Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd  FCA 820 (21 July 2016)
Unsuccessful action by Stone & Wood alleging trademark infringement, misleading or deceptive conduct and passing off.
Stone & Wood operate breweries in the Byron Bay and Murwillumbah areas of New South Wales. Their first beer was launched in 2008 and known as ‘Draught Ale’. This was re-named in November 2010 as “Pacific Ale’. This is one of the four main craft beer products produced by Stone & Wood, but is their best selling product, accounting for some 80-85% of its total sales. Their craft beer products are marketed and sold mostly across the eastern seaboard of Australia. Stone & Wood also own the trade mark shown below registered from 18 November 2010 for beer in class 32.
Intellectual Property Development Corporation is an intellectual property holding company related to Elixir Signature Pty Ltd (Elixir) which operates a brewery in Brunswick, Victoria and commenced selling beer in May 2010. One of its brands is Thunder Road and this beer is sold in both ‘on premise’ and ‘off premise’ trade channels in Victoria, New South Wales, Western Australia and Tasmania. In or about January 2015, it launched a beer named ‘Pacific Ale’ under the Thunder Road brand. Following receipt of letters of demand from Stone & Wood, it changed the name of this beer from ‘Pacific Ale’ to ‘Pacific’.
Images of bottles and packaging of Stone & Wood Pacific Ale and Thunder Road Pacific Ale/Pacific are shown below:
The allegations of misleading or deceptive conduct under the Australian Consumer Law and passing off under common law were not made out. Moshinsky J concluded the labels and packaging of the Thunder Road products look very different to the labels and packaging of the Stone & Wood Pacific Ale. The dominant feature of the Stone & Wood Pacific Ale is the ‘Stone & Wood’ brand name, while the dominant feature of the Thunder Road products is the word ‘Pacific’. The colours used in the labels and packaging are quite different. All in all, the overall ‘look and feel’ of the Stone & Wood Pacific Ale is very different from the Thunder Road Pacific Ale / Thunder Road Pacific. The adoption of the name ‘Pacific Ale’ or ‘Pacific’ does not convey an association or connection between the Thunder Road products, on the one hand, and Stone & Wood or Stone & Wood Pacific Ale, on the other.
His Honour commented that “it is important to note the dominance of the Stone & Wood branding in the labelling and packaging of the Stone & Wood Pacific Ale. This applies to the marketing of the Stone & Wood Pacific Ale as well. As has been noted, it is the dominant feature of the label on the bottle of the Stone & Wood Pacific Ale and the decal for that product. It is also to be noted that 80 to 85 per cent of Stone & Wood’s sales are of the Stone & Wood Pacific Ale. In these circumstances, there is reason to think that some or many consumers will recognise or identify the name ‘Stone & Wood’ or the composite expression ‘Stone& Wood Pacific Ale’ rather than the words ‘Pacific Ale’ on their own. This makes it less likely that the words ‘Pacific Ale’ on their own would distinguish Stone& Wood’s product from the products of others. Moreover, it makes it less likely that consumers would think or assume there to be an association or connection with Stone & Wood or its product in the absence of the brand name ‘Stone & Wood’… It is also relevant to take into account the impact of the Thunder Road branding on the Thunder Road Pacific Ale and the Thunder Road Pacific. While it is true that the name ‘Pacific Ale’ or ‘Pacific’ is the dominant feature on the bottle labels, the brand ‘Thunder Road’ is not an insignificant feature. The bright green label near the top of the bottle has the words ‘Thunder Road’ on it, as does the bright green bottle cap. The words ‘Thunder Road’ are also clearly presented on the decal. The branding of the products in this way makes it difficult to sustain the proposition that the respondents have represented that their product has an association or connection with Stone & Wood or its product.”
The trade mark infringement claim also failed because his Honour concluded the words ‘Pacific Ale’ and ‘Pacific’, used by the respondents in relation to beer, are not deceptively similar to Stone & Wood’s registered trade mark. His Honour made the assumption, but without deciding, that the words Pacific Ale and Pacific were being used as trade marks by the respondents. However, the dominant feature of the registered trade mark is the name Stone & Wood and the words ‘Pacific Ale’ could not be characterised as an essential feature.
Significantly, Moshinsky J upheld the Elixir’s cross claim that Stone & Wood’s threats of legal proceedings based on trademark infringement were groundless. Their initial demand letter included an allegation of trademark infringement, but they did not begin and pursue the infringement action with due diligence. The claim for infringement was not included in the originating application and was introduced by amendment only after the respondents’ cross claim was filed. His Honour commented that, but for the cross claim, it is doubtful whether the trademark infringement claim would have been brought at all.