Overseas brand owners have a potent ground to challenge trade mark filings by unconnected local businesses in Australia under the bad faith ground.

Anyone looking at decisions from the Australian Trademarks Office over the last 12 months or so could be forgiven for thinking they’d entered the Wild West.  We are seeing an increasing amount of cases in which a local company has filed for a trademark that is essentially owned by an overseas business.  There are ways to stop activity of this sort and one of the most potent grounds we have is the bad faith ground of opposition which was introduced in Australia in 2006. 

Companies like Next, The White Company and New Look have all encountered filings by Australian companies for their marks or very similar marks and have had to resort to various tactics in order to try and retrieve those marks with mixed and in some cases questionable results that may have come down to the particular evidence available at the relevant date. 

Australia has a potent provision since 2006 under the bad faith ground in which you can prevent the registration of a mark in similar circumstances and which supplements existing provisions that did not necessarily cater for those facts. 

The first detailed judicial discussion of the bad faith provision actually took place this year in the Fry Consulting v Sports Warehouse case involving an application for Tennis Warehouse Australia in a stylised form.  A local business named Fryer Consulting applied for Tennis Warehouse Australia in a stylised form in full knowledge of the overseas business Sports Warehouse and its use of Tennis Warehouse in America and Australia. 

The parties were involved in negotiations in 2004 but Sports Warehouse did not act swiftly following on from those discussions.  Fry Consulting filed for Tennis Warehouse Australia and that led to these opposition proceedings.  One of the key grounds that Sports Warehouse relied on in its opposition was the bad faith ground.  It argued that the filing of this mark with knowledge of their mark would amount to bad faith. 

Justice Dodd-Streeton considered various cases including from the registry and the UK; she in fact did not consider the leading European decision, but in a roundabout way referred to it by referring to some of the leading UK cases.  They effectively adopted the same approach which is one of combined subjective and objective factors.  The opposition was in the end rejected and the critical factor was that following on from the correspondence between the parties in 2004, Sports Warehouse did not act swiftly enough to prove its rights in Tennis Warehouse.  Also of importance was the fact that Justice Dodd-Streeton refused to close the categories of bad faith conduct.  She referred to the explanatory memorandum and the particular examples in there, but noted that they were all inclusive examples. 

She has adopted a broad reading of the bad faith provision which will be to the advantage of many overseas companies trying to prevent this kind of conduct in Australia.  Bad faith was not found in these particular circumstances but the case emphasises that these categories of bad faith are not closed and they’re in fact quite broad and that you must act swiftly if you are to retrieve your rights in your mark in a bad faith scenario.

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