England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MR JUSTICE LADDIE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL Wednesday 12th December, 2001

LORD JUSTICE MUMMERY :

1. This is an appeal by Reliance Water Controls Limited (Reliance), with the permission of Aldous LJ, against the decision of Laddie J dated 12 December 2000.
2. The case concerns the right of an applicant for the registration of a trade mark to change the class number specified by him on Form TM3 in respect of goods for which he has made an application for registration. The appeal turns on the true construction of the relevant provisions of the Trade Marks Act 1994 (the 1994 Act) and of the Trade Marks Rules 1994, as amended (the Rules), and their application to the facts of this case. (The current rules are now contained in the Trade Marks Rules 2000.)
3. Reliance is a supplier of plumbing equipment and apparatus, including control valves. It is a specialist in the market for under basin thermostatic mixing valves.
4. It is a competitor of the respondent, Altecnic Limited (Altecnic), which manufactures valves for hot water systems. Both Reliance and Altecnic wish to register the same mark "CAREMIX" in respect of valves for use in water circulation and blending valves.

Application to Register

5. On 15 March 1997 the Trade Marks Registry received from Messrs Swindell & Pearson, Altecnic's Trade Mark Agents, a completed Form TM3 in which Altecnic applied to register two trade marks, "CAREMIX" and "ALTECNIC CAREMIX."
6. In the column in Section 8 of Form TM3 for the identification of the class number, the number 7 was inserted. In the column in Section 8 of the form under the heading "List of goods/services" these words were typed in-

"Valves; valves for use in water circulation; blending valves; and all other goods/services in this Class."

7. The number 2126884 was allocated to the application.
8. Class 7 of the Classification of Goods and Services in Schedule 4 to the Rules contained the following goods-

"Machines and machine tools; motors and engines (except for land vehicles); machine coupling and transmission components (except for land vehicles); agricultural implements; incubators for eggs."

9. So, under the heading "Specification of goods/services" in Form TM3, Altecnic's application (a) specified the numerical class number to which it related; (b) listed the goods considered to be appropriate to that class; and (c) cross referred to " all other goods/services in this Class" i.e. class 7.
10. On 27 March 1997 Messrs Swindell & Pearson wrote to the Trade Marks Registry asking that, for the purpose of examination, there be deleted from the specification of goods/services the words " and all other goods/services in this Class." That deletion was made. It is not in dispute that an applicant may at any time restrict the goods or services covered by the application: section 39(1) of the 1994 Act.
11. On 16 April 1997 Messrs Swindell & Pearson wrote another letter to the Trade Marks Registry making the following request

"It is requested that the above application should be restricted to the first form of the mark, CAREMIX, and on this basis we trust this application can proceed to advertisement at an early date."

12. The appropriate deletion was made. No issue arises on it.
13. The dispute between the parties arises from the request made by Messrs Swindell & Pearson in a letter sent to the Trade Marks Registry on 16 May 1997. The letter followed a telephone conversation of 7 May between a representative in the Registry and Mr Sales of Swindell & Pearson.

"As discussed, we believe the above application had been incorrectly classified and should be in Class 11 rather than Class 7. To illustrate this point enclosed is a copy of a draft mailer bearing the mark of the present application along with an excerpt from a catalogue of the Applicants' Italian parent company illustrating other mixing (blending) valves.

We request that this application is transferred to Class 11 for the specification of goods as filed. This matter is of particular urgency to the Applicants and we should therefore be grateful for an indication to this transfer has taken place and the above application is proceeding to advertisement. We look forward to hearing from the Registry concerning this application."

14. The goods in Class 11 are

"Apparatus for lighting, heating, steam generating, cooking, refrigerating, drying, ventilating, water supply and sanitary purposes."

15. There is no dispute between the parties and the Registry that Altecnic's products fitted better within Class 11 than in Class 7.
16. The Registry replied on 29 May confirming that the application should proceed in respect of the mark "CAREMIX" only and that this was regarded as an acceptable amendment to the application as filed. The letter continued

"I now refer to our telephone conversation of 07 May regarding the specification of goods in this case, in which you stated your belief that this application had been filled in the wrong class of goods, since you now think that the applicant's goods are proper to Class 11, being parts and fittings for plumbing installations. I would be pleased to consider any submissions which you may wish to make on this point and request that you supply me with further information, eg. advertising brochures or materials which are produced by the applicant in relation to these goods, in order that a decision regarding the appropriate class for these goods may be reached.

If you do not reply within two months from the date of this letter, the application will be refused."

17. On 3 June Messrs Swindell & Pearson referred to earlier letters sent in May enclosing catalogues and other published material and seeking a response as soon as possible. A further letter stressing the urgency of the matter was sent on 11 June 1997.
18. On 19 June 1997 the Registry replied as follows

"I am pleased to confirm that the goods claimed do appear to be proper to Class 11 and not to Class 7 as filed, consequently I will arrange for this application to be immediately transferred to the correct class.

As there are now no further outstanding objections or requirements I will arrange for this application to proceed to advertisement on the following basis:

The second mark shown on Form TM3 is to be deleted, ie, the application will proceed for the single word mark "CAREMIX" only.

The specification of goods (in Class 11) will be amended as follows:

Valves; valves for use in water circulation; blending valves. "

19. On that basis the application was accepted and advertised accordingly.

Opposition

20. By a remarkable coincidence Reliance had applied on 27 March 1997 to register the mark "CAREMIX" in Class 11 for substantially identical valves. Its application was No. 2127993.
21. Reliance opposed Altecnic's application on a number of grounds set out in its Notice of Opposition of 4 November 1997. In particular it contended that the amendment of the classification of Altecnic's application from Class 7 to Class 11 was ultra vires.
22. The point was put in this way in the Statement of Grounds dated 5 November 1997 submitted by Reliance's Trade Mark agents, SG Unwin & Co, with the Notice of Opposition to Altecnic's application

"5. The Opponents submit that the amendment from Class 07 to Class 11 was contrary to the provisions of Section 39(2) of the Act as it effectively adds goods not covered by the original application.

6….

7. From the Applicants' request to the examiner in May/June 1997, it is clear that the Applicants had no bona fide intention of using the mark in relation to any of the goods specified in the Application as filed in Class 07, so the Opponents submit that the Application was filed in bad faith such that, under the provisions of Section 3(6) of the Act, the mark should not be allowed to proceed to registration".

23. The dispute came before the Hearing Officer, Mr M Knight, acting on behalf of the Registrar of Trade Marks. Reliance partly succeeded in its application. The Hearing Officer rejected the contention of bad faith, but held that the amendment of Form TM3 so as to change the Class number from 7 to 11 was ultra vires.
24. He pointed out in his decision dated 13 July 2000 that the application form must list the goods or services on which the trade mark is used, or is proposed to be used. If a class number is relied on, together with a description of the goods and/or services which may be ambiguous, then that class number must be considered part of the descriptor attached to the list. If the list of goods and services is at odds with the stated class number the Registrar must be able to correct the classification under the provisions of Section 34(2) or 39(2) (c) of the 1994 Act. There was, however, no power to accede to the application of Altenic to amend the class. It was clear that the valves fell within Class 7, which was not at odds with the listed goods, so there was no inconsistency within the class number and the specification of the goods. There was no "obvious mistake" which could be the subject of an amendment under section 39 (2) (c).

Appeals

25. There was then a successful appeal by Altecnic to Laddie J. By his order dated 12 December 2000 he dismissed the opposition of Reliance, set aside the order of the Hearing Officer and directed that Altecnic's application proceed in Class 11.
26. In giving permission to appeal Aldous LJ pointed out that, although this was a second tier appeal attracting a more stringent test for giving permission, the matter raised issues of importance to applicants for trade marks and the difference of view between the Judge and the Registrar ought to be considered by this court and the practice in relation to amendments be settled finally.
27. In the light of these observations this court accepted the offer of the Registrar of Trade Marks, contained in a letter sent by the Treasury Solicitor on 19 September 2001, to assist the court on an issue which was described as "potentially wide importance for the system of registration of trade marks under the Trade Marks Act 1994 and the practice of the Trade Marks Registry". The Registrar offered to make submissions at the hearing as to the practical consequences of any approach that it was minded to take. Mr Daniel Alexander of Counsel was instructed on behalf of the Registrar. He made helpful written and oral submissions on this aspect of the appeal.

Statutory Provisions and Rules

28. It is provided by section 10 of the 1994 Act that a person infringes a registered trade mark if he uses in the course of trade a sign which is identical with or similar to the trade mark in relation to goods or services which are identical with or similar to those for which it is registered
29. Sections 32 to 34 of the 1994 Act deal with applications for a registered trade mark. It is provided by section 32 that

"(1) An application for registration of a trade mark shall be made to the registrar

(2) The application shall contain –

(a) a request for registration of a trade mark,

(b) the name and address of the applicant,

(c) a statement of the goods or services in relation to which it is sought to register the Trade Mark, and

(d) a representation of the trade mark."

30. Section 34 deals the " Classification of trade marks":

"(1) Goods and services shall be classified for the purposes of the registration of trade marks according to a prescribed system of classification.

(2) Any question arising as to the class within which any goods or services fall shall be determined by the registrar, whose decision shall be final."

31. The classification current at the time of the application was contained in Schedule 4 to the Rules. It is now contained in Schedule 3 to the Trade Marks Rules 2000.
32. Sections 37 to 41 govern the registration procedure. Section 39 deals with the withdrawal, restriction or amendment of applications. It is the only provision in the 1994 Act which expressly deals with the amendment of an application to register a trade mark.

"(1) The applicant may at any time withdraw his application or restrict the goods or services covered by the application.

If the application has been published, the withdrawal or restriction shall also be published.

(2) In other respects, an application may be amended, at the request of the applicant, only by correcting –

(a) the name or address of the applicant,

(b) errors of wording or of copying,

(c) obvious mistakes,

and then only where the correction does not substantially affect the identity of the trade mark or extend the goods or services covered by the application."

33. The language of section 39 of the 1994 Act expressly limiting the circumstances in which an application may be amended reflects the provisions governing the amendment of an application to register a Community trade mark: see Article 44.2 of Council Regulation 40/94 EC on the Community Trade Mark.
34. The Rules also dealt in detail with applications for registration. In particular, Rule 8 provided

"(1) An application may be made for registration in more than one class of Schedule 4.

(2) Every application shall specify the class in Schedule 4 to which it relates; and if the application relates to more than one class in that Schedule the specification contained in it shall set out the classes in consecutive numerical order and list under each class the goods or services appropriate to that class.

(3) If the specification contained in the application lists items by reference to a class in Schedule 4 in which they do not fall, the applicant may request, by filling Form TM3A, that his application be amended to include the appropriate class for those items, and upon the payment of such class fee as may be appropriate the registrar shall amend his application accordingly."

Rule 17 provided

"A request for an amendment of an application to correct an error or to change the name or address of the applicant or in respect of any amendment requested after publication of the application shall be made on Form TM21."

No Form TM21 was submitted by Altecnic.

The Judgment

35. In allowing the appeal by Altecnic Laddie J summarised his conclusion as follows

"26….The registrar had power to amend the classification of the application under s. 34. There is no suggestion that in exercising that power on his behalf, the examiner in the Trade Marks Registry was acting in a Wednesbury unreasonable manner. On the contrary, the parties agree that putting this application into class 11 was to put it in the correct class. It follows that the decision to change the class was not ultra vires.

27. For these reasons I have come to the conclusion that the change in class was a permissible exercise of the Registrar's powers under s. 34. It was not an amendment under s. 39 and it was not ultra vires."

36. In setting out the steps in his reasoning to that conclusion Laddie J made the following key points:-

(a) Classification was primarily a matter of administrative convenience, the classes representing " convenient, but loosely defined, pigeon holes into which applications can be put": see paragraph 21 of the judgment. The judge quoted from Kerly (12^th edition) at p.60 in paragraph 19 of his judgment.

(b) There is a distinction between the classification of a mark and the specification of goods to which it is to be applied.

(c) Section 32 does not impose on the applicant any obligation to define the class into which his registration will fall: see paragraphs 17 and 21 of the judgment.

(d) Classification is determined under section 34 of the 1994 Act by the decision of the Registrar in the exercise of his discretion, which cannot be challenged on appeal and is only subject to judicial review if it is irrational: see paragraph 21 of the judgment.

(e) The distinction between the specification of goods on an application for registration and the classification of marks under section 34 directly affects the issue of amendment under section 39: see paragraph 24 of the judgment. Section 39 is only concerned with an application under Rule 17 to amend an application for registration made under section 32. But "an application to amend classes is not an application to amend the section 32 application": see paragraph 24 of the judgment, in which the judge treated applications to change classes as dealt with by Rule 8 (3). The judge continued in paragraph 25 of his judgment that

" It follows that the argument that the amendment here has to be shown to be obvious is misplaced. A change of class under s.34, even if initiated by the proprietor, may well not be an application to amend the application. I use the expression "may well not" here deliberately. In some cases a proprietor may define the goods or services to which he intends to apply the mark by reference to a particular class. For example he may apply for a mark in respect of "all goods in Class X" or "the following goods in Class X." If that form for wording is used then the proprietor may be held to have adopted the existing classification so as to define what goods he intends to use the mark on. In other words the form of words used in the classification has been adopted as the statement of goods or services required by section 32(2)(c). To that extent the classification becomes part of his statement of goods and, if so, changing the class may amount to an alteration of the goods or services in relation to which it is sought to register the mark. However in this case the statement of goods was "Valves; valves for use in water circulation; blending valves." After the change of class, the statement of goods was unaltered."

Submissions of Altecnic

37. Mr Purvis contended that the judge was right for the reasons he gave and adopted the judge's analysis of the system of classification of goods and of the distinction between the power to permit amendment of an application under section 39 and the power to change the class of goods under section 34. He emphasised that the classes of goods varied greatly in terms of generalisation, were not by definition mutually exclusive and were neither precise nor logical. They had always been treated as a matter of administrative convenience only. So far as the applicant was concerned there was no obligation on him under section 32 to make an application by reference to any particular class. Classification was an administrative matter for the Registrar under section 34. The change of class in this case was a decision within his discretionary power.
38. Reliance was misconceived in its submissions on section 39 as restricting the power of the Registrar to amend an application by changing the class of goods. The change of class of goods in this case had no effect on the scope of the mark applied for, as the class was not referred to in the specification of goods. The request by Altecnic was not therefore an application under section 39 to amend the application to register and was not subject to the restrictions on the amending power in that section. It was a request to the Registrar to exercise his own power under section 34 in a particular way.

Other Submissions and Materials

39. In addition to the helpful arguments of Mr Purvis, the court has had the benefit of detailed written and oral submissions from Mr Simon Thorley QC and Ms Amanda Michaels for Reliance and from Mr Daniel Alexander for the Registrar on the law and on the practice in the Registry. At the conclusion of argument on 19 October the Court asked for information about the practice on this point in the Trade Marks and Design Department of the Office for the Harmonisation of the Internal Market (OHIM) in Alicante. OHIM is concerned with applications for the registration of Community Trade Marks. The Registrar obtained information from the Vice-President for Legal Affairs of OHIM at the end of October. The legal materials supplied by him led to a further round of written legal submissions from the Registrar, Altecnic and Reliance, which were not completed until the middle of November.
40. The result is that this court has had the benefit of a wider range of arguments and materials on law and practice than was available to Laddie J. It is even so with considerable hesitation that I have reached the conclusion that this appeal should be allowed.

Conclusion

41. In my judgment the legal position in this case may be briefly stated:

(a) Altecnic made an application to register "CAREMIX" as a trade mark in relation to goods. On the Form TM3 it specified the goods in question both by reference to the Class number 7 and to a list of goods, which in its original state cross-referred to Class number 7 by incorporating into the list of goods "all other goods/services in this Class."

(b) The deletion of the words "all other goods /services in this Class" as requested in the letter of 27 March 1997 was permissible under section 39(1), as Altecnic was thereby restricting the goods covered by the application to those expressly described in the list. Such restrictions and withdrawals are not subject to the express limitations on amendments contained in section 39 (2).

(c) Class number 7 rightly remained in the column for Class numbers even on deletion of the words " all other goods/services in this Class," because there was no request at that stage to substitute a different Class number or to add another Class number. Class number 7 was still part of Altecnic's application in the context of the "Specification of goods." The fact that the system of classes of goods is for the purposes of administrative convenience or that the identification of a Class number serves such purposes does not prevent the statement of the Class number from being part of the application, which can only be amended in accordance with the provisions of the 1994 Act and the Rules.

(d) Altecnic's letter of 16 May 1997 was expressed as a "request that this application is transferred to Class 11 for the specification of goods as filed." Although not in terms described as such, it was in substance an amendment of the application. The reference to Class 7 in the column for the Class number was to be deleted and a reference to Class 11 inserted in its place. In the ordinary sense of the language of section 39 the application was "amended, at the request of the applicant." That could only be properly done to correct one or more of the matters specified in (a), (b) or (c) of subsection (2) of section 39. The fact that the exercise was described by the Registry in its letter of 19 June 1997 as arranging "for this application to be immediately transferred to the correct class" does not make the alteration to the application in Form TM3 any the less an amendment of the application.

(e) That amendment of the application, at the request of the applicant, was not permissible, because it did not fall within any of the three types of correction allowed under section 39 (2) (a), (b) or (c). It could not be said to be a case of an "obvious mistake", as valves do fall within Class 7. The position might well be different if none of the particular goods expressly described in the "Specification of goods" column fell within goods contained in the Class number given in the "Class number" column of Form TM3. Such a case might reasonably be described as one of an "obvious mistake" in the selection of the Class number and the Class number could accordingly be corrected. Even in those circumstances, however, the amendment of the application could only be made under section 39 (2) and not simply by virtue of a determination of a question under section 34 of the 1994 Act.

(f) On the facts of this case section 34 of the 1994 Act cannot be relied on as authorising the deletion of Class 7 from the application and the insertion of Class number 11 in the application. It is clear from the correspondence and other documents, read in their contextual setting, that the Registrar was acceding to a request to amend the application. He was not simply being asked by Altecnic to exercise his discretion under section 34 to determine a question arising as to the class within which the goods fall. Even if he was being asked by Altecnic to make that determination, such determination alone did not suffice for Alecnic's purposes. The determination might, for example, be a prelude to a fresh application for registration in relation to goods in a different class. In most situations that would not cause any problem. But in the circumstances of this case Altecnic does not want to make a fresh application for Class 11, which would post date the application of Reliance for the same mark, and lose its priority. It is clear that it was seeking to amend the existing application, which it was only entitled to do in a case falling within section 39 (2). As already explained, this was not such a case.

42. This result is not inconsistent with the approach in the current general practice of the Registry nor, as I understand it, with the general practice of OHIM in dealing with amendments to an application by treating the Class number in the application for registration as part of the application. In my judgment, the Registrar is entitled to treat the Class number in the application as relevant to the interpretation of the scope of the application, for example, in the case of an ambiguity in the list of the specification of goods. The application is a considered statement of the applicant which, on ordinary principles of the construction of documents, has to be read as whole to determine its meaning and effect. The fact that the internationally agreed Nice Classification System has been devised to "serve exclusively administrative purposes" (see, for example, Rule 2(4) of the Commission Regulation 2868/95 EC ) does not mean that the selection by the applicant of one or more Class numbers in his application for registration has to be totally ignored in deciding, as a matter of the construction of the application, what the application is for and whether it can properly be amended. I would reject the submission of Mr Purvis that it is only permissible to take account of the Class number when it is expressly (or implicitly) referred to in the description of the "Specification of goods" column of Form TM3, as in the examples helpfully discussed by Jacob J in British Sugar PLC –v- James Robertson & Sons Limited [1976] RPC 280 at p.289 (eg. consideration of the relevance of the practice of the Registrar at the date of registration of adding to the list " All included in this class" and "All included in class X"). That kind of case is no doubt a stronger one for interpretation of the application by reference to the Class number, but I fail to see why it should be the only kind of case in which the Class number can be taken into account by the Registrar or why the Registrar should have to ignore the Class number which the applicant (or his advisers on his behalf) have inserted in the Form TM3 as part of the required expression of the applicant's case in relation to the registration of the trade mark.
43. For these reasons I would allow this appeal.
44. Both the Hearing Officer and the Judge dealt with and rejected a further submission by Reliance that, if the application by Altecnic were forced to proceed in Class 7 as set out in the unamended Form TM3, that would offend against section 3 (6) of the 1994 Act, which provides that a trade mark shall not be registered if or to the extent that the application is "made in bad faith." This court indicated that it did not wish to hear argument on that point. The appropriate course is for Altecnic to consider its position with its advisers in the light of this judgment and, if it decides to proceed with an application to register in respect of Class 7, that particular application should in the first instance be the subject of a decision by the Registrar on the basis of the material before him on that application.

Lord Justice Sedley – I agree

Lord Justice Kennedy- I also agree.

LORD JUSTICE KENNEDY: The order will be drafted, so far as paragraphs 1, 2 and 3 are concerned, in the recitals the word "intervening" will be deleted which appears in brackets after reference to the Registrar of Trade Marks. Paragraph 4 of the draft order is deleted, which means that the remaining paragraphs have to be renumbered. Old paragraph 5, now paragraph 4, will read that: "The matter be remitted to the Registry with an effective filing date of 15th March 1997". Old paragraph 6, now numbered paragraph 5, will be as originally prepared. The same applies to old paragraphs 7 and 8, now respectively numbered 6 and 7.PRIVATE 

Leave to appeal to the House of Lords will be refused.