'Brand hijacking' in the context of trade marks involves the deliberate, systematic and calculated adoption and seeking of registered rights and protection in a third party's trade mark when that third party has yet to secure adequate trade mark protection in a particular jurisdiction. This includes where a trade mark has not been registered at all outside its home country, but also where there are gaps in the registered protection that has been obtained, for example for only some goods/services or for transliterated marks.
Once a 'strategy' confined to 'first to file' jurisdictions where an applicant would squat on a brand and wait for the true owner to pay handsomely for its repatriation, in recent months we have witnessed a marked and disturbing increase in Australia in what might generously be considered 'sharp practice'.
Typically this modus operandi is adopted by an applicant familiar with a brand that has accrued significant goodwill over years of use and owned by someone outside of Australia, with knowledge that an owner has yet to secure protection in Australia. This usually involves applicants who are familiar with the trade mark registration system in Australia targeting brands owned by multiple third parties overseas. In some cases, the hijacker will be a trader with a relationship to the overseas trade mark owner, for example a local distributor seeking to leverage exclusive distribution.
What happens when a brand hijacker strikes?
Where the trade mark owner has adequate trade mark protection
Where a trade mark owner has already registered all of its marks in Australia for all the goods/services of interest to its business, hijacking attempts are unlikely to be a serious issue. This is because applications for similar marks for similar goods/services will usually be blocked from registration by the existing registrations without further action being required. The problem arises where a brand owner has not acquired adequate trade mark protection. This is not as rare an occurrence as one might think. Many businesses seek trade mark protection for their core goods or services but do not regularly revisit whether the protection secured aligns with their use or the broader evolution of their business.
Where the trade mark owner does not have adequate trade mark protection
Australia is a first to use jurisdiction, which means that Australian law prioritises rights by seniority of use (and in some cases, reputation) rather than the first person to file a trade mark application. Even where a trade mark owner has not registered its trade mark or the registration is not adequate to cover all its goods/services, the Australian Trade Marks Act relevantly allows for a trade mark application to be opposed on the basis that:
- an applicant is not the true owner of the trade mark (where the true trade mark owner can demonstrate actual use of its mark in Australia). This ground will not be available where an overseas trade mark owner has not commenced use of its mark in Australia, but may be available even where the use relates to unauthorised or grey import sales;
- because the true trade mark owner has a reputation in its mark in Australia (including reputation spilling over from its overseas use, even where a mark may not be in use in Australia), use of the applied-for trade mark is likely to be deceptive or confusing;
- use of the applied-for trade mark would be contrary to law, whether under the misleading and deceptive conduct provisions of the Australian Consumer Law, the tort of passing off, or the Copyright Act where a substantive part of a trade mark mark has been reproduced;
- the application has been filed in bad faith, including with a view to take unfair advantage of the overseas/true trade mark owner's rights and reputation.
While many of these grounds may assist in opposing hijacked trade marks, undertaking trade mark opposition still requires trade mark owners to incur expense, time and effort. Moreover, options to challenge hijacked applications may be more limited in overseas "first to file" or "first to register" jurisdictions where rights are prioritised by filing date or registration date rather than by the date of first use.
Types of hijackers
The 'cut and paste' trade mark hijacker is a champion of the right-click of the mouse and is the laziest of hijackers, in that they either copy and file for protection of the identical trade mark for the identical goods/services for which it is protected overseas, or simply co-opt a mark in use overseas or a transliteration of it. An example is a recent dispute regarding Penfolds' Chinese transliterated mark BEN FU ("Rush Rich") which an unscrupulous company sought to register in Australia. Going a little further back, Australian consumers might be surprised to know that the WINNEBAGO campervans that previously roamed the country had nothing to do with the original US WINNEBAGO brand.
The 'Frankenstein' trade mark hijacker realises that cutting and pasting is too obvious. Instead, they take key aspects of different trade marks and amalgamate them to create a Frankenstein-like monster trade mark that they believe will be sufficiently different to fly under the radar and avoid detection before securing registration. Alternatively, they may seek to work around existing levels of protection by filing an application for the mark for goods/services different from those for which the mark is already registered in Australia, but within the overall field of the true trade mark owner's commercial interest included. They may even remove a key element of the known mark in filing their own application. In another recent case, an Australian burger chain adopted the mark DOWN-N-OUT / , which fans of American burger chain IN-N-OUT may recognise as being reminiscent of the mark.
The 'Bizarro' trade mark hijacker adopts all the key memorable features of a trade mark but tweaks them ever so slightly, such that, although different, the resulting trade mark clearly brings to mind the original trade mark. A certain supermarket chain operating in Australia is a regular proponent of this approach, as anyone who buys REMANO pasta instead of SAN REMO or CHEEZY TWISTS instead of TWISTIES would attest.
- In a digitally connected world where anyone with access to the internet is a potential customer, due consideration should be afforded to a strategic and perpetually evolving brand protection strategy that seeks early trade mark protection and proactively rather than reactively addresses the real risks of being blocked by a rogue.
- Watching services for key brands can assist in identifying potential hijackers and allow sufficient time to issue appropriate cease and desist letters or invitations for withdrawal of offending applications, or if necessary commencing remedial action before the trade marks office or Federal Court.
- When in doubt, file early and often, and regularly review the scope of coverage in markets of interest to ensure protection aligns with use. The early investment in securing trade marks rights can be infinitely more impactful and cost effective than playing 'whack a mole' and seeking enforcement in the absence of adequate registered rights.
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.