FanFirm Stands Firm – Competing Trademarks

On 17 July 2024, Australian sporting fan club FanFirm Pty Limited (Applicant) won a trademark law case in the Federal Court against US billion-dollar sports merchandise company, Fanatics, LLC (Respondent).  Several key findings emerged from this case, including the importance of establishing the first user of a trademark and the requirements of an honest concurrent use defence.  The case is a stark reminder for persons applying for a new trademark to ensure the mark is not substantially identical with, or deceptively similar to, an existing trademark.^[1]

For over two decades, the two companies coexisted in the broad industry of supplying sporting goods and services.  The slightest degree of separation was maintained by each company registering the mark “Fanatics” in different classes of goods and services.  The Applicant registered the word “Fanatics” in classes 9, 16, 24, 25, 32, 38 and 39 in April 2008.^[2]  The Respondent registered the word “Fanatics” in classes 35 and 42 in September 2008.  

Matters came to a head in 2020 when the Respondent’s presence in Australia intensified.  The Respondent entered a partnership with Essendon Football Club to sell licensed merchandise and a deal with Rebel Sport to sell the Respondent’s branded apparel.^[3]  The Applicant brought proceedings claiming the Respondent infringed its registered trademarks and sought cancellation of the Respondent’s registered trademarks.^[4]  The Respondent cross-claimed on the same bases.^[5]  Justice Rofe ultimately found in the Applicant’s favour.  The Respondent has appealed her Honour’s finding.^[6]

First user

Establishing who between the parties was the first to use the “Fanatics” mark in relation to the relevant goods and services was significant for resolving most of the issues raised in this case.^[7] 

The Applicant first used the “Fanatics” mark in relation to its online retail store selling sports merchandise from at least 2004.^[8]  The Applicant registered its mark in class 25 which includes the sale of clothing, footwear and headgear.^[9]  The Applicant did not register its mark under class 35 which provides for online retail store services featuring sports related and sports team branded clothing and merchandise.

In 2008, the Respondent registered its mark under class 35.^[10]  Her Honour found that by the time the Respondent had registered under class 35, the Applicant had already established a reputation with the mark “Fanatics” in relation to class 35 services.^[11]  Her Honour accordingly found:_^[12]

“By reason of the applicant’s reputation as at 10 September 2008, consumers in Australia might be caused to wonder whether the use by the respondent of the FANATICS Word Marks in relation to an item of sports merchandise, and the sale of that merchandise on an online store, might cause them to wonder if the item originated from the applicant or the website was operated by the applicant.”

Despite not being registered under class 35, it was the Applicant's first use of the "Fanatics" mark in relation to class 35 services and its correspondent reputation which caused Justice Rofe to exercise her discretion in cancelling the Respondent's class 35 registration. ^[13]

Honest concurrent user

Section 44(3)(a) of the Trade Marks Act 1995 (Cth) (TMA) provides application for registering a trademark which is substantively identical with, or deceptively similar to, an existing trademark, which may be accepted if there has been an honest concurrent use of the trademark.

The Respondent relied on section 44(3)(a) as a defence in relation to the Applicant's allegation that it had infringed the Applicant's class 25 registration by selling class 25 goods displaying the Respondent's "Fanatics" mark.^[14] 

Justice Rofe rejected the defence on the basis the Respondent adopted its new corporate name and mark with full knowledge of the Applicant’s prior use of the trademark.^[15]   Her Honour further found the Respondent failed to adduce evidence demonstrating an honest belief that there would be no confusion as a result of adopting the same or a similar mark to the Applicant.^[16]

Lavan Comment

Justice Rofe notably referred to the Applicant’s first use and the Respondent’s lack of honest and concurrent use in the following summary of her findings:^[17]

“… for ten years or so after the respondent adopted the FANATICS Marks, the parties managed to coexist. However, with both parties’ expansion outside their original “lanes”, I consider there is now a possibility that consumers may be caused to wonder whether the goods of one are the goods of the other. The applicant is the first user of the mark. The respondent knew that when it adopted the mark. The risk it took in adopting the mark has now come home to roost.”

This case demonstrates that just because a person is granted a trademark registration, does not mean they can use the trademark as they please.  Rather, such persons must hold their use of the trademark against the standards set by the TMA.  Further, to avoid the predicaments of both the Applicant and Respondent in this case, those employing a trademark must keep a constant eye on trademarks being used in their industry or closely related industries for potential infringement. 

If you require assistance or advice in relation to competing trademarks, do not hesitate to contact Iain Freeman or Andrew Sutton.