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.
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.