In a judgement handed down on 29 October, the Federal Court
ruled that Greg Norman branded garments manufactured by the then
Indian manufacturer and exclusive Indian distributor of Great White
Shark Enterprise's Inc, infringed the "Greg Norman"
and shark device marks used on "Greg Norman"
The infringing clothing was imported by Paul's Retail Pty
Ltd, one of the companies behind "Paul's Warehouse".
The product was manufactured by the exclusive Indian manufacturer,
distributor and licensee of the Greg Norman brand.
However, the Indian distributor's rights were expressly
restricted to India – the relevant contractual terms
granted the Indian company a non-exclusive license to use the Greg
Norman trade marks in India only. Pursuant to a clause of the
licence agreement, the Indian manufacturer expressly acknowledged
that its licence to use the trade marks was limited to India, and
it would not sell licensed products outside India without the
licensor's prior approval.
The infringing goods were sold by the Indian company for export
to Pakistan, but were shipped to Singapore and were onsold to
Paul's Retail and shipped from Singapore to Australia.
Paul's Retail claimed that because the clothing was
manufactured by a licensee of the Greg Norman trade marks, the
trade mark had been applied to the clothing it had imported with
the consent of the trade mark owner, giving rise to a defence to
trade mark infringement (pursuant to Section 123 of the Trade
In one of the few cases which have considered the operation of
Section 123, the Court held that where an owner of registered trade
marks consents to another person applying that mark to goods on the
condition that the goods must not be distributed outside a
designated territory, that consent will not extend to the goods
manufactured with the intention of a broader distribution.
Because the products supplied into Australia had been
manufactured by the Indian licensee specifically for the purpose of
exporting the product to Pakistan, the Court held that the effect
of this contractual prohibition was that the owner of the trade
marks had not provided its consent to apply the trade mark to those
This case reinforces the importance of managing trade marks to
prevent the flow of parallel or "grey" imports into
Australia. One way trade mark owners can control the flow of grey
goods into Australia is to ensure local manufacturers are expressly
prohibited from supplying the goods outside the licensed territory.
This judgement gives trade mark owners comfort that the courts will
not allow the use of the defence in Section 123 of the Trade
Marks Act to assist traders of grey goods to flout trade mark
owners' territorial licensing arrangements.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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