E. & J. Gallo Winery v Lion Nathan Australia Pty Limited

• Jurisdiction: Australia Federal only
• Judgment Date: 20 June 2008
• Neutral Citation: [2008] FCA 934
• Court: Federal Court

FEDERAL COURT OF AUSTRALIA

E. & J. GALLO WINERY v LION NATHAN AUSTRALIA PTY LIMITED [2008] FCA 934

TRADE MARKS – substantial identity – deceptive similarity – goods of the same description – non-use – obstacle to use – discretion not to remove trade mark even though non-use – use “in good faith” – no special facts or circumstances – evidence of internet search

Evidence Act 1995 (Cth), ss 69, 146, 147

Trade Marks Act 1995 (Cth), ss 6, 7, 8, 10, 17, 92, 100, 101, 120

Trade Marks Act 1955 (Cth), s 23(1)(b)

Federal Court Rules 1979 (Cth), O 11, r 10

Anheuser-Busch Inc v Budejovický Budvar [2002] FCA 390, 56 IPR 182 followed

Asia Television Ltd v Yau’s Entertainment Pty Ltd (No 2) [2000] FCA 838, 49 IPR 264 followed

Australian Woollen Mills Ltd v F S Walton & Co Ltd (1937) 58 CLR 641 followed

Banque Commerciale SA en liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 followed

Brother Industries Ltd v Dynamic Supplies Pty Ltd [2007] FCA 1490, 163 FCR 530 followed

Buying Systems (Australia) Pty Ltd v Studio Srl (1995) 30 IPR 517 distinguished

C A Henschke & Co v Rosemount Estates Pty Ltd [2000] FCA 1539, 52 IPR 42 followed

Campomar Sociedad Limitada v Nike International Ltd [2000] HCA 12, 202 CLR 45 followed

Carnival Cruise Lines Inc v Sitmar Cruises Ltd (1994) 120 ALR 495 considered

Coca Cola Co v All-Fect Distributors Ltd [1999] FCA 1721, 96 FCR 107 followed

Colorado Group Ltd v Standbags Group Pty Ltd [2007] FCAFC 184, 243 ALR 127 distinguished

Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 considered

Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd [2004] FCAFC 196 followed

“Daiquiri Rum” Trade Mark [1969] RPC 600 cited

de Cordova v Vick Chemical Co (1951) 68 RPC 103 considered

Delta Metallics v Hawley-Jacobs t/as Fightboi Health & Fitness Centre [2006] FCA 334 followed

Dyno Wesfarmers Ltd v Orica Australia Pty Ltd [1999] FCA 554, 46 IPR 386 followed

Estex Clothing Manufacturers Pty Ltd v Ellis and Goldstein Ltd (1967) 116 CLR 254 followed

Figgins Holdings v Beltrami SpA (1998) 46 IPR 411 followed

Global Brand Marketing Inc v YD Pty Ltd [2008] FCA 605 followed

Health World Ltd v Shin-Sun Australia Pty Ltd [2008] FCA 100, 75 IPR 478 considered

Hermes Trade Mark [1982] RPC 425 considered

In re Australian Wine Importers’ Trade Mark (1889) 6 RPC 311 considered

In re Powell’s Trade Mark [1893] 2 Ch 388 followed

In re Turney and Sons’ Trade Mark (1893) 11 RPC 37 cited

Jackson & Co v Napper (1886) 35 Ch D 162, 4 RPC 45 considered

Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326 followed

Jonathan Ross Sceats v Jonathan Sceats Design Pty Ltd (1990) 17 IPR 28 distinguished

Kowa Co Ltd v Organon [2005] FCA 1282, 223 ALR 27 followed

McCormick & Co Inc v McCormick [2000] FCA 1335, 51 IPR 102 followed

Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 156 CLR 414 distinguished

Murray Goulburn Co-operative Co Ltd v NSW Dairy Corporation (1990) 24 FCR 370 followed

Nordstrom Inc v Starite Distributors Inc (2008) 75 IPR 418 considered

NSW Dairy Corporation v Murray Goulburn Co-operative Co Ltd (1990) 171 CLR 363 cited

NSW Dairy Corporation v Murray Goulburn Co-operative Co Ltd (No 1) (1989) 14 IPR 26 followed

Paragon Shoes Pty Ltd v Paragini Distributors (NSW) Pty Ltd (1988) 13 IPR 323 followed

Pioneer Kabushiki Kaisha v Registrar of Trade Marks (1977) 137 CLR 670 followed

Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd (1993) 42 FCR 227 distinguished

Re Carl Zeiss Pty Ltd’s Application (1969) 122 CLR 1 followed

Re J Lyons & Co Ltd’s Application [1959] RPC 120 followed

Registrar of Trade Marks v Woolworths Ltd [1999] FCA 1020, 93 FCR 365 followed

Ritz Hotel Ltd v Charles of the Ritz Ltd (1988) 12 IPR 417 followed

Rowntree plc v Rollbits Pty Ltd (1988) 10 IPR 539 followed

San Remo Macaroni Co Pty Ltd v San Remo Gourmet Coffee Pty Ltd [2000] FCA 1842, 50 IPR 321 considered

Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1964) 109 CLR 407 followed

Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 followed

Tavener Rutledge Ltd v Specters Ltd [1959] RPC 355 followed

Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 49 FCR 89 followed

Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261, 107 FCR 166 followed

Woolworths Ltd v Registrar of Trade Marks (1998) 42 IPR 615 followed

Yau’s Entertainment Pty Ltd v Asia Television Ltd [2002] FCA 338, 54 IPR 1 followed

Burrell R, The Requirement of Trade Mark Use: Recent Developments in Australia (2005) 16 AIPJ 231

Colman W J, Use of a Trade Mark in Australia (1968–1971) 6 Syd LR 52

Crowley-Smith L, The Evidence Act 1995 (Cth): Should Computer Data Be Presumed Accurate? (1996) 22 Mon LR 166

Davison M, Johnston K, Kennedy P, Shanahan’s Australian Law of Trade Marks and Passing Off (3^rd ed, 2003)

Explanatory Memorandum, Trade Marks Bill 1995 (Cth) (Senate, 1995)

Loughlan P, Trade Marks: Property Rights and Their Limits (2005) 31 Mon LR 273

Luck J, Case Note (1990) 1 IPJ 63

McKeough J, Stewart A and Griffith P, Intellectual Property in Australia (3^rd ed, 2004)

Morcom C, Roughton A, Graham J and Malynicz S, The Modern Law of Trade Marks (2^nd ed, 2005)

Rothnie W, Gray Goods Billow onto the Open Main: Section 123 of the Trade Marks Act 1995 (1996) 7 AIPJ 87

Working Party to Review the Trade Marks Legislation, Recommended Changes to the Australian Trade Marks Legislation (1992)

E. & J. GALLO WINERY v LION NATHAN AUSTRALIA PTY LIMITED

(ACN 008 596 370)

NSD 1950 OF 2007

FLICK J

20 JUNE 2008

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1950 OF 2007

BETWEEN:	E. & J. GALLO WINERY Applicant
AND:	LION NATHAN AUSTRALIA PTY LIMITED (ACN 008 596 370) Respondent

JUDGE:	FLICK J
DATE OF ORDER:	20 JUNE 2008
WHERE MADE:	sydney

THE ORDERS OF THE COURT ARE:

1. The parties are to draft Short Minutes of Proposed Orders within 7 days which give effect to these reasons.

2. The proceedings be stood over to 27 June 2008 at 9.30 am with a view to then making final orders disposing of the proceedings.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1950 OF 2007

BETWEEN:	E. & J. GALLO WINERY Applicant
AND:	LION NATHAN AUSTRALIA PTY LIMITED (ACN 008 596 370) Respondent

JUDGE:	FLICK J
DATE:	20 JUNE 2008
PLACE:	sydney

REASONS FOR JUDGMENT

1 The Applicant in these proceedings, E. & J. Gallo Winery (Gallo Winery) began operations on 1 December 1933, the day on which Prohibition ended in the United States. It is incorporated in California in the United States of America and is the second largest wine-producing company in the world. It distributes its alcoholic beverages in over 90 countries and its international business is managed from offices located around the world, including California, Canada, England, Florida, Germany, Hong Kong, Japan, Mexico, the Netherlands, Poland and Sweden.

2 By way of a Further Amended Statement of Claim filed on 22 February 2008, the Applicant contends that it is the registered owner under the Trade Marks Act 1995 (Cth) of the word “BAREFOOT”. That trade mark has been registered with effect from 9 March 1999 in respect of “wines”. Prior to 17 January 2005, the registered owner of that mark was Mr Michael Houlihan; E & J Gallo Winery became the registered owner after that date. It contends that it sells wine in Australia under the trade mark BAREFOOT. That trade mark, it is further contended, has been and is being infringed by the conduct of the Respondent by using as a trade mark the words “BAREFOOT” or “BAREFOOT RADLER” in relation to its new radler beer.

3 Declaratory and injunctive relief is sought together with an account of profits.

4 The Respondent, Lion Nathan Australia Pty Limited (Lion Nathan), on 5 September 2007 lodged an Australian trade mark application for the mark “BAREFOOT RADLER” in relation to beers and other goods in class 32. On 20 September 2007 the Respondent also lodged an application for the mark “LIFE’S BETTER BAREFOOT” and on 17 December 2007 it lodged an application for the mark “BAREFOOT RADLER” with a bare foot design in relation to beers and other goods in class 32, and “alcoholic beverages (except beers)” in class 33.

5 The Respondent, by way of an Amended Cross-Claim filed on 2 April 2008, contends that there has been a non-use by Gallo Winery of the trade mark BAREFOOT in Australia. The Respondent seeks an order for the removal of the trade mark relied upon by the Applicant pursuant to s 94(2)(b) of the 1995 Act. Gallo Winery denies that there has been a non-use of the mark and further contends, in the alternative, that if there has been a non-use the Court should exercise the discretion conferred by s 101(3) and not remove the mark from the Register.

The Facts: A Very Summary Overview

6 In the United States a company, Grape Links Inc, carried on business under the trading name “Barefoot Cellars”. The principals of that business were Mr Michael Houlihan and Ms Bonnie Harvey. The business had its headquarters in Santa Rosa, California. Mr Houlihan was the President and Ms Harvey was the Vice-President.

7 In January 2005 Gallo Winery acquired the share capital of Grape Links Inc and acquired the rights to the BAREFOOT brand. The brand was perceived to be “an attractive acquisition for Gallo Winery because its carefree, slightly irreverent, California ‘surf and sand’ lifestyle positioning had significant consumer appeal”.

8 By early 2006 there were discussions between officers of Gallo Winery and McWilliams Wines Pty Ltd (McWilliams Wines) for the sale of BAREFOOT wine in Australia. McWilliams Wines is one of Australia’s largest family-owned wine companies. Samuel McWilliams first planted vines at...