[Guest post] Xactware Solutions Inc. vs. Buildxact Software Ltd: Four Appeals and a Recusal

The IPKat has received and is pleased to host the following guest contribution by Ian Gill (AA Thornton), who moves from a recent appeal against a trade mark decision of the UK Intellectual Property Office (IPO) to discuss - more generally - appeals in IPO practice. Here's what Ian writes:

Xactware Solutions Inc. vs. Buildxact Software Ltd: Four Appeals and a Recusal

by Ian Gill

In some cases, a successful appeal results in the case being remitted back to a lower tribunal to reconsider the decision. In what circumstances should the decision be remitted to the same decision-maker, or when should a fresh decision-make be appointed?

This issue is discussed in one of the four appeals arising from the UK IPO opposition decision BL O/0298/23, where Xactware Solutions Inc. opposed a UK trade mark application for "BUILDXACT" by Buildxact Software Ltd, citing prior registrations for XACTWARE, XACTANALYSIS, and XACTIMATE?

It is hard to succeed in appeals before the UK IPO (see our previous IPKat guest posts on the subject here, here and here).

Background

The opposition was initially heard by Hearing Officer Mr. Bryant, who rejected the opposition. This decision was appealed, and the first appeal was heard by Mr. Philip Johnson. Mr. Johnson rejected most of the grounds of appeal, but did agree that Mr. Bryant had made an error. Specifically, he found that the Hearing Officer had mistakenly believed the Opponent was only relying on the XACTIMATE mark in relation to its objection under Section 5(3) of the Trade Marks Act 1994 which relates to issues of reputation, and not for its objection under Section 5(2)(b) which concerns issues of confusion.

As a result, Mr. Johnson remitted the case back to the UK IPO, instructing them to consider the limited issues that had arisen from this mistake. Mr. Johnson made no substantive comment on whether a different Hearing Officer should handle the remitted case, and there were no substantive submissions from either party on this point. Mr. Johnson simply stated, "I see no reason why the case needs to be assigned to a new Hearing Officer" leaving the matter to the discretion of the Registrar.

The Recusal Issue

When the opposition was remitted, the UK IPO assigned it back to Mr. Bryant, the original Hearing Officer and that prompted a second appeal, this time heard by Geoffrey Hobbs KC. The Appellant (Xactware Solutions) argued that Mr. Bryant should not hear the case again for several reasons:

• The error in the original decision was clear and fundamental in nature.
• Failing to consider the XACTIMATE mark was akin to overlooking critical evidence, which, according to XPetitioner [2022] CSOH 15, should have necessitated a fresh tribunal.
• The risk of “confirmation bias” was too great, raising concerns of perceived unfairness.
• The mistake in the original decision could be embarrassing for Mr. Bryant, leading him to justify his earlier ruling rather than reassess the case impartially.

In response, Mr. Hobbs provided a thorough review of the relevant case law on recusals, including a reference to the UK Post Office scandal in Bates v Post Office Limited [2019] EWHC 871 (QB), paragraphs [27]-[77] as well as HCA International Ltd v Competition and Markets Authority (CMA) [2015] EWCA Civ 492. In the latter case, the CMA accepted that two decisions should be quashed because of material errors, but refused HCA’s request to constitute a fresh tribunal, and the Court of Appeal summarise the positions as follows:

1. Remission could be made to the same decision-maker unless that would cause reasonable perceived unfairness or would same public confidence;
2. The presence of actual bias, apparent bias or confirmation bias would make remission to the original decision-maker undesirable, because any such bias would give rise to a perceived unfairness and potentially damage public confidence;
3. The kind of unfairness concerned was such as contravened the public law duty of fairness.

In this context, the second appeal was rejected, it being noted that:

• The opponent/appellant had not argued in the first appeal that there was any unfairness in Mr Bryant’s conduct of the opposition;
• Neither the UK IPO nor Mr Johnson had any reason to suppose that there was any ground for concern with regard to remittance back to Mr Bryant;
• The opponent/appellant was unable to identify any sustainable bias and there was no suggestion - still less any finding – of unfairness in the first appeal.

Kat-examination

It was not accepted that the case was analogous to XPetitioner, where the first instance tribunal has proceeded in ignorance of the availability of evidence due to a mistake which played a material part in their reasoning and resulted in the judge stating his preference that a new tribunal be convened. By contrast, as stated, Mr Johnson’s express view was that there was no reason for a fresh decision-maker to be appointed.

UK IPO Process

Another interesting part of the decision was the insight provided by the UK IPO into how hearing officers are assigned. At the hearing, the UK IPO’s representatives explained that case assignment follows discussions between senior managers and hearing officers. The Appointed Person’s decision in this case had left the UK IPO with discretion, and they had used their normal process to allocate the case back to Mr. Bryant, taking into account factors like seniority, complexity, availability, and resourcing.

Ultimately, Mr. Bryant rejected the remitted opposition and that decision was not successfully appealed so a registration was granted to Buildxact Software Ltd.

Comment

This case highlights the difficulty in convincing the UK IPO to appoint a new Hearing Officer, even where an error is found in a previous decision. The most appropriate time to raise such concerns is during the appeal proceedings themselves. It is not enough to show that there has been a mistake – it must be shown that a reference back to the same tribunal would cause a reasonably perceived unfairness or damage public confidence and this is a high bar. It is particularly likely that the same decision-maker will be used when the remittance relates to a limited aspect of the original, such that reconsideration of the case as a whole is not needed because it is more efficient in those circumstances for the case to be reviewed again by the same decision-maker.