Australia: Scandinavian Tobacco Group Eersel BV v Trojan Trading Company Pty Ltd (2016) 119 IPR 247; [2016] FCAFC 91

Last Updated: 11 February 2017
Article by Michael Deacon and Chris Bevitt

The Parties

Scandinavian Tobacco Group Eersel BV (STG) is the registered owner of various Australian trade marks. Trojan Trading Company Pty Ltd (Trojan) is the alleged infringer of the trade marks. The judgment of the Full Federal Court (Besanko, Nicholas and Yates JJ) relates to an appeal by STG and its Australian distributor, Scandinavian Tobacco Group Australia Pty Ltd, from the first instance Federal Court decision of Allsop CJ, who dismissed STG's claims against Trojan for trade mark infringement, passing off and contraventions of the Australian Consumer Law.

The Trade Marks

The Australian trade marks in issue were:

  • CAFE CREME (No. 761892) – registered in class 34 for "Cigars, cigarettes, tobacco, tobacco products, smokers' articles, lighters, matches";
  • HENRI WINTERMANS (No. 179680) – registered in class 34 for "Manufactured tobacco, cigars, cigarillos and other manufactured tobacco products";
  • HENRI WINTERMANS (No. 1529889) – registered in class 34 for "Cigarettes, tobacco, tobacco products, smokers' requisites, lighters and matches"; and
  • LA PAZ (No. 643779) – registered in class 34 for "Cigars and cigarillos",

(all together referred to as the STG Marks).

Background and Issues

STG manufactures cigars in Belgium, Holland and Indonesia, during which time the STG Marks are applied to the packaging of the cigars by or under the control of STG.

Trojan imported into Australia genuine STG cigars which had been manufactured and packaged by STG overseas. Trojan then unwrapped and re-packaged the cigars for compliance with the Tobacco Plain Packaging Act 2011 (better known as Australia's "plain packaging laws"), which involved Trojan replacing the original packaging with new packaging and then applying to the new packaging the STG Marks that were on the original packaging.

STG claimed that the importation and sale of the re-packaged cigars by Trojan infringed the STG Trade Marks pursuant to section 120(1) of the Trade Marks Act 1995. Section 120(1) states that "a person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered".

Under section 121, a person may also infringe a trade mark by doing certain prescribed acts in connection with the trade mark or the packaging of the goods, as long as those acts have been prohibited by the trade mark owner by notice applied to the goods. Applying the trade mark to goods after the state, condition, getup or packaging in which they were originally offered to the public has been altered is one of the acts which may be prohibited by notice from the trade mark owner. Importantly, STG did not apply any such notice to the original packaging of its cigars.

Trojan relied on section 123 to defend the infringement claim, which states that "in spite of section 120, a person who uses a registered trade mark in relation to goods that are similar to [or the same as] goods in respect of which the trade mark is registered does not infringe the trade mark if the trade mark has been applied to, or in relation to, the goods by, or with the consent of, the registered owner of the trade mark".

STG also claimed that Trojan's conduct constituted passing off and contraventions of sections 18 and 29 of the Australian Consumer Law. Those claims were dismissed and are not discussed here.

Previous Decision

At first instance, Allsop CJ found that the application of the STG Marks by Trojan to the re-packaged cigars was an infringing use of the marks under section 120(1). However, Allsop CJ also found that Trojan had a defence to infringement under section 123.

STG argued that the phrase "has been applied to... with the consent of the registered owner" in section 123 refers to the alleged infringer's application of the trade mark, not to any earlier application of the mark by or under the control of the trade mark owner (in which case, Trojan's re-application of the trade mark would not have been protected by section 123). Conversely, Trojan argued that section 123 is directed to any application of the trade mark by or with the consent of the owner, which means the defence applies if the trade mark has at any time been applied to the goods by or under the control of the owner.

Chief Justice Allsop agreed with Trojan, noting that section 123 only requires that the trade mark has been applied to the goods with the consent of the trade mark owner at some time in the past. Section 123 does not require the goods to continue to bear the mark as applied by the owner. In other words, section 123 will provide a defence in connection with the later use of a trade mark on or in relation to goods, such as re-packaging the goods with the same trade mark, as long as the trade mark was initially used on or in relation to those goods by or with the consent of the trade mark owner. This interpretation was considered to be consistent with the primary purpose of section 123 to protect non-infringing uses of trade marks to indicate a connection between the goods and the trade mark owner, for example in the context of advertising and sale by retailers.

The Decision

The Full Federal Court upheld Chief Justice Allsop's decision stating:

"The language of s123(1) refers to a mark that has been applied to or in relation to goods by or with the consent of the registered owner. The operation of the section is not expressly or impliedly confined to a situation in which the goods still bear the mark as applied by the owner. The temporal requirement of the section will be satisfied if at some time in the past, which may be after the time of manufacture, the mark has been applied to or in relation to goods by or with the consent of the owner. If those goods are later sold by a person in circumstances which involve him or her using a mark that was previously applied by or in relation to the goods by the owner then s123(1) will be engaged."

As a result, the Court held that Trojan's repackaging of the cigars with the original STG Marks fell within the scope of section 123 and that Trojan therefore had a valid defence to STG's trade mark infringement claim.

The Significance

This decision may cause serious concern for trade mark owners wishing to control the quality and nature of their product packaging, particularly where the quality of the product packaging is an important aspect of the owner's branding and goodwill. Applying an appropriate notice to product packaging as contemplated by section 121 is critical to provide grounds to stop importers altering product packaging in certain cases. Trade mark owners could also have other options available in addition to an action for trade mark infringement. Actions for passing off or breach of the Australian Consumer Law could be available, for example if the trade mark owner is able to establish that the re-packaging misleads or deceives Australian consumers or there is a misrepresentation that the re-packaging was carried out with the trade mark owner's consent. The specific circumstances will generally dictate whether these other options are available to trade mark owners.

Read full Scandinavian Tobacco v Trojan judgment

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Shelston IP ranked one of Australia's leading Intellectual Property firms in 2015.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Corrs Chambers Westgarth
Pointon Partners
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Corrs Chambers Westgarth
Pointon Partners
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions