PERNOD RICARD'S INTENTIONS
114 It was submitted (correctly) by both parties that Pernod Ricard's state of mind was relevant to my assessment of whether the impugned sign had been used as a trade mark. It is therefore appropriate that I set out my findings in relation to Pernod Ricard's subjective purposes for using the impugned sign. I will assess the facts concerning Pernod Ricard's state of mind against the requirements of s 122(1)(b)(i) of the TM Act, even though the application of that provision to the facts does not strictly fall for determination. As will be seen, s 122(1)(b)(i) of the TM Act would not have assisted Pernod Ricard had I determined that the impugned sign was deceptively similar to the Yalumba Mark.
115 Section 122(1)(b(i) of the TM Act provides:
(1) In spite of section 120, a person does not infringe a registered trade mark when:
…
(b) the person uses a sign in good faith to indicate:
(i) the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services.
116 As Mansfield J observed in Britt Allcroft (Thomas) LLC v Miller (t/as The Thomas Shop) [2000] FCA 699; (2000) 49 IPR 7 (Thomas) at [66], s 122(1)(b)(i) is expressed in different terms than its legislative predecessor in s 64(1)(b) of the Trade Marks Act 1955 (Cth). The predecessor protected the use of a sign in good faith "of a description of the character or quality" of the goods or services in question. The words "kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services" in s 122(1)(b)(i) are broader. They have, as their underlying genus, some objective description of the goods: Thomas at [67].
117 Pernod Ricard's case was that it intended to use the sign for the sole purpose of indicating the kind, quality, geographical origin or some other characteristic of the goods promoted and sold in the Barossa Signature sub-range. More specifically, it alleged that the objective characteristic of the goods sought to be indicated was the characteristic of being "quintessential" or "typical" of wines produced from grapes grown in the geographical region of the Barossa Valley (the relevant characteristic).
118 The relevant characteristic is, I am satisfied, a characteristic falling within the broad range of objective characteristics to which s 122(1)(b) of the TM Act may apply. It is a characteristic that concerns (at least) the value, kind and quality of the goods in question. I am also satisfied that the sign BAROSSA SIGNATURE in fact indicates the relevant characteristic, albeit by the indirect means of a peculiar phrase.
119 However, I am not satisfied that Pernod Ricard in fact had the narrowly confined state of mind for which it contends. Rather, Pernod Ricard intended to use the sign BAROSSA SIGNATURE both to indicate the relevant characteristic and to distinguish its goods from those of other traders.
120 I have weighed in the balance the facts as found at [22] - [46] above to support that conclusion. I add the following observations and inferences.
121 Although Mr Couture was not aware of the Yalumba Mark at the time that he first favoured the word SIGNATURE to name the new sub-range, the existence of the Yalumba Mark came to the attention of the ISC very early in the product development stage.
122 Thereafter, the project was heavily characterised by legal risk assessments, as demonstrated accumulatively by the provision of legal advice, the search of trade mark registers, the involvement of the GIPH, the proposal of label ideas by Landor and the progressive elimination of label ideas by the ISC. It is apparent from the communications to and from Pernod Ricard's legal advisers that the decision to use the words BAROSSA and SIGNATURE together and in that order was influenced by a desire to address the legal risk that Yalumba may sue Pernod Ricard for infringement of the Yalumba Mark. In part to address that risk, the attachment of the word BAROSSA to the word SIGNATURE was intended to convey a different message to that conveyed by the Yalumba Mark.
123 The relevant decision makers and advisors within Pernod Ricard nonetheless sought to have the impugned sign appear in prominent and fancy typeface on the labels and to market the products by reference to the impugned sign displayed prominently on the promotional displays. In other words, the thinking within Pernod Ricard did not seek first to solve the problem of best to describe the characteristics of the goods in question, but instead sought to solve the problem of a potential infringement action by its intended use of a proposed new sub-brand. The latter problem was approached by developing a sign that would be more likely to appear descriptive. At the same time, a public relations and marketing message was developed to promote the products by direct reference to the very message conveyed by the impugned sign. That branding message coincided with the descriptive purpose: the products were quintessential or typical of wines produced from grapes sourced from the Barossa Valley. There was, in effect, a dual imperative: to develop a sign that conveyed a descriptive meaning (so as to reduce the risk of a successful infringement action) and that would also serve the purpose of an effective and attractive sub-brand (so as to distinguish Pernod Ricard's goods from those of other traders).
124 I have already determined that, on an objective assessment, the sign did in fact serve to distinguish the goods dealt with by Pernod Ricard from goods dealt with by other traders. That, in my opinion, was a result intended by Pernod Ricard.
125 Consistent with my objective assessment, I consider it improbable that Pernod Ricard would have subjectively intended that the impugned sign be regarded by consumers as serving only as a line of demarcation between goods within the Reserve range but not also as a badge of origin in its own right. Further, I find that Pernod Ricard is a sophisticated enterprise which applied considerable human and other resources to the innovation of new products and brands, and that the innovation process employed in respect of the goods and mark in question in the present case was no less sophisticated and deliberated upon (except to the extent that the project was expedited). The process was one in which the development of the underlying product, the product name, its position within Pernod Ricard's "portfolio" and the design of its label was an organic one in which the marketing potential and descriptive purposes of words necessarily interrelated.
126 All of the above tells against an intention to use the impugned sign purely for the purpose of indicating the relevant characteristic. The intention to give the impression of a brand is reinforced by my observations at [73] above as to the unusual order in which the words in the impugned sign appear, and my observations at [58] - [60] in respect of the objective appearance of the sign on the labels and promotional materials. Those features are, to my mind, intended to have an impressionistic effect upon consumers standing before a crowded shelf in a wine retail store beyond the effect of indicating the relevant characteristic.
127 Although I have determined that Pernod Ricard did not have the state of mind contended for at trial, it does not follow that Pernod Ricard acted dishonestly in its use of the impugned sign. On the contrary, I am satisfied that Pernod Ricard did not intend to cause confusion by its use of the sign BAROSSA SIGNATURE on its goods. I would arrive at that finding even if I am wrong in my objective assessment on the issue of deceptive similarity. Moreover, I am satisfied that Pernod Ricard did not subjectively intend to infringe the Yalumba Mark, nor did it intend to wrongfully exploit the goodwill residing in the Yalumba Mark.
128 The facts as I have found them would nonetheless deprive Pernod Ricard of the protection afforded by s 122(1)(b) of the Act.
129 It is important to observe the terms in which s 122(1)(b) is expressed. The provision does not have as its primary concern the question of whether a trader intends to cause confusion or to exploit the reputation in a registered mark (although the presence of such an intention will determinative of the issue of "good faith" in most, if not all, instances). Rather, the focus of the provision is on the protection of descriptive uses of words or signs that ought not to fall within the exclusive rights enjoyed by the registered owner of a trade mark. In F H Faulding & Co Limited v Imperial Chemical Industries of Australia and New Zealand Limited (1965) 112 CLR 537 at 543, McTiernan J made similar observations of the policy considerations underlying two previous statutory iterations of the "defence":
It is convenient first to deal with the defence based on s 64 (1)(b). This provision is as follows: 'Notwithstanding anything contained in this Act, the following acts do not constitute an infringement of a trade mark:- ... (b) the use in good faith by a person of a description of the character or quality of his goods'. The verbiage varies somewhat from s 53A of the Trade Marks Act 1905-1948 (Cth). Section 53A was in these terms: 'No registration under the Act shall interfere with any ... use by any person of a bona fide description of the character or quality of his goods'. Lord Herschell said in Eastman Photographic Materials Company Ltd v Comptroller-General of Patents, Designs, and Trade-Marks (The Solio Case) ([1898] AC 571): '... it would obviously have been out of the question to permit a person by registering a trade-mark in respect of a particular class of goods to obtain a monopoly of the use of a word having reference to the character or quality of those goods. The vocabulary of the English language is common property: it belongs alike to all; and no one ought to be permitted to prevent the other members of the community from using for purposes of description a word which has reference to the character or quality of goods' ([1898] AC at p 580). His Lordship made these observations with respect to a provision corresponding to s 24 (1)(d) of the present Australian Act. I think that these observations are apposite to the policy inspiring a provision of the nature of s 64 (1)(b).
What this provision protects is the use of a mark that is genuinely descriptive of the character or quality of goods in connexion with which it is used, where the use is purely for the purposes of description.
(emphasis added)
130 The same principles apply on a purposive construction of s 122(1)(b)(i) of the TM Act as now in force. A trader relying on the provision must demonstrate that its intention was to indicate, and only to indicate, certain characteristics (broadly defined) of its goods. A trader who intentionally uses a sign to distinguish its goods in the course of trade from those of another trader will not have used the sign "purely for the purposes of description" as required by s 122(1)(b)(i) of the TM Act. It matters not whether the trader has otherwise acted honestly.
131 For these reasons, had I determined that the impugned sign was deceptively similar to the Yalumba Mark, Pernod Ricard would not have established its pleaded case under s 122(1)(b)(i) of the TM Act and Yalumba's application, in that event, would have been allowed.
132 I will hear the parties as to costs.
I certify that the preceding one hundred and thirty-two (132) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Charlesworth.