Quantcast

16 May 2011

Removal of a trade mark for non-use and the court's discretion

by Mary Still, Brett Doyle

Austin Nichols, the owner of WILD TURKEY for bourbon and other alcoholic drinks, unsuccessfully sought removal of Lodestar's WILD GEESE registration for beverages in classes 32 & 33. Austin appealed from the Registrar of Trade Marks to the Federal Court of Australia, which considered three issues (Austin, Nichols & Co Inc v Lodestar Anstalt [2011] FCA 39).

Standing

Lodestar unsuccessfully challenged Austin’s standing in relation to non-alcoholic beverages in class 32 but not for beers in class 32 or alcoholic drinks in class 33.

Justice Cowdroy was bound by the joint judgment of four judges of the Australian High Court in the Health World case, requiring “person aggrieved” to be liberally construed on the basis of “trade rivalry” of the parties, not by reference to minute product analyses.

Accordingly, Austin did not need to trade or intend to trade in non-alcoholic beverages in class 32 to have standing.

Obstacles excusing non-use

Lodestar argued that non-use of WILD GEESE on alcoholic beverages (especially whiskey) should be excused because of:

  • worldwide litigation in relation to the trade mark;
  • product sourcing difficulties; and
  • promotional impediments.

Justice Cowdroy held that section 100(3)(c) excuses non-use only when external events, not brought about by the voluntary act of the trade mark owner, so disrupt the trade in the owner's goods as to cause the non-use in the relevant period, whether or not other traders are similarly affected. The owner must show that "but for" the impediment of a "trade character", the trademark would have been used on the goods in the relevant non-use period. They cannot include, for example, personal illness.

Justice Cowdroy found no basis to excuse non-use:

  • worldwide litigation and product sourcing issues did not cause the non-use in Australia. They had not prevented use in other jurisdictions; and
  • the restrictions on promotion were very limited.

Discretion

The discretion not to remove an unused mark is broad, not requiring exceptional circumstances and is exercised reasonably in the light of the public interest in expunging unused marks and the private rights of the parties. Nonetheless, binding precedent required a sufficient reason to retain the registration in the face of the non-use applicant’s prima facie entitlement to removal.

Justice Cowdroy retained the WILD GEESE registration for limited goods (whiskey), taking into account the following factors:

  • substantial use of mark overseas before and after the non-use period in 34 countries;
  • various industry awards and a limited public profile in Australia;
  • the legal and financial detriment to the owner if the mark were expunged;
  • the relatively short period the mark had not been used;
  • difficulties in sourcing product;
  • the non-abandoned of the trade mark;
  • that wine (the other party's goods of interest) and whiskey could be distinguished, so separate registrations for WILD GEESE for wine and whiskey in the name of different owners would not lead to confusion.

Even so, Justice Cowdroy observed that the right of third parties to take up an unused trade mark was "a primary reason why the court should retain a registration only in cases where there were good reasons to do so".



You might also be interested in ...

Related Knowledge

Get in Touch

Get in touch information is loading

Disclaimer

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.