Lindgren J has ordered that the owners of the WILD TURKEY trade mark (which those of you who drink bourbon may be familiar with) provide security for costs before they can pursue their Federal Court application to have WILD GEESE removed from the Register of Trade Marks.
Lindgren J accepted that the owners, members of the international Pernod Ricard or Davide Campari groups, would have sufficient funds to satisfy an order of costs if they were unsuccessful. However, the purpose of s 56 of the Federal Court of Australia Act was to ensure that there was a fund available within Australia to satisfy the costs order.
His Honour accepted that there were procedures available to enforce money judgments against the owners in their home base(s) eg New York, but those procedures placed an additional burden on a party seeking satisfaction of a costs order over and above the difficulties a party litigating against an Australian based entity would incur.
Lindgren J then rejected the owners’ argument that their registered trade marks in Australia were sufficiently liquid assets within the jurisdiction. They were indeed assets, but they were not “sufficiently liquid”.
44 With respect, the applicants’ submissions fail to grapple with the critical question whether the bare trade marks would be readily convertible into cash by sale to satisfy an adverse order for costs.
45 The evidence to which the applicants refer is not evidence of a sale of the trade marks as items of property distinct from a sale of the underlying business.
46 Considerable difficulty might be experienced in realising the trade marks if Lodestar ever had to take that course. The underlying business would remain that of Rare Breed. A prospective buyer of the trade marks would know that Rare Breed would remain a competitor in the Australian market, albeit under a mark or name dissimilar to the trade marks.
47 Moreover, the only prospective buyers would be sizeable corporations that were in the same line of business in Australia or wished to embark upon such a line of business in Australia. If they already traded under a trade mark or business name, they might not be prepared to abandon it in order to buy and use Rare Breed’s trade marks. Would they be interested to acquire those trade marks in addition?
48 It may be that a receiver would eventually be able to sell the trade marks but the course of doing so would or might well be fraught with considerable difficulty and delay.
With respect, the applicants’ submissions fail to grapple with the critical question whether the bare trade marks would be readily convertible into cash by sale to satisfy an adverse order for costs.
The evidence to which the applicants refer is not evidence of a sale of the trade marks as items of property distinct from a sale of the underlying business.
Considerable difficulty might be experienced in realising the trade marks if Lodestar ever had to take that course. The underlying business would remain that of Rare Breed. A prospective buyer of the trade marks would know that Rare Breed would remain a competitor in the Australian market, albeit under a mark or name dissimilar to the trade marks.
Moreover, the only prospective buyers would be sizeable corporations that were in the same line of business in Australia or wished to embark upon such a line of business in Australia. If they already traded under a trade mark or business name, they might not be prepared to abandon it in order to buy and use Rare Breed’s trade marks. Would they be interested to acquire those trade marks in addition?
It may be that a receiver would eventually be able to sell the trade marks but the course of doing so would or might well be fraught with considerable difficulty and delay.
Similarly, his Honour rejected the Australian distribution rights for Wild Turkey.
Austin, Nichols & Co Inc v Lodestar Anstalt [2009] FCA 1228
Lid dip POF
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