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Singing the White Shark Grey Goods Blues ...

By Johanna Gibson, David Pearce, Jeremy Phillips and Ilanah Simon.

Great White Sharks can be pretty scary ...

From the IPKat's Australian friends at Allens Arthur Robinson comes news of a recent decision that might appeal to his trade mark readers.  It's Sporte Leisure Pty Ltd v Paul's International Pty Ltd (No 3) [2010] FCA 1162, of 20 October 2010.  In this dispute Nicholas J, in the Federal Court of Australia, held that Paul's Retail infringed some 'Greg Norman' registered trade marks held by Great White Shark Enterprises (GWSE) -- even though the allegedly infringing merchandise was made by and bought from an authorised licensee.  Readers will instantly sense the problem here -- parallel importation.  The judge rejected Paul's Retail defence under section 123(1) of the Trade Marks Act 1995 (consent of the trade mark owner) because the licensee of the trade marks was not allowed to sell the goods it made outside the Union of India without consent and knew in advance that the goods made for Paul's Retail were to be sold outside India.

There are three key points to appreciate here:

1. According to the judge, when the registered owner of a trade mark consents to another person applying that mark to goods on condition that those goods must not be supplied outside a designated territory, the trade mark owner is not usually regarded as having consented to the application of the mark to goods which the other person knows, when the mark is applied, are to be supplied outside the territory. However, this a principle may be restricted to the specific facts of this case, because the evidence demonstrated that the licensee only made the goods after receiving a purchase order for them which was to be delivered outside the territory. It is not clear if the same conclusion would apply if the licensee was unaware of the destination of the goods or if the order was met from an existing stockpile.

2. In considering the authorities and concluding that the sole director of Paul's Retail, Paul Dwyer, was not liable for trade mark infringement as a joint tortfeasor, the Court considered that if a director is to be liable as a joint tortfeasor, something more than a finding that the director caused or directed his company to perform infringing acts is required. The extent of the director's personal involvement and his state of mind is important.  Whether the director held an honest belief that the acts which he directed or procured were not unlawful is also a significant (and, in this case, decisive) consideration.

3. Obiter, the court rejected Paul's Retail's submission that there is an onus on GWSE to show that the consent defence under section 123 of the Act does not apply. As a matter of construction, because section 123 of the Act creates an exception to infringement, the burden of proof lies on the person invoking the section.  However, in certain circumstances, it may take little for the evidential burden to shift to the registered owner.

... but the IPKat is not easily intimidated

So now you know.  Says the IPKat, in the European Union -- where trade mark enforcement cannot be separated from principles of competition law and protection of the integrity of the single market -- the burden of proof of consent to marketing trade mark-protected goods is a complex issue. In Case C-244/00 Van Doren + Q GmbH v Lifestyle + Sportswear Handelsgesellschaft mbH [2003] ETMR 75, the Court of Justice of the European Communities (as it then was) fixed the burden of proof on the alleged infringer, unless that party could demonstrate that the effect of that burden was to enable the trade mark owner to partition the single market, in which case the burden would shift to the trade mark owner.  The Australians have spared themselves this horror, but there still seem to be some grey areas in grey area consent, as the comments on this decision show.

Great White Shark here
Great White Sharks here
Great White Shark recipe here
Three Little Fishes here [not-to-be-missed performance by Frankie Howerd]

Full post as published by IPKat on November 16, 2010 (boomark / email).