Federal Court dismisses appeal regarding MALISHUS use

What you need to know

• The Federal Court of Australia has dismissed an appeal from a decision of the Federal Circuit Court of Australia in which Mr Lamont argued that the fourth respondent, Mr Nicholas, should have been found to have infringed Mr Lamont's MALISHUS trade marks.
• The appeal failed because the Federal Court disagreed with Mr Lamont's arguments that the primary judge made errors when concluding that Mr Nicholas did not use the trade marks in Australia and therefore did not infringe the marks, and did not properly inform Mr Lamont of the Court's practices and procedures which he argued may have assisted him to succeed in his claim against Mr Nicholas.

What you need to do

• When making claims of trade mark infringement the evidence must show that there was actual use of the trade mark in the course of trade in Australia by the alleged infringer. It is not enough that the alleged infringer is associated with a business trading in Australia that makes use of the trade mark if all of the alleged infringers' conduct takes place in or in relation to another jurisdiction.

The Federal Circuit Court of Australia's decision

The appellant, Mr Lamont, owns four Australian trade mark registrations that contain the word MALISHUS which are registered for clothing, footwear and headgear and music. Mr Lamont claimed that the respondents (Malishus Limited and three individuals involved in the business, Mr Jurcic, Mr Selwyn and Mr Nicholas) infringed the MALISHUS marks, and engaged in misleading or deceptive conduct in contravention of the Australian Consumer Law, by:

• registering and using domain names incorporating the word "malishus" including malishus.com, malishus.co.nz and malishus.com.au to sell Malishus-branded clothing;
• posting material on Facebook that included the word "Malishus" in connection with clothing; and
• selling clothing bearing the word "Malishus".

The respondents argued that they undertook those activities but only in connection with overseas markets with trade marks they registered in New Zealand, the USA and UK and not in Australia.

Mr Lamont succeeded against all of the respondents except the fourth respondent, Mr Nicholas. The primary judge concluded that Mr Nicholas did not infringe the marks because he did not engage in conduct in Australia, rather all of Mr Nicholas's conduct was in or related to New Zealand.

Injunctive relief was granted and the three respondents found to have infringed Mr Lamont's trade marks were ordered to pay nominal compensatory damages, additional damages of $32,686.75 as well as Mr Lamont's costs. See our article on the Federal Circuit Court's decision in the December 2019 edition of IP@Ashurst.

The decision was appealed to the Federal Court and was settled with all parties except Mr Nicholas.

The appeal

The appeal to the Federal Court was focused on two errors that Mr Lamont alleged the primary judge made being that the primary judge erred by:

• finding that Mr Nicholas did not infringe Mr Lamont's MALISHUS trade marks; and
• failing to properly inform Mr Lamont, as a self-represented litigant, about the practices and processes of the Court (such as to seek production of documents) which he asserts may have enabled him to obtain evidence to succeed in his claims against Mr Nicholas.

No use of trade marks in Australia

On the first alleged error, Mr Lamont argued that there was evidence to support findings that Mr Nicholas made some of the posts on Facebook in which the MALISHUS marks were displayed and that the primary judge was wrong to find that Mr Nicholas did not engage in infringing conduct in Australia. The Court disagreed with that argument and concluded that the primary judge did not err in finding that Mr Nicholas did not use the trade marks in Australia.

The malishus.co.nz domain name and the Facebook posts made by Mr Nicholas to his own personal page were found to be directed only to persons in New Zealand. The evidence also demonstrated that Mr Nicholas was recruited to act on behalf of Malishus Limited in New Zealand only and it was the other respondents, Mr Jurcic and Mr Selwyn and the entity they created to operate in Australia, who were engaged in the activity in Australia.

While Mr Nicholas visited Australia, the Court stated that that should be considered in light of the fact that Mr Nicholas was recruited to act with Malishus Limited in New Zealand. The evidence also showed that Mr Nicholas's trip was for the purpose of introducing a person, not to act on behalf of Malishus Limited in Australia.

No failure to properly inform

On the second alleged error, the Court found that Mr Lamont's actions and written and spoken interactions with the Court indicated that he was "literate, intelligent and coherent" and that the primary judge was entitled to form the view (which would have been clear to an objective observer) that Mr Lamont was aware of the availability of the Court rules to do things such as seek production of documents. Accordingly, this ground of appeal was also dismissed.

Because Mr Nicholas did not participate in the appeal proceedings, the Court did not make any costs orders.

*A version of this article first appeared on WTR Daily, part of World Trademark Review, on 5 April 2022. For further information, please go to www.worldtrademarkreview.com.

Authors:  Annika Barrett, Senior Expertise Lawyer and Lisa Ritson, Partner.