The Federal Court has dismissed an appeal by sporting goods retailer Paul’s Warehouse and found the company’s importation of Greg Norman branded goods was a trademark infringement in a case hailed as “good news” for Australian trademark owners and licensed distributors.
The dispute stemmed from a complex series of transactions that saw Paul’s bring the Greg Norman branded goods into Australia without dealing with the Australian licence holder.
A company that represents Norman licensed an Indian company, BTB, to manufacture, market, distribute and sell clothing and other goods bearing the trademarks Greg Norman and the shark logo, within India only.
BTB fulfilled a purchase order for goods bearing the trademarks from a third party who was based in Pakistan.
That party then supplied those goods to another business based in Singapore, who then on-sold the goods to Paul's Warehouse, who marketed and sold the goods in Australia.
As the trademark owner had only licensed the use of the mark in India, the trademark owner was found not to have consented to application of its mark to the goods that were specifically destined to be delivered outside India.
At trial, the judge found “where a registered owner consents to another person applying the registered mark to goods on condition that the goods must not to be supplied outside a designated territory, the registered owner would not usually be regarded as having consented to the application of the mark to goods which the other person knows at the time he or she applies the mark are to be supplied by him or her outside the territory."
The court ordered an injunction and awarded costs in a decision which was upheld last week by the Full Federal Court on appeal.
This is not the first time Paul’s Warehouse has been before the courts with the retailer having previously been found by the Federal Court to have been selling counterfeited goods bearing the Quiksilver and Billabong trademarks.
Jane Owen, partner at the law firm Middletons, told SmartCompany the case highlights the importance of strong contractual terms with limitations on an authorised manufacturer or distributor to market or sell goods, including the territories in which such goods can be made or sold.
“It is an endorsement of the ability of trademark holders to be able to contractually constrain the distribution of their goods outside nominated territories,” says Owen.
“The decision gives a lot more control to trademark holders.”
Owen says the decision is “a powerful tool” as it helps extend more territoriality to trademark rights and considered the issue of parallel importation.
“The million dollar question is can the trademark owner prove where the goods emanated from and whether that was in breach of a trademark,” she says.
“I don’t think these things are incredibly hard barriers but the impetus is on the trademark owners to ensure their contractual arrangements are tight and they have sufficient controls so they know what is being manufactured and sold.”
“We are really pleased that the case has given more teeth to trademark owners to prevent parallel importation.”
Paul’s Warehouse was contacted by SmartCompany but did not respond prior to publication.