Energy Beverages LLC v Cantarella Bros Pty Ltd ACN 000 095 607

[2023] HCATrans 124

[2023] HCATrans 124

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S35 of 2023

B e t w e e n -

ENERGY BEVERAGES LLC

Applicant

and

CANTARELLA BROS PTY LTD ACN 000 095 607

Respondent

Application for special leave to appeal

KIEFEL CJ
GAGELER J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA AND BY VIDEO CONNECTION

ON FRIDAY, 15 SEPTEMBER 2023, AT 11.18 AM

Copyright in the High Court of Australia

KIEFEL CJ:   In accordance with the protocol for remote hearings, I will announce the appearances of the parties.

MR N.R. MURRAY, SC appears with MS S. RYAN, KC and MS J.P.S. AMBIKAPATHY for the applicant.  (instructed by Davies Collison Cave Law Pty Ltd)

MR A.J.L. BANNON, SC appears with MR B.P. CAMERON and MS N.L. GOLLAN for the respondent.  (instructed by Herbert Smith Freehills)

KIEFEL CJ:   Yes, Mr Murray.

MR MURRAY:   May it please the Court.  Your Honours, the relevant trade mark of this application is for the word “MOTHERLAND”.  It is registered in respect of goods including energy drinks.  It was deployed in a marketing campaign from 2010 by the applicant’s predecessor, the Coca‑Cola Corporation.

There are some screenshots of that campaign in the primary judge’s reasons, at paragraph [124], or page 31 of the MOTHERLAND book.  Your Honours will see there the mark as used for the purposes of that campaign comprised the word “MOTHERLAND” with “MOTHER” appearing in gothic script and the word “LAND” appearing in plainer script, and next to it is a can of the applicant’s energy drink product with the gothic script “MOTHER” on it.  Then, jumping ahead, briefly, to page 44, in the reasons of [202], there is another screenshot from the “MOTHERLAND” commercial, showing a similar depiction of that trade mark.

There were voiceovers in the usual way deployed through the commercial.  The text of those is set out in our submissions at paragraph 10 – that is at page 133 of the book.  At the foot of that page:

“There’s a place fuelled by MOTHER, where men act before they think”, “Welcome to MOTHERLAND” “A MOTHER drinker needs so much more” and “MOTHERLAND, from a MOTHER of energy hit” –

The commercial was posted on social media in 2010 and 2011, and remained online throughout the non‑use period, which ran from 2016 to 2019.  Another aspect of the use of that campaign was the use of the trade mark in the context of a greeting:

“Welcome to MOTHERLAND!” –

deployed on the “About” tab of the YouTube page for the MOTHER energy drink.  The principles of what constitutes use of a trade mark are not in dispute – at least in respect of the logical first aspect of this application, was MOTHERLAND used as a trade mark.  There is a separate question as to whether it was used at all, which calls into question how one characterises online use – and I will deal with that second.

But the question of whether something has been used as a trade mark – recently re‑affirmed by this Court in Self Care, and not in dispute – the critical part of that re‑affirmation was that another part of a label or promotional material may act as a trade mark – that is, to distinguish the goods – in conjunction with a clear dominant brand.  As your Honours will have seen from the screenshots, the clear dominant brand here is “MOTHER”.  However, as I will develop, that is not to extinguish the branding significance or trade mark function of “MOTHERLAND”.  Justice Kitto famously asked in the Shell v Esso Case when identifying whether use is as a trade mark, would the images:

have appeared to the television viewer as possessing the character of devices, or brands . . . for the purpose of indicating . . . a connexion in the course of trade –

and his Honour framed the question this way:

“There I see something that the Shell people are showing me as being a mark by which I may know that any petrol in relation to which I see it used is theirs.” –

In our respectful submission, for the reasons I will develop now, the primary judge in the Full Court’s findings stand as apparently in conformity with well-accepted principle, going back to Shell v Esso, and as re‑confirmed in Self Care, then the proper application of those principles will be jeopardised because, in truth, they are simply not conformable.  Can I go to the primary judge’s findings, please, at paragraph [202] on page 44.

KIEFEL CJ:   Mr Murray, do you not have difficulty in the sense that the principles are really quite well‑established in this area, and this involves the application of those principles?

MR MURRAY:   Yes, your Honour.  As to the uses of trade mark point, the highest I can put it is to say, with great respect to the courts below, that the findings were so out of kilter with those statements of principles that if they stand as Full Federal Court authority, there is a risk of misapprehension and misapplication of what should be clearly stated principles.  But I cannot put the point of general importance any higher than that.

The second question as to online use is the point of greater public importance, because if I cannot demonstrate the likelihood of error in respect of the uses of trade mark point, then the online user point would not arise.  And so, if it assists the Court, I will continue to develop my submissions on that first question.  Page 44 of the book, paragraph [202] of the primary judge’s findings:

It is readily apparent from the MOTHERLAND commercial that TCCC was using the term “Motherland” to describe a fictional theme park and it was being used as a component of a marketing strategy.

His Honour then said:

It was not being used as a trade mark in relation to goods of respect of which it was registered.

Pausing here, that includes energy drinks:

It was not a use of the MOTHERLAND mark for an energy drink product.

And again, pausing there, well then, what?  No other goods or services are being promoted, this is a fictional theme park.  Its theme park services are not in question here.  The only reason “MOTHERLAND” exists is as a figment of someone’s imagination as a means of adding to the marketing web around MOTHER and working in conjunction with the MOTHER mark itself to promote the sale of energy drinks.

KIEFEL CJ:   Mr Murray, the Full Court held that, in reality, the word “MOTHER” in gothic script is really the only mark being used to distinguish MOTHER energy drinks.  That is really what it comes down to, does it not?

MR MURRAY:   From the Full Court’s point of view, I think that is right, your Honour.  They perhaps did it in two ways.  First, to say it would make no difference if one said MOTHER showroom, factory or playground, in our respectful submission, that was erroneous, because if one were in fact talking about a place where you could go to see the drink being made, to see it being sold or enjoyed, well, they would be descriptive uses and of course, no trade mark use.  As I said, this fictional theme park is a marketing construct.

Secondly, as to the relationship between MOTHER and MOTHERLAND, the Full Court’s approach was to, in our respectful submission, impermissibly dissect the mark.  As your Honours have seen from the screenshots, MOTHERLAND was used, the mark registered – the word “MOTHERLAND” – that was used, although across the breadth of the word, different fonts.  It is not a permissible question, in our respectful submission, to ask, is “MOTHER” being used as the trade mark.  The word “MOTHERLAND” is plainly being used.  One asks, having regard to that word as a whole – that is, the sign that is registered – is that word being used as a trade mark viewed as a whole?

Of course, there is a synergy and a connection between the “MOTHER” in “MOTHERLAND” and the standalone predominant brand in the same way that there might be – to pick an example – between McDonald’s and McNuggets, the “Mc” prefix reinforces the overall clear predominant brand of McDonald’s.  So, that is not surprising that there is a connection between the subsidiary brand and the dominant brand.  But to reason, as the Full Court did, in our respectful submission, is to impermissibly dissect the mark into its component parts rather than ask, is the mark as a whole being used as a trade mark?

The reason I took your Honours to the evidence about our aural uses and the voice‑overs in the commercial is to say that, of course, the consumer does not, when hearing “MOTHERLAND” spoken in voiceover context, see that graphical distinction between different types of script.  There is no debate as to the primary facts.  It is the characterisation of those facts first by the primary judge and then by the Full Court that has gone awry, in our respectful submission.  I have already made my submission in answer to your Honour the Chief Justice’s question about the Full Court – this is to the analysis by the primary judge, which the Full Court, largely, adopted.

KIEFEL CJ:   Mr Murray, what about the facts in relation to the trade mark use of MOTHERLAND in Australia?  The Full Court seemed to think that the lack of evidence here about usage, or accessing the commercial in Australia was insurmountable.

MR MURRAY:   In our respectful submission, it is not our – although it is an interesting question and one of considerable importance in trade mark law, given the ubiquity of online commerce.  What is necessary to establish use of a registered trade mark in Australia where the mark is used only on the internet – the factual context is critical to this question, your Honour – Australia was the primary market for MOTHER energy drinks.  The Facebook page was locally controlled from Australia.  The MOTHERLAND campaign was targeted at Australian consumers.

What happened was that the Coca‑Cola Corporation uploaded the content to the internet before the non‑use period.  The applicant, at special leave, maintained that online availability throughout the non‑use period.  During that time, the products continued to be sold in Australia, but there was no evidence that it was, in fact, downloaded.

So, it is not accurate to reduce that conduct to the mere uploading or storage of trade mark content on a website or a server outside Australia.  One looks at the fact that the conduct was targeted towards Australia.  It was a company – an active marketer, did not think it necessary to remove it because its marketing had moved in a different direction.  It remained online throughout the non‑use period.

So, unlike defamation, where publication is a bilateral act requiring the making available of information and a third party having it for their comprehension, giving rise to the conclusion in Dow Jones v Gutnick that it is the place where reputation can be damaged, where someone can comprehend the information, there is no requirement in trade mark law for the purposes of use as a trade mark that a consumer actually see or engage with the mark.  This would be available for that purpose, in the course of trade, but if, for example, the use is in a telephone directory or a billboard on a country road that has been bypassed by the freeway and one cannot prove that during the non‑use period someone turned to the relevant page of the phone directory or drove down the back road, there is nevertheless trade mark use.

In our respectful submission, online content is directly analogous, subject to this:  the telephone directory is plainly in Australia; the billboard is plainly in Australia – how, in an online context do you satisfy the requirement in 92(4)(b) that the use is in Australia?  It is, in our respectful submission, wrong to ask where the server is located.  Neither traders nor consumers care.  Online content is online and the physical location of the electrons making up that data is simply, with great respect, an impoverished way to look at it.  A commercially realistic way to look at it is to say, is the conduct being targeted towards consumers in Australia – it need not be exclusive, but it must include Australian consumers – and are the goods or services being provided in the course of trade in Australia?

If the answer to those two questions is yes, then trade mark use on the internet, even in the absence of downloading, is fulfilling its function as a trade mark in Australia; that is, demonstrating a connection in the course of trade as a badge of origin to identify the origin of the goods.  In our respectful submission, your Honours, that is an important question of principle warranting a grant of special leave.

KIEFEL CJ:   You have finished your submissions, Mr Murray?

MR MURRAY:   I have, your Honour.

KIEFEL CJ:   Thank you.  Yes, Mr Bannon.

MR BANNON:   The two parts of the applicant’s case are inconsistent.  The first part invites the Court to examine the video, consistent with principle, whether or not a mark used as a trade mark involves looking at the advertisement and determining whether or not, as a matter of impression, it objectively conveys a brand as submitted.  So much is true as a matter of principle and the principles are applied to pick up findings which are well‑established.

The second part of the case is to say the advertisement, which must be viewed to determine whether there is a trade mark use, does not in fact have to be viewed at all.  It can stay as electronic data on a server – does not really matter where the server is – that is only visible – that is question number one – if somebody, by chance, makes a request of the server and in response to that request, the advertisement is sent.  Unless and until it is sent, it is not being broadcast in the country.

It is not like a television ad, which gets broadcast whether you like it not.  It is not like a billboard.  It is not that dissimilar to some of the old trade mark cases considered by this Court where somebody – company overseas would have a letterhead or an invoice which included the mark.  But only when the invoice was sent across – probably in an aeroplane, in those days – to Australia and arrived, you could say there was a trade mark use, in response to a telegram conversation.  But while the invoices and the letterheads sit on a desk in America or wherever, ready to be sent when requested, that is not a trade mark use in Australia.

As to the first point, there are well-established principles, as I say, four eyes have looked at this and come to the view, correctly, we say, it is not a use of MOTHERLAND as a trade mark.  It is not an occasion for this Court to revisit that question.

May it please the Court.

KIEFEL CJ:   Anything in reply, Mr Murray?

MR MURRAY:   Only to reiterate that the notion of online use being reduced to electronic data that does not take material form until someone downloads it is to ignore the reality of online commerce.  Traders promote their materials; it is available on the internet there to be seen.  It is materially, from a business point of view, no different to a listing sitting in a telephone directory ready to be turned up if anyone ever does it.

May it please the Court.

KIEFEL CJ:   The Court will adjourn to consider the course that it will take.

AT 11.35 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.38 AM:

KIEFEL CJ:   In our view, there are insufficient prospects of success in relation to both grounds to warrant the grant of special leave.  Special leave is refused with costs.

MR MURRAY:   May it please the Court.

KIEFEL CJ:   The Court will now adjourn until 12.30 pm.

AT 11.39 AM THE MATTER WAS CONCLUDED