What is trade mark infringement in Australia?

Quick summary of trade mark infringement

Under section 120 of the Trade Marks Act 1995 (Cth), a person infringes a registered trade mark by using, as a trade mark, a substantially identical or deceptively similar sign for the registered goods or services, closely related ones or, for well-known marks, unrelated ones. Courts can order injunctions, damages or an account of profits.

——— The basics

What is a trade mark?

A trade mark is a sign used, or intended to be used, to distinguish one trader’s goods or services from those of other traders.^[3]

A “sign” is broadly defined. It includes any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent, or any combination of these.^[4]

Registration gives the owner the exclusive right to use the trade mark, and to authorise others to use it, for the goods and services it is registered for. It also gives the owner the right to obtain relief under the Act if the trade mark is infringed.^[5] A registered trade mark is also an asset that can be licensed, for example to franchisees, or sold.

An unregistered brand cannot be infringed under the Act. Its owner must instead rely on the common law tort of passing off or the prohibition on misleading or deceptive conduct in the Australian Consumer Law, both of which usually require proof of reputation.^[6]

In short, a trade mark is a badge of origin, and registration is what gives the owner a statutory right to stop others using it.

——— Infringement

When is a registered trade mark infringed?

A registered trade mark is infringed when a person uses, as a trade mark, a sign that is substantially identical with or deceptively similar to it, in relation to goods or services that fall within one of three categories in section 120.

• Section 120(1) – the sign is used for goods or services in respect of which the trade mark is registered.^[7]
• Section 120(2) – the sign is used for goods or services of the same description as the registered ones, or closely related to them. The user escapes liability if it proves the use is not likely to deceive or cause confusion.^[8]
• Section 120(3) – the trade mark is well known in Australia and the sign is used for unrelated goods or services, in a way likely to suggest a connection with the owner and to harm the owner’s interests. Whether a mark is well known depends on how far it is known within the relevant sector of the public.^[9]

Solahart shows how the routes work together. The SOLAHART marks were registered for solar hot water systems, and the rival used SOLARHUT to sell photovoltaic systems. Those were not registered goods, so section 120(1) failed, but the Court held they were goods of the same description, so section 120(2) applied.^[10] Unlike the other two routes, section 120(3) depends on the owner’s reputation, which is relevant to whether the mark is well known.^[11]

In short, the further the user’s goods or services are from the registration, the more the owner has to prove.

——— Comparing marks

When is a sign substantially identical or deceptively similar?

A sign is substantially identical when a side-by-side comparison shows the marks are essentially the same; it is deceptively similar when it so nearly resembles the registered mark that it is likely to deceive or cause confusion.

The two tests are different. For substantial identity, the marks are compared side by side, their similarities and differences noted, and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity.^[12]

Deceptive similarity is defined in section 10 of the Act.^[13] The High Court in Self Care explained that the question is objective and asked from the viewpoint of a notional buyer, whose imperfect recollection of the registered mark lies at the centre of the test. The comparison is between the marks, not the totality of the user’s conduct.^[14] The Court also held that the registered owner’s reputation is not taken into account when assessing deceptive similarity under section 120(1).^[15]

In Solahart, SOLARHUT was not substantially identical to SOLAHART, because HUT and HART look different. But it was deceptively similar, because the two words sound almost the same, and the aural impression made the decisive difference.^[16] For another example of a near-identical spelling, see our article on Sensis v Senses.

In short, the question is whether an ordinary buyer, recalling the registered mark imperfectly, would be likely to be confused, judged by look, sound and idea rather than by reputation.

——— Trade mark use

What is use “as a trade mark”?

A sign is used as a trade mark when it is used to indicate the trade source of goods or services, as a badge of origin, rather than to describe them.

Whether a sign has been used as a trade mark is assessed objectively, without reference to the user’s subjective trading intentions.^[17] The question is how the sign would appear to consumers in context.

In Self Care, the words “instant Botox® alternative” appeared once on the front of the box, in much smaller type than the FREEZEFRAME brand and INHIBOX product name. The High Court held the phrase was descriptive: it told buyers the product was an alternative, not who made it.^[18]

By contrast, in Mantra, a rival letting business used the CIRCLE ON CAVILL mark in domain names and on websites offering accommodation in the Circle on Cavill complex. The Court held that use was a badge of origin for the rival’s services and infringed.^[19] Similarly, in Solahart, a domain name used to sell goods under the infringing name was treated as “largely analogous to a shop front”.^[20] See also our article on trade marks in Google Ads.

In short, using another trader’s mark to describe or compare is not necessarily infringement, but using it to brand your own goods or services is.

——— Defences

What defences are available?

The Act sets out several situations in which use of a sign that would otherwise infringe is not an infringement.

Under section 122(1), a person does not infringe a registered trade mark when, among other things, they:^[21]

• use in good faith their own name or the name of their place of business;
• use a sign in good faith to indicate the kind, quality, intended purpose, value, geographical origin or another characteristic of goods or services;
• use the trade mark in good faith to indicate the intended purpose of goods, such as accessories or spare parts;
• use the trade mark for the purposes of comparative advertising; or
• would obtain registration of the trade mark, or of their own substantially identical or deceptively similar mark, if they applied for it.

Other defences cover goods to which the trade mark was applied by or with the consent of the owner or a related person, where the user made reasonable inquiries,^[22] and continuous use of an unregistered mark from before the owner’s registration or first use.^[23]

Good faith is not easily shown. In Mantra, the rival’s director received legal advice about the use, rejected it and kept using the words as “a calculated risk”. The Court described that conduct as the antithesis of good faith and rejected the defence.^[24] For more, see our article on the good faith defence.

In short, the defences protect honest descriptive, comparative and prior use, but not a deliberate decision to take the risk.

——— Remedies

What remedies can a court order?

A court can grant an injunction and, at the owner’s option, damages or an account of profits, with additional damages in serious cases.

In Mantra, the Court ordered the rival to transfer its domain names, restrained it from using the marks as trade marks, including in domain names, metatags, search engine keywords and business names, and ordered an account of profits.^[29] For how profits are worked out, see our article on calculating an account of profits.

Owners should also be careful before alleging infringement. A person threatened with an infringement action can sue for a declaration that the threat is unjustified, an injunction and damages.^[30]

In short, the remedies are strong, but the owner must choose its monetary remedy and should make sure any threat it sends is justified.

Frequently asked questions about trade mark infringement

Key takeaways about trade mark infringement

• A trade mark is a badge of origin, and only a registered trade mark can be infringed under the Act.
• Section 120 has three routes to infringement, and the owner must prove more as the goods or services move further from the registration.
• Under section 120(1), deceptive similarity turns on a buyer’s imperfect recollection of the marks, not the owner’s reputation.
• The sign must be used as a trade mark; descriptive or comparative use may not infringe.
• Defences protect honest descriptive, comparative and prior use, but not a calculated risk.
• Remedies include injunctions, damages or an account of profits, and additional damages, but unjustified threats carry their own risk.

Need advice about trade mark infringement? Call Dundas Lawyers on 07 3221 0013 or submit an enquiry online.

Links and further references

Legislation

Trade Marks Act 1995 (Cth) ss 6, 7, 10, 17, 20, 120, 122, 122A, 124, 126, 127, 129, 132, 133, 145, 146, 148
Competition and Consumer Act 2010 (Cth) sch 2 (Australian Consumer Law) s 18

Cases

Mantra Group Pty Ltd v Tailly Pty Ltd (No 2) [2010] FCA 291
Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8
Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407
Solahart Industries Pty Ltd v Solar Shop Pty Ltd [2011] FCA 700