Intellectual Property in Commercial Settings

Exceptions to infringement

It is not the case that every single use of a trade mark will be an infringement. Generally, the benchmark for trade mark infringement is consumer confusion. So where there is no likelihood of confusion arising from the use, then there may not be infringement.

Additionally, there will not be an infringement where the mark is being used descriptively. If the mark is only being used to indicate the kind, quality, purpose or some other characteristic of the goods or services, then the use will not be infringing.

The law also provides certain defences to trade mark infringement.

The spare parts defence

A trader may use a trade mark to indicate their goods or parts are compatible with the trade mark owner’s goods.

ExampleConsider car and computer parts

A mechanic advertising that their engines are compatible with FORD cars, or a computer technician advertising parts that are compatible with MICROSOFT computers would not cause confusion.

The comparative advertising defence

It will not be an infringement to use a trade mark in the process of comparing one trader’s products to another’s.

ExampleDueling department stores

MYER can run an advertisement explaining why their store is a better place to shop than DAVID JONES.

The second hand goods defence

It is not an infringement to use a trade mark in relation to goods where the mark has been applied to the goods with the consent of the trade mark owner.

ExampleSecondhand jeans

Sally purchases legitimate WRANGLER jeans, and then decides to resell them on eBay. It will not be an infringement for Sally to advertise that she is selling WRANGLER jeans because this is true - the mark was, at one stage, applied to the jeans by the trade mark owner or with their consent.

The prior use defence

If a person has been using a mark that is substantially identical or deceptively similar to a registered trade mark since before that trade mark was registered, then they may be able to continue using the mark.

Box of fancy chocolates

ExampleFLORET chocolates were first

Amina has been using the name FLORET for her homemade chocolates, which she sells to cafes and sweet shops, since 1998. In 2006, Cheng registered the trade mark FLORET with IP Australia for his bakery business. Amina and Cheng became aware of each other in 2011. Even though Cheng has the registered trade mark right, Amina may be able to continue to use FLORET for her chocolates (a similar good to bakery goods) under the prior use defence.