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.
Fair use of trade marks
A trade mark serves as a badge of origin of particular goods and/or services. One of the benefits of having a registered trade mark is that the owner of the trade mark can enforce their trade mark rights against someone who is using their registered trade mark to sell their similar goods or services. However, certain instances of use of a registered trade mark can be considered “fair use”. This allows a party to legitimately use another person’s trade mark without infringing the trade mark.
What is considered fair use?
Fair use of trade marks is classified into two parts: namely, descriptive fair use and nominative fair use.
Descriptive fair use
Descriptive fair use is when someone’s registered trade mark can be used in good faith to describe the user’s products or services. This usually happens when the trademark in question has a descriptive meaning in addition to its secondary meaning as a trademark. However, in Wellness Pty Ltd v Pro Bio Living Waters Pty Ltd  FCA 438, it was held that the use of the term “Living Water” was found to infringe a registered trade mark which was owned by Wellness Pty Ltd. The court found that the use of the words“Living water” by Pro Bio was neither descriptive of the goods nor reasonably necessary for adequate description of the goods. Therefore, the court did not consider Pro Bio’s use of the words “Living water” to constitute fair use.
Nominative fair use
Nominative fair use is when the use of another’s trade mark to refer to the trade mark owner’s actual goods and services associated with the mark is permitted. Nominative fair use is allowed if:
- the product or service is not identifiable without use of the trade mark;
- only a portion of the mark that is necessary to identify the product or service is used; and
- use of the mark does not suggest endorsement by the trade mark owner.
One example of nominative fair use is the use of the “Barbie” trade mark in a parody or criticism by a certain photographer. His work would not have been identifiable without the use of the trade mark “Barbie.”