Understanding Trade Marks and the Importance of Trade Mark Protection

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What is a Trade Mark?

The legal definition of a Trade Mark can be found under section 17 of the Trade Marks Act 1995 (Cth). A trade mark is defined as a:

sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.

Essentially, a trade mark is a sign which distinguishes the goods or services one business provides from those of another business. This trade mark must also comply with other requirements under the Trade Marks Act before it can be registered, including distinctiveness, that the mark is not confusing or deceptive, and the trade mark is not similar to a trade mark already registered.

A sign can include any of the following things (or a combination of any of the following) which are distinct to a business:

  • any letter
  • Word
  • Name
  • Signature
  • Numeral
  • Device
  • Brand
  • Heading
  • Label
  • Ticket
  • Aspect of packaging
  • Shape
  • Colour
  • Sound or
  • Scent

Why should I register a Trade Mark?

Registering your business’ trade mark can have numerous advantages, and is particularly recommended for start ups and/or businesses which have not had the time to build up a reputation around its trade mark. While we have noted the advantages here, one primary advantage of trade mark registration is the ability to enforce and protect a business from onerous court proceedings should another business attempt to copy or infringe on its trade mark.

How is my Trade Mark recognised in law?

The Trade Marks Act vs Australian Consumer Law and ‘Passing Off’

There are two types of trade marks recognised under the law: registered trade marks and common law (unregistered) trade marks.

A registered trade mark will be able to bring an action against a third party under the Trade Marks Act 1995 (Cth) (‘Trade Marks Act’); a common law trade mark, however, will need to bring an action in the tort of ‘passing off’ or under section 18 of The Australian Consumer Law (‘ACL’).

To bring an action under the ACL and in tort is more difficult. To prove passing off involves proving  reputation or goodwill on the part of the plaintiff, deceptive conduct from the defendant, and some form of damage. The elements in proving deceptive conduct under the ACL are also similar.

In order to defend matters, it is recommended that you register your Trade Mark.

What happens to unregistered trade marks?

The Need to Prove Goodwill / Reputation

If a trade mark is not registered, it will be necessary to bring an action of passing off in common law or an action under section 18 of the ACL. In order to prove ‘passing off’, however, the plaintiff must first prove their particular trade mark has ‘goodwill or reputation’ attached to it. Goodwill and reputation takes time to develop.

This generation of goodwill and reputation is particularly difficult for businesses which are about to or have only just started operating. Under the Trades Mark Act, however, there is no requirement to prove good will or reputation. In fact, a business can register a trade mark as long as there is an intention to commercially use it. The trade mark registration is enough to bring an action against those who attempt to exploit the registered sign.

The Need to Prove Deception

Registered trade marks have an automatic right of action which extends nationally if that trade mark is exploited by a third party without authorisation. This means that business owners whose trade marks are exploited have an automatic right to bring an action; a court will automatically presume confusion and deception to the public when a party uses that trade mark.

Under passing off, however, the plaintiff must prove that the third party has engaged in misrepresentation. That is, a plaintiff must prove that a third party actively misled consumers into thinking that the third party’s trade mark is the plaintiff’s. For example, in the case of Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 159 FCR 397, Cadbury alleged that Darrell Lea was guilty of attempting to mislead consumers (by using its trade mark colour of purple) into thinking they were buying Cadbury chocolate, when in fact the chocolates were manufactured by Darrell Lea. The test for this is quite extensive.

Similarly, section 18 also requires that the plaintiff prove that a third party has actively misled or deceived consumers.

As noted above, however, an action under the Trade Mark Act does not require this element to be proved by the plaintiff before a claim can succeed. No evidence needs to be adduced to support the making out of the public being misled or deceived.

What is the Way Forward?

Suggestions for Businesses

In essence, enforcing an action under the Trade Mark Act for trade mark infringement is significantly easier than attempting to make out the elements required for passing off or for a contravention of the ACL.

If you are a business owner, registering your trade mark is the best way to ensure against having to produce evidence of your business’ good will or a third party’s deception should a third party attempt to exploit your business’ trade mark.

Trade mark registration is a protective step which all businesses can take to ensure the value and reputation held in a business’ sign.

Have questions regarding Trade Marks or Trade Mark Protection?

Please contact our Business Development Team or call us on (07) 3252 0011 to book an appointment with one of our specialist Intellectual Property Lawyers today.

Written by Eduardo Cruz (Senior Associate)