US owned E. J. Gallo Winery, the second largest producing wine company in the world, had previously brought trademark infringement proceedings against Lion Nathan in relation to the use of Gallo’s trademark BAREFOOT in respect of wine in the Federal Court of Australia.
The matter was the subject of an appeal to the Full Court of the Federal Court, with Lion Nathan prevailing in their appeal to the Full Court in respect of their application to cancel Gallo’s trade mark registration on the grounds that Gallo had not used it in Australia. Lion Nathan contended that the trade mark had not been in use during the three year period from 2004-2007. The Court ruled that the trademark be removed from the trade mark register in Australia.
However in an appeal to the High Court, the High Court accepted the contention of Gallo Winery that to effectively demonstrate use of their registered trademark in Australia, it did not need to show a conscious intention to use the trademark in Australia as long as the goods were being used in the course of trade and functioned as a source indicator.
Sixty cases of the wine bearing the trademark owned by Gallo had been sold to a company in Germany, which had in turn sold the wine to a Victorian liquor wholesaler who was demonstrated to have sold and marketed the wine during the period Lion Nathan argued that the trademark had not been used and should therefore be expunged from the register.
The High Court, in arriving at it’s finding, stated it was not necessary to show that the goods bearing the mark had been knowingly projected into the Australian market by the registered owner, and that use of a trademark is to be determined objectively rather than by reference to the subjective intentions of the trademark owner. The Court stated that sales by an unauthorised party of goods bearing a trade mark could constitute trade mark use by the trade mark owner, even where the use of the trade mark occurred without it’s knowledge. Goods are said to remain “in the course of trade” until the point at which they are purchased for consumption by Australian consumers.
Therefore, the Court concluded that Gallo’s BAREFOOT trade mark remained validly on the Trade Marks Register and that Lion Nathan would have to relinquish their use of the BAREFOOT RADLER trade mark.
The decision lends more certainty to international trade mark owners when deciding whether the use of their trade mark has been sufficient to successfully defend an action brought to have a trade mark removed from the register on the grounds of non-use.