We are pleased to report that the Australian Federal Government has implemented a range of reforms in the Intellectual Property Laws Amendment (Raising the Bar) Act 2011. The Act is effective from 16 April 2012 with trade mark provisions taking effect from 16 April 2013. Baker & McKenzie assisted IP rights owners lobby for a number of the reforms which have been implemented.
The changes relating to trade mark practice are significant and should have a positive impact on IP rights owners' prosecution and enforcement strategies, improving their ability to enforce rights and protect the integrity of their brands. We set out the key areas of reform below.
Australian Customs seizure regime
Putting in place Customs notices enables Australian Customs to seize goods that infringe registered trade marks or copyright, thereby stopping counterfeit goods before they enter the Australian market.
The current system has, however, led to some frustration in circumstances where rights owners are forced to commence court proceedings against importers who simply ignore a notice of seizure or are not contactable. In these circumstances, Customs is required to release the goods.
The reforms will enable Customs to:
- deem goods to be automatically forfeited to Customs if an importer fails to make a claim for the release of the goods, including providing its name and address for service. The onus is shifted to the importer to seek release of the seized goods and identify themselves;
- release details of the exporter and consignor of the seized goods at the time of seizure. Currently, only the importer's details are released and a court order is required to obtain further details. This is critical to identifying and tracking infringers (in particular serial infringers).
Court proceedings should only be required in Customs seizures matters where there is a genuine dispute. If an importer lodges a claim for return of the goods, the rights owner must commence proceedings within the statutory period of 10 days (extendable by a further 10 days).
These new procedures will hopefully reduce the resources devoted to Customs seizures and have a greater deterrent effect on counterfeiters.
Infringement proceedings - new forum and additional damages available for flagrant infringement
Additional damages have been available for infringement of copyright, patents and designs for some time, but this remedy for flagrant infringement has not been available in trade mark infringement actions.
Under the new legislation, Courts will now have the discretion to award additional damages (also known as punitive or exemplary damages) for flagrant infringement in civil trade mark infringement cases. This will be a useful tool in trade mark enforcement, particularly in cases of egregious infringement.
The Federal Magistrates Court will also have jurisdiction to hear trade mark cases, providing a potentially cheaper, faster and less formal forum than the Federal Court of Australia for straightforward disputes.
Trade mark offences
Penalties for existing offences will be increased and new summary offences will be introduced, recognising that counterfeiting is a serious issue. The changes are as follows:
- Increased penalties: the maximum penalties for indictable trade mark offences have been increased from a maximum of two years imprisonment and/or 500 penalty units to five years imprisonment and/or 550 penalty units. Higher monetary penalties are intended to act as a deterrent to counterfeiting activities;
- Summary offences: a new class of summary offences for trade mark infringement will be introduced which require negligence rather than knowledge or recklessness, so that potential infringers must take care to avoid the use of registered marks. This amendment is consistent with the summary offences provisions in the Copyright Act.
Trade mark opposition procedures will be streamlined and the amendments will change relatively long-standing practices.
Specific details of the new procedures will be set out in the Regulations (which are yet to be drafted), but we note:
- an opponent must file a statement of particulars (within one month of the notice of opposition) of the grounds on which it intends to oppose an application. So as to avoid opponents simply listing every ground, the particulars must include material facts in support of the grounds. If the opponent does not comply with this requirement the Registrar may dismiss the opposition. This is potentially problematic for some opponents. At the time of filing an opposition, many opponents simply have not had sufficient time to marshal the necessary facts and may not know whether it can prove certain grounds. Conversely, the new practice will provide trade mark applicants with a better indication of the issues and arguments they must address in the proceedings;
- the timetable for key steps in the opposition process will be tightened and opposition periods will likely be shortened from 3 months to 2 months;
- IP Australia will take on the responsibility of serving the notice of opposition on the applicant – this should standardize procedures and facilitate the efficient administration of proceedings;
- an applicant must give notice of its intention to defend an opposition, failing which the application will be treated as withdrawn or abandoned. This is a welcome change – currently opponents to International Registrations filed by applicants with no address for service in Australia can wait months and spend significant resources on evidence without knowing whether the opposition will be defended. The applicant must now participate in the opposition process; and
- a 6 month cooling off period (extendible to a maximum of 12 months) will be available with the consent of both parties.