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 Infringement
Trade mark registration grants the owner exclusive rights for using that trade mark in respect of the goods and services it is registered for. Nowadays, many business owners understand the need and benefits of trade mark registration, but business owners must also be aware that registration is not the last step to protecting your brand. It is up to business owners to be watchful of potential trade mark infringement and to ensure timely action is taken to enforce their rights.
What is trade mark infringement?
Trade mark infringement is the unauthorised use of a registered trade mark. A conduct will amount to trade mark infringement when a sign is used as a trade mark and is substantially identical or deceptively similar to a registered trade mark. As a trade mark owner, it is important to monitor the market and ensure that no third party is taking advantage of your IP rights or to take action quickly if you believe that they are.
The registered owner of the trade mark may start legal proceedings against a party that violates its trade mark rights, and such conducts are heard in the Federal Court, Federal Circuit court, or the supreme court of an Australian state and territory.
How to identify trade mark infringement cases
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 of which the trade mark is registered for (trade mark dilution).
While trade mark infringement may appear as a simple concept, legislation is often misunderstood. If you believe an infringing conduct may be taking place in relation to your trade mark, contact an IP professional to help you assess your options and strategy.
How to avoid trade mark infringement
Guaranteeing that your trade mark is unique from the onset can save your business from needlessly allocating budget and time. You should perform your due diligence and contact a trade mark attorney to help you perform a preliminary search of previously registered trade marks and pending applications before investing in developing a logo or a name.
In other cases, the use of another person’s registered trade mark is not considered as trade mark infringement when the use is categorised as fair use.
Example of trade mark infringement
A Cautionary TaleIn Société Des Produits Nestlé SA & Anor v Christian & Anor (No.4)  FCCA 2025  James Christian, the proprietor of an online vitamin business called A-sashi Vitamins (a spin from the Japanese beer Asahi), incorporated and registered a business name, two domain names and a Facebook page bearing the word “A-sashi”. Nestlé, who owned a range of trade marks which contained the word MUSASHI in relation to performance vitamins and nutrition products, sued Christian and sought to cease the production of the A-sashi supplements. The court ruled that the ‘Sashi’ in both trade marks was similar enough for consumers to be confused into thinking that the products of both lines were connected. After an unsuccessful appeal, the court ordered Christian to pay Nestlé for damages. As of 2016, Christian was revealed to be still under debt to Nestlé.
This trade mark infringement case underlines the importance of having an original mark and performing a trade mark search that covers both similar and identical trade marks. A trade mark attorney specialises in this type of searches and will be able to assess the strength of your mark.
Addressing trade mark infringement
Conversely, someone could be benefiting from your brand and reputation by using a sign as a trade mark which is substantially identical or deceptively similar to your trade mark. Trade mark infringement against 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; in the case of trade marks, the registration needs to be kept up to date. Moreover, the trade mark should be actively used.
- You are the owner of the trade mark.
- Another party is actually infringing on your trade mark. This needs to be established because if the infringement charges were proven groundless, the accuser in trade mark infringement cases can be sanctioned by the courts to pay for damages incurred by the accused party.
- The infringing party does not have authority to use your trade mark.
It is important to note that court proceedings can be quite costly; therefore exhausting the possibility of settling disputes outside of the courts is preferable. You can have your solicitor prepare and send a carefully worded Cease and Desist letter to the infringing party to stop the use of the offending trade mark. Mediation and arbitration may be employed so that both parties can come to a mutual agreement before the issue is escalated to court litigation.
If the above is not possible, successful court litigation can lead to the issuance of an injunction to permanently stop the infringing behaviour and repeat offense. Moreover, the courts can add additional damages depending on how flagrant the trade mark infringement action is and the conduct of the offending party after being informed of the transgression.
Defence for inadvertent trade mark infringement
Should you find yourself on the receiving end of a Cease and Desist letter, note that the Trade Marks Act 1995 includes provisions that may counter trade mark infringement accusations.
Section 122 provides that, trade mark infringement is not committed if, under the conditions of good faith:
- The trade mark is a person’s name or the person’s place of business;
- The trade mark is the name of a predecessor in business of the person or the name of the predecessor’s place of business;
- The trade mark is used descriptively, which means describing the kind, quality, quantity, intended purpose, value, geographical origin, some other characteristic of goods or services, or the time of production of goods or rendering of the services;
- The trade mark is provided to explicitly define the intended purpose of the good/service (as an accessory or spare part);
- The trade mark is mentioned for comparative advertising;
- The user has the right to use the trade mark given to the person under the Act;
- A disclaimer was published in relation to a section of the trade mark for use only of that particular section of the trade mark; and/or
- There is of a mark that could, in the court’s’ opinion, obtain registration.
In addition to the above defenses, Section 124 of the Act states that you are not committing trade mark infringement when your unregistered trade mark relating to goods and services in question has been used continuously before the filing date (priority date) of the contested trade mark or the first time that the contesting party or their predecessor started using their unregistered trade mark, whichever is earlier.
Trade mark infringement on the Internet
Owing to the misconception that everything on the internet is fair game, trade mark infringement cases have become extremely prevalent online.
Meta tags are information regarding pages that are typically not seen by visitors of the said page and are present only in the page’s code. These tags usually contain description or keywords that characterise the page. While visitors of the page cannot see them, metadata are used by algorithms to rank pages. The mention of a trade mark by a third party, possibly to drive up the ranking of and thus directing more traffic to a certain page, can be classified as meta tag trade mark infringement. Put in another way, if the text would infringe if it appeared on physical material, then the text is likely to infringe if its used in source data.
With Google being its own verb, internet traffic and advertisements using the search engine giant and its tool Google AdWords lead to possible avenues for trade mark infringement. In Veda Advantage Limited v Malouf Group Enterprises Pty Limited  FCA 255, Veda owned the rights to several trade marks bearing the word ‘VEDA’ like ‘Veda’, ‘Veda Advantage’, ‘Veda Check’, and ‘Vedascore’. Malouf Group registered a number of keywords which incorporated the name VEDA for use in sponsored ads to describe their credit repair service. Veda sued Malouf, alleging trade mark infringement and breach of the Australian Consumer Law. The court initially found that Malouf’s use of VEDA did not amount to trade mark infringement but did find some of their headings, such as “The Veda Report Center,” to mislead customers into thinking that Malouf Group is affiliated with Veda.
This decision highlights the importance of business owners being careful in relation to any use of a competitor’s name and trade marks as keywords.
Domain names are addresses which connect Internet users to a website and are a must for businesses that intend to establish online operations. However, this word or group of words can also be subject to trade mark infringement.
Registration of a domain name which incorporates a registered trade mark can amount to trade mark infringement when coupled with use, and it can be heard in court. Alternatively, complaints can be filed under the Uniform Domain Name Dispute Resolution Policy (UDRP) and be heard by a panel.
To determine domain name infringement under the UDRP, three elements should be present:
- The domain name should be identical or at least highly similar (at times appearing as a ‘typo’ error) to your domain name such that the infringing domain can be mistaken or confused as that of the trade mark owner;
- The registrant of the domain does not have any rights or interests in the domain name; and
- The domain name has previously been registered and is being used with duplicitous intent or in bad faith.
In cases involving the UDRP, bad faith can be assessed by considering several factors, such as whether the domain name was registered for the purpose of disrupting the operations of the trade mark holder, preventing the same from registering a domain that reflects the trade mark, knowingly driving online traffic to the registrant’s website and creating confusion among visitors.
Cybersquatting is the act of purchasing identical or similar domain names to registered trade marks by parties with unrelated business for possible purposes of duping customers into patronising a competitor, destroying the reputation of the trade mark owner, or selling the domain to interested parties for an exorbitant price. In Australia, the .au Domain Administration Ltd. suggests registering the .au address of businesses primarily operating in Australia as early as possible to prevent other parties from registering identical or confusingly similar domains. The agency bans the purchase of a domain name for the sole purpose of reselling, and Australian businesses and organisations that have been victimised by cybersquatters should first refer to the .au Dispute Resolution Policy (auDRP). Note that, once deregistered, the domain will not be automatically transferred to the complaining party, but instead, it will be available for registration by any interested party.
Protecting your trade mark internationally
Expansion of Australian businesses globally exposes your intellectual property to different trade mark infringement risks because trade mark rights are territorial, meaning they are only valid in the country where they are granted. As a trade mark owner, you should protect your business from trade mark squatting and trade mark dilution by registering your trade mark in countries whose markets you intend to enter. Trade mark dilution occurs when a well-known brand is used in dissimilar goods. Two approaches can be taken to protect your trade mark from trade mark dilution in an international scale: one is by registering your trade mark in each foreign market of interest, and the other is through an application through the Madrid Protocol. There are pros and cons to both approaches; thus, certain factors need to be preliminarily assessed to decide which IP protection route is better suited to your purposes:
- consider the prospective direction and potential future markets of your business;
- consult with a trade mark specialist that can help in strategising trade mark filing.
The Madrid Protocol provides a centralised filing system for filing overseas trade mark applications, which must be linked to a “home-base” application or registration. A Madrid Protocol application can be filed with an authorised office (IP Australia) and designate any one or more member countries. At present, there are more than 90 Madrid Protocol members.
The authorised office will transmit the application to the International Bureau of the World Intellectual Property Organisation (WIPO). WIPO will then send the application to the Trade Mark Offices in the countries designated for registration where the separate applications will be subject to local standards for registration in the designed countries.
While the Madrid Protocol represents a practical and cost-effective means of filing multiple overseas applications in a single step, there are some drawbacks to the system over direct filing. For example, the international registration is dependent on the home-base application or registration during the first five years after issuance. This means that if the home-base application or registration is abandoned or cancelled for any reason during the first five years after issuance, the international registration will also be abandoned or cancelled.
International registration is not cost effective if you are filing only for a small number of prospective foreign markets; in this case, individually filing for each country may be more convenient.
A specialised trade mark attorney with experience in individual filing as well as Madrid Protocol filings is indispensable in helping you weigh the advantages against the disadvantages of each type of filing and determining an appropriate strategy for internationally protecting your trade mark.
Filing your trade mark in China
As opposed to that in Australia, where the first party to use a trade mark is legitimate, China’s intellectual property rules give priority to those who file their trade marks first. This provision does not bode well for foreign companies looking toward expanding or producing in China, with issues such as trade mark squatting being prevalent even with the increasingly stringent IP protection applied by the country in recent years. Proactively filing your trade mark application in China from the onset of your business to encompass several classes of goods (coffee giant Starbucks filed for all 45 classes), consulting an expert trade mark attorney who is experienced in trade mark filing in China, and selecting trustworthy distributors and producers can be indispensable to ensure the protection of your trade mark. Financial constraints may be a deterrent to advanced filing, but it is better to err on the side of caution rather than getting your production and/or distribution halted and having to rebrand your products because your trade mark in China was usurped by trade mark squatters.
While it is often more difficult to prove and more costly, there is some protection to trade marks that are not registered. The tort of passing off and consumer protection legislation provide an avenue for business owners to protect their trade marks from unauthorised use.
Passing off is a common law action in which a party makes unauthorised use of a get-up, namely, the overall packaging, external appearance, or feel of a product, to profit from the product’s established reputation. Registration of a trade mark is not necessary in passing off cases. In essence, three the following elements must be present to establish a cause of action under passing off:
- Reputation or goodwill of the trade mark
- Damage to the original owner’s goodwill
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 than it would on 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, but the elements to establish each are different. Since the actions can be related, and often also overlap with claims of trade mark infringement, it will be always advisable to have a specialised lawyer to analyse your situation.
Trade mark registration may be a broad, daunting prospect, but doing so will protect your brand and it may help you avoid costly and damaging scenarios that may arise, should you fail to protect your intellectual property.