Australia: Federal Court rules Signature wine trade marks not deceptively similar

Services: Intellectual Property & Technology

What you need to know

  • The Federal Court has considered the deceptive similarity of THE SIGNATURE and BAROSSA SIGNATURE in a recent trade mark battle between the owners of the Yalumba and Jacob's Creek wine brands.
  • The decision is a reminder that deceptive similarity will be assessed by examining the overall impression created by each mark, and that reputation will only be taken into account if a sufficient level of familiarity is established.
  • The decision also demonstrates that those seeking to defend an infringement claim by arguing that they have used their mark merely to describe their product, or to indicate its geographic origin, may struggle if their mark has been used in a unique or unconventional way.

Arguing that trade marks are 'deceptively similar' is one of the grounds most frequently relied on by trade mark owners asserting that another person's mark infringes their own registered rights. It can also be one of the most difficult concepts to grasp, as the question whether two marks are 'deceptively similar' has been answered in unexpected ways in some cases.

In a decision issued just before the close of 2016, the Federal Court considered deceptive similarity alongside the alleged infringer's arguments that it had only used its mark descriptively and to indicate the geographic origin of its product.1

Background

In September 2015, Pernod Ricard, owner of the Jacob's Creek brand, launched its BAROSSA SIGNATURE line of red wines as part of its premium Reserve sub-brand range.

A few months later, Samuel Smith & Son, owner of the Yalumba brand, commenced trade mark infringement proceedings in the Federal Court against Pernod Ricard on grounds that 'BAROSSA SIGNATURE' was deceptively similar to 'THE SIGNATURE' (the Yalumba Mark), which has been registered in Australia for wines in class 33 since September 1999.

In dismissing the case, Charlesworth J considered three principal issues:

  1. whether Pernod Ricard had used BAROSSA SIGNATURE as a trade mark within the meaning of section 17 of the Trade Marks Act 1995 (Cth) (the Act)
  2. whether BAROSSA SIGNATURE was deceptively similar to THE SIGNATURE under section 120(1) of the Act
  3. if there was deceptive similarity, whether Pernod Ricard's unauthorised use was excused on the basis that Pernod Ricard had, in good faith, intended to use the mark for the purposes of indicating the geographic origins of the goods, enabling it to rely on the defence to infringement available under section 122(1)(b)(i) of the Act.

Use as a trade mark

Pernod Ricard argued that it had not 'used' BAROSSA SIGNATURE as a trade mark to indicate the origin of its goods because the sign was merely descriptive of the goods, rather than characteristic of a brand. It submitted that the only signs it had used as a trade mark on its label were JACOB'S CREEK and RESERVE.

Charlesworth J was not persuaded. In acknowledging that BAROSSA SIGNATURE contained descriptive elements pointing to the regional source of the goods, her Honour concluded that the unusual combination of words, outside the wine industry's typical vocabulary, strengthened a conclusion that the sign functioned 'as a badge of origin'.

Her Honour found further support for this finding in considering the prominence of BAROSSA SIGATURE on the label, and accepted that ordinary consumers of wine would recognise and rely on sub-brands like BAROSSA SIGNATURE to inform their decision-making.

Evidence of Pernod Ricard's subjective intentions, though admissible, had little weight in determining the question of use, which is assessed objectively.

Deceptive similarity

Assessing deceptive similarity ordinarily involves considering the impression that the impugned mark produces in the mind of an ordinary consumer with imperfect recollection when compared with the plaintiff's mark. Evidence of reputation conveyed in a mark may be taken into account if it is "so notoriously ubiquitous and of such long standing that consumers generally must be taken to be familiar with it and with its use in relation to particular goods or services."2

Samuel Smith & Son contended that the word 'SIGNATURE' was the distinctive element of the Yalumba Mark that created an impression that would be recalled by an ordinary consumer. It submitted that by incorporating the word into its mark, Pernod Ricard was likely to deceive consumers or cause them to wonder whether the respective goods originated from the same source.

Although Charlesworth J accepted that Pernod Ricard had used a distinctive part of the Yalumba Mark, her Honour nonetheless concluded that this alone was not sufficient to create a likelihood of deception or confusion.

In considering the Yalumba Mark, Charlesworth J held that when 'SIGNATURE' is taken together with the word 'THE' (as it must be), this has the effect of presenting the word 'SIGNATURE' in its nominal form and imparting a message of importance. Charlesworth J noted that the significance of the definitive article was sufficiently memorable to 'register in the consumer's conscious or unconscious mind'.3

Turning to Pernod Ricard's mark, her Honour held that the distinctive feature of BAROSSA SIGNATURE was the grammatical nonsense produced by the unusual word combination including use of SIGNATURE in its adjectival sense. When compared with the Yalumba mark, this produced an impression sufficient to remove any likelihood of deception or confusion.

Charlesworth J also declined to take into account Samuel Smith & Son's reputation stored within the Yalumba Mark on the basis that evidence it had adduced about the volume of production and sales was, without more, insufficient to meet the requisite standard of familiarity.

Pernod Ricard's subjective intentions

Relying on the defence to infringement in section 122(1)(b)(i) of the Act, Pernod Ricard submitted that it had intended to use BAROSSA SIGNATURE for the sole purpose of indicating that the grapes used to make the wines were sourced from the geographical region of the Barossa Valley, as this was a characteristic of the underlying goods.

Determination of the issue was ultimately unnecessary, since deceptive similarity between the marks was not established. Nevertheless, Charlesworth J found it improbable that Pernod Ricard would have subjectively intended to use BAROSSA SIGNATURE for the sole purpose of indicating the geographical origin of the goods. Having regard to stylistic presentation of the mark and Pernod Ricard's sophisticated marketing strategies, her Honour considered that the mark served a "dual imperative: to develop a sign that conveyed a descriptive meaning ... [and] an effective and attractive sub-brand (so as to distinguish Pernod Ricard's goods from those of other traders)."4 While this did not indicate a lack of good faith on Pernod Ricard's behalf, it would, had infringement been established, have been sufficient to deprive Pernod Ricard from the protection afforded by the section 122(1)(b)(i) defence.

Key takeaways

For those who seek to rely on the deceptive similarity ground to argue that another mark infringes their own:

  • for the purposes of assessing deceptive similarity, it is the distinctive element of a mark that will create an impression in the mind of the consumer
  • while reputation may be taken into account for the purpose of assessing deceptive similarity, evidence of sales, without more, will not be sufficient to establish reputation.

For those who seek to counter a claim for trade mark infringement by arguing that their 'use' of their mark has been merely descriptive, or to indicate geographic origin:

  • signs that include a descriptive element can still function as a badge of origin when presented in a unique or unconventional way
  • marks that contain a geographic name can still serve a branding function.

Thanks to Laura Holmes for her assistance in preparing this article.

Footnotes

1 Samuel Smith & Son Pty Ltd v Pernod Ricard Winemakers Pty Ltd [2016] FCA 1515.

2 C A Henschke & Co v Rosemount Estates Pty Ltd [2000] FCA 1539 [52] (per curiam).

3 Samuel Smith & Son Pty Ltd v Pernod Ricard Winemakers Pty Ltd [2016] FCA 1515 [105] (Charlesworth J).

4 Ibid, [123].

This article is intended to provide commentary and general information. It should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this article. Authors listed may not be admitted in all states and territories

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Authors
Stuart Green (formerly with Corrs Chambers Westgarth)
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