Australia: Urban Ails: Federal Court cancels Urban Alley Brewery's trade mark after legal battle with La Sirène

Last week, the Federal Court of Australia delivered judgment in Urban Alley Brewery v La Sirène¹, finding 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.

The case has implications for businesses seeking to use, register and enforce registered trade marks with descriptive elements.

Trouble Brewing

In February 2018, Urban Alley commenced proceedings against La Sirène, claiming La Sirène's use of URBAN PALE for beer constituted infringement of Urban Alley's registered trade mark for URBAN ALE (registered from 14 June 2016 for beer in class 32), misleading and deceptive conduct, and passing off.

La Sirène cross-claimed for, among other things, the cancellation of Urban Alley's URBAN ALE trade mark on the basis that the mark was not capable of distinguishing Urban Alley's goods from the goods of other traders.

Background Flavour

In May 2016, Urban Alley launched its URBAN ALE beer. Promotional material referred to URBAN ALE as the style of the beer, with the name of the product being ONCE BITTER. Evidence revealed Urban Alley wanted the name to be descriptive of the style of beer, a new style that hadn't been done before – a cross between an Australian golden ale and a Belgian blonde.

By the end of 2017, Urban Alley dropped the ONCE BITTER label, thinking consumers would believe the beer product was in the bitter style, and subsequently emphasised the URBAN ALE branding in large lettering.

Meanwhile, by December 2015 La Sirène was referring to itself as an 'urban farmhouse' by virtue of its location in Alphington (an inner city suburb of Melbourne) near a creek and national park, where it was able to take advantage of native yeast and bacteria for its brewing process of farmhouse ales. La Sirène began documenting a range of potential beer products, including one referred to as an 'urban ale' for which a recipe was created in February 2016.

Between June 2016 and October 2016, La Sirène decided to name its new pale ale product FARMHOUSE STYLE URBAN PALE BY LA SIRÈNE, to reflect the style (farmhouse), production location (urban), colour and type (pale ale). The first commercial batch of La Sirène's URBAN PALE product was launched in October 2016.

A Case of Bitters

La Sirène's response to Urban Alley's infringement claims were, in part, that:

• La Sirène had not engaged in the conduct alleged, because La Sirène had not used URBAN PALE as a trade mark; and
• La Sirène had used the words URBAN PALE in good faith to indicate the characteristics of its beer product (i.e. the production location, colour, and type of beer).

La Sirène also cross-claimed that Urban Alley's URBAN ALE trade mark should be cancelled pursuant to section 88 Trade Marks Act 1995 (Cth) (TMA) because (among other grounds) the mark was not capable of distinguishing Urban Alley's goods from those of other traders.

La Sirène submitted the words URBAN ALE described an ale made in an urban area, or intended for consumption by an urban audience, and that other urban breweries producing ale might choose those words without improper motive. Additionally, La Sirène argued Urban Alley had not used the URBAN ALE mark prior to the filing date of its trade mark to such an extent that it had come to distinguish Urban Alley's products. Rather, the label ONCE BITTER distinguished the source of the product, while URBAN ALE described the type of the product.

Urban Alley countered that the words URBAN ALE did not convey any meaning or idea to consumers as to the character or quality of the goods. They argued the words are capable of distinguishing because, in the context of beer, they have an allusive or metaphorical meaning of being cool, trendy, industrial or grungy.

Urban Legend

The Court accepted La Sirène's evidence that 'urban' has been extensively used in Australia in connection with inner-city breweries and beer products for a considerable length of time (and at least from 2010), both to craft beers and more mainstream products. O'Bryan J noted:

"The usage appears intended to convey not merely a generic city location, but a laudatory epithet ... indicating that the brewer or the beer is "fashionable", "trendy" or "cool"."

La Sirène's expert evidence included that of Matthew Kirkegaard (founder of Australian Brews News and award-winning beer writer), who stated:

"in the context of beer in Australia, "URBAN" does not have any particular significance in terms of beer style or flavour characteristics. It is a very generic term used to describe the location of a brewery or its target audience" and "it would be difficult to communicate the aesthetic of an inner-city brewery or describe the inner-city beer movement without using the word "URBAN"."

Kirkegaard further stated that URBAN ALE would not communicate anything to consumers about what to expect from a beer product with this label, other than that it was brewed in an urban location or marketed towards urban consumers, and that the beer was an ale rather than a lager.

Bitter Pils to Swallow

Ultimately, the Court accepted La Sirène's submissions, finding that:

• many traders had used the word 'urban' in relation to beer prior to the filing date of the URBAN ALE mark to describe inner city craft breweries and their beer products;
• URBAN ALE was not to any extent inherently adapted to distinguish Urban Alley's beer products from those of other traders;
• Urban Alley had not developed a significant reputation in the URBAN ALE mark;
• La Sirène was unaware of Urban Alley's use of the URBAN ALE mark prior to La Sirène adopting the words URBAN PALE in relation to its beer products;
• while Urban Alley had intended for the words URBAN ALE to come to mean a new style or flavour of beer, the words had not taken on that signification. Instead, they signified a craft beer brewed in an inner-city location, including via Urban Alley's own use of the words;
• the packaging and labelling of La Sirène's product differed in fundamental ways to the packaging of Urban Alley's product. In particular, La Sirène promoted its URBAN PALE product as being produced by La Sirène; and
• the public interest would be adversely affected if the registration of the URBAN ALE mark continued, in part because the words URBAN ALE are ones which other traders may wish to use in connection with beer products and breweries for their ordinary signification.

O'Bryan J ordered the Australian Trade Marks Register be rectified pursuant to section 88(1)(a) TMA by cancelling the registration of Urban Alley's URBAN ALE mark, and dismissed Urban Alley's claims against La Sirène of trade mark infringement, misleading and deceptive conduct, and passing off.

Beyond the Pale

This case serves as a timely reminder for brand owners seeking to use, register and enforce trade marks consisting of descriptive elements.

By choosing a brand with descriptive aspects, businesses run the risk of others using the name, causing brand dilution and making enforcement problematic. In addition, having a registered trade mark does not mean a mark is immune to challenge. Active, consistent, extensive and appropriate brand usage on packaging and marketing material is key to maintaining registered rights.

Businesses should also seek strategic advice prior to launching a new brand to ensure the brand is registrable, enforceable and an asset for the business.

Footnote

¹ [2020] FCA 82.

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