Finkelstein J throws cold water on the Registrar’s decision to stay opposition proceedings
In proceedings before Justice Finkelstein of the Federal Court, Cadbury UK Limited successfully appealed the decision of a delegate of the Registrar for Trade Marks to stay opposition proceedings to the registration of its trade marks for shades of the colour purple in relation to chocolate and related products pending resolution of a Federal Court action for passing off and breach of section 52 of the Trade Practices Act.
By way of background Darrell Lea applied to the delegate to "suspend" the opposition proceedings "until the determination of [the passing off action]." In requesting the "suspension" Darrell Lea submitted that because Cadbury’s use of the colour purple was the subject of a Federal Court proceeding, it would be inappropriate to continue with the opposition proceedings as that may result in findings of fact that are inconsistent with those made by the Federal Court. The delegate accepted Darrell Lea’s argument. She said the judge deciding the passing off action must investigate the reputation of Cadbury in the colour purple and that such an inquiry would necessitate an investigation into similar evidence that would be useful in establishing factual distinctiveness for the purposes of section 41(6). The delegate considered that findings of fact made by the Federal Court would be based on more extensive material and would be better tested than evidence before the Registrar and a suspension would avoid duplication in the decision making process, and will reduce the chance of inconsistent findings resulting from the analysis of similar evidence. The Delegate then gave the following direction:
"[T]he present oppositions be suspended until the Federal Court decision in the passing off proceeding is handed down. If there is no appeal from that decision, the present oppositions shall be lifted from suspension, and further directions given such that the opposition will continue through the evidence stages in accordance with normal practice and procedure."
In reaching his decision that the delegate’s direction to stay the opposition proceedings for an indeterminate period could not stand and should be set aside, Finkelstein J firstly had regard to the Trade Mark Regulations in particularly reg 21.15(7). Whilst the Registrar’s power to give directions with regard to the conduct of opposition proceedings was not questioned, it was his Honour’s view that “the suspension of the opposition proceedings for an indefinite period amounted to a denial of justice and a refusal by the delegate to perform her duty to hear and determine those proceedings: R v Whiteway; Ex parte Stephenson [1961] VR 168, 170; compare Thornton v Repatriation Commission (1981) 35 ALR 485.”
His Honour also considered that in reaching the decision to stay the opposition proceedings the Delegate placed too much emphasis on the judge’s or judges’ findings. Finkelstein J stated that “(t)o proceed on the basis that it is unlikely that the Registrar will depart from the court’s findings and, that there is a public interest in avoiding inconsistent fact findings, indicates to me that there is a real risk that the delegate was not going to decide for herself the issues that must be decided to dispose of the opposition proceedings”.
This decision of Justice Finkelstein is interesting and one that will have ramifications not only on proceedings before the Registrar of Trade Marks but those before the Commissioner of Patents. Fortunately his Honour was able to provide us with some guidance on the circumstances where it would be appropriate to suspend an opposition proceeding pending resolution of a court proceeding. These are said to include: “a) the degree of similarity of the issues involved, (b) the significance of the issues to the opposition proceeding, (c) whether the Registrar has more evidence than the trial judge, (d) the likelihood of the judge’s findings being challenged, and (e) whether it may be unfair (ie a breach of the rules of natural justice) to rely on the judge’s findings or the evidence on which those findings were based.”
By way of background Darrell Lea applied to the delegate to "suspend" the opposition proceedings "until the determination of [the passing off action]." In requesting the "suspension" Darrell Lea submitted that because Cadbury’s use of the colour purple was the subject of a Federal Court proceeding, it would be inappropriate to continue with the opposition proceedings as that may result in findings of fact that are inconsistent with those made by the Federal Court. The delegate accepted Darrell Lea’s argument. She said the judge deciding the passing off action must investigate the reputation of Cadbury in the colour purple and that such an inquiry would necessitate an investigation into similar evidence that would be useful in establishing factual distinctiveness for the purposes of section 41(6). The delegate considered that findings of fact made by the Federal Court would be based on more extensive material and would be better tested than evidence before the Registrar and a suspension would avoid duplication in the decision making process, and will reduce the chance of inconsistent findings resulting from the analysis of similar evidence. The Delegate then gave the following direction:
"[T]he present oppositions be suspended until the Federal Court decision in the passing off proceeding is handed down. If there is no appeal from that decision, the present oppositions shall be lifted from suspension, and further directions given such that the opposition will continue through the evidence stages in accordance with normal practice and procedure."
In reaching his decision that the delegate’s direction to stay the opposition proceedings for an indeterminate period could not stand and should be set aside, Finkelstein J firstly had regard to the Trade Mark Regulations in particularly reg 21.15(7). Whilst the Registrar’s power to give directions with regard to the conduct of opposition proceedings was not questioned, it was his Honour’s view that “the suspension of the opposition proceedings for an indefinite period amounted to a denial of justice and a refusal by the delegate to perform her duty to hear and determine those proceedings: R v Whiteway; Ex parte Stephenson [1961] VR 168, 170; compare Thornton v Repatriation Commission (1981) 35 ALR 485.”
His Honour also considered that in reaching the decision to stay the opposition proceedings the Delegate placed too much emphasis on the judge’s or judges’ findings. Finkelstein J stated that “(t)o proceed on the basis that it is unlikely that the Registrar will depart from the court’s findings and, that there is a public interest in avoiding inconsistent fact findings, indicates to me that there is a real risk that the delegate was not going to decide for herself the issues that must be decided to dispose of the opposition proceedings”.
This decision of Justice Finkelstein is interesting and one that will have ramifications not only on proceedings before the Registrar of Trade Marks but those before the Commissioner of Patents. Fortunately his Honour was able to provide us with some guidance on the circumstances where it would be appropriate to suspend an opposition proceeding pending resolution of a court proceeding. These are said to include: “a) the degree of similarity of the issues involved, (b) the significance of the issues to the opposition proceeding, (c) whether the Registrar has more evidence than the trial judge, (d) the likelihood of the judge’s findings being challenged, and (e) whether it may be unfair (ie a breach of the rules of natural justice) to rely on the judge’s findings or the evidence on which those findings were based.”
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