Australia: Owning a trademark is not enough - ensuring ongoing trademark protection

Last Updated: 30 March 2012
Article by Rita Khodeir

How you use it is important too!

Many businesses register their trademarks and then tick that task off the 'to do' list and forget about it. However, a recent Court decision illustrates the potential dangers of not using your registered marks enough, or using them incorrectly.

In this particular case, Optical 88 Ltd v Optical 88 Pty Ltd and Others, the issue at hand concerned the use of the name OPTICAL 88 in Australia (and related trade indicia) with respect to the retail supply of optical goods and accessories, and of optometry services.

Optical 88 Ltd is a Hong Kong based company which operated a chain of stores in the Asia-Pacific region under the brand name 'Optical 88'. Optical 88 Ltd was also the owner of registered trade marks in Australia – including the logo, the name "Optical 88" in Chinese characters and the name "Optical 88".

Optical 88 Pty Ltd is an Australian company that carries on an optometry practice and business under the name "OPTICAL 88".

The Details of the Case

Optical 88 Ltd commenced proceedings against Optical 88 Pty Ltd for trade mark infringement. Optical 88 Pty Ltd not only defended the proceedings, but also filed a cross-claim seeking the removal of Optical 88 Ltd's registered marks based on non-use.

The judge dismissed Optical 88 Ltd's claim for Trade Mark infringement and found two of Optical 88 Ltd's registered marks should be removed from the Register on the basis of non-use.

Optical 88 Pty Ltd successfully defended the claim for trade mark infringement on the basis that it's use of the name OPTICAL 88 as a trade mark was a use in good faith of its name (notwithstanding the absence of the corporate designation, i.e. Pty Limited). In this connection use in "good faith" was taken to mean "honest" use. The judge found it made no difference that Optical 88 Pty Ltd has used its name in association with additional matter or other indicia because the infringement only arose by use of the name OPTICAL 88.

It was also found that two of Optical 88 Ltd's registered marks had not been used in good faith in relation to the goods in respect of which each mark was registered. Optical 88 Ltd had no stores in Australia, but did send goods bearing the marks of third party brands to customers in Australia and other overseas destinations. The judge held that sending coupons with the goods amounted to use in the course of trade in Australia – they were part of its promotional activity, aiming to encourage customers to use their services, and the trademark was on coupons as a distinguishing factor. While the use was only a limited number of times (eight) it was still enough to satisfy the use issue. However, the issue here was that the mark was only registered for optical goods while the relevant use in this case was for Optical 88 Ltd's retail services. The goods sold were not branded with the mark, but rather third party brands, and therefore Optical 88 Ltd's trade mark was not being used in relation to those goods and so the application for removal succeeded.

Further, it was held that on the day it filed the application for registration, Optical 88 Ltd's intention was no more than an uncertain or indeterminate possibility that it might open stores in Australia – the evidence suggested nothing more than this.

Optical 88 Ltd lodged an appeal against the original findings, however, after reviewing the facts and the original decision, it was held there was no error in the Primary Judge's finding on this issue.

Important Lessons to Learn

· Do not become complacent with your trademark registrations. Always audit your marks to ensure that you are using them as registered, and in respect of the registered goods or services. If your use has changed, you need to obtain additional protection.

· Failure to use your mark will expose you to a removal application. A small amount of promotional conduct in Australia may save your registered trademark, IF that use is in relation to the actual goods or services for which the trademark is registered.

· Think twice before commencing proceedings against another company. In the case above, not only did Optical 88 Ltd fail in its application, it also lost two registered trademarks and was ordered to pay Optical 88 Pty Ltd's legal costs.

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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Authors
Rita Khodeir
 
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