Trade mark battles at the bottle store

David McGregor, Senior Partner | Monday 29 June 2009

This article was first published in New Zealand Wine Grower magazine, June/July 2009.

The Federal Court of Australia recently heard an appeal involving a contest between American wine producer, E & J Gallo Winery and the large Australian company, Lion Nathan Australia Pty Limited about the sale of alcoholic beverages.

The contest was over the use of the word "BAREFOOT" as a trademark (or part thereof) associated with alcoholic beverages. Gallo is the Registered Owner of a trademark constituted by that word in Australia in relation to wines. Lion Nathan allege the mark is not being used in Australia and it applied for removal of the mark from the Register and contended that accordingly, the mark should be removed. Understandably Gallo contested this. Lion Nathan is selling in the Australian market a speciality beer using the trademark "BAREFOOT RADLER".

The decision which is recorded as E & J Gallo Winery v Lion Nathan Australasia Pty Limited NSD1085 of 2008, includes an analysis of the use of both products in the Australian market.

Arising from this analysis, the issues to be determined by the Court were whether or not the Registered Trademark of Gallo should be removed from the Register for non-use and/or whether there had been an infringement of the Registered Trademark by Lion Nathan. The Gallo argument was essentially that both were alcoholic beverages, fruit flavoured, were marketed from the same sales networks and that both companies sold both beer and wine. Also, both had business plans targeted to non-beer and non-wine drinkers alike. Lion Nathan's argument was focused on the traditional nature of beer being malt not grape and that "Radler" represented a beer tradition. Further, they were beverages included normally in different areas of liquor outlets, had different packaging and the differences were understood by, and recognised by those involved in the alcoholic beverage business.

The original trial judge found that they were very different goods and confusion was unlikely.

The Appellant panel found that these are goods of the same general description and the original determination was floored by focussing on differences which were materially less significant. The decision addresses the issue of whether wine and fruit flavoured beer are "goods of the same description" in the context of trademarks.

At this stage of the proceedings in Australia, the Court determined that they were.

With the emerging boutique beer markets possibly seeking refuge in the wine industry's domain, the trade marking of brands remains an all important protection of intellectual property and vigilance of it.

 

SALE OF LIQUOR REVIEW

The Law Commission's project on Liquor Review has identified the central issue for its consideration is to determine whether the pendulum of the structure of the law relating to the sale and consumption has swung too far in the direction of liberality and the availability of alcoholic drinks and, if so, what measures can be adopted to combat the situation and limit the harm it causes.

Part 1 of the Commissioner's report is now published and in what is clearly a prelude to successive parts, no doubt dealing with the extent of liberality of the existing law, focuses entirely upon the suitability of the conscience vote for those issues as part of Parliamentary process.

The following are extracts from the report¹ instancing the Commissioner's concerns:

1.1	The Law Commission wishes to draw attention to the use of the conscience vote to determine laws related to the sale and supply of alcohol. The Commission believes the conscience vote, where Members of Parliament cast their votes free from the usual expectation of party discipline, can reduce the quality and effectiveness of the alcohol laws that Parliament enacts.
1.2	While there are clearly topics where the exercise of a conscience vote is entirely understandable – capital punishment and abortion law, for example – the Commission believes there are compelling grounds for dispensing with the historical practice of applying the conscience vote to alcohol Bills.
1.3	Alcohol is an important social issue. While the consumption of alcohol can bring considerable enjoyment, the harmful use of alcohol contributes to a wide variety of serious social harms, in particular in the areas of crime and public health. Continuing to treat alcohol Bills on the basis of a conscience vote may produce legislation that fails to deal with these issues effectively. Amendments stand a much greater chance of being incorporated into a Bill in a situation where voting is highly fluid and outcomes are unpredictable. The resulting statute can lack coherence and structural logic.
1.4	The Commission suggests it is preferable that the House of Representatives vote on alcohol Bills using standard party-based voting rather than the conscience vote. In doing so, the House would be treating alcohol Bills in the same way it does issues of comparable seriousness, for example, Bills controlling the sale, supply and use of illegal drugs.
1.5	The Commission recognises that the decision to grant a conscience vote in any given instance is not a subject for the Executive Government so we make no recommendations to the Executive Government.
1.6	Whether there is a conscience vote is a question for the caucus of each political party represented in Parliament. The Commission recognises that the use of the conscience vote can be a politically contentious issue within the House. Nevertheless, our concern lies with the quality of future laws that will regulate the sale and supply of alcohol.
1.7	Organisations and individuals besides the Law Commission have expressed concerns about the use of the conscience vote for alcohol Bills, including the New Zealand Police, the Alcohol Advisory Council of New Zealand, the New Zealand Drug Foundation, the Liquor Licensing Authority, and several medical professionals. In recent decades some Members of Parliament have also argued against the use of the conscience vote for alcohol Bills. The Law Commission is not alone in calling for a change.
1.8	The Parliament has in front of it important legislative proposals in relation to alcohol. It would be helpful if decisions on limiting conscience voting on alcohol Bills were decided before those substantive decisions are made.

One pleasing aspect of the Law Commissioner's Terms of Reference is that the revised policy framework applicable to the legislation ensures that unnecessary and disproportionate compliance costs are not imposed by the licensing system.

 

¹ Review of Regulatory Framework for the Sale and Supply of Liquor. Law Commission report 106, May 2009