The Federal Court recently handed down a decision of much
importance to importers, providing room for trade mark owners to
prevent sales of products bearing their marks in certain
circumstances.
The decision establishes that importers shall bear the onus of
proof where it is asserted that the registrant of a trademark has
consented to the use of the trademarks, and provides guidance on
what may amount to such consent.
The Facts
Lonsdale Australia was the registered owner of certain marks,
having acquired them from Lonsdale Sports Limited. It had licensed
its rights to those marks to another entity, who for a period
supplied Lonsdale-marked products to Pauls Warehouse.
Separately (in Europe), Lonsdale Sports Limited licensed the
rights to use its marks (separate to the Australian registered
marks) to Punch, who affixed certain holographic labels to products
that bore the Lonsdale marks.
Sometime after the supply from Lonsdale to Paul's Warehouse
was discontinued, Paul's warehouse ordered from a US company
Lonsdale products with the holographic affixture (the European
products). There was no evidence however that Lonsdale Australia
had any intention of retailing those uniquely marked holographic -
products in Australia.
Londsale Australia objected to Paul's Warehouse's
importation and promotion of the European products, and asserted
that importation and promotion of the holographic - marked products
constituted a use that infringed its rights under the Trade Marks
Act. Paul's Warehouse pointed to the license between the
European licensee and Lonsdale Sports Limited to assert that there
was no infringement, as there was a legitimate application of the
marks to the products by the entity that was entitled to so apply
the mark.
However, Justice Gordon rejected this assertion as it was
factually inaccurate: the Australian registered owner of the trade
marks had not consented, and so the use of the marks was not
legitimate. This case is different to that of Transport Tyres v
Montana Tyres where s 123 of the Trade Marks Act provided a defence
to an importer who could trace the chain of supply of the goods
from the retailer back to the registered owner of the trademarks.
In this case, the act of Punch in affixing the holographic mark to
the products was not consented to by Lonsdale Australia. There were
separate supply chains of separate entities for separately
registered marks, even though the ultimate products were
similar.
Importantly Justice Gordon discussed what may and may not amount
to consent under section 123 of the Trade Marks Act. That provision
provides that conduct otherwise amounting to infringement is not
characterised as such where the application of the trademark to the
goods was consented to by the registered owner of the trademark.
First, it was acknowledged that the alleged infringer bears the
onus of establishing consent under section 123. Her Honour stated
that the law so far had acknowledged that consent may be
established by "[proof of a] chain of title or supply chain,
[proof that the parties are] related entities in the same corporate
group or other conduct". In this case there was "separate
ownership of the marks in Australia and Europe and separate
manufacture (under license) of the goods to which the relevant
registered marks in each jurisdiction are applied". Neither
the first nor second example of consensual cases was
established.
As to "other conduct" that may establish consent, this
will depend upon case by case development of the law, and her
Honour was of the view that the facts of this case spoke against
consent.
The decision is an important illumination of the care that must
be taken in importation from overseas suppliers.
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.
Specific Questions relating to this article should be addressed directly to the author.
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