Australian Co-Operative Foods v Norco

(1999) 46 NSWLR 267; [1999] NSWSC 274

Supreme Court of NSW

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Interrogate

Catchwords

1. Contract
2. › Construction
3. › Licence agreement
4. › Discretion to grant or withhold approval
5. › Whether discretion subject to implied limitation of honesty, reasonableness and good faith
6. › Whether refusal to approve co-branded packaging exceeded discretion
1. Contract
2. › Implied terms
3. › Good faith in exercise of contractual powers
4. › Licence to use registered trade mark
5. › Whether implied term required approval of co-branded packaging
1. Estoppel
2. › Estoppel by convention
3. › Prior industry practice of co-branding trade marks
4. › Change of circumstances in industry
5. › Whether party estopped from refusing approval under licence to continue co-branding
1. Estoppel
2. › Pre-contractual representations
3. › Subsequent written agreement containing entire agreement clause
4. › Whether estoppel inconsistent with express terms of written agreement
5. › Whether pre-contractual estoppel available

Quick Take

A discretionary power to approve or withhold approval of packaging under a trade mark licence agreement is subject to an implied limitation requiring the discretion to be exercised honestly, reasonably and in good faith, but a decision to refuse co-branding in order to protect the trade mark owner's commercial interests is within the range of reasonable outcomes. Pre-contractual estoppels cannot qualify the express terms of a comprehensive written agreement containing an entire agreement clause, following Johnson Matthey v A C Rochester. Former Part B trade marks under the Trade Marks Act 1955 that became registered under s 233(1) of the Trade Marks Act 1995 cannot be attacked under s 88(2)(a) but remain susceptible to attack under s 88(2)(c).