Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Trade Marks Bill 1994



Download PDFDownload PDF

Date Introduced: 21 September 1994

House: House of Representatives

Portfolio: Industry, Science and Technology

Commencement:Either,

(i) a day to be fixed by Proclamation, or

(ii) 1 January 1996,

whichever first occurs.

Purpose

This Bill replaces the Trade Marks Act 1955 with new legislation and has essentially two main purposes.

1. The Bill introduces new legislation incorporating most of the recommendations of a working party which was formed to review the law relating to trade marks with a view to streamling the workings of the trade marks system, updating the legislation in line with modern marketing practices and bringing Australia into line with international developments and practices. An attempt has also been made to simplify the language as much as possible to make it easier for readers to understand the law.

2. In order to enable Australia to accept the Agreement Establishing the World Trade Organization, the Bill has been drafted so as to be consistent with the standards and principles prescribed for trade marks contained in that Agreement.

Background

Agreement Establishing the World Trade Organization

The principle of a world trade organisation has been argued over since the end of the Second World War.

The 1944 Bretton Woods meetings paved the way for the foundations of the modern world economic system. Bretton Woods, although primarily charged with matters of finance (establishing the IMF and the World Bank), recognised the need for a comparable authority for world trade. The Geneva Round of negotiations in 1947 set about meeting this challenge.

The Geneva Agreement, which founded the GATT (General Agreement on Tariffs and Trade), did so with the express intention that the GATT would provide rules and regulations for the International Trade Organisation (ITO) to enforce at a later date.

The ITO was to oversee world trade, but never came into existence for reasons related mainly to various concerns of the USA Congress. As a result, countries applied the GATT under what were termed the protocols of provisional application (PPA), a set of provisional rules put in place in 1947.

The failure to enact the ITO left the GATT to be governed by what were to be interim rules. The secretariat element of the GATT was set up under the title of the Interim Committee of the International Trade Organisation (ICITO). Despite being 'interim', both the PPA measures and the ICITO have remained operative for over 40 years.

Trade negotiations have taken place in negotiating rounds. There have been eight rounds of the GATT since it was founded.

The GATT negotiating rounds

No. of

Round Date countries

_______________________________________________________________

Geneva 1947 23

Anncey 1949 33

Torquay 1950 34

Geneva 1956 22

Dillon 1960-61 45

Kennedy 1962-67 48

Tokyo 1973-79 99

Uruguay 1986-93 118

_______________________________________________________________

Before the Tokyo Round, begun in 1973, the main topic for negotiation was the tariff barrier. The Tokyo and Uruguay Rounds have focused on the question of non-tariff barriers.

When the GATT came into being, tariff barriers were the primary focus of negotiations and, indeed, were the main impediment to freer trade in goods. In the early rounds of negotiations the process worked well as tariff barriers tumbled. However, the GATT was fated to become a victim of its own success. As tariff barriers fell, non-tariff barriers loomed, especially after the Kennedy Round.

After successive rounds of talks, tariff barriers were drastically reduced (outside agriculture) and the main challenge to the free movement of goods became the non-tariff barrier. The non-tariff barrier takes a wide variety of forms ranging from quotas through technical regulations to restrictive business practices.

On 15 December 1993 the Uruguay Round ended in what has been described as the widest-ranging and largest multilateral trade agreement yet reached. The results of the negotiations since the Round was launched in Punta del Este, Uruguay, in September 1986 are contained in an agreement appropriately entitled 'The Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations'.

The Final Act was signed by Australia on 15 April 1994. It is over 450 pages long and contains legal text which spell out the results of the Uruguay Round negotiations. In addition to the texts of the agreements, the Final Act also contains texts of Ministerial Decisions and Declarations which further clarify certain provisions of some of the agreements.

The Agreement Establishing the World Trade Oganization envisages a single institutional framework encompassing the GATT, as modified by the Uruguay Round, all agreements and arrangements concluded under its auspices and the complete results of the Uruguay Round.

The World Trade Organization (WTO) will operate as a forum for multilateral negotiations between member states and shall coordinate international policy with the IMF and the World Bank.

The WTO will be established not later than July 1995. Each prospective member of the WTO must have accepted, or be about to accept, the provisions of the GATT 1947 as well as the GATT 1994. The Agreement Establishing the World Trade Organization is treated as a 'single undertaking ' and thus each member must accept all parts of the GATT 1994 as a whole. The Government believes 1 that accepting this Agreement would enable Australia to maximise its commercial advantage and secure new trading opportunities for exporters by reducing trade barriers and curtailing unfair trading practices.

The GATT TRIPS Agreement

The TRIPS Agreement refers to the Agreement on Trade-Related Aspects of Intellectual Property Rights and is one of the many separate agreements embodied in the Final Act. Accordingly, it will become part of the Agreement Establishing the World Trade Organization.

The TRIPS Agreement provides for minimum standards of intellectual property protection, with members free to determine the appropriate method of implementing the provisions of the Agreement within their own legal system and practice.

The Government believes the TRIPS Agreement will provide for Australia and other members of the WTO a stronger, more comprehensive and predictable system of international protection for a range of intellectual property rights relating to patents, copyright, trade marks, industrial designs, layout designs of integrated circuits, geographical indications and trade secrets. Owners of intellectual property will also be able effectively to enforce their rights, something not provided for in existing intellectual property conventions 2 . The real benefits of the TRIPS Agreement for Australia will flow from its trading partners enacting intellectual property laws to better protect Australian technology and products overseas.

Legislative Background

The Trade Marks Act 1955 currently regulates the Australian trade marks system. The Trade Marks Bill 1994 is intended to replace this Act.

In 1989 Barry Jones, the then Minister for Science, Customs and Small Business, instructed the Australian Trade Marks Office to review the law with respect to:

(i) Streamling the working of the trade marks system so as to decrease costs;

(ii) Updating the legislation in line with modern marketing practices;

(iii) Bringing Australia into line with international developments and obligations, particularly in light of the Uruguay Round of the General Agreement on Tariffs and Trade.

In July 1992 a working party of the Australian Trade Marks Office, the Working Party to Review the Trade Marks Legislation, published a Working Party Report entitled 'Recommended Changes to the Australian Trade Marks Legislation'. The Working Party consisted of nominees from the Institute of Patent Attorneys of Australia, the Law Council of Australia and the Trade Marks Office. When it re-convened to prepare recommendations for transitional and savings provisions and the draft regulations, it was augmented by nominees of the Australian Manufacturers' Patents, Industrial Designs, Copyright Trade Marks Association (AMPICTA) 3 .

As a result of the work undertaken by the Working Party a draft bill was developed and released for public discussion and comment on 1 March 1994 4 . The exposure period ran until 31 August 1994. On September 1994 the Trade Marks Bill 1994 was introduced into the House of Representatives containing only four minor amendments to the TRIPS Agreement related provisions of the Bill.

The Government's intention is that the new legislation accords with international developments and implements the Government's acceptance of the recommendations of the Working Party. The Government says that the Bill will align Australia's Trade Mark system with internationally accepted norms and that the trade marks system, as set out in the Bill will streamline procedures for obtaining and maintaining a trade mark registration. The Bill has also been drafted to take into account the minimum standards demanded by the TRIPS Agreement 5 .

The Government has stated that it has a commitment to the widest possible public consultation in the development of this new legislation so that it will reflect as completely as possible the needs of the users of the trade marks system, and promote its efficiency and its harmonisation with international developments 6 .

In the normal course of events, the results of the consultation process would be implemented by changes to the exposure draft of the Bill prior to its first introduction into the Parliament 7 .

However, because Australia's domestic legislation will need to be in order before Australia can accept the Agreement Establishing the World Trade Organization, of which the TRIPS Agreement is part, and because the Government is desirous of becoming a founding member of the World Trade Organization by having accepted that Agreement on or before it comes into force (proposed to be 1 January 1995), Australia's Trade Marks legislation will need to be consistent with the TRIPS Agreement this year 8 .

To meet this commitment the Government proposes to enact the Trade Marks Bill 1994 before the results of the consultation process have been assessed. Any changes thought necessary after those results have been assessed will be made prior to the commencement of the new legislation, which will be no later than 1 January 1996, by introducing an amending bill early in the 1995 Autumn sittings 9 .

The Trade Marks Bill 1994 contains the substantive provisions embodying the policy underline the Australian Trade Marks legislation. The procedural provisions which contemplate the legislative scheme are contained in the draft regulations which have recently been exposed for public comment.

Main Provisions

Clause 241 repeals the Trade Marks Act 1955.

Clauses 242 to 267 comprise the balance of Part 23 of the Bill and explain how matters being dealt with under the Trade Marks Act 1955 at the time of its repeal are to be dealt with on the commencement of the Trade Marks Bill 1994.

Index - Trade Marks Bill 1994

Part 1 - Commencement and Application: clauses 1 to 4

Part 2 - Interpretation and Definitions: clauses 5 to 15

Part 3 - Trade Marks and Trade Mark Rights: clauses 16 to 24

Part 4 - Application for Registration: clauses 25 to 51

Part 5 - Opposition to Registration: clauses 52 to 63

Part 6 - Amendment of Application and

Other Documents: clauses 64 to 68

Part 7 - Registration of Trade Marks: clauses 69 to 81

Part 8 - Amendment and Cancellation of Registration: clauses 82 to 90

Part 9 - Removal of Trade Mark from

Register for Non-Use: clauses 91 to 105

Part 10 - Assignment and Transmission of Trade Marks: clauses 106 to 112

Part 11 - Registered Users: clauses 113 to 120

Part 12 - Voluntary Recording of Interests

in and Rights in Respect of Trade Marks: clauses 121 to 128

Part 13 - Infringement of Trade Marks: clauses 129 to 139

Part 14 - Importation of Goods Infringing

Australian Trade Marks: clauses 140 to 153

Part 15 - Offences: clauses 154 to 168

Part 16 - Collective Trade Marks: clauses 169 to 175

Part 17 - Certification Trade Marks: clauses 176 to 191

Part 18 - Defensive Trade Marks: clauses 192 to 198

Part 19 - Jurisdiction and Powers of Courts: clauses 199 to 207

Part 20 - Administration of the Trade Marks Office: clauses 208 to 214

Part 21 - The Register and Official Documents: clauses 215 to 220

Part 22 - Miscellaneous Matters Including

the Making of Regulations: clauses 221 to 240

Part 23 - Repeal of the Trade Marks Act 1955

and Transitional Provisions Applying on

Commencement of the Trade Marks Bill 1944: clauses 241 to 267

General Analysis

Meaning of Trade Mark

The definition of trade mark is contained in clause 16 and is considerably broadened when read in conjunction with the definition of 'sign' in clause 5. A trade mark is a sign used or intended to be used to distinguish the goods or services of one person in the course of trade from those of another. The term 'sign' replaces the current term 'mark' and significantly expands its definition to include a 'shape, colour, sound or aspect of packaging'.

Consequentially, under the new legislation virtually any distinctive traders' 'sign' will be registrable provided it is capable of distinguishing the applicant's goods or services. It has even been suggested that tastes and smells may be registrable as trade marks. In theory, a taste or a scent may be registrable as a trade mark under the proposed Bill if it is distinctive, but in common with all applications it must be capable of being represented in writing as required by clause 38. Furthermore, it would seem that a taste or a scent could not be 'used' as a trade mark within the meaning of clause 6.

The new legislation will allow for the registration and consequent protection as trade marks of shapes and articles such as bottles or other distinctive packages. Under the current law, new and original shapes or articles may receive limited protection under the Designs Act 1906 but no protection is offered under the Trade Marks Act 1955.

Types of Trade Marks Registration

The current Act provides for four different registers, one for each type of trade mark registration. The Bill provides for only one register but still allows for different types of trade mark registration.

The existing legislation distinguishes between trade marks that are distinctive, those registered in Part A of the Trade Marks Register, and those that are not distinctive at the time of registration but capable of becoming distinctive, which are registered in Part B.

The distinction between these two types of registration will be extinguished under the new Act as it provides that a trade mark need only be 'capable of distinguishing' 10 in order to be registered, which would seem to equate with the existing Part B registration requirement.

Certification trade marks, currently recorded in Part C of the Trade Marks Register, will continue to be registrable under Part 17 of the new Act. However, the Trade Practices Commission will take over from the Registrar of Trade Marks the role of approving rules governing their use. Certification trade marks may be assigned with the consent of the Trade Practices Commission 11 . The prohibition 12 against a certification trade mark owner trading in the relevant goods or services will not exist in the new Act.

Defensive trade marks, currently recorded in Part D of the Trade Marks Register, will continue to be registrable under Part 18 of the new Act with no significant changes to the registration process or the extent of rights granted thereby.

Collective trade marks, which are used in the course of trade by unincorporated associations, will be registrable for the first time in Australia under Part 16 of the new Act. Such trade marks will be registered in the name of the association and cannot be assigned or transmitted.

After noting the similarities of collective trade marks and certification trade marks, Lahore 13 highlights some important differences between the two and with respect to one of these, it is suggested that there may be an oversight in the proposed legislation. As collective trade marks will not be exposed to the gaze of the Trade Practices Commission in the same way that certification trade marks will, Lahore 14 goes onto say that the Trade Practices Commission should have a role with respect to collective marks, particularly where a collective trade mark is really used as a certification trade mark.

Some interesting questions raised by the new legislation are also pointed out, such as, can a body own both a certification mark and a collective mark? Can a 'state' professional body or association such the NSW Bar Association own a collective or certification trade mark in the name 'barrister' in New South Wales? Can the state governments abolish these federal rights? 15

Well-Known Trade Marks

The new legislation will afford additional protection for 'well-known' trade marks both registered or unregistered in infringement proceedings and in opposition and rectification. A trade mark having a well-known reputation in Australia may be a ground for opposing an application even though it may not have been used here 16 .

Conflicting Trade Marks

Clause 42 will overcome the deficiency in the current section 28 of the Trade Marks Act 1955 with respect to conflicting marks and enable an application for registration to be rejected during the examination process where the objection is based on a conflicting mark.

Multi-Class Trade Mark Registration

The current legislation provides that a trade mark application may be made in respect of goods or services in one class only. Sub-clauses 18(2) and 25(5) of the Bill will allow for the one application for the same trade mark in several classes.

Registration and Renewal Period

Clause 73 provides that a trade mark will be registered for an initial period of ten years rather than the period of seven years applying under the current Act. Clause 78 provides for successive renewal periods of ten years rather than periods of fourteen years that currently apply. This will bring Australia's registration and renewal periods in line with international developments.

Assignment of Trade Marks

The proposed legislation raises some potential problems concerning the transfer of the right to use a trade mark.

It appears that it will be incumbent on an assignee to contractually prohibit an assignor from continuing to use the trade mark assigned because the Bill does not contain an equivalent provision to paragraph 82(2)(b) of the current Act which prohibits continued use by an assignor.

An alternative view is that an assignment will constitute a complete transfer. It seems that clause 20 is supposed to clarify this issue which, unlike the current legislation, expressly states that a registered trade mark is personal property. However, Lahore 17 raises the question: 'Is a registered trade mark still personal property if sold without the goodwill of the business?'.

Subclause 106(1) provides that a trade mark may be assigned even if the trade mark is only in the application stage. Currently the rights upon assignment only take effect from the date of registration of a trade mark.

Associated Trade Marks

A significant departure concerning associated trade marks is that they will not be entered on the Register as such under the new system proposed by the Bill nor will trade mark examiners be required to determine whether or not trade marks are associated. Clause 10 provides for what are associated trade marks for the purposes of the new Act.

Whether trade marks are associated or not will arise primarily in the context of an assignment. An assignor will be required to determine whether or not trade marks owned by him are associated because he will be obliged to assign any trade mark that is subsequently found to be associated with a trade mark previously assigned 18 . The effect of this will also place an onus on solicitors acting on the purchase and sale of a business to make judgements as to whether or not trade marks are associated.

Registered Users

The system of registered users will continue under Part 11 of the new legislation. Additionally, licences granted in respect of trade marks will not necessarily have to be registered by virtue of the concept of 'authorised use', provided for in clause 7, qualifying as 'use' within clause 6. However, unlike a registered user, an unregistered licensee will not be able to bring infringement proceedings 19 .

Register of Interests in Trade Marks

Unlike the current legislation, Part 12 of the proposed legislation provides for the voluntary registration of interests in a trade mark, including trade marks the subject of a trade mark application.

Registration of an interest, for example a mortgage, licence or assignment, will not however constitute proof of its existence 20 . Nor will registration afford any substantially increased protection for securities as registration is only voluntary.

Infringement

The new legislation will provide, as does the current Act, that an infringement will occur when use is made of a trade mark in connection with goods or services and which is the same as, or substantially the same as, or deceptively similar to a trade mark registered in respect of the same goods or services 21 .

Unlike the current Act however, the proposed legislation goes further in that goods or services need only be closely related to goods or services in respect of which a trade mark is registered 22 . Furthermore, as alluded to earlier in this Digest concerning 'well-known' trade marks, sub-clause 129(3) provides an infringement will occur in certain circumstances when a trade mark deceptively similar to a well-known registered trade mark is used in connection with goods or services unrelated to those in respect of which the well-known trade mark is registered.

It should be noted that use of a trade mark includes 'aural' representations as well as 'visual' by virtue of clause 6 and the new legislation will therefore mean that improper use of a trade mark on a radio broadcast, for example, will constitute an infringement.

Offences

Part 15 of the proposed Act provides for a range of criminal offences as does the current Act. Additionally, sub-clause 154(3) provides that it will also be an offence to unlawfully remove a representation of a registered trade mark.

Non-Use Proceedings

In proceedings under the proposed legislation for removal of a registered trade mark on the grounds of non-use, the onus will be placed on the trade mark owner to show use, but only after the applicant has made a declaration that investigations have been made to support the allegation of non-use 23 .

Rectification Proceedings

Although, the grounds for cancellation of a registered trade mark appeared to be wider under the proposed provisions of Part 8, some of the grounds require a finding of fault on the part of the owner.

The Bill does not define 'fault' and in not so providing will leave unaddressed the fundamental issues raised by the High Court's decision in the Moove Case 24 and deceptive trade marks will still manage to become and remain registered.

Comments

Law of Passing Off Adversely Affected

The proposed Bill will significantly expand the types or kinds of signs capable of registration as trade marks as indicated in earlier discussion. This will mean that many signs which cannot be registered at present will not in future have to rely on the common law action of passing off for protection.

However, the new legislation may impact unfavourably on the law of passing off, even to the point of nullifying it. The problem is found in clause 89 of the Bill which provides that an application for cancellation in cases of deception and confusion may be refused if the registered owner of the trade mark has not been responsible for the deception or confusion. Having alluded to this problem, Lahore 25 then questions whether the proposed legislation will override both the law of passing off and the Trade Practices Act 1974 in these circumstances.

Cautionary Note

It is beyond the scope of this Digest to embark on any analysis of the specific terms of the Agreement Establishing the World Trade Organization, the Final Act Embodying the Result of the Uruguay Round of Multilateral Trade Negotiations or the Agreement on Trade-Related Aspects of Intellectual Property Rights and, accordingly, it is not possible to say whether any of the amendments proposed by the Bill are in fact necessary to enable Australia to enter into the Agreement Establishing the World Trade Organization.

<BREAK> </BREAK>

Endnotes

1 'Uruguay Round Briefing: Countdown to December 15', Department of Foreign Affairs and Trade, p.17.

2 'Uruguay Round Outcome: Intellectual Property', September 1994, Services and Intellectual Property Branch, Trade Negotiation and Organizations Division, Department of Foreign Affairs and Trade, p. 12.

3 Accompanying Notes to the exposure draft of the Trade Marks Bill 1994 released on 1 March 1994.

4 Senator Chris Schacht: Media Release 1 March 1994.

5 See note 4.

6 See note 4.

7 Senator Chris Schacht: Media Release 27 July 1994.

8 See note 7.

9 See note 7.

10 Sub-clause 40(2), Trade Marks Bill 1994.

11 Clause 170, Trade Marks Bill 1994.

12 Sub-section 82(2), Trade Marks Act 1955.

13 'Intellectual Property in Australia: Patents, Designs and Trade Marks Law' , Lahore, Garnsey, Dwyer, Dufty and Covell, Butterworths, p. 4108.

14 See note 13.

15 See note 13.

16 Clause 61, Trade Marks Bill 1994.

17 'Intellectual Property in Australia: Patents, Designs and Trade Marks Law', Lahore, Garnsey, Dwyer, Dufty and Covell, Butterworths, p. 4115.

18 Sub-clause 107(2), Trade Marks Bill 1994.

19 Clause 116, Trade Marks Bill 1994.

20 Clause 125, Trade Marks Bill 1994.

21 Sub-clause 121(1), Trade Marks Bill 1994

22 Sub-clause 129(2), Trade Marks Bill 1994.

23 Clause 100, Trade Marks Bill 1994.

24 NSW Dairy Corporation v Murray-Goulburn (1990) 171 CLR 363; 17 IPR 269.

25 'Intellectual Property in Australia: Patents, Designs and Trade Marks Law', Lahore, Garnsey, Dwyer, Dufty and Covell, Butterworths,p. 4120.

References

' The EIU guide to the new GATT ', Phillip Evans and James Walsh, The Economist Intelligence Unit.

' News of the Uruguay Round of Multilateral Trade Negotiations', NUR 084, 5 April 1994, Information and Media Relations Division of the General Agreement on Tariffs an Trade.

' Intellectual Property in Australia: Patents, Designs and Trade Marks Law', Lahore, Garnsey, Dwyer, Dufty and Covell, Butterworths.

' Intellectual Property in Australia: Patents, Design and Trade Marks', Bulletin No. 63, April 1994. Article by James W Dwyer and Jackie O'Brien.

' Australian Industrial and Intellectual Property', CCH, p. 34,106. Article by Adam Liberman and Peter Hansen of Freehill Hollingdale and Page.

Simon Lang (Ph. 06 277 2467)

Bills Digest Service

Parliamentary Research Service

This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

Commonwealth of Australia 1994.

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members of the Australian Parliament in the course of their official duties.

Published by the Department of the Parliamentary Library, 1994.