JJ Hahn Pty Limited v Hahn Barossa Vineyards (SA) Pty Ltd

[2005] FCA 317

FEDERAL COURT OF AUSTRALIA

JJ Hahn Pty Limited v Hahn Barossa Vineyards (SA) Pty Ltd [2005] FCA 317

PRACTICE AND PROCEDURE – interlocutory injunction – orders sought to restrain trademark infringement and passing off – whether serious question to be tried – whether balance of convenience favours the grant of an injunction.

JJ HAHN PTY LIMITED (ACN 098 098 536) and SIX GENERATION WINES PTY LIMITED (ACN 097 960 668) v HAHN BAROSSA VINEYARDS (SA) PTY LTD (ACN 079 479 922), NEIL ANDREW HAHN and SANDRA MICHELLE HAHN

SAD 53 of 2005

LANDER J
31 MARCH 2005
ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SAD53 OF 2005

BETWEEN:

JJ HAHN PTY LIMITED (ACN 098 098 536)
FIRST APPLICANT

SIX GENERATION WINES PTY LIMITED (ACN 097 960 668)
SECOND APPLICANT

AND:

HAHN BAROSSA VINEYARDS (SA) PTY LTD
(ACN 079 479 922)
FIRST RESPONDENT

NEIL ANDREW HAHN
SECOND RESPONDENT

SANDRA MICHELLE HAHN
THIRD RESPONDENT

JUDGE:

LANDER J

DATE OF ORDER:

31 MARCH 2005

WHERE MADE:

ADELAIDE

THE COURT ORDERS THAT:

1.        The application for an interlocutory injunction be dismissed.

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

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SAD53 OF 2005

BETWEEN:

JJ HAHN PTY LIMITED (ACN 098 098 536)
FIRST APPLICANT

SIX GENERATION WINES PTY LIMITED (ACN 097 960 668)
SECOND APPLICANT

AND:

HAHN BAROSSA VINEYARDS (SA) PTY LTD
(ACN 079 479 922)
FIRST RESPONDENT

NEIL ANDREW HAHN
SECOND RESPONDENT

SANDRA MICHELLE HAHN
THIRD RESPONDENT

JUDGE:	LANDER J
DATE:	31 MARCH 2005
PLACE:	ADELAIDE

REASONS FOR JUDGMENT

1. These proceedings were commenced on 3 March 2005 by application in which the applicants have sought extensive orders.

2. I set out paragraph 1 of the orders sought in that application:

   ‘1.An order that the Respondents, by themselves, their servants, officers or agents, be restrained from selling, offering or exposing for sale, distributing, marketing or advertising in Australia any wine by reference to the words, trade mark, business name, label or web address:

   1.1      “Hahn”;

   1.2      “Hahn Barossa Vineyards”;

   1.3      “ or

   1.4      “>

   Paragraph 1 of the application serves to indicate the breadth of the orders sought.  In paragraph 2 of the application other orders of the same kind, in relation to the packaging of the wine, are also sought.  Orders are also sought restraining the respondents from representing that their wine is the applicants’ wine or manufactured or distributed by the applicants, or otherwise sourced from the applicants.

3. Orders are sought restraining further infringement of the first applicant’s trade mark and from passing off the applicants’ wine.  A number of consequential orders relating to delivery up and destruction of packaging, advertising and promotional material are sought.

4. Orders are sought against the second and third respondents restraining them from aiding and abetting in the contraventions of the law committed by the first respondent.

5. The applicants, generally, wish to restrain the respondents from using the description referred to in paragraphs 1.1 to 1.4 in any way in connection with the respondents’ business.

6. The application was supported by an affidavit of a director of the applicants and an affidavit of the applicants’ solicitor.

7. On 9 March 2005 the applicants filed a further notice of motion in which they sought, relevantly for the purpose of this application, the following order:

   ‘3.Until further order, the Respondents be restrained from taking any further steps towards the sale, distribution or exposure to the public of wine in bottles bearing the words “Hahn Barossa Vineyards” or any deceptively similar variant thereof including the printing of wine bottle labels bearing those words.’

8. The applicants have sought an interlocutory injunction in the terms of paragraph 3 mentioned above.  The applicants have, by their counsel, proffered the usual undertaking as to damages.

9. The applicants filed further affidavits in support of that interlocutory application.  The respondents filed affidavits in response.

10. The applicants market wine under the brand name ‘JJ Hahn’.

11. They market three different Shiraz wines; JJ Hahn 1914 Shiraz; JJ Hahn 1928 Shiraz; and JJ Hahn Reginald Shiraz.  They market a Cabernet Sauvignon wine; JJ Hahn Homestead Cabernet Sauvignon.  They also market a white wine; JJ Hahn Riverflat Semillon.

12. The first applicant owns the registered trademark, JJ Hahn.  The trademark details are:

    ‘Trade Mark: 814181

    Word:  JJ. HAHN
    Image:
    Lodgement Date:               18-NOV-1999
    

    JJ¿HAHN    [Barcode]

     

    Registered From:               18-NOV-1999

    Acceptance Advertised:     22-NOV-2001                
    Registration Advertised:    19-FEB-2004
    Sealing Date:  30-JAN-2004
    Renewal Due:  18-NOV-2009
    Class/es:  33
    Status:  Registered/Protected
    Kind:  n/a
    Type:  Fancy

    Owner/s:                   JJ Hahn Pty Ltd
      ACN:   098098536
    Nuraip Road
      NURIOOTPA,5355,SA
      AUSTRALIA

    Address for Service:  Piper Alderman
      167 Flinders Street
      ADELAIDE
      5000,SA
      AUSTRALIA

    Goods & Services

    Class: 33 Wines, spirits and liqueurs

    Endorsements:  Provisions of paragraph 44(3) applied.*

    Indexing Details – Word    Constituents
    =JJ  HAHN
    JJ  JJHAHN
    LTR

    Indexing Details – Image Constituents’

13. The applicants grow grapes on land originally purchased by Mr James Anthony Hahn’s great-great-great-grandfather, Johann Christian Hahn.

14. It appears to be beyond doubt that the applicants produce high quality wine which is directed to a niche market.

15. The applicants do not produce quantity but rather rely upon quality for profitability.

16. The respondents are in the same business as the applicants.  They also grow grapes in the Barossa Valley area and on one property which was settled by a second generation Hahn.

17. The second respondent is also a descendant from the original Hahn settlers in the Barossa Valley.

18. The respondents market both red and white wine and have so far developed three wines:

    1.The Catharina Shiraz.  The 2002 vintage was the first release of this wine.  The 2003 vintage is anticipated for release late this year.

    2.The Catharina Riesling.  The 2004 vintage was the first release for this wine.  The 2005 vintage is anticipated for release late this year.

    3.The Yanyarrie Shiraz.  The 2003 vintage was the first release for this wine.  It was released in January 2005.

19. The respondents assert that their wines are also of premium quality.  That does not seem to be disputed.

20. Thus it is, that the applicants and the first respondent are both controlled by descendants of the original Hahn settlers.  They both carry on the same business in the Barossa Valley and both produce premium quality red and white wines.

21. On or about 18 March 2004 the second respondent approached Mr James Hahn, director of the first applicant, and advised him that he intended to produce a wine using the name ‘Hahn Barossa Vineyards’.  At that time, he showed Mr James Hahn draft labels for the front and reverse of a bottle.  Mr James Hahn said that he noticed that the front label used the words ‘Hahn Barossa Vineyards’ prominently and the reverse label contained information asserting an historical link between the wine, the region and the name ‘Hahn’.

22. He said he was asked whether he objected and he said that he told the second respondent he objected to the proposed use on the bases that JJ Hahn Pty Limited owned the registered trademark, and the use of the Hahn brand for wine was likely to cause confusion in the market.

23. On 29 March 2004 a further conversation took place.  Mr James Hahn asserted that Mr Neil Hahn said he would refrain from using the word Hahn on the front label of the wine.  Mr James Hahn said that he told the second respondent that he should get legal advice.

24. Apparently, the second respondent took that advice and, on 11 May 2004, he attended at Mr James Hahn’s house and showed him a letter.  He said that he had received legal advice and that he intended to proceed upon that advice, and that the use of the proposed labels would not infringe the Trademarks Act 1995 (Cth).

25. The applicants did nothing.

26. In late October 2004 the applicants became aware of the release by the first respondent of its riesling.  Mr James Hahn noticed the reference on the front label to the words ‘Hahn Barossa Vineyards’.  He had understood that those words would be removed.

27. He spoke to his partners and took advice in mid-December 2004.  These proceedings were brought in March 2005.

28. After obtaining his advice in December 2004, the applicants, through their solicitors, attempted to persuade the respondents that they should not use the words ‘Hahn Barossa Vineyards’ in any way in connection with the marketing of their wine, but they were unsuccessful and so brought these proceedings.

29. It seems to me that the applicants cannot be criticised for any delay on their part between consulting solicitors in December 2004 and issuing these proceedings.  On the other hand, they are more open to criticism in failing to take any steps to protect themselves between March and December 2004.

30. In any event, the applicants now claim that the respondents’ labels on their wine infringe their trademark.  They further claim that the manner in which the wine is presented amounts to a ‘passing off’.  They also claim that the respondents’ conduct constitutes contraventions of the Trade Practices Act 1974 (Cth).

31. In those circumstances, they seek the interlocutory injunction to which I have referred.

32. It is necessary to give an immediate answer to the application because of certain arrangements that the respondents have put in place in relation to further bottling of their wines.

33. I am prepared to accept, notwithstanding the respondents’ submissions, that there is a serious question to be tried.

34. In my opinion, the real question on this application is whether or not the balance of convenience favours the grant of an injunction or not.

35. The applicants have, up until recently, mainly marketed their wine overseas.  More recently, they have sought to develop a market in Australia.  The respondents, on the other hand, have marketed their wines in Australia and not overseas.

36. There is little evidence before me to indicate that the applicants and the first respondent are selling in the same market.  It is possible that that would occasionally occur.

37. It must be remembered that both sell a relatively small quantity of wine.

38. There is not a high risk of the applicants suffering damage in the near future.

39. The applicants seek a very limited injunction.  They only seek removal of the words ‘Hahn Barossa Vineyards’ from the front label.  They are prepared to accept, pending the hearing of this matter, the back label of the bottle in its present form and thereby the reference to the name Hahn and the Hahn family.

40. The applicants say that they have deliberately fashioned the orders sought so as to cause minimum disruption to the respondents’ business pending the trial.  In due course, they will seek all of the orders sought in the original application.

41. The applicants claim that the cost to the respondents of complying with the orders sought would be in the order of $10,000 and, in the event that the applicants are unsuccessful at trial, the undertaking which they have proffered in relation to damages would mean that the respondents would be compensated.

42. I can well understand why the applicants have crafted this application so narrowly.  If they had sought interlocutory injunctions in the terms of the orders sought in the originating application it would have been unlikely that the orders would have been made, because the orders would have paralysed the first respondent, in particular, in relation to its bottling, labelling, marketing and sales, pending the trial of this action.  In those circumstances, it would have been unlikely that orders of the kind would have been made, because the balance of convenience would have favoured the first respondent.

43. However, because the order sought would simply require the first respondent to remove the words ‘Hahn Barossa Vineyards’ from the labels on their bottle, in my opinion, the order sought would be of very limited value to the applicants.  As was conceded by the applicants’ counsel, the order would not prevent the first respondent marketing, by way of advertising or otherwise, the wine under the name Hahn Barossa Vineyards.  Moreover, there would still be reference on the back label to the Hahn name and the Hahn family.

44. In my opinion, the order sought would do little to protect the applicants if, in fact, at the trial they were shown to be deserving of protection, but would inconvenience the first respondent in having to relabel its bottles.

45. I think, having regard to the limited form of the order sought, that the balance of convenience favours the first respondent.

46. I would dismiss the application for an interlocutory injunction.

47. However, the matter should proceed to an early trial.  The applicants’ counsel said that it was the applicants’ view that the matter should proceed on pleadings.  I agree.

48. I have in mind, therefore, to give directions for the delivery of a statement of claim, the filing of a defence and discovery, and set the matter for early trial.  The matter could be heard in June.

49. I will hear the parties as to the directions which should be made.

I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander.

Associate:

Dated:             31 March 2005

Counsel for the Applicant:	D Yates SC
Solicitor for the Applicant:	Piper Alderman
Counsel for the Respondent:	I Robertson
Solicitor for the Respondent:	Thomson Playford
Date of Hearing:	23 March 2005
Date of Judgment:	31 March 2005