Australia

A trade mark is a sign, used or intended to be used, to distinguish goods or services from those of other persons in the course of trade. In Australia, applications to register trade marks undergo both inherent and relative examination. Potentially protectable signs include words, devices and logos as well as non-traditional matter such as aspects of packaging, shape, colour, sound, scent or movement.

This means aspects of fashion products themselves can be protectable, such as their shape and/or the position of design or colour elements upon them, provided these are deemed sufficiently distinctive (either inherently or as a result of the use made). In practice, inherent registrability generally requires that aspects of shape, colour and/or position have more than a purely utilitarian purpose.

Unregistered trade mark rights may be enforced against third parties under the Australian Consumer Law in Schedule 2 to the Competition and Consumer Act 2010 (Cth) (ACL) and/or the tort of passing off. However, the clearly defined rights conveyed by registered trade mark rights usually make infringement proceedings more straightforward than enforcing unregistered trade mark rights, which rely on establishing a likelihood of consumer confusion due to the trade mark owner’s reputation in the market.

In the context of infringement proceedings, prior and/or concurrent use by an alleged infringer can defeat enforcement actions, provided this is deemed to be “honest” and “in good faith”. Recent Australian decisions have raised the bar for establishing the requisite “honesty” and “good faith”, making it more difficult for alleged infringers to avoid liability and so increasing the value of registration in enforcement strategies.

A registered design protects the overall appearance of a product (or component) resulting from one or more visual features (e.g. shape, configuration, pattern or ornamentation). A design must be new and distinctive. Design registrations do not protect the materials used but can protect patterns used on textiles.

Compared to registered trade marks, there are fewer grounds by which a registered design can be revoked. However, there are strict restrictions on prior disclosure of designs (subject to a 12-month grace period) before the application is lodged.

The test for design infringement is narrower than the tests for copyright or trade mark infringement. The seasonal nature of fashion design may also mean that the cost and time of obtaining a design registration is not practical.

Copyright protects original works (including artistic works) and certain subject matter other than works (e.g. sound recordings and films). Copyright protects the expression of the idea, rather than the idea itself. This could include a logo used on a garment, a two-dimensional artwork printed on fabric, or a pattern or sketch of a garment (each an artistic work).

However, copyright typically cannot be used to protect garment design in Australia, if the design has been industrially applied and if it is not considered a “work of artistic craftmanship”. Copyright and trade mark protection can coexist, however, the tests for trade mark and copyright infringement differ and may produce different results.

Patent protection may be available to protect new manufacturing processes or materials used. Additionally, parties may have causes of action for misleading or deceptive conduct under the ACL or common law passing off, if trade dress or unregistered trade marks have been misappropriated.

Licence agreements

A licence agreement should include clauses relating to:

• duration, territory and exclusivity;
• the licensee’s rights (including sublicensing) and the circumstances in which it may exercise its rights;
• restrictions on the licensee’s use of licensed assets;
• the licensor’s rights of inspection or quality control;
• compensation/royalties;
• protection of IP and goodwill; and
• standard contractual components such as warranties, indemnities, confidentiality and dispute resolution clauses (including in relation to disputes with third parties concerning licensed assets).

Non-disclosure agreements (NDAs)

NDAs should be put in place prior to disclosure of confidential information including trade secrets.

In addition to standard contractual clauses, NDAs should include terms that:

• define the confidential information and distinguish it from “know-how” and other information held by either party;
• set out the purpose for which the information is being provided, and how it can be used/disclosed;
• set out any physical or electronic security requirements for the treatment of the confidential information;
• stipulate whether the information must be returned or destroyed upon expiry; and
• ensure obligations of confidentiality continue beyond the term of the agreement.

Subcontract agreements with suppliers/in-house manufacturing

In addition to standard contractual clauses and confidentiality obligations, agreements with external suppliers and manufacturers should include terms relating to:

• exclusivity;
• key performance indicators (KPIs) related to manufacture and delivery;
• payment for delivery and passage of title and risk;
• quality control measures, rights of inspection and provision of samples;
• any necessary IP licences and ownership of any IP created in the manufacturing process; and
• permitted subcontracting and head contractor liability for loss or damage caused by the subcontractor.

Agency agreement

An agency agreement appointing an agent to distribute goods in a particular territory should include (in addition to standard contractual clauses):

• limitations on the scope of the agent’s role (including duration, territory, permitted conduct);
• necessary licenses to use the principal’s IP;
• obligations to provide information, support services, or promote the products;
• sales targets or other KPIs;
• warranties and indemnities in relation to the use of the principal’s IP;
• payment of commission/remuneration to the agent;
• restraints of trade applicable once the agreement has expired; and
• tax implications, including responsibility for payment of goods and services tax (GST).

Selective distribution online in high-end fashion and trade mark protection

For selective distribution agreements consideration must be given to the Competition and Consumer Act 2010 (Cth), which prohibits certain conduct which may affect competition in the market (including agreements not to purchase competitor products).

To protect high-end brand assets, online distribution agreements should ensure the brand owner retains control over the use and appearance of its mark on the site.

Co-branding and co-marketing

In addition to standard contractual clauses, and terms of purchase and supply of co-branded goods, agreements for co-branding and co-marketing should include:

• licences of IP rights including royalties;
• guidance on use of IP and representations about the collaboration (possibly with reference to marketing guidelines);
• details of ownership of any co-created IP, whether it is to be registered and what to do in the event of infringement; and
• approval required by either brand in relation to use of IP or co-created IP.

Franchising and alternative sales model agreements

Franchises in Australia are regulated by the Franchising Code of Conduct and the ACL (both governed by the ACCC).

Pop-up stores and other alternative, short-term sales models, must comply with Australian employment and occupational health and safety laws. Businesses should also consider how Australian tax law applies to their business model, including responsibility for payment of GST where goods are sold on consignment.

Employing fashion models

Businesses engaging fashion models must comply with Australian employment law. Media release forms should be signed recording the model’s consent in relation to the use of their likeness. Unauthorised use of a person’s likeness may give rise to legal action under the ACL.

Employment of children in Australia may also require obtaining additional permissions and approvals from state-based authorities, and compliance with specific laws and advertising guidelines to protect their wellbeing.

Social media, influencers and brand ambassadors/celebrities

Brands working with social media influencers and brand ambassadors must comply with Australian employment law. In addition to standard contractual clauses, agreements with influencers/brand ambassadors should include terms dealing with:

• clarification of whether the person is an employee, agent or independent contractor;
• how the brand will exercise control over influencer content (e.g. approval before posting);
• KPIs and expected output (e.g. which social media platforms and how many posts?);
• warranties/indemnities in relation to content (to limit brand liability for content which contravenes the ACL or infringes third-party IP rights);
• ongoing confidentiality and non-disparagement obligations; and
• any required IP licences.

Influencers are required to disclose paid content in their social media posts. The ACCC, Australian Association of National Advertisers (ANAA), and the Australian Influencer Marketing Council, also regulate influencer conduct.

Advertising standards, relevant authorities and advertising practice

The ACCC, AANA and Ad Standards Australia regulate advertising in Australia. The AANA’s Code of Ethics includes provisions dealing with offensive or harmful content in advertising, including sexual imagery and unattainable body standards. Complaints about non-compliance with the AANA Code of Ethics are assessed by the Ad Standards Community Panel.

Australia has very strong consumer protection legislation. Any person, including the ACCC, can commence legal proceedings in relation to misleading or deceptive advertising. The ACL also contains mandatory consumer guarantees regarding quality of goods, fitness for purpose and rights to replacement, repairs or refunds. The ACCC (alongside state-based authorities) also regulates product safety for general consumer goods. There are mandatory standards in relation to some specific classes of goods, such as the labelling of clothing (Consumer Goods (Care Labelling) Information Standard 2023) and sunglasses/eyewear (Consumer Goods (Sunglasses and Fashion Spectacles) Safety Standard 2017).

False or misleading representations about place of origin of goods are expressly prohibited under the ACL.

Store layout (physical or online) may in some circumstances be protectable under the ACL or common law (passing off), if the layout has acquired a reputation in Australia. To date, protection of store layout under trade mark or copyright law has not been considered by Australian courts.