The Full Court upheld the trial judge’s conclusion that the word “yellow” lacked any capacity to distinguish print or online directories under (the old version of) s 41. However, the Full Court accepted that the word “yellow” had become sufficiently distinctive of Telstra by reason of use and promotion after the date of the application that it would have been registrable if it had had some inherent capacity to distinguish.
Following the High Court’s ruling in “Oro/Cinque Stelle“, the Full Court agreed with the trial judge that the word “yellow” signifies the colour yellow and the evidence showed that the colour yellow signified print and online directories. Consequently, the word itself was descriptive. At , in considering the ordinary signification of the word, the Full Court said:
We would say at the outset that it was appropriate for Telstra to proceed on the basis that capacity to distinguish could not be decided by reference to inherent adaption alone even if the Court accepted all of its arguments. The word yellow describes a colour and, even without evidence, it would be appropriate to infer that at least some other traders might wish to use that colour. Furthermore, there was at the very least evidence in this case of not infrequent use of the colour yellow in connection with print and online directories.
The Full Court then considered that the evidence of use by other traders in print and online directories confirmed that consumers did in fact consider the word “yellow” descriptive of such directories. Like the trial judge, the Full Court took into account the usage of traders overseas as well as within Australia, although it may have been to support the good faith of the local traders’ use.
Survey and acquired distinctiveness – s 41(5)
If the word “yellow” had had some capacity to distinguish print and online directories, the Full Court would have allowed Telstra’s appeal that it had become sufficiently distinctive under s 41(5) by use after application. A 2008 survey (not the 2007 survey relied on by the primary judge) showed that after several years of use including millions of dollars of expenditure on advertising, at least 12% of the survey respondents identified (associated?) the word “yellow” with Telstra’s directory unprompted. A further 4%, making 16% in total, had similar unprompted association.
The Full Court distinguished British Sugar and held that would be sufficient. (The report does not disclose the terms of the question that elicited those responses.) Arguably, makes a nice contrast to the Oro/Cinque Stelle case.
What about .com.au
In dismissing a second, cross-appeal in which yellowbook.com.au was found to be deceptively similar to Telstra’s Yellow Pages trade mark, the Full Court treated the domain name “accoutrement” .com.au as largely insignificant for the purposes of the deceptive similarity analysis.
The interesting point here is that the Full Court considered this may not always be the case. It was appropriate to disregard the element here in the context where the services were online directories and consumers were shown largely to disregard such elements.
The question of onus
The Full Court also seems to have resolved the ongoing disputes about the onus of proof. The Full Court held that the opponent has the onus of proving that a proposed trade mark has no inherent capacity to distinguish. It further held that that onus was on the balance of probabilities, not the practically certain standard which some courts at first instance have applied.
In a further round of the Food Channel / Network war, Greenwood J has accepted that the inclusion of the trade mark on programming broadcast by ABC Asia Pacific is use of the trade mark in Australia.
ABC Asia Pacific is primarily intended to transmit ABC programming into countries in the Asia Pacific region. Depending on the satellite, however, Australia or large parts of mainland Australia fell within the transmission footprint and not on the periphery. As the ABC Asia Pacific transmissions were free-to-air, the transmissions could be received and viewed by members of the Australian public who installed appropriate satellite dishes and there was evidence before his Honour of businesses operating in Australia which sold and installed the necessary equipment.
As a result, his Honour found that the trade mark was used in relation to the television production services in class 41 for which it was registered. However, the trade mark was not used in relation to the class 38 services of television broadcasting – ABC Asia Pacific was the broadcaster.
Food Channel Network Pty Ltd v Television Food Network G.P.  FCA 703
If there were any doubt about it, the Full Federal Court has confirmed that the person opposing the registration of a trade mark bears the onus of proving a successful ground of opposition on appeal to the Court. (As a side note, I think this is the new Chief Justice’s first IP decision, at least since joining this Court.)
The Food Channel Pty Ltd (Channel) had applied to register TM 967804:
in class 16 for printed matter. During the application process, it assigned the trade mark application to The Food Channel Network Pty Ltd (Network). Both companies were related entities as a Mr Lawrence was the sole director and shareholder of both.
The registration of TM 967804 was opposed by Television Food Network GP (Television), a US entity. Television is the owner of TM 881666 for TELEVISION FOOD NETWORK and TM 881667, both registered in classes 9, 38, 41 and 42 and TM938228 for services in class 41. TM 881667 and 938228 were for devices:
The Registrar rejected Television’s opposition. The trial judge, however, upheld the appeal finding that Network bore the onus of establishing it was the owner of the trade mark, had used it in good faith and that it was confusingly similar to Television’s trade marks.
The onus point
The Full Court (Keane CJ, Stone and Jagot JJ) dealt with this point quite quickly as inconsistent with the the presumption of registrability established by s 33, long standing principle and the legislative scheme.
The Full Court rejected Television’s argument that the difficulties facing an opponent attempting to establish lack of ownership (s 58) or lack of intention to use (s 59) meant that an evidential onus should shift to the applicant. While the Court appeared to accept that an evidential onus might arise under s 59 where the opponent raises a prima facie case of lack of intention, it considered the difficulties that could arise in the context of s 59 did not attend s 58 which was usually directed to showing that someone else, often the opponent, had used the trade mark first.
The not the owner point
The difficulty which Television seized on here was the assignment from Channel to Network and some evidence in chief from Mr Lawrence:
1. I am the Founder and Managing Director of Food Channel Network Pty Ltd (The Food Channel) and am authorized to make this affidavit. [Network] is based in Queensland Australia.
5. In 1996, and with the advent of pay television being developed in Australia, The Food Channel trademark was created and a logo device attached to its name. In 1997 after filing the required documentation with our then solicitors MALLESON STEPHEN JACQUES which was then AIPO – (Australian Industrial Property Organisation) and after their search of the database that was conducted, it was concluded that there was no applications [sic] that had been filed or applications that were pending for the trademark – The Food Channel. The Food Channel trademark proceeded to registration without any opposition. The Food Channel is a REGISTERED AUSTRALIAN TRADEMARK – NUMBER 733265 – The Food Channel trademark has been registered in Australia since 1997 and is registered until 2017 when it again comes up for renewal. Annexed hereto and marked annexure H. ….
Television’s argument was that Mr Lawrence defined “The Food Channel” as Network in his affidavit and deposed that it was The Food Channel (i.e., Network) which created and used the trade mark.
The trial judge had found that, the onus being on Network and it not being clear from Mr Lawrence’s evidence who created the trade mark, the ground of opposition was successfully made out.
The Full Court noted that Mr Lawrence had drawn his affidavit himself and commented:
61 The courts should be cautious to allow the legal fiction of the corporate veil to defeat registration in a case where one of a group of companies, all controlled by the same directing mind and will, used the mark prior to the other. This is particularly so where, as here, the conclusion that the words The Food Channel in Mr Lawrence’s affidavit meant Network and only Network depends on a single opening definition in an affidavit drafted by a layperson, in a case where Network was the sole respondent attempting to answer a notified ground of opposition that Network was not the owner of the mark, and where any distinctions Mr Lawrence drew between his companies were few, random and confused. In this case, this evidence does not establish that Network was the prior owner through use. It may establish that Network used the mark at a time before registration, but it doesn’t negate the possibility that Channel was, in fact, also a user (and indeed the first user) of the mark before registration. Further, there is no evidence as to how the mark was used by Network. Use needs to be in relation to the goods or services claimed; on the only evidence before the Court, there was “no set formula” with regard to use. This tends against a conclusion that any mark was used by Mr Lawrence, Network or Channel to distinguish one company’s goods from another. Finally, the requirement of prior user as a trademark is that it is used to distinguish one’s goods from another’s: if Network did use the mark, there does not seem to be evidence of an attempt to use it in such a manner as to distinguish its goods from those of Channel. And of course, it is inherently unlikely that Mr Lawrence, as the directing mind and will of both companies, would have had any such an intention.
62 To treat Mr Lawrence’s statement that Network ‘created’ and ‘used’ the mark as exclusive of permitted use by Channel is counter-intuitive, given her Honour’s observation at  that the “evidence …is that Mr Lawrence tended to confuse his own business interests with those of his companies, and appeared to randomly use companies and trade marks depending on the circumstances…”.
This with respect pragmatic approach may be constrasted with the very strict approach taken by a rather different Full Court in Crazy Ron at  – .
As the Full Court noted, further, to the extent there was any confusion about ownership, it fell to Television to clarify the position since the onus lay on it as the opponent.
(It would appear from the Register that TM 733265 was in fact registered by Channel and subsequently assigned to Network.)
The trial judge’s finding that Network had no intention to use the trade mark when it was filed was tied up with the confusion in Mr Lawrence’s evidence about who created the trade mark.
Mr Lawrence did give evidence that “The Food Channel” had provided recipes bearing the trade mark to butchers for distribution by the butchers to their customers. It was not clear whether or not the recipes were sold to the butchers or there was some other quid pro quo. However, the Full Court accepted that this uncontested evidence demonstrated that there had in fact been use of the trade mark in the course of trade.
Trade mark comparison
Finally, the Full Court found that Network’s trade mark was not deceptively similar to Television’s trade marks when viewed as a whole – they neither looked nor sounded similar – and having regard to the differences in the goods and services specified.
Food Channel Network Pty Ltd v Television Food Network GP  FCAFC 58 (Keane CJ, Stone and Jagot JJ)
E & J Gallo owns TM No 787765, BAREFOOT, for “wines” in class 33. It had acquired ownership of the trade mark by assignment in 2005 from a Mr Houlihan.
Lion Nathan introduced a new beer into Australia under the trade mark BAREFOOT RADLER (with a barefoot device):
The Full Federal Court found that Lion’s beer infringed Gallo’s trade mark as goods of the same description, but ordered the trade mark removed because it had not been used for the 3 year statutory period prescribed by s 92(4) – in this case between 7 May 2004 and 7 May 2007.
Neither Gallo nor Mr Houlihan had ever sold, or specifically authorised the sale of, any wine under the BAREFOOT trade mark in Australia. If that were all, it would have been an end to the matter. However, there was a complication. Wine made by Mr Houlihan’s company, Barefoot Cellars, in California had actually found its way into Australia and been offered for sale.
Barefoot Cellars had sold a shipment of 60 cases of its wine to a distributor in Germany in 2001. Some of the consignment to the German distributor was imported into Australia by a liquor wholesaler, Beach Avenue. In the 3 years relevant to the non-use claim, Beach Avenue imported 144 bottles of the wine; at least 41 of which were actually sold during the period (and a further 18 were given away).
Lion Nathan argued, and the Full Federal Court had accepted, that there had been no use of the trade mark as a trade mark because neither of the trade mark owners had intended to project their goods into the Australian market.
There was use in the course of trade
The High Court rejected this argument.
51 The capacity of a trade mark to distinguish a registered owner’s goods from those of others, as required by s 17, does not depend on whether the owner knowingly projects the goods into the Australian market. It depends on the goods being in the course of trade in Australia. Each occasion of trade in Australia, whilst goods sold under the trade mark remain in the course of trade, is a use for the purposes of the Trade Marks Act. A registered owner who has registered a trade mark under the provisions of the Trade Marks Act can be taken, in general terms, to have an intention to use that trade mark on goods in Australia. It is a commonplace of contemporary international trade that prior to consumption goods may be in the course of trade across national boundaries.
52 An overseas manufacturer who has registered a trade mark in Australia and who himself (or through an authorised user) places the trade mark on goods which are then sold to a trader overseas can be said to be a user of the trade mark when those same goods, to which the trade mark is affixed, are in the course of trade, that is, are offered for sale and sold in Australia. This is because the trade mark remains the trade mark of the registered owner (through an authorised user if there is one) whilst the goods are in the course of trade before they are bought for consumption. As affirmed by Gummow J in Wingate Marketing Pty Ltd v Levi Strauss & Co,
“whilst a trade mark remains on goods, it functions as an indicator of the person who attached or authorised the initial use of the mark”.
During the trading period, the trade mark functions as an indicator of the origin of the goods, irrespective of the location of the first sale.
That is, what is required is that (1) there be some sign which functions as a trade mark – a badge of origin – and (2) the sign be used in the course of trade in Australia.
The sale in England by the English manufacturer to retailers for resale in Estex was sufficient for this, but awareness that the retail markets in Australia was the intended destination was not necessary.
As the High Court’s references to Champagne Heidsieck v Buxton (a case, if not exactly dear to my heart, certainly engraved on it!) show, any other conclusion would be inconsistent with the cases establishing that parallel imports do not infringe trade marks and which have been enshrined in s 123.
In context, therefore, the last sentence of , noting that the goods had been sold to the German trader without any limitation on resale should not be determinative.
Was there enough use?
Lion’s first fall back position was to rely on the insubstantiality of the 144 bottles imported compared to the size of the market for wine in Australia. The High Court rejected this attack:
65 A commercial quantity of wine, some 144 bottles, was imported and offered for sale under the registered trade mark by Beach Avenue during the statutory period. Some 41 sales during that time were proven by reference to invoices and tax paid. There was no suggestion in the evidence that the offering for sale and selling either overseas or in Australia was for any purpose other than making profit and establishing goodwill in the registered trade mark. It was not contended that the use was fictitious or colourable. In all the circumstances the use was genuine and sufficient to establish use in good faith for the purposes of Lion Nathan’s application for removal.
That is, the High Court adopted a qualitative rather than quantitative approach. It is also worth noting the careful reservation that it was not called upon to decide whether or not a single use would suffice.
What trade mark was used?
Lion’s next attack argued that use of BAREFOOT with a representation of a bare footprint on the wine bottle label was not use of the trade mark as registered – BAREFOOT.
The High Court did not reject this argument on the grounds that there was use of BAREFOOT alone.
Rather, at  it distinguished the Colorado case (a case from which special leave was refused) on the grounds that the word COLORADO had no inherent capacity to distinguish because of its geographical significance and so the mountain peak device used with the word element was “not a mere descriptor but a distinguishing feature”. In this case, however, at  the device element was an addition which did not substantially affect the trade mark’s identity: consumers were likely to identify the mark by reference to the word, the device merely illustrated the word and, except in the case of honest concurrent use, the device alone would not be registrable in the face of the word mark.
An evidential issue about authorised use
Lion’s last attack, arguing that Barefoot Cellars was not an authorised user when it applied the trade mark to the wine, also failed. The potential problem for Gallo here was that neither Mr Houlihan nor anyone else involved in the production of the wine gave evidence about what quality control, if any, Mr Houlihan had exercised. There were 2 strands to this attack.
The first strand was to contend that some assertions of quality control recorded in a consultancy agreement were not in fact statements of fact. This failed as a matter of interpretation of the document. In a separate concurring judgment, Heydon J explained that the consultancy agreement constituted a “business record” and the statements were therefore admissible as an exception to the hearsay rule.
The second argument that there was no quality control by Mr Houlihan because he was only a joint principal in Barefoot Cellars and in addition a third person was the winemaker. This was not, however, sufficient to preclude the exercise of quality control by Mr Houlihan.
E. & J. Gallo Winery v Lion Nathan Australia Pty Limited  HCA 15 (19 May 2010)
Update: should have added links to report on Full Federal Court and first instance (here and here).
Some things the High Court didn’t deal with:
The Full Federal Court’s finding that, notwithstanding the order to remove the trade mark for non-use, Lion still had to pay damages for infringement until the judgment.
Whether or not Gallo’s negotiations with McWilliams Wines to introduce a BAREFOOT wine into Australia constituted use of the trade mark or warranted an exercise of discretion to leave the trade mark on the Register. The negotiations culminated in the grant of a licence to McWilliams and the sale of products under the trade mark in September 2007, some 4 months after the expiry of the relevant 3 year period.
Whether beer and wine are goods of the same description.
The first question, of course, did not arise as a result of the High Court’s principal ruling. The third question was part of the “evaluative findings” which did not raise general questions of public importance. See 
You’ll recall that SAG licensed its database software to RWWA. RWWA engaged KAZ to provide disaster recovery services and installed a copy of the software on KAZ’ off-site servers. Meckerracher J dismissed SAG’s claim that this was unlicensed and therefore infringement of its copyright. (link via my attempt to summarise here).
The Full Court has substantially dismissed the appeal, but found the judge was wrong to the extent his Honour considered s 47F of the Copyright Act 1968 would have provided a defence also.
On the question of licence construction, their Honours found that the proposed use fell within the terms of the licensed use “for … emergency restart purposes“:
34 The phrase “for … emergency restart purposes” is more ample than, for example, “in order to restart the System in an emergency”. A penumbra surrounds “emergency restart”. It is a natural reading of the composite phrase to include within its coverage testing whether the copied System will restart should an emergency occur.
35 If one were to regard the phrase “for … emergency restart purposes” as open to two constructions, SAG’s construction, in our view, results in a meaning that would be unreasonable or inconvenient. The purpose behind clause 12.3 is to protect RWWA from serious loss in an emergency, whether caused by a breakdown of its mainframe or some external event putting it out of action. It would be an unreasonable and inconvenient result if RWWA were to be unable to take sensible steps to make it more likely that the purpose behind clause 12.3 would be achieved, by testing the copied system in order to maximise the chance of the restart occurring in the event of an emergency arising.
36 Further, we agree with the primary judge’s observation quoted at  that SAG’s interpretation would make clause 12.3 a pointless exception to the other prohibitive or restrictive provisions of the agreement, and that such a construction would provide very little scope for achieving the purpose of clause 12.3 described above.
The expert evidence was also consistent with this.
While the Licence Agreement did (by clause 1.4) expressly prohibit the software being installed at any location other than the “designated location”, the clause had to be read in context and clause 12.3, as SAG acknowledged, did permit RWWA to use the software “for archival or emergency restart purposes”. Clause 1.2,which prohibited “use” on anything other than the designated hardware, similarly had to be read down.
If the terms of the licence had not been capable of construction to permit this (fairly typical) type of disaster recovery strategy, however, s 47F would not have protected RWWA. S 47F provides a limited defence for “security testing”. However:
55 What s 47F(1) permits is the reproduction of the original copy for the purpose of testing the security of that copy. The original copy is the copy RWWA is licensed to use. The permitted testing is of the security of that copy. The passages from the primary judge’s reasons quoted at  appear to us to be saying that the testing of the functionality of the DR Copy at the DR Site is the testing of the security of the original copy at Osborne Park. That, in our view, is not what s 47F(1) authorises. On the facts of this case, what it permits is the making of a copy of the installed copy at Osborne Park for the purpose of testing the security of the installed copy. As it seems to us, the primary judge’s construction of the provision enables the DR Copy at the DR Site to be tested so as to determine its efficacy should the installed copy at Osborne Park for some reason be no longer available.
and, given the unchallenged expert evidence on the issue:
68 For the above reasons we are unable to accept RWWA’s contention, which the primary judge appears to have adopted, that “testing … the security of the original copy” extends to what was done at the DR Site, namely testing of the DR Copy to ensure that the System would be capable of being restarted and operated without the loss of data. In our view, “testing … the security of the original copy” should be confined to testing the original to ascertain its security from unauthorised access or against electronic or other invasion.
The Court noted, but did not need to consider the correctness, of his Honour’s conclusion that s 47C would also have protected RWWA.
So, an appellate level illustration providing some confirmation of how strictly the the Courts will approach the gobbledygook enacted in the special computer program defences. Make sure you draft your software licences to provide the protection actually needed – especially if the software needs to be used in a “disaster recovery” situation.
Software AG (Australia) Pty Ltd v Racing & Wagering Western Australia  FCAFC 36 (Spender, Sundberg and Siopis JJ)
The Full Court has affirmed the trial judge’s finding that Gallo’s registration of the trade mark BAREFOOT for wine should be removed for non-use. However, the Full Court has overturned his Honour’s finding that Lion Nathan’s use of Barefoot Radler for beer did not infringe that registration (before it was removed). Consequently, the Full Court has found that Lion Nathan did infringe the registration up until the date the registration was removed from the Register.
Gallo acquired the trade mark by assignment. Neither it nor the assignor had ever consciously used it in Australia. However, some wine bearing the trade mark had made their way into Australia for resale via, presumably, a parallel importer. (More detailed summary of the facts from the decision at 1st instance here and here – the internal links are broken I’m afraid.)
On the question of whether or not Gallo (or its predecessor) had used the trade mark as a trade mark, the Full Court said:
34In our opinion, the conclusion of the primary judge was correct. The contention of Gallo that an owner of a registered trademark uses the mark in Australia simply because goods to which the owner (or an authorised user) has affixed the mark are traded in the ordinary course of trade in Australia should be rejected.
38 …. The essence of Gallo’s case in this matter is this is all that is necessary to establish use in Australia by the manufacturer or producer. However, that is not what the Full Court said. Projection by the manufacturer of goods bearing its mark into the course of trade in Australia was the other factor which, together with the display, sale or offering for sale, led to the conclusion that there had been use of the mark in Australia by the manufacturer and its owner. We think fairly plainly what the Full Court was saying was that for there to be use in Australia of the mark by the owner, the owner of the mark must have engaged in conduct of some type which the owner might reasonably contemplate would result in dealings with its goods marked with its mark in Australia while the goods were in the course of trade.
As a matter of interpretation, the Full Court concluded, contrary to Lion Nathan, that the trade mark could be expunged only from the date the Court made the order under s 101.
This was particularly significant because the Full Court, as noted above, found that Lion Nathan’s use infringed the trade mark while it was registered.
First, the Full Court rejected the trial judge’s finding that beer and wine were not goods of the same description:
72The primary judge accepted that there were a number of factors which supported the view that Lion Nathan’s beer and wine were goods at the same description. They were both alcoholic beverages and generally distributed by this same major wholesale distributors. The beer was intended to be an appealing alternative to wine and in developing the product, Lion Nathan deliberately set out to attract people who did not drink beer. Indeed it was developed with the deliberate objective of enticing consumers who previously drank wine but not beer. Producers of alcoholic beverages are no longer confined to the production of beer, as opposed to wine, and large producers of alcoholic beverages now produce a range of products and market themselves as doing so. Companies which were once brewers now market and distribute a range of products including beer, wine, spirits, cider and non-alcoholic drinks. Wine and beer are now frequently distributed by the same retailers. We agree that these matters point, and in our opinion point convincingly, to Lion Nathan’s beer and wine being goods of the same description.
73The considerations which led his Honour to reach the opposite conclusion are, in our opinion, of materially less significance. The first, which concerned the origin of the goods, focused on the manner of manufacture of beer on the one hand and wine on the other. While this clearly establishes that they are not the same goods, it is unlikely that this difference would be significant to the consuming public if, as his Honour found, large producers of alcoholic beverages produce a range of products. Additionally it is important to bear in mind that this issue is being considered in the more general context of whether consumers might see the goods as having the same trade origin: Southern Cross at 606. The same can be said of the next consideration relied on by his Honour, namely the specific manner of sale in restaurants on the one hand and retail outlets on the other. If large producers of alcoholic beverages are producing a range of products then the fact that the wine might be sold in a slightly different way would not be a difference of significance to the consuming public who may come to consider the trade origins of Lion Nathan’s beer. The next consideration was the manner in which beer is consumed, that is drunk for its refreshing qualities, and not, like wine, consumed in a “sipping fashion”. For our part, we doubt this is a relevant consideration. Nor do we think the last consideration, the detailed corporate structure of Lion Nathan, is of any real significance.
Then, the Full Court upheld the trial judge’s finding that Lion Nathan’s BAREFOOT RADLER trade mark was deceptively similar to Gallo’s trade mark.
Finally, the Full Court rejected Lion Nathan’s attempt to rely on the (rarely used) proviso to s 120(2)(b) which provides:
However, the person is not taken to have infringed the trade mark if the person establishes that using the sign as the person did is not likely to deceive or cause confusion.
The Full Court foreshadowed that this was a tough requirement to hurdle:
76 …. However, any conclusion about deceptive similarity would usually inform consideration of whether the actual use was likely to deceive or cause confusion. In a sense, an affirmative answer to the question of whether the alleged infringing mark was deceptively similar would be the starting point. If it was, then it would, in many instances, render it more likely (though not inevitable) that the actual use of the allegedly infringing mark was likely to deceive or cause confusion. Also relevant, in our opinion, would be the matters considered in determining whether the alleged infringer’s goods are of the same description as the goods in respect of which the registered mark is registered.
Lion Nathan had not satisfied this requirement here. The facts that the usage was on beer, the beer was packaged in six packs and in retail stores from the “beer” section did not help:
77 …. The use of the image of a bare foot with the words “BAREFOOT RADLER” would be more likely to reinforce the significance or prominence of the word “BAREFOOT”. The fact that the allegedly infringing mark was on beer packaged in the way described does not, in our opinion, tell against the likelihood that a person looking at beer packaged in this way would think that the beer originated from Gallo. If, in a retail liquor outlet, there was beer bearing the trade mark “BAREFOOT RADLER” where the word “RADLER” was the description of a type of beer and also wine with the trade mark “BAREFOOT” immediately followed by a description of the type of wine (by reference to grape type), then there is, in our opinion, little room to doubt that it is likely many would view the former as originating from the producer of the latter.
The matter will be remitted to the trial judge to deal with remedies. Wonder what the damages will be?
So, it would seem you should bring and conclude your non-use action before you launch the product. That will require a client with a very long term commitment to the brand!
E & J Gallo Winery v Lion Nathan Australia Pty Limited  FCAFC 27 (Moore, Edmonds and Gilmour JJ)
An Austrian company, Maselli, sells clothing under its brand WELLNESS. It has the trade mark registered for clothing in class 25 and also in classes 16 (for printed matter) and class 32 (for alcohol free drinks). It gave away bottles of a non-alcoholic drink bearing the WELLNESS brand, but never sold the drinks independently of the clothing.
On application by Silberquelle, a producer of alcohol free drinks, the ECJ has ruled that affixing the mark to goods, which are given away free of charge to purchasers of other goods, is not genuine use of the trade mark for the free goods in the EU.
That is, it should follow that Maselli’s mark will be revoked.
Here, of course, there has to be use as a trade mark and the use (as a trade mark) has to be in good faith see s. 92 and Gallo v Lion Nathan
As the IPKat asks, what happens to a newspaper’s trade mark where the newspaper is given away free?
Ever since the old Irish case about “Golden Pages” TM, where a classified directory was given away for free, but contained paid advertising, we have thought the trade mark was being used in the course of trade (or in more modern parlance, in good faith as a trade mark). Wonder if that’s still the case?
C-495/07Silberquelle GmbH v Maselli-Strickmode GmbH
So, you’re not a USA-based trade mark owner and you’ve got your “trademark” registered in the US through the Madrid system. That means you don’t have to worry about all those annoying requirements actually to use the trade mark there, doesn’t it?
Saunders & Silverstein lay out all the pitfalls that you are going to have to hurdle here.
A rare and interesting decision on the scope of (mainframe) computer software licences and s 47C (computer program back-ups) and s 47F (security testing) of the Copyright Act:
RWWA (which runs the West Australian TAB). SAG granted it a non-transferable, non-exclusive licence to run the ADABAS database management software on its mainframe computer. This was the software used for its its betting business.
In addition to installing the software on its mainframe computer, RWWA arranged with KAZ to use KAZ’ mainframe for a ‘warm’ disaster recovery site: RWWA stored a mirror-image disk copy on KAZ’s mainframe computer. Although a copy was stored on KAZ’s mainframe, it was not loaded into ‘memory’ except when being used in an actual disaster recovery situation or routine testing to ensure the back-up would work. Prior to this, RWWA had used back-up tapes stored off-site.
In a 268 paragraph decision, McKerracher J has held that RWWA did not breach of its licence by doing this and, in any event, was protected from copyright infringement by ss 47C and s 47F of the Copyright Act.
The main issues were whether or not RWWA’s off-site storage and testing of the back-up and/or the involvement of KAZ entitled SAG to claim additional licence or maintenance fees (up to several hundred thousand dollars per annum). In broad summary, SAG contended that
(1) storage and, in particular, the testing of the back-up was in breach of cl. 12.3 and required further maintenance fees or
(2) the involvement of KAZ was in breach of cl. 1.5 which prohibited ‘outsourcing’.
Cl. 1.5 provided:
1.5The Licensee shall not assign, sub-licence, sell, lease, encumber, charge or otherwise in any manner attempt to transfer this Licence or any of its rights or obligations hereunder. The Licensee may not allow any third party to operate the System(s) on its behalf as part of any outsourcing, facilities management, application service provision or similar type of arrangement.
Clause 12.3 provided
12.3Software AG hereby expressly authorises the Licensee to copy the System(s) (in object code only) and the Documentation for archival or emergency restart purposes PROVIDED THAT no more than (3) copies made by the Licensee of the then current system version shall exist at any time and all old versions shall be destroyed.
In rejecting SAG’s claims that cl. 12.3 did not protect RWWA, McKerracher J found:
186 Clause 12.3 is intended to be permissive. Objectively viewed, its purpose is to permit the licensee to reproduce the software to the extent that may be required for emergency restart purposes. To merely copy the distribution tapes or cartridges would be of limited practical use for that purpose. This is common ground amongst all experts. To construe cl 12.3 as being confined simply to copying tapes or cartridges of the unconfigured and uninstalled System would be a construction that is at least unreasonable and inconvenient but would also be unjust.
187 It is common ground that the System as supplied does include some source code. When the source code is converted to object code and is then linked to create load modules on installation of the System, the System as installed and configured then becomes a copy ‘in object code only’ and there is a copying of the System for emergency restart purposes.
203 As there is no technical meaning, the question is one of construction of the Licence Agreement. In my view the only sensible construction is that when the Licence Agreement refers to ‘use’ it means using the System within RWWA’s ordinary business or some other business, not for occasional testing for one DR Site. This must be so, in my view, if the DR Copy at the DR Site is authorised by cl 12.3 as I conclude that it is.
205 If the use by RWWA of the DR Site is authorised by cl 12.3, then the question as to whether or not the System is otherwise in use (for cl 1.1(d)), in my view, falls away. I consider that the use is so authorised.
Further, the copy was made for the purposes of emergency restart:
209 In a business which has an extremely high turnover of transactions and a substantial financial turnover, each day of delay is significant. In my view there is no scope for the argument that emergency restart simply means that the business has sustained a disaster or emergency which will require a restart at some leisurely pace in a week or so. In my opinion the whole concept of emergency restart means that as an essential part of a highly sophisticated business environment, the restart is required as quickly as reasonably possible.
Taking into account similar considerations, his Honor found that ss 47C and 47F would also operate to protect RWWA.
Nor was there any ‘outsourcing’ in breach of cl. 1.5:
249 Mr Fink who has had very extensive experience in the mainframe industry rejects the suggestion that the arrangement or contract between KAZ and RWWA is one which constitutes outsourcing in any sense. Rather, as a matter of practice and in accordance with the nature of the arrangement between KAZ and RWWA by its contractual documents, what KAZ provides to RWWA is an environment for the equipment on which the DR Copy will be loaded should an emergency occur. RWWA retains responsibility for the DR process. There is no evidentiary basis for suggesting that KAZ is in any way involved in operating the System. Without that evidence which, had it been available, may have been the closest there was to any ‘outsourcing’, none of the other suggested actions could constitute ‘outsourcing’ as it is used in the Licence Agreement.
Racing & Wagering Western Australia v Software AG (Australia) Pty Ltd  FCA 1332 (29 August 2008)