Skyy Spirits LLC v Lodestar Anstalt [2015] FCA 509 (26 May 2015)
A trade mark registration can be removed from the register for non-use during a continuous three year period, after it has been on the register for at least 5 years.
In response to a non-use action by a third party, an owner of a trade mark registration can provide evidence of their use of the trade mark to the Trade Marks Office.
But what if the owner of the registration did not use the trade mark, but licensed a third party to use it?
The question will then be whether the owner “authorised” a licensee to use the trade mark. “Authorised use” is defined in section 8 of the Trade Marks Act. In order to qualify as authorised use, the owner of the registration must “control” the use of the trade mark by the licensee. Examples of “control” in the Act include “quality control” or “financial control.”
The issue of “authorised use” arose in the case of Skyy Spirits LLC v Lodestar Anstalt [2015] FCA 509.
Skyy Spirits LLC is the owner of the famous trade mark WILD TURKEY for bourbon. It is also the owner of trade mark registrations for WILD GEESE trade mark for wine.
Lodestar Anstalt owns and uses the WILD GEESE for Whiskey overseas. Hence, they wanted to remove any impediment to their use of the WILD GEESE mark in Australia.
The registration for WILD GEESE was originally filed on 26 July 2005 by an Australian company, Wild Geese Wines Pty Ltd.
On 1 June 2007, Wild Geese Wines Pty Ltd agreed to assign the WILD GEESE registration to a predecessor in title to Skyy Spirits LLC to in exchange for a perpetual exclusive license to use the mark in Australia. The License Agreement contained provisions for quality control but did not mention any royalties.
Lodestar Anstalt obtained evidence that Skyy Spirits LLC did not desire to enter into any business relationship with Wild Geese Wines Pty Ltd, nor did it want to be identified in the market as the owner of the WILD GEESE mark. The true ownership of the WILD GEESE marks was not evident from the labeling on the wine bottles or on the tax invoices supplied as evidence of use.
Accordingly, a Hearing Officer at the Trade Marks Office removed the trade marks from the register on the grounds that there was no actual “authorised use.”
Skyy Spirits LLC appealed the decision to the Federal Court.
Perram J of the Federal Court concluded that Skyy Spirits LLC exercised no actual control over the use of the trade marks by Wild Geese Wines Pty Ltd.
Nevertheless, Perram J was bound to follow the earlier Full Federal Court decision in Yau’s Entertainment Pty Ltd v Asia Television Ltd FCAFC [2002] FCAFC 78; [2002] FCAFC 338 (28 March 2002), which held that the mere theoretical possibility of contractual control is sufficient to constitute authorised use under s 8. Accordingly, the WILD GEESE mark was not removed from the trade mark register.
This decision highlights the importance of documenting licence agreements and making sure that they include provisions for quality control and financial control. The risk of not having a written agreement is that the trade mark can be removed from the register on the grounds of non-use.