In Short
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Defences to trade mark infringement include prior use, consent from the registered owner, and honest concurrent use.
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Using a mark descriptively, such as indicating compatibility with another product, can be a valid defence.
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Good faith use, especially in comparative advertising or commentary, may also protect against infringement claims.
Tips for Businesses
If you receive a trade mark infringement notice, assess whether any defences apply to your situation. Consider if your use predates the registered mark, if you have consent, or if your use is descriptive or in good faith. Consult with a trade mark lawyer to understand your options and respond appropriately. Prompt and informed action can help protect your business interests.
Trade marks are signs that businesses use to distinguish their goods and services from those of their competitors. If you have inadvertently infringed the trade mark rights of another business, may face legal demands for action. It is crucial to be aware of the various defences available under Australian law should this situation arise. It is crucial to know whether you have a possible defence to trade mark infringement. This article will discuss several defences to trade mark infringement that you may be able to claim.
What is Trade Mark Infringement?
Trade mark infringement occurs when one party uses a trade mark that is identical or deceptively similar to a third-party mark already registered on IP Australia’s trade mark register. The infringement must also involve using the mark for goods or services that are similar or closely related to those covered by the registered trade mark.
Use of a Name in Good Faith
One of the defences available to trade mark infringement is that the use was in good faith. Trade mark infringement does not occur if your trade mark uses either:
- your name or the name of your place of business; or
- the name of a predecessor or a predecessor’s place of business.
For example, if your last name was Macintosh and you ran a computer repair shop called ‘Mr Macintosh’s Computer Repairs’, you might be able to establish that you had not infringed Apple’s trade mark for ‘Macintosh’. However, this depends on whether you can convince a court that you were acting in good faith.
What is Good Faith?
In this context, acting in good faith means acting honestly.
The good faith defence applies when someone uses a name without any intent to benefit from the reputation of the registered trade mark owner.
For example, if your business is called ‘Pyrmont Liquor Store’ and is located in Pyrmont, you may likely be found to have been using the trade mark in good faith even if another party had registered a trade mark for ‘Pyrmont Liquor Store’.
Continue reading this article below the formUse of Trade Mark to Describe Goods or Services
Further, trade mark infringement does not occur if a person uses a mark in good faith to:
- describe a characteristic of the goods or services on offer; or
- indicate the time of production of goods or provision of services.
A ‘characteristic’ can refer to a:
- type;
- quality;
- quantity;
- intended purpose;
- value; or
- geographical origin of the goods or services.
To rely on this defence, you must show that you are using a sign in a purely descriptive manner. For example, a juice company using the phrase “100% Orange” to describe their product could argue this is a purely descriptive sign of the juice’s contents, even if another company had registered “100% Orange” as a trade mark for beverages.
Similarly to the good faith defence, you must demonstrate that you’re not using the mark to benefit from another company’s reputation.
Used to Indicate the Purpose of Goods or Services
Trade mark infringement does not occur if you act in good faith to indicate the purpose of your goods or services. This defence applies when you manufacture or supply accessories, spare parts, or services intended for use with goods or services of a registered trade mark.
For example, if you sell phone cases, you may advertise them as “compatible with Apple iPhones”. Similarly, an auto parts retailer could advertise “filters for Toyota vehicles”.
Used to Make a Comparison
Trade mark infringement does not occur if you refer to a mark solely for the purpose of comparing goods or services
For example, a smartphone company could advertise that their phone’s battery lasts longer than Apple’s iPhone battery without infringing their trade mark.
However, while this use is permitted under trade mark law, advertisers must ensure their comparisons are accurate and not misleading. Other laws, such as the Australian Consumer Law, regulate the content of comparative advertising to prevent false or misleading claims.
Honest and Concurrent Use
A letter of demand may be sent to you by the owner of a registered trade mark in relation to your use of an unregistered trade mark. However, if you can prove honest and concurrent use of your mark, your use may not infringe that of the registered trade mark.
For example, you have been using the brand ‘Bingo’s Burgers’ for your burger joint in Bronte since 2020. You are aware that up and over the hill in North Bondi, ‘Bingo’s Deli’ has been operating since 2018. One day you receive a letter demanding you stop using the trade mark ‘Bingo’s’ as the deli owns a trade mark registration for this mark. However, you have both been coexisting peacefully in the same geographic area for years without any consumer confusion or issue. In such a scenario, you may be able to rely on honest and concurrent use as a defence.
Prior Continuous Use
If you have been using your trade mark without registration before a similar mark was registered or used by another party, you may have a defence against infringement claims. This is known as prior continuous use.
To rely on this defence, you must prove that you started using your mark before the other party applied to register their similar mark, or before the other party first used their similar mark.
For example, if you have been operating as “Sarah’s Surf Shop” since 2015, and in 2020 another company registered “Sarah’s Surf Supplies” as a trade mark, you may be able to continue using this name based on your prior continuous use.
This guide explains the essentials of trade marks and the steps required to register a trade mark.
Key Takeaways
While a party who has a registered trade mark has exclusive rights to use that mark, there are several circumstances where they cannot monopolise their use of that mark. If you receive a legal complaint alleging trade mark infringement, it is crucial to understand your rights before responding. You may have valid grounds for using the mark in question, such as a defence to trade mark infringement.
If you are concerned that you have infringed a trade mark and need assistance responding to an infringement notice, contact our experienced trade mark lawyers as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
Trade mark infringement occurs when someone uses a sign that is identical or deceptively similar to a registered trade mark for similar goods or services, potentially causing consumer confusion. There are different thresholds for trade mark infringement which is why it’s important to seek advice from a trade mark specialist.
Do not ignore letters of demand, as this could be a costly mistake. If you know you are infringing a registered trade mark, it may be as simple as ceasing the use of the infringing trade mark. However, it often is not as straightforward as this, so it’s important to speak to a trade mark specialist as soon as possible, especially when there is a deadline.
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