Foster's Wine Estates Limited v Serafino Wines Pty Ltd

[2010] ATMO 81

TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS

Re:Opposition by FOSTER'S WINE ESTATES LIMITED to registration of trade mark application 1033609 (33) - SERAFINO MAGLIERI - filed in the name of SERAFINO WINES PTY LTD.

Delegate:	Bianca Irgang
Representation:	Opponent: Mr Ben Fitzpatrick of counsel, instructed by Allens Arthur Robinson Applicant: Ms Phoebe Arcus of counsel, instructed by Johnson Winter & Slattery Lawyers
Decision:	2010 ATMO 81 s.52 opposition: sections 42, 44, 59, 60 and 62 pressed – s 44 ground of opposition established since trade marks are deceptively similar – no consent from the opponent to use a deceptively similar trade mark – no prior use – registration refused. Costs awarded against the applicant.

Background

1. Serafino Wines Pty Ltd (‘the applicant’), filed application number 1033609 on 9 December 2004 in class 33 of the International Classification of Goods and Services (‘Nice’ classification). Current details of the application are set out below.

   Trade mark:  SERAFINO MAGLIERI

   Trade mark application:        1033609

   Filing Date:  9 December 2004

   Specification:  Class 33: Wines

   Endorsements:  Provisions of paragraph 44(3)(b) applied

2. Foster's Wine Estates Limited (‘the opponent’) filed a Notice of Opposition (‘the Notice’) dated 25 August 2006 to registration of the application. Thereafter the parties served and filed evidence in accord with the provisions of the Trade Mark Regulations 1995 (‘the Regulations’).

3. I heard the matter in Canberra as a delegate of the Registrar of Trade Marks on 6 May 2010. The opponent was represented by Mr Ben Fitzpatrick of Counsel, instructed by Allens Arthur Robinson. The applicant was represented by Ms Phoebe Arcus of Counsel, instructed by Johnson Winter & Slattery Lawyers.

   Grounds of Opposition

4. The Notice nominated most of the grounds of opposition under the Trade Marks Act 1995 (‘the Act’).  However, only those grounds under subsections 42(b), 44, 59, 60 and 62 were pursued at the hearing. As a formal matter, I note the remaining grounds listed in the Notice have not been established.

5. The onus is upon the opponent to establish one or more of its grounds of opposition. Gyles J has referred to the standard of proof required in terms of a ‘balance of probabilities’.[1] His findings upon that issue, arrived at after a consideration of the relevant authorities, have been discussed with approval by Sundberg J in Chocolaterie Guylian NV v Registrar of Trade Marks[2].

   [1] Pfizer Products Inc v Karam [2006] FCA 1663; (2006) 70 IPR 599;

   [2] [2009] FCA 891, para 22-27

   Evidence

6. The evidence of the parties consists of the following declarations:

Declarant	Position	Date Made	Exhibits
Evidence in Support
Mathew Jordan O’Keefe[3]	Trade Mark Attorney employed by Foster's Wine Estates Limited	23 May 2008	MJO-1 to MJO-8
Sandra Elizabeth Forman[4]	Senior Associate of Allens Arthur Robinson Patent and Trade Mark Attorneys	23 May 2008	SEF-1 to SEF-7

[3] For ease of reference this statutory declaration will be called O’Keefe #1

[4] For ease of reference this statutory declaration will be called Forman #1

Evidence in Answer
Serafino Maglieri	Director of Serafino Wines Pty Ltd	25 May 2009	SM-1 to SM-4
Terry James Davis	Group Managing Director of Coca-Cola Amatil Ltd.	21 May 2009	-
David Anthony Shultz	Chartered Accountant	25 May 2009	-
Keith Smith	Consultant and Non Executive director of companies in the wine industry	25 May 2009	-
Evidence in Reply
Sandra Elizabeth Forman[5]	Senior Associate of Allens Arthur Robinson Patent and Trade Mark Attorneys	26 August 2009	SEF-A to SEF-E
Mathew Jordan O’Keefe[6]	Trade Mark Attorney employed by Foster's Wine Estates Limited	26 August 2009	MJO-A to MJO-C
Further Evidence
Maria Maglieri	General Manager of Serafino Wines Pty Ltd	29 April 2010	-

[5] For ease of reference this statutory declaration will be called Forman  #2

[6] For ease of reference this statutory declaration will be called O’Keefe #2

Applicant’s Evidence

1. In 1972 Mr Serafino Maglieri established a winery called “Gully Wines” in the McLaren Vale wine region of South Australia. In 1977, “Gully Wines” was renamed “Maglieri Wines Pty Ltd” and proceeded to establish its reputation as a quality wine producer which has been awarded numerous medals and trophies.

2. In August 1998 all the shares in Maglieri Wines Pty Ltd (‘Maglieri Wines’) were sold to Mildura Blass Ltd, now known as Foster’s Wine Estates Limited (the opponent). The sale of Maglieri Wines to the opponent included not only the shares in the company but all associated assets including the business premises, land, bulk wine and associated intellectual property. The terms of the contract of sale also included a number of restraint clauses. This contract of sale plays a pivotal part in the dispute between the applicant and the opponent and I will discuss it in greater detail later in my decision.

3. In 2000 Mr Maglieri established a new winery called Serafino Wines Pty Ltd (the applicant) which has proceeded to develop its reputation with the production of quality wines. The applicant produces a number of wines which are most commonly exhibited at wine shows and sold under the name SERAFINO as evidenced by exhibits SM-1 to SM-3 accompanying the statutory declaration of Mr Serafino Maglieri (‘the Maglieri declaration’).

4. I note that the applicant’s trade mark SERAFINO MAGLIERI is the birth name of the Director of Serafino Wines, Mr Serafino Maglieri. I also note that Mr Maglieri has gone by the name Steve Maglieri since he settled in Australia and that he developed a considerable reputation for a wine under the brand STEVE MAGLIERI. This same brand was sold to the opponent in August 1998 with a restraint clause on Mr Maglieri to prevent him from using this name in relation to wine for five years from the date of the sale of Maglieri Wines. After the initial five year period, the opponent retained the option to renegotiate terms with Mr Maglieri for the use of the name STEVE MAGLIERI. The opponent did not renegotiate terms.

5. Mr Maglieri has made considerable comment on the opponent’s failure to renegotiate for the use of STEVE MAGLIERI on its wine. Mr Maglieri has asserted that this failure after the expiration of the restraint clauses implies that the opponent gives permission for Mr Maglieri to use his name on wine. This argument is vehemently denied by the opponent.  

   Opponent’s Evidence

6. The opponent’s evidence consists of a number of statutory declarations and exhibits. In particular, the Agreement for Purchase of Shares between the opponent and Maglieri Wines (exhibit MJO-1 accompanying the statutory declaration of Matthew O’Keefe) is included in the evidence. The O’Keefe #1 declaration outlines the considerable reputation that Maglieri Wines had in its produce and the reasons why the opponent purchased Maglieri Wines.

7. The O’Keefe #1 declaration states that by purchasing the shares in Maglieri Wines, the opponent obtained effective control over all of the assets of Maglieri Wines, including its brands. Mr O’Keefe states that the opponent owns a number of registered and common law trade marks which incorporate the word MAGLIERI. Most notably, the opponent is the owner of trade mark registrations 630850, 739391 and 784313. The details of these registrations are as follows:

   Trade mark:  MAGLIERI WINES WHEN ONLY THE BEST WILL DO

   Trade mark registration:      630850

   Filing Date:  30 May 1994

   Specification:  Class 33: Wines, spirits, liqueurs and all other goods in this class

   Endorsements: Registration gives no right to the exclusive use of the words WHEN ONLY THE BEST WILL DO. When the mark is used for items in the specification of goods other than WINES, the word WINES in the mark will be changed to accord with those items. The preceding endorsement(s) were recorded prior to commencement of the Trade Marks Act 1995.

   Trade mark:  MAGLIERI

   Trade mark registration:      739391

   Filing Date:  18 July 1997

   Specification:  Class 33: Wines, spirits, liqueurs and other alcoholic beverages in this class

Trade mark:  MAGLIERI OF McLAREN VALE

Trade mark registration:      784313

Filing Date:  1 February 1999

Specification:  Class 33: Wines

Endorsements: It is a condition of registration that the trade mark will only be used in respect of wines originating (as defined in the Australian Wine and Brandy Corporation Act 1980) in the area in respect of which the geographical indication MCLAREN VALE is registered and that the use is in accord with the Australian Wine and Brandy Corporation Act 1980.

1. The O’Keefe #1 declaration states that the opponent had no intention of preventing Mr Maglieri from being referred to as a winemaker on any product produced by any business after the expiration of the restraint clause mentioned previously in paragraph 10 which was five years after the completion date of the contract of sale. Mr O’Keefe avers that after the restraint period finished on 25 August 2003, Mr Maglieri began using his name again as a winemaker and that the opponent was comfortable with this.

2. Mr O’Keefe avers that the restraint clause 12.1(c)(ii)(A) in the Agreement for Purchase of Shares is a clause which specifically bans each vendor from ever using any trade mark which is substantially identical or deceptively similar to any of the trade marks owned or currently used by the business which had been sold to the opponent. Mr O’Keefe further asserts that such restraint clauses are standard features in large acquisitions of this kind.

3. The O’Keefe #1 declaration and attached exhibits demonstrate that the opponent continued to sell wine under its MAGLIERI trade marks after the opponent became the owner of Maglieri Wines. Confidential Exhibit MJO-6 demonstrates that the sales revenue generated through the sales of wine under the MAGLIERI trade marks has been constant from 2004 through until 2007.

   Discussion

4. I note that during examination the opposed application had three registrations cited against it as grounds for rejection under section 44 of the Act. These were the opponent’s trade mark registrations 630850, 739391 and 784313 (as outlined above). The opposed application was eventually accepted under the provisions section 44(3)(b).

5. While the opponent pursued a number of grounds of opposition at the hearing I find, having considered all of the evidence, that it is expedient to turn first to the ground of opposition under section 44 of the Act.

   Section 44 - Identical etc. trade marks:

6. Section 44 of the Act relevantly provides:

   44Identical etc. trade marks

   (1)Subject to subsections (3) and (4), and application for the registration of a trade mark (applicant’s trade mark) in respect of goods (applicant’s goods) must be rejected if:

   (a)the applicant’s trade mark is substantially identical with, or deceptively similar to:

   (i)a trade mark registered by another person in respect of similar goods or closely related services; or

   (ii)…; and

   (b)the priority date for the registration of the applicant’s trade mark in respect of the applicant’s goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.

7. To establish its opposition in terms of section 44 of the Act the opponent must show all of the following:

   Ø  a trade mark (or trade marks), either registered or pending registration, in the name of a person other than the present applicant, and in relation to which the opposed trade mark is either substantially identical or deceptively similar;

   Ø  the trade mark(s) in the name of the other person must be in respect of similar goods or closely related services; and

   Ø  the priority date(s) of the other person’s trade mark(s) is (are) the earlier.

8. The opponent is the owner of trade mark registrations 630850, 739391 and 784313 which all have earlier priority dates to that of the opposed trade mark. The opposed trade mark application covers the same goods in class 33 as those relevant to the opponent’s trade marks. The remaining issue for me to determine is whether the opposed trade mark is either substantially identical or deceptively similar to the opponent’s previously registered trade marks.

Comparison of the trade marks

1. It is obvious that the applicant’s SERAFINO MAGLIERI trade mark is not substantially identical to the opponent’s various MAGLIERI trade marks according to the side-by side test set out by Windeyer J. in Shell Co. (Aust) Ltd v Esso Standard Oil (Aust) Ltd[7]. The applicant’s trade mark includes the additional word SERAFINO which acts as a clear visual difference from the opponent’s trade marks.

   [7] (1963) 109 CLR 407 at 414

2. Deceptive similarity is, however, defined by section 10 of the Act. The determination of deceptive similarity requires a comparison of the impression persons of ordinary intelligence and memory would have recalling the opponent’s trade mark, to the impression they would get from the applicant’s trade mark.[8]  The probability of deception must be finite and non-trivial.[9]

   [8] The Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407, per Windeyer J at 415

   [9] Registrar of Trade Marks v Woolworths Limited 45 IPR 411, per French J at [43]

3. The test to determine whether trade marks are ‘deceptively similar’ is set out in Shell Company (Aust) Limited v Esso Standard Oil (Aust) Limited (1961) 109 CLR 407 at 415:

   The marks are not now to be looked at side by side [as for substantial identity]. The issue is not abstract similarity, but deceptive similarity … the comparison … is between, on the one hand, the impression based on recollection of the plaintiff’s mark that persons of ordinary intelligence and memory would have; and, on the other hand, the impression that such persons would get from the defendant’s [trade mark]

4. The Court added at 416, that:

   [The] deceptiveness that is contemplated must result from similarity; but the likelihood of deception must be judged not by the degree of similarity alone, but by the effect of that similarity in all the circumstances.’ In addition, the test is not one of mere possibility of confusion but of a real tangible danger that a number of persons will be caused to wonder whether the products come from the same source.

5. The principles laid out in these tests have not been challenged.

6. Ms Phoebe Arcus, counsel for the applicant, discussed at length the proposition that the trade marks in question were not deceptively similar, drawing on the established authorities for the comparison. Whilst I agree that there are clearly differences between the trade marks I cannot agree that they are not deceptively similar to each other.

7. The O’Keefe #2 declaration and the Forman #2 declaration attest to how striking and unusual the term MAGLIERI is when used in the wine industry. The O’Keefe #2 and Forman #2 declarations state that MAGLIERI is also a very uncommon surname. Mr O’Keefe states his belief that it is more likely that consumers would assume a trade connection between wines bearing trade marks containing the uncommon surname, such as a forename/surname combination, as the uncommon surname will be the part of the trade mark which consumers recall. I agree with this submission.

8. The O’Keefe #2 declaration provided a number of examples of well known trade mark within the wine industry which comprise a surname. These examples include PENFOLDS, LINDEMANS, BLASS and HENSCHKE. Mr O’Keefe went on to aver that it is commonplace for wine producers to adopt the surname of the original winemaker or the original wine producer as the trade mark for the product. This is such a commonplace practice that the surname and the forename/surname combination are interchangeable in indicating the same trade origin for the wine.

9. I consider that the striking and memorable feature of the opposed trade mark is the word MAGLIERI. The opponent’s trade mark registrations all contain the word MAGLIERI. Indeed, trade mark registration 739391 is for the word MAGLIERI solus. Therefore, the striking word MAGLIERI is the common element in all the trade marks. However, a further question that requires consideration is whether it is likely that deception or confusion could occur through ‘contextual confusion’ whereby the common element in all the trade marks may induce traders and the public into believing the marks emanate from the same trade source.[10]

   [10] Ravenhead Brick Co Ltd v Ruabon Brick & Terra Cotta Co Ltd (1937) 54 RPC 341

10. The principal of conceptual confusion is summed up in John Fitton & Co. Ltd’s Application[11] where Mr S. E. Chisholm, the Assistant-Comptroller, commented:

    With reference to the nature of the confusion alleged the evidence furnished on behalf of the Opponents by their trade declarants is direction not so much towards showing that the two marks ‘Jests’ and ‘Easyjests’ might themselves be confused either visually or orally, as towards establishing that confusion would result, owing to the presence of the common element ‘Jest’ in each mark, in traders and the public being induced to believe that the two sets of goods sold under the marks emanated from the one and same trade source.

    [11] 66 RPC 113

11. Therefore, it needs to be determined whether a prospective purchaser, although aware that the respective trade marks are different, may still be caused to wonder whether they are the property of the same entity. To hold such a belief requires that the respective trade marks are seen to have some sort of relationship – that SERAFINO MAGLIERI would be seen as a member of the ‘family’ of MAGLIERI trade marks of the opponent because of a commonality that has been produced by a mutual feature.

12. As already discussed, the word MAGLIERI is the common element in all the trade mark representations. I note the additional words to some of the opponent’s trade mark registrations but these are minor variations and it is likely that the common element, MAGLIERI, in all the trade marks will induce traders and the public into believing that goods branded with the trade marks emanate from the same trade source.

13. While the opposed trade mark contains the additional word SERAFINO, I am not satisfied this is enough to sufficiently differentiate the applicant’s trade mark from the opponent’s trade marks. Although the trade marks look different when viewed side by side, marks are often imperfectly remembered by prospective purchasers. They may have a general impression, in this case of the trade mark registrations incorporating the word MAGLIERI and consequently become confused as to the origin of the goods when faced with the applicant’s trade mark SERAFINO MAGLIERI, particularly when the marks are applied to the same or similar goods.

14. I am satisfied there is a real tangible danger of these trade marks being confused in the marketplace in respect of the goods in class 33. The opponent’s prior registrations in class 33 cover the same goods that the applicant has claimed in class 33. Therefore, the opponent has established a ground of opposition under the provisions of section 44, in respect of the goods in class 33.

15. However, subsections 44(3)(a) or (b) of the Act make provision for the applicant to overcome a section 44 ground of opposition on the basis of prior use, honest concurrent use or other circumstances.

16. A consideration of the evidence demonstrates the applicant has not used the SERAFINO MAGLIERI trade mark before the priority date of the opposed trade mark. The applicant has not been able to provide any evidence of use before the filing date so the provisions of section 44(3)(a) are not applicable.

17. I note that the applicant’s trade mark was accepted under the provisions of section 44(3)(b) being ‘other circumstances’. Exhibit SEF-2 accompanying the Forman #1 declaration is a copy of the official examination file relating to the opposed trade mark as received by the opponent from IP Australia on 11 July 2006 pursuant to the opponent’s FOI request. This exhibit demonstrates that it is likely the applicant convinced the examiner that Clauses 12.1(b)(iv) and 13.15 of the Sale Agreement with Mildara Blass gave it the right to claim special circumstances.

1. The applicant asserted to the examiner that the terms of the agreement made it quite clear that when Maglieri Wines was acquired by Mildara Blass, the name of Steve Maglieri was a separate issue. The applicant further stated that given that the five year restraint period expired on 24 August 2003, and no approach was made by Berringer Blass (formerly Mildara Blass) for a license for use of the name “Steve Maglieri” the applicant stated that he felt he had every right to adopt and use his given name being SERAFINO MAGLIERI.

2. I note that the applicant did not provide the examiner with the entire Sale Agreement. However, the complete Sale Agreement between the parties has been provided in confidential exhibit MJO-1 accompanying the O’Keefe #1 declaration. Contrary to the applicant’s assertions that the Sale Agreement between the parties implies that the applicant had the right to use his name as a trade mark on wine after the expiry date of the restraint clauses, the O’Keefe #1 declaration states that restraint clause 12.1(c)(ii)(A) in the Agreement for Purchase of Shares specifically bans each vendor from ever using any trade mark which is substantially identical or deceptively similar to any of the trade marks owned or currently used by the opponent.

3. As noted before, Mr O’Keefe stated that the opponent had no intention to prevent Mr Maglieri from being referred to as a winemaker on any product produced by any business after the expiration of the restraint clause on 24 August 2003. However, the opponent did not intend for the applicant to commence using a trade mark which is substantially identical or deceptively similar to any of the trade marks owned or currently used by the opponent.

4. I have noted the applicant’s arguments surrounding the restraint clauses and the opponent’s failure to renegotiate for use of the name STEVE MAGLIERI. However, I am not satisfied that the opponent ever gave its consent (implied or otherwise) to the applicant to use a deceptively similar trade mark to the opponent’s MAGLIERI trade marks after 24 August 2003. Nor am I satisfied that there are any other reasons which would allow me to apply the provisions of section 44(3)(b) to the applicant’s trade mark.

5. I accept the opponent’s proposition that where an assignee has bought a business including trade marks, the value of the purchase will be undermined it the assignee is not able to protect those trade marks and maintain enforceable rights. Indeed, it is my opinion that it is unlikely that the opponent would have paid the a considerable sum it did to acquire Maglieri Wines and the associated trade marks and goodwill in the business if it did not intend to maintain and protect the considerable reputation vested in the MAGLIERI brand.

6. Taking into account all of the above, I am not satisfied that the current circumstances make it proper to apply the provisions of section 44(3)(b). Nor has the applicant been able to provide any evidence of use before the filing date so the provisions of 44(3)(a) are not applicable. Therefore, the opponent has established the section 44 ground of opposition.

7. Having found in favour of the opponent in terms of section 44 there is no need for me to discuss the other grounds set out in the notice although these grounds or any others in the Act may also be relied on in the event of an appeal from this decision.

   Decision

8. Section 55 of the Act provides:

   Decision

   Unless the proceedings are discontinued or dismissed, the Registrar must, at the end, decide:

   (a) to refuse to register the trade mark; or

   (b) to register the trade mark (with or without conditions or limitations) in respect of the goods and/or services then specified in the application;

   having regard to the extent (if any) to which any ground on which the application was opposed has been established.

9. I find that the opponent has met the onus upon it, in terms of the grounds of opposition under section 44 argued at the hearing. Accordingly, I refuse to register trade mark application 1033609.

   Costs

10. It is usual for costs to follow the event, and I see no reason to depart from that principle here. I award costs, according to the official scale set out in Schedule 8 of the Trade Marks Regulations 1995, against the unsuccessful trade mark applicant Serafino Wines Pty Ltd.

    Bianca Irgang
    Hearing Officer
    Trade Marks Hearings
    27 August 2010