E & J Gallo Winery v Lion Nathan Australia Pty Limited

In the matter of E & J Gallo Winery v Lion Nathan Australia Pty Limited, the Respondent sought an order for the removal of the Applicant's BAREFOOT trade mark from the Register on the basis that it had not been used in Australia. Gallo Winery opposed this claim, arguing that the trade mark had been used and, in the alternative, that if there had been non-use, the court should exercise its discretion under s 101(3) of the 1995 Act and not remove the mark. The dispute arose from Gallo Winery's acquisition of the BAREFOOT brand in 2005, its subsequent licensing of the trade mark to McWilliams Wines, and the eventual sale of BAREFOOT wine in Australia by McWilliams Wines in 2007. Gallo Winery further contended that it had shipped wine from California to McWilliams Wines in December 2007, and that limited quantities of BAREFOOT wine had been sold by a wholesaler in Melbourne from 2004 to 2007.

The central legal issue before the court was whether there had been a non-use of the trade mark, and if so, whether the court should exercise its discretion to not remove the mark from the Register. Gallo Winery argued that the trade mark had been used in Australia through the licensing agreement with McWilliams Wines and the subsequent sale of BAREFOOT wine. It further contended that even if there had been non-use, the court should exercise its discretion under s 101(3) of the 1995 Act and not remove the mark. Lion Nathan, on the other hand, argued that the trade mark had not been used in Australia and that there were no special facts or circumstances warranting the exercise of discretion in favour of Gallo Winery. The court found that there had been a non-use of the trade mark by Gallo Winery in Australia, and that there were no special facts or circumstances warranting the exercise of discretion in favour of Gallo Winery. The court held that the Applicant had failed to make out any case entitling it to declaratory or injunctive relief, and that the relief claimed in the Cross-Claim should be ordered. The parties were directed to draft Short Minutes of Proposed Orders within 7 days, which give effect to the court's reasons. The proceedings were then stood over to 27 June 2008 at 9:30 am with a view to then making final orders disposing of the proceedings.