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A ‘Good Faith’ Defence to Trade Mark Infringement

There are several defences that can be useful in mounting a challenge against an allegation of trade mark infringement. Though, each defence will need to be assessed on its merits and against the evidence put forward in a trade mark infringement claim.

This article considers the ‘good faith’ defence that may be raised in response to an allegation of trade mark infringement under the Trade Marks Act 1995 (Cth). In a previous article, we discussed what is trade mark infringement, which you may find useful if you believe someone is infringing on your registered trade mark. A brief recap is provided below.

Trade mark Infringement in a ‘nutshell’

Section 120 of the Trade Marks Act provides that:

A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.

There are two-limbs to consider when evaluating whether a sign infringes a registered trade mark. That is, whether the sign is:

(a) “substantially identical” with, or
(b) “deceptively similar” to,

the trade mark in relation to the same or closely related goods or services in respect of which the trade mark is registered.

For a further explanation of trade mark infringement, check out our previous article here.

A ‘good faith’ defence

Section 122 of the Trade Marks Act provides that:

A person does not infringe a registered trade mark when the person uses in good faith:

• the person’s name or the name of the person’s place or business; or
• the name of a predecessor in business of the person of the name of the predecessor’s place of business.

The principle here is that one should have the right to trade mark under one’s own name or the name of your predecessor in business.

What is good faith?

This issue was considered by Beach J in the Federal Court in the case of Flexopack S.A. Plastics Industry v Flexopack Australia Pty Ltd [2016] FCA.

In this case, Beach J submitted that good faith requires, in the context of submitting a defence under section 122 of the Trade Marks Act:

“reasonable diligence to ascertain that a chosen name does not conflict with a registered trade mark”

In evaluating whether reasonable diligence had been exercised by the respondent, the court considered that an objective examination of the specific facts of the case was crucial in determining whether a defence of ‘good faith’ had been established.

Further, it was established by Beach J that ‘good faith’ requires a positive obligation on the party relying on the defence, and mere ignorance of another registered trade mark will not suffice. That is, a person must make reasonable inquiries as to the existence of a registered trade mark prior to using their own name to satisfy the use was in ‘good faith’.

Take-away points:

• ‘good faith’ requires an objective test of the facts relevant to establishing ‘reasonable diligence’;
• a person relying on a ‘good faith’ defence must demonstrate that it has taken positive actions in relation to ascertaining the existence of the corresponding registered trade mark;
• consider the other defences available to an allegation of trade mark infringement that may be more pertinent to your circumstances.

Sam Gilbert, IP and Technology Consultant, B.A., LL.B  University of Technology, Sydney

 If you would like to know more about this article or about defences to trade mark infringement, please do not hesitate to get in contact with the team at W3IP Law on 1300 776 614 or 0451 951 528.
Disclaimer. The material in this post represents general information only and should not be taken to be legal advice.

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