Protecting Heritage Brands – No beers for you

Danielle Jepson

By Danielle Jepson

The long running dispute between Fosters and Thunder Road Brewing has finally come to a close, with Fosters to retain ownership of the majority of their iconic beer brands such as Brisbane Bitter, Cairns Draught and Richmond Lager. The case helps to reinforce what trade mark holders need to take into account when protecting their heritage brands.

For those who may be unfamiliar with the long running feud, a brief summary of the tale that led the parties down a path to the largest set of opposition proceedings in Australian history is provided below.

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Mr Philip Withers owns Elixir Signature Pty Ltd (“Elixir”), which operates the Thunder Road Brewery in Brunswick, Melbourne. CUB Pty Ltd (“Fosters”) is one of Australia’s most iconic brewers, with a large stable of brands that include some of the most recognised and nostalgic trade marks that date back to 1906.

In 2009, Mr Withers wanted to acquire, or license, some of Fosters heritage beer trade marks and approached them with his request. During the negotiations, Fosters filed 5 new trade mark applications to strengthen their trade mark protection. However, the parties could not agree on terms for a potential acquisition, or license, and the negotiations ceased.

In 2010, Mr Withers, via his intellectual property holding company, filed trade mark applications for BALLARAT BITTER (and the associated Ballarat Bertie character), RICHMOND LAGER, BULIMBA (including the GOLD TOP brand), NQ LAGER and KENT. He opposed the 5 recent trade mark applications filed by Fosters on grounds of “bad faith” and “lack of intention to use”, and filed removal applications against a total of 54 of Fosters heritage beer brand trade marks. Fosters opposed the removal of all 54 trade mark registrations.

From the above, it appeared that Mr Withers and Elixir were only interested in the BALLARAT BITTER, RICHMOND LAGER, BULIMBA, NQ LAGER and KENT brands. However, they sought to remove the majority of the Fosters heritage beer marks including traditional logos for Carlton Draught, Brisbane Bitter and more. Prior to 2006, it is unlikely that this would have been possible. Previous legislation provided that only a person aggrieved, being persons who would be commercially disadvantaged by the trade mark registration, could apply for removal for non-use.

The Trade Mark Office consolidated the 5 oppositions by Elixir to the registration of Fosters trade mark applications and also, the 54 oppositions to the removal applications filed by Elixir against Fosters trade mark registrations. The size of these proceedings was unprecedented in Australia. The Hearing was scheduled over 2 days, before the Deputy Registrar Michael Arblaster, assisted by Hearing Officers Alison Windsor and Cristy Condon.

Subsequently, the decisions were issued on 10 September 2013 in Intellectual Property Development Corporation Pty Ltd v CUB Pty Ltd [2013] ATMO 73 (Opposition to Registration) and CUB Pty Ltd v Elixir Signature Pty Ltd [2013] ATMO 74 (Opposition to Removal).

Intellectual Property Development Corporation Pty Ltd v CUB Pty Ltd [2013] ATMO 73

As mentioned earlier, the grounds pressed by Mr Withers were “bad faith” and “lack of intention to use” the trade marks. He argued that the trade marks were no longer part of Fosters business and that the applications were filed purely to re-register 5 older, already registered marks in an attempt to stockpile protection as a result of his request for a license.

Cristy Condon, the Delegate handing down this decision, disagreed with Mr Withers and stated at [61 to 63]:

I am not prepared to draw the inference proposed by the Opponent, that is, that the filing of the applications was purely a defensive or tactical response to the interest Mr Withers had shown in regard to using the Applicant’s prior registrations. If any inference is to be drawn, it seems more reasonable that, as the Opponent sought license from the Applicant for use of its prior registrations, the Opponent regarded the Applicant to be the legal owner of the Trade Marks.

The Applicant has not renewed the registration of many of its brands. To my mind, this adds some weight to the argument that the Trade Mark applications are for the securement of heritage brands being for use in future commercial releases, not for the purpose for trade mark ‘banking’ as the Opponent would have me believe.

The Delegate went further and stated that there was “only a contention of a lack of intention” and that Mr Withers had not provided anything further than argument to support the allegations of “bad faith” and “lack of intention to use” the marks.

In light of the above, the Delegate decided that the grounds of opposition had not been established and directed that the applications should proceed to registration, awarding costs against Mr Withers.

CUB Pty Ltd v Elixir Signature Pty Ltd [2013] ATMO 74

The removal proceedings centred around whether it was reasonable not to remove the trade marks from the Register, although the trade marks had not been used during the statutory period.

Mr Withers claimed that Fosters had not used the trade marks in the 3 years preceding lodgement of the non-use action and therefore, should be removed. Fosters acknowledged that 53 of the 54 trade mark registrations had not been used within this period however, it called upon the Registrar to exercise her discretion not to remove the registrations on the basis that:

• the marks were originally filed in good faith;

• they had not abandoned the marks;

• they held residual reputation despite the lack of use and;

• the prospects of confusion in the marketplace, arising from removal of the registrations would be high.

Importantly, Fosters provided limited evidence that some of the trade marks had been used in short run ‘heritage beer’ releases both pre and post lodgement of the removal applications. With regard to this, the Hearing Officer referred to E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2008) 77 IPR 69; [2008] FCA 934, where the Court said (at 64):

Whilst a single act of sale may not be sufficient to prevent removal, in the case of genuine use, a relatively small amount of use may be sufficient to constitute “ordinary and genuine” use judged by commercial standards.

Fosters went further and argued that the residual reputation of the marks was sustained not only through the continuing visibility in pubs, hotels, breweries, bottle shops, websites, social media, museums, private collections, artworks and second-hand trades but also through the simple fact of their long lifespan in Australia.

Mr Wither’s argued that Fosters was essentially acting as a roadblock to the freedom of other Australian companies from using historical trade marks and that the purpose of the non-use law in Australia is to ensure that any trade mark that is not used in good faith in a 3 year period is “set free” to be used again by other parties.

The Hearing Officer was critical of this argument and stated at [126]:

I am not convinced that the argument about ‘setting trade marks free’ or indeed ensuring that other parties are enabled to use historical trade marks necessarily stands up to close scrutiny. I could see the point of the argument if the trade mark consisted of words or images that other traders are likely to think of and want to use. If that was the case and the trade mark had not been used, then it stands to reason that those words or images should be available for others to use. However, where the trade mark consists of a more complex grouping of words and images, the matter is not as clear.

Despite Mr Wither’s view that historical trade marks should be “set free” for others to use, the Hearing Officers were of the view that if the trade marks were removed from the Register and another trader sold the same goods under the same brand, there would be a high likelihood of consumers being misled as to the source and nature of the goods.

In light of the above, the Delegates directed that the grounds for removal had not been made out for 3 of the trade mark registrations, 10 trade mark registrations would be removed for lack of use, and the Registrar would exercise discretion and allow the remaining 41 registrations to remain on the Register.

Key Message

The key message from these decisions is that large scale brand owners must have a strategy to ensure the longevity of their brands and validity of their trade mark rights. The brand holder was assisted by the substantial reputation and goodwill built up around their brands and by the likelihood of consumers being misled by another trader selling the same goods under those same brands. However, with a more pro-active strategy a brand-holding company may have a greater degree of certainty. If Fosters had not produced limited runs of their “Heritage Beers” and/or could not show that they had the intention to continue to do so, it is unlikely that they would have been able to successfully defend the removal applications.