FEDERAL COURT OF AUSTRALIA

Urban Alley Brewery Pty Ltd v La Sirène Pty Ltd [2020] FCA 82

ORDERS

THE COURT ORDERS THAT:

1.    The parties file, within 14 days, draft short minutes containing an agreed form of orders reflecting the reasons for decision of the Court (including as to the costs of the proceeding) or, in the absence of agreement, the parties file competing draft short minutes containing the orders proposed by each party and accompanying submissions in support of no more than 3 pages in length.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

O’BRYAN J:

A.    Introduction

1    The parties are in dispute with respect to marks used in connection with the supply of their craft beer products. Nowadays, the expression “craft beer” is a commonly used description for beer products produced by smaller breweries. Such breweries are often referred to as “microbreweries” and craft beers are also referred to as “boutique” beers. The description “craft beer” is used to distinguish beer products produced in smaller breweries from beer products produced by the large multinational brewing companies, which might be referred to as “traditional” or “mainstream” beer products. Brewers of craft beers seek to differentiate their products from traditional beers by highlighting the flavours of the ingredients, the story behind the beer and brewery and the techniques involved in production. Since 2011, the craft beer segment of the beer market has had its own national industry association, originally called the Craft Beer Industry Association but now called the Independent Brewers Association. The association defines a craft brewer as a brewer that produces less than 40 million litres of beer per year.

2    Writing in The Australian newspaper for the weekend of 4-5 November 2017, Peter Lalor commenced his article on the “Top 20” beers for that year with the observation that: “The craft beer market’s relentless expansion continues apace. Barely a day goes by without a fistful of new brews landing on the shelves of good bottle shops; barely a month passes without another brewery opening its doors.” Perhaps indicating that more flavoursome beers are not the preserve of newly released craft beers, Mr Lalor includes Coopers Sparkling Ale, made by Coopers Brewery, in his list, describing it as:

Old Red, as faithful and consistent as the family labrador, for decades was an anachronism as the world was obsessed with lagers. But eventually things come full circle - think beards and pickling - and ales are popular again. This brew is as iconic as Vegemite and the baggy green. Unfiltered, fruity and honest, Sparkling is craft’s granddaddy.

3    The applicant, Urban Alley Brewery Pty Ltd (Urban Alley), produces and distributes a craft beer product in bottles and cans from its “brewpub” located in the Docklands area of Melbourne. Although not the subject of specific evidence, I understand the expression “brewpub” to refer to a microbrewery which also operates as a pub, enabling patrons to drink the craft beer that is manufactured on the premises. Urban Alley is the owner of the registered trade mark “URBAN ALE” in class 32 for beer (to which I will refer as the Urban Ale mark). The Urban Ale mark has a priority date of 14 June 2016.

4    The respondent, La Sirène Pty Ltd (La Sirène), is also a producer and distributor of various craft beer products from its brewery located in the suburb of Alphington in Melbourne. In about October 2016, La Sirène began manufacturing, marketing, offering for sale and selling a beer product under a name that incorporated, in large lettering, the words “URBAN PALE”. A representation of the label for La Sirène’s Urban Pale product is shown below:

5    On 28 February 2018, Urban Alley commenced this proceeding claiming that the use of the Urban Pale name by La Sirène constitutes:

(a)    an infringement of the Urban Ale mark in breach of s 120 of the Trade Marks Act 1995 (Cth) (TMA);

(b)    misleading and deceptive conduct in breach of ss 18 and 29 of the Australian Consumer Law (ACL) as found in Schedule 2 to the Competition and Consumer Act 2010 (Cth); and

(c)    the tort of passing off.

6    On 24 October 2018, and after the commencement of this proceeding, La Sirène filed a trade mark application for “FARMHOUSE STYLE URBAN PALE BY LA SIRÈNE” in class 32 in relation to beer (the La Sirène word mark). On 26 October 2018, La Sirène filed a further trade mark application in class 32 in relation to beer for the following trade mark (the La Sirène label mark):

7    The La Sirène label mark is in the same form as the label that has appeared on the La Sirène Urban Pale product since its launch in October 2016. The marks were registered on 4 June 2019.

8    The trade mark infringement claims made by Urban Alley in this proceeding have given rise to a series of competing claims between the parties.

9    First, La Sirène seeks orders for the cancellation of the Urban Ale mark under s 88(1)(a) of the TMA on the following three bases:

(a)    under s 41 of the TMA on the basis that the mark is not capable of distinguishing Urban Alley’s goods (in respect of which the trade mark is registered) from the goods of other persons;

(b)    under s 44 of the TMA on the basis that the mark is substantially identical with or deceptively similar to the prior registered mark “URBAN BREWING COMPANY”; and

(c)    under s 58 of the TMA on the basis that Urban Alley is not the owner of the mark (based on the registration of the prior mark Urban Brewing Company).

10    Second, La Sirène defends the infringement claims on the following four bases:

(a)    under s 120 of the TMA on the basis that it has not used the name Urban Pale as a trade mark;

(b)    under s 122(1)(b)(i) of the TMA on the basis that it has used the name Urban Pale in good faith to indicate the kind, quality, geographical origin, or some other characteristic, of its beer product;

(c)    under s 124 of the TMA on the basis that it has used an unregistered trade mark, being the word “urban”, continuously in the course of trade in relation to craft beer products from before the priority date; and

(d)    under s 122(1)(e) of the TMA on the basis that it has exercised its right to the La Sirène word and label marks in the period since the date of registration of those marks.

11    Third, to counter La Sirène’s reliance on s 122(1)(e), Urban Alley seeks the cancellation of the La Sirène word and label marks under s 88(1) of the TMA on the following bases:

(a)    under s 44 of the TMA on the basis that the La Sirène marks are substantially identical with, or deceptively similar to, the Urban Ale mark;

(b)    under s 42(b) of the TMA on the basis that the use of the La Sirène marks would be contrary to law because such use constitutes misleading and deceptive conduct in breach of ss 18 and 29 of the ACL and the tort of passing off;

(c)    under s 60 of the TMA on the basis that, before the priority date of the La Sirène marks, the Urban Ale mark had acquired a reputation in Australia and, because of that reputation, use of the La Sirène marks would be likely to deceive or cause confusion; and

(d)    under s 88(2)(c) of the TMA, on the basis that, as at the filing date of the claim (being 11 June 2019), the use of the La Sirène marks is likely to deceive or cause confusion.

12    Fourth, La Sirène makes a claim under s 129 of the TMA alleging that Urban Alley has no grounds for bringing an action against it for infringement of Urban Alley’s trade mark.

13    Urban Alley’s claims based on ss 18 and 29 of the ACL and the tort of passing off stand apart from the competing trade mark claims of the parties, but are based on the same underlying facts.

14    The evidence on behalf of Urban Alley was principally given by its director and chief executive officer, Mr Ze’ev Meltzer. The evidence on behalf of La Sirène was principally given by its director, Ms Eva Nikias. La Sirène also adduced evidence from Mr Matthew Kirkegaard, who is a freelance beer writer, commentator, educator and consultant focussed on the craft beer industry. Each of those witnesses was cross-examined. In the end, there were no contested issues of primary fact. The contested issues of fact largely involved the characterisation of the primary facts. A central issue is the ordinary signification of the words “urban” and “ale” when used in connection with beer and whether the Urban Ale mark was capable of distinguishing the craft beer product sold by Urban Alley.

B.    The factual background

B.1    Urban Alley’s business

15    In 2015, Mr Meltzer began taking steps to establish a beer brewing business, which he planned to operate in the Melbourne central business district. Throughout late 2015 and early 2016, Mr Meltzer took preliminary steps to establish the business, including creating a recipe for the beer and identifying possible brand names for the beer. Mr Meltzer’s initial idea was to name the brewing company after a prominent Melbourne street and he came up with the name Swanston Street Brewing Co Pty Ltd. He incorporated that company on 13 November 2015. A short time later, on 1 March 2016, he changed the company’s name to Collins Street Brewing Co Pty Ltd (CSBC) because at that time he was working in Collins Street.

16    On 17 November 2015, CSBC filed a trade mark application for the word mark “ONCE BITTER” in class 32 for beer. The mark was entered on the Register of Trade Marks on 17 May 2017 with a priority date of 17 November 2015. Mr Meltzer initially envisaged that the Once Bitter trade mark would serve as a parent brand name to be used in conjunction with other product specific brand names. It was his intention to create a range of new beers as a sub-brand to the Once Bitter brand.

17    Mr Meltzer gave evidence that, in early 2016, he conceived the name “Urban Ale” as a possible brand name for the beer to be sold by CSBC. At the time, he decided that he did not want to use a generic beer descriptor on the beer label such as Pale Ale or Golden Ale, but he wanted to create a new style of beer and a segment of the market that the business could own.

18    By early 2016, Mr Meltzer had developed the business to the point where he had a recipe for the beer to be sold and he had settled on the brand names “Urban Ale” and “Once Bitter”. Since he had not constructed a brewery of his own, he engaged a contract brewer, Southern Bay Brewing Company, to brew the beer.

19    In May 2016, CSBC launched its first beer product under the names “Once Bitter” and “Urban Ale”. The product was sold in 330ml bottles in packs of 4 or 24 and in kegs (50 litres) supplied to hotels and pubs in Melbourne. Initially, the product was sold through pubs, bars and independent bottle shops. The bottles bore the labelling depicted below:

20    The packaging of the 4 and 24 packs of the bottles was as follows:

21    It can be seen that the most prominent label on the product and its packaging was Once Bitter and the Urban Ale label was depicted in a subsidiary manner in a contrasting font. For that reason, and to distinguish the product from a subsequent version which had different packaging, I will refer to this product as the Once Bitter product.

22    From about May 2016, coinciding with the launch of the Once Bitter product, CSBC disseminated promotional material relating to the Once Bitter product, which included table talkers for display on the tables and bars at the Network Public Bar located at Southern Cross Station, Melbourne, and decals for use on beer taps in bars and pubs. In May 2017, CSBC disseminated further decals. That material took materially the same form as the labelling and packaging of the Once Bitter product, with the dominant label being Once Bitter and the subsidiary label being Urban Ale.

23    On 14 June 2016, CSBC filed a trade mark application for the word mark “URBAN ALE” in class 32 for beer. That mark was entered on the Register of Trade Marks on 11 January 2017 with a priority date of 14 June 2016.

24    On 25 June 2016, the Once Bitter product was listed on Untappd under the style category of “Golden Ale”. Untappd is a mobile phone application that allows its users to check beer ratings and post and share their beer ratings. It has 8 million registered users. The listing contained no reference to the label Urban Ale.

25    On 14 July 2016, CSBC filed a trade mark application for the word mark “ONCE BITTER” in the fancy lettering depicted above in class 32 for beer. That mark was entered on the Register of Trade Marks on 11 January 2017 with a priority date of 14 July 2016.

26    On 8 September 2016, CSBC issued a press release with the subject heading “Once Bitter, Melbourne’s Brand New Craft Beer”. The covering email introduced the brand as Once Bitter and the brewery was introduced as Collins St Brewery and prominently displayed the Once Bitter label in fancy letters. The press release commenced with the heading “ONCE BITTER LAUNCHES INTO THE AUSTRALIAN CRAFT BEER MARKET” and the beer product was referred to as Once Bitter throughout the press release. There were two references to Urban Ale in the press release. The first was in the following sentence:

The signature Urban Ale sits somewhere between a classic Australian golden ale and a Belgian blonde, with pleasant tropical notes but a crisp, clean finish. This is a premium beer for the people and is described as a 'celebration of our great city, a tribute to the laneway culture and a blend of the old and the new'.

27    The second reference appeared at the end of the press release in an information section as follows:

Name: Once Bitter

Style: Urban Ale (Somewhere between an Aussie Golden Ale and Belgian Blonde)

ABV: 4-5%

Hops: Motueka, Galaxy, Southern Cross, Citra, Cascade and a secret dry hop!

Malt: Wheat, Pilsner and Vienna

Yeast: American ale yeast

28    It is apparent that, in the press release, the words Urban Ale were used to describe the style or flavour of the product. That use is consistent with Mr Meltzer’s evidence that he wanted to create a new style of beer and a segment of the craft beer market that the business could own. Mr Meltzer also gave evidence that, over the years, he has been questioned by numerous buyers and consumers about the kind of beer offered by reference to “Urban Ale”, and he has explained that Urban Ale is a new style of beer that is a cross between a classic Australian Golden Ale and a Belgian Blonde.

29    On 16 September 2016, a publication called “We Know Melbourne” published an online article titled “Interview: Ze’ve Meltzer of Once Bitter”. In the article, the Once Bitter product is predominantly referred to as Once Bitter, although in one paragraph it is referred to as Urban Ale.

30    On 20 September 2016, The Age newspaper featured the Once Bitter product in the article titled “10 fresh Australian beers to drink this spring” in the Good Food Guide. In the article, the product was identified as Once Bitter and the brewer was identified as Collins Street Brewing Co. The article commences with the statement that “The media release for this Melbourne “urban ale” (which seems to be a cross between a Belgian blonde and Australian golden ale) says it’s a celebration of our great city…”. Again, the name Urban Ale is understood as a description of the style or flavour of the product.

31    On 16 November 2016, CSBC registered the domain name “www.oncebitter.com.au”. The website featured a large depiction of the brand, Once Bitter, above a depiction of the product bearing no reference to Urban Ale at all. After various passages of text elaborating on the Once Bitter brand, the only reference to Urban Ale was towards the bottom of the website, in answer to the question “What does it taste like?”, with the answer stating: “Our signature Once Bitter Urban Ale sits somewhere between a classic Australian golden ale and a Belgian blonde, with pleasant tropical notes but a crisp, clean finish”. On the last page of the website, next to an image of the Once Bitter product, the following words appear: “A CELEBRATION OF OUR GREAT CITY, A TRIBUTE TO THE LANEWAY CULTURE AND A BLEND OF THE OLD AND THE NEW”. These features of the webpage remain in the same form today.

32    On 27 December 2016, a publication called “The Crafty Pint” published an interview with Mr Meltzer titled “WHO BREWS ONCE BITTER?” The Crafty Pint is an Australian beer news website. It is an online magazine and resource for people interested in craft beer in Australia. Throughout the interview, the Once Bitter product was referred to as Once Bitter, save in one part of the interview in which Mr Meltzer explained that his intention was to bring out a variety of beers under the Once Bitter banner, stating: “I'm also keen to explore a secondary range of beers that will be limited releases under a separate name. They’ll be challenging, varied in style, and offer up something at the other end of the scale from our Urban Ale. In ten years’ time, I hope there’ll be plenty of them.”

33    By mid-2017, Mr Meltzer decided to build his own brewery, which he initially wanted to locate on Collins Street since he had named his company “Collins Street Brewing Co”. However, after making some initial enquiries, Mr Meltzer determined that it would not be feasible to operate a brewery at a location on Collins Street and instead decided to build a brewery and bar in the Docklands area of Melbourne. Mr Meltzer decided to transfer the assets of CSBC to the applicant company, which was then named Laneway Brewery Pty Ltd (Laneway Brewery), and to trade under the name “Urban Alley Brewery”. He also decided to stop using the “Once Bitter” brand name as he was of the view that, by incorporating the word “bitter” into the label, consumers might think that the beer had an accentuated bitter taste, which it did not. Mr Meltzer deposed that he also wished to further emphasise the Urban Ale mark on the urban ale products.

34    From November 2017, the business produced and distributed to bars and pubs that stocked its products 1,000 coasters featuring the Urban Ale mark (and without the Once Bitter mark).

35    On 21 December 2017, Laneway Brewery purchased the business of CSBC. Under a deed of assignment entered into on that date, CSBC assigned to Laneway Brewery:

(a)    any and all past, present and future rights, title and interest in and to the intellectual property owned by CSBC together with the associated goodwill (if any) throughout the world; and

(b)    all rights to bring, make, oppose, defend or appeal claims, proceedings or actions and obtain relief including but not limited to injunctive relief and pecuniary relief (and to retain any amounts recovered) in respect of any cause of action arising from CSBC's intellectual property whether occurring before, on or after 21 December 2017.

36    On 28 February 2018, Laneway Brewery added a product listing to Untappd called “Urban Ale”, under the style category of “pale ale”.

37    On 15 March 2018, Laneway Brewery registered the domain name “urbanalley.com.au”. The website features the prominent statement “SUSTAINABLY CRAFTED IN THE HEART OF MELBOURNE”.

38    On 30 April 2018, Laneway Brewery changed its name to Urban Alley Brewery Pty Ltd.

39    From May 2018, Urban Alley launched its new beer product under the dominant label Urban Ale (to which I will refer as the Urban Ale product to differentiate it from the product sold under the dominant Once Bitter label) and began to phase out supply of the Once Bitter product. Mr Meltzer was unable to say how long it took to phase out existing supplies of the Once Bitter product, although he accepted it took some months in certain cases. From about June 2018, the Urban Ale product was sold in 375ml cans (either in packs of 6 or cases of 24) as well as bottles.

40    The bottles bore the labelling shown below:

41    The cans bore the labelling shown below (shown in a 6 pack):

42    The case of 24 cans bore the labelling shown below:

43    From May 2018, Urban Alley has been distributing to customers t-shirts and clothing patches featuring the Urban Ale mark as depicted on the products shown above. Urban Alley distributed 50 t-shirts and 50 clothing patches for bar staff to wear at The South Melbourne Mussel & Jazz Festival in 2018. Urban Alley has also distributed t-shirts featuring the Urban Ale mark to bars and pubs throughout Victoria that stock the Urban Ale products.

44    On 27 July 2018, Australian Brews News published an online article titled “Production to begin at Urban Alley Brewery”, which described the brewhouse then being constructed by Urban Alley in the Docklands suburb of Melbourne. The article stated that Urban Alley had been brewing its “Urban Pale Ale” at Southern Bay and Hawkers Brewery since May 2016. Australian Brews News publishes online content relating to beer, brewing, beer history and breweries. Australian Brews News' daily news digest has a subscriber list of over 2750 people, primarily people involved in the brewing industry, and its website receives in excess of 600,000 unique visits a year.

45    On 6 March 2018, Urban Alley filed trade mark applications for “URBAN ALLEY BREWERY”, “URBAN LAGER”, “URBAN IPA”, “URBAN DARK”, “URBAN APA” AND “URBAN PILSNER” in class 32 for beer. Each of those applications has been opposed by La Sirène, but the applications and the marks are not the subject of the present proceeding.

46    In September 2018, Urban Alley launched its “brewpub” in the Docklands region of Melbourne. The Urban Alley business currently has 7 employees, including Mr Meltzer.

47    From September 2018, Urban Alley has developed and used a bar and tasting station which features the Urban Ale mark. The bar and tasting station has been used at various retail outlets including at Liquorland stores for tastings and at events and beer festivals. Urban Alley has also provided further decals for use on beer taps in bars and pubs with the Urban Ale mark.

48    After December 2018 (the evidence does not reveal when, but by at least June 2019), Urban Alley changed the label of its Urban Ale product to the form depicted below:

49    Urban Alley adduced in evidence some financial data concerning the volume of products sold by it and the revenue earned, and marketing expenditure incurred, in the period from May 2016 until August 2018. Urban Alley sought an order from the Court to keep the data confidential. However, in circumstances where Urban Alley has made claims under ss 18 and 29 of the ACL and in passing off, it is necessary to refer to the data at least in general terms for the purposes of this decision. The data does not differentiate between the Once Bitter and Urban Ale products, but the volume data is provided in monthly figures which provides some indication of the sales of each product by reason of the fact that the Urban Ale product was launched and the Once Bitter product was phased out from May 2018. I have extracted the following figures from the data provided:

50    Overall, the sales of the Once Bitter and Urban Ale products, and the marketing expenditure, have been modest. This is particularly so in the period to October 2016 when La Sirène launched the Urban Pale product.

B.2    La Sirène’s Business

51    In December 2007, Ms Eva Nikias, together with her husband, Mr Costa Nikias, incorporated a company under the name Ensticto Pty Ltd (now called Beverage & Brewing Group Pty Ltd) through which they established a business of setting up microbreweries for third parties in Australia and Asia. From 2009 to 2017, the business expanded to offer courses, run by Costa Nikias, for people looking to establish their own microbrewery.

52    In January 2010, the Nikias founded their own brewing business, La Sirène Brewing (La Sirène), through their company Beverage & Brewing Group Pty Ltd.

53    On 14 January 2011, Beverage & Brewing Group Pty Ltd filed a trade mark application for the word mark “LA SIRÈNE” in class 32 for beer (to which I will refer as the La Sirène mark). The La Sirène mark was entered on the Register of Trade Marks on 10 November 2011 with a priority date of 14 January 2011.

54    On 25 July 2012, Beverage & Brewing Group Pty Ltd incorporated the respondent company, La Sirène Pty Ltd, as its wholly owned subsidiary, to conduct the brewing business. La Sirène Pty Ltd licenses the La Sirène mark from Beverage & Brewing Group Pty Ltd.

55    La Sirène brews farmhouse-style ales, also known as “saisons” (French for “seasons”). The Wikipedia entry for “farmhouse ale” (to which no objection was taken) provides the following description:

Farmhouse ale is an ancient European tradition where farmers brewed beer for consumption on the farm from their own grain, hops and yeast. Most farmers would brew for Christmas and/or harvest time, but in areas where they had enough grain farmers would use beer as the every-day drink. This was in a time when it was safer to drink beer than water. Farmhouse ale has enormous variation in the ingredients and brewing process used, both of which follow ancient local traditions.

56    La Sirène’s brewery is located in Alphington, an inner suburb of Melbourne. Proximity to the Darebin Parklands is important to the business, because of the availability of local indigenous yeast and bacteria that is incorporated into the farmhouse ales produced by La Sirène.

57    Since December 2011, La Sirène has produced a significant number of products, including saisons, sour ales, witbiers, dark ales, fruit beers and Belgian ales. Each of these products has been sold with labels that incorporate the La Sirène mark together with the name of the product that describes the type and style of beer such as Saison, Wild Saison, Farmhouse Red, Belgian Sour, Witbier and Praline (to name a few).

58    La Sirène has won 23 national and international awards for its beers, including winning Champion French and Belgian Category Gold at the Australian Craft Beer Awards 2014, the “People’s Choice Award” at the Great Australasian Beer Spectacular in 2014 and silver medals at both the International Beer Cup in Japan in 2015 and the International Beer Challenge in the UK in 2018.

59    In 2012, Costa Nikias began working on the creation of a pale ale with the aim of targeting a wider audience as well as offering an “everyday” La Sirène pale ale to existing customers. However, the first pilot brews of the pale ale product were not undertaken until 2015 and early 2016.

60    In January 2015, a journalist at The Australian newspaper, Max Allen, visited the La Sirène brewery and met with the Nikias. In an article published on 31 January 2015 in The Australian, Mr Allen wrote:

The brewery’s location is about as far from a French farmhouse as it's possible to imagine: the fermenting tanks and cool store and barrel room are located on an old urban industrial park ... [b]ut what’s inside La Sirène’s art nouveau labelled bottles is anything but industrial: these are seriously exciting, complex, in some cases groundbreaking, artisan beers of the very highest quality.

61    On 8 December 2015, another article featuring Costa Nikias was published in Ale of A Time titled “The Nation of Unconventional Fermentation”. Ale of a Time is a craft beer focussed Australian beer blog and beer pod cast with approximately 3,100 followers on Twitter. The article included the following quote from Costa Nikias:

I think we are lucky because being in an urban area, 9kms from the city, you wouldn't think there is a huge amount of opportunity to harvest indigenous yeast and bacteria. I think the opposite, I think in urban areas you've got more diversity and where our brewery is located, we are bordered by a creek, and bordered on the other side by a national park, so our brewery is directly exposed to this amazing diversity of microflora.

62    It was around this time (December 2015) that the Nikias began referring to La Sirène more regularly as an “Urban Farmhouse”. An email dated 10 December 2015 from Costa Nikias sent to a potential US distributor refers to La Sirène as an “urban farmhouse”. On 25 January 2016, The Crafty Pint published an article on La Sirène’s Wild Tripelle product and referred to La Sirène’s aim to “spontaneously ferment several thousand litres of wort using the native yeasts and bacteria that exist in the nearby Darebin Creek and Parklands, thus creating an ‘urban farmhouse’ ale”.

63    Between late 2015 and early 2016, the Nikias decided to pursue the “Urban Farmhouse” concept more formally because they considered that that particular combination of words aptly described the interplay between what they were doing (creating “farmhouse style” beers) and where they were doing it (in an “urban” location). On 15 February 2016, La Sirène registered the business name “Urban Farmhouse Brewing Co” with ASIC and also registered the domain names “www.urbanfarmhousebrewing.com.au” and “www.urbanfarmhousebrewing.com”.

64    On 21 February 2016, Costa Nikias created a document on his computer titled “Urban Farmhouse Brewing Co. Concept” which described a range of beer products the Nikias had been discussing, including two products under the names “urban ale” and “urban wit”. The name “urban ale” also appeared in a recipe for the pale ale being created by La Sirène in a document which bears the date February 2016 and which was last modified on 25 April 2016.

65    Prior to departing on a family holiday on 25 February 2016, Eva Nikias conducted a number of internet searches of the word “urban” in connection with beer in Australia. Those searches included searches using the Google search engine and searches on the Untappd website. The searches returned a large number of results for other beer names and breweries containing the word “urban” in conjunction with other words but no results in Australia for the names “urban ale” or “urban pale”.

66    At about this time, Eva Nikias also ran searches of the Australian Trade Mark Register for trade mark applications and registrations containing the word “urban” in connection with beer. This was because the Nikias were contemplating registering the name Urban Farmhouse Brewing Co as a trade mark. Eva Nikias gave evidence that she did not print out the results of those searches, but recalled that the results showed several trade marks on the Register containing the word “urban”, including:

(a)    five trade mark applications containing the words “Passionate Urban Brewers Hahn Brewers ESTO 1987” in the name of Lion-Beer, Spirits & Wine Pty Ltd; and

(b)    one trade mark consisting of the words “Urban Crusader” in the name of Liquorland (Australia) Pty Ltd.

67    On 13 April 2016, Eva Nikias filed a trade mark application for the word mark “URBAN FARMHOUSE BREWING CO” in class 32 for beer (to which I will refer as the Urban Farmhouse mark). The Urban Farmhouse mark was entered on the Register of Trade Marks on 2 March 2017 with a priority date of 13 April 2016.

68    As mentioned above, the first pilot brews of La Sirène’s proposed pale ale product were undertaken in 2015 and early 2016. It is common ground that “pale ale” is a well-recognised description of a style or flavour of beer. Eva Nikias gave evidence that, in creating a farmhouse style pale ale, she and her husband wanted to contribute to the diversity of pale ales which constitute the majority of the craft beer market in Australia. Since they operated a brewery that identified itself as an “urban farmhouse” brewery, the Nikias decided to name the pale ale “Farmhouse Style Urban Pale by La Sirène” because they considered that the name succinctly described the key elements of the product, which included: the style (farmhouse); the location of its production (urban); and its colour and type (pale ale). The precise timing of that decision was not clear from the evidence. Eva Nikias could not recall when the decision was made.

69    During 2016, the Nikias made the decision to package their pale ale product in a can rather than a bottle. In late June 2016, work began with the can designer engaged by La Sirène on the labelling for the can. On 12 October 2016, La Sirène’s new pale ale product was listed on Untapped under the style category of “Pale Ale – Belgian” and was referred to in the listing by the name “Urban Pale”. The first commercial batch of La Sirène’s Urban Pale product was brewed in September 2016 and canned on 25 and 26 October 2016. The product was formally launched on 27 October 2016. The press release accompanying the launch stated that “The Urban Pale is a hop-driven juicy Farmhouse Pale Ale made in our Urban Farmhouse Brewery” and contained an image of the product as shown below:

70    It is apparent from the above picture that the words “Urban Pale” dominate the label, being in a larger and more prominent font compared with the other words that appear on the label.

71    On 31 October 2016, Australian Brews News published an article about the La Sirène Urban Pale product, in which the product was consistently referred to by the name “Urban Pale”, while also identifying the brewer as La Sirène.

72    Eva Nikias gave evidence that, at the time that La Sirène launched its Urban Pale product, she had not heard of Urban Alley’s Once Bitter product (which, as described above, included the name Urban Ale on the label). There is no evidence to the contrary and I accept that evidence. For the same reason, I also accept Eva Nikias’ evidence that La Sirène chose to use the word “urban” in the name of its product because it described the location of the production of the beer (in an urban area).

73    On 4 November 2016, La Sirène filed a trade mark application for “URBAN PALE” in class 32 for beer. Eva Nikias gave evidence that La Sirène chose not to proceed with the application because there were a considerable number of third parties already using the word “urban” in relation to beer and related goods and services, and the word “pale” is a shorthand description of a very popular style of beer, being pale ale, as well as a key descriptor of the colour and appearance of a wide range of beers. I accept that evidence.

74    The evidence shows that, on its website and its Instagram account, La Sirène has commonly referred to the Urban Pale product as “Urban Pale” or “La Sirène Urban Pale” and not the lengthier name “Farmhouse Style Urban Pale by La Sirène”.

75    In an article published in The Weekend Australian on the weekend of 4-5 November 2017 (referred to earlier), Peter Lalor named La Sirène’s Urban Pale product as the “Best Beer 2017”. In the article, Mr Lalor described the product as “My favourite drop from 2017”, and “Definitely the best new beer of the year. La Sirène is an elite Melbourne outfit that specialises in the sour to saison range.”

76    As noted earlier, on 24 October 2018, and after the commencement of this proceeding, La Sirène filed a trade mark application for the La Sirène word mark (Farmhouse Style Urban Pale by La Sirène) and, on 26 October 2018, La Sirène filed a further trade mark application for the La Sirène label mark (which is in the same form as the can packaging). The trade marks were subsequently registered.

77    No evidence was adduced concerning the volume of sales of the Urban Pale product since its launch, or revenue earned.

B.3    Use of the word "urban" in connection with beer

78    The evidence shows that the word “urban” has been used in connection with breweries and beer products for a considerable period of time, both in Australia and in other countries. La Sirène relies on this evidence to establish the common usage and meaning of the word “urban” in connection with beer in Australia. A significant part of the evidence concerned usage in other countries, which I consider has little if any relevance to the issues in this proceeding. The evidence which I regard as relevant, and which is referred to below, concerns usage in Australia as well as usage in publications such as Time magazine which, while produced overseas, have a recognised readership in Australia.

79    It is a well-known fact that many traditional or mainstream brewers are located in urban areas. In Melbourne, for example, where both the parties to this proceeding are based, Carlton & United Breweries has a major brewing facility in the inner city suburb of Abbotsford. Nevertheless, the evidence shows that, in recent times, the word “urban” has been used by beer writers and brewers as signifying a connection with the craft beer industry. The usage appears intended to convey not merely a generic city location, but a laudatory epithet to refer to craft beer made in an inner city location and indicating that the brewer or the beer is “fashionable”, “trendy” or “cool”.

80    Broadsheet is an Australian online city guide founded in 2009. The site covers news related to food and drink, fashion and shopping, art and design, and entertainment. It also has a directory of cafes, restaurants, bars and shops which contains imagery and short descriptions of each venue. There are separate versions of the site for Melbourne and Sydney. In an article published on Broadsheet on 20 October 2010 and titled “Band of Brewer”, Hilary McNevin discussed craft beer culture in Melbourne and brewers building their own breweries around the city. The article contained the following quote from Renee Mathie, founder and director of BeerMasons, an online craft beer appreciation society:

Being close to the disposable income and dwellers of a large city reduces some major overheads and increases your opportunity to sell directly to a local market while building a wider distribution chain. Beer has historically been an urban product, a working-class drink, produced in working-class suburbs, whereas wine was a product of the countryside and the landed gentry.

81    In November 2010, Mountain Goat Beer’s Hightail Ale made the list of Peter Lalor’s Top 20 Beers of 2010 published in The Weekend Australian. The listing for the ale was accompanied by the following description:

About a decade back, word filtered out about a cult in inner city Melbourne devoted to mountain goat. It wasn't as bad as it sounds. Cam and Dave hooked the locals and have slowly spread the word of their crafted and very popular urban brews.

82    In an accompanying article called “Cheers All Round – James Halliday’s Top 100 Wines” published that same weekend, Peter Lalor made further reference to the “inner-urban market” for craft beers.

83    An article published in Time magazine in America on 9 December 2014, titled “Craft Beer Officially Isn't Cool Anymore Because Delta Will Begin Selling It On Flights", satirically posed the question “[h]as craft beer - the sweet, sweet nectar of urban hipsters trying to impress their friends who are in town for the weekend - officially Jumped the Shark?”

84    On 1 April 2015, Kylie Fleming published an article titled “Golden age of dining is upon us” in The City Messenger which is an Adelaide newspaper focussing on local news and sport published by News Corp Australia. Amongst “Kylie's Food Predictions” for Adelaide were “more specialty coffee, craft beers and urban breweries (such as Lady Burra in Currie St in April/May)”.

85    On 27 March 2015, Australian Brews News republished an article appearing on the website of Stone & Wood Brewing Co. which referred to porter being the “original urban ale”:

Porter is the original urban ale, getting its name from the 1700’s equivalent of white delivery van drivers who loaded and unloaded the ships, moving goods around the city. Its silky charms made this dark brew the pint for the people.

86    On 4 January 2016, Hospitality Magazine published an article titled “Urban dwellers increasingly choosing craft over regular beer: Clipp” which summarised analysis drawn from beer purchase data compiled by mobile payment app Clipp. Hospitality Magazine is a source of news and industry insights for Australia’s food service businesses. The article stated:

Australian urban dwellers are choosing craft beer over regular beer new data compiled by mobile payment app Clipp has revealed.

…

The data revealed that urban areas led the craft beer charge with craft beer accounting for 45 per cent of all purchases nationally, with regular beer coming in second at 40 per cent. Melbourne had the highest percentage of craft beer purchases (55 per cent) against just 34 per cent of regular beer purchases.

…

“With the variety of beers on offer at Australian establishments, urban beer lovers now regard beer as an experience - much like they do wine and coffee. People seek to be more adventurous and it's common now to be offered ‘beer tastings’ at pubs to enable you to choose your preferred beer,” says Greg Taylor, CEO and co-founder of Clipp.

87    On 24 February 2017, Renata Gortan published an article in the Sydney newspaper The Daily Telegraph titled “Sydney's newest urban brewer taps into our love of a good, local beer”. The article refers to the fact that “Australians love their beer and their urban breweries”; that “[Endeavour Vintage Beer Co] is the latest to hit Sydney’s booming urban brewery scene”; and referred to “Sydney's urban brewery pioneer Young Henry’s at Newtown ...”.

88    On 29 August 2017, Anna Webster published an article in Broadsheet titled “A New Brewery for Burnley” with the subtitle “Romulus & Remus to close and reopen as an urban brewery serving everything from Australian summer ales to barrel-aged Russian imperial stouts” and reported that “Italian restaurant Romulus & Remus will close to make way for a new urban brewery, Burnley Brewing, which will open in November.”

89    On 24 April 2018, Matthew Kirkegaard (an expert witness in this proceeding) published an article in the Brisbane newspaper The Courier Mail titled “Beer booming in our ageing tourism scene” which observed:

An interesting aspect of the brewing industry is that breweries are largely city-based which makes it such an ideal urban tourism drawcard. Wine tends to be made where the grapes are grown, but the transportability of beer’s ingredients means a vibrant small brewing culture can be cultivated anywhere, as has happened in Brisbane.

90    On 7 November 2018, Jaydn O’Neil published an article in Broadsheet titled “Beer Fest 2018 Is Coming to Esplanade Park This Weekend” which described attending brewers Nowhereman and Otherside Brewing as “urban breweries”.

91    On 6 December 2018, Visit Victoria (the primary tourism and events company for the State of Victoria), published the article “Melbourne’s urban producers” which, under the heading “Urban Drinks Producers”, included the following information about urban breweries:

Urban Breweries

Craft & Co, Colonial Brewing, Thunder Road Brewery, Temple Brewing, Two Birds, Clifton Hill Brewpub, Mountain Goat, Stomping Ground, 3 Ravens, Tall Boy and Moose, Westside Ale Works, MoonDog, Hop Nation, Burnley Brewing, Hawkers, La Sirène - this is unlikely to be the exhaustive list of an inner-city brewery scene which just keeps growing. The pure range of styles from IPA to NEIPA to sours, pale ales, lagers, saison, wheat beer, porter, red ale, amber ale, golden ale and more, plus the fresh taste straight from the keg will keep hop lovers happy in Melbourne.

92    The evidence shows that a number of brewers and beer suppliers have chosen to use the word “urban” in the name of their beer products. The usage is not confined to craft beer producers.

93    Tiny Rebel is a brewery located in Newport, South Wales, in the United Kingdom. It has produced a number of beers containing the word “urban” in their name, specifically:

(a)    Tiny Rebel Urban IPA (listed on Untappd on 7 February 2012);

(b)    Tiny Rebel Belgian Urban IPA (listed on Untappd on 12 November 2013);

(c)    Tiny Rebel Urban Pils (listed on Untappd on 3 May 2013); and

(d)    Tiny Rebel Urban Bourbon (listed on Untappd on 28 August 2015).

94    The evidence showed that Tiny Rebel products, including its Urban IPA and Urban Belgian IPA products, have been available in Australia since at least February 2014.

95    On March 2014, Goose Island released a product called “312 Urban Pale Ale”. Goose Island was established in Chicago in 1988 as craft brewery and was acquired by Anheuser-Busch in 2011. The number “312” in the label refers to the Chicago telephone code and “urban” refers to the ale’s inner-city industrial origins of Chicago. While the evidence indicated that Goose Island products have been sold in Australia, there was no evidence that that included the 312 Urban Pale Ale product.

96    Liquorland (Australia) Pty Ltd is the owner of an Australian Trade Mark “URBAN CRUSADER” in relation to beer and other beverages in class 32 with a priority date of 16 July 2015. A lager sold under and by reference to the “URBAN CRUSADER” trade mark was listed on Untappd on 26 February 2016.

97    Lion-Beer, Spirits & Wine Pty Ltd filed a number of Australian trade mark applications for its famous HAHN beer brand using the tagline “PASSIONATE URBAN BREWERS” on 14 and 21 August 2015 in relation to beer and other goods in class 32. Those trade marks have been registered. However, the evidence did not establish how the mark had been used (if at all) in connection with Hahn beer.

98    Urban Purveyor Group Pty Ltd is the owner of the following Australian trade marks containing the word “urban”:

(a)    URBAN BREWING COMPANY in classes 31, 32 and 40 in respect of, amongst other things, beer and the brewing of beer with a priority date of 24 March 2016; and

(b)    URBAN CRAFT BREWING COMPANY in classes 32, 33, 40, 41 and 43 in respect of, amongst other things, beer and the brewing of beer with a priority date of 5 July 2016.

99    The evidence concerning the activities of the Urban Purveyor Group was limited, but its webpage indicates that it was part of the “Rockpool Dining Group” and offered a range of craft beers (none of which included the word “urban” in their names).

100    Hopworks Urban Brewery was founded in 2007 in Portland, Oregon in the United States of America and a number of its beer products are available in Australia. At the Australian International Beer Awards hosted by The Royal Agricultural Society of Victoria Limited at the Melbourne Showgrounds in May 2016, Hopworks Urban Brewery received a number of medals for its products. A number of its products are listed on Untappd.

101    Sierra Nevada Brewing Co. is a large brewer based in California in the United States of America. Its products have been available in Australia since around 2010. Sierra Nevada has produced at least one beer containing the word “urban” in its name, being the Sierra Nevada Urban Trail Happy Pale Ale. That product was listed on Untappd on 9 September 2016.

102    The evidence showed that there are also a number of beer tour providers in Australia who use the word “urban” in connection with their beer tours, including Urban Beer Tour, Urban Beer Odyssey and Melbourne Urban Beer Tour. There are also a number of restaurants and bars in Australia, with a focus on beer, that use the word “urban” as part of their name, including:

(a)    the Riverland Urban Beer Garden located at Federation Wharf in Melbourne (which has been operating under that name since at least 4 October 2015); and

(b)    the Hopscotch Urban Beer Bar located at Southbank in Melbourne (which has been operating under that name since at least 30 September 2016).

103    A Facebook page of the Riverland Urban Beer Garden dated 21 January 2016 promoted a meal of barbecue prawns paired with wine or “anything from our urban beer list”.

104    Urban Alley also adduced evidence from the Australian Register of Trade Marks of marks which are registered in class 32 and related classes and which contain the word “urban” as the first word in the trade mark followed by a word which describes the goods claimed. Urban Alley relied on the fact that these trade marks proceeded to acceptance and registration without a distinctiveness objection being raised. Those trade marks included (in respect of class 32): Urban Detox, Urban Remedy, Urban Guru, Urban Fruit, Urban Crusader, Urban Beverage Imports, Urban Casual Dining Company, Urban Brewing Company, Urban Farmhouse Brewing Co, Urban Craft Brewing Company, 312 Urban Wheat, Urban Cellars, Urban Fatigue And Urban Aloe. Numerous other trade marks were registered in other classes which contained the word “urban” as the first word of the mark. No evidence was adduced about the use of those marks in relation to the products in respect of which they were registered, save for the mark registered by La Sirène (Urban Farmhouse Brewing Co). In my view, the fact that numerous trade marks containing the word “urban” as the first word of the mark have been registered in respect of beer and other drinks products has little if any bearing on the question whether the Urban Ale mark is entitled to registration in respect of beer products.

B.4    Opinions of Mr Kirkegaard

105    As noted earlier, La Sirène also adduced evidence from Mr Matthew Kirkegaard, who is a freelance beer writer, commentator, educator and consultant focussed on the craft beer industry. Mr Kirkegaard started writing about beer (and, in particular, craft beer) on a freelance basis about fourteen years ago and, in the last 10 years, has published articles about craft beer in the following publications:

(a)    the Virgin In-flight Magazine (periodically between about 2005 and 2013);

(b)    Australian Beer and Brewer, which is a quarterly trade and consumer magazine relating to beer and cider (between about 2007 and 2010);

(c)    Drinkstrade, which is a bi-monthly trade magazine for the liquor industry (between about 2010 and 2015);

(d)    Beers of the World, which was formerly an English beer magazine (in 2008);

(e)    All About Beer, which is an American beer magazine (between about 2008 and 2011);

(f)    the Courier Mail newspaper, which is a daily newspaper distributed in Queensland and published by News Limited (since about 2010);

(g)    various lifestyle magazines such as Lexus Magazine, a glossy lifestyle magazine distributed to Lexus owners (from time to time);

(h)    James Halliday’s Wine Companion, which is a wine industry magazine that also covers other aspects of the drinks trade;

(i)    The Broadsheet, an online consumer-focused publication that covers food, drink and lifestyle; and

(j)    ABC Online, which is the online news and opinion service of the Australian Broadcasting Corporation.

106    Mr Kirkegaard also founded Australian Brews News in about 2010.

107    Mr Kirkegaard was the inaugural winner of the Australian Beer Writer of the Year award at the 2014 Australian International Beer Awards. In 2017, Mr Kirkegaard was presented with a special achievement award at “The Beeries”, a Queensland beer industry-based awards event, in recognition of his services to the craft beer industry.

108    Mr Kirkegaard gave evidence about the meaning of the word “urban” as used in the context of the beer market in Australia. Mr Kirkegaard expressed the opinions that:

…in the context of beer in Australia, “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.

…

As a writer, it would be difficult to communicate the aesthetic of an inner-city brewery or describe the inner-city beer movement without using the word “URBAN”.

…

…“URBAN” is a generic term that brewers use to describe their location or ground their beer marketing as being relevant to an inner-city consumer.

109    Mr Kirkegaard expressed the opinion that craft beer began and gained popularity in inner city or urban areas, stating that “Whether consumers are identified as ‘urban hipsters’, ‘urban professionals’ or another term, craft beer really gained acceptance as an urban beverage and the styling and culture around it has generally reflected this fact.”

110    Mr Kirkegaard expressed the view that the label “Urban Ale” used by Urban Alley does not communicate anything to consumers in terms of what they could expect from the taste of the product. That is because the word “urban” is not a beer style recognised by the market and the word “ale” is a description of the process used to make the beer. In respect of the word “ale”, Mr Kirkegaard explained that the two major classifications of beer are ales and lagers. As a general rule, “ales” are beers that have been fermented at relatively warm temperatures for short periods of time with top-fermenting yeasts whereas “lagers” are cold fermented for longer periods of time with bottom-fermenting yeasts.

B.5    Evidence of confusion between the parties’ products

111    No evidence was adduced by Urban Alley as to possible confusion between its Once Bitter product and La Sirène’s Urban Pale product. The only evidence adduced as to possible confusion between the Urban Ale and Urban Pale products was given by Mr Matthew Powell who was employed as the off premises sales representative for Urban Alley since about March 2019. In his role, Mr Powell visits retailers of beer to promote the beers manufactured and sold by Urban Alley.

112    Mr Powell gave evidence that Dan Murphy’s commenced selling the Urban Ale product in about 50 of its stores from the end of May 2019. Dan Murphy’s is owned by the Woolworths Group and is the largest retailer of alcohol products in Australia with over 220 retail outlets Australia wide. On 5 June 2019, Mr Powell accessed the Dan Murphy’s website and searched on the words “urban ale”. The results showed the Urban Ale product and the La Sirène Urban Pale product.

113    I do not consider that the foregoing evidence is probative of the risk of confusion between the parties’ products. It is common for an internet search to produce results based on similar but not identical search terms. The search results depicted each of the parties’ products and the question of confusion needs to be considered by reference to the labelling and promotion of the competing products.

114    Mr Powell also gave evidence that on 3 June 2019 he visited the Dan Murphy’s retail store located at 567 Bridge Road, Richmond (a suburb of Melbourne) to determine the shape and size of shelf talkers that could be displayed for the Urban Ale product. A shelf talker is a label which allows brands to provide marketing information to potential customers. After locating the Urban Ale product in the store, Mr Powell observed that the beer brand and price ticket used under the product listed the La Sirène Urban Pale product and the price for that product (which was more expensive than for Urban Ale). Mr Powell looked around for the La Sirène Urban Pale product in the same aisle but was unable to locate it, concluding that it was not merchandised in the same area or on the same shelf as the Urban Ale product. Mr Powell then spoke to a member of Dan Murphy’s staff and asked him to correct the store labelling.

115    Again, I do not consider that the foregoing evidence is probative of the risk of confusion between the parties’ products. It merely establishes that someone in Dan Murphy’s pinned the incorrect store labelling to the shelf where the Urban Pale product was displayed. The reason for the error is not known. It may have been due to confusion between the names of the products, but equally it could have been due to a lack of care or clumsiness in picking up the wrong label. It is also a single instance of such an error.

C.    Cancellation of the Urban Ale mark

116    By its cross-claim, La Sirène seeks orders for the cancellation of the Urban Ale mark under s 88(1)(a) of the TMA. That section provides that, subject to ss 88(2) and 89, the Court may order that the Register be rectified by cancelling the registration. Relevantly, s 88(2)(a) provides that an application may be made on any of the grounds on which registration of the trade mark could have been opposed under the TMA. La Sirène relies on the following three grounds of opposition:

(a)    under s 41 of the TMA, on the basis that the mark is not capable of distinguishing Urban Alley’s goods (in respect of which the trade mark is registered) from the goods of other persons;

(b)    under s 44 of the TMA, on the basis that the mark is substantially identical with or deceptively similar to the prior registered mark “URBAN BREWING COMPANY”; and

(c)    under s 58 of the TMA, on the basis that Urban Alley is not the owner of the mark (based on the registration of the prior mark Urban Brewing Company).

117    It is convenient to consider each of these grounds in turn.

C.1    Opposition under s 41

Relevant principles

118    Section 41 of the TMA was amended by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth) with effect from 15 April 2013. As stated in the relevant Explanatory Memorandum (at pages 145-146), the amendments were intended to clarify that the presumption of registrability, as provided for in s 33, applies to s 41. Otherwise, though, the principal concepts in s 41 are unchanged. The amended form of s 41 provides as follows:

(1)    An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant’s goods or services in respect of which the trade mark is sought to be registered (the designated goods or services) from the goods or services of other persons.

Note:    For goods of a person and services of a person see section 6.

(2)    A trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons only if either subsection (3) or (4) applies to the trade mark.

(3)    This subsection applies to a trade mark if:

(a)     the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons; and

(b)    the applicant has not used the trade mark before the filing date in respect of the application to such an extent that the trade mark does in fact distinguish the designated goods or services as being those of the applicant.

(4)    This subsection applies to a trade mark if:

(a)    the trade mark is, to some extent, but not sufficiently, inherently adapted to distinguish the designated goods or services from the goods or services of other persons; and

(b)    the trade mark does not and will not distinguish the designated goods or services as being those of the applicant having regard to the combined effect of the following:

(i)    the extent to which the trade mark is inherently adapted to distinguish the goods or services from the goods or services of other persons;

    (ii)    the use, or intended use, of the trade mark by the applicant;

    (iii)    any other circumstances.

Note 1:    Trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate:

(a) the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or

(b) the time of production of goods or of the rendering of services.

Note 2:    For goods of a person and services of a person see section 6.

Note 3:    Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (5) and 7(3) and section 8).

(5)    For the purposes of this section, the use of a trade mark by a predecessor in title of an applicant for the registration of the trade mark is taken to be a use of the trade mark by the applicant.

Note 1:    For applicant and predecessor in title see section 6.

Note 2:    If a predecessor in title had authorised another person to use the trade mark, any authorised use of the trade mark by the other person is taken to be a use of the trade mark by the predecessor in title (see subsection 7(3) and section 8).

119    The meaning of the phrase “inherently adapted to distinguish” in subsections (3) and (4) was recently considered by the High Court in Cantarella Bros Pty Ltd v Modena Trading Pty Ltd (2014) 254 CLR 337 (Cantarella). The majority endorsed the test formulated by Lord Parker in Registrar of Trade Marks v W & G Du Cros Ltd [1913] AC 624 (Du Cros) at 635 under earlier UK legislation, whether other traders are likely, in the ordinary course of their business and without improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connection with their own goods. The majority observed that that test had been long applied in Australia, including by Kitto J in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 (Clark Equipment) (at 514) and F.H. Faulding & Co Ltd v Imperial Chemical Industries of Australia and New Zealand Ltd (1965) 112 CLR 537 (F.H. Faulding) (at 555) and by Gibbs J in Burger King Corporation v Registrar of Trade Marks (1973) 128 CLR 417, stating (at [44]):

The requirement that a proposed trade mark be examined from the point of view of the possible impairment of the rights of honest traders to do that which, apart from the grant of a monopoly, would be their natural mode of conducting business (Lord Parker), and from the wider point of view of the public (Hamilton LJ), has been applied to words proposed as trade marks for at least a century, irrespective of whether the words are English or foreign. The requirement has been adopted in numerous decisions of this Court dealing with words as trade marks under the 1905 Act and the 1955 Act. Those decisions show that assessing the distinctiveness of a word commonly calls for an inquiry into the word’s ordinary signification and whether or not it has acquired a secondary meaning.

120    The reference to a word’s “ordinary signification” reflects the statement of Kitto J in Clark Equipment (at 514) that whether a trade mark consisting of a word is “adapted to distinguish” certain goods is to be tested:

…by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives – in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess – will think of the word and want to use it in connection with similar goods in any manner which would infringe a registered trade mark granted in respect of it.

121    The majority in Cantarella summarised the applicable principle in the following terms (at [59] and [71]):

It is the “ordinary signification” of the word, in Australia, to persons who will purchase, consume or trade in the goods which permits a conclusion to be drawn as to whether the word contains a “direct reference” to the relevant goods (prima facie not registrable) or makes a “covert and skilful allusion” to the relevant goods (prima facie registrable). When the “other traders” test from Du Cros is applied to a word (other than a geographical name or a surname), the test refers to the legitimate desire of other traders to use a word which is directly descriptive in respect of the same or similar goods. The test does not encompass the desire of other traders to use words which in relation to the goods are allusive or metaphorical. In relation to a word mark, English or foreign, “inherent adaption to distinguish” requires examination of the word itself, in the context of its proposed application to particular goods in Australia.

…

As shown by the authorities in this court, the consideration of the “ordinary signification” of any word or words (English or foreign) which constitute a trade mark is crucial, whether (as here) a trade mark consisting of such a word or words is alleged not to be registrable because it is not an invented word and it has “direct” reference to the character and quality of goods, or because it is a laudatory epithet or a geographical name, or because it is a surname, or because it has lost its distinctiveness, or because it never had the requisite distinctiveness to start with…

122    As observed by Lockhart J in Oxford University Press v Registrar of Trade Marks (1990) 24 FCR 1 (Oxford University Press) at 8, the “other traders” test from Du Cros reflects the underlying policy objective of s 41 that no person should be able to monopolise a word or phrase and thereby impose an unreasonable restraint upon other traders who may legitimately wish to use that name in relation to their own goods.

123    In Apple Inc v Registrar of Trade Marks (2014) 227 FCR 511 (Apple), a decision handed down on the same day as Cantarella, Yates J explained (at [11]):

What does it mean to say that a trade mark is inherently adapted to distinguish the goods or services of one person from the goods or services of another? The notion of inherent adaptation is one that concerns the intrinsic qualities of the mark itself, divorced from the effects or likely effects of registration. Where the mark consists solely of words, attention is directed to whether those words are taken from the common stock of language and, if so, the degree to which those words are, in their ordinary use, descriptive of the goods or services for which registration is sought, and would be used for that purpose by others seeking to supply or provide, without improper motive, such goods or services in the course of trade.

124    The foregoing statement by Yates J has been endorsed by Allsop CJ and Perram J in the Full Court decision of Aldi Foods Pty Ltd v Moroccanoil Israel Ltd (2018) 261 FCR 301 (Aldi Foods) (per Allsop CJ at [13] and Perram J at [126]) and by Burley J in Bohemia Crystal Pty Ltd v Host Corporation Pty Ltd [2018] FCA 235 (Bohemia Crystal) at [93]; 354 ALR 353; 129 IPR 482.

125    While every case turns on its own facts, examples of trade marks found to have no inherent adaption to distinguish include ROHOE for rotary hoes (Howard Auto-Cultivators Ltd v Webb Industries Pty Ltd (1946) 72 CLR 175), BARRIER for skin cream (F. H. Faulding), MICHIGAN for excavating goods (Clark Equipment), OXFORD for printed publications (Oxford University Press), OREGON for chainsaw accessories (Blount Inc v Registrar of Trade Marks (1998) 83 FCR 50), COLORADO for shoes, bags, wallets, purses and backpacks (Colorado Group Ltd v Strandbags Group Pty Ltd (2007) 164 FCR 506 (Colorado)), PERSIAN FETTA for cheese (Yarra Valley Dairy Pty Ltd v Lemnos Foods Pty Ltd (2010) 191 FCR 297), APP STORE for retail store services for computer software provided by the internet (Apple), MOROCCANOIL for hair care products (Aldi Foods) and BOHEMIA for glassware (Bohemia Crystal).

La Sirène’s submissions

126    La Sirène places primary reliance on s 41(3), submitting that the Urban Ale mark is not to any extent inherently adapted to distinguish Urban Alley’s beer from rival producers and Urban Alley did not use the Urban Ale mark before the filing date to such an extent that the mark does in fact distinguish the Urban Ale product as being that of Urban Alley.

127    La Sirène submitted that the ordinary signification of the words “urban ale” is to describe an ale made in an urban area or intended for consumption by an urban audience. It says that the word “urban” is an ordinary, common word which means “of or in or relating to cities or towns”. La Sirène says that the evidence shows that the ordinary signification of the word “urban” when used in connection with beer is as a laudatory epithet to describe inner-city craft breweries, their beers and their target market; it conveys that the product is “cool” or “trendy”. In the context of beer, the word has a tangible meaning and has promotional attraction. The word “ale” describes one of the two principal classifications of beer, being beer that has been fermented at relatively warm temperatures for short periods of time with top-fermenting yeasts. As such, La Sirène submitted that the words “urban ale” are not to any extent inherently adapted to distinguish the beer produced by Urban Alley from beer produced by any other brewer. They are words that any other brewer might choose to use without improper motive; that is, for their ordinary signification. The fact that La Sirène chose to use the words “Urban Pale” within the name of its beer product, without improper motive, is an illustration of the very point.

128    La Sirène further submitted that the combination of the words “urban” and “ale” does not result in the trade mark being inherently adapted to distinguish the goods. Both words, when used in connection with beer, are wholly descriptive.

129    La Sirène submitted that Urban Alley had not used the Urban Ale mark before the filing date of 14 June 2016 to such an extent that the mark did in fact distinguish its beer. La Sirène relies on the following matters. First, Urban Alley had only used the Urban Ale mark for two weeks prior to the filing date and, in that period, Urban Alley made minimal sales of its Once Bitter product. Secondly, during those two weeks, La Sirène submitted that the Urban Ale mark was not used by Urban Alley as a trade mark. Rather, the label “Once Bitter” served to distinguish the commercial source of the product, whereas “Urban Ale” described the style of the product. Thirdly, La Sirène submitted that the prior and ongoing use of the word “urban” at that time by many others in relation to beer prevented the Urban Ale mark from becoming distinctive of Urban Alley in that short period.

Urban Alley’s submissions

130    Urban Alley submitted that the Urban Ale mark is sufficiently inherently adapted to distinguish its beer products without the need for any consideration of the use of the mark under ss 41(3) or 41(4). Alternatively, Urban Alley relies on s 41(4) and submitted that, even if the Urban Ale mark is only to some extent, but not sufficiently, inherently adapted to distinguish Urban Alley’s beer products from those of other traders, the combined effect of the extent to which the Urban Ale mark is inherently adapted to so distinguish Urban Alley’s beer products and Urban Alley’s use and intended use of the mark are such that the mark does and/or will in the future distinguish Urban Alley’s beer products. Urban Alley does not rely on s 41(3), accepting that the extent of its use of the Urban Ale mark prior to the filing date was minimal.

131    Urban Alley accepts that the word “urban” is an ordinary, common word (rather than a made-up word) and has a meaning (namely “of or in or relating to cities or towns”) that may be used in a descriptive sense. Urban Alley also accepts that the word “ale” has a descriptive meaning (being a type of beer). Urban Alley concedes, and indeed embraces, the fact that the combination of words “urban ale” does not convey any significance in terms of style or flavour characteristics of beer.

132    Urban Alley’s principal argument is that the words “urban ale”, when used in combination, do not convey any meaning or idea that is sufficiently tangible to anyone in Australia concerned with beer products as to be words having a direct reference to the character or quality of the goods. Urban Alley argued that the words “urban ale” are capable of distinguishing the particular beer sold by Urban Alley because, in the context of beer, they have an allusive or metaphorical meaning of being cool, trendy and perhaps industrial or grungy.

133    Urban Alley submitted that that conclusion is supported by the evidence that many trade marks have been registered in class 32 and related classes which have the word “urban” as the first word of the trade mark. It argued that the presence of various other marks on the Register of Trade Marks that comprise the word “urban” together with another descriptive word or words reinforces the inherent adaptability of the Urban Ale mark to distinguish Urban Alley’s beer products. It further argued that neither Urban Alley nor any other trader is entitled to a monopoly over the word “urban” in respect of beer products; rather, Urban Alley claims only a monopoly over the Urban Ale mark and marks that are substantially identical or deceptively similar to the Urban Ale mark in respect of beer products.

Consideration

134    In my view, the submissions of La Sirène should be accepted and those of Urban Alley should be rejected. In particular, I find that the Urban Ale mark is not to any extent inherently adapted to distinguish Urban Alley’s beer products from those of other beer producers.

135    To a considerable extent, the parties are in agreement as to the ordinary signification of the word “urban” when used in connection with beer and breweries. They agree, and I find, that at one level the word conveys its ordinary meaning that the beer is brewed in a city as opposed to a country location. They also generally agree, and I find, that on another level the word has become associated with craft beer products and breweries, referring to the fact that the beer is produced in an inner city location which is regarded within a certain segment of the market as being “cool” or “trendy” and attractive for that reason. They also agree that the combination of words “urban ale” does not convey any significance in terms of style or flavour characteristics of beer.

136    The evidence shows that many journalists writing about beer in Australia have used the word “urban” in a laudatory manner to describe inner city craft breweries. The articles were directed to beer producers and consumers. In my view, they are evidence of the common usage of the word “urban” by those who have an interest in beer whether as producers or consumers. The evidence includes many articles published before the filing date for the Urban Ale mark on 14 June 2016, including articles appearing in Broadsheet, The Australian newspaper, the City Messenger, Australian Brews News and Hospitality Magazine. While other articles appeared after the filing date of the mark, including articles in the Daily Telegraph and the Courier Mail, in my view those articles are consistent with the earlier usage of the word “urban” and therefore reinforce the ordinary signification of the word as at the filing date.

137    The evidence also shows that a number of businesses associated with beer, whether brewers or vendors, had adopted or used the word “urban” as part of their product or business name in Australia. Prior to the filing date for the Urban Ale mark, the evidence included the use in Australia of the names Tiny Rebel Urban IPA and Urban Belgian IPA (available in Australia since February 2014), Urban Crusader lager (a Liquorland product listed on Untappd from February 2016), Urban Brewing Company (registered as a trade mark in classes 31, 32 and 40 with a priority date of 24 March 2016), Hopworks Urban Brewery (which exhibited its beer products at the Australian International Beer Awards hosted by The Royal Agricultural Society of Victoria Limited at the Melbourne Showgrounds in May 2016 and received a number of awards), and the Riverland Urban Beer Garden (which has been operating under that name since at least 4 October 2015).

138    Shortly after the filing date of the Urban Ale mark, La Sirène began using the word “urban” as part of the name of its beer product called “Farmhouse Style Urban Pale by La Sirène”. As noted earlier, I accept the evidence of Eva Nikias that La Sirène was unaware of the Urban Ale mark or product at the time it chose to adopt the words “urban pale” as part of the name of its product, and that La Sirène chose to use the word “urban” in the name of its product because it described the location of the production of its beer (in an urban area). I accept La Sirène’s submission that its adoption of the word “urban” in its name affords evidence of a rival trader seeking to use the word without improper motive; that is, for its ordinary signification.

139    The evidence supports the opinions expressed by Mr Kirkegaard. In my view, Mr Kirkegaard’s experience as a beer industry writer qualifies him to express an opinion on the common usage and meaning of the word “urban” in connection with beer products and breweries. I accept Mr Kirkegaard’s opinions that the word “urban” does not have any particular significance in terms of beer style or flavour characteristics; that it is a very generic term used to describe the location of a brewery or its target audience; that it communicates the aesthetic of an inner-city brewery or describes the inner-city beer movement; and that 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.

140    As already noted, both parties agree that the words “urban ale” do not have significance in terms of the style or flavour of the beer beyond what is ordinarily conveyed by the word “ale”. This is despite Mr Meltzer’s evidence that he adopted the name “Urban Ale” with the intent of creating a new style or flavour of beer and that, in Urban Alley’s press release and on its website and in interviews given by Mr Meltzer following the launch of the Urban Ale product, Urban Ale is described as a new style of beer that is a cross between a classic Australian golden ale and a Belgian blonde. Despite those efforts, the words have not taken on that signification. Rather, the words signify a craft beer brewed in an inner-city location. The evidence shows that Urban Alley, and its predecessor, has consistently promoted itself as a craft brewery in an inner-city location: it has adopted a corporate and business name that implies an inner city location (Swanston Street Brewing Co, Collins Street Brewing Co, Laneway Brewery and Urban Alley Brewery); the Once Bitter website promoted the inner-city location of the Once Bitter product (describing the product as “A celebration of our great city, a tribute to the laneway culture and a blend of the old and the new”); and the more recent Urban Alley website also promoted Urban Alley as a craft brewery in inner-city Melbourne (stating prominently “Sustainably crafted in the heart of Melbourne”).

141    I do not accept Urban Alley’s submission that the meaning of “urban ale”, when used in connection with beer, is allusive or metaphorical. The evidence referred to above shows that, in relation to beer, as at the filing date of the Urban Ale mark, the word “urban” had a tangible meaning. At one level, it describes the beer as having been produced in a city location and, at another level, it connotes that the beer has been produced in an inner-city craft brewery. As such, the use of the word is descriptive and laudatory and the evidence shows that it was commonly used in that manner.

142    A similar factual conclusion was reached by Moshinsky J, upheld on appeal, in relation to the name “Pacific Ale” used in connection with beer: Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd [2016] FCA 820; 120 IPR 478 (Stone & Wood) and on appeal by the Full Court: Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd [2018] FCAFC 29; 357 ALR 15; 129 IPR 238. The applicant, which produced a beer labelled “Stone & Wood Pacific Ale”, brought proceedings against the respondent, which produced a beer first called “Thunder Road Pacific Ale” and later called “Thunder Road Pacific”, alleging misleading and deceptive conduct and passing off. The case did not involve any direct consideration of s 41 of the TMA. Nevertheless, Moshinsky J found that the word “Pacific”, when used in relation to beer, had a descriptive aspect to it, notwithstanding that it was not a recognised style of beer. His Honour observed (at [205]):

In my view, the word ‘Pacific’ has a descriptive aspect to it when used in relation to both Stone & Wood’s and the Respondents’ products. ‘Pacific’ is, of course, the name of the Pacific Ocean. It can be used adjectively to refer to someone or something that pertains to the Pacific Ocean (for example, Pacific islander, Pacific solution). It is also an adjective which means peaceful or calm (among other meanings). That the word has a descriptive aspect is underlined by the reasons why Stone & Wood chose the name in the first place. The first was that one of the Stone & Wood breweries (the only one in operation in 2010) is located in Byron Bay, which is situated on the Pacific Ocean. The second reason was to generate a calming, cooling emotional response in consumers. This evidence calls to mind the observation of Stephen J in Hornsby, quoted above: “There is a price to be paid for the advantages flowing from the possession of an eloquently descriptive trade name”. In the present case, by choosing a name for its product that has a descriptive aspect to it, Stone & Wood ran the risk that others in the trade would use it descriptively and that it would not distinguish its product.

143    The Full Court upheld Moshinsky J’s conclusions regarding the descriptive aspect of “Pacific Ale” (at [100]) and made the following further observations regarding the capacity of a word to distinguish the goods of one trader from another (at [68]):

…At this point it is perhaps worth saying that the word “descriptive” is perhaps inadequate. What is the subject of consideration is the use of the words in their commercial and physical context to create a reputation through a capacity to distinguish the goods of the trader. In this kind of context (such as s 41(3) of the Trade Marks Act) it may become relevant to assess the capacity of a word to distinguish the goods of one trader from the goods of another. The relevant concepts are not binary in nature: descriptive or distinguishing. Language is more subtle than that. A word may have no precise meaning but be capable of evoking geographic as well as metaphoric resonances, without being particularly apt to distinguish goods of rival traders. See, for example, the word “Colorado” in the context of clothes and s 41 of the Trade Marks Act in Colorado Group Ltd v Strandbags Group Pty Ltd [2007] FCAFC 184; 164 FCR 506 at 538-540 [120]-[128].

144    I also do not accept Urban Alley’s submission that the combined words “urban ale” are distinctive, relying in part on the submission that many other trade marks using the word “urban” have been registered in class 32 without opposition based on distinctiveness. In my view, each of the words “urban” and “ale”, when used in relation to beer, are descriptive. Their combination does not alter their ordinary signification or their descriptiveness. Further, I do not consider that anything can be drawn from the fact that many other trade marks which commence with the word “urban” have been registered in class 32 (or related classes). In the first place, many of those marks are registered in relation to products other than beer products and, as such, are wholly irrelevant to the statutory enquiry. As the High Court emphasised in Cantarella, “inherent adaption to distinguish” requires examination of the mark in the context of its proposed application to particular goods in Australia (at [57]). In so far as the marks are registered in relation to beer products, the fact of registration is not determinative of distinctiveness within s 41 and the present proceeding is no occasion for such an enquiry.

145    As noted earlier, Urban Alley does not rely on s 41(3), accepting that the extent of its use of the Urban Ale mark prior to the filing date was insufficient to distinguish its good in fact. As I have found that the Urban Ale mark is not to any extent inherently adapted to distinguish Urban Alley’s beer products from those of other producers, I conclude that the mark is not capable of distinguishing Urban Alley’s beer products within the meaning of s 41(1) and registration should be rejected. It follows that the Court’s discretion to order that the Register be rectified by cancelling the registration of the mark under s 88(1)(a) is enlivened, which I consider below.

C.2    Opposition under s 44

Relevant principles

146    Section 44(1) provides as follows:

(1)    Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant's trade mark) in respect of goods (applicant's goods) must be rejected if:

(a)    the applicant’s trade mark is substantially identical with, or deceptively similar to:

(i)    a trade mark registered by another person in respect of similar goods or closely related services; or

(ii)    a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; and

(b)    the priority date for the registration of the applicant's trade mark in respect of the applicant's goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.

147    The classic test for substantial identity was stated by Windeyer J in Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 (Shell v Esso) at 414:

In considering whether marks are substantially identical they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison.

148    The Full Court explained further in Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd (2017) 251 FCR 379 (Pham Global) at [52]:

The required exercise of side-by-side comparison is not carried out in a factual and legislative vacuum. The purpose of the exercise is to decide if two trade marks are substantially identical, where a trade mark is “a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person” (s 17). Given this context, it is unlikely that the essential elements of a mark or its dominant cognitive clues are to be found in mere descriptive elements, which are not apt to perform this distinguishing role in respect of the relevant goods or services. While this does not mean that differences, including descriptive differences, may be ignored, it does mean that the side-by-side comparison is to be carried out cognisant of the essential elements of the mark.

149    Applying this approach, the Full Court found substantial identity between trade marks including the words “Insight Clinical Imaging” and “Insight Radiology” along with similar but somewhat different logos (at [56]).

150    As to the alternative standard of deceptive similarity, s 10 provides that a trade mark is taken to be “deceptively similar” to another trade mark if it “so nearly resembles that other trade mark that it is likely to deceive or cause confusion”. The following principles have been established by the cases:

(a)    First, confusion includes being left in doubt or having cause to wonder: Southern Cross Refrigerating Company v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 594–5 per Kitto J, or being perplexed or mixed up: Coca-Cola Co v All-Fect Distributors Ltd (1999) 96 FCR 107 (Coca-Cola) at [39].

(b)    Second, it is not necessary to establish that confusion is more probable than not; likelihood is established if there is a real risk, that is a finite, non-trivial risk, of confusion: Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 at [43] per French J, Tamberlin J agreeing.

(c)    Third, no intention to deceive or cause confusion is required: Re Bali Brassiere Co. Inc’s Registered Trade Mark & Berlei Ltd’s Application (1968) 118 CLR 128 (Re Bali Brassiere) at 139 per Windeyer J.

(d)    Fourth, the test is to be assessed by reference to persons who may have an imperfect recollection of the marks: Reckitt & Colman (Australia) Ltd v Boden (1945) 70 CLR 84 at 98 per Williams J and at 89 per Latham CJ; Re Bali Brassiere at 136-137 per Windeyer J, and who do not have an opportunity to compare the respective marks side-by-side: Shell v Esso at 415-416 per Windeyer J.

151    If two marks share a common element, it tends to increase the likelihood of the later mark being considered to be deceptively similar. This is particularly so if the common element between the marks is particularly prominent or is an “essential feature” of the marks: Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd [2004] FCAFC 196 at [79]-[90]; 209 ALR 1; 61 IPR 212.

Submissions of La Sirène

152    La Sirène submitted that the Urban Ale mark is substantially identical with or deceptively similar to the registered mark Urban Brewing Company which is registered in respect of beer and has a priority date that is earlier than the Urban Ale mark.

153    As to substantial identity, La Sirène submitted that the respective marks are only differentiated by the entirely generic and directly descriptive terms “ale” and “brewing company”. Those words are not apt to perform any distinguishing role in respect of the relevant goods and therefore, in comparing the marks, the words should be discounted. Once those generic and descriptive terms are discounted, the only remaining word in the respective marks, “urban”, is identical. La Sirène argued that the present case is an even stronger case for substantial identity than Pham Global, insofar as the respective marks in that case included somewhat different logos whereas the present case is limited to plain word marks without any logos.

154    As to deceptive similarity, La Sirène submitted that the idea conveyed by each of the marks, namely beer that is produced in an urban location or environment, is also identical. To the extent consumers recognise any differences between the marks, they are likely to be caused to wonder whether the Urban Ale mark is merely a brand variation or extension of the Urban Brewing Company mark (as per Carlton Draught produced by Carlton & United Breweries and Coopers Pale Ale produced by Coopers Brewery, among others). La Sirène submitted that there is a likelihood that consumers would think that an Urban Ale product might be produced by the Urban Brewing Company. At the very least, consumers are likely to wonder or be left in doubt about whether the products are related or originate from the same source.

Submissions of Urban Alley

155    With respect to substantial identity, Urban Alley submitted that the word “Urban” cannot be fairly characterised as an “essential feature” of the Urban Brewing Company and Urban Ale marks such that primary weight should be attributed to that word when comparing the marks. Rather, both of the marks comprise a combination of ordinary, common words that gain their distinctiveness from that combination. Urban Alley submitted that a side by side comparison of Urban Brewing Company and Urban Ale demonstrates that the marks are entirely different save for the presence of the word “Urban”. It argued that there is no substantial identity unless the words “Brewing Company” and “Ale” are ignored completely.

156    With respect to deceptive similarity, Urban Alley submitted that La Sirène’s analysis places undue weight on the word “Urban” in circumstances where the Register of Trade Marks contains a number of trade marks for beer products that contain that word. It submitted that the correct approach is to recognise that none of the registered marks containing the word “urban” have a monopoly over the use of that word and their respective monopolies are confined to the particular combination of words used in the marks.

157    Urban Alley did not plead or place any reliance on ss 44(3) or 44(4).

Consideration

158    I accept the submission of La Sirène that the Urban Ale mark is deceptively similar to the Urban Brewing Company mark within the meaning of s 44(1), but not the submission that the marks are substantially identical. The side by side comparison is relatively straightforward, given that both marks are word marks without any stylised elements or associated devices.

159    In my view, the two marks are not substantially identical. While there is an obvious relationship between the words “Brewing Company” and “Ale”, the words convey different things. The former refers to the maker of beer, while the latter refers to beer. In my view, the words perform a descriptive function within the respective marks, but the description is sufficiently different to negative a finding of substantial identity.

160    However, I consider that the Urban Ale mark so closely resembles the Urban Brewing Company mark that it is likely to deceive or cause confusion. Given the close association in meaning between “Brewing Company” and “Ale”, and the common use of the word “Urban” as the first word of the marks, I consider that there is a real risk that Australian consumers would be left in doubt or having cause to wonder whether goods bearing the respective marks have the same origin. There is nothing in the marks, as registered, to dispel such confusion.

161    It follows that s 44 provides a further basis on which the Court’s discretion to order that the Register be rectified by cancelling the registration of the Urban Ale mark under s 88(1)(a) is enlivened, which is considered below.

C.3    Opposition under s 58

Relevant principles

162    Section 58 provides:

The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.

163    The word “owner” is not defined in the TMA. Its meaning has been established by a number of decisions, reflecting both the common law origins of trade mark rights and the statutory provisions. Relevantly for present purposes, in respect of a mark that has not been used prior to the application for registration, the basis of a claim to ownership has been found in the combined effect of authorship of the mark, the intention to use it upon or in connection with the goods and the application for registration: Food Channel Network Pty Ltd v Television Food Network GP (2010) 185 FCR 9 (Food Channel) at [52], citing Shell Company of Australia Ltd v Rohm and Haas Company (1949) 78 CLR 601 (Shell) at 627 per Dixon J; Pham Global at [18] and [19]. An intention to use the trade mark may be inferred from the making of an application to register the mark: Food Channel at [67], [70] and [72]. In respect of a mark that has been used prior to the application for registration, ownership is established by authorship of the mark and prior use: Food Channel at [55]; Pham Global at [19].

164    In Carnival Cruise Lines Inc v Sitmar Cruises Ltd (1994) 120 ALR 495 (Carnival Cruise Lines) at 513; 31 IPR 375; AIPC 91-049, Gummow J (while a judge of this Court) considered the question whether ownership of a trade mark is limited to the precise form of that mark as authored, or whether ownership extends to marks that are substantially identical or that are deceptively similar to that mark (such that a challenge to registration of a mark on the ground that the applicant is not the owner might be made if the mark is substantially identical to, or that are deceptively similar to, another registered mark. In obiter but considered reasons, his Honour concluded that ownership of a trade mark extends to marks that are substantially identical to that mark, but not to marks that are merely deceptively similar (at 38-114).

Submissions of La Sirène

165    Consistently with the conclusion of Gummow J in Carnival Cruise Lines, La Sirène’s submissions proceed on the basis that the Urban Ale mark is substantially identical to the Urban Brewing Company mark. On that basis, La Sirène submitted that Urban Alley is not the owner of the Urban Ale mark, because ownership is held by the registered owner of the prior Urban Brewing Company mark. La Sirène submitted that it is not necessary to demonstrate that the registered owner of the Urban Brewing Company mark made actual use of that mark prior to 14 June 2016. In the absence of actual use of a trade mark, ownership may be established by reference to the combined effect of authorship of the mark, the intention to use it upon or in connection with the goods and applying for registration. La Sirène submitted that those elements are proven, or at least to be inferred, from the filing of the application on 24 March 2016 (and subsequent registration) of the Urban Brewing Company mark.

Submissions of Urban Alley

166    Urban Alley advanced two principal submissions. First, it contended that the Urban Ale mark is not substantially identical to the Urban Brewing Company mark, and accordingly the registered owner of the prior Urban Brewing Company mark is not the owner of the Urban Ale mark. Second, it submitted that the evidence shows that Mr Meltzer coined the Urban Ale mark as a brand name (in his capacity as a director of CSBC) and applied for registration of the mark and used the mark. There is no other evidence contradicting ownership and therefore La Sirène cannot prove this ground of opposition.

Consideration

167    Given my earlier finding that the Urban Ale mark is not substantially identical to the Urban Brewing Company mark, the submissions of Urban Alley must be accepted and the submissions of La Sirène must be rejected. The evidence establishes authorship and first use of the Urban Ale mark by CSBC (to which Urban Alley is the successor in title). There is no other evidence that contradicts ownership by Urban Alley. Accordingly, I reject La Sirène’s application under s 88(1)(a) seeking cancellation of the Urban Ale mark based on s 58 of the TMA.

C.4    Exercise of discretion

Relevant principles

168    Once a ground of opposition to the registration of a trade mark is established under s 88(2)(a) of the TMA, s 88(1)(a) confers a discretionary power on the Court to make an order requiring the Register to be rectified by cancelling the registration of the mark. The principles relating to the exercise of that discretion were recently considered by the Full Court in Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd (2018) 259 FCR 514 (Anchorage). The principles can be summarised as follows:

(a)    First, unless s 89 is engaged, the discretion under s 88(1) is at large, constrained only by the general scope and objects of the TMA (Anchorage at [146]).

(b)    Second, the correct question to ask when deciding whether to exercise the discretion is whether sufficient reason appears not to order the cancellation of a registered mark once the statutory discretion to make such an order has been enlivened. If the evidence does not disclose sufficient reason not to cancel the mark then it should be cancelled. In the ordinary course of events, it will be for the party that resists the cancellation to persuade the Court that there is a sufficient reason not to order its cancellation (Anchorage at [158]).

(c)    Third, there is a public interest in ensuring that marks the use of which are likely to give rise to deception or confusion are not registered as trade marks and that trade mark registrations only be made in favour of applicants who are entitled to obtain them (Anchorage at [163]).

169    In Bohemia Crystal, after referring to the above principles, Burley J added that, in circumstances where a mark is incapable of distinguishing the goods of the registered owner from those of other traders, there exists a “long standing notion that registered trade mark rights ought not to accrue in respect of marks that, according to their ordinary signification, are for words that other traders may desire to use” (at [246]).

Urban Alley’s submissions

170    Urban Alley submitted that the Court should exercise its discretion and allow the Urban Ale mark to remain on the Register and dismiss the application for rectification for the following reasons:

(a)    first, the public interest will not be adversely affected if registration of the mark continues;

(b)    second, Urban Alley has developed a significant reputation in the Urban Ale mark in respect of beer goods and their sale in Australia;

(c)    third, Urban Alley has been using the Urban Ale mark since at least May 2016 and it should be able to continue to enjoy the mark given the significant sales it has made of the Urban Ale product and the significant investment it has made in promoting the Urban Ale product and the Urban Ale brand; and

(d)    fourth, the Urban Ale product is the only beer product which has been sold and which continues to be sold by Urban Alley and it should be able to continue to sell its product with the Urban Ale mark.

La Sirène’s submissions

171    In response, La Sirène submitted that the public interest will be adversely affected if registration of the Urban Ale mark is allowed to continue, principally for the reason given by Burley J in Bohemia Crystal; viz, continued registration impedes the ability of other traders who, without improper motive, desire to use the word “urban” in connection with beer and related services. La Sirène submitted that it is one of those other traders.

172    La Sirène further submitted that Urban Alley has not developed any significant reputation in the name “Urban Ale” in respect of beer goods in Australia, particularly given that it promoted and sold the Once Bitter product until at least May 2018 (on which the Urban Ale mark had a subsidiary position). Even if Urban Alley has, since the filing date of the Urban Ale mark, acquired some reputation, La Sirène submitted that that does not displace the legislative intention behind ss 41 and 88(2)(a) to ensure that historical registrations do not remain on the Register where they should not have been granted in the first place.

173    La Sirène also submitted that cancellation of the Urban Ale mark would not prevent Urban Alley from using the mark in connection with its products, and nor would it affect any reputation that has accrued in its products. It would merely prevent Urban Alley from asserting the statutory rights against other traders to prevent those other traders from using a similar mark in connection with their products.

Consideration

174    In my view, Urban Alley has not advanced a sufficient reason not to order the cancellation of the Urban Ale mark.

175    Contrary to Urban Alley’s submission, the public interest would be adversely affected if registration of the Urban Ale mark continued in two respects. First, I have found that the words “urban ale” are words that other traders may desire to use in connection with beer products and breweries for their ordinary signification. As recently reiterated by Burley J in Bohemia Crystal, registered trade mark rights ought not to accrue in respect of marks that, according to their ordinary signification, are for words that other traders may desire to use. Second, I have also found that the Urban Ale mark is deceptively similar to the Urban Brewing Company mark. As stated by the Full Court in Anchorage, there is also a public interest in ensuring that marks the use of which are likely to give rise to deception or confusion are not registered as trade marks.

176    As discussed in more detail below in connection with Urban Alley’s claims under the ACL and passing off, the evidence adduced by Urban Alley is insufficient for me to find that it has developed a significant reputation in the Urban Ale mark in respect of beer goods and their sale in Australia. From May 2016 until at least May 2018, Urban Alley sold the Once Bitter product. The evidence shows that both the sales volume and the marketing expenditure for that product were modest, and the Urban Ale name was only promoted in a subsidiary manner by reference to the style or flavour of the beer. In respect of the Urban Ale product, the evidence was limited to sales volume in the period from June to August 2018, which remained modest, and there was no evidence as to marketing expenditure. There was no other evidence of any weight to show that Urban Alley had developed a significant reputation in the Urban Ale mark.

177    It is uncertain whether cancellation of the Urban Ale mark would prevent Urban Alley from using the mark in connection with its products. In itself, cancellation does not prevent Urban Alley from using the mark. However, cancellation may enable the owner of the Urban Brewing Company mark to bring infringement proceedings to prevent Urban Alley from using the Urban Ale mark, whereas the registration of the Urban Ale mark would have afforded Urban Ale a defence to infringement proceedings under s 122(1)(e). Although cancellation of the Urban Ale mark exposes Urban Alley to the risk of infringement proceedings, I do not place much weight on that risk. In the first place, any assessment of the likelihood of such a proceeding, and the availability of defences to Urban Alley, involves considerable speculation. There is no evidence that the owner of the Urban Brewing Company mark has taken any step in the past to oppose the Urban Ale mark. It is also apparent that the Urban Brewing Company mark may be vulnerable to cancellation under s 41 for the same reasons that I consider the Urban Ale mark should be cancelled. Secondly and more broadly, any such proceeding would be adjudicated in accordance with the provisions of the TMA, which is entirely consistent with the public interest.

C.5    Conclusion on cancellation of the Urban Ale mark

178    In conclusion, I will make an order under s 88(1)(a) that the Register be rectified by cancelling the registration of the Urban Ale mark.

179    Cancellation of the Urban Ale mark means that no question of infringement of the mark by La Sirène arises and that claim must be dismissed for that reason: Colorado at [32] per Kenny J, at [191] per Allsop J (as his Honour then was) and [35] per Gyles J; Anchorage at [193] per Nicholas, Yates and Beach JJ. Nevertheless, against the prospect that my findings as to cancellation are the subject of a successful challenge, I will proceed to consider the issues raised in the trade mark infringement claim (and also the claims made under the ACL and passing off).

D.    Trade mark infringement

180    By its statement of claim, Urban Alley alleges that La Sirène has infringed the Urban Ale mark in breach of s 120(1) of the TMA by manufacturing, advertising, marketing, offering for sale and selling beer by reference to the Urban Pale name, thereby using a mark in the course of trade in Australia which is substantially identical with and/or deceptively similar to the Urban Ale mark in connection with the goods in respect of which the Urban Ale mark is registered.

181    La Sirène does not contest Urban Alley’s allegation that the Urban Pale name is substantially identical with, or deceptively similar to, the Urban Ale mark, nor that it has used the Urban Pale name in relation to goods in respect of which the Urban Ale mark is registered. Rather, La Sirène defends Urban Alley’s infringement claims on the following four bases:

(a)    under s 120 of the TMA on the basis that it has not used the name Urban Pale as a trade mark;

(b)    under s 122(1)(b)(i) of the TMA on the basis that it has used the name Urban Pale in good faith to indicate the kind, quality, geographical origin, or some other characteristic, of its beer product;

(c)    under s 124 of the TMA on the basis that it has used an unregistered trade mark, being the word “urban”, continuously in the course of trade in relation to craft beer products from before the priority date; and

(d)    under s 122(1)(e) on the basis that it has exercised its right to the La Sirène word and label marks in the period since the date of registration of those marks.

182    In respect of the fourth defence based on s 122(1)(e), Urban Alley has applied for an order cancelling the La Sirène word and label marks under s 88(1)(a) of the TMA on the following bases:

(a)    under s 44 of the TMA on the basis that the La Sirène marks are substantially identical with, or deceptively similar to, the Urban Ale mark;

(b)    under s 42(b) on the basis that the use of the La Sirène marks would be contrary to law because such use constitutes misleading and deceptive conduct in breach of ss 18 and 29 of the ACL and the tort of passing off;

(c)    under s 60 on the basis that, before the priority date of the La Sirène marks, the Urban Ale mark had acquired a reputation in Australia and, because of that reputation, use of the La Sirène marks would be likely to deceive or cause confusion; and

(d)    under s 88(2)(c) of the TMA, on the basis that, as at the filing date of the claim (being 11 June 2019), the use of the La Sirène marks is likely to deceive or cause confusion.

183    The issues that underpin Urban Alley’s application under s 88(1)(a) overlap substantially with the issues raised in its ACL and passing off claims. For that reason, it is convenient to first address Urban Alley’s trade mark infringement claim and La Sirène’s defences other than the defence under s 122(1)(e). These reasons then address Urban Alley’s ACL and passing off claims, then its application under s 88(1)(a) before returning to the defence under s 122(1)(e).

D.1    Section 120 - use as a trade mark

Relevant principles

184    Section 120(1) provides that a person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered. The applicant alleging infringement must show that the respondent’s use of a sign is use as a trade mark.

185    In E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144, French CJ, Gummow, Crennan and Bell JJ approved (at [43]) the statement by the Full Court of the Federal Court in Coca-Cola at [19] that:

“Use ‘as a trade mark’ is use of the mark as a ‘badge of origin’ in the sense that it indicates a connection in the course of trade between goods and the person who applies the mark to the goods … That is the concept embodied in the definition of “trade mark” in s 17 – a sign used to distinguish goods dealt with in the course of trade by a person from goods so dealt with by someone else.”

186    As observed by their Honours (at [42]), the essential characteristics of a trade mark are distinguishing goods of a registered owner from the goods of others and indicating a connection in the course of trade between the goods and the registered owner.

187    In Anheuser-Busch, Inc v Budějovický Budvar, Národní Podnik [2002] FCA 390; 56 IPR 182, Allsop J summarised the task of determining whether there has been use of a sign “as a trade mark” as follows (at [185]-[186]):

(a)    the task is to examine the way the words are used in their context, including the totality of the packaging, to assess their nature and purpose in order to see whether they are used to distinguish the goods from the goods of others;

(b)    the assessment is made from the perspective of what a person looking at the label would see and take from it, as to the purpose and nature of its use.

188    The Court has regard to the context of the use of the impugned sign, including factors such as the positioning of the sign, the type of font used, the size of the words or letters and the colours that are used: Mantra Group Pty Ltd v Tailly Pty Ltd (No 2) (2010) 183 FCR 450 at [50]. Use as a trade mark is more likely to be found where the impugned sign is used prominently on the alleged infringer’s packaging: Aldi Stores Ltd Partnership v Frito-Lay Trading Co GmbH [2001] FCA 1874 (Aldi Stores) at [56]; 190 ALR 185; 54 IPR 344.

189    The application of the foregoing principles can be illustrated by reference to a number of the decided cases.

190    In Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326 (Johnson & Johnson), Sterling owned a registered trade mark for CAPLETS in respect of medicated tablets for human use. Johnson & Johnson launched a paracetamol product called TYLENOL and used the word CAPLETS in advertising and packaging. A key issue was whether Johnson & Johnson had used the word CAPLETS as a trade mark or whether it had used the word in a descriptive sense, referring to the form or shape of the product. The Full Federal Court found that it had not used CAPLETS as a trade mark in respect of capsule-shaped tablets (at 341 per Lockhart J, at 344 per Burchett J and at 351 per Gummow J). In reaching that conclusion, Lockhart J noted (at 341):

The context in which CAPLETS appears on the TYLENOL packaging and in its advertising demonstrates plainly, in my opinion, that the use is essentially descriptive and not a badge of origin in the sense that it indicates a connection in the course of trade between the product TYLENOL and the appellant.

191    Lockhart J reached this conclusion notwithstanding the fact that “caplet” had not found its way into ordinary Australian parlance; that did not deprive it of the characteristic of a descriptive word for the purposes of trade mark law (at 339). Burchett J similarly noted that (at 343-344):

No one looking at the packet could doubt that the product was sold under the name Tylenol, that the company concerned in its sale was Johnson & Johnson, and that it had been made up in the form of the stated number of caplets.

192    In Pepsico Australia Pty Ltd v Kettle Chip Co Pty Ltd (1996) 135 ALR 192; 33 IPR 161; AIPC 91-213, the Full Federal Court found that the word “KETTLE” was not used as a trade mark in respect of “THINS” potato chips (at 163 per Lockhart J, at 169 per Sheppard J and at 188 per Sackville J). Lockhart J rejected the argument that there were three marks used on the allegedly infringing product, namely Thins, DOUBLE CRUNCH and KETTLE COOKED (at 163). Lockhart J explained the particular problems arising with the use of descriptive words (at 162):

It is easier to find infringement of a registered mark where it consists of a coined phrase (see Mark Foys Limited v Davies Coop & Co Limited (1956) 95 CLR 190 (the Tub Happy Case) than in a case where the registered mark is a generally descriptive word which has acquired a secondary meaning, so becoming distinctive of the plaintiff's goods as a badge of origin. The reason is that there is always inherent in a word that is originally descriptive the risk that even when it is used by others in trade it will be used in its original descriptive sense. And of course, where a word that is initially descriptive subsequently acquires a secondary meaning, it remains that use of the word in a descriptive sense cannot be restrained by the proprietor of the trade mark.

193    Sackville J noted that the use of distinctive marks (THINS and perhaps DOUBLE CRUNCH) on the packet had a bearing on whether the words KETTLE COOKED had been used to show the commercial origin of the product, or whether they have some other purpose and effect (at 182). Sackville J declined an invitation to assess the subjective intentions behind the use of KETTLE COOKED. Instead, his Honour focussed on the essentially objective nature of the inquiry as to whether those words were used as a trade mark: “that is to be determined by considering the words as they present themselves to the persons who are to read them and form a view about what they are meant to connote” (at 187).

194    In Mars Australia Pty Ltd v Sweet Rewards Pty Ltd [2009] FCAFC 174; 84 IPR 12; [2010] AIPC 92-364, the Full Federal Court upheld the decision of Perram J (reported at [2009] FCA 606; 81 IPR 354; AIPC 92-344) that the name “Malt Balls” was used on Sweet Rewards’ malt ball product descriptively and not as a trade mark, and therefore its use did not infringe Mars’ trade mark “Maltesers”. Sweet Rewards’ product was packaged as shown below:

195    The Full Court agreed with Perram J’s findings that the use of the DELFI mark was the use of a trade mark and that the DELFI mark was the distinguishing feature of the Sweet Rewards product ((2009) 81 IPR 354 at [91] per Perram J; (2009) 84 IPR 12 at [29] per Emmett, Bennett and Edmonds JJ). Perram J noted there may be cases where one label bears two marks, but this was not such a case (at [91]).

196    In Aldi Stores, the Full Federal Court concluded that the name “Cheezy Twists” used on the packaging of an Aldi product containing cheese flavoured snacks was used as a trade mark, despite the name being essentially descriptive of the product and also being used with another trade mark on the packaging, “Chazoos” (at [26] per Hill J, at [57] and [58] per Lindgren J, and at [182] per Conti J). In reaching that conclusion, the Court took into account the prominence with which the name “Cheezy Twists” appeared on the packaging, and the fact that a descriptive statement, “cheese flavoured snacks”, also appeared on the packaging below the name.

Urban Alley’s submissions

197    Urban Alley submitted that La Sirène has used the Urban Pale name as a trade mark for three reasons.

198    First, it argued that the Urban Pale name on the label of La Sirène’s Urban Pale product is in larger lettering and in a different colour and font when compared to the other words on the label. It is the dominant name that appears on the label. Urban Alley submitted that La Sirène has chosen to use two trade marks on its label, La Sirène and Urban Pale, with La Sirène functioning as the identification of the brewer and Urban Pale functioning as the specific product name. Urban Alley argued that the branding approach was the same as that deployed by Carlton & United Breweries with its well-known beer product called “Victoria Bitter”. Urban Alley argued that the word “urban” is not descriptive of the style or flavour of the beer, and the packaging of the product includes the descriptive words “Farmhouse Style”.

199    Second, Urban Alley argued that La Sirène has used the Urban Pale name on its website and in social media (Instagram account) numerous times on its own (that is, without the use of the full name “Farmhouse Style Urban Pale by La Sirène”) and in most cases the words are used in capital letters in order to highlight the use of the mark and to show an association with La Sirène.

200    Third, La Sirène filed a trade mark application for the words “Urban Pale”, affording evidence that La Sirène intended to use the Urban Pale name as a trade mark.

La Sirène’s submissions

201    La Sirène submitted that, on the packaging of the Urban Pale product, the commercial source of the product is identified by the stylised brand name “La Sirène” and that the name “Urban Pale” is rendered in plain font and has a descriptive role in identifying the product as a pale ale made in an urban setting. It submitted that the commercial source of the product is reinforced by reading the labelling as a whole. Viewed from a consumer’s perspective, the product would be seen as branded to convey that the beer emanates from “La Sirène” (made clear by the use of the preposition “by”), and that the style of the beer is described as a “Farmhouse Style Urban Pale”. Only the words “La Sirène” would appear to consumers as possessing the character of a brand for the purpose of indicating the trade source origin. La Sirène relies on the following opinions expressed by Mr Kirkegaard:

The use of the words “Farmhouse Style” and “Pale” assist the consumer to get a sense of the characteristics they would expect from this beer, even though it does not fit into any recognised style. “Farmhouse” has a distinct meaning in the craft beer industry, as does “pale”. In the context of the name of the product the word “urban” does not convey anything about the taste or flavour profile of the product per se but provides a contrast because La Sirène is an urban based brewery producing farmhouse style ales, which were historically produced in rural locations.

202    La Sirène argued that descriptive terms may appear on product labelling with relatively large lettering and a different font without losing their descriptive effect, a good example being “Malt Balls” on the Sweet Rewards product. The correct approach is to examine the way words are used in the context of the totality of the packaging from the perspective of a person looking at the packaging, to assess the nature and purpose of the words in order to see whether they are used to distinguish the goods from the goods of others. It argued that a consumer viewing the La Sirène product would read that the product is made “by La Sirène”. The consumer would not read the words “Urban Pale” in isolation and would not consider those words to be a brand of beer, as opposed to a style of beer, given the inherently descriptive nature of that term.

203    La Sirène submitted that the fact that it applied to register “Urban Pale” as a trade mark is irrelevant; the question whether a sign has been used as a trade mark involves an objective assessment from the perspective of a consumer. La Sirène also says that it opted not to proceed with the application due to the number of third parties using the word “urban” in relation to beer and the descriptive nature of the word.

Consideration

204    On the question of trade mark use, there are factors pointing in different directions. On balance, Urban Alley has not satisfied me that La Sirène has used the name “Urban Pale” as a trade mark. Rather, the evidence leads me to conclude that La Sirène has used the name as a product name that is descriptive of the nature and style of the beer product.

205    It is apparent that the labelling of the La Sirène Urban Pale product features the words “Urban Pale” in large lettering and an emboldened font. It is the most prominent name on the labelling. However, for the following reasons, I do not consider that that prominence converts the essentially descriptive name into a trade mark indicating the source of origin of the product.

206    First, I consider that the words “by La Sirène” are sufficiently prominent on the label to convey to a consumer that La Sirène is the source of origin of the product. While those words are somewhat less prominent than the words “Urban Pale”, in my view that is counterbalanced by the clear message conveyed by those words that the product has been made by La Sirène.

207    Second, and for reasons given earlier, the words “urban” and “pale”, when used in connection with beer, would be understood by consumers as describing the nature and style of the beer: the word “urban” signifies that the product is presenting itself as a craft beer and the word “pale” indicates a common style of beer (pale ale). As the cases show, a descriptive name of a product may also function as a trade mark, indicating a source of origin. However, it is less likely. In the present case, I consider that the name “Urban Pale” is overwhelmingly descriptive, such that consumers would understand the name to be a description of the product’s nature and style and would not consider that the name is used to distinguish the goods from the goods of others.

208    Third, I do not accept the submission of Urban Alley that La Sirène has commonly used the name “Urban Pale” on its own and in a manner to distinguish the Urban Pale product from other products. As already noted, the source of origin of the product is clearly identified on the product label as La Sirène. The other uses of the name relied on by Urban Alley were on La Sirène’s website and Instagram account. As Eva Nikias said in evidence, all such uses of the Urban Pale name were closely associated with the La Sirène brand, because the La Sirène brand is prominently displayed on both its website and its Instagram account. No consumer could see those references without understanding that the origin of the product was La Sirène. In my view, and as stated by Eva Nikias in evidence, if a consumer only saw the name “Urban Pale”, the consumer would have no information as to the origin of the product.

209    Fourth, I place no weight on the fact that La Sirène filed a trade mark application for the words “Urban Pale”. The authorities show that the question whether a sign has been used as a trade mark is essentially an objective question. Even if La Sirène’s subjective intention with respect to the use of the name can have some bearing on the question, as noted earlier I accept Eva Nikias’ evidence that La Sirène withdrew the application because of the number of third parties already using the word “urban” in relation to beer and the word “pale” is a shorthand description of a very popular style of beer.

210    For those reasons, I consider that La Sirène has not used the name “Urban Pale” as a trade mark and, accordingly, it has not infringed the Urban Ale mark.

D.2    Section 122(1)(b)(i) - good faith use

Relevant principles

211    Section 122(1)(b)(i) of the TMA provides as follows:

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; …

212    La Sirène bears the onus of establishing that the defence under s 122(1)(b)(i) (as well as under ss 124 and 122(1)(e)) is made out: Cantarella Bros Pty Ltd v Kona Coffee Roastery & Equipment Supplies Pty Ltd (1993) 28 IPR 176 at 179; [1994] AIPC 91-048.

213    The principles governing this defence were recently summarised by Burley J in Bohemia Crystal at [291]-[299]. His Honour observed that:

(a)    The purpose of s 122(1) is to protect the fundamental right of a trader to honestly describe his or her product. It has been said to provide a “second-line” mechanism to preserve the freedom of traders to use descriptive terms, with the “first line” mechanism being that a use of the mark will only infringe if it is used as a trade mark.

(b)    The policy underlying s 122(1)(b)(i) may be seen to lie in a consistent aim in trade marks legislation to ensure that traders may continue to use language in respect of their goods or services insofar as it represents the normal usage of the English language, referring to the observations of Mansfield J in Britt Allcroft (Thomas) LLC v Miller (t/as Thomas Shop) [2000] FCA 699 at [67]; 49 IPR 7; ATPR 41-776.

(c)    Although the same circumstances might lead to a finding that the use of a sign is not use as a trade mark and the defence in s 120(1)(b)(i) is satisfied, the two issues involve different enquiries. Section 122(1)(b)(i) concerns the question whether the respondent has used the sign in good faith to indicate geographical origin, or some other characteristic of the goods in question, which is a factual question.

(d)    The good faith element requires the respondent to show that they have acted honestly and without ulterior motive, citing Johnson & Johnson at 353-354 per Gummow J and Nature's Blend Pty Ltd v Nestle Australia Ltd [2010] FCA 198 at [42] per Sundberg J; 86 IPR 1; AIPC 92-375.

214    Resemblance between a registered trade mark, of which a defendant is aware, and the sign used by that defendant does not prevent the use being bona fide provided that there was an honest belief that no confusion would arise and there was no intention of wrongfully diverting business: Wellness Pty Ltd v Pro Bio Living Waters Pty Ltd [2004] FCA 438 at [43] per Bennett J; 61 IPR 242; AIPC 91-983.

La Sirène’s submissions

215    La Sirène submitted that the evidence establishes that it began using the word “urban” in connection with its business, and selected and adopted the name “Farmhouse Style Urban Pale by La Sirène”, before it knew about the Urban Ale mark. La Sirène submitted that it chose to use the word “urban” by reason of its ordinary signification when used in connection with beer, being to describe a beer made or consumed in an urban area.

216    La Sirène further submitted that there can be no suggestion that its decision to use the words “Urban Pale” in the name “Farmhouse Style Urban Pale by La Sirène” was borne of an improper or ulterior motive giving rise to an absence of good faith. It submitted that, at the time it adopted this name, La Sirène was already established as an award-winning producer of high quality beers in the style of French farmhouse ales. There are also clear differences between the appearance of the La Sirène Urban Ale product and the Once Bitter product, including the presence of the La Sirène mark, distinctive colouring and background pattern, and the central prominence of the ONCE BITTER mark.

Urban Alley’s submissions

217    Urban Alley submitted that La Sirène has produced no evidence to show that the words “Urban Pale” indicate the kind, quality, provenance and/or other characteristics of its Urban Pale product. It submitted that use of the word “urban” in connection with beer products is too nebulous to convey anything meaningful about the characteristics of the product.

Consideration

218    The issue between the parties on the application of s 122(1)(b)(i) is relatively narrow. In closing submissions, Urban Alley did not suggest that La Sirène had adopted the name Urban Pale dishonestly or with an ulterior motive.

219    As submitted by La Sirène, the evidence showed that La Sirène adopted the name “Farmhouse Style Urban Pale by La Sirène” before it knew about the Urban Ale mark and did so for the ordinary signification of the word “urban” when used in connection with beer. Relevantly, La Sirène commenced using the word “urban” in connection with its business (in the context of describing itself as an “urban farmhouse”) in December 2015, well before Urban Alley conceived of the name “urban ale”. In late February 2016, Eva Nikias conducted searches of the Register of Trade Marks and other internet resources. Having conducted those searches, on 13 April 2016 La Sirène filed its trade mark application for “Urban Farmhouse Brewing Co” in class 32, which was subsequently registered. Ultimately, La Sirène settled on the name “Farmhouse Style Urban Pale by La Sirène” some time between June and October 2016.

220    Urban Alley made no public use of the Urban Ale mark until May 2016. Even after it commenced public use, Urban Alley’s use was limited in volume and was the subject of minimal marketing. The Urban Ale mark was also used in a subsidiary manner on the Once Bitter product, where the name “Once Bitter” was the dominant mark on the labelling of the product and in marketing.

221    I accept Eva Nikias’ evidence that she found out about Urban Alley’s Urban Ale mark upon receiving the Trade Marks Office’s adverse report (which was after the filing of La Sirène’s application for Urban Pale on 4 November 2016). I also accept her evidence that La Sirène adopted the word “urban” as part of the name of its product because it described a key element of its product.

222    I do not accept Urban Alley’s argument that the defence in s 122(1)(b)(i) was not satisfied because the word “urban” is too nebulous to indicate the kind, quality, geographic origin or any other characteristic of beer. For the reasons given earlier, in my view the word “urban” has a tangible meaning when used in relation to beer products. At one level, it describes the beer as having been produced in a city location and, at another level, it connotes that the beer has been produced in an inner-city craft brewery. The use of the word is descriptive and laudatory, conveying that the product is cool or trendy and suited to inner-city beer drinkers. As such, the word “urban”, when used in connection with beer, indicates the kind, quality or other characteristic of the product.

223    Accordingly, La Sirène has satisfied me that the defence to infringement in s 122(1)(b)(i) applies to its use of the words “Urban Pale”.

D.3    Section 124(1) – prior use

Relevant principles

224    Section 124(1) provides as follows:

A person does not infringe a registered trade mark by using an unregistered trade mark that is substantially identical with, or deceptively similar to, the registered trade mark in relation to:

(a)    goods similar to goods (registered goods) in respect of which the trade mark is registered; or

…

if the person, or the person and the person's predecessor in title, have continuously used in the course of trade the unregistered trade mark in relation to those goods or services from a time before:

(e)    the date of registration of the registered trade mark; or

(f)    the registered owner of the registered trade mark, or a predecessor in title, or a person who was a registered user of the trade mark under the repealed Act, first used the trade mark;

whichever is earlier.

La Sirène’s submissions

225    La Sirène relies on its use of the word “urban” in connection with its business, including as part of the business name “Urban Farmhouse Brewing Company”, arguing that it has made continuous use of the word in connection with beer since late 2015, prior to Urban Alley’s first use of the Urban Ale mark in May 2016.

226    Relying on s 7(1) of the TMA, La Sirène submitted that, if the Court finds that it has used the unregistered trade mark “Urban Pale” as a trade mark, the defence in s 124 will apply if La Sirène has made prior continuous use of that trade mark either in that exact form, or with alterations that do not affect the identity of the trade mark. La Sirène argued that the word “pale” is entirely descriptive of beer and cannot play any role in distinguishing one brand from another. As such, the presence or absence of the word “pale” does not affect the identity of a mark used for beer. On that basis, it says that the defence under s 124 may be made out by way of prior continuous use of the word “urban” without “pale” and/or with the addition of other common descriptive and non-distinctive terms such as “Farmhouse Brewing Co”.

Urban Alley’s submissions

227    Urban Alley submitted that La Sirène’s prior use of the word “urban” does not satisfy the defence under s 124(1). It argued that the alleged infringement involves the use of the name “Urban Pale”, not the name “Urban” on its own. Therefore, in order for La Sirène to avail itself of the defence under s 124(1), it needs to show that it has prior use of the Urban Pale mark before May 2016. There is no evidence of such use before that date.

Consideration

228    In my view, the defence under s 124(1) is not available to La Sirène on the facts of this case. The defence requires a respondent to show that it has been continuously using the unregistered mark that is the subject of the infringement. The chapeaux to s 124(1) excuses an infringement “by using an unregistered trade mark”, directing attention to the unregistered trade mark that is the cause of the infringement. A defence arises if the respondent (or its predecessor in title) has continuously used in the course of trade that unregistered mark. Further, the respondent (or its predecessor in title) must have continuously used the unregistered mark in relation to, relevantly, goods that are similar to the goods in respect of which the trade mark is registered. As observed by Windeyer J in Hy-Line Chicks Pty Ltd v Swifte (1966) 115 CLR 159 at 162 in relation to the predecessor provision, s 64(1)(c) of the Trade Marks Act 1955 (Cth), the defendant must show that their earlier use of the mark was the same manner of use as they now assert and for goods of the same kind as now.

229    In the present case, the unregistered mark that is the subject of the infringement is “Urban Pale”. The evidence shows that La Sirène commenced using that mark after May 2016, being the date of registration and date of first use of the Urban Ale mark. In my view, s 7(1) does not assist La Sirène. Even if s 124 is to be read with s 7(1), I do not accept La Sirène’s submission that the word “pale” is an addition or alteration to the unregistered trade mark “Urban Pale” that does not substantially affect the identity of the mark. While the word “pale” is descriptive of beer, the removal of that word from the mark “Urban Pale” substantially alters the mark.

D.4     Conclusion on infringement

230    In summary, in my view La Sirène’s use of the Urban Pale name does not infringe the Urban Ale mark both because its use is not use as a trade mark and because the defence in s 122(1)(b)(i) is applicable. These reasons return to the defence under s 122(1)(e) below.

E.    Australian Consumer Law and Passing Off Claims

231    Urban Alley claims that the use of the Urban Pale name by La Sirène constitutes misleading and deceptive conduct in breach of ss 18 and 29(1)(g) and (h) of the ACL and the tort of passing off.

232    As observed by the Full Federal Court in Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 159 FCR 397 (Cadbury Schweppes) at [98], there is overlap between causes of action arising under the ACL (previously Part V of the Trade Practices Act 1974 (Cth)) and passing off, but they have distinct features. The Full Court explained:

There is an overlap between causes of action arising under Pt V of the Trade Practices Act and the common law tort of passing off. However, the causes of action have distinct origins and the purposes and interests that both bodies of law primarily protect are contrasting. Passing off protects a right of property in business or goodwill whereas Pt V is concerned with consumer protection. Part V is not restricted by common law principles relating to passing off and provides wider protection than passing off.

233    While ss 18 and 29 have a broader operation than passing off, as a practical matter, where the facts of a case are said to amount to passing off, the principles applicable to that cause of action offer guidance in relation to the application of ss 18 and 29: Flexopack S.A. Plastics Industry v Flexopack Australia Pty Ltd [2016] FCA 235 (Flexopack) at [273] per Beach J; 118 IPR 239, citing Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 (Hornsby) at 227 per Stephen J.