Austin, Nichols & Co Inc v Lodestar Anstalt

Austin, Nichols & Co Inc v Lodestar Anstalt - [2011] FCA 39 - FCA 2011 case summary — Zoe

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The Facts 3 The respondent Lodestar Anstalt ('Lodestar') is an Anstalt incorporated in Liechtenstein. Although the precise status and characteristics of an 'Anstalt' were not disclosed at the hearing, for the purposes of this judgment it is sufficient to say that an Anstalt is a corporate form peculiar to Liechtenstein which has legal personality. Lodestar is associated with Stichting Lodestar, a company which has its registered office in the Netherlands. 4 Trade Mark Registration No. 839740 in respect of the words WILD GEESE ('the WG trade mark') was registered under the Trade Marks Act in the name of Lodestar on 21 June 2000 in respect of the following goods: Class 32: Beers; mineral and aerated waters and other non-alcoholic drinks; fruit drinks and fruit juices; syrups and other preparations for making beverages Class 33: Alcoholic beverages (except beers) 5 Wild Geese Wines Pty Ltd ('WG Wines') is an Australian Proprietary Company registered 27 September 2009. Such company produces and sells wines, principally in South Australia. 6 On 30 January 2001 WG Wines applied to register a graphical mark containing the word 'WILD GEESE WINES'. Such application was rejected. 7 The first named applicant Austin, Nichols & Co Inc ('Austin Nichols') was at all relevant times a subsidiary of a Pernod Ricard Group. Austin Nichols carried on the business of making and selling bourbon whiskey under various trade marks including the trade mark 'WILD TURKEY'. 8 On 27 June 2005 Austin Nichols filed an application for removal of the WG trade mark pursuant to s 92(4)(b) of the Trade Marks Act ('the first removal application') on the grounds of non-use. Section 92 of the Trade Marks Act then extant relevantly stated: Application for removal of trade mark from Register etc. (1) A person aggrieved by the fact that a trade mark is or may be registered may, subject to subsection (3), apply to the Registrar for the trade mark to be removed from the Register. (2) The application: (a) must be in accordance with the regulations; and (b) may be made in respect of any or all of the goods and/or services in respect of which the trade mark may be, or is, registered. … (4) An application under subsection (1) of (3) (non-use application) may be made on either or both of the following grounds, and on no other grounds: … (b) That the trade mark has remained registered for a continuous period of 3 years ending one month before the day on which the non-use application is filed, an, at no time during that period, the person who was then the registered owner: (i) used the trade mark in Australia; or (ii) used the trade mark in good faith in Australia; in relation to the goods and/or services to which the application relates. 9 On 26 July 2005 WG Wines applied to register the trade marks 'WILD GEESE' and "WILD GEESE WINES' in the category of 'Class 33: Wine' ('the WG Wines trade marks') but because of Lodestar's prior registration of the WG trade mark, such application was not immediately successful. 10 On 6 September 2005 WG Wines filed an application for partial removal of the WG trade mark, seeking removal in 'Class 33: Alcoholic beverages (except beers)' on the grounds of non-use pursuant to s 92(4)(b) of the Trade Marks Act ('the second removal application'). Such application had also sought removal pursuant to s 92(4)(a) of the Trade Marks Act which provides for an application for removal where it is proved that the owner of the trade mark had no intention to make use of the mark. Such ground was not pressed at the hearing either before the Registrar's delegate or this Court. 11 On 13 October 2005 Lodestar filed a Notice of Opposition to both the first and the second removal applications. 12 The relevant period of non-use relied upon in respect of the first removal application was from 28 May 2002 until 27 May 2005. In relation to the second removal application the relevant period of non-use was 7 August 2002 until 6 August 2005. Accordingly, a non-use period of 28 May 2002 until 6 August 2005 ('the relevant non-use period') would have satisfied the non-use requirement prescribed by s 92(4)(b) in respect of both applications. 13 On 1 June 2007 Austin Nichols entered into an agreement with WG Wines. Pursuant to such agreement WG Wines assigned to Austin Nichols all its right, title and interest in the pending applications made by WG Wines for the WG Wines trade marks. Simultaneously Austin Nichols licensed WG Wines to use the WG Wines trade marks which had been applied for. WG Wines also transferred its interest in the second removal application to Austin Nichols. As a result, WG Wines ceased to have further involvement in the removal applications before the Registrar. 14 The business and assets of Austin Nichols was thereafter sold and transferred to the second named applicant, Rare Breed Distilling LLC ('Rare Breed'), which is itself a subsidiary of a major international group, namely Davide Campari-Milano S.p.A., an Italian corporation. As part of that transaction the applications for the WG Wines trade marks originally made by WG Wines on 26 July 2005 were assigned from Austin Nichols to Rare Breed as was Austin Nichols' interest in the first and second removal application. Hereafter for convenience, the applicants will be collectively referred to as 'Austin Nichols' or 'the applicants'.

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Background to the Production of Wild Geese Whiskey by Lodestar 24 In late 1999 Mr Levy was approached by a group of investors ('the investors') seeking to become involved in the spirit industry and who wished to produce a new whiskey product. Mr Levy stated that due to the competitiveness of the Scotch Whisky market, he in co-operation with the investors decided to create a new Irish whiskey product. Mr Levy stated that prior to the development of the Wild Geese Whiskey product, he was aware of the story of the 'Wild Geese', the name given to Irish soldiers of fortune who left Ireland for Europe as far back as the 13th century in organised military units. 25 According to Mr Levy's evidence, in approximately 1691 more than 11,000 Wild Geese soldiers left Ireland for France where they joined the French Army and were known as the Irish Brigade. Such brigade assisted France in fighting every major conflict from the days of Louis XIV of France to World War II. The Wild Geese name is also said to embrace the totality of the Irish Diaspora rather than merely soldiers of fortune. Mr Levy determined that the incorporation of the name 'Wild Geese' into the name of a new Irish whiskey product would allow the creation of a very memorable marketing campaign and branding of a new Irish whiskey 26 As referred to above the application for the WG trade mark was lodged in Australia on 21 June 2000. The WG trade mark was entered on the register on 8 December 2000. Such registration was one of many applications lodged by Lodestar for WILD GEESE trade marks around the world. On 1 December 2001 Stichting Lodestar, as licensor, granted to the Avalon Group Inc ('Avalon'), the exclusive licence to use the WILD GEESE trade mark in most countries of the world. 27 On 4 January 2002 by trade mark deed of assignment, Stichting Lodestar transferred six trade marks of which it was the proprietor and owner in Australia to Lodestar Anstalt for a consideration of $1. One of such trade marks was the WG trade mark. 28 Mr Levy testified of his difficulties in sourcing whiskey for Wild Geese Whiskey after its name had been determined. According to such evidence in approximately February 2001, Mr Levy, on behalf of Protégé and Lodestar, entered negotiations with Old Bushmills Distillery Co Ltd in Northern Ireland for the supply of whiskey spirits, to be marketed under the trade marks WILD GEESE, and/or WILD GEESE RARE IRISH WHISKEY. Old Bushmills Distillery Co Ltd was until 2006 a wholly owned subsidiary of Irish Distillers Limited ('Irish Distillers'). Mr Levy found that Irish Distillers was the only readily available source for Irish whiskey as another distiller, namely Cooley Distillery ('Cooley's') was unable to provide an immediate supply of whiskey. Mr Levy had discussions with the Master Blender of Irish Distillers and the Master Blender of Cooley's as to whether the existing stock of those distilleries could be used for the purpose of producing Wild Geese Whiskey. 29 Mr Levy gave extensive evidence regarding the apparent obstacles that Protégé, Avalon and Lodestar (the companies he represented) had encountered in producing and marketing the Wild Geese Whiskey product. 30 Mr Levy stated that prolonged negotiations were required before those representing Lodestar had been able to acquire the rights to use the WILD GEESE trade mark in Ireland, which was already in use in the category of wine. Mr Levy stated that Avalon could not begin negotiations to find a supplier until such negotiations were finalised. 31 Mr Levy gave evidence concerning the difficulties he experienced when negotiating with Irish Distillers, a wholly owned subsidiary of Pernod Ricard. Mr Levy claimed that such difficulties resulted from Irish Distillers' attempts to limit the distribution of the Wild Geese Whiskey product. 32 Mr Levy was directly involved in negotiations with the Managing Director and the Master Blender of Irish Distillers relating to a supply agreement between Avalon and Irish Distillers. Such negotiations took place over approximately 8 months. However, by 2 October 2001 it became apparent to Mr Levy that Irish Distillers were seeking to impose a territorial limitation upon the places where Avalon could offer Wild Geese Whiskey for sale. Accordingly Mr Levy approached Cooley's with a view to engaging that company to supply Irish whiskey for the Wild Geese Whiskey product. 33 Mr Levy also claimed that at about this time a party he described as 'Irish Distillers Limited/Groupe Pernod Ricard and/or Austin Nichols/Groupe Pernod Ricard' began attempts to disrupt the sale of the Wild Geese Whiskey by lodging opposition to Lodestar's trade mark registration WILD GEESE in multiple countries around the world, commencing with the filing of a notice of opposition in Korea in March 2001. 34 Negotiations between Mr Levy and Cooley's for the supply of Irish whiskey extended until October 2002. Mr Levy claimed that such delay was on account of the unfavourable conditions offered by Cooley's in comparison to those previously negotiated with Irish Distillers. When the contracts were finalised Protégé and Avalon resumed designing and purchasing bottles, labels, caps and cases and arranging bottle supply. Despite substantial investment being made in such items, as well as in promotional items, such items were not available until early 2003. 35 Mr Levy claimed in summation that delays during the negotiations with Irish Distillers and Cooley's led to a delay in the commercialisation of the Wild Geese Whiskey product of over four years.

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Display of Wild Geese Whiskey 36 Mr Levy also gave evidence in respect of the marketing and promotion of Wild Geese Whiskey by Protégé. In 2003 Protégé exhibited Wild Geese Whiskey at the London Wine and Spirit Fair. Protégé also exhibited the product at the Tax Free World Association ('TFWA') in 2004 and 2005 in Singapore. 37 Mr Levy claimed that the exhibitions conducted by TFWA in Singapore attracted approximately 600 delegates and advertising material relating to Wild Geese Whiskey had been forwarded to the attendees prior to the event. 38 Mr Levy stated that exhibitions organised by TFWA were also held in Cannes in 2002, 2003, 2004 and 2005. Such exhibitions usually attracted approximately 5000 delegates but Mr Levy claimed that Protégé had been refused permission to exhibit Wild Geese Whiskey on the apparent grounds of lack of commercial space. 39 Mr Levy stated that he believed that the ongoing international trademark dispute between Austin Nichols and Lodestar was the motivating factor behind such refusal. Mr Levy stated that it was important for Protégé to attend such exhibitions as part of its marketing strategy in order to 'break into Europe and Asia prior to investing in the brand further a field [sic] i.e. Australia and New Zealand'. 40 In the latter part of 2003 Mr Levy made contact with a potential agent in Melbourne Australia, Mr Simon Ogilvie. Mr Ogilvie had prior experience in the food and drink industry in Australia and the Asia Pacific region. On 18 March 2004 an agreement was concluded by email between Mr Ogilvie and Mr Levy for the marketing of the Wild Geese Whiskey product. For various reasons the arrangement was unsuccessful and was terminated within three months. 41 It is not disputed by Lodestar that there was no use of the trade mark WILD GEESE by Lodestar in the relevant non-use period. That is, there was no use by Lodestar of the WILD GEESE trade mark in Australia from 27 May 2002 until 6 August 2005. 42 Wild Geese Whiskey has been distributed and sold in Australian retail outlets since late 2008. The Court will consider the issues arising in relation to these sales under the topic of discretion considered later in this judgment.

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Applicant's Submissions 48 The applicants submit that the effect of the High Court's judgment in Health World is to greatly clarify and liberalise the legal principles relating to standing in respect of an application for non-use. The applicants submit that the effect of the High Court's judgment in Health World, particularly that of the combined reasons of French CJ, Gummow, Heydon, and Bell JJ ('the majority judgment') establishes the proposition that an applicant is a 'person aggrieved' for the purposes of a removal application under s 92 the Trade Marks Act if they operate in the 'same trade' as the owner of the challenged mark. 49 The applicants submit that Austin Nichols satisfies the definition of a 'person aggrieved' since they operate in the same trade as Lodestar, namely as a producer and seller of alcoholic drinks, namely whiskey. The applicants submit that following Health World, general 'trade rival' status is determinative of standing and that no detailed analysis of the description of the contested goods need be undertaken. Accordingly the applicants submit that they have standing to apply to remove Lodestar's mark in the contested category of Class 32 goods, despite not being involved in production of goods of that description. 50 To establish the fact that the contested Class 32 non-alcoholic drinks were encompassed in the parties' common trade, the applicants referred to the close connection between the non-alcoholic goods in Class 32 and the alcoholic products which Austin Nichols produced. They submit that the intimate connection between alcoholic and non-alcoholic drinks in the form of mixed drinks and 'Ready-to-drink' beverages (RTDs) together with the close connection between such drinks and the business of Austin Nichols and Lodestar demonstrates the fact that such parties are trade rivals in relation to such goods. 51 The applicants relied extensively upon the evidence of Mr Christopher John Middleton, a witness called by Lodestar, to explain the connection between alcoholic and non-alcoholic drinks. Mr Middleton is an independent consultant and the Chairman of the Victoria Valley Distillery and has been involved in the whiskey and beverage industry for more than 20 years. 52 Mr Middleton testified that the vast majority of whiskies, whether American, Irish, Scottish or Japanese or from some other country, tend to be sold in full strength bottles to consumers who mix their drinks. The drinks are mixed with cola, ginger ale or water to dilute the strength of the alcohol and mix it to a flavour profile that the consumer prefers to drink. Mr Middleton testified that approximately 60% of whiskey is consumed with cola in Australia whilst approximately 10% is consumed with ginger ale and other mixers and that only 10% was drunk without any mixing. 53 Mr Middleton acknowledged however that '[i]n about 99.9% of cases' it was traditional for a single malt Scotch whisky to be advertised as a spirit that should be taken neat or only with ice and possibly a jug of water. He also stated that he would be surprised if 'a lot of people would be mixing' Wild Geese Whiskey with Coca-Cola given its price but stated that such decision was 'their choice'. 54 Mr Middleton also gave detailed evidence regarding the popularity of various combinations of alcoholic and non-alcoholic drinks and their corresponding 'bar-calls' including generic combinations such as 'whiskey and soda' or 'gin and tonic' and also brand-specific combinations such as 'Bundy and Coke' (Bundaberg Rum and Coca-Cola) and 'JD and Coke' (Jack Daniel's Tennessee Whiskey and Coca-Cola). 55 Mr Middleton also gave evidence regarding the increased popularity of RTDs in the Australian marketplace.

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Consideration 61 The delegate's decision in respect of the first removal application found that there was no deceptive similarity between the trade marks of Austin Nichols and of Lodestar and accordingly found that Austin Nichols was not a person aggrieved. However the subsequent decision of the High Court of Australia in Health World has clarified the requirements for determining whether a person is a 'person aggrieved' within s 92(1) of the Trade Marks Act. 62 At [30] of the majority judgment, French CJ, Gummow, Heydon, and Bell JJ held that a liberal test is to be applied to the meaning of 'person aggrieved', adopting the observations of Lord Pearce in "Daiquiri Rum" Trade Mark [1969] RPC 600 at 615. In reference to Lord Pearce's test, the majority said at [43]: All that mattered was that they were rivals in relation to the goods to which the mark applied. It did not matter whether or not they intended to use the mark on those goods. 63 In applying Lord Pearce's observations to the facts before them, the majority of the High Court said at [44]-[45]: Shin-Sun submitted that the test required the applicant to establish a reasonable possibility that the trade mark proprietor in maintaining registration was having an adverse impact on the applicant. The test does not require that, beyond proof of trade rivalry. With respect, then, Lord Pearce correctly stated one test, among others, for ascertaining whether a person is "aggrieved". It is satisfied here, for Health World and Shin-Sun are rivals in selling the health products in question. They are in the same trade, and they each trade in the class of goods in respect of which the challenged mark is registered. 64 Accordingly the mere fact of being engaged in the same trade, trading in the same class of goods was regarded by the majority as sufficient to warrant a claimant being constituted a 'person aggrieved' for the purpose of standing. 65 The majority of the Court also did not identify any requirement that there be a likelihood of confusion between any mark currently used by the apparently aggrieved person and the mark under attack. Significantly, the High Court held that it was immaterial that an applicant seeking removal had not established an intent to actually use the trade mark. At [38] the majority said: Hence a possibility of use of the mark unsupported by evidence suffices, even where there is no evidence of an actual desire or intention on the applicant's part to use the mark. 66 In arriving at such conclusion the majority made reference to the findings of Lord Watson in William Powell (trading as Goodall, Backhouse & Co) and The Birmingham Vinegar Brewery Company, Limited [1894] AC 8 at 12 where his Lordship said: Whatever benefit is gained by registration must entail a corresponding disadvantage upon a trader who might possibly have had occasion to use the mark in the course of his business. It is implied, of course, that the person aggrieved must manufacture or deal in the same class of goods to which the registered mark applies, and that there shall be a reasonable possibility of his finding occasion to use it. But the fact that the trader deals in the same class of goods and could use it, is prima facie sufficient evidence of his being aggrieved, which can only be displaced by the person who registered the mark, upon whom the onus lies, shewing that there is no reasonable probability that the objector would have used it, although he were free to do so. 67 It should be observed that in her separate judgment Crennan J, while not dissenting from the majority, at [61] left open the question whether it was sufficient for a 'person aggrieved' to prove no more than trade rivalry with the registrant of the trade mark sought to be removed. 68 At [60] her Honour states: Health World satisfies Lord Pearce's test set out above. Health World, a trade rival of Shin-Sun's, is asserting a right to conduct its business in goods of the same description as Shin-Sun's goods, under its trade mark "INNER HEALTH PLUS", without having that business affected by a concurrent registration of the trade mark "HEALTHPLUS" for goods of the same description, which registration Health World claims is erroneously on the Register. For that reason, Health World is "a person aggrieved" as required by the applicable sections of the Act. [Emphasis added] 69 Lodestar places emphasis on her Honour's reasons in support of its claim that the applicants must be rivals 'in goods of the same description' to have the requisite standing.

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Finding: Standing 70 This Court is bound to apply the High Court of Australia's decision in Health World and will apply the approach of French CJ, Gummow, Heydon, and Bell JJ. As is made plain by their Honours' judgment, the definition of an 'aggrieved person' in the Trade Marks Act is to be liberally construed. Applying such interpretation, there are several consequences for the Court's determination in the matter now before it. 71 In implementing a liberal construction to the facts currently before the Court, there is no requirement that Austin Nichols evidence any intention to actually use a trade mark in the production of non-alcoholic Class 32 goods. Nor is Austin Nichols required to prove any possibility of disadvantage arising from Lodestar's registration of the unused mark. The parties before the Court agree that a finding that Austin Nichols and Lodestar are in the same trade is sufficient to establish standing in respect of the first removal application. 72 As submitted by Lodestar, the precise breadth of the definition of 'trade' used in the terms 'same trade' and 'trade rivalry' (as appears at [44] and [45] in Health World) is left open by the majority judgment in Health World. Austin Nichols submits that a wide definition of the term 'trade' should be applied, apparently consistent with the liberal view taken by the High Court in Health World. Such an approach seeks to define the terms 'same trade' and 'trade rival' in a general sense. The applicants submit that in view of Health World it is now unnecessary to undertake a detailed analysis of the description of the goods in order to establish standing in each class of goods. The applicants submit that such approach would result in an over-elaborate analysis of standing which the High Court in Health World sought specifically to disavow. 73 Applying the applicants' liberal interpretation, Austin Nichols and Lodestar are clearly in the 'same trade' and are 'trade rivals' as they are both producers of whiskey. 74 The Court is satisfied that on the facts before it that the applicants' interpretation should be adopted. Accordingly it finds that Austin Nichols has standing to bring the first removal application as a person aggrieved on the grounds that it is in the same trade as Lodestar and can be properly called a trade rival. The Court has come to this view on a number of bases, as discussed hereunder. 75 The majority of the High Court in Health World states that the 'person aggrieved' test must be construed liberally and must be determined on the basis of 'trade rivalry' simpliciter. It is apparent on the facts before the Court that Austin Nichols and Lodestar are plainly in the same trade as trade rivals. 76 The Court accepts the submission of Austin Nichols that the effect of the majority judgment in Health World in respect of standing is to place emphasis on the identity of the parties as trade rivals as opposed to placing emphasis on the goods to which the specific marks pertain. 77 Lodestar's submission seeks to confine the analysis of trade rivalry to the specific goods classes contained in the register. It submits that Austin Nichols cannot be considered to be a trade rival of Lodestar in reference to non-alcoholic class 32 goods as Austin Nichols produces no such goods. 78 The Court considers that such an approach does not give sufficient weight to the instruction of the majority in Health World to construe 'person aggrieved' liberally. The concepts of 'trade rivalry' and 'in the same trade' must be construed as being sufficiently broad to give effect to the ordinary meaning of such terms. 79 Austin Nichols' submissions regarding the close alliance between Class 33 alcoholic products and Class 32 non-alcoholic products is also a persuasive factor in leading the Court to its conclusion that Austin Nichols has standing in relation to non-alcoholic Class 32 products. 80 The prospect of manufacturing different goods in the future was recognised by the Full Court of this Court in E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2009) 175 FCR 386. Although this decision was successfully appealed to the High Court of Australia (see E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144), the successful appeal related to a different issue to that now under consideration. At [72] the Full Court said: The primary judge accepted that there were a number of factors which supported the view that Lion Nathan's beer and wine were goods at the same description. They were both alcoholic beverages and generally distributed by this same major wholesale distributors. The beer was intended to be an appealing alternative to wine and in developing the product, Lion Nathan deliberately set out to attract people who did not drink beer. Indeed it was developed with the deliberate objective of enticing consumers who previously drank wine but not beer. Producers of alcoholic beverages are no longer confined to the production of beer, as opposed to wine, and large producers of alcoholic beverages now produce a range of products and market themselves as doing so. Companies which were once brewers now market and distribute a range of products including beer, wine, spirits, cider and non-alcoholic drinks. Wine and beer are now frequently distributed by the same retailers. We agree that these matters point, and in our opinion point convincingly, to Lion Nathan's beer and wine being goods of the same description. 81 This extract gives recognition to the fact that a manufacturer may decide to develop other types of drink, and might not be confined solely to its traditional manufacturing base. Such possibility may be a factor to give relevant standing for classes of goods which are not currently manufactured. Significantly, such passage also informs the Court's task in determining the definition and scope of 'trade rivalry' within the beverage industry so as to determine whether Austin Nichols and Lodestar are trade rivals in accordance with Health World. 82 The Court is satisfied that the connection between Class 33 products such as whiskey and non-alcoholic Class 32 products such as cola is sufficient to establish that the 'trade' in which Lodestar trades encompasses both categories. 83 Austin Nichols rightly points out that such a connection will not always be apparent. It provided at the hearing a hypothetical example of the standing of Qantas Airlines to remove a trade mark registered for a Class 32 Cola product by the Virgin Group (for the purposes of the judgment, it is assumed that the Virgin Group operates an Airline division as part of its undertaking). In such example, it could not be said that Qantas Airlines was in the same trade as the Virgin Group in regard to cola products, despite the fact that both companies were trade rivals in some capacity (airline travel). 84 The Court is satisfied that Austin Nichols and Lodestar's trade rivalry should encompass non-alcoholic as well as alcoholic drinks. The two categories have been shown to be closely connected with the consequence that Austin Nichols should be properly understood as a trade rival of Lodestar in relation to non-alcoholic Class 32 drinks. The fact that Lodestar sought to acquire the trade mark in respect of Class 32 goods in addition to Class 33 supports such conclusion. Such a construction gives effect to a liberal construction of 'person aggrieved'. 85 The above conclusion does not seek to establish a new test to determine the necessary connection between classes in the Trade Marks Act so as to render such classes in the 'same trade'. The Court merely seeks to apply a liberal construction to the term 'person aggrieved' by adopting a test of 'trade rivalry'. 86 The Court further considers that Lodestar's emphasis placed on observations of Crennan J in Health World at [60] overstates her Honour's findings. Her Honour's observations still emphasise Lord Pearce's test of trade rivalry albeit in a more specific form. The Court notes that her Honour's reservations concerning the majority's judgement only extends to declining to decide the question whether 'trade rivalry' is sufficient to satisfy the 'person aggrieved' test. Notwithstanding, the majority judgment is binding and adequately instructive of the test to be applied. 87 In consequence of the above findings the Court finds that the applicants have standing in respect to the first and second removal applications.

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Issue Two: Obstacles to the use of the WG trade mark 88 As the applicants have established standing, the second question for determination by the Court is whether Lodestar has established that there were obstacles preventing its use of the WG trademark within the meaning of s 100(3)(c) of the Trade Marks Act. At the relevant time s 100 of the Trade Marks Act relevantly provided as follows: (1) In any proceedings relating to an opposed application, it is for the opponent to rebut: … (c) any allegation made under paragraph 92(4)(b) that the trade mark has not, at any time during the period of 3 years ending one month before the day on which the opposed application was filed, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services. … (3) For the purposes of paragraph 1(c), the opponent is taken to have rebutted the allegation that the trade mark has not, at any time during the period referred to in that paragraph, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services if: … (c) the opponent has established that the trade mark was not used by its registered owner in relation to those goods and/or services during that period because of circumstances (whether affecting traders generally or only the registered owner of the trade mark) that were an obstacle to the use of the trade mark during that period. 89 As stated above Lodestar does not contest that it did not use the WG trade mark in Australia in the relevant non-use period. However, it submits that there were obstacles to its use and that accordingly pursuant to s 100(3)(c) it is entitled to rebut the allegation of non-use. 90 Lodestar submits that the critical matter for determination under s 100 (3) of the Trade Marks Act is whether a causal link can be shown between circumstances of a trading nature and the failure to use the trade mark. 91 The obstacles relied upon by Lodestar are essentially threefold, as detailed hereunder.

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Obstacle 1: Trade Mark Litigation 92 Firstly, Lodestar submits that significant time and legal costs have been expended to defend the multiple challenges by the applicants (and their predecessors) to the WILD GEESE trade marks around the world. 93 The first opposition to Lodestar's WILD GEESE and related trade marks commenced in early March 2001 in Korea, approximately one month after Protégé commenced its negotiations with Old Bushmills Distillery Co Ltd for a supply of Irish whiskey. The evidence before the Court demonstrates that similar claims opposing Lodestar's registration of WILD GEESE trademarks have been made in other jurisdictions around the world including claims in countries in Europe, Asia, North America, South America and the Middle East. Lodestar claims it has expended in excess of £300,000 in legal fees to date and has been awarded only £12,509.41 in costs in the multiple proceedings where it has been successful. 94 Lodestar submits that it was prudent and reasonable to delay full commercialisation of Wild Geese Whiskey in Australia until its rights to use the contested mark had been established, particularly as Wild Geese Whiskey was, in Lodestar's words, a 'global brand'. It submitted that its right to the WILD GEESE trade mark in New Zealand, a country culturally and legally similar to Australia, was only resolved in March 2007 after a successful appeal to the Court of Appeal of New Zealand (see Stichting Lodestar v Austin, Nichols & Co. Inc. [2007] NZCA 61). 95 In rebuttal to such submissions, the applicants submit that limited resources and the distraction of trade mark proceedings are insufficient to constitute relevant circumstances for the purposes of s 100(3)(c) of the Trade Marks Act. 96 The applicants submit that, unlike other jurisdictions where Austin Nichols and Lodestar have contested the use of the WILD GEESE mark, Lodestar possesses the registered mark in Australia (the WG Trade Mark) and accordingly could have made use of it. The applicants further submit that simultaneous litigation did not prevent use of the WILD GEESE trade mark in other jurisdictions, citing the example of Great Britain where Wild Geese Whiskey was exhibited in trade fairs in 2003 and made available for review despite simultaneous litigation in that jurisdiction.

[20]

Obstacles to Use: Consideration 103 In Woolly Bull Enterprises Pty Ltd and Another v Reynolds (2001) 107 FCR 166 Drummond J considered the circumstances sufficient to constitute an obstacle to the use of a trade mark within the meaning of s 100(3)(c). His Honour at [45] considered s 26(3) of the Trade Marks Act 1938 (UK) and observed: Section 26(3) of the Trade Marks Act 1938 (UK) ("the 1938 UK Act") prevented reliance by an applicant for removal on the ground of non-use on "any non-use of a trade mark that is shown to be due to special circumstances in the trade and not to any intention not to use or to abandon the trade mark." 104 His Honour observed that s 23(4) of the Trade Marks Act 1955 (Cth) ('the 1955 Act') was to similar effect. At [45] his Honour referred to the authorities constituting those 'special circumstances'. 105 However, his Honour also observed at [46] that the text of s 100(3)(c) was deliberately adopted to significantly widen the corresponding provision of the 1955 Act so that under s 100(3)(c) it was not necessary to show 'unusual or abnormal …, trading conditions' before s 100(3)(c) can have operation. At [47] Drummond J indicated the parameters with which the obstacles referred to in s 100(3)(c) could exist but added the limitation in [48] as follows: 47. In the context of s 100(3)(c), there are, however, good grounds for reading "circumstances" as not embracing any event of any kind. The circumstances must be "an obstacle to the use of the trade mark by the registered owner". This suggests that they must arise from or comprise events external to the registered owner in the sense of not having been brought about by the voluntary act of the owner. 48. But if any circumstance external to the owner, in the sense of being a circumstance not brought about by the voluntary act of the owner, is within the provision, the Court would be drawn into inquiries of a kind that it is difficult to accept were in the contemplation of the Parliament. Financial impecuniosity could excuse non-use of a trade mark, irrespective of how enduring and intractable the owner's impecuniosity might be. Illness of the registered owner could also excuse non-use of the registered trade mark (as is the contention of the applicants here). A falling out between joint registered owners of a mark that disrupts the use by either of the mark might also be capable of excusing non-use. In all such situations, questions could arise requiring investigation by the Court into whether the obstructing circumstances were due to the conduct of the registered owner. 106 Drummond J found that the circumstances referred to in s 100(3)(c) would only be established in limited circumstances which he described in [55] of his decision as follows: In my opinion, circumstances within s 100(3)(c) will only exist when events arise that are capable of disrupting trade in the area of commercial activity in which goods bearing the registered owner's mark are traded. For the statutory excuse to be made out, those circumstances must cause (in a practical business sense) non-use of the particular mark by the owner, whether or not they have an impact on any persons other than the owner of that mark who are also involved in that same area of commercial activity. There must be a causal link shown between the relevant circumstances and the mark's non-use. This requirement arises from the fact that s 100(3)(c) creates an excuse only where the mark has not been used by the registered owner "because of" circumstances etc. It will not assist the opponent to removal to show the existence of an impediment to use of the kind referred to in s 100(3)(c) if he does not also establish that, but for that impediment, he would have used the mark. Compare Re James Crean & Son Ltd's Trade Mark at 162. 107 Critically at [56] his Honour said: Circumstances that do not have a trade character but which only affect a mark owner in his personal character, such as illness afflicting the owner of the mark that is sufficiently disabling to prevent the owner using the mark, can never therefore found an answer within s 100(3)(c) to an application for removal of the mark for non-use. 108 His Honour's observations raise the question of the nature of the obstacles which are relied upon by Lodestar for its non-use of the trade mark in Australia. Lodestar is required to firstly prove such circumstances existed, secondly that such circumstances were of a trading nature and lastly demonstrate a causal link between the apparent obstacles and the failure to use the WG trade mark in the relevant non-use period.

[21]

Trade Mark Litigation 109 The evidence clearly establishes that Lodestar and Austin Nichols have been engaged in extensive litigation in multiple jurisdictions over the best part of a decade. The Court has received into evidence approximate figures of the cost of such litigation to Lodestar and also evidence relating to the time spent in defending such actions by key representatives of Lodestar such as Mr Levy. The nature and extent of such litigation has had some effect on the activities of Lodestar in marketing their Wild Geese Whiskey product. Whether such litigation can constitute an obstacle for use in Australia for the purposes of s 100(3) of the Trade Marks Act is less clear. 110 Authorities of this Court have held that litigation relating to the use of a trade mark is not an 'obstacle' to trade: see Unilever Australia Ltd v Karounos and Another (2001) 113 FCR 322 at [68]. See also Conquip Holdings Pty Ltd v S & A Restaurant Corp (2000) AIPC 91-547. The facts in these cases involve litigation on a far smaller scale than those currently before the Court. Indeed Lodestar submitted that Unilever is distinguishable on the basis that the litigation relied upon as an obstacle in that cancellation proceeding was the cancellation proceeding itself. Lodestar also submitted that the multiplicity of proceedings in a wide range of jurisdictions between Lodestar and Austin Nichols requires that the litigation be considered an obstacle for the purposes of s 100(3). 111 The effect of litigation on the commercial behaviour of a company cannot be underestimated. In Uniline Australia Ltd (ACN 010 752 057) v SBriggs Pty Ltd (ACN 007 415 518) and Another (No 2) (2009) 82 IPR 56 Greenwood J observed at [38]: In the modern world of commercial litigation and various subsets of that litigation such as intellectual property litigation, costs are a very real and quantifiable concern. It would be extremely odd to think otherwise. Costs are incurred in a recoverable inter-parties sense from the moment the proceedings issue and they continue to be incurred at every point along the continuum of the litigation. Litigants who are required to pay these costs in order to assert or resist a claim, regard them as a very real and present expense, if not a real and present danger. Very often these costs are a significant business expense. They invariably require a commitment of significant resources and separate budget allocations. An offer to compromise which is framed in terms of a party's willingness to abandon the recovery of costs so incurred along that continuum through the preparation and analysis of statements, disclosure, analysis of documents and the preparation and review of expert reports, is undoubtedly considered by the litigant as an offer that involves giving up something meaningful, real and measurable. This is particularly so after the completion of case managed preparatory steps at various phases of the litigation which may have the effect of front-end loading significant costs in order to save trial costs. In many cases although not in all cases, the notion that a party is giving up nothing by inviting another party to discontinue a claim on the footing that the offeror will not make any claim for payment of its costs incurred to the date of the offer, is a fundamentally abstracted notion from the practical perspective of the engaged litigant confronting the management of the proceeding and the appropriation of expenditure to conduct it. An offer, on the other hand, that invites discontinuance of a claim on the payment of the offeror's costs to date offers not very much at all other than the stemming of future costs which in a particular case may nevertheless be very real. 112 Despite the guidance of the above authorities, the ultimate success of Lodestar in establishing that its involvement in worldwide litigation constitutes an obstacle for the purposes of s 100(3) is dependent upon its ability to demonstrate, as stated by Drummond J in Woolly Bull, a causal connection between the non-use of the WG trade mark in Australia and its involvement in litigation. 113 The principal evidence weighing against a finding that the worldwide litigation in which Lodestar was involved constituted an obstacle for the purposes of s 100(3) of the Trade Marks Act is the evidence that Wild Geese Whiskey was being promoted and sold in other parts of the world by 2003. Although Lodestar submits that entry into the Australian market was not advisable until after the resolution of litigation in the New Zealand jurisdiction, ongoing litigation had placed no bar to the promotion and sale of products bearing the WILD GEESE trade mark in the United Kingdom. The Court also notes that in Australia Lodestar actually possessed a registered WILD GEESE trade mark in the form of the WG trademark, a status that it did not enjoy in other jurisdictions. 114 The Court finds that Lodestar has not demonstrated any causal link between their involvement in ongoing worldwide litigation and the specific non-use of the WG trade mark in Australia. The Court considers the cause of Lodestar's non-use of the WG trade mark in Australia resulted from its deliberate decision to develop other international markets in priority to establishing its market in Australia. The Court is not satisfied that, but for Lodestar's involvement in extensive worldwide litigation, Lodestar would have made use of its WG trade mark in the relevant non-use period. For a large proportion of the relevant non-use period Lodestar and those representing it possessed an available supply of whiskey and were in the process of promotion and sale in jurisdictions other than Australia. 115 The Court notes that after the production of Wild Geese Whiskey had commenced, those representing Lodestar retained the services of Mr Simon Ogilvie to make sales of Wild Geese Whiskey in Australia. Such engagement was made during the relevant non-use period and while a supply of whiskey was available. The Court is not satisfied that the failure of such arrangement to produce any sales of Wild Geese Whiskey in the Australian market was caused by Lodestar's ongoing involvement in litigation. Further, the Court finds that the agency arrangement made with Mr Ogilvie demonstrates the capacity of Lodestar and those representing it to market Wild Geese Whiskey in Australia and accordingly make use of the WG trade mark within the relevant non-use period. 116 For the reasons stated above, the Court is not satisfied on the facts before it that the involvement of Lodestar in ongoing worldwide litigation constitutes an obstacle for the purposes of s 100(3) of the Trade Marks Act.

[23]

Promotion of Whiskey 119 The third matter relied upon by Lodestar relates to the difficulties in promoting Wild Geese Whiskey at the TWFA fairs held in Cannes in 2002, 2003, 2004 and 2005. The Court finds that such difficulties, which were experienced outside Australia and in relation to only one TFWA fair location, do not provide a sufficient reason for Lodestar's non-use of the WG trade mark for the purposes of s 100(3) of the Trade Marks Act. Lodestar has demonstrated no causal link between an apparent inability to exhibit the Wild Geese Whiskey product at the Cannes TWFA fair and the non-use of the WG trade mark in Australia. While absence of the Wild Geese Whiskey product at that event may have some cumulative effect on the global profile of the brand, such circumstances cannot amount to an obstacle to use consistent with the authority of Woolly Bull, particularly in circumstances where the Wild Geese Whiskey product was being exhibited and sold in other areas of the world during the relevant non-use period. 120 The Court concludes, for the reasons referred to above, that none of the reasons advanced by Lodestar constitute obstacles which satisfy the requirements of s 100(3) of the Trade Marks Act sufficient to warrant the rebuttal of the non-use of the WG trade mark during the relevant period. 121 It is convenient at this stage to refer to three separate submissions made by the applicants. 122 The applicants submit that the exclusive trade mark licence made between Stichting Lodestar and Avalon on 1 December 2001 contained no obligation on Avalon to exploit and use the WILD GEESE trade mark. The applicants submit that the failure to incorporate such a provision was a voluntary act on the part of Stichting Lodestar to give up its right to use the WILD GEESE trade mark in favour of Avalon in the faith that Avalon might use the mark, but with no power to enforce such use. 123 In light of the above findings, it is unnecessary to make any finding in respect of this claim. 124 The applicants also claimed that there is an evidentiary gap relating to the relationship between Avalon and the company of which Mr Levy was a director, namely ARL Communications Ltd. The Court finds that any such discrepancy is unnecessary to consider since it is not raised by the parties as being a discreet issue in the proceedings. 125 The Court also notes the applicant's submission that the obstacles put forward in evidence by Lodestar were not obstacles for the registered owner of the trademark, namely Lodestar Anstalt, as required by s 100(1)(c). In light of the above findings it is unnecessary to make a finding in regard to such submission.

[24]

Issue Three: Discretion 126 Section 101(3) of the Trade Marks Act invests the Registrar of Trade Marks and the Court with a broad discretion to allow a trade mark to remain upon the register even if the grounds on which an application for removal was made have been established. 127 The discretion is unlimited: see Pioneer Computers Australia Pty Ltd v Pioneer KK (2009) 176 FCR 300 at [167], [172] and [173]. Further, it is unnecessary to demonstrate that 'exceptional circumstances exist before the discretion may be exercised in favour of the holder of the trademark': see Kowa Company Ltd v NV Organon (2005) 66 IPR 131 at [98]; Pioneer Computers at [168]; E & J Gallo Winery v Lion Nathan Australia Pty Ltd (ACN 008 596 370) (2008) 77 IPR 69 at [198]. 128 In E & J Gallo Winery Flick J at [202]-[203] referred to the observations of Falconer J in Hermes Trade Mark [1982] RPC 425 in which Falconer J in the High Court of Justice held that there had been no abandonment of the HERMES trade mark. In Hermes the Court considered whether the applicant, a French company dealing in clocks and watches in the United Kingdom, was entitled to removal of the respondent's registration of HERMES in Class 14 for watches and clocks on the ground of five years of continuous non-use. 129 The respondent in Hermes acquired the mark in 1954 and had sold watches under that name between 1960 and 1971. From 1954 until the hearing, advertisements had appeared in an annual trade publication referring to the trade mark and to the respondent. Occasionally the respondent received Hermes watches for repair and in 1976 they made plans to recommence selling watches under the mark in July 1977. To do so the respondent placed orders containing references to the mark with a component supplier in October 1976 and the orders were fulfilled in April 1977. They prepared a price list and ordered boxes for the sale of their products. No sales took place until September 1977. 130 The Assistant Registrar expunged clocks from the registration resulting from the concession by the respondent that there had been no sales of clocks. However, with regard to watches, he held that whilst the advertisements alone would have not been sufficient to establish sufficient use, their combination with the steps taken in preparation for the re-launch of the watches constituted sufficient use of the trademark to defeat the application for removal by rectification. Falconer J affirmed the decision of the Assistant Registrar, dismissing the appeal. 131 In Pioneer Computers, Bennett J at [169] succinctly stated the principles arising from Hermes and adopted by Flick J in E & J Gallo Winery as follows: In E & J Gallo 77 IPR 69 at [202]-[203], Flick J stated that the following factors set out by Falconer J in Hermes Trade Mark [1982] RPC 425 were of assistance in considering the exercise of the discretion: • there had been no abandonment of the trade mark; • the registered proprietors of the mark still had a residual reputation in the mark; • there had been sales by the registered proprietors of goods for which removal was sought since the relevant period ended; • the applicants for removal had entered the market without having taken steps to ascertain from the Register whether anyone had a right to exclude their use of the mark; • the registered proprietors were not aware of the applicant's sales under the mark. 132 Based upon the above authorities, Lodestar submits that the Court, if satisfied that the grounds of the applicants' applications are made out, should nevertheless exercise discretion in favour of Lodestar for the following reasons. 133 Lodestar submits that the evidence clearly establishes that it has not abandoned the WG trade mark. It submits Wild Geese Whiskey is currently sold in over 34 countries including Australia where sales have occurred since 2008. Lodestar submits that the Court should also take into account the extensive promotion and sale of the Wild Geese Whiskey product before, during and after the relevant non-use period around the world. Lodestar further submits that the difficulties experienced in the production, promotion and sale of the product as extensively detailed above is also relevant to the Court's exercise of discretion. 134 In relation to Australian use of the WG trade mark, Lodestar submits that the Wild Geese Whiskey product has been sold in Australia since 2008; the product had been promoted to Australian delegates to the TFWA Trade Fair in Singapore; and that during the relevant non-use period Mr Ogilvie had been appointed to make sales of the product. 135 In relation to the public interest in maintaining the integrity and purity of the register, Lodestar submit that there is no evidence that the public has been or would be deceived if the WG trade mark was to remain on the register. It submits that Austin Nichols' mark of WILD TURKEY is not deceptively similar to the WG trade mark. It further submits that the concurrent registration of the WG wines trade marks and the WG trade mark has not resulted in any confusion in relation to those products as wine and whiskey are distinct and differentiable products. Finally Lodestar submits that there are no legitimate private interests served by removing the mark. 136 The applicants submit that the Court should not exercise its discretion under s 101(3). In simple terms, the applicants submit that the Court's discretion to decline to remove a trade mark should only be exercised in circumstances where there is sufficient reason for the retention of the trade mark and not merely because there is insufficient reason to remove it. The applicants submit that the onus rests upon Lodestar to demonstrate such reasons for retention and that Lodestar has not done so. 137 The applicants submit that the limited extent of Lodestar's use of the WG trade mark in Australia since 2008 is not sufficient to warrant the Court exercising its discretion to maintain that mark. They submit that the use of the WILD GEESE mark by WG Wines is at least comparable and accordingly discretion should not be exercised in favour of Lodestar. 138 The applicants further submit that earlier decisions in which the Court's discretion to allow a trade mark to remain on the register after the conditions for removal have been satisfied have fallen into one of two categories, namely; circumstances where a trade mark owner has engaged in substantial past use followed by a period of non-use; and circumstances where non-use by the trade mark owner has arisen out of a technicality. The applicants submit that an exercise of the Court's discretion in favour of Lodestar would create a further category for the exercise of discretion which has not previously been recognised. 139 The applicants submit that it is inappropriate for the Court to embark upon on any analysis of the possibility of future confusion between the WILD TURKEY trade mark and WG trade mark given insufficient evidence has been produced on that issue. The applicants submit that the lack of evidence necessarily follows from the fact that such evidence is not relevant for the purposes of a removal proceeding. 140 Lastly the applicants submit that evidence relating to Lodestar's apparent non-abandonment of the WG trade mark is also irrelevant, given that as Lodestar had never used the WG trade mark before the relevant non-use period, Lodestar was incapable of abandoning it.

[25]

Consideration: Discretion 141 The applicants established a prima facie case for removal. The issue now for determination is whether there is any justification for the Court exercising its discretion in favour of Lodestar to retain the WG trade mark. The principal concern of the Court in relation to the register is the need to keep the register 'pure'. This recurrent theme is referred to in the decision of the majority in Health World at [22]. 142 In Gallo Winery, Flick J said at [210]: Although the "guiding principle behind the discretion is public interest, particularly in the integrity of the register" (Kowa Co Ltd v Organon (2005) 223 ALR 27; 66 IPR 131; [2005] FCA 128 at [92] per Lander J), the private commercial interests of both Gallo Winery and Lion Nathan remain matters which may be taken into account when exercising the discretion. Trade mark law, it has been recognised, is more complex than is suggested by the proposition that the supreme - or, at least - a predominant interest is the maintenance of the integrity of the Register: Campomar Sociedad Limitada v Nike International Ltd (2002) 202 CLR 45; 169 ALR 677; 46 IPR 481; [2000] HCA 12 at [40]. Speaking of the 1955 Act, Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ there pointed out the balance struck by the legislation between various interests. Both the interests of the consuming public and the interests of traders have to be recognised. 143 The question of the public interest arises in the determination whether confusion would be caused by removing the mark. As submitted by the applicants, the mark should be removed unless it would cause confusion to remove it. In Re Carl Zeiss Pty Limited's Application (1969) 122 CLR 1, Kitto J considered (with reference to the Trade Marks Act) whether a trade mark should be removed from the register. His Honour said at 11: It has been urged upon me that no deception of any particular purchaser has been proved, and that there is no practical interest of the public to be served by removing the mark from the register. This seems to me to put the matter the wrong way round. The Stiftung's omission to use the mark for the statutory period entitles the applicant to have the mark removed from the register unless sufficient reason appears for leaving it there. No advantage that I can see would accrue to the public from maintaining the register in its present form. The only result of doing so would be that the V.E.B., though neither the registered proprietor nor a registered user, would enjoy the advantage, in its use of the mark, of protection against competitors by reason of the willingness of the Stiftung to enforce, for the benefit of the V.E.B.'s trade, rights which the Trade Marks Act confers upon the Stiftung for the benefit of its own trade. I see no reason for allowing this perversion of the trade mark law to continue. 144 Kitto J's judgment demonstrates the competing interests of preserving an unused trade mark on the register for the benefit of the holder of that mark and the need to maintain the purity of the register within the objective of trade mark law. 145 In Ritz Hotel Ltd v Charles of the Ritz Ltd and Another (1988) 15 NSWLR 158 McLelland J at 221 considered the discretion of the Court to order rectification of the register. His Honour referred to the principle that even if the ground for removal has been established, the exercise of the discretion may be withheld and said: The existence of a discretion to withhold relief even if a ground for rectification or removal has been made out is also well established by authority: see, as to rectification, Hannaford & Burton Ltd v Polaroid Corporation [1976] 2 NZLR 14 at 17-18 (Privy Council); General Electric Co (of USA) v General Electric Co Ltd [[1972] 2 All ER 507 at]… 526-529; Berlei Hestia Industries Ltd v Bali Co Inc [(1973) 129 CLR 353] (at 363); Imperial Group Ltd v Phillip Morris & Co Ltd (1982) 8 FSR 72 at 87-88 and as to removal, Re Carl Zeiss Pty Ltd's Application (1969) 122 CLR 1 at 5-6 and the earlier cases there referred to, and "Astronaut" Trade Mark [1972] RPC 655 at 672. 146 His Honour continued (at 221): The proper approach under both s 22(1) and s 23(1) is that if the condition of exercise of the court's power has been established, the entry of the mark should be expunged, or the mark should be removed, as the case may be, "unless sufficient reason appears for leaving it there": cf Carl Zeiss (at 11); "Astronaut" (at 672). 147 At 224 McLelland J held that potential public confusion would result if the existing monopoly held by the respondent were expunged from the register. 148 In Paragon Shoes Pty Ltd v Paragini Distributors (NSW) Pty Ltd and Others (1988) 13 IPR 323, Woodward J, having considered several authorities including that of Carl Zeiss, said at 345: There are several points which emerge from this line of authority. The first is the importance of the public interest - whether anyone has been deceived or is likely to be if the mark remains on the register; whether, on the other hand, the public has an interest in the preservation of an established mark. The second is the significance of an unimpeached title to the mark and its continuous use in good faith by the person entitled to it. Finally, if the public interest is not adversely affected and such title and use are shown, then technicalities or defects in legal formalities may be overlooked. 149 The applicants submit that if Woodward J's observations are taken as an attempt to restate the general principles for the exercise of the relevant discretion then such observations were in error and his Honour was mistaken in his interpretation of the test laid down by Kitto J in Carl Zeiss. As noted above, the applicants submit the relevant question for the Court is not whether there would be deception or confusion if the mark remained on the register but rather whether there would be deception or confusion if the mark were removed. 150 The Court observes that the latter approach was adopted by Bennett J in Pioneer Computers. At [178] her Honour said: Pioneer Computers relies upon the policy of the Act to facilitate the removal of an unused trade mark and the public interest in the integrity of the Register which, it submits, will generally demand the removal of an unused trade mark (Shanahan [Shanahan's Australian Law of Trade Marks & Passing Off (M Davison, K Johnston and P Kennedy, Shanahan's Australian Law of Trade Marks & Passing Off (3rd ed, Lawbook Co., 2003)] at [15.145]). However, as Shanahan also points out at [15.145], the underlying policy of the Act is to give the Court sufficient flexibility to give effect to public interest considerations. This includes the flexibility not to order removal even though the trade mark is unused in the sense required by s 92. The authors suggest that removal may not be appropriate where, for example, the trade mark is nonetheless well-known either from earlier use or from advertising or publicity coming from abroad. A further consideration, as noted by McLelland J in Ritz Hotel and by the Registrar in this case, is where removal could be 'potentially conducive to public confusion' (Ritz Hotel at 224). 151 In Conquip Holdings Heerey J considered a claim for removal where there had been a period of 18 years of non-use of the trade mark. In considering the exercise of his discretion, his Honour observed at [90] that the very long period in which the marks had remained on the register and unused was a powerful factor against the exercise of any discretion in favour of retaining registration of the mark. 152 As referred to in Hermes, an applicant's abandonment of an unused mark may also be a relevant factor in the exercise of the Court's discretion. In Suyen Corporation v Americana International Ltd (2010) 187 FCR 169 Dodds-Streeton J found at [211]: Although non-use does not, in itself, imply a lack of the intention, the intention would usually accompany genuine use in Australia, which accordingly may constitute evidence of its existence. As confirmed by the Full Court in Food Channel and Burchett J in Conde Naste Publications Pty Ltd v Taylor (1998) 41 IPR 505 at 509, use of the mark after the date of filing the application may also throw light on the existence of the intention at that earlier time.

[26]

Finding: Discretion 153 The present case involves factual circumstances different to those in any of the authorities quoted above. The WG trade mark was not used by Lodestar until three years after the relevant non-use period and it was also not used at all prior to the commencement of such period. These factors weigh heavily against the Court exercising its discretion in favour of Lodestar. 154 The applicants referred to the possible existence of conflicting authority in respect of the test to be applied. While it is only necessary for the Court's immediate purposes to restate Carl Zeiss as a leading authority on this subject matter (as affirmed by Ritz Hotel which in turn was affirmed by Pioneer Computers), the Court notes again that the discretion in question is broad and that it is to be exercised 'when it is reasonable to do so' as found by Lander J in Kowa Company at [98]. The weight of authority suggests that the discretion exercised under s 101(3) should be exercised as a means to allow (in appropriate circumstances) a concession to an applicant's prima facie entitlement of removal for non-use. 155 It would however be a mistake to treat the observations of Kitto J in Carl Zeiss as a panacea for removal of a registered trade mark where a requisite period of non-use has been established. When exercising an unlimited discretion, the Court must consider the facts of the particular matter before it. 156 While the Court recognises that Lodestar first used the WG trade mark in Australia more than three years after the expiry of the relevant non-use period, its use of the WILD GEESE trade mark in other jurisdictions during and after the completion of the relevant non-use period has been substantial. 157 Since production, Wild Geese Whiskey has being distributed in 34 countries including the United Kingdom, Malaysia, Bulgaria, Lebanon, Singapore and France. Sales of such product are also taking place in the Netherlands, Latvia, Ireland, South Africa, the United States of America, Italy and Denmark. Protégé has continued to market Wild Geese Whiskey on behalf of Lodestar and the product has been exhibited at trade fairs in Utrecht in 2009; at a TFWA fair in Cannes between 19 and 23 October 2009; at the Whiskey Festival held in Leiden in November 2009 and at other fairs and trade shows in South Africa, Belgium, the United States of America, Denmark, Singapore and France since 2009. 158 Protégé is actively marketing Wild Geese Whiskey through newspapers in many countries of the world. Such product is referenced in a Penguin Group publication which is available in Australia. Since 2003 Lodestar has also been the recipient of 11 industry awards in countries other than Australia. 159 Noting Bennett J's observations in Pioneer Computers at [178], the Court finds that the international publicity and sale of the Wild Geese Whiskey product is a legitimate factor in the exercise of its discretion whether to allow the WG trade mark to remain on the register. However evidence of the profile of Wild Geese Whiskey internationally is of limited weight in relation to the exercise of discretion to maintain the registration of the WG trade mark in this jurisdiction unless such profile is of such a magnitude as to raise the possibility of confusion in Australia should the trade mark be removed. 160 The Court is satisfied that Wild Geese Whiskey has attained a limited profile in Australia. The Court notes the evidence of sales of the Wild Geese Whiskey products in the order of 120 cases since late 2008 to mid-2010. Such exposure, although small, could amount to a degree of brand recognition on the part of the public that might lead to confusion should the WG trade mark be removed. The Court also notes the various promotional material produced in evidence and notes the fact that Lodestar and Protégé had also appointed Mr Christopher Gray as Protégé's sales consultant for Australia, New Zealand and Fiji in 2009. 161 As to the private interests of the parties, the Court notes the obvious interest of Lodestar in maintaining the WG trade mark on the register. Wild Geese Whiskey is now a marketed brand in Australia and overseas and the removal of the WG trade mark in Australia will have legal and financial consequences for Lodestar in the development of the brand. 162 Unlike the circumstances in other authorities such as Hermes, the period of non-use, although fulfilling the requirements of s 92(4)(b) of the Trade Marks Act, is not substantial. It is also of significance that approximately five years has passed between the end of the relevant non-use period and the hearing before the Court. The evidence demonstrates that in that time Lodestar has made use of the mark internationally and also made some use of the mark in Australia. 163 As found above, Lodestar's submissions relating to the apparent obstacles it encountered in the production and distribution of the Wild Geese Whiskey product are not sufficient for the purposes of s 100(3)(c) of the Trade Marks Act to provide an answer for the non-use of the WG trade mark. Such submissions carry limited weight in determining the exercise of discretion under s 101(3). 164 The Court does not accept the applicants' submission that as Lodestar had not engaged in use of the WG trade mark before the relevant non-use period, evidence of Lodestar's intention not to abandon such trade mark is irrelevant. The evidence establishes that Lodestar acquired the WG trade mark with an intent to use it, namely to brand their Wild Geese Whiskey product. Having acquired the registration of the WG trade mark, Lodestar could have abandoned the mark by exhibiting an intention not to use it as planned. Despite delays in its use, Lodestar plainly did not abandon its intent to use the WG trade mark to market Wild Geese Whiskey. The Court considers that the fact of non-abandonment is relevant in the Court's exercise of its discretion. 165 Lodestar has referred the Court to extensive evidence regarding the distinction between whiskey and wine in order to demonstrate that no confusion will arise should the WG trade mark as used for branding Wild Geese Whiskey be allowed to continue to coexist with the WG wines trademarks registered for use by WG Wines. 166 The Court accepts that such evidence is relevant to the Court's exercise of discretion only to the limited extent that it suggests that the maintenance of the status quo in respect of the register would not cause confusion and accordingly would be consistent with the public interest. Yet following Carl Zeiss, this circumstance alone is not a sufficient reason to justify the Court exercising its discretion in favour of Lodestar. Lodestar must demonstrate a reason to justify the Court exercising its discretion against removal of the WG trade mark. 167 The Court finds that the extent of Lodestar's use of the WG trade mark both in Australia and internationally requires that the mark be maintained on the register. Although Lodestar's use of the WG trade mark in Australia has been limited, the Court is satisfied that because the WG trade mark now possesses some degree of reputation and profile, its removal may cause a degree of confusion to the public. 168 In exercising its discretion the Court also observes that the continued presence of the WG trade mark on the register would not be detrimental to the 'purity' of the trademark register as referred to above. Unlike the circumstances in Carl Zeiss, it cannot be said that the existence of the WG trade mark on the register constitutes a 'perversion' of trade mark law in view of the fact that the mark is now being used in the promotion and sale of Wild Geese Whiskey in Australia. Such use has arisen some time after the expiration of the relevant non-use period but it is relevant to the exercise of the Court's broad discretion. An additional fact for consideration is the circumstance that there is no evidence of any current trader producing substantially identical products as was the fact in Carl Zeiss. 169 The Court also notes that no evidence has been produced concerning the prospect of confusion should the WG trade mark remain on the register, nor of any public mischief in maintaining it. The lack of such evidence is not determinative of the exercise of discretion to retain the mark but any evidence to the contrary would have been relevant in the Court's deliberations. 170 The Court has also considered the applicants' submission that the public interest in maintaining the purity of the register also extends to the interests of other traders who, although strangers to the current litigation, may have been unfairly denied the opportunity to use the WG trade mark on account of the fact that it was registered by Lodestar but remained unused. 171 The Court observes that in the absence of evidence it is difficult to quantify the interests of other traders of whom the Court has no knowledge, who might have been effected by Lodestar's registration and prolonged non-use of the WG trade mark. That is not to say that such interests are disregarded. The Court observes that in fact such interests are a primary reason why the Court should exercise its discretion to decline to remove a trade mark under s 101(3) only in cases where there are good reasons for doing so. 172 The Court is prepared to exercise its discretion in favour of Lodestar by maintaining a register and marketplace where Wild Turkey Whiskey, Wild Geese Wine and Wild Geese Whiskey co-exist. It is not for the Court to provide any detailed finding as to the similarity or otherwise of the WILD GEESE and WILD TURKEY trade marks. It is sufficient to find, as it has, that the public and private interest will not be unduly compromised should the Court exercise its discretion to retain the WG trade mark. 173 For the above reasons, the Court is satisfied that the circumstances of Lodestar's use of the WG trade mark warrant an exercise of discretion to retain it on the register, with the consequence that the application to remove the trademark from the register fails. The Court is accordingly satisfied that the application before the Court should be dismissed.

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Judgment (29 paragraphs)

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