FEDERAL COURT OF AUSTRALIA

Fry Consulting Pty Ltd v Sports Warehouse Inc (No 1) [2011] FCA 1417

THE COURT ORDERS THAT:

1.    The application to amend the amended notice of contention made orally on 7 December 2011 is refused.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT (REVISED FROM THE TRANSCRIPT)

ex tempore

1    In this appeal, the respondent, Sports Warehouse Inc (“Sports Warehouse”), applied on the first day of trial to further amend its amended notice of contention dated 17 March 2011, in which it seeks to affirm the decision of the delegate of the Registrar of Trade Marks to refuse to register the applicant’s trade mark

on additional grounds, including under s 60 of the Trade Marks Act 1995 (Cth) (“the Act”). In my opinion, leave to amend should be refused for the following reasons.

2    The application arose in circumstances where, by the agreement of the parties, the trial commenced with the testimony of two witnesses for the respondent appearing by video link from America, as difficulties of scheduling would otherwise arise. At the conclusion of the witnesses’ evidence, Dr Ricketson, counsel for the applicant, Fry Consulting Pty Ltd (“Fry Consulting”), commenced his opening. Dr Ricketson submitted that it was not open to Sports Warehouse now to contend (as foreshadowed in its written submissions) that the reputation, for the purposes of the ground of opposition based on s 60 of the Act, resided in a mark other than the trademark consisting of the words “TENNIS WAREHOUSE”, for which Sports Warehouse had unsuccessfully sought registration, and which was the subject of Kenny J’s decision in Sports Warehouse Inc v Fry Consulting Pty Ltd (2010) 87 IPR 300 delivered on 25 June 2010. Dr Ricketson submitted that it was not apparent from Sports Warehouse’s amended notice of contention that it relied on a different mark for the purposes of its s 60 argument and that Fry Consulting was accordingly taken by surprise and thereby prejudiced.

3    Mr Cordiner, counsel for Sports Warehouse, contended that paragraph 2 of the amended notice of contention sufficiently notified Fry Consulting that Sports Warehouse relied on an unregistered composite mark of Sports Warehouse, rather than the “TENNIS WAREHOUSE” mark which it had applied to register. Further, Mr Cordiner submitted that if it were not sufficiently plain from the amended notice of contention that Sports Warehouse relied on a mark other than Tennis Warehouse, paragraph 11.3 of Sports Warehouse’s written submissions, dated 29 November 2011, made it obvious that it relied on a different, composite mark. The submissions were filed and served six days before trial, which gave Fry Consulting a sufficient opportunity to deal with the point by way of submission, so that no prejudice was entailed. Mr Cordiner sought leave to further amend the amended notice of contention if the court did not consider that it referred to a mark different from the TENNIS WAREHOUSE mark.

4    In my opinion, particularly in the context of this case, paragraph 2 of the amended notice of contention does not notify Fry Consulting of the s 60 case Sports Warehouse required it to meet, as it refers only to the words “TENNIS WAREHOUSE” and makes no reference to a composite mark. Particularly given the history of this matter, the reference in paragraph 2 is, on any reasonable reading, to the TENNIS WAREHOUSE trademark, the subject of Sports Warehouse’s application for registration. Thus, an amendment would be necessary in order for Sports Warehouse to rely on an alternative trademark.

5    Unfortunately, Dr Ricketson had already cross-examined two witnesses when the issue emerged, although he was unable initially, with precision, to assert or point to prejudice by way of a need to lead new evidence or to run his case differently by reason of the proposed amendment. While I was therefore initially inclined to grant leave to amend, an exchange on the terminology of the proposed amendment revealed that doubt, even now (and much more so as at the date of service of Sports Warehouse’s written submissions), attended the precise definition and identification of the common law mark on which Sports Warehouse now sought to rely. The respondent’s written submissions left unclear to which alternative mark they referred.

6    The respondent’s submissions at paragraph 11.3 referred to use of a composite mark, that is “TW Tennis Warehouse”, and extracted the following observation of Kenny J (at [133]):

In my view, when the TW logo was placed in close association with the words “Tennis Warehouse” in 2003, this had the effect of substantially diluting any trade mark significance that attached to the words “Tennis Warehouse” by themselves.

7    Those observations of Kenny J did not precisely identify any particular alternative trademark in the context where there were a number of potential trademarks, including the TENNIS WAREHOUSE trademark, a composite mark of which that trademark was an element, or two separate trademarks being used together, to which Kenny J referred. Kenny J did not decide whether the “close association” she described amounted to the use of two separate trademarks or a single composite mark. Further, Kenny J’s reasons referred to a number of changes in presentation since 2003 of the use of the words “TENNIS WAREHOUSE” in various sizes and fonts. At paragraph 127 of her reasons, Kenny J identified the most significant change as the addition of the TW logo in an oval in 2003, followed by another change from 2005, when the symbol “TW” was added. Kenny J, in paragraph 128 of her reasons, referred to those matters and “other changes”.

8    Sports Warehouse contended that from the observations of Kenny J extracted in paragraph 11.3 of its submissions, Fry Consulting should have realised that the mark or marks referred thereto were those physically represented in paragraph 4.2(c)(i) and (ii) of the submissions, although the submissions nowhere expressly or, in my view, implicitly, so stated. Sports Warehouse submitted that it was possible to identify a single mark from sub-paragraphs 4.2(c)(i) and (ii), as it would argue that the latter mark merely contained an immaterial addition to the first.

9    Dr Ricketson submitted, and I accept, that Sports Warehouse’s written submissions did not clearly and unambiguously identify to the court or the opponent the precise common law mark on which it sought to rely. Paragraph 11.3 in the submissions did not clearly point to the representations in paragraph 4.2(c)(i) and (ii), and even if they did, Dr Ricketson justifiably questioned what variations, including colour, were intended to be caught, in a context where there were many different manifestations of the association of the words “TENNIS WAREHOUSE” and the oval containing the letters “TW”. In the absence of a clear, unambiguous and precise identification of the alternative mark relied upon in the respondent’s submissions, the applicant (even at the level of submission only) lacked a reasonable opportunity to prepare and run its case. The clarifications suggested today were advanced too late and, in any event remained, to some extent, a work in progress. In the circumstances, there was, in my view, insufficient notice of the application to amend the notice of contention, and prejudice would be occasioned were leave to be granted at this stage. Accordingly, leave to amend the amended notice of contention is refused.

Associate:

Dated:    7 December 2011