1
[No.1]
27th March, 1969
[1969] R.P.C.
IN THE HIGH COURT OF JUSTICE--{:HANCERY DIVISIO~
Before
5
MR. JUSTICE CROSS
9th, 10th, 13th to 17th, 20th to 24th, 27th and 28th February; 1st, 2nd,
6th to 10th, 13th to l Zth, 20th to 22nd Maroh and 31st July, and
10th, 16th and 27th November, 1967
VINE PRODUCTS LIMITED & OTHERS v. MACKENZIE
LIMITED & OTHERS
& COMPANY
Passing off-Unfair trading-Sherry-Attempt by Spanish producers to claim
exclusive right to word-Long acquiescence in sale of wines styled" British Sherry"
10 etc>-" Sherry" " simpliciter meant exclusively Spanish product-Injunction granted
only against use of "sherry" unqualified by other indication of origin-Unlawful
competition by plaintiffs-Deception or confusion irrelevant-Costs-Order.
Sherry derived its name jrom the Jerez district of Spain, and for centuries wines
of that area had been imported into this country. However, for more than a
15 century wines similar in character had been produced in England and in some
foreign countries other than Spain, and sold in this country either as "sherry
type" wines or as "British Sherry," "South African Sherry," "Cyprus Sherry"
or "Australian Sherry" (hereafter abbreviated to "British Sherry etc.). There
was no evidence that anyone was deceived into thinking wines sold by those
20 descriptions emanated from Spain, although some advertisements for "British
Sherry" referred to it incidentally as "sherry" rather than" British Sherry," or
suggested a connection with Spain by reference to -a toreador called Pedro, or girls
in mantillas.
II
In December 1960 the Champagne producers of the Champagne district of
25 France succeeded in obtaining an injunction restraining a company importing
Spanish sparkling wine from selling it under the name "Spanish Champagne,"
and from using the word "Champagne" in relation thereto ; Bollinger v. Costa
Brava Wme Co. Ltd, [1961] R.P.C. 116. In the light of the law determined in that
case, in 1963 sherry producers and shippers asked through their solicitors for
30 an undertaking from three producers and importers of British Sherry" etc. that
they would not use the word " sherry" other than in relation to wines emanating
from the Jerez district of Spain. After an exchange of correspondence those producers and importers launched an action for a declaration that they were entitled
to describe their wines as " British Sherry" etc. By their counterclaim the sherry
35 producers (the defendants in the action) claimed an injunction to restrain the
plaintiffs from passing off wines not from the Jerez district as sherry. By their
defence to the counterclaim the plaintiffs alleged that the defendants had been
aware of their activities for many years and had stood by and allowed them to
U
2
Vine Products Ltd. v, Mackenzie & Co. Ltd.
[1969] R.P~C.
acquire goodwill and reputation in " British Sherry" etc., and were thereby estopped
from alleging passing of],. alternatively that the defendants were guilty of laches
and acquiescence, and therefore no relief should be granted.
Held (1) that the Spanish Champagne case possibly extended the law of passing
to cover a new aspect of the law of unfair trading, and that that case should 5
be applied) as far as appropriate, to the present facts (p. 23).
off
(2) That the word" sherry" standing alone ordinarily meant, in the context of
buying and selling, a wine from the Jerez district of Spain (p. 25).
(3) That whatever might have been the result if one hundred years ago the
defendants had sought an injunction against the use by the plaintiffs of the word 10
"sherry" with or without qualification, the defendants having delayed claiming an
exclusive right to the word while the plaintiffs built up a valuable goodwill, it
would be unjust now to grant an injunction in broad terms (p. 26).
Lindsay Petroleum COl. v. Hurd (1874) L.R.5 P.C. 221 at 239 applied.
(4) That the defendants' delay in asserting their rights was not excused by 15
ignorance of the law, albeit that the decision in the Spanish Champagne case
may have come as a surprise to most lawyers in this country (pl. 26).
(5) That the plaintiffs were accordingly entitled to a declaration that they could
call their product "British Sherry" etc. Cpo 26).
(6) That on finding (2) above as to the meaning of "sherry" the defendants 20
were entitled (save insofar as they had lost their right to do so by acquiescence)
to complain of the use of the word sherry" in connection with wines which did
not come from Jerez. They had not acquiesced in the use of the word sherry"
simpliciter and were entitled to an injunction restraining the plaintiffs from using
that word unqualified in connection with their wines, but by their acquiescence 25
they had lost the right to complain of the use of the description British Sherry"
.
etc. (p. 26).
H
H
II
After an adjournment the parties made an application to the court on the [orm
of the order and costs. Submissions were made on behalf of both parties and
the plaintiffs alleged that it was not open to the judge on the pleadings to find 30
unlawful competition.
Held (1) that the special type of passing off in the present case and the Spanish
Champagne case involving unlawful competition differed from the ordinary case Of
passing off in that the allegation here was that the plaintiffs were selling goods
under an unlawful trade description, and that the defendants were being injured 35
thereby. The concepts of confusion and deception were irrelevant. The- plaintiffs
knew that the defendants were relying on the Spanish Champagne case and must
have foreseen how the defendants would put their case, and should not have been
taken bry surprise (p. 29).
(2) That an injunction would be granted restraining the plaintiffs from using the 40
word sherry" simpliciter in relation to their wines but not preventing them from
selling wines from the Jerez district of Spain as "sherry". No further limitations
would be made and no account of the plaintiffs' profits would be ordered. Liberty
to apply to mention the form of the order if it could not be agreed was granted
II
(p. 29).
45
[No.1]
Chancery Division
(3) That the plaintiffs had made clear to the defendants that they were concerned
with their right to use the description "British Sherry" etc. and were prepared
to discuss the wording of any advertisements. The defendants deliberately chose
to challenge those rights even claiming them for themselves thus necessitating a
5 counterclaim by the defendants. A great deal of evidence and many documents
were produced in court to rebut that challenge. It would place too great a burden
on the Taxing Master to separate the issues and to decide how much of the total
cost was attributable to each. The fair order for costs was that the defendants
should pay one-quarter of the plaintiffs' costs (p. 31).
10
This was an action by Vine Products Limited, Whiteways Cyder Company
Limited and Jules Duval & Beaufoys Limited, producers and importers of " British
Sherry" "South African Sherry" "Australian Sherry" and "Cyprus Sherry "
against 'the producers and shippers of sherry from the Jerez district of Spain.
Mackenzie & 'Company Limited, Williams & Humbert Limited, Gonzalez Byass
15 & Company Limited and Pedro Domecq, S.A., in which the plaintiffs sought a
declaration from the court that they were entitled to describe their products as
stated above. The defendants by a counterclaim sought an injunction to restrain
the plaintiffs from passing off their wines not from the Jerez district as sherry.
The facts of the case appear from the arguments of counsel and the judgment
20
Guy Aldous, Q.C., A.C. Sparrow, Q.rC. and Robin Webb, instructed by Robbins,
Olivey & Lake, appeared for the plaintiffs. Sir Milner Holland, Q.C., R. G. Lloyd,
Q.C. and Peter Hayward, instructed by Monier-Williams & Keeling, appeared
for the defendants.
Aldous, Q.C.-The issue is a simple one, namely were the descriptions "British
25 Sherry," "English Sherry," "South African Sherry," "Cyprus Sherry" and
" Australian Sherry" deceptive when applied to the wines made in these countries.
The relative quality of the plaintiffs and defendants' products is 'wholly irrelevantKerly, 8thedn. p. 278. The present case can be distinguished from Bollinger v.
Costa Brava Wine Co. Ltd. (No.2) [1961] R.P.C. 116 because in that case there
30 had been no user of the word "Champagne" in the United Kingdom except on
wine from the Champagne district of France. In the present case there is very
extensive user of the word sherry for wine not coming from the Jerez district of
Spain, and no case of deception is alleged by the defendants. Because of the
extent of the user of "British Sherry," etc. these expressions have become publici
35 juris and the defendants cannot complain of them-National Starch Manufacturing
Co. v. Munn's Patent Maizena Co. [1894] A.C.275.
The plaintiffs also rely on the inaction of the defendants in relation to the
use of "British Sherry" etc, in two ways, firstly as an admission that there
has been no confusion or passing off, secondly as creating an estoppel by laches
40 or acquiescence, This inaction is apparent in that there are a number of trade
mark registrations of sherries not originating in Spain, for example "Australian
Sherry Sack," to which the defendants have not objected, and it is also apparent
from the defendants' failure to take other steps to restrain the use of the word
sherry.
45
Evidence on behalf of the plaintiffs was given by William Lear Specketer,
Walter Alfred Foyer, Samuel David Creasey, John Anthony Phillips, Philip George
Moss, Stanley Albert Henry Sleeman, William John Presland, John Henry Wiillam
Dunbar, Alexander Clark Craig, William Watson Mcl.ean Kelly, Arthur Douglas
4
Vine Products Ltd. v, Mackenzie & Co. Ltd.
[1969] R.P.C.
Francis, Thomas Ure Barr, Bertrand Mather, George Ernest Picketts, Harry Caplan,
Lionel Lawrence Edgley, John Maurice Underwood, Morris Dickson, Laughlin
Rose, John Rahilly, Edward Dennis Clapp, William Watt, Ralph Bagshaw Ward,
Horace Gerrard Relton, Alan Cawston Strofton, Wilfred OwenCrawt, Frank
Ralph Egan, Joseph Samuel Woolley, Stephen Alan Fabes, George Eric Bellis, 5
Stanley Arthur Ball, Alfred Charles Duff, James Edward Nicholls, Sir Ronald
Martin Howe, James Edgar Howden, and Gerald Ernest Munday. The witnesses
on behalf of the defendants were Manual Maria Gonzales Gordon, Dermot
Michael Macgregor Morrah, Leslie William Marrison, John Whyte, Edward
Mathew Blagden Hale, John Frederick Plowman, Jose Ignacio Domecq, Salvador 10
Ruiz-Berdejo, Don Jaime Oliver Asin, Julian Jeffs, Frank Hasler, John Patrick
Dennis Landregan, David Oelyn Evans, Jack Saxton White, and 'Herbert Graham
Cawdron.
Holland, Q.C.-There are nine questions in this case: 1. Does the word" sherry"
in England, used alone, mean today a wine from an area in South-West Spain,
a word not applicable when used alone to imitations produced from elsewhere?
2. Is the English word "sherry" a word etymologically derived from Sherrish,
the name of the place now known in Spanish as Jerez? 3. Has the wine from
the area around and adjacent to Jerez been known in England for a long time
as "sherry," and acquired a high reputation? 4. Are the wines produced by
the defendants made in Jerez or in areas around Jerez which have long been
associated with it? 5. Are those wines-that is, the wines produced by the
defendants-made from grapes grown in the area with the addition, under controlled conditions, of small amounts of wine from neighbouring provinces which,
when matured and blended in the Jerez zone, produce similar wine? 6. Have
the plaintiffs produced or sold wines having no connection with the Jerez zone or
its adjacent areas and sold or advertised or represented them as sherry? 7. Do
the qualifications, " British," " Empire," " South African," " Australian," " Cyprus,"
when used in connection with the word "sherry," sufficiently distinguish the
products so named from sherry so as to avoid confusion? 8. Has the substantial
use of such expressions for some time by the plaintiffs conferred upon them some
right against the defendants to continue so to do? 9. Have all the defendants
(plaintiffs by counterclaim) lost their right to complain of the matters raised by
the counterclaim (a) by not bringing civil proceedings until 1963, or (b) by some
other and, if so, what acts ?
15
20
25
30
35
Provided sh-erry is a geographical name, and not an English word m-eaning a
type of wine, and provided it is associated with the product made in the area
which it represents, then it is a part of the goodwill and a right of property
belonging to every person who makes that class of goods in that area, and any
act which takes a part of that right of property or injures that right of property 40
is actionable-Bollinger v. Costa Brava Wine Co. Ltd. (No.1) f1960] R.P.C. 16,
Spalding & Bros v. A. W. Gamage Ltd. [1915] 32 R.P.C. 273 at 284. Once it is
shown that part of the complainants' goodwill has been taken, the onus lies with
the taker to show that no deception has been caused. It is for those who have
used the word sherry to show that it is not likely to mislead-Bollinger v. Costa 45
Brava Wine Co. Ltd. (No.2) [1961] R.P.IC. 116. Registration of a trade mark is
no protection from a passing off action-v-section 2 of the Trade Marks Act, 1938,
and does not of itself establish user.
Three conditions must be satisfied by the plaintiffs before they can rely on laches,
acquiescence or estoppel: (i) the person who invades the right of another must 50
not be aware that he is doing so; (ii) the person whose right is invaded must
5
[No.1]
Chancery Division
have done something to encourage the other to continue on his course of action;
(iii) the person whose right is invaded must be aware of the existence of his right
to sue-Willmott v. Barber (1880) 15 Ch.D. 96 at 105 ; Ramsden v. Dyson (1866)
L.R. 1 H.L. 129 at 140 ; Electrolux Ltd. v. Electrix Ltd. (1953) 71 R.P.'C. 23 at 33 ;
5 Cluett-Peabody v. McIntyre, Hogg Marsh & Co. [1958] R.P.C. 335 at 354 ~
Cockerell v. Cholmeley (1830) 1 R. & M. 418 at 425 ; Howlett v. Howlett [1949]
Ch. 767 at 775 ; Holder v. Holder 11966] 2 All. E.R. 116 at 127; Armstrong v.
Sheppard [1959] 2.Q.B. 384 at 396; Ward v. Kirkland '[1966] 1 All. E.R. 609 at
624. The principle ignorantia juris nemine excusart does not apply where, as in
10 this case, rights are of a complex nature and there is no decided English authorityEarl Beauchamp v. Winn (1873) L.R. 6 H.L.-223 at 234.
Aldous, Q.C.-The only material cause of action which arises is passing off.
Not every injury to the goodwill of a business amounts to passing off, and the
law does not protect the goodwill from every injury. But it does protect the
15 goodwill from a particular wrong arising from a false representation which is
deceptive and injures it. As to the distinction between the wrong committed and
the right of property injured see Draper v. Trist (1939) 56 R.P.C. 429 at 442.
20
25
30
35
Trade marks apart, there is no such thing as a monopoly in the use of a name
save that no one may make, either directly or indirectly, a false representation
that his goods are the goods of another-i-see Reddaway v. Banham (1896) 13 R.P.C.
218, Singer Manufacturing Co. v. Loog (1880) 18Ch.D. 395. The falsie representation is the nub of the action-s-see Spalding & Bros v. Gamage (1915) 32 R.P.C.
273 at 284. It is a question of evidence whether there has been a false representation or not. If there is no evidence of deception or of intention to deceive, the
court should not find that there is likelihood of deception, particularly where goods
have been on the market a long time-s-see Claudius Ash v. Invicta (1913) 29
R.P.C. 465. Deception or likelihood of deception is basic to passing off, and
anyone is entitled to use ordinary 'English words to describe his goods provided
he can .do so without deceiving-s-see Burberrys v. Cording & Co. Ltd. (1909) 26
R.P.C. 693 ; Cope v. Evans (1874) L.R. 18 Eq. 138. In order to establish deception,
evidence should be given by persons who say they would be deceived. It is not
enough to invite the court to find likelihood of deception 'Solely on the basis of
the appearance of the goods-see London General Omnibus Co. v. Lavell (1901)
18 R.P.C. 74; Treasurer Cot. Co. Ltd. v. Hamleys (1950) 67 R.P.'C. 89 at 92;
Gor-Ray v. Gilray (1952) 69 R.P.C. 199 Thomas Bear & Sons Ltd. v. Prayag
Narain (1941) 58 R.P.C. 25. The plaintiffs cannot be held liable for any deceptive
use of their products by retailers-see Payton v. Snelling Lampard & Co. (1900)
17 R.P.C. 628 at 634.
There was no new principle of law in Bollinger v. Costa Brava Wine Co. (No.2)
40 [1961] R.P.,C. 116. Ignorance of the law cannot be an excuse; the ignorant
should take advice. The law on acquiescence is adequately dealt with in CluettPeabody v. McIntyre, Hogg Marsh & Co. [1958] R.P.IC. 335.
Holland, Q.C.-Danckwerts J. did not 'regard the Champagne case as one of
passing off-see Bollinger v. Costa Brava Wine Co. Ltd. (No.1) [1960] R.P.C. 16
45 at 27. lit only became apparent that the present defendants had a cause of action
when the second Bollinger case was decided. In a clear case the court can decide
the issue of passing off on the appearanc,e of the goods. The present case does
not involve oomparison of goods which are not identical, but the similarity of
the word " sherry" to the word sherry. No evidence is required that if I see the
6
Cross, J.
Vine Products Ltd. v, Mackenzie & Co. Ltd.
[1969] R.P.C.
word" sh'erry" I will think it refers to sherry. See the London General Omnibus
case at page 79 and the Thomas Bear case at page 30. Also North Cheshire &
Manchester Brewery Co. v. Manchester Brewery Co. [1899] A.C. 83 at 84.
Judgment was reserved, and was delivered on 31st July 1967.
Cross, J.-This case is an aftermath of the Spanish Champagne case, Bollinger 5
v. Costa Brava Wine Co. Ltd. [1960] R.P.C. 16 and [1961] R.P.C. 116. Later in
this judgment I shall have to consider the reasoning on which that decision rested.
At present it is enough to say that at the instance of certain French companies
which carried on business as producers of wine in the Champagne district of France
and supplied such wine to this country Danckwerts, J. granted an injunction against 10
the defendants, an English company which for a few years past had been importing
a sparkling wine from Spain and offering it for sale here under the name " Spanish
Champagne," restraining them from passing off as and for wine produced in the
Champagne district of France wine not so produced by advertising, offering for
sale or selling it as Spanish Champagne or under any other name or description 15
including the narne Champagne.
.
The plaintiffs in this action, Vine Products Limited, Whiteways Cyder 'Company
Limited and Jules Duval & Beaufoys Limited (who are all members of the
Showering group of companies) are large producers of what is called British wine.
The method of production is, stated briefly, as follows, The juice of gropes is 20
dehydrated in its country of origin - usually Greece or Cyprus - so that it is
reduced to about one-fifth of its former volume and attains the consistency of
thin honey. This substance is brought to "wineries" in this country, and there
rehydrated (if I may coin the word) to its former volume by the addition of the
necessary quantity of water. Then yeast is added to make the liquid ferment; 2S
sugar to sweeten it ; and spirit to fortify it. The plaintiffs sell three main varieties
of British wine. The first is a wine of a port character, usually called" Ruby,"
it being unlawful in this country to describe any liquid which is not fortified wine
from the Douro district of Portugal as port. The second lis called "Sweet Whfte"
and is of the character of white port. The third is usually sold under the description 30
"British Sherry."
As well as making and selling British wines the first and third plaintiffs also
import wine from Australia and Cyprus, and the third plaintiffs wine from South
Africa. Some of such wine is sold here by the first and third plaintiffs respectively
under the descriptions "South African," or "Australian," or "Cyprus Sherry." 35
On 12th July 1963 a firm of solicitors, Messrs. Monier-Williams and Keeling,
wrote letters to each of the plaintiffs in the following terms:
"We are instructed by the Sherry Shippers of London and Jerez with
reference to the advertisement and sale of your "British Sherry."
"We would observe that your advertisements for this product and the 40
labels used upon the bottles are couched in such terms as to indicate that
it is sherry.
"Th'e word sherry can properly only be used upon or in relation to wine
made from grapes grown in the Jerez district of Spain, and blended and
matured under and subject to the control of the 'Council for the Denomination 45
of Origin "Jerez-Xeres-Sherry." Furthermore the use of the word" sherry"
7
[No.1]
5
10
15
20
Chancery Division
Cross, J.
upon or in relation to any other wine or beverage is likely to cause that
other wine or beverage to be passed off as, or to enable others to pass it off
as and for, sherry. Such use must cause serious damage to our respective
clients in their businesses and in their interest in the goodwill attaching to
the designation" sherry."
"Our clients have taken advice upon this matter and have decided collectively to take any necesary steps to protect their interests. They do not
however wish to be unnecessarily involved in, nor indeed unnecessarily to
involve others in, litigation. They further hope that now that this matter has
been drawn to your attention you will agree with them that the use of the
word sherry upon or in connection with other wines or beverages should be
stopped; as they assume that you would not wish to be a party to any
deception or to assist others in deceiving.
"We are accordingly instructed to ask whether you are prepared to give
our respective clients your undertaking not hereafter to advertise, offer for
sale or sell under or by reference to the word " sherry" any wine or beverage
other than wines made from grapes grown in the Jerez district of Spain and
matured and blended under the control of the 'Council for the Denomination
of Origin" Jerez-Xeres-Sherry."
" Perhaps you would let us have your reply to this letter in the course of the
next three weeks as our clients, in the light of the advice which they have
been given, are anxious to arrive at a determination of this matter."
This was answered by Messrs. Robbins, Olivey & Lake, the solicitors for the
plaintiffs, on 26th July as follows:
25
30
35
40
45
" We have been consulted by our clients Vine Products Limited, Whiteways
Cyder Company Limited, and Jules Duval & Beaufoys Limited (the successors
to Jules Duval & Company Limited) with respect to letters written by you to
them concerning their British sherry wines. Your letter to our clients, Vine
Products Limited, is dat,ed 12th July 1963, and bears the reference RK/MMR
and the other letters are similar.
" Each of our clients is anxious not to do anything to represent in any way
either that any of the wines that they make in this country were made abroad
or that any of their wines are different from what they in fact are. If any
advertisements or labels have been put out by or on behalf of any of our
clients which are misleading, then our clients would wish to put the position
right as soon as possible. Will you please, therefore, give us details of the
labels and advertisements of which your clients complain ?
"If anything misleading has occurred for which any of our clients are
responsible, then we think that our clients, in addition to remedying the
matter, would probably be prepared to give an undertaking that such should
not be repeated, but before we can advise our clients as to this it would be
essential for us to be given not only details of what is complained of but
also the names of your clients. You will appreciate that we could not advise
our clients to give an undertaking without knowing to whom the undertaking
is to be given. No doubt you will give us this information, as it is very
unsatisfactory that we do not know the names of your clients.
"The form of undertaking which you ask would, we think, upon its strict
interpretation prevent our clients from continuing to sell 'British Sherry,'
'Australian Sherry,' 'South African Sherry' and' Cyprus Sherry.'" (Those
8
Cross, J.
Vine Products Ltd. v•.Mackenzie & Co. Ltd.
[1969] R.P.C.
words read in inverted commas.) "We have assumed, however, that this is
not what you intended, and that you are not in fact requesting on behalf of
your clients that our clients. should now abandon the right to use these common
descriptions which have been in constant use for verymany years and' in the
case of " British Sherry " for hundreds of years. We should however appreciate 5
your confirmation that this assumption of ours is correct."
To this letter Messrs. Monier-Williams and Keeling wrote the following reply
on 30th July:
" We thank you for your letter of 26th July... We regret it if our letter of 10
12th July was insufficiently clear, but w,e think that it will clarify the position
if 'we deal with the last paragraph of your letter.
" The undertaking which we are seeking is in respect of the sale of ' British
Sherry' or ' English Sherry , by your clients. We are instructed to ask whether
your clients will give to our clients their undertaking not hereafter to advertise, 15
offer for sale or sell any of (their products under or by"reference to the words
'sherry' 'British Sherry' or 'English Sherry' or any other word or words
likely to indicate or enable others to indicate the belief that such products
are wines made from grapes produced in the Jerez district of Spain.
"We think that this clarification will make it unnecessary at this stage to 20
reply in detail to the other points you have raisedvexcept to say that our
clients are all the shippers of sherry wine from Spain to this country. If your
clients are willing to give such an undertaking as we have mentioned we will,
of course, let you have a list of their names, as 'the undertaking will be made
with each of them; if your clients decline, we shall give you particulars of 25
the facts on which our clients rely in the writ and statement of claim which
we are, in the absence of a favourable reply, instructed to issue and serve,
and in respect of which w,e should be glad to have your confirmation that
you will accept service."
As they were not prepared to give the undertaking asked for and preferred to 30
be plaintiffs rather than defendants in any litigation, the plaintiffs started this
action by writ dated 8th August 1963 against five defendants, Mackenzie &
Company Limited, Williams & Humbert Limited, Gonzalez Byass & Company
Limited, Martin Silva & Company Limited and Pedro Domecq S.A. The first
three are English companies and the fifth a Spanish company which produces sherry 35
in the Jerez district in Spain and ships it to this country. The fourth defendant
was joined by mistake and soon dropped out of the proceedings. The word
" defendants" in this judgment will therefore mean the first three and the fifth
defendants.
The statement of claim, which was delivered on 9th August 1963 was in the 40
following terms:
1. The plaintiffs, Vine Products Limited, sell, offer for sale, and advertise
for sale in (inter alia) England wines under the descriptions 'British Sherry,
'English Sherry,' "Cyprus Sherry' and 'Australian Sherry.' The plaintiffs,
Whiteways Cyder Company Limited, sell, offer for sale and advertise for 45
sale in (inter alia) England wines under the description "British Sherry."
The plaintiffs, Jules Duval & Beaufoys Limited, sell, offer for sale and advertise
for sale in England wines under the descriptions" British Sherry," "South
African Sherry," "Cyprus Sherry " and" Australian Sherry." The said wines
l
9
[No.1]
s
Chancery Division
Cross, J.
are sold in bottles bearing labels or marks having thereon the various descriptions aforesaid together with other symbols, marks, or designs intended to
identify particular wines of the several plaintiffs, and the several plaintiffs
have acquired valuable goodwills in respect of the said several wines so
identified by reason of trade done therein by the plaintiffs and their respective
predecessors in title.
10
2. The defendants and each of them are shippers of sherry wine from
Spain to this country. By letters dated l Zth and 30th July 1963 and sent to
the first two plaintiffs and to Jules Duval & Company Limited or their solicitors
by solicitors purporting to be writing on behalf of all the ·shippers of sherry
wine from Spain to England, the said solicitors on behalf of (inter alia) each
of the defendants :
15
(a) claimed that the word "sherry" can properly only be used upon or
in relation to wine made from grapes grown in the Jerez district of Spain
and blended and matured under and subject to the control of the Council
for the Denomination of Origin "Jerez-Xeres-Sherry."
(b) claimed that the use of the word" sherry" upon or in relation to any
wine or beverage is likely to cause such other wine or beverage to be passed
off as or to enable others to pass it off as and for, sherry.
20
25
30
(c) claimed that such use must cause serious damage to (inter alia) each
of the defendants in their businesses and in their interest in the goodwill
attaching to the designation " sherry."
(d) asked that each of the companies to whom the said letters were addressed
should undertake not hereafter to advertise, offer for sale or sell any of their
products under or by reference to the words " sherry," "British Sherry," or
"English Sherry" or any other word or words likely to indicate or enable
others to indicate the belief that such products are wines made from grapes
produced in the Jerez district of Spain.
(e) threatened, in the event of such undertaking being refused, to commence
proceedings.
3. The plaintiffs, Jules Duval & Beaufoys Limited, are successors in title
to Jules Duval & Company Limited, which no longer trades.
35
40
4. Each of the plaintiffs claims to be entitled to continue to sell and to
advertise and offer for sale the said respective wines sold by them as alleged
in paragraph 1 hereof under the respective descriptions aforesaid free from
any interference by the defendants. Each of the plaintiffs further claims that
none of the defendants have any such right as will entitle them either severally
or in conjunction with all other such shippers to restrain any of the plaintiffs
continuing to act as aforesaid or to sell, advertise or offer for sale wines of
similar characteristics under or in respect of the descriptions "British Sherry,"
" English Sherry," "South African Sherry," "Cyprus Sherry," or " Australian
Sherry."
5. The plaintiffs will, if and so far as necessary, rely upon the following
matters in support of their claim:
45
(a) that ito the interested public in Englandtlle word "sherry" means
only a particular type of wine, usually regarded as an aperitif, and fortified
with added spirit, and of a colour varying from very pale yellow to deep
brown, and varying in taste from very dry to very sweet.
10
Cross, J.
Vine Products Ltd. v, Mackenzie & Co. Ltd.
[1969] R.P.C.
(b) that the word " sherry" even when used alone does not mean and is
not understood by the interested public to mean exclusively a wine made from
grapes grown in the Jerez district of Spain.
(c) that the description "British Sherry" has been widely used in England
for upwards of 100 years past and the descriptions" South African Sherry," 5
"Australian Sherry," "Cyprus Sherry" and "English Sherry" have been
widely used in England for many years past on and in relation to very large
quantities of wine having no connection with Jerez or Spain.
(d) that such user has taken place for many years past without interference
from the defendants or other shippers of sherry from Spain.
10
(e) that the word "sherry," when used in conjunction with the words
"British," "English," "South African," "Australian" or "Cyprus," does
not mean and is not understood by the interested public to mean a wine made
from grapes grown in the Jerez district of Spain or as otherwise having any
connection with Spain in point of origin or manufacture.
15
(f) that each of the claims as set out in paragraph 2 subparagraphs (a) to
(c) inclusive is unjustifiable.
6. Each of the plaintiffs has a valuable goodwill in (inter alia) England
in relation to the wines sold by them under the descriptions referred to in
paragraph 1 hereof and in bottles bearing labels and marks as therein set 20
forth, and the defendants' threats are calculated to cause the plaintiffs and
each of them loss and damage, and it is of the highest importance to the
plaintiffs and each of them that the validity or otherwise of the rights and
title claimed by the defendants should be established without delay. Such
goodwill includes the rights in respect of the registered trade marks numbered," 25
and they set out certain trade marks.
The plaintiffs claim:
1. A declaration that each of the plaintiffs is entitled to continue to sell,
advertise and offer for sale any wine heretofore sold by any of them
respectively under any of the descriptions" British Sherry," "English Sherry," 30
"South African Sherry," "Cyprus 'Sherry" or "Australian Sherry" and is
entitled to sell advertise or offer for sale any similar wine under such descriptions without infringing any right of any of the defendants.
2. A declaration that none of the defendants have any such right as would
entitle them either severally or in conjunction with all other shippers of 35
sherry wine from Spain to England to restrain any of the plaintiffs from selling,
advertising or offering for sale any such wines as aforesaid, or similar wine
under the respective descriptions as "British Sherry," "English Sherry,"
"South African Sherry," "Cyprus Sherry" or "Australian Sherry;" thirdly
they claim an appropriate injunction; further or other relief; and costs.
40
The defendants delivered a defence and counterclaim on 20th November 1963
which, as subsequently amended, ran, so far as I need set it out here, as follows:
1. These defendants admit that the plaintiffs sell offer for sale and advertise
beverages under the descriptions specified in paragraph 1 of the amended
statement of claim but do not admit that the beverages sold as "British 45
Sherry" and "English Sherry" are wines, and do not admit that the several
plaintiffs have acquired or could acquire valuable goodwills in respect of the
11
[No.1]
Chancery Division
Cross, J.
beverages identified in paragraph 1 of the amended statement of claim by
reason of the trade done therein by the plaintiffs and their respective predecessors in title.
S
2. These defendants admit the despatch of the letters referred to in
paragraph 2 of the amended statement of claim but will refer to the said
letters at the trial of the action for the full terms and effect. Paragraph 3
is admitted.
4. As to paragraph 5 of the amended statement of claim these defendants
will say:
10
15
20
25
30
(a) The word "sherry" is and always has been distinctive of a wine
fortified matured and blended in the Jerez district of Spain and produced
from the juice of specified varieties of grapes grown in the Jerez district
supplemented under specified circumstances with 'wines from the neighbouring
provinces of Huelva, Sevilla and Cordoba and brought into the Jerez district
under controlled conditions. For well over two centuries the methods of
cultivation of the vines bearing the grapes for the production of sherry and
the methods of maturation and blending of the wines made from such grapes
have been strictly controlled. Such control has been excercised since 1934
under the Ministerial Order of 14th July 1935 by the control board for the
Denomination of Origin "Terez-Xeres-Sherry." Sherry is sold and bought
in the United Kingdom by both the trade and the public on the reputation
established by the wines made as aforesaid, and the reputation attaching to
the word "sherry" has by reason of the care taken in the production of
sherry been for many years a very high one. The reputation attaching to
the word "sherry" forms a valuable part of the goodwill of the business
of persons concerned in the production 'shipping and supply of sherry although
the origin of such reputation though well-known to the majority of the trade
is only known to a proportion of the consuming public.
(b) That the word " sherry " when used alone has the signification referred
to in subparagraph (a) above.
(c) That they make no admissions as to the matters set out in paragraph 5
(c) and (d).
35
40
(d) As to paragraph 5(e), that the use of the word "sherry" by the
plaintiffs alone or in conjunction with the words "English," "British,"
"Cyprus," "Australian" or "South African" is calculated to deceive and
cause confusion and to lead the trade and public to believe that the beverages
offered for sale and sold by the plaintiffs and each of them are sherry, that
is to say wines produced in manner specified in subparagraph (a) above,
and is calculated to pass off and enable and assist others to pass off such
beverages as and for sherry. These -defendants will in particular refer to
such usages by the plaintiffs as are set out hereunder.
There follow particulars of a number of advertisements in papers and on
television to which I will refer later. The first, which I give now as a specimen, was
an advertisement in the Evening News for Ist November 1961 stating, inter alia,
45 "The more you know of sherry the more you will appreciate Magna Golden
Cream," the only indication that the liquid in question was a British wine being the
words" British Sherry" in rather small letters on the label of the bottle, a photograph of which was included in the advertisement.
12
Cross, J.
Vine Products Ltd. v, Mackenzie & Co. Ltd.
[1969] R.P.C.
The defence continued as follows:
5. If which is not admitted the plaintiffs, as alleged in paragraph
6 of the amended statement of claim, have any goodwill in relation
to the wines 'Sold 'by them under the description "English Sherry"
and "British Sherry," these defendants will assert that the plaintiffs are not
entitled to claim protection therefor in that the beverages sold by the plaintiffs
under such description are not wines and bear no resemblance to sherry by
reason whereof the use of such descriptions is and always has been likely to
deceive and cause confusion, and to lead to the plaintiffs' beverages so
described being passed off as and for sherry, and is calculated to enable and
assist others to pass off the plaintiffs' beverages so described as and for sherry,
by reason further whereof the plaintiffs are not entitled to the protection of
this honourable court. The defendants deny that the plaintiffs or any of them
have rights in respect of the three registered trade marks listed in paragraph 6
of the amended statement of claim. The said marks are and always have
been invalid on the ground that each mark comprises matter (the words
"British Sherry" or "British Cream Sherry") the use of which would, by
reason of its being likely to deceive or cause confusion as aforesaid or otherwise, be disentitled to protection in a court of justice, or would be contrary
to law. The marks are also invalid on the ground of non-use and/or registration without any bona fide intention to use and/or abandonment (and they
say they will rely on a certain letter to which I need not refer. They say
there are pending applications to the Registrar for removing the trade marks
from the register).
5
10
15
20
6. Further the plaintiffs are not entitled to claim protection for the use 25
of the descriptions "Cyprus Sherry," "Australian Sherry" and "South
African Sherry" in that the plaintiffs' wines sold under such descriptions are
not sherry, by reason, whereof the use of such descriptions is and always
has been likely to deceive and cause confusion, 'and to lead to the plaintiffs'
beverages so described being passed off as and for sherry, and is calculated 30
to enable and assist others to pass off the plaintiffs' beverages so described
as and for sherry by reason further whereof the .plaintiffs are not entitled to
the protection of this ... court.
7. Save as ... expressly admitted each and every allegation in the . . .
statement of claim ... is denied.
35
8. These defendants carryon business in the production of sherry and
are shippers of sherry to the United Kingdom, and claim to sue by way of
counterclaim on behalf of themselves and all other persons producing sherry
or shipping and supplying sherry to and in the United Kingdom.
In response to the request for particulars under paragraph 8 the defendants 40
gave the names of over 100 producers of sherry in and suppliers of sherry from
Spain.
The counterclaim runs as follows:
9. These defendants repeat paragraph 4above~ Each of the plaintiffs has
advertised and offered for sale and sold as sherry, "English Sherry" or 45
"British Sherry" or "Cyprus Sherry" or "Australian Sherry" or "South
~frican Sherry." or." Empire Sherry" beverages not being wines produced
In manner specified In paragraph 4(a) above. Hereunder these defendants will
rely upon the particulars given under paragraph 4(d) above.
13
[No.1]
Chancery Division
Cross, 1.
"As against the plaintiffs, Jules Duval & Beaufoys Limited: the sale of
beverages in bottles bearing respectively labels having thereon the words:
(then I give as an 'example the first) "Duval Magna Golden Cream Superior
Quality English Sherry," (and there follow a number of labels of a similar sort).
5
10
15
20
25
"As against the plaintiffs, Vine Products Limited: the sale of beverages
in bottles bearing respectively labels having thereon the words" (the first
one is) "VP British Sherry" (and there follow a number of similar labels).
"As against the plaintiffs, Whiteways Cyder Company Limited: the sale
of beverages in bottles bearing labels having thereon the words' Cream British
Sherry' or ' Rich Brown British Sherry' specimens whereof may be inspected
at the offices of the solicitors to these defendants."
10. The use of the words "sherry," "British Sherry," "English Sherry,"
" Cyprus Sherry," " Australian Sherry," " South African Sherry" or " Empire
Sherry" as aforesaid by the plaintiffs and each of them is calculated to
deceive and cause confusion and to lead the trade and public to believe that
the beverages offered for sale and sold by the plaintiffs and each of them are
sherry and is calculated to pass off and enable and assist others to pass off
beverages which are not sherry as and for sherry.
11. By reason of the wrongful acts of the plaintiffs and each of them, these
defendants and each of them have suffered damage. The plaintiffs and each
of them claim the right to sell beverages not being sherry under or in relation
to the words " sherry," " British Sherry," " English Sherry," "Cyprus Sherry,"
"Australian Sherry" and" South African Sherry" and threaten and intend
to continue so to do unless restrained by this honourable court by reason
whereof these defendants and each of them will suffer further damage to
their business and goodwill.
Then the defendants claim :
30
35
(1) An injunction to restrain the plaintiffs and each of them, whether by
their servants or agents or otherwise howsoever, from passing off or enabling
or assisting others to pass off as and for sherry beverages which are not
wines fortified matured and blended in the Jerez district of Spain under the
control of the Council for the Denomination of Origin" Jerez-Xeres-Sherry,"
and produced from the juice of specified varieties of grapes grown in the
Jerez district supplemented under specified circumstances with wines from
the neighbouring provinces of Huelva, Sevilla and Cordoba, and brought into
the Jerez district under controlled conditions, by offering for sale or selling
the same under or by reference to the word" sherry."
There follow claims for injunctions in the same terms, mutatis mutandis, with
regard to the words "British" or "English Sherry," "Cyprus" or "Empire
40 Sherry," "Australian Sherry" and "South African Sherry," and for relief by
way of damages and an account of profits.
The defence to the counterclaim was as follows:
45
2. The plaintiffs do not admit that paragraph 8 of the defence and counterclaim defines any class or classes sufficiently certain to entitle the said
defendants to sue on behalf of themselves and the members of any such
class or classes, and further do not admit that in any event a claim so
constituted discloses any cause of action.
14
Cross, J.
Vine Products Ltd. v, Mackenzie & Co. Ltd.
[1969] R.P.C.
3. As to paragraph 4 of the defence, the plaintiffs do not admit any of
the allegations in subclauses (a) or (b) thereof. Alternatively, if the word
" sherry" ever had such a meaning as is therein alleged, it no longer has
such meaning, and the plaintiffs repeat paragraph 5(a) and (b) of the statement
of claim. The plaintiffs and each of them deny that they have used the S
word "sherry" in a manner calculated to deceive or cause confusion, or to
lead the trade or public to believe that the beverages offered for sale and
sold by the plaintiffs or any of them are wines produced in manner specified
in subparagraph (a) of paragraph 4 of the defence, or in a manner calculated
to pass off or enable or assist others to pass off such beverages as or for 10
wines produced in manner so specified. The plaintiffs repeat paragraph 5
of the statement of claim by way of defence to thedefendants' counterclaim.
4. As to paragraph 9 of the counterclaim, the plaintiffs admit sales as
alleged in paragraph 1 of the statement of claim, and that the plaintiffs,
Jules Duval & Beaufoys Limited, have sold offered for sale and advertised 15
for sale in England wines under the description "Empire Sherry" and
"Empire Cream Sherry." The plaintiffs and each of them deny each and
every allegation in paragraph 10 of the counterclaim.
5. The plaintiffs admit that they claim the right to sell beverages, not
being wines produced in manner specified in subparagraph (a) of paragraph 4 20
of the defence, under or in relation to the words "British Sherry" "English
Sherry" "Cyprus Sherry" "Australian Sherry" "Empire Sherry" and"
" South African Sherry." Save as aforesaid and as herein expressly admitted,
the plaintiffs and each of them deny each and every allegation in the counterclaim.
25
6. If, contrary to the plaintiffs' contention, any of the allegations in paragraph 10 of the counterclaim are true, the plaintiffs repeat paragraph 1 of
the statement of claim. The acts done by the plaintiffs as alleged in paragraphs
9 and 10 of the counterclaim have been known to the defendants and those
on behalf of whom they claim to sue by way of counterclaim ... for a number 30
of years prior to the letter dated 12th July 1963, referred to in paragraph 2
of the statement of claim. The claimants by counterclaim had such knowledge
as aforesaid by reason of the sale and advertising and offering for sale of
wine under the descriptions in question generally throughout the country.
Further the claimants by counterclaim had, or are to be taken to have had, 35
knowledge by reason of the publication in the Trade Marks Journal of the
registration of the marks pleaded in paragraph 6 of the statement of claim.
Nevertheless none of the claimants by counterclaim took any action to
restrain the acts alleged to have been wrongfully committed by the plaintiffs
by reason of the matters pleaded in paragraph 10 of the counterclaim. The 40
claimants by counterclaim have stood by for a number of years and allowed
the plaintiffs to acquire goodwill and reputation, and are thereby estopped
from alleging that the acts of the plaintiffs as alleged constitute passing off,
or are calculated to lead to passing off, or to enable or assist others to
pass off, as alleged. Alternatively the claimants by counterclaim are guilty 45
of laches and acquiescence, and no relief by way of injunction or otherwise
should be granted. The plaintiffs will rely upon the aforesaid inactivity of
the claimants by counterclaim with knowledge as aforesaid of the matters
referred to in paragraph 1 of the statement of claim and also insofar as
necessary upon the matters hereinafter set out.
50
15
[No.1]
Chancery Division
Cross, J.
There follow certain particulars which I need not read.
Then paragraph 7 says:
5
10
7. Further or in the alternative the plaintiffs will rely upon long public
usage of the descriptions "British Sherry," "South African Sherry,"
"Australian Sherry" and "Cyprus Sherry" or some of them; and in
particular (but without prejudice to the generality of the foregoing) the
registration of (certain trade marks which are set out) of which the claimants
by counterclaim had, or are to be taken to have had, knowledge by reason
of the publication thereof in the Trade Marks Journal, the Wine and Spirit
Trade Record and the Wine and Spirit Trade Diary.
The defendants delivered a reply to this defence to counterclaim, which so far
as material ran as follows:
15
If, which is not admitted, the claimants by counterclaim or any of them
had knowledge of the plaintiffs' acts as alleged, none of the claimants by
counterclaim was aware until after the decisions in Bollinger v. Costa Brava
Wine Co. Ltd. (and they give the references in the reports) that they had any
cause of action against the plaintiffs in respect of the matters raised in the
counterclaim. The defendants and other claimants by counterclaim proceeded
with due diligence thereafter in seeking relief again the plaintiffs.
20
The issues in this action, therefore, as I see them are, first whether the plaintiffs
are entitled to use the word "sherry" at all in conection with the sale of the
liquids which they sell under the names" British Sherry," " South African Sherry,"
and so on ; and secondly, if they are entitled to use the word" sherry " preceded
by the relevant adjective, they are entitled to describe the" British Sherry," " South
25 African Sherry" and so on as "sherry" simpliciter in the way in which they
have done in some of their advertisements to one of which I have referred. The
case differs from the Spanish Champagne case in that the defendants in that case
had only just begun to sell their product under the name" Spanish Champagne"
whereas in this case the expressions "British Sherry," "South African Sherry,"
30 "Australian Sherry" and "Cyprus Sherry" have all been used in this country
for some time, some of them for a long time. It has been therefore necessary
to investigate the circumstances in which these expressions came to be used, and
the manner in which they have been used, in some detail.
The hearing before me lasted for 29 days, in the course of which a great many
35 witnesses were examined and a vast mass of documentary material put in evidence.
At the end of the day, however, it emerged that there was very little dispute
between the parties as to the facts, and that the dispute between them was really,
first as to the basis of the decision in the Spanish Champagne case, and secondly
how that case applied, if at all, to the facts of this case. Consequently although
40 I read the transcript of a good deal of the evidence and looked again at many of
the exhibits, my judgment will be comparatively short.
I will deal first with the Spanish side of the picture. There is a town near
Cadiz called today Jerez de Ia Frontera. The town was in existence before the
Moors invaded and conquered Southern Spain in the seventh century A.D. They
45 called it "Shereesh." In the thirteenth century the town and the surrounding
countryside was 'reconquered by the Christians and, as the boundary between the
lands ruled by the King of Castile and the lands still ruled by the Moors ran near
the town it came to be called" Shereesh de la Frontera." The way in which the
16
Vine Products Ltd. v, Mackenzie & Co. Ltd.
Cross, J.
[1969] R.P.C.
name of the town was spelled and pronounced has changed from time to time
over the centuries. Today, as I have said, it is spelled J-e-r-e-z and pronounced,
as near as I can get to the sound, " Hereth."
Wine from this area was being imported into this country in large quantities
by the sixteenth century. Thus in a report sent to Queen Elizabeth in 1561, our
envoy in Madrid, Sir Thomas Chamberlain, mentions that English merchants sent
from a town in Andalusia called Xeres de la Frontera (" Xeres " was then the
normal spelling) at least 40,000 butts of wine annually. It appears from a work
entitled "Three to one" printed in London in 1626 that the name of the town
could then be spelt in English "Sherries" or "Sherrys" as well as "Xeres."
Probably the only difference between the English and the Spanish pronunciation
of the name of the town at that time was that whereas the Spaniards called it
Sheres, with the accent on the last syllable, we, as we always tend to do, threw
the accent back and called it Sherries. I have no doubt that the" Sherris-sack,"
the virtues of which Falstaff extolled (see Henry IV, Part II, Scene 3), was wine
from Jerez de la Frontera. The word " sack" is probably derived from the Spanish
word "sacar," "to draw out," and signifies wine exported from the place in
question. In the literature of the time there are references to Canary Sack and
Malaga Sack, as well as to Sherris Sack. In the course of the seventeenth and
early eighteenth centuries the word "sack" tended to be dropped and the wine
to be usually called "Sherris" or "Sherry."
5
10
15
20
This was the position reached when Johnson's Dictionary was published in
1757. The relevant entry in it runs as follows:Sherris
Sherris sack
Sherry
.} From Xeres, a town in Andalusia in Spain: a kind
,
of sweet Spanish wine
25
Since then, of course, "sherris" has fallen out of use and "sherry" come to
be the only name for the wine. Its popularity here has varied from time to time.
It reached a peak about 1870, and then declined in the later nineteenth century.
It began to revive again in the early part of this century and of late the consumption 30
has been steadily increasing. In 1960 41 million gallons were imported, and in
1965 5f million gallons. Nearly all is imported in bulk and bottled here. In
nearly all cases the label on the bottle bears the word "Sherry" in large letters
as well as the brand name. The words" Produce of Spain," which are required
by law to be on the label, are always in small letters. The expression" Spanish 35
Sherry" is never found on the labels.
Since 1935 the use of the words " Jerez" or " Xeres " or " sherry" in connection
with wine has been regulated by Spanish law. To be entitled to be so described
the wine has to have been made of grapes of certain kinds grown in certain
areas and has to have been matured and blended in "bodegas" situated in certain 40
places. There is a board of control whose duty it is to secure, so far as may be,
that nobody offers wine for sale under those names without complying with
the regulations. But Senor Manuel Gonzales Gordon, who is 91 years of age,
who was, to use his own words, "born among the butts," and has spent most
of his life in "Sherryland," told me that the regulations only put into writing 45
and gave legal force to what had been customary before. For many years pas1tsubject to an exception which I will mention in a moment-the wine brought
from Spain to this country under the name "sh,erry" has, I think, been made
from grapes grown in substantially the same districts and from musts blended
17
[No.1]
Chancery Division
Cross, J.
and matured in the same places as those prescribed by the present regulations.
The exception is the wine of a sherry character made in the Montilla district of
the province of Cordoba. Montilla has now its own regulations and board of
control and is no longer classed as "sherry," but it may well be that, in the past,
5 a good deal of Montilla was exported to this country as sherry. Another recent
requirement relates to Manzanilla, a wine produced from the same grapes as
ordinary sherry but matured and blended exclusively in bodegas in San Lucar,
a town in the Jerez district at the mouth of the Guadalquivir. When the regulations
were made in 1935 it was originally intended that Manzanilla should have its
10 own regulations and board of control, but this intention was not carried out, and
the production of Manzanilla is regulated by the same regulations and board of
control as ordinary sherry, though in strictness it ought not to be called " sherry "
but simply Manzanilla, I do not think, however, that these requirements affect
the problem which I have to solve.
I turn now to "British Sherry." The manufacture of wine in this country from
grapes or grape juice produced abroad has a long history. As long ago as 1635
one Francis Chamberlayne was granted a monopoly for 21 years for the making
of wine out of " dryed grapes or raysons," and two of the firms which were making
British wines at the beginning of this century, Bishops and Beaufoys, were founded
20 in the eighteenth century. But the first reference to "British Sherry" which was
brought to my attention was in the evidence of a Mr. Walker and a Mr. Frith,
given in 1852 before a select committee of the House of Commons on the import
duties on wines. It appears from this evidence that some 600,000 gallons of
British wines of various sorts were made here each year, and that some of this
25 was sold under the description" British Sherry." British wines were, it appears,
largely sold by confectioners or grocers under a special licence called a "sweets "
licence and were particularly popular with women.
15
After the passing of the first Trade Mark Act in 1875 several trade marks
containing the words "British Sherry" were registered in the latter part of the
30 nineteenth century, and evidence was given by elderly witnesses formerly employed
by Beaufoys as to the sale of substantial quantities of "British Sherry" in the
closing years of the last century and the beginning of this. Down to this date
British wjnes had been made from raisins, so far as grapes entered into their
composition-though other ingredients, particularly rhubarb, were often added.
35 But at about the turn of the century a Mr. Alexander Metzotakis thought of the
method of manufacture from dehydrated grape juice which I described in outline
at the beginning of this judgment. This discovery was adopted by other
manufacturers of British wines and has, no doubt, belen one of the causes for the
enormous increase in its consumption. The customs and excise returns show
40 that in 1927-28, 2,272,593 gallons of British wine were made. This figure rose
gradually year by year, and reached 6,407,709 gallons in 1941. It then declined
for some years, but started to rise again in the 1950's and was 9,182,860 gallons
in 1965-66.
Mr. Metzotakis was one of the founders of Vine Products Limited, which was
45 originally incorporated in 1905. The other plaintiffs, Whiteways Cyder Company
Limited and Jules Duval & Beaufoys Limited are also, as I have said, manufacturers
of British wines on a large scale, and all three plaintiffs are now members of
the same group of companies. The British wines produc-ed by the plaintiffs account
for some 65 to 70 per cent of the total quantity produced. About half of the
50 British wines produced is wine of a "sherry type "-some of it of the character
of dry sherry but most of it of the character of sweet sherry.
18
Cross, J.
Vine Products Ltd. v, Mackenzie & Co. Ltd.
[1969] R.P.C.
I must next consider under what descriptions British wine of a "sherry
character" has been sold in this country. The first point to observe in this connection is that, except in a few isolated cases which have been the subject of prosecutions under the Merchandise Marks Act, 1887, the labels on the bottles containing
" British Sherry" have never described it as " sherry" simpliciter,
5
At this point I must refer to some of the provisions of this Act. Under section
2(1Xd) it is an offence to apply any "false trade description " to goods. Section
5 says that a person shall be deemed to apply a trade description to goods if he
(inter alia) applies it to a label with which the goods are sold.
Section 18 is in the following terms:
10
"Where, at the passing of this Act, a trade description is lawfully and
generally applied to goods of a particular class, or manufactured by a particular
method, to indicate the particular class or method of manufacture of such goods,
the provisions of this Act with respect to false trade descriptions shall not apply
to such trade description when so applied: Provided that where such trade 15
description includes the name of a place or country, and is calculated to
mislead as to the place or country where the goods to which it is applied
were actually made or produced, and the goods are not actually made or
produced in that place or country, this section shall not apply unless there
is added to the trade description, immediately before or after the name of that 20
place or country, in an equally conspicuous manner, with that name, the
name of the place or country in which the goods were actually made or
produced, with a statement that they were made or produced there."
In 1925 the Sherry Shippers' Association, which had been founded in 1910 to
protect the interests of the trade, brought a prosecution under the Act against
Pipers Limited, who were selling some British wine-in fact manufactured by
Vine Products Limited-under a label which said in large letters "Corona Pale
Sherry," and underneath in much smaller letters" Produced in England from the
juice of selected foreign grapes." The case is shortly reported under the name
of Corke v. Pipers Ltd. in the Justice of the Peace, but I was 'Supplied with a full
transcription of the magistrate's judgment and of some exchanges between him and
counsel after he had delivered it. He found as a fact, on the evidence before
him, that "sherry" meant wine produced in the Jerez district of Spain and that
by selling British wine under the label in question the defendants were applying
a false trade description to their goods. In the course of the case he had been
shown a label reading: "Rohilla British Sherry" under which some other British
wine was being sold, and he expressed the view. that that was unexceptionable
and could deceive no-one. Counsel for the Sherry Shippers Association said:
"Yes, that seems to comply with the proviso." He meant by that, I think:, that
the expression" British Sherry" was in use in 1887 to describe British wine of a
" sherry character" and that though the expression included the name of a placeJerez-which was itself calculated to mislead, inasmuch as the contents of the
bottle had no connection with Spain, the addition of the word "British " in an
equally conspicuous position brought the case within the particulars of seotion 18.
At. all events, ~h~ther or not that is the explan~tion for their attitude, the Sherry
Shippers' ASSOCIatIon have never brought proceedings under the Merchandise Marks
Act in any case in which the words on the label were " British Sherry" as opposed
to "sh·erry" alone, though in fact they were almost invited to do so in 1936 by a
magistrate who heard a case in which the facts were similar to Corke v. Pipers Ltd.
But though the expression "British Sherry" received the blessing of the magistrate
25
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19
[No.1]
Chancery Division
Cross, I.
who tried the case of Corke v. Pipers Ltd., and the Sherry Shipper's Association
have never sought to argue that it is a "false trade description" within the
Merchandise Marks Acts, in the 1920's it was by no means universally used to
describe British wine of a "sherry character," and though it has gained ground
5 very much in the last 40 years it is not, even today, always used.
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In the first place in the 1920's and 1930's the words" sherry style" were often
used on labels together wieh Ithe brand name, and not the words "British Sherry."
Vine Products themselves have never used the words "sherry styl'e" on a label;
but between about 1929 and 1937 they did not sell their products in bottles but
only in bulk to customers, who bottled the wine under their own labels, and in
correspondence with the trade Vine Products Limited used the expression " sherry
style" freely to describe the wine in question. But thinking, no doubt, that " British
Sherry" sounded better than" sherry style," they did what they could to induce
their customers to put " British Sherry" rather than " sherry style" on their labels ;
and when they themselves began to sell in bottle again they invariably used the
words" British Sherry" if the word" sherry " appeared at all on the label. It was,
I think, largely owing to the influence of Vine Products that the expression " sherry
style" went out of use on labels on bottles. Certainly since the war "British
Sherry" has been almost universally used on labels to describe wine of a " sherry
character" made in this country if the word "sherry" appeared on the label at all.
But a substantial quantity of such wine has at all times been sold under a brand
name alone without the word" sherry." There is, for example, a British wine of
the character of sweet sherry which is sold under the description" Q.C. Cream ""Q.IC." denoting, I was told, not leading counsel, but" Quality Counts." Again
Vine Products themselves sold large quantities of wine of a "sh,erry type" in
the years 1954 to 1959 under the description "V.P. Point Brand Old Brown"
and "V.P. Point Brand Rich Golden" without the word "sh,erry" appearing
on the label.
At this point it will be convenient to leave British wines for the time being
30 and to turn to wines of a "sherry type" produced in the Commonwealth. The
vine was introduced into the Cape by the Dutch in the seventeenth century, and
by the end of the eighteenth century wine was being produced there in considerable
quantities. The difficulty in obtaining wine from the Continent in the period of
the Napoleonic Wars encouraged the import of Cape wines into this country, and
35 this was further favoured in the first half of the nineteenth century by preferential
duties. The expressions "Cape Ports" and Cape Sherries" were generally used
at this time to describe South African wines of a "port" or " sherry character."
As an example, I would refer to some catalogues issued by Messrs. Gilbeys in the
early 1860's. Cape wines did not, however, 'enjoy a high reputation, and the
40 removal of the colonial preference by Mr. Gladstone in 1861 practically killed
the market for them for the next half century or so.
About the beginning of this century wine began to be imported from Australia.
Soon afterwards the trade with South Africa began to revive, and the re-introduction of Empire or Commonwealth preference in the 1920's led to a considerable
45 increase in the imports of wines from both countries.
A little later, about 1930, wine began to be imported from Cyprus. Imports
of wine from South Africa, Australia and Cyprus are now very substantial and
much of the wine so imported is of a "sherry character." These wines are
sometimes sold under a brand nam,e alone without any reference to "sherry"SO an example is the South African wine "Paarlsack "~and in the 1930's South
20
Cross, J.
Vine Products Ltd. v. Mackenzie & Co. Ltd.
[1969] R.P.C.
African wine of a " sherry character" was sometimes sold under labels describing
it as "sherry type." But as with the British product, most of those Commonwealth
wines of a "sh'erry character" have for many years been sold, and are being
sold, under labels describing them as " sherry" preceded by the adjeotive "South
African," " Australian" or "Cyprus." They are, however, never sold under labels 5
describing them as " sherry" simpliciter.
The distinction in labelling between the Spanish product on the one hand, and
the British and Commonwealth product on the other, is reflected in the vast
majority of wine sellers' catalogues, Just as the Spanish wine is called" sherry"
on the label and never" Spanish sherry" whereas the British and Commonwealth 10
wines, if the word "sherry" appears on the label at all, are called "British,"
"South African," "Australian" or "Cyprus Sherry" as the case may be, so
nearly all wine sellers' catalogues have a separate entry headed" sherries" under
which are listed wines from Spain exclusively, whereas the British and Commonwealth products are listed in a different place in the catalogue and under a different 15
heading or headings, An analysis of some 1,500 wine lists issued in the years 1960
to 1964 showed that over 90 per oent have a heading "sherry" or "sherries"
followed by Spanish wines exclusively.
Oral evidence was given as to what the word "sh,erry" means to the members
of the public who use it by a number of people engaged in one capacity or another 20
in the buying and selling of wine. Many of them stressed the fact, of which
I might almost take judicial notice, that the public interested in wine is much larger
and much more diversified than it used to be. It extends from "Masters of wine"
to the man who takes a bottle of wine more or less at random from a rack in a
self-service store with very little idea of what it may be expected to taste like 25
or in what quantities and with what food it would be wise to drink it, let alone
where it may be supposed to come from. Again the fact that for many years a
great deal of wine of a sherry character has been sold in this country under the
description" South African Sherry," " Australian Sherry" and so on has inevitably
had an effect on the meaning of the word " sherry " when used by itself.
30
In the first place even people who are knowledgeable about wine and would
expect if they asked in a bar for a glass of dry sherry to be given a wine from
Spain may on other occasions use the word "sherry" to include "sherry type"
wines. For instance one Master of wine might well say to another "These three
glasses contain three different sherries one from Spain, one from South Africa 35
and one from Australia. Can you tell which is which"? If his friend replied
" You mean, I suppose, that one glass contains sherry and the other two wines
of a "sherry character" coming from South Africa and Australia respectively"
he would probably retort " Come off it You are not giving evidence in the sherry
case."
40
In the second place the sale of so much wine under the description "British
Sherry," "South African Sherry" and so on, probably tends to confirm in their
ignorance people who know little about wine and have never learned to associate
the word sherry with Spain. Nevertheless although the large sales of wine under
the descriptions "British Sherry," "South African Sherry" and so on over the 45
last 40 years or so has undoubtedly tended to weaken the connection in men's
minds of the word "s'herry" with Spain exclusively, the oral 'evidence showed
clearly that the distinction between "sherry" on the one hand and "British
Sherry," "South African Sherry" and so on on the other which is observed on
the labels and in the wine lists is also reflected in the speech of most of the 50
2i
[No.1]
Chancery Division
Cross, J.
wine buying public when they come to buy sherry. The witnesses all agreed that
if a customer previously unknown to them asked fora bottle or a glass of sherry
in a shop or a bar they would assume without question that he meant a wine
from Spain unless it was clear from the price which he expected to pay that he
5 must mean a British or a Commonwealth wine.
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Finally I come to the advertisements issued by the plaintiffs of which the
defendants complain and of which they give particulars in their defence and
counterclaim. They fall roughly into three categories. The first is that in which
there is no reference to the non-Spanish origin of the wine in the advertising
matter itself which simply describes the product as "sherry" but the words
" British Sherry" appear on the label of a bottle which is displayed in some cases
more and in some cases less conspicuously in connection with the advertising
matter. One example of this category is the advertisement of " Magna Cream" to
which I have referred. Others can be found among the television advertisements
objected to. For instance in Script No. 9 what the viewer hears are the words
" If you like a good dry sherry ask for R.S.V.P. Dry." Art the same time he sees
a customer and a salesman in a wine shop and on the counter a card advertising
R.S.V.P. Dry which includes a picture of the bottle which itself bears the words
"British Sherry" on ii. The second category is where the advertising matter itself
indicates the British or Commonwealth origin of the wine but also describes it as
" sherry" simpliciter. An example of that is an advertisement running "Three
Crown Empire Cream Sherry by Jules Duval, Produce of Cyprus, the sherry you
are proud to offer your friends." The third category consists of certain advertisements of their" British Sherry" issued by the plaintiffs, Whiteways Cyder Company
Limited, which contain matter suggesting a connection with Spain-e.g. a toreador
called" Pedro" or girls in mantillas.
Having set out, I hope not too briefly, the salient facts as I see them I turn
now to consider the decision in the Spanish Champagne case in detail. The statement of claim-so far as relevant-ran as follows:
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1. Each of the plaintiffs is a company incorporated according to the laws
of the Republic of France and carries on business as a producer of wine in
the district of France known as and hereinafter referred to as the Champagne
district and as a supplier of such wine to England and Wales. The plaintiffs
sue on behalf of themselves and all other persons who produce wine in the
Champagne district and supply such wine to England and Wales which other
persons, together with the plaintiffs, are hereinafter called "The Champagne
Houses."
2. The wine produced by the Champagne Houses and each of them and
supplied by them to England and Wales is a naturally sparkling wine produced
in the Champagne district by a process of double fermentation from grapes
grown in the Champagne district and is and has for long been known to
the trade and public throughout the United Kingdom as Champagne and as
such has .acquired a high reputation. Any member of the trade or public in the
United Kingdom ordering Champagne or seeing wine advertised or offered
for sale as Champagne will expect the wine so ordered, advertised or offered
for sale to be a naturally sparkling wine produced in the Champagne district
from grapes grown in the Champagne district and no other wine.
3. The defendants are a company carrying on business at 75 Gray's Inn
Road, London, W.'C.l, as wine and spirit merchants and have passed off and
threatened and intend to pass off, as and for Champagne, wine not produced
22
Cross, J.
Vine Products Ltd. v. Mackensle & Co. Ltd.
[1969] R.P.C.
by the Champagne Houses in the Champagne district from grapes grown in
the Champagne district and supplied by the Champagne Houses to England
and Wales by advertising, offering for sale and selling the same as Spanish
Champagne.
The defendants demurred and an issue of law was directed to be tried which 5
so far as relevant ran as follows:
"that assuming the truth of paragraphs 1 and 2 of the statemen·t of claim
if the defendants have as alleged in paragraph 3 of the statement of claim
passed off or threatened or intended to pass off as or for Champagne wine
not produced by the Champagne Houses in the Champagne district from 10
grapes grown in the Champagne district, and supplied by the Champagne
Houses to England and Wales, they have not thereby done any act in respect
of which any of the plaintiffs have a cause of action against them according
to the law of England."
The defendants argued that it was essential for a plaintiff in a passing off
action to prove that the method of trading adopted by the defendant was calculated
to lead to his goods being taken to be the goods of the plaintiff. Even if every
single producer of Champagne in France had joined in this action, the 'plaintiffs
could not have said that the defendants were representing their goods to be the
goods of anyone of the plaintiffs individually-and it was not enough, so the
argument ran, to prove that the defendants were representing their goods to be
"Champagne." There was no English authority exactly in point. The cases of
Dent v. Turpin (1861) 2 Johns & Hem. 139 and Southern v. Reynolds (1865) 12
L.T.(N.S.) 75 showed, indeed, that someone who was not the only person entitled
to use a given trade name could bring a passing off action against someone who
was using the mark or name without the consent of any of the persons entitled
to use it. But it could not be said that the word "Champagne" was a trade name
or description in which each producer has an individual right of property of such
a character t,hathe could license its UIseI" by som;eoneel:s:e. There 'was, however,
an American case Pilsbury Washburn Flour Mills v. Eagle (1898) 86 Fed. R.608-which lent support to the plaintiffs' claim.
"This was an action by a number of manufacturers, including one, the
one named in the case, which was an English company, who for many years
had manufactured flour on a large scale at the city of Minneapolis in
Minnesota. The defendants were wholesale and retail grocers, selling flour
at Chicago, Illinois. The plaintiffs sought to stop them from using on barrels
and sacks containing flour the words "Minnesota Patent" or "Minneapolis,
Minnesota," or "Minneapolis Minn." The plaintiffs had for many years
identified their flour by the words "Minneapolis," "Minneapolis, Minn," or
"Minneapolis, Minnesota," or "Minnesota Patent." The use of the words
" Minnesota " or "Minnesota Patent" was understood by the trade and the
public to mean flour made under a certain patent process somewhere in the
State of Minnesota. Originally, before 1893, it appeared that the defendants
had stocked and sold the plaintiffs' flour under the name and description used
by them, but after 1893 proceeded to use the names and descriptions complained of for flour produced at Milwaukee in Wisconsin, which was alleged
to be inferior flour sold at a cheaper 'price.
"The court after an extensive examination of the authorities, including
numerous English cases, and among them nearly all the leading English cases
on ordinary passing off, came to the conclusion that an injunction ought to
be granted, reversing the decisions of the court below."
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23
[No.1]
Chancery Division
Cross, J.
In the absence of any English authority to the contrary effect, Danckwerts, J.
accepted that case as correctly stating the law of England as well as of America,
and so overruled the defendants' demurrer. That, of course, left open the question
whether the plaintiffs could establish the facts alleged by them and in particular
5 whether the expression "Spanish Champagne " was calculated to deceive. In this
connection it is to be observed that in the Pilsbury Washburn case the defendants
had been marking their bags with words which clearly indicated that the flour
contained in them had come from Minnesota. It would have been an analogy
to this if the Costa Brava Company had been labelling their wine" 'Champagne ";
10 but in fact they were labelling it "Spanish Champagne."
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The trial of the issues of fact in the action is reported in {1961] R.P.C. 116.
The 'evidence established that the word "'Champagne" meant in England wine
produced in the Champagne district of France by the plaintiffs and the other
growers and shippers of that district. The defendants argued that nevertheless the
addition of the word " Spanish" showed that their product was not a wine produced
in France, and that accordingly the description "Spanish Champagne" could
mislead no-one, The judge described this as "a fairly specious argument" (see
page 120, line 41) but he rejected it. In doing so he drew a distinction between
those who were knowledgeable and those who were ignorant in matters of wine.
The former would know that Champagne came exclusively from France, and
so would realise if they bought a bottle labelled " Spanish Champagne " that they
were not buying real Champagne but a Spanish sparkling wine. But according
to the evidence given in that case-which was to the same effect as that given in
this case-many people in this country are today drinking wine who were not
brought up to this habit and know little or nothing of the various types of wine
and their countries of origin. Such people, the judge thought, might well be
deceived by a bottle labelled "Spanish Champagne." But how would they be
deceived ?Counsel for the plaintiffs, if I understand his argument correctly,
suggested that Danckwerts, J. meant that they would think that the wine which they
were buying came from France in the same way as those who purchased from the
defendants in the Pilsbury Washburn case would have thought that the flour which
they were buying came from Minnesota. That I am sure does far less than justice
to the judge's reasoning. A man who does not know where Champagne comes
from can have not the slightest reason for thinking that a bottle labelled " Spanish
Champagne" contains a wine produced in France. But what h,e may very well
think is that he is buying the genuine article-real Champagne-s-and that, I have
no doubt, was the sort of deception which the judge had in mind. He thought,
as I read his judgment, that if people were allowed to call sparkling wine not
produced in Champagne "Champagne," even though 'preceded by an adjective
denoting the country of origin, the distinction between genuine Champagne and
"champagne type" wines produced elsewhere would become blurred; that the
word "Champagne" would come gradually to mean no more than "sparkling
wine ." and that the part of the plaintiffs' goodwill which consisted in the name
would be diluted and gradually destroyed. If I may say so without impertinence
I agree entirely with the decision in the Spanish Champagne cese-s-ou: as I see
it it uncovered a piece of common law or equity which had till then escaped noticefor in such a case there is not, in any ordinary sense, any representation that
the goods of the defendant are the goods of the plaintiffs, and evidence that
no-one has been confused or deceived in that way is quite beside the mark. In
truth the decision went beyond the well-trodden paths of passing off into the
unmapped area of "unfair trading" or "unlawful competition."
24
Cross, J.
Vine Products Ltd. v, Mackenzie & Co. Ltd.
[1969] R.P.C.
That, being, as I see it, the scope of the decision in the Spanish Champagne
case, it remains to see how far, if at all, it applies to the facts of this case. It
was not suggested by the plaintiffs that there was any distinction to be drawn
between a Champagne shipper and a sherry shipper so far as concerned his. title
to bring the action. No doubt a plaintiff in this sort of action must establish 5
that the district in which goods in question were produced and which gives the
goods their name is defined with reasonable precision either by law or custom. The
court must obviously be in a position to decide in case of dispute whether or not
any given plaintiff is a producer in the district in question. But the evidence in
this case shows that there would not be the least difficulty in saying whether or 10
not anyone claiming to be a producer and shipper of " sherry" was entitled to be
so described. lit can, of course, make no difference in this connection that the
boundaries of the district are not static but are liable to change, provided that
there is no uncertainty as to when this change occurs and what is its extent. Thus
the fact that Montilla used to be classed as sherry but now has its own separate 15
system of control does not affect the question at issue one way or another.
But, to turn from the Spanish to the English end, have the defendants established,
as the plaintiffs established in the Spanish Champagne case with regard to
"Champagne," that the word "sherry" means in this country a wine produced
in the Jerez district of Spain? The contentions of the plaintiffs on this point 20
are set out in paragraphs 5(a) and (b) of the statement of claim which I will
read again:
"(a) that to the interested public in England the word 'sherry' means
only a particular type of wine usually regarded as an aperitif and fortified
with added spirit and of a colour varying from very pale yellow to deep 25
brown and varying in taste from very dry to very sweet ; (b) that the word
, sherry' even when used alone does not mean and is not understood by the
interested public to mean exclusively a wine made from grapes grown in
the Jerez district of Spain."
The defendants contended that the suggested definition must be wrong because
it was so vague that it would cover other wines-" madeira" for example-as well
as sherry, But it appear,ed from the evidence and argument that what was intended
by the words "a particular type of wine " was a wine wherever produced which
as well as having the other characteristics mentioned tasted and smelt like some
wine produced in the Jerez district. Another point urged by the defendants against
the plaintiffs' definition was that it could not include their own product since
"British Sherry" is not a wine. Wine, it was said, is fermented grape juice, and
what the plaintiffs ferment, namely a compound of one-fifth dehydrated grape
juice and four-fifths water, could no more be called" grape juice " than orangeade
and water can be called orange juice. But assuming this to be true, the point can
easily be met by substituting "alcoholic liquid" for "wine" in the definition.
What the plaintiffs are really saying is that "sherry" means a wine produced
in the Jerez district of Spain or any alcoholic Iiquid-i-whether or not strictly
speaking a wine-wherever produced which tastes and smells like a wine produced
in the Jerez district. Of course, if that is all that "sherry" means, the word
has been debased with a vengeance and a man may with impunity put almost
any alcoholic liquid. into a bottle and cal.l it " s~erry." It is not perhaps surprising
that the representative of the South African WIne Farmers' Association who was
calle~ .as a wi~ness for the plaintiffs did not accept this definition of " sherry." His
definition, which was, of course, framed so as to cover the South African product
was wine from the Jerez district and wine produced elsewhere in a similar way in
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[No.1]
Chancery Division
Cross, J.
similar climatic conditions and achieving a comparable standard of excellence. He
repudiated altogether the idea that "British Sherry" could properly be called
sherry. But as I have already said I am satisfied from the evidence with regard
to labels, wine lists and current usage that despite the long established and wide5 spread use of the expressions "British Sherry," "South African Sherry" and so
on, the word "sherry" standing alone still ordinarily means, in the context of
buying and selling, a wine from the Jerez district of Spain and not a typ,e of wine or
alcoholic liquid which may be produced anywhere or in any way. To that extent
I think that the defendants have established what the plaintiffs established in the
10 Spanish Champagne case. I would add that my view accords with that of the
magistrates who have from time to time decided the cases under the Merchandise
Marks Acts to which I have referred. If "sherry" means no more than the
plaintiffs say it means, it would follow that it would not be a false trade description
for them to label their products "sherry," for one of their witnesses said-and
15 I do not doubt truly-that to him "V.P. British Sherry" tasted and smelt like
a wine from the Jerez district.
On the basis that" sherry" still means wine produced in the Jerez district of
Spain, the defendants argue that the continued use of such expressions as "British
Sherry," "South African Sherry" and so on should be forbidden just as the
20 continued use of the expression "Spanish Champagne" was forbidden in the
Spanish Champagne case. They argued that the distinction between sherry and
" sherry style" wines made outside the Jerez district has already become somewhat
blurred and the longer such expressions are allowed to be used the more blurred
it will become. But whatever might have been the result had this action been
25 brought 100 years ago, and the courts had appreciated that the law was as laid
down by Danckwerts, J. in the Spanish Champagne case, can the defendants object
to the use of these 'expressions now after so long a user as has been proved ?
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The principle to be applied in considering this sort of question is to be found
in the opinion of the Privy Council delivered by Sir Barnes Peacock in Lindsay
Petroleum Co. v. Hurd (1874) L.R. 5 P.,C. 221 at 239, which was adopted by
Upjohn, J. lin the ARRow Shirt 'Case, Cluett-Peabody v. Mclntyre, Hogg Marsh &
Co. Ltd. [1958] R.P.-C. 335 at 354:
"In my judgment the true principle is to be found in the judgment of
Sir Barnes Peacock "-and he gives the reference to the Lindsay Petroleum
case:" 'Now the doctrine of laches in courts of equity is not an arbitrary
or a technical doctrine. Where it would be practically unjust to give a remedy,
either because the party has, by his conduct, done that which might fairly
be regarded as equivalent to a waiver of it, or where by his conduct and
neglect he has, though perhaps not waiving that remedy, yet put the other
party in a situation in which it would not be reasonable to place him if the
remedy were afterwards to be asserted, in either of these cases, lapse of time
and delay are most material. But in every case, if an argument against relief,
which otherwise would be just, is founded upon mere delay, that delay of
course not amounting to a bar by any statute of limitations, the validity of
that defence must be tried upon principles substantially equitable. Two
circumstances, always important in such cases, are, the length of the delay
and the nature of the acts done during the interval, which might affect either
party and cause a balance of justice or injustice in taking the one course or
the other, so far as relates to the remedy.' "
In my judgment it would be unjust to allow the defendants to object at this
date to the use of the expressions in question. The defendants themselves have
admittedly at all material times been aware of their use and I cannot doubt that
26
Cross, J.
Vine Products Ltd. v, Mackenzie & Co. Ltd.
[1969] R.P.C.
it has always been common knowledge in "Sherryland." Further the plaintiffs
have altered their position and incurred expense on the footing that they were
entitled to sell wine under the names" British Sherry," " South African Sherry"
and so on. The only argument of any substance which the defendants had to
urge against this conclusion was that raised in their reply to the defence to counterclaim-namely, that before the decision in the Spanish Champagne case they did
not realise that they could bring civil proceedings against the plaintiffs in respect
of their user of the words in question. Now I have no doubt that the decision in the
Spanish Champagne case came as a surprise to many if not most lawyers in this
country, and I am quite ready to believe that before that decision was given neither
the defendants nor their legal advisers appreciated that they could object to the
use of the words "British Sherry," "South African Sherry " and so on. But I
do not think that this fact avails the defendants at all. When A is said to have
lost his right to object to some conduct on the part of B, it is no doubt relevant to
oonsider not only whether A knew what was being done, but also whether he knew
of his right in law to object to what was being done. But the weight fairly to be
attributed to ignorance of law must vary with the circumstances. It must, for
example, be greater if it is ignorance of some private right-for example, the true
construction of some obscure 'deed-than where it is, as here, ignorance of a general
principle of law. Again it must be less if the party who is said to have lost his
right was to the knowledge of the other party in receipt of legal advice than if
that was not the case. In this case the plaintiffs could properly assume that the
defendants were at all times in receipt of the best available advice as to the steps
which they could take to protect their goodwill in the word "sherry" and it
would, to my mind, be altogether unjust to allow the defendants to rely on the
ignorance of their lawyers, excusable though it was, as to the law on the point
in question before the decision in the Spanish Champagne case. It follows in my
judgment that the plaintiffs are entitled to the declarations which they claim,
and that the counterclaim fails 8:0 far as concerns the claim'S to restrain the use
of the words" British Sherry," "South African Sherry" and so on.
It remains to consider whether the defendants are entitled to the first injunction
claimed by the counterclaim. The attitude of the plaintiffs on this point was
somewhat ambiguous. They put forward a definition of " sherry" in the statement
of claim which was plainly intended to cover "British Sherry" and which, if
right, would mean that a prosecution under the Merchandise Marks Acts for
describing their product as "sherry" on a label ought to fail. But at the same
time their counsel was at some pains to say that the plaintiffs were not claiming
any general right to call" British Sherry" "sherry" simpliciter, and he defended
the advertisements not on the broad ground that "British Sherry" was sherry,
but on the narrower ground that no-one, whatever his knowledge or ignorance as
to wine, would be deceived by any of them into supposing that the wine referred
to came from Spain. But if my view of what the Spanish Champagne case decided
is right, it is not necessary to prove that sort of deception in this kind of action.
On my finding as to the meaning of the word" sherry,' the defendants are entitled
(save in so far as they have lost their right to do so by acquiescence) to complain
of the use of the word "shlerry" in connection with any wine which does not
come from the Jerez district of Spain, whether or not it is so used as to suggest
that the wine in question comes from or has any connection with Spain. I have
held that the defendants have by acquiescence lost their right to complain of
wines of a sherry type not coming from Spain being described as "British Sherry"
" South. Africa~ Sherry" ~nd so o,~. ~ut ~~ey have not acquiesced in such she~y
style WInes being called sherry simpliciter, All the advertisements of which
complaint is made are recent, and the plaintiffs did not suggest that they had
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27
[No.1]
Chancery Division
Cross, J.
issued similar advertisements at an earlier date. If, onc'e one rejects the plaintiffs'
definition of sherry and holds, as I do, that in the context of buying and selling
wine it still means a wine from the Jerez district of Spain, then to say in an
advertisement or television broadcast that" Magna Cream," for example, "is an
5 excellent s'herry" is something of which, on the basis of the Spanish Champagne
case, the defendants are entitled to complain. Further I do not think that it makes
any difference that the advertisement or television broadcast says not "Magna
Cream is an excellent sherry " but "Magna Cream British Sherry is an excellent
sherry." Even the latter form of advertisement must tend pro tanto to blur the
10 distinction between sherry which is a product of Spain, and" sherry style" wines
made ielsewhere, and so to injure the part of the defendants' goodwill which
resides in the word "sherry." It may, perhaps, be said that it is hard on a man
who has acquired the right to call his wine " British Sherry" not to be allowed to
say that his "British Sherry" is sherry, But after all, he is not obliged to call
15 his product "British Sherry" and so saddle it with a suggestion of inferiority
which it may not deserve. He can-and indeed he sometimes does-sell it under
a brand name without using the word " sherry" at all.
In all the circumstances, I propose on the counterclaim to grant an injunction
restraining the plaintiffs from using the word" sherry" in connection with any
20 wines sold by them otherwise than as part of the phrases" British Sherry," " South
African Sherry" and so on. The precise wording of this injunction will have
to be considered by the parties, and also the question of costs.
On 10th November 1967 the following submissions were made on the form of
order appropriate to the above judgment.
25
Aldous, Q.C.-The defendants were granted a modified relief on their counterclaim, it having been found that certain acts would constitute unlawful competition
even without evidence of deception. Unlawful competition was not pleaded. Had
it been, our evidence and pleadings would have been different [Cross, J.-I don't
think I had in mind the point that it was not open on the pleadings, and I had
30 not appreciated that the evidence would be in any way different.] I am accepting
your views ion 'the law. You have Iogically ignored, Singer Manufacturing Co. v.
Loog (1880) 18 Ch.D. 395 aJt 412 because, at page 23 you hold you are not
here concerned with passing off and that deception and confusion are unnecessary.
You are concerned with unfair trading or unlawful competition so that decisions
35 on passing off are irrelevant, However, my case on deceptiveness was simply that
there had been no instance of deception. It was not directed to meet a case of
unlawful competition, as this cause of action was not raised on the pleadings.
In Bollinger v. Costa Brava Wine Co. Ltd. [1960] R.P.'C. 16 at 24 unlawful competition was specifically pleaded in paragraph 5 of the 'Statement of claim.
Holland, Q.C.-In my speech I plainly raised the question of the property in
the word "sherry" and the effect of the judgment in the Bollinger (" Spanish
Champagne ") case. In that case Danckwerts, J. was deciding whether the use of
the word " Champagne" was actionable at the suit of those who made Champagne
in the Champagne district. This arose from the question of whether the words
45 "Spanish Champagne" amounted to passing off. In the pres-ent case, you did
not have to decide whether the words" British Sherry" were a passing off, or were
likely to deceive, because long user debarred the defendants from complaining
of this phrase. I spent much time arguing that the original decision of Danckwerts,
J. [1960] R.P.C. 16 related to the right i~O use the word "sherry."
40
28
Cross, J.
Vine Products Ltd. v, Mackenzie & Co. Ltd.
[1969] R.P.C.
Paragraph 5 of the statement of claim in the Spanish Champagne case merely
states that the acts particularised in paragraph 3 constituted unlawful competition.
Paragraph 3 ,contains an allegation of passing off by selling as Champagne wine
not produced in the Champagne district. The plaintiffs in that case regarded
paragraph 5 as simply attaching a label to the tort complained of, see page 18. 5
Provided all the material facts are pleaded, inferences of law need not be stated.
It is enough if the facts give rise to a cause of action. See Shaw v. Shaw [1954]
2 Q.B. 429 at 441 and R.S.C., Ord. 18, r. 74 I argued fully that any use of the
word "sherry" was a wrongful interference with the goodwill of the defendants.
The only question on the pleadings is whether sufficient facts were pleaded to 10
justify that conclusion. We pleaded that "sherry" is part of our goodwill, that
use of, the word "sherry" alone is calculated to deceive when used on wine
not produced in the manner specified, that the plaintiffs have offered for sale such
wine under the name "sherry," and that this amounts to passing off. Once you
find the word" sherry" has the meaning we claim it has, likelihood of deception 15
must follow from the plaintiffs' use of the word on its own. The plaintiffs' point
on unlawful competition is a bad point, and it is now too late to take it.
Aldous, Q.C.-In order to succeed on the issue of passing off, the defendants
in this case must prove not only their goodwill in the name, but also likelihood
that the plaintiffs' goods would be confused with those of the defendants. If this 20
case is passing off, the case of Singer Manufacturing Co. v. Loog is conclusive,
but you did not refer to that case because you found that this was not a case of
passing off. It is true that pleadings should plead facts not law, but an allegation
of passing off is an allegation of fact. There is no other wrongful act alleged in
the defendants' pleadings.
25
Judgment was reserved, and was delivered on 27th November 1967.
Cross, J.-At the end of the judgment which I gave on 31st July I said that I
would hear further argument after the vacation on the wording of the order and
the question of costs. On 10th and 16th November I heard argument on those
points and also a submission by counsel for the plaintiffs that I ought not to grant 30
any relief on the counterclaim because the ground upon which I had decided in
favour of the defendants-assuming (as the plaintiffs must for present purposes)
that it was well-founded in law-was not open to the defendants on the pleadings,
had not been argued for by them and came as a surprise to the plaintiffs when
35
they heard it in my judgment.
I will deal with the last point first. The basis of it, as I understand, is that the
tort which I held the defendants had committed by the advertisements and television
broadcasts in question was not passing off but a new-fangled tort called" unlawful
competition " which had been pleaded in the Spanish Champagne case Bollinger v.
Costa Brava Wine Co. Ltd. [1961] R.P.;C. 116, but not in this case. It is of the 40
essence of passing off, so the argument ran, that the plaintiff should show that
the defendants' method of trading was calculated to deceive or confuse members
of the public by leading them to think that the goods of the defendants which
they were buying were in fact the goods of the plaintiff. The plaintiffs in this
case had, so they said, come prepared to rebut, and did rebut, any such confusion 45
or deception, only to find to their amazement that in my judgment I said that .the
faet th3Jt there was no such deception or confusion here was irrelevant Now itt
is true enough that paragraph 5 of the statement of claim in the Spanish Champagne
case contained the words" unlawful competition," but paragraph 3 alleged in terms
29
[No.1]
5
10
15
20
Chancery Division
Cross, J.
that the defendants had passed off, and intended to pass off, as and for Champagne
wine not produced by the Champagne Houses in the Champagne district by
advertising, offering for sale and selling the same as "Spanish Champagne." All
that paragraph 5 said was that the pleaded acts of the defendants constituted
unlawful competition with the plaintiffs in the way of trade and the order made
in the action did not refer to unlawful competition at all but merely restrained
the defendants from passing off as and for wine produced in the Champagne
district wine not so produced by selling it as "Spanish Champagne." I do not
think that it made any difference to the result that the words "unlawful competition"
appeared in the statement of claim in the Spanish Champagne case, nor do I
think it makes any difference that they do not appear in the pleadings in this case.
As I read the Spanish Champagne case, what differentiates an ordinary case of
passing off from the special type of passing off illustrated by that case is that
in the latter type of case the plaintiff is not saying that the defendant is leading
people to think that his goods are the goods of the plaintiff; he is merely saying
that the defendant is selling his goods under a false trade description and that he
is being, or is likely to be, injured thereby. That, of course, necessarily involves
the deception of anyone who does not already know that the description is falsebut it is quite a different sort of deception from that usually relied on in passing
off actions, and that, no doubt, is why the pleader in the Spanish Champagne
case gave that particular type of passing off the label "unlawful competition."
The plaintiffs in this case knew perfectly well that the defendants were relying
on the Spanish Champagne case; their legal advisers must have known the
decision almost by heart ; and I find it a little difficult to understand how they can
25 have failed to foresee how the defendants would put their case. It is enough,
however, for me to say that if and so far as they were taken by surprise they
have only themselves to blame. They may, of course, persuade a higher court
that the Spanish Champagne case was wrongly decided; but that is quite a
different matter.
30
I turn now to the form of order. Each side produced a draft, and I will deal
shortly with the various points on which they differ.
(1) The defendants wished to preface the order with a declaration or expression
of opinion that "sherry" means what they allege it to mean in paragraph 4(a)
of the defence. I do not propose to do that,
35
(2) The defendants wished me to preface the declarations made in the plaintiffs'
favour with a statement to the effect that the plaintiffs' right to use the expressions
"British Sherry," "South African Sherry" and so on is based on long user, I
will not do that either. In my judgment the plaintiffs are entitled to the declarations
which they asked for in the prayer to the statement of claim. Anyone who is
40 interested to see why can read the judgment.
(3) The plaintiffs asked that the expression "Empire Sherry" should be added
to the list of descriptions under which they are entitled to sell wine. There was
a little evidence of use of that phrase for some time and the defendants do not
strenuously oppose its inclusion. In the circumstances I will include it.
45
(4) The plaintiffs submitted that I ought not to grant an injunction against them
but only give the defendants liberty to apply for one. I see no reason for not
granting an injunction. The plaintiffs never offered to desist from using the word
" sherry" simpliciter in advertising the wjne they sold. On the other hand, the
plaintiffs, Whiteways Limited, did in the course of the trialexpress regret for their
30
Cross, J.
Vine Products Ltd. v, Mackenzie & Co. Ltd.
[1969] R.P.C.
advertisement suggesting a connection with Spain. I am sure that they will not
repeat them, and I do not think that the injunction should deal with that form of
advertising but simply with the use of the word "sherry." The injunction will
obviously have to be so worded as not to prevent the plaintiffs from selling wine
from the Jerez district of Spain as " sherry."
5
(5) The defendants suggested that the order should state that the word " British"
and the word "!Sherry" should both be of the same size and colour. So far as
I know the plaintiffs always have used letters of the same size and colour for both
words, and I do not propose to refer to this in the order.
(6) The plaintiffs suggest that I should put words in the order enabling them to 10
interpose between the geographical adjective and the word "sherry" descriptive
words such as "Cream" 'or "Dry". I am not prepared to qualify the order in that way.
(7) The defendants submitted that they were entitled to an account of the
profits made by the plaintiffs respectively by using the word" sherry" simpliciter
in advertisements of "British Sherry" and of the profits made by Whiteways 15
by the "Pedro" advertisement. It would be quite impossible to ascertain such
profits, and, in view of that fact and of the fact that the defendants are suing
on behalf of some hundred sherry producers, I do not propose to order any
account.
That, I think, covers all the points that were raised on the form of order, 20
and I hope that the parties will now be able to agree a minute of it.
Finally, I turn to the question of costs. There were several different issues,
and some of them were interlocked. For example, many witnesses gave evidence
both as to the meaning of "sherry" when used alone and as to the long user
of such expressions as "British Sherry" or "South African Sherry." In 'Such a 25
case to give the plaintiffs the general costs of the aotion and the defendants only
the costs arising out of the counterclaim - in so far as it was not merely the
claim in reverse-might well produce an unfair result. On the other hand, to
direct the Taxing Master to deal with the issues separately and to decide how
much of the totality of the costs was attributable to each issue would impose a 30
very heavy burden on him and involve the parties in a great deal of further expense.
In the circumstances, I think that I ought either to make a special order directing
the defendants to pay to the plaintiffs an appropriate fraction of the aggregate
of their costs or a special order directing the plaintiffs to pay the defendants an
appropriate fraction of the aggregate of their costs or alternatively make no order 35
for costs at all.
I now proceed to consider which of these three alternatives would be fair. One
starts with the fact that before starting the action the plaintiffs made it clear to
the defendants that what concerned them was their right to use the expressions
"British Sherry," "South African Sherry" and so on. If that was conceded they 40
were prepared to discuss the wording of advertisements. If their offer to do so
had been accepted it is, to my mind, probable that Whiteways would have agreed
that there should be no more advertisements of the "Pedro" type and quite
possible that the plaintiffs might have agreed not to use the word "sh,erry"
simpliciter in advertisements, The defendants, however, deliberately chose to 45
challenge the plaintiffs' right to use the phrases" British Sherry," "South African
Sherry" and so on-and to meet that challenge the plaintiffs took a vast deal of
trouble and incurred very great expense in proving long, continued and widespread
31
[No.1]
5
10
15
20
25
Chancery Division
Cross, J.
user of those phrases. From time to time in the course of the trial counsel for
the defendants complained that the plaintiffs had disclosed and were adducing
in evidence an altogether excessive number of documents and calling an excessive
number of witnesses to say the same thing; but it hardly lay in the defendants'
mouth to complain of this as they had challenged the plaintiffs' right to use
those expressions and never, until during the trial, made any admissions on the
question of user. But, not content with defending their right to use these
expressions because they and 'their predecessors bad used them for so long
the plaintiffs went on in paragraph 5(a) and (b) of the statement of claim to put
forward a definition of sherry which, if right, would have entitled them to sell
"British Sherry" in bottles labelled "sherry." This invited a counterclaim, in
connection with which the defendants, in their turn, took a great deal of trouble
and incurred a great deal of expense. Counsel for the plaintiffs submitted that
some of this 'expense-for example the research into the derivation of the word
"sh'erry "-was unjustified; but here, as it seems to me, the plaintiffs in their
turn had only themselves to blame. They were indeed asked to make an admission
on this point and refused to do so. Of course it is easy enough for an outsider
to say" Why on earth all this expense to prove what is really as clear as daylight?
Why did they not agree a statement of facts and simply argue the law?" Indeed,
that thought occurred to me more than once in the course of the hearing. But
when you have two sets of wealthy litigants each of which is challenging the other
on a point which the other considers vital, it is easier to talk of "admissions"
and "agreed statements of fact " than to achieve them. The legal advisers on each
side are-quite naturally-e-afraid that they may inadvertently give away some
valuable point. Counsel on each side analysed the evidence given with the object
of showing that more time was devoted to the points on which his clients succeeded
than to those on which they failed-s-and as the issues overlapped each counsel
was able to make out a plausible case.
After considering the arguments of counsel, supplemented by my own memory
30 of the course of the proceedings, the conclusion that I have come to is first that
it would be unjust to the plaintiffs to direct them to pay any part of the defendants'
costs; secondly, that to make no order as to costs-i-though it would be nearer the
mark-would still be unduly favourable to the defendants; and that I ought to
direct the defendants to pay some fraction of the plaintiffs' costs whichvwould
35 amount to an appreciable sum but yet be substantially less than they would have
to pay if I gave the plaintiffs the costs of the action and the defendant'S the costs
of the counterclaim. In the nature of the case the fraction must be fixed in a rough
and ready fashion. I fix it at one-quarter.
That, I hope, as far as I am concerned, is the end; but I do not know, Mr.
40 Aldous.
Aldous, Q.'C.-My Lord, it ought to be the end. Of course, your Lordship
has still left untied (but I hope it will be ,easy to tie) the knot in the form
of the injunction.
Cross, I.-What I have done is that I have attempted to deal, I hope, with each,
45 of the points that you and Sir Milner raised, and I hope your juniors will get
together and see if they can agree a form of order in the light of what I have
said. If they cannot, you must come back.
Aldous, Q.C.-That was all that I was going to ask, that your Lordship should
give us liberty to apply to mention the form of the injunction if we cannot agree.
32
Vine Products Ltd. v, Mackenzie & Co. Ltd.
Cross, J.
[1969] R.P.C.
Cross, J.-If you cannot agree. I think I dealt with each of the specific points
that you raised, but I quite see there may be some loose ends.
Aldous, Q.C.-You did, but you never know. The juniors may not be able
to agree.
Cross, J.-I will not be angry to s,ee you all again, Mr. Aldous.
5
The order of the court was in the following terms:
THIS COURT DOTH DECLARE that each of the Plaintiffs is entitled to
continue to sell advertise and offer for sale any wine heretofore sold by any of
them respectively under any of the descriptions " British Sherry" " English Sherry "
"South African Sherry" "Cyprus Sherry" "Australian Sherry" or "Empire 10
Sherry" and is entitled to sell advertise or offer for sale any similar wine under
such descriptions without 'infringing any right of any 'ofthe Defendants.
AND THIS CO~URT DOTH DEICLARE that none of the Defendants has any
such rights as would entitle them either severally or in conjunction with all other
shippers of sherry wine from Spain to England to restrain any of the Plaintiffs 15
from selling advertising or offering for sale any such wines as aforesaid or similar
wine under the respective descriptions " British Sherry" " English Sherry" " South
African Sherry" "Cyprus Sherry" "Australian Sherry" or "Empire Sherry"
AND THIS COURT DOTH ORDER that the Plaintiffs and each of them be
restrained (whertherby their respective directors officers servants or agents or any 20
of them or otherwise howsoever) from using in the course of trade the word
" sherry" in connection with any wine not being wine coming from the Jerez
district of Spain otherwise than as part of one or more of the phrases "British
Sherry " " English Sherry " " South African Sherry " "Cyprus Sherry " " Australian
Sherry" and" Empire Sherry."
2S
AND IT IS ORDERED that the Defendants do pay to the Plaintiffs one quarter
of their costs of this Action and the said Counterclaim such costs to be taxed by
the Taxing Master.
M.R.M.
Wt.8147
EGE
3/69