All questions

Civil litigation

Common causes of action for civil litigation are trademark infringement under the TMA, the common law tort of passing off, and for misleading and deceptive conduct under the ACL.

i Forums

The FCA, FCC and supreme courts of the various states and territories can all hear claims regarding trademark infringement, passing off and misleading and deceptive conduct; however, in practice, these claims are typically brought in the FCA. Intellectual property is one of nine specialised national practice areas (NPAs) for the purposes of FCA hearings, and trademarks is a sub-area within the intellectual property NPA.

In July 2018, the FCC introduced a new practice direction to streamline the management of IP matters and increase the visibility of the FCC as a cheaper and more efficient alternative to the FCA. All IP proceedings in Australia are initially docketed to, and case managed by, a single IP specialist judge based in the Sydney Registry, who is supported by other specialist judges within the IP NPA of the FCC. The intention is that overall costs will be lower (especially due to the limited length of trials and the ability to make orders for capped costs) and that matters will proceed to hearing more quickly compared with the FCA; however, at this early stage, it remains to be seen whether this new option will be taken up enthusiastically by litigants.

ii Pre-action dispute resolution

Alternative dispute resolution (ADR), including mediation, arbitration and expert determination, is strongly encouraged as an alternative to litigation. It is a requirement prior to launching proceedings in the FCA or the FCC that proper attempts have been made to resolve the dispute between the parties.

As one means of encouraging ADR, IP Australia offers an IP Mediation Referral Service, which aims to provide small and medium-sized enterprises (SMEs) with access to qualified, accredited specialist mediators to resolve their disputes out of court. There are currently over 25 trademark specialist mediators listed on the service, although it remains to be seen how widely this will be adopted by SMEs as an alternative to formal legal action.

iii Causes of action

The owner of a registered trademark can bring an infringement claim against another party if that other party uses as a trademark a sign that is either identical or deceptively similar to the owner’s registered trademark. There are, however, numerous defences to alleged infringement, including the use of a name or business location in good faith, descriptive use in good faith, use in comparative advertising, and prior and continuous use.

Trademark infringement claims are often brought in conjunction with claims for passing off and misleading and deceptive conduct. These causes of action depend upon whether consumers have been, or are likely to be, misled or deceived as to the origin of the respondent’s goods or services, incorrectly believing that they come from or are affiliated with the applicant. Where the applicant has unregistered trademarks or suffers misuse of company, trade, business or domain name, the applicant will have to rely on these causes of action.

The leading authority on passing off requires a misrepresentation made in the course of trade (1) to prospective or actual customers of goods or services supplied by the injured party; (2) that is calculated to injure the business or goodwill of another trader; and (3) that causes actual damage to the business or goodwill of the claimant.

The later English authority of Reckitt & Colman is also applied, in which the elements of passing off (often referred to as ‘the classic trinity’) were identified as (1) the existence of a reputation; (2) a misrepresentation leading or likely to lead the public to believe that the defendant’s goods are the plaintiff’s goods; and (3) damage suffered by the plaintiff as a result of that erroneous belief.

iv Conduct of proceedings

Court proceedings in Australia are similar to other common law systems with advocates (usually barristers) appearing in person before the courts.

For infringements requiring urgent restraint, the court has the power to order an interim injunction ordering that the alleged infringer ceases its action immediately, pending the outcome of the trial.

The court also has powers to require Anton Piller orders, which operate like a search warrant, allowing the applicant to search the alleged infringer’s property without notice and to seize evidence. Generally, these are only granted in serious cases where there is sufficient evidence that the subject of the order possesses important evidence and is likely to destroy it or otherwise cause it to be unavailable for use.

Substantive trademark infringement proceedings are commenced by a statement of claim. The alleged infringer then has the opportunity to reply to these claims. Following this, the parties provide each other with all relevant documents in their possession by way of discovery. Evidence in support of each aspect of the claim (including the quantum of damages) is then provided by the applicant, often by way of written statements, such as affidavits by relevant witnesses or experts, and evidence in answer is provided by the defendant. This evidence is likely to be tested by way of cross-examination of witnesses during a hearing, after which the judge will rule on the facts, apply relevant law to the case and issue a judgment. Court proceedings can be lengthy, and resolution of fully contested proceedings can take more than a year.

v Remedies

The court can grant an injunction to restrain further infringement, passing off or engagement in misleading or deceptive conduct, and at the option of the applicant, either damages or an account of profits. As a result of recent amendments, the court also has powers under the TMA to award additional punitive damages for trademark infringement if it considers it appropriate to do so, having regard to matters such as the flagrancy of the infringement, the need to deter others from similar conduct, the conduct of the infringer after the infringement (and, particularly, after being informed of the infringement) and any benefit the infringer has gained as a result of the infringement. This power has been used in recent cases where it has been difficult to establish actual loss or where infringement has continued following notice of the relevant trademark owner’s rights.

Other enforcement proceedings

The TMA and the ACL contain various criminal offences in relation to counterfeiting, which are brought by the Australian Federal Police or the Department of Public Prosecutions. In the case of the ACL, the Australian Competition and Consumer Commission has the power to commence proceedings. In Australia, it is a criminal offence to:

  1. falsify a registered trademark;
  2. falsely apply a registered trademark;
  3. alter or remove a trademark knowing it is a registered trademark;
  4. make a die, block, machine or instrument that can help in falsifying or removing a trademark;
  5. sell, possess, distribute or import a good, knowing that the trademark has been falsified or removed; and
  6. make certain false or misleading representations about goods or services, including in relation to the standard, history, value, place of origin, nature or characteristics of goods or services.

The penalties for these criminal offences may include imprisonment or a fine. However, in practice, criminal proceedings are rarely brought and are typically confined to cases involving organised crime or public health and safety issues.

The TMA also contains a scheme allowing the Australian Customs Service (Customs) to seize imported shipments of goods suspected of infringing registered trademarks. Rights holders can lodge a notice of objection with Customs, listing the marks they would like to protect, and Customs then seizes goods imported into Australia bearing these marks if they are suspected of being counterfeit. The importer has a short time to provide grounds for releasing the goods, otherwise they are automatically forfeited to Customs and ultimately destroyed.