Reconciling use-based and Registration-Based Rights within the Trade Mark System: What the Problems with Section 58A of the Trade Marks Act Tell Us
| Author | Robert Burrell,Michael Handler |
| DOI | 10.22145/flr.42.1.4 |
| Date | 01 March 2014 |
| Published date | 01 March 2014 |
| Subject Matter | Article |
RIGHTS WITHIN THE TRADE MARK SYSTEM:
WHAT THE PROBLEMS WITH SECTION 58A
OF THE TRADE MARKS ACT TELL US
Michael Handler * and Robert Burrell**
ABSTRACT
Reconciling registration and use as mechanisms by which rights can be acquired in a
trade mark is inherently difficult. The federal Australian registered trade mark system
is built around a hybrid of a registration-based and a use-based model of protection.
While it is perfectly possible to defend such a dual model, the two means of acquiring
trade mark rights rest on very different logics. In the event of a conflict between a
registered mark and a mark that has been used for some time the question of which
should take precedence is not necessarily capable of being determined a priori. The
relationship between registration and use is mediated by a number of provisions of the
Trade Marks Act 1995 (Cth). In this article we focus on one such provision, s 58A, a
relatively recent addition to the legal landscape.
Through a close analysis of s 58A, focusing on court decisions and decisions of the
Trade Marks Office that have applied this provision, we demonstrate that s 58A has
the potential to operate in an entirely unsatisfactory manner. We then use problems
with s 58A as a vehicle to explore the relationship between use-based and registration-
based rights generally, suggesting a new conceptual framework that might serve to
guide future discussion of how the relationship between registration and use ought to
be mediated.
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*
Associate Professor, Faculty of Law, University of New South Wales.
** Professor, School of Law, University of Sheffield; Winthrop Professor of Law, University of
Western Australia.
Our thanks go to Rob Batty, Lionel Bently, Megan Jones, Jani McCutcheon, Sean McManis
and the two anonymous referees.
2
Federal Law Review
Volume 42
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I
INTRODUCTION
The federal Australian registered trade mark system and its British precursors came to
be built around a hybrid of a 'registration-based' and a 'use-based' model of
protection.1 Under this model rights are not strictly determined either by use or by
registration. Rather, use and registration interact with one another in complex ways.
Reconciling registration and use as mechanisms by which rights can be acquired in a
trade mark is inherently difficult. To explain, trade mark registration is intended to
serve a valuable public end. Specifically, the recording of marks on a publicly available
register ought to provide a valuable source of information about marks that are in use.
The extensive rights conferred by registration (for example, protection that applies
nationwide, irrespective of where the mark has in fact been used) should be seen as
incentives for traders to register: traders get more extensive protection in return for
placing information that is valuable to other traders in the public domain.2 There is,
however, no requirement under Australian law for traders to register their marks in
order to attract protection. Nor would such a requirement make sense. It is almost
inevitable that some small traders would remain ignorant of the need for registration.3
Moreover, even for larger traders it can be difficult to predict how consumers will
respond to a product — consumers may ascribe a source identification function to
signifiers that the trader would not have thought to register or would be prevented
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1
We say 'came to be built' because there was a period following the introduction of the first
UK registered trade mark system in 1875 during which the relationship between use and
registration was entirely uncertain. Specifically, s 1 of the Trade Marks Registration Act 1875,
38 & 39 Vict, c 91 provided that no action for 'infringement' could be brought after 1 July
1876 unless the mark had been registered. At first there was real uncertainty as to how this
provision impacted on actions for passing off, with many commentators at the time taking
the view that registration had become compulsory for any action to lie. We should perhaps
add as an aside that we take the advent of the UK registration system as our starting point
because although a number of the Australian colonies introduced trade mark registration
before the UK the Acts in question seem to have had little bearing on the subsequent
development of Anglo-Australian trade mark law.
2
We do not suggest that the relationship between the incentives to register and the scope of
the rights afforded to registered trade mark owners is to be accepted at face value. On the
contrary, we have argued elsewhere that any suggestion that the public information
produced by trade mark registration serves as 'consideration' for the scope of the registered
trade mark monopoly is deeply problematic. Nevertheless this 'registration as
consideration' account is the best explanation available with justificatory power (that is, if
one leaves aside explanations grounded in public choice theory and the like aside).
3
See, eg, Advisory Council on Intellectual Property, A Review of the Relationship between Trade
Marks and Business Names, Company Names and Domain Names (March 2006) 1, 27–30
f> (noting evidence that suggests that many small and medium sized enterprises
erroneously assume that registration of a business name gives them positive rights over the
name in question and insulates them from a claim for trade mark infringement).
2014
Reconciling Use-Based and Registration-Based Rights within the Trade Mark System
3
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from registering.4 To require registration as a precondition of protection would
therefore leave the public vulnerable to unscrupulous traders.
It is therefore perfectly possible to defend a dual registration-based and use-based
system, but because these means of acquiring trade mark rights rest on very different
logics the question of which should take precedence in the event of a conflict between
similar marks is not necessarily capable of being determined a priori. It would be
possible, for instance, to imagine a system that gave strong pre-eminence to
registration, for example, by making registration an absolute defence to any action
brought in reliance on an unregistered mark. Equally, however, it would be possible to
imagine a system that afforded registration very little weight, such as a system where
registration creates a mere evidential presumption that the owner has satisfied the tests
for establishing rights in a mark. Importantly, moreover, this is not merely an
intellectual exercise — existing trade mark systems around the world mediate the
relationship between registration and use in very different ways, such that it cannot be
said that there is any sort of consensus as to how the relationship is best managed.5
There is, however, a touchstone that ought to inform decisions as to whether a mark
should be accepted for registration in circumstances where there appears to be a
conflict between parties claiming use-based and registration-based rights. This is that
the register ought to provide as accurate a record as possible of usable and enforceable
marks. The operation of a registration system may at times lead us to modify or curtail
use-based rights, but doing so only makes sense to the extent that the internal logic of
registration is preserved.
One technique that is used in the Australian registered trade mark system to try to
manage and accommodate use-based and registration-based rights is the doctrine of
'prior continuous use'. This is a principle that applies in various places throughout the
trade mark system as a way of allowing for the co-existence of otherwise conflicting
trade marks. The essence of this principle is that the party seeking to rely on it has to
demonstrate that it used its mark 'first', that is, from a time both before the owner of
the conflicting mark commenced use of its mark and before the owner of the
conflicting mark applied to register its mark. Prior continuous use, as a device to allow
for an applicant's mark to be registered, notwithstanding the presence of an earlier,
conflicting mark on the Register of Trade Marks, became part of the Anglo-Australian
trade mark system in 1905.6 In its earliest form the exception turned solely on whether
the applicant had made earlier use of its mark in the marketplace. But from 1919 there
was a shift towards the dual temporal requirement just described, that is, that the
applicant's use had to predate both the registered owner's first use and the registered
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4
For example, it is possible that consumers will immediately see a trader's slogan or aspects
of the shape or colour of the trader's goods as carrying a source identification function, but
such trade indicia will often only be registrable on proof of acquired distinctiveness.
5
It is widely recognised, for example, that the United
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