Overseas supplier caught by Australian trade mark law

Can an overseas company be sued for infringement of an Australian trade mark even though it engages in no commercial activity in Australia? A recent trade mark case says yes – Playgro Pty Ltd v Playgo Art & Craft Manufactory Limited [2016] FCA 280 (22 March 2016).

The Playgo companies were incorporated in Hong Kong and were involved in the manufacture and wholesale of toys marked with the PLAYGO trade mark. The toys were sold to retailers, including Australian retailers, on terms which meant that ownership of the goods passed to the purchaser in China and Playgo had no further control over them. Accordingly, the conduct of Playgo took place entirely outside Australia, although it was aware that the toys were intended for the Australian market.

The Judge held that Playgo had “used” the trade mark in Australia – when the Australian retailers offered for sale and sold the toys – so that it had infringed Playgro’s PLAYGRO trade mark. While consistent with earlier authorities on “use of a trade mark”, this is the first time that an Australian court has applied this aspect of the law in an infringement context. It is not clear whether the overseas supplier would have been found liable if it did not know that the goods were going to be sold in Australia.

The case strengthens the arsenal of remedies available to a trade mark owner but may be of concern to overseas suppliers of goods. Whether an Australian judgment can be enforced in an overseas country – so that compensation can be recovered – is a separate issue. Some countries, such as Hong Kong, have arrangements with Australia to make this easier, whereas other countries, such as China, do not.