Why Trade Mark Searches Matter: Protecting Your Brand Through Honest Adoption

Traders have always been expected to adopt trade marks honestly and to use them honestly. 

Historically, in the event of an objection due to earlier similar trade marks, examiners were inclined to take a declarant’s word at face value when they were explaining why they’d chosen a particular trade mark and whether they had been aware of any similar marks that were already in use.

However, the decisions following several recent cases before the courts have clarified, or perhaps tightened, the requirements for making out honest adoption and use of a trade mark.  This in turn means examiners are following the Courts’ position on honest adoption and use – and that they will be looking for further information or evidence that trade mark applicants followed the correct procedures in choosing, and in turn using, a trade mark.

If the applicants or defendants aren’t  able to provide satisfactory confirmation that a suitable  trade mark search was done, or that  professional advice was sought on the availability of the name,  this will now likely lead to a finding that there was no honest adoption.

These recent court decisions serve as a timely reminder of the critical importance of doing thorough groundwork and due diligence before launching a new brand.

What is ‘honest adoption and honest concurrent use’ of a trade mark?

We touched on the importance of honest adoption in a previous article entitled ‘How Trade Marks Attorneys Help Avoid Infringement Headaches with Due Diligence Checks, but we really do believe that it is a topic worth exploring in greater detail especially given these recent practices.

Honest adoption and honest concurrent use relate to the assumption that traders adopted a trade mark honestly. Traditionally this may mean that the way in which the trade mark was chosen was honest and with good intentions and without malicious intent. 

Honest, concurrent use is when two traders have independently and in good faith, adopted the same, or very similar, trade mark and used them concurrently in the marketplace. The later adoptee may still register their similar trade mark to the earlier registration so long as the adoption/use has been honest, and the concurrency to such a degree registration should be granted.

How is ‘honest adoption’ determined?

IP Australia sets out five criteria for examiners to consider when examining evidence for ‘honest concurrent’ use of a trade mark.  No single criterion is determinative and because evidence needs to be detailed and complete, the trade marks office may request additional information to get a clearer picture.

The trade marks office basically looks for proof that a trader genuinely believed that their adoption and use of the trade mark has been honest and that there was no confusion with any existing mark when they first started using it. 

The five core criteria are:

1. The honesty of adoption
2. Whether consumers are likely to be confused by multiple trade marks in the marketplace
3. The extent of use of the trade mark – including how long it’s been used for, where it’s been used and the volume or amount of goods and services sold or promoted using the mark
4. The relative inconvenience to the respective parties – ie how the trader would be affected if the mark isn’t or hadn’t been registered versus the inconvenience to the other party with the same or similar mark if the mark is or had been registered
5. Geographical factors – the specific areas in Australia where the mark has been used

What happens if two traders have honestly and legitimately adopted the same or similar trade marks?

Australian trade mark law recognises that there are instances where two traders have legitimately adopted the same or similar marks independently and in good faith.

Both trade marks may be allowed to co-exist provided the later adoptee can prove that they adopted their marks honestly and were using them properly – and provided certain conditions are met.

However, if a trader didn’t do a comprehensive trade mark search to establish the availability of a trade mark, or seek advice around the same, in view of the recent case law, they may not be able to rely on ‘honest concurrent use’ provisions when applying to register the mark.  They may not be able to use honest adoption as a defence against any allegation of trade mark infringement either.

How can traders ensure honest adoption?

An in-depth trade mark search is the only failsafe way that a trader can establish the availability of a particular name or sign and thereby protect their brand through honest adoption.  Read more here on why you should conduct a trade mark search.

A trade mark search should always be done before any commercial activity involving the use of that mark.  Ideally, specialist advice from a qualified trade marks expert should also be sought as they can provide guidance on the scale and scope of any searches and identify any possible conflict areas.

Why trade mark searches are important

As mentioned, situations can arise where two traders have, seemingly, legitimately adopted the same, or very similar marks, independently and in good faith. 

However, unless a trader, who is the later adoptee/user, can declare that appropriate trade mark searches were conducted and/or speak to or provide proof that they sought professional advice upfront, the trade mark office is unlikely to find the adoption and initial use honest. 

Practical ways that traders can protect their brands through honest adoption

Ignorance is not an excuse.

We know from experience that many small business owners are time-poor and it is tempting to outsource tasks if possible, or to skip through checklists and similar.  If outsourcing to another person to register a business name, it is important they pass on the necessary information that comes along with that registration. 

When registering a business name with ASIC, applicants are presented with a checklist which includes a specific reference to the fact a business name does not protect a name, and, trade mark searches should be considered.  The application form also provides a relevant link.

It is not possible to move on to the business name registration form without ticking the series of boxes so it is important to read them, or ensure the person registering the business name for you passes the information along. In view of the recent case law discussed, it would be particularly difficult to plead ignorance to the importance of trade mark searches if you have ticked that box, registered a business name, but not conducted such searches.

Note that searching online using Google or any other search engine for existing business names is certainly recommended but insufficient to make out honest adoption of a name.  It is always recommended to do a comprehensive trade mark search and/or engage a trade marks expert to determine the eligibility of a trade mark. 

Read more here on why trade mark searches are so important when registering a business name.

Recommendations for trade mark owners

• Always do appropriate trade mark searches for any proposed new brand and before making any changes to an existing brand
• Keep comprehensive records of all trade mark searches (including the search criteria, the dates on which searches were completed and the results of the searches). If you did find trade marks in your searches that appear similar, you will also be expected to explain why you continued with your name choice, and, why you believed there would be no confusion.
• Keep a record of advertising and marketing materials in case you are asked to provide evidence of use
• Maintain detailed business and financial records, for the same reasons as above
• Seek professional advice from a trade marks attorney to ensure that your trade mark meets IP Australia’s honest adoption requirements. In the event of a potential conflict, a trade marks specialist can help you collate the type of evidence needed and advise you on your prospects of success whether in defence or in a trade mark application.

Why you should consider MMW Trademark Services

Our principal  trade marks attorney, Jacqui Pryor, has decades of experience in the complicated field of trade mark law and she is highly sought-after by SMME owners and big businesses alike for her expertise and practical solutions to trade mark-related issues.  She’s also authored a number of informative articles – including a number on the subject of trade mark searches – which you’ll find in our blog section.

MMW Trademark Services can help you with any questions about trade marks – including their honest adoption and concurrent use – and we will provide you with cost-effective, practical advice that is tailored to your particular circumstances.  Please contact us on 03 8288 1432 get in touch via our website.