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The Federal Court has confirmed, in the case of Sporte Leisure Pty Ltd v Paul’s International Pty Ltd, that a licence to use trade marks on goods manufactured in one territory does not include a right to export those goods and sell them elsewhere.  

The case involved the infringement of the Greg Norman word mark and the shark image mark (Marks). The head licensor of the Marks (the Greg Norman Collection) entered into a limited and non-exclusive licence with an Indian manufacturer and distributor (Indian Distributor) to manufacture Greg Norman branded garments in India. The Indian Distributor specifically agreed in the licence contract not to sell licensed products outside the territory.

The garments however were indirectly exported to Australia by Paul’s Retail Pty Ltd. They were sold by the Indian distributor for export to Pakistan, but were shipped to Singapore and on-sold to Paul’s Retail who then imported the garments into Australia.

Paul’s Retail sought to rely on section 123 of the Trade Marks Act 1995 (Cth) which provides a defence to an infringement where a trade mark is used with the consent of the registered trade mark owner. Paul’s Retail argued that because the infringing garments were manufactured by a licensed and authorised manufacturer at the time the Marks were applied to the garments, they were applied with consent. The court found that such consent did not extend to goods manufactured and exported outside the licensed territory, where the Marks were only licensed on the condition that the goods be distributed in a specified territory.

This case upholds the significance of territorial licensing arrangements and the value in ensuring express terms are included in any trade mark licence agreement. Liability cannot be avoided through defences such as section 123, where clear terms have not been complied with.

Contact Details

Melbourne

Dan Pearce
Partner
T: +61 (0)3 9321 9841
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Sydney

Ian Robertson
Managing Partner - Sydney
T: +61 (0)2 8083 0401
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Brisbane

Paul Venus
Partner
T: +61 (0)7 3135 0613
E: paul.venus@holdingredlich

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