IP - Lapsed Rights

Hayley Tarr, Principal of Tarr Law, addresses key questions regarding inadvertantly lapsed rights in a Q&A session with Legalwise Seminars. She will be presenting at the upcoming IP Fundamentals Series Webinar in October.

How would you briefly describe the current state of inadvertently lapsed rights? Are they increasing?

There is no publicly accessible data on how many rights have lapsed inadvertently. But it is evident from the trade marks database that roughly 30,000 trade marks are removed from the register due to non-renewal annually. Feasibly, some of these cases are unintentional. I do not have mass data for this, but individual cases are evident when you go hunting through the database. You can see, for example, where a mark has been removed for non-renewal and then almost immediately thereafter, a new application for the same mark, same goods and services, and same applicant, has been filed. Some of these are self-represented and some of these have law firms listed as the address for service.

As to whether it is increasing, you can imagine it might as IP Australia has made the process of filing trade mark applications very user friendly, so many people are self-filing and many lawyers who do not specialise in trade marks are feeling comfortable to do the work. This could lead to issues where self-filers are not that organised, or do not think to advise IP Australia of a change of contact particulars. It could also lead to issues where a lawyer does not do enough work in the trade mark space to have specialist IP docketing software, and so does not properly monitor deadlines.

One interesting point to note is that there has been a sharp decrease in the trade marks removed from the register due to non-renewal in the past year. There has not been any major change in the number of marks being removed for other reasons (non-use, voluntarily cancellation, court order etc). So, it appears the difference is in owners choosing to maintain their registrations.

It is hard to explain why, except to theorise that in the post-covid era people are taking stock of what they own and seeing the value in their intellectual property assets. Possibly also the rise of platforms for IP rights holders to sell their IP assets rather than just abandon them, may reduce the number of rights that are simply just left to lapse. Or, it could mean that the instances of involuntarily lapse of rights is decreasing, not increasing?

What’s a common mistake do you see lawyers make when the Rights lapse?

If a trade mark renewal deadline is missed, the lawyer has 6 months to attend to late renewal, upon payment of a renewal fee. It is vital that the lawyer catches and rectifies the problem within this 6 month period, as renewal of a trade mark is a prescribed act under regulation 21.28. Prescribed acts are excluded from the definition of relevant acts under s224. Section 224 extensions are only available for relevant acts. So, what this all means is that it is not possible to obtain an extension of the late renewal deadline, even when the reason the deadline was missed is a clear error or omission. There is nothing you can do at that point. The trade mark will lapse.

What steps should trade mark attorneys take to mitigate the consequences of the lapse?

Notify the insurance provider. Immediately file a new application for the same goods and services, at your own cost. If the trade mark is descriptive of the goods and services, or there are other prior conflicting marks, this new application may receive a distinctiveness or citation objection. Some lawyers simply advise the client that they need to provide evidence of acquired distinctiveness from scratch as if this were any other normal application. This requires the client to do a lot of work to answer the evidence of use questionnaire and provide the necessary extensive evidence to prove acquired distinctiveness. But, in cases where the client already filed the evidence of acquired distinctiveness to achieve registration of the inadvertently lapsed registration, notifying IP Australia of the inadvertent lapse should be sufficient to convince the examiner that all is required is evidence of continuous use of the trade mark in relation to all of the goods and services since the last evidence was filed. Provision of evidence of continuous use is a lot lesser burden than meeting the threshold of acquired distinctiveness through use.

How real is the threat of consequences for violations?

In a worse case scenario, the client may not have sufficient use to overcome objections raised in the new exam report, and may not be able to get their trade mark registration ‘back’, for all the goods and services they had before. Even if the client restores the registration, it will only date back to a more recent priority date and so may open up the opportunity for 3^rd parties to register their trade marks on the basis of prior continuous use or other grounds that they did not have open to them before. You may lose a client who is disgruntled by the failing, you will incur internal costs as you spend firm money to work to restore the client’s rights, you may get fired, sued, or reprimanded for professional misconduct. Basically, you don’t want to miss a deadline, and – if you ever do – you want to take swift action to minimise the damage.