Stone & Wood “craft-y” competitor “hops” to it in trade mark dispute | Don’t underestimate the importance and value of using distinctive and descriptive trademarks

Commercial, Property

One of the most valuable assets of your business are the intellectual property rights which you hold in a trade mark, design or copyright.  The value attributed to intellectual property often involves an analysis of how a business’ intended customer base is likely to recognise and react to the visual image or sound of a trade mark, name, or logo – your ‘brand’.

Deciding on which brand to use for your business is more complicated than simply choosing one and opening your doors.  Even after this decision has been made, it is possible that one of your competitors in the market are already using similar or identical ways to market their business.  It is also important to find out whether your chosen name or logo is available for registration.

Registration of your brand is the clearest and most efficient way in which to protect your intellectual property rights.  When registering a trade mark for example, the Trade Marks Act 1995 (Cth) requires that the trade mark not be similar or identical in sound or look to one which has already been registered or used or a long period of time.  This is where how distinctive and unique your brand is becomes an important consideration, so that they can more easily be enforced and protected against your competitors.

Recently, the Full Federal Court dismissed claims made by beverage manufacturer Stone & Wood Group Pty Ltd in proceedings initially brought against one of their competitors, Thunder Road Brewing Company, and later against Intellectual Property Development Corporation Pty Ltd.

–          Stone & Wood Group Pty Ltd -v- Intellectual Property Development Corporation Pty Ltd [2018] HCAFC 29.  LINK: Stone & Wood Group

This case arose out of the use of the words “Pacific Ale” and involved an appeal raised by Stone & Wood regarding a determination made by the IPDC.

Stone & Wood sell various types of craft beer, including one called “Pacific Ale”.  They own registered trade marks for the words “Stone & Wood” and a logo incorporating these words.  Thunder Road also sell a range of craft beers, and in 2015 released one beer called “Pacific Ale”

Around the time that Thunder Road released their Pacific Ale, Stone & Wood had their solicitors write to Thunder Road threatening legal proceedings and claiming that they were ‘passing off’ their “Pacific Ale” beer as being the same as Stone & Wood’s beer.  After receiving this letter, Thunder Road changed the name of their beer to “Thunder Road Pacific”. 

‘Passing off’ occurs when one party has used either the same or a substantially similar name, brand or goodwill of another party in an attempt to misrepresent to consumers that they have some kind of an association with that party’s business, or its goods or services.

Stone & Wood later brought a claim against Thunder Road for passing off, misleading and deceptive conduct and making false or misleading representations in contravention of the Australian Consumer Law.  This claim was later amended, claiming that Thunder Road were infringing Stone & Wood’s registered trade mark.  In response, Thunder Road brought a cross claim against Stone & Wood on the basis that they had made ‘groundless threats’ to make a trade mark infringement claim and did not pursue their claim with ‘due diligence’ (see sections 129 and 130 of the Act).

After rejecting all of Stone & Wood’s claims and finding that Thunder Road had not infringed Stone & Wood’s trade mark, it was found that a number of significant differences existed in the words and colours used in each party’s labelling and packaging.  These differences included the fact Thunder Road had not made any direct references to Stone & Wood and that Stone & Wood were not sufficiently well known in the market for usinghe words ‘Pacific’ and ‘Ale’.

The Court accepted Thunder Road’s cross claim relating to groundless threats of legal proceedings and rejected Stone & Woods defence to this cross claim.  The Court’s reasoning in this case was that the ‘dominant feature’ in the registered trade mark was the name ‘Stone & Wood’, and not the words ‘Pacific Ale’.   In the most recent proceedings Stone & Wood later sought leave to appeal this decision, which was rejected by the Full Federal Court, who supported the primary judge’s findings.

Had Stone & Wood registered their interest in a trade mark for the words ‘Pacific Ale’ or included these words in a logo registered as a trade mark, the outcome of this case may have been different.  The take home message here is that it is critical for a business to assess and know their market and give serious consideration in relation to whether all of their Brands, products and services are adequately protected.

How Keystone can assist?

Keystone Lawyers are well equipped and experienced to advise and assist with setting up, purchasing or selling a business or company, as well as the steps required to protect your interests in the assets of your business or company, including your intellectual property.  While Stone & Wood may be good at making beers, don’t follow in their footsteps.