Goods of the Same Description?
65 Section 120(2)(a) of the 1995 Act provides that it is an infringement if a person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark "in relation to goods of the same description".
66 Again there is no dispute between the parties as to the meaning of the phrase "goods of the same description".
67 It is again accepted that it is a question of fact and impression whether goods are "of the same description": Rowntree plc v Rollbits Pty Ltd (1988) 10 IPR 539 at 545 per Needham J.
68 In resolving this question, the fact that goods serve different purposes is not conclusive; nor is any one particular consideration conclusive. Assistance, however, has been provided as to those matters which may be taken into account: Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592. Dixon CJ, McTiernan, Webb, Fullagar and Taylor JJ there, at 606-7, gave content to the task to be undertaken as follows:
The fact that examination of the nature of the applicant's goods may, by itself, induce an observer to conclude that they are different in character from those of an opponent, and designed to serve different purposes, is by no means conclusive. Nor is the fact that the applicant's goods are not specified by the regulations as being within the same class of goods… There may be many matters to be considered apart from the inherent character of the goods in respect of which the application is made and some indication of what matters are relevant to this inquiry was given by Romer J. in In re Jellinek's Application [(1946) 63 RPC 59]. Romer J. thought it necessary to look beyond the nature of the goods in question and to compare not only their respective uses but also to examine the trade channels through which the commodities in question were bought and sold. Shortly after the decision in Jellinek's Case the Assistant-Comptroller elaborated on the observations of Romer J. in the following manner:
"In arriving at a decision upon this issue the reported cases show that I have to take account of a number of factors, including in particular the nature and characteristics of the goods, their origin, their purpose, whether they are usually produced by one and the same manufacturer or distributed by the same wholesale houses, whether they are sold in the same shops over the same counters during the same seasons and to the same class or classes of customers, and whether by those engaged in their manufacture and distribution they are regarded as belonging to the same trade. In the case of Jellinek's Application [(1946) 63 RPC 59], Romer J. classified these various factors under three heads, viz., the nature of the goods, the uses thereof, and the trade channels through which they are bought and sold. No single consideration is conclusive in itself, and it has further been emphasized that the classifications contained in the schedules to the Trade Marks Rules are not a decisive criterion as to whether or not two sets of goods are 'of the same description'": In re an Application by John Crowther & Sons (Milnsbridge) Ltd. [(1948) 65 RPC 369 at 372].
Much the same considerations are evident in the observation of Dixon J. (as he then was) in Reckitt & Colman (Australia) Ltd. v. Boden [(1945) 70 CLR 84 at 94] when he said:
"What forms the same description of goods must be discovered from a consideration of the course of trade or business. One factor is the use to which the two sets of goods are put. Another is whether they are commonly dealt with in the same course of trade or business. In the present case, the goods are quite different, their uses are widely separated and they are not commonly sold in the same kinds of shops or departments".
69 In McCormick & Co Inc v McCormick [2000] FCA 1335, 51 IPR 102, Kenny J also identified some of the factors to be taken into account when determining whether goods were of the same description. Her Honour there observed:
[18] The authorities establish that there are three principal factors to be considered in this regard. They are: (1) the nature of the goods, including their origin and characteristics; (2) the uses made of them, including their purpose; and (3) the trade channels through which the goods are bought and sold.
70 The Applicant accepts that other cases which have resolved whether the goods there in issue were "goods of the same description" are not determinative. But it does contend that some guidance may be gleaned from decisions which have held or suggested that the following are "goods of the same description": namely, "rum and a rum cocktail or a Daiquiri" ("Daiquiri Rum" Trade Mark [1969] RPC 600 at 609 per Lord Reid, at 613 per Lord Morris, at 615 per Lord Pearce); wines and spirits (In re Australian Wine Importers' Trade Mark (1889) 6 RPC 311); and beer and rum (In re Turney and Sons' Trade Mark (1893) 11 RPC 37 at 44-5). Of these decisions, it is of significance to note that in the Australian Wine Importers case the Court of Appeal dismissed an appeal from a decision of Kay J. Cotton LJ held at 316:
… Well, it is not confined to the same goods, but it is "the same goods or description of goods ;" and if it were necessary to decide it absolutely on that point, my opinion would be that there was an application for registration with respect to the same description of goods ; because although wine and whiskey, and wine and spirits are in a great many ways considered as different goods, yet we are not considering here how chemists would describe them, but whether manufacturers would describe them as being the same description of goods or not. We find that they are goods which are generally sold by the same persons, and for the purposes of trade may, in some respects, be considered as the same description of goods; for they are both alcoholic, and although there may be differences in them, they may fairly be considered as coming within the same description of goods, though they are not the same goods. …
Lindley LJ similarly concluded at 318-19:
Of course one has to look at the trade. One must look at it from a business point of view. They are alcoholic and spirituous. They are sold in this country constantly by the same people. Wine and spirit dealers are common enough in this country, and I am not sure that they are not the same description of goods ; but whether they are or not, it seems to me that they are so uncommonly near the line that we ought not to depart from the view taken by Mr. Justice Kay, and say to the Comptroller, "You must register in favour of these wine merchants a mark which is already on the Register in favour of a spirit merchant who is also a wine merchant." It appears to me that Mr. Justice Kay has taken the right view of the case, and that we ought not to interfere with his Order.
These observations disclose, at the very least, that questions of fine judgment may be involved.
71 Overall, the matter is to be determined from a business point of view: San Remo Macaroni Co Pty Ltd v San Remo Gourmet Coffee Pty Ltd [2000] FCA 1842 at [35], 50 IPR 321 at 330 per Goldberg J.
72 The fact that both types of goods may be consumed does not, of itself, make them goods of the same description: Re J Lyons & Co Ltd's Application [1959] RPC 120 at 127-8 per Lord Evershed MR (Romer and Ormerod LJJ agreeing). (Applied: San Remo Macaroni [2000] FCA 1842 at [35]-[36], 50 IPR 321 at 330 per Goldberg J).
73 It is not considered, however, that the Lion Nathan radler beers are "goods of the same description" as wine.
74 It may be accepted that a number of considerations support a contrary conclusion. Thus, for example:
(i) both the BAREFOOT RADLER beer and the Gallo Winery wine, obviously enough, are types of alcoholic beverage. And they are generally distributed by the same major wholesale distributors such as Australian Liquor Marketers, Independent Liquor Group and National Independent Liquor Wholesalers Association;
(ii) to a considerable extent, the BAREFOOT RADLER beer was intended to appeal to what Lion Nathan regarded as both its "core" beer drinkers and to "marginal beer drinkers" and was intended to be an appealing alternative to wine. Indeed, when developing its new beer product, Lion Nathan deliberately set out to attract people who did not drink beer. To many people, it was recognised, beer had a "bitter taste" and it was to overcome this "hurdle" that the lemon flavouring was added. Later in the development of the product, lime was also added. The product developed by Lion Nathan was developed with the deliberate objective of enticing consumers who previously drank wine but not beer.
Extracts from Lion Nathan's website set forth photographs of the BAREFOOT RADLER beer and sought to promote that beer by stating:
… And if beer has never been your first choice of beverage, chances are you'll be pleasantly surprised by Barefoot Radler's smooth, refreshing taste.
A "Business Plan" dated November 2007 provided as follows a "RECAP" in its "Executive summary":
RECAP: Barefoot Radler is a 'phenomenally' refreshing beer infused with lemon and lime. Inspired by the German 'Radler' tradition but adapted for the Australian climate, the brand is designed to appeal to bring marginal beer drinkers more into the beer category.
In developing the "Business Plan" it was recognised that "the types of alcohol with the greatest increases in consumer spending are the lighter, less bitter, easier drinking styles - such as Vodka and Sauvignon Blanc". The way in which the "Business Plan" developed was to recognise that there was a "significant - and as yet untargeted - group of consumers". This "marginal group" was estimated as comprising approximately 2.5 million drinkers. The "Business Plan" continued:
In terms of the source of volume for this product, research has indicated that this will be drawn from both beer and non beer products. Approximately 2/3 of the projected volume will be sourced from beer, with 22% from wine and 14% from spirits/RTDs.
A "media strategy" developed for 2007/2008 also expressly recognised that the radler beer was also competing with other alcoholic beverages, including wine. In addressing the "Competitive context - who are we competing with on premise?", the media strategy went on to state:
·Although BF Radler is a beer, we are competing with a much broader competitive set: all light and refreshing beers (Corona with lemon, TED), lighter RTDs (Bacardi Breezer), wine, cocktails and refreshing soft drinks (Coke, lemon lime bitter)
A further document addressing the "launch strategy" recognised that there was a "need to arouse curiosity with consumers who may not shop the beer aisle" and that there was a need to "place" the beer in publications where "beer doesn't normally go", including "women's mags, enviro mags".
(iii) both the BAREFOOT wine and the BAREFOOT RADLER beer were intended for consumption during the summer months; and
(iv) producers of alcoholic beverages are no longer confined to the production of beer, as opposed to wine, or even as opposed to other alcoholic beverages such as rum or whisky. The large producers now produce a range of products and market themselves as doing so. Corporations which were once brewers now seek to develop their business through the acquisition of wineries, and joint ventures are developed as between producers of rum and spirits and the brewers. Companies which were once brewers now market and distribute a range of products including beer, wine, spirits, ciders and non-alcoholic drinks. Also distributed are "ready to drink" beverages.
Where there is a range of alcoholic beverages, and where the source of that variety may be the same producer or distributor, no clear distinction can any longer be drawn between beer and wine.
(v) wine and beer are now frequently distributed by the same retailers.
These considerations leave open a finding of fact that the BAREFOOT RADLER beer and wines are "goods of the same description".
75 But it is not considered that such a finding of fact should be made.
76 One consideration relied upon in reaching a contrary finding is the simple fact that the goods have a different origin.
77 The Sales Strategy Director of Lion Nathan, Mr Kelly, gave evidence that beer is made of water, a fermentable source of starch and yeast. A flavouring, such as hops, can also be added. Malting barley is usually used as the source of starch, although a mixture of sources may be used including corn, rice and sugar. Mr Kelly gave further evidence as to the stages of manufacture and production of beer. According to Mr Kelly, the sooner that beer is consumed the better.
78 The General Manager of the Wine Group for Lion Nathan, Mr Anthony Roberts, gave evidence as to the manner in which wine is made. Wine, according to Mr Roberts, is made of crushed grapes to which are added certain varieties of yeast. The yeast converts the sugars in the grapes into various ingredients, including alcohol and aroma and flavoured compounds. Sulphur dioxide is added to many wines as a preservative. The grapes are grown in vineyards managed on an annual cycle. The details of the production processes adopted for particular wines vary significantly depending upon the type of wines being produced. A wine's shelf life is typically expressed as its "peak drinking period". In contrast to beer, Mr Roberts stated that wines are typically characterised by reference to the region from which they come.
79 A second consideration which indicates that the BAREFOOT RADLER beer and wine are not "goods of the same description" is the manner in which beer and wine may be sold.
80 Both beer and wine may be sold through restaurants and liquor stores.
81 But within restaurants, wine selection is generally made by reference to a wine list. Beer is usually sold by reference to brand name or sometimes by strength, such as "light". A typical beer consumer, apparently, has a "repertoire" of perhaps three to four brands that are consumed on a regular or semi-regular basis.
82 Within retail outlets, wine is generally displayed by reference to categories with red and white wines being displayed separately. Within each section, wines are further categorised by reference to wine type and country of origin. Beer, according to Mr Kelly, is rarely sold by reference to where it was produced or from where its ingredients were sourced. Within retail outlets, approximately 20% of shelf space is usually given over to beer and 80% of the coolroom. It is the coolroom which is the main selling area of beer. This evidence of Mr Kelly was also supported by a director of three Porter's Liquor retailers in New South Wales and a person involved in the liquor retail sector since 1973, Mr Malcolm Higgs. Mr Higgs maintained that a lot more wine is stored on the shop floor than beer, the wine displays taking up approximately 80% of the floor space. Within the coolroom, beer is generally not categorised or organised but placed where it is most convenient. In addition, beer producers also tend to rely heavily on signage both inside and outside retail and bar premises. Beer producers also market the products by sponsoring major national and international sporting and music events, such as motor racing, football and cricket.
83 A third consideration is the manner in which beer is consumed. Beer, again according to the Sales Strategy Director for Lion Nathan, is consumed for its thirst quenching and refreshing qualities. Indeed, the labelling of the BAREFOOT RADLER beer states that that beer is "phenomenally refreshing". In part, beer's thirst quenching and refreshing qualities are due to its lower alcohol content relative to other alcoholic beverages, such as wines and spirits, which tend to be consumed in a "sipping fashion". Beer can also be served at very low temperatures. For males in particular, according to the Sales Strategy Director, beer performs an important role in bonding and "rights of passage" bringing groups, such as sports teams, closer together.
84 A further consideration is the fact that, although there may be instances provided of producers now brewing beer and making wines, within Lion Nathan the responsibility for the production and distribution of beer and wine is separated. Within Lion Nathan it is Lion Nathan Australia which produces and distributes beer; it is Lion Nathan Wine Group Australia Limited which produces and distributes wines. The two aspects of the business are almost entirely separate in Australia with distinct production, marketing and sales organisations.
85 Within Australia, the major competitors of Lion Nathan are Foster's, Coca-Cola Amatil (which acquired Bluetongue Brewery) and Coopers. With the exception of Foster's, none of these other competitors also produce wine in Australia. Mr Higgs, in this regard, said that he generally dealt with separate sales representatives for beer and for wine as the knowledge and processes used to assist a liquor store to order and sell wine is very different to that used to order and sell beer. Mr Higgs also said that Foster's attempted to send a single sales representative to his stores for both beer and wine following the acquisition by Foster's of the Southcorp wine group in 2005. The Foster's group, however, now sends separate sales representatives with specialist knowledge of wine to two of Mr Higgs' stores.
86 The evidence of Messrs Roberts, Kelly and Higgs, none of whom were cross-examined, as to these differences is accepted.
87 The fact that consumers may drink both BAREFOOT RADLER beer and wine, and the fact that deliberate steps were undertaken to entice some wine drinkers into drinking beer, does not lead to a conclusion - either by itself or in conjunction with other considerations - that the beer and wine are "goods of the same description". As was the case in NSW Dairy Corporation v Murray Goulburn Co-operative Co Ltd (No 1) (1989) 14 IPR 26 it was not suggested that BAREFOOT RADLER beer and wines are "commonly used as substitutes or alternatives": 14 IPR 26 at 43. And, as was the like assessment of Gummow J in that decision, some reliance may also be placed upon the initial reaction of the Consumer Insight Manager for Lion Nathan (Mr Simpson) when he first learned of the trade mark registration of the word "BAREFOOT" for wines - he "was not overly concerned about the wine mark as beer was the main category that the project team was initially focusing on".
88 It is thus considered that the Lion Nathan BAREFOOT RADLER beers are not "goods of the same description" as wine.