Trade mark cancelled after Melbourne brewers' legal battle

A judge has cancelled Urban Alley Brewery’s “Urban Ale” trade mark after a legal battle with fellow brewer La Sirène.

Melbourne-based Urban Alley instigated the legal battle in 2018 which culminated in a hearing in June last year.

The brewery claimed that the use of the Urban Pale name by La Sirène constituted an infringement of its trade mark, as well as “misleading and deceptive conduct” in breach of consumer law.

In addition it accused La Sirène of “the tort of passing off”, where a business makes a (usually incorrect or unauthorised) connection with another’s good or services, which can or does threaten the reputation or commercial interests of the original party.

Last week a judge ruled that Urban Alley’s Urban Ale trademark would be cancelled. Justice O’Bryan found that the Urban Ale mark is not “inherently adapted” to distinguish Urban Alley’s beer products from those of other beer producers.

According to court documents, Urban Alley (then called Collins Street Brewery) launched its Once Bitter Urban Ale in early 2016.

The company, founded by Ze’ev Meltzer, became the owner of registered trademark Urban Ale, along with ‘Once Bitter’ in early 2017 after filing to register the trade mark in mid-2016.

A press release at the time reportedly explained that Urban Ale was a new beer style, “somewhere between an Aussie Golden Ale and a Belgian Blonde” rather than replicating a pale ale. It was referred to as Once Bitter in a number of articles listed around this time.

Urban Alley Brewery was officially launched under its new name in 2018, and at this stage dropped the ‘Once Bitter’ from the labels, as consumers “might think it had a bitter taste”.

Meanwhile, at the end of 2015 Eva and Costa Nikias, founders of the Alphington-based brewery La Sirène, began referring to the brewery as an ‘Urban Farmhouse’, relating to the types of farmhouse ales that La Sirène produce and its location.

The first commercial batch of La Sirène’s new pale ale, Urban Pale Ale, was commercially brewed in September and canned in October of 2016. Just over a year later, Urban Alley commenced proceedings against the brewery.

The arguments

The judge’s verdict was handed out in a complex 82-page judgement which covered beer styles, the use and meaning of “urban” in the beer world and confusion with existing trade marks.

No evidence was introduced by Urban Alley to support assertions of the possible confusion between its Once Bitter produce and La Sirène’s Urban Pale product, save anecdotal evidence from the brewery’s off-premises sales representative, who found Urban Alley’s version in a Dan Murphy’s under the similar La Sirène label.

Urban Alley argued that the Urban Ale mark is “sufficiently inherently adapted” to distinguish it from other beer products.

Urban Alley submitted that many trade marks have been registered which have the word ‘urban’ in them, and that neither Urban Alley nor any other trader is entitled to a monopoly over the word “urban” in respect of other beer products. It said it claims only monopoly over the Urban Ale mark.

However the judge said that while other companies had registered trademarks in relation to products with the word urban in them, they were in relation to products other than beer products which make them “wholly irrelevant to the statutory enquiry”.

La Sirène founders the Nikias’ gave evidence that at the time their brewery launched its Urban Pale product, they had not heard of Urban Alley’s Once Bitter product.

The judge also noted that while La Sirène filed a trademark application for Urban Pale in November 2016, Eva Nikias chose not to proceed as there were a number of other people using ‘urban’ in relation to beer and related goods and services, and ‘pale’ was a popular description of beer.

La Sirène argued that ‘urban’ ale describes a generic area relating to towns or cities, and when used in connection with beer is a “laudatory epithet to describe inner city craft breweries” and not inherently adapted to distinguish the beer produced by Urban Alley from the beer produced by another brewer, and that they are words that any other brewer might choose to use without an “improper motive”.

It said that the public interest would be “adversely affected” if registration of the Urban Ale mark is allowed to continue as it impedes the ability of other traders who want to use urban in connection with beer (of which La Sirène is one).

La Sirène said Urban Alley had not developed any significant reputation in the name Urban Ale, especially as it was promoted and sold under the Once Bitter name until at least May 2018. It pointed out that the cancellation of the Urban Ale mark would not prevent Urban Alley using the mark in connection with its products.

However Urban Alley said it had made “significant sales” of the Urban Alley product and significant investment in promoting the Urban Ale product and brand.

Despite these arguments, the judge ruled that Urban Alley had not put forward sufficient reason to justify allowing the Urban Ale trade mark to remain registered..

Analysis: Trademarking styles

“There’s a couple of interesting things to come out of the decision,” said James Omond, trade mark attorney and founder of Omond & Co.

“In essence the case can be summed up withthe judge’s comment that “there is a price to be paid for the advantages flowing from the position of an eloquently descriptive trade name”.

“In other words, it’s bad to have a descriptive name because it means you can’t protect it from use of something very similar by others.

“This case is unusual because the applicant wanted the name to be descriptive, but they wanted it to be descriptive of the beer style. The evidence was that it hadn’t become descriptive of that.

“The problem was that the judge ruled that it was descriptive of something else, which is any pale ale that’s brewed in an urban area. That means that anyone else can use urban if they are brewing in an inner city location.”

Omond suggested that it was a trade mark which perhaps should not have been registered in the first place due to this. But he also said the ruling proved a warning for other potentially litigious brewers.

“The scariest thing I think for brewers out there from this is that you might think you’re in a good position to sue someone, because you’ve got a registered trade mark and they appear to be infringing it by using something too similar,” he said.

“But if your trade mark shouldn’t have been registered in the first place for some reason, the infringement action you bring can lead to your trade mark being struck off.

“That is certainly not what they were intending when they brought the action.

“The evidence that was offered was not good for them, because when they used it initially, it was being used in a purely descriptive sense.”

He compared the trademarking of beer styles with pharmaceuticals, saying that while you can trademark a brand name such as Panadol, a brand version of the commonly-used and accepted general term of paracetamol, paracetamol cannot be trademarked.

“You shouldn’t be able to trade mark beer styles,” he explained.

“Even where you make up a style, technically if you’re saying it is the name of a style it shouldn’t be protectable, because everyone else should be able to brew that.

“The moral of that is that if you are coming out with a new style that hasn’t been done before, you don’t want to come out saying it’s a new style of beer called ‘Urban Ale’ for example, because that could come back to bite you.

“You need to be careful with the way you describe your product and how you brand it if you’re wanting to do a new style and somehow be the owner of that style, which is what Meltzer said he wanted to do in this case.”

Omond said that in this particular case the early name changes of Urban Ale had also caused challenges.

“It does muddy the waters a bit, ‘Once Bitter’ was the brand and Urban Ale was the style, they flipped that to make it the name of the product and that didn’t do them any favours in terms of the mindset the judge had.

“[Matt Kirkegaard] gave evidence in the case talking about whether you’d never tried it and you just saw the name Urban Ale, that wouldn’t give you any flavour cues apart from that it will be an ale rather than a lager. It doesn’t tell you if it will be super hoppy, or lightly hopped, or acidic, or high in bitterness, any of that.”

And this may not be the last time we see a similar dispute.

“I think we will continue to see [cases like this] come up for a couple of reasons. One is because the market is becoming even more crowded with 600-plus brewers out there.

“People are looking for a competitive advantage, a point of difference. The point of difference might be your location, who your brewer is, any one of a number of things.

“Some people may come up with a recipe that hasn’t been done before.

“But you can’t protect an idea. So what can you protect? You might not tell people that your secret ingredient is, like KFC – that’s their point of difference.

“As soon as you have a name that fulfills that function, that’s descriptive, you’re not going to be able to protect it as a trade mark.”

Disclaimer: Australian Brews News Editor Matt Kirkegaard was called as an expert witness at the proceedings. He has not been involved in the reporting of the case.

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