Austin, Nichols & Co Inc v Lodestar Anstalt [2011] FCA 39

In the latest Australian chapter of a long-running, international trade mark dispute between the owners of Wild Turkey bourbon whiskey and Wild Geese whiskey, the Federal Court has exercised its discretion not to remove the registered Wild Geese trade mark for non-use, even though the statutory grounds for doing so had been established. Justice Cowdroy’s decision further develops the definition of a ‘person aggrieved’ for the purposes of the Trade Marks act 1995 (Cth) and demonstrates the circumstances in which the Court will be willing to exercise its discretion.

Facts of the case

Austin, Nichols & Co Inc (‘Austin Nichols’), which promotes and distributes whiskey under the Wild Turkey trade mark, had sought removal of Lodestar Anstalt’s Wild Geese trade mark,1 which was registered for both alcoholic and non-alcoholic beverages. Austin Nichols relied on section 92(4)(b) of the Trade Marks Act 1995, which provides that an application may be made to remove a registered trade mark if the mark has not been used in the three year period prior to the application for removal.

Initially, both Austin Nichols and Wild Geese Wines Pty Ltd - an Australian company seeking to register the graphical mark ‘Wild Geese Wines’ - had made separate (largely unsuccessful) applications to the registrar of Trade Marks to have Lodestar Anstalt’s Wild Geese mark removed from the register. having entered into an agreement with Wild Geese Wines Pty Ltd to assume its interest in the matter, Austin Nichols then appealed the registrar’s decision on both applications to the Federal Court.

The decision

Justice Cowdroy identified three key issues for determination:

  1. Did Austin Nichols, which markets alcoholic drinks within Australia, have standing as a “person aggrieved” in order to make an application for removal of the Wild Geese mark in the class of nonalcoholic beverages?
  2. Had Lodestar Anstalt (‘Lodestar’) adequately rebutted Austin Nichols’ allegations of non-use by demonstrating, for the purposes of section 100(3)(c) of the Trade Marks Act, that external ‘obstacles’ had prevented it from using the mark in Australia?
  3. Even if the grounds for removal were established by Austin Nichols, should the Court exercise its discretion under section 101(3) of the Trade Marks Act and permit the registration to remain?

Was Austin Nichols a ‘person aggrieved’?

At the time of Austin Nichols’ application, section 92 of the Trade Marks Act allowed a ‘person aggrieved’2 by a registered trade mark to apply for its removal on two grounds: that at the time of registration the trade mark owner had no intention of using the mark, or that the owner has not used the mark in the prior three year period. A key question before Justice Cowdroy was whether Austin Nichols was such a ‘person aggrieved’ in all the classes of goods for which removal had been sought.

The Wild Geese mark was registered in both Class 33 (alcoholic beverages except beer) and Class 32 (beer and non-alcoholic beverages including fruit juices, mineral water and syrups). While it was accepted that Austin Nichols had standing to bring an application for removal from Class 33, at issue was whether Austin Nichols - which did not market non-alcoholic beverages or beer under the Wild Turkey brand - was a ‘person aggrieved’ by the registration of the Wild Geese mark in Class 32.

In finding for Austin Nichols, Justice Cowdroy applied and developed the liberal definition of ‘person aggrieved’ adopted by the High Court in Health World Ltd v Shin-Sun Australia Pty Ltd3 - a test that focuses on whether the applicant is a ‘trade rival’ within the ‘same trade’ as the registered trade mark owner.4 His Honour held that an analysis of trade rivalry should not be confined to the specific classes of goods contained in the Register of Trade Marks and that the close relationship between alcoholic and non-alcoholic beverage markets led to the finding that Austin Nichols was a person aggrieved within the meaning of the Act.

Had Lodestar faced obstacles preventing use of the Wild Geese mark?

In reply to Austin Nichols’ allegations of non-use, Lodestar submitted that it had faced obstacles to the launch of its Wild Geese whiskey product in Australia. Section 100(3)(c) of the Trade Marks Act provides that registered trade mark owners can rebut allegations of non-use if it can be shown that ‘circumstances (whether affecting traders generally or only the registered owner of the trade mark) … were an obstacle to the use of the trade mark’ during the relevant period.

Lodestar argued that Austin Nichols’ trade mark litigation against it in multiple countries over the Wild Geese mark was a key reason that full commercialisation had been delayed in Australia. After all, Lodestar submitted, Wild Geese is a global brand and it was prudent to ensure trade mark issues around the world were resolved before investing heavily in individual markets such as Australia.

Lodestar also led evidence regarding the difficulties it had faced in securing supplies of whiskey, which it in part blamed on Austin Nichols’ trade mark litigation. Lodestar also alleged that the ongoing worldwide dispute was a key reason that some international trade shows had refused to allow Lodestar to promote Wild Geese to potential buyers, thereby further delaying use in the domestic market.

Justice Cowdroy rejected all of these assertions, finding that Lodestar had not established any causal link between the ongoing litigation or its failure to secure a place at key international trade shows, and the non-use of the Wild Geese mark in Australia. Furthermore, His Honour observed that Wild Geese whiskey had been marketed in other countries within the relevant period, and therefore concluded that the delay in the use of the mark in Australia was the result of a deliberate commercial decision by Lodestar to prioritise other markets, rather than the consequence of external obstacles that would fall within the ambit of section 100(3)(c).

Should the Court use its discretion to allow the trade mark to remain on the register?

Lodestar submitted that even if Austin Nichols established its case for removal under section 92, the Court should exercise its broad discretion to allow the mark to remain. Section 101(3) of the Trade Marks Act invests the Court with a broad discretion to allow a trade mark to remain on the register even if the grounds for removal have been established.

In considering Lodestar’s submission, Justice Cowdroy noted that since a prima facie case for removal had been made out, the presumption was that the mark should be removed unless ‘it would cause confusion to remove it’5; the Court’s primary concern was to keep the Register of Trade Marks ‘pure’6 in the name of public interest.

His Honour discussed some of the relevant factors that might inform the Court’s discretion, distilled from prior cases such as hermes Trade Mark7 and Pioneer Computers Australia Pty Ltd v Pioneer KK8 though distinguished these from the present case on their facts. ultimately Justice Cowdroy found the following factors relevant:

  • Lodestar had not used the Wild Geese mark at all in Australia until three years after the relevant non-use period. however its use of the mark in other jurisdictions, including distribution in 34 countries and promotion at a number of trade shows, had been ‘substantial’.9 This was relevant to the exercise of the Court’s discretion so long as the mark’s international reputation was so substantial as to cause confusion in Australia should the mark be removed.10
  • The period of non-use at issue in the case, although fulfilling the requirements of section 92(4)(b), was not substantial. Lodestar had also since started using the mark in Australia.
  • Although Lodestar had delayed launching its product in the domestic market, it had plainly not abandoned the mark in Australia.11

In light of the above factors, Justice Cowdroy found that removal of the Wild Geese mark for non-use ‘may cause a degree of confusion to the public’12 and as a result an exercise of discretion was warranted and the application for removal of the mark was dismissed.

Commentary

The present case provides a number of important lessons for trade mark owners:

  • Firstly, although the Trade Marks Act no longer requires that applications for removal of a mark for non-use be made by persons aggrieved, Justice Cowdroy’s observations on the liberal approach to be employed when applying the definition will very likely be of relevance in interpreting other sections of the Act that retain the ‘person aggrieved’ requirement.13
  • Secondly, the decision also emphasises the importance of showing a clear causal connection between an external obstacle - i.e. an event not brought about by the registered owner’s voluntary acts - claimed for the purposes of section 100(3)(c) and the non-use of the mark in Australia.
  • Thirdly, Justice Cowdroy’s identification of the Register of Trade Mark’s purity as the Court’s primary concern when exercising its discretion to keep a mark on the register is illuminating. The importance placed by His Honour on the risk of confusion should the mark be removed, and the degree to which various forms of evidence may demonstrate such risk, provides guidance to other trade mark owners seeking a similar exercise of discretion in the future.  

Austin Nichols has appealed Justice Cowdroy’s decision, no doubt setting the scene for the next chapter in this epic avian squabble.