Don't steal my brand

As the owner of a trade mark, you may have the right to prevent another trader from using that trade mark in relation to goods or services similar to your own.

These rights are likely to arise under the Trade Marks Act 1995 (for registered trade marks), the Australian Consumer Law (contained in Schedule 2 to the Competition and Consumer Act 2010) and/or the common law action of "passing off" (for unregistered trade marks).

However, in many scenarios, traders are reluctant to take legal action due to the amount of time involved in litigation. From the date on which an Application is filed in Court, it can often take 12 months (and in some cases even longer) to bring a matter to trial.

From a commercial perspective, the amount of damage caused by an infringing party during that pre-trial period can be significant - both to the financial bottom line (e.g. through loss of sales) and to the trader's reputation (e.g. damage caused by poor quality products produced by an infringing trader under a similar trade mark).

Due to these considerations many traders decide not to bother with legal action, meaning that the infringing competitor is able to continue operating in the market, probably to the trader's detriment. So what is the alternative? If someone is infringing your brand, you may be able to obtain an interlocutory injunction.

An interlocutory injunction is an Order made by a Court preventing a party from engaging in particular conduct on an interim basis, pending the Court's decision at the final trial. For example, if you file claim against another trader on the grounds of trade mark infringement, you may also be able to obtain an interlocutory injunction preventing the other trader from using the trade mark during the period leading up to the trial (i.e. until the Court decides whether or not you should succeed in your claim of trade mark infringement).

This means that the interim damage caused by the other trader's use of the infringing trade mark is minimised. In the recent case of Organic Marketing Australia Pty Ltd v Woolworths Limited (March 2011), the Applicant was the owner of the registered trade mark containing the words "Honest to Goodness" in stylised text and the image of a tulip.

The Applicant took action against Woolworths for its use of the words "Honest to Goodness" in a national marketing campaign featuring Margaret Fulton. The Applicant also sought an interlocutory injunction preventing Woolworths from using the "Honest to Goodness" mark until after the case had been decided. In that case, the injunction was not granted.

However, the case did emphasise the key factors that a Court takes into consideration when considering whether or not to grant an interlocutory injunction.

Key factors: 1. Is there a serious question to be tried?

The Applicant needs to establish that a legitimate case does exist. In the "Honest to Goodness" case, the Applicant succeeded on this ground by showing that there was a possible basis for a finding of trade mark infringement within the criteria of section 120(1) of the Trade Marks Act 1995.

2. Does the balance of convenience favour the granting of an injunction?

The Applicant needs to show that: (a) the potential damage caused if an injunction is granted and the Applicant ultimately loses at trial IS OUTWEIGHED BY (b) the potential damage that would be caused if an injunction were not granted and the Applicant ultimately wins at trial.

In the "Honest to Goodness" case, the Applicant failed on this ground, because the potential damage caused to Woolworths if an injunction were granted (e.g. loss of $3 million spent on marketing campaign, loss of sales, damage to reputations) far outweighed the potential damage to the Applicant if the injunction were not granted (comparatively, a much smaller loss of sales, and limited damage to reputation as a boutique wholesaler and retailer).

The parties have since reached a confidential settlement.

The "Honest to Goodness" case is a reminder that if you think another trader is infringing your brand, and you can show that their continuing infringing conduct during the pre-trial period is likely to cause significant additional commercial or reputational damage, you may be able to obtain an interlocutory injunction preventing the other trader from engaging in the infringing conduct on an interim basis.

Speak to mdp McDonald Partners Lawyers and Commercial Advisors on +61 3 9620 9660 for more information.

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