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How Does Fair Use Apply To Trademarks?

How Does Fair Use Apply To Trademarks?

'Fair use' can be an important defence to any intellectual property allegation. Read on to find out how fair use can apply to trademarks.

10th September 2021
Reading Time: 4 minutes

Is it ever legal to use someone else’s trademark without their permission? Generally, if you hold a trademark, others cannot use that trademark illegally or in any unauthorised way. It is always best to obtain the permission of the trademark owner, before using their trademark. But, is there a little grey area to using a trademark without the trademark owners permission? There certainly is! It’s called the ‘fair use’ defence. This article will take you through how fair use can apply to trademarks.

What is a Trademark?

Before we dive into the fair use defence, let’s look at what trademarks are and how they can be infringed.

A trademark is any unique way of identifying some product or service. The trademark must be ‘unique’, meaning it must be distinctly different from any other trademarks, so the public understands that your product, service or brand is distinctly different from similar products or services. In other words, a trademark sets your product or service apart from other products or services.

The most common example of a trademark is a company logo. However, a trademark can be any, or a combination, of elements such as letters, numbers, phrases, sounds, shapes, pictures, smells. This can certainly include the packaging of products and logos.

What is Trademark Infringement?

In general, the owner of a registered trademark holds the exclusive right to use their trademark however they like. The trademark owner also holds the power to grant others the right to use their trademark under a licensing agreement. However, when someone uses a trademark against the trademark owners will, an action for trademark infringement may arise. Now, just because an individual uses a trademark without asking for the trademark owners permission does not automatically mean an action in trademark infringement will arise. There is a defence called the ‘fair use’ defence.

In other words, if an individual or business has allegedly infringed the trademark owners rights by using their trademark without their permission, one of two things can happen:

  1. A claim for trademark infringement will be possible or,
  2. The ‘fair use’ defence may arise.

‘Fair Use’ of a Trademark

Fair use is basically a defence to trademark infringement, as well as copyright infringement. The fair use defence essentially requires the court to ask is the use of the trademark against the trademark owners rights fair? If the use is fair, then trademark infringement did not occur in the circumstances.

Two general instances allow someone to fairly use a registered trademark without obtaining prior permission. These two circumstances include:

  • Descriptive Fair Use and,
  • Intended Purpose Fair Use.

Descriptive Fair Use

Descriptive fair use means that someone has used a registered trademark to describe some other product or service. This defence is contained in section 122(1)(b) of the Trade Marks Act 1995 (Cth). It allows someone to use another’s trademark to describe their own product or services, quality, description, value, location or some other characteristic of their goods or services. In other words, the descriptive fair use defence will arise when an alleged infringer merely uses the registered trademark to describe their product or service.

Example

Nature’s Blend, a confectionary company had registered a trademark for their “Luscious Lips” chocolates. Nestle, the owner of Allen’s confectionary company created a new range of sweets called the Retro Party Mix. On the Allen’s Retro Party Mix bag packaging, there was a description of the sweets. The description contained words such as, “Partying Pineapples…Luscious Lips…” Nature’s Blend attempted to sue Nestle for trademark infringement regarding the use of their trademark “Luscious Lips”. The court found that Nestle was able to rely on the descriptive fair use defence. This was because the use of the words “Luscious Lips” on their packaging were describing their own product.

Notes: the example above refers to the case of Nature’s Blend Pty Ltd v Nestle Australia Ltd [2010] FCA 198.

Intended Purpose Fair Use

The fair use defence can also protect the intended purpose of the use of the trademark. This defence under section 122(1)(c) of the Trade Marks Act allows another person to use a trademark to indicate the intended purpose of your goods or services. However, the reference to the registered trademark cannot create any misleading or deceptive conduct. So, if you decide to refer to a trademark to show the intended purpose of your own product or service, make it clear that your product or service is not affiliated with that product or service.

Example

The Gillette Company (Gillette) has trademarked its “Sensor” line of razors. The company Pharma-Goods Australia (Pharma) released a line of blades for razors and used Gillette’s trademark “Sensor” on the packaging of their blades by stating, “No Frills Moving Blades would fit Gillette’s Sensor handles”. Pharma expressed in their packaging that “Sensor” is “a registered trademark of Gillette”. The court found that Pharma’s use of Gillette’s trademark was fair as it simply explained the intended purpose of their own product. This conclusion was made because although Pharma used the Gillette trademark to explain the purpose of their product, they did so in a way that made it clear that their product was not affiliated with Gillette, although their product was merely “suitable for” Gillette products.

Note: this example refers to the case of Gillette Co v Pharma-Goods Australian Pty Ltd [1997] FCA 629.

Key Takeaways

Not every unauthorised use of a registered trademark will end up resulting in trademark infringement. Accordingly, if the use of a registered trademark is ‘fair’, trademark infringement will not be present. Fair use is therefore is a reasonable defence to trademark infringement. Fair use can come in two main forms, namely the descriptive fair use defence and the intended purpose fair use defence. However, if you are wishing to use a registered trademark for your own purposes, you must be extremely careful to respect the rights of the intellectual property owner. It is always best to consult a lawyer before doing so.

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Author
Mai Sarkissian

Mai is a Digital Marketing Coordinator at Lawpath, working as part of the Content Team. She is in her final year of a Bachelor of Laws degree at the University of Wollongong. She is interested in Business Law and Employment Law.