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Judgment handed down in Apple and Pear Australia Ltd v Pink Lady America LLC

23 November 2016

Today the Court of Appeal granted leave to appeal and allowed an appeal brought by Apple and Pear Australia Ltd (‘APAL’) against Pink Lady America LLC (‘PLA’) in respect of an agreement relating to PINK LADY trademarks for apples grown and exported from Chile.

APAL and PLA entered into an agreement (‘the Option Deed’) whereby PLA agreed to transfer to APAL the ownership of PINK LADY trademarks it had applied for in Chile in exchange for an exclusive licence to use the trademarks for all relevant apple products between Chile and North America, royalty free, in perpetuity.

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 the International Pink Lady Alliance (‘IPLA’), an international organization with an interest in developing and promoting the PINK LADY brand, of which APAL and PLA were members.

The judge found that the Option Deed included the refreshed trademark because the parties were aware that a refreshed mark would be adopted by IPLA.

The Court of Appeal today held that the judge erred in taking this approach. It held that properly construed the Option Deed does not extend to the refreshed mark and is limited to the trademarks listed in the schedule to the deed. That construction does not lead to commercial absurdity or futility. Even if surrounding circumstances could be taken into account in construing the Option Deed, those circumstances did not support the conclusion that the Option Deed was intended to apply to the refreshed mark. The Court of Appeal also rejected an argument by PLA that the Option Deed had been varied to include the refreshed mark.

NOTE: This summary is necessarily incomplete. It is not intended as a substitute for the Court’s reasons or to be used in any later consideration of the Court’s reasons. The only authoritative pronouncement of the Court’s reasons and conclusions is that contained in the published reasons for judgment.

Read the full judgment here on AustLII (External link)

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