Continental Liqueurs Pty Ltd v GF Heublein & Bro Inc - [1960] HCA 37 - HCA 1960 case summary — Zoe

CTHHCA

Continental Liqueurs Pty Ltd v GF Heublein & Bro Inc

[1960] HCA 37

High Court of Australia|1960-06-28|Before: Kitto J, Farwell J

At a glance

AI case summary

Result

appellant. Order that trade mark No. 82843 be removed from the register of trade marks on the ground of no bona fide user for three consecutive years; respondent to pay costs of applicant and costs of...

Key principles

The filing of a notice of motion under s. 72 of the Trade Marks Act 1905-1948 Cth constituted an 'act done by an individual towards availing himself of that right' within the...
The phrase 'the date of the last registration' in s. 72(1) of the Trade Marks Act 1905-1948 Cth means the date of the original registration, not the date of any renewal, and the...
The first or affirmative condition of s. 72(1) requires proof that during some consecutive period of three years since the last registration no bona fide user has taken place,...
A dealer in goods of the same class as those in respect of which a trade mark is registered has prima facie sufficient evidence of being a 'person aggrieved' under s. 72; this...

Issues before the court

Whether the repeal of the Trade Marks Act 1905-1948 Cth by the Trade Marks Act 1955 Cth deprived the Court of jurisdiction to hear a pending...

Plain English Summary

This case established important principles about when trade marks can be removed from the register for non-use. The High Court held that once you file an application to remove a trade mark, that right continues even if the law changes while your case is pending. The Court also clarified that to be a 'person aggrieved' who can apply for removal, you need to be in the same trade and have your legal rights potentially limited by the mark's presence on the register—but your past business conduct doesn't matter. Most importantly, the Court ruled that simply licensing someone else to use your trade mark doesn't count as 'use' by you if their labels suggest the goods come from them, not you. Here, an English company (Gilbeys) made vodka under licence from the American owner, but the labels said 'Produced in England' by Gilbeys, so this wasn't use by the trade mark owner. The Court ordered the 'Smirnoff' trade mark removed because it had effectively been unused in Australia for years.

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Judgment (25 paragraphs)

[1]

High Court of Australia Kitto J. Continental Liqueurs Pty Ltd v GF Heublein & Bro Inc [1960] HCA 37

[6]

Sub-section (1) of s. 72 was in the following terms: "The Court may, on the application of any person aggrieved, if it is shown that there has been no bona fide user of a trade mark for a consecutive period of three years since the date of the last registration thereof, order its removal from the register, unless it was at the date of the application in bona fide use and had been so for a period of six months immediately prior to the date of the application". Sub-section (2) defined bona fide user or use for the purposes of the section to mean user or use of a trade mark in respect of the goods in respect of which it was registered for the purposes of trade by the proprietor or registered user of the trade mark or a predecessor in title. In the section as originally enacted in 1905 there were only these two sub-sections. Like s. 37 of the English Act passed in the same year, 5 Edw. 7, c. 15, it dealt with a topic which had come before the House of Lords in John Batt & Co. v. Dunnett [1] and had been further considered by Farwell J. in Louise and Co. Ltd. v. Gainsborough [2] . In the absence of the special provisions made in 1905, the courts had reached the position that there were two cases of non-user in which a trade mark would be removed from the register: first, where, at the time of registration, there was no bona fide intention of using it and it had never in fact been used for the goods in respect of which it was registered, and, secondly, where, although there was a bona fide intention to use it at the beginning and it was even used for a time, its use had been discontinued and an intention to abandon it was proved either by direct evidence or by inference from the duration of the non-user: see the case last cited [3] . The United Kingdom and Australian legislatures dealt with the matter in rather different ways. The first of the two cases abovementioned was dealt with in the United Kingdom in 1905, but not in Australia until sub-s. (1A) was inserted into s. 72 in 1948. The second of the two cases was dealt with in the United Kingdom by prescribing an objective test in the first instance, namely whether the trade mark had not been bona fide used during the five years immediately preceding the application, with the qualification "unless such non-user is shown to be due to special circumstances in the trade, and not to any intention not to use or to abandon such trade mark in respect of such goods". In Australia it was dealt with by s. 72 (1) and (2). The reason for drawing attention to the nature of the subject-matter of these provisions is that it enables a clear choice of meanings to be made in order to resolve the ambiguity of sub-s. (1). On the face of that sub-section, the first or affirmative condition of the power which it gives might be either that it is shown that during some consecutive period of three years since the last registration no bona fide user has taken place, or that it is shown that since the last registration there has been no consecutive period of three years of bona fide user. Given the first meaning, the sub-section provides an objective test which may not unreasonably have been thought a practically desirable substitute for the former test of intentional abandonment. This consideration is enough to justify the adoption of that meaning, and it does not seem to be counterbalanced by any which favours the second meaning. It appears to have been adopted by Fullagar J. without discussion, in Rothman's Limited v. W. D. & H. O. Wills (Australia) Ltd. [1] , and presumably was adopted by the Full Court also: W. D. & H. O. Wills (Australia) Ltd. v. Rothman's Ltd. [2] .

[9]

For reasons which have not been investigated before me and may have been connected with the fact that other litigation involving the same parties was in progress, no further step was taken in the application until September 1958. In that month the applicant filed several affidavits. In the meantime, namely on 1st August 1958, the Trade Marks Act 1955 Cth came into operation. By s. 4 it repealed the whole of the Trade Marks Act 1905-1948 Cth, and by s. 5 it made certain transitional provisions. Subject to an immaterial qualification, the new Act was made to apply to and in relation to trade marks registered under the repealed Acts (s. 5 (2)), and to and in relation to applications for the registration of trade marks made before the commencement of the new Act and the registration of trade marks on those applications (s. 5 (4)). But nothing was said about applications for removal which were pending at the commencement of the new Act. The respondent Heublein Inc. (which I shall call the respondent, since the Registrar of Trade Marks has not taken any active part in these proceedings) contended before me that the new Act, when it came into operation, had the effect of taking away the jurisdiction of the Court under the old s. 72 and thereby making the present application incompetent. The new Act makes its own provision, in s. 23 (1) (b), as to the removal of trade marks from the register on the ground of non-user, but (the respondent's contention proceeds) the application cannot be treated as an application under that provision, because it was instituted before the new Act came into force; and the difficulty cannot be overcome by any amendment of the proceedings, because s. 23 (1) (b), since it requires a period of non-user measured from the date of the application, is incapable of being applied in proceedings instituted before the commencement of the new Act. Finally, it was said, the applicant can find no comfort in s. 8 of the Acts Interpretation Act 1901-1957 Cth, for these proceedings are not in respect of any right or privilege acquired or accrued under the repealed Act, or any obligation or liability accrued or incurred under that Act.

[10]

If the application had not been pending in the Court when the new Act came into force, I should have agreed that the applicant company had not a right to relief under s. 72 which it could thereafter enforce. Even though it had a locus standi to apply under the section as a "person aggrieved", s. 8 of the Acts Interpretation Act could have no application in its favour: see Abbott v. Minister for Lands [1] ; and cf. Brandon's Patent, Ex parte Doty [2] . But in my opinion the applicant, by instituting its application in the Court, that is to say by filing its notice of motion, acquired a right to have the Court decide whether it ought to exercise its jurisdiction under s. 72 in that application, and that right was within the protection of s. 8 (c) of the Acts Interpretation Act: cf. Colonial Sugar Refining Company Limited v. Irving [3] . The principle of Abbott v. Minister for Lands [4] , is expressed in the sentence: " the mere right (assuming it to be properly so called) existing in the members of the community or any class of them to take advantage of an enactment, without any act done by an individual towards availing himself of that right, cannot properly be deemed a "right accrued" " [1] . The filing of the notice of motion in the present case was an act done by an individual towards availing himself of the right to have an order made for the removal of the mark from the register: cf. In re A Debtor; Ex parte Debtor [2] . There is nothing in the 1955 Act to displace the general rule of the common law which the Acts Interpretation Act reinforces, namely that, in general, when the law is altered during the pendency of an action the rights of the parties are decided according to the law as it existed when the action was begun, unless the new statute shows a clear intention to vary such rights: Maxwell on The Interpretation of Statutes 10th ed. (1953) p. 221, Hutchinson v. Jauncey [3] . Accordingly I am of opinion that the repeal of the former s. 72 the Trade Marks Act 1955 Cth does not affect this application, and that the application must now be dealt with as if that section were still in force.

[12]

The respondent's trade mark is registered in respect of "fermented liquors and spirits". The applicant is a dealer in goods of that class, and that fact is prima facie sufficient evidence of his being a person aggrieved: Powell v. Birmingham Vinegar Brewery Co. [4] ; Attorney-General for N.S.W. v. Brewery Employes Union of N.S.W. [5] ; Farley (Aust.) Pty. Ltd. v. J. R. Alexander and Sons (Q.) Pty. Ltd. [6] ; Shell Co. of Australia Ltd. v. Rohm and Haas Co. [7] . In the case first cited Lord Herschell used words which I respectfully adopt as applicable to s. 72: "Wherever it can be shewn that the applicant is in the same trade as the person who has registered the trade-mark, and wherever the trade-mark if remaining on the register would or might limit the legal rights of the applicant so that by reason of the existence of the entry upon the register he could not lawfully do that which but for the appearance of the mark upon the register he could lawfully do, it appears to me that he has a locus standi to be heard as a "person aggrieved" " [8] . In the present case the applicant is already using the word "Smirnoff" in connexion with his goods, and the same word forms a significant part of the respondent's trade mark. I need not refer at this point to the disputes which have arisen between the parties with respect to this word. It is enough to say that the respondent has shown an intention of preventing the applicant from using the word, if by any means it can do so, and on some future occasion it may well rely for this purpose on the trade mark now in question. The applicant has applied for registration of three trade marks consisting of or containing the word "Smirnoff", and the examiner has made adverse reports under s. 33 (2) on the ground, amongst others, that each of the proposed three marks so closely resembles the respondent's mark as to be likely to deceive. This would suffice even by itself to give the applicant a locus standi: cf. Batt's Case [1] . In all the circumstances it seems to me too clear for argument that the applicant has a substantial business interest in getting the trade mark removed from the register, and accordingly is entitled to maintain the application as a "person aggrieved". I should add that I disallowed cross-examination directed to showing that the applicant had been guilty of some kind of reprehensible conduct in the course of building-up the business by virtue of which it claims to be a "person aggrieved". The ruling which I gave, and to which after consideration I adhere, was that on the question of locus standi under s. 72 it was not relevant to inquire into the past conduct of the applicant in carrying on that business.

[16]

It is quite clear that the first of the two issues in the case must be decided in favour of the applicant. Persons who would have been likely to see or hear of any use of the trade mark in this country have given evidence, which I accept, to the effect that no such use came to their notice, at least before 1954. I refer to the respective affidavits of S. E. Curtis, F. S. Kassel, L. Fulop, D. Mandie and A. F. Hocking. The respondent has made no attempt to suggest any use of the trade mark before March 1954 otherwise than in advertisements, and the only advertisements proved were in the American periodicals "Esquire" and the "New Yorker". These were inserted by the respondent. In the issue of "Esquire", the advertisements were in 1947, 1956, 1957 and 1958; and in the case of "New Yorker" they were in 1950, 1954, 1955, 1956, 1957 and 1958. "Esquire" advertisements of July and October 1947 have been produced, and they show the trade mark with only one variation, namely the substitution of "21" for "57" - a variation which might well be overlooked by virtue of the provisions of s. 30. Other advertisements have been put in evidence, some having appeared in the one magazine and some in the other; and although they have a general resemblance to the trade mark their features are too hazy for definite identification. Evidence as to the circulation of the magazine in Australia is contained in affidavits of Mr. G. G. Johnson and Mr. A. M. Davis respectively. I need not consider the advertisements, however, in deciding the question on which the applicant has the onus of proof; for after the "Esquire" advertisement of October 1947 there was a gap of more than six years in which, so far as the evidence shows, nothing occurred which by any possibility could be considered a user of the trade mark. The evidence refers to a series of six advertisements which appeared in the "New Yorker" in the second half of 1950, but there is nothing before me as to their contents. The conclusion is inevitable that the condition is fulfilled which prima facie entitles the applicant to succeed.

[20]

But Mr. Bruel and Mr. Hucks were respectively the New South Wales Manager and the attorney in Australia of Gilbeys Limited, an English company, and their evidence concerning the labels relates only to use in the course of the marketing in Australia by that company of vodka of its own manufacture. By reason of the express provision of sub-s. (2) of s. 72, no use of the trade mark can be counted, in the circumstances of this case, as bona fide use for the purposes of the section unless it was a use by the respondent. Prima facie, the use of the labels by Gilbeys Limited was not a use by the respondent. Gilbeys Limited was a separate corporation, and in addition (if it matters: contrast Re Radiation Trade Mark [1] ) there was a complete absence of any connexion between the corporations by means of, or through, any shareholding. Moreover Gilbeys Limited, in using the labels, was acting entirely on its own account and not as agent for the respondent. The situation between the two corporations was that as a result of negotiations which began in 1952 the respondent in April 1956 gave Gilbeys Limited a franchise, as it may be conveniently called, in consideration of a royalty, for the making and selling of what was described as "Smirnoff Vodka", together with a licence to use their trade marks, in all parts of the British Commonwealth of Nations. Accordingly Gilbeys Limited made the product in England, imported quantities of it into Australia, and marketed it in Australia under the labels which I have described. The respondent contends that the use of the labels by Gilbeys in these circumstances was a use by the respondent, because it was a use by the respondent's permission for which royalties were payable to the respondent. No doubt in some contexts it may be said that an owner of property who lets it or hires it to another thereby makes a use of it; but that is not to say that the tenant's or hirer's use of it is a use of it by the owner. In any case, what has to be considered here is the nature of the use which s. 72 of the Trade Marks Act intends to comprehend when it speaks of the "use" of a trade mark by the proprietor. It would be inconsistent both with the principle I have stated from Rothman's Case [1] and with a recognition of the evil to which the section was directed to hold that any conduct with respect to a trade mark amounts to a use of it in the relevant sense unless it is a use indicating, or for the purpose of indicating, a connexion between goods and the proprietor of the trade mark. The evil is that which would exist if a person were allowed to retain a trade mark on the register, and so keep it exclusively for himself, after a degree of non-user which the legislature has regarded as sufficient to be treated in the same way as an abandonment. The use of the labels by Gilbeys Limited was not a use by, or in any relevant sense on behalf of, the respondent. The legend at the foot of the labels underlined the fact that the goods had been produced in England by an English company, and not in America by an American corporation. The case is therefore not merely one of a use of a trade mark by someone other than the proprietor: it is a case of a use of a trade mark so altered as to indicate that the goods are connected with someone other than the proprietor. I am not concerned here to inquire whether, as a result of what was done, the trade mark has lost its distinctiveness and consequently its validity: cf. Bowden Wire Limited v. Bowden Brake Company Limited (No. 1) [2] . What I have said relates only to the question whether the use of the mark by Gilbeys Limited (if use of the mark it was) was a use of it by the respondent. In my opinion it was not.

[23]

For these reasons I reach the conclusion that in this case the situation exists in which s. 72 provides that the Court "may" order the removal of a trade mark from the register. This appears to be a grant of judicial power: cf. Farbenfabriken Bayer Aktiengesellschaft v. Bayer Pharma Pty. Limited [1] , and prima facie the principle of Julius v. Bishop of Oxford [2] would require the Court to exercise its jurisdiction to order removal. It has been submitted, however, on behalf of the respondent, that on the true construction of the section there is a discretion to refuse to remove a mark notwithstanding its non-user, and that I should exercise the discretion favourably to the respondent in this case for two reasons: first, because the applicant has been guilty, so it is said, of unconscientious conduct in building up the business which gives it a locus standi in these proceedings, and, secondly, because of delay on the part of the applicant in applying for the removal. Kerly (7th ed. (1951) p. 278) assumes that the jurisdiction is discretionary, citing as authority on the point the cases of Andrew v. Kuehnrich [3] and Magneta Time Co. Ld's. Application [4] . To these cases there may be added the Columbia Gramaphone Co. Ld's. Case [5] . It is, I think, a sufficient answer to the respondent's argument to say that even if there is a discretion under the section it is not one to be exercised upon a consideration of any demerits of the particular person who happens to be moving for expungement. The question whether the respondent's non-user of his trade mark disentitles him to have it retained on the register is really one between the respondent and the public, and not only between the respondent and the applicant: In re Hill's Trade Mark [6] . It is to be distinguished from the question which arises in a case where removal is sought on a ground relating peculiarly to the applicant: see, for example, Paine and Co. v. Daniell and Sons' Breweries, Ld. [7] , and cf. Chudzikowski v. Sowak [8] . Turning from the grounds relied on by the respondent, I do not see any reason for leaving the trade mark on the register, even assuming that I have a discretion to do so. Prior to the institution of these proceedings, the respondent and its predecessor did very little indeed in Australia in relation to the trade mark, except to register it and thereby reserve it for possible future use. It does not seem to me to accord with the intention of the Act that other people should be embarrassed in their choice of trade marks by the continued presence of this mark on the register when it has lain unused, or so little used, for so long a time.

Continental Liqueurs Pty Ltd v GF Heublein & Bro Inc

At a glance

Result

Key principles

Issues before the court

Plain English Summary

Judgment (25 paragraphs)

Cited legislation

Parties

Cited By (2)

AI Analysis