Energy Beverages LLC (EB) – the owner of the MOTHER line of energy drinks – recently lost its appeal against the Trade Marks Registrar’s decision to remove two of its registered marks, MOTHERLAND (no. 1345404) and MOTHER LOADED ICED COFFEE (no. 1408011) (MLIC) for non-use. In the latest instalment of the legal battle between the energy drinks giant and Cantarella Bros Pty Ltd (Cantarella), EB also lost its appeal against the Registrar’s decision to dismiss its opposition to Cantarella’s MOTHERSKY trade mark (no. 1819816). In Energy Beverages LLC v Cantarella Bros Pty Ltd [2022] FCA 113, Justice Halley of the Federal Court, sitting alone, dismissed EB’s appeals with costs. Given the breadth of the issues discussed in his Honour’s judgment, this case note will focus on his Honour’s reasoning in upholding Cantarella’s non-use removal application in respect of the MOTHERLAND and MLIC marks.
Key takeaway
This case serves as a poignant reminder that, at the time of filing a trade mark application, an applicant must have a concrete and concluded intention to use that mark in respect of all goods and services covered by the application. It is insufficient to deliberate over the potential uses of the mark without making any concrete plans on how the mark will be used in respect of all designated goods and services. Once the trade mark has been registered, it is equally important for the owner to continue their use of the mark and be able to evidence such continued use, to ensure the mark does not become vulnerable to a removal action for non-use.
Background
In June 2015, EB acquired the MOTHERLAND and MLIC marks from The Coca-Cola Company (TCCC).
The MOTHERLAND mark has a priority date of 11 February 2010 and is registered in class 32. For the purpose of the appeal, EB had sought to limit the goods covered by the registration to “drinking waters, flavoured waters, mineral and aerated waters; carbonated soft drinks energy drinks and sports drinks” (MOTHERLAND Protected Goods).
The MLIC mark has a priority date of 8 February 2011 and is registered in classes 29 and 30. Again, for the purpose of the appeal, EB had sought to limit the goods covered by the registration to:
- class 29: 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;
- class 30: coffee; cocoa; chocolate; artificial coffee; beverages in this class including coffee based beverages and chocolate based beverages; herbal infusions (other than for medicinal use)
(collectively, the MLIC Protected Goods).
Pursuant to section 92(4)(b) of the Act, the Registrar granted Cantarella’s application for the removal of both marks on the basis that EB had not used the marks during the relevant non-use removal periods.
Issues in dispute
On appeal to the Federal Court, EB conceded that it had not used the MLIC mark in relation to the MLIC Protected Goods in Australia, whether during the relevant non-use removal period, or at all. Accordingly, the parties agreed to the following issues for determination:
- as at the priority date of the MLIC mark, did TCCC have an intention to use, in good faith, the MLIC mark in Australia in relation to the MLIC Protected Goods?
- did EB use the MOTHERLAND mark in respect of the goods covered by the registration during the relevant non-use removal period, namely 12 January 2016 to 12 January 2019?
- are there facts and circumstances that warrant the exercise of the discretion under section 101(3) of the Act to allow the marks to remain registered in respect of some or all of the protected goods?
Justice Halley’s findings
At [161]-[168] Halley J set out a useful summary of the general principles applicable to the determination of whether a trade mark owner had intended to use, and had actually used, a trade mark in good faith.
Intention to use – section 92(4)(a)
In determining whether TCCC (as the previous owner of the MLIC mark) had intended to use the mark in Australia on the date of filing, his Honour observed that the lodgment of a trade mark application is considered to be prima facie evidence of an intention to use the mark. However, once the opponent has made out a prima facie case that there was a lack of such intention, the onus then shifts to the applicant to establish that intention. Interestingly, any subsequent use (or lack thereof) of the mark after the date of filing may be relevant for the purpose of drawing an inference about the owner’s intention at the time of filing.
One striking issue in this case was the fact that EB was unable to produce any internal documentary evidence that disclosed a concluded decision any dairy coffee products where to be launched in Australia at the filing date under the MOTHER brand. EB produced confidential planning documents that reflected genuine consideration of potential future product launches, and sought to rely on an article dated 20 June 2010 in the Sunday Times newspaper which reported that “Coca-Cola Amatil is rumoured to be working on a dairy version of its popular Mother energy drink”.
Further, EB submitted that, given TCCC had used and registered MOTHER-derivative marks, such as MOTHER BIG SHOT and MOTHER GREEN STORM, in respect of its various energy drinks, registering the MLIC mark was consistent with that brand strategy insofar as that mark also covered beverages. However, his Honour was not persuaded that a good faith intention to use the MLIC mark could be inferred from any of the matters relied upon by EB.
In light of the agreed facts that various MOTHER marks had been in use since 2007 and that EB had sold hundreds of millions of cans of MOTHER energy drinks in Australia, it was telling that the MLIC mark had never been used in the decade since its registration. In his Honour’s view, this lack of use, coupled with the fact that EB had not made concrete plans to launch an ice coffee beverage, gave rise to a strong inference that no good faith intention to use the MLIC mark existed at the priority date.
Actual use – section 92(4)(b)
As to whether EB used the MOTHERLAND mark in good faith during the relevant non-use removal period, his Honour at [167] referred to NSW Dairy Corporation v Murray Goulburn Co-operative Co Ltd (1989) 86 ALR 548 in which Gummow J held, at 567, that the trade mark owner needs to demonstrate ordinary and genuine use of the mark, judged by commercial standards. While a single act of sale may be insufficient to satisfy this requirement, Halley J noted that even a relatively small amount of use may suffice.
MOTHERLAND Commercial
In an attempt to demonstrate genuine commercial use of the MOTHERLAND mark during the relevant non-use period, namely 12 January 2016 to 12 January 2019, EB relied heavily on evidence of a MOTHERLAND advertising campaign run by TCCC from 2010 to 2011. EB submitted that the campaign was based on a marketing construct, namely a fictional theme park called ‘Motherland’ tailored to MOTHER-drinking consumers. The centrepiece of that campaign was a MOTHERLAND commercial that was broadcast on free-to-air television in 2010.
A 15-second video of the commercial (MOTHERLAND video) was posted on EB’s dedicated MOTHER YouTube and Facebook pages in 2011 and remained accessible until 2021. EB submitted that consumers who had viewed the MOTHERLAND video would recognise the MOTHERLAND mark as possessing the character of the MOTHER brand. Further, the continued online presence of the MOTHERLAND video had the purpose and effect of promoting the energy drinks (which remained available for purchase throughout the relevant non-use period period).
In other words, EB submitted that the MOTHERLAND video constituted an invitation to treat, and was accordingly a genuine commercial use of MOTHERLAND as a trade mark. In finding that the MOTHERLAND video did not constitute use of MOTHERLAND as a trade mark, his Honour drew a distinction between use of MOTHERLAND as a marketing construct (namely, the setting of a fictional narrative which promoted MOTHER branded products), and use of the mark as a badge of origin for the MOTHERLAND Protected Goods.
A particularly salient factor was the depiction of the word MOTHERLAND in the video, with MOTHER rendered in a memorable black gothic font with twirls, and LAND in normal red font, and the whole word positioned alongside a can of MOTHER energy drink. In light of this, his Honour held that the MOTHER mark, rather than the MOTHERLAND mark, was used in the video as a badge of origin for the MOTHER energy drinks. Even if the MOTHERLAND video could constitute use of MOTHERLAND as a trade mark, his Honour was not persuaded that the video established genuine commercial use of the mark during the non-use removal period. His Honour accepted expert evidence to the effect that once a video has been uploaded onto Facebook and YouTube, it simply remains online until its removal from those platforms.
Further, EB did not adduce any evidence of it publishing a link to the video or otherwise making it available, or evidence as to how a person could find that link. Accordingly, his Honour held that the fact that the MOTHERLAND video had remained online since 2011 could not, in itself, establish genuine commercial use of the mark during the non-use removal period between 2016 and 2019.
Comments on social media
EB also sought to rely on two comments posted on the MOTHER Facebook and YouTube pages during the non-use removal period, which appeared to refer to the depiction of a theme park in the MOTHERLAND video.
The comments were posted by persons whose identities and physical locations were not disclosed in the evidence, and did not suggest any engagement with the MOTHER energy drinks. Further, it was unclear whether the comments were made after those persons had viewed the MOTHERLAND video in the course of trade, or at all. In finding that the comments similarly did not constitute use of MOTHERLAND as a trade mark, his Honour made the general observation that comments or other forms of online engagement by Australian consumers on a website that did not specifically target Australian consumers did not, prima facie, amount to use as a trade mark. More broadly, his Honour noted at [216] that:
The uploading of content on a website outside Australia, by itself, was insufficient to constitute use of a mark in any jurisdiction in which it was possible to access the content. A use in a jurisdiction required both an intention to target a particular jurisdiction and a downloading of the content in that jurisdiction.
Accordingly, given it was impossible to determine on the evidence whether the comments were posted by users who were physically located in Australia at the time of posting, his Honour found that the comments were not capable of demonstrating use of the MOTHERLAND mark in Australia.
Discretion – section 101(3)
In determining whether facts and circumstances existed to justify the exercise of the discretion under section 103(3) of the Act to allow the MOTHERLAND and MLIC marks to remain on the register, his Honour noted at [228] that the primary concern was to maintain the purity of the register as an accurate record of marks that continue to perform their statutory function of indicating trade origins. Given his Honour’s earlier findings in respect of EB’s lack of intention to use, or lack of actual use, of the marks, it was clear that those marks had failed to perform their designated statutory function.
Accordingly, his Honour held that the facts and circumstances of the case did not warrant the exercise of the discretion to allow the marks to remain on the register.
You can access the full text of the Court’s decision here.
On 4 March 2022, EB applied for leave to appeal this decision. And in related news, EB’s latest trade mark applications for MOTHER (no. 2235275), MOTHER (stylised) (no. 2235272 and 2235274), MOTHERLAND (no. 2005023) and MOTHER LOADED ICED COFFEE (no. 1935640) are currently under opposition by Cantarella.
The battle of the beverages continues.
