Last year I blogged about the necessity for conducting thorough trade mark searches before adopting a new trade mark or business name https://ipbymargaret.com.au/searches-a-must-before-adopting-a-new-trade-mark/.  There has been another Federal Court decision that has shown the dangers of failing to conduct adequate trade mark searches.

The facts

The Practice Pty Ltd v The Practice Business Advisers & Tax Practitioners Pty Ltd [2024] FCA 1299 involved two accountancy firms with obviously similar names.  The Practice Pty Ltd commenced business in 1999 and registered the words “THE PRACTICE” as a business name.  In 2016 it registered the following logo as a trade mark.

The Practice Business Advisors & Tax Practitioners Pty Ltd (PBA) was incorporated in 2017 and used the words “THE PRACTICE” and the following logo.

From 2001, prior to the incorporation of PBA, its sole director and shareholder conducted his business as a sole trader under the registered business name “The Practics (IT and Accountancy)” (“Practics” being a typo on the business name register that he never corrected).  He changed his business name in 2013 to “The Practice Business Advisers and Tax Practitioners”.

The Practice Pty Ltd sued PBA in 2023, over 20 years after the first use of a mark including the words “The Practice”.

Unsurprisingly, the Judge held that the marks were too similar and PBA infringed the registered trade mark of The Practice Pty Ltd.

Good faith defences

PBA tried to rely on several defences, but failed because each defence required PBA to prove that it had adopted its marks “in good faith” or honestly. 

Good faith involves both a subjective element – that the defendant was honestly not aware of the other trader – and that objectively they had taken steps that an honest and reasonable person would take to determine whether they could use the trade mark.  If a business fails to undertake trade mark searches and takes a risk about whether the mark is available for use, the law says that this is not good faith.  This will severely limit a defendant’s options if they have to defend a claim for trade mark infringement.  

The Judge’s decision

The Practice Pty Ltd argued that what PBA’s director said about his searches should not be believed.  The Judge held that, even if it was true, the director’s searches were inadequate because:

• Searches were only made of the phrases “The Practice (IT and Accountancy)” and “The Practice Business Advisers and Tax Practitioners”, rather than just the words “The Practice”; and

• The Trade Marks Register was searched only once, in 2001, not in 2013 when the business name was changed, nor in 2017 when the business was incorporated.

One-man company

PBA argued that no more could be expected of a one-man company and it should not be held to the same standard that might be expected of a multinational corporation (who could afford expert legal advice).  There seems to be a certain practical sense in this submission.  Many people starting a small business do not know about searching the Trade Marks Register and often believe that business name registration both provides an approval for use of their new name as well as providing legal protection.  Neither of these is true.

However, the Judge rejected this argument and held that a person in PBA’s position acting honestly and reasonably would have conducted far more extensive and thorough trade mark searches to ensure that their chosen name did not conflict with a registered trade mark.

Benefits of adequate searches

The benefits of performing adequate searches are two-fold:

• Proper searches (of the Trade Marks Register, ASIC records, Google and any other relevant databases) should reveal any similar marks or names so that you can avoid a conflict in the first place; and

• If despite the searches, a rival claims trade mark infringement (which may be years down the track) you should be better placed to rely on one of the good faith defences under the Trade Marks Act. 

Lessons

1. All businesses must perform thorough and extensive searches of each name or trade mark before it is adopted or changed.
2. Searches must include a search of the Trade Marks Register – https://search.ipaustralia.gov.au/trademarks/search/quick .
3. Trade mark searching is a skill but, at a minimum, each important word should be searched.  Use the Advanced search function on the IP Australia page and, at least, search for each of the key words as a “part word”.
4. You can search two key words together but this will only reveal other marks with both of those words.  Each key word should also be searched separately. This was PBA’s problem – its director put too many words in his searches and so did not discover The Practice Pty Ltd. 
5. Search any alternative spellings for your chosen words.
6. These tips also apply for any other database that you search, such as ASIC company and business names databases.
7. Images can be searched on the Trade Marks Register.
8. Google searches are also essential as they may reveal businesses using a similar name that has not been registered as a trade mark.  The owner may have rights in the name or mark if it has developed a reputation in Australia.
9. You need to copy and keep records of all of your searches in case someone claims that you infringe their trade mark.

A professional trade marks search will do all this and take the worry out of searching.

I can advise on trade marks searches and file and prosecute trade mark applications.

This blog provides general information only, and is not intended as legal advice specific to your circumstances.  Please seek the advice of a legal professional if you have any particular questions.

Liability limited by a scheme approved under Professional Standards Legislation

© Margaret Ryan, Melbourne, Australia, 2024