The email arrives mid-afternoon on a Tuesday. The subject line is your trading name. The first paragraph says your name is identical or deceptively similar to the sender's registered trade mark, that your use amounts to infringement, and that you have 14 days to respond before "further action" is taken. A lawyer has signed it, and there is an attachment that looks like a trade mark registration certificate.
If you run a small business, this letter is one of the most stressful documents you can receive. Your brand is tied up in your domain, your signage, your packaging, your social media handles and your marketing spend. But how you handle the next few weeks matters more than the letter itself. This guide sets out what a trade mark infringement claim actually involves in Australia, the five steps to work through before you respond, and when you should be talking to a lawyer rather than drafting the reply yourself.
What an infringement claim is actually testing
In Australia, trade mark infringement is set out in s 120 of the Trade Marks Act 1995 (Cth) (the Act). A registered trade mark is infringed when someone uses, as a trade mark, a sign that is substantially identical with, or deceptively similar to, the registered mark, in relation to the goods or services the mark is registered for. Registration is the trigger: a trade mark is defined as a sign used, or intended to be used, to distinguish your goods or services from someone else's (s 17), and a sign can be a word, name, logo, slogan, shape, colour, sound or a combination of them.
Section 120 creates three kinds of infringement:
- Same goods or services: using a substantially identical or deceptively similar sign for the exact goods or services the mark is registered for (s 120(1)).
- Similar or closely related goods or services: using the sign for goods of the same description or services closely related to the registered goods, unless the user can show the use is not likely to deceive or cause confusion (s 120(2)).
- Well-known marks: using a sign substantially identical or deceptively similar to a well-known mark on unrelated goods or services, where the use would suggest a connection with the mark owner and adversely affect their interests (s 120(3)).
"Deceptively similar" is defined in s 10 of the Act: a mark is deceptively similar to another if it so nearly resembles it that it is likely to deceive or cause confusion. The comparison is made by the ordinary purchaser, with an imperfect recollection of the earlier mark, considering the marks by look, sound and idea. That test has stood since Australian Woollen Mills Ltd v F S Walton & Co Ltd (1937) 58 CLR 641, and "confusion" in this context usually means customers thinking the two businesses are connected, affiliated or rebranded versions of each other.
The High Court restated the two essential elements of infringement in Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8: the sign must be used as a trade mark, that is as a badge of origin for the user's goods or services, and it must be substantially identical or deceptively similar to the registered mark in respect of the relevant goods or services. The Court also held that the reputation of the registered mark does not change the analysis under s 120(1): the test applies whether the mark is newly registered and little known or has been on shelves for decades.
Why should a small business owner care about the details? Because the stakes are real. An infringement claim can mean rebranding at your own cost, replacing signage and packaging, losing customers who cannot find you under your new name, and paying legal costs if the dispute reaches court. On the other hand, many claims are overstated, or based on a registration that does not actually cover what you do. The letter is the start of a negotiation, not a verdict.
Five steps that protect your position before you respond
The order matters. Most of the damage in these disputes is done in the first exchange of letters, so work through these steps before you send anything substantive.
Step 1: Send a holding response and diarise every deadline
The one thing you should do immediately is acknowledge receipt in writing and say you are reviewing the claim. A short email along the lines of "we confirm receipt and are taking advice; we will respond substantively by [date]" keeps you responsive without conceding anything.
While you are at it:
- Note every deadline: the date in the letter, any deadline in the correspondence, and anything the sender has said about court proceedings. Injunctions can be sought on short notice, so do not let the file drift.
- Say nothing else: avoid "we didn't realise", "we'll stop immediately" or "this is a coincidence". Those words can be used against you later, including in negotiations about costs and damages.
- Ask for the details you need: if the letter does not identify the registration number, the classes covered or the specific use complained of, ask for them in the same holding response.
Step 2: Verify what the other side actually owns
Not every complaint is backed by enforceable rights. Check the claim against the register before you spend a minute worrying about it:
- Is the mark registered in Australia: Search IP Australia's Australian Trade Mark Search, which is free. If the mark is not registered here, there is no infringement claim under the Act at all.
- What does the registration cover: Registrations are divided into classes of goods and services. A registration for clothing does not stop you using a similar name for software. Confirm the classes, and confirm the mark is still in force (renewal is required periodically).
- Is the mark actually being used: A registered mark that has not been used in good faith in Australia for a continuous period of three years can be removed from the register on application (s 92 of the Act). A mark that is only being used to threaten small businesses is a weaker basis for a claim.
- Is the owner the person writing to you: Check that the registered owner is the entity making the claim, and that the mark is not subject to conditions or disclaimers that limit its scope.
A qualification: if the mark is not registered, the sender may still have common law passing off or the misleading or deceptive conduct prohibition in s 18 of the Australian Consumer Law (Cth) to fall back on. Those claims protect reputation rather than registration, and they are harder and more expensive to prove. For infringement under the Act itself, registration is the threshold.
Step 3: Gather the evidence of your own use and timeline
While the other side's rights are being checked, start assembling your own file. You will need this material whether you defend, negotiate or later enforce:
- domain purchase dates and registration records
- business name registration and ABN records
- website archives, including your own backups
- invoices, receipts and marketing materials showing first use
- design drafts, brand guidelines and logo development files
- any correspondence showing when you adopted the name
Timing can be legally important. If you have continuously used your mark in trade since before the other side's mark was registered or first used, you may have a prior use defence under s 124 of the Act. Even where a defence does not apply, evidence of your trading history strengthens your negotiating position and protects you if the dispute widens.
Step 4: Test the claim against the actual legal test
This is where legal analysis replaces gut feeling. Work through each element of s 120:
- Was the sign used as a trade mark: The High Court's example in Self Care is instructive: a competitor's descriptive phrase referencing the BOTOX mark was not use of a sign as a trade mark, and so did not infringe, because it was not used as a badge of origin. If you use a word descriptively, that is a different question from using it as your brand.
- Is the sign substantially identical or deceptively similar: Compare the marks as wholes, by appearance, sound and idea, through the eyes of the ordinary purchaser with imperfect recollection. Shared common words matter less than the overall impression.
- Do the goods or services overlap: If the other side's registration covers unrelated goods and the mark is not well known, the claim falls away. If the goods are merely similar, s 120(2) gives you a defence if your use is not likely to deceive or cause confusion.
- Does a statutory defence apply: Section 122 of the Act lists situations where use does not infringe, including good faith use of your own name or place of business, descriptive use of a sign to indicate the kind, quality or purpose of goods, and use for comparative advertising.
- What if you did not know: A lack of awareness is not a defence. But it can matter at the remedies stage: courts can award additional damages having regard to the flagrancy of the infringement and the conduct of the infringer after being told of the claim (s 126(2)). Genuine early engagement can therefore make a practical difference to your exposure.
If the claim fails any of these limbs, say so clearly in your response, with reasons. If it does not fail, you now know what you are negotiating about.
Step 5: Decide the outcome you want and respond deliberately
Once you know the strength of the claim and of your own position, choose the outcome before you choose the words:
- Rebranding: sometimes the cheapest path, even when your arguments are decent. A rebrand with an agreed transition period can end the dispute quickly.
- Coexistence: both sides keep trading with agreed boundaries, such as different classes, different geographies or different presentation.
- Licence or permission: less common, but possible where the mark owner is prepared to licence the use.
- Push back: where the claim is weak, a firm, reasoned response can make it go away.
- Formal escalation: if you own the mark and the infringement is deliberate or continuing, the remedies available from a court include injunctions, damages or an account of profits, and additional damages for flagrant infringement (s 126).
Whatever you choose, the response letter should state your position, respond to each claim and propose the next step. It should not threaten, apologise or concede. If the other side is aggressive, a carefully drafted cease and desist letter, or a response to one, is usually better than an escalating exchange of emails.
When you should talk to a trade mark lawyer
Deceptive similarity is a legal test applied by courts, not a matter of opinion. A lawyer can help in ways that a careful business owner generally cannot:
- Clearance and validity: searching the register properly, working out what the registration actually covers, and assessing whether it is vulnerable, for example to a non-use removal under s 92.
- Infringement analysis: applying the s 120 elements and the s 122 defences to your actual use, and giving you a candid view on whether the claim has merit.
- Drafting: preparing the holding response, the substantive response or the cease and desist letter, so that nothing in writing undermines your position.
- Negotiation: structuring a rebrand transition, coexistence arrangement or licence that protects you commercially.
- Proceedings: running IP Australia actions such as opposition or removal for non-use, or court proceedings for an injunction and damages if the dispute cannot be resolved.
The judgement calls that justify the cost are real: whether your use is "as a trade mark", whether goods are "closely related", whether a prior use defence is available on your facts, and whether an offer should be made at all. These are exactly the questions that decide disputes, and they are hard to answer objectively when it is your own brand on the line.
The register decides, not your intentions
The single most important thing to remember when the letter lands is that trade mark infringement is not about whether you copied anyone, and not about who thought of the name first. It is about the other side's registered rights and whether an ordinary customer would be deceived or confused by the similarity. Your good faith matters for damages and for negotiation, but it does not answer the legal question.
Work the steps in order: send a holding response with no admissions, verify the registration, gather your evidence, test the claim against s 120, and only then respond substantively. If the claim is strong, a controlled exit such as a rebrand with a transition period is usually cheaper than a fight. If it is weak, a reasoned response is usually enough. Either way, the first letter is where the dispute is won or lost, and the person who understands what the other side actually owns holds the better hand.
In short: trade mark infringement in Australia turns on registered rights under s 120 of the Trade Marks Act 1995 (Cth), assessed by the deceptively similar test in s 10, with defences available for prior use, descriptive use and good faith use of your own name. If you receive a claim, respond without admissions, verify the registration and gather your evidence before deciding between rebranding, negotiation or resistance. If someone is infringing your brand, remember the remedies available to you, including injunctions, damages and additional damages, and that a lawyer's assessment of the claim before you respond is usually money well spent.