Use it or Lose it – a bitter storm brews for heritage beer brands

In a dispute that many (from beer lovers to IP lawyers) have been following, a decision on Foster’s ownership of 60 trade marks of heritage beers by IP Australia is expected by July 2013.

The dispute centres on approximately 60 of Foster’s trade marks, such as as Ballarat Bitter, McCracken’s, Brisbane Bitter, Kent Old Brown, White Horse (registered as a trade mark in 1910!), and Richmond Lager – brands which Thunder Road Brewing claim have not been used by Foster’s in many years[1].

Under the Trade Marks Act, a trade mark that has not been ‘in-use’ for a continuous period of 3 years or more, can be removed from the Trade Marks Register[2] – a requirement introduced in order to help protect the Register’s integrity. Interestingly, any person (for a fee) can make an application for the removal of a trade mark for non-use, i.e. no standing or interest in the trade marks is required. Further, once such an application is made, the burden is on the registered owner of the trade mark (i.e. Foster’s) to establish use of the trade mark[3].

During the hearing, Thunder Road Brewing’s lawyers argued that some of the beer trade marks in question had not been used in decades. They also somewhat controversially suggested that Foster’s limited releases of heritage brands was in reality, a ploy to show usage, and did not reflect ongoing commercial use of those trade marks[4].

Foster’s lawyers argued that they had never abandoned the trade marks and that it was “not an option for somebody to commandeer these heritage brands”. They further argued that Foster’s release of commercial batches (around 50,000 cans per release) of some its heritage beers to major retailers and pubs demonstrated that Thunder Road Brewing’s allegation that it was all a sham was “all an elaborate case of smoke and mirrors…[and not] a serious contention’’[5].

A decision in favour of Thunder Road Brewing could mean that some of the trade marks previously owned by Foster’s could be up for grabs in the near future. However, just because Foster’s trade marks are removed from the Register, the use and registration of those brands by third parties like Thunder Road Brewery is not necessarily safe from legal challenge. Foster’s could still allege misleading and deceptive conduct based on a residual reputation and/or file an opposition to any trade mark application. No matter which way IP Australia decides on the issue, both parties have the option of appealing the decision to the Federal Court.

IP Australia and the Federal Court (if appealed to) will consider things such as: the existing reputation in the trade mark(s); the risk of consumer deception and/or confusion in removing the mark(s) from the Register; and the actual ‘use’ of the marks by Foster’s. Interestingly, under s101(3) of the Act, the Court (as well as IP Australia) is given a broad discretion which allows it to not remove a mark from the Register, even if grounds of opposition have been established, provided it is “satisfied that it is reasonable to do so”. This discretion is not taken lightly however, and as we saw in the Wild Turkey appeal case, the exercise of this discretion requires factual evidence (for example, as to the mark’s reputation and profile in Australia) for it to be validly invoked.

So what can be learnt from this? It’s important to realise that the “Use it or Lose it” requirement of the Trade Marks Act is real and must be considered when looking at your business or organisation’s trade marks/brands. In order to help protect your brands, and lessen the risk of losing registration of your marks, we suggest the following:

1. Undertake regular audits of your trade mark portfolio;
2. Identify the core brands that are: key to your business, have particular goodwill/ commercial value, or that you simply do not want to lose; and
3. Ensure those brands are legitimately (in good faith) and regularly ‘in-use’ in the course of trade i.e. that those marks appear upon, or in physical or other relation to, the relevant goods and/or services.

 

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