Use it or Lose it: Trade Mark Non-Use
Introduction
Under the Trade Marks Act 1995, trademarks can be removed from the register if they have not been used in the previous three years. An owner might allow another person or company (a ‘licensee’) to use the mark, but if this isn’t done properly, then the trademark can be removed for non-use by the owner even though the licensee has been using the mark. This article explains how this can happen.
There are two grounds for removing trade marks for ‘non-use’?
In simple terms, registered trademarks can be removed for ‘non-use’ for either or both of the following two reasons:
the absence of a good faith intention on the part of the trademark owner to use the trademark when applying to register it;
a failure by the registered owner to use the trademark during the previous three years.
The first ground listed above is difficult to prove and is reasonably rare. The second ground is probably the most common way for traders to seek to remove their competitors’ trademarks, and that ground is the focus of this article.
How are trademarks removed for non-use?
Applications to IP Australia
A trademark can be removed for non-use when a ‘person aggrieved’ makes an application in an approved form to IP Australia. In that case, the trademark owner has two months to oppose the removal of the trademark. If the owner does not oppose the registration of the trademark, then the IP Australia removes the trademark from the register.
If the owner files a ‘notice of intention to oppose’ the removal of the trademark within the required time frame, then this begins a ‘trademark opposition’ process.
Applications to the court
The above process doesn’t apply if a court action is underway regarding the relevant trademark. This normally happens when someone is being sued for the infringement of the trademark. In that case, the alleged infringer would file a ‘cross-claim’ to the court asking for the trademark to be removed from the register. If the court grants this application, then the alleged infringer can’t be liable for infringement of the registered trademark.
When is a trademark ‘used’?
The central issue in any application to remove a trademark for ‘non-use’ is whether or not a trademark has in fact been been used.
Very little use is required to defeat a non-use application. A single, genuine sale of the relevant goods or services in the course of trade during the relevant period is usually enough to keep the trademark safe. In that regard, there’s no requirement for the use to be continuous across the relevant period.
If there have been no sales of the product bearing the mark during the relevant trade, then that’s not the end of the matter. An ‘offer to trade’, an advertisement that doesn’t result in a sale, or sometimes the taking of preliminary steps before making an offer of sale can constitute use. In one case, the owner of a trademark for a new magazine had a letterhead printed, and wrote to a potential subscriber and advertiser asking for an opportunity to discuss the magazine (which was yet to be launched). This was held to be ‘use’ of the trademark.
When do trademark non-use applications tend to fail?
Given that it takes so little evidence to defeat a non-use application, what are the most common reasons for them failing?
Classic non-use
Many trademarks simply fall into disuse. The product may not have been as successful as the owner was hoping, or the owner may have closed down business.
In some jurisdictions, notably the United States, the register is ‘cleaned’ of these dis-used trademarks because owners are required to submit evidence of continuing use. If they are not using the mark, then they can’t submit evidence of use when required, and the trademarks are automatically removed in that case. However, no such procedure exists in Australia, and so many trademarks remain on the register years after they have ceased being used.
Partial non-use
A trademark might be registered for five different goods, but only used in relation to one of them. In that case, the trademark could potentially be removed for four of the goods.
Use of a different trademark
If a mark is registered in a particular form, then best practice is to use it in that form. However, sometimes owners change the trademark over time. For example, the registered trademark might be ‘ACME OMNISCIENCE’ but the owner might drop the word ‘OMNISCIENCE’ after a while. More commonly, if the mark is registered in a logo form, the logo might be re-designed as part of a brand overhaul.
If the changes are minor or – to use the technical language – the changes ‘do not substantially affect the identity of the trademark’, then that doesn’t pose any problems for the owner. The use of the modified mark is still regarded as being the use of the registered mark. However, if the changes go beyond this, then the owner is no longer using the trademark, and the registration is vulnerable to removal for non-use.
Use by a different party
Sometimes a registered owner doesn’t use the mark directly, but does permit another party to use it. In these cases, the trademark will not be removed for ‘non-use’ if the owner can prove that the other party is an ‘authorised user’. This is because the Act provides that a use of a trademark by an ‘authorised user’ is taken to be a use by the registered owner. The question of whether or not the other party is an ‘authorised user’ or whether the use is an ‘authorised use’ is quite technical. We discuss this in more detail in our article on the authorised use of trade marks.
Remember the fine print
There’s an exception to almost any legal rule. It’s important for you to understand that we’ve simplified the information in this article and all of the other articles on our website. To list just a few of the many example:
The non-use provisions described above apply to ‘standard’ trademarks, but don’t apply to ‘certification marks’ or ‘defensive marks’.
There are some technical rules which govern how the three year non-use period is defined.
If the application for a registered trademark was made before 23 February 2019, then it’s protected from being removed for ‘non-use’ for a period of five years from the application date. Therefore, a registered trademark filed on 24 February 2018 which has never been used can’t be removed for non-use until 24 February 2024. In contrast, a mark filed on 24 February 2019 which has never been used can be removed from 24 February 2022.
Even if it is shown that a trade mark has not been used, both IP Australia and the court have a discretion not to remove the trade mark from the register.
As always, please consult a lawyer before acting on any information contained in this article or any other article on this website, as the general information may not apply to your particular circumstances.
Thanks to David Kovalenko for the awesome photo.