The Optical 88 case (Full Court of the Federal Court of Australia, October 17, 2011) provides a lesson on why potential claimants in trade mark matters should carefully consider the strength of their mark before claiming infringement.

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Proctor | March 201244
Your trade mark –
use it or lose it
Optical 88 Limited v Optical 88 Pty Limited & Ors.
This case provides a lesson on why potential claimants in trade mark matters
should carefully consider the strength of their mark before claiming infringement.
Non-use
It is a fundamental principle of the Australian
trade mark registration system that one
cannot‘warehouse’registered trade marks.
If the trade mark applicant has not used its
registered mark for its registered goods/
services, the mark may be removed from the
register after a grace period (or even before if
the applicant had no intention in good faith
to use or license use of the mark in Australia at
the filing date and there has been no use). Use
for services closely related to the registered
goods, or use for goods closely related to the
registered services will not suffice.
Intention in good faith to use: Did the appellant
have an intention in good faith to use its 966
mark as at the date of filing? The relevant
provision is s92(4)(a) of the Trade Marks Act
1995 (Cth). Because the onus is on removal
applicants to establish lack of intention on
the part of the registered trade mark owner,
and the mere fact of making a trade mark
application is a reasonably good indication
of intention, this ground of challenge is a
difficult one and is not commonly pursued.
The Optical 88 Case is an illustration of one
of the relatively few cases in which a
challenge on this ground succeeded.
The court accepted that good faith intention
does not require an intention to use the mark
“immediately or within any limited time”.
But there must be some intention. The court
found that the evidence was inconsistent with
the existence of this. The appellant’s evidence
had risen no higher than a general intention
to expand its Optical 88 services into Australia
at some future but unascertained time.
Use in relation to goods/services: In relation to
the 707 mark, the court considered whether
the appellant had used its mark in relation
to the registered goods even though goods
(mainly spectacles) supplied by the appellant
had not themselves been marked with the
registered mark. The spectacle frames which
the appellant had supplied with lenses carried
numerous fashion and luxury brands, but not
The Full Court of the Federal Court
of Australia’s decision on 17 October
2011 in Optical 88 Limited v Optical
88 Pty Ltd & Ors [2011] FCAFC 130
developed legal precedent on
important trade mark law issues.
These are:
• the intention to use which must be present
at the time of filing a trade mark application
• the test for deciding whether a mark has
been used for goods when the goods don’t
bear the mark
• when name use may be raised as a
successful defence to a registered trade
mark infringement claim
• the appellate court’s role in intellectual
property cases.
Key facts and findings
A chronology of the parties’trade mark-related
activities is the starting point for analyses in
trade mark infringement cases. In the Optical
88 case, key dates and activities were:
the‘Optical 88’mark (or similar). The appellant
referred to s7(4) of the Trade Marks Act:
“Use of a trade mark in relation to goods”
means use of the trade mark upon, or in
physical or other relation to, the goods…
[italics added].
It submitted there had been use of its 707
mark in relation to the registered goods within
the meaning of this provision. Its stores were
known as supplying optical products. It sold
spectacles in cases which included a cleaning
cloth bearing a variant of the 707 mark. It was
identified as the origin of and responsible for
the final vended product as a whole (lenses in
frames). The court was not persuaded. It said:
“… whether the …707 mark had been used
in relation to goods and/or services involves a
question of characterisation. …[In] the overall
factual context, where the evidence showed
both that the appellant had placed other
trade marks on goods … this fact [is] material
to characterisation … [The] appellant’s
activities, characterised as a whole, resulted in
it being the source of the retail services involved
in providing the goods… and not the source
of the goods themselves.”[italics added]
Discretion not to remove: Another non-use issue
was the exercise of discretion against removal,
notwithstanding non-use. Use of a registered
trade mark for goods (for example spectacles)
might be infringed if the registered mark is
used for closely related services (for example,
retailing services in respect of spectacles)
(s120(1) of the Trade Marks Act). But use of a
mark by an owner not for registered goods,
but for closely related services is no defence
to a non-use removal challenge under s92(4).
Such circumstance may lead to the exercise
of discretion not to cancel the mark (s101(3)
of the Trade Marks Act). The policy is to avoid
a removal paving the way for confusion
stemming, for example, from two traders
using the same mark for services closely
related to the registered goods and vice versa.
The Optical 88 case is a reminder that the
exercise of discretion against removal in such
by Anna Sharpe
| Intellectual property
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March 2012 | Proctor 45
circumstances is not a given and that the way
the discretion should be exercised hinges on
the particular facts of each case. The court was
satisfied that the trial judge had weighed the
matter correctly and held that it was not within
the scope of its review to revisit discretionary
considerations. The court held that the
trial judge had considered the appellant’s
reputation in exercising his discretion,
but made the point that the respondent’s
reputation was also relevant:
“When reputation is advanced as a discretionary
consideration favouring the retention of a
mark that has not been used for particular
goods or services, the existence of a competing
reputation in relation to similar goods or closely
related services, or similar services or closely
related goods, should not be ignored.”
What’s in a name?
The interaction between the trade mark
registration system and systems for name
registration (corporate names, business
names, domain names, phone words and
those used on new media such as Facebook
and Twitter) is one of the most difficult
practical issues facing trade mark practitioners.
The Optical 88 case highlights the prudence of
securing all relevant name registrations from
both a legal and a commercial perspective.
Even though the first respondent’s use of its
‘Optical 88’name was use as a trade mark and
therefore potentially infringing the appellant’s
966 mark, the court upheld the trial judge’s
finding that the first respondent had made
out the infringement defence in s122(1)(a)(i)
of the Trade Marks Act:
“ … a person does not infringe a registered
trade mark when … the person uses in good
faith … the person’s name or the name of the
person’s place of business …”
The first respondent’s use of‘Optical 88’
without‘Pty Limited’was held to constitute
a use of the first respondent’s name. The
appellant argued that the defence did not
apply because the first respondent had used
its name with additional matter (such as, for
example,‘Vision Centre’,‘Vision’or‘V.I.P Card’).
The court rejected this. It held that if the
reason for the infringement is the use of the
person’s name, as was the case here, then
the defence applies. It cited the trial judge’s
statement that:
“The defence bites when the use of the
person’s name is the reason for the finding
of infringement (provided the use has been
in good faith).”
Appellate court’s role in
intellectual property cases
Intellectual property cases often involve
matters of degree and impression, and much
turns on findings of fact. The court considered
the appropriate test for its intervention on
these issues and held that the key issue was
consistency of approach, not semantic tests:
“Consistent and predictable judicial decision-
making is not discouraged by either phrase. If
one phrase were more appropriate to describe
the role of the appellate court than the other,
‘sufficiently clear difference of opinion’both
reflects the nature of an appeal by way of
rehearing and conveys the appellate court’s
duties to come to its own conclusion, while at
the same time giving due respect and weight
to the trial judge’s findings.’
Conclusion
The case is a reminder for potential claimants
in trade mark matters to carefully consider
the strength of their mark before claiming
infringement. In the Optical 88 case, the
appellant was not only unsuccessful in its
infringement claims against the respondents,
but it also suffered removal of its 707 and 966
trade mark registrations for non-use.
This article appears courtesy of the QLS Intellectual
Property and IT Committee. Anna Sharpe is principal
at Sharpe Ivo and a member of the committee.
Oct 1989
The appellant registered this mark
(the 707 mark) in respect of optical goods:
Jul-Aug 1993
‘Optical 88 Pty Limited’(the first respondent) was
incorporated and from August 1993 provided optical
services under that name.
May 1997
The second respondent became aware of the
appellant’s Optical 88 stores in Hong Kong.
Mid-2001
The appellant became aware of the first respondent’s
business in Australia.
Nov 2005
The appellant registered the following trade mark
(the 966 mark) in respect of optical services:
Oct 2006
The appellant wrote to the respondents alleging
infringement.
2008 – 2011
These proceedings. The appellant alleged
that the respondents infringed on its marks
and copyright in its logo. The respondents
sought removal of the 707 mark and 966
mark from the Trade Marks Register.
Oct 2011
The Full Court of the Federal Court unanimously
upheld the trial judgment that the 707 and 966 marks
be removed from the Trade Marks Register and that
the first respondent’s logo did not infringe copyright
in the appellant’s logo.
Intellectual property |
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