Rare Breed Distilling LLC v Lodestar Anstalt [2013] ATMO 85 (25 October 2013)

This decision concerned a removal application on the grounds of non-use by Lodestar Anstalt (“LA”), of Trade Mark Registration No. 1066646 WILD GEESE WINES and 1066650 WILD GEESE (“the Trade Marks”), both in the name of Rare Breed Distilling LLC (“RBD”). 

Background

By way of background, the ownership of the Trade Marks is currently in the name of Skyy Spirits, LLC (“SSL”) after a number of ownership assignments occurred subsequent to the filing of the Trade Marks (from Wild Geese Wines Pty Ltd (“WGW”) to Austin Nichols & Co, Inc (“ANC”), ANC to RBD, and RBD to SSL). 

Furthermore, LA is the owner of Trade Mark Registration No. 839740 WILD GEESE, which has been the subject of lengthy court proceedings whereby ANC and RBD sought removal of this trade mark for non-use. After a number of appeals, the Federal Court ordered that Trade Mark Registration No. 839740 be removed from the Register. 

Issue

The main issue in this decision was not whether there had in fact been use of the Trade Marks in the relevant period, as this was easily established by the removal opponent. Rather, the issue revolved around whether that use of the Trade Marks was made under the control of the owner of the Trade Marks in the relevant period, namely RBD. 

Was there authorised use of the Trade Mark?

In June 2007, WGW entered into a number of agreements with ANC with the intention of settling a dispute between the parties. The effect of these agreements was to assign the ownership of the Trade Marks from WGW to ANC, whilst allowing WGW to retain an exclusive license to use the Trade Marks in Australia (consequently in the relevant period). As part of these agreements, there were a number of clauses specifically relating to quality control, although no reference was made to royalties to be attributed to ANC from WGW for the use of the Trade Marks. 

An ‘authorised user’ is defined by Section 8(1)-(2) of the Trade Marks Act 1995 to mean a person who uses a trade mark in relation to the goods under the control of the trade mark owner. Section 8(3)-(5) does confine the definition of ‘control’ solely to the exercise of quality and financial control by the trade mark owner. 

With this in mind, it was noted by the Hearings Officer that the existence of quality control clauses in a licensing agreements would normally be sufficient to satisfy that there was ‘authorised use’, and it was not necessary to demonstrate “specific instances” of the exercise of control outside of this. 

The twist

Despite these comments, evidence was brought by LA which cast doubt upon the genuineness of the relationship between WGW and ANC. In the Federal Court proceedings relating to Trade Mark Registration No. 839740, the Director of WGW gave evidence to the effect that during the relevant use period, there had never been any financial interest from RBD or ANC in WGW, nor had they ever exercised any quality control over the production of the wine bearing the Trade Marks by WGW in the relevant period.

Further, the agreement stipulated that Austin Nichols did not wish to be identified in the marketplace as the owner or licensor of the Trade Marks unless they provided written approval for this accordingly. 

The Hearings Officer determined that the combination of these factors had the effect of putting the use of the Trade Marks at odds with Section 17, notably that a trade mark is intended to distinguish the goods and services of one trader who is responsible for these goods from another. The Hearings Officer noted that, In effect, Austin Nichols (and by extension the Opponent) appeared to be the owner of the Trade marks on the Register of Trade Marks only, and did not exercise any form of control in relation to the demonstrated use in the relevant period”. 

As such, it was considered that there was an insufficient connection between RBD as the owner of the Trade Marks, and WGW as the user of the Trade Marks, in order to demonstrate that such use was authorised.

The aftermath

It appears that an appeal has been lodged at the Federal Court by RBD. Stay tuned.