17 December 2011


SSRN has released Mark Davison's 'Reputation in Trade Mark Infringement: Why Some Courts Think it Matters and Why it Should Not' - published in 38 Federal Law Review (2010) 231.

Davison comments that -
Australian case law on infringement of registered trade marks has placed an increasing emphasis on the reputation of the owner of the registered trade mark in determining whether infringement has occurred. Consideration of the trade mark owner's reputation has been included in determining whether the sign used by the defendant is deceptively similar to the registered trade mark and, more recently, in determining whether the defendant has used its allegedly infringing sign 'as a trade mark'. Neither development is consistent with either the law relating to registered trade marks or the underlying policy reasons for the system of registration. This article discusses the case law which has introduced the tendency of the courts to consider the reputation associated with an owner of a registered trade mark in determining infringement proceedings, the reasons why such an approach is not consistent with the legislation nor with the rationale underlying our registered trade mark system.

In particular, one of the objectives of the registered trade mark system is to provide a bright line that delineates the property rights of the registered owner. The bright line is publicly available information as to who has the rights in a trade mark and what those rights are. These rights are defined by reference to the act of registration, not by reference to the rights to protection of the reputation of the registered owner conferred by a passing off action which are independent of the rights flowing from registration. Consequently, if the rights conferred by registration are diminished or enhanced by reference to the trade mark owner's reputation, the exercise of delineating the rights of the owner in advance would be rendered nugatory to the extent that they are so diminished or enhanced. For that reason alone considerable caution should be exercised before introducing evidence of a trade mark owner's reputation in the process of determining whether its trade mark has been infringed.
He offers five conclusions -
First, the reputation of a registered owner is never relevant to the question of use of a sign as a trade mark by a defendant. The decisions to the contrary are simply wrong.

Second, the only circumstance in which the reputation of the registered owner may be relevant to the issue of deceptive similarity is where judicial notice of that reputation is, and can be taken. Consequently, evidence on the point is neither required nor even permissible for this purpose. The circumstances in which such judicial notice will be taken will be very limited.

Third, extreme care must be taken to identify which aspect of the trade mark owner's judicially noticed reputation will be taken into account. In particular, the relevant reputation must be the reputation of the registered trade mark, not other aspects of the trade mark owner's reputation. Otherwise, the inquiry becomes a general one relevant to passing off actions but not relevant to trade mark infringement proceedings.

Fourth, the extremely limited circumstances in which reputation may be relevant and the tendency to incorrectly rely on aspects of reputation not based on components of the registered trade mark, coupled with the far greater importance of other aspects of the comparison of the allegedly infringing sign and registered trade mark, suggests that the starting point of courts should be to ignore reputation altogether in considering trade mark infringement issues. At best, reference to reputation should be an extremely rare event.

Fifth, all of the above conclusions are not only consistent with, but required by, both the wording of the trade marks legislation and the underlying policy objectives. The act of registration alone should define the rights of a registered owner. By doing so, there is both an incentive to register and a corresponding incentive to contribute to a system which is more transparent than the protection of common law trade marks. The introduction of considerations of reputation into determining trade mark infringement unnecessarily complicates litigation and understanding of the positions of trade mark owners.