Live Entertainment Investments III Pty Ltd v The Education Group Pty Ltd
[2017] ATMO 163
•20 December 2017
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Oppositions by Southcorp Brands Pty Limited to applications under section 92 of the Act by Modern Ancient Brands Pty Ltd to remove trade mark numbers 119756(33), 383762(33) - WOODLEY'S SHERRY and WOODLEY - in the name of Southcorp Brands Pty Limited
| Delegate: | Jock McDonagh |
| Representation: | Opponent: Ben Fitzpatrick of counsel, instructed by Wrays Attorneys Applicant: Craig Vinall of Madderns Attorneys |
| Decision: | 2017 ATMO 163 Section 96 opposition to removal application – use established for registration 383762– no use established for registration 119756 – Registrar’s discretion not applied – registration 119756 to be removed |
Background
This matter is a proceeding under subsection 92(4)(b) of the Trade Marks Act 1995 (‘the Act’) in which by an application filed on 22 December 2014, Modern Ancient Brands Pty Ltd (‘the Applicant’) has sought the removal from the Register of the trade marks appearing below in respect of all of the goods for which each is registered:
| Trade Mark No. | 119756 | 383762 |
| Trade Mark | ‘Sherry Mark’ | WOODLEY ‘Woodley Mark’ |
| Registered from | 19.08.1954 | 21.10.1977 |
| Goods | Class 33: Wines | Class 33: All goods in Class 33 |
On 13 March 2015, Southcorp Brands Pty Limited (‘the Opponent’) filed Notices of Intention to Oppose the removals. The statements of grounds and particulars, filed 13 April 2015, asserted that the opponent or an authorized user had used trade mark registrations 119756 and 383762 (collectively ‘the Trade Marks’) as registered or with additions and alterations not substantially affecting its identity, in Australia on the relevant goods during three year period ending on 22 November 2014 (‘the relevant period’).
On 28 April 2015 the Applicant filed a Notice of Intention to Defend. The parties then commenced filing evidence in accordance with the Trade Mark Regulations 1995 (‘the Regulations’).
I heard the matter in Canberra on 6 October 2017 as a delegate of the Registrar of Trade Marks. Ben Fitzpatrick of counsel, instructed by Wrays Patent and Trade Mark Attorneys appeared by telephone link for the Opponent. Craig Vinall of Madderns Patent and Trade Marks Attorneys appeared by telephone link for the Applicant.
Evidence
The parties filed and served the following declarations in evidence:
| Declarant | Status | Date, (Known as) | Exhibits |
| Evidence in Support | |||
| Owen John Malone | Director Intellectual Property, Treasury Wines | 24.07.15 (‘Malone’) | OJM-1 to OJM-12 |
| Evidence in Answer | |||
| Stewart Kay | Owner of Applicant | 10.11.15 (‘Kay’) | SCK-1 to SCK-15 |
| Michael Andrewartha | Proprietor East End Cellars Pty Ltd | 9.11.15 (‘Andrewartha’) | AW1 |
| Mark Wickman | Proprietor Wickman’s Fine Wines | 9.11.15 (‘Wickman’) | |
| Evidence in Reply | |||
| Andrew Caillard | Specialist Wine Auctioneer, Langton’s Fine Wine Auctions | 30.12.15 (‘Caillard’) | AC-1 |
| Francis James Halliday | Wine critic. Wine writer, vigneron, wine judge | 1.01.16 (‘Halliday’) | FJH-1 |
| Sandra Elizabeth Forman | Attorney for Opponent’s Attorney firm | 7.01.16 (‘Forman’) | SEF-1 to SEF-3 |
Discussion
Section 92 relevantly states:
92Application for removal of trade mark from Register etc.
(1)Subject to subsection (3), a person may apply to the Registrar to have a trade mark that is or may be registered removed from the Register.
(2)The application:
(a)must be in accordance with the regulations; and
(b)may be made in respect of any or all of the goods and/or services in respect of which the trade mark may be, or is, registered.
(3)An application may not be made to the Registrar under subsection (1) if an action concerning the trade mark is pending in a prescribed court, but the person may apply to the court for an order directing the Registrar to remove the trade mark from the Register.
Note:For prescribed court see section 190.
(4)An application under subsection (1) or (3) (non‑use application) may be made on either or both of the following grounds, and on no other grounds:
(a)… ;
(b)that the trade mark has remained registered for a continuous period of 3 years ending one month before the day on which the non‑use application is filed, and, at no time during that period, the person who was then the registered owner:
(i)used the trade mark in Australia; or
(ii)used the trade mark in good faith in Australia;
in relation to the goods and/or services to which the application relates.
Section 100(1)(c) of the Act provides that the opponent bears the onus of rebutting the allegation made against it under s.92(4)(b), which it may do by, inter alia, establishing that the Trade Marks, (or, per s 100(3)(a), the Trade Marks with additions or alterations not substantially affecting its identity), were used in good faith during the relevant period. I proceed on the basis that the relevant standard of proof is on the balance of probabilities.
The use must be genuine commercial use in accordance with the test in Imperial Group Ltd v Philip Morris & Co[1]. A single bona fide use of the trade mark during the non-use period is sufficient to resist an application for removal: Woolly Bull Enterprises Pty Ltd v Reynolds[2]. However, Wilberforce J, in Nodoz Trade Mark[3] (Nodoz), said that if a registered owner relies on one single act of use of the trade mark, then that single act ought to be established by “if not conclusive proof, at any rate overwhelmingly convincing proof.”
[1] [1982] FSR 72
[2] [2001] FCA 261; (2001) 51 IPR 149 at [17]
[3] (1962) RPC 1 at 7.
The tribunal may not be persuaded by evidence that is solely from the internal files of the opponent: Nodoz, supra; or of a circumstantial nature: Trina Trade Mark[4]; although one invoice, if genuine, will suffice: Geo W McPherson v Remington[5].
[4] [1977] RPC 131.
[5] (1999) 47 IPR 636
As mentioned in [2], above, the relevant period for the purposes of s 92(4)(b) is the three years ending on 22 November 2014.
Trade Mark Use
The history of Woodley’s Wines is detailed in Malone and referred to in other evidence, including Kay. It is clear that Woodley Wines was established in South Australia in the early 1840s and that it became an iconic producer of Coonawarra wines by the mid 20th Century. As well as table wines, it also produced brandy and fortified wines such as sherry.
The various extracts from wine publications in Malone OJM-1 indicate that the peak of Woodley Wine’s fortunes occurred in the two decades following World War 2. Woodley Wines produced various outstanding quality red table wines under the Woodley Mark, the most well-known beingthe ‘Treasure Chest’ series.
In Malone OJM-1 there is a copy of James Halliday Classic Wines of Australia (otherwise unreferenced), where in a chapter regarding the Treasure Chest series 1949 to 1956, the author notes ‘[the winemaker] held back significant quantities of these wines in Woodley’s underground cellars.’
As well as the premium wines already mentioned, the evidence shows that Woodley Wines also produced less expensive table wines including Woodley St Adele red wine, Woodley’s Queen Adelaide series of red, white and sparkling wines.
Woodley Wines was purchased by investment companies in the 1970s before being purchased by Seppelt Wines in 1986 and then the Opponent’s predecessors in title in the early 1990s.
Kay states that Seppelt Wines continued producing Queen Adelaide white wines and Queen Adelaide red wines until 2002 and 2003 respectively, and that these wines continued to be sold under the Woodley’s Queen Adelaide label.
There is no specific evidence of when wines ceased to be produced under the Woodley Mark. However, Malone OJM-1 exhibits a Wickman’s catalogue offering a 1981 vinatge Woodley’s Skeleton Commemorative Cabernet Sauvignon, with an opening bid of $225.
Malone demonstrates that a number of wines bearing the Woodley Mark have been sold through Wickmans Fine Wine Auctions during the non-use period.[6]
[6] Malone [17] – [21] and Exhibits OJM-3 to 6
The wines bearing a Woodley Mark sold through Wickmans were original bottles manufactured by Woodley Wines Pty Ltd.[7] The Woodley wines were offered for sale at prices ranging from $27 to in excess of $1500.[8]
[7] Wickman [5]
[8] Malone [18] - [21] and Exhibits OJM-3, 4,5, 6
The evidence indicates that the Woodley Treasure Chest bottles offered for sale in July 2014 had come from an ex-restaurateur from North Adelaide who was given the wines personally by Tony Nelson directly from the Woodley cellars, and they had been stored in an underground cellar until they were brought forward for sale in 2014.[9]
[9] Kay [14]
The evidence also establishes that a number of bottles of wine bearing the Woodley Mark were sold through Langton's auction house throughout the non-use period, namely, 14 March 2012, 25 July 2012, 22 August 2012, 11 September 2012, 24 April 2013, 9 January 2014, 21 January 2014, 5 June 2014, 2 October 2014 and 11 November 2014.[10]
[10] Malone [26] [27]; Caillard [28]
There was no evidence of any use of the Sherry Mark.
Mr Fitzpatrick submitted that the sale of the wine lots through auction houses was genuine commercial use of the Woodley Mark during the relevant period.
Mr Fitzpatrick submitted that a proper consideration of the evidence of sales in the non-use period necessarily requires an understanding of the market and trade channels for wine in Australia and the nature of the product itself. He referred to the evidence of the nature of that market as provided in Halliday and Caillard. The declarants are both well respected experts in the wine industry.
Mr Fitzpatrick submitted that a notable feature of the market is that wine can be, and is often, purchased for purposes other than consumption.
Mr Fitzpatrick pointed out that timelines are very elastic. Red wine is often brought to the market within about two years of the vintage, although that period can extend to five years. From a drinking perspective, the lifecycle of a wine can be anywhere from 20-50 years. From a collector's perspective, the lifecycle of wine brand can be almost indefinite if there is demand for the brand as an item of value.[11] Mr Fitzpatrick submitted that the market is such that a wine which may have been produced fifty years ago, for instance, continues to be traded time and time again with reference to its original branding. There is, he says, no discontinuation of the badge of origin principle, nor a severance of the link between the brand on the label, the contents of the wine bottle and the wine producer. [12]
[11] Caillard [26]
[12] Caillard [22]
Mr Fitzpatrick explained that consistent with the nature of the product, the market for wine includes the primary or retail market and the so-called secondary market.
He submitted that the primary or retail market encompasses offers for sale directly from vignerons at cellar door, via on line stores and wine clubs, through distribution channels such as, for example, Dan Murphy's, BWS, Liquorland, Vintage Cellars and First Choice, through fine wine merchants and through licensed premises including hotels, bars, restaurants and cafes.
Mr Fitzpatrick submitted that the so-called secondary market generally encompasses the re-sale of wine through auction houses such as Langton's and Wickmans, and through online auction sites including Gray's Online and eBay.[13]
[13] Caillard [18]
The auction market also involves the offering for sale of products provided by the original producer that have not been owned by a private collector prior to coming to the secondary market. These wines may comprise old vintages, or relatively new wines.
Mr Fitzpatrick submitted that a wine such as Woodley appears in the secondary market from time to time, which also provides a constant reminder to the public of the brand and its heritage and place in the upper echelons of Australian winemaking. It is also apparent that wine, although it is marketed as a consumable, has a very different life cycle to other products by reason of the collectible nature of certain brands and vintages.[14]
[14] Halliday [30]
Mr Fitzpatrick submitted that there is no relevant distinction between wines auctioned by private owners and collectors or by larger commercial enterprises. In both instances the continuity of the brand, and its provenance, remain. In all cases, it is the integrity of the product being offered at auction which is paramount.[15]In all cases, the wine’s mark operates to indicate origin. The sale of wine through the secondary market does not sever its connection with or to the brand owner. The WOODLEY brand has acted, and continues to act, as an unadulterated badge of origin for those wines.
[15] Caillard [21]
For the Applicant, Mr Vinall had a different approach to the issue of the course of trade in relation to the goods in question. He submitted that the Woodley wines were privately owned and normally offered as a single bottle or small lots and were not manufactured by the Opponent. As the wines that were available for auction were owned by private owners for their own consumption, these wines are no longer in the course of trade and therefore cannot be considered as use of the Woodley Mark by the Opponent. He added that here was no evidence that the wines had been purchased for resale.
Mr Vinall referred to the High Court decision in E & J Gallo Winery v Lion Nathan (Aust) Pty Ltd[16] where the Court discussed and followed the decision in Estex Clothing Manufacturers Pty Ltd v Ellis and Goldstein Ltd[17] whereby, when considering use of a trade mark, goods bearing the trade mark no longer remain ‘in the course of trade once they are acquired for consumption. In their joint judgment at [46] the majority of the bench stated [highlight added]:
In considering what “use” meant under s 23 of the Trade Marks Act 1995 (Cth) a provision similar to, but not identical with, s 92(4)(b) Windeyer J said [24]:
“When it is said that a trade mark is used to distinguish the goods of one man from those of another, that abbreviated statement obviously does not refer to the goods of the owner of the mark in the sense of goods which he owns or possesses. After the goods have been sold by him his mark may still, using the definition of trade mark in the Act, be used in relation to those goods for the purpose of indicating a connection in the course of trade between them and him, he registered proprietor of the mark. The manufacturer who sells goods, marked with his mark, to a warehouseman, wholesaler or retailer does not, in my view, thereupon cease to use the mark in respect of those goods. The mark is his property although the goods are not; and the mark is being used by him so long as the goods are in the course of trade and it is indicative of their origin, that is as his products. Goods remain in the course of trade so long as they are upon a market for sale. Only when they are bought for consumption do they cease to be in the course of trade.”
[16] (2010) 241 CLR 144; 84 ALJR 352; [2010] HCA 15.
[17] (1967) 116 CLR 254, 266-267
Mr Vinall referred to the decision of the Delegate in Make Wine Pty Ltd v Modern Ancient Brands Pty Ltd [18](‘Queen Adelaide’), which held that the sale of wine through auction houses is use by private individuals who purchased the wine. By this Mr Vinall submitted, this should extend to any wine that was in someone’s possession once the wine was no longer in the course of trade.
[18] [2017] ATMO 17
Mr Vinall submitted that Sheppard J in Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 28 IPR 193, at 211 – 212, cited a passage from the judgment of Burchett J in Fender Australia Pty Limited v Bevk [1989] FCA 276 as follows:
The connection in the course of trade which it is the essential function of a trade mark to denote (see the comments of Aickin J in Pioneer Kabushiki Kaisha v. Registrar of Trade Marks [1977] HCA 56; (1977) 137 CLR 670 at 683) is a connection which is broken by the retail sale of the goods and their use. When they re-enter the market as second-hand goods, although their source in the sense of the ultimate origin remains the same, a new origin has been interposed, and the goods have entered upon a new commercial existence. This is so whether the first sale was local or overseas. There has been created a new connection in the course of trade, which is now the relevant one.
Mr Vinall submitted that the term ‘second-hand’ does not imply that the goods have been used, rather that they have been previously owned by someone else prior to their subsequent resale.
Mr Vinall concluded that the auction sales were not in the course of trade for the purposes of s 92 of the Act.
As I mentioned earlier in this decision, there was no evidence of any use of the Sherry Mark. Subject to my consideration of exercising the Registrar’s discretion, the mark is therefore liable to be removed from the register for all goods in the specification.
Evidence of use of the Woodley mark is different to that in Queen Adelaide, where the delegate found at [22]:
there appear to be a total of a dozen bottles of wine having been sold during the relevant period by individuals some years after the initial purchase had been made. The price range on those wines also places them very firmly in the low-cost end of the market with bottles sold for $2 and $3 each. This low price range, given the age of the wine, makes it unlikely the wine was initially purchased for the purpose of investment or future resale.
In this matter, the value of the wines sold is significantly greater (between $27 and $1,500), there is no direct evidence of the provenance of some of the wines; however, in this case there is the evidence of the wines being gifted by the owner of Woodley Wines to the restaurateur and cellared by him until sale by Wickman’s auction house.
Restaurateurs are in a different commercial situation to ordinary wine buyers who may have bought wines bearing the Woodley Mark for the purposes of consumption, but have decided to auction an odd bottle left in their collection. Restaurateurs are in the business of selling goods such as wine to their patrons. The wine remains in the course of trade until consumed.
While there is no evidence of the restaurateur’s original intention when accepting the gift of Woodley wines, it is a fact that the wines were cellared continuously before being auctioned in the course of Wickman’s business as mercantile agents. This is not, in my opinion, consistent with being ‘bought for consumption’ such that it interrupts the course of trade. The sale of the wines by a mercantile agent such as an auctioneer continues to be in the course of trade.
It is settled law that use ‘as a trade mark’ is use of the mark as a ‘badge of origin’ in the sense that it indicates a connection in the course of trade between goods [or services] and the person who applies the mark to goods [or services]. I am satisfied that there was no discontinuation of the badge of origin principle, nor a severance of the link between the brand on the label, the contents of the wine bottle and the wine producer when the wines bearing the Woodley Mark were offered for sale or sold.
I am satisfied that the sale of the Opponent’s wine that had been gifted by the Opponent’s predecessor in title to the restaurateur and cellared by him until sale by Wickman’s Auctions constitutes use of the Trade Mark by the Opponent during the course of trade sufficient to resist an application for removal for non-use.
Registrar’s Discretion
Section 101 of the Act deals, inter alia, with the Registrar’s discretion:
Determination of opposed application—general
(1) Subject to subsection (3) and to section 102, if:
(a) the proceedings relating to an opposed application have not been discontinued or dismissed; and
(b) the Registrar is satisfied that the grounds on which the application was made have been established;
the Registrar may decide to remove the trade mark from the Register in respect of any or all of the goods and/or services to which the application relates.(2) Subject to subsection (3) and to section 102, if, at the end of the proceedings relating to an opposed application, the court is satisfied that the grounds on which the application was made have been established, the court may order the Registrar to remove the trade mark from the Register in respect of any or all of the goods and/or services to which the application relates.
(3) If satisfied that it is reasonable to do so, the Registrar or the court may decide that the trade mark should not be removed from the Register even if the grounds on which the application was made have been established.
(4) Without limiting the matters the Registrar may take into account in deciding under subsection (3) not to remove a trade mark from the Register, the Registrar may take into account whether the trade mark has been used by its registered owner in respect of:
(a) similar goods or closely related services; or
(b) similar services or closely related goods;to those to which the application relates.
Note 1: If the registered owner of the trade mark has authorised another person to use it, any authorised use of the trade mark by that person is taken to be a use of the trade mark by the registered owner (see subsection 7(3)).
Note 2: For registered owner see section 6.
There is no evidence of use of the Sherry Mark in the course of trade during the relevant period.
While Mr Fitzpatrick did not concede that the Sherry Mark should be removed from the Register, his submissions relating to the exercise of the discretions were directed to the Woodley Mark and Woodley wines generally and no mention was made of Woodley’s Sherry or the Sherry Mark.
I note that retention of the Woodley Mark means that any type of wine could be sold under that mark in the future, but by virtue of the Wine Australia Act 2013 (Cth) no Australian wine may be sold as ‘sherry’, as that is a Spanish Geographical Indication.
I am not satisfied that there are sufficient reasons before me to exercise the Registrar’s discretion to maintain the Sherry Mark on the Register.
Decision
The evidence satisfies me that there has been genuine commercial use of the Woodley Mark with respect to the Class 33 goods specified in the registration during the relevant period. The grounds for removal have not been established for this trade mark and I therefore refuse to remove trade mark registration 383762.
I am not satisfied that it is appropriate to exercise the Registrar’s discretion to maintain the Sherry Mark on the Register for wine in class 33. Accordingly, the application for removal is successful.
The application for removal in relation to the Sherry Mark has been established. I direct that the trade mark registration 119756 be removed from the Register in respect of all goods for which it is registered one month from the date of this decision. If the Registrar is served with a notice of appeal on or before that time, the registration will not be removed until the appeal is withdrawn or discontinued. Otherwise, the registration will be subject to the decision of the Court.
Costs
The parties have requested costs. However, as each party has been successful in their claims to some degree, I decline to award costs against either party.
Jock McDonagh
Hearing Officer
Trade Marks Hearings
20 December 2017
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