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The Basics Of Trade Mark Infringement

From the outset, the boring disclaimer – note that trade mark infringement is a case by case matter and advice should always be sought if you believe you have a trade mark infringement situation on your hands. As such, the following is provided as general information only.  

Ever wondered how discount grocery chain Aldi, gets away with selling products that may bear a strong resemblance to established brands?   Are they taking advantage of someone else’s hard-earned reputation?  Isn’t that trade mark infringement?

These are all really good questions – and they’ve been answered in the Federal Court of Australia.  Trade Mark infringement is often more than meets the eye. What a brand owner or business owner may feel is an infringement of their rights is not always the case. There are circumstances where what appears to be ‘copying’ is entirely lawful. A business owner might not like it, but, where such ‘copying’ is legal, needs to tread carefully before demanding they cease. In an earlier article we discuss scenarios about products being copied and what you can/cannot do.

In this article, we’ll discuss the basics of trade mark infringement and give a synopsis of the legal consequences that can result from trade mark infringement.  We’ll also highlight some prominent cases where trade mark infringement was a significant issue and tell you why Aldi’s products don’t fall foul of trade mark laws. 

What constitutes trade mark infringement?

Trade mark infringement can be broadly explained as the violation of the exclusive legal rights attached to a registered trade mark without authorisation from the trade mark owner.  This article entitled ‘What rights do you have as a trade mark owner?’ is a useful reference point with regards to trade mark ownership.

Trade marks in Australia are governed by the Trade Marks Act 1995 (Cth), with infringements covered under Section 120 of this Act.  

There are three circumstances where a registered trade mark is infringed:

  1. When a person uses a sign which is substantially identical or deceptively similar to a registered mark in relation to the same nominated goods or services of the registered trade mark
  2. When a person uses a sign which is substantially identical or deceptively similar to a registered mark in relation to goods or services which are closely related to those of the registered trade mark
  3. When a person uses a ‘well-known’ mark

Goods or services don’t have to be exactly the same as the description under the registered trade mark for the infringement to happen.  It’s largely a question of whether the use of the mark could result in confusion in the eyes of the public.  For example, if someone owns a trade mark that covers goods such as dresses, skirts, blouses and pants then use of a substantially identical or deceptively similar name in relation to goods such as shorts, singlets and t-shirts may still infringe. Further, if someone was to use a well-known mark for goods and services unrelated to those of the registered trade mark, it could be deemed to be infringement because consumers were already aware of the connection between the trade mark and its rightful owner and could therefore make incorrect assumptions about ownership. For example, use of the trade mark Google in relation to musical instruments could still infringe the Google trade marks as they are so well known that even though they are not registered for musical instruments, consumers would still be lead to believe there is an affiliation.  

These concepts may seem fairly straightforward, but the world of trade marks is actually very complex and legislation is often misunderstood.  Our MMW Trade mark Services team has experienced many cases involving alleged and actual trade mark infringement and our advice to trade mark owners is always to be vigilant about these valuable assets and to seek professional advice promptly if there is any suspicion or allegation of transgression.

What are the legal consequences of trade mark infringement?

If the case goes to the courts, the penalties can be severe and the financial impacts crippling. 

The consequences for trade mark infringement vary depending on the circumstances of each specific case.  Factors that impact the consequences include the severity of the infringement and the damages suffered by the trade mark owner.  Other factors such as the accused’s intention (or not) to deceive or mislead the public will also be taken into consideration.

A ‘cease and desist’ letter is generally the starting point for matters of trade mark infringement.

Some possible consequences include:

  • A court injunction to stop the infringing use of the trade mark
  • Claim for damages by the trade mark owner or An account of profits whereby the infringing party is ordered to pay the trade mark owner any profits made as a result of the infringement
  • A court order for the disposal of goods which carry the infringed trade mark

Some high-profile trade mark infringement cases in Australia

There have been numerous cases of trade mark infringement before the Australian courts over the years.  Here are some recent cases: 

  • Australian family-owned business, Luda Production and the American sheepskin company, Deckers Outdoor Corporation were involved in a legal dispute over the use of the name ‘UGG Boots’.
  • Australian fashion designer, Katie Jane Taylor (nee Perry) took American singer songwriter Katie Perry to court over trade mark infringement allegations.
  • Brand owner of Finish dishwasher tablets, RB (Hygiene Home) Australia challenged Henkel Australia’s use of marks on its Somat brand of dishwashing tablets.
  • And finally, back to Aldi. Since the supermarket giant first started trading in Australia in 2001, it has been involved in several legal battles over trade mark infringement claims, but often come out on top because it has managed to mimic products whilst still ensuring that there are sufficient points of difference in the packaging and trade marks.  Comparative advertising is allowed in Australia and the ruling was that the names that Aldi were using weren’t ‘deceptively similar’ and therefore not likely to cause confusion among consumers. Notably, Aldi has filed more than 600 trade mark applications in Australia, and often when opposed will simply withdraw the application.

A last word on trade mark infringement

As mentioned, trade mark law is complex and ever-changing.  The internet age has resulted in even greater challenges for trade mark enforcement as brands can now cross borders and compete in global markets with ease – and at speed. 

If you’re considering registering a trade mark, it is imperative to do your due diligence thoroughly to minimise the risk of trade mark infringement.  Pay careful attention to trade mark searches to avoid any likelihood of confusion with existing marks and choose your class or classes of goods and services carefully to ensure comprehensive protection.

Vigilance is another key imperative for trade mark owners.  Know where and how your trade mark is being used and monitor competitive behaviour so that you can identify any possible infringements early.

You’re welcome to contact our experienced trade marks attorneys, for any assistance or advice with regards to your trade mark and if you have concerns that another trader may be infringing on your legal rights.  Remember, when it comes to protecting your valuable IP asset, there’s no such thing as a silly question.

Jacqui Pryor

Jacqui is a registered trade marks attorney with the Trans-Tasman IP Attorneys Board and is the founder and owner of Mark My Words Trademark Services Pty Ltd.

After being introduced to the world of trade marks in one of her first jobs after high school, Jacqui discovered she had a deep passion and interest for all things to do with protecting brands and intellectual property. She completed a Graduate Certificate in Trade Mark Law and Practices as well as a Diploma in Business Management and then set up her own business in 2011.

Her motivation for starting Mark My Words was to support SMEs which typically couldn’t afford such a service and while the company has grown in both size and reputation over the years, she has remained true to her founding principles of providing professional, friendly, reliable and affordable trade mark services to all.

Mark My Words now has a client list that spans businesses of all sizes across a range of industries. It provides advice and assistance on all types of complex trade mark registrations, infringements and opposition matters both in Australia as well as overseas.

Jacqui’s wealth of experience, broad range of professional qualifications and her ongoing participation in industry forums and networking platforms keeps her at the forefront of developments in the global trade mark arena. Her expertise in her field has also led to several nominations as a top individual trademark attorney by the World Trademark Review - the world’s leading trademark intelligence platform.

To keep up to date with the latest in the field of trade marks, follow Jacqui and MMW Trademark Services on Facebook.

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