TRADEMARK REGISTRATION REVOKED ON COURT ORDER
This is an example of a DIY business owner placing excessive reliance on IP Australia’s Trademark system, without seeking proper Trademark Attorney research and advice before adopting the name. This is not new, with this case just being the latest.
Trademark Registrations issued by IP Australia are not safe or final (see here), and insufficient to clearly identify if there are legal conflicts or compensation claims owing. Business owners should have an experienced Trademark Attorney conduct infringement research before trading with a brand (or even trademarking a name), so as to avoid litigation risk.
Quick (or free) searches offered by some trademark companies should be avoided as they can provide misleading results.
A thorough investigation and assessment, as offered by more reputable companies, should be conducted before filing a trademark application.In this case, as a result of the Court finding against the DIY business owner, the company will lose its trademark and the company Director’s personal assets can be accessed (so hiding behind the corporate veil didn’t work).
IP Australia has now removed the “Registered” status of the DIY business owner’s trademark and replaced it with a status of “Court action pending”.
Recommended Safe Steps for Businesses
Step 1: Have your Trademark Attorney conduct an Infringement Assessment (Audit) (1-2 weeks).
Step 2: Have your Trademark Attorney prepare and lodge a trademark application. Contrary to general belief, the details in the trademark application are not checked by IP Australia, so could have mistakes in them unless checked by a professional, such as your Trademark Attorney.
Our firm regularly conducts infringement assessments for brands. You can have this done by filling out this form.
So What Happened?
CLIPSAL is a well-known brand for electrical goods in Australia, with many Registered trademarks including the CLIPSAL name – but, nevertheless, IP Australia accepted and Registered a trademark by a rival for the brand name CLIPSO: CLIPSO was Registered by IP Australia in August 2009 in the name of Mazen Abdul Kader, the owner of Clipso Electrical Pty Ltd.
Clipsal Australia (and Schneider Electric, being the registered owner of the CLIPSAL trademark registrations) objected and claimed that Clipso Electrical’s use of the CLIPSO trademark meant that it had engaged in misleading and deceptive conduct AND passing off.
Clipsal Australia succeeded and a judgement was delivered in 2017.
So what are the details?
CLIPSO’S DIRECTOR – PERSONAL LIABILITY
Mr Kader was the director of Clipso Electrical, and this would normally distance him from company liabilities. However, the Court found that Mr Kader was personally liable for the conduct of Clipso Electrical because of his close personal involvement in its dishonest conduct.
This means that Clipsal Australia has access to the personal assets of Mr Kader, if Clipso Electrical PL does not have sufficient assets to meet the claim.
Clipsal Australia had no success in its trademark infringement claim, because Clipso Electrical’s registration of the CLIPSO trademark gave it a complete defence. However, Clipsal Australia was successful in arguing that the CLIPSO trademark registration should be cancelled on various grounds, including that Clipso Electrical had registered CLIPSO in bad faith.
The result is that the CLIPSO trademark was cancelled. Once that occurs, Clipso Electrical will no longer be able to rely on it as a defence to any future infringement of the CLIPSAL trademark.
MISLEADING AND DECEPTIVE CONDUCT
CLIPSAL AUSTRALIA also argued that Clipso Electrical’s use of their CLIPSO trademark was misleading or deceptive due to the similarity between the names CLIPSO and CLIPSAL. So, for all of you who do searches for exact names only: Beware! Exact searches are inadequate.
Passing off involves a misrepresentation that a trader’s goods/services are those of another trader who has a reputation in the relevant goods/services. Clipsal Australia / Schneider Electric have a significant reputation in Australia for their CLIPSAL brand name, and successfully argued that Clipso Electrical had engaged in passing off because ordinary (non-trade) customers would mistake the CLIPSO products for CLIPSAL products.
If you are looking to protect your brand, business or company name our Trademark Attorneys can help.
Contact us here, and we’ll be in contact right away.