Plaintiff v Defendant

Plaintiff v Defendant - [2015] VSC 617 - VSC 2015 case summary — Zoe

[100]

6.1 Terms and conditions of assignment

PLA must, within 10 Business Days from the receipt of an Option Notice, assign to APAL, free of any encumbrances, the entirety of its right, title and interest in any issued registration in the Territory of the Trade Marks and any Applications.

6.2 No Warranties by PLA

APAL acknowledges that PLA's attempt to register the Trade Marks in the Territory may not be successful, and that there may be information about the Trade Marks in the Territory that is unknown to both PLA and APAL. Therefore, APAL acknowledges and agrees that PLA makes no warranties or representations of any kind regarding the validity or enforceability of the Trade Marks in the Territory, and no warranties or representations of any kind regarding any third party claim of right to use or own the Trade Marks in the Territory. PLA does agree that it will not create though its own actions, or the actions of any person under PLA's control, any encumbrances in or over the Trade Marks or Applications. PLA also agrees not to assign or license any rights in the Trade Marks in the Territory to any party other than APAL. And, PLA also agrees that it will have the unrestricted right and ability to assign or license to APAL, on a quit-claim basis, whatever rights PLA may have in the Trade Marks in the Territory, although APAL acknowledges that PLA may in fact have no rights in the Trade Marks in the Territory.

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6.4 Mutual Obligations of Parties

Both APAL and PLA undertake:

(a) to execute all documents and do all such acts which are necessary or appropriate to enable either party APAL [sic] to obtain their intended benefit under this Deed;

(b) not to do, or assist any other person to do, any act which would or might:

(i) invalidate or put in dispute PLA's or APAL's title to the Trade Marks;

(ii) invalidate, or render unenforceable, any registration of the Trade Marks in due course; or

(iii) support an application to remove the Trade Marks as registered Trade Marks in the Territory;

(c) not to oppose or cancel, or assist any other person to oppose or cancel, any application for registration, or issued registration of the Trade Marks;

(d) not to use a substantially identical or deceptively similar mark to the Trade Marks in the Territory without the written authorisation of APAL after the date of the assignment; and

(e ) to provide to each other all non-privileged records in their respective possession or control in connection with the Trade Marks in the Territory. Privileged records are those records that are protected by the attorney-client privilege.

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6.6 Binding agreement

On the date that an Option is exercised, or deemed to have been exercised, pursuant to the provisions of clause 3, PLA and APAL shall for all purposes be deemed to have entered into a binding and enforceable agreement for the future assignment of the Trade Mark.

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18 Governing law and jurisdiction

18.1 Governing law

This Deed is governed by the laws in force in Victoria, Australia.

18.2 Jurisdiction of courts

The parties submit to the non-exclusive jurisdiction of courts of Victoria including the Federal Court sitting in Victoria and any courts that may hear appeals from those courts about any proceedings in connection with this Deed.

[102]

APAL Exclusive Trade Mark Licence means the exclusive licence that PLA grants to APAL regarding any rights that PLA has in the Trade Mark in the Territory, solely with respect to all trade between the Territory and the world, except for trade between the Territory and North America which PLA reserves solely for itself, as is more fully described in clause 5.2.

Application means any application made by PLA for registration of a trade mark in the Territory which is:

(a) substantially identical or deceptively similar to the Trade Marks or otherwise incorporates the words "PINK LADY";

(b) existing at the time an Option Notice is issued in accordance with 3.2; and

(c) approved of by APAL in accordance with clause 12 of the Trade Mark Master Licence;

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Exercise Date means the date on which APAL exercises the Option in accordance with clause 3;

Exercise Period means

(a) the period commencing:

(i) 24 months from the date of registration of trade mark application no. 753.414 in the Territory, or

(ii) if trade mark application no. 753.414 is not registered, 24 months from the date of registration of trade mark application no. 760.964 in the Territory, or

(iii) if trade mark application nos. 760.965 and 753.414 are not registered, 24 months from the date of registration of trade mark application no. 770.217 in the Territory;

and ending 180 days later; or

(b) any date that is mutually agreed to by both APAL and PLA;

Option means the right of APAL to have assigned to it from PLA, and the obligation on PLA to assign to APAL, the Trade Marks and any Applications in accordance with clause 2;

Option Notice means a notice substantially in the form of the document annexed as Annexure A to this Deed which has been executed by APAL;

Pier-to-Pier Licensing System means a system of trademark licences whereby both importing activity and exporting activity with respect to a target consuming country is licensed. For example, a Pier-to-Pier Licensing System for a trademark used with goods exported from the Territory and imported into North America would require at least the following basic licence elements:

1. Import Licence document in place for each company that is importing the goods bearing the trademark into North America from the Territory. The Import Licence would authorize the licensed importer to receive goods bearing the trademark from any licensed exporter in the Territory.

2. Export Licence document in place for each company that is exporting the good bearing the trademark from the Territory to North America. The Export Licence would authorize the licensed exporter to ship goods bearing the trademark from the Territory to any licensed importer in North America

3. Quality Control Agent of the owner/exclusive licensee of the trademark in the importing country, which agent would be physically located and active in the exporting country to administer the Export Licence documentation;

PLA Exclusive Trade Mark Licence means the exclusive licence that APAL will grant to PLA regarding the Trade Marks and all trade between the Territory and North America in the event that APAL exercises the Option as is more fully described in clause 5.1, below;

Products means fresh whole apples of the Cripps Pink variety, processed apples of the Cripps Pink variety in the form of fresh cut apple slices, dried apples, apple sauce, apple cider, and apple juice, and

(a) in respect of PLA, all other related promotional goods for which either PLA or Brandt's Fruit Trees currently have PINK LADY trademark registrations for in the United States or Mexico; or

(b) in respect of APAL, all other goods or services for which APAL currently has PINK LADY trade mark registrations for anywhere in the world;

Territory means Chile; and

Trade Marks mean the pending trade marks as set out in Schedule 1.

[122]

In Australia the true nature of an option to purchase and whether such an option may be expressed as an agreement to sell upon condition or an offer together with an agreement not to revoke it or as the grant of an option so called has been considered in many cases. In Gerraty v McGavin, Isaacs J said: "An option given for valuable consideration is merely an irrevocable offer, but beyond that there is no contract for a further term, unless and until the offer is duly accepted by exercising the option."[57]

The nature of an option was also considered by Gibbs J in Laybutt v Amoco Australia Pty Ltd, particularly at pp 71-6.[58] Gibbs J concluded "that an option to purchase [in a form that the option might be exercised by notice in writing to the grantor by a specified date and by payment to a specified agent within the specified date of a specified deposit] is a contract to sell the land upon condition that the grantee gives the notice and does the other things stipulated in the option. An option to purchase, regarded in that way, is not an agreement which gives one of the parties the right to perform it or not as he chooses; it gives the grantee the right, if he performs the stipulated conditions, to become the purchaser."[59]

In McCaul's Case the Full Court in New South Wales was concerned with a clause in a lease granting the tenant an option to renew the lease for a further term of five years subject to the giving of three months' previous notice in writing to the lessors, the punctual payment of rent and the due performance of covenants by the tenant. An issue arose as to whether performance of the term relating to payment of rent was a condition precedent to the tenant being able to accept the offer of renewal of the lease contained in the option clause.

The Full Court (Owen J, Roper CJ in Eq and Herron J) held that an option of renewal of a lease "is no more than an offer to make a contract". The court said: "In the present case the lessor irrevocably offered to grant a lease. Its offer prescribed the time and manner for acceptance. Only by performing the conditions prescribed could it be accepted and result in an agreement for a lease. A purported acceptance without performance of the prescribed conditions would not and could not be an acceptance of the offer. It would in reality be a counter offer by the original offeree requiring acceptance by the original offeror if an agreement were to result. If a conditional offer is made and the offeree without performing the condition purports to accept it, that is to say makes a counter offer and that counter offer is accepted, it is a loose although not uncommon use of language to say that the original offeror has waived performance of the condition which was prescribed by his offer as being the manner of accepting it. In contemplation of law the original offeror has done no such thing. What he has done is to accept a counter-offer and in the result an agreement is made but it is not an agreement consisting of the original offer and an acceptance of that offer."[60]

The court also determined that because the lessee was required to perform the conditions stated in the option clause before the offer to renew the lease could be accepted, performance of the conditions was the only way by which the offer could be accepted. Accordingly, non-performance of a condition could not be waived by the offeror (lessor).

McCaul's Case was considered in the High Court in Bowman, a case concerned with an option to purchase an interest in reversion in mineral deposits under certain land.[61] Stephen J, who delivered the principal judgment of the court comprising Barwick CJ, Menzies and Stephen JJ, upheld an argument that the doctrine of waiver was inapplicable in circumstances where there is a right available to the grantee to purchase by exercise of an option but only by the observance by it of certain conditions. The correctness of McCaul was not doubted by Stephen J with whose judgment in this respect the other members of the court agreed.

[192]

90 Additionally, the fact that both PLA and APAL were aware that under the IPLA Operating Agreement they would be obliged to move to a refreshed trademark, if and when introduced, does not mean that the rights under the Option Deed were worthless. Mr Brandt was cross-examined in this respect and his view was to the effect that by reason of the similarity of the refreshed trademark to the registered trademarks, a refreshed trademark would be encompassed by the Option Deed.[157] In my view, it is clear that knowledge of this surrounding circumstance and the fact that the clause 5.1 Licence was granted in perpetuity compels the conclusion that it was an implied term that the clause 5.1 Licence would subsist over any refreshed trademark, whenever introduced. Alternatively, it might be said, as PLA contends, that in compliance with their obligations under the IPLA Operating Agreement, the clause 5.1 Licence would necessarily be varied upon that happening. It is not, however, for the reasons previously indicated, necessary to rely on the latter proposition, though this would, in my view, follow from the provisions of the IPLA Operating Agreement in the context of the express or implied agreements between APAL and PLA as found in the Option Deed. As contended by PLA, the obligation on the parties to the IPLA Operating Agreement required the refreshed trademark to be made available by APAL to PLA. The terms upon which that was to be done are not, however, contained within the IPLA Operating Agreement. The Option Deed provided PLA with the clause 5.1 Licence, royalty free, in perpetuity and subject to a very limited right of termination to APAL. The right of PLA to compel APAL to make the refreshed trademark available under the IPLA Operating Agreement is a much more limited right and, it follows, a right which must be inherent in PLA's rights with respect to the grant provided by the 5.1 Licence for that licence to have effect according to its terms, its very broad grant.

[240]

[A] number of authorities discuss the need not to constrict one's thinking in the formation of contract to mechanical notions of offer and acceptance. Contracts often, and perhaps generally do, arise in that way. They can also arise when business people speak and act and order their affairs in a way without necessarily stopping for the formalities of dotting i's and crossing t's or where they think they have done so ... Sometimes this failure occurs because, having discussed the commercial essentials and having put in place necessary structural matters, the parties go about their commercial business on the clear basis of some manifested mutual assent, without ensuring the exhaustive completeness of documentation. In such circumstances, even in the absence of clear offer and acceptance, and even without being able (as one can here) to identify precisely when a contract arose, if it can be stated with confidence that by a certain point the parties mutually assented to a sufficiently clear regime which must, in the circumstances, have been intended to be binding, the court will recognise the existence of a contract. Sometimes this is said to be a process of inference or implication_. For my part, I would see it as the inferring of a real intention expressed through, or to be found in, a body of conduct, including, sometimes, communications, even if it be the case that the parties did not consciously advert to, or discuss, some aspect of the relationship and say: 'and we hereby agree to be bound/ in this or that respect. The essential question in such cases is whether the parties' conduct, including what was said and not said and including the evident commercial aims and expectations of the parties, reveals an understanding or agreement or, as sometimes expressed, a manifestation of mutual assent, which bespeaks an intention to be legally bound to the essential elements of a contract._ The authority for the above can be found in, at least, the following: Meates v Attorney-General;[187] Integrated Computer Services Pty Ltd v Digital Equipment Corporation (Aust) Pty Ltd;[188] Vroon BV v Foster's Brewing Group;[189] Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd;[190] Pagnan SpA v Feed Products Ltd;[191] Pobjie Agencies v Vinidex Tubemakers;[192] Brambles Holdings Ltd v Bathurst City Council[193]; though see Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd;[194] and in this context see also Electrical Enterprises Retail Pty Ltd v Rodgers[195] and Manzi v Smith.[196]

Some authorities, for example, Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd, citing Williston on Contracts,[197] refer to the possibility of this class of contract, lacking manifested offer and acceptance, as rare. For my part, I think the use of such language of prediction of frequency tends to create an unwarranted presumptive barrier to the application of the approach referred to above.

[288]

119 APAL emphasises in its submissions that on a position taken by Mr Ballew in 2008 that the Option Deed does not change the ability of PLA to directly license exporters in Chile to export "PINK LADY" brand apples to North America.[230] Nevertheless, the context of this discussion must be considered. It concerned the form of the licence having regard to the fact that APAL had concluded the TMMLA with VR. The discussion concerned the issue by APAL of the licence to exporters to APAL export territories. It did not concern PLA at all. APAL took the view that, in light of this fact, the proper party to provide the APAL licence under the Joint Licence was VR. Mr Ballew was concerned that the parties had agreed that collection of fees had to occur outside Chile and by parties other than VR. His view was that there were legal and political impediments to VR so doing.[231] Mr Hamilton, however, took a different view. He noted that the basis of the licensing mechanism was that the collection of the royalty was done by the importer in the destination country pursuant to a licence granted by VR to the exporter.[232] Mr Ballew then responded raising various arguments including that the Pier-to-Pier Licensing system did not involve the use of any intellectual property in Chile.[233] Mr Ballew recited the history that PLA had previously directed licensed exporters to export "PINK LADY" apples to any licensed importer in North America. He asserted that neither the Option Deed nor the Variation Deed changed this. This was overreaching. The changed circumstance that APAL had become the registered owner of the "PINK LADY" trademarks in Chile had necessitated PLA obtaining the exclusive licence under clause 5.1 of the Option Deed and utilising it to grant licences under the Pier-to-Pier system provided for. I accept PLA's submission that merely because Mr Ballew incorrectly stated this point does not negate the parties' assumption that the option had been exercised and the clause 5.1 Licence had been enlivened. Ultimately, APAL and VR agreed to amend the TMMLA such that APAL would directly issue its licences under the Joint Brand Export licences.[234]

[334]

4. Advertising, Marketing, and Packaging. All parties to this Agreement agree to meet (or to confer by telecommunications means) on a mutually scheduled basis, but in no event less than once every year, to establish a consistent advertising and marketing strategy for use of the PINK LADY Trademarks and the methods of selling apples under the PINK LADY Trademarks, and to establish a uniform and consistent design for all packaging used to store, ship, display and sell PINK LADY brand apples. The advertising and marketing strategy, and packaging design must be agreed upon by three fourths (75%) of the parties to this Agreement, with each Master Representative entitled to a total of two votes, except the Australia Representative and AAPGA which shall each have one vote. The agreed upon advertising and marketing strategy, and packaging design, shall be committed in writing or color illustration when they are adopted by vote, and a copy provided to all parties. Once voted upon and approved, the agreed upon strategy and packing design shall be used by all parties to this Agreement, regardless of whether a particular party has agreed or disagreed with the approved strategy or packaging design. A meeting or telecommunications conference to discuss a new strategy or packaging design, or any issue concerning the existing strategy or packaging design, may be scheduled by agreement of three fourths of the parties to this Agreement. The current approved advertising and marketing strategy shall be appended to this Agreement as Appendix E. Illustrations of the current approved packaging design shall be appended to this Agreement as Appendix F.

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6. Breach of this Agreement. The failure of any Master Representative to adhere to the minimum quality standards established under the procedure set forth in Section 3 above, or the failure to adhere to the advertising and marketing strategy established under the procedure set forth in Section 4 above, or any failure to confer or breach of any agreement reached between parties under the procedure set forth in Section 5, shall be a breach of this Agreement.

[399]

RE: 2014 Chilean Exports of Pink Lady® Brand Apples from Chile to any Country

2014 Chilean Shipments to North America

Dear Marketer/Exporter,

The big news for 2014 is that Pink Lady America has taken back from APAL the ownership and management of the Pink Lady® Brand in Chile. Few people know that Pink Lady America was the original owner of the first successful Pink Lady® trademark registration in Chile. Since 2007, Pink Lady America had an agreement with APAL allowing APAL to administer the Pink Lady® Brand in Chile, subject to certain requirements. APAL did not honor that agreement, and so starting in 2014 Pink Lady America has taken back control of the Pink Lady® Brand in Chile.

Be assured, you will enjoy Pink Lady® Brand management in Chile under Pink Lady America. You are a commercial company, and Pink Lady America is a commercial company. We speak the same commercial language, and we have the same goals - to increase your profits and your usage of the Pink Lady® Brand. So the first question in your mind is: Will I have to pay higher royalties now? The answer is NO. Your royalty rates will be the same or less. In fact, our first action in Chile is to implement a Royalty Simplification Plan for the Pink Lady® Brand. This Plan has two parts:

1. Royalty Simplification Plan for Chile-North America - Starting immediately Pink Lady America is offering a 50% discount on the royalty for Pink Lady® Brand apples shipped to North America, and the only requirement is that you must agree to send all of your fresh market Cripps Pink or Rosy Glow apples that are U.S. Fancy grade or better as Pink Lady® Brand apples. Slicing apples can still be sent however you want. The normal royalty for Chile-North America is $77 USD/metric ton, so a 50% discount means a royalty of only $38.50 USD/metric ton. To accept this 50% royalty discount, just check the "I Agree" box in Section 2.6 of the enclosed 2014 Shipping Licence, sign the Licence at Section 2.6, and sign again at the end of the Licence.

2. Royalty Simplification Plan for Chile-World (Except North America) - In 2014, there will be NO CHANGE in your royalties for exports to APAL countries.

At a glance

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Judgment (727 paragraphs)

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Legislation Cited (2)

Cases Cited (41)