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Wednesday, March 22, 2017

Beat It

By Nick Li, Lawyer

The Australian Trade Marks Office has amped up Dr Dre's BEATS brand in its trade mark battle against an upstart rival's ATOMIC BEATS speakers.

In so doing, ATMO has confirmed that it can consider evidence in opposition proceedings which was not filed in time, under regulation 21.19 of the Trade Marks Regulations 1995 (Cth).

The decision of the Delegate in Beats Electronics LLC v Strategies Unleashed Pty Limited [2017] ATMO 6 follows another recent decision of the Australian Trade Marks Office in Apple Inc v Healthkit Pty Ltd [2016] ATMO 112 which also considered the operation of regulation 21.19. Together, the two decisions assist practitioners sound out the scope and limits of using regulation 21.19 as a means of getting in evidence which would otherwise not have been taken into account.

Facts


The hearing before Delegate Wilson concerned an opposition by Beats Electronics to an application by Strategies Unleashed for the word mark ATOMIC BEATS in relation to speakers. Beats Electronics claimed that the Strategies Unleashed trade mark was too similar to Dr Dre's BEATS brand which had acquired a reputation in Australia.

Beats Electronics sought to rely on a declaration and exhibits which were unsworn by the evidence due date (a sworn version was filed a day late) (La Perle 1). The declaration and exhibits were being relied upon to demonstrate that the BEATS brand had acquired a reputation through use, in relation to speakers, headphones and earphones. Beats Electronics filed an application under regulation 21.19 for La Perle 1 to be taken into account after IP Australia refused an extension of time for filing the evidence.

Regulation 21.19  


Regulation 21.19 provides that the Registrar must provide information, which is available and relevant to the proceedings and which the Registrar proposes to take into account in their decision, but which is not known to a party in the proceedings, to the unknowing party and give that party a reasonable opportunity to respond to that information. The regulation implies that the Registrar may take into account materials which were not filed by the evidence due date.

The Delegate, finding in favour of Beats Electronics, emphasized that regulation 21.19 was not a means for a party to subvert the extension of time provisions. Therefore, a party applying under regulation 21.19 must demonstrate more than the mere fact that the evidence was filed after the due date.

The Delegate then referred to the Part 51.2.6 of the Trade Marks Office Manual of Practice and Procedure, which provided that out-of-time evidence will not be considered unless a compelling case is made by the filing party with regard to considerations including:

  • why the evidence was filed after the due date;
  • why the evidence was not filed earlier;
  • what the evidence shows;
  • why that information is crucial to the delegate's decision;
  • why it is in the public interest to have the information considered; and
  • the balance of convenience to the parties if the information is considered. 

In assessing the above factors, the Delegate noted that in the present case:

  • materials in La Perle 1 were attached to other sworn declarations which were already in evidence;
  • La Perle 1 was filed only one day late; 
  • as noted above, an unsworn version of La Perle 1 was available to Strategies Unleashed at the evidence due date; and
  • the Applicant had ample opportunity to respond to La Perle 1.

In the light of the above the Delegate decided that the inconvenience that would visit Strategies Unleashed if La Perle 1 was considered was minimal, when compared to the inconvenience that may visit Beats Electronics if La Perle 1 was excluded.

The substantive opposition


The Delegate then considered the substantive opposition under section 60 of the Act in the light of the evidence (including La Perle 1), and decided that:

  • Beats Electronics had established that its trade marks including among others, 'BEATS', 'POWERBEATS' and 'BEATS PILL', were similar to the Applicant's mark;
  • Beats Electronics had established a reputation in the market of its trade marks through use, for speakers, headphones and earphones; and
  • consumers were likely to be confused or misled by the Strategies Unleashed mark because of its similarity with Beats Electronics' mark given its established reputation for similar goods. 

Accordingly, the Delegate found in favour of Beats Electronics, and refused registration of the Strategies Unleashed mark.

Significance of decision


The decision in this case is consistent with another decision of the Australian Trade Marks Office in December 2016, Apple Inc v Healthkit Pty Ltd [2016] ATMO 112. In that case, the solicitor acting for the Applicant did not file any evidence because he had incorrectly assumed that the evidence on the application file, and evidence in a related, but separate, proceeding would be taken into consideration. There the Delegate also found in favour of the party seeking for the evidence to be taken into account. Similar to the present case, the Delegate in Apple Inc v Healthkit Pty Ltd also concluded that the detriment the opponent would suffer was small compared to that which the applicant would suffer if the evidence was excluded.

The two decisions confirm that an application under regulation 21.19 of the Regulations can be used to admit evidence which would otherwise have been excluded. However, seeking to include evidence via regulation 21.19 should be a course adopted cautiously, as the Australian Trade Marks Office have emphatically confirmed that regulation 21.19 applications are not substitutes for extension of time provisions or 'back doors' for filing late evidence. Parties seeking to include evidence by using regulation 21.19 will almost certainly have to face the music when it comes to explaining why the evidence was not filed in time.


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