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 litigation
An overview of trade mark litigation
The owner of a registered trade mark has the exclusive rights to use the trade mark and authorise others to use the trade mark in relation to the goods and/or services in respect of which the trade mark is registered.
The registered owner of a trade mark also has the right to obtain relief under the Trade Marks Act 1995 (Cth) if the trade mark has been infringed.
Trade mark infringement
If a third party uses a registered trade mark without authorisation from the registered owner, the third party may be infringing the exclusive rights of the registered owner.
Section 120(1) of the Trade Marks Act 1995 (Cth) states:
A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.
Components of infringement
Use of an alleged infringing mark must be use as a trade mark. 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.
The test for review of the marks under substantial identity is based on a side by side comparison of the respective marks, their similarities and differences noted and 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.
The test for deceptive similarity of marks does not involve a side by side comparison. The issue is not abstract similarity but deceptive similarity. The test is therefore 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.
Goods/services closely related
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.
Pre-commencement of infringement
Once we become aware of instances of unauthorized use of a registered Trade Mark, it is usual practice 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.
Commencement of litigation
In some cases where it is essential to prevent or stop alleged infringing use immediately, we can file an Interlocutory Injunction with the Federal Court. These type of actions generally require the applicant to show (i) there is a serious issue to be tried, (ii) without an injunction, the plaintiff will suffer injury for which damages will not be an adequate compensation, and (iii) the balance of convenience favours such relief.
Most if not all litigation is commenced in the Federal Court or Federal Circuit Court, although it is possible to use the Supreme Court of a State. In part, the reason for this is that most trade mark litigation also involves complimentary actions brought under misleading and deceptive conduct provisions of the Competition and Consumer Act 2010 (Cth) (Schedule 2 Section 18), and the common law tort of ‘passing off’.
Powers of an authorised user of the trade mark
Subject to any agreement between a registered 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 straight forward because a registered Trade Mark will be entered on the Register of Trade Marks.
If a trade mark is not registered (unregistered Trade Mark at Common Law), an individual will have to rely on the passing off tort under common law, the elements of which are more difficult to establish, generally requiring:
- 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.
Relief granted by the court
The relief that a court may grant in an action for infringement of a registered trade mark includes an injunction, which may be granted subject to any condition that the court thinks fit, and at the option of the plaintiff but subject to section 127 (where the defendant has applied to the court for an order directing the Registrar to remove the trade mark from the register for those goods/services), damages or an account of profits.
A court may include 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 a number of factors including:
- the flagrancy of the infringement; and
- 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; or
- 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; and
- all other relevant matters.