Energy Beverages LLC v Cantarella Bros Pty Ltd [2022] FCA 113.

In a trade mark dispute between energy drink giant (Energy Beverages LLC known as “EB”) and coffee supplier (Cantarella Bros Pty Ltd known as “Cantarella”), the Federal Court of Australia dismissed the appeals by EB for the oppositions to the non-use removal applications of MOTHERLAND and MOTHER LOADED ICE COFFEE (“MLIC”) marks under s 92(4)(b) of the Trade Marks Act 1995 (Cth) (“TMA”) on account, inter alia that there was lack of intention to use both the MOTHERLAND and MLIC marks as trade marks in good faith on their respective filing dates.

As for the opposition to the application of the MOTHERSKY mark, the Federal Court clarified, inter alia if coffee was “goods of the same description” as ready-to-drink coffee/tea in cans and upheld the decision of the delegate of the Registrar and allowed Cantarella’s mark to proceed to registration.

Federal Court of Australia

Judge: HALLEY J

Judgment Date: 18 February 2022

Background

On 11 January 2017, Cantarella, one of the earliest suppliers of pure coffee to the Australian market applied for trade mark no. 1819816 for MOTHERSKY in respect of goods “coffee; coffee beans; chocolate” in class 30 and for services “coffee roasting; coffee grinding” in class 40.

The application was accepted in June 2017 but opposed by EB on several grounds. EB relied on the following registered trade marks (cited marks):

• 1230388 MOTHER for goods in class 32 (“MOTHER 388 mark”)
• 1364858 MOTHER for goods in class 33 (“MOTHER 858 mark”)
• 1345404 MOTHERLAND for goods in class 32 (“MOTHERLAND mark”)
• 1408011 MOTHER LOADED ICED COFFEE for goods in classes 29 and 30 (“MLIC mark”)

On the 18 October 2019, the delegate of Registrar dismissed all the grounds of opposition (ss 42(b), 44 and 60 of the TMA) by EB and ordered the MOTHERSKY mark to proceed to registration. 

Removal Applications of MOTHERLAND and MLIC marks by Cantarella

24 Sept 2019 – MLIC

21 Dec 2020 – MOTHERLAND

Cantarella applied for the removal of the MLIC (under ss 92(4)(a) and 92(4)(b) of the TMA) and MOTHERLAND (under s 92(4)(b) of the TMA) on the 13 February 2018 and 12 February 2019 respectively and succeeded in the removal of MLIC and MOTHERLAND marks under s 92(4)(b). The relevant non-use period for MOTHERLAND was between 12 January 2016 to 12 January 2019 (MOTHERLAND Relevant Period).

EB sought to reduce its scope of goods for MLIC in class 29 to flavoured milk beverages; milk based beverages with or without fruit additives; liquid food supplements and nutritional supplements (other than for medicinal use); liquid food supplements with herbs (other than for medicinal use); drinks flavoured with herbs and having a milk base and in class 30 to Coffee; cocoa; chocolate; artificial coffee; beverages in this class including coffee based beverages and chocolate based beverages; herbal infusions (other than for medicinal use) (together MLIC Protected Goods) and scope of goods forMOTHERLAND in class 32 to drinking waters, flavoured waters, mineral and aerated waters; carbonated soft drinks, energy drinks and sports drinks. (MOTHERLAND Protected Goods).

EB appealed against the decisions of the delegate of the Registrar for the oppositions to the non-use removal applications. Before the Federal Court of Australia, the issues, inter alia to be determined included if TCCC, the predecessor of EB, forMLIC had intention in good faith to use the mark at its filing date (for MLIC Protected Goods) and whether EB used the MOTHERLAND mark for its MOTHERLAND Protected Goods during the MOTEHRLAND Relevant Period.

Halley J, determined the issues on the basis of the following observations:

• That the markets for coffee and Ready to Drink (“RTD”) products such as ice coffee, iced tea and cold brewed coffee sold in cans are different.
• His Honour was not persuaded that there was any material interface between energy drinks and coffee or significant overlaps between the marketing and sales of energy drinks and coffee.
• His Honour was not satisfied that the evidence adduced in the appeals established that the market in which energy drinks is supplied, at least in Australia extends to other RTD products such as iced coffee, iced tea and cold brewed coffee sold in cans.

Insofar as MLIC, Halley J found that EB’s reliance on its MOTHER-derivative marks in relation to several varieties of energy drinks provided no support for the alleged intention of TCCC. TCCC’s filing of MLIC mark was only prima facie evidence of intention to use the mark at the time it was filed. The absence of any use of the mark in the last ten years since it was registered gave rise to the inference that it had no good faith intention to use the mark existed at the date of the application. In the absence of evidence of use, his Honour was satisfied that TCCC did not have intention in good faith to use the mark for its MLIC Protected Goods at the filing date and hence EB failed to discharge its onus under s 92(4)(a) of the TMA.

His Honour did not find MOTHERLAND being used as a badge of origin to distinguish its energy drinks from TCCC and subsequently EB from other manufacturers and hence the MOTHERLAND mark was not being used as a trade mark for goods in respect of which it was registered for. His Honour was also not satisfied that the advertisement that EB purported to have appeared on the social media page, many years after a promotional campaign was use of the MOTHERLAND mark in the course of trade. Consequently, his Honour held that there was no use of the MOTHERLAND mark for its MOTHERLAND Protected Goods during the MOTHERLAND Relevant Period.

The Court found, inter alia the absence of intention or use MLIC and MOTHERLAND as trade marks at the date of filing for registration militated strongly against an exercise of s 101(3) discretion to retain the marks on the register. The Court did not find EB persuasive in advancing its case for both MOTHERLAND and MLIC marks. In the absence of use, abandonment of the marks became irrelevant. Residual reputation was insignificant. His Honour took the view that there was no material convergence of energy drinks with pure coffee products even though there was use of common distribution channels and retail outlets and held that energy drinks and pure coffee products were not goods of the same description. On balance, his Honour saw no need to exercise discretion under s 101(3) to retain MOTHERLAND and MLIC marks on the register. 

Opposition to MOTHERSKY trade mark application

The goods covered by MLIC for coffee in class 30 was held to be closely related to services in class 40 applied for by MOTHERSKY in relation to coffee grinding and coffee roasting but the Halley J did not take the view the flavoured milk (for MLIC) were goods of the same description as coffee; coffee beans; chocolate (goods covered by MOTHERSKY). Halley J considered the purchase of a refrigerated product in a cardboard or plastic bottle for immediate consumption had little relationship to a freshly brewed cup of coffee derived from grinded coffee beans or capsule. RTD coffee and iced coffee products and EB’s competitors using their coffee marks to similar products do not sufficiently form a close relationship to conclude that coffee and flavoured milk are goods of the same description.

As for MOTHERLAND, MOTHER 388 and MOTHER 858 marks, the Court did not take an oversimplistic view that coffee and non-alcoholic beverages were goods of the same description, having considered the form, function and the origin of how the beverages came about. The common distribution channel between the products was held not to be determinative of whether the goods were of the same description.

The Court took the view that MOTHERSKY when assessed against MOTHERLAND, MLIC, MOTHER 388 and MOTHER 858 marks were visually, aurally and “materially different” conceptually and not sufficient to amount to resemblance that would likely confuse or deceive. On balance, the Court upheld the findings of the delegate of the Registrar and dismissed the ground of opposition under s 44.

His Honour found reputation of MOTHER-derivative marks established narrowly for “energy drinks” and held that the use of the MOTHERSKY mark for its applied goods and services would unlikely cause confusion among consumers and consequently dismissed the s 60 ground of opposition. Since the s 42(b) ground of opposition under ss 18 and 29 of the ACL was more stringent than s 60, the ground under s 42(b) was dismissed as well.

Key Takeaways

The case further confirms the following observed by Yates J in Frucor Beverages Limited v The Coca-Cola Company^[1]that ‘Energy drinks are accepted in the beverage industry as a separate and distinct category of non-alcoholic drink’^[2]and are ‘presented to the public as a stand-alone drinks category’.^[3]

The present case also establishes that:

• The markets for coffee and RTD iced coffee, iced tea, cold brewed coffee sold in cans are different
• Energy drinks are not goods of the same description as RTD iced coffee, iced tea, and cold brewed coffee sold in cans
• Energy drinks and coffee, even though may contain caffeine are not goods of the same description.

The filing an application for trade mark is only prima facie evidence of an intention to use the mark at the filing date. In order to demonstrate use of a trade mark in good faith it is necessary to show an ordinary and genuine use of the mark, judged by commercial standards: New South Wales Dairy Corporation v Murray Goulburn Co-operative Co Ltd and Another (1989) 86 ALR 549 at 567 (Gummow J), citing Re Concord Trade Mark [1987] FSR 209 (Falconer J) (with respect to the equivalent provision in the British legislation, s 26 of the Trade Marks Act 1938 (UK) (UK Act)). Failure to produce evidence that one had an intention to use the mark may lead the Court to infer that there is an absence of bona fide intention to use the mark at the filing date.

Disclaimer: The above is provided to assist in the understanding of the decision by the Federal Court of Australia. It should not be relied upon as legal advice. Any errors or omissions are the author’s. For queries related to the article, please contact the author here.

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^[1] [2018] FCA 993.

^[2] Ibid [36].

^[3] Ibid [48].