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Trademark Lawyer Sydney – Full Federal Court Appeal – Urban Ale v Urban Pale

Urban Alley Brewery Pty Ltd v La Sirene Pty Ltd [2020] FCAFC 186 (4 November 2020)

Urban Alley was unsuccessful in its appeal from the judgement of O’Bryan J cancelling its URBAN ALE trademark registration and rejecting its claims for trade mark infringement arising from La Sirene’s use of URBAN PALE for beer.

The judgment of O’Bryan J is reported at https://www.selfmark.com.au/trademark-lawyer-sydney-federal-court-urban-ale-v-urban-pale/

Background

Urban Alley produces and sells craft beer products. Its business was originally conducted by Collins Street Brewing Co. Pty Ltd. Its beer was initially produced by a contract brewer and offered for sale under the Once Bitter Urban Ale label shown below from May 2016.

The accompanying press releases and other business documents used the words Urban Ale in a manner which described the style or flavor of the beer.

By around mid 2017 a decision was made to drop use of Once Bitter and from November 2017 coasters were produced which featured the Urban Ale mark (without Once Bitter).

The business of Collins Street Brewing Co. Pty Ltd was sold to Laneway Brewery Pty Ltd on 21 December 2017 which changed its name to Urban Alley Brewery Pty Ltd on 30 April 2018. The sale included a transfer of all trade mark rights and goodwill.

From May 2018, Urban Alley started selling a new craft beer under the URBAN ALE label shown below

From September 2018, Urban Alley commenced producing and selling its own beer at its microbrewery and pub (which it called its “brewpub”). It continues to distribute its beer through other independent retail outlets.

Sometime after December 2018 and by at least June 2019, Urban Alley changed the label of its Urban Ale product to that shown below:

The sales revenues and marketing expenditure for the Once Bitter and Urban Ale products were modest.

La Sirene also produces and sells craft beers in Melbourne. From around December 2015 it described its business as an Urban Farmhouse as it produced Farmhouse style beers in an urban location in Melbourne. In October 2016 it started selling a pale ale craft beer with a label shown below:

It registered this label as a trade mark for beer with effect from 26 October 2018. It also obtained trademark registration of the words FARMHOUSE STYLE URBAN PALE BY LA SIRENE for beer with effect from 24 October 2018. Both registrations carried s44(3)(b) endorsements.

Urban Alley also sought cancellation of these marks on grounds that they were wrongly registered.

The evidence established that the word “urban” has been used in connection with breweries and beer products for a considerable period of time, both in Australia and in other countries. A number of brewers and beer suppliers have chosen to use the word “urban” in the name of their beer products. The usage is not confined to craft beer producers.

There was no evidence of any actual confusion between Urban Alley’s URBAN ALE product and La Sirene’s URBAN PALE product.

Primary judge

O’Bryan J found the URBAN ALE trade mark registration was invalid on two grounds, namely under s41 for lack of distinctiveness and under s44 for deceptive similarity with an earlier registration for Urban Brewing Company.

By way of obiter, his Honour considered that, even if the URBAN ALE mark was validly registered, there was no infringement because PALE ALE was used as a product name and not as a trade mark, and La Sirene could utilise the s122(1)(b) defence to infringement because URBAN PALE was being used in good faith to indicate a characteristic of its beer product. La Sirene could also utilise the s122(1)(e) defence arising from use of its registered label mark after 26 October 2018.

O’Bryan J rejected Urban Alley’s claims under the ACL and passing off  given the descriptive nature of the words “Urban Ale”, the limited reputation acquired by Urban Alley as at October 2016, the differing packaging and labelling, and the presence of “by La Sirene” .

His Honour also rejected Urban Alley’s claims for cancellation of La Sirene’s trademark registrations.

Appeal

Middleton, Yates and Lee JJ dismissed all grounds of appeal raised by Urban Alley. The Full Court considered there was no error by the primary judge in finding that the URBAN ALE mark was invalidly registered. This finding necessarily impacted upon Urban Alley’s other grounds of appeal.

On inherent distinctiveness of “urban ale”, it was argued that the primary judge failed to appreciate the distinction between use of “urban” for breweries as opposed to its use for beer. However, the Full Court disagreed and found no error. The evidence relied upon included articles about craft beers brewed in urban breweries such that, as a matter of substance, the word “urban” attached not only to the brewery but also to the beer produced from the brewery. The primary judge’s findings as to the descriptive and laudatory meaning of the word “urban” in relation to beer were based on the facts in evidence. The word “urban” functioned descriptively to identify the beer as a craft beer brewed in an inner-city location and this description also gave rise to “urban ale” being laudatory in the sense of indicating a beer which is cool, trendy or fashionable. It was also argued that “urban ale’ di not have ordinary significance in terms of the style of flavour of beer and reference was made to the Note appearing after s41(4). However, their Honours observed that this Note was merely facilitative and not an exhaustive statement. In any event, while style and flavour are among the characteristics of a beer, its characteristics can also include being a craft beer brewed in an inner city location.

Hence the Full Court agreed with the primary judge that Urban Alley’s URBAN ALE mark was invalidly registered. As a consequence, infringement could not be established and La Sirene’s defences to infringement did not need to be considered.

On deceptive similarity of the URBAN ALE mark with the earlier Urban Brewing Company registered mark, it was argued that the primary judge erred in finding deceptive similarity after having found that the words “brewing company” and “ale” convey different things, namely the making of beer and the beer itself, and so the respective marks were not substantially identical. However, the Full Court noted that the finding of these words conveying different things when compared side-by-side was not of significance when the comparison of the respective marks  is based on imperfect recollection. There remained a clear association in meaning between “brewing company” and “ale” which, when coupled with use of the common element “urban”, meant it was open for the primary judge to reach a conclusion of deceptive similarity and so there was no error.

This was a further ground for invalidating the URBAN ALE registration. Again, infringement could not be established and La Sirene’s defences to infringement did not need to be considered.

The Full Court went on to discuss the ground of appeal based on the primary judge having erred in finding that La Sirene’s use of “urban pale” was not trade mark use, but noted this was an academic exercise with no practical outcome in light of the finding that the URBAN ALE mark was invalidly registered. It was argued that it was inconsistent for the primary judge to have found that “urban pale” was overwhelmingly descriptive of a type of craft beer brewed in an inner city location, while accepting that “urban ale” did not convey any significance in terms of style or flavour characteristics of beer. However, the Full Court found no inconsistency. Their Honours speculated that it is entirely possible, indeed likely that, but for the finding of the URBAN ALE registered mark’s lack of inherent adaptation to distinguish because of the ordinary signification of the word “urban”, the primary judge would have come to a different conclusion on trade mark use in relation to La Sirene’s use of “Urban Pale” on its label, particularly given its relative prominence. Nonetheless, given the findings against Urban Alley’s other grounds of appeal discussed above, the Full Court necessarily dismissed this ground of appeal as well.

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