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Will s42(b) Stop Being Invited to the Trade Mark Opposition Party?

IP Australia Review of the Trade Mark Opposition Cost Structure

IP Australia’s 2024 Fee Review

IP Australia is currently in the process of reviewing a number of its fees and fee structures for Trade Marks, Patents, Designs and Plant Breeder Rights.  The most recent public feedback round has closed.  Any changes that proceed are expected to be announced in July 2024 and to commence on 1 October 2024.

In respect of Trade Mark Oppositions, there are proposed increases to the costs that may be ordered to the successful party following a decision.  The set cost amounts have always been well below the actual cost of running an opposition so it is no great surprise that many within the industry support this increase; in-fact a number think that the amounts should be increased further than proposed.  The changes also include a positive simplification of the fees which are paid for a hearing.  Less welcome is the proposal to increase the fee for filing a removal for non-use action by 60%. 

Proposed New Fee Structure for Opposing a Trade Mark

Shockingly, there is a proposal that an Opponent to the registration of a trade mark should be charged a fee based upon the number of grounds and conflicting trade marks that they elect to include in their Statement of Grounds and Particulars (SGP).  In Australia there are 16 grounds upon which you may oppose the registration of a trade mark.  Like a thrift store, it is proposed that the first three grounds nominated in the SGP will not attract an additional charge, similarly the first 10 conflicting trade marks nominated for a s44 ground will not attract an additional charge.  However, each ground and mark nominated above these thresholds would cost A$250 a piece!  Currently there is no fee for filing an SGP and the fee for commencing an opposition is A$250.  Under this proposed structure if for some reason you decided to nominate every opposition ground available you would have to pay A$3500 in official fees; that is before we look at how many trade marks you nominate for s44.

The grounds of opposition which are nominated in the SGP are selected at the commencement of a proceeding and before any evidence is prepared.  Often it is the case that as the matter progresses the Opponent gains more clarity as to where their best case lies.  When the matter reaches a hearing often the Opponent will elect not to pursue a number of the grounds.  Also, when making a decision in an opposition which has succeeded, commonly a Hearing Officer will examine and comment on the ground which they consider is the most successful and will not make any decision regarding the other grounds that are pursued.  Under the proposed pricing system, these practices could lead to a level of unnecessary outlay in official fees.

Analysis of Grounds for Oppositions to Registration in 2023

Whilst we await the final decision on what will be implemented, we decided to analyse past cases to see how this might possibly change Opponent behaviour when selecting their opposition grounds.  We have looked at every Australian opposition to registration that reached a published decision in 2023 to see what grounds were most commonly nominated in the proceedings, which grounds were not pursued by the time the matter reached a hearing, which grounds lost, which grounds won and how many grounds never have a decision made upon them.  Our data was obtained from the text of the published decisions and so may not be completely accurate as some decisions were not highly detailed with respect to all of the grounds contained in the SGP.  However, there was enough data available to see certain trends.

2023 Opposition Hearings - Grounds

Of the 129 decisions in 2023, it is clear that the most popular grounds that get invited to most every opposition event are s60, s42(b), s44 and s58; with s62A following closely behind.  The grounds that seem to have been about as popular as an echidna at a balloon festival were sections 39, 61, 177 and 187 which did not appear in a single opposition decision in 2023.

A popular ground seen at all the best oppositions, s42(b), was pleaded no less than 88 times across 129 decisions in 2023, or in 68% of the cases.  However, not once did the ground lead its host to victory.  The section was formally decided to be a loser in 52 (59%) of the cases, was no longer pushed by its host on 8 (9%) occasions and was not even judged upon about 28 (32%) times.  If one had to pay for these grounds to show up one would expect a much better performance.

S42b

When compared to the most popular ground, s60, which was invited to 110 events or 85% of the time, at least it succeeded on 7 (6%) occasions. 

S60

Of the other grounds in the top 5 most frequently pleaded grounds, s44 was a clear winner with a 29% success rate, followed by s58 with 17% success and s62A with 13% success.

S62a

These popular grounds certainly did not come anywhere near the wallflower s41 which achieved a 33% success rate; whilst only pleaded 12 times, 4 of those led to victory.

Why Isn’t s42(b) a Winner?

So, what is the problem with s42(b)?  Why does everyone want to take a turn around the room with it despite it providing such an empty promise?  The main issue is the wording of the ground itself; the ground states that the Opponent must establish that the use of the opposed trade mark would be contrary to law rather than could be contrary to law.  This proves to be a very high and difficult standard to meet and is most likely only ever going to succeed in the most clear-cut cases of a breach of a law.

Some of the rare occasions where this ground has been the star on the dance floor include:

Where condoms bearing the trade mark Virgin would be contrary to law because the Applicant had already unlawfully imported 20,000 products bearing the trade mark into Australia in contravention of the Therapeutic Goods Act (Virgin Enterprises Limited v Virgin International Pty Ltd [2010]);  

Where the use of the below trade mark in respect of the provision of information about entertainment and sporting activities was found that it would amount to a misrepresentation under the Australian Consumer Law as a result of the fame enjoyed by The Masters golf tournament (Augusta National Inc v Dennis Roy [2018]); and

The Masters Pennant

Where the use of the Advantage Car Rentals trade mark below in respect of car rental services would be a breach of the Copyright Act with respect to the copyright in the Advantage Rent-A-Car image below. Noting however that it was the Federal Court that reached this conclusion on appeal as the ground was not pressed in the opposition before the Trade Marks Office (Advantage-Rent-A-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683 (8 June 2001).

It is evident that in an environment where you may have to pay per ground for your opposition, that s42(b) should only be on the guest list when there is a clear and patent breach of a law associated with the opposed trade mark.

Most Successful Grounds for Oppositions to Registration

Overall, there were 56 opposition wins in 2023.  The ground with the most wins (25) was s44, although this was a 29% success rate for that ground.  Ironically the data shows that the grounds which overall had the highest success rate were the two grounds which relate to the substantive examination conducted by an Examiner prior to acceptance; s41 – distinctiveness, and s44 – substantially identical or deceptively similar prior marks on the Register.

10. Winner Winner Chicken Dinner

Index to Opposition Grounds

Section 39 The Opposed Trade Mark contains or consists of a sign, or so nearly resembles a sign that is not to be used as a trade mark 

Section 41 The Opposed Trade Mark is not capable of distinguishing the goods/services for which registration is sought

Section 42a The Opposed Trade Mark contains or consists of scandalous matter

Section 42b Use of the Opposed Trade Mark would be contrary to law  

Section 43 Because of a connotation that the Opposed Trade Mark or a sign contained in the Opposed Trade Mark has, use of the Opposed Trade Mark in relation to the specified services would be likely to deceive or cause confusion

Section 44 The Opposed Trade Mark is substantially identical with or deceptively similar to a trade mark registered by another person or whose registration is being sought in respect of similar goods/services or closely related goods/services and the priority date of the Application is not earlier than the priority date of the other trade mark

Section 58 The Applicant is not the owner of the Opposed Trade Mark

Section 58A The Opponent has earlier use of the same or a similar mark in respect of similar services/goods or closely related goods/services -this ground is only available where the opposed application was accepted under either s 44(4) [national application] or reg 4.15A(5) [IRDA].

Section 59 The Applicant is not intending to use the Opposed Trade Mark or authorise the use of the Opposed Trade Mark 

Section 60 The Opposed Trade Mark is similar to a trade mark that has acquired a reputation in Australia and because of the reputation of that other trade mark, use of the Opposed Trade Mark would be likely to deceive or cause confusion

Section 61 The Opposed Trade Mark is in respect of relevant services and contains or consists of a sign that is a geographical indication for the designated services  

Section 62a The Application for registration of the Opposed Trade Mark, or a document filed in support of the Application, was amended contrary to the Trade Marks Act 1995 (Cth)

Section 62b The Registrar accepted the Application for registration on the basis of evidence or representations that were false in material particulars  

Section 62A The Application was made in bad faith 

Section 177 The trade mark is not capable of distinguishing goods or services certified by the applicant or an approved certifier from goods or services not so certified – this ground is only available for certification trade mark applications.

Section 187 It is not likely that the use of the trade mark in relation to the goods or services in respect of which its registration as a defensive trade mark is sought will be taken to indicate that there is a connection between those goods or services and the registered owner – this ground is only available for defensive trade mark applications