Heublein Inc v Continental Liqueurs Pty Ltd

Where it is proposed that a person shall be registered as a registered user of a trade mark, the proprietor and the proposed registered user are required by sub-s. (5) to apply in writing to the Registrar in the prescribed manner, and to furnish him with a statutory declaration containing information on a number of topics. The declaration is to give particulars of the relationship, existing or proposed, between the proprietor and the proposed registered user, including (inter alia) particulars showing the degree of control by the proprietor over the permitted use which their relationship will confer. It is to state the goods in respect of which registration is proposed, and any conditions or restrictions proposed with respect to the characteristics of the goods, the mode or place of permitted use, or any other matter; and it is to state the duration of the proposed permitted use. In addition the parties must furnish such further documents information or evidence as is required by the regulations or by the Registrar.

When these requirements have been complied with, the Registrar is empowered, by sub-s. (6), to register the proposed registered user, if one condition is fulfilled. The condition is that the Registrar is satisfied that in all the circumstances the use of the trade mark in relation to the proposed goods or any of them by the proposed registered user, subject to any conditions or restrictions which the Registrar thinks appropriate, would not be contrary to the public interest. The registration is to be in respect of the goods as to which the Registrar is so satisfied.

The trade mark here in question is registered in respect of "fermented liquor and spirits" generally, and the application under s. 31A is expressed to be for the registration of Gilbeys Limited as registered user in respect of the whole of that class of goods. In fact, however, the registration is desired in respect only of vodka. Moreover, the application, as framed, is for registration subject to certain conditions and restrictions. These are that the trade mark is to be used by the registered user in relation to the goods only if they are manufactured in accordance with the formulae and processes of manufacture furnished to the registered user by the registered proprietor from time to time, and only so long as the registered proprietor has the right at all reasonable times to inspect "the production and sale" of the goods, and only so long as the charcoal used in the preparation of the goods is that supplied by the registered proprietor. (Charcoal is used for filtration in the process of making vodka.).

As the terms of the proposed conditions and restrictions indicate, Gilbeys Limited intends, if it obtains registration as a registered user, to market in Australia under the trade mark vodka of its own manufacture. That being so a serious question presents itself as soon as the trade mark is examined. It is an elaborate mark, in the form of a shield surmounted by a crown. Across the shield, about one-fourth of its height from the top, is a scroll. Above the scroll are four medallions each having immediately below it a number indicating a year, the numbers being 1877, 1886, 1882 and 1896. The scroll carries the inscription "Purveyors to The Imperial Russian Court 1886-1917". Below a central fold of the scroll appear the words "Pierre Smirnoff" and, immediately below them, "Est. 1818 Moscow". Below that, the word "Successors" is printed in small letters above the words, in large script, "Ste - Pierre Smirnoff Fls - ". Then there are two words which I am told mean, in Russian, table wine, and "No. 57", and then a small representation of a coronet, and, below that, a space large enough to permit the insertion of a word such as "vodka" in prominent letters. Towards the bottom of the shield there appear the words "Prepared and Bottled by Ste - Pierre Smirnoff Fls - Inc. Hartford. Conn. U.S.A.". The crown above the shield bears the name "Ste - Pierre Smirnoff Fls - ", beneath a scroll which resembles the scroll on the shield and has indications of letterpress which, in the copy in evidence, is indecipherable.

In my opinion the trade mark, when used on the label of a bottle or other container, must convey unequivocally the meaning that the liquor in the container is a product of Ste. Pierre Smirnoff Fls. Inc. of Hartford, Connecticut, and that that corporation is the successor of Pierre Smirnoff in a business which was established by him in 1818 in Moscow, received some kind of award in each of the years that are indicated, and purveyed liquor to the Imperial Russian Court from 1886 to 1917. These assertions may have been true when made by Ste. Pierre Smirnoff Fls. Inc. with respect to its own products. I am prepared to assume that they would have been, although the evidence does not prove it. But, according to the evidence, Ste. Pierre Smirnoff Fls. Inc. was dissolved in 1954, after having assigned the mark (apparently with goodwill) to the corporation which now bears the name Heublein, Inc. It is obvious that if the mark be applied to liquor manufactured since 1954 it must convey false information. In particular it must convey false information if applied by Gilbeys Limited to vodka of its manufacture. This is so even if the vodka concerned be made according to a formula and a process handed down from the original business of Pierre Smirnoff, and a fortiori if (as the appellants intend) the vodka be not so made. The misinformation, moreover, is of a kind upon which the public is likely to rely in purchasing the vodka in connexion with which it is given, for it implies that the liquor may be depended upon for quality, since it is a product of a long-established and successful business of high reputation, boasting a tradition of royal approval in the country which is the home of vodka.

If I grant the registration that is sought, I must grant it in respect of the trade mark precisely as it stands. The section enables conditions or restrictions to be imposed on the use of the mark by the registered user, but it does not authorize any deletion from it or alteration of it. That being so, to authorize the "permitted use" which is applied for would necessarily be to authorize Gilbeys Limited to use the mark on their vodka and by so doing to make it an instrument of deception of the public, whether that be the intention or not. A condition might conceivably be imposed with a view to securing that the mark shall not be used by Gilbeys Limited except when accompanied by an additional statement contradicting the untrue representation which the mark by itself would convey, and so expressed and displayed that a person reading the trade mark would be likely to read the corrective statement also. The terms of the condition might even be such as would make it seem likely that anyone reading the mark and the accompanying statement together would believe the latter and would therefore disbelieve the former. Notwithstanding one or two suggestions to this end which counsel for the appellants made, I do not think it is practicable, by any condition or restriction, to ensure that the use of the mark by Gilbeys Limited on vodka of its manufacture will involve no likelihood of the public's being deceived. It follows that I am not satisfied that, with any condition or restriction that may be devised, the use of the mark by the proposed registered user would not be contrary to the public interest.

The appellants' counsel sought to deal with the situation by two arguments. First, he contended that the view I have expressed as to the likely operation of the mark on the minds of the public is unsound. If you take the features of the mark separately, (this is the substance of the submission), there is nothing more than "puffing" in it, and all the flourishes together merely make up a decorative and distinctive label which would not be understood and relied on by the public as making any serious representation relevant to the quality of the vodka. I am not prepared to whittle down in this fashion the plain intendment of the mark. It is designed to inspire confidence in the goods, not by praising them, but by making assertions of historical fact about their origin. If it is placed on goods of Gilbeys Limited it will be likely to inspire the intended degree of confidence by misrepresentation. This is the plain fact of the matter, and it must be faced.

Then it was contended that s. 31A should not be so construed as to be inapplicable to a class of trade marks, namely to those which, because of their contents, are likely, if applied to the goods of a registered user, to make or imply mis-statements about the goods. The proprietor himself, it is said, may use it consistently with the Act, notwithstanding any misleading effect which its contents may produce when applied to his goods, and the section must mean that every proprietor shall have power to license as wide a use of the mark as he himself might make. I am not to be understood as holding that the present proprietor, the assignee of the original proprietor, has any right in law to misrepresent its goods by means of the trade mark; but even if I were to hold that it had such a right I should regard the appellants' argument as flying in the face of the plain words of the section. The registration of a proposed registered user is clearly forbidden, unless it positively appears that use of the mark by him would not be contrary to the public interest; and that must mean that it would not be contrary to the public interest for any reason at all, including a reason based on the contents of the mark itself.

The argument seems to be put in two ways: either that "public interest" is, in the context, subject to an implied limitation, or that sub-s. (6) as a whole is subject to an implied limitation, the limitation in either case being that on the question of public interest the only matters to be considered are those which emerge from the particulars required by or under sub-s. (5), and that therefore considerations arising by reason of features of the mark itself are to be put aside as irrelevant. There is, in my opinion, no basis for implying either limitation. There is nothing in the context to justify it on any sound principle of construction. The public interest, as a general concept and subject to no artificial exclusion, is made the ultimate test by which an application is to succeed or fail; and it seems to me a necessary consequence that not every trade mark lends itself to the kind of licensing which s. 31A makes possible. It must be that some trade marks, because of what they contain within their own four corners, are incapable of being used by anyone other than the original proprietor without the public interest being endangered by a likelihood of deception. In such cases it is the imperative requirement of sub-s. (6), as I understand it, that registration of a registered user be refused.

There is, as far as I know, no authority directly covering this case, but it is not uninstructive to refer to the well-known case of The Leather Cloth Company v. The American Leather Cloth Company [1] . The trade mark there in question contained the name of a particular corporation, and it was held to mean that that corporation was the producer of the goods to which it was applied. In the House of Lords its two aspects were recognized: it was more than a distinctive mark; it was an advertisement of the goods, containing (to use words of Lord Kingsdown) "statements materially affecting the value of the goods to which they are affixed" [1] . As his Lordship went on to say, statements so made "must be judged of like statements in separate labels or advertisements. The question will be, are such statements true? And if not, are they mis-statements of material facts, and calculated to impose upon the public" [2] . The appellants' argument here makes it apposite to quote yet another passage from his Lordship's judgment: "Though a man may have a property in a trade mark, it does not follow that he can in all cases give another person a right to use it, or to use his name. If an artist or an artisan has acquired by his personal skill and ability a reputation which gives to his works in the market a higher value than those of other artists or artisans, he cannot give any other persons the right to affix his name or mark to their goods, because he cannot give to them the right to practise a fraud upon the public" [2] . These observations were made in the course of considering the attitude of a court of equity to an assignment of a trade mark, the trade mark containing statements as to the origin of the goods to which it was to be applied; they were not directed to the construction of any legislative provision such as s. 31A. But they show the traditional attitude of trade mark law. Deception is deception, and the fact that it is brought about by the use of a trade mark duly acquired does not make it anything else. A person to whom the proprietor of a mark purports to give a right to use the mark is no less guilty of acting in a manner contrary to the public interest if his use of the mark involves a misrepresentation as to the quality of his goods than he would be if he were to make a similar representation by any other means. That the legislature, in passing the Act of 1948, intended to give effect to a narrower conception of what is contrary to the public interest than that upon which the courts have consistently acted, is a proposition for which I can see no justification.

1. (1865) 11 H.L.C. 523 [11 E.R. 1435]. 2. (1865) 11 H.L.C., at p. 543 [11 E.R., at p. 1444]. 3. (1865) 11 H.L.C., at p. 544-545 [11 E.R., at p. 1445]. 4. (1865) 11 H.L.C., at p. 544-545 [11 E.R., at p. 1445].

For these reasons, I am of opinion that the appeal should be dismissed. The appellants must pay the costs of Continental Liqueurs Pty. Limited and of the Registrar of Trade Marks, including any reserved costs.

From this decision the applicants appealed to the Full Court.

In my opinion the decision of the Deputy Registrar of Trade Marks not to register Gilbeys Limited as a registered user of the trade mark in this case should stand. His decision was an exercise of the discretion which s. 31A sub-s. (6) of the Trade Marks Act 1905-1948 confers on the Registrar of Trade Marks but which the Deputy Registrar could exercise by virtue of s. 11 sub-s. (3). The provisions of s. 31A relating to proceedings for the registration of registered users applied to the application because it fell within the operation of s. 5 sub-s. (6) of the Trade Marks Act 1955-1958.

It was a condition precedent to the competency of the application to be considered under s. 31A sub-s. (6) that the appellants had complied with the requirements of s. 31A sub-s. (5) in making it. The Deputy Registrar was not satisfied that the particulars were as sufficient as sub-s. (5) required. If he had thought that this was the only objection to the application he would have given the appellants an opportunity to supplement the particulars before giving his decision on the application. They did so on the appeal heard by Kitto J. In my view an examination of the further materials does not show that the particulars furnished in the first instance were really insufficient. But a different matter led the Deputy Registrar to his decision.

The question is whether that matter was extraneous to the discretion reposed in him under sub-s. (6). The matter was the pendency of the proceedings which the Deputy Registrar described in the reasons for his decision. One of these matters was a motion under s. 72 of the Trade Marks Act 1905-1948 for the removal of the trade mark from the Register of Trade Marks. This motion was taken out by Continental Liqueurs Pty. Limited against Heublein Inc. formerly G. F. Heublein & Bro. Inc., the registered proprietor. This corporation has never used the trade mark in Australia. But Gilbeys Limited had used it in Australia in relation to Smirnoff Vodka made in England under licence from Heublein Inc. The licence was extended to the manufacture and sale of that kind of vodka in Australia and to the use of the trade mark in relation thereto. The present application for the registration of Gilbeys Limited as a registered user of the trade mark is based upon the licence. Gilbeys Limited were using the trade mark with some alterations varying the verbiage of the trade mark to accord with the place of manufacture but not detracting from the essentials of the trade mark. It is in relation to Smirnoff Vodka that the registration of Gilbeys Limited as registered user is sought by the present application. The other proceedings which were pending were brought by Continental Liqueurs Pty. Limited against Gilbeys Limited. In those proceedings an injuction was sought to restrain the latter from passing off the goods, in relation to which they were using the trade mark, as the goods of the plaintiff.

Continental Liqueurs applied to the Deputy Registrar for leave to oppose the present application upon the basis that it had a locus standi as the party seeking relief in both cases. The appellants opposed this intervention but the Deputy Registrar allowed it. In the present appeal the appellants did not contest that ruling.

Was it right for the Deputy Registrar to be led by the fact that the other proceedings were pending into refusing the present application? The discretion which is given by s. 31A sub-s. (6) is not an absolute or uncontrolled discretion to grant or refuse an application as the Registrar or Deputy Registrar should think fit. The words of the sub-section express the intention that the public interest is the governing consideration. Public interest covers a wider range than the interests of the applicants. This criterion extends to the material interest of a member of the public which is directly affected by the application. The involvement of the present application with the other proceedings gave Continental Liqueurs Pty. Limited an interest which sub-s. (6) required the Deputy Registrar to take into account. It became material for him to consider the possible effect of the operation of s. 77 sub-s. (2) of the Trade Marks Act 1955-1958 in relation to the previous use of the trade mark by Gilbeys Limited if he registered them as a registered user of it. That sub-section would by reason of s. 5 sub-s. (6) of that Act have possibly operated in relation to such use. In my judgment it was a matter with which the Deputy Registrar was properly concerned in exercising his discretion whether by granting the application he would be lending adventitious aid to Heublein Inc. to resist the pending motion to remove the trade mark from the register. The Deputy Registrar approached the exercise of his discretion in this way. For these reasons I think that he correctly exercised his discretion by refusing to register Gilbeys Limited as a registered user on the present application.

With respect to the learned primary judge, I am not prepared to assent to his reasons for judgment. For my part I find it difficult to reconcile them in so far as they affect Heublein Inc. as assignee of the trade mark with the provisions of the Act relating to assignment of trade marks; and in so far as they affect Gilbeys Limited as a proposed registered user, to reconcile them with the statutory meaning of trade mark and with the legislative plan of having a registered user of a trade mark other than its registered proprietor. But for the reasons which I have given I uphold the order of the learned judge. I think that the Court should order that the present appeal be dismissed with costs.

In our opinion this appeal should be dismissed and we have little to add to the reasons which led Kitto J. to dismiss the application which came before him.

The difficulty in the way of Gilbeys Limited (hereinafter called the appellant) becoming a registered user of the trade mark in question is inseparably bound up with the fundamental character and significance of a trade mark. Until 1948 the statutory expression meant "a mark used or proposed to be used upon or in connexion with goods, for the purpose of indicating that they are the goods of the proprietor of the trade mark by virtue of manufacture, selection, certification, dealing with, or offering for sale" (Trade Marks Act 1905-1936, s. 4). But in that year, a new definition was substituted by the Trade Marks Act 1948 by which provision also was made, for the first time in this country, for the registration of persons as registered users of trade marks. Henceforth "trade mark" was to mean, except in relation to Pt. XI of the Act, "a mark used or proposed to be used in relation to goods for the purpose of indicating, or so as to indicate, a connexion in the course of trade between the goods and some person having the right either as proprietor or as registered user to use the mark ". The precise limits of this definition are by no means clear though the members of the House of Lords who took part in the decision in Aristoc Ltd. v. Rysta Ltd. [1] did not think that a similar substituted definition in England had effected any change of a revolutionary character. It is, however, as unnecessary for us as it was in that case to attempt to indicate with precision the field covered by the expression "a connexion in the course of trade between the goods and some person having the right either as proprietor or as registered user to use the mark". No doubt, as Lord Simonds said in that case [2] it is right to assume that the new words are wider than the old but it is sufficient for the purpose of the present case to say that it is of the essence of a trade mark that it is or will be used to indicate such a "connexion". But the use by the appellant of the trade mark the subject of this appeal would, for obvious reasons, purport to indicate an absence of any connexion between the appellant and the goods in respect of which it wishes to use the mark and a non-existent connexion between the registered proprietor and those goods. And, by clear implication, it would deny the real connexion between those parties and the subject goods.

These propositions necessarily follow from the fact that the mark itself asserts that any liquor in relation to which it may be used is the product of Société Pierre Smirnoff Fils Incorporated of Hartford, Connecticut, the successor of Pierre Smirnoff of Moscow, and that the product had been prepared and bottled by that organization in the United States. Indeed, although the appellant has, to some extent, used a substantial part of the mark, it was not prepared to use the mark in its entirety in relation to liquor which it produced and sold during a period prior to the making of the application. In making some use of the mark it subsituted for the final legend the words "Produced in England, Oval Road, London N.W." and, later, the words "Distilled in Australia". Its application, however, was for registration as a registered user of the proprietor's registered mark and we agree with Kitto J. in thinking that neither the Registrar nor the Court can entertain an application for the registration of the applicant as the registered user of the trade mark as so modified. The modification involves the deletion of an integral part of the mark and, even if there were no other objection to the use by the appellant of a mark in that form, the fact remains that power to register a person as the registered user of a registered trade mark does not contemplate or authorize the registration of a person as a registered user of part only of the mark. It is possible that such a conclusion will create difficulties in the way of persons seeking registration as registered users whenever the subject mark contains unequivocal statements concerning the origin of the goods in relation to which it is proposed to use it but to our minds the effect of the relevant provision is beyond question. The question is, therefore, whether the appellant is entitled to registration as a registered user of the trade mark as an entirety. In our view the foregoing considerations make it clear that it is not. It may, of course, be said that the provisions as to registered users, contemplating, as they do, the use by one person of another person's mark, sanction what would have been regarded under the earlier legislation as a form of deception but the deception which would result from the use by the appellant of the mark in question here could not by any means be described in the language of the Report of the Goschen Committee as "no material deception" ( Kerly on Trade Marks 7th ed. (1951) p. 368).

On the assumption that the views already expressed are correct the suggestion was made that registration might be directed subject to a condition that an additional label should be affixed in a prominent position to the appellant's products intimating manufacturing and bottling by the appellant as their immediate origin. But if the Court has no power to authorize use of part only of the mark it is difficult to understand how we can, or if we can, why we should permit use of the mark subject to a condition that would involve a flat denial of the statements contained in the mark itself. To do so, of course, might reduce the risk of deception but the contradictory statements would, to say the least, be confusing and a very real risk would still remain. In the circumstances, we are of the opinion that the application was rightly dismissed and that this appeal should meet the same fate.