Make Wine Pty Ltd v Modern Ancient Brands Pty Ltd

TRADE MARKS ACT 1995

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

Re:Opposition by Make Wine Pty Ltd to application under section 92 of the Act by Modern Ancient Brands Pty Ltd to remove trade mark number 196073 (33) – WOODLEY’S QUEEN ADELAIDE RIESLING with graphic device - in the name of Make Wine Pty Ltd

Delegate:	Bianca Irgang
Representation:	Opponent: Mr Tony Norris of Collison and Co. Non-use applicant: Mr Craig Vinall of Madderns
Decision:	2017 ATMO 17 S 96 opposition–no use shown during the relevant period of the trade mark on class 33 goods– s101(3) - Registrar’s discretion appropriate for remaining goods – non-use application unsuccessful – trade mark 196073 to remain on the Register in its entirety.

Background

This matter is an opposition proceeding under section 96 of the Trade Marks Act 1995 (‘the Act’) in which by an application under subsection 92(4)(b) filed on 22 December 2014, Modern Ancient Brands Pty Ltd (‘the non-use applicant’) has sought the removal from the Register of the trade mark (‘Trade Mark’) appearing below in respect of the goods in classes 33 for which it is registered:

Trade mark:

Trade mark number: 196073

Date of registration: 22 July 1965

Goods:Class 33: Wines
Endorsements: In use the description of goods appearing in the Mark may be varied in accordance with the application of the Mark to other goods comprised in the specification. The preceding endorsement(s) were recorded prior to commencement of the Trade Marks Act 1995

Make Wine Pty Ltd (‘the opponent’) filed a notice of intention to oppose removal on 16 March 2015. The statement of grounds and particulars filed on 10 April 2015 asserted that the ground on which the removal applicant relied was not relevant because the opponent or an authorized user had used the Trade Mark 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 30 April 2015 the non-use applicant filed their Notice of Intention to Defend. The parties then commenced filing evidence in accordance with the Trade Mark Regulations 1995 (‘the Regulations’).
The matter came before me, as a delegate of the Registrar of Trade Marks, at a hearing in Canberra on 2 December 2016. Mr Craig Vinall of Madderns appeared on behalf of the non-use applicant. The opponent was represented by Mr Tony Norris of Collison and Co.

Legal Framework

Part 9 of the Act governs the removal of trade marks from the Register for non-use. The sections of that part which are most relevant to the case in hand are sections 92, 96, 100 and 101.
Section 92 provides, inter alia, that a person may apply to the Registrar to have a trade mark removed from the Register because it has not been used for a continuous period of three years. The removal application must be in accordance with the Regulations[1] and may be made in respect of any or all of the goods in respect of which the Trade Mark is registered. Subsection 92(4)(b) as it is relevant to this case provides the following:
(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:
[1] Regulations 9.1 to 9.4 are relevant here.
…
(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.
As the Registrar’s delegate observed in Courier Luggage Pty Ltd v Wenger SA Inc[2]:
Section 100(1) of the Act provides that the opponent bears the onus of rebutting the allegation made against it under s92(4) which it may do by, inter alia, establishing that the trade mark, (or, per section 100(3)(a), the trade mark with additions or alterations not substantially affecting its identity), was used by the registered owner 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 required use is as a trade mark, that is to say it is as a badge of origin in that it indicates a connection in the course of trade between the goods and the person who applies the mark to the goods: for example see E&J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144 at [41] – [43].
The use must be genuine commercial use in accordance with the test in Imperial Group Ltd v Philip Morris & Co [1982] FSR 72. A single bona fide use of the trade mark during the non-use period may be sufficient to resist an application for removal: Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261; (2001) 51 IPR 149 at [17]. However, Wilberforce J, in Nodoz Trade Mark (1962) RPC 1 (Nodoz) at 7, 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.”
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 [1977] RPC 131; although one invoice, if genuine, may suffice: Geo W McPherson v Remington (1999) 47 IPR 636.
[2] [2015] ATMO 10
Further, 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.
In Pioneer Computers Australia Pty Ltd v Pioneer KK[3] Bennett J made the following observations concerning the Registrar’s discretion:
[3] [2009] FCA 135; (2009) 176 FCR 300; (2009) 80 IPR 38; [2009] AIPC 92-354
[167] The discretion under s 101(3) is a broad discretion to decide not to remove a trade mark from the Register or not to carve out some of the goods and services for which the mark is registered, even if s 92 grounds have been made out, if the Court is satisfied that it is reasonable to do so. Irrespective of the lack of use of the trade marks on the removal goods and the removal services in the relevant period, there is a discretion not to alter the registrations.
[168] In Kowa Company at [98], Lander J rejected the submission that a party seeking the exercise of the discretion needs to show “exceptional circumstances”. In E & J Gallo at [198], Flick J agreed with Lander J that there is no requirement to establish exceptional circumstances. With respect, I also agree with Lander J that there is no warrant to read a requirement for exceptional circumstances into s 101(3).
[…]
[171] By amendment in 2006, s 101(4) was added to provide that without limiting the matters that the Registrar may take into account in deciding under s 101(3) not to remove a trade mark from the Register, the Registrar may take into account whether the trade mark has been used by the registered proprietor in respect of (a) similar goods or closely related services; or (b) similar services or closely related goods. The parties disagree as to whether or not the matters now raised in s 101(4) are able to be taken into account for the purposes of the unamended section; that is, whether it was necessary to insert s 101(4) to add discretionary factors not previously available, or to clarify that they were always available to be taken into account.
There is no limitation within s 101(3) on the discretion, nor any indication of the factors to be taken into account. In the Explanatory Memorandum to the Trade Marks Amendment Bill 2006 (Cth) by which s 101(4) was introduced, it is stated that ‘[c]urrently, it is not clear that the Registrar is able to take use on closely related goods or services into account, when deciding whether to exercise his or her discretion not to remove a trade mark from the Register’ and that the amendment was for the purposes of clarifying the Registrar’s discretion.

Evidence

Evidence in Support

The declaration of Rebecca Tolhurst (‘Tolhurst’) made on11 August 2015 accompanied by exhibits RT-1 to RT-5

Evidence in Answer

The declaration of Stewart Kay (‘Kay’) made on 10 November 2015 accompanied by exhibits SCK-1 to SCK-15; and
The declaration of Michael Andrewartha (‘Andrewartha’) dated 9 November 2015 accompanied by exhibit AW1; and
The declaration of Mark Wickam (‘Wickam’) dated 9 November 2015.

Evidence in Reply

The declaration of Anthony Norris (‘Norris’) made on 18 January 2016 accompanied by exhibits AJN1 to AJN2

Discussion

To defeat the non-use application, the opponent must demonstrate that it has used the Trade Mark on the goods covered by the registration within the relevant period. This arises by virtue of section 100(1)(c) of the Act. As mentioned earlier, the evidentiary standard is ‘balance of probabilities’ which means that I must be satisfied it is more likely than not that the Trade Mark was used in the relevant period.
The main arguments advanced by the non-use applicant in this case are that:

The opponent has not demonstrated use of the Trade Mark as registered for the relevant goods; and
The wines that were available for auction were owned by private owners for their own consumption. As noted in paragraphs 5 and 6 of the Wickham declaration, the wines that were on auction at Wickman’s Fine Wine Auctions were privately owned and are normally offered as a single bottle and these wines were not manufactured by the opponent. As the wines that were available for auction were owned by private owner for their own consumption, these wines are no longer in the course of trade and therefore cannot be considered as use of the Opposed Mark by the Opponent.

Here the opponent has supplied a number of exhibits and declarations which it claims demonstrate that the sale of goods in a secondary market, such as the wine auction market relevant in this case, continues to be use of the manufacturers trade mark because that trade mark appears on the goods to distinguish them from the other goods manufactured by different traders.
The opponent argues that there is a sound rationale for treating sale in such a secondary market as establishing use of the Trade Mark. In particular it submits that were it otherwise and the Trade Mark removed from the Register as a consequence, then public confusion would likely result if a third party used the same or similar trade mark for wine. This, it claims, it because (genuine) wine actually bearing the Trade Mark is still being sold in Australia.
However, many of the exhibits are not persuasive in, and of, themselves to prove use of the Trade Mark through the relevant period.
Tolhurst states that the Trade Mark was registered in 1965 and since that time has been assigned to a number of parties, culminating in the Trade Mark being assigned to the opponent in 2010 as evidenced by exhibit RT1. Andrewartha and Wickman asserts that the various wines bearing the Trade Mark have been sold and traded in Australia over a 50 year period, although the wine appeared to fall out of favour in more recent years and was no longer produced and sold to the Australian public by the opponent since around 2005. Kay says that his research indicates that the opponent (or rather its predecessor in title) ceased producing wine using the Trade Mark after 2002 and that the last known vintage using the Trade Mark was in that year. He says it is likely that white wine sold under the trade mark was available in 2002 and red wine was available for purchase in 2003. Accompanying Kay are exhibits SCK-1 to SCK-3 which appear to support Mr Kay’s findings
Tolhurst asserts that the Trade Mark has achieved a level of fame and notoriety with the Australian wine buying public. In order to demonstrate this, exhibit RT2 contains excerpts from several Australian wine publications providing the history and use of the “WOODLEY’S” element which is contained in the Trade Mark. It is this element of the Trade Mark which is where the dispute between the parties arises. The Trade Mark contains the name Woodley’s and the non-use applicant seeks registration of trade mark no. 1666006 for the word WOODLEY in relation to wine. The Trade Mark was appropriately raised as a ground for rejection under section 44 for the non-use applicant’s trade mark.
I note that the opponent was contacted by the non-use applicant’s legal representatives in regards to the Woodley’s element of the Trade Mark before the removal application was filed. Upon hearing from the non-use applicant, the opponent was willing to provide the non-use applicant with a letter of consent for as long as the non-use applicant desired so that the respective trade marks might co-exist within the market place. The non-use applicant responded by stating this was not sufficient and commenced removal for non-use proceedings with the Office.
The Woodley’s name in association with the production and marketing of wine appears to have a long and established history with Woodley Wines being established close to Adelaide on the site of a one-time vineyard which was planted in 1856 by Osmond Gilles. Indeed, the excerpts from various wine books in evidence do demonstrate that the name Woodley’s does form a part of Australia’s history with wine and vignerons.
The opponent has also put forward evidence in exhibit RT4 that three bottles of wine with descriptions including the words “WOODLEYS Queen Adelaide’ were sold during the relevant period through Wickman’s Fine Wine Auctions. Exhibit RT5 demonstrates that a similar small number of bottles of wine bearing WOODLEYS Queen Adelaide were sold through Langtons wine auctions. The opponent has argued this demonstrates use of the Trade Mark during the relevant period as wine is a unique good because it is well established in the industry that consumers purchase wine for investment and resale purposes rather than solely for private consumption. The non-use applicant has argued that this is not the case and that the original purchase from the manufacturer occurred some decades earlier for private consumption and therefore left the ‘course of trade’. According to the non-use applicant, any resale during the relevant period was not use in the course of trade of the trade mark by the opponent.
I turn to the High Court decision in E & J Gallo Winery v Lion Nathan (Aust) Pty Ltd[4] where the Court discussed and followed the decision in Estex Clothing Manufacturers Pty Ltd v Ellis and Goldstein Ltd[5] 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 judgrement at [46] four of the five judges stated:
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.”
[4] (2010) 241 CLR 144; 84 ALJR 352; [2010] HCA 15.
[5] (1967) 116 CLR 254, 266-267
The use of the Trade Mark that has been demonstrated during the relevant period, is by private individuals who purchased individual bottles of the opponent’s wine during the 70s until 2002 and then offered them for sale some decades later.
While I appreciate that wine is an unusual category of perishable in that it can be purchased for purposes other than consumption, 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.
The significant delay between the initial purchase of bottles and before they were offered for sale in the marketplace makes the link between the opponent and use of the Trade Mark within ‘the course of trade’ somewhat tenuous. Most of the very limited number of wines were essentially ‘off the market’ for a period of decades before they were sold at minimal prices during a time when the opponent was not promoting the Trade Mark on wine in the marketplace. While the wine was clearly not consumed while it was ‘off the market’ how long can goods be off the market and still remain in the course of trade for the purpose of defeating applications for removal for non-use? This is the question before me. While the wine before me has not been consumed, it has been off the market for many years before it was eventually sold at a public auction for what appears to be less than the wine originally may have been purchased for. The bottles were also sold individually rather than in cases by individuals. Given this substantial time lapse and the low reward for selling, I am not satisfied that those wines did remain in the course of trade over this period.
Without more evidence before me to the contrary, I cannot be satisfied, on the balance of probabilities, that the sale of the opponent’s wine by individuals in such small quantities some decades after their initial purchase, constitutes use of the Trade Mark by the opponent during the course of trade sufficient to resist an application for removal for non-use. However, in the event that I am incorrect I now turn to the Registrar’s discretion.

Registrar’s Discretion

There is a discretion embodied in subsection 101(3) of the Act. That particular part of the legislation reads as follows:
(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.

The application for removal is for all goods within classes 33. The opponent has requested the Registrar’s discretion to allow the Trade Mark to remain registered for all those goods as the Trade Mark:
·   Has an interesting and valuable heritage in Australia;
·   Still has residual reputation within Australia given its long history;
·   Australian consumers still trade in wine bearing the Trade Mark; and
·   Is the older version of the current Queen Adelaide trade mark that the opponent is presently selling its wine under.
The non-use applicant has argued that the opponent has adopted an updated and fresh new QUEEN ADELAIDE trade mark which excludes the Woodleys element. The non-use applicant makes the argument that ‘refreshing’ the QUEEN ADELAIDE wine brand by the design of the new label which is significantly visually different from the Trade Mark is an expensive action by the opponent and is indicative that the opponent is unlikely to return to its original Trade Mark to sell its goods now or in the future. However, I am not persuaded by this argument.
While the opponent has not been able to conclusively satisfy me that it had used its Trade Mark in the course of trade during the relevant period, there are a number of other considerations which I consider makes it appropriate to exercise the Registrar’s discretion in its favour.
The opponent does have a significant and enduring reputation in its QUEEN ADELAIDE branded wines. It has adopted a refreshed and new label for its wine which is at least deceptively similar to the Trade Mark. The respective trade marks both prominently contain a graphic device depicting Queen Adelaide and contain the words QUEEN ADELAIDE. These are the most prominent and striking features of the respective trade marks. I also note that it is common for traders that have been trading in the marketplace for a long time to update and alter their trade marks to make themselves more marketable in a constantly changing marketplace. Some traders which come to mind are Adidas ® and Kentucky Fried Chicken ®.
The opponent is actively selling its QUEEN ADELAIDE wine under the refreshed label in the Australian market place and individuals are still clearly buying and selling wine bearing the Trade Mark. This is much more than a case of the opponent having a residual reputation in the Trade Mark. The opponent has an active and ongoing reputation in its QUEEN ADELAIDE branded wine and it is selling that wine under a trade mark which is at least deceptively similar to the Trade Mark.
I am satisfied that there are sufficient reasons before me to exercise the Registrar’s discretion to maintain the Trade Mark on the Register.

Decision

It is my decision that, the opponent having been unable to show use of its Trade Mark during the relevant period, and technically the non-use application having made out a case for removal, it is not appropriate to remove the Trade Mark from the Register.
I am satisfied that it is appropriate to exercise the Registrar’s discretion to maintain the Trade Mark on the Register for wine in class 33. Accordingly, the application for removal is unsuccessful.

Costs

The parties have requested costs. However, as each party has been successful in their claims to some degree, I determine that each party should bear its own costs.

Bianca Irgang
Hearing Officer
Trade Marks Hearings
24 February 2016

[2017] ATMO 17

24 February 2017