But when you have a successful business, competition is never far away. Properly protecting unique brand elements is vital in securing your market position and keeping competitors at bay, as Stone & Wood recently discovered the hard way.
In September 2016 the Federal Court of Australia handed down its ruling in Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd  FCA 820. Stone & Wood was unsuccessful in establishing its allegations against competitor craft brewery, Thunder Road, of trade mark infringement, misleading and deceptive conduct, and passing off of Stone & Wood’s brand.
The Stone & Wood Story
In 2008 Stone & Wood launched its unique “Stone & Wood Draft Ale”. After enjoying reasonable success, Stone & Wood undertook a rebranding in 2010 and relaunched the product as its now iconic “Stone & Wood Pacific Ale”. Stone & Wood Pacific Ale was at one time recorded as accounting for approximately 85% of the sales of Stone & Wood.
With a view to protecting its most valuable product, Stone & Wood applied for, and subsequently obtained registration of, its Stone & Wood Pacific Ale logo (below). The trade mark was registered in respect of “beer” products.
Thunder Road Brewing Enters the Scene
In January 2015 Thunder Road launched its own Pacific Ale beer, coined “Thunder Road Pacific Ale”. Upon becoming aware of Thunder Road’s actions, Stone & Wood was quick to issue letters of demand alleging that Thunder Road’s use of “Pacific Ale” in association with its products amounted to:
- An infringement of Stone & Wood’s trade mark rights;
- Breaches of the Australian Consumer Law, in particular misleading and deceptive conduct; and
- Passing off of Stone & Wood’s reputation.
Following receipt of Stone & Wood’s letters of demand, Thunder Road rebranded its product as “Thunder Road Pacific”. This was not sufficient to appease Stone & Wood, which commenced proceedings seeking injunctive relief and damages.
The Court’s Decision
The Federal Court found in favour of Thunder Road, dismissing Stone & Wood’s claims. The Federal Court also found in favour of Thunder Road with respect to its cross-claim that Stone & Wood had made groundless threats of legal proceedings in breach of the Trade Marks Act 1995 (Cth).
Central to the Court’s decision was the manner in which Stone & Wood used the term Pacific Ale in its branding. After taking into account all of the circumstances of the matter, the Court found that the term Pacific Ale was being used as a descriptive term (albeit an eloquent one) for Stone & Wood’s product, as opposed to a distinctive term. This is similar to the way lager and pilsner, for example, are used to describe a type of beer, as opposed to a specific brand.
As a result, the Court ruled that there was not a likelihood that the public would be misled or deceived by Thunder Road’s use of Pacific or Pacific Ale in association with its beer products. Furthermore, as the Pacific Ale term was found to be a descriptive element, the Court dismissed the allegations of trade mark infringement on the basis that the predominant distinguishing features of Stone & Wood’s trade mark were the words Stone & Wood and the accompanying logo.
Takeaways for Brand Owners
The decision for Stone & Wood illustrates that the registration of a trade mark will not necessarily protect all of the individual elements of that mark. Brand owners need to consider exactly how their brand is intended to be used, i.e. are the elements of the mark being used as a badge of origin to identify the goods and services provided, or are elements of the trade mark being used to describe the nature of goods/services being provided?
A well-structured marketing and business plan helps to determine which aspects of branding should be protected by way of trade mark registration. If Stone & Wood wished to protect Pacific Ale, the term should have been registered solus and utilised in a manner that made it clear Pacific Ale was a brand of Stone & Wood’s, as opposed to a particular kind of beer.
The fallout from failing to appropriately protect intellectual property can be dramatic. Where Stone & Wood once enjoyed a brand monopoly on Pacific Ale, it is now forced to contend with a number of Pacific Ale competitors. It is telling that in the months following the Stone & Wood decision, CUB released its own “Wild Yak Pacific Ale”.
If you’re not confident that your brand is adequately protected and safe from infringement, please get in touch with our trade marks team at firstname.lastname@example.org or on 07 3223 6100.