In the latest round of the worldwide war between Wild Turkey bourbon and Wild Geese Irish whisky, Perram J has reluctantly found that actual control of the licensee is not necessary and potential control will suffice for authorised use under the Trade Marks Act 1995.
Mr Sullivan QC, a barrister in South Australia, has a winery there under the name Wild Geese Wines. When he sought to register it as a trade mark, he discovered the war between Wild Turkey and Wild Geese Irish whisky. Deciding discretion was the better part of valor, in 2007 he sold his trade mark rights to Wild Turkey bourbon and received a perpetual, exclusive licence back for the princely sum of $1.00 plus he agreed to a number of quality control provisions:
- his wine had to be of sufficient quality to obtain continuing export approval from the Australian Wine and Brandy Corporation;
- on request from the licensor, he had to supply up to 3 bottles of his wine to the licensor each year and, if the licensor required, supply 4 bottles to the Australian Wine and Brandy Corporation for testing;
- if his wines did not meet the Australian Wine and Brandy Corporation’s requirements, the licensor could terminate the licence;
- he was not allowed to use the trade mark outside Australia and he could use the trade mark only on Australian wine;
- as is typcial, he was not allowed to use the trade mark in some altered or abbreviated form or in any scandalous fashion;
- he also had to maintain insurance; and
- he was not allowed to represent in any way that he was a licensee of Wild Turkey.
The main point of interest about these provisions is that Wild Turkey did not actually seek to exercise any of them until April 2011, that is, four years down the track. By this time, however, Lodestar Anhalt had filed its non-use action and so Wild Turkey had to show it had used its Wild Geese Wines trade mark as a trade mark in the period September 2007 to September 2010. Its only way to do so was in reliance on Mr Sullivan’s use as an authorised user.
The Wine and Brandy Corporation conditions are interesting for at least 2 reasons. The first was that Mr Sullivan proposed them so that he was not at the mercy of the licensor’s potentially subjective whim about whether or not his wine was of an acceptable quality. Secondly, while Mr Sullivan had no idea what standard was required for export approval, apparently over 99% of wine submitted to the Australian Wine and Brandy Corporation qualified for export approval.
Perram J had no trouble finding that Wild Turkey had not exercised actual control over Mr Sullivan’s use of the Wild Geese Wines trade mark. The question was whether the potential for such control was enough.
First, Perram J considered that a trade mark licence under the 1955 Act would be valid only if control was actually exercised over the licensee.
Secondly, his Honour considered that what needed to be shown under the 1955 Act was a connection in the course of trade. This was different to what was required under s 17 of the 1995 Act and the requirements for authorised use under s 7 and s 8.
Left to his own devices, Perram J considered that the requirements for authorised use still required that control actually be exercised over the licensee. However, his Honour considered he was bound by the Full Court’s decision in Yau Entertainment to find that the potential to exercise control was sufficent. As Wild Turkey had that potential through the terms of the licence agreement, Mr Sullivan’s use qualified as authorised use and so his sales under the trade mark in the relevant period, while small, were sufficient to defeat the non-use action.
If his Honour had found that potential control had not been sufficient, he would not have exercised a discretion against removal.
Skyy Spirits LLC v Lodestar Anstalt  FCA 509
- For this round of the dispute owned by Skyy Spirits, part of the Campari group. Previously, the relevant entity had been Austin Nichols. ?
- Still held by Lodestar Anhalt, a Lichtenstein corporation. More wild geese. ?
- Authorised use counts as use by the trade mark owner: s 7(3). ?
- One can imagine that the impending removal action may have been the trigger for Wild Turkey’s “sudden” interest in exercising control. Things are perhaps not so clear as that: in fact, from 2007 to 2010, Mr Sullivan was only offering for sale a merlot he had bottled in 2004. It was not until 2010 that he bottled a pinot noir, which did not go on the market until later in 2011. The reported reasons do not indicate whether anyone on the Wild Turkey side ever tasted the merlot as part of the “licensing” process although, as Wild Turkey had the onus to rebut the non-use allegation, one might expect it would have to have led evidence to establish that – if it wished to rely on it. ?
- On one view, paragraph 42 of the High Court’s Gallo decision tells us that the definition of “use as a trade mark” provided by s 17 of the 1995 Act means the same thing as the definition in s 6(1) of the 1955 Act, notwithstanding that s 17 no longer refers to “a connexion in the course of trade”. ?