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Lion Nathan victorious in barefoot battle

Lion Nathan victorious in barefoot battle

A LANDMARK Federal Court decision has sent a clear warning to holders of trademarks in Australia — use them or lose them.The case involved a battle over the name “Barefoot”…

A LANDMARK Federal Court decision has sent a clear warning to holders of trademarks in Australia — use them or lose them.

The case involved a battle over the name “Barefoot” between Australian wine and beer producer Lion Nathan, and US wine giant E&J Gallo.

Lion Nathan had produced a new, carbon-neutral beer, with the intention of naming it “Barefoot Radler”, but Gallo had already registered “Barefoot” as a trademark in Australia for one of its top-selling wines.

However after determining that Gallo hadn’t actually used the trademark in Australia, Lion Nathan sought to have it removed in accordance the “non-use” provisions of the Trade Marks Act 1990 (Cth) (the Act). It then applied for its own trademark for “Barefoot Radler”. Gallo, in response, brought an action against Lion Nathan for trademark infringement.

Lion Nathan, represented by Mallesons Stephen Jaques, successfully defended the action. The court found that Lion Nathan’s removal of Gallo’s trademark was allowed under the “non-use” provisions, and even if it wasn’t, wine and beer are not products of the same description so there could be no infringement.

Under the “non-use” provisions of the Act, a party can apply to have another party’s trademark removed if it hasn’t been used in good faith for a period of three years, once it has been registered for at least five years.

According to Mallesons partner Scott Bouvier, this is the first time the provisions have really been tested. “There’s non-use [matters] that happen in the Australian Trade Marks Office every day, and they all go very administratively. But this was probably the first ever really big fight about non-use,” he said.

It was significant, Bouvier said, that Lion Nathan’s removal of Gallo’s trademark was upheld despite evidence that a small amount of Gallo’s barefoot wine had actually been sold in Australia.

“Gallo exported wine to Germany, and a small wholesaler in Melbourne imported it and sold it, but that wasn’t enough,” Bouvier said. “They hadn’t projected those bottles into Australia. That’s important ... because [it shows that] you need to actually plan to use the trademark here in Australia.”

Gallo also argued that at the time Lion Nathan had their trademark removed, they were actually in the process of developing a strategy to launch Barefoot wines in Australia in partnership with McWilliams Wines. But this argument was also rejected by the court, Bouvier explained, because this strategy wasn’t considered to be far enough developed.

The case is also significant for its finding that beer and wine are classified differently for trademark purposes.

“It’s the first time an Australian court has really looked at the question of whether beer is a good of the same description as wine,” Bouvier explained. “That’s quite important because there is so much branding in beer and wine, and in alcohol generally.”

The judgement will sends a strong message to international companies holding trademarks in Australia — that unused trademarks would not remain protected indefinitely.

BY ZOE LYON

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