Trade Mark News & Information

Trademark Lawyers Australia – Federal Court – Wild Geese

Skyy Spirits LLC v Lodestar Anstalt [2015] FCA 509 (26 May 2015)

Wild Geese Wines LabelThis case will be met with a sigh of relief by licensors of registered trade marks, but it is apparent the concept of ‘authorised use’ under the Trade Marks Act 1995 is controversial.

Perram J allowed an appeal by Skyy Spirits overturning a decision by a delegate of the Registrar of Trade Marks directing registrations for the trade marks WILD GEESE WINES and WILD GEESE be removed from the Register on the ground of non use during the three year period ending on 27 August 2010. This decision is summarised here

This is part of a long running and ongoing dispute between entities involved with WILD TURKEY Bourbon and WILD GEESE Irish Whiskey.

By way of background, the relevant WILD GEESE WINES and WILD GEESE trade marks were originally filed on 26 July 2005 by the Australian company Wild Geese Wines Pty Ltd (which was not related to any of the overseas entities involved with WILD GEESE Irish Whiskey) and subsequently assigned to Austin Nichols & Co Inc and then to Rare Breed Distilling LLC which then merged with and into Skyy Spirits LLC. The ensuing registrations covered wine in class 33.

The first assignment in 2007 from Wild Geese Wines Pty Ltd was part of a transaction in which, in return for the assignment for the value of $1, Wild Geese Wines Pty Ltd was granted a royalty free, exclusive and perpetual licence to use the WILD GEESE WINES and WILD GEESE trade marks in Australia for wines.

There was no dispute that these registered trade marks had been used for wines sold in Australia by Wild Geese Wines Pty Ltd during the relevant three year period. The issue was whether this use was authorised by the registered owner of these trade marks.

Under s8 of the Trade Marks Act:

(1)  A person is an authorised user of a trade mark if the person uses the trade mark in relation to goods or services under the control of the owner of the trade mark.

(2)  The use of a trade mark by an authorised user of the trade mark is an authorised use of the trade mark to the extent only that the user uses the trade mark under the control of the owner of the trade mark.

(3)  If the owner of a trade mark exercises quality control over goods or services:

(a)  dealt with or provided in the course of trade by another person; and

(b)  in relation to which the trade mark is used;

the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.

(4)  If:

(a)  a person deals with or provides, in the course of trade, goods or services in relation to which a trade mark is used; and

(b)  the owner of the trade mark exercises financial control over the other person’s relevant trading activities;

the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.

(5)  Subsections (3) and (4) do not limit the meaning of the expression under the control of in subsections (1) and (2).

The licence agreement included certain quality control provisions including that the wine would be of sufficient quality to obtain export approval from the Australian Wine and Brandy Corporation and that, if requested, Wild Geese Wines Pty Ltd would provide the trade mark owner with samples for inspection.

However, Perram J reached the conclusion, on the evidence, that the licence agreement was that the trade mark owner exercised no actual control over the use of the trade marks by Wild Geese Wines Pty Ltd. The licence agreement was not intended to deliver anything but the appearance of control. The trade mark owner’s ability to control the quality of the wine sold in Australia was entirely theoretical and had no footing in reality.

Perram J then went on to construe s8 and the meaning of “control”. His Honour considered that, under ordinary principles of statutory construction, it was appropriate to have regard to extrinsic materials to consider the context of this provision. His Honour considered the change in language from the earlier 1955 Act, the authoritative High Court decision in Pioneer KK v Registrar of Trade Marks [1977] HCA 56 decided under the 1955 Act, Article 19(2) of the TRIPS Agreement and the second reading speech prior to enacting the current 1995 Act, and reached the view that control under s8 required more than theoretical control.

However, Perram J was bound to follow the earlier Full Federal Court decision in Yau’s Entertainment Pty Ltd v Asia Television Ltd FCAFC [2002] FCAFC 78; [2002] FCAFC 338 (28 March 2002) and was obliged to conclude that a mere theoretical possibility of contractual control is sufficient to constitute authorised use under s 8. Having reached that conclusion, his Honour noted “in my opinion, Yau is, with the greatest respect to the eminent judges who decided it and from whose views I would depart only most hesitantly, wrongly decided”. Clearly, Perram J considered that s8 requires a factual enquiry into the control exercised by the registered trade mark owner.

Despite this personal view, Perram J was constrained by the Yau case to conclude that the use of the WILD GEESE WINES and WILD GEESE trade marks by Wild Geese Wines Pty Ltd was authorised by the registered owner of these trade marks and the power to remove these trade marks from the Register was not enlivened.

Although unnecessary to decide, Perram J also expressed the view that, if the power to remove these trade marks had arisen, he would have done so and not exercised discretion in favour of the registered owner.