Foreign owners of Australian registered trade marks, who have not yet started to target the Australian market, may have cause to celebrate today. In a 5-0 decision, the High Court (overturning an earlier decision in the Full Federal Court), ruled that E & J Gallo’s ‘BAREFOOT’ trade mark registration for wine should not be removed from the Register for non use, even though the only ‘use’ of that mark during the non-use period was on the labels of genuine wine which had been imported, distributed and sold in Australia without E & J Gallo’s knowledge or authority.1
Following the ruling, it is clear that an Australian trade mark registration is no longer vulnerable to removal for non use if goods to which the mark has been applied by (or with the consent of) the trade mark owner, have been marketed here during the non use period. It is no longer relevant whether the trade mark owner intended that marketing to occur, or even had any knowledge of it.
The reasoning in the case may not apply if there has been a ‘split’ in the ownership of a trade mark, such that the Australian mark is owned by a different company than the owner of the mark in the place of manufacture of the goods. This is because the relevant ‘use’ of the mark may not in those circumstances be considered to be use by or with the consent of the owner of the local mark. This may have implications, for example, for companies which employ such strategies in order to combat parallel importation.
There is another potential sting in the tail of the case. It is usual for a company to seek to register as a trade mark the word component of its branding simpliciter, whether or not protection is also sought for additional elements—such as an accompanying graphic or combination of colours. However, trade marks in use typically consist of various elements. Such was the case in Gallo, where the registered mark was for the word BAREFOOT alone, but the following marks appeared on the actual imported wine labels:
The High Court ruled that those labels involved use of the mark BAREFOOT and that, in particular, the device component of the mark (ie the picture of the sole of a foot) did not separately distinguish the goods or substantially affect the identity of the mark, as consumers would be likely to identify the wine by reference to the name BAREFOOT, and to view the device ‘as an illustration of the word’. Thus, use of the above label constituted use of the BAREFOOT registration.
Although the High Court ruled in Gallo’s favour on this aspect, it will be a question of fact in each case whether the use of a word with an accompanying graphic involves use of the word mark as such or use of a composite mark. The High Court distinguished (but did not disapprove) an earlier Full Court decision that the use of a mark including the word COLORADO and a distinctive ‘mountain motif’, did not constitute use of the word mark COLORADO as such.2
Brand owners would be well advised to consider, in light of this important ruling, whether the trade marks they are actually using constitute trade mark use of their Australian registrations.
This article was written by Campbell Thompson, Partner and David Jackson, Senior Associate, Melbourne.
Endnotes
- E. & J. Gallo Winery v Lion Nathan Australia Pty Limited [2010] HCA 15 (19 May 2010).
- Colorado Group Ltd v Strandbags Group Pty Ltd [2007] FCAFC 184.
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