A recent Federal Court trade mark dispute between Energy Beverages, LLC and Kangaroo Mother Australia Pty Ltd provides useful guidance to trade mark applicants seeking to amend a trade mark application during the course of litigation. Leanne Oitmaa and Darcy Cousins review the decision.
Background
Energy Beverages, LLC (EB) is the owner of a series of registered MOTHER trade marks in Australia used predominately in respect of its line of energy drinks. Kangaroo Mother Australia Pty Ltd (KMA) is a prospective entrant into the Australian food and beverage market. The dispute arose in relation to the KMA’s trade mark application ‘KANGAROO MOTHER’ which claims various food and beverage goods in classes 5, 29, 30, 31 and 32.
KMA were initially successful before a delegate of the Registrar in opposition proceedings. EB’s appeal was heard by O’Callaghan J, whose reasons in Energy Beverages LLC v Kangaroo Mother Australia Pty Ltd [2023] FCA 999, are available here.
The grounds of opposition pressed on appeal were:
- that KMA’s predecessor in title had no intention to use or authorise use of the KANGAROO MOTHER trade mark at the date of filing (s 59 of the Trade Marks Act 1995 (Cth) (TM Act));
- that the KANGAROO MOTHER trade mark was deceptive similarity with two of EB’s existing registrations in respect of similar goods (s 44); and
- the likelihood of the KANGAROO MOTHER trade mark to deceive or cause confusion in light of EB’s acquired reputation in MOTHER trade marks (s 60).
EB was ultimately successful on all grounds, overturning the opposition findings.
This article concerns KMA’s application to amend its specification during the course of proceedings under s 197 of the TM Act.
KMA’s amendment application
On the penultimate day of the six-day hearing, counsel for KMA made a last-minute application for an order to amend the specification of the claimed goods pursuant to s 197 of the TM Act. Justice O’Callaghan refused to exercise his discretion to allow the amendment and justified the decision by reference to s 105 of the Patents Act 1990 (Cth) (which concerns patent amendments proposed during court proceedings). KMA’s amendments sought to reduce the scope of the claimed goods by deleting substantial parts of the specification.
KMA contended that its request was merely to “to narrow the issues in dispute” and to “inform the Court that [they did not intend to] press the specifications indicated in strikethrough as a matter of efficiency”.
EB opposed the application and argued that KMA had not provided a full and frank disclosure of the real reasons for seeking amendment. The true intention, EBA argued, was to avoid the refusal of the registration of the whole mark if his Honour held that part of the specification failed under one or more of the opposition grounds.
Justice O’Callaghan agreed with EB, and added:
The application was made orally. There was no interlocutory application, and no affidavit. And it was made, as I said, on the penultimate day of the trial.
Justice O’Callaghan J likened the power to amend under s 197 of the TM Act to that of s 105 of the Patents Act 1990 (Cth) (Patents Act), noting that the powers were similar.
His Honour quoted from Frucor Beverages Ltd v Coca-Cola Company [2018] FCA 993, [195] (‘Frucor’):
“A decision of the Registrar in opposition to registration proceedings under the Trade Marks Act [does not differ] materially from an appeal to this Court from a decision of the Commissioner in opposition to grant proceedings under the Patents Act.”
This is a novel approach. No prior cases have likened the court’s discretion to amend a trade mark specification under s 197 of the TM Act to the express power to amend a patent specification pursuant to s 105 of the Patents Act.
His Honour considered that the factors relevant to the court’s discretion to amend patent specifications which were adopted in Apotex Pty Ltd v Les Laboratoires Servier (No 2) 83 IPR 42 with respect to patent applications under s 105, apply equally to the discretion to amend trade mark specifications under s 197. These are:
- whether there has been a full disclosure of all relevant matters;
- whether the [applicant] has sought to obtain an unfair advantage from the unamended [specification];
- whether there has been any unreasonable delay in seeking amendment; and
- whether any circumstances arise that would lead the Court to refuse the amendment.
His Honour held that EB’s submissions were compelling and that it was appropriate to draw an inference that the real reason for seeking the amendment was to avoid the failure of the whole of the KANGAROO MOTHER mark if it failed in one respect. Accordingly, KMA had not provided the ‘full and frank disclosure’ required.
Further, O’Callaghan J noted that the application was made late, and that no explanation was provided as to why some goods were deleted while others were preserved. His Honour considered that the trade mark had been framed in the widest possible terms, and the application had blocked other applications from registration for more than four years during which time KMA had not used the trade mark.
Key Takeaways
Justice O’Callaghan’s decision provides useful guidance to trade mark applicants seeking to amend a trade mark application during the course of litigation. We recommend that applicants consider whether any amendments should be made to a specification before commencing legal proceedings. In the event that amendments are sought during court proceedings, it is important to ensure that the applicant satisfies the Court that the above factors justify the exercise of discretion.
