6 January, 2020
Southcorp Brands Pty Ltd v Australia Rush Rich Winery Pty Ltd [2019] FCA 720.
What you need to know
- Southcorp Brands Pty Ltd was successful in its application for default judgment for trade mark infringement in relation to marks relating to the Penfolds brand.
- The infringing marks were Chinese character marks targeted at Cantonese and Mandarin speakers only in relation to wine.
- The Federal Court held that the infringing marks were intended to cause confusion and deception, even though they were targeted at Cantonese and Mandarin speakers only.
- The Court held that the use of a Chinese character trade mark infringed the English trade mark registration.
What you need to do
- Consider the importance of registering trade marks in English as well as in any other languages, transliterations or characters that are significant to the market in which products are exported or sold.
Background
This case concerned an interlocutory application by Southcorp Brands Pty Ltd (Southcorp) for default and summary judgment against Australia Rush Rich Winery Pty Ltd and its related entities (ARRW). Southcorp claimed that ARRW infringed its registered trade marks by using a number of Chinese character marks in relation to wine.
Southcorp Trade Marks
Southcorp owns the following trade marks, each of which is registered in class 33 relating to wine and spirits (Southcorp marks):
- Australian Trade Mark No. 37674 for PENFOLDS (Penfolds Trade Mark);
- Australian Trade Mark No. 1762333 for BEN FU (Ben Fu Trade Mark); and
- Australian Trade Mark No. 1762317 for 奔富 (Chinese Character Trade Mark).
Southcorp adopted the Chinese Character Trade Mark in 1995 at the recommendation of its Chinese distributor. The Chinese Character Trade Mark depicts the phrase "Bēn Fù" in Mandarin and Cantonese, which can be translated as "Penfolds" in English.
ARRW Marks
Southcorp alleged ARRW infringed Southcorp's marks in its use of the following ARRW marks as trade marks:
- 奔富;
- 奔富酒园;
- 奔富酒庄;
- 澳大利亚奔富酒庄; and
- 澳洲大利亚奔富酒庄 (ARRW Marks).
Apart from the characters used in the ARRW Marks which are the same as the Chinese Character Trade Mark and can be translated as "Penfolds", Justice Beach found the other Chinese characters in the ARRW Marks to be entirely descriptive, translating to "winery", "wine park" or "Australia".
Default judgment
Over the course of the proceedings, ARRW failed to comply with various orders made by the Court, including that it appoint legal representation and file opening submissions. Justice Beach found that due to the fact the respondents failed to appoint legal representation, had not been granted leave to proceed without legal representation, and had not complied with the orders made by the Court for filing submissions, the Court's power to enter default judgment was enlivened under r 5.22 of the Federal Court Rules 2011 (Cth).
Use as a trade mark
Justice Beach found that the ARRW marks were in use as trade marks in relation to wine, as they appeared in bold text at the top of Chinese wine labels, and were followed by the ® symbol on the wine labels. Justice Beach held that the intention of ARRW in using the ARRW Marks was to cause confusion and deception to Mandarin and Cantonese speakers as to the quality of the wine which displayed the ARRW Marks. Justice Beach stated that misleading or deceptive conduct can be established by the use of the Chinese characters even though the class of potential customers who might be misled is essentially confined to those who speak and read only Cantonese or Mandarin, and even though no misrepresentation has been communicated to anyone who could not read those characters.
Infringement
In relation to Southcorp's case for infringement, Justice Beach considered:
- the significance of China as a major Australian wine export market;
- the significant number of Mandarin and Cantonese speakers resident in Australia, and visiting Australia from overseas each year; and
- the resulting use of Mandarin and Cantonese speaking staff and signage by Southcorp in its wine business, which supported the significance of the Ben Fu Trade Mark and Chinese Character Trade Mark in Southcorp's business.
In his assessment of trade mark infringement concerning Chinese characters, Justice Beach stated that "it is necessary to consider the appearance and sound as well as the meaning of Chinese characters when assessing allegations of trade mark infringement". Justice Beach closely examined the characters which comprise the ARRW Marks and determined that some of the Chinese characters were identical to the Chinese Character Trade Mark, with the remaining characters serving a descriptive purpose. The additional characters in the ARRW Marks could be translated to "winery", "wine park" or "Australia". As such the ARRW Marks were considered to be substantially identical or deceptively similar to the Chinese Character Trade Mark.
Importantly, Justice Beach held that the use of the ARRW Marks also infringed the English Penfolds Trade Mark (in addition to the BEN FU Trade Mark and the Chinese Character Trade Mark).
As such the ARRW Marks were held to infringe the Southcorp marks. Because ARRW did not have any reasonable prospects of defending any of the claims brought by Southcorp, default judgment was made. ARRW was ordered to pay Southcorp $351,916.75 by way of an account of profits, plus interest for the infringement, as well as Southcorp's costs of bringing the claim.
For further information, please contact:
Lisa Ritson, Partner, Ashurst
Lisa.ritson@ashurst.com
