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Trademarks in court: Barefoot Wines and Barefoot Radler

The High Court of Australia has recently handed down a significant decision in the case of E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2010] HCA 15. While there were a number of questions before the court, the most important one before the court was what constituted “use” of a trade mark.

Barefoot RadlerThe information in this article is for general purposes only and should not be relied on as specific legal advice. Should you have any particular questions please contact your solicitor or contact the author directly.

In this case, Gallo Winery is an American Company who owns the registered trade mark for a brand of wines called “BAREFOOT”. In 2008 Lion Nathan begun selling a light beer called “BAREFOOT RADLER”. Gallo Winery alleged that Lion Nathan was infringing on its trade mark and commenced legal proceedings.

Lion Nathan denied infringement, and cross-claimed, seeking removal of Gallo Winery’s trade mark from the register. Lion Nathan alleged that Gallo Winery did not actively market or trade the goods in Australia and as a result of non-use over 3 years, the trade mark should be removed.

Gallo Winery itself did not actively sell the wine in Australia, however there was evidence that about 41 bottles of the wine was sold in Australia. This was done through a wholesaler who had purchased the wine from Germany. This was done at the time without the knowledge of Gallo Winery.

Initially the Federal Court found that the Australian sales were done without Gallo Winery’s knowledge and so, they were not “using” the trade mark.  The Federal Court initially ruled that the trade mark should be removed from the register for non-use.

The case was appealed and eventually found itself before the High Court. The High Court considered that even if the goods were sold in Australia without the knowledge of the owner, the owner is considered using the trade mark. It is not necessary for the trade mark owner to actively participate in selling the goods – it doesn’t even matter if they knew that the goods were being sold or not, so long as the goods are being circulated in the Australian market.

Consequently the court held that Gallo Winery’s trade mark was valid and that Lion Nathan had infringed on it.

There are a number of things you can take away from this case. A registered trade mark is quite powerful and little use of the trade mark does not mean non-use of the trade mark.

The more important lesson to learn is that these matters could have been avoided by doing the proper checks before actively engaging in trade. Brand owners need to be careful in selecting a brand or a trade mark to market even if, on the surface, the trade mark is for a different good or class of goods.

About the author

Kenneth Ti is an Associate Solicitor with Phang Legal and a graduate from the University of New South Wales. He has a background in financial services and insurance and has interest in a wide range of legal areas including Commercial and Civil matters and Intellectual Property. Kenneth is a strong believer in community services and pro bono work.

About Phang Legal

Phang Legal is a progressive and dynamic law firm offering a different attitude to the practice of law and a different approach to the delivery of legal services. The firm continues to honour the traditions and standards of the legal profession, while remaining current and relevant to ever changing client requirements and expectations. Phang Legal provides cost effective and practical solutions across a wide range of practice areas including conveyancing and property law, corporate and commercial law, litigation and dispute resolution, wills and estates (elders law), legal aid and criminal law, and notary public services.

Contact Details
6/83 George Street, Parramatta NSW 2150 AU
Telephone: +61 2 9687 8885
Web: www.phanglegal.com.au

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Kenneth Ti

Kenneth Ti

Kenneth Ti is an Associate Solicitor with Phang Legal (http://www.phanglegal.com.au). He has a background in financial services and insurance, and is focused on commercial and intellectual property matters. Kenneth is a strong believer in small business, the community, and pro bono work. Follow Kenneth Ti at @kennethti and Phang Legal at @phanglegal.

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