Although many business owners understand the importance of protecting their trade marks through registration, some trade mark owners are unaware that registration is only the first step towards brand protection. It is up to trade mark owners to be vigilant, to watch for infringement and take action when required.
Trade Mark Infringement
Under section 120 of the Trade Marks Act 1995, a person/business infringes a registered trade mark if during trade they:
- Use a sign that is substantially identical or deceptively similar to a registered mark; and
- The use is in relation to the goods or services the trade mark is registered for.
The test for whether two marks are substantially identical involves a side-by-side comparison of the trade marks, noting their essential features and their similarities and differences.
The test for whether two trade marks are deceptively similar is slightly more complex. It involves a comparison between the overall impression given by one mark with the memory of the impression left by the other mark. If there is a likelihood of confusion between the two, then the trade marks will be considered deceptively similar.
Importantly, there are no hard and fast rules about the threshold of difference required for a trade mark not to infringe (i.e. there is no 10% difference rule). Rather, taking into account all their features, it is the overall impression given by the two signs that matters. The appearance of the trade marks, as well as the way they are pronounced is important. It is helpful to remember that the key test is the likelihood of consumer confusion.
Comparing Goods and Services
As trade mark owners will know, trade mark registration only protects the goods and/or services for which the mark is registered. Like the test for deceptive similarity, comparing goods/services involves more than simply checking whether the products sold under the marks are the same.
In the case of goods, it is necessary to consider the following:
- Nature of the goods;
- Use of the goods;
- Manner in which they are bought and sold;
- Whether the goods are usually found on the same shelf;
- Whether the goods are usually bought and sold together by the same supplier;
- Origin of the goods;
- Manufacturing circumstances; and
- Industry sales practices.
It is important for trade mark owners to watch carefully for infringement and address it as soon as it is found. The longer infringing activity is allowed to occur, the more difficult and costly it can be to stop. For this reason, trade mark owners need to take an active role in monitoring for infringing conduct.
The Trade Marks Database
IP Australia’s trade mark database, accessible through the Australian Trade Mark Online Search System (ATMOSS), publishes all new trade mark applications. Trade mark owners can search the database for existing registered trade marks, as well as new applications. If a rival company applies to register a trade mark that is similar to your mark, it can be a sign that infringement is occurring or has been contemplated.
The Business and Company Names
As with trade mark applications, new business name or company registrations can indicate that someone intends to begin trade under a new sign. Searching the business names database can be a good indicator of whether infringement is occurring or is likely to happen in the future. Remember, however, that not all registered business names or company names will infringe – you will still need to verify that the registrant is trading under the potentially conflicting sign in relation to the same or similar goods/services.
Most IT-savvy business owners will know that their online presence is key to acquiring new customers. It is rare nowadays for a business not to have some web presence, either a website, social media account or business listing in a directory such as the Yellow Pages or truelocal. Searching these registers can reveal other rival businesses that trade under a similar trade mark.
Domain name registration can also indicate that a person is looking to commence trade under a new name. While simply registering a conflicting domain name will not necessarily constitute infringement, it is a sign that trade mark owners should take seriously and monitor closely.
While it is straightforward to search for exact matches of trade marks, finding infringing misspellings, close matches, or images/logos is more complicated. Searching for infringing conduct takes practice and can be time-consuming – particularly when an investigation into a rival business’ operations is required. Trade mark owners should consider regularly engaging the assistance of a professional experienced in finding and addressing infringement. They can assist with setting the search parameters, conducting the search, assessing whether it qualifies as infringement, and addressing it if it is of concern.
Once trade mark owners have identified the infringing conduct, the next step is to contact the infringing party to notify them that they are engaging in trade mark infringement, and demand that they cease doing so. Trade mark infringement allegations are commonly coupled with claims of passing off, and of contravention of the misleading or deceptive conduct provisions of the Australian Consumer Law.
In most cases, the first communication should be a formal cease and desist letter. The purpose of this letter is to provide formal notice of your rights to the infringing party and set out your requirements for resolution of the dispute. It shows that you are serious about enforcing your rights. Every case is different, and it is important to craft the initial letter based on the particular circumstances carefully. For example, adjusting the tone of the letter can affect the likelihood of a resolution, depending on the nature of the other party, and it is important to confine any allegations only to rights that can be enforced.
In many cases, a simple letter is enough to get infringement to stop. In other instances, however, the other party may be unwilling to stop the infringing conduct or disagree as to whether infringement is occurring in the first place. Frequently, parties will recognise that addressing the matter through formal proceedings will be expensive and that a commercial resolution may provide a more appropriate outcome. In these cases, negotiation of the terms of settlement of the dispute is the next step.
If trade mark owners are prepared to negotiate, it is helpful to clearly identify the points of negotiation they are willing to consider. For example, given that changing branding and addressing legal formalities can be expensive and time-consuming, it can be appropriate in some cases to allow the infringing party a period to change, or even (in rare circumstances) some financial assistance. Negotiating a settlement needs to be carefully considered and will vary in every case. However, there are some common things to consider:
- Who is the infringing party?
- What is the strength of the allegations?
- Is the infringement deliberate?
- For how long has the infringement occurred?
- What damage has been caused/is likely to be caused by the infringement?
- Has the infringing party profited from the infringement?
- In what geographic area has the infringement occurred?
- Are there other disputes between the parties that can be resolved (e.g. a branding dispute in another jurisdiction)?
- What is the likely cost of enforcing the rights through the courts?
- Will damages/compensation be recoverable from the other party?
- Is there the possibility of negative publicity arising from the enforcement action?
Enforcement Through the Court
If the other party refuses to cease the infringing conduct and negotiation of a settlement is not possible, the next step is to commence court proceedings. In most cases, trade mark infringement proceedings will be commenced in the Federal Court, by filing with the court and serving on the other party an originating application and statement of claim. The originating application starts the proceedings, and the statement of claim sets out the trade mark owner’s rights and the relief that they are claiming.
At all stages of a trade mark infringement dispute, it is important to understand your legal position so that you can best make decisions on how to proceed. Enforcing your rights can be costly, but obtaining quality advice early can help to minimise the costs involved. This applies from the outset – ensuring your brand is appropriately protected, monitoring infringement, contacting infringing parties, and commencing court proceedings. If you have any questions, get in touch with our specialist trade mark lawyers on 1300 544 755.