Energy Beverages LLC v Cantarella Bros Pty Ltd
[2022] FCA 113
•18 February 2022
FEDERAL COURT OF AUSTRALIA
Energy Beverages LLC v Cantarella Bros Pty Ltd [2022] FCA 113
File numbers: NSD 1711 of 2019
NSD 1858 of 2019
NSD 63 of 2021Judgment of: HALLEY J Date of judgment: 18 February 2022 Catchwords: TRADE MARKS – appeal from two decisions of the delegate of the Registrar of Trade Marks (delegate) to refuse opposition to application for removal of appellant’s trade marks (MOTHERLAND mark and MOTHER LOADED ICED COFFEE mark, together marks) – hearing de novo – whether appellant had an intention in good faith to use MOTHER LOADED ICED COFFEE mark pursuant to s 92(4)(a) of the Trade Marks Act 1995 (Cth) (Act) – whether appellant had demonstrated genuine commercial use of the MOTHERLAND mark during relevant period pursuant to s 92(4)(b) of the Act – whether facts and circumstances warrant exercise of discretion pursuant to s 101(3) of the Act to allow marks to remain on Register – where no intention in good faith to use MOTHER LOADED ICED COFFEE mark – where no genuine use of MOTHERLAND mark during relevant period – where insufficient facts or circumstances to warrant exercise of discretion – appeal dismissed
TRADE MARKS – appeal from decision of the delegate to refuse opposition to registration application of trade mark by respondent (MOTHERSKY mark) – hearing de novo – whether MOTHERSKY mark is substantially identical or deceptively similar to appellant’s marks or MOTHER marks pursuant to s 44 of the Act – whether goods in registration application are goods of the same description to appellant’s registrations – whether respondent’s use of MOTHERSKY likely to deceive or cause confusion due to appellant’s reputation in MOTHER marks pursuant to s 60 of the Act – where MOTHER marks had acquired a significant reputation in Australia for energy drinks – appeal dismissed
CONSUMER LAW – whether use of the MOTHERSKY mark contrary to law pursuant to ss 19 or 29 of the Australian Consumer Law due to appellant’s reputation in the MOTHER marks – appeal dismissed
Legislation: Competition and Consumer Act 2010 (Cth) Schedule 2 (Australian Consumer Law) ss 18, 29
Trade Marks Act 1995 (Cth) ss 42, 44, 52, 60, 92, 101
Cases cited: Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd (2017) 124 IPR 264; [2017] FCAFC 56
Advantage-Rent-A-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683
Allergan Australia Pty Ltd v Self Care IP Holdings Pty Ltd (2021) 393 ALR 595; [2021] FCAFC 163
Apple Inc v Registrar of Trade Marks (2014) 227 FCR 511; [2014] FCA 1304
Aston v Harlee Manufacturing Co (1960) 103 CLR 391
Austin, Nichols & Co Inc v Lodestar Anstalt (2012) 202 FCR 490; [2012] FCAFC 8
Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Limited (2014) 317 ALR 73; [2014] FCA 634
Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54
Australian Competition and Consumer Commission vTPGInternet Pty Ltd (2020) 278 FCR 450; [2020] FCAFC 130
Australian Woollen Mills Limited v F S Walton & Co Limited (1937) 58 CLR 641
Bauer Consumer Media Ltd v Evergreen Television Pty Ltd (2019) 142 IPR 1; [2019] FCAFC 71
Bohemia Crystal Pty Ltd v Host Corporation Pty Ltd (2018) (2018) 129 IPR 482; [2018] FCA 235
Butcher v Lachlan Elder Realty Pty Limited (2004) 218 CLR 592; [2004] HCA 60
Campomar Sociedad, Limitada v Nike InternationalLimited (2000) 202 CLR 45; 46 IPR 481; [2000] HCA 12
Cantarella Bros Pty Limited v Modena Trading Pty Limited (2014) 254 CLR 337; [2014] HCA 48
Carter v Liberty Procurement Co Inc (2016) 125 IPR 235
Christian v Société Des Produits Nestlé SA (No 2) (2015) 115 IPR 421; [2015] FCAFC 153
Colorado Group Ltd and Another v Strandbags Group Pty Ltd (2007) 164 FCR 506; [2007] FCAFC 184
Cooper Engineering Co Proprietary Limited v Sigmund Pumps Limited [1952] HCA 15; (1952) 86 CLR 536
Dunlop Aircraft Tyres Limited v Goodyear Tire and Rubber Company (2018) 262 FCR 76; [2018] FCA 1014
E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2008) 77 IPR 69; [2008] FCA 934
E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144; [2010] HCA 15
Energy Beverages LLC v Cantarella Bros Pty Ltd [2019] ATMO 140
Energy Beverages LLC v Cantarella Bros Pty Ltd [2019] ATMO 150
Energy Beverages LLC v Cantarella Bros Pty Limited [2020] ATMO 198
Food Channel Network Pty Ltd v Television Food Network GP (2010) 185 FCR 9; [2010] FCAFC 58
Frucor Beverages Limited v The Coca-Cola Company (2018) 358 ALR 336; [2018] FCA 993
Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82
Goodman Fielder Pte Ltd v Conga Foods Pty Ltd (2020) 158 IPR 9; [2020] FCA 1808
Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435; 99 IPR 197; [2013] HCA 1
Health World Ltd v Shin-Sun Australia Pty Ltd (2010) 240 CLR 590; [2010] HCA 13
Hungry Spirit Pty Limited ATF The Hungry Spirt Trust v Fit n Fast Australia Pty Ltd [2020] FCA 883
Kraft Foods Group Brands LLC v Bega Cheese Limited (2020) 151 IPR 369; [2020] FCAFC 65
McCormick & Co Inc v McCormick (2000) 51 IPR 102; [2000] FCA 1335
MID Sydney Pty Ltd v Australian Tourism Company Ltd and Others (1998) 90 FCR 236
Monster Energy Company v Mixi Inc (2020) 156 IPR 378; [2020] FCA 1398
New South Wales Dairy Corporation v Murray Goulburn Co-operative Co Ltdand Another (1989) 86 ALR 549
Nature’s Blend Pty Ltd v Nestlé Australia Ltd (2010) 272 ALR 487; [2010] FCAFC 117
Optical 88 Limited v Optical 88 Pty Limited (No 2) (2010) 89 IPR 457; [2010] FCA 1380
Oracle Corporation v Newcom Technologies Pty Ltd (2000) 49 IPR 647
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191
PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd (2020) 154 IPR 68
Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd (2017) 251 FCR 379; [2017] FCAFC 83
Primary Health Care Limited v Commonwealth of Australia [2017] FCAFC 174
Re Application by Pianotist Company Ltd (1906) 23 RPC 774
Reckitt & Coleman (Australia) Limited v Boden (1945) 70 CLR 84
Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365; [1999] FCA 1020
Rodney Jane Racing Pty Ltd v Monster Energy Company (2019) 370 ALR 140; 142 IPR 275; [2019] FCA 923
Rowntree plc v Rollbits Pty Ltdand Another (1988) 10 IPR 539
Sensis Pty Ltd v Senses Direct Mail and Fulfilment Pty Ltd (2019) 141 IPR 463; [2019] FCA 719
Southern Cross Refrigerating Company v Toowoomba Foundry Proprietary Limited (1954) 91 CLR 592
Sports Warehouse, Inc v Fry Consulting Pty Ltd (2010) 186 FCR 519; [2010] FCA 664
Suyen Corporation v Americana International Ltd (2010) 87 IPR 262; [2010] FCA 638
Telstra Corporation Ltd and Another v Phone Directories Company Australia Ltd (ACN 079 290 805)and Others (2015) 237 FCR 388; [2015] FCAFC 156
Trident Seafoods Corp v Trident Foods Pty Ltd (2018) 137 IPR 65; [2018] FCA 1490
Urban Alley Brewery Pty Ltd v La Sirène Pty Ltd [2020] FCAFC 186
Vivo International Corporation Pty LtdvTivo Inc (2012) 99 IPR 1; [2012] FCAFC 159
Ward Group Pty Ltd v Brodie & Stone Plc (2005) 143 FCR 479; [2005] FCA 471
Woolworths Ltd v BP plc (2006) 150 FCR 134; [2006] FCAFC 52
Division: General Division Registry: New South Wales National Practice Area: Intellectual Property Sub-area: Trade Marks Number of paragraphs: 393 Date of hearing: 5, 6, 8 and 9 July 2021 Counsel for the Appellant: Mr N Murray SC with Ms S Ryan Solicitor for the Appellant: Davies Collison Cave Law Counsel for the Respondent: Mr A Bannon SC with Mr M Green SC and Mr B Cameron Solicitor for the Respondent: Herbert Smith Freehills
ORDERS
NSD 1711 of 2019 BETWEEN: ENERGY BEVERAGES LLC
Appellant
AND: CANTARELLA BROS PTY LTD ACN 000 095 607
Respondent
ORDER MADE BY:
HALLEY J
DATE OF ORDER:
18 FEBRUARY 2022
THE COURT ORDERS THAT:
1.The notice of appeal be dismissed.
2.The appellant is to pay the respondent’s costs, as taxed or agreed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ORDERS
NSD 1858 of 2019 BETWEEN: ENERGY BEVERAGES LLC
Appellant
AND: CANTARELLA BROS PTY LTD ACN 000 095 607
Respondent
ORDER MADE BY:
HALLEY J
DATE OF ORDER:
18 FEBRUARY 2022
THE COURT ORDERS THAT:
1.The notice of appeal be dismissed.
2.The appellant is to pay the respondent’s costs, as taxed or agreed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ORDERS
NSD 63 of 2021 BETWEEN: ENERGY BEVERAGES LLC
Appellant
AND: CANTARELLA BROS PTY LTD ACN 000 095 607
Respondent
ORDER MADE BY:
HALLEY J
DATE OF ORDER:
18 FEBRUARY 2022
THE COURT ORDERS THAT:
1.The amended notice of appeal be dismissed.
2.The appellant is to pay the respondent’s costs, as taxed or agreed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
TABLE OF CONTENTS
INTRODUCTION
[1]
THE TRADE MARKS
[4]
MOTHERLAND mark
[4]
MOTHER LOADED ICED COFFEE mark
[8]
MOTHERSKY mark
[12]
MOTHER marks
[15]
ISSUES FOR DETERMINATION
[20]
MLIC and MOTHERLAND appeals
[20]
MOTHERSKY appeal
[21]
PRINCIPAL CONCLUSIONS
[25]
PRELIMINARY ISSUES
[26]
Appeals from the Registrar of Trade Marks
[26]
Onus and standard of proof
[36]
THE WITNESSES
[40]
Witnesses for EB
[40]
Witnesses for Canterella
[49]
EVIDENTIARY BACKGROUND
[53]
MOTHER energy drinks
[53]
Cantarella’s coffee products
[56]
Origin of “MOTHERSKY” name
[61]
Distribution channels for MOTHER energy drinks
[62]
Advertising, marketing and promotion of MOTHER energy drinks
[65]
Brand pillars for MOTHER energy drinks
[69]
MOTHER energy drinks brand image
[70]
Promotion of MOTHER energy drinks on social media accounts
[72]
MOTHER-derivative marks and taglines
[73]
Display and sale of energy drinks and other beverages, particularly coffee
[76]
Sale of coffee and tea flavoured energy drinks
[79]
Energy drinks as an alternative to coffee
[81]
Competitive landscape for energy drinks in the United States
[83]
Competitive landscape for energy drinks in Australia
[87]
Competitive landscape for coffee in Australia
[91]
Product innovation for MOTHER energy drinks
[94]
Recent EB Planning Documents
[98]
Sale of energy drinks and coffee products
[100]
Marketing of energy drinks and coffee products
[107]
Scope of use of Cantarella’s pure coffee brands
[116]
MOTHERLAND marketing campaign
[123]
MOTHER-derivative trade marks
[129]
MARKET ISSUES AND EB’S REPUTATION IN MOTHER
[137]
EB submissions
[138]
Cantarella submissions
[140]
Consideration
[144]
LACK OF USE OR INTENTION TO USE
[158]
Section 92(4) of the Act and relevant legal principles
[158]
Submissions – MOTHER LOADED ICED COFFEE mark
[172]
Consideration – MOTHER LOADED ICED COFFEE mark
[183]
Submissions – MOTHERLAND mark
[190]
Consideration – MOTHERLAND mark
[201]
EXERCISE OF DISCRETION
[225]
Section 101 of the Act and relevant legal principles
[227]
EB submissions
[238]
Cantarella submissions
[247]
Consideration
[250]
MOTHERSKY MARK – DECEPTIVE SIMILARITY
[261]
Section 44 of the Act and relevant legal principles
[261]
EB submissions
[277]
Goods of the same description
[278]
Priority dates
[289]
Deceptively similar
[290]
Cantarella submissions
[297]
Goods of the same description
[297]
Priority dates
[300]
Deceptively similar
[301]
Consideration
[305]
Goods of the same description
[305]
Priority dates
[317]
Deceptively similar
[318]
MOTHERSKY MARK – LIKELIHOOD OF DECEPTION OR CONFUSION
[331]
Section 60 of Act and relevant legal principles
[331]
EB submissions
[339]
Cantarella submissions
[345]
Consideration
[350]
MOTHERSKY MARK – UNLAWFULNESS
[369]
Section 42(b) of the Act and relevant legal principles
[369]
EB submissions
[382]
Cantarella submissions
[387]
Consideration
[388]
DISPOSITION
[393]
REASONS FOR JUDGMENT
HALLEY J:
INTRODUCTION
The appellant (EB) appeals from three decisions of delegates of the Registrar of Trade Marks (Delegate or Delegates) comprising two decisions refusing opposition by EB to applications by the respondent (Cantarella) for the removal of trade marks registered in the name of EB and a third decision refusing opposition by EB to an application by Cantarella for the registration of a trade mark.
EB, through its wholly owned subsidiary, Energy Beverages Australia Pty Ltd (EB Australia), supplies energy drinks under its MOTHER trademarks and MOTHER-derivative marks and taglines. The MOTHER brand was acquired by EB in June 2015 from The Coca-Cola Company (TCCC).
Cantarella is a supplier of pure coffee, either in bean, ground or, more recently capsule form, in Australia under a number of brands. It sells pure coffee to cafés and restaurants, major supermarket chains and wholesale and retail grocery stores, among other establishments.
THE TRADE MARKS
MOTHERLAND mark
EB was the owner of the registered trade mark “MOTHERLAND” under Australia trade mark registration number 1345404 (MOTHERLAND registration) with respect to the following class 32 goods:
Non-alcoholic beverages; drinking waters, flavoured waters, mineral and aerated waters; carbonated soft drinks, energy drinks and sports drinks; fruit drinks and juices; syrups, concentrates and powders for making beverages including syrups, concentrates and powders for making mineral and aerated waters, carbonated soft drinks, energy drinks, sports drinks, fruit drinks and juices
EB now seeks to limit the scope of the goods and services claimed by the MOTHERLAND mark to the following goods and services:
drinking waters, flavoured waters, mineral and aerated waters; carbonated soft drinks, energy drinks and sports drinks
(together MOTHERLAND Protected Goods)
On 12 February 2019, Cantarella applied for the removal of the MOTHERLAND registration pursuant to s 92(4)(b) of the Trade Marks Act1995 (Cth) (Act), alleging non-use in the period 12 January 2016 to 12 January 2019 (MOTHERLAND Relevant Period). EB filed a Notice of Intention to Oppose on 10 April 2019, and a Statement of Grounds and Particulars on 9 May 2019.
On 21 December 2020, the Delegate found that Cantarella’s application for removal pursuant to s 92(4)(b) of the Act was successful due to non-use, and directed that the MOTHERLAND mark be removed from the Australian Trade Marks Register (Register): see Energy Beverages LLC v Cantarella Bros Pty Limited [2020] ATMO 198 (MOTHERLAND decision).
MOTHER LOADED ICED COFFEE mark
EB was also the owner of the registered trade mark “MOTHER LOADED ICED COFFEE” under Australia trade mark registration number 1408011 (MLIC registration) with respect to the following goods:
Class 29:
Milk and milk products; flavoured milk beverages; dairy products including milk and yoghurt based products and beverages with or without fruit additives; yoghurt; food supplements and nutritional supplements (other than for medicinal use); natural products in this class incorporating herbal preparations (other than for medicinal use); food supplements with herbs (other than for medicinal use); drinks flavoured with herbs and having a milk base
Class 30:
Coffee; tea; cocoa; chocolate; artificial coffee; ice cream; beverages in this class including coffee based beverages, tea based beverages and chocolate based beverages; herbal extracts (other than for medicinal purposes); herbal infusions (other than for medicinal use) and herbal tea (other than for medicinal use)
EB now seeks to limit the scope of the goods and services covered by the MOTHER LOADED ICED COFFEE mark to the following goods and services:
Class 29:
flavoured milk beverages; milk based beverages with or without fruit additives; liquid food supplements and nutritional supplements (other than for medicinal use); liquid food supplements with herbs (other than for medicinal use); drinks flavoured with herbs and having a milk base
Class 30:
Coffee; cocoa; chocolate; artificial coffee; beverages in this class including coffee based beverages and chocolate based beverages; herbal infusions (other than for medicinal use)
(together MLIC Protected Goods.)
On 13 February 2018, Cantarella applied for removal of the MLIC registration pursuant to ss 92(4)(a) and (b) of the Act. On 30 April 2018, EB filed a Notice of Intention to Oppose, and a rectified Statement of Grounds and Particulars on 20 June 2018. Cantarella filed its Notice of Intention to Defend the removal application on 6 August 2018.
On 24 September 2019, the Delegate found that Cantarella’s application for removal pursuant to s 92(4)(b) of the Act was successful due to non-use, and directed that the MLIC mark be removed from the Register: see Energy Beverages LLC v Cantarella Bros Pty Ltd [2019] ATMO 140 (MLIC decision).
MOTHERSKY mark
On 11 January 2017, Cantarella applied for registration of “MOTHERSKY” in class 30 in respect of coffee, coffee beans and chocolate, and in class 41 in respect of coffee roasting and coffee grinding under Australia trade mark registration number 1819816 (MOTHERSKY application). Originally, Cantarella had also applied for coffee beverages and chocolate beverages in class 30, but deleted those items after EB filed its Notice of Intention to Oppose.
On 31 July 2017, EB opposed acceptance of the MOTHERSKY application pursuant to s 52 of the Act. The grounds of the opposition were ss 44, 60 and 42(b) of the Act, which deal with deceptive similarity or marks that are identical, reputation in a trade mark, and whether use of the mark would be contrary to the law, respectively. EB filed a Statement of Grounds and Particulars on 30 August 2017, and Cantarella filed a Notice of Intention to Defend on 16 October 2017.
On 18 October 2019, the Delegate found in favour of Cantarella as EB had not established a ground of opposition, and the registration of the MOTHERSKY mark was completed one month later: see Energy Beverages LLC v Cantarella Bros Pty Ltd [2019] ATMO 150 (MOTHERSKY decision).
MOTHER marks
Two other trade marks of EB are relevant to a determination of the appeals.
First, the MOTHER mark (TM 1230388) (MOTHER 388 mark).
The MOTHER 388 mark was a mark with a priority date earlier than MOTHERSKY and was registered in respect of the following goods:
Class 32: Non-alcoholic beverages; drinking waters, flavoured waters, mineral and aerated waters; carbonated soft drinks, energy drinks and sports drinks; fruit drinks and juices; syrups, concentrates and powders for making beverages including syrups, concentrates and powders for making mineral and aerated waters, carbonated soft drinks, energy drinks, sports drinks, fruit drinks and juices.
Second, the MOTHER mark (TM 1364858) (MOTHER 858 mark).
The MOTHER 858 mark was also a mark with a priority date earlier than MOTHERSKY and was registered in respect of the following goods:
Class 33: Alcoholic beverages (except beers); distilled spirits; liqueurs; wines; wine based alcoholic beverages; spirit based alcoholic beverages
ISSUES FOR DETERMINATION
MLIC and MOTHERLAND appeals
The principal agreed issues for determination in NSD1711/2019 (MLIC appeal) and NSD63/2021 (MOTHERLAND appeal) are as follows (noting that the agreed issues for determination document was prepared prior to the order that the MOTHERLAND appeal be heard together with the MLIC appeal and the appeal in NSD1858/2019 (MOTHERSKY appeal)):
(a)as at the filing date of the application for the MLIC registration, did TCCC have an intention in good faith to use, authorise the use of, or assign to a body corporate for use by that body corporate, the MOTHER LOADED ICED COFFEE mark in Australia in relation to the MLIC Protected Goods pursuant to s 92(4)(a) of the Act?
(b)did EB use the MOTHERLAND mark in relation to goods covered by the registration of the mark during the MOTHERLAND Relevant Period within the meaning of s 100(3)(a) of the Act?
(c)are there facts and circumstances that warrant the exercise of the discretion pursuant to s 101(3) of the Act to allow the MOTHER LOADED ICED COFFEE mark to remain on the Register in relation to some or all of the MLIC Protected Goods and the MOTHERLAND mark to remain on the Register in relation to some or all of the MOTHERLAND Protected Goods?
MOTHERSKY appeal
The principal agreed issues for determination in the MOTHERSKY appeal are as follows.
In relation to s 44 of the Act:
(a)is the MOTHERSKY mark substantially identical with or deceptively similar to any of the following marks:
(i)the MOTHER 388 Mark and the MOTHER 858 Mark (together MOTHER marks);
(ii)the MOTHERLAND mark; or
(iii)the MOTHER LOADED ICED COFFEE mark?;
(b)are “coffee” and “chocolate” specified in the MLIC registration the same goods, or goods of the same description, as “coffee; coffee beans; chocolate”?;
(c)are “coffee” and “chocolate” specified in the MLIC registration closely related to the services of “coffee roasting; coffee grinding”?;
(d)are “cocoa” and “artificial coffee” specified in the MLIC registration goods of the same description as “coffee; coffee beans; chocolate”?;
(e)are “carbonated soft drinks, energy drinks and sports drinks” and “… syrups, concentrates and powders for making … carbonated soft drinks, energy drinks, sports drinks …” specified in the MOTHERLAND registration and the MOTHER 388 mark goods of the same description as “coffee” and “chocolate”?;
(f)are “non-alcoholic beverages” and “syrups, concentrates and powders for making beverages” specified in the MOTHERLAND registration and the MOTHER 388 mark goods of the same description as “coffee” and “chocolate”?; and
(g)are “alcoholic beverages (except beers)”, “distilled spirits” and “liqueurs” specified in the MOTHER 858 mark goods of the same description as “coffee” and “chocolate”?
In relation to s 60 of the Act:
(a)had the MOTHER marks acquired a reputation in Australia prior to 11 January 2017 (MOTHERSKY Priority Date)?;
(b)if so, what was the nature and extent of that reputation?; and
(c)because of EB’s reputation in the MOTHER mark as at the MOTHERSKY Priority Date, would Cantarella’s use of the MOTHERSKY mark have been likely to deceive or cause confusion as at the MOTHERSKY Priority Date?
In relation to s 42(b) of the Act:
(a)because of the reputation of the MOTHER marks in Australia, would the use of the MOTHERSKY mark be contrary to law as at the MOTHERKY Priority Date, on the basis that it:
(i)constitutes misleading or deceptive conduct, contrary to s 18 of the Australian Consumer Law (ACL); and/or
(ii)gives rise to a false or misleading representation that Cantarella or its goods and services have a sponsorship, approval or affiliation that they do not have, contrary to ss 29(1)(g) and (h) of the ACL?
PRINCIPAL CONCLUSIONS
For the reasons outlined below my principal conclusions are as follows:
(a)TCCC did not have an intention in good faith to use, authorise the use or assign to a body corporate for use by that body corporate of the MOTHER LOADED ICED COFFEE mark in relation to the MLIC Protected Goods as at its filing date;
(b)EB has not demonstrated that it used the MOTHERLAND mark in relation to goods covered by the registration of the mark during the MOTHERLAND Relevant Period;
(c)there are insufficient facts and circumstances to warrant the exercise of the discretion under s 101(3) of the Act to allow either the MOTHER LOADED ICED COFFEE mark or the MOTHERLAND mark to remain on the Register;
(d)the MOTHERSKY mark is not substantially identical with or deceptively similar to the MOTHER marks, the MOTHERLAND mark or the MOTHER LOADED ICED COFFEE mark;
(e)“coffee” and “chocolate” are the same goods as “coffee; coffee beans and chocolate”;
(f)“coffee” but not “chocolate” is closely related to the services of “coffee roasting; coffee grinding”;
(g)“cocoa” and “artificial coffee” are not goods of the same description as “coffee, coffee beans; chocolate”;
(h)“carbonated soft drinks, energy drinks and sports drinks” and syrups, concentrates and powders for making them, are not goods of the same description as “coffee” and “chocolate”;
(i)“non-alcoholic beverages” and syrups, concentrates and powders for making them, are not goods of the same description as “coffee” and “chocolate”
(j)“alcoholic beverages (except beers)”, “distilled spirits” and “liqueurs” are not goods of the same description as “coffee” and “chocolate”;
(k)the MOTHER marks had acquired a significant reputation in Australia for energy drinks prior to the MOTHERSKY Priority Date;
(l)EB’s reputation in the MOTHER marks as at the MOTHERSKY Priority Date did not cause Cantarella’s use of the MOTHERSKY mark to have been likely to deceive or cause confusion as at the MOTHERSKY Priority Date; and
(m)EB’s reputation in the MOTHER marks as at the MOTHERSKY Priority Date did not cause Cantarella’s use of the MOTHERSKY mark to be contrary to law nor did it constitute misleading or deceptive conduct in contravention of s 18 of the ACL nor give rise to a false or misleading representation as to sponsorship, approval or affiliation, in contravention of s 29(1)(g) and (h) of the ACL.
PRELIMINARY ISSUES
Appeals from the Registrar of Trade Marks
Appeals to the Federal Court from a decision of a delegate of the Registrar of Trade Marks are as of right and are heard de novo: see ss 56 and 104 of the Act. They are heard within the Court’s original rather than appellate jurisdiction: Woolworths Ltd v BP plc (2006) 150 FCR 134; [2006] FCAFC 52 at [30] (Black CJ, Sundberg and Bennett JJ); Bauer Consumer Media Ltd v Evergreen Television Pty Ltd (2019) 142 IPR 1; [2019] FCAFC 71 (Bauer) at [2] (Greenwood J) and [256] (Burley J).
As a hearing de novo, the Court must approach the matter afresh without undue concern as to the reasons for the decision of the delegate, although weight can be given to the delegate’s opinion as a skilled and experienced person: Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365; [1999] FCA 1020 (Woolworths) at [32] (French J, as his Honour then was); Telstra Corporation Ltd and Another v Phone Directories Company Australia Ltd (ACN 079 290 805)and Others (2015) 237 FCR 388; [2015] FCAFC 156 (Telstra) at [181] (Besanko, Jagot and Edelman JJ).
The expression “goods of the same description” is one of impression and different minds may give different answers, and a different conclusion may be reached by the Court after considering the decision of the Registrar: Rowntree plc v Rollbits Pty Ltdand Another (1988) 10 IPR 539 at 546 (Needham J). The degree of weight that can be given will depend on the circumstances of each case, in particular, the extent to which the evidence before the Court might travel beyond or be inconsistent with the evidence before the delegate: Apple Inc v Registrar of Trade Marks (2014) 227 FCR 511; [2014] FCA 1304 at [23]-[24] (Yates J).
EB submits that there is a qualitative difference between its evidence in the hearings before the Delegates and in the appeals.
Cantarella submits that although EB has filed fresh affidavits in support of the appeals, the new evidentiary record relied upon by EB “simply gives greater weight to the conclusions which the Delegates formed”. In particular, Cantarella contends that there is no new evidence of “actual intentions” to use the MOTHERLAND nor MOTHER LOADED ICED COFFEE mark, nor any intention to produce a “coffee product” under the name “MOTHER” in Australia. It further submits that the late production of documents relied upon by EB to establish a relevant intention (Recent EB Planning Documents) should be accorded little weight because they have “recently been created in the shadow of this litigation, which has been on foot now for a number of years”.
Cantarella made two further submissions relevant to the weight to be attributed to the decisions of the Delegates.
First, the Delegates, unlike the Court, had the benefit of evidence as to future intentions from the most senior decision maker within EB, Mr Rodney Cyril Sacks, its Chief Executive Officer. I note, however, that Mr Samuel Thiele, the Vice President – Oceania for EB, gives evidence that while EB made recommendations on future product launches in Australia, ultimately all decisions on which products would be launched in this country were made by Monster Energy Company (Monster) in the United States of America.
Second, at the contested hearing before the Delegate in relation to the MOTHERSKY application, EB advanced the same contention as it advances before the Court. That submission was that, given the reputation of its MOTHER marks, the use of MOTHERSKY would be likely to deceive or cause confusion. The absence of any attempt to adduce evidence of actual confusion in the two years since the hearing before the Delegate, notwithstanding Cantarella continuing to promote and sell coffee under the MOTHERSKY mark, suggests the Delegate was correct in rejecting EB’s contentions under ss 42(b) and 60 of the Act, and that conclusion ought to be given weight.
I am satisfied that:
(a)the contentions advanced by EB before the Delegates were not materially different to those advanced in these proceedings;
(b)the evidence relied upon by EB in these proceedings was more extensive but not qualitatively different to that relied upon by EB before the Delegates;
(c)from my review of the Recent EB Planning Documents and submissions made in closed court by Mr Murray SC, who appeared for EB:
(i)the documents reflect genuine consideration by Monster and EB of potential future product launches; but
(ii)they do not disclose the existence of any concluded decision to launch any coffee product in Australia with the brand “MOTHER” or any “MOTHER”-derivative; and
(d)the absence of any evidence of confusion given the promotion and sale of coffee under the MOTHERSKY mark in the face of EB’s MOTHER marks is relevant to the weight that should be afforded to the decision of the Delegate in the MOTHERSKY application.
I therefore consider that it is appropriate to give weight to the decisions of the Delegates but I recognise that, ultimately, this is a hearing de novo and I must consider the issues raised in the appeals afresh.
Onus and standard of proof
Generally speaking, EB bears the onus in the MOTHERSKY appeal, as the party seeking to oppose the registration of the MOTHERSKY mark, to establish the grounds of opposition on which it relies. The standard of proof is the ordinary civil standard on the balance of probabilities: Telstra at [132]-[133] (Besanko, Jagot and Edelman JJ).
As Cantarella submits, the legislative intent and judicially recognised result of the Act is that there is a presumption of registrability when an application is examined by the Registrar of Trade Marks: Recommended Changes to the Australian Trade Marks Legislation, Working Party to Review the Trade Marks Legislation (1992) p 44; Australia, Senate, Debates (1995) Vol 170, p 2590; Horak I and Davison M, Shanahan’s Australian Law of Trade Marks and Passing Off (6th ed, 2016, Lawbook Company) (Shanahan’s) at [25.05]; Woolworths at [24] (French J, as his Honour then was); Sports Warehouse, Inc v Fry Consulting Pty Ltd (2010) 186 FCR 519; [2010] FCA 664 (Sports Warehouse) at [26] (Kenny J).
It is against that background and presumption of registrability that the MOTHERSKY appeal is to be determined.
As the opponent to the non-use applications, EB also bears the onus in the MOTHERLAND and MLIC appeals to rebut any allegation that the marks have not been used or have not been intended to be used: s 100(1) of the Act; Hungry Spirit Pty Limited ATF The Hungry Spirt Trust v Fit n Fast Australia Pty Ltd [2020] FCA 883 at [9], [11] and [15] (Burley J).
THE WITNESSES
Witnesses for EB
Mr Samuel Thiele is the Vice President – Oceania for EB. He has worked continuously for Monster since May 2013 and for EB since its incorporation in 2015. He has 18 years of experience in the beverage industry in Australia in various marketing and business development roles. He was cross-examined.
Cantarella submits that except to the extent that Mr Thiele’s evidence was adverse to EB’s own interests it is of limited assistance. It submits that: first, he has no personal knowledge of much of the history and use of the MOTHER, MOTHERLAND and MOTHER LOADED ICED COFFEE marks and his evidence is largely based upon a consideration of documents; second, he resisted acknowledging that he was aware of matters in the course of his cross examination and only reluctantly, when pressed, conceded that he was in fact aware of those matters; third, he expressed opinions on matters that he was not qualified to express, such as the value of advertisements that were 10 years old; fourth, his evidence concerning the placement of the phrase “HIGH CAFFEINE CONTENT” on cans of MOTHER energy drinks was implausible because he acknowledged in cross examination that he was not part of the relevant decision making process; and fifth, he sought to speak at length about “coffee drinks on the horizon” in the absence of any evidentiary basis at the time his cross examination was concluded and his acknowledgment that EB had produced all evidence that it had of any plans to introduce any product relevant to the issues to be determined in the appeal.
I accept that there was at times a reluctance on the part of Mr Thiele to accept what appeared to be relatively uncontentious issues, such as his understanding of how to convert grams of sugar to teaspoons of sugar. On balance, however, I was satisfied that Mr Thiele was answering questions put to him truthfully, bearing in mind the perhaps natural tendency of witnesses to seek to rely upon minor ambiguities or imprecision in questions to avoid answering questions directly and the difficulties many senior executives appear to face in giving evidence limited to recollection rather than reconstruction.
Moreover, I am satisfied that the other challenges to Mr Thiele’s evidence go to the weight of the evidence, not whether any reliance can be placed on it. I do not make any adverse credit finding against Mr Thiele and I generally, subject to questions of weight, found his evidence to be of assistance.
Mr Thomas Kelly is the Chief Financial Officer of Monster and EB. He was not cross-examined.
Ms Elizabeth Godfrey is a principal of Davies Collinson Cave. She was not cross-examined.
Ms Emily Maartensz is a solicitor employed by Davies Collinson Cave. She was not cross-examined.
Ms Jyoti Goonawardena is a solicitor employed by Davies Collinson Cave. She gives evidence of trade mark searches that she conducted in response to trade mark searches that had been undertaken by Ms Meg Stacey for Canteralla. She was cross-examined.
Cantarella submits that her evidence in cross-examination was responsive and she made all appropriate concessions. I agree.
Witnesses for Canterella
Mr Simon Creswick is the General Manager Foodservice at Canteralla. He gives evidence about the manufacturing processes for, and marketing and function of, coffee and energy drinks. He was cross-examined.
EB submits that Mr Creswick’s affidavit evidence was of limited value because it focused on the difference between “pure coffee” and “energy drinks” and was therefore of limited value because “coffee” extends well beyond “pure coffee”. The submission reflected the fundamentally different taxonomical approaches taken by EB and Cantarella to “coffee”. I found Mr Creswick’s evidence of assistance in addressing those different approaches and I generally accepted it.
Ms Meg Stacey is a solicitor employed by Herbert Smith Freehills. She gave evidence of four trade mark searches that she undertook of the Register on 5 August 2020. She was not cross-examined.
Mr Michael Simonetti is an expert witness. He is a computer scientist and software engineer with extensive experience in digital marketing. He gives evidence explaining the technical aspects of posting content to YouTube and Facebook. He was not cross-examined.
EVIDENTIARY BACKGROUND
MOTHER energy drinks
In early 2007, TCCC launched the MOTHER energy drink in Australia.
In June 2015, TCCC transferred the trade marks in Australia associated with the MOTHER range of energy drinks, as well as the business and goodwill pertaining to those trade marks to EB.
In December 2015, EB incorporated EB Australia to oversee the distribution of MOTHER energy drinks in Australia and to carry out marketing and promotion activities.
Cantarella’s coffee products
Mr Creswick gives evidence that Cantarella’s business was founded in 1947, and since that time Cantarella has continuously traded in Australia, including by importing, distributing, marketing, advertising and promoting, and offering products for sale to both food service and retail customers.
Mr Creswick explains that Cantarella first began to import raw coffee beans into Australia in 1958 for the purpose of roasting, grinding and packaging coffee products in for sale to cafés, restaurants and delicatessens under the trade mark VITTORIA.
Mr Creswick gives evidence that in the 1980s, after trading in pure coffee under the VITTORIA trade mark for over 20 years, Cantarella commenced selling pure coffee in the Australian grocery market, making it one of the first businesses to offer pure coffee for sale through the grocery channel. Cantarella’s strategy for marketing pure coffee through the grocery channel in Australia involved utilising the reputation it had built up through its sales of pure coffee through the café, restaurant and delicatessen channels, encouraging existing customers of VITTORIA coffee to bring home the pure coffee they had previously experienced in these venues.
When VITTORIA was launched in the grocery channel, Cantarella continued to promote the coffee sold under this mark as being a high-quality coffee product with a refined taste, the focus on quality being a point of distinction from the instant coffee that was commonly sold through the grocery channel at the time. Mr Creswick gives evidence that Cantarella now markets and sells coffee under a number of brands, including MOTHERSKY and WILL&CO, which are directed at the growing connoisseur aspect of the Australian coffee market.
Mr Creswick explains that with the exception of the AURORA brand, the coffee sold by Cantarella under each of its brands is pure coffee, in bean, ground or more recently capsule form. All of the pure coffee sold by Cantarella in Australia is sourced from high quality local and international sources, and is roasted and blended using sophisticated equipment at Cantarella’s factory in Silverwater, Sydney. He states that this practice of using coffee beans from high-quality sources and sophisticated manufacturing equipment is now expected amongst pure coffee manufacturers if they are to be successful in the pure coffee market Australia.
Origin of “MOTHERSKY” name
Mr Creswick gave evidence that the name MOTHERSKY was suggested by two contractors who had been engaged by Cantarella to work on developing a boutique coffee brand with an Australian focus. One of the contractors, Mr Greg Mullins, was a member of a band that had a blog called “motherskyrecords” that showed posts as early as 2010. The band subsequently released a single under a “Mother Sky Records” label.
Distribution channels for MOTHER energy drinks
Mr Thiele gives evidence that MOTHER energy drinks have been distributed throughout Australia, since before the MOTHERSKY Priority Date, including to supermarkets, retail chains such as Target and Kmart, convenience stores and service stations, restaurants, bars and pubs, liquor outlets, vending machines, universities and TAFEs, cinemas, and food service and independent stores, such as food courts, general stores, bakeries and pharmacies.
Mr Thiele also gives evidence that MOTHER energy drinks are available on tap in some pubs in metropolitan cities in Australia.
Since at least June 2015, MOTHER energy drinks have also been distributed to a large range of cafés, bars and takeaway food outlets.
Advertising, marketing and promotion of MOTHER energy drinks
Mr Thiele gives evidence that since the launch of the original MOTHER energy drink in 2007, the MOTHER brand has been the subject of extensive advertising, marketing and promotion. This has included television commercials, radio advertisements, sponsorship of events, print advertisements, point of sale material, outdoor advertising (such as on bill boards, bus stops and on buses) and promotional campaigns (including partnerships, competitions and giveaways, often in association with radio broadcasters, popular websites or video games).
Mr Kelly gives evidence that between 2015 and 2019, EB spent a significant amount on advertising, marketing and promotion of its MOTHER energy drinks in Australia.
Mr Thiele gives evidence that EB’s promotional strategy since 2015 has focussed heavily on sponsorship, advertising via its website and other social media pages, in-store promotions and point of sale materials. An example of EB’s promotions on social media provided by Mr Thiele is reproduced below:
Mr Thiele states that this strategy was adopted because indirect forms of advertising such as sponsorship and product placement were seen as instrumental in reaching EB’s target audience of 18 to 34 year olds. It was also designed to enable EB to take advantage of unsolicited press coverage at live events, and to engage more directly with its consumers.
Brand pillars for MOTHER energy drinks
Mr Thiele gives evidence that EB’s “brand pillars” for the MOTHER brand are music and adventure. He explains that in support of these pillars, EB sponsors music festivals in Australia with consequential promotion of the MOTHER brand in various ways. These include providing entertainment within the event, such as a MOTHER branded “ball pit” and photo booth, selling MOTHER energy drinks (often as the exclusive energy drink supplier for the festival), sampling MOTHER energy drinks at the music festival and nearby towns in the lead up to the event, and sponsorships or collaborations with the festival artists, local artists and bloggers (as demonstrated in the social media image above). He states that in the lead-up to a festival, EB runs competitions in conjunction with supermarkets and selected retailers and prepares point of sale material to be distributed across convenience stores, petrol stations and grocery stores located near the festival precinct.
MOTHER energy drinks brand image
Mr Thiele gives evidence that the image EB’s advertising, marketing and promotional activities conveys is that the MOTHER energy drink is “a high energy and rebellious product”. He states that the taglines adopted by the brand reflect this image by emphasising the contents of the products that give energy to the consumer. He refers to a number of examples: HIGH CAFFEINE CONTENT; NATURAL CAFFEINE, ACAI: GUARANA: CAFFEINE: GINSENG; and LEMON LIME FLAVOUR WITH CAFFEINE, TEA & YERBA MATE. Further, he states that this image appeals to consumers who desire an energy “hit” during their day and provides the following examples: 100% NATURAL ENERGY; MOTHER OF AN ENERGY HIT; MOTHER OF AN ENERGY KICK; HEAPS OF ENERGY; BIG SHOT; EXTRA ENERGY; DOUBLE GUARANA & TAURINE; and MOTHER REVIVE.
Mr Thiele gives evidence that he had discussions with EB’s marketing directors and regulatory team about the packaging and reference to caffeine content on the can. When asked about the words “HIGH CAFFEINE CONTENT” featured prominently on the MOTHER cans, Mr Thiele said EB “had no obligation to have that on the front of the can” and the intent of the words is, to his understanding, to “market to our consumers because they like high caffeine content”.
Promotion of MOTHER energy drinks on social media accounts
Mr Thiele gives evidence that EB has promoted the MOTHER brand heavily in Australia on dedicated MOTHER branded social media accounts. He states that fans and/or followers of those pages are exposed to and engage with the content posted by EB. These include:
(a)the MOTHER Facebook page, which is locally controlled in Australia with a “brief approval process” in the United States. This page has been in operation since 2008 and had over 120,000 followers as at May 2020;
(b)the MOTHER YouTube page, launched in 2008. The videos posted to this account regularly receive over 10,000 (and in some cases, 100,000) views; and
(c)the MOTHER Instagram page. This page has been registered since 2017 and had over 3,500 followers as at May 2020.
MOTHER-derivative marks and taglines
The MOTHER brand is promoted by using the word MOTHER in conjunction with other words. For example, each of EB’s MOTHER products (as identified at [95] below) has a different name, which adopts the form of “MOTHER + [additional word or words]”.
In addition to product names, EB promotes the MOTHER brand using taglines and slogans, which include the word “MOTHER” in conjunction with other words. For example: MOTHER 100% NATURAL ENERGY (2007); MOTHER: A FORCE OF NATURE (2007); MOTHER OF AN ENERGY KICK (2009 to 2010); MOTHER OF AN ENERGY HIT (2009 to 2013); MOTHERLAND (2010 to 2013); MOTHERLAND IT’S A RUSH (2010); MOTHER MAIDENS (2012); MOTHER MADE ME DO IT (2012); MOTHER SAYS… (2016 to 2017); and MOTHER OF A FESTIVAL (2018).
Mr Thiele gives evidence that the strategy of using MOTHER-derivative marks and taglines creates more exposure and increases the reputation and recognition of the MOTHER brand, by creating opportunities to use the MOTHER marks across all of EB’s advertising, marketing and promotional activities.
Display and sale of energy drinks and other beverages, particularly coffee
Mr Creswick gives evidence that energy drinks are sold in pre-packaged cans or bottles, and are displayed in refrigerated units or shelves. He further gives evidence that to the extent there is any evidence of energy drinks being sold for consumption at particular venues (such as bars), the evidence is consistent that the marketing similarly emphasises “energy” over all other attributes.
Mr Creswick gives evidence that Cantarella’s coffee products are sold in the same aisles and alongside other coffee products sold by competing brands. He states that they are not sold in close proximity to any pre-packaged and ready to drink (RTD) coffee products, such as “iced coffee” flavoured milk, or other RTD beverages such as soft drinks or energy drinks. He annexed to his affidavit copies of photographs taken by Cantarella’s merchandising sales team showing how Cantarella’s VITTORIA pure coffee branded products are displayed on supermarket shelves, an example of which is reproduced below:
Mr Thiele annexes to his first affidavit copies of photographs showing how MOTHER energy drinks are typically displayed for sale, an example of which is reproduced below:
Sale of coffee and tea flavoured energy drinks
Mr Thiele and Ms Maartensz give evidence that beverage companies, including Monster, have already sold coffee- or tea-flavoured energy drinks in Australia from time to time since 2008, including:
(a)X-PRESSO MONSTER (2010), a dairy based coffee and energy drink;
(b)MONSTER REHAB TEA + ENERGY (2012 to 2014), a non-carbonated energy drink with electrolytes, flavours including “TEA + LEMONADE + ENERGY” and “PEACH TEA + ENERGY”);
(c)V ICED COFFEE (2010 to present), an iced coffee product available in the flavour “DOUBLE ESPRESSO + GUARANA ENERGY”;
(d)MUZZ BUZZ “BIG BUZZ” (2012 to 2015), an energy drink sold by Australian drive-through café chain, Muzz Buzz; and
(e)ICE BREAK LOADED (2008), an iced coffee product containing “a hit of guarana”.
Mr Thiele gives evidence that as part of its product innovation strategy, EB (and TCCC) has sold tea based energy drinks in Australia, including MOTHER REVIVE (2014 to 2016), a product which combined energy drink with tea and yerba mate, and MOTHER EXTREME TEA + ENERGY (2013), an “energy tea” sold in partnership with Chatime Australia.
Energy drinks as an alternative to coffee
Mr Thiele and Ms Maartensz give evidence of examples of energy drinks in Australia positioning themselves as an alternative to coffee. They point to the following examples:
(a)a post to the MOTHER Facebook page dated 31 March 2014: “When you see those chumps waiting in line for their Monday coffee… and you’ve already had your morning MOTHER”;
(b)a post to the MOTHER Facebook page dated 13 April 2015: “Move over coffee, this is a job for MOTHER. Who has a case of #mondayitis?”; and
(c)a post to the V Energy Drink Australia Facebook page dated 20 August 2012: “Screw coffee, grab a V!”.
Mr Thiele conceded in cross-examination that the caffeine in MOTHER energy drinks is synthetic, synthetic caffeine has a higher rate of absorption than naturally occurring caffeine, and none of EB’s current or former products are advertised as having a coffee flavour.
Competitive landscape for energy drinks in the United States
Mr Kelly exhibits to his affidavit extracts of Monster’s annual reports and other SEC filings between 2007 and 2020 (Monster US SEC filings) in which references are made to the product offering and competitors of Monster and EB. Those extracts include references to “Caffé Monster® Energy Coffee Drinks” said to be “a line of non-carbonated, 100% Arabica coffee, reduced fat, dairy based energy coffee drinks”, and “Espresso Monster Espresso + Energy Drinks” said to be “a line of non-carbonated dairy based espresso + energy drinks” within what is described as the “Monster Energy Drinks” segment. The Monster Form 10-K SEC filing for the financial year ended 31 December 2019 records:
Our Java Monster®, Espresso Monster® and Caffé Monster® product lines compete directly with Starbucks Frappuccino, Starbucks Doubleshot, Starbucks Doubleshot Energy Plus Coffee, Starbucks Tripleshot and other Starbucks coffee drinks, Costa Coffee, Rockstar Roasted, Dunkin Donuts, Gold Peak, Stok, High Brew, McCafé, hi*ball, Douwe Egberts Coffee, Emmi CAFFÈ, Bang Keto Coffee, Nescafe and International Delight.
The Monster Form 8-K SEC filing dated 17 January 2019 (Form 8-K SEC Filing) contained the following “Industry Overview”:
The “alternative” beverage category combines non-carbonated, ready-to-drink iced teas, lemonades, juice cocktails, single-serve juices and fruit beverages, ready-to-drink dairy and coffee drinks, energy drinks, sports drinks and single-serve still waters (flavored, unflavored and enhanced) with “new age” beverages, including sodas that are considered natural, sparkling juices and flavored sparkling beverages. According to Beverage Marketing Corporation, domestic U.S. wholesale sales in 2018 for the “alternative” beverage category of the market are estimated at approximately $55.5 billion, representing an increase of approximately 6.7% over estimated domestic U.S. wholesale sales in 2017 of approximately $52.0 billion.
The Form 8-K SEC Filing included a series of charts illustrating market shares of the “Beverage Landscape” and “Brand Performance” within that landscape by reference to “TOTAL U.S. - CONVENIENCE SNAPSHOT”. The “Beverage Landscape” slide included “RTD COFFEE”:
The Form 8-K SEC Filing included the following slide showing market shares of the “ENERGY COFFEE CATEGORY”:
Competitive landscape for energy drinks in Australia
The Form 8-K SEC Filing also included the following slide entitled “AUSTRALIA//SELECTED MARKET”:
Ms Maartensz gives evidence that on 15 April 2020 she conducted trade mark searches of the Register and found a number of examples of energy drink companies in Australia filing for trade mark coverage in respect of “coffee” and “chocolate”. Similarly, she gives evidence that she found a number of examples of coffee beverage manufacturers in Australia filing for trade mark coverage in respect of “energy drinks”.
In the February/March 2020 edition of the “Convenience and Impulse Retailing” magazine, published by C&I Media Pty Ltd, exhibited to the affidavit of Mr Thiele, there is an article entitled “Bundle of Energy” that analyses the “evergreen energy drinks segment” including data from the most recent State of the Industry Report from the Australasian Association of Convenience Stores. It states:
Energy is dominated by major players such as Red Bull, Frucor Suntory with its V and Rockstar brands, and by the Monster Energy Company (MEC) which owns both the Monster Energy and Mother Energy brands, which are distributed through a long-term partnership with Coca-Cola Amatil in Australia. From a combined portfolio perspective MEC brands account for approximately one third of energy drink sales in Australia.
Mr Thiele gives evidence about the existence of an Australian energy drinks market in which the principal competitors are MOTHER, Monster, Red Bull and V.
Competitive landscape for coffee in Australia
As a result of his experience in the coffee industry in both the United States and Australia, Mr Creswick gives evidence that the markets for coffee in Australia and the United States are fundamentally different. He explains that Cantarella sells a higher ratio of pre-ground filter style coffee in the United States than in Australia due to demand from large hospitality venues. In contrast, equivalent venues in Australia commonly sell roasted whole beans.
Mr Creswick also gives evidence that the closure by Starbucks of the majority of its retail outlets in Australia also emphasised the extent to which Australia had developed a sophisticated café culture with a focus on quality, and Australian consumers expected a more refined taste than was present in the products offered by Starbucks.
Mr Creswick gives evidence that the only Nielsen competitor and market reports that Cantarella subscribes to are those directed solely at the pure coffee market. The reports do not include any data relating to RTD or pre-packaged coffee drinks, energy drinks or instant coffee products.
Product innovation for MOTHER energy drinks
Mr Thiele gives evidence that product innovation is a vital element for energy drink suppliers as a means of attracting and retaining customers, and for remaining competitive.
Mr Thiele gives evidence that TCCC, and subsequently EB, have launched a variety of sublines or variants of the original MOTHER energy product in Australia since 2010, including: MOTHER BIG SHOT; MOTHER LEMON BITE; MOTHER LOW CARB; MOTHER FROSTY BERRY; MOTHER SUGAR FREE; MOTHER BIG CHILL; MOTHER GREEN STORM; MOTHER SURGE ORANGE; MOTHER REVIVE; MOTHER KICKED APPLE; MOTHER PASSION; MOTHER TROPICAL BLAST; and MOTHER EPIC SWELL.
Mr Thiele gives evidence that EB’s product range will likely continue to evolve, and non-carbonated dairy based drinks, such as iced coffee and iced chocolate, are a key opportunity for expansion.
The Form 8-K SEC Filing included the following slide entitled “STRATEGIC BRANDS INNOVATION”:
Recent EB Planning Documents
Mr Thiele gave the following evidence in the course of his cross examination by senior counsel for Cantarella, Mr Bannon SC, concerning the future intentions of EB in relation to the launch of new products in Australia:
Could you answer my – could you answer my question. You haven’t produced in evidence a single piece of paper to indicate any plan of Monster or Mother to introduce any single new product in this country, have you?---Not that I can recall, no. That’s not saying that they don’t exist, because we do have very thorough plans, and you know, maybe they’re not in evidence here, but we certainly have a lot of new products on the short-term and long-term horizon that are confirmed, so - - -
And if there was a plan in relation to any particular product in existence, it would have been a simple matter for you to include it in your affidavit, wouldn’t it?---I think, you know, since the time of writing - - -
It would have been a simple matter for you to include it in your affidavit, wouldn’t it?
[Objection to question overruled.]
HIS HONOUR: Sorry. I – please continue to answer. Yes?---Yes. This was completed in May 2020, and our innovation plans have moved quite substantially since that time, and so, you know, a year is a long time in the beverage industry and we have, you know, quite a lot of plans confirmed in between. I mean, this is a product we pulled off the production line last week that’s a new Mother product that will be out in August this year, a sugar-free raspberry flavour. We’ve got, you know, coffee drinks on the horizon for both Monster and Mother. We have a multitude of different products coming in. We’ve got a mango-flavoured sugar-free Monster coming in in August as well as the Mother. We’ve got a brand refresh of the Mother sugar-free original flavour to – to give clearer sugar-free cues around the colour of the packaging. So we’re always looking at things, but things evolve pretty quickly and, you know, a year is a long time in the beverage industry since this was written at that time as well.
MR BANNON: If there was a single plan to produce any new product in Australia which is relevant to this case, it will be in a document, firstly; do you agree?---I mean, I can only speak for the plans we’ve got. But yes, I mean, there is documentation of all of those things - - -
And if it - - -?--- - - - in some form.
If it existed, it would have been a simple matter for you to produce it for the purposes of this case, wouldn’t it?---Yes, sure.
What I want to suggest to you is that the company has produced such evidence as it’s able to produce to evidence any plans to introduce any product relevant for the purposes of this case; do you agree?---Yes.
[Emphasis added.]
EB sought to rely on the Recent EB Planning Documents to evidence the existence of such plans, including with respect to plans for “coffee drinks on the horizon”. Given their commercial sensitivity, suppression orders were made over the content of the Recent EB Planning Documents. I address the relevance of the Recent EB Planning Documents at [34(c)] above.
Sale of energy drinks and coffee products
Mr Thiele gives evidence that MOTHER energy drinks are sold in convenience stores like 7-Eleven, and that freshly ground coffee is also sold in 7-Eleven stores.
Mr Creswick accepted in the course of his cross examination that at least one stockist of MOTHERSKY coffee, the Beans & Barrels café in Parramatta, New South Wales, sells a range of beverages including coffee, iced coffee, milkshakes, protein shakes, and energy drinks.
Ms Maartensz gives evidence that she visited two service stations and three supermarkets in the period 14 April 2020 to 7 May 2020. She exhibits photographs taken during those visits to her affidavit. One photograph taken at a petrol station energy shows that drinks were located in the same fridge section as what appears to be two canned iced coffee products. Another photograph shows that a large quantity of iced coffee products were displayed in a separate, open fridge section, alongside milk products. In another petrol station, she observed a “Wild Bean” café counter in the petrol station where an attendant was brewing fresh coffee using an espresso machine. The photographs show largely products such as Gatorade and Powerade in one closed fridge, energy drinks in another fridge, and iced coffee products in another fridge.
Ms Maartensz also exhibits a photograph taken in a supermarket, in which two iced coffee products are in the same fridge as energy drinks, and another image in which iced coffee products are in a separate refrigerated unit, located next to what appears to be a check-out area, next to a refrigerated unit containing energy drinks. She exhibits another photograph that was taken in the same supermarket of energy drinks of various brands shelved in a non-refrigerated section.
She also exhibits photographs taken at a different supermarket in which energy drinks are in a non-refrigerated section, iced coffee products are in a refrigerated section, and in a refrigerated unit next to what appears to be a check-out area, there are energy drinks shelved next to three iced coffee products.
At the final supermarket, she exhibits a photograph showing two refrigerated units next to one another: one unit containing energy drinks and water, and the other containing, among other products, iced coffee products and iced tea products.
Mr Creswick gives evidence that, in his experience, Cantarella’s pure coffee products sold in major supermarket chains and retail grocery stores are sold in particular aisles and mostly alongside other competitors’ pure coffee products. He gives evidence that in his experience they are not sold in the same aisle as iced coffee milk drinks (such as Dare Iced Coffee) or energy drinks (such as Red Bull or MOTHER drinks); rather, energy drinks are generally sold in refrigerated units near the check-out or in aisles dedicated to pre-packaged beverages such as soft drinks and bottled water.
Marketing of energy drinks and coffee products
Ms Maartensz gives evidence that the RTD coffee brands Ice Break, Oak, Dare Iced Coffee and Barista Bros employ advertising and promotional strategies similar to those identified above in relation to MOTHER energy drinks, including sampling, promotions, sponsorships and partnerships with video games.
Mr Creswick gives evidence that pure coffee is sold using distinct sales approaches and channels, being sold as an ingredient to be transformed into a beverage, often by a professional barista. He further gives evidence that pure coffee is sold using a particular marketing emphasis; primarily, the quality of the coffee bean and taste. Mr Creswick gives evidence that energy drinks are marketed by reference to their effect, providing energy, with the utility of that quality consistently emphasised.
Mr Kelly gives evidence that energy drinks are produced by the preparation of “concentrates” and/or “beverage bases” that are then provided to bottling and canning operations, which combine the concentrates and/or bases with sweeteners, water and other ingredients to produce RTD packaged energy drinks. Mr Thiele gives evidence that energy drinks typically have a sweet and fruity flavour profile.
Mr Creswick accepted that pure coffee and RTD coffee can be sweetened by the addition of sugar or sweeteners, and that coffee drinkers add sugar to their coffee in order to meet their taste preferences. He also accepted that some blends of coffee, including MOTHERSKY coffee, may be perceived by coffee drinkers as sweet, and/or as having characteristics of fruit flavours.
Mr Thiele acknowledges that sugar is an important aspect of energy drinks, but that the sugar is present “mostly for taste”. Mr Thiele gives evidence that other ingredients in energy drinks, the amount of kilojoules of which are listed on the back of the product, may be described as a type of “energy”. Mr Creswick accepted that coffee marketing refers to coffee as a “pick me up” in the sense that caffeine revives the drinker and makes them feel more “energised”
In a 7-Eleven Facebook post dated 17 August 2015, exhibited to Ms Goonawardena’s affidavit, that is reproduced below, 7-Eleven’s freshly ground coffee is advertised as “the reason you can get out of bed in the morning”. In response to this post, a user has commented with a “selfie” with a Red Bull energy drink, captioned “My reason”. 7-Eleven responds, “oooo we sell those too”.
Mr Creswick accepted that:
(a)the stimulating benefits of caffeine are regularly invoked in the marketing of coffee in Australia, and that this is a functional benefit for coffee drinkers;
(b)coffee is often advertised as a pick-me-up;
(c)there are references in coffee marketing, including in the advertisements of some of Cantarella’s own coffee brands and competitor brands, to coffee serving the functional purposes of providing sustenance or energy and reviving the drinker, including to “refuel”, “powering your day”, and “get through a big day”;
(d)coffee is often used as a means of delivering caffeine to the drinker;
(e)the stimulant effects of caffeine in coffee acts as a pick-me-up to help you to wake up, to stay focussed, to improve productivity, to “keep you going”, or to feel more energised;
(f)there are references in coffee marketing which invoke a link between coffee and energy drinks;
(g)a consumer would not be taken by surprise to see coffee marketed with a direct or indirect reference to the stimulant effects of caffeine; and
(h)the marketing of coffee in Australia regularly picks up the stimulant qualities of caffeine.
Mr Creswick also accepted that the stimulating effects of caffeine in coffee “helps one get going the morning” and “it is a selling benefit that is promoted” but emphasised that:
It’s not the main selling benefit of coffee in the experience of coffee that we promote and that I see generally. A lot of it is about taste and flavour and the experience of having a coffee as opposed to the – the simple delivery of energy or stimulation.
Interface between pure coffee and other products
Mr Creswick gives evidence that pure coffee products are produced using particular manufacturing processes (roasting and in some cases grinding of coffee beans, and packaging of beans), and that pure coffee is commonly consumed in a “dining” environment such as a café or restaurant in which the consumption experience is emphasised.
Scope of use of Cantarella’s pure coffee brands
Mr Creswick gives evidence that Cantarella’s “pure coffee” brand VITTORIA is also used in relation to biscuits and drinking chocolate.
Ms Goonawardena gives evidence that it is also used for mineral water, iced tea, Italian soda, fruit nectars, cheese, confectionary, hazelnut spread, oil, vinegar, wine, tea, pasta and gelato under the VITTORIA or SANTA VITTORIA sub-brands.
Mr Creswick gives evidence that Cantarella’s “pure coffee” brand AURORA is also used in relation to instant coffee, tea, olive oil, vinegar and Italian cheese, and Ms Goonawardena gives evidence that it is also used for pasta.
Mr Creswick and Ms Goonawardena give evidence that Cantarella’s “pure coffee” brand DELTA is also used in relation to cooking oils.
Mr Creswick gives evidence that Cantarella’s “pure coffee” brand WILL&CO is also used in relation to beer (although he notes that this was part of a co-branding partnership with a third party, and the product was marketed and sold by that third-party), and Ms Goonawardena gives evidence that it is also used for drinking chocolate and RTD cold brew and iced coffee products:
Ms Goonawardena gives evidence that the CAMPOS COFFEE brand, Cantarella’s competitor, is used in relation to several “extended” products, including:
(a)an RTD “iced latte” product;
(b)an RTD “cold press” product, with or without milk;
(c)a “tiramasu white stout” beer, in collaboration with Young Henry’s Brewery;
(d)a “Campos Cascara Gin” product, in collaboration with Melbourne Moonshine;
(e)a “Campos Espresso Martini” product; and
(f)a coffee liqueur product, in collaboration with Mr Black Spirits.
Ms Goonawardena also gives evidence that Pablo & Rusty’s branding is used in relation to “extended” products, including a “Nitro” canned coffee product as shown below:
MOTHERLAND marketing campaign
Mr Thiele gives evidence that the MOTHERLAND campaign was run by TCCC in 2010 and 2011. He explains that MOTHERLAND refers to a fictional fantasyland tailored to MOTHER-drinking consumers. He gives evidence that a significant component of that campaign was the “MOTHERLAND” commercial (MOTHERLAND commercial) which was broadcast in various iterations on free-to-air television in 2010, including as a full length version (45-second) version and a shorter (30-second) version. He states that an even shorter (15-second) “Demolition Dodgem” version was posted to the MOTHER YouTube page.
Ms Maartensz gives evidence that as at 30 March 2021, the videos of the MOTHERLAND commercial remained on the MOTHER YouTube and Facebook pages. She states that the MOTHERLAND mark is used visually and aurally. Set out below is a screenshot from the MOTHERLAND commercial dated 30 March 2021:
Mr Thiele gives evidence that the MOTHERLAND campaign also involved other forms of advertising, including: print advertisements; online advertising on websites such as TV.com, Gamespot.au, NRL.com, bigpond.com, MySpace and Ninemsn; social media advertising, including numerous references to MOTHERLAND in posts and user comments on the MOTHER Facebook page, and in sponsored posts; downloadable “wallpapers”; point of sale materials; and competitions and cross-promotions, including a promotion (in partnership with 2Day FM and Triple M) to win $5,000 and visit “Motherland”.
Ms Maartensz gives evidence that many of the above examples, including the MOTHERLAND commercial and various social media posts, remain accessible, at least as at 6 April 2021. She also gives evidence that the phrase “Welcome to MOTHERland!” is in the description that appears in the “About” tab of the MOTHER YouTube Page, at least as at 11 March 2020.
Mr Simonetti gives expert evidence that content, including videos, posted to a Facebook page or on YouTube remains there unless and until manually removed or hidden by the user or the person with administration rights for the page. Mr Simonetti also gives evidence that the default settings on Facebook and You Tube are, respectively, “Everyone” and “Public”, meaning that the content is publicly available.
Mr Thiele gives evidence that the brand equity built in the MOTHERLAND campaign remains valuable to EB and that consumers still connect the MOTHERLAND mark to the MOTHER brand. Mr Thiele also gives evidence that the MOTHERLAND mark lends itself to EB’s current marketing strategies and is a mark that could be deployed by EB in the future, for example, as part of EB’s online presence or at music festivals.
MOTHER-derivative trade marks
Ms Stacey gives evidence that on 5 August 2020 she conducted searches of registered and pending trade marks on the Register containing the word “MOTHER, either as a standalone word or as a MOTHER-derivative, in the course of which she had located:
(a)15 results in class 30 in which “coffee” was listed, of which 12 results were not owned by either Cantarella or EB, of which eight were on the Register at the time of the MOTHERSKY Priority Date;
(b)17 results in all classes in which “coffee” was listed, of which 14 results were not owned by either Cantarella or EB, of which nine were on the Register at the time of the MOTHERSKY Priority Date;
(c)35 results in class 30, of which 32 results were not owned by either Cantarella or EB, of which 20 were on the Register at the time of the MOTHERSKY Priority Date; and
(d)104 results in class 30 and its associated classes, of which 99 results were not owned by either Cantarella or EB, of which 64 were on the Register at the time of the MOTHERSKY Priority Date.
Ms Stacey annexed copies of the trade marks that she had identified as a result of her searches of the Register to her affidavit affirmed on 12 August 2020 (Stacey affidavit).
Ms Goonawardena gives evidence that she had reviewed the results of the trade mark searches undertaken by Ms Stacey and concluded that 21 of the 105 trade marks annexed to the Stacey affidavit were in respect of “beverage and confectionary” products and that these 21 trade marks were registered to only 13 different traders. She also stated that she had found no evidence from searches of the internet that any of the 13 traders had, in fact, used those marks in respect of coffee or chocolate products.
Ms Goonawardena also gives evidence that only 30 of the 105 trade marks annexed to the Stacey affidavit were in respect of “any type of beverage”. Ms Goonawardena states that she had found evidence from her internet searches that only one of the trade marks had been used for “beverages” and that was with respect to an apple cider vinegar product.
The registered trade mark “Mother Earth” has been in use in Australia since prior to 2017. Prolife Foods Ltd is the owner of the Mother Earth mark. Ms Goonawardena gives evidence that the Prolife Foods website records on its “Our Brands” page:
The brand started on Waiheke Island, close to Auckland, New Zealand … In 1973, the product range comprised just health baked loaves. Mother Earth joined Prolife Foods in 2008 and has grown exponentially since …
The registered trade mark “Mother’s Choice” has also been in use in Australia since prior to 2017. Mother’s Choice Flour was advertised in the Australian Women’s Weekly as early as June 1935 and is now listed as a Goodman Fielder brand on its website under “Australia”.
In addition, the registered trade mark owned by Scott Anderson “Don’t Mess With Mother Nature” has been in use in Australia since prior to 2017. The website exhibited in the affidavit of Ms Goonawardena, states that “Don’t Mess With Mother Nature” is a business name for a winery that was established in 1999, with the first vintage of wines produced in 2005.
The evidence is less compelling that other MOTHER-derivative registered trade marks relied upon by Cantarella in their submissions were used prior to 2017 such as Mother Meg’s, Mothers Milkbank and Mother’s Kitchen. I accept that each is currently used but I am not persuaded that I can find on the evidence before me that each was used prior to 2017.
MARKET ISSUES AND EB’S REPUTATION IN MOTHER
Prior to considering the particular causes of action relied upon by EB in these appeals it is convenient to address the following overarching propositions advanced by EB and Cantarella in support of their respective positions.
EB submissions
The submissions advanced by EB in these appeals are based on two fundamental propositions. First, there is a material interface between energy drinks and other beverages, including coffee, and a material interface between pure coffee and other products. Second, there is a significant overlap in the marketing and sale of energy drinks and other beverages, including pure coffee.
EB advances the following principal contentions in support of these two propositions:
(a)product innovation is a vital element for energy drink suppliers to remain competitive;
(b)beverage companies, including Monster, have already sold coffee or tea flavoured energy drinks in Australia;
(c)energy drink companies often position themselves as a direct alternative to coffee;
(d)energy drink companies, such as Monster, consider coffee drink companies to be direct competitors;
(e)energy drink companies routinely file for trade mark coverage for “coffee” and “chocolate” and coffee beverage manufacturers routinely file for trade mark coverage for “energy drinks”;
(f)Cantarella’s coffee products are sold through similar trade channels to energy drinks;
(g)energy drinks, cold brew coffee products, iced coffee products and iced tea products are sold side-by-side in fridges at supermarkets, convenience stores and service stations;
(h)many RTD coffee brands employ advertising and promotional strategies similar to those used for MOTHER energy drinks;
(i)the notion of energy in energy drinks is not limited to their high sugar content;
(j)coffee companies regularly emphasise the functional nature of coffee such as providing a “pick me up”, “wake me up”, “ a recharge” or “energy”; and
(k)brands that sell “pure coffee” do not limit themselves to “pure coffee” products only.
Cantarella submissions
Cantarella submits that the evidence incontrovertibly demonstrates two crucial matters that are largely determinative of the appeals. First, the markets for energy drinks and pure coffee are separate and distinct. Second, EB has a reputation in its MOTHER mark (with its distinctive gothic script) that is narrowly confined to the energy drink market.
Cantarella refers to the following characterisation of the market in which energy drinks are supplied that was determined by Yates J in Frucor Beverages Limited v The Coca-Cola Company (2018) 358 ALR 336; [2018] FCA 993 (Frucor) at [36]:
Energy drinks are a type of non-alcoholic beverage containing caffeine and other stimulant ingredients, such as guarana, taurine and ginseng. Energy drinks are marketed to consumers on the basis of their mental and physical stimulatory effects, arising from their ingredients. Energy drinks are accepted in the beverage industry as a separate and distinct category of non-alcoholic drink.
Cantarella also refers to the following finding by Yates J in Frucor at [48]:
Energy drinks are presented to the public as a stand-alone drinks category. Petrol and convenience stores use “destination doors” to communicate product location.
Cantarella submits that the evidence advanced by EB in these proceedings, much of which I have outlined above in the Evidentiary Background, is consistent with the findings made by Yates J in Frucor.
Consideration
The characterisation of the markets in which goods and services are supplied can arise in the context of trade mark disputes, particularly in addressing reputation and the likelihood of deception or confusion. See by way of example: Dunlop Aircraft Tyres Limited v Goodyear Tire and Rubber Company (2018) 262 FCR 76; [2018] FCA 1014 at [15], [53]-[55], [139], [193] and [198] (Nicholas J); Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd (2017) 251 FCR 379; [2017] FCAFC 83 at [65], [74], [82] and [89] (Greenwood, Jagot and Beach JJ); Allergan Australia Pty Ltd v Self Care IP Holdings Pty Ltd (2021) 393 ALR 595; [2021] FCAFC 163 at [43] (Jagot, Lee and Thawley JJ); Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd (2017) 124 IPR 264; [2017] FCAFC 56 (Accor) (Greenwood, Besanko and Katzmann JJ) at [339].
Neither EB nor Cantarella adduced any empirical economic evidence relevant to market definition. Rather, each sought to rely on largely impressionistic or qualitative evidence to support the respective contentions that each advanced on the markets in which energy drinks and coffee were sold. Necessarily, this demanded an evaluative consideration of the significance and weight to be given to the material relied upon by EB and Cantarella to establish those contentions.
As explained above, EB approached the market issue by seeking to establish the existence of what it described as a “material interface” between first, energy drinks and other products, including coffee, and second, between “pure coffee” and other products.
The effect of this approach was to introduce into the evaluation a very broad range of beverage products that sat between the MOTHER energy drinks sold by EB and the MOTHERSKY pure coffee products sold by Cantarella. These products included RTD beverages such as iced coffee, iced tea and cold brew coffee products sold in cans. The introduction of these “intermediate products” ultimately had a tendency to distract from, rather than assist in, the determination of the likelihood of deception or confusion and the extent of the reputation that EB had established in its MOTHER marks.
At times in the course of its submissions Cantarella sought to distinguish between “pure coffee” and “instant coffee”, but the principal distinction drawn by Cantarella and the subject of the most attention by the parties was the distinction between “pure coffee” and what might be described as “coffee flavoured milk” and other coffee flavoured RTD beverages. EB’s expansive taxonomical approach was to include such RTD products within the concept of coffee.
Moreover, the evidence adduced in the appeals and summarised in the Evidentiary Background provides only limited support for the material interface market contentions that EB seeks to advance for the following reasons.
First, the need for product innovation to remain competitive in the energy drink market cannot in itself give rise to an expectation on the part of consumers that EB could be expected to diversify its product offering to include MOTHER coffee beans and ground coffee. Rather, as illustrated by the Monster “Strategic Brands Innovation” slide in the Form 8-K SEC Filing reproduced at [97] above, consumers could expect diversification in the presentation, packaging and flavour of energy drinks rather than a diversification into products outside the RTD range of product offerings.
Cantarella submits that its use to date of the MOTHERSKY mark is with respect to goods manifestly different to the energy drink market in which EB has used the MOTHER mark. It submits that coffee is a particular type of beverage, not simply a beverage, and the coffee products that it sells are not sold as beverages, but rather coffee beans from which beverages can be produced.
Cantarella further submits that in the context of the reputation that EB has in the MOTHER mark, the use of the MOTHERSKY mark (within the applied for monopoly) could not be likely to deceive or cause confusion because:
(a)the marks are different visually, aurally and in the idea which they connote: “MOTHER” has a well-known meaning, whereas MOTHERSKY is a combination of two different and distinct words, which put together have no definition or meaning;
(b)relatedly, MOTHERSKY does not suggest any particular product or service inherently, and therefore does not prompt consumers to consider that it represents a flavour or extension of another product category;
(c)EB’s reputation arises in the extensive use of the MOTHER mark in relation to energy drinks as reflected in the Monster US SEC filings that refer to MOTHER as a line of “carbonated energy drinks”; and
(d)the evidence establishes that energy drinks are in a relevantly different market to coffee.
In addition, Cantarella submits that EB’s reference to other brands used by Cantarella expanding into different markets is irrelevant and only serves to emphasise that the relevant enquiry is whether deception or confusion is likely due to EB’s reputation in the stylised MOTHER logo. Cantarella contends that consumers may expect a pure coffee brand (such as CAMPOS COFFEE) to extend in those ways, in light of previous extensions into other markets. Contrastingly, MOTHER has only ever been used in relation to energy drinks.
Consideration
I am satisfied that EB’s reputation in the MOTHER mark is correctly described as deep but narrowly focused for the reasons advanced by Cantarella. As the Delegate in the MOTHERSKY decision stated at [42]:
[T]he evidence only shows use on energy drinks; this is not a situation where the Opponent uses its trade marks (or parts of the trade marks) on other beverages or foodstuffs which might induce a consumer into believing that the Opponent has expanded into chocolate or coffee. The strength of the Opponent’s reputation in the Mother Trade Marks in relation to energy drinks reduces the likelihood of confusion or deception from the use of the Trade Mark on, or in relation to, the Applicant’s Goods and Services to something less than ‘real and tangible’.
First, I accept that as at the MOTHERSKY Priority Date, EB’s MOTHER marks had acquired an extensive reputation in Australia in relation to energy drinks. That reputation had arisen from the variety of retail outlets in which those products were sold; the “substantial” figures pertaining to “Mother brand retail sales”, including at least 317 million cans sold since June 2015 and its extensive marketing and promotional campaigns.
Second, I do not accept that any similarities between prompts and taglines used in relation to energy drinks by EB and coffee companies in promoting or marketing their products can relevantly give rise to any real or tangible danger of confusion.
At a general level, both energy drinks and coffee might be thought to be stimulants. Energy drinks may typically contain at least some quantity of caffeine; coffee may, at times, be marketed as some form of “wake up” or “pick up”; and both may be sold through the same distribution channels. However, caffeine cannot simply be equated with coffee and references to the presence of caffeine in both coffee and energy drinks cannot in my view give rise to any real or tangible danger of confusion in the minds of consumers.
Third, EB’s reputation included the use of “MOTHER” in combination with other words, taglines and slogans but only in the context of the sale of energy drinks. The sublines or variants of the original MOTHER branded energy drink, such as MOTHER BIG SHOT, MOTHER LEMON BITE, MOTHER GREEN STORM and MOTHER PASSION serve to differentiate flavours and perceived attributes of MOTHER energy drinks, but in each case the word MOTHER remains the prominent brand and is used without any prefix or suffix.
Fourth, the depiction of the MOTHER mark with its stylised gothic print on EB’s energy drinks and in promotional and advertising material is fundamental to the use of the MOTHER mark as a trade mark. I accept Cantarella’s submission that references to “Mother” in non-gothic script in social media do no more than invite recollection of the known gothic script in cans and other advertising, where “mother” is used by EB without the gothic script, it is closely accompanied by the MOTHER logo and radio advertisements which refer to “mother” invite listeners to recall and associate the word “mother” with the stylised MOTHER logo.
As O’Bryan J stated in Rodney Jane Racing Pty Ltd v Monster Energy Company (2019) 370 ALR 140; 142 IPR 275; [2019] FCA 923 at [98] with respect to the use of the stylised MONSTER mark with its distinctive device that is referred to as the “M-icon” (that resembles a claw mark or scraping that might be made by a figurative monster):
… MEC draws attention to the occasions on which it, or consumers, use the plain word “Monster” when referring to MEC or its energy drink products. However, the plain word is never used as a brand. It is only ever used in written communications by MEC, such as a brochure that contains a written description of branded merchandise (for example, Monster10.0084-6. T-shirt) or point of sale material (Monster cooler), or written communications by consumers on social media writing a response to a post from MEC or a sponsored athlete. Such use is always associated with, proximate to and never separate from, the other distinctive MEC marks, being the M-icon and the stylised “Monster Energy”.
Fifth, the extent to which Cantarella and other coffee companies, in particular CAMPOS COFFEE, have expanded the use of their brands to products other than coffee does not give rise to any likelihood of deception or confusion because these are different products in different markets. Moreover, the relevant enquiry is the likelihood of deception or confusion arising from EB’s reputation in the MOTHER brand, a reputation acquired exclusively for energy drinks. EB has not sought to expand the use of MOTHER to products other than energy drinks.
Sixth, the MOTHERSKY mark shares the element “Mother” but only as part of a composite invented word with no established meaning. Although as a word mark, its notional use would include other ways in which the MOTHER element could be further emphasised, such as MOTHER SKY or MOTHERsky, I am not satisfied, however, for the reasons explained above at [330], that there is any reasonable basis for such a concern.
Seventh, any assessment of the notional use of the MOTHERSKY mark must take into account the full range of use in relation to “coffee”, but there remains a fundamental distinction between “coffee” and “energy drinks” that is not materially diminished by the existence of RTD and pre-packaged coffee beverages such as iced coffee, cold brew coffee, “coffee-in-a-can” products.
Eighth, the sale of energy drinks and coffee, including coffee products sold by Cantarella, through common distribution channels is of little probative value. Supermarkets, retail outlets such as Target and Kmart and convenience stores offer a broad range of products for sale to consumers, more relevant is how the products are displayed for sale, their brand image, the means by which they are promoted and advertised for sale, and to whom they are marketed.
The evidence summarised above in the Evidentiary Background demonstrates that coffee and energy drinks are displayed for sale in different ways and generally in different areas of supermarkets and convenience stores.
Ninth, the marketing and promotion of energy drinks and coffee is fundamentally different. They have different brand images and are promoted and marketed to different classes of consumers in different ways. The marketing and advertising of MOTHERSKY coffee is directed at the growing connoisseur aspect of the Australian coffee market as a high-quality coffee product with a refined taste. MOTHER energy drinks are promoted and advertised as a “high energy and rebellious product” to a target audience of 18 to 34 year olds, employing brand pillars of adventure and music, with a particular emphasis on the use of social media and the sponsorship of live music events, including with MOTHER branded “ball pits” and photo booths.
The references in marketing and advertising of coffee products to caffeine, the stimulant attributes of coffee giving a “hit”, “fix”, “kick”, “energy”, a “wake up” or a “pick up” tool, a boost to productivity, to combat the feeling of tiredness and other similar attributes do not materially detract from the fundamental differences in the promotion and marketing of energy drinks and coffee. Two products may be promoted and marketed with overlapping claimed attributes but any evaluation of the extent of any similarity in the manner in which the products are promoted and marketed must also have regard to the target audience and the specific means by which any distinguishing brand pillars are promoted and marketed.
In the course of his cross examination, Mr Creswick acknowledged that certain characterisations of selective marketing by coffee companies put to him “made sense” and he “expected” that was their pitch. The following exchange after giving that evidence, however, is instructive:
And so, Mr Creswick, you would agree, wouldn’t you, that a common aspect of coffee marketing in Australia picks up the notion of the stimulating benefits of caffeine in coffee helps one get going in the morning?---It is – it is a – it is a selling benefit that is promoted. It’s not the main selling benefit of coffee in the experience of coffee that we promote and that I see generally. A lot of it is about taste and flavour and the experience of having a coffee as opposed to the – the simple delivery of energy or stimulation.
Thank you. And then the second element was another – I’m putting to you that another common – I’m sorry. Another aspect picked up in coffee marketing in Australia is the stimulant effect of caffeine helping the drinker keep going through the date. Do you agree?---Yes. It is an argument that’s used.
And I suggest to you that it’s used often?---I mean, if my often or the majority, the majority of the premium coffee advertising that we see in market is based around taste and flavour, for example, higher quality coffees using Arabica coffee beans actually have a lower caffeine content, so is less about the delivery of the high levels of caffeine, but more about the attributes and the flavour and the taste of the beverage.
Thanks. And if one is not focussing specifically on premium coffee brands, but coffee as a drink generally, you would agree, wouldn’t you, that those two qualities, that is, getting going in the morning and keeping going through the day, are regular features of coffee marketing in Australia?---They’re definitely used. And we’ve seen examples of that. But it’s not the – it’s not the only argument around – around coffee. And even cheaper coffees tend not to claim levels of caffeine. A lot of it is about – still about taste and flavour.
Mr Creswick, although pressed, did not resile from his evidence that the marketing of coffee is focused on the taste and flavour and the experience of having a coffee rather than the delivery of energy and stimulation. His evidence is generally consistent with the many examples of the marketing of coffee by taste, effect on the palate, consumption experience, quality (including source) of the bean that were in evidence and summarised in Schedule A to Cantarella’s closing written submissions.
The taste and flavour of energy drinks is very different to coffee. The following evidence given by Mr Thiele is instructive:
And I will ask you one more time, and I won’t go back to it. And you agree that you’ve always understood that the rough teaspoon sugar content of the original energy drink is in the order of – I will make it a bit easier for you – around 10 teaspoons of sugar?---It was roughly around that amount, yes.
Right. And if we could then turn to the next page, which is page 5 of this document. And under nutritional info, sizes, it says:
An explosive blast of fruity pineapple and orange flavours with a refreshing energy hit.
Again, may we take it you would accept that that is an accurate description of the flavours of this version of the product, namely the Tropical Blast?---I’m trying to remember whether it had the mango in there. I think it was mostly pineapple and orange. May have had some mango component in there as well, but that surprises me a little bit.
Tenth, the extent of EB’s success in creating such a powerful reputation in the MOTHER marks in connection with energy drinks reduces the likelihood of confusion or deception from the use of the MOTHERSKY mark on or in relation to Cantarella’s goods and services to something less than real or tangible.
For the reasons outlined above, I am not satisfied that EB has established that the use of the MOTHERSKY mark is likely to deceive or cause confusion due to the reputation of the MOTHER marks. The s 60 ground cannot succeed.
MOTHERSKY MARK – UNLAWFULNESS
Section 42(b) of the Act and relevant legal principles
Section 42(b) of the Act provides:
42 Trade mark scandalous or its use contrary to law
An application for the registration of a trade mark must be rejected if:
…
(b) its use would be contrary to law.
The relevant unlawfulness must arise from the use of the mark itself and it is necessary to establish that its use would, rather than could, be contrary to law: see Advantage-Rent-A-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683 at [28] (Madgwick J); Primary Health Care Limited v Commonwealth of Australia [2017] FCAFC 174 at [411].
A hypothetical future contravention of provisions proscribing misleading and deceptive conduct or false and misleading representations has long been recognised as a legitimate basis for opposition under s 42(b): Monster at [23] (Stewart J) citing Health World Ltd v Shin-Sun Australia Pty Ltd (2005) 64 IPR 495; [2005] FCA 5 at [44] (Cooper J).
EB submitted that consumers would be likely to be misled or deceived into believing that the goods and services under the MOTHERSKY mark are those of EB or somehow affiliated with EB in contravention of s 18 of the ACL. Further, it submitted that offering the goods and services suggests that Cantarella is associated or affiliated with EB or that Cantarella has obtained a sponsorship or approval from EB, in contravention of s 29 of the ACL. EB also argued that Cantarella’s use of the MOTHERSKY mark amounted to passing off.
The relevant provisions of the ACL are as follows:
Section 18 Misleading or deceptive conduct
(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
…
Section 29 False or misleading representations about goods or services
(1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:
…
(g) make a false or misleading representation that goods or services have sponsorship approval, performance characteristics, accessories, uses or benefits;
(h) make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation;
The relevant principles and authorities in relation to ss 18 and 29 of the ACL are well established. They were usefully distilled by Stewart J in Monster at [25] to [33]. If I might gratefully adopt his Honour’s review these principles can be summarised as follows.
First, there is no material difference between the phrase “misleading or deceptive” in s 18 and the phrase “false or misleading” in s 29: Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Limited (2014) 317 ALR 73; [2014] FCA 634 (Coles) at [40] (Allsop CJ); Australian Competition and Consumer Commission vTPGInternet Pty Ltd (2020) 278 FCR 450; [2020] FCAFC 130 (TPG FCAFC) at [21] (Wigney, O’Bryan and Jackson JJ).
Second, it is necessary to identify the impugned conduct and then to consider whether that conduct, considered as a whole and in context, is misleading or deceptive or likely to mislead or deceive: Coles at [38], citing Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435; 99 IPR 197; [2013] HCA 1 (Google) at [89], [102] and [118] (Hayne J); Campomar Sociedad, Limitada v Nike InternationalLimited (2000) 202 CLR 45; 46 IPR 481; [2000] HCA 12 (Campomar) at [100]–[101] (Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ). In the present case, the impugned conduct is the normal and fair use of the MOTHERSKY mark in relation to the goods and services specified in the application. The enquiry then shifts to whether that conduct, considered as a whole and in context, is misleading or deceptive or likely to mislead or deceive.
Third, conduct is misleading or deceptive or likely to mislead or deceive if it has the tendency to lead into error, that is, there is a sufficient causal link between the conduct and the likely error on the part of persons exposed to the conduct: Coles at [39], citing Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54 (TPG HCA) at [39] (French CJ, Crennan, Bell and Keane JJ). Conduct is likely to mislead or deceive if there is a real and not remote chance or possibility that a person is likely to be misled or deceived: Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 at 87 (Bowen CJ, Lockhart and Fitzgerald JJ); Butcher v Lachlan Elder Realty Pty Limited (2004) 218 CLR 592; [2004] HCA 60 at [112] (Gleeson CJ, Hayne and Heydon JJ); TPG FCAFC at [22(a)].
Fourth, unlike under s 60 of the Act, contraventions of ss 18 and 19 of the ACL are not established by demonstrating that use of the MOTHERSKY mark would be confusing or would cause wonderment: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 (Puxu) at 198 (Gibbs CJ); Google at [8] (French CJ, Crennan and Kiefel JJ).
Fifth, it is necessary to view the conduct as a whole and in its proper context. This will or may include consideration of the type of market, the manner in which the goods are sold, and the habits and characteristics of purchasers in such a market: Coles at [41], citing TPG HCA at [52]; Puxu at 199.
Sixth, where the impugned conduct is directed to the public generally (or some relevant section of the public), the court must consider the likely characteristics of the persons who comprise the relevant class of persons to whom the conduct is directed and consider the likely effect of the conduct on ordinary or reasonable members of the class, disregarding reactions that might be regarded as extreme or fanciful: Campomar at [101]-[105]; Kraft Foods Group Brands LLC v Bega Cheese Limited (2020) 151 IPR 369; [2020] FCAFC 65 (Kraft) at [236] (Foster, Moshinsky and O’Bryan JJ). In assessing the effect of conduct on a class of persons such as consumers who may range from the gullible to the astute, the court must consider whether the “ordinary” or “reasonable” members of that class would be misled or deceived: Coles at [43], citing Campomar at [105]; see also Google at [7]; Kraft at [236].
Seventh, the presence or absence of evidence that someone was actually misled or deceived is relevant to an evaluation of all the circumstances relating to the impugned conduct: Coles at [45]. However, it is unnecessary to prove that the conduct in question actually deceived or misled anyone: Google at [6].
EB submissions
EB submits that the conduct of Cantarella in offering coffee, coffee beans, chocolate and coffee roasting and coffee grinding services under the MOTHERSKY mark would:
(a)constitute misleading or deceptive conduct, contrary to s 18 of the ACL; and
(b)give rise to a false or misleading representation that Cantarella and/or its goods or services have a sponsorship, approval or affiliation that they do not have, contrary to ss 29(1)(g) and (h) of the ACL.
EB submits that a not insubstantial segment of Australian consumers of coffee, coffee beans and chocolate would be familiar with the MOTHER mark and EB’s history of adding words and taglines, many of which emphasise the caffeine content of energy drinks and their stimulant effects. It contends that consumers would also be familiar with coffee companies promoting the stimulant benefits of coffee, and in some cases, the mimicry of energy drink marketing.
As such, EB contends that for the reasons set out in [339] to [343] above, the proposed use of the MOTHERSKY mark would (mis)represent that its products and services under the MOTHERSKY mark were associated with, or licensed or approved by, EB and/or the MOTHER brand. Such a representation goes beyond mere confusion or cause to wonder and therefore satisfies the distinct requirements for establishing misleading or deceptive conduct under the ACL.
EB contends as the representation is undoubtedly false, Cantarella’s conduct in offering its goods and services under the MOTHERSKY mark would amount to a false or misleading representation as to the sponsorship, approval or affiliation of EB and/or its goods or services, contrary to the ACL.
On that basis, EB submits that the use of the MOTHERSKY mark would be contrary to law, and that therefore the ground of opposition under s 42(b) of the Act is made out.
Cantarella submissions
Cantarella submits that the use of the MOTHERSKY mark in relation to coffee, coffee beans, chocolate, coffee roasting and coffee grinding makes no representation of association with or license or approval by EB. It submits that no such representation is made because EB does not market coffee, or “beverages” more generally, by reference to the word “mother”. Rather, EB only markets energy drinks by reference to the MOTHER mark.
Consideration
Unlike under s 60 of the Act, alleged contraventions of ss 18 and 29 of the ACL cannot be established by demonstrating confusion or cause for wonder. In that sense, s 60 of the Act provides a less exacting or stringent test than opposition under s 42(b) of the Act, relying on ss 18 and 29 of the ACL: Monster at [33] (Stewart J); citing Puxu at 198 and Google at [8].
For the reasons outlined at [350] to [368] above with respect to the less exacting s 60 contentions, I do not accept that the use of the MOTHERSKY mark by Cantarella in relation to coffee, coffee beans, chocolate, coffee roasting and coffee grinding has a tendency to lead any person to whom that conduct might be directed to believe that those products were associated with, or licensed or approved by, EB or the MOTHER brand.
I am therefore satisfied that Cantarella has not engaged in conduct that is misleading or deceptive, or likely to mislead or deceive in contravention of s 18 of the ACL or has made a false or misleading representation in connection with the supply of goods or services in contravention of s 29 of the ACL.
EB has not established that the use of the MOTHERSKY mark by Cantarella would be contrary to law.
The s 42(b) ground cannot succeed.
DISPOSITION
Each of the appeals is to be dismissed and EB is to pay Cantarella’s costs.
I certify that the preceding three hundred and ninety-three (393) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Halley. Associate:
Dated: 18 February 2022
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