A new hope for shoppers

Not so long ago, but in a country far, far away, Australia Post set up the 'ShopMate' service, which offers consumers a way to obtain products from sellers in the US who do not normally ship to Australia. In the lead up to 'Black Friday', monthly registrations for the service tripled. However, trade mark owners might have a bad feeling about ShopMate, as it may have the unintended consequence of frustrating trade mark owners seeking to prevent cross-jurisdictional importation.

On signing up to ShopMate, users are provided with a US postal address which they can give to sellers for delivery to Australia Post's designated warehouse in the US. Once a package arrives at the warehouse, users receive an email and are required to declare their package (if over $2,500) and pay the shipping costs to Australia. Australia Post will then deliver the product to the user's designated address in Australia.

In a test we conducted, ShopMate provided us with an address in Portland, Oregon, of a warehouse run by a logistics company. The second line of the address to be given to the seller read 'Suite SM-1234-5678' [we've altered these numbers], which presumably is how Australia Post matches the user with the package.

Importation and trade marks

Where a trade mark's owner is the same in the US and Australia, no infringement will arise from importing genuine trade marked goods into Australia. This is because the trade mark has been applied on the goods with the consent of the Australian trade mark owner, and as such, section 123 of the Trade Mark Act 1995 (Cth) acts as a full defence for the importer. (This blog post does not consider the situation where trade mark owners are different in each country.)

Of course, trade mark owners often like to divide up distribution channels of trade marked goods. As an example, trade mark owners may license the right to use their mark in the US to one party, and the right to use their mark in Australia to another.

Trade mark owners will sometimes enforce this divide by prohibiting their US licensee from delivering to addresses outside of the US. Trade mark owners might impose such a restriction in order to create value in an Australia licence.

For consumers, the dark side of this divide can be that it arguably reduces competition and raises prices by stopping Australian shoppers purchasing directly from US sellers. This can lead to frustration for shoppers wanting the cheapest price, and can result in Australians not being able to access some goods at all. However, with the increasing popularity of ShopMate (and similar services), trade mark owners may soon realise the power of the consumer.

ShopMate is a practical way for Australian consumers to avoid restrictions on deliveries outside the US. The result is a win for shoppers, but what now for trade mark owners?

It's difficult to see how trade mark owners could use trade mark monopoly rights to stop people importing goods from the USA for personal use in Australia. Trade mark owners could adopt logistical alternatives, such as refusing delivery to identified ShopMate addresses, or refusing to accept Australian credit cards as payment. However, these alternatives may be difficult or impractical to implement. (It may be possible in some circumstances for a trade mark owner to use copyright to prevent an importation - but that's the subject of a future blog post.)

It seems revenge of the trade mark owners may be hard to come by.

Happy holidays from the Intellect Blog team!

(And apologies for the geeky Star Wars references in this post.)