Banksy fight may paint a different picture under Australian trade mark law 03: When is intention to use relevant?

This series of articles deals with the approach taken by the European Intellectual Property Office (EUIPO) to Banksy's trade marks and draws comparisons with the likely position in Australia. The first article outlined the key issues concerning artworks used as trade marks; the second, what "bad faith" means in an Australia context.

This article examines intention to use as a trade mark under Australian law. Significantly the EUIPO's decision turned on its finding that Banksy did not honestly intend to use the artworks as trade marks.

Use as a trade mark

It is often the case that a range of signs (words or graphics) is used for goods and services to attract consumers' attention and encourage their purchase.  Most if not all of these will have multiple purposes.  The only signs that can be registered under the Trade Marks Act 1995 are those that have been or will be used "as a trade marks", provided of course that they are otherwise registrable. That means that a sign must act objectively as a "badge of origin", that is, it must serve to differentiate the goods/services of the applicant for registration from those similar goods/services of other traders. The sign can have other functions (descriptive, aesthetic, allusive) but it must have as at least one its functions acting as a badge of origin indicating a unique source of goods/services. The sign must therefore indicate a connection in the course of trade between the goods and/or services in question and the trade mark owner, even if the identity of the trade mark owner is not known to the end consumer.  

Whether a sign is used as a trade mark is determined by an objective examination of how it might or can be used or how it has been used.  There are therefore two points in time when the assessment can be made: either before use has begun (prospective use) and after use has been made.  In each case a range of factors will be relevant including whether the sign is an image, a word, a colour, a shape, a sound, a scent or a combination of these elements.  The assessment will often require a close examination of packaging, advertising and promotional materials, industry practice, and the claimant's history in relation to its other trade marks among other things.

Intention

It is important to bear in mind that the intention to use can fail for two reasons:  there was no intention at all to use the trade mark – for example, the mark filed for was a "ghost mark", such as NERIT which was intended to protect the unregistrable mark MERIT or when goods/services are unreasonably broad; or the intention was to use the sign but the use was not "as a trade mark".  This latter instance is most relevant to Banksy where the contention is that the sign (artwork) was not being used as a trade mark at all.  Such instances of not being used "as a trade mark" generally arise in the infringement context where the alleged infringer seeks to escape liability because the registered mark, though used, was not being used "as a trade mark".  Such an example is the word "caplets" which was a validly registered mark but was used purely descriptively: "24 caplets", that is 24 capsule-shaped tablets.      

An application for registration must always be supported by use or a good faith intention to use the sign under application "as a trade mark" for the goods and/or services in question at the date of lodgement.^[1]The intention can extend to authorising another to use or applying on behalf of a corporation yet to be formed.  Prospective use can be an issue in two circumstances:  when the registration of the application is opposed or after registration if it is attacked for non-use or for being wrongly registered.  The considerations in each of these situations are not significantly different.

Who bears the onus?

The onus will be different at the application/opposition stage from at the non-use/expungement stage.  At the application stage, the applicant enjoys a presumption of bona fide intention that needs to be rebutted.  In a non-use or expungement action, the owner has no such presumption in its favour and bears the onus of establishing its bona fide intention.  As a practical matter, before registration, the amount of material available from which to draw inferences of a lack of intention might be considerably less than in a non-use/cancellation case after the mark has been registered for some time.

Relevant factors

Two recent Federal Court cases illustrate that:

• The intention must be in good faith;
• The intended use must be use as a trade mark;
• Intention is not regarded as meaning an intention to use immediately or within any limited time;
• It is not sufficient if the intention is “merely speculative” or of “an uncertain or indeterminate possibility";
• A general intention to expand at some future time will not suffice, particularly if the applicant lacks the capacity to expand the business to provide the goods or services in question;
• An intention to use may be demonstrated or inferred by actual use after the filing date. Similarly a failure to use after the filing date may result in an inference that there was a lack of intention at the filing date; and
• There is a difference between being prevented from using a trade mark and not having the requisite intention to do so.

Courts are increasingly reluctant to keeps marks on the Register for broad goods and services. An obvious lack of intent coupled with no actual use is unlikely to result in the exercise of discretion to retain the registration despite its not having been used. This discretion is more commonly exercised in cases where there has been some actual use (whether historical use, proposed resumption of use or use on related goods or services) and where the cancellation of the registration could lead to confusion.

In Goodman Fielder Pte Ltd v Conga Foods Pty Ltd [2020] FCA 1808, the registered goods extended well beyond the evidence of actual use. To establish bona fide intention, Goodman Fielder relied on use for similar goods and evidence of intended use to resist removal for non-use but to no avail.   

Justice Burley said that ambit claims for broad goods/services were "perhaps indicative of an approach to registration that is not aligned with genuine intention, but rather to a desire to cover a field beyond the range of expected or intended use".

In Bauer Consumer Media Ltd v Evergreen Television Pty Ltd (2019) 367 ALR 393 the Full Federal Court held by majority (Justice Burley, with whom Justice Greenwood agreed, Justice Rangiah dissenting) that Evergreen had not demonstrated its intention to use the mark DISCOVER DOWNUNDER for the production of television programs, but rather only as the name or the title of a television program.  A distinction was drawn between the acts of production or creation of a television program, which were undertaken by Evergreen, and the result of that process, which was the DISCOVER DOWNUNDER television program. It was not permissible to carry across the intention from one to the other. 

Intention: the EUIPO's position vs Australia

While conduct which underpinned the EUIPO's finding of bad faith might not amount to bad faith in Australia, that same conduct might be relevant to Full Colour Black's allegation that the applicant lacked an intention to use the marks as trade marks.

Banksy will always enjoy the presumption of intention to use the artworks as trade marks.  It is likely however that Full Colour Black will rely on the same public statements that the EUIPO based its findings of bad faith on to argue that Banksy never intended to use the artworks as trade marks. Banksy will probably need to rebut this inference, establishing the necessary intention for the full range of goods and services.   

Key takeaways

Evidence of actual use is not required to obtain registration but applications with ambit claims for broad goods and services may be opposed once accepted, removed or cancelled once registered, for all or part of their goods/services, if it can be shown that there was no intention in good faith to use the trade mark in respect of the range of goods and/or services.

If brand owners do not have clear plans in place at the time of applying for registration they may risk having their applications refused in whole or in part. Those plans should be updated as their offerings expand and contemporaneous records should be kept of the actual use that has been made. The records should include not only the goods and/or services for which registration has been sought and/or obtained but also similar goods and/or services. This will ensure they are prepared to defend any oppositions or application for removal/expungement.

^[1]  There is no requirement that an application for registration, or a registered owner of a defensive trade mark establish use or an intention to use a defensive trade mark. Such marks cannot be opposed or removed for non-use. Certification marks cannot be removed for non-use but can be opposed on the basis that there is no intention to use the mark in good faith.^{Back to article}

Related Insights

• Banksy fight may paint a different picture under Australian trade mark law 01: it's not just a question of faith
• Banksy fight may paint a different picture under Australian trade mark law 02: Making out bad faith in Australia