Case: Jonathan Ross Sceats v Jonathan Sceats Design Pty Ltd (1990) 17 IPR 28
Outcome: distinguished
In addition to contending that the Gallo Winery trade mark should be removed for non-use, the Respondent further maintains (at least in its written submissions) that the " sign " that it uses in marketing its beer is the words " BAREFOOT RADLER " and the image of a bare foot; denies that the sign BAREFOORT RADLER is " substantially identical or deceptively similar to " Gallo Winery's BAREFOOT trade mark; denies that the goods in relation to which the sign is used are " goods of the same description as wines " and contends that its use is " not likely to deceive or cause confusion ". 23 The resolution of these competing submissions involves a resolution of the following questions, namely: (i) what is the " sign " being used as a trade mark by Lion Nathan ? (ii) is the " sign " being used by Lion Nathan " substantially identical with " the trade mark of Gallo Winery ? (iii) is the " sign " being used by Lion Nathan " deceptively similar to " the trade mark of Gallo Winery ? (iv) are the radler beers of Lion Nathan " goods of the same description " as the BAREFOOT wine of Gallo Winery ? (v) is the manner in which Lion Nathan uses its sign " not likely to deceive or cause confusion "? (vi) has there been a " non-use " of the BAREFOOT trade mark during the period from 7 May 2004 to 8 May 2007? The resolution of this question, as it was advanced in submissions, separately involves a consideration as to: (a) whether there were sales of the BAREFOOT wine during the non-use period; (b) whether the wine was offered for sale during the non-use period; (c) if the wine was sold or offered for sale during the non-use period, whether there was a use of the trade mark by Barefoot Cellars as an authorised user; (d) if the wine was sold or offered for sale during the non-use period, whether there was a use of the trade mark by Beach Avenue Wholesalers as an authorised user; (e) whether the negotiations as between Gallo Winery and McWilliams Wines during the non-use period constituted a use of the trade mark; (f) whether there was an " obstacle " to the use of the Gallo Winery trade mark; (g) even if there was a use, which mark was in fact being used; and (h) whether any use was a use " in good faith ". (vii) if there has been a " non-use " of the trade mark by Gallo Winery , should the discretion conferred by s 101(3) of the 1995 Act be exercised so as to allow its trade mark to remain on the Register? Depending upon the manner in which one or other of these questions may be answered, other questions may not necessarily have to be answered. With the concurrence of the parties, however, the course has been taken of answering each of these questions should the matter proceed further. 24 Section 120(2) dictates that Lion Nathan infringes the trade mark of Gallo Winery if Lion Nathan " uses as a trade mark a sign that is substantially identical with, or deceptively similar to " the trade mark of Gallo Winery . The term " sign " is itself broadly defined by s 6 as including: ... the following or any combination of the following, namely, any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent. 25 The trade mark of Gallo Winery is the word " BAREFOOT ". 26 In the present proceedings there is a dispute at the outset as to the ability of Lion Nathan to rely upon any sign other than the word " BAREFOOT " or the combination of words " BAREFOOT RADLER ". The dispute centres upon whether the Amended Defence so confines Lion Nathan or whether Lion Nathan is otherwise free to contend that its sign also incorporates the image of a bare foot. 31 Lion Nathan contends that as a matter of fact, the " sign " which it is using for the purposes of s 120 is a combination of the words and the image -- and further contends that such a finding of fact is not to be denied by the pleadings. Its position is that: (i) its Amended Defence is simply a response to the allegations being made against it and there was no obligation or requirement placed upon it to positively set forth what was the " sign " in fact being used by it for the purposes of s 120; and (ii) any unfairness to the Applicant is removed by reason of its written Outline of Opening Submissions , available at the outset of the hearing, which stated that: [46] The Court should find that the trade mark used by the Respondent to distinguish the Respondent's beer from other beers on the market comprises the words BAREFOOT RADLER and an image of a bare foot. ... 32 Notwithstanding paragraph [46] of its Outline of Opening Submissions , it is considered that the Amended Defence confines Lion Nathan to the position that the " sign " upon which it places reliance for the purposes of defending the current proceedings is the combination alone of the words " BAREFOOT RADLER ". Albeit in response to the allegation in the Further Amended Statement of Claim that it has infringed Gallo Winery's BAREFOOT trade mark, the Amended Defence states in part that it " denies that the sign to be used by the Respondent, BAREFOOT RADLER, is substantially identical or deceptively similar to the Applicant's BAREFOOT Trade Mark ". This can only be construed as conveying to the Applicant at least two things: (i) the position that the Respondent denies that the sign to be used is substantially identical with or deceptively similar to the Applicant's sign; and (ii) the sign " to be used " by the Respondent, and to be relied upon in resisting the Applicant's claim, is the sign it then identifies, namely " BAREFOOT RADLER ". 33 Had the Amended Defence simply denied the infringement being alleged, Lion Nathan may well have been able to advance submissions that the sign to be used was a combination of the words and the image. But the fact is that the Amended Defence goes on to expressly identify the sign which it says is not substantially identical with or deceptively similar to that being relied upon by Gallo Winery , and it identifies that sign as being " BAREFOOT RADLER ". At the very least, that express statement in the Amended Defence is productive of such uncertainty that it was thereafter incumbent upon Lion Nathan to identify in its Amended Defence the sign upon which reliance was to be placed -- if that sign was to be anything other than the combination of words. Without that further express clarification, a contention that the " sign " is the words and the image would be a contention that would " take the other party by surprise " within the meaning of O 11, r 10. 36 But for its pleadings, there was otherwise no reason not to conclude that the " sign " Lion Nathan was in fact the following, incorporating both a combination of the words and the image: Such is what appears on the cardboard packaging for its " six pack "; such is what appears on the individual bottles of beer and in its advertisements for its beer. And each of the elements of that " sign " has a degree of prominence. Prominence is attracted to the image of the bare foot and the word " BAREFOOT " by reason of their being printed in white; prominence is also equally attracted to the word " RADLER " by reason of it being printed in green. The words and the image of the bare foot are given additional prominence by all being set against a blue background encircled by a roughly drawn white circumference. The word " BAREFOOT " is also given additional prominence by that word dissecting the image of the bare foot. 37 Given the constraint imposed by the pleadings, however, there is similarly no reason not to conclude that the " sign " being used by Lion Nathan is the combination of the words " BAREFOOT RADLER " alone. This was the sign identified in the Amended Defence. Even without the image of the bare foot, the prominence and distinctiveness of those words remains sufficiently discrete as to be the " sign " used. 38 What is the " sign " being used by Lion Nathan , it is accepted by both parties, is a question of fact. 39 The second of the questions posed requires resolution of whether the " sign " being used by Lion Nathan is " substantially identical with " the trade mark of Gallo Winery. 40 There is no dispute between the parties as to the meaning of the phrase " substantially identical " as used in s 120(1) -- the dispute is as to the manner in which that phrase is to be applied to the facts. 41 There is no definition in the 1995 Act of the phrase " substantially identical ". 44 A " side by side " comparison of the trade mark of Gallo Winery and the " sign " as used by Lion Nathan -- as confined by its pleadings -- discloses, it is considered, no substantial identity . The two marks are certainly not " identical ". The two marks have in common the word " BAREFOOT ". But the " sign " as used by Lion Nathan also employs the additional word " RADLER ". The question is thus whether there is a substantial identity. Section 120(2), it will be noted, does not require that the two marks be " identical "; s 120(2) is infringed if the mark of Lion Nathan is " substantially identical with " that of Gallo Winery . 45 In reaching the conclusion that the marks are not substantially identical, it has been recognised that the word " BAREFOOT " is both an ordinary English word and a word which has been used in a variety of contexts advertising many different types of goods. An internet search undertaken by a law graduate employed by the solicitors for Lion Nathan (Mr Campbell) disclosed the word " BAREFOOT " being used in the promotion of a beach-side resort; a water-skiing club; a sailing cruise; a coffee roaster; weddings; horse saddles; furniture; and vacations. Other instances were also exposed. Not surprisingly, many of these products had some association with the beach or water. 46 It is a word, however, common to both marks and a word which is strongly associated with a carefree lifestyle. 47 But it is the addition of the word " RADLER " which denies any substantial identity as between the trade mark of Gallo Winery and the " sign " as used by Lion Nathan . Rejected is a submission advanced by Gallo Winery that the word " RADLER " is but a description of a particular type of beer and that it is the word " BAREFOOT " alone which distinguishes its beer from that of others. It is the combination of the words which distinguishes the Lion Nathan beer -- an essential and prominent feature of the sign as used by Lion Nathan is thus not only the word " BAREFOOT" but also the word " RADLER ". Lion Nathan's use of the word " RADLER " is an important and integral part of the sign it uses and is an obvious source of distinction. 48 Of limited assistance in confirming such a conclusion is the following exchange between the Deputy Chairman of McWilliams Wines (Mr Kevin McLintock) and his cross-examiner: But your reaction at the time when you saw the product was that the name of the product was Barefoot Radler capital B, capital R, wasn't it? --- Correct. ... ... because you think that the name of this product is Barefoot Radler don't you? --- Yes. 49 Had Lion Nathan not been confined by its pleadings and had it been free to also include as part of its sign the image of the bare foot, any finding of fact that there was substantial identity would have been more easily denied. The differences would be such that -- and the total impression would be such that -- any similarity as would have been occasioned by the word " BAREFOOT " alone would be of little significance. The similarity, of course, would remain the single word " BAREFOOT ". But the differences would be even more significant if the prominent image of the bare foot were able to be included. 50 Section 120(1) is expressed in the alternative and requires a consideration of whether the " sign " being used by Lion Nathan is " substantially identical with, or deceptively similar to " the trade mark of Gallo Winery . 51 Again, there is no dispute between the parties as to the meaning to be given to the phrase " deceptively similar " -- the dispute is as to the manner in which that phrase is to be applied to the facts. 52 A trade mark is taken to be " deceptively similar to " another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion: s 10. 57 The impression based on a recollection of the " sign " as used by Lion Nathan and a recollection of Gallo Winery's trade mark, it is considered, would lead to a likelihood of deception or confusion. 197 In applying the terms of the discretion previously conferred by s 23(1) of the Trade Marks Act 1955 (Cth), Foster J observed that it was a discretion only to be exercised in " exceptional circumstances ": Jonathan Ross Sceats v Jonathan Sceats Design Pty Ltd (1990) 17 IPR 28. Foster J there observed at 29 30: The section to which I have just made reference has been the subject of consideration by courts of high authority. It is quite clear that the word "may", used in the section, requires that a court, in determining whether relief should be granted, exercise a discretion. Accordingly, a court in considering the matters raised by s 23 may, even though it be satisfied that the desiderata of the section have been made out, nevertheless refrain from ordering the removal of the trade mark in the manner contemplated by the section. The question of the operation of this discretion is considered in Shanahan's Australian Trade Mark Law and Practice, 1982 ed, p 212, under the heading, "Discretion under s 23(1)". The learned author refers to the decision of Kitto J in Carl Zeiss Pty Ltd's Application [1969] HCA 17 ; (1969) 122 CLR 1 , which clearly establishes the existence of the residual discretion in the court, to which I have made reference. It is also clear, as the learned author points out, that the discretion is one of general application and not restricted specifically to sections of the Act. However, he also goes on to say: "It has been said that the discretion should be exercised only in 'exceptional circumstances'; however, there may well be cases where the public interest requires that the registration be retained." Reference is made to the case of J Lyons &amp; Co Ltd's Application [1959] RPC 120 at 130. I consider that the law is quite clear in this regard: although the discretion not to make an order of removal exists even though the enabling circumstances required by the section are proved, the discretion to refuse such an order is only to be exercised in the exceptional circumstances referred to.