In a decision which may yet see the Court delving into uncharted waters on the question of damages for trade mark infringement, the Full Court have in part upheld and in part overturned the decision of the trial Judge in E. & J. Gallo Winery v Lion Nathan Australia  FCA 934 previously reported here.
To succeed on appeal, Gallo needed to overturn findings of the trial Judge both in relation to Lion Nathan’s application for removal of its trade mark for non-use and in relation to its own infringement claim. While the Full Court decision allowed Gallo’s appeal in relation to the infringement issues, the trial Judge’s findings on the removal application were upheld.Non-Use
At trial, it was held that while there had been sales, albeit limited, of BAREFOOT wine in Australia in the relevant non-use period, these sales occurred without the knowledge of the trade mark owner and as such were not use of the trade mark by the owner. On appeal, Gallo argued that the test of use was an objective one, such that the trade mark owner’s awareness of use of the trade mark in Australia was irrelevant. The Full Court, relying the decisions of Windeyer J and the Full Court of the High Court in the Estex cases, upheld the decision at first instance, confirming that in order to satisfy the requirement that there be use in the course of trade by the owner of a trade mark there must be:
a) conduct by the owner of the mark which the owner might reasonably contemplate would result in dealings with its goods marked with its trade mark in Australia while the goods were in the course of trade; and
b) actual display, sale or offering for sale of those goods in Australia.
The Full Court also confirmed that an order that the trade mark be removed from the register did not operate retrospectively, such that even where a trade mark is so removed, there might be infringement of that mark up until the date of the order for removal.
The trial Judge considered a range of factors on the issue of whether the goods in respect of which Gallo’s trade mark was registered, wine, and the goods on which Lion Nathan was using its mark, beer, were goods of the same description and concluded that they were not.
The Full Court noted that while “s 120(2) requires a number of discrete questions to be asked and answered”:
these discrete questions arise in the context of determining, as the ultimate question, whether there has been infringement of the registered trade mark and, to that end, the object or purpose of the statutory prohibition on infringement is relevant. It is to protect the statutory monopoly the registered owner has to use the registered trade mark as a badge of origin. In the context of goods sold in the course of trade to the public, the question of whether the alleged infringement has arisen by the affixing of a deceptively similar trade mark is not divorced from the question of whether the alleged infringement has arisen by doing so in relation to goods of the same description. One would have thought both questions necessarily require consideration of what members of the consuming public might perceive as a result of the use of the alleged infringing mark on the goods in question and whether they might be led to believe they were goods of the registered owner.
The Full Court found to be convincing the factors supporting the view that beer and wine were goods of the same description, such as both being alcoholic beverages distributed largely by the same major wholesale distributors and retailers and directed at the same type of consumer. By contrast, the considerations which led the trial Judge to the opposing conclusion were stated by the Full Court to be “of materially less significance”. Regarding the origin of the goods and in particular the difference in the manner of manufacturing wine and beer the Full Court stated that “it is unlikely that this difference would be significant to the consuming public”. In relation to another factor relied upon by the trial Judge being “the manner in which beer is consumed, that is drunk for its refreshing qualities, and not, like wine, consumed in a “sipping fashion” the Full Court noted that “For our part, we doubt this is a relevant consideration”.
As a result of the findings of the Full Court, Lion Nathan infringed Gallo’s trade mark from the time it commenced selling its BAREFOOT beer up until the date of the order that the trade make be removed. The question of what if any pecuniary relief Gallo might be awarded in respect of this period of infringement remains to be determined.