) 120 CLR 136 at 142. The Court does not undertake a form of review of the Registrar's decision. Rather, it makes a new decision. Therefore, the 'appeal' is actually a separate judicial consideration and determination of the application that was before the Registrar. 7 As the appeal proceeds in this Court in the exercise of original jurisdiction conferred by the Trade Marks Act, it is the practice and procedure of this Court that governs how to deal with applications concerning the proper parties to the appeal, subject to the requirements of the Act in relation to such applications. 8 Finally, it is to be noted that, on appeal, the application for a trade mark must be accepted unless the Court is satisfied that it is not properly made or there are grounds for rejecting it: Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks [2002] FCAFC 273; (2002) 122 FCR 494 at [22]. Therefore, the onus is upon a respondent who seeks to maintain a decision of the Registrar upholding an objection. Although the appeal is brought by Skyn, it will succeed unless a respondent discharges the onus of establishing a basis for rejecting the appeal. 9 Ansell places reliance upon s 197(e) of the Trade Marks Act. It states that the Court may 'give any judgment, or make any order, that, in all the circumstances, it thinks fit'. It says that the Court has power pursuant to that provision to substitute Lifestyles Healthcare for Ansell as a respondent. It also submitted that the Court should have regard to the terms of s 53 when exercising that power. Section 53 deals with what is to occur when, after a person has filed a notice of opposition the right or interest on which the person relied to file the notice of opposition becomes vested in another person. It says that upon notification to the Registrar, the opposition is to proceed 'as if the notice of opposition had been filed in that other person's name'. 10 As to a notice of opposition, s 52 provides that a person may oppose the registration by filing a notice of opposition. It has been observed that s 52 has no standing requirement: Health World Ltd v Shin-Sun Australia Pty Ltd [2010] HCA 13; (2010) 240 CLR 590 at [25]. However, the terms of s 52(5) should be noted. They are: If: (a) a person is granted an extension of time in which to file a notice of opposition; and (b) before the notice of opposition is filed, the right or interest on which the person could have relied to file the notice of opposition becomes vested in another person; and (c) the other person notifies the Registrar in writing that the right or interest is vested in him or her; then: (d) the other person is taken to have been granted an extension of time in which to file the notice of opposition; and (e) that extension ends when the extension mentioned in paragraph (a) ends. 11 It can be seen that s 52(5) is expressed in terms that concern instances where the opposition to an application for a trade mark is raised by a person with a right or interest on which the person could have relied to file the notice of opposition. Therefore, the Act recognises that there will be cases where the party who opposes does so on the basis of a right or interest held by that party that may be transferred to another party. It then confers on the transferee (the person in whom the right or interest 'is vested') the same status in respect of any extension of time as the holder of the right or interest at the time the extension was granted. 12 Section 53 follows the same logic. It confers on the transferee the status of objector under s 52(1) where there is the requisite notification and the objection is not withdrawn by the transferor. 13 It is to be noted that both s 52(5) and s 53 are dealing with subsequent transfers. Further, they are dealing with the procedures that occur before the Registrar. They manifest an intention that the owner of a trade mark should be substituted for the former owner in respect of any objection where a right or interest relied upon as the basis for the objection has been transferred. 14 In this case, the transfer of the right or interest was subsequent to the hearing and before the decision on the objection (as to the interest associated with three trade marks) and after the commencement of the appeal but before the notice of address for service (as to the fourth trade mark). Therefore, there was no occasion before the Registrar to seek the substitution of Lifestyles Healthcare as the party advancing the objection to the trade mark application by Skyn. Rather, the question which arises is whether the Court in the exercise of the power under s 197(e) or its general power as to the joinder of parties, should order the substitution that is sought.

The character of the power conferred by s 197 15 Even though the matter proceeds de novo in the Court, the subject matter of the 'appeal' is the application and objections filed in accordance with the provisions of the Act. In Frucor Beverages Limited v The Coca-Cola Company [2018] FCA 993, Yates J reasoning by analogy to cases concerned with the similar appeal structure that applies to patents, in which the Court had decided that the 'deployment of judicial power in an appeal … is over the same subject matter' as the objection process before the Commissioner: at [196]. However, on an appeal it is the powers conferred by the Court on appeal that were being exercised not the powers conferred by the legislation on the Commissioner or the Registrar as the case may be. Therefore, in the case of an appeal against a decision by the Registrar, it was the terms of s 197 which stated the powers that may be exercised by the Court on appeal. The objection process before the Registrar had concluded. What proceeded in the Court was the appeal. The approach was summarised at [204] in the following terms: Section 197 is the source of the Court's powers on such an appeal. However, the deployment of those powers to direct or effect an amendment to a trade mark application must be exercised conformably with the boundaries and limitations imposed on the Registrar's powers … [relevantly in that case the powers of amendment]. 16 So, once an appeal is commenced, s 53 does not apply. It is dealing with the administrative procedure while the notice of opposition is being dealt with before the Registrar. As to s 197, it applies to the appeal and it does so in a way that ensures that the judicial character of the proceedings is brought to account when dealing with procedural matters. It entrusts to the Court the express powers stated in s 197 so it can deal with the matter judicially. Relevantly for present purposes there is power to make orders that the Court thinks fit. It is to be expected that the Court will apply the practice and procedure provided for in its Rules but mindful of the nature of the application, its statutory context and the procedures for stating an objection. 17 The power under s 197(e) has been appropriately described as wide: Tricarico v Dunn Bay Holdings Pty Ltd [2012] FCA 271 at [7]. It is not a power to simply follow the procedures that would have been followed by the Registrar. There are many differences between the administrative process before the Registrar and the judicial process on an appeal to this Court. One is that the Court will make appropriate costs orders. Another is that the process is required to be commenced by an appeal, not by application and objection. Another is that it applies the laws of evidence in receiving material. Another is that the Court acts judicially in the exercise of discretions, meaning that it applies principles that are applied by Courts to ensure that there is a just and fair determination of the proceedings. 18 In Frederikshavn Vaerft A/S v Stena Rederi Aktiebolag [2002] FCA 1024; (2002) 124 FCR 243, the Court was dealing with a legislative structure in relation to patents that has similarities to that pertaining to trademarks. In particular, the legislature has the same procedure for an appeal as applies under the Trade Marks Act including an equivalent to s 193. It too provides for an appeal de novo: Kaiser Aluminium and Chemical Corporation v The Reynolds Metal Co at 142. Section 160 of the Patents Act 1990 (Cth) is on the same terms as s 197 of the Trade Marks Act. However, the provisions of the applicable Regulations dealing with what was to occur before the Commissioner if there was a change in ownership are different to those provided for in s 53 of the Trade Marks Act. Amongst other things, the relevant regulation provided for notification to the other party before there can be a substitution. In that context, an application of the kind advanced by Ansell in the present proceedings was brought to substitute in the course of the appeal a new opponent to the application for a patent. 19 Sundberg J approached the matter in the same manner as Yates J in Frucor Beverages. That is to say, on appeal the Court is not exercising the power to substitute that might be exercised during the administrative process provided for by the Patents Act. Rather, it is exercising the statutory powers conferred in the event of an appeal. However, the Court will consider how the matter would have proceeded before the Commissioner. In the result, Sundberg J made an order amending the notice of opposition to show another party as the opponent for the purposes of the proceedings. Sundberg J reasoned as follows at [20]-[22]: The final question is whether the Court should order that the notice of opposition be amended so as to show Austal as opponent. The facts I have summarised in pars 4 to 6 show a clear case for making such an order. Austal has a genuine and substantial commercial interest in the opposition and its prosecution. It has purchased the business of the opponent, together with the right to maintain the opposition. Even before the purchase Austal had a genuine commercial interest in the opposition. On the evidence now before me, whatever may be the position at trial, Austal entered the field of Stena's patent application before Stena, and continues to operate in the field. If granted, the patent has the potential to be a significant restriction on Austal's business. Austal has already taken part in the opposition through its alliance with Danyard, and has expended significant sums in costs associated with the opposition proceedings in the Patent Office and in the Court. Most of the costs have been incurred since its purchase of the business. All these costs would be wasted if Austal cannot be substituted as opponent before Danyard is dissolved. Austal has explained its delay in causing Danyard to make this application. Until it discovered that Danyard was to be liquidated, Austal felt adequately protected by the sale agreement in which Danyard declared itself trustee for Austal of all the business assets, which included the opposition proceedings and the rights flowing therefrom. It was only in October 2001 that Austal became aware that Danyard was going to be liquidated in due course, and it became necessary for Austal to be substituted as opponent. Austal had disclosed to Stena its acquisition of Danyard's business about ten months earlier. In October 2001 it sought Stena's consent to the substitution, and provided it with the evidence showing its title to the opposition proceeding. Danyard is entitled to an order under s 160(e) that Austal replace it as opponent. I will consider the precise form of the order in pars 29 and 30.

Decision in Frederikshavn Vaerft to be distinguished 20 I would distinguish the circumstances in Frederikshavn Vaerft from the present for the following reasons. 21 First, the application before Sundberg J included provision for the rights and liabilities accruing in the proceedings to be transferred to the new party to be substituted. No such express provision was proposed on the present application. The main concern raised by Skyn was that the substitution would result in a foreign corporation becoming the respondent in place of Ansell. There had been considerable costs incurred in the matter to date and it should be able to look to Ansell for those costs in the event that it was successful in its appeal. I see no reason why Ansell should be excused from any costs liability given the extent of its involvement in the proceedings to date. Therefore, having regard to the approach to costs in this Court, it is not appropriate for Ansell to cease being a party without any provision for costs. Further, given the position of Lifestyles Healthcare as a foreign corporation this was not a case where Skyn could look to Lifestyles Healthcare for costs in the same way it could look to Ansell. 22 Second, there was no adequate explanation for the delay by Lifestyles Healthcare in bringing the application. 23 Third, Ansell remains a proper party as the original objector. It was the party who advanced the objection. It was the objector at the time the decision was made by the Registrar. It may choose to abide by the decision once Lifestyles Healthcare is joined. However, this is not a case where there has been a change in the status of Ansell. It remains the party who objected, the party whose objection was upheld and the party who opposed the appeal for a considerable period. If Ansell no longer wished to take an active part in the proceedings then it may choose to abide by the outcome of the appeal. 24 Fourth, this is not a case where there is objection to the joinder of Lifestyles Healthcare as a party to the appeal as appears to have been the case in Frederikshavn Vaerft. If Lifestyles Healthcare is added as an additional respondent then it will be able to appear in the appeal and take the steps required to discharge the onus. It is not necessary for Ansell to be removed as a party for that to occur. It has demonstrated that it has sufficient interest to be joined and joinder is not opposed. 25 Finally, this is not a case where the right to appeal must be considered, as was the case in Frederikshavn Vaerft. Lifestyles Healthcare does not seek to be substituted as the appellant. It seeks to actively participant as a respondent to the appeal. In those circumstances, it is not necessary to make orders dealing with who was the objector before the Registrar. I have some doubts as to whether this Court could alter the identity of the objector before the Registrar after the administrative determination of the matter has concluded. However, by reason of the view I take of the matter generally it is not necessary to consider that aspect.

Conclusion 26 For those reasons, I will make orders joining Lifestyles Healthcare as the third respondent in the appeal. I will direct that the third respondent do file its statement of grounds and particulars of opposition within 14 days. I will otherwise dismiss the application and order that Ansell pay the costs of the interlocutory application in any event. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Colvin.