In the recent case of Playgro Pty Ltd v Playgo Art & Craft Manufactory Limited [2016] FCA 280, the Australian Federal Court held that an overseas manufacturer infringed Australian trade mark registrations by supplying goods to third party retailers in China, who then on-sold the goods to customers in Australia.
Briefly, the facts of the case were as follows: the applicant was the owner of a number of Australian trade mark registrations for “PLAYGRO”. The respondents were Hong Kong companies who manufactured and sold in China toy products bearing the mark “PLAYGO”. The respondents sold and delivered toy products to third party Australian retailers in China. The respondents knew when they sold the products to the Australian retailers that the goods were to be offered for sale and sold to customers in Australia.
The Court held that the respondents had infringed the applicant’s Australian trade mark registrations on the basis that:
- the “PLAYGRO” and “PLAYGO” marks were deceptively similar; and
- the respondents’ conduct constituted use of the “PLAYGO” mark in Australia.
On the question of use of the mark in Australia, the respondents submitted that they should not be liable for trade mark infringement under Australian law given that they sold and delivered the goods to the third party retailers in China. However, the Court rejected this and concluded that the “PLAYGO” mark was being used by the respondents so long as the goods were in the course of trade, with the goods remaining in the course of trade until their ultimate sale to customers in Australia.
Lesson: Overseas manufacturers should beware that they could infringe Australian trade mark registrations if they supply goods that are then on-sold into the Australian market. Overseas suppliers should consequently consider trade mark clearance searches in Australia and obtain Australian trade mark registrations where possible.
