Clarke v TNSG Biotech — Federal Court allowed appeal and registered Chinese trademark application where respondent abandoned opposition

The Court’s Holding

Justice Stellios allowed Clarke’s appeal, set aside the delegate’s decision, dismissed TNSG’s opposition, and ordered the Registrar to allow the application to proceed to registration. The Court found that TNSG had effectively abandoned its opposition by ceasing legal representation without filing a notice of address for service as required by the Federal Court Rules, and making no attempts to engage with the proceeding despite knowledge of the hearing dates established by consent orders.

The Court held that even if TNSG’s evidence were considered, it had not been properly adduced. The affidavits filed by TNSG were never read into open court, and the deponents did not attend for cross-examination despite notice being given. Under established authority, affidavits do not constitute evidence merely by being filed; they must be read in open court, and if a deponent fails to attend cross-examination after notice, the affidavit cannot be used. Since TNSG bore the burden of establishing bad faith and no evidence had been properly adduced, the opposition could not succeed.

The Court noted that the distribution agreements between Clarke’s company Biozeal and TNSG expressly acknowledged Biozeal’s ownership of intellectual property and required Biozeal’s written approval for any use of marks and intellectual property. These terms established that TNSG was at most an authorized user of the marks under quality control exercised by Clarke, not an owner, and contradicted TNSG’s bad faith claim.

Key Takeaways

• A respondent in a trade mark opposition appeal who fails to appear and ceases legal representation without complying with court rules may have its opposition dismissed, particularly where it has abandoned engagement with the proceeding.
• Affidavits do not constitute evidence merely by being filed in court; they must be read in open court, and affidavit evidence is not adduced unless the deponent attends for cross-examination following notice.
• The statutory appeal under section 56 of the Trade Marks Act 1995 (Cth) is a de novo hearing where the court exercises original jurisdiction and applies the evidentiary rules applicable to first-instance proceedings, not appellate review of the delegate’s reasoning.
• Distribution agreements establishing that a distributor uses marks under the quality control of the trademark owner support a finding of authorized user status rather than independent ownership, even if the distributor displays the mark on commercial materials.

Why It Matters

This decision clarifies the procedural consequences of abandoning engagement in trade mark opposition proceedings and reinforces the evidentiary requirements for bad faith allegations. For trademark applicants facing opposition, it demonstrates that a respondent who fails to appear and properly adduce evidence may lose its opposition even on serious allegations such as bad faith. The decision also provides practical guidance on what constitutes proper evidence in trade mark proceedings under Australian law: mere filing of affidavits is insufficient, and cross-examination remains a critical step in the litigation process.

For international trademark strategy, the case illustrates the importance of carefully structured distribution and licensing agreements that explicitly reserve ownership and quality control to the brand proprietor. Such agreements, properly documented, protect trademark applicants from bad faith allegations by establishing that foreign distributors who use marks do so as authorized users, not as independent owners—a distinction that carries significant legal consequences in intellectual property disputes. The decision also reflects practical challenges in enforcing procedural compliance against respondents with limited presence in Australia, highlighting the role of courier services and diplomatic communication in ensuring proper service in international disputes.