With the prevalence of the internet and social media, growing your brand and your business and connecting with markets overseas has never been easier. In navigating this era of globalisation, it is important that business owners trading under valuable brand names or using other types of trade marks in the operation of their businesses, understand that there are different rules which may apply to determine trade mark ownership and rights in different countries.
In trade mark law in Australia, the "use" of a trade mark by a trader in relation to their goods or services on a commercial level is important and can assist in determining matters such as: the ownership of a trade mark, the distinctiveness of a trade mark, whether a trade mark registration should be removed from the Australian trade marks register for non-use and whether a registered trade mark has been infringed (amongst others).
Australia is therefore considered to be a "first to use" country – that is, a country which gives priority to those who are the "first to use" a particular trade mark in Australia "as a trade mark" in relation to goods or services, and can demonstrate evidence of that use, even if another party has applied to register that mark as a trade mark in Australia first. Other countries which are also known as "first to use" countries include the United States and New Zealand.
Some countries however follow a "first to file" trade mark system instead. This approach gives rights to the party who first filed a trade mark application in that country for such mark, even if another party has used that trade mark in that country prior to the filed application. Countries which follow a "first to file" system include China, Japan and Thailand.
In "first-to-file" countries however, the failure of a trade mark owner to register a trade mark application in such countries, can leave their business vulnerable to "trade mark squatting". This situation occurs where a trade mark is registered by a third party in such a country, without the authorisation of the legitimate owner. This may be done, for instance, by a competitor or other party, with a view to obtaining a financial gain from the legitimate owner for the transfer or by a supplier or manufacturer with whom the legitimate owner has a supply or manufacturing arrangement with (as well as other circumstances). Many businesses have fallen subject to this in recent years. For instance, it was reported in July 2012, that Apple paid US$60 million to Proview Technology (Shenzhen) to end a dispute in relation to the iPad trade mark name in China,1 following a Chinese court's ruling that Proview Technology, who had registered trade marks for the IPAD and iPad names in a number of countries including China, was the rightful owner of the iPad trade mark in China.2
Whilst it is important to seek trade mark registration in the markets in which you are operating to protect your trade mark, whether in Australia or overseas, trade mark owners should be particularly mindful when supplying to, trading in, manufacturing in or operating in "first to file" countries. Lodging your trade mark application as early as possible will assist in increasing your chances of obtaining trade mark protection in such countries.
Footnotes
1 Lee, M and S Shen, 2012, "Apple settles China iPad dispute for $60 million", The Sydney Morning Herald, 2 July 2012; "Apple loses China iPad trademark case".
2 IP Australia, 31 July 2017, HTTPS://WWW.IPAUSTRALIA.GOV.AU/TOOLS-RESOURCES/CASE-STUDIES/APPLES-TRADE-MARK-PROBLEMS-CHINA
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