Apple & Pear Australia Ltd v Pink Lady America LLC

[2015] VSC 617

Supreme Court of Victoria

Built by Barristers,
For Australian Law.

1. Contract
2. › Options
3. › Exercise of option otherwise than in prescribed manner
1. Contract
2. › Implied terms
3. › Business efficacy — obligation to re-assign trademarks upon breach of licence-back
1. Estoppel
2. › Estoppel by convention
3. › Parties conducting relationship on assumed basis that option exercised and licence operative
1. Intellectual Property
2. › Trademarks
3. › Trademark licensing agreement — assignment in consideration for perpetual licence-back

Where parties to an option agreement consensually adopt a course of exercising the option that departs from the strict requirements of the option deed, the court will give effect to that exercise — either as acceptance of a counter-offer on identical terms or as a variation — particularly where the grantor accepted and retained the consideration stipulated in the option agreement yet later disclaimed proper exercise.
A perpetual, royalty-free licence granted as the sole consideration for assignment of trademark rights carries an implied term that if the assignee denies the assignor the full benefit of that licence, the assignee must re-assign the trademarks; the officious bystander test is satisfied because it would be legally incongruous for the assignee to retain the benefit while refusing to pay the price.
A perpetual licence expressed to be terminable only for breach of quality control provisions constitutes an accrued right that survives termination of the broader agreement for repudiatory breach, as a matter of construction of the contract.