2009 International Law Update, Volume 15, Number 1 (January)

2009 International Law Update, Volume 15, Number 1 (January)

Legal Analyses published by Mike Meier, Attorney at Law. Copyright 2017 Mike Meier. www.internationallawinfo.com. 

HABEAS CORPUS

In case of 17 Chinese Muslims detained at Guantanamo Bay and not classified as “enemy combatants,” District of Columbia Circuit reverses grant of habeas corpus because Habeas statute does not grant detainees right to be taken to U.S. for release

This case concerns 17 Chinese citizens held at Guantanamo Bay Naval Base in Cuba. They are Uighurs, members of a Muslim minority in far‑west China. They argue that the U.S. Government must take them to U.S. territory and release them. In China, on the other hand, they would face arrest, torture and possible execution.

The Petitioners had settled in the Tora Bora mountains in Afghanistan, and were eventually turned over to the U.S. military as “enemy combatants.” At hearings before the Combatant Status Review Tribunal in Guantanamo, the evidence indicated that the Petitioners intended to fight the Chinese government and had received firearms training. Furthermore, an Uighur independence group allegedly associated with al Qaida or the Taliban had run the Petitioners’ camp The District of Columbia federal court issued the writ and this appeal ensued. The U.S. Court of Appeals for the District of Columbia Circuit reverses.

As a general principle, it is not within the province of any court to review the Government’s decision to exclude an alien from the U.S., unless there is an exception in the law. Here, the U.S. Government did not allow the Petitioners to enter the U.S. The crucial question then is what authority the district court had to set aside the Government’s decision.

“[W]hat law authorized the district court to order the government to bring Petitioners to the United States and release them here? It cannot be that because the court had habeas jurisdiction, see Boumediene v. Bush, 128 S. Ct. 2229 (2008), it could fashion the sort of remedy Petitioners desired. .. [T]he Supreme Court held that the decision whether to allow an alien to enter the country was for the political departments, not the Judiciary.”

“Petitioners and the amici supporting them invoke the tradition of the Great Writ as a protection of liberty. As part of that tradition, they say, a court with habeas jurisdiction has always had the power to order the prisoner’s release if he was being held unlawfully. But as in Munaf v. Geren, 128 S. Ct. 2207, 2221 (2008), Petitioners are not seeking ‘simple release.’ Far from it. They asked for, and received, a court order compelling the Executive to release them into the United States outside the framework of the immigration laws. Whatever may be the content of common law habeas corpus, we are certain that no habeas court since the time of Edward I ever ordered such an extraordinary remedy ...”

“An undercurrent of Petitioners’ arguments is that they deserve to be released into this country after all they have endured at (sic) hands of the United States. But such sentiments, however high‑minded, do not represent a legal basis for upsetting settled law and overriding the prerogatives of the Political Branches. We do not know whether all Petitioners or any of them would qualify for entry or admission under the immigration laws. ...”

“We do know that there is insufficient evidence to classify them as enemy combatants—enemies, that is, of the United States. But that hardly qualifies Petitioners for admission. Nor does their detention at Guantanamo for many years entitle them to enter the United States. Whatever the scope of habeas corpus, the writ has never been compensatory in nature. See Heck v. Humphrey, 512 U.S. 477, 481 (1994) ... The government has represented that it is continuing diplomatic attempts to find an appropriate country willing to admit petitioners, and we have no reason to doubt that it is doing so. Nor do we have the power to require anything more.” [Slip op. 10‑12]

Citation: Kiyemba v. Obama, No. 08‑5424 (D.C. Cir. February 18, 2009).

Judgments (Foreign, Enforcement)

Florida Intermediate Court of Appeal reverses refusal of lower court to domesticate foreign money judgment where Defendant failed to challenge sufficiency of process service in Israeli court thus waiving that defense in Florida court under Florida’s Foreign Judgment Recognition Act

Keler Israel and several others (Plaintiffs), all of whom are Israeli citizens, bought homes at the Lake Marion Golf Resort in Florida. Flick Mortgage Investors, Inc. (Defendant) held the mortgages. It turned out that those homes were worth substantially less than the amount which the Plaintiffs had paid, and they sued Defendant and others in Israel. In October 2002, Plaintiffs served the Israeli complaint upon Defendant in the U.S. by registered mail.

In the Israeli court, Defendant unsuccessfully moved to challenge jurisdiction but neglected to attack the service of process by registered mail. His local attorney argued the motion, but Defendant did not take further part in the Israeli litigation. In June 2005, the Israeli court entered a judgment against Defendant for almost $1.5 million. Defendant did not appeal. Plaintiffs then sought recognition and enforcement of the Israeli judgment in the Dade County court under Florida’s Uniform Out‑of‑country Foreign Money‑Judgment Recognition Act, §§ 55.601.607, Fla. Stat. (2008).

Defendant moved for summary judgment, claiming that the Israeli court did not have personal jurisdiction because of insufficient service of process. The court gave summary judgment to Defendant, declining to domesticate the Israeli money judgment. Plaintiffs appealed.

The Florida Court of Appeal reverses. In the first place, Defendant failed to present any substantive defense to recognition of the Israeli judgment. Secondly, Defendant waived the defense of insufficient service of process by failing to raise it before the Israeli court.

The Act generally provides that a foreign country money judgment is enforceable unless one of the specified exceptions applies. Among the mandatory exceptions to enforcement are (1) that the foreign court was not an impartial tribunal which accords due process; (2) that the foreign court lacked personal jurisdiction over the defendant; and (3) that the foreign court lacked jurisdiction over the subject matter. Section 55.605(1)(a)‑(c). The discretionary exceptions include one for insufficient service of process. While the Act does not expressly deal with the manner of service, it does focus on whether the Defendant had received “notice of the proceedings in sufficient time to enable him or her to defend.” Section 55.605(a)(2), Fla. Stat. (2008).

Here, Defendant actually did receive sufficient notice, and his attorney did appear in the Israeli court but failed to challenge the adequacy of the registered mail service to provide enough notice. The Act precludes a judgment debtor from collaterally attacking a foreign judgment on an issue that the defendant litigated and lost before a foreign court or had a chance to litigate that issue before the foreign court and neglected to do so.

“In Florida, failure to raise insufficiency of service of process as a ground for dismissal at the earliest opportunity constitutes a waiver of that defense. See Fla. R. Civ. P. 1.140(b); Re‑ Employment Servs. Ltd. v. Nat’l Loan Acquisitions Co., 969 So.2d 467, 470 (Fla. 5th DCA 2007). The same appears to be true in Israel. Thus, [Defendant’s] failure to raise this recognized defense in Israel constitutes a waiver of that defense and precludes collateral attack on the Israeli judgment here. See Dart v. Balaam, 953 S.W.2d at 480 (‘The [Uniform Foreign Country Money‑Judgments] Recognition Act precludes a judgment debtor from collaterally attacking a foreign judgment where an issue was litigated before a foreign court or the party was given the opportunity to litigate the issue before that court. Grounds for nonrecognition may be waived if a party had the right to assert that ground as an objection or defense in the foreign country but failed to do so’) see also Somportex Ltd. v. Philadelphia Chewing Gum Corp., 453 F.2d 435, 441 (3d Cir. 1971) (finding that where the defendant requested and was given the opportunity to challenge an English court’s exercise of personal jurisdiction in the English proceedings, but failed to do so, the defendant had waived the jurisdictional challenge such that it could not then raise it as a defense in an action to domesticate the judgment in the federal district court); Linda J. Silberman & Martin Lipton, Enforcement & Recognition of Foreign Country Judgments in the United States, 739 PLI/Lit 351, at 380 (March 2006) (‘If the defendant challenged the jurisdiction of the rendering court in the first action and the challenge was unsuccessful or not carried to conclusion, ... a renewed challenge to jurisdiction of the rendering court on that ground [in an enforcement and recognition action] is generally precluded. Such jurisdictional findings of the first court are res judicata with regard to sister state judgments.... A similar rule is usually held to apply with regard to foreign country judgments.’).”[2]

Citation: Israel v. Flick Mortgage Investors, Inc., 2008 WL 5213830; No. 3D07‑2715 (D.C. App. Fla., 3rd Dist. 12/16/2008).

MARITIME LAW (ANTI‑POLLUTION)

In matter of first impression, Second Circuit affirms conviction of Bahamian flag vessel’s management company, holding that false entries in its “oil record book” breached requirement” of U.S. Act to Prevent Pollution on Ships and implementing Regulations which do not conflict with international conventions against marine pollution

Ionia Management S.A. (Defendant) manages a 600‑foot oil tanker, the M/T Kriton under the flag of the Bahamas. The company is incorporated in Liberia and headquartered in Greece. The crew of the Kriton had allegedly discharged oily waste water on several occasions while delivering oil and petroleum to several U.S. ports, and made false entries in the “Oil Record Book” (ORB). A jury found Defendant guilty of violating the APPS requirement to maintain an accurate oil record book while in U.S. waters, as required under 33 C.F.R. § 151.25. Defendant appeals.

In a per curiam opinion, the U.S. Court of Appeals for the Second Circuit affirms the conviction. One of the issues on appeal is the requirement to maintain an ORB while in U.S. waters.

The intent of the Act to Prevent Pollution from Ships (APPS), 33 U.S.C. § 1901‑1912, is to implement two international multi‑party treaties to protect the marine environment. First is the 1973 International Convention for the Prevention of Pollution from Ships, Nov. 2, 1973, 1340 U. N. T. S. 184, and (2) the Protocol of 1978 Relating to the International Convention for the Prevention of Pollution from Ships [in force for U.S. Oct. 2, 1983]; 1340 U.N.T.S. 61 (jointly referred to as MARPOL). The goal of MARPOL was to control the output of pollution by oceangoing vessels.

As for oil pollution, MARPOL requires that a vessel process oil polluted water through oil filtration equipment. Annex I mandates that ships record all oil transfer operations, including discharge of bilge water, in an ORB that the vessel must make available for inspection by “competent authorities.” The Court holds that 33 CFR § 151.25 requires ships to “maintain” an ORB.

“The crux of the dispute before us focuses on the words ‘shall maintain’ in the APPS regulations regarding ORBs. Defendant argues that the word ‘maintain’ obligates it only to keep possession of an ORB, while the Government submits that the APPS requires Defendant to keep the ORB accurately. Shortly after Defendant filed its appeal in this case, the Fifth Circuit issued an opinion in United States v. Jho, 534 F.3d 398 (5th Cir. 2008), which presented a similar fact scenario and essentially identical arguments. ... As in the case sub judice, the defendants argued that international law prohibited the government from prosecuting these offenses that, they alleged, occurred on the high seas. Id. at 403.”

“The Fifth Circuit, reversing the district court, disagreed. It first held that the district court was incorrect in concluding that the alleged conduct—failing to ‘maintain’ an ORB—occurred outside of U.S. waters. Id. at 402‑03. The court reasoned that if the requirement to ‘maintain’ an ORB included only an obligation to record entries when discharges were made (an obligation violated on the high seas), and not to keep the book accurate (an obligation existent at U.S. ports), then the regulation would be ‘at odds with MARPOL and Congress’ clear intent under the APPS to prevent pollution at sea according to MARPOL.’ Id. at 403.

Because ‘[a]ccurate [ORBs] are necessary to carry out the goals of MARPOL and the APPS,’ the court found that, if record books ‘did not have to be `maintained’ while in the ports or navigable waters of the United States, then a foreign‑flagged vessel could avoid application of the record book requirements simply by falsifying all of its record book information just before entry into a port or navigable waters,’ and thus avoid detection. Id. Consequently, the Fifth Circuit held that the requirement to ‘maintain’ an ORB ‘impos[es] a duty upon a foreign‑flagged vessel to ensure that its [ORB] is accurate (or at least not knowingly inaccurate) upon entering the ports of navigable waters of the United States.’ Id.”

“Furthermore, the Jho court rejected the defendants’ argument that international law—i.e., the law of the flag doctrine [LFD] embodied in the United Nations Convention on the Law of the Sea (‘UNCLOS’) and MARPOL—limited the government’s jurisdiction to prosecute violations of domestic law committed in port. Id. at 409. Because the failure to maintain the ORB occurred in U.S. waters, there was no obligation to let the flag state prosecute the violation.”

“The Fifth Circuit noted that the ‘Supreme Court has recognized that the [LFD] does not completely trump a sovereign’s territorial jurisdiction to prosecute violations of its laws: The [LFD] is chiefly applicable to ships on the high seas, where there is no territorial sovereign; and, as respects ships in foreign territorial waters, it has little application beyond what is affirmatively or tacitly permitted by the local sovereign.’ Id. at 406 (quoting Cunard S.S. Co. v. Mellon, 262 U.S. 100, 123 (1923)). . Accordingly, the court found that the ORB offenses were charged ‘in accordance with’ the law of the flag. Id.”

“We agree for substantially the reasons stated by the Fifth Circuit in Jho. Any other reading would defeat the purpose of MARPOL and the APPS, and would be inconsistent with international law. The [LFD] depends on member states being able to report violations to flag states. If ships such as the Kriton did not have to maintain an accurate ORB, member states would be severely hampered in their ability to report violations to the flag state for enforcement, and the international system of reporting and accountability under MARPOL would collapse.” [Slip op. 7‑9].

“[W]e join the Fifth Circuit in holding that this provision imposes a duty on ships, upon entering the ports or navigable waters of the United States, to ensure that its ORB is accurate (or at least not knowingly inaccurate). We find that this requirement complies with international law as required by 33 U.S.C. § 1912, which provides that ‘[a]ny action taken under [the APPS] shall be taken in accordance with international law.’ In addition, it is supported by the regulation’s plain text and is necessary to advance the aims of the international treaties governing pollution on the high seas.” [Slip op. 4]

Citation: United States v. Ionia Management, No. 07‑5801‑cr (2d Cir. January 20, 2009).

SOVEREIGN IMMUNITY

Second Circuit finds that clauses in Argentine offering circulars for government bonds waiving sovereign immunity in Frankfurt and Buenos Aires courts, as well as for enforcement in other courts, also waived immunity under Foreign Sovereign Immunities Act thus supporting jurisdiction of U.S. court

Capital Ventures International (CVI) owns certain bonds issued by the Republic of Argentina. German law governs one group of bonds, denominated in German Marks and Euros (the German bonds). According to the offering circulars, Argentina submits to jurisdiction in Frankfurt, Germany, and in Buenos Aires, and waives any objection as to forum non conveniens. The prevailing party may enforce a final judgment in other jurisdictions as provided by law. The other group of bonds is listed in U.S. dollars.

In December 2001, Argentina declared a moratorium on its foreign debt and stopped paying. CVI reacted by accelerating the bonds it owned, making the principal due immediately. CVI filed this action in New York federal court in April 2005 . The district court gave summary judgment to CVI on the U.S. bonds. As for the German bonds, the court found that it lacked subject matter jurisdiction under the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1330(a), 1604 (FSIA). On these bonds, Argentina had tried to limit its waivers of sovereign immunity to the courts of Frankfurt and Buenos Aires.

CVI appealed. The U.S. Court of Appeals for the Second Circuit affirms in part and vacates in part.

The main question here is whether Argentina has explicitly waived its sovereign immunity from suit in the U.S. The FSIA is the statutory source for determining subject matter jurisdiction over any civil action against a foreign state. It preserves the traditional immunity of all foreign states unless a specific statutory exception applies. Section 1605(a)(1) provides an exception to sovereign immunity where “the sovereign state has waived immunity either explicitly or by implication.” The language in the offering circulars clearly waives Argentina’s immunity.

“Argentina advances the argument that § 13(4), read in conjunction with § 13(3), merely allows for judgments obtained pursuant to § 13(3) to be enforced in other courts. However, the language of subsection 4 is not so limited. Subsection 4 refers to ‘any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise),’ language that contemplates actions other than those to enforce judgments.”

“Further, subsection 3 ends with the provision that ‘a final judgment in any such suit ... in the courts mentioned above ... may be enforced in other jurisdictions by suit on the judgment or any other method provided by law.’ If the Republic’s interpretation of subsection 4 were adopted, this last sentence in subsection 3 would render subsection 4 superfluous, a result that should be avoided. ... Further, if subsection 4 were intended to discuss enforcement in other jurisdictions, we would expect that the same terms in the last sentence of subsection 3 would be repeated in subsection 4—but they are not. Accordingly, we do not read § 13(4) as applying only to the enforcement of judgments.”

“Argentina also argues that reading §13(4) as a waiver of sovereign immunity in any court renders subsection 3 superfluous, a result which, as just discussed, is disfavored. ... According to Argentina, under such a reading, Argentina has ‘agree[d] to jurisdiction in Germany and Argentina’ in subsection 3 and also ‘agree[d] to jurisdiction everywhere’ in subsection 4. Of course, such an interpretation of §13(4) would render subsection 3 superfluous—but that is not what subsection 4 says. Subsection 4 is a waiver of Argentina’s ‘immunity (sovereign or otherwise),’ but it does not waive other objections to suit that Argentina might have, such as objections based on lack of personal jurisdiction, improper venue, or forum non conveniens.”

“Section 13(3), on the other hand, provides that Argentina ‘submits to the non‑exclusive jurisdiction’ of the courts in Frankfurt and Buenos Aires as well as ‘waives ... the defense of an inconvenient forum ... and any ... objection ... on the grounds of venue, residence or domicile.’ It is thus clear that reading subsection 4 as a waiver of sovereign immunity in any court does not render subsection 3 superfluous.”

“Argentina also presses the argument that the case law reveals a requirement that, to be explicit, a waiver must contain a reference to the United States or a specific jurisdiction within the United States. We do not find such a requirement in the cases. Of course, a specific reference to the United States can be helpful in determining that a waiver meets the FSIA’s requirement of explicitness, ... but the statutory requirement is only that the waiver be ‘explicit.’ There can be explicit waivers without a reference to the United States, as the waiver of immunity in ‘any court’ in this case illustrates. ... Any other result would stray from the plain meaning of the statutory language.” [294‑5]

On the other hand, the Court finds that there is subject matter jurisdiction over the claims regarding the German bonds; Argentina had expressly waived its sovereign immunity in U.S. courts on those claims.

Citation: Capital Ventures Int’l, Republic of Argentina, 552 F.3d 289 (2d Cir. 2009).

TRADEMARKS

In trademark dispute between large U.S. beverage maker and large Australian beverage maker over use of “Barefoot” mark on its wine, Federal Court of Appeal rules that Australian company did infringe U.S. company’s mark

Michael Houlihan was the registered owner of the “Barefoot” trade mark in Australia from March 9, 1999 to January 17, 2005. He licensed the trade mark to Grape Links Inc, trading as “Barefoot Cellars”, a company he ran. The home base of the business lies in the United States . The class of goods in relation to which this trade mark was registered was class 33, “Wines”. Plaintiff acquired the Barefoot Cellars’ business and acquired the trade mark in January 2005.

Barefoot Cellars exported bottles of wine bearing the trade mark “Barefoot” to Germany in 2001. In 2002, Beach Avenue Wholesalers Pty. Ltd. (BAW) imported into Australia a very small number of bottles of wine from the German stock and sold some of them in Australia between May 2004 and May 2007. This is the non‑use period for the purposes of § 92(4)(b) the Trade Marks Act of 1995 (Cth) (TMA). BAW was a liquor wholesaler operating in Victoria, Australia. There was no evidence that Mr. Houlihan or anyone associated with Barefoot Cellars knew about this sale into, and in, the Australian market. Defendant began selling its beer using the trade mark “Barefoot Radler” in the Australian market in January 2008.

The primary judge made orders on June 27, 2008. The judge concluded that there had been non‑use of Plaintiff’s registered trade mark and, accordingly, ordered its removal from the trade mark Register as of the date of the judgment. As Defendant began using the mark Barefoot Radler as to its beer before then it was potentially an infringing use.

The primary judge, however, concluded that Defendant had not infringed Plaintiff’s registered mark. His Honor accepted the defense of Defendant that its actual use of the mark Barefoot Radler as to beer was not likely to deceive or cause confusion for the purposes of § 120(2) of the TMA, although the judge had earlier concluded that the mark Barefoot Radler was “deceptively similar” to the trade mark Barefoot. There was no infringement (1) because the defense had been made out and, (2) because his Honor also concluded that Defendant’s Radler beer and wine were not “goods of the same description” for the purposes of § 120(2)(a) of the TMA.

Plaintiff’s notice of appeal filed on July 15, 2008 challenged the primary judge’s conclusions (1) about non‑use of its registered trade mark, (2) whether the goods were of the same description and (3) whether the actual use of the allegedly infringing mark by Defendant was likely to deceive or cause confusion to the average buyer.

The notice also contended that, if Plaintiff used a trade mark during the non‑use period ( May 7, 2004 to May 8, 2007), it was a trade mark consisting of Barefoot with an image of a bare foot and not the registered trade mark and further that this use was not in good faith. Defendant filed a cross appeal alleging that the primary judge had erroneously failed to specify the effective date of removal from the Register of the Trade Mark No 787765 as May 8, 2007.

Before considering the primary judge’s analysis of the legal issues, some findings of fact not challenged in this appeal should be noted. As to the use of the registered trade mark in Australia in the non‑use period (May 7, 2004 to May 8, 2007), his Honour made the following findings about the 750ml bottles of wine prominently bearing the trademark Barefoot on the label on the front of the bottle: “The wine sold during that period—at least in part—can be traced back to wine originally exported from the United States to Germany and later imported into Australia.”

The Barefoot wine which ultimately found its way to Australia had initially been exported by Barefoot Cellars in the United States to Germany in 2001. The German purchaser, Einig‑Zenzen GmbH & Co, had placed the order for 60 cases of wine on February 12, 2001 and the wine had been shipped from the United States on February 14, 2001. Barefoot Cellars, by 2000, had arrangements in place for the international distribution of wine under the Barefoot brand with a number of companies, one of them being Einig‑Zenzen.

What happened to that wine after its arrival in Germany is not known, except to the extent that some of those wines were later imported by BAW into Australia in July 2002. To the limited extent that it assumes any relevance, the fact that the wine shipped to Australia was part of the shipment to Germany was evidenced by the serial number disclosed in the approval given by the United States government on February 14, 2001 to the export of that wine corresponding with the serial number on the carton of wine bought in September 2007 from BAW.

That wholesaler thereafter sold some quantity of the wine imported from Germany. The first sale took place prior to May 2004, namely on March 14, 2003. During the relevant period, there was a sale of a dozen bottles of Barefoot Red Zinfandel to a tavern in Queensland in October 2004. There was also a sale of three bottles of the same wine in Victoria in December 2004. There was a cash sale of a single bottle in July 2005. In addition to these sales there was the supply of Barefoot wine during the non‑use period to a company related to BAW supplied at a price comparable to other sales.

On this appeal, the Federal Court of Appeal ruled in Plaintiff’s favor. It then explains its rulings. “Broadly two issues arise in these proceedings. The first is whether, and from when, the registered trade mark of Plaintiff should be removed from the Register for non‑use. The second is whether there has been infringement of the registered trade mark by Defendant.”

24 “The first issue considered is whether there has been use of the registered mark in the non‑use period for the purposes of § 92(4)(b) of the TMA. 25. Removal of the trade mark was ordered by the primary judge pursuant to § 92(4)(b)(i) of the TMA which provides as follows: (b) ‘that the trade mark has remained registered for a continuous period of 3 years ending one month before the day on which the non‑use application is filed, and, at no time during that period, the person who was then the registered owner: (i) used the trade mark in Australia.”

26 “The bottles of wine offered for sale and sold in Australia bore the Barefoot mark and accordingly the mark was ‘used’ in relation to those goods in Australia within the meaning of § 7(4) of the TMA. The question is whether this use was by the registered owner as a consequence of use by Barefoot Cellars as authorised user.”

27 “As Plaintiff formulated the question it is whether, when a registered trade mark is used in Australia on, or in physical or other relation to the goods, which are offered for sale and sold here but manufactured overseas by an owner or authorised user of the mark who applied the mark to them, the use of the mark constitutes a use by the owner, even though that person may not know that the goods are being offered for sale or sold in Australia but rather sold them to a foreign distributor for resale without any limitation on where they might be resold. [28] There is no direct authority on this question.”

29 “[The] answer to the question, Plaintiff submitted, follows from three basic propositions of trade mark law: (a) first, the term ‘use’ in §§ 92(4)(b) and 100(3)(a) of the TMA refers to more than mere physical use of the mark, it refers to use of the mark as a badge of origin in the sense that it indicates a connection in the course of trade between goods and the owner of the mark. That is consistent with the definition of a trade mark, in § 17 of the TMA, as (a) ‘a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by another person’; (b) ‘ whether or not there has been use of a trade mark in this sense is to be determined objectively, and not by reference to the subjective intentions or knowledge of the person said to have used the mark; and (c) in the case of goods, use of a mark in the relevant sense commences when goods bearing the mark as a badge of origin enter the course of trade and ends only when the goods are bought for consumption.’”

30 “In our opinion, it is not the content of these propositions which is controversial, rather these propositions themselves which pose—but do not answer—important questions. For example what is meant by ‘used ... in the course of trade ... by a person’: § 17 TMA, when goods bearing a trade mark registered in Australia have entered this country.”

31 “Plaintiff submitted that, consistently with these propositions, when Barefoot Cellars applied, under licence from Mr. Houlihan, the Barefoot mark to its bottles of wine and exported them, it commenced to use the mark as a badge of origin indicating a connection in the course of trade between the trade mark owner and those bottles. The mark continued to perform this function while the bottles of wine bearing the mark remained in the course of trade, including when they were offered for sale and sold in Australia by BAW.”

“In this way, Barefoot Cellars (and, through it, the registered owner) continued to use the mark as a badge of origin in the course of trade until the bottles of wine were bought from BAW for consumption. Although neither Mr. Houlihan nor Barefoot Cellars may have known that the particular bottles of wine in question were being offered for sale and sold in Australia, this cannot affect the objective question of whether there was a use of the Barefoot mark by the registered owner.”

32 “Plaintiff did not challenge any of the primary judge’s findings of fact concerning Mr. Houlihan’s or Barefoot Cellars’ lack of knowledge of the use of the mark in Australia. However, it submitted that the Barefoot trade mark was used in Australia by the registered owner during the non‑use period by virtue of the importation of some wine bearing the registered trade mark by BAW and its subsequent sale in Australia.”

33 “Plaintiff submitted that the registered mark was used in Australia because it was affixed with the authorisation of the registered owner to goods which entered the course of trade in Australia, the registered trade mark remained affixed to the goods as a badge of origin and ‘intention and knowledge are simply irrelevant to an objective assessment of trade mark use’. [34] In our opinion, the conclusion of the primary judge was correct. The contention of Plaintiff that an owner of a registered trademark uses the mark in Australia simply because goods to which the owner (or an authorised user) has affixed the mark are traded in the ordinary course of trade in Australia should be rejected.”   

43 “Many authorities deal, in a variety of ways, with the question of the use of a trade mark in Australia in the context of related overseas use. There are none of which we are aware that proceed on any basis other than use in Australia involved or comprehended some act that was known either to have had, or potentially have, the result that the goods to which the mark was attached would be dealt with in some way within Australia in the course of trade.

47 “Turning to the provisions of the TMA, registration of a trade mark creates a statutory monopoly in relation to its use. However, to secure the monopoly, a person must claim to be the owner of the trade mark and, by dint of § 27(1)(b) of the TMA, is using or intending to use the trade mark, has authorised or intends to authorise another person to use the trade mark or intends to assign the trade mark to a body corporate which will use the trade mark. ‘Use’ (or user as it is sometimes spoken of) or ‘intended use’ is use in Australia: [Cite]. Ownership from ‘intended use’ necessarily involves a conscious resolve on the part of the person alleging ownership of future use in Australia.”

“No authority of which we are aware suggests that inadvertent, unknown and unintended use in Australia results in ownership of the mark for the purposes of registration under Australian law. As to § 27(1)(b), each of the several statutory preconditions to registration (except present use), are expressed in terms which appear to necessarily involve a consciousness on the part of the person claiming to be the owner that the use of the mark is proposed in Australia.”

“That flows from the several concepts in § 27(1)(b) involving an intention to use in Australia, prior or proposed authorisation of someone else to use in Australia or intention to assign for use in Australia. A person cannot unwittingly intend to do something, unwittingly authorise someone else to do something or unwittingly intend to assign something. Context strongly suggests likewise that use by the person claiming to be the owner: § 27(1)(b)(i), is not unwitting or inadvertent use but deliberate use of the mark in Australia as a badge of origin.”

48“ [T]he failure of a registered owner to continue to use the trade mark directly or indirectly or to give effect to the intention to use the trade mark (which ordinarily is presumed at the time registration is sought unless an opponent discharges the burden of proving the absence of intention) exposes the mark to removal from the Register under § 92. It is tolerably clear that for the statutory scheme of the TMA to be a cohesive one, the use to which § 92 is directed is use of the same character which would warrant registration of the trade mark in the first place. That is conduct, by or on behalf of the owner, associated with a witting or deliberate use of the trade mark in Australia.”

54 “Section 17 of the TMA provides: ‘A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.’ 55 Accordingly, the use of a trade mark is not use in a vacuum but rather it is use ‘in the course of trade by a person’.”

56 “In this case the course of trade was between Plaintiff and the wholesale company in Germany. There was, objectively considered, no course of trade between Plaintiff and BAW or any other party in Australia. The primary judge was ... correct in so finding.”

57 “Part of Plaintiff”s case raised the question of whether BAW used the Barefoot trade mark in Australia. Plaintiff submitted that BAW did not use the trade mark in selling or offering for sale bottles of wine bearing the mark and that it must have been a use by Barefoot Cellars and Houlihan. We do not accept this submission. A trade mark may be used by someone other than the registered owner or an authorised user. [B]y selecting the goods and selling them with the marks originally placed on them and by displaying them for sale, the local importer used the marks in Australia.”

59 “Not all non‑infringing use of a trade mark in the course of trade is use by the trade mark owner. [S]ection 17 does not provide that a trade mark is a sign used to distinguish goods dealt with or provided in the course of trade by the owner of the trade mark. Rather, it distinguishes goods dealt with, or provided in, the course of trade by a person.”

61 “In the result, the primary judge was correct in concluding that the trade mark Barefoot had not been used in Australia by Houlihan or Plaintiff and should be removed from the Register on the basis that the ground of removal in § 92(4)(b)(i) had been established. ... ”

“Also, given this conclusion, it is unnecessary to deal with the question of use in good faith raised by Defendant as a ground of removal: § 92(4)(b)(ii) and also two issues raised by Defendant in its amended notice of contention, namely that any use was by Grape Links Inc. which was not an authorised user and the trade mark used was not the registered mark Barefoot but rather was that word in conjunction with an image of a bare foot. We should, however, note that our conclusion that there was no use of the mark in Australia, necessarily means there was no use in good faith.”

63 “The only issue raised by the cross appeal is the effective date of removal from the Register of Australian Trade Mark No 787765 under §§ 92 and 101. The date of removal, Defendant contended, should have been May 8, 2007, not June 27, 2008.”

65 “From this point in the statutory scheme when the Court comes to make the order, the effect of the order is, in substance, determined by the TMA itself. That is because the task the Registrar must perform is, as expressly identified in § 101(2), to ‘remove the trade mark from the Register’. The expression ‘remove from the Register’ (an expression in the active voice) is defined in § 6 and that definition draws attention to § 13. While that latter section, in terms, is in the passive voice and identifies the circumstances in which a trade mark is taken to have been removed from the Register, it nonetheless makes plain that the Registrar is obliged to make an entry in the Register to the effect that all entries in the Register relating to the trade mark are taken to have been removed from the Register.”

68 “The primary judge concluded that Defendant’s Radler beer did not constitute ‘goods of the same description’ as wine (‘wines’ being the goods in respect of which Plaintiff’s trade mark was registered) for the purposes of § 120(2)(a). This conclusion was challenged by Plaintiff. Plaintiff submitted that the evidence before the primary judge ‘compellingly established... that Defendant’s Radler beer and wines are ‘goods of the same description’ for a number (sic) reasons: (1) Both Radler beer and wines are types of alcoholic beverage sold by the Australian alcoholic beverages industry; (2) Corporate groups, such as the group to which Defendant belongs, and large multi‑beverage companies produce and import both beer and wine; (3) Beer and wine are generally distributed by the same major wholesale distributors; (4) Radler beer and wine are likely to appeal to the same segment of consumers; (5) The relevant comparison is between customers who are targeted for the consumption of Radler beer and wine drinkers not ‘marginal and non‑beer drinkers’. Because Radler beer and wine are ‘sold to the same sort of customers’ it can be concluded that they are goods of the same description; (6)While it is not determinative, it has been held in a number of cases that ‘whisky and rum; beer and rum; liqueurs and beers, stout and ales; wines and spirits; rum and rum cocktails and sherry and a rum and passionfruit cocktail’ are goods of the same description.”

70 “The expression ‘goods of the same description’ is a term of art which was found in the legislative predecessors to the TMA. There is Full Court authority, MID Sydney Pty. Ltd. v Australian Tourism Co. Ltd. (1998) 90 F.C.R. 236, that authorities predating the enactment of the TMA in 1995 concerning the meaning and effect of the expression in a different context are apt to be applied in considering the meaning and effect of the expression in § 120(2). The fact that the Full Court was considering the expression ‘services of the same description’ rather than ‘goods of the same description’ does not appear to us to be a material difference”

“In this context, the Full Court referred to the [earlier precedent] of the High Court. Considerations ... include: the nature and characteristics of the goods, their origin, their purpose, whether they are usually produced by one and the same manufacturer or distributed by the same wholesale houses, whether they are sold in the same shops over the same counters, during the same seasons and to the same class or classes of customers and whether, by those engaged in the manufacture or distribution, they are regarded as belonging to the same trade.”

71 “It is true ... that § 120(2) requires a number of discrete questions to be asked and answered. One which may emerge in a particular factual context is whether the alleged infringing trade mark is deceptively similar to the registered trade mark. Another is whether it is used by the alleged infringer on goods of the same description as that of the registered trade mark. However these discrete questions arise in the context of determining, as the ultimate question, whether there has been infringement of the registered trade mark and, to that end, the object or purpose of the statutory prohibition on infringement is relevant.”

“It is to protect the statutory monopoly [that] the registered owner has to use the registered trade mark as a badge of origin. In the context of goods sold in the course of trade to the public, the question of whether the alleged infringement has arisen by the affixing of a deceptively similar trade mark is not divorced from the question of whether the alleged infringement has arisen by doing so in relation to goods of the same description.”

72 “The primary judge accepted that there were a number of factors which supported the view that Defendant’s beer and wine were goods at the same description. They were both alcoholic beverages and generally distributed by this same major wholesale distributors. The beer was intended to be an appealing alternative to wine and, in developing the product, Defendant deliberately set out to attract people who did not drink beer. Indeed it was developed with the deliberate objective of enticing consumers who previously drank wine but not beer.”

“Producers of alcoholic beverages are no longer confined to the production of beer, as opposed to wine, and large producers of alcoholic beverages now produce a range of products and market themselves as doing so. Companies which were once brewers now market and distribute a range of products including beer, wine, spirits, cider and non‑alcoholic drinks. Wine and beer are now frequently distributed by the same retailers. We agree that these matters point, and in our opinion point convincingly, to Defendant’s beer and wine being goods of the same description. Accordingly we would conclude that Defendant’s Radler beer constitutes goods of the same description as wine.”

75 “This conclusion immediately raises for consideration an issue in Defendant’s notice of contention. It is whether its trade mark Barefoot Radler is deceptively similar to Plaintiff’s registered mark Barefoot. We are here concerned with the imperfect recollection of Plaintiff’s Mark when considering Defendant’s mark. The essence of Defendant’s argument was that the word ‘Radler’ is sufficiently distinctive in the allegedly infringing mark it has used to remove the real possibility that the other word ‘Barefoot’ would be sufficiently evocative of Plaintiff’s trade mark to satisfy the test for deceptive similarity. ... Notwithstanding the inclusion of the word ‘Radler’ in Defendant’s mark, the word ‘Barefoot’ remains prominent and there is an obvious and clear link between that word and an imperfect recollection of Plaintiff’s registered mark such as to ‘likely deceive or cause confusion: § 10 TMA.”

76 “The last issue is Plaintiff’s challenge to the primary judge’s conclusion that Defendant cannot be taken to have infringed Plaintiff’s trade mark because using its sign as it did was not likely to deceive or cause confusion. This issue is raised by the concluding words of § 120(2) which have received only limited judicial consideration ...”

77 “In the present case, Defendant pointed to the fact that its sign was used on beer. The beer was packaged in a beer bottle, packaged in six packs which, in turn were packaged in cartons. The beer was sold in retail stores in the section devoted to beer. It also pointed to the fact that its sign was used in conjunction with the image of a bare foot.”

“However, in our opinion, these matters do not advance Defendant’s defence. The use of the image of a bare foot with the words ‘Barefoot Radler’ would be more likely to reinforce the significance or prominence of the word ‘Barefoot’. The fact that the allegedly infringing mark was on beer packaged in the way described does not, in our opinion, tell against the likelihood that a person looking at beer packaged in this way would think that the beer originated from Plaintiff. ...”

79 “The preceding analysis leads to the ultimate conclusion that, from the time Defendant launched its beer, it infringed the trade mark of Plaintiff. In these proceedings, Plaintiff indicated it would make no claim for pecuniary remedies after June 27, 2008. However, because of the various conclusions reached by the primary judge, it was unnecessary for his Honour to consider remedies for infringement.”

“It is appropriate that the parties be given an opportunity to consider what orders should be made in these proceedings and whether an order should be made remitting the matter to the primary judge to determine what further orders might be made. While, in the ordinary course, that would be the conventional order, it may well be appropriate to make an order directing the parties to mediation before any further hearing takes place in the proceedings.”

Citation: E&J Gallo Winery v. Lion Nathan Australia Pty Limited, [2009] F.C.A.F.C. 27; 2009 WL 765541 (Aust. Fed. Ct. App. 2009).