Unjustified threats riskier than ever

On 24 February 2019, a suite of changes to key IP legislation came into effect, pursuant to the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018. This Act amends the Trade Marks, Patents, Designs and Plant Breeder’s Rights Acts. Rights holders are cautioned that additional damages are now available for unjustified threats of infringement proceedings. Further, trade mark owners now need to act faster after filing, following changes to the non-use provisions.

A number of key changes relevant to brand owners are discussed below.

Non-use applications

Section 92(4)(b) of the Trade Marks Act provides for the removal of a registered trade mark on the ground that it has not been used (or has not been used in good faith) in Australia for three years.

Previously, under section 93(2), such a non-use application could not be made until five years had passed since the trade mark application filing date. This period, however, has now been condensed to three years from the date the particulars of the trade mark were entered into the Register. The amendment is intended to address concerns about the many unused marks on the Register.

The new application period applies only to trade marks with a filing date on or after 24 February 2019.

‘Groundless threats’ become ‘unjustified threats’

References to ‘groundless threats’ in the Trade Marks Act have now been changed to ‘unjustified threats’. This brings the Trade Marks Act into line with the terminology already used in the Patents Act and Designs Act.

Repeal of provisions preventing unjustified threats action

Previously, a trade mark owner could defeat an action for groundless threats simply by commencing infringement proceedings. There was no requirement that the infringement proceedings be successful.

Following concerns raised about the disadvantages of this for alleged infringers, the relevant provision of the Trade Marks Act, section 129(5), has been repealed.

Additional damages for unjustified threats

Under new section 129(2A), the Trade Marks Act now provides for additional damages for unjustified threats of trade mark infringement proceedings. In deciding whether to award such damages, the court will have regard to factors similar to those considered in relation to additional damages for trade mark infringement. These include the flagrancy of the threat, the need to deter similar threats and all other relevant matters.

These new provisions address the concern that, for well-resourced businesses in particular, the benefit of making unjustified threats may outweigh any potential liability for compensatory damages incurred as a result of making the threats.

Similar provisions for additional damages for unjustified threats have also been introduced to the Patents and Designs Acts, while the Plants Breeder’s Rights Act now includes additional damages provisions for both unjustified threats and infringement.

Mere notification of registered mark not a threat

New section 130A has been inserted into the Trade Marks Act, which clarifies that the mere notification of a registered trade mark does not constitute an unjustified threat under section 129.

For further information on the recent amendments and how they could affect you, please contact us for a consultation.

Alexis Keating - Lawyer

Alexis Keating, Former POF Attorney

LLB (Hons), BSc, (MIPLaw)

Alexis is an intellectual property (IP) lawyer and registered trade marks attorney. She practises across the full scope of IP rights, including both contentious and non-contentious matters.