Is your trade mark being infringed? What to consider first


Posted By on 17/02/20 at 7:25 PM

By Alexandra Shaw (Lawyer) and David Robbins (Principal Solicitor)

A trade mark is a valuable asset and enforcing your rights is an important step in protecting what is rightfully yours. If you are concerned that your trade mark rights are being infringed, it’s important to consider how things could play out before taking action.

First thing’s first – are your trade mark rights actually being infringed?

A trade mark will be infringed if a substantially identical or deceptively similar mark is used as a trade mark in relation to the same or similar goods or services to the registered mark.

The key elements here are:

  • Substantially identical: if placed side by side, does the infringing mark look indistinguishable from yours?
  • Deceptively similar: if not identical, is the infringing mark so similar that a consumer looking at the infringing mark would be reminded of yours and therefore be confused?
  • Use “as a trade mark”: this is where the mark is being used as a badge of origin to distinguish the goods/services, as opposed to using it in a descriptive manner. Not all use will constitute ‘use as a trade mark’.
  • Same or similar goods or services: even if the infringing party does not offer the same goods or services as you, they could still be closely related and cause confusion. Further, trade mark protection for well-known trade marks (think Coca-Cola, Nike, etc.) can even extend to unrelated goods and services.

Although decisive action is important, the first part of this should be to understand the process and potential outcomes.

Potential defences

As always, there are defences available against an allegation of trade mark infringement. For example, a person does not infringe a registered trade mark if:

  • the person is using their own personal name (or the name a predecessor in business);
  • the use was in good faith: this is an objective test as to whether the person had an honest belief that there would be no conflict or confusion between the two marks when they started using it. Mere ignorance is not sufficient, and the onus is on the defending party to prove their good faith;
  • trade mark registration: if the trade mark has been accepted and registered by IP Australia;
  • likely trade mark registration: if the court is of the opinion that registration would be obtained; or
  • the alleged infringing trade mark has prior use: if the defending party can show they were using the mark prior to you and continuously.

Doing your due diligence is essential before taking action.

A ‘dose’ of reality: Chemist Warehouse vs Discount Chemist

In some cases, a claim for trade mark infringement can backfire by the infringing party proving that your trade mark is not capable of distinguishing the relevant goods and services and should never have been registered.

When Chemist Warehouse issued trade mark infringement proceedings against its competitor, Direct Chemist, back in 2016, not only did they lose the case but they also lost their registered trade mark.

Chemist Warehouse alleged that Direct Chemist:

  • had adopted a similar store ‘get-up’ by using the Chemist Warehouse’ colour palette of yellow as the prominent colour with red and blue; and
  • infringed its trade mark rights, by using the slogan, “Is this Australia’s Cheapest Chemist?”, which was similar to Chemist Warehouse’s “Who Is Australia’s Cheapest Chemist?”

Discount Chemist cross-claimed that Chemist Warehouse’s trade mark for the phrase “Who is Australia’s Cheapest Chemist?” should be invalidated for lack of distinctiveness.

The Court found in favour of Direct Chemist, and declared the features of the “Who is Australia’s Cheapest Chemist?” trade mark were not distinctive.  The Court specifically noted that:

  • colours have a functional aspect and the colour yellow can be used to denote a discounted value; and
  • the phrase, “Australia’s Cheapest….” is so common and therefore is not capable of distinguishing its goods and services.

Chemist Warehouse was ordered to pay Discount Chemist’s costs and subsequently lost its trade mark for “Who Is Australia’s Cheapest Chemist?”.

Unjustified threats

In taking action, you also need to be confident you have a valid legal case, and not make groundless threats.

In February 2019, the law was amended so that a recipient of unjustified trade mark threats can claim compensation for the loss suffered as a result of those threats.

Further, the previous law allowing registered trade mark owners to rely on the fact they had issued trade mark infringement proceedings as a defence to an action for a groundless threat was repealed.

Consider the angles before you shoot

Taking action against trade mark infringement is in many cases essential to protect your business. But before commencing Court proceedings, there are some other steps that need to be considered first:

  1. Cease and desist letter: sending a clearly worded legal letter, outlining your rights, the damages you can seek and the action you will take if the infringing party does not cease from using your trade mark immediately, can encourage a commercial resolution without the need to go to Court – which is often very time consuming and expensive. Parties to civil litigation are also now generally required to demonstrate they have first taken genuine steps to resolve the matter themselves before starting the Court process.
  2. Prevent their trade mark registration: if the defending party does not have a registered trade mark, they may be looking to apply for one. Make sure you are ahead of the game and tracking their trade mark application activity. If the mark has been applied for and IP Australia has not raised an objection, you have the option to oppose the mark on various grounds prior to it being registered. This can also be a strategic tool in negotiations.

If you need assistance with enforcing your trade mark rights, contact a member of our Intellectual Property team for an obligation-free chat on +61 (0)3 9663 9877.

KHQ Lawyers - David Robbins

David Robbins Principal Solicitor

David leads our Competition Law & Regulatory Compliance team and also specialises in intellectual property law.  He is a highly experienced litigator in state and federal courts, and regularly... Read More