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August 1, 2016 Vol. 71 No. 13 Back to Bulletin Main Page

AUSTRALIA: Sale of Goods in China Infringes Australian Trademark

A federal court decision issued on March 22, 2016, held that a foreign company infringed Australian registrations for similar marks, despite all its dealings in infringing goods taking place overseas. Playgro Pty Ltd v Playgo Art & Craft Manufactory Limited [2016] FCA 280.

Playgro Pty Ltd (Playgro Australia) had registered the trademark PLAYGRO in Australia as a word mark and logo in relation to games and play things. Playgo Art & Craft Manufactory Limited and Playgo Toys Enterprises Limited (Playgo Hong Kong) are Hong Kong companies that design, manufacture, and sell children’s toys under the stylized PLAYGO mark. The parties’ marks are:

(PLAYGRO logo)       (PLAYGO device mark)

In 2013 and 2014, Playgo Hong Kong sold and delivered toys bearing the PLAYGO device mark to a Hong Kong agent of Myer Pty Ltd and a subsidiary of Woolworths Limited in China. Myer and Woolworths then advertised and sold the toys to their own customers in Australia.

Playgo Hong Kong had no control over what Myer and Woolworths did with the PLAYGO toys and never promoted, sold, or delivered its toys in or to Australia.

After finding that the parties’ marks were deceptively similar, the judge held that Playgo Hong Kong had infringed the PLAYGRO trademarks, even though it never advertised, sold, or delivered its goods in or to Australia. This was because he found that Playgo Hong Kong continued to use its mark on its goods in Australia because they were still “in the course of trade” (albeit through Woolworths and Myer) until they reached the end consumer. Playgro Pty Ltd v Playgo Art & Craft Manufactory Limited [2016] FCA 280 at [142].

Even if an overseas manufacturer only sells its goods outside Australia, those goods may infringe an Australian trademark registration if they are subsequently sold in Australia—even if only by an unrelated third party, the judge held.

This case therefore demonstrates the benefit of trademark registration in Australia. If Playgo Hong Kong had registered its PLAYGO mark in Australia, this would have provided it a guaranteed statutory defense against Playgro Australia’s allegations of trademark infringement.

Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers are urged to check independently on matters of specific concern or interest.

© 2016 International Trademark Association