Trademarks are an important way of protecting a business’s brand. Australian businesses must register their trademarks with IP Australia for them to have legal effect. However, many businesses overlook certain details or regulations, leading to intentional or unintentional trademark infringement. Trademark infringement not only damages the brand reputation of the infringed party, but also causes substantial losses to the infringing party — as the following case illustrates. Today we explain what to watch out for when registering a trademark in Australia, and how to respond to trademark infringement.

Case Study: Treasury Wine Estates v Rush Rich

Australia’s renowned Treasury Wine Estates (TWE) was once involved in a high-profile trademark infringement case. TWE sued an Adelaide, South Australia-based winery, Rush Rich, for trademark infringement, and was ultimately awarded AUD 800,000 in damages (approximately RMB 3.81 million).

TWE sued Rush Rich for infringing the trademark rights of TWE’s Penfolds brand. The Chinese trademark name for Penfolds is “奔富” (Benfu), and the literal Chinese translation of Rush Rich is also “奔富”, which in English also carries the meaning of “rushing towards wealth”.

Rush Rich was also accused of imitating Penfolds’ Bin range by launching its own Vin and R ranges, and printing the same Chinese name “奔富” on the back of its bottles.

TWE’s CEO stated that the company would absolutely not tolerate such infringement, and announced it had filed proceedings in the Federal Court of Australia to stop Rush Rich’s infringing conduct in both Australia and China.

After TWE filed suit, the Federal Court in Melbourne ordered Rush Rich Winery to immediately cease producing wine products whose “trademarks are substantially identical with or deceptively similar to any of Penfolds’ Chinese brand trademarks”, and ordered Rush Rich to pay TWE approximately AUD 800,000 in damages.

1. The Importance of Trademarks and Trademark Registration

Trademarks are signs used to distinguish a business’s goods and services from those of other traders. They are designed to protect a business’s brand and enhance brand recognition and identification. A trademark can be a letter, number, word, business name, phrase, sound, scent, shape, logo, picture or aspect of packaging.

The importance of registering a trademark:

Every business in Australia must register its trademark with IP Australia for the trademark to have legal effect, giving the business the exclusive right to use that trademark in commerce. Unregistered trademarks receive significantly less legal protection.

Benefits of trademark registration:

National protection (a registered trademark helps your business and brand obtain protection throughout Australia);

Visibility (a registered trademark acts as a deterrent against misuse by competitors);

Asset creation (a trademark is an asset that you can license or sell);

Reduces future enforcement costs;

Simplifies international registration.

2. What Should You Watch Out For When Registering a Trademark?

1. Conduct a trademark search

Before applying for trademark registration, you should gather information about competitors’ trademarks. It is recommended that you complete a trademark search through the IP Australia trade mark search database to ensure that the trademark you have selected is available, and that it does not infringe anyone else’s rights.

2. Your trademark must also meet the following conditions:

Your trademark is capable of distinguishing your goods and services from those of other traders;

It does not conflict with an existing trademark; and it is not prohibited (Australian law prohibits certain trademarks).

Under Australian law, the following trademarks cannot be registered:

Those containing specific words or symbols (for example: the Olympic Rings, the words “registered”, “Austrade” or “Returned Airman”);

Those containing Commonwealth or State arms, flags or seals;

Those that are scandalous or contrary to law; and those likely to be misleading or deceptive.

Scandalous trademarks — for example, trademarks containing offensive or abusive elements of a personal, religious or racial nature.

3. Other considerations:

Intellectual property (IP) is an important asset that can add value through brand recognition and consumer acknowledgement.

Your trademark is only enforceable in Australia. If you wish to register your trademark internationally, you can apply directly to the relevant countries.

As a trademark owner, it is your responsibility to monitor for infringement and determine whether legal action is required.

3. What Should You Do If You Encounter Trademark Infringement?

Trademark infringement refers to the use of a registered trademark without authorisation. When a sign is used as a trademark, and is identical with or similar to a registered trademark, using that sign is likely to be regarded as infringement.

If your trademark has been infringed, you can generally respond through litigation or out-of-court settlement. If you intend to sue the infringing party, you must ensure that you can provide evidence establishing the legal effectiveness of your trademark rights. Such evidence may include the following:

Documents proving that your trademark has been registered and is in force.

Materials proving that you are the owner of the trademark.

Materials proving that the infringing party’s conduct has in fact infringed your trademark rights.

Materials proving that the infringing party has no right to use your trademark.

Please note, if you encounter trademark infringement, it is recommended that you engage a professional lawyer to take legal action to protect your trademark rights and reputation. A lawyer can help you send a cease-and-desist letter to the infringing party to stop the infringement. Mediation, or even legal proceedings, can also be used to enforce your rights and obtain compensation.

4. What Situations Do Not Constitute Trademark Infringement?

Section 122 of the Trade Marks Act 1995 (Cth) provides that the following situations do not constitute trademark infringement:

The trademark is a person’s name or the name of a person’s place of business;

The trademark is the name of the business’s predecessor or a former place of business;

The trademark is descriptive — that is, it describes the kind, quantity, value, geographical origin or other characteristic of the goods or services;

The business is entitled to use the trademark under the right conferred on it by the Act;

In the court’s opinion, the trademark would obtain registration, and other similar circumstances.

5. The “First Use” Principle Under Australian Trademark Law

Under the Australian Trade Marks Act, trademark protection in Australia follows the “first use” principle. In addition, in China a registered trademark may be cancelled if it is not used after registration, whereas in Australia a registered trademark can still receive legal protection even if it is not used after registration.

In Summary

Trademarks protect a business’s brand and reputation, so it is important to take your trademark rights seriously. Before registering a trademark, businesses should also confirm that it does not overlap with an existing trademark, to avoid trademark infringement. If you do encounter trademark infringement, we recommend engaging a professional lawyer to help you plan a response and protect the rights that are rightfully yours.