Defending allegations of trade mark infringement in Australia

When building a brand for your startup or small business it is critical to have an understanding of the key concepts of trade mark.  As discussed in our startup trade mark blog, a trade mark is a sign your business can use to distinguish its goods and services from competitors.

If your business has infringed another business’s trade mark, you could be sued for trade mark infringement in Australia and you’ll probably need to engage a lawyer to help defend the claim. In this article, we will outline key defences to trade mark infringement. As a new business or startup consulting a startup lawyer can advise you on the best way to approach this.

But first, what is trade mark infringement?

Trade mark infringement occurs when a person or company uses a sign that is substantively identical or deceptively similar to a trade mark that is already registered.  The alleged infringer must also be using that sign in relation to similar goods or services as the goods or services supplied by the registered trade mark owner.

What are the key legal defences to trade mark infringement?

1.     Comparative advertising defence

You will not have infringed a registered trade mark if you used the trade mark for the purposes of comparative advertising.  This defence is currently being litigated for the first time in the litigation being fought between Self Care and Allergan.  

Allergan is the maker of Botox, a neurotoxic protein, and the owner of the BOTOX trade mark. It brought a trade mark infringement claim against Self Care for using the brand name PROTOX and the tagline ‘instant Botox® alternative’ in connection with its anti-wrinkle cosmetic products. At first instance, the Federal Court dismissed Allergan’s claims of trade mark infringement, but this decision was overturned on appeal in the Full Federal Court. Self Care was granted special leave to appeal the decision, and the case is currently being heard before the High Court of Australia. 

There are two key issues that are being reviewed by the High Court. First, it will consider whether ‘instant Botox® alternative’ infringes Allergan’s trade mark BOTOX. The trial judge held that the word ‘alternative’ indicated that Self Care’s product had a different trade origin to Botox products. On the other hand, the Full Court held that although the word ‘alternative’ implies that the products are different, it does not necessarily imply that the trade source of those products is different. For example, it is plausible that consumers may be led to wonder whether Allergan expanded their product range to include cosmetic goods like Self Care’s products.  

The second issue that the High Court will consider is the comparative advertising defence in section 122(d) of the Trade Marks Act 1995 (Cth).

The Full Court determined that the defence could not apply since the phrase ‘instant Botox® alternative’ is not entirely identical to the registered mark, BOTOX. Moreover, the Court held that Self Care was not referring to BOTOX to compare its products, but rather, they merely used it to leverage off the reputation of Botox.

This case will hopefully clarify the comparative advertising defence in some key respects, and may have a significant impact on start-ups and SMEs.

2.     The ‘own name’ defence

You will not have infringed a registered trade mark if your sign uses your name or your place of business.  For example, in Angoves Pty Ltd v Johnson [1982] FCA 119, the plaintiff registered a trade mark for ‘St Agnes’ for wine and spirits. Subsequently, the defendant bought a store in St Agnes in Adelaide and named it ‘St Agnes Liquor store’. In these circumstances, the Court found that the defendant was entitled to rely on this defence as it was using ‘St Agnes’ to indicate the place of business, that is, the suburb in which the defendant was trading in.

3.     The good faith use of a trade mark to describe goods or services

Trade mark infringement does not occur if you used a sign in good faith to indicate: the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or the time of production of goods or of the rendering of services.

For example, this defence might allow a person to use the slogan ‘For a Perfect Complexion’ (use to indicate quality or characteristics of goods) despite the registration of the mark ‘Perfect’ for soap.

4.     Use of trade mark to indicate the purpose of goods or services

Similarly, a trade mark infringement does not occur when you have used the trade mark in good faith to indicate the intended purposes of your goods or services.

For example, if your business sell accessories for certain types of cars, you may be able to use the trade marks of those car brands without infringing the marks.

Other ways you could challenge the infringement claim against you

While not technically legal defences, there are additional mechanisms you could rely on to challenge an infringement claim brought against you.

1.     Apply to revoke a registered trade mark

One option is to challenge the registered trade mark through the process of revocation. The Trade Mark Registrar may revoke the registration of a mark if it is satisfied that the mark should not have been registered, taking into account of all the circumstances that existed when the trade mark became registered, or if it is reasonable to revoke the registration, taking account of all the circumstances.

2.     Argue non-use as a ground for removal

You could also have the existing trade mark removed from the register for non-use. A non-use application can be brought in respect of any or all of the goods and/or services in respect of which a mark is registered, and can be made on one or both of two grounds. The first ground is that, on the day on which the application for the registration of the trade mark was filed, the applicant had no intention in good faith to use the mark and has not in fact used the mark. The second ground is that the trade mark has not been used in the preceding 3 years.

 The above article was written by Pippin Barry (BA, JD - 2012, The University of Melbourne), an Australian Legal Practitioner, and Hyein Kim, paralegal.