Own Name Defence to Trademark Infringement

27 07 2016

A trademark battle over the term “Flexopack” has provided useful insights into the “Own Name” Defence contained under Section 122(1)(a) of the Trade Marks Act.

The Applicant, Flexopack SA Plastics Industry, was a long established Greek company which had sold and distributed thermoplastic packaging films locally and internationally since 1979. The First Respondent was an Australian company trading under the name Flexopack Australia Pty Ltd which had supplied packaging films for use in the Australian food industry since 2010. The Second Respondent was Flexopack Australia’s sole director and shareholder.

Flexopack SA alleged that the Respondents engaged in passing off and misleading or deceptive conduct under the Australian Consumer Law in addition to infringing their Australian trade mark for their “Flexopack” logo; which was registered in 2008. Flexopack Australia cross-claimed, arguing that Flexopack SA’s Australian trade mark should be removed from the Register of Trade Marks pursuant to Sections 41 and 88 of the Trade Marks Act and also filed an application for non-use.

The Court ruled in favour of Flexopack SA, holding that Flexopack SA had made out its claims for trade mark infringement, contraventions of the Australian Consumer Law and the tort of passing off. The Court dismissed the First Respondent’s cross-claim and non-use application.

In his judgement, Justice Beach clarified the “Own Name” Defence contained in Section 122(1)(a) of the Trade Marks Act which provides that:

“(1) In spite of section 120, a person does not infringe a registered trade mark when:
(a) The person uses in good faith:
(i) the person’s name”

In establishing whether Flexopack Australia’s use was in good faith, Justice Beach held that “good faith in s 122 is properly interpreted as requiring reasonable diligence to ascertain that a chosen name does not conflict with a registered trade mark”; that is, that “the mere ignorance of the trade mark is not sufficient”. It was held that the test to be applied in relation to the “Own Name” Defence is in “one sense objective” in that the person must take honest and reasonable steps prior to the adoption of a corporate name to avoid trade mark infringement as “the failure to make proper inquiries should not place a respondent in a better position than if such inquiries had been made”.

In attempting to make out the defence, the Respondents provided evidence that they had conducted ASIC, domain name and general internet searches prior to registering the company name and claimed that they were not aware of Flexopack SA’s Australian trade mark. However, they conceded that they did not conduct a trade mark search under the belief that no such search could be performed. The Court found the Respondents’ evidence unconvincing and held that they had failed to prove that their use of the “Flexopack” mark was in good faith.

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