Importer caught offside as Lonsdale Australia puts the boot into parallel imports

In Lonsdale Australia Limited v Paul's Retail Pty Ltd ([2012] FCA 584, June 5 2012), the Federal Court of Australia has held that Paul's Retail Pty Ltd and PW Inventory Pty Ltd had breached Section 120 of the Trademarks Act 1995 (Cth) by using trademarks registered to Lonsdale Australia Limited without licence or authorisation. The decision is a red card for importers who import goods bearing trademarks which are the same as, or substantially identical to, Australian registered trademarks without first obtaining the registered trademark owners' consent.

On May 23 2011 the Federal Court of Australia granted Lonsdale Australia an interim injunction restraining sportswear retailer Paul's Retail and importer PW Inventory (together the respondents) from importing, promoting, distributing or offering for sale in Australia approximately 300,000 units of LONSDALE-branded sports gear originally destined for the European market. The products were branded with LONSDALE trademarks which were the same as, or substantially identical to, trademarks which were licensed to Lonsdale Australia by Lonsdale Sports Limited and registered to Lonsdale Australia under the act.

The court granted the interim injunction pending final determination of Lonsdale Australia's claims of trademark infringement against the respondents. Lonsdale Australia claimed that the respondents had breached Section 120 of the act by using LONSDALE trademarks which were the same as, or substantially identical to, the Australian LONSDALE marks in relation to the Lonsdale products without the consent of Lonsdale Australia. The respondents claimed that they had not infringed the act, in that the Lonsdale products were branded with LONSDALE trademarks by Lonsdale Sports Limited's European distributor under a licence, and that this constituted implied consent for the use of the Australian LONSDALE marks under Section 123 of the act.

The court declared that the respondents had infringed Section 120 of the act. It ordered that the respondents deliver up the Lonsdale products, and discover all documents relating to the sale and importation of the Lonsdale products to enable Lonsdale Australia to elect whether to claim damages or an account of profits.

The court held that the respondents had failed to establish that they had the consent of Lonsdale Australia for the use of the Australian LONSDALE marks in Australia under Section 123 of the act. The court held that neither of the two established categories of consent argued by the respondents applied in this case. In this respect, the court noted that consent could not be implied from the chain of title to, or supply chain of, the Lonsdale products given that there was no evidence that Lonsdale Australia played any role in the application of the infringing marks to the Lonsdale products. Similarly, the court was of the opinion that consent could not be implied from any relevant corporate group structure as Lonsdale Australia and the European distributor are separate entities, have separate ownership of LONSDALE trademarks, and separate processes for the manufacture of LONSDALE-branded goods under license from Lonsdale Sports Limited.

In reaching the decision, the court concluded that, in all the circumstances, the respondents had not established a defence to trademark infringement under the act.

Lisa Ritson and Paul Dimitriadis, Ashurst Australia, Sydney