Should defensive trade marks be part of your portfolio protection strategy?

Key points

• The owner of a standard trade mark registration (primary registration) may register the same trade mark for goods/services for which it has no intention to use its mark as a defensive registration.
• Defensive registrations cannot be removed for non-use and can only be cancelled if the primary registration is removed or cancelled.
• Defensive registrations block acceptance of subsequently filed third party applications to register the same or similar mark for the same or similar goods/services and avoids the costs and effort associated with opposition, revocation actions and litigation.
• Defensive registrations are a cost effective and efficient mechanism to enforce well-known marks.

The value of defensive registrations

There are three main reasons to consider including defensive registrations in trade mark portfolio protection strategies. Firstly, unlike the United States, Australia does not have a law of trade mark dilution to protect well-known marks. Secondly, recent practice has shown the ease in which standard trade mark registrations can be removed or the goods/services limited in non-use actions. Thirdly, defensive registrations can provide a more convenient and cost effective avenue to relief than infringement actions under the Trade Marks Act 1995 (Cth) (“the Act”), the tort of passing off and for misleading and deceptively conduct under Australian Consumer Law.

The small number of defensive registrations that do exist – as at 14 June 2016, there are only 307 registered defensive trade marks listed on the Australian Trade Marks Office official records - indicate that these registrations remain underutilised. Given the benefit afforded to trade mark owners, why are defensive registrations not utilised more often in trade mark protection strategies?

Onerous requirements to demonstrate the extent of use and reputation in the mark and a connection with the goods/services for which defensive registration is sought, may be a deterrent for owners of well-known marks. However, given the significant value defensive registrations can bring to major brand owners, they should be considered more often in trade mark portfolio protection strategies.

What is a defensive trade mark registration?

A defensive registration provides enhanced statutory protection for a trade mark which has been used to such an extent for particular goods or services that if another party were to use the mark for even quite different goods or services, the public could be misled.

An example is the trade mark GRANGE which is especially well-known for wine and is registered for those goods. The trade mark owner does not use, nor may it ever intend to use, its mark for beers and non-alcoholic drinks, but is concerned that if any other party were to use GRANGE for those goods, the public is likely to be misled by assuming a connection or rights in GRANGE could be diluted. A defensive registration covering beers and non-alcoholic beverages prevents a third party from registering a mark for those goods and provides the trade mark owner with a statutory infringement action against unauthorised use of its mark for those goods.

A few examples of defensive trade marks currently on the Register include:

Trade Mark	Primary registration/s cover	Defensive registration covers
NIKE	all goods in class 25.	beers and non-alcoholic beverages.
FACEBOOK	telecommunication services; computer services; online directory information services; social networking services; software; clothing.	a broad range of goods and services including, travelling bags, beers, non-alcoholic beverages, transport, packaging and storing of goods, services for providing food and drink.
DYSON	vacuum cleaners.	a broad range of goods and services including cleaning preparations, refrigerating apparatus and toy household appliances.
BLACK CAVIAR	live animals, horses; articles for horses; figurines.	a broad range of goods and services including cosmetics, pharmaceutical preparations and confectionary.
ALDI	retail and wholesale services; department stores, supermarkets, grocery, variety, liquor and discount stores; packaging and transportation of goods; provision of food and drinks.	a broad range of goods and services in all 45 classes including firearms, medical services, veterinary services, tattooing and security services.

Advantages of a defensive trade mark

• The registration is defensive in nature and will obstruct acceptance of third party applications to register the mark for the goods/services covered and similar or closely related goods/services, avoiding the need for lengthy (and often costly) opposition or revocation actions, and may assist in avoiding litigation.
• The registration is not subject to the ‘use’ provisions of the Act including: o the registration will not be vulnerable to removal for non-use; and o the applicant is not required to have an intention to use the trade mark at the time of filing.
• The registration cannot be cancelled unless the primary registration is cancelled and the trade mark owner does not hold another standard registration for the same trade mark.
• The registration can be relied upon in alleging trade mark infringement.
• Enforcing a defensive registration is likely to be more cost effective and certain than an action for infringement of a well-known trade mark or for passing off or misleading and deceptive conduct. Whilst a trade mark owner will need to prove its reputation in order to secure defensive registration, this is done at a time when the owner is not facing the stresses and pressures of litigation; it is a more easily managed process.

Requirement for filing defensive applications - extent of evidence and inferred connection

To be eligible for a defensive registration, an applicant must:

• be the owner of a registration for the trade mark - a pending application will not suffice, and
• show that the trade mark has been used to such an extent in relation to the goods/services for which the mark is registered, that use on the goods/services subject of the defensive application would be likely to indicate to consumers a connection between those good/services and the owner of the registration.

The extent of evidence of use/reputation required to establish the mark is well-known and the likelihood use of the mark in relation to goods/services of the defensive application will indicate a connection with the owner is a vexed issue. The extent of reputation to be demonstrated will vary depending on how closely allied the goods and services of the defensive application are to the goods and services subject of reputation of the owner.

Extent of evidence

Evidence must be supplied in a formal Declaration and should cover the following:

Reputation of the trade mark
The reputation of the primary trade mark must be established by demonstrating duration and amount of use, geographic area of use and details of advertising and promotion of the mark including samples.

Why potential consumers are likely to infer a connection
The declaration must explain the basis on which the claim for defensive registration is made including why potential consumers are likely to infer a connection and the nature of that connection if the mark is used on the goods/services of the defensive application.

Additional materials
Supporting declarations filed by members of the trade or a professionally conducted market survey may also be filed to strengthen the argument.

Inferred Connection

The “connection” need not be a connection in the course of trade. “Connection” should be understood in the broad sense ascribed to it of “association, relationship”. The Trade Marks Office Manual of Practice and Procedure details a number of factors which may influence a likely connection, these are considered below.

The nature of the mark
An invented word has a better prospect of securing defensive protection as it is unlikely that other traders will have a legitimate need to use the word as a trade mark.

The existence of other registrations of the trade mark
If there are registrations for the same trade mark held by different owners, this will influence whether consumers will be likely to make a connection between the applicant for defensive registration and its goods and/or services.

The extent of use of the trade mark as otherwise registered by the applicants
The extent of use refers to the intensity of marketing and promotion of the mark, geographical reach as well as the duration of use. A trade mark with extensive promotion may well acquire the necessary reputation in a relatively short period or, if the mark is specialised or limited, less than extensive use may be sufficient.

The goods or services upon which the registered trade mark has been used
As previously mentioned, whilst there need not be a trade connection, if the goods or services subject of the defensive application are likely to originate from the same trade source as the goods or services covered by the primary registration, this will assist.

This list is by no means exhaustive.

Productivity Commission’s Recommendation

Although the recent Productivity Commission’s Draft Report on Intellectual Property Arrangements recommends abolishing defensive trade marks, to do so would breach Australia’s international obligations (including under TRIPS). The provisions for defensive registrations were broadened under the Act in order for Australia to comply with its international obligations to provide protection for well-known marks. However, the Report is silent on what would happen with the existing defensive registrations and whether an alternative provision for well-known marks would be introduced to avoid this breach. Given the extensive rights given to the owners of defensive trade marks, there is still value in obtaining a defensive registration notwithstanding this uncertainty.

Conclusion

Yes, the evidence required to show the extent and reputation of the mark and inferred connection with the goods/services covered by the defensive application may be burdensome. However, the time and expense to obtain a defensive registration must be measured against the broad scope of protection provided and the ease with which it can be enforced in comparison to infringement action under the Act for well-known trade marks and actions for passing off or misleading and deceptively conduct under Australian Consumer Law. For a company’s key marks, defensive registrations are valuable in the toolkit of trade mark rights.

This article originally appeared in the March 2016 edition of the Australian Intellectual Property Law Bulletin and is reprinted with permission.