Using terms in your branding that have a 'descriptive' quality i.e. that do not distinguish your product from other traders, can later be problematic when you want to stop other traders from using the term. This was seen recently in the Full Federal Court's dismissal of an appeal by Stone & Wood Group Pty Ltd (Stone & Wood) against Intellectual Property Development Corporation Pty Ltd and Elixir Signature Pty Ltd (Elixir).i
In 2010, Stone & Wood started producing a craft beer called "Pacific Ale". In 2015, Elixir started selling a beer called "Thunder Road Pacific Ale", which was later re-named "Thunder Road Pacific". Thunder Road is one of Elixir's brands of beer.
Stone & Wood commenced proceedings claiming that Elixir engaged in:
- passing off i.e. Elixir wrongly suggested a connection with Stone & Wood's products causing damage or likely damage to Stone & Wood's goodwill or reputation
- misleading or deceptive conduct in contravention of s18 of the Australian Consumer Law. This section states that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive
- false or misleading representations in contravention of s29 of the Australian Consumer Law.
The primary judge dismissed Stone & Wood's claims including on the following bases:
- After comparing the labels and packaging of the beer bottles, Elixir's label had no reference to "Stone & Wood" and its dominant feature on the bottle was "Pacific Ale" or "Pacific", whereas Stone & Wood's beer bottle's dominant feature was the name "Stone & Wood". Elixir's branding with a different label and colours adequately identified that Thunder Road sold that particular beer.
- The word "Pacific" used by Stone & Wood is inherently descriptive. It can be used to describe the Pacific Ocean and other things associated with the Pacific Ocean. It was also used by Stone & Wood to describe beers made from hops in Australia and New Zealand and to generate a calming, cooling response in customers.
- By choosing a name for a product with a descriptive aspect, Stone & Wood ran the risk that others might use this name and that the word "Pacific" would not adequately distinguish its product from other traders' products.
- Stone & Wood did not have a well-known market reputation with the word "Pacific". This case was distinguished from the Anheuser-Busch, Inc v Budejovický Budvar, Národní Podnik (Budweiser Case)  FCA 390; 56 IPR 182, where the "Budweiser" trade mark/beer was found to have a well-known reputation.
The primary judge also found that Elixir sought to some extent to take advantage of Stone & Wood's success on the Pacific Ale product, but not because Elixir wanted to confuse people into thinking Thunder Road's product was "Stone & Wood Pacific Ale" or that there was an association or connection between the two products.
Stone & Wood challenged the primary judge's findings in the Full Federal Court of Australia.
The Full Federal Court similarly dismissed Stone & Wood's appeal including on the basis that "Pacific Ale" is a descriptive term and even appeared on Stone & Wood's website in the location where information about the type of beer is commonly provided.
- When considering whether to register a trade mark, consider whether the word is distinctive or on the other hand descriptive or generic. Generic or descriptive terms which describe the goods or services sold will generally not be accepted by the Trade Marks Examiner e.g. registering the word "apple" for a trade mark relating to juice may not be accepted as it would deprive other juice traders from using a generic or descriptive word relating to their product. However, the word "apple" has been registered as a trade mark in relation to electronics. We can assist with advising you on whether your proposed trade mark is descriptive or generic and advise you on how to best position your proposed trade mark for acceptance in an application to the Trade Marks Examiner.
- If you are pursuing a trader for misleading or deceptive conduct or passing off, key things to consider in your strategy and assessment of your prospects of success include:
- whether the terms allegedly infringed are too generic and cannot be used to distinguish your goods from the goods of another trader; and
- separately, whether you have built a market reputation in the term(s).
iStone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd and Elixir Signature Pty Ltd  FCAFC 29.
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.