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An Apple a day … gives the trade mark away

Intellectual Property Law News | November 2016

Apple and Pear Australia Ltd (“APAus”) has been successful in its appeal to the Victorian Supreme Court in Apple and Pear Australia Ltd vs Pink Lady America LCC [2016] VSCA 280, in respect of an agreement (“Option Deed”) with Pink Lady America LCC (“PLA”) relating to Pink Lady trade marks for apples grown and exported from Chile.

APAus is the registered owner of Pink Lady trade marks in a number of countries, except for in Chile. PLA applied to register the Pink Lady trade mark in Chile.  These parties entered into an Option Deed, under which PLA agreed to grant APAus an option to acquire ownership of any trade marks that might be issued in Chile and APAus would grant PLA an exclusive licence to use those trade marks in respect of trade between Chile and America.

In the previous proceedings (APAus v PLA [2015] VSC 617), the issue before the trial judge was whether the Option Deed covered not only the trademarks set out in the schedule to that Deed, but also a "refreshed" PINK LADY mark subsequently adopted in 2008 by PLA. PLA were successful in arguing that when a contract is terminated either or breach or acceptance of a repudiation, only future obligations are discharged and accrued rights (such as trade mark licences) will continue.

In the APAus appeal, the issues of the case focused on the ownership and control of Pink Lady trade marks in Chile. APAus argued that the Deed encompassed only those defined trade marks listed in the schedule contained in the Deed and did not extend to a later ‘refreshed trade mark’. APAus also argued that where the Deed was terminated as a consequence of breach or accepted repudiation, the IP licence conferred to PLA by the Deed did not survive the termination.

The Court held that the trial judge in the 2015 proceedings erred in taking the approach that the Option Deed included the refreshed trade mark and found that the Option Deed was limited to the trade marks listed in the schedule to the Option Deed. The Court rejected PLA’s claim that the IP licence would survive the termination of the Option Deed.  

When licensing your IP under an agreement, it is important for businesses to consider what they intend to happen to the IP and the licence for that IP in the event that the agreement is terminated, and ensure that this scenario is reflected in the agreement. It is also important to clearly identify exactly what intellectual property an agreement and licence are intended to cover.    

Addressing the issue of a termination of the agreement in a termination clause can assist with preventing doubts as to the intention of the parties to the agreement and can minimise the risk of subsequent disputes arising.

Forum Law, solicitors in Sydney’s inner west, advises and assists business on trade marks or other intellectual property. Call us for a free 30-minute discussion on (02) 9560 3388 or in our friendly and professional office in Leichhardt where parking for clients is free.

Forum Law is an active member of several reputable law and industry associations. We have recently obtained ISO9001 accreditation.