It’s ale gone pear shaped for Urban Alley: Appeal dismissed with costs

In February 2020, we reported on the Federal Court case of Urban Alley Brewery v La Sirène, in which the Federal Court of Australia found in favour of Melbourne brewer La Sirène’s cross-claim to have Melbourne brewer Urban Alley’s trade mark for URBAN ALE cancelled from the Australian Trade Marks Register.  Our case summary is available here.

A bitter end

The Full Court of the Federal Court of Australia has now handed down their decision in Urban Alley’s appeal from the Federal Court’s judgement.  The Full Court (Middleton, Yates, and Lee JJ) dismissed Urban Alley’s appeal with costs, agreeing with the primary judge (O’Bryan J) that Urban Alley’s URBAN ALE trade mark was not inherently adapted to distinguish, and should be cancelled.

Arguments on tap

Urban Alley’s grounds of appeal were (in summary) that the primary judge:

1. erred by ordering cancellation of Urban Alley’s URBAN ALE mark;

2. erred by finding that URBAN ALE was not capable of distinguishing Urban Alley’s beer, and that the mark had not acquired distinctiveness from Urban Alley’s use of the mark;

3. erred by finding that Urban Alley’s URBAN ALE mark was deceptively similar to another mark on the register (URBAN BREWING COMPANY), and that the mark was not capable of registration;

4. erred by finding La Sirène’s use of the words “Urban Pale” was not use as a trade mark, and therefore not infringing on Urban Alley’s URBAN ALE mark, on the basis that La Sirène’s use of the words “Urban Pale” were the most prominent on its labels, and that the words “Urban Pale” do not convey any significance in terms of style or flavour characteristics of beer and therefore could not be descriptive of La Sirène’s beer;

5. erred by finding La Sirène was able to rely on a defence to trade mark infringement in its use of the words “Urban Pale” – that is, La Sirène used the “Urban Pale” words in good faith to indicate a characteristic of its own beer product;

6. erred in finding La Sirène was able to rely on its own registered trade mark (1961654) for the words FARMHOUSE STYLE URBAN PALE BY LA SIRÈNE;

7. ought to have found La Sirène did not have a good faith defence to trade mark infringement on the basis that the attempted registration by La Sirène of a trade mark for URBAN PALE showed anticipated infringement; and

8. erred by finding the La Sirène label mark was not substantially identical with and/or deceptively similar to the URBAN ALE mark, and thus that it should not be cancelled.

Tasting notes

Urban Alley’s arguments for grounds 1, 2, 4, and 5 largely hinged on the fact that the parties had agreed, and the primary judge had found, that the words “Urban Ale” do not convey any significance in terms of style or flavour characteristics of beer.  Urban Alley argued this finding should have led the primary judge to find the mark was capable of distinguishing Urban Alley’s products from other traders.  Urban Alley relied on Note 1 to section 41(4) of the Trade Marks Act 1995 (Cth) in its argument.  The Note sets out a non-exhaustive list of characteristics which, if contained wholly within a trade mark, would indicate the trade mark is not inherently adapted to distinguish designated goods or services.  Urban Alley’s argument was that the word ‘Urban’ does not describe any relevant characteristic attributable to beer, having regard to the Note.

However, the Full Court was not persuaded by Urban Alley’s arguments, stating that the Note was guidance only, the characteristics listed were non-exhaustive, and that relevant characteristics attributable to beer concerned more than simply its style and flavour.  The Full Court found that a beer’s characteristics could encompass other attributes, including the fact the beer was a craft beer brewed in an inner-city location.  Indeed, the parties generally agreed that “urban” had become associated with craft beer products and breweries and referring to the fact that beer is produced in an inner-city location, which a certain segment of the market would regard as “cool” or “trendy”.

With respect to ground 3, the Full Court noted that the test of deceptive similarity “is a comparison between one mark and the impression of another mark carried away and hypothetically recalled, paying due regard to the fact that recollection is not always perfect.”  Even though the words “brewing company” and “ale” convey different things when seen side by side, there is a close association in meaning between the two, and when coupled with use of the common element “urban”, the Full Court agreed with the primary judge’s finding on the question of deceptive similarity.

Having rejected grounds 1, 2 and 3 of the appeal, the Full Court found Urban Alley’s case on infringement could not succeed, and grounds 4, 5, 6, 7, and 8 were also dismissed.

The big pitcher

Businesses seeking to use, register, and enforce a brand with descriptive aspects should take note.  This case highlights the risks of others being able to use the same or a similar name, even if the trade mark is registered.

Businesses should think carefully about the choice to use a brand with descriptive aspects, rather than a distinctive non-descriptive brand.  For businesses with descriptive branding, maintaining registered rights requires active, consistent, and appropriate brand usage on packaging and marketing material.

If you require any assistance with branding advice and strategy, please contact a member of our Intellectual Property team below.

Special thanks to Jennifer Ashlan, Lawyer and Alison Walshe, Senior Associate for their assistance in putting this article together.