28.3. Examining evidence of honest concurrent use - the five criteria

When examining evidence for honest concurrent use, examiners need to consider all five criteria listed at paragraph 2. While no single criteria is determinative, the honesty of adoption of the trade mark is essential. Applicants supply the information in different formats and in different orders within their submissions. The Office does not insist on any particular order for this evidence, but encourages applicants to supply information pertinent to all five criteria. On occasions, it might be necessary to request additional information if what the applicant provides does not give a sufficiently clear picture.

3.1  The degree of confusion likely between the trade marks in question

Paragraph 44(3)(a) provides an exception for the registration of trade marks which are likely to cause confusion and which would otherwise fail on the tests of ss 44(1) or 44(2) (see Re Alex Pirie & Son Ltd’s Application (1932) 49 RPC 195 and (1933) 50 RPC 147). As such, even a high likelihood of confusion (such as that posed by identical marks) does not bar registration under s 44(3)(a), although it is a factor to consider.

3.1.1

Factors affecting the degree of confusion:

Similarity of trade marks

The similarity of the trade marks will be a relevant consideration but not determinative. The purpose of s 44(3) is to allow for registration in circumstances where there is a likelihood of confusion. However, a very close similarity between trade marks obviously must be considered when weighing up all relevant criteria (particularly, the honesty of adoption of the trade mark and the relative inconvenience to the trade mark applicant and the owner of the earlier trade mark).

Similarity of goods and services

The more similar the trade marks and goods/services, the greater is the likelihood of confusion, and the greater the public inconvenience.

Geographical location of activities

The use of trade marks in the same geographic area is likely to increase the potential for confusion.

However, in most cases, the cited trade mark is unlikely to be subject to a geographical restriction. As such, rights in the cited trade mark will generally be Australia-wide. Examiners should therefore be cautious in giving weight to statements by a trade mark applicant regarding the geographical extent or likely extent of use of the cited trade mark. A geographical restriction by the trade mark applicant is a more relevant factor for consideration.

The nature of the trade mark itself

Broadly, if the trade mark is a descriptive term or image or contains a descriptive term or image as its essential feature, purchasers are less likely to expect exclusive proprietorship. See paragraph 3.3 and the comments of Assistant Registrar Farquhar in Jean Patou Parfumeur v Crisena Corp Pty Ltd [1991] AIPC 90-388 that it was not surprising more than one trader had selected the trade mark ‘Joy’. Expectations are likely to be different if the trade mark has a high degree of adaptation to distinguish. The word ‘Wuppertaler’, as applied to bread is a relevant example (Re Dandenong Ranges Bakery [1990] AIPC 90-740).

3.2  Whether instances of confusion have in fact occurred

It is not usual for instances of confusion to be before the examiner. The applicant is in a position to say whether or not they are aware of any instances and this information should be included in the evidence declaration.

In most cases, mention of this matter consists of a brief denial of knowledge of any instances contained within the applicant's declaration. Such information, when incorporated in a declaration, will be taken at face value.

In the unlikely event that confusion is shown to exist, it will have a direct bearing on the first consideration and will undoubtedly add force to concern regarding the degree of confusion likely. However, the discovery of instances of actual confusion is not necessarily fatal to the application. (See Berlei Limited v Bali Brassiere Co Inc [1968] HCA 72 (‘Bali’)).

3.3  The honesty or otherwise of the concurrent use

Honesty of use is a prerequisite to the application of para 44(3)(a) and the onus for establishing this honesty rests with the applicant.  

In Chris-Telle Pty Ltd v Australian Swimming Inc [2004] ATMO 60, the delegate, quoting earlier authorities, said at [38]:

Of the [five] criteria, the most important factor is the ‘honesty’ of the concurrent user, ‘for if the concurrent use is not honest it is as nothing’: per Mr Myall in the Granada case [1979] RPC 303 at 313.

In Re: J.R. Parkington and Coy. Ltd.’s application (1946) 63 RPC 171, Romer J at 183 said:  

In knowledge of all this Parkingtons secretly adopted their mark and secretly put it to commercial use. I should be sorry for it to be thought that such conduct is, in the view of this Court, commercially honest. I am abundantly clear that it is not, and that traders who obtain the use of a name by hoodwinking those who would have interfered had they known the truth, cannot some years later come to the Court and found a claim for relief on the footing of honest concurrent user.

There are a number of cases in which Australian courts have considered whether a trade mark was adopted honestly or whether its use has been in good faith. It is clear that ignorance of an earlier trade mark may in some circumstances not suffice to constitute ‘honesty’. In Insight Radiology Pty Ltd v Insight Clinical Imaging Pty Ltd [2016] FCA 1406, Davies J said at 125:

The evidence does not support a finding that either Mr or Mrs Pham knew about the use of similar marks by Insight Clinical Imaging before Insight Radiology commenced using the Radiology marks. Nonetheless, I do not think that it can be said that there has been honest concurrent use of the Radiology marks. In Tivo Inc v Vivo International Corporation Pty Ltd [2012] FCA 252 at [293], Dodds-Streeton J found there had not been honest concurrent use in circumstances where, amongst other things, the applicant had failed to carry out an adequate search, seek professional advice or take reasonable precautions in relation to its adoption of a trade mark. In Flexopack S.A. Plastics Industry v Flexopack Australia Pty Ltd [2016] FCA 235; (2016) 118 IPR 239, Beach J considered that if a person does not take steps that an honest and reasonable person would take to ascertain the ability to use a trade mark, and has in effect taken a risk, then the person is not acting in good faith in the sense of “honestly” within the terms of the good faith ‘own name’ defence under s 122(1)(a) of the Trade Marks Act. In the present case, I have accepted the expert’s evidence that the Google search that Mrs Pham conducted would have come up with Insight Clinical Imaging. Had reasonable diligence been exercised by her at the time, it is reasonable to expect that she would have searched the website and found out that Insight Clinical Imaging was trading in the same field, using similar marks. Whilst there is insufficient evidence from which to conclude that she had looked at the website, the evidence does point to a failure on her part to conduct an proper and adequate search, either because her search was not sufficiently comprehensive to bring up the website in the search result or, if it did, because she failed to visit the website. Furthermore, no searches were done once the IR composite mark had been designed to check whether there were any similar marks used by other traders or before Insight Radiology commenced using the logo. These matters demonstrate a lack of diligence and reasonable care in carrying out adequate searches before the marks were adopted for use by Insight Radiology. It cannot be said that there has been “honest” concurrent use of the Radiology marks within the terms of s 44(3) when the searches, if conducted properly, would have come up with Insight Clinical Imaging’s website and its similar marks. If Mr Pham was not aware of Insight Clinical Imaging’s marks before he had Insight Radiology adopt and commence to use the Radiology marks, it was because of the inadequacies in the searches that were conducted and lack of care taken.

In Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83, the Full Court agreed with Davies J finding on the issue of honest concurrent use.

Making out a case for honest adoption of a trade mark will present additional difficulties if the earlier trade mark has reputation. In Tivo Inc v Vivo International Corporation Pty Ltd [2012] FCA 252, Dodds-Streeton J held at [299]:

TiVo (as discussed below) had acquired a reputation in Australia prior to 18 February 2008; the Vivo trade mark was adopted with knowledge of, and to obtain the benefit of, the TiVo trade mark’s reputation; Vivo did not undertake an adequate search, seek professional advice or take reasonable precautions in relation to its adoption of the Vivo trade mark; Vivo did not conduct significant direct advertising to establish goodwill prior to the priority date; there is evidence of post‑priority date confusion amongst sales staff; and TiVo’s post‑priority date sales (while fewer in number and of less total value than the Vivo’s sales) are nevertheless considerable, particularly given the relative expense and nature of the item; in my opinion, the discretion under s 44(3)(b) should not be exercised to permit concurrent use.

In Sensis Pty Ltd v Senses Direct Mail and Fulfillment Pty Ltd [2019] FCA 719, Davies J said at [74]-[75]:

Mr Mina was not challenged on any of this evidence, and I accept that evidence. However, the applicant pointed to a number of factors which, it was submitted, were against a finding of honest concurrent use.

The first such factor was a claim of a lack of diligence and reasonable care in carrying out adequate searches before the mark was adopted. Whether a person does take steps that an honest and reasonable person would take to ascertain the ability to use a trade mark is a consideration: Tivo Inc at [293]; Insight Radiology at [25], but here the evidence was that Mr Mina undertook various searches before adopting the mark and ‘Sensis’ did not appear in the searches that he conducted. Moreover, it was not suggested, and the evidence did not support a finding, that Sensis would have appeared if the searches had been done competently: cf Insight Radiology. I also take into account that when the respondent did make an application for registration of its marks, the IP Australia examiner did not identify the applicant’s mark as a prior conflicting mark when the application was examined. It is reasonable to assume that had the respondent engaged an IP professional to search the Register before adopting the mark, an IP professional may also not have identified the SENSIS mark.

The authorities do not go so far as to say that a lack of appropriate due diligence will disqualify an applicant from claiming a trade mark was adopted honestly. However, the market no longer reflects an age where it was readily conceivable that two traders in the same country could adopt and use the same or very similar marks with no possible way to know of each other.

Given the accessibility of the Australian Trade Mark Search, and the ease with which a proposed new brand can be searched via Google or other search engines, it will be difficult for an applicant to establish that their adoption and use was honest if they commenced use without any serious attempt to inform themselves whether someone else in Australia may have prior rights that would pose an obstacle to use of the trade mark.

As such, examiners should be cautious accepting bare statements that a trade mark was adopted honestly or that an applicant was not aware of the earlier trade mark without any explanation as to what investigations were conducted prior to commencing use. Even in cases where the applicant’s reasons for adopting a trade mark are not based on an attempt to take advantage of the reputation of someone else, this does not mean that ignorance or disregard of prior rights can constitute ‘honesty’.

As such, there is an onus on the applicant to demonstrate why adoption of the trade mark was honest in circumstances where no due diligence (or clearly insufficient due diligence) has been undertaken.

It should also be noted that mere knowledge of the prior trade mark(s) does not (without more) preclude a finding that an applicant has acted honestly (McCormick & Company Inc v McCormick [2000] FCA 1335, [33]).

Factors that may support a claim to honest adoption where the applicant did not undertake sufficient due diligence or was aware of the earlier mark include:

• the applicant’s trade mark is an existing brand or trading name extended to a new but related field of goods and services
• the applicant had a reasonable belief that the trade mark was not likely to infringe the earlier trade mark
• the trade mark was first used extensively overseas and use in Australia was a natural extension of the business.

3.4  The extent of use in duration, area and volume

Evidence of use of the trade mark ‘as a trade mark’ (see Part 19A: Use of a Trade Mark) must show that the mark has been used before the priority date of the applied for trade mark in respect of the goods and/or services applied for, for a satisfactory term, over a satisfactory area and to a satisfactory level.

In EJOT GmbH & Co. KG v Eastcoast Fasteners Pty Limited [2017] ATMO 45, the delegate considered that in cases where likelihood of confusion was high, the evidence produced by the Applicant ‘should be substantial in terms of volume, duration and area of use’.

In assessing the evidence, the examiner must weigh the components of the use, particularly duration, volume sold, amount of promotion and the nature of the relevant market for goods and services. As indicated in GE Trade Mark [1973] RPC 297, and “Granada” Trade Mark [1979] RPC 303, the evidence ought to demonstrate real commercial value and goodwill in the trade mark.

It may be apparent that a shortfall in one of the metrics of use is compensated by the strength of another. For example, limited sales or a limited market size could be compensated by long term use with the prospect of a geographic limitation depending on the particular merits of the case.

Duration or length of use:  

Lord Hanworth MR in “Pirie’s application” H.L. (supra) said at [212]:

It must always be a matter of consideration to be weighed as to whether or not the user has been of such a length of time as would justify it being called a user... It would be impossible to say that in all cases a particular span of time must be accomplished before it can be treated as justifying a user within section 21.

Some guidance can be taken from case law, but each case will be considered on its merits. In ‘Granada’ Trade Mark [1979] RPC 303, 3 years use prior to filing was considered sufficient. In Re Alex Pirie & Sons Ltd’s Application (1932) 49 RPC 195, 6 years use was demonstrated, and in Re John Fitton & Co Ltd’s Application (1949) 66 RPC 110, the application was allowed based on use over 20 years. However, in Foodland Associated Limited v John Weeks Pty Ltd (1988) AIPC 90-466 it was found that 1-7 months was insufficient:

... the applicant's period of use had been very limited: about one month in the first instance and about seven months in the second ... I find it difficult to concede that any amount of use, no matter how great in monetary terms, in such a short period would be sufficient to meet the overall requirement that the use be substantial and of real commercial value.

As a general guide, if an honestly adopted trade mark has been used extensively for 10 years or so before its priority date, then the provisions of para 44(3)(a) can most likely be applied. Where the likelihood of confusion is not so great, evidence of considerably shorter periods of use and lower levels of turnover will suffice.

3.5  The relative inconvenience that would be caused to the respective parties if the applicant's trade mark should be registered

This consideration entails a weighing up of the inconvenience to be borne by the applicant if the registration is denied, against any inconvenience likely to be conversely imposed on the proprietor of the cited trade mark.

As with the second consideration (see 3.2) the full facts are unlikely to be available to the examiner and in the main, the assessment will need to be on the basis of the inconvenience to the applicant. However, it is fair to say that a trade mark owner who has enjoyed the marketplace to itself over a period will undoubtedly suffer some inconvenience if another player enters the same market with the same or a very similar trade mark.  

Inconvenience to the applicant will be directly related to the goodwill that exists. If this goodwill is valuable, the applicant will clearly have a strong interest in securing registration rights. If registration is not available and if continued use is liable to infringe, then the inconvenience to the applicant might include the prospect of abandoning the subject trade mark and the goodwill attached thereto.

3.6  Summary of information requirements for honest concurrent use

The following is a reminder list of information necessary for an examiner to make a decision under the provisions of para 44(3)(a):

• The applicant should provide information about the reasons for adoption of the trade mark, and if they were aware of the earlier trade mark at the time.  The applicant should also indicate whether any searches were undertaken to check whether anyone else owned or was using a similar trade mark.   
• The evidence should demonstrate use in Australia before the date of priority for the applied-for trade mark. Use after the priority date may be relevant if it reflects on issues such as lack of instances of confusion  
• The use should be over a commercially reasonable period of time. It is unlikely that consumers will have been exposed to both trade marks in the marketplace if the period of use is very short. This usually means the applicant has to demonstrate several years of use before the priority date, although extensive use in a shorter period may also be persuasive
• The applicant should address the matter of instances of confusion. A statement within the declaration specifying lack of knowledge of any instances will be taken at face value at the examination stage
• The applicant should provide clear information on the goods/services on which the trade mark was used before the priority date. As the applicant is claiming concurrent use, it is not appropriate to allow the mark to proceed for a broad range of goods/services if the evidence only supports something narrower. However, it should be noted that concurrent use only needs to be established for the conflicting goods/services
• The applicant should provide a clear indication of the geographical extent of use. The examiner needs to decide whether it is appropriate to allow the trade mark to proceed for a broad geographical area, or to restrict it to a particular geographical area
• Evidence for honest concurrent use needs to be detailed and complete. The examiner is trying to conceptualise where the trade mark stands within its particular marketplace. The greater the detail supplied, the easier it will be for the decision to be made
• A useful summary of the type of evidence needed to support honest concurrent use is attached to this part as Annex A1.

The evidence must be presented in declaratory form by the applicant or by a competent member of the applicant organisation.

Supporting declarations from members of the trade are not usually necessary. However, there may be occasions when evidence from members of the trade will be the factor that turns the case in favour of acceptance. An example would be where the likelihood of confusion between the marks is very high, and where use is limited in time and turnover, but where the goods or services are specialised. In such a case the evidence within the supporting declarations could support a claim that within the context of the specialist area there has been satisfactory concurrent use.