The High Court has confirmed a major shakeup of Australia’s intellectual property legal landscape by rejecting a request to appeal against a landmark win by Brisbane IP lawyer Ken Philp, in a case which defines how trade mark holders could lose their marks if not properly used.
The High Court this week effectively endorsed a unanimous decision by five Federal Court judges earlier this year when Mr Philp won an appeal case over the issue of a trade mark owner failing to show proper control and use of their mark.
Mr Philp, a prominent IP lawyer and a Director of Brisbane law firm Bennett & Philp Lawyers, had argued that the mere existence of a quality control clause in a trade mark licence was not sufficient evidence of its "use" under Australia’s trade marks legislation.
The action was played out as part of an ongoing global trade mark war between rival alcohol brands Wild Geese and Wild Turkey that have involved litigation in about 55 cases around the world for the past 15 years.
For the last three years Mr Philp has been acting for the Wild Geese Whiskey company, Lodestar Anstalt, in its latest battle with Campari America, the owner of the Wild Turkey trade marks.
The Federal Court found in Mr Philp’s favour earlier in the year but the lingering issue was whether the other party would seek High Court leave to appeal the decision.
This week’s High Court ruling, rejecting an appeal move, ends the case and significantly means Campari has lost the right to use the Wild Geese trade marks on its products in Australia.
At the same time Mr Philp’s client, the Wild Geese Whiskey company, Lodestar Anstalt, will now be able to issue its Wild Geese branded products.
The case centred on Wild Geese seeking to remove Campari's trade marks to the brands Wild Geese and Wild Geese Wines for legal “non-use” of the marks in Australia in the relevant non-use period. Lodestar Anstalt wants to market its whiskey under the Wild Geese brand name but could not do so while the trade marks were held by its rival.
“Under our legislation if you don’t use a trade mark or do not properly control its use by a licensee for a period of three years and one month before an application to remove it is filed, then you are vulnerable to losing it,” Mr Philp said.
While there have been many instances of trade marks being forfeited due to lack of use, this court appeal was a precedent-setter because it was the first major case since the 1960s to argue about the definition of “use” and “control” of a trade mark as factors in a trade mark’s non-use.
The Chief Justice, at the start of the appeal process, directed there be a full bench of five judges instead of the usual three, to hear the appeal because the court considered the matter to be important to Australian trade mark law.
Campari had licensed the trade marks Wild Geese and Wild Geese Wines to a small South Australian wine producer called Wild Geese Wines Pty Ltd, the original owner of those marks.
It acquired those marks from that producer under an assignment agreement and immediately gave back to the producer a perpetual, royalty-free licence for them. Mr Philp argued there was a bare quality control clause in the licence, in other words Campari did nothing to control the use of the trade marks by the licensee.
“My main argument was that the mere existence of a quality control clause was not sufficient evidence of its "use" under the Act. A precedent-setting judgment in the 1960s said that the necessary connection that needed to be established between the trade mark owner and his goods need only be “slight”, such as having a quality control clause. However our argument was that there still had to be actual exercise of control and not just the theoretical possibility of control being able to be exercised,” he said.
Wild Geese’s original action to have Campari lose the trade marks succeeded but Campari appealed and won. Mr Philp then appealed that decision for Lodestar. The Full Court of the Federal Court found in favour of the appeal five-nil with costs.
“What had not been decided until now was that if you want a control clause over your trade mark, you have to show actual control over its use, not just theoretical control. The message it sends to businesses is that if you are a trade mark licensor, you need to show you are actively involved in control of the mark’s use by your licensee. If not, you could lose the trade mark,” Mr Philp said.
He said the decision has major implications for both licensees and licensors and whether or not the trade marks that are licensed are vulnerable to a non-use removal application by a commercial rival or, indeed, the licensee, in a non-use period.
Mr Philp said all trade mark licence agreements will have to be carefully scrutinised in light of the Federal Court and High Court’s decisions.
“Our firm will be giving advice to our own licensor clients on their reviewing their licence agreements and their procedures for control of their marks under those agreements or, if they are licensees, how they might extract some commercial advantages from their licensors.
“We will be advising our clients that, as a matter of caution, a high priority review on their licence agreements should be done.
“What happens now is Campari loses its two trade marks and Wild Geese is cleared to lodge its marks for its Wild Geese whiskey products,” Mr Philp added.
“We are proud that, by Australian size, a small IP firm in Brisbane has set another landmark legal IP precedent which builds on other precedent-setting IP successes Bennett & Philp has achieved since the 1980s,” Mr Philp said.