INTA Bulletin

July 1, 2018 Vol. 73 No. 11 Back to Bulletin Main Page

AUSTRALIA: Stone & Wood Loses Pacific Ale Appeal

In Stone & Wood Group Pty Ltd v. Intellectual Property Development Corporation Pty Ltd [Mar. 9, 2018] FCAFC 29, Stone & Wood lost its appeal against Intellectual Property Development Corporation Pty Ltd (trading as Thunder Road) in relation to Thunder Road’s alleged misappropriation of the word “Pacific” with respect to beer.

Stone & Wood launched the PACIFIC ALE brand in 2010, and it has been Stone & Wood’s flagship beer ever since (approximately 80 percent of its sales). Thunder Road launched its “Thunder Road Pacific Ale” in 2015 (renamed “Thunder Road Pacific” after Stone & Wood’s first demand letter).

Not satisfied with the name change, Stone & Wood launched proceedings claiming:
  • Thunder Road’s use of the word “Pacific” amounted to misleading and deceptive conduct and representations; 
  • passing off of Thunder Road’s beer as Stone & Wood’s beer; and 
  • trademark infringement.

Thunder Road successfully defended all claims and obtained a declaration that Stone & Wood had made groundless threats of trademark infringement.

Stone & Wood appealed on six grounds, including that the primary judge incorrectly found that:
  • Stone & Wood’s reputation in the word “Pacific” was not as substantial as it in fact was;
  • The term “Pacific” was/is descriptive (or had descriptive aspect); and 
  • The name “Pacific Ale” did not distinguish Stone & Wood’s beer from the beer of other traders.
All grounds of appeal were rejected and the primary judge’s decision was upheld on the basis that:
  • Stone & Wood’s reputation existed in its trademark, STONE & WOOD PACIFIC ALE, of which “Pacific Ale” made up only a very small part;
  • The two beers were either: 
    o Not sold in the same venues/stores and therefore confusion was unlikely to occur; or
    o Were sold closely together in stores, allowing easy comparison of the products, which would    allow the consumer to discern between the different products; and
  • Although Thunder Road had chosen “Pacific” to take advantage of Stone & Wood’s success, it had used the name in a way that was not confusing, misleading, or deceptive. 
It is apparent that the biggest problem with Stone & Wood’s case was that its marketing promoted Pacific Ale as a style of beer and that the name was almost always accompanied by the STONE & WOOD trademark. As a result, Thunder Road’s appropriation of “Pacific,” combined with its own clear branding as THUNDER ROAD, was unlikely to confuse, mislead, or deceive consumers.

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