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Described by the Full Court judges as “byzantine”, a myriad of trade mark issues were raised recently in Fanatics, LLC v FanFirm Pty Limited [2025] FCAFC 87. The Full Federal Court of Australia considered competing infringement and cancellation claims in connection with various FANATICS trade marks.
The case summary below is primarily focused on the consideration of a number of statutory defences to trade mark infringement under s 122(1) of the Trade Marks Act 1995 (the Act).
A key takeaway is that to avail of these defences, at the outset, the adoption of a name and/or trade mark must be honest, as well as the relevant concurrent use. While awareness of a third party using the same name or trade mark is not fatal, there should be an honest belief that no confusion would arise as a result of the adoption of the name or trade mark and there should be no intention of wrongfully diverting business to itself.
Proceedings at first instance
The dispute concerned the use of various FANATICS trade marks in connection with clothing and the online sale of clothing in Australia by Fanatics, LLC (Fanatics) and FanFirm Pty Ltd (FanFirm). Fanatics is a US based online supplier of sporting merchandise including clothing, while FanFirm is an Australian company offering travel, tours and merchandise for sporting events. The parties had co-existed in the Australian market since at least 2010, with an increase in Fanatics’ Australian activities in around 2020, including by way of partnership with Rebel Sport and the Australian Football League.
In 2022, FanFarm commenced proceedings against Fanatics successfully asserting that Fanatics had infringed FanFirm’s Australian Registered Trade Mark No 1232983 FANATICS (FanFirm Word Mark) (FanFirm Pty Limited v Fanatics, LLC [2024] FCA 764) in connection with sale of various items including clothing, headgear and footwear.
The first instance proceedings also involved an unsuccessful trade mark infringement cross claim, and claims by each party that the other party’s trade marks be removed under s 88 of the Act. The cancellation actions resulted in the removal of various trade marks in whole or in part. Various other claims, including reciprocal allegations that the other party had contravened the Australian Consumer Law and had engaged in passing off were dismissed.
Appeal Proceedings
Fanatics appealed from the first instance decision, and among other things, challenged the finding that it had infringed the FanFirm Word Mark, and the related findings that it could not rely on specific defences to infringement under s 122(1)(a) and 122(1)(f)/ (fa) and s 44(3) of the Act.
FanFirm filed a notice of contention which included challenges to aspects of the findings made in respect of the statutory defences raised by Fanatics. On the second day of the hearing of the appeal, FanFirm sought leave to rely on a Notice of Cross Appeal that among other things challenged the primary judge’s finding that the defence under s 122(1)(e) of the Act had been established (leave was ultimately granted).
Findings on appeal
The Full Court, in a joint decision of Justices Burley, Jackson and Downes, substantially upheld the findings of trade mark infringement against Fanatics, also finding that it was not entitled to rely on any of the statutory defences asserted. The Full Court also upheld the various trade mark cancellations and rejected the Australian Consumer Law and passing off claims.
Several aspects of the decision in relation to the statutory defences asserted are explored below.
Infringement of the FanFirm trade marks
The first instance judge had found that Fanatics’ sale of goods such as clothing, headgear, footwear and other goods online by reference to the Fanatics Marks was conduct that infringed the FanFirm Word Mark. That finding was largely upheld by the Full Court in respect of most of the goods.
Of note, the Full Court reversed the first instance judge’s finding of infringement with respect to the use of the Fanatics Marks in domain names, webpage headers and otherwise on the website to promote the retail sale of items on the website, that is, in connection with the act of offering and selling items online.
The defence of ‘good faith use of its own name’ under s 122(1)(a)(i)
It is a defence to a claim of trade mark infringement to use one’s own name in good faith. Fanatics sought to rely upon this defence, since it was using its own name, however it was unable to establish that use was in good faith.
The problem for Fanatics concerned the circumstances of the adoption of the Fanatics name in 2010 and specifically the timing of that adoption. While Fanatics argued that the change from Football Fanatics to Fanatics occurred on 10 June 2010, the first instance judge found, and the Full Court accepted, that it occurred on 7 December 2021. This date difference was significant because Fanatics (however named) had filed oppositions to FanFirm’s trade marks, including the FanFirm Mark in August 2010. This indicated that before the name change, Fanatics knew of FanFirm, its business and its use of the FanFirm trade marks.
While the Full Court accepted a party is not necessarily precluded from relying on the good faith use defence of a corporate name just because the party was aware of the use of a deceptively similar or substantially identical name by another party at the time of adoption, there was a requirement that there be an honest belief that no confusion would arise and that there was no intention of wrongfully diverting business to itself. No evidence had been adduced of such belief and intention.
Instead, Fanatics relied on an argument based on its history of the use of name Fanatics (with or without other words) and the assertion that dropping those other words to leave the name Fanatics alone was a natural evolution. The Full Court agreed with her Honour that this was not sufficient to establish honesty of adoption of the Fanatics name.
The defence of ‘honest concurrent use’ under ss 122(1)(f) or (fa) and s 44(3)
It is also a defence to trade mark infringement if the alleged infringer can show that it would have been able to obtain a trade mark registration for the impugned mark. Fanatics asserted that it would have successfully obtained registration of the Fanatics Marks if it applied to do so.
Although s 44(1) would have posed a barrier to registration by reason of substantial identify or deceptive similarity between the Fanatics Marks and the FanFirm Word Mark, that barrier could be overcome if Fanatics had engaged in honest concurrent use of the Fanatics Marks within the meaning of s 44(3).
As with the “own name” defence, the honesty of the adoption of the Fanatics Marks was relevant to whether s 44(3) would have applied. The Full Court upheld the primary judge’s finding that this defence failed for the same reasons that the “own name” defence failed – since the adoption of the name Fanatics was not honest for the purpose of s 122(1)(a), neither was adoption of the Fanatics Marks.
Fanatics also unsuccessfully asserted that the time for assessment of honest concurrent use was at the time the defence was filed. However, the Full Court held that honest concurrent use is to be assessed at the time of the first infringing conduct. Accordingly, the defence of ‘honest concurrent use’ under ss 122(1)(f) or (fa) and s 44(3) failed since there was no prior period of honest concurrent use when the Fanatics Marks were first used.
Defence of the exercise of a right to use a trade mark given to the person under the Act pursuant to s 122(1)(e)
Finally, it is a defence to trade mark infringement to exercise a right to use a trade mark given to the person under the Act. The availability and effect of this defence was challenged by FanFirm in its cross appeal.
In the first instance proceedings, Fanatics had relied upon its right to use Fanatics Marks (and specifically in respect of the class 35 registrations). It also asserted that notwithstanding the cancellation of the Fanatics Marks in this class, the defence survived to cover conduct prior to cancellation.
The Full Court held that, contrary to the position taken at first instance, the defence under s 122(1)(e) was not open to Fanatics since the Fanatics Marks (and specifically class 35) did not confer rights to use those trade marks in respect of goods such as clothing, headgear and footwear (among others). Accordingly, to the extent the Fanatics Marks were used in connection with those goods, this did not involve an exercise of a right to use a trade mark in a manner giving rise to a defence under s 122(1)(e).
Since the defence was not available in any event, the Full Court declined to address the question of whether a party could rely on a s 122(1)(e) defence in respect of conduct taking place before the relevant trade mark was cancelled.
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