Still Barefoot
(Beer & Wine, Goods of a similar description after all)

E & J Gallo Winery v Lion Nathan Australia Pty Limited [2009] FCAFC 27 (24 March 2009)

The decision of the Full Federal Court of Australia was handed down on appeal from the decision of Federal Court, which was reported on our website on 8 September, 2008.

Summary

Two main issues arise in these proceedings:

1. (1) The first is what constitutes use of a trade mark in Australia by the registered owner for the purposes of the non-use provisions of the Trade Mark Act, and whether Gallo’s registration for trade mark BAREFOOT should be removed from the Register for non-use.
   The Full Federal Court confirmed the primary judge’s decision that when goods bearing a registered trade mark are imported into Australia through no action or intent on the registered owner’s part, and without the knowledge of the registered owner, such import do not constitute use of the trade mark in Australia and do not suffice to successfully oppose a non-use application against that registered trade mark.
2. (2) The second is whether Lion Nathan’s use of trade mark BAREFOOT RADLER and device with respect to beers has infringed Gallo’s trade mark registration for BAREFOOT with respect to wine.

The Full Federal Court overturned the primary judge’s decision on the issue of infringement and found that Lion Nathan had infringed Gallo’s trade mark registration because the trade marks are deceptively similar and the goods, namely beer and wine, are of a similar description (the Federal Court had held that beer and wine were not of a similar description and for that reason had ruled out any infringement on Lion Nathan’s part).

BACKGROUND:

Federal Court

The contest in this matter was over the use of the word “BAREFOOT” as a trade mark or as part of a trade mark, associated with alcoholic beverages.

E & J Gallo Winery (“Gallo”) was the registered owner in Australia of trade mark BAREFOOT for wines in Class 33.

Lion Nathan Australia Pty Limited (“Lion Nathan”) was using the trade mark BAREFOOT RADLER for beers in Australia.

Lion Nathan claimed that the trade mark BAREFOOT had not been used in Australia by Gallo and applied for the removal of the mark from the Register.

Gallo contested this claim and said that the use made by Lion Nathan of the trade mark BAREFOOT RADLER infringed its trade mark BAREFOOT.

Lion Nathan contested this.

On the issue of the use of the mark BAREFOOT by Gallo in Australia, the primary Judge found that although there had been some use of the trade mark in Australia because an Australian retailer had put on the Australian market a few bottles of BAREFOOT wines that it had previously purchased from a German wholesaler, this did not constitute use of the mark BAREFOOT by Gallo in Australia because Gallo had had no knowledge and no input in the import of its wine into Australia. Accordingly, the Federal Court ordered the removal of the BAREFOOT trade mark registration.

On the issue of infringement, the Federal Court found that Lion Nathan had not infringed Gallo’s trade mark. Although the primary judge acknowledged that trade marks BAREFOOT and BAREFOOT RADLER and device are deceptively similar, he found that Lion Nathan’s goods (i.e. beers), were not of the same description as the goods specified in Gallo’s registration ( i.e. wines).

Full Federal Court

The Full Federal Court dismissed Gallo’s appeal on the non-use issue and found that the primary Judge had not erred in deciding that there had been no use of the trade mark BAREFOOT by Gallo in Australia, under the provision of Section 92 of the Trade Marks Act for the reasons given by the primary judge.

However, the Full Federal Court allowed Gallo’s appeal on the infringement issue and reached the conclusion that Lion Nathan had infringed Gallo’s trade mark registration by using its trade mark BAREFOOT RADLER with respect to beers in Australia for the following reasons:

1. The trade marks BAREFOOT and BAREFOOT RADLER are deceptively similar
2. The goods (beer and wine) are of a similar description:
   1. beer and wine are both alcoholic beverages, generally distributed by the same major wholesale distributors,
   2. producers of alcoholic beverages are no longer confined to the production of beer or wine, and large producers of alcoholic beverages often produce both,
   3. wine and beer are frequently distributed by the same retailers.

The Full Federal Court considered of less significance the consideration that had led the primary Judge to reach the opposite conclusion and which were:

1. ‘the difference in the manner of manufacturing beer and wine’: the Full Federal Court held that “while this clearly establishes that they are not the same goods, it is unlikely that this difference would be significant to the consuming public.”
2. ‘the specific manner of sale in restaurants and in retail outlets’: The Full Federal Court found that the fact that wine might be sold in a slightly different way to beer “would not be a difference of significance to the consuming public.”
3. ‘the manner in which beer is consumed’: The Full Federal Court held that the fact that beer might be drunken for its “refreshing qualities” and that wine was consumed in a more “sipping fashion”, was not a relevant consideration.

If you have any queries, please do not hesitate to contact Florence McFarlane at florence.mcfarlane@ekmpatent.com.