The Federal Court case of Urban Alley Brewery Pty Ltd v La Sirène Pty Ltd  FCA 82 illustrates the difficulties that can arise from using descriptive words in a trade mark. In this case, the words had only recently become descriptive as a result of prevailing trends rather than as a result of their dictionary definitions. Accordingly, the choice of a trade mark for adoption should include consideration of whether that choice is ahead of prevailing trends rather than just being a part of them.
Urban Alley Brewery Pty Ltd (Urban Alley), a supplier of craft beer products, was the owner of a registration for the trade mark URBAN ALE in class 32 for beer, having a priority date of 14 June 2016. Urban Alley had commenced use of the trade mark URBAN ALE in May 2016, although initially that use was subsidiary to another mark ONCE BITTER. In May 2018, Urban Alley launched a product under labelling featuring URBAN ALE as the dominant mark, achieving modest sales.
La Sirene Pty Ltd (La Sirene) was another supplier of craft beer products. It had commenced using the word “urban” in connection with its business in December 2015, when it described itself as an “urban farmhouse”, and used the following label for a beer under the name of URBAN PALE from about October 2016:
La Sirene Label
In February 2018, Urban Alley commenced proceedings against La Sirene alleging that the use of URBAN PALE by La Sirene for beer constituted an infringement of its registered trade mark URBAN ALE under s 120 of the Trade Marks Act 1995, a contravention of the Australian Consumer Law (ss 18 and 29) and the tort of passing off.
In response to these proceedings, La Sirene sought orders for the cancellation of the registered trade mark URBAN ALE under s 88 of the Trade Marks Act 1995 under various grounds including that the mark was not capable of distinguishing Urban Alley’s goods (in respect of which the trade mark was registered) from the goods of other persons (being the ground for cancellation available under section 41).
After proceedings commenced, La Sirene applied for registration of two trade marks in class 32 for beer, for the word mark “FARMHOUSE STYLE URBAN PALE BY LA SIRENE” and a logo mark based on the La Sirene Label (La Sirene Trade Marks). Neither of the La Sirene Trade Marks were opposed by Urban Alley and they were registered on 4 June 2019. However, Urban Alley then sought cancellation of the La Sirene Trade Marks post registration.
Justice O’Brien first considered whether the URBAN ALE Trade Mark should be cancelled. In considering the s 41 ground, his Honour found that the trade mark URBAN ALE was “not to any extent inherently adapted to distinguish Urban Alley’s beer products from those of other beer producers” for the following reasons (among others):
- That the word “urban” in connection with beer and breweries conveyed the meaning that the beer was brewed in a city (urban) location rather than a country (rural) location;
- That the word “urban” has “become associated with craft beer products and breweries”;
- That “urban ale” did not refer to a particular variety or flavour of beer; and
- Several businesses in Australia associated with beer have used the word “urban” as a part of their product or business name.
Expert evidence, which his Honour accepted, indicated that:
the word “urban” does not have any, particular significance in terms of beer style or flavour characteristics; … it is a very generic term used to describe the location of a brewery or its target audience; … it communicates the aesthetic of an inner-city brewery or describes the inner-city beer movement; and … it is a generic term that brewers use to describe their location or ground their beer marketing as being relevant to an inner-city consumer.
His Honour accepted that a craft beer producer such as La Sirene could use the word “Urban” without improper motive but rather for its ordinary meaning, concluding that the use of “Urban” and “Ale” in connection with beer was descriptive and that this did not change just because the two words were combined.
Accordingly, the Court’s discretion to order cancellation of the URBAN ALE trade mark was enlivened. His Honour also found that the trade mark URBAN ALE was deceptively similar to an earlier, third party trade mark (URBAN BREWING COMPANY), providing a further basis for cancellation under s 44.
On the question of discretion, Justice O’Bryan held that the trade mark URBAN ALE should be cancelled under s 88 as:
- Other traders may wish to use the words “urban ale” in connection with their products;
- The trade mark URBAN ALE was deceptively similar to the URBAN BREWING COMPANY Trade Mark; and
- There was limited evidence that Urban Alley had established a reputation in the trade mark URBAN ALE.
Although cancellation of the URBAN ALE trade mark meant that trade mark infringement was no longer in question, his Honour briefly considered the position of infringement, finding that La Sirene had not, in any event used URBAN PALE as a trade mark but rather as a product name. A significant reason for that conclusion was the use of the words “By La Sirene” on the La Sirene Label. This was a statement as to the origin of the product, notwithstanding that these words were less prominent on the La Sirene Label than the words “URBAN PALE”. Further, His Honour accepted that La Sirene had made out a defence of good faith under ss 122(1)(b)(i).
His Honour did not accept that Urban Alley had established a case against La Sirene either on the basis of the ACL or passing off, nor any case for cancellation of the La Sirene Trade Marks. La Sirene’s claim for relief under s 129 of the Trade Marks Act 1995 for groundless threats was refused because the relevant threat was made by Urban Alley’s predecessor in title and not by Urban Alley.*
* The relevant provision now concerns unjustified threats.