Part 36.4 Is it reasonable to revoke acceptance or registration or amend or cease protection?

Whether it is reasonable to revoke acceptance or registration or amend or cease protection requires assessment of all relevant circumstances. The assessment of reasonableness is context specific, balancing the integrity of the Register, the desirability of certainty, and fairness to affected parties. The Registrar should exercise caution before using these powers to correct what might be characterised as minor issues, finely balanced matters of evaluative opinion on which minds may reasonably differ (as distinct from an identified error or oversight of the original delegate), or to resolve disputes more appropriately settled between parties in other forums. 

Ultimately, the Registrar should consider whether intervention is necessary to:

• correct an outcome that is clearly inconsistent with the Act and Regulations; and

• ensure the Register remains accurate and reliable.

This consideration must be balanced against certainty and stability for rights holders. A significant element of the public interest which is relevant to consider in the revocation process is any adverse impact that revocation may have on the trade mark owner: NCF first instance at [72], not disturbed by the Full Court on appeal.

While the question of whether the mark should have been accepted, registered or protected is constrained by the circumstances prevailing at the time of registration, the question of reasonableness has no such temporal constraint: NCF first instance at [22], not disturbed by the Full Court on appeal.

36.4.1 Considerations relevant to reasonableness

Although the Registrar is not limited in what circumstances they are allowed to take into account, the circumstances which the Registrar is obliged to take into account in considering the reasonableness of revocation of registration (pursuant to s 84A(3)) or ceasing or limiting protection of a PITM (pursuant to reg 17A.42A(4)) include:

• any use that has been made of the trade mark;

• any past, current or proposed legal proceedings relating (as the case may be):

  • to the trade mark as a registered trade mark or to the registration of the trade mark, or

  • to the trade mark as a protected international trade mark or seeking amendment or cessation of its protection;

• any other action taken in relation to the trade mark as a registered / protected trade mark (as the case may be); and

• any special circumstances making it appropriate for the Registrar to exercise or not exercise the power.

While the above factors have been identified as specific circumstances that must be taken into account when the Registrar considers the reasonableness of revocation of registration under s 84A or amendment or cessation of protection under reg 17A.42A, the Registrar is obliged to take account of all the circumstances that existed when the trade mark became registered / protected, and not just those listed above.

No specific circumstances are prescribed as mandatory circumstances that the Registrar must take into account when considering the reasonableness of revocation of acceptance under s 38 or reg 17A.27. However, the above-listed circumstances may well be relevant when considering the exercise of this power, though the Registrar is similarly obliged to take account of all the circumstances that existed when the trade mark was accepted.

These broad categories of circumstances, among other particularly relevant categories of circumstances, are set out further below.

36.4.1.1 The nature of the deficiency and the strength of applicable grounds for rejection

In NCF appeal, the Full Court was not satisfied that the trade mark under consideration should not have been registered, and as such, it did not consider the trial judge’s decision on reasonableness in any detail. However, in contrasting the requirement under s 84A(1)(b) with the requirement under s 84A(1)(a), the Full Court said at [96]:

… s 84A(1)(b) is cast in broader terms. We can see no reason that the Registrar should be prevented from considering the fact that the deceptive similarity analysis was finely balanced, or even that there had been a previous decision by an examiner in favour of registration. These are matters which a decision maker may (in the exercise of their discretion) consider to be relevant to the reasonableness of the revocation.

When considering the exercise of the Registrar’s powers, it is therefore relevant whether there was error or defect, as well as the nature, seriousness, and clarity of the issues involved. Some of the factors that collectively inform whether revocation or cessation is reasonable in the circumstances may therefore include:

• Where a mark that should have been rejected under an absolute or relative ground, including whether:

  • there is an error that is obvious or the question is one on which reasonable minds could differ;

  • appropriate register searches were omitted or inadequately conducted;

  • evidence or amendments were properly assessed;

  • conditions or limitations were clearly warranted but not applied;

  • an application was accepted, registered, or protected due to a procedural error.

• if there were defects affecting the filing requirements of an application.

Note: Many of the aforementioned circumstances themselves are not grounds for revocation, however a defect in examination may have resulted in a ground for rejection being missed.

Revocation and cessation are generally more likely to be reasonable when the underlying basis is clear, well-supported, and there is an identified administrative defect or circumstances which would not have been known to the decision maker at the time. Conversely, when issues are finely balanced, arise from differences in evaluative opinion, minor formalities, or classification matters, such considerations may weigh against revocation or cessation.

36.4.1.2 Reliance, use, and prejudice to the trade mark owner

The Registrar should consider whether the owner reasonably relied on the trade mark being registered or protected, or the extent of use of the mark in the circumstances. Reliance is generally more persuasive where there is a clear connection between the registration or protection of the mark and the steps the owner later took. If the owner decided to begin using the mark before registration was obtained, that decision was necessarily taken subject to a higher level of risk and is therefore a less persuasive factor against revocation than use by the trade mark owner that commenced after registration.

Relevant factors include:

• the extent of use prior to and following acceptance, registration, or protection (as the case may be);

• whether the trade mark owner has other relevant registered or protected trade marks; and

• commercial decisions made in reliance on acceptance, registration, or protection.

  • for example, it may be argued that a registration was relied upon in instances where an international filing strategy was only executed upon registration in Australia being secured, or commercial decisions were made in relation to purchasing livery or signage following registration. However, these may only be a compelling factor if the applicant can demonstrate a genuine nexus between the registration occurring and their subsequent actions relying upon it.

  • Note: Reliance and use based on acceptance should be treated cautiously. This is because the opposition process means acceptance does not guarantee that a trade mark will be registered or protected. However, reliance on acceptance in combination with other circumstances which encouraged the applicant to commence use may be more persuasive.

• Whether, considering all the circumstances, prejudice rises beyond mere inconvenience.

If use or reliance is demonstrated and the owner is likely to be disadvantaged, this may weigh against the reasonableness of exercising the powers.

In NCF first instance the Federal Court accepted that a registered owner’s investment made in the mark was not substantial, however it was a factor which supported that revocation would not be reasonable. The Court found that a significant element of the public interest relevant to the revocation process is any adverse impact revocation may have on the trade mark owner, and that deprivation of statutory property is a serious matter that ought not be undertaken lightly and in a way that lacks rigour. Consistent with earlier statements, investment based on acceptance should be treated with some caution in this regard, noting revocation of acceptance does not necessarily deprive an applicant of statutory property. This aspect of the decision was not disturbed on appeal.

36.4.1.3 Any past, current or proposed legal proceedings relating to the trade mark

If the owner is relying, or intends to rely, on the trade mark for legal proceedings, the Registrar may consider that revocation would not be reasonable in the circumstances. For example, this may apply where the owner relies on the trade mark for infringement proceedings, as revoking registration may cause unfairness or prejudice to the owner in those proceedings.

36.4.1.4 Other action taken in relation to the trade mark

Other action is not defined under the Act or Regulations. Depending on the circumstances, it may include administrative actions, or other actions, in the context of which the Registrar may consider revocation is not reasonable.   

36.4.1.5 Any special circumstances making it appropriate to exercise or not exercise the power

Special circumstances refer to situations outside of the normal course that make it particularly appropriate, or inappropriate, for the Registrar to exercise their powers regarding revocation or cessation (s 84A(3)(d) and reg 17A.42A(4)(d)).

In some instances, an applicant or registrant may provide a letter of consent from the owner of an earlier trade mark that forms the basis for revocation. Such letters can be a persuasive reason not to proceed with revocation, if it would have sufficed to allow acceptance under s 44(3)(b). However, unlike the provision of letters of consent during examination, the owner of the earlier mark is not notified of acceptance and the possibility of filing an opposition during the opposition period.

If there are doubts whether the letter of consent provided is genuine, it may be appropriate to notify the owner of the earlier trade mark that a letter of consent has been provided, and that the office will proceed on the assumption that it is genuine unless the consenter notifies the Office to the contrary within four weeks.

Note: that where a letter of consent is prepared and provided in response to a proposal to revoke, a s 44(3)(b) endorsement should not be added as this was not the initial basis for acceptance. Rather, the letter of consent is a factor which contributes to the decision that it is not reasonable to revoke. 

36.4.1.6 Impact on third parties and the public interest

Relevance: The Register serves a public function as correctly reflecting the status and scope of ownership of registered trade mark rights.

When considering the reasonableness of revocation, the Registrar must balance the interests of the owner in maintaining the status of the trade mark, and the public interest (including the interests of other traders) in the accuracy and reliability of the Register.

This factor is relevant because it directs attention to one side of the balancing exercise, namely the public and commercial interest in ensuring that the Register does not reflect rights that should not have been granted. An incorrectly registered trade mark may confer an unwarranted monopoly, provide an unjustified competitive advantage, create uncertainty for other traders, or otherwise undermine the accuracy, reliability and integrity of the Register.

Accordingly, the Registrar should consider whether allowing the registration to remain would adversely affect the accuracy and reliability of the Register or otherwise prejudice the interests of other traders or the public. If so, that consideration may weigh in favour of revocation.

36.4.1.7 Availability of alternative mechanisms

The Registrar’s powers provide a limited administrative remedy. They are not intended to resolve competing ownership claims, function as de facto oppositions, or replace other dispute resolution mechanisms.

As such, the Registrar should consider whether other resolution mechanisms, such as opposition, removal proceedings, or court action, are available and more suitable, which may indicate that exercising the Registrar’s powers is not reasonable.

36.4.2 Considerations not relevant to reasonableness

Although a holistic assessment of all circumstances is required, the Federal Court in NCF first instance (at [73] – [74]) considered two matters raised in that proceeding as not being of central relevance to the question of reasonableness in that proceeding (with the Court’s findings on these issues not disturbed on appeal). While the Court’s consideration does not necessarily reflect more general principles of law separated from the circumstances of that case, it provides some judicial consideration of the question of what circumstances might not be relevant in this assessment.

First, delays in the revocation process including in the provision of information to the affected rights holder, even if substantial and unexplained, in circumstances where there has been no use of the trade mark in question. Nevertheless, the Registrar endeavours to avoid unnecessary delays.

Second, that a third party with a direct interest in the matter had requested revocation of registration and raised the matter to the Registrar’s attention. It should be borne in mind that the third party in this case had not filed an opposition.