One Federal Court decision clarifies what is considered as “authorised use” of a trade mark wherein the trade mark user is not the trade mark owner but a subsidiary of the owner’s company.
Trade Mark Enforcement and Defence
The value of your IP is normally directly related to the extent to which the owner of the intellectual property rights can enforce these rights. Effective trade mark enforcement is necessary to maintain the value of your IP in legal terms and to provide an ongoing deterrent to infringement by any third party.
Enforce your trade mark rights
Infringement is the unauthorised use of a registered trade mark. A registered trade mark is infringed if a sign that is substantially identical or deceptively similar to a registered trade mark is used. As a trade mark owner, it is important to monitor the market to identify any third party selling their goods and services under your trade mark.
If you believe your trade mark is being infringed by a third party, it is highly advisable to get into contact with a registered trade mark attorney before commencing any communication with the alleged infringer.
How to identify cases of trade mark infringement
Under Section 120 of the Trade Marks Act 1995 (Cth), a person infringes a registered trade mark by:
- Using a sign which is substantially identical or deceptively similar to a registered mark in relation to:
- Goods and services for which the trade mark is registered for;
- Goods and services that are of the same description or closely related to the goods and services the trade mark is registered for.
- Using a “well-known” mark for unrelated goods and services to those in respect of which the trade mark is registered.
Components of infringement
An allegedly infringing mark must be used as a trade mark i.e. a badge of origin for goods and services in respect of which the allegedly infringed trade mark has been registered. Various defences exist under Sect. 122 of the Act, which include bone fide use of a sign to indicate a characteristic of the goods/services.
The alleged infringing mark must be either substantially identical or deceptively similar to the registered trade mark and be used upon or in relation to goods or services of the same description or closely related to goods or services in respect of which the trade mark is registered.
To determine whether a mark is substantially identical to a registered mark, a side-by-side comparison of the respective marks, with their similarities and differences are noted. The importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison.
If the trade marks are not substantially identical, it should be considered whether they are deceptively similar. The test for deceptive similarity of marks does not involve a side-by-side comparison. he test is between, on the one hand, the impression based on recollection of one mark that a person of ordinary intelligence and memory would have and, on the other hand, the impressions that such a person would get from looking at the second mark.
Closely related goods/services
This is assessed by taking into consideration the following circumstances:
- the nature and characteristics of the goods/services;
- the origin of the goods/services;
- the purpose of the goods/services;
- whether the goods/services are usually provided by one and the same business or person;
- whether the goods/services are provided by the same sources, in the same area or district, during the same season or in relation to the same related goods or services and to the same class or classes of customers; and
- whether the goods/services are regarded as the same by those who provide them.
These concepts may be quite confusing, and legislation is often misunderstood. To enforce your trade mark rights, contact an IP professional to help you assess your options.
Trade Mark Enforcement in Australia
Another party could be benefiting from your brand and reputation by using a sign as a trade mark that is substantially identical or deceptively similar to your trade mark. Trade mark enforcement against parties infringing your own registered mark can be addressed either in or out of the courts. In order to establish legal action against a potential infringer, you will need to prove the validity of your IP rights by providing evidence of the following:
- Your trade mark is registered and in force. Intellectual property rights have expiry dates and in the case of trade marks, the registration needs to be kept up to date. Moreover, the trade mark should be actively used in trade.
- You are the owner of the trade mark.
- Another party is actually infringing on your trade mark. This needs to be established because if proven groundless, the accuser in trade mark infringement cases can be ordered by the courts to pay for damages incurred by the accused party.
- The infringing party does not have authority to use your trade mark.
When can you initiate action against trade mark infringement?
Subject to any agreement between the owner of a registered trade mark and an authorised user of the trade mark, the authorised user may bring an action for infringement of the trade mark:
- at any time, with the consent of the registered owner; or
- during the prescribed period, if the registered owner refuses to bring such an action on a particular occasion during the prescribed period; or
- after the end of the prescribed period, if the registered owner has failed to bring such an action during the prescribed period.
If the authorised user brings an action for infringement of the trade mark, the authorised user must make the registered owner of the trade mark a defendant in the action. However, the registered owner is not liable for costs if he or she does not take part in the proceedings.
Trade Marks Act
The Trade Marks Act provides protection for registered trade marks. Establishing registration is straightforward because a registered trade mark will be entered into the Register of Trade Marks.
While it is often more difficult to prove and more costly, some protection is accorded to unregistered trade marks. The tort of passing off and consumer protection legislation provide avenues for business owners to protect their trade marks from unauthorised use.
In the Common Law tort of passing off, a party makes unauthorised use of a get-up, namely, the overall packaging, external appearance, or feel of a product, to profit from another product’s established reputation. Registration of a trade mark is not necessary in passing off cases. The elements of passing off are more difficult to establish and generally require:
- establishment of a reputation or goodwill,
- there has been a misrepresentation that good/services of one trader are connected with the goods/services of another trader, and
- there has been damage to (the Plaintiff’s) goodwill.
Passing off and trade mark infringement cases frequently overlap but are addressed using different approaches. Compared with infringement, passing off is not covered in any statutory sanction, and is instead ruled based on precedent cases tried in the pertinent courts.
A successful passing off claim can result in an injunction with the possibility of the court also awarding damages in certain cases.
Misleading and Deceptive Conduct
Section 18 of the Australian Consumer Law (ACL) provides that a person must not engage in conduct that is misleading or deceptive or that is likely to mislead or deceive. The main focus of this provision is consumer protection. Therefore, the conduct will be analysed differently to how it would in a passing-off claim and a determination will have to be made on whether the use of a particular get-up or name is likely to mislead and deceive consumers.
It is common to see cases where there is an overlap of passing-off and misleading and deceptive conduct. Since the actions can be related and often also overlap with claims of trade mark infringement, it will be always advisable to have a IP specialist lawyer analyse your situation.
In addition to the above defences, Section 124 of the Act states that infringement is not established when your unregistered trade mark relating to goods and services in question has been used continuously before the filing date (priority date) of the infringed trade mark or the first time that the infringing party or their predecessor started using their unregistered trade mark, whichever is earlier.
Pre-commencement of infringement
Court proceedings can be quite costly and therefore, settling disputes outside of court is usually preferable. Once aware of instances of unauthorized use of a registered Trade Mark, it is usual practice for the trade mark attorney to send a ‘letter of demand’ to the infringing party. The letter of demand can be prepared in a number of ways depending on the objective of the Trade Mark owner. This is a pre-condition to commencing litigation in the Federal Court.
Mediation and arbitration may be employed so that both parties can come to a mutual agreement before the issue is escalated to litigation.
Relief granted by the courts
Relief that may be available is determined on a case by case basis. In general, the courts may grant an injunction, damages or an account of profits if infringement is found.
A court may assign an additional amount in an assessment of damages for an infringement of a registered trade mark, if the court considers it appropriate to do so having regard to several factors, including:
- the flagrancy of the infringement;
- the need to deter similar infringements of registered trade marks; and
- the conduct of the party that infringed the registered trade mark that occurred:
- after the act constituting the infringement;
- after that party was informed that it had allegedly infringed the registered trade mark;
- any benefit shown to have accrued to that party because of the infringement; or
- all other relevant matters.
Trade mark registration will protect your brand and by association, any reputation that you build in your brand name. It has a value that grows with the growth of your business. If you are considering trade mark protection or enforcing your trade mark rights against a potential infringer, please do contact us.