That’s not your name: casting light on the ‘Own Name Defence’, under section 122 (1)(A) of the Trade Marks Act 1995 (Cth)

In the recent decision of Flexopack S.A. Plastics Industry v Flexopack Australia Pty Ltd[1] (Decision), Justice Beach provided a useful illustration of the applicability of section 122 (1)(A) of the Trade Marks Act 1995 (Cth) (Act) – the ‘Own Name Defence’.

The Decision is something of a Trade Marks Act blockbuster in that Justice Beach made findings in relation to several sections of the Act, however, his Honour’s consideration of the Own Name Defence will be the focus of this update.

The facts

The Applicant is a successful company listed on the Athens Stock Exchange, with a proud history of producing and marketing packaging goods, which are particularly well-adapted to the preservation of cheeses, olives and other Mediterranean foods. The products (which are made of thermoplastic polymer films) are widely exported, and in Australia are sold under the banner of one of the Applicant’s trade marks (the Flexo-Pack Mark). The Flexo-Pack Mark was registered in 2008.

The First Respondent in the proceedings – Flexopack Australia Pty Ltd – which was incorporated by the Second Respondent (Mr Katelis) in 2010, is also a supplier of plastic packaging products in the Australian food industry. On its website, the First Respondent described itself (until May 2014) in the following way:

Flexopack Australia Pty Ltd is a flexible packaging company, specialising in the production and supplier of printed, laminated, co-extracted-barrier films…to the Australian food chain.

The Applicant commenced proceedings in 2014 alleging that the First Respondent was infringing the Flexo-Pack Mark in contravention of section 120 of the Act. One of the various defences raised by the Respondent was the Own Name Defence.

The Own Name Defence

Section 122 (1)(A) of the Act provides that:

In spite of section 120, a person does not infringe a registered trade mark when:

(a) the person uses in good faith:

(i) the person’s name….

In other words, conduct which would amount to infringement of a registered trade mark will be defensible if the infringing party was merely using their own name in good faith.

His Honour held that the following principles apply to the Own Name Defence:

• it applies to both corporations and natural persons;
• it applies with or without the Respondent’s corporate signifiers (for example Pty Ltd), and can be used notwithstanding other inclusions (for example geographical distinguishing words, such as ‘Australia’);
• the good faith element of a requirement of honesty;
• if the infringing party was on notice of the earlier mark, then it will be harder to make a finding of good faith;
• a lack of good faith may be found where a person has acted in a deliberate manner to take advantage of another party’s reputation (in other words, has been fraudulent or dishonest);
• if the Respondent has adopted honest business practices in relation to their industrial or commercial matters, it may aid in raising the defence; and
• if the Respondent has acted diligently in ensuring that the chosen name does not conflict with a registered trade mark, then it may evidence their good faith.

Whether or not an infringing party has acted in good faith needs to be determined objectively, as his Honour held:

If only subjective knowledge was relevant, a person could use the good faith defence despite not having taken any appropriate steps to inform himself of any relevant existing trade marks. This has the potential to undermine the utility of a registered trade mark.

His Honour’s findings

His Honour found that the Own Name Defence was not available to the First Respondent (in spite of the fact that the First Respondent’s name was substantially similar to the Flexo-Pack Mark), on the basis that it had not been selected or used in good faith. His Honour held the following facts to be relevant in making this assessment:

• Mr Katelis had seen the word “Flexo-Pack” used before, and that is why he included the word “Australia” in the name;
• Mr Katelis had performed an ASIC search when he chose the First Respondent’s name, and had seen that similar names already existed;
• the First Respondent, for a while in 2014, used a photograph which may have been taken from the Applicant’s website, leading to the conclusion that Mr Katelis was aware of the Flexo-Pack Mark; and
• Mr Katelis had received a letter of demand from the Applicant in May of 2014 which put him on notice of the trade mark infringement. His Honour held at [137]:

It establishes the falsity of the assertion that Mr Katelis did know of the Applicant prior to the letter of demand. It also points out the falsity of the evidence that he received the photo from a Chinese manufacturer. If so, why remove the photo? Why that particular photo? In my view this conduct amounts to consciousness of guilt.

As an additional matter, his Honour held that IP Australia and ASIC both publish information packs to be read when registering a company, that encourage people to search for registered trade marks when selecting company names. His Honour held that if Mr Katelis had not read this, then he did not consider him to have acted reasonably when selecting the First Respondent’s name, and therefore he had engaged in knowingly risky behaviour.

Lavan Legal comment

Given the tendency of traders to use descriptive names for their products and services, it is likely that there will be conflicts between registered trade marks and company names. In such cases, the importance of acting in good faith is obvious: if you do not act in good faith, the defence will not be available, and liability for the infringement of a trade mark may arise.

Therefore, when considering a company’s name (and indeed its overall branding) it is of the utmost importance that the Applicant researches the existence of prior registrations including trade mark registration, as it will:

• ensure that they avoid selecting a brand which infringes an earlier registered trade mark; or
• alternatively, aid in establishing that they have acted in good faith, should the need arise.

Conversely, if a party becomes aware that another entity has adopted a name which is substantially similar or identical to its own registered trade mark, it is of critical importance that they be put on urgent notice of the similarity, as it may be highly relevant to defeating an Own Name Defence.

[1] Flexopack S.A. Plastics Industry v Flexopack Australia Pty Ltd [2016] FCA 235.