The Productivity Commission Report released on 29 April recommends a number of changes that affect trade mark owners.  

Impact on trade marks

The Commission was particularly concerned with “cluttering” of the Trade Marks Register. Cluttering is defined as when Applicants “register trade marks over a wider range of elements and Classes as is necessary”. Cluttering was seen to be an issue because most oppositions filed on the basis of sections 44 and/or 60 are successful.

Those grounds are successful if a prior right exists which prevents the registration of the opposed application. A prior right is an earlier trade mark which should prevent the registration of a later filed trade mark.

The Commission concluded that, given the cluttering of the Register, it is not possible for Examiners to carry out effective and accurate examination of prior rights. This has been leading to the high number of successful oppositions on the above grounds.

De-cluttering solutions

The Commission discussed “de-cluttering” with the Register as follows:

  1. re-introducing mandatory disclaimers on trade marks;
  2. charging more official fees for each additional Class claimed acts as a deterrent to Applicants filing in more Classes of goods/services than is necessary
  3. introducing the requirement of an intention to use the mark; and
  4. abolishing defensive trade marks.

The Commission also suggested that other ways of “de-cluttering” could be to amend the Trade Marks Act to remove the notion that the Registrar must approve the application if no fault is found with it. And in addition, clarify how far the presumption or registrability should extend.

Geographical trade marks

The Commission was also concerned that consumers did not understand trade marks, in particular trade marks that included geographical place names. It was suggested that the Trade Marks Office challenge geographic references in trade marks more frequently. The Commission also found that business owners were confused about the difference between business names and trade marks.

The Commission was also concerned that parallel imports of legitimately trade marked goods are frequently prevented by laws which are not clear or functional. This was considered to be a detriment to competition and to consumers. A parallel import is when non-counterfeit goods are imported into a market without the authorisation of the intellectual property rights owner.

Commission recommendations

The Commission made the following recommendations to improve the effectiveness of Australia’s trade mark system:

  • restore the power for the trade mark Registrar to apply mandatory disclaimers to trade mark applications;
  • repeal part 17 of the Trade Marks Act relating to defensive trade marks;
  • amend s. 43 of the Trade Marks Act so that the presumption of registrability does not apply to the registration of marks that could be misleading or confusing;
  • amend the schedule of fees for trade mark registrations so that higher fees apply for marks in multiple classes and/or entire classes of goods and services;
  • the Trade Marks Office should routinely challenge trade mark applications that contain geographical references (under s. 43 of the Trade Marks Act). Challenges wouldn’t apply where endorsements require goods and services to be produced in the area nominated;
  • in conjunction with ASIC, link the Australian Trade Mark on-line database with the business registration portal, including a warning if a registration may infringe an existing trade mark, and to allow for searches of disclaimers and endorsements; and
  • Amend s. 123 of the Trade Marks Act to ensure that parallel imports of marked goods do not infringe an Australian registered trade mark provided that the marked good has been brought to market elsewhere by the owner of the mark or its licensee. 

What you need to know

Rights owners should be particularly aware of the following points:

  • The potential increase in fees at filing and registering when deciding on the goods/services to be covered by their trade mark. Specifications of goods/services may need to be narrower, and applications only cover the precise goods/services in respect of which the trade mark is/will be used;
  • The potential removal of the right to file defensive trade marks. Rights owners may need to consider other ways of protecting their well-known marks;
  • Trade marks which contain geographical references should be considered carefully, particularly if the goods/services covered by the trade mark do not originate from the particular geographical area mentioned; and
  • The suggested amendments to the Trade Marks Act regarding parallel imports.