In Australia, there are two types of protection for trade marks. Common law trade marks are marks that have acquired a reputation through use that may give the owner of the trade mark enforceable rights, while registered trade marks are marks that have been registered under the TM Act. Common law rights can co-exist with rights arising from registration.
Common law trade mark rights arise from using a trade mark in Australia. The amount of use must be sufficient for the trade mark to acquire some reputation in Australia, as it is the trade mark owner’s reputation (as represented by the trade mark) that is the basis for a passing off action at common law.
For a passing off action to succeed, the trade mark owner must establish:
• that the trade mark has a reputation in Australia;
• that a third party has made a misrepresentation relating to the trade mark;
• that the goodwill (i.e. reputation) in the trade mark has been damaged or is likely to be damaged as a result of the misrepresentation.
The level of reputation required for a passing off action depends on the nature of the trade mark owner’s goods or services, and the distinctiveness of the trade mark. A trade mark representing high value goods or services may require relatively little use to establish the necessary reputation, whereas a trade mark that describes the relevant goods will require extensive use to acquire a sufficient reputation.
A wholly descriptive trade mark (or one that has become descriptive of a type of goods, rather than indicating the source of those goods) may never acquire a sufficient reputation to found a successful passing off action, since other traders are entitled to use a descriptive term for their own similar goods or services.
A misrepresentation may arise from using a competitor’s trade mark (or a deceptively similar mark) to suggest that particular goods or services are connected in trade channels with the true owner of the trade mark when that is not true.
Indirect misrepresentation may also exist, where the goods or services are falsely associated in some way with the owner of the trade mark, but in either case the misrepresentation must be in the course of trade. The misrepresentation must generally lead to a likelihood of actual deception, although mere confusion has been sufficient in some cases.
Damage to goodwill may include, for example, simple diversion of trade, or damage to the reputation of particular goods as being of a certain standard. The damage must be to the business of the trade mark owner (but this does not have to be a commercial business). Not-for-profit organisations may have goodwill associated with their activities and that goodwill may be damaged by passing off.
In some respects, a passing off action is similar to the concept of misleading or deceptive conduct under the Australian Consumer Law (ACL) (see Consumer guarantees).
Although the ACL is intended primarily to protect consumers, traders can take action against competitors under the ACL for misleading or deceptive conduct where the conduct relates to misuse of a trade mark.
Passing off actions are often combined with actions for misleading or deceptive conduct.
The owner of the trade mark must show that there has been misleading or deceptive conduct, or conduct likely to mislead or deceive. However, unlike a passing off action (where mere confusion may be sufficient), in an ACL action it must be shown that consumers have either actually been misled or deceived or are likely to be misled or deceived – mere confusion is not sufficient unless this leads to a consequent likelihood of consumers being misled or deceived.
Because the ACL is intended to protect consumers, not traders, it is not necessary for the trade mark owner to demonstrate a likelihood of damage to their business. The misleading or deceptive conduct must occur in the course of trade.
Trade marks may be registered under the TM Act if they meet certain criteria. All “signs” (see “What is a trade mark?”) may be accepted for registration if:
• they are capable of distinguishing the trade mark applicant’s goods or services from similar goods or services of other traders;
• they are not substantially identical or deceptively similar to trade marks that have already been applied for or registered;
• they can be graphically represented;
• they are not prohibited marks, or marks that would be scandalous, or marks the use of which would be contrary to law;
• they are not likely to deceive or cause confusion.
Examples of unusual registered trade marks include:
• the sound of a band playing “Happy Little Vegemites” registered in relation to food products;
• the shape of a Bic “Cristal” pen and cap.