When is a Trade Mark Not Infringed?
George Raptis
If you have successfully registered your trade mark, you gain the exclusive right to use that trade mark. This means that someone can infringe your trade mark rights if they use a sign which is substantially identical with, or deceptively similar to, your registered trade mark and concerns the specified goods and services of your trade mark. However, under the Trade Marks Act, there are limited circumstances where someone’s use of a sign without your permission does not infringe on your rights. This article explains circumstances where trade marks are not infringed so that you can respond accordingly.
1. Using A Personal or Business Name
The Trade Marks Act allows business owners to use their business names. If they use their name in good faith, a registered trade mark is not infringed.
Good faith means an honest belief that you would not confuse consumers by using your name. In addition, there must be no intention to take advantage of the reputation gained by the business that owned the registered trademark.
For example, it may be possible to advertise your small business with your family name McDonald, despite McDonald’s Inc. owning the exclusive rights to use the trade mark ‘McDonald’s’ concerning fast food. However, if you used your family name McDonald to advertise your own fast-food company, this is likely to deceive consumers or take advantage of McDonald’s reputation.
Whether someone acted in good faith does not depend on what they believed when they used their family name. Instead, a court will assess the trader’s actions objectively. This means that the court will consider what a reasonable person in their position would have honestly believed when they used the sign containing your family name.
2. Descriptive Use
Another instance where a trader does not commit trade mark infringement is when they use a trade mark to describe the nature of their goods or services. For example, a trader may use a trade mark in good faith to indicate the kind, quality, intended purpose, value, geographical origin, or another characteristic of their business’ goods or services.
However, there is a fine line between what is and is not descriptive use. In a 2014 case, the Federal Court held that a company’s use of the word ‘Living Water’ on bottled water went beyond descriptive and constituted use as a trade mark. The Court held that the company did not use the words as a description of the goods, nor was their use reasonably necessary for the adequate description of the goods.
Like the exception above, a trader can only use a trade mark to describe their goods or services in good faith. If a trader’s conduct shows an attempt to deceive consumers or take advantage of your business’s reputation, it could be open to arguing that they used your sign as a trade mark instead of a description.
3. Intended Purpose
Say you are in the business of making smartphones, and another company produces compatible accessories for your products. In this instance, the company producing the accessories may use your trade mark to indicate the intended purpose of their products. However, they must indicate that their goods are different from yours in specific language. For example, the trader might use the words “suitable for use with” to show that their products are compatible with your products.
Nevertheless, the trader must do so in good faith to avoid committing trade mark infringement. That is to say, the trader must avoid creating a mistaken or misleading impression that your company produced their products.
4. Comparative Advertising
Another instance where a trade mark is not infringed is when a trader uses the trade mark for comparative advertising. Businesses often distinguish their goods or services from others in the market to gain a competitive advantage. Comparative advertising can also be helpful for consumers in making choices between similar products or services.
While using a trade mark for comparative advertising will not constitute trade mark infringement, it can breach Australian Consumer Law (ACL). This is because if the comparative advertising presents false or misleading information, they could be liable for breaches of ACL. For traders to comply with the ACL, their statements must be true, accurate, and substantiated.
Key Takeaways
If you think someone has infringed your trade mark rights, you must consider whether their conduct falls within the ambit of trade mark infringement. The Trade Marks Act lists some exceptions to infringement where a trader uses a trade mark that:
- contains their family name or business name;
- describes their goods and services;
- indicates the intended purpose of their goods and services; and
- helps with comparative advertising.
If you have any questions about when trade marks are not infringed, our experienced trade mark lawyers can assist. Call us on 1300 657 423 or complete the form on this page.
Frequently Asked Questions
A person commits trade mark infringement if they use a sign that is substantially identical with, or deceptively similar to, your registered trade mark and concerns the specified goods and services of your trade mark.
If you use a registered trade mark without the owner’s permission, you risk committing trade mark infringement. To avoid this, you should contact the registered trade mark owner.