Best Australian and New Zealand Trade Mark Cases of 2012 - Part 1

Shelston IP is delighted to present its annual summary of the most important trade mark cases for 2012. In recognition of the opening of our Auckland, New Zealand office in 2012, for the first time, we discuss both Australian and New Zealand cases.

2012 was an important year for parallel importing cases in Australia. The Full Federal Court affirmed on two occasions that a breach of territorial manufacturing restrictions by a licensee will prevent an Australian importer of those goods from arguing that the trade marks have been applied with consent of the trade mark owner. However, this approach will not assist for goods manufactured legitimately within the licensed territory and sold in the licensed territory but which subsequently find their way out of the licensed territory. The decisions turn very much on their individual facts, as is often the case with parallel importing cases.

The Courts have also ruled on important matters such as use of building names in trade mark applications, demonstrating prior use by predecessors in title and the existence of local Australian reputation in respect of marks which have not been actively or extensively used in Australia.

In New Zealand, the Courts have provided further guidance on confusion in relation to similar trade marks and the proper time for admission of evidence.

We hope you enjoy our update on trade mark cases in Australia and New Zealand in 2012.

1. Paul's Retail cases: parallel importing and territorial restrictions

   Paul's Retail Pty Ltd failed twice in 2012 to defend trade mark infringement claims arising from the promotion and sale in Australia of goods manufactured overseas.

   1A. Paul's Retail Pty Ltd v Sporte Leisure Pty Ltd [2012] FCAFC 51

   Background

   Greg Norman Collections Inc (GNC) granted an Indian company named BTB Marketing Pvt Ltd (BTB) a licence to apply the words "Greg Norman" and a stylised shark logo (the Greg Norman Marks) to clothing manufactured by BTB for the purpose of distribution in India only. BTB manufactured merchandise bearing the Greg Norman Marks specifically to fill an order from a company outside of India, knowingly in breach of its licence with GNC. Paul's Retail Pty Ltd (Paul's) subsequently imported that merchandise from the company located outside of India and sold it in Australia.

   Federal Court first instance decision

   GNC sued Paul's for infringement of GNC's Australian trade mark registrations for the Greg Norman Marks, claiming that Paul's had used the marks in Australia as trade marks in respect of goods for which the marks were registered without the consent of the trade mark owner. The primary judge found that Paul's had infringed the Australian trade mark registrations for the Greg Norman Marks. Paul's appealed the decision to the full Federal Court.

   Given that BTB was a licensed manufacturer of GNC, Paul's sought to rely on s123 of the Trade Marks Act 1995 to defend the trade mark infringement claim. Section 123 provides that a person who uses a registered trade mark in relation to goods similar to those for which the mark is registered does not infringe the mark if the mark has been applied to the goods with the consent of the registered owner of the mark. In addition, Paul's asserted that the case of Champagne Heidsieck et Cie Monopole Société Anonyme v Buxton [1930] 1 Ch 330 established a principle that there can be no infringement of a registered trade mark in respect of the importation and supply of "genuine goods".

   Full Federal Court decision

   On appeal, Paul's also sought leave to argue that it had not used the marks "as trade marks" in the sense required by s120 of the Trade Marks Act 1995 because it did not use the marks to indicate that the goods originated from Paul's. However, the Court refused to consider Paul's argument on this point. The Court held that it would be inappropriate to consider the issue on appeal because Paul's conceded at first instance that it had used the marks "as trade marks" (so that Paul's could rely on s123 as a defence) and did not provide an adequate explanation for withdrawing that concession.

   The Court agreed with the primary judge that Paul's had infringed the Greg Norman Marks and dismissed the appeal. In particular, the Court agreed with the primary judge's view that a registered owner would not usually be considered to consent to the application of its mark to goods if the manufacturer, at the time of applying the mark, knows that the goods will be supplied in a manner not authorised by the trade mark owner (in this case, outside of the authorised territory in breach of the licence). On that basis alone, s123 did not apply because the owner of the registered marks had not consented to their application to the particular merchandise distributed by Paul's.

   The Court also held that the Champagne Heidsieck principle did not apply because the relevant goods were not goods upon which the marks were properly used and therefore could not be considered "genuine goods". No doubt the Court would have considered that s123 and Champagne Heidsieck applied if BTB manufactured the goods in accordance with the terms of its licence with GNC or otherwise without knowledge, at the time the goods were manufactured, that the goods were for supply outside of the authorised territory in breach of the licence.

   1B. Paul's Retail Pty Ltd v Lonsdale Australia Ltd [2012] FCAFC 130

   Background

   Lonsdale Australia owns various Australian trade mark registrations for or incorporating LONSDALE and/or a stylised lion logo (the Registered Marks). The Registered Marks were previously owned by Lonsdale Sports Ltd, a related entity of Lonsdale Australia.

   Lonsdale Sports owns similar trade mark registrations in Europe. Lonsdale Sports licensed Punch GmbH to manufacture and distribute clothing bearing specific Lonsdale marks (the Licensed Marks) in Europe only (but allowing manufacture in China provided all clothing was sold in Europe). Punch agreed with Unicell Limited, a Cyprus company, to manufacture Lonsdale clothing in China and sell it to Unicell on an "Ex-Warehouse China" basis. Paul's offered the clothing for sale in Australia having obtained it from a US company supplied by Unicell. Two of the three marks applied to the clothing by Punch were not in the form of the Licensed Marks. The clothing Paul's distributed was of lesser quality than the clothing distributed by the authorised Australian distributor.

   Lonsdale Australia claimed that Paul's had infringed the Registered Marks by importing and selling the Punch clothing in Australia and sought an injunction to prevent further sale of the goods in Australia.

   Federal Court first instance decision

   Gordon J held that Paul's had infringed the Registered Marks by importing into and selling in Australia clothing bearing the same or similar marks without Lonsdale Australia's consent. Justice Gordon distinguished the Registered Marks from the Licensed Marks by noting that the relevant question was whether Paul's had infringed the Registered Marks in accordance with s120, not whether Paul's had sold goods bearing the Licensed Marks. In other words, the question was whether Paul's had infringed Lonsdale Australia's...