Litigation procedures and strategies: Australia

Legislative framework and causes of action

In Australia, trademark law is governed by the Trademarks Act 1995 (Cth) and the Trademarks Regulations 1995 (Cth). However, the act confers rights only on trademarks that are registered through IP Australia, which acts as Australia’s patents, trademarks and designs registration authority. Trademarks can also be used if they are unregistered, referred to as ‘common law use’ of that mark; however, causes of action for the protection of unregistered trademarks are more limited than those available where the mark is registered.

Registered trademarks

According to the Trademarks Act (Section 17), a ‘trademark’ is defined as a sign that is used, or intended to be used, to distinguish goods or services that are dealt with or provided in the course of trade.

The registered owner of a trademark has the right to use that trademark in relation to the goods or services for which it is registered (Section 20(1)). The owner may also authorise another person to use the mark where the owner retains some control over use. In such a case, the owner still retains the right to obtain relief if the trademark has been infringed (Section 20(2)).

Trademark application opposition – IP Australia

The application process to register a trademark in Australia involves an examination stage, where a trademark examiner from IP Australia will consider the mark against other marks already on the register. If an adverse examination report is issued, the applicant must respond with submissions and evidence substantiating their application for the mark.

After this stage, the trademark is provisionally accepted by IP Australia and is then advertised publicly for two months for opposition purposes. This is to give other traders the opportunity to oppose the registration by filing a Notice of Intention to Oppose (Section 52; Reg 5.6) during the two-month period. The opponent trader must then file a Statement of Grounds and Particulars within one month of filing the Notice of Intention to Oppose (Reg 5.7).

The applicant must respond by filing a Notice of Intention to Defend one month after service of the opponent’s Statement of Grounds and Particulars (Section 52A; Reg 5.6). Grounds of opposition include (Section 57):

  • the opponent’s earlier use of a similar trademark;
  • the applicant’s lack of intention to use the trademark;
  • the applicant not being the trademark owner;
  • the trademark being similar to one that has acquired a reputation;
  • the trademark containing or consisting of a false geographical indication;
  • the application being defective; and
  • the application having been made in bad faith.

The parties must submit the evidence and may apply to have the matter heard by a delegate of the Trademarks Registrar, otherwise the decision will be made based on the material submitted (Section 54).

The decision issued will either refuse the trademark registration or register the trademark in the applicant’s favour. The decision will also determine costs – it is usual that the loser pays the winner’s costs according to a set scale. Delegate decisions can be appealed to the Federal Court or the Federal Circuit Court (Section 56).

Infringement – Section 120 of the Trademarks Act

A sign used by another party as a trademark will infringe a registered trademark if it is “substantially identical with or deceptively similar to” the registered trademark in relation to the same goods or services (Section 120(1)).

Additionally, where the goods or services are of the same description or closely related to those protected by the registered trademark, the sign will infringe the registered mark unless the alleged infringer can demonstrate that its use of the sign is not likely to deceive or cause confusion (Section 120(2)).

Well-known marks are afforded additional protection in Australia, as the bar for infringement is lowered to include use as a sign in respect of goods or services that are not similar if it is shown that the mark is well-known and the sign would likely be taken as indicating a connection between the unrelated goods or services and the registered owner. This is designed to protect the reputation in the trademark and it must be demonstrated that the owner’s interests are “likely to be adversely affected” by the association with the infringing mark (Section 120(3)).


After a trademark is registered, an opponent trader may file an application to remove a trademark from the register under Section 88 of the Trademarks Act. That allows the trader to apply to the Federal Court of Australia or the Federal Circuit Court of Australia to have the trademark removed on any of the grounds on which it could have been opposed.

This technique is often used as a cross-claim.

Causes of action for both registered and unregistered trademarks

The following causes of action apply to both registered and unregistered trademarks due to the connection that trademarks generally have to acts in trade or commerce that are prohibited under the Competition and Consumer Act 2010 (Cth), Schedule 2 of the Australian Consumer Law:

  • common law tort of passing off;
  • misleading or deceptive conduct (Section 18(1) of the Consumer Law); and
  • false and misleading representations (Section 29(1)).

Passing off is founded in Australian case law that prevents traders from representing an association between their goods or services and those of someone else. Reputation in the trademark is essential to the passing off claim, as is proof that unauthorised use of the trademark has caused or would likely cause consumers to be confused or deceived to the detriment of the trademark owner.

The statutory cause of action for misleading or deceptive conduct prohibits a person in trade or commerce from engaging in conduct that is misleading or likely to mislead or deceive (Section 18(1) of the Consumer Law). The court will assess the conduct in terms of an ordinary, reasonable person who is a member of the relevant audience with reference to the conduct complained of.

The prohibition on false and misleading representations is similar, in that a person is prohibited from making, in trade or commerce, false or misleading representations in connection with the supply or possible supply of goods or services, or their promotion (Section 29(1) of the Consumer Law):

  • In terms of trademarks, it is commonly asserted that representations were made in relation to goods or services being of a certain standard, quality, value, grade, style or history (Section 29(1)(a) and (b)).
  • In connection with passing off, it is commonly pleaded that representations were made that goods or services had a sponsorship, approval or characteristics that they do not have (Section 29(1)(g)), or the trader had represented they had the sponsorship, approval or affiliation of another trader that they did not have (Section 29(1)(h)).

In practice, there is often overlapping conduct between these causes of action, such that they are commonly pleaded together where the facts allow it.

Unjustified threats

It is possible under the Trademarks Act for a trader to bring an action for unjustified threats of trademark infringement. The provision is aimed to stop traders sending cease and desist letters without just cause.

In most cases unjustified-threat claims are brought by a trader when a supplier or customer has been told not to deal with the trader due to infringement. Between the would-be infringer and the trademark owner, where no third party is involved and no harm is suffered by the would-be infringer, it is rare to see unjustified-threats claims brought.

The relief for unjustified threats includes appropriate injunctions and damages.

When unjustified-threats proceedings are begun, it is common to see a cross-claim for infringement.

Alternative dispute resolution

It is common for the courts to order parties to take part in good-faith mediation.

Mediation can be held through the Court Registrar or a private mediation provider. It can be ordered at any stage, but it is more common after the evidence is filed so that each party knows the full case it must answer. Mediation is confidential. If it is unsuccessful, the judge will be notified. If it is successful, the judge will be respectfully asked by the parties to hand down whatever orders are agreed between the parties.

Litigation venue and formats

IP Australia deals with the following types of trademark litigation only:

  • registration applications;
  • registration oppositions; and
  • removal for non-use and revocation applications.

Every other cause of action must be commenced in the Federal Court of Australia or the Federal Circuit Court of Australia. This includes appeals from IP Australia decisions, infringement actions, passing-off actions and claims made under the Consumer Law.

While the Federal Circuit Court is generally a cheaper venue than the Federal Court, the Federal Court judges have greater experience in trademark matters. Federal Court decisions are also binding on the Federal Circuit Court.

As trademarks are governed by federal legislation, there is no ‘forum shopping’ as such, but it is open to each applicant to file the proceeding in the state of its own choosing. The respondent may then bring a claim to have the matter moved to a different state, which generally occurs due to convenience or the location of witnesses or counsel.

It is now possible to split the proceedings to hear the issues relating to infringement separately to the issues of quantum of damages or account of profits. This reduces the cost of the case as it avoids the need to file expert forensic evidence on losses or profits. Once the decision of liability is made the parties tend to come to an agreement on settlement in respect of damages or account of profits.

Damages and remedies

A registered owner that succeeds in an action for trademark infringement may obtain an injunction preventing further use of the infringing trademark and damages or an account of profits (Section 126(1)).

Additional damages may be awarded if, for instance, the infringement was flagrant (Section 126(2)). Additional damages are discretionary and do not relate to the award of damages. However, there is a trend between the award for additional damages and whether the infringement ceased when the infringer was put on notice of the rights.

It is not currently possible to be awarded both an account of profits and additional damages, as additional damages are seen to be an addition to damages themselves.

Jury trial

Australian trademark disputes, in the first instance, are heard before a judge alone, without a jury. It is possible to request a jury, but it is unusual and not advisable as a jury would not have the experience in case law and in hearing similar matters.

Evidencing the case

It is not necessary to investigate infringement before filing a proceeding, but it is strongly advised. Particularly so given that prior continual use is a full defence to infringement and that Australia is a first-to-use country.

It is also advisable for a trademark owner to monitor its marketplace to catch infringement early.

It is necessary under the Civil Dispute Resolution Act to make genuine steps to attempt to settle the case. There are exceptions in cases of emergency and practicality, among others. If genuine steps are not taken by the parties before filing the case, the court may order costs in the respondents’ favour given that genuine steps may have resolved the matter.

In that respect, as part of filing the proceedings, it is necessary to file a Genuine Steps Statement.

It is still debated as to whether a demand for full capitulation to the applicant’s demands is a genuine attempt to settle the matter or whether some compromise is necessary.

Expert evidence

Experts can be relied on by the court in trademark matters. First, on the issues of damages or account of profits, but also in terms of whether a trademark has the ability to distinguish that trader’s goods and services from another trader. In terms of infringement, experts may attest to pronunciation or longevity of use in the marketplace.

Survey evidence

Survey evidence can be filed but it is increasingly being dismissed by the courts. This can be for various reasons, including the fact that:

  • survey questions can be leading;
  • the survey may not have been completed by a representative sample; or
  • the wrong class of consumers was surveyed.

Available defences

The onus is on the applicant for it to prove its case against the respondent. Therefore, the primary defence in trademark litigation is that:

  • the trademark is not being used as a sign;
  • the trademark is not deceptively similar or substantially identical to the registered mark; or
  • the goods or services are not of the same description or closely related to those protected by the registered trademark.

Use of a name in good faith

Under Section 122(1)(a) of the Trademarks Act, trademark infringement does not occur if a party uses, in good faith, its name or the name of its place of business, or the name of a predecessor or a predecessor’s place of business.

In practical terms, to establish this defence the adoption of the name is investigated. It is not possible to deliberately adopt a name corresponding to the trademark of another trader and claim the defence. The use must be in a good faith. How the trademark is used will also be assessed. For example, to assess whether the trader has targeted its use of the mark to align it with the registered trademark.

It has also been held that a trader’s full name may not need to be used to rely on the defence. For instance, Sweetheart Plastics Pty Ltd could shorten its name to Sweetheart Plastics and rely on the defence, but it could not rely on the defence if it shortened the name to Sweetheart.

Use of a trademark to describe goods or services

Good-faith descriptive use is also a defence under the Trademarks Act. According to Section 122(1)(b) of the act, trademark infringement does not occur if a person uses a sign in good faith to describe a characteristic of the goods or services on offer, or to indicate the time of production of goods or provision of services.

A ‘characteristic’ can refer to the following about the goods or services:

  • type;
  • quality;
  • quantity;
  • intended purpose;
  • value; and
  • geographical origin.

In terms of good faith, the respondent must show that it is not using the mark in such a way as to trade off the reputation of the trademark owner.

Use to indicate the purpose of goods or services

According to Section 122(c) of the Trademarks Act, trademark infringement does not occur where an individual or organisation uses a mark in good faith to indicate the purpose of the goods.

This defence is directed towards traders advertising spare parts that can be used as a substitution to those of the trademark owner.

Once again, this defence relies on the need for good faith. Therefore, use of the mark will be analysed to ensure that there is no attempt by the respondent to mislead consumers into a belief that they are connected to or have the sponsorship or approval of the trademark owner.

Comparative advertising

Comparative advertising is a hotly contested issue in Australia.

The Trademarks Act provides a defence to the use of a trademark for comparison purposes under Section 122(d).

The argument is that there is no actual use of the trademark on that trader’s goods, rather the trader is comparing its goods with the legitimate goods of another trader.

Comparative advertising cases almost always includes a claim under the Consumer Law which aims to protect traders against misleading and deceptive conduct. The trader may argue that the comparison is misleading because one trader’s goods are portrayed in a positive light while the other’s goods are portrayed in a negative light. These cases also generally involve an argument that the two products are not comparable at all.

Use of your own registered trademark

Under Section 23 and Section 122(e) of the Trademarks Act, an individual or organisation has not infringed a trademark where they are exercising their right to use their registered trademark. This defence is also available to authorised users.

The defence is available only if the trademark is being used as registered and so a test may be applied to determine whether the trader is using the mark as registered or a variation thereof which alters the mark’s identity.

Obtaining registration

If the court is of the opinion that a party can obtain registration for its own mark if it applies to register that trademark, it is deemed not to have infringed the mark. This often comes down to the fact that Australia is a first-to-use country and if a trader can demonstrate that it either pre-dated the registered trademark or that it has co-existed without confusion, it may rely on the defence.

Use of a registered trademark that is subject to limitations

While rarely seen, limitations can be placed on trademark registrations. These limitations are displayed on the trademark register.

It is a defence to infringement to use the mark outside of those limitations. According to Section 122(g) of the Trademarks Act, trademark infringement does not occur where a person uses a trademark that is subject to limitations or conditions.

Prior continual use

Under Section 124 of the Trademarks Act, if a trader has used the trademark continuously from a date that pre-dates the trademark registration or the owner’s first use, it does not infringe the trademark. This provision also protects subsequent owners.

Once again, this is due to Australia’s position as a first-to-use country.

Cross-claim for invalidity

It is becoming increasingly common to see cross-claims for invalidity of a trademark. In Australia, only the person who claims to be the owner of the mark can apply for its registration.

It is also common to see asset protections put in place whereby the trademark would be held in the name of a holding company. Where an operating company has used the trademark first, but not assigned it to the holding company, and then the holding company applies for registration of the trademark, the trademark will be invalid.

This gives the respondent a possible defence on the basis that the trademark should not have been registered in the first place and that the trademark should be removed from the register (known as ‘cancellation’).

Appeals process

Decisions of IP Australia, the Delegate of the Registrar of Trademarks or the Registrar of Trademarks may be appealed to the Federal Circuit Court or directly to the Federal Court . In either case, the appeal will usually be heard by a single judge of the court.

There is also a very limited right to administrative review of such decisions to the Administrative Appeals Tribunal; however, the scope for such review is narrow and not commonly used or recommended. Decisions of the Administrative Appeals Tribunal may also be appealed to the Federal Circuit Court or directly to the Federal Court.

Decisions of a single judge of the Federal Circuit Court may be appealed to the Federal Court. Decisions of a single judge of the Federal Court may be appealed to a full court of usually three but sometimes five Federal Court judges.

Decisions of the Full Court of the Federal Court may be finally appealed to the High Court of Australia. Special leave to appeal is required from the High Court before it will hear the appeal. The High Court is at the top of the Australian judicial hierarchy and no right of appeal lies from its decisions.

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