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Federal Court of Australia - Full Court |
Last Updated: 17 August 2009
FEDERAL COURT OF AUSTRALIA
E & J Gallo Winery v Lion Nathan Australia Pty Limited
CORRIGENDUM
E
& J GALLO WINERY v LION NATHAN AUSTRALIA PTY LIMITED ACN 008 596 370; LION
NATHAN AUSTRALIA PTY LTD; E & J GALLO WINERY
NSD1085 of
2008
MOORE, EDMONDS AND GILMOUR JJ
24 MARCH 2009
(CORRIGENDUM 29 JULY 2009)
SYDNEY
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IN THE FEDERAL COURT OF AUSTRALIA
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NEW SOUTH WALES DISTRICT REGISTRY
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NSD1085 of 2008
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ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF
AUSTRALIA
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BETWEEN:
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E & J GALLO WINERY
Appellant/Cross-Respondent |
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AND:
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LION NATHAN AUSTRALIA PTY LIMITED ACN 008 596
370
Respondent/Cross-Appellant |
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JUDGES:
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MOORE, EDMONDS AND GILMOUR JJ
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DATE OF ORDER:
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24 MARCH 2009
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WHERE MADE:
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SYDNEY
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CORRIGENDUM
1. On page 31 omit "Date of Hearing: 24 & 25 November 2009" and insert "Date of Hearing: 24 & 25 November 2008".
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I certify that the preceding one (1) numbered paragraph is a true copy of
the Corrigendum to the Reasons for Judgment of the Honourable
Justices Moore,
Edmonds and Gilmour.
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Associate:
Dated: 29 July 2009
FEDERAL COURT OF AUSTRALIA
E & J Gallo Winery v Lion Nathan Australia Pty Limited
TRADE MARKS – whether the
registered trade mark should be removed from the Register for non-use –
meaning of "used...in the course
of trade...by a person" – whether there
was an intention to use or authorisation to use the trade mark – whether
the
actual use of the mark was likely to deceive or cause
confusion –
prospective operation of an order to remove a trade mark from the Register
– infringement – deceptive similarity
– goods of the same
description
Trade Marks Act 1995 (Cth), ss 6,
7, 8, 10, 13, 17, 92, 100, 101, 120, 123, 127
Trade Marks Act 1955 - 1958
(Cth), s23(1)(b)
Blackadder v Good
Roads Machinery Company Inc (1926) 38 CLR 332 applied ; Carnival Cruise
Lines Inc v Sitmar Cruises Limited [1994] FCA 936; (1994) 120 ALR 495 applied ; Estex
Clothing Manufacturers Pty Limited v Ellis and Goldstein Limited (1967)
116 CLR 254 followed ; MID Sydney Pty Ltd v Australian Tourism Co Ltd
(1998) 90 FCR 236 referred to ; Jackson & Co v Napper (1886) 35
Ch D 162 cited ; Polo Textile Industries Pty Ltd v Domestic Textile
Corporation Pty Ltd [1993] FCA 203; (1993) 42 FCR 227 followed ; Re the Registered Trade
Mark "Yanx" [1951] HCA 28; (1951) 82 CLR 199 applied ; Riv-Oland Marble Co (Vic) Pty Ltd
v Settef SpA (1988) 19 FCR 569 discussed ; Settef SpA v Riv-Oland Marble
Co (Vic) Pty Ltd (1987) 10 IPR 402 followed ; Southern Cross
Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 followed ;
S & I Publishing Pty Ltd v Australian Life Saver Pty Ltd [1999] FCA 316; (1998) 88
FCR 354 referred to ; Transport Tyre Sales Pty Ltd v Montana Tyres Rims and
Tubes Pty Ltd (1999) 93 FCR 421 followed
E
& J GALLO WINERY v LION NATHAN AUSTRALIA PTY LIMITED ACN 008 596 370; LION
NATHAN AUSTRALIA PTY LTD; E & J GALLO WINERY
NSD1085 of 2008
MOORE, EDMONDS
AND GILMOUR JJ
24 MARCH
2009
SYDNEY
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AND:
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THE COURT ORDERS THAT:
1. The parties to bring in short minutes of orders to give effect to these reasons within 10 days.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal
Court Rules.
The text of entered orders can be located using eSearch on the
Court’s website.
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NEW SOUTH WALES DISTRICT REGISTRY
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ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF
AUSTRALIA
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BETWEEN:
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AND:
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DATE:
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PLACE:
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REASONS FOR JUDGMENT
THE COURT
INTRODUCTION
1 This appeal and cross appeal involve a contest between a large American wine producer, E & J Gallo Winery, and a large Australian company, Lion Nathan Australia Pty Ltd, which are engaged in the production and sale of alcoholic beverages. The contest is over the use of the word BAREFOOT as or as part of a trade mark associated with alcoholic beverages. Gallo is the registered owner of a trade mark constituted by that word in Australia in relation to wines. Lion Nathan says the mark had not been used in Australia before it applied for removal of the mark from the Register and, accordingly, the mark should be removed. Gallo contests this. Lion Nathan is selling in the Australian market a speciality beer using the trade mark BAREFOOT RADLER. Gallo says this involves an infringement of its registered mark. Lion Nathan contests this. 2 The contest arises in this appeal in this way. The registered owner of the BAREFOOT trade mark from 9 March 1999 to 17 January 2005 in Australia was Michael Houlihan who licensed the trade mark to a company he operated, Grape Links Inc, trading as Barefoot Cellars. The business was based in the United States of America. The class of goods in relation to which this trade mark was registered was class 33, "Wines". Gallo acquired the Barefoot Cellars' business and acquired the trade mark in January 2005. Bottles of wine bearing the trade mark BAREFOOT were exported by Barefoot Cellars to Germany in 2001. In 2002, Beach Avenue Wholesalers Pty Ltd ("BAW") imported into Australia a very small number of bottles of wine from the German stock and sold some of them in Australia during the period from 7 May 2004 to 8 May 2007, which is the non-use period for the purposes of s 92(4)(b) the Trade Marks Act 1995 (Cth) ("the TM Act"). BAW was a liquor wholesaler operating in Victoria, Australia. There was no evidence that Mr Houlihan or anyone associated with Barefoot Cellars knew about this sale into and in the Australian market. Lion Nathan commenced selling its beer using the trade mark BAREFOOT RADLER in the Australian market in January 2008. 3 The primary judge made orders on 27 June 2008. His Honour concluded that there had been non-use of Gallo's registered trade mark and, accordingly, ordered its removal from the Register. His Honour determined that this order should operate from the date of the judgment, namely 27 June 2008. As Lion Nathan began using the mark BAREFOOT RADLER before then it was potentially an infringing use. However the primary judge concluded Lion Nathan had not infringed Gallo's registered mark. His Honour accepted the defence of Lion Nathan that its actual use of the mark BAREFOOT RADLER was not likely to deceive or cause confusion for the purposes of s 120(2) of the TM Act, although his Honour had earlier concluded that the mark BAREFOOT RADLER was deceptively similar to the trade mark BAREFOOT. There was no infringement both because the defence had been made out and, additionally, because his Honour also concluded that Lion Nathan's radler beer and wine were not goods of the same description for the purposes of s 120(2)(a) of the TM Act. 4 Gallo's notice of appeal filed on 15 July 2008 challenged the primary judge's conclusions about non-use of its registered trade mark, whether the goods were of the same description and whether the actual use of the allegedly infringing mark by Lion Nathan was likely to deceive or cause confusion. A notice of contention was filed on 5 August 2008 by Lion Nathan. An amended notice of contention was filed on 24 November 2008 which contended that the trade mark BAREFOOT RADLER is not deceptively similar to the trade mark BAREFOOT. Also, the notice contended that if Gallo used a trade mark during the non-use period (7 May 2004 to 8 May 2007) it was a trade mark consisting of BAREFOOT with an image of a bare foot and not the registered trade mark and further that this use was not in good faith. On 5 August 2008 a cross appeal was filed by Lion Nathan alleging that the primary judge had erroneously failed to specify the effective date of removal from the Register of the Trade Mark No 787765 as 8 May 2007.
RELEVANT STATUTORY PROVISIONS
7. ...
5 A significant issue in these proceedings is what constitutes use in Australia of a trademark by the registered owner for the purposes of the non-use provisions of the TM Act. The provisions of the TM Act of central significance to this question are sections 7 and 92. They provide relevantly:
(4) In this Act:(3) An authorised use of a trade mark by a person (see section 8) is taken, for the purposes of this Act, to be a use of the trade mark by the owner of the trade mark. (Emphasis added)
92. ...use of a trade mark in relation to goods means use of the trade mark upon, or in physical or other relation to, the goods (including second-hand goods).
(a) that, on the day on which the application for the registration of the trade mark was filed, the applicant for registration had no intention in good faith; (i) to use the trade mark in Australia; or (ii) to authorise the use of the trade mark in Australia; or (iii) to assign the trade mark to a body corporate for use by the body corporate in Australia; in relation to the goods and/or services to which the non-use application relates and that the registered owner: (iv) has not used the trade mark in Australia; or (v) has not used the trade mark in good faith in Australia; in relation to those goods and/or services at any time before the period of one month ending on the day on which the non-use application is filed;(4) An application under subsection (1) or (3) (non-use application) may be made on either or both of the following grounds, and on no other grounds:
(vi) used the trade mark in Australia; or (vii) used the trade mark in good faith in Australia;(b) that the trade mark has remained registered for a continuous period of 3 years ending one month before the day on which the non-use application is filed, and, at no time during that period, the person who was then the registered owner:
in relation to the goods and/or services to which the application relates. (Emphasis added)
6 Sections 10 and 120 are centrally relevant to the question of infringement. They provide:
10. For the purposes of this Act, a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion.
(a) goods of the same description as that of goods (registered goods) in respect of which the trade mark is registered; or120. (1) A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.
(2) A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to:
(b) ...
However, the person is not taken to have infringed the trade mark if the person establishes that using the sign as the person did is not likely to deceive or cause confusion. (Emphasis added)
(a) the trade mark is well known in Australia; and (b) the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to:(3) A person infringes a registered trade mark if:
(i) goods (unrelated goods) that are not of the same description as that of the goods in respect of which the trade mark is registered (registered goods) or are not closely related to services in respect of which the trade mark is registered (registered services); or(ii) ...
(c) because the trade mark is well known, the sign would be likely to be taken as indicating a connection between the unrelated goods or services and the registered owner of the trade mark; and (d) for that reason, the interests of the registered owner are likely to be adversely affected.
(4) In deciding, for the purposes of paragraph (3)(a), whether a trade mark is well known in Australia, one must take account of the extent to which the trade mark is known within the relevant sector of the public, whether as a result of the promotion of the trade mark or for any other reason.
101. ...
7 Section 101 of the TM Act empowers the Court to order the removal of a trade mark from the Register. It provides, relevantly:
(2) Subject to subsection (3) and to section 102, if, at the end of the proceedings relating to an opposed application, the court is satisfied that the grounds on which the application was made have been established, the court may order the Registrar to remove the trade mark from the Register in respect of any or all of the goods and/or services to which the application relates.
8 Relevant to the question of the terms on which the Court might order the removal of a registered trade mark from the Register are ss 6, 13 and 127. They provide:
6.
...
remove from the Register, in relation to a trade mark, has the meaning given by section 13
13. A trade mark is taken to have been removed from the Register if the Registrar makes an entry in the Register to the effect that all entries in the Register relating to the trade mark are taken to have been removed from the Register.
127. If:
(a) in an action for the infringement of a trade mark registered in respect of particular goods or services, the court finds that the defendant has infringed the trade mark; and(b) either:
(i) the defendant has applied to the court under subsection 92(3) for an order directing the Registrar to remove the trade mark from the Register in respect of those goods or services; or
(ii) the defendant has applied to the Registrar under subsection 92(1) for the trade mark to be removed from the Register in respect of those goods or services, and the matter has been referred to a court under section 94; and
(c) the court finds that, because the trade mark has not during a particular period (critical period) been used in good faith by its registered owner in relation to those goods or services, there are grounds (under subsection 92(4)) for so removing the trade mark from the Register;
the court may not grant relief to the plaintiff by way of damages or an account of profits in respect of any infringement of the trade mark that happened during the critical period.
THE PRIMARY JUDGMENT
The wine sold during that period -- at least in part -- can be traced back to wine originally exported from the United States to Germany and later imported into Australia. The BAREFOOT wine which ultimately found its way to Australia had initially been exported by Barefoot Cellars in the United States to Germany in 2001. The German purchaser, Einig-Zenzen GmbH & Co, had placed the order for 60 cases of wine on 12 February 2001 and the wine had been shipped from the United States on 14 February 2001. Barefoot Cellars, by 2000, had arrangements in place for the international distribution of wine under the BAREFOOT brand with a number of companies, one of them being Einig-Zenzen. What happened to that wine after its arrival in Germany is not known, except to the extent that some of those wines were later imported by Beach Avenue Wholesalers into Australia in July 2002. To the limited extent that it assumes any relevance, the fact that the wine shipped to Australia was part of the shipment to Germany was evidenced by the serial number disclosed in the approval given by the United States Department of Territory on 14 February 2001 to the export of that wine corresponding with the serial number on the carton of wine purchased in September 2007 from Beach Avenue Wholesalers. That wholesaler thereafter sold some quantity of the wine imported from Germany. The first sale took place prior to May 2004, namely on 14 March 2003. During the relevant period, and without being exhaustive, there was a sale of a dozen bottles of BAREFOOT Red Zinfandel to a tavern in Queensland in October 2004. There was also a sale of three bottles of the same wine in Victoria in December 2004. There was a cash sale of a single bottle in July 2005. In addition to these sales there was the supply of BAREFOOT wine during the non-use period to a company related to Beach Avenue Wholesalers, Centre Euro Wines. Centre Euro Wines was supplied some wine free of charge and some was supplied at a price comparable to other sales.
9 Before considering the primary judge's analysis of the legal issues, some findings of fact not challenged in this appeal should be noted. As to the use of the registered trade mark in Australia in the non-use period (7 May 2004 to 8 May 2007), his Honour made the following findings about the 750ml bottles of wine prominently bearing the trademark BAREFOOT on the label on the front of the bottle (at [112] and following):
It is convenient to mention, at this point, one related matter of detail which was not the subject of an express finding but which Lion Nathan submitted, correctly, was established by the evidence and which was not disputed by Gallo. The bottles of wine acquired by BAW bore a label at the back of the bottle which was printed for the purpose of importation into Germany. It identified the name and address of the German importer.
... during 2006 to 2007 ..... steps [were] being undertaken by Lion Nathan to attract legal-aged drinkers who did not drink beer. These steps commenced in about August 2006 and involved developing the concept of a beer that was less bitter to the taste than traditional beers. The concept was developed of adding a lemon flavouring which was intended to be "a suitably refreshing taste for the warmer weather". That was the concept. It was then necessary to create a brand name. The term "RADLER" had already been decided upon as part of the branding. That term is apparently the German word for "cyclist" and describes a traditional Bavarian beer flavoured with a mixture of lemon and lime. The use of the term to describe a beer has its origins in June 1922 when a Munich publican, Franz Kugler, "started mixing dark beer with lemonade to meet the high demand from large groups of cyclists who wanted a more refreshing drink so they could continue on their journey without falling off their bicycles!" Other distinctive words in addition to the word "RADLER" were also being considered by Lion Nathan. It was in February 2007 that the Consumer Insight Manager for that company, Mr Ralph Simpson, came up with the marketing term "BAREFOOT". Mr Simpson came up with the idea of using that term from his reading of a "Form Guide" for horse racing where the name of a horse attracted his attention, namely "Barefootonbondi". He thought that it was an "interesting name" as it "conjured up a positive mental image and feeling of relaxation, summer and the beach". Checks made of registered trade marks in February 2007 revealed the trade mark BAREFOOT in relation to wine. That did not cause Mr Simpson any concern as beer was his principal focus of attention. Prior to February 2007, Mr Simpson had never heard of a BAREFOOT branded wine in Australia or heard of Barefoot Cellars or E. & J. Gallo Winery. In January 2008 the beer BAREFOOT RADLER was launched on the Australian market. It was launched across all States and Territories.
10 In relation to Lion Nathan's activities and in particular the development of the radler beer and the use of the trade mark BAREFOOT RADLER, his Honour made the following findings (at [12] - [17]):
11 As to the form Lion Nathan's trade mark took, it was set out and its use described by his Honour in the following passage at [36]:
An essential feature common to both the mark of Gallo Winery and the sign as pleaded by Lion Nathan remains the word "BAREFOOT" which, it is considered would leave a considerable impression on the mind of a consumer of ordinary intelligence. Notwithstanding the distinctiveness which the word "RADLER" brings to the sign of Lion Nathan, it would not be sufficient to remove the likelihood of deception otherwise arising. (Emphasis added)
12 It should be noted that the primary judge held, over Lion Nathan's objection, that the sign on which it could rely in defending the infringement proceedings, having regard to the pleadings, was only the combination of the words BAREFOOT RADLER, and not a combination of the words and the image of a bare foot. 13 The primary judge published reasons on 20 June 2008 (E & J Gallo Winery v Lion Nathan Australia Pty Limited [2008] FCA 934) which first addressed the question of infringement and secondly addressed the use of the registered mark by the registered owner in the context of determining whether the mark should be removed from the Register. Further reasons were published on 27 June 2008 (E & J Gallo Winery v Lion Nathan Australia Pty Limited (No 2) [2008] FCA 1005) which concerned the day on which the removal from the Register should take effect. 14 The primary judge made, as the authorities require, a "side by side" comparison between the registered trade mark and Lion Nathan's mark, BAREFOOT RADLER in assessing whether it was substantially identical with the registered mark. His Honour concluded the two marks were not identical. His Honour noted the word BAREFOOT was an ordinary English word, used in a variety of contexts and one that is "strongly associated with a carefree lifestyle". His Honour concluded that the addition of the word RADLER denied any substantial identity as between BAREFOOT and BAREFOOT RADLER and that it was the combination of words which distinguished Lion Nathan’s beer. 15 The primary judge then assessed whether the mark used by Lion Nathan so nearly resembled Gallo’s registered mark that it would be "likely to deceive or cause confusion": s 10 TM Act. His Honour noted that this did not involve a side by side comparison but an estimation of the "effect or impression produced on the mind of persons of ordinary intelligence and memory". His Honour noted that the similarity would have to be "such that persons would wonder whether the products came from the same source". His Honour said at [63]:
The manner in which the BAREFOOT wine and the BAREFOOT RADLER beer are presented for sale in liquor outlets, in particular, is such as to negative any likelihood of deception or confusion. A comparison of the two marks may give rise to a deceptive similarity; but any such confusion would be removed when the two products are displayed and stored separately (for example) in a liquor retail outlet.
16 In analysing the impression made by the addition of the word RADLER, his Honour observed that the word would leave an impression on the people who knew its German origin and on those unfamiliar with it. He also observed that it was a word given prominence in Lion Nathan's sign. However, his Honour concluded that this did not remove the likelihood of deception or confusion. The word RADLER added an "important distinguishing feature to the product" but not distinctive enough to "remove the likelihood of deception otherwise arising". 17 To resolve the question of whether the goods were of the same description, the primary judge considered a number of factors, including those mentioned by Dixon CJ, McTiernan, Webb, Fullagar and Taylor JJ in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592. These include such factors as: whether the goods are of a different character, designed to serve different purposes, the inherent character of the goods and the trade channels through which they are bought and sold. No single factor is determinative. His Honour concluded that Lion Nathan's radler beer and Gallo’s wine were not goods of the same description. His Honour identified the following factors as supporting a conclusion that they were goods of the same description: • Lion Nathan’s beer and Gallo’s wine are types of alcoholic beverages, generally distributed by similar wholesale distributors. • Lion Nathan’s BAREFOOT RADLER beer was intended to appeal to "core" beer drinkers and "marginal" beer drinkers and it was developed "with the deliberate objective of enticing consumers who previously drank wine but not beer". • Both products were intended for consumption during summer. • Both wine and beer are frequently distributed by the same retailers. • Corporations, which were once brewers, now seek to expand their business by acquiring wineries and can produce a range of alcoholic and non-alcoholic drinks. 18 However the following factors led the primary judge to conclude that they were not goods of the same description: • Beer and wine have a different origin and are made by different processes. • The manner in which beer and wine is sold may differ. In retail outlets, wine is displayed by reference to categories and may be further organised into wine type and country of origin. It is usually stored on the shop floor. Beer is usually displayed in the coolroom and rarely sold by reference to where it is produced. • The manner in which beer is consumed was also seen to differ from wine, because it is "thirst quenching and refreshing", with a lower alcohol content and may play a different social role to wine. • Although beer and wine may be produced by the same company, there is a separation of the two aspects of the business for production, marketing and sales. • The deliberate steps taken to "entice some wine drinkers into drinking beer" did not lead to a conclusion that beer and wine are goods of the same description. 19 Although the primary judge found that the trade mark BAREFOOT RADLER was deceptively similar to the registered mark BAREFOOT his Honour found that because of the "circumstances and environment" in which Lion Nathan used the mark BAREFOOT RADLER, its use brought it within the concluding words of s 120(2) of the TM Act. BAREFOOT RADLER was not, as used, a mark which would "deceive or cause confusion". The circumstances his Honour had in mind were discussed in the following passage at [94]:
20 The primary judge found that there was no use of the BAREFOOT trade mark by the registered proprietor in Australia arising from the wine, originally exported to Germany, arriving in Australia by a circuitous route and then being offered for sale. His Honour found there was no agreement or arrangement between Mr Houlihan or Barefoot Cellars and BAW whereby the wine imported into Germany would later be sold in Australia. Indeed his Honour expressly found that neither Mr Houlihan nor any officer of Barefoot Cellars knew that the BAREFOOT wine exported to Germany in 2001 may ultimately find its way to Australia. 21 His Honour referred to Estex Clothing Manufacturers Pty Limited v Ellis and Goldstein Limited (1967) 116 CLR 254 and observed that there were no objective criteria which would warrant a conclusion that Gallo had "'projected' its goods into any market other than Germany." 22 In exercising the discretion under s 101(3) of the TM Act to remove the trade mark BAREFOOT from the Register, the primary judge found no "special facts and circumstances" nor "sufficient reason" for leaving the mark on the Register. His Honour held that it would not be "reasonable" to allow Gallo's trade mark to remain registered. In making this finding his Honour considered the public interest, the private commercial interests of Gallo Winery and Lion Nathan, and the integrity of the Register.
THE APPEAL
23 Broadly two issues arise in these proceedings. The first is whether and from when the registered trade mark of Gallo should be removed from the Register for non-use. The second is whether there has been infringement of the registered trade mark by Lion Nathan. 24 It is convenient to deal with the issues raised in the appeal in a slightly different order than the order in which they were considered by the primary judge. The first issue considered is whether there has been use of the registered mark in the non-use period for the purposes of s 92(4)(b) of the TM Act.
USE OF THE MARK: SECTION 92(4)(b)(i)
25 Removal of the trade mark was ordered by the primary judge pursuant to s 92(4)(b)(i) of the TM Act which provides as follows:
(i) used the trade mark in Australia; ...(b) that the trade mark has remained registered for a continuous period of 3 years ending one month before the day on which the non-use application is filed, and, at no time during that period, the person who was then the registered owner:
26 The bottles of wine offered for sale and sold in Australia bore the BAREFOOT mark and accordingly the mark was "used" in relation to those goods in Australia within the meaning of s 7(4) of the TM Act. The question is whether this use was by the registered owner as a consequence of use by Barefoot Cellars as authorised user. 27 As Gallo formulated the question it is whether, when a registered trade mark is used in Australia on, or in physical or other relation to the goods, which are offered for sale and sold here but manufactured overseas by an owner or authorised user of the mark who applied the mark to them, the use of the mark constitutes a use by the owner, even though that person may not know that the goods are being offered for sale or sold in Australia but rather sold them to a foreign distributor for resale without any limitation on where they might be resold. 28 There is no direct authority on this question. 29 That answer to the question, Gallo submitted, follows from three basic propositions of trade mark law:
(a) first, the term "use" in ss 92(4)(b) and 100(3)(a) of the TM Act refers to more than mere physical use of the mark, it refers to use of the mark as a badge of origin in the sense that it indicates a connection in the course of trade between goods and the owner of the mark. That is consistent with the definition of a trade mark, in s 17 of the TM Act, as "a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by another person";(b) secondly, whether or not there has been use of a trade mark in this sense is to be determined objectively, and not by reference to the subjective intentions or knowledge of the person said to have used the mark; and
(c) thirdly, in the case of goods, use of a mark in the relevant sense commences when goods bearing the mark as a badge of origin enter the course of trade and ends only when the goods are bought for consumption.
30 In our opinion, it is not the content of these propositions which is controversial, rather these propositions themselves which pose but do not answer important questions. For example what is meant by "used ... in the course of trade ... by a person": s 17 TM Act, when goods bearing a trade mark registered in Australia have entered this country. 31 Gallo submitted that, consistently with these propositions, when Barefoot Cellars applied, under licence from Mr Houlihan, the BAREFOOT mark to its bottles of wine and exported them, it commenced to use the mark as a badge of origin indicating a connection in the course of trade between the trade mark owner and those bottles. The mark continued to perform this function while the bottles of wine bearing the mark remained in the course of trade, including when they were offered for sale and sold in Australia by BAW. In this way, Barefoot Cellars (and, through it, the registered owner) continued to use the mark as a badge of origin in the course of trade until the bottles of wine were bought from BAW for consumption. Although neither Mr Houlihan nor Barefoot Cellars may have known that the particular bottles of wine in question were being offered for sale and sold in Australia, this cannot affect the objective question of whether there was a use of the BAREFOOT mark by the registered owner. 32 Gallo did not challenge any of the primary judge's findings of fact concerning Mr Houlihan's or Barefoot Cellars' lack of knowledge of the use of the mark in Australia. However it submitted that the BAREFOOT trade mark was used in Australia by the registered owner during the non-use period by virtue of the importation of some wine bearing the registered trade mark by BAW and its subsequent sale in Australia. 33 Gallo submitted that the registered mark was used in Australia because it was affixed with the authorisation of the registered owner to goods which entered the course of trade in Australia, the registered trade mark remained affixed to the goods as a badge of origin and "intention and knowledge are simply irrelevant to an objective assessment of trade mark use". It submitted that observations in Estex were not a statement of general principle regarding the projection of goods in the course of trade in Australia but rather a particular finding on the facts of the case. Gallo submitted that once a registered owner, or licensee, has affixed the trade mark to his goods, that trade mark continues to perform the function of distinguishing the owner's goods, whether they are imported or offered for sale and even if they are sold without his consent. This, Gallo submitted, constitutes use sufficient to satisfy the statutory requirement and avoid removal. 34 In our opinion, the conclusion of the primary judge was correct. The contention of Gallo that an owner of a registered trademark uses the mark in Australia simply because goods to which the owner (or an authorised user) has affixed the mark are traded in the ordinary course of trade in Australia should be rejected. 35 It is necessary to say something about the facts in Estex. The respondent was the registered owner under the Trade Marks Act 1955 (Cth) of two trade marks. The two marks were the word "Eastex" in slightly different forms. The respondent was a manufacturer in England of women's dresses, jersey suits and coats which it sold by wholesale. The applicant and later appellant, was a New South Wales company which also manufactured articles of women's clothing and used the word "Estex" on its garments seemingly as a trade mark. Indeed it had sought registration of that word as a trade mark. The appellant applied for an order that the respondent's two trade marks be removed on the ground that during a period of three years before the application was brought there was no use in good faith of the trade marks in Australia by the respondent. 36 The primary judge, Windeyer J, made findings to the following effect. During the relevant three year period, the respondent manufactured and sold to Australian retail traders, either directly or through its London buying agent, substantial quantities of garments with "Eastex" tags and labels sewn on or otherwise attached to the garments for resale in Australia. The sales made by the respondent to the Australian retail traders were made in England and the garments, in each instance, were the subject of an FOB contract and property in them passed upon shipment in London. However, during the three year period the garments were displayed for sale and sold in Australia by those retail traders. 37 The applicant contended unsuccessfully before Windeyer J that there had been no use by the respondent in Australia of the marks. The applicant appealed. The Full Court of the High Court dismissed the appeal. As to whether there had been use by the respondent of the marks in Australia, the Full Court said (at 271):
[The word "use"] denotation [in s 23] is not limited by any concept of the physical use of the tangible object and we have no doubt that when an overseas manufacturer projects into the course of trade in this country, by means of sales to Australian retail houses, goods bearing his mark and the goods, bearing his mark, are displayed or offered for sale or sold in this country, the use of the mark is that of the manufacturer. (Emphasis added)
Now, in considering that, I do not think I can do better than refer to what Lord Westbury said in McAndrew v Bassett [1864] EngR 448; [4 D. J. & S. 380] with respect to the essential ingredients of a trade mark. He says [4 D.J. & S. 384]: `An element of the right to the property in a trade mark, may be represented as being the fact of the article being in the market as a vendible article, with that stamp or trade mark, at the time when the defendants imitate it. The essential ingredients for constituting an infringement of that right probably would be found to be no other than these: first, that the mark has been applied by the plaintiffs properly (that is to say) that they have not copied any other person's mark and that the mark does not involve any false representation; secondly, that the article so marked is actually a vendible article in the market; and, thirdly, that the defendants, knowing that to be so, have imitated the mark for the purpose of passing in the market other articles of a similar description.’ It seems to me, according to that passage from Lord Westbury's judgment, that the trade mark has been used in England if you find that the articles marked with it have been actually vendible articles in the market in England; and that is the test which I proceed to apply...
38 In this passage, the Full Court identified two factors which, in the circumstances of that case, led to the conclusion that the respondent had used its marks in Australia. The second, referred to after the word "and", was that goods bearing the manufacturer's mark had been displayed or offered for sale or sold in Australia. The essence of Gallo's case in this matter is this is all that is necessary to establish use in Australia by the manufacturer or producer. However, that is not what the Full Court said. Projection by the manufacturer of goods bearing its mark into the course of trade in Australia was the other factor which, together with the display, sale or offering for sale, led to the conclusion that there had been use of the mark in Australia by the manufacturer and its owner. We think fairly plainly what the Full Court was saying was that for there to be use in Australia of the mark by the owner, the owner of the mark must have engaged in conduct of some type which the owner might reasonably contemplate would result in dealings with its goods marked with its mark in Australia while the goods were in the course of trade. 39 Later authorities which have considered this passage do not suggest it should be understood differently: Carnival Cruise Lines Inc v Sitmar Cruises Limited [1994] FCA 936; (1994) 120 ALR 495 at 510 per Gummow J; Transport Tyre Sales Pty Ltd v Montana Tyres Rims & Tubes Pty Ltd (1999) 93 FCR 421 at [68]-[70] per the Full Court; Asia Television Ltd v Yau’s Entertainment Pty Ltd (No 2) [2000] FCA 838; (2000) 49 IPR 264 at [9] per Gyles J; and Brother Industries Ltd v Dynamic Supplies Pty Ltd [2007] FCA 1490; (2007) 163 FCR 530 at [42] and [45] per Tamberlin J; Pioneer Electronic Corporation v Registrar of Trade Marks [1977] HCA 56; (1977) 137 CLR 670 at 688; Ward Group Pty Ltd v Brodie & Stone plc [2005] FCA 471; (2005) 143 FCR 479 at 489. 40 In Estex, the London manufacturer knew that its goods had been sold to Australian retail houses for sale there, rather than in some other country. However, Gallo submitted that this knowledge formed no part of Windeyer J's reasoning on the critical issue in the case. Nor, Gallo submitted, could it properly have formed such a part given that whether there has been use of a mark is to be determined objectively. While the reasons of Windeyer J might be thought to have been subsumed by the Full Court, we advert to them in order to deal with Gallo’s submission as it was formulated. Gallo submitted that the result in Estex would have been exactly the same had the London manufacturer not known to whom its garments had been sold or where they were bound. It is certainly the case that no part of the reasoning set out above would require adjustment to accommodate that change in the facts. 41 In support of this view of Windeyer J's reasons, Gallo referred to Jackson & Co v Napper (1886) 35 Ch D 162, which was the only authority his Honour cited on this issue and which he described as "instructive". In that case, in deciding whether German manufacturers of steel and hardware goods had used their mark in England, Stirling J said (at 178):
The size and composition of the consignment points in my view to the purchaser purchasing not for resale but for its own use despite the fact that it was a firm and received samples and brochures. I consider that it follows from the authorities that a mark is used as a trade mark only if it is used with a view to facilitating or promoting the operation of a trading channel which in a business sense had already been opened to Australia. The mark must be used for the purposes of trade: W D & H O Wills (Australia) Ltd v Rothmans Ltd (1956) 94 CLR 183 at 191. The forwarding of samples and brochures is not sufficient to indicate that... [the Italian manufacturer] was ready and willing to fulfil such orders as it received from Australia. The purpose of these items may well have been to ascertain whether there was a market in Australia sufficient for it to be worthwhile for... [the Italian manufacturer] to export here. Use of the mark in such preliminary activities would not be use in the course of trade: Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) [1984] HCA 73; 59 ALJR 77 and 83. (Emphasis added)
42 Gallo submitted, that consistently with Windeyer J's judgment in Estex, this passage from Jackson reveals that Stirling J was concerned, not with the knowledge or intention of the proprietor in relation to whether its goods, to which its trade mark had been applied, were on the market in England, but merely with whether the goods so marked were on the market at all. 43 Many authorities deal, in a variety of ways, with the question of the use of a trade mark in Australia in the context of related overseas use. There are none of which we are aware that proceed on any basis other than use in Australia involved or comprehended some act that was known either to have had, or potentially have, the result that the goods to which the mark was attached would be dealt with in some way within Australia in the course of trade. 44 An example is Blackadder v Good Roads Machinery Company Inc (1926) 38 CLR 332. An Australian company had secured registration in Australia of the trade mark "Winner" in relation to machinery and agricultural and horticultural machines. This was achieved in circumstances where he had been aware that an American company had exported to Australia road-grading machines marked with the word "Champion" and later and in addition, marked with the word "Winner". However the Australian importer obliterated the word "Winner" on those machines so marked and substituted the word "Champion". One issue was whether the American manufacturer had used the mark "Winner" in Australia. In his reasons for judgment, Starke J recounted evidence which established that the American company had accepted orders from Australia for machines under the trade names "Champion" and "Winner", prepared advertisements and invoices and sent them to Australia, describing its machines under the same names and sent goods to Australia bearing a registered name and also the trade names. Later in his reasons (at 337), his Honour said that the American company "had lawfully used the word ["Winner"] in Australia in the limited way already mentioned". That was plainly a reference to the evidence to which we have just referred. That is, use involving conduct which did and was known to result in goods with the mark entering the course of trade in Australia. 45 Another example is Re the Registered Trade Mark "Yanx"; Ex parte Amalgamated Tobacco Corporation Limited [1951] HCA 28; (1951) 82 CLR 199. An English manufacturer of cigarettes sold them using the mark "Yanx". Another English company and trade competitor registered the mark in Australia, although it had not used the mark in Australia or elsewhere. The date of registration was 30 September 1946. One issue was whether the registered owner of the mark in Australia was, in truth, the owner of the mark at the time of registration. That, in turn, depended on whether the English manufacturer who actually used the mark on its cigarettes in, amongst other places, England, had used the mark in Australia. The facts were that before 30 September 1946 an order had been received from Australia by the manufacturer for several million "Yanx" cigarettes and the manufacturer had commenced shipping them to Australia, although they had not arrived by 30 September 1946. Justice Williams concluded that there had been use of the trade mark in Australia observing that as a matter of principle and common sense it would seem that a mark is used as a trade mark in Australia if it is used in Australia to designate the goods of a particular trader which are offered for sale in Australia under the mark whether the goods themselves are actually in Australia or not. His Honour said the goods are "put upon the Australian market" whether they are in Australia awaiting delivery upon sale or they may have to be imported for delivery after sale. His Honour was fairly clearly referring to the goods being "put upon the Australian market" by the actions of the English manufacturer. 46 A more recent example is Settef SpA v Riv-Oland Marble Co (Vic) Pty Ltd (1987) 10 IPR 402. In that matter an Italian manufacturer of building products had registered a trade mark (as of 30 June 1978) in Australia which was then being used by an Australian company which had originally been the distributor of the Italian manufacturer's products. The trial was conducted in the Supreme Court of Victoria. One issue was whether the Italian manufacturer had used the mark in Australia and thus was its proprietor at the time registration was secured. The trial judge reviewed, in detail, the evidence. The activities of the Italian manufacturer were discussed in relation to two periods. The first was the period preceding a visit to Italy by one of the principals of the Australian company in 1967. The second was the period following the visit. In the first period the Italian manufacturer had sent some small amounts of product bearing, it seems, the trade mark to another company in Sydney. The trial judge said at 417:
The trial judge went on to conclude that there had been use by the Italian manufacturer having regard to the sale of the product and the provision of samples and brochures by it to the Australian company in the second period which were then sold or used to promote sales of the product in the Australian market. An appeal from this judgment was dismissed by a Full Court of this Court: Riv-Oland Marble Co (Vic) Pty Ltd v Settef SpA (1988) 19 FCR 569, although in the appeal it was conceded by the Australian company that there had been use of the mark by the Italian manufacturer before 30 June 1978. It is reasonably clear that the conclusions of the trial judge on that particular question, were not challenged in the appeal.
The manufacturer who sells goods, marked with his mark, to warehousemen, wholesaler or retailer does not, in my view, thereupon cease to use the mark in respect of those goods. The mark is his property although the goods are not; and the mark is being used by him so long as the goods are in the course of trade and it is indicative of their origin, that is as his products. Goods remain in the course of trade so long as they are upon a market for sale. Only when they are bought for consumption do they cease to be in the course of trade.
47 Turning to the provisions of the TM Act, registration of a trade mark creates a statutory monopoly in relation to its use. However, to secure the monopoly a person must claim to be the owner of the trade mark and, by dint of s 27(1)(b) of the TM Act, is using or intending to use the trade mark, has authorised or intends to authorise another person to use the trade mark or intends to assign the trade mark to a body corporate which will use the trade mark. "Use" (or user as it is sometimes spoken of) or "intended use" is use in Australia: see for example the discussions of Bowen CJ and Lockhart J in Riv-Oland Marble Co (Vic) Pty Ltd v Settef SpA (1988) 19 FCR 569 at 570 and 601 respectively, as well as s 59. Ownership from "intended use" necessarily involves a conscious resolve on the part of the person alleging ownership of future use in Australia. No authority of which we are aware suggests that inadvertent, unknown and unintended use in Australia results in ownership of the mark for the purposes of registration under Australian law. As to s 27(1)(b), each of the several statutory preconditions to registration (except present use), are expressed in terms which appear to necessarily involve a consciousness on the part of the person claiming to be the owner that the use of the mark is proposed in Australia. That flows from the several concepts in s 27(1)(b) involving an intention to use in Australia, prior or proposed authorisation of someone else to use in Australia or intention to assign for use in Australia. A person cannot unwittingly intend to do something, unwittingly authorise someone else to do something or unwittingly intend to assign something. Context strongly suggests likewise that use by the person claiming to be the owner: s 27(1)(b)(i), is not unwitting or inadvertent use but deliberate use of the mark in Australia as a badge of origin. 48 Putting aside special provisions of the TM Act such as Pt 17 concerning defensive trade marks, the failure of a registered owner to continue to use the trade mark directly or indirectly or to give effect to the intention to use the trade mark (which ordinarily is presumed at the time registration is sought unless an opponent discharges the burden of proving the absence of intention) exposes the mark to removal from the Register under s 92. It is tolerably clear that for the statutory scheme of the TM Act to be a cohesive one, the use to which s 92 is directed is use of the same character which would warrant registration of the trade mark in the first place. That is conduct, by or on behalf of the owner, associated with a witting or deliberate use of the trade mark in Australia. 49 The primary judge, referring to the judgment of the Full Court in Estex, found that there had been no "projection" of the BAREFOOT wine by the proprietor of the BAREFOOT trade mark into the Australian market but only into the German market [146]. We respectfully agree. 50 The use of the like expressions "overseas manufacturer projects into the course of trade in this country ..." or "projecting goods ... on to the Australian market ..." by the Full Court of the High Court in Estex at 271-2 is simply to characterise in that case what was the use of the trade mark by the registered proprietor in Australia. It is this which, according to the language of the legislation, is required to be considered. 51 Section 23(1)(b) of the Trade Marks Act 1955-1958 (Cth) was in substance similar to s 92(4)(b)(i) of the TM Act. Relevantly, it engaged amongst other things the question whether there "was no use in good faith of the trade mark in relation to those goods by the registered proprietor or a registered user of the trade mark for the time being". 52 Gallo placed considerable reliance upon the following passage from the judgment of Windeyer J at first instance at 267:
After the goods have been sold by him his mark may still, using the definition of trade mark in the Act, be used in relation to those goods for the purpose of indicating a connection in the course of trade between them and him, the registered proprietor of the mark. [at 266 - 267]
53 However, these observations must be seen in context. They are found sandwiched between the following passages:
And then:
Of course the use which s 23 speaks of is a use in Australia by the registered proprietor ... [at 267].A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.
54 Justice Windeyer, in our respectful opinion, correctly focused upon the definition of "trade mark" in the Act. Relevantly, that same enquiry ought to be made here. Section 17 of the TM Act provides:
It was argued that Estex Clothing Manufacturers Pty. Ltd. v. Ellis and Goldstein Ltd [(1967) 116 CLR 254] decided that a retailer who sold imported goods bearing an Australian registered trade mark did not use the mark, and that therefore a "distributor" did not use a mark which was already on the goods. In my opinion the Estex Case is not authority for that proposition.... It was not necessary in that case to consider whether the retailer also used the mark because the only relevant question was whether the registered proprietor himself had used the mark in Australia. ... Thus if Pioneer Australia had done no more than import the goods and sell them by retail it would have used the mark .... (Emphasis added)
55 Accordingly, the use of a trade mark is not use in a vacuum but rather it is use "in the course of trade by a person". The remarks of Windeyer J in the above passage relied upon by Gallo require them to be understood in the context of a course of trade in Australia between a person, in that case the registered owner, and someone else not being the ultimate consumer. 56 In this case the course of trade was between Gallo and the wholesale company in Germany. There was, objectively considered, no course of trade between Gallo and BAW or any other party in Australia. The primary judge was, in our respectful opinion, correct in so finding. 57 Part of Gallo's case raised the question of whether BAW used the BAREFOOT trade mark in Australia. Gallo submitted that BAW did not use the trade mark in selling or offering for sale bottles of wine bearing the mark and that it must have been a use by Barefoot Cellars and Houlihan. We do not accept this submission. A trade mark may be used by someone other than the registered owner or an authorised user. The Full Court in Transport Tyre Sales Pty Ltd v Montana Tyres Rims and Tubes Pty Ltd (1999) 93 FCR 421 at [94] held that the mere sale by an importer of tyres in the side of which the registered proprietor had moulded the relevant mark overseas was a use of the mark in Australia by the importer. Pioneer Electronic Corporation v Registrar of Trade Marks [1977] HCA 56; (1977) 137 CLR 670 was to the same effect. In that case the Registrar of Trade Marks contended that the Australian subsidiary of Pioneer ought not to be registered as a user of the Pioneer registered marks because it merely imported goods manufactured by the parent company already bearing the marks and sold them. Aickin J said at 688:
As his Honour found at 686, by selecting the goods and selling them with the marks originally placed on them and by displaying them for sale, the local importer used the marks in Australia.
58 We do not accept Gallo's submission that Champagne Heidsieck et Cie Monopole Societe Anonyme v Buxton (1930) 1 Ch 330 is authority in support of the proposition that the trade mark owner continues to use the goods wherever they end up in world trade and hence a parallel importer such as BAW does not use the mark because only the original proprietor uses the mark. As the respondent submitted, that case is not authority for that proposition. It was held that a registered proprietor could not sue for infringement a person selling goods to which the registered proprietor had applied the mark. As Branson J said in Parfums Christian Dior (Australia) Pty Limited v Dimmeys Stores Pty Limited (1997) 39 IPR 349 at 353-354, citing Revlon Inc v Cripps & Lee Ltd [1980] FSR 85, it is reasonably argued that the philosophical basis for the rule in Champagne is that the registered proprietor consents to the use of its trade mark in those circumstances. That is entirely consistent with the introduction in the 1995 Act of s 123. That section provides that a defence to infringement is that the mark was applied to the goods with the consent of the registered proprietor. That is to say, it is a statutory recognition that absent s 123 the mere sale by an importer of goods already marked would be an infringing use of the mark by the importer. 59 Not all non-infringing use of a trade mark in the course of trade is use by the trade mark owner. As the respondent submitted, s 17 does not provide that a trade mark is a sign used to distinguish goods dealt with or provided in the course of trade by the owner of the trade mark. Rather, it distinguishes goods dealt with or provided in the course of trade by a person. This important distinction reflects Aickin J’s elucidation in Pioneer of the ability of a retailer to associate itself with a particular mark by selecting for resale and selling goods bearing a particular mark. 60 We also accept the submission of Lion Nathan that the structure of the TM Act provides clear scope for non-infringing use of a trade mark other than by owners. "Use" in relation to goods is relevantly defined as "use of the trade mark upon, or in physical or other relation to, the goods (including second hand goods)". The grant of a licence to use a trade mark, in the absence of the control required by s 8, will result in use by the licensee that does not enure for the benefit of the owner under s 7(3). The relevant connection between the owner and the trade would be severed in such a case, consistent with the common understanding of the old law, that to grant a licence to use a trade mark invalidated it but if the licensee sold or advertised goods under the trade mark, there would undoubtedly be trade mark use: Health World Ltd v Shin-Sun Australia Pty Ltd [2008] FCA 100; (2008) 75 IPR 478. 61 In the result, the primary judge was correct in concluding that the trade mark BAREFOOT had not been used in Australia by Houlihan or Gallo and should be removed from the Register on the basis that the ground of removal in s 92(4)(b)(i) had been established. It is unnecessary in this appeal to consider the effect of s 100 in the face of a finding correctly made that there had not been use of the registered mark in Australia or, because of Lion Nathan's allegation of non-use, to consider what precisely Gallo would have had to establish in opposition to the revocation application having regard to s 100(3). Also, given this conclusion, it is unnecessary to deal with the question of use in good faith raised by Lion Nathan as a ground of removal: s 92(4)(b)(ii) and also two issues raised by Lion Nathan in its amended notice of contention, namely that any use was by Grape Links Inc which was not an authorised user and the trade mark used was not the registered mark BAREFOOT but rather was that word in conjunction with an image of a bare foot. We should, however, note that our conclusion that there was no use of the mark in Australia, necessarily means there was no use in good faith. 62 It is convenient, at this point, to deal with the cross appeal concerning the date upon which the removal order commenced to operate. If the primary judge was correct in deciding that the order could only, and in any event should, operate from the date the order was made, then it is necessary for us to consider the arguments raised in the appeal about infringement. 63 The only issue raised by the cross appeal is the effective date of removal from the Register of Australian Trade Mark No 787765 under ss 92 and 101. The date of removal, Lion Nathan contended, should have been 8 May 2007, not 27 June 2008. Lion Nathan submitted that ss 13 and 101 of the TM Act do not, either expressly or by implication, preclude, as the primary judge decided, an order being made for removal of the trade mark from 8 May 2007 and s 127 implies that this is possible. It submitted that not only is there power to make such an order but it should have been made. The construction adopted by the primary judge exposes Lion Nathan, it was submitted, to "considerable injustice in the form of pecuniary and other orders for trade mark infringement". 64 Section 101(2) is clear in its terms. Firstly, it makes plain that the power conferred on the Court to order the Registrar to remove the trade mark from the Register is a power exercisable at the end of the proceedings relating to an opposed application for the removal of a trade mark. The section identifies when the power can be exercised. Also, the terms and the character of the order are clear. It is an order directing someone to do something, namely the Registrar to remove the trade mark from the Register. Manifestly, that order can only operate prospectively. That is, the act directed by the order can only be done after the order is made. This consequence is reinforced by s 103 which requires the Court to cause a copy of the order be served on the Registrar and, additionally, mandates that the Registrar comply with the order. 65 From this point in the statutory scheme when the Court comes to make the order, the effect of the order is, in substance, determined by the TM Act itself. That is because the task the Registrar must perform is, as expressly identified in s 101(2), to "remove the trade mark from the Register". The expression "remove from the Register" (an expression in the active voice) is defined in s 6 and that definition draws attention to s 13. While that latter section, in terms, is in the passive voice and identifies the circumstances in which a trade mark is taken to have been removed from the Register, it nonetheless makes plain that the Registrar is obliged to make an entry in the Register to the effect that all entries in the Register relating to the trade mark are taken to have been removed from the Register. Accordingly, once the removal order is made by the Court, it must be complied with in the way prescribed by the TM Act. It is, in our opinion, a false issue to contemplate whether or not an order under s 101(2) can be made as a "retrospective" order. The TM Act does not authorise the Court to make an order requiring the Registrar to do anything other than what the TM Act itself prescribes. 66 It is, of course, an entirely different question as to what is the effect of the act of the Registrar when complying with the order. Does the act of making the entry in the Register have a legal effect on events which occurred before the entry was made? It is tolerably clear from s 127 that, apart from the effect of that section, it does not. The section proceeds on the basis that even if a ground for removal is made out and, by implication as at least one possibility, a removal order has been made, there nonetheless can be infringement of the trade mark whilst ever it is registered and before the entry is made. 67 This leads to a consideration of the other issues in these proceedings (including those raised by Lion Nathan's notice of contention) concerning the conclusion of the primary judge that there had been no infringement by Lion Nathan.
INFRINGEMENT
In my opinion, the application of a principle so broadly stated requires some concentration upon the object which s 23(2) exists to serve. That object seems plainly to be the avoidance of confusion and deception in the market place, which would be likely to arise should a mark become available for use by two or more different companies, which are unrelated, upon goods of the same description. From that point of view, the expression "goods of the same description" is generally to be understood in such a sense that, if two different items are held not to fall within the expression, their sale under the same mark by different companies is not likely to lead to confusion or deception. That approach would seem to me to accord with the common sense business view recommended by Lord Evershed.
68 The primary judge, concluded that Lion Nathan's radler beer did not constitute "goods of the same description" as wine ("wines" being the goods in respect of which Gallo's trade mark was registered) for the purposes of s 120(2)(a). This conclusion was challenged by Gallo. Gallo submitted that the evidence before the primary judge "compellingly established... that Lion Nathan's radler beer and wines are goods of the same description" for a number reasons: • Both radler beer and wines are types of alcoholic beverage sold by the "Australian alcoholic beverages industry". • Corporate groups, such as the group to which Lion Nathan belongs, and large multi-beverage companies produce and import both beer and wine. • Beer and wine are generally distributed by the same major wholesale distributors. • Radler beer and wine are likely to appeal to the same segment of consumers. • The relevant comparison is between customers who are targeted for the consumption of radler beer and wine drinkers not "marginal and non-beer drinkers". Because radler beer and wine are "sold to the same sort of customers" it can be concluded that they are goods of the same description. • While it is not determinative, it has been held in a number of cases that "whisky and rum; beer and rum; liqueurs and beers, stout and ales; wines and spirits; rum and rum cocktails and sherry and a rum and passionfruit cocktail" are goods of the same description. 69 Lion Nathan submitted that the primary judge did not err by finding that the evidence supported the conclusion concerning the differences between beer and wine. It is not a relevant factor, at the consumer level, that corporate groups own a variety of beer and wine and there was no evidence that consumers have an awareness about the distribution of alcoholic beverages. Lion Nathan submitted the evidence demonstrated that it wanted the radler beer to appeal to traditional beer drinkers, despite the initial strategy of attracting marginal and non-beer drinkers, including wine drinkers. 70 The expression "goods of the same description" is a term of art which was found in the legislative predecessors to the TM Act. There is Full Court authority, MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236, that authorities predating the enactment of the TM Act in 1995 concerning the meaning and effect of the expression in a different context are apt to be applied in considering the meaning and effect of the expression in s 120(2). The fact that the Full Court was considering the expression "services of the same description" rather than "goods of the same description" does not appear to us to be a material difference. In this context, the Full Court referred to the judgment of the High Court in Southern Cross at 606. Considerations referred to in the passage from the judgment of the High Court include the nature and characteristics of the goods, their origin, their purpose, whether they are usually produced by one and the same manufacturer or distributed by the same wholesale houses, whether they are sold in the same shops over the same counters, during the same seasons and to the same class or classes of customers and whether, by those engaged in the manufacture or distribution, they are regarded as belonging to the same trade. 71 It is true, as Lion Nathan submitted, that s 120(2) requires a number of discrete questions to be asked and answered. One which may emerge in a particular factual context is whether the alleged infringing trade mark is deceptively similar to the registered trade mark. Another is whether it is used by the alleged infringer on goods of the same description as that of the registered trade mark. However these discrete questions arise in the context of determining, as the ultimate question, whether there has been infringement of the registered trade mark and, to that end, the object or purpose of the statutory prohibition on infringement is relevant. It is to protect the statutory monopoly the registered owner has to use the registered trade mark as a badge of origin. In the context of goods sold in the course of trade to the public, the question of whether the alleged infringement has arisen by the affixing of a deceptively similar trade mark is not divorced from the question of whether the alleged infringement has arisen by doing so in relation to goods of the same description. One would have thought both questions necessarily require consideration of what members of the consuming public might perceive as a result of the use of the alleged infringing mark on the goods in question and whether they might be led to believe they were goods of the registered owner. In this way, the following observations of Burchett J, relied on by Gallo, in Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd [1993] FCA 203; (1993) 42 FCR 227 at 240 are relevant to the present enquiry, even though made by reference to provisions concerning the removal of a trade mark:
What was said in Edwards Hot Water Systems is no more than a salutary reminder that questions of fact and degree involving judgment may be such that minds may differ so that in a doubtful case an appellate court should give weight to the views of the trial judge. It is not a fetter on an appellate court reaching its own conclusion where it is of a contrary view to that taken by the trial judge.
72 The primary judge accepted that there were a number of factors which supported the view that Lion Nathan's beer and wine were goods at the same description. They were both alcoholic beverages and generally distributed by this same major wholesale distributors. The beer was intended to be an appealing alternative to wine and in developing the product, Lion Nathan deliberately set out to attract people who did not drink beer. Indeed it was developed with the deliberate objective of enticing consumers who previously drank wine but not beer. Producers of alcoholic beverages are no longer confined to the production of beer, as opposed to wine, and large producers of alcoholic beverages now produce a range of products and market themselves as doing so. Companies which were once brewers now market and distribute a range of products including beer, wine, spirits, cider and non-alcoholic drinks. Wine and beer are now frequently distributed by the same retailers. We agree that these matters point, and in our opinion point convincingly, to Lion Nathan's beer and wine being goods of the same description. 73 The considerations which led his Honour to reach the opposite conclusion are, in our opinion, of materially less significance. The first, which concerned the origin of the goods, focused on the manner of manufacture of beer on the one hand and wine on the other. While this clearly establishes that they are not the same goods, it is unlikely that this difference would be significant to the consuming public if, as his Honour found, large producers of alcoholic beverages produce a range of products. Additionally it is important to bear in mind that this issue is being considered in the more general context of whether consumers might see the goods as having the same trade origin: Southern Cross at 606. The same can be said of the next consideration relied on by his Honour, namely the specific manner of sale in restaurants on the one hand and retail outlets on the other. If large producers of alcoholic beverages are producing a range of products then the fact that the wine might be sold in a slightly different way would not be a difference of significance to the consuming public who may come to consider the trade origins of Lion Nathan's beer. The next consideration was the manner in which beer is consumed, that is drunk for its refreshing qualities, and not, like wine, consumed in a "sipping fashion". For our part, we doubt this is a relevant consideration. Nor do we think the last consideration, the detailed corporate structure of Lion Nathan, is of any real significance. 74 While paying due regard to the assessment made by the primary judge, we think this is a case to which the observations of a Full Court in S & I Publishing Pty Ltd v Australian Surf Life Saver Pty Ltd [1999] FCA 316; (1998) 88 FCR 354 at 361 apply:
Accordingly we would conclude that Lion Nathan's radler beer constitutes goods of the same description as wine.
75 This conclusion immediately raises for consideration an issue in Lion Nathan's notice of contention. It is whether its trade mark BAREFOOT RADLER is deceptively similar to Gallo's registered mark BAREFOOT. We are here concerned with the imperfect recollection of Gallo's Mark when considering Lion Nathan's mark. The essence of Lion Nathan's argument was that the word "RADLER" is sufficiently distinctive in the allegedly infringing mark it has used to remove the real possibility that the other word "BAREFOOT" would be sufficiently evocative of Gallo's trade mark to satisfy the test for deceptive similarity. For our part, we agree with the approach and conclusion of the primary judge. An argument by analogy, as Lion Nathan advances by reference to Registrar of Trade Marks v Woolworths Ltd [1999] FCAFC 1020; (1999) 93 FCR 365 is of extremely limited assistance. Notwithstanding the inclusion of the word "RADLER" in Lion Nathan's mark, the word "BAREFOOT" remains prominent and there is an obvious and clear link between that word and an imperfect recollection of Gallo's registered mark such as to "likely deceive or cause confusion": s 10 TM Act. 76 The last issue is Gallo's challenge to the primary judge's conclusion that Lion Nathan cannot be taken to have infringed Gallo's trade mark because using its sign as it did was not likely to deceive or cause confusion. This issue is raised by the concluding words of s 120(2) which have received only limited judicial consideration: see Coca-Cola Company v All-Fect Distributors Ltd [1999] FCA 1721; (1999) 96 FCR 107 at [43]. The words "as the person did" direct attention to the way in which, as a matter of fact, the alleged infringer has used the allegedly infringing trade mark. These concluding words pose a different question to that raised by the opening words of s 120(2) which, in the context of deceptive similarity, direct attention only to a comparison of the marks in the way already discussed. However, any conclusion about deceptive similarity would usually inform consideration of whether the actual use was likely to deceive or cause confusion. In a sense, an affirmative answer to the question of whether the alleged infringing mark was deceptively similar would be the starting point. If it was, then it would, in many instances, render it more likely (though not inevitable) that the actual use of the allegedly infringing mark was likely to deceive or cause confusion. Also relevant, in our opinion, would be the matters considered in determining whether the alleged infringer's goods are of the same description as the goods in respect of which the registered mark is registered. 77 In the present case, Lion Nathan pointed to the fact that its sign was used on beer. The beer was packaged in a beer bottle, packaged in six packs which, in turn were packaged in cartons. The beer was sold in retail stores in the section devoted to beer. It also pointed to the fact that its sign was used in conjunction with the image of a bare foot. However, in our opinion, these matters do not advance Lion Nathan's defence. The use of the image of a bare foot with the words "BAREFOOT RADLER" would be more likely to reinforce the significance or prominence of the word "BAREFOOT". The fact that the allegedly infringing mark was on beer packaged in the way described does not, in our opinion, tell against the likelihood that a person looking at beer packaged in this way would think that the beer originated from Gallo. If, in a retail liquor outlet, there was beer bearing the trade mark "BAREFOOT RADLER" where the word "RADLER" was the description of a type of beer and also wine with the trade mark "BAREFOOT" immediately followed by a description of the type of wine (by reference to grape type), then there is, in our opinion, little room to doubt that it is likely many would view the former as originating from the producer of the latter. 78 We should add that neither party suggested that the consideration of the way in which Lion Nathan actually used its trade mark also raises for consideration the way in which, in the period during which infringement might have arisen, Gallo actually used its registered mark as well. This analysis proceeds on that basis and it can be assumed that the registered mark might have been used by Gallo in any of a variety of ways on wine. This is important because we were not taken to evidence demonstrating how in the period after Lion Nathan launched its beer, Gallo was deploying its registered mark though it is clear from the primary judge's summary of the facts at [10] of his reasons of 20 June 2008, Gallo appears to have commenced marketing in Australia in earnest, large quantities of wine using the registered mark. 79 The preceding analysis leads to the ultimate conclusion that from the time Lion Nathan launched its beer, it infringed the trade mark of Gallo. In these proceedings, Gallo indicated it would make no claim for pecuniary remedies after 27 June 2008. However, because of the various conclusions reached by the primary judge, it was unnecessary for his Honour to consider remedies for infringement. It is appropriate that the parties be given an opportunity to consider what orders should be made in these proceedings and whether an order should be made remitting the matter to the primary judge to determine what further orders might be made. While, in the ordinary course, that would be the conventional order, it may well be appropriate to make an order directing the parties to mediation before any further hearing takes place in the proceedings.
Associate:
Dated: 24
March 2009
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Solicitor for the Appellant/Cross-Respondent:
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Corrs Chambers Westgarth
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Counsel for the Respondent/Cross-Appellant:
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A J L Bannon SC with N R Murray and J M Beaumont
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Solicitor for the Respondent/Cross-Appellant:
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Mallesons Stephen Jaques
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URL: http://www.austlii.edu.au/au/cases/cth/FCAFC/2009/27.html