TGI Friday's of Minnesota, Inc v T.G.I. Friday's Australia Pty Ltd

Introduction 1 The applicant, TGI Friday's Minnesota, Inc. ("TGIFM"), was registered as the owner of trade mark no. 438365 ("the registered trade mark") under the Trade Marks Act 1995 ("the Act") on 21 July 1997. On the same day TGIFM commenced this proceeding for infringement of the registered trade mark against the respondents, T.G.I. Friday's Australia Pty Limited ("Friday's Australia") and Big Country Developments Pty Limited ("Big Country"). TGIFM alleges that its registration as owner had effect from 19 December 1985. 2 When this proceeding was begun, proceeding NG 678 of 1996 was already pending in the Court. In that proceeding TGI Friday's Inc. ("Friday's Inc") and TGIFM claimed relief against Friday's Australia and Big Country for passing-off and for contraventions of ss 52 and 53(c) of the Trade Practices Act 1974 in connexion with the use of the name TGI Friday's. Both proceedings were heard together. In proceeding NG 678 of 1996 I granted the applicants permanent injunctions under s 80(1) of the Trade Practices Act. On appeal, those orders were set aside and the application in proceeding NG 678 of 1997 was dismissed: [1999] FCA 304. The background to the dispute between the two camps is set out in the reasons for judgment of the Full Court, and these reasons should be read with those of the Full Court. 3 In this proceeding Friday's Australia and Big Country cross-claim against TGIFM for an order of rectification under the Act. TGIFM's defence to this cross-claim pleads a presumption of validity provided by the transitional provisions in the Act. Accordingly, the cross-claimants also seek a declaration that the registered trade mark ceased to have effect on 19 December 1996. This claim thus raises a threshold issue, which necessitates an examination of the circumstances leading up to the entry of the registered trade mark. The Registration Process 4 Friday's Inc applied, on 19 December 1985, for registration of the trade mark T.G.I. FRIDAY'S in Part A of the Register of Trade Marks kept under the Trade Marks Act 1955 ("the repealed Act"). The application specified "restaurant services and alcoholic beverage bar services" as the services in respect of which registration was sought. The application was allocated number 438365. The acceptance of the application was advertised on 20 October 1988. Notices of opposition were lodged by Big Country and by Weller Hotels & Taverns Pty Ltd ("Weller"). 5 Big Country's opposition was dismissed on 12 November 1991. Weller's opposition was determined on 4 November 1994, when Farquhar DR decided to register the trade mark in respect of "restaurant services". Both Friday's Inc and Weller appealed to this Court from her decision. 6 Meanwhile, by a deed of assignment dated 8 November 1993, Friday's Inc had assigned to TGIFM "effective as and from October 26, 1993" the benefit of its pending application and the registration to be granted thereon. Also, on 8 November 1993, TGIFM's attorney apparently signed on its behalf an application for the recording of the assignment. The evidence does not indicate when that application was received or lodged at the Trade Marks Office. 7 The registration of the trade mark was delayed by the pending appeals of Friday's Inc and Weller. Those proceedings were eventually settled, and on 10 April 1997 Cooper J made consent orders dismissing both appeals. On 1 July 1997 a delegate of the Registrar of Trade Marks directed that the trade mark be registered on or before 1 September 1997. Having regard to the time that had elapsed since Friday's Inc filed its application for registration on 19 December 1985 and in the light of certain provisions of the Act shortly to be considered, Friday's Inc lodged on 16 July 1997 an application for renewal of the registration. On 21 July 1997 the trade mark T.G.I. FRIDAY'S was registered in the name of Friday's Inc subject to the following condition: "Registration of this trade mark shall give no right to the exclusive use of the letters TGI." On 21 July 1997 the registration was also renewed and the assignment to TGIFM was recorded. The registration of TGIFM as the owner of the trade mark was recorded as having had effect from 1 January 1996. The Current Effectiveness of Registration 8 Section 241 of the Act relevantly provides: "241 (1) This section applies if an application for the registration of a trade mark in Part A or B of the old register was pending immediately before 1 January 1996. (2) If the application had been accepted under the repealed Act and the acceptance was in force immediately before 1 January 1996, the following provisions apply: (a) … the repealed Act … continues to apply in relation to the application; (b) if, after dealing with the application in accordance with the repealed Act, the Registrar is required under section 53 of that Act to register the trade mark in the old register - the Registrar is to register the trade mark under Part 7 of this Act … (5) The filing date in respect of the application is: (a) … the day on which the application was lodged with the Trade Marks Office under the repealed Act;…". 9 It is common ground that these provisions were applicable in the present case and that the trade mark was registered under Part 7 of the Act. That Part is headed "Registration of Trade Marks" and is divided into "Division 1 - Initial Registration" and "Division 2 - Renewal of Registration". 10 Division 1 contains the following relevant provisions: "72 (1) … the registration of a trade mark in respect of the goods and/or services in respect of which the trade mark is registered is taken to have had effect from (and including) the filing date in respect of the application for registration. … (3) Unless it is earlier cancelled, or the trade mark is earlier removed from the Register, the registration of the trade mark expires 10 years after the filing date in respect of the application for its registration. 73 The registration of a trade mark ceases if: (a) the trade mark is removed from the Register under section 78 or Part 9; or (b) the registration of the trade mark is cancelled." 11 The provisions in Division 2 may be set out in full: "75 (1) Any person may, within the prescribed period before the registration of a trade mark expires, ask the Registrar to renew the registration. (2) The request must: (a) be in an approved form; and (b) be filed in accordance with the regulations. 76 If, at the beginning of the prescribed period, the Registrar has not received a request for the renewal of the registration of the trade mark, the Registrar must, in accordance with the regulations, notify the registered owner of the trade mark that the renewal is due. 77(1) If a request for the renewal of the registration of a trade mark is made in accordance with section 75, the Registrar must renew the registration for a period of 10 years from the day on which the registration of the trade mark would expire if it were not renewed. (2) The Registrar must give notice of the renewal to the registered owner of the trade mark in accordance with the regulations. 78 If the registration of a trade mark is not renewed, then: (a) subject to sections 79 and 80, the registration ceases to have effect when it expires; and (b) unless the registration is renewed under section 79, the Registrar must remove the trade mark from the Register 12 months after the day on which the registration expired. 79 If, within 12 months after the registration of a trade mark has expired, a person asks the Registrar, in accordance with subsection 75(2), to renew the registration of the trade mark, the Registrar must renew the registration of the trade mark for 10 years from the day on which the registration expired. 80 If: (a) the registration of a trade mark ("unrenewed trade mark") has not been renewed; and (b) within 12 months after the registration expired, an application for the registration of a trade mark is made by a person other than the person who was registered as the owner of the unrenewed trade mark; the unrenewed trade mark is taken to be a registered trade mark for the purpose of the application." 12 The period prescribed for the purposes of s 75(1) of the Act is twelve months ending on the day on which the registration of the trade mark expires. 13 Senior counsel for the respondents relies on the fact that the filing date of the application lodged by Friday's Inc was 19 December 1985. He submits that, once the particulars of the trade mark are entered in the Register of Trade Marks, the registration ceases to have effect "as from" 19 December 1995 by virtue of ss 72 and 78 of the Act. The effect of s 72(3) is said to be that in the present case the registration expired on 19 December 1995. No request for renewal was made prior to that date or within twelve months thereafter, and it is suggested that, therefore, registration cannot be renewed under ss 77 or 79 of the Act. The consequences, senior counsel for the respondents submits, are that registration ceased to have effect on 19 December 1995 and that the Registrar is obliged under s 78(b) of the Act to remove the trade mark from the Register. 14 It seems to be implicit in the submissions on behalf of the respondents that Friday's Inc could (and, indeed perhaps, should) have protected its position by lodging a request for renewal prior to 19 December 1995. The Act had, after all, been assented to on 17 October 1995 and all the relevant provisions were to commence on 1 January 1996. Be that as it may, prior to 19 December 1995 the repealed Act was still in force, and under s 69 of that Act only the registered proprietor of a trade mark could apply for its registration to be renewed. No course of action was available at that time to Friday's Inc in respect of any renewal. 15 Section 241(2) of the Act provides expressly for an applicant, such as Friday's Inc, whose application was "pending" immediately before 1 January 1996. (See the definition of "pending" in s 11(2) of the Act.) Such an application is to be dealt with in accordance with the repealed Act up to the point at which, under s 53 of that Act, the Registrar becomes obliged to register the trade mark. The time for registration is thus governed by s 54 of the repealed Act, upon which the Registrar's delegate correctly relied on 1 July 1997 in order to extend the time for registration. By virtue of s 241(2) of the Act, the obligation to register arises under s 53 of the repealed Act. That obligation is not imposed by s 68(1) of the Act and, accordingly, reg 7.1 of the Trade Marks Regulations 1995 did not apply so as to fix the period beyond which the application of Friday's Inc would lapse. 16 It is also significant, so far as the mechanics of registration are concerned, that s 241(2)(b) does not state that registration is to be effected under s 69 of the Act. Instead, it requires the Registrar "to register the trade mark under Part 7 of this Act." In my opinion, the reference to Part 7, as a whole, is apt to pick up, where necessary, the renewal of registration provided for in Division 2. This authorizes the simultaneous registration and renewal that appears to have taken place in the present case. 17 The Act permits the registration of a trade mark for further periods of ten years beyond the initial term of ten years. The construction of s 72(3) contended for by the respondents would, if correct, at the very moment of registration, deprive Friday's Inc of that right. The submission is that the registration ceases to have effect "as from" a date ten years after the filing date. But this is not the language of s 72(3), which merely states prospectively the initial term of registration. The phrase "as from" is not used at all. On the other hand, s 71(1) does provide that the fact of registration "is taken to have had effect from" an earlier date and, in doing so, fixes the "date of registration" as that expression is defined by s 6 for the purposes of that Act. This provision has important consequences, but it undoubtedly benefits a registered owner: see s 20(3) of the Act and Hunter Douglas Australia Pty Ltd v Perma Blinds (1970) 122 CLR 49 per Barwick CJ at 61. 18 There is a certain tension between the language of ss 72(3) and 75(1) and the obligation imposed by s 241(2)(b) in the circumstances of this case. The correct approach to the construction of apparently conflicting provisions has been recently explained by the majority in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 and 384. Here s 241 is clearly the dominant provision. In giving effect to it, the Registrar may be confronted by language in ss 75 and 77 that is not apposite. In my opinion, the goals of the Act will be achieved by construing Part 7 as permitting the Registrar simultaneously to renew the registration of the trade mark for a period of ten years from the day on which the registration would expire if it were not renewed. The fact that a request for renewal cannot be filed before such a notional day will not, in my view, render the renewal invalid: Project Blue Sky Inc at 390-391. 19 It follows that, on the threshold issue, the submission on behalf of the respondents is rejected. It may be that the Registrar erred in recording the assignment to TGIFM as being effective from 1 January 1996. This would appear to have been done pursuant to s 249 of the Act, even though TGIFM's application did not relate to an "existing registered mark": see s 6 of the Act. In any event, there was no argument on this point and nothing appears to turn on it. The Rectification Claim 20 The respondents' cross-claim faces the obstacle provided by s 234 of the Act. Relevantly that section provides: "234 (1) This section applies in relation to: … (b) a registered trade mark: (i) whose application for registration in Part A of the old register had been accepted under the repealed Act and was still pending immediately before 1 January 1996; and (ii) that has not at any time on or after that day ceased to be registered. (2) In any legal proceedings: … (b) the original registration under this Act of a trade mark referred to in paragraph (1)(b); is taken to be valid in all respects after a period of 7 years from the date of registration of the trade mark unless it is shown that: (c) the original registration was obtained by fraud; or (d) the registration of the trade mark would be contrary to section 28 of the repealed Act; or (e) the trade mark did not, at the commencement of the proceedings, distinguish the goods or services of the registered owner in relation to which the trade mark is used from the goods or services of other persons."