Wine snobbery and the heritage value of the Queen Adelaide wine brand: Make Wine Pty Ltd v Modern Ancient Brands Pty Ltd [2017] ATMO 17 (24 February 2017)

On 22 December 2014, Modern Ancient Brands Pty Ltd (the non-use applicant) filed an application for the removal from the Australian Trade Mark Register TM 196073 (Trade Mark), which had been registered under class 33 wines on 22 July 1965.

The non-use applicant sought to have the Trade Mark removed from the Register as per s92(4)(b) of the Trade Mark Act 1995 (the Act), under which a non-use application is made on the grounds that the Trade Mark has

“…remained registered for a continuous period of 3 years ending one month before the day on which the nonuse application is filed, and, at no time during that period, the person who was then the registered owner:

(i) used the trade mark in Australia; or

(ii) used the trade mark in good faith in Australia;

in relation to the goods and/or services to which the application relates.”

The removal application was opposed on 16 March 2015 by the registered owner, Make Wine Pty Ltd (the opponent). In its statement of grounds and particulars, the opponent asserted that either it, or an authorised user, had used the Trade Mark in Australia for the relevant goods during the relevant period.

The non-use applicant relied mainly on the argument that the opponent has not demonstrated any use of the Trade Mark with regard to the relevant goods. Further, any wines that still bear the trade mark, to be found at Wickman’s Fine Wine Auctions, were privately owned and meant only for the owner’s consumption. The proposition was that this type of use was not use in the course of trade, and so the mark no longer functioned as a trade mark.

The opponent’s counterargument is that sale in a secondary market can nonetheless establish use of a trade mark. The opponent argued that removing the Trade Mark from the Register could result in public confusion if a third party used a similar or the same trade mark for wines. This was because the opponent’s wines bearing the Trade Mark were still being sold in Australia, at least to some extent.

The Trade Mark Registrar’s delegate, who was the decision maker in this dispute, noted that the most recent use of the Trade Mark, as established by evidence, was only by private individuals that purchased individual bottles during the 70s to 2002. The total amount sold were only a dozen bottles, and these wines were offered for sale after a few decades (presumably of storage).

The prices also ranged from $2 to $3 per bottle, which put them at the low-cost end of the market. This low price point, the delegate surmised, rendered it unlikely that the wines were initially purchased for the purpose of investment or future resale. (As unrepentant wine snobs, we entirely understand this rationale.) The delegate was not convinced that the examples of use submitted by the opponent constituted actual use of the Trade Mark during the course of trade. The evidence was found to be insufficient to resist an application for removal due to non-use.

The delegate noted:

23.The significant delay between the initial purchase of bottles and before they were offered for sale in the marketplace makes the link between the opponent and use of the Trade Mark within ‘the course of trade’ somewhat tenuous. Most of the very limited number of wines were essentially ‘off the market’ for a period of decades before they were sold at minimal prices during a time when the opponent was not promoting the Trade Mark on wine in the marketplace. While the wine was clearly not consumed while it was ‘off the market’ how long can goods be off the market and still remain in the course of trade for the purpose of defeating applications for removal for non-use? This is the question before me. While the wine before me has not been consumed, it has been off the market for many years before it was eventually sold at a public auction for what appears to be less than the wine originally may have been purchased for. The bottles were also sold individually rather than in cases by individuals. Given this substantial time lapse and the low reward for selling, I am not satisfied that those wines did remain in the course of trade over this period.”

However, interestingly, the delegate invoked subsection 101(3) of the Act, under which the Registrar may exercise a discretion to retain a trade mark on the register even if grounds for removal has been established.

The delegate noted:

“The opponent has requested the Registrar’s discretion to allow the Trade Mark to remain registered for all those goods as the Trade Mark:◦Has an interesting and valuable heritage in Australia;

◦Still has residual reputation within Australia given its long history;

◦Australian consumers still trade in wine bearing the Trade Mark; and

◦Is the older version of the current  Queen Adelaide  trade mark that the opponent is presently selling its wine under.

27.The non-use applicant has argued that the opponent has adopted an updated and fresh new  QUEEN ADELAIDE  trade mark which excludes the Woodleys element. The non-use applicant makes the argument that ‘refreshing’ the  QUEEN ADELAIDE  wine brand by the design of the new label which is significantly visually different from the Trade Mark is an expensive action by the opponent and is indicative that the opponent is unlikely to return to its original Trade Mark to sell its goods now or in the future. However, I am not persuaded by this argument.

28.While the opponent has not been able to conclusively satisfy me that it had used its Trade Mark in the course of trade during the relevant period, there are a number of other considerations which I consider makes it appropriate to exercise the Registrar’s discretion in its favour.

29.The opponent does have a significant and enduring reputation in its  QUEEN ADELAIDE  branded wines. It has adopted a refreshed and new label for its wine which is at least deceptively similar to the Trade Mark. The respective trade marks both prominently contain a graphic device depicting  Queen Adelaide  and contain the words  QUEEN ADELAIDE . These are the most prominent and striking features of the respective trade marks. I also note that it is common for traders that have been trading in the marketplace for a long time to update and alter their trade marks to make themselves more marketable in a constantly changing marketplace. Some traders which come to mind are Adidas ® and Kentucky Fried Chicken ®.

30.The opponent is actively selling its  QUEEN ADELAIDE  wine under the refreshed label in the Australian market place and individuals are still clearly buying and selling wine bearing the Trade Mark. This is much more than a case of the opponent having a residual reputation in the Trade Mark. The opponent has an active and ongoing reputation in its  QUEEN ADELAIDE  branded wine and it is selling that wine under a trade mark which is at least deceptively similar to the Trade Mark.

The delegate therefore dismissed the applicant’s argument. Despite failing to counter the non-use application, the delegate saw it fit to exercise the Registrar’s discretion and keep the Trade Mark on the Register for wines in class 33.

Although not specifically mentioned in the decision, this matter is entirely reminiscent of the decision in CUB Pty Ltd v Elixir Signature Pty Ltd [2013]  ATMO  74 (10 September 2013). In that dispute, the non-use applicant applied to remove from the Register for non-use 54 trade marks owned by CUB Pty Ltd, in what looked like an extremely well-thought through, if only partially successful, raid upon CUB’s family silver. Some of these marks were very old indeed: one dated back to the 1910s but had not been in use since the 1960s. CUB’s evidence included the following statement:

The residual reputation of the Attacked Marks has been sustained not only through the continuing visibility of the Attacked Marks in Australian 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. Each of the Attacked Marks comes with a long history. CASCADE dates from 1832. TOOTH’S and KENT date from 1835, BALLARAT from 1853 and VICTORIA from 1854. McCRACKEN’S dates from 1851, CARLTON from 1864 and BULIMBA from 1882. The turn of the century saw ABBOTS emerge together with MELBOURNE in 1904, CAIRNS followed in 1925, then RICHMOND in 1927. NQ was established in the 1930s and the QB logo in the 1950s (QB itself having been established some 70 years earlier). BRISBANE harks back 40 years to the 1970s. These are legacy brands, brands which were in the market for generations at a time and which command still a great degree of respect and affection.

The delegate allowed eight of the marks to be retained on the Register because of their heritage value. This new decision regarding Queen Adelaide seems to be squarely in line with the CUB decision.

( As an aside, Queen Adelaide has an interesting history in Australian trade mark jurisprudence. Deputy Registrar Hardie’s decision in Southcorp Wines Pty Ltd [2000]  ATMO  34 (14 April 2000),  concerned with the mark Queen Adelaide Regency and the operation of what was then the Australian Wine and Brandy Corporation Act 1980, was distinguished in Ross & Veronica Lawrence [2005]  ATMO  69 (21 November 2005).)