E. & J. Gallo Winery v Lion Nathan Australia Pty Limited [2008] FCA 136 (14 February 2008)

Last Updated: 22 February 2008

FEDERAL COURT OF AUSTRALIA

E. & J. Gallo Winery v Lion Nathan Australia Pty Limited [2008] FCA 136

TRADE MARKS – proceeding for infringement with cross-claim for revocation – respondent/cross-claimant seeking registration of similar marks – whether applicant/cross-respondent able to pursue declaration of non-registrability in proceeding






Trade Marks Act 1995 (Cth), s 94
Federal Court of Australia Act 1976 (Cth), s 31A

Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 236 ALR 720; (2006) 70 IPR 146 cited
Kamha v Australian Prudential Regulation Authority (2007) 98 ALD 49; [2007] FCA 1422 cited
Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd [1999] FCA 816; (1999) 91 FCR 167 discussed
Philips Electronics NV v Remington Products Australia Pty Ltd (1997) 150 ALR 355; (1997) 39 IPR 303 discussed
RGC Mineral Sands Ltd v Wimmera Industrial Minerals Pty Ltd (No 2) [2000] FCA 22 followed
White Industries Aust Ltd v Commissioner of Taxation (2007) 160 FCR 298 cited














E. & J. GALLO WINERY v LION NATHAN AUSTRALIA PTY LIMITED (ACN 008 596 370)
NSD 1950 OF 2007

GYLES J
14 FEBRUARY 2008
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1950 OF 2007

BETWEEN:	E. & J. GALLO WINERY Applicant/Cross-Respondent
AND:	LION NATHAN AUSTRALIA PTY LIMITED (ACN 008 596 370) Respondent/Cross-Claimant

JUDGE:	GYLES J
DATE OF ORDER:	14 FEBRUARY 2008
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. Paragraph 4 of the Amended Application be dismissed.

2. Paragraph 20 of the Amended Statement of Claim be struck out.

3. The respondent/cross-claimant’s notice of motion dated 21 December 2007 and the applicant/cross-respondent’s notice of motion dated 31 January 2008 be otherwise dismissed and the costs thereof be costs in the cause.

4. The respondent/cross-claimant file and serve its evidence dealing with its adoption of the BAREFOOT RADLER mark and the use by it of the BAREFOOT RADLER mark, by 14 March 2008.

5. The respondent/cross-claimant file and serve its remaining evidence on all issues by 26 March 2008.

6. The applicant/cross-respondent file and serve:

(a) any evidence in reply; and

(b) any further evidence in answer to the cross-claim,

by 7 April 2008.

7. The proceedings be set down for hearing commencing at 10.15 am on 14 April 2008, with an estimate of five days.

8. The parties have liberty to apply on 48 hours’ written notice.

9. Confidential Exhibit SAB2 is to be kept confidential to the parties in the case to be utilised for the purposes of the case only.

10. Pursuant to s 50 of the Federal Court of Australia Act 1976 (Cth) the contents of Exhibit SAB2 not be published.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1950 OF 2007

BETWEEN:	E. & J. GALLO WINERY Applicant/Cross-Respondent
AND:	LION NATHAN AUSTRALIA PTY LIMITED (ACN 008 596 370) Respondent/Cross-Claimant

JUDGE:	GYLES J
DATE:	14 FEBRUARY 2008
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1 Two motions need to be resolved. I have had the benefit of written submissions on each motion prior to the hearing and then oral submissions today. I need not reproduce all of those submissions and it is not necessary to explain the details of the case beyond those that are desirable to express my reasons.

AMENDMENT/SUMMARY DISMISSAL

2 This was a standard application for infringement of a registered trade mark, "BAREFOOT", which was registered with effect from 9 March 1999 in class 33 in respect of wines. In addition to defending the application, the respondent/cross-claimant filed a cross-claim seeking removal of the applicant/cross-respondent’s trade mark from the register on the basis of non-use, an application to the Registrar of Trade Marks to that effect having been referred to the Court pursuant to s 94 of the Trade Marks Act 1995 (Cth). The applicant/cross-respondent then purported to amend the application by seeking the following relief:

"A declaration that the pending Australian trade marks applications referred to in paragraphs 7, 8, 10, 11, 12, 13, 14, 14A and 14B of the accompanying statement of claim are not registrable by the Respondent as trade marks under the Trade Marks Act."

3 Paragraphs 7–14 of the statement of claim had referred to a series of applications on the part of the respondent/cross-claimant for the registration of various trade marks consisting of or including the word "BAREFOOT" in relation to various goods, including beers and alcoholic beverages apart from wines. Paragraphs 7–14 had originally been pleaded as evidence of a threat to infringe. Paragraphs 14A and 14B added two other applications for trade mark by the respondent/cross-claimant. Paragraph 20 was added to the statement of claim as follows:

"At all relevant times the marks the subject of the Australian trade marks applications specified in paragraphs 7, 8, 10, 11, 12, 13, 14, 14A and 14B were and are not registrable by the Respondent as trade marks under the Trade Marks Act.

Particulars

(a) each mark sought to be registered is substantially identical with or deceptively similar to a trade mark registered by the Applicant in respect of similar goods, being the Applicant’s BAREFOOT Trade Mark described in paragraph 3, and having a priority date of 9 March 1999;

(b) the Respondent is not the owner of the marks; and

(c) the applications for the marks were made in bad faith."

4 Whether or not the applicant/cross-respondent was entitled to amend without leave need not be determined as the parties are agreed that the substance of the matter should be decided on the basis that the respondent/cross-claimant is to satisfy the Court that the test laid down by s 31A of the Federal Court of Australia Act 1976 (Cth) is met. There is a burgeoning number of authorities which have considered the relatively straightforward wording of s 31A. Many of the authorities are cited by Lindgren J in White Industries Aust Ltd v Commissioner of Taxation (2007) 160 FCR 298 at [58]; see also Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 236 ALR 720; (2006) 70 IPR 146 at [45]. Subsection (3) of s 31A of the Federal Court of Australia Act 1976 (Cth) makes it clear that the way in which the previous regime had developed should no longer govern the question. Beyond that I respectfully see little merit in this case in considering judicial paraphrases of ordinary English.

5 I am relieved of the necessity of analysing the question that arises here ab initio, as it has been considered in the authorities to which I have been referred. In Philips Electronics NV v Remington Products Australia Pty Ltd (1997) 150 ALR 355; (1997) 39 IPR 303 Lehane J, confronted with a similar question, refused to strike out a claim for a similar declaration. His Honour said (150 ALR at 360; 39 IPR at 309):

"In the end, however, the question, on the footing that there is jurisdiction to make a declaration of the kind sought, is whether the case pleaded in support of that relief ... is so evidently hopeless that the paragraphs and prayers for relief should be struck out. It may be accepted that it will be a rare case where the court finds it appropriate to grant declaratory relief in relation to a pending trade mark application rather than allow the procedure under the Act to take its course. But it is now well established that, given jurisdiction, the provision by statute of a particular means of determining an issue in relation to which a declaration is sought does not necessarily mean that a declaration will be refused ...; the existence of the statutory procedure is a matter – albeit an important matter – to be taken into account in exercising the court’s discretion."

(Emphasis added.)

In the event, his Honour was not satisfied at that stage that the case for declaration was hopeless and did not strike it out. However, on the final hearing, Lehane J declined to make the declaration and, in substance, was unpersuaded that the statutory process should be interfered with (see Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd [1999] FCA 816; (1999) 91 FCR 167 at [60]–[65]).

6 A similar question in relation to the Patents Act 1990 (Cth) was determined by Lindgren J in RGC Mineral Sands Ltd v Wimmera Industrial Minerals Pty Ltd (No 2) [2000] FCA 22. That, too, was decided prior to the introduction of s 31A of the Federal Court of Australia Act. In a typically thorough judgment, his Honour analysed the issues that arise and the many authorities relating to it, including the decision of Lehane J to which I have just referred. Summary dismissal was granted.

7 In my opinion, in this case I should follow the approach of Lindgren J. I also venture the view that, if s 31A had been in force at the time Lehane J gave his interlocutory decision, it more than likely would have been different. In short, I am not satisfied that this is one of those rare cases where it is appropriate to have this Court intervene by way of declaration in statutory process (see also in another context, Kamha v Australian Prudential Regulation Authority (2007) 98 ALD 49; [2007] FCA 1422 at [9] and [13]).

8 There is inevitably some overlap between the issues which arise in this proceeding, absent the amendment, and the applications for trade mark by or on behalf of the respondent/cross-claimant, which are now before the Registrar. It may be that a decision on one or more of those issues might be inconsistent with the trade marks being entitled to registration, if decided favourably to the applicant/cross-respondent. However, there is by no means an identity of issues. Therefore, a decision in this case would not be necessarily decisive of one or more of those applications before the Registrar. Furthermore, the Registrar would not be bound by any declaration that is made in a technical sense, and nor would any other party who joined in those proceedings. There is no claim for an injunction against the Registrar, and it is difficult to see any proper basis on which an injunction could be granted.

9 It is possible, but by no means certain, that some time and money might be saved if the declaration was decisive as to registrability, and no other party took any interest in the applications. That result is speculative. The possibility of inconsistent findings is not removed, because granting declarations is not the equivalent of actually deciding the applications before the Registrar on the same issues. The paragraphs of the statement of claim which refer to the respondent/cross-claimant’s applications have, in effect, been superseded by events, as the respondent/cross-claimant is now "on the market" with beer being sold in connection with the mark "BAREFOOT". I am not persuaded that there is any legitimate way in which the validity of the applications for trade mark will arise in the proceeding as it stands without amendment.

SEPARATE AND EARLIER HEARING OF CROSS-CLAIM

10 The respondent/cross-claimant submits that the cross-claim should be determined first as a matter of logic and practicality. It is a relatively straight forward factual issue that could be promptly determined. Infringement, it is said, is a more complex issue which will take time both to prepare and hear. If the respondent/cross-claimant were to succeed in the cross-claim, it would be unnecessary to proceed with the action for infringement. It is also put that the original application to the Registrar was made prior to the proceeding for infringement being commenced. It is also said that the applicant/cross-respondent has shown no great expedition in relation to its prosecution of the claim for infringement and, in particular, has sought no interlocutory relief. It was also pointed out that the separate hearing of a cross-claim is not to be equated with isolating one out of a number of issues arising on a claim.

11 This submission has more legs than many of its kind. The non-use point is quite distinct and separate, and should be capable of relatively quick resolution. However, on balance, the risk of potential problems created by separately hearing the cross-claim and the claim in relation to the same trade mark need not, and should not, be run. The carrot of an early disposition of the cross-claim rendering infringement proceedings unnecessary is more apparent than real in view of the opportunities for appeal. There is the problem occasioned by witnesses being dealt with on more than one occasion (one such witness has been identified to date). There is always the risk of issues emerging in the course of running, which should be dealt with in a comprehensive manner. Furthermore, the applicant/cross-respondent has the benefit of a registered mark, and should be entitled to pursue an infringement action with expedition and no more complication than is necessary. I do not think that there has been any delay in the real sense on its part, such as would disentitle it to have its claim dealt with with appropriate expedition. I also take into account that finding successive times for hearing parts of a case is disruptive to the schedule of the Court and its resources.

CONCLUSION

12 In this matter I make orders in accordance with the proposed draft order.

I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

Associate:

Dated: 21 February 2008

Counsel for the Applicant/ Cross-Respondent:	Mr MJ Darke
Solicitor for the Applicant/ Cross-Respondent:	Corrs Chambers Westgarth
Counsel for the Respondent/ Cross-Claimant:	Mr AJL Bannon SC, Mr N Murray
Solicitor for the Respondent/ Cross-Claimant:	Mallesons Stephen Jaques
Date of Hearing:	14 February 2008
Date of Judgment:	14 February 2008