Empirical Analysis of Australian Trademark Infringement Decisions: Implications for the U.S. Trademark Use Debate
38 Pages Posted: 21 May 2019 Last revised: 19 Sep 2019
Date Written: April 6, 2019
Abstract
There is considerable concern in U.S. trademark scholarship that privileging the “likelihood of consumer confusion” test has expanded trademark owners’ monopoly rights beyond traditional limits. An unfortunate consequence of this expansion is said to be a chilling effec t on useful and necessary artistic and commercial expression. To combat this, the introduction of an Australian-style “trademark use” threshold test has been vigorously debated. In Australia, the plaintiff must show that the defendant has used the impugned sign as a badge of origin before confusing similarity is assessed. Therefore, if the defendant has not used the mark “as a trademark”, the case quickly resolves. However, a small number of U.S. critics have argued that a “trademark use” test will inevitably collapse into a labored, consumer-dependent inquiry, thereby neutralizing any supposed efficiency gains. This study provides an empirical analysis of Australian trademark infringement cases to challenge these critiques. Specifically, this paper conducts a systematic content analysis of all Australian infringement decisions under Section 120 of the Trade Marks Act 1995 (Cth) reported over a twenty-year period (January 1, 1996 through January 1, 2016) – 78 cases.
The empirical analysis shows that Australian cases that “turn on” trademark use resolve 39 percent more quickly than cases that “turn on” the issue of deceptive similarity. In addition, contrary to some U.S. critiques of the trademark use test, Australian courts when assessing use do not rely on questions of consumer confusion or an assessment of factors outside the inherent features of the mark. The determinative factors for Australian courts are the immediate context of the mark (such as the surrounding packaging) and an objective determination of the purpose and nature of that use (e.g., as a badge of origin or some non-trademark use) and whether any policy considerations should apply.
This paper argues that there are three distinctive features of the Australian trademark system that make a trademark use threshold test a successful efficiency tool. These are: (1) the Australian concept of a trademark as property, including an underlying history of infringement as a strict liability harm where consumer confusion is not central to liability; (2) the absence of a general tort of unfair competition anchored in elastic concepts of consumer confusion; and (3) well-developed collateral actions which proscribe consumer confusion such as common law passing off and actions under consumer protection statutes. Because of the absence of these features in U.S. trademark law, the results of importing an Australian-style trademark use test would be difficult to predict. Nevertheless, it will be argued that the benefits of a trademark use test as demonstrated in this article can reinvigorate aspects the U.S. trademark use debate.
Keywords: trademark, comparative law, australia, united states, empirical, trademark use, passing off
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