Partner, Belinda Breakspear and Senior Associate, Harriet Young, have authored the Australian chapter of The Global Legal Post Luxury Law Guide 2024. The first instalment of our two-part series highlights the key considerations involved in trade mark ownership, protection, copyright law, and design law for luxury brands in Australia.
Download the full chapter here or read below.
1. Trade Mark
1.1 Sources of Law
In Australia, the sources of trade marks law are commonwealth (federal) law, international law (to the extent it is implemented into domestic legislation), and common law.
The two principal pieces of commonwealth legislation are the Trade Marks Act 1995 (Cth) (the Trade Marks Act) and the Trade Marks Regulations 1995 (Cth) (the Trade Marks Regulations). The Australian Government Trade Marks Manual of Practice and Procedure also contains detailed information on the implementation of the Trade Marks Act and Trade Marks Regulations by staff at the local trade marks office at IP Australia, as well as on practices and procedures relating to aspects of the filing, examination and registration of a trade mark.
Australia is a party to international agreements and conventions including the Madrid Protocol, Paris Convention, the Agreement on Trade-related aspects of Intellectual Property Rights, 1994 (TRIPS), and the Nice Agreement, amongst others. International agreements and conventions are in force in Australia only to the extent to which they have been implemented by domestic legislation or the rights in question are recognised at common law. For example, most aspects of the trade marks regime extend to internationally registered trade marks designating Australia and to protected international trade marks under the Madrid Protocol, and the Trade Marks Act provides for convention priority claims in accordance with Australia’s obligations under the Paris Convention.
Ownership rights in a trade mark can be established by registration (statutory ownership) or by use (common law ownership). Registered trade mark rights confer the exclusive right to use or to authorise the use of the trade mark and the right to seek relief for infringement, Australia-wide, for renewable periods of 10 years. In contrast, common law or unregistered trade mark rights are enforceable by the tort of passing off and only to the extent the owner/plaintiff is able to prove:
- prior reputation and goodwill — within or throughout Australia (including spillover reputation from trading activities overseas) in the asserted brand indicium, limited by its particular circumstances;
- actionable misrepresentation by the defendant — creating the likelihood of actual deception in the geographical area, and to the class of purchaser, in which the owner/plaintiff has reputation and goodwill; and
- injury — the existence or threat of damage to the owner/plaintiff as a result of that conduct.
Common law rights are therefore generally narrower and less effective than registered rights. Conduct that amounts to passing off and/or registered trade mark infringement will generally also amount to misleading or deceptive conduct in contravention of the Australian Consumer Law (the ACL).
1.2 Substantive Law
Trade marks in the luxury industry do not enjoy a broader range of protection unless they are well known or have a local reputation in accordance with local laws. A person infringes a registered trade mark if the person uses, as a trade mark, a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to similar or closely related goods or services in respect of which the trade mark is registered. Additionally, infringement of a ‘well known’ registered trade mark may occur by use more broadly in relation to unrelated goods or services. Guidelines for considering whether a trade mark is well known in Australia include: uniqueness of the mark; extent and duration of use; market share; channels of trade (multiple channels suggesting broad reputation); extent of commercial value attributable to the mark; degree of recognition of the mark; and whether the trade mark is used as a domain name.
A very well known or ‘famous’ trade mark with overwhelming general reputation arising from use in Australia may also be registrable as a defensive trade mark. A defensive trade mark is filed for goods and services unrelated to the mark of the owner, without intention to use, and (if registered), provides broader protection and enforcement capacity, as the mark is not vulnerable to removal for non-use and infringement does not require proving deception. Examples of registered defensive trade marks include: CHANEL (word), VOGUE (word) and ESTÉE LAUDER (words). There is no anti-dilution law in Australia, and therefore ‘famous’ trade marks do not receive any further additional protection.
Trade marks with local reputation in Australia (including spillover reputation from overseas) may succeed in a passing off action (see Section 1.1, above), or oppose the registration of a trade mark on the ground that use of the trade mark may confuse or deceive because of another trade mark with a local reputation in Australia.
1.3 Enforcement
Evidence in proceedings is predominantly provided through written witness statements or affidavits, supplemented by oral testimony (including cross examination) at trial.
A registered trade mark may be enforced against use of each of the following (provided there is ‘use as a trade mark’ (see Section 1.2, above), subject to the particular circumstances:
- a domain name (depending on the use on the associated website);
- a business, trade or product name; and
- other distinctive signs.
The use of metatags and keyword advertising (such as Google Ads keywords) is generally not considered ‘use as a trade mark’, and therefore usually does not constitute trade mark infringement (unless coupled with use of the trade mark more broadly).
A trade mark may also be enforced against unauthorised use in social media or online, and a trade mark registration can greatly assist with enforcement and take down notices on social media and online retailing platforms.
The following defences can be raised by way of non-infringement to a claim of trade mark infringement: comparative advertising; names used in good faith; descriptions used in good faith; parts and accessories; concurrent registration; defendant would obtain registration; registration subject to conditions or limitations or disclaimers; trade mark applied to goods or services with consent of registered owner; prior use; and (in some cases) there is no likelihood of confusion.
The following defences can be raised in addition to non-infringement: delay; laches; acquiescence; consent; invalidity; and non-use. Parody is not a statutory defence to infringement. However, the reproduction of a trade mark for parody will generally not amount to trade mark infringement unless there is ‘use as a trade mark’.
Current issues facing luxury brands in Australia include that trade mark infringement is unlikely to occur where second hand luxury goods bearing their original trade mark(s) are upcycled and resold under the subsequent trader’s brand. This is because, for the use of the original trade mark to be infringing, the mark must be used in such a way as to suggest the subsequent trader was the trade origin of the goods, and not the trade mark owner. Generally, the use of a disclaimer stating the goods were upcycled, or similar, will be sufficient.
Luxury brands are also grappling with the unauthorised use of their brands in virtual worlds, in particular, whether traditional goods and services claims are sufficient for enforcement in those realms. As a result, IP Australia has recently released guidance on how to classify trade mark goods that relate to the emerging technologies of virtual goods, the metaverse, non-fungible tokens (NFTs) and blockchains.
2. Copyright
2.1 Sources of law
In Australia, the sources of copyright law are commonwealth law and international law (to the extent implemented into domestic legislation). By extension, case law/ common law is made by judges through the interpretation of copyright legislation.
The principal piece of commonwealth legislation is the Copyright Act 1968 (Cth) (the Copyright Act). Australia is also a party to international agreements and conventions including the Berne Convention, TRIPS, the WIPO Copyright Treaty (WCT), the WIPO Performances and Phonograms Treaty (WPPT) and the Marrakesh Treaty, amongst others, which are in force to the extent implemented into domestic legislation.
The Circuits Layouts Act 1989 (Cth) provides a standalone form of intellectual property protection for circuit layouts, and is not addressed in this guide.
2.2 Substantive law
The following material is eligible for copyright protection: ‘works’ (literary works, dramatic works, musical works and artistic works) and ‘subject matter other than works’ (cinematograph films, sound recordings, broadcasts and published editions); and crown/government copyright material. Copyright does not protect ideas, information, styles, techniques, names, titles or slogans.
Three-dimensional objects of industrial, fashion or accessory design may be eligible for copyright protection as ‘artistic works’. Artistic works are exhaustively defined to mean: (1) paintings, sculptures, drawings, engravings and photographs; (2) buildings and models of buildings; or (3) works of artistic craftsmanship (whether or not mentioned in either of the previous categories). To attract copyright protection, the artistic work must be original: it must emanate from the (human) author, and the author must also have applied sufficient independent intellectual effort (by the application of knowledge, judgment, skill or labour) in expressing the work in material form. A work of artistic craftsmanship must also exhibit a real or substantial artistic element.
A three-dimensional object that qualifies as a work of artistic craftsmanship retains copyright protection even if it has been industrially applied (provided there is no design registration), unlike other three-dimensional artistic works, which lose copyright on industrial application. This is because dual copyright/registered industrial design protection for three-dimensional artistic works is not available in Australia. Rather, a design that initially has copyright protection will lose that copyright protection once it is registered as a design or, if unregistered, once it has been ‘industrially applied’ that is, more than 50 copies of the article are made. Of course, two-dimensional reproductions of artistic works (including on useful items such as clothing) retain copyright protection despite mass production. The interaction between design and copyright law is complex, and seeking legal advice is recommended.
The author of a work holds moral rights automatically upon creation: the right to be identified and named as the author of the work; the right to not have their work falsely attributed; and the right to ensure that the work is not subjected to derogatory treatment. Moral rights cannot be assigned, waived, bequeathed or otherwise disposed of. However, creators may consent to the infringement of their moral rights, or for their work to be used in specific ways.
The creator/author is usually the first copyright owner if the material is a work. However, this general rule may not apply if, for example:
- there is a written agreement otherwise;
- the author was an employee (rather than an independent contractor, consultant or volunteer) and created the work in the course of employment as part of their usual duties; or
- the work is a commissioned photograph, portrait or engraving.
If in doubt, it is best practice to have a written agreement setting out the first copyright owner, and/or seek legal advice as required.
To assign ownership in copyright, the assignment must be in writing and signed by or on behalf of the copyright owner. It is also recommended to set out key details such as the assignor and assignee, a description of the copyright material, and the copyright(s) granted, amongst others.
In relation to the length of copyright protection, the rules in Australia include that: copyright protection arises automatically when the copyright material is fixed in tangible form; and copyright in literary, dramatic, artistic and musical works subsists for 70 years following the death of the creator. However, different copyright terms may apply to different copyright materials created at different periods in time.
2.3 Enforcement
Copyright is free and automatic under the Copyright Act. There are no formalities for protection or enforcement such as registration or copyright notices. However, copyright notices identify the copyright owner and can act as a deterrence to potential infringers, and are strongly recommended. Infringement occurs if copyright material, or a ‘substantial part’ of it, is used without authorisation in one of the ways exclusively reserved to the copyright owner. ‘Substantial part’ is qualitative rather than quantitative; relevant considerations include whether the part is important having regard to the work as a whole, whether it is an essential or material part, and/or whether there has been an appropriation of the essential features and substance of the work. For artistic works, the rights exclusively reserved to the copyright owner are to reproduce the work in a material form, publish it and communicate it to the public. ‘Reproduction’ of the work for infringement purposes requires objective similarity and some causal connection between the artistic work and the infringing material. Independent creation (coincidental similarity without a causal link of copying) does not infringe copyright; however, copying may be inferred from the circumstances of the particular case, for example, where the alleged infringer had the opportunity to access the copyright material and/or subconscious reproduction. Owners of copyright in artistic works do not have rights to perform in public, or to make an adaptation.
Copyright may also be infringed when someone authorises someone else to infringe, imports without authorisation items containing copyright material for sale or distribution, or deals commercially with infringing copies of copyright material, amongst other actions.
Copyright may be enforced against graphic trade marks (including registered trade marks for invalidation proceedings). However, copyright generally cannot be enforced against word marks, domain names, trade names or pseudonyms.
There are exceptions/defences to copyright infringement including: fair dealing, specific defences relating to artistic works, specific defences relating to industrial designs, statutory licences and technology-based exceptions, amongst many others. Australian law does not have a general fair use defence to copyright infringement. Rather, the defence of ‘fair dealing’ applies only if the infringing use is ‘fair’ and for one of the following purposes: research or study, criticism or review, reporting news, parody or satire, enabling a person with a disability to access the material, and giving professional advice (lawyer, patent attorney or trade mark attorney). ‘Fairness’ is judged objectively in relation to the specific applicable purpose.
Once a design is registered, it generally loses copyright protection. This means that it is not generally an infringement of copyright to, for example: make a replica of the design, reproduce the underlying artistic works (such as design drawings or prototypes) as part of the manufacturing process, or reproduce underlying artistic works.
3. Design
3.1 Sources of Law
In Australia, the sources of design law are commonwealth law and international law (to the extent implemented into domestic legislation). By extension, case law/common law is made by judges through the interpretation of design legislation. The two principal pieces of commonwealth legislation are the Designs Act 2003 (Cth) (the Designs Act) and the Designs Regulations 2004 (Cth) (the Designs Regulations). The Australian Government Designs Examiners’ Manual of Practice and Procedure also contains detailed information on the implementation of the Designs Act and the Designs Regulations by staff at the local designs office at IP Australia, as well as on the formalities check of design applications and examination of registered designs. Distinctively, the Designs Act provides for a process of formal examination only prior to registration, with substantive examination occurring after registration upon request and as a precondition for enforcement of the registered design.
Australia is also a party to international agreements and conventions including the Paris Convention, the Locarno Agreement and TRIPS, amongst others, which are in force to the extent implemented into domestic legislation. Australia is not yet a member of the Hague Agreement (although it agreed in principle to join as part of the Australia-United Kingdom Free Trade Agreement in 2021) but recognises convention applications.
3.2 Substantive law
Design rights protect the overall visual appearance of a functional product, or a component of a complex product, that is manufactured or hand made for commercial purposes. A thing cannot be a product if it is an intangible item or a design that is applied to a human being. Integrated circuits and masks used to make integrated circuits are also not products under the Designs Act. The ‘visual feature(s)’ of the product are those capable of being judged visually including shape, configuration, pattern and ornamentation of the product. Visual features do not include the feel of the product, materials used in the product or indefinite dimensions and indefinitely repeating patterns.
To be registrable, a design must be new and distinctive when compared to the prior art base for the design, consisting of: designs publicly used in Australia; designs published in a document within or outside Australia; and designs disclosed in applications (with a 12-month grace period commencing before the priority date of the subject design for applications filed on or after 10 March 2022). Generally a design is ‘new’ unless it is identical to a design that forms part of the prior art base for the design. A design is ‘distinctive’ unless it is substantially similar in overall impression to a design that forms part of the prior art base for the design. Factors taken into account for determining whether a design is substantially similar in overall impression to another design in the prior art base include: the state of development of the prior art base; the freedom of the creator of the design to innovate; the statement of newness and distinctiveness disclosed with the design application (if applicable); and, if only part of the design is substantially similar to another design, the quantity, quality and importance of that part in the context of the design as a whole. On balance, greater weight is to be given to the similarities than to differences.
It is relatively easy to register a design in Australia because the local designs office at IP Australia only conducts formalities examination at the time of filing. However, a design can only be enforced if it is subsequently certified. The local office will only conduct substantive examination after registration and upon request by any person or a court order. During substantive examination, the examiner will then consider whether the design is validly registrable including assessing whether the design is new and distinctive. If the examiner considers the design is not validly registrable, an examination report will issue, and if the objections raised are not overcome, the design registration will be revoked. If the design registration passes examination, a certificate of examination (certification) will issue, and the validly registered design is then certified and enforceable against infringers.
The owner of a registered design is the person(s) who is entered in the Register as the registered owner of the design. However, the applicant for a registered design must be one of the following: the designer; if the designer created the design during employment or under a contract with another person, that other person (unless there is an agreement otherwise); a person who derives title by assignment, by devolution by will or by operation of law; or a person who is the legal personal representative of a deceased person who was the previous owner. A design assignment agreement must be in writing and signed by both the assignor and the assignee, or on their behalf. It should contemplate key details such as whether the assignment is full or partial, or limited to a particular place, amongst others. The assignment should also be recorded on the register. The moral rights of a designer cannot be assigned, transferred, or waived, however the designer may consent to the infringement of their moral rights (see Section 2.2, above).
Once a design is registered it generally loses copyright protection. Registered design rights (once examined and certified) give a design owner the right to enforce their design right and prevent others from using, selling or importing their design, Australia-wide, for up to 10 years. Unexamined and uncertified registered designs will also have a term of up to 10 years, without enforcement capacity.
3.3 New technologies
A design right in Australia currently protects the overall look of physical products. It does not protect the look of intangible (non-physical) things whose use results in the display of visual features through electronic means (‘virtual designs’).
In 2023, the Australian Government issued its Public Consultation paper on ‘Protection for virtual designs’, which sets out possible changes to the designs scheme to enable virtual designs to be protected. The paper proposes that virtual products be added to the statutory definition of ‘product’ as an additional type of product that is registrable. A virtual product would be defined as ‘an intangible thing, the use of which results in the display of visual features through electronic means’, and could include GUIs, icons/animated icons, augmented reality where digital elements are overlaid on real-world views, and a product in a virtual reality environment. The definition of ‘visual feature’ would also be amended so that it explicitly includes ‘visual features that appear for a limited time when the product is used in its normal way’.
The digital goods of luxury brands linked to NFTs, or for use in augmented or virtual reality, are not protectable as virtual designs in Australia (yet).
Additionally, while not yet tested by the courts, AI-generated designs are unlikely to qualify for registered design protection because of the absence of a human designer, which is currently a requirement.
3.4 Enforcement
A registered design is enforceable only once examined and certified. A person infringes a registered design if, during the term of registration, and without the licence or authority of the registered owner, the person: makes or offers to make a product in relation to which the design is registered, which embodies a design that is identical, or substantially similar in overall impression to the registered design; imports such a product into Australia for sale, or for use for any trade or business; sells, hires or otherwise disposes of (or offers to sell, hire or otherwise dispose of) such a product; uses such a product in any way for the purposes of trade or business; or keeps such a product for the purpose of doing any of the aforementioned.
In assessing whether a design is substantially similar in overall impression to another design for infringement purposes, the same factors apply that govern the distinctiveness test in substantive examination (see Section 3.2, above).
Certain repairs or spare parts do not infringe registered design. There is also a new prior user defence, which applies if a person starts using a design before it is published on the register and during the grace period. Additionally, there is a defence of ‘innocent infringement’ whereby a party will not be liable for infringing a design if they did not know or had no reasonable way of knowing the design was registered. A successful application of this defence can result in a refusal to award damages, a reduction in the damages awarded, or a refusal to award for an account of profits, in respect of an infringement occurring before the date the design was registered.
The second instalment of this two-part series will address privacy and endorsement, product placement regulation, and corporate image protection trends for luxury brands in Australia. Read here.