A hard-fought battle over the right to use the “FANATICS” mark in Australia for clothing and retail services has been won at first instance by Aussie company FanFirm after two competitors who had seemingly co-existed in the Australian market for almost two decades went head-to-head. 

In an unusual occurrence in trade mark infringement proceedings, both FanFirm and the alleged infringer, Fanatics, LLC, have Australian registered trade marks for FANATICS that cover the majority of their respective activities, and so Fanatics sought to invoke the trade mark registration defence as a complete defence to the infringement allegation (amongst other defences). 

However, in a more interesting turn of events, Rofe J also found that certain of Fanatics’ Australian registrations (some of which had been on the Register since 2008) should be cancelled on grounds including that it was not the owner of the mark. 

Further, she declined to exercise her discretion to allow the marks to remain on the Register in circumstances where the evidence was that Fanatics knew about FanFirm and its use of FANATICS at the time that it adopted the mark.  

We explore the factual matrix of this case in this article. 

The case serves as reminder that Australia is a first to use - or where there has been no use  -first to file system, and illustrates the difficulties entities may face in adopting a mark for a use in Australia where there is knowledge of pre-existing use of that mark in Australia by a potential trade rival.   

Background 

FanFirm was launched in the early 2000’s following the success of tours that took Australian sports fans, known as the Fanatics and often clad in matching fluorescent shirts, to international sporting events. 

FanFirm is the owner of Australian trade mark registrations for the following marks in classes 9, 16, 24, 25 (significantly, in relation to clothing), 32, 38 and 39:

• FANATICS; and 
• , 

together the FanFirm Marks. 

Meanwhile, Fanatics LLC is a US business originally established to sell merchandise for the Jacksonville Jaguars NFL team and was previously known as ‘Football Fanatics’.  The entity changed its name in 2010 to Fanatics, Inc, and later Fanatics, LLC from Football Fanatics, Inc.   Around this time, Fanatics opposed FanFirm’s Australian trade mark applications for FANATICS proceeding to registration. 

The brands seemingly co-existed in Australia for many years albeit “operating in slightly different lanes that largely did not overlap”.  However, the “status quo changed in 2020 by both parties moving out of their lanes: the respondent through the Rebel Sport and AFL deals, and the applicant by launching its retail store”, Rofe J said. 

Fanatics LLC relied on a suite of Australian trade mark registrations covering services in class 35 (particularly, in relation to the operation of online retail stores for sports merchandise) and class 42 including as part of its defence to infringement: 

• FANATICS  
• , 

together the Fanatics Marks. 

The first user 

At the centre of many of the issues in this case was the issue of who was the first to use “FANATICS” in Australia in respect of clothing and also retail services. 

Rofe J found that FanFirm was the first to use ‘Fanatics’ in relation to clothing and online retail services in Australia, including via its website.  Her Honour accepted that the use of ‘Fanatics’ on merchandise sold to promote a FanFirm tour did not cease to be use as a trade mark in relation to clothing simply because the sale was closely tied to a tour.

Despite launching in the Australian market later than FanFirm, Fanatics LLC was the first to use ‘Fanatics’ as a trade mark in relation to class 42 (including operating online stores for third parties) after establishing merchandise stores for AFL teams. 

The infringement finding and Fanatics’ defences

In terms of Fanatics’ conduct, consumers were invited by Fanatics to purchase merchandise from Fanatics’ website.  That website domain name included “fanatics” and “FANATICS” was also used on the site in relation to clothing and certain merchandise.

Her Honour found such conduct constituted infringement of the FanFirm registered trade marks.

Fanatics sought to rely on 3 defences to infringement in respect of this conduct, namely:

1.  it had used in good faith its corporate name pursuant to s 122(1)(a)(i);
2. it was an honest concurrent user under s 122(1)(f) or (fa); and
3. it was entitled to rely on its registrations to provide a complete defence pursuant to s 122(1)(e).

Corporate name defence

Pursuant to Australia law, it is a defence to trade mark infringement if the mark in issue is your corporate name and that mark is being used in good faith. 

Rofe J found that Fanatics was not using its corporate name in good faith. 

Her Honour found that Fanatics was aware of FanFirm’s use of “FANATICS” at the time it changed its name, and that they were trade rivals in at least part of their respective businesses. 

In circumstances where Fanatics witnesses did not give evidence in relation to the decision to adopt that mark, and belief that there would be no confusion arising by the adoption of the name (instead choosing to rely on a branding update presentation), her Honour found that the use was not in good faith. 

Such evidence was necessary for the respondent to adduce, having regard to the authorities and the circumstances of this case, which include that the respective marks are the same, the similar goods, the overlap of businesses, and the respondent’s awareness of the applicant’s mark, she said.  

This defence was not available to Fanatics in relation to the logo mark (as it contains more than just the corporate name). 

Own registrations 

A person is entitled to rely on its own trade mark registrations to provide a complete defence to an allegation of infringement, provided they are using the mark in respect of the registered goods and services. 

Accordingly, Fanatics could rely on its Fanatics Marks in class 35 as a defence to the infringing acts that had occurred on their online store (as opposed to the use of ‘Fanatics’ directly on clothing, tags and packaging). 

The Court considered whether the application of this defence could have a retrospective effect, bearing in mind that the Fanatics Marks were ultimately cancelled – FanFirm contending that the cancellation of a trade mark forecloses an ability to rely on the registration as a defence to past infringement.

Her Honour found that while the registration is extant, it operates to provide the respondent with a defence under the Act, but that, once cancelled, the mark cannot provide a defence to future infringement after the date of cancellation.

Honest concurrent use

Pursuant to the Australian trade mark regime, there is a defence to infringement that applies in circumstances where the court is of the opinion that the alleged infringer would obtain registration of a relevant trade mark in his or her name if they were to apply for it. 

Fanatics argued that they would have been entitled to a registration for the FANATICS Word Marks and the FANATICS Flag Mark in respect of clothing if they were to apply for them. 

The difficulty that has arisen in Australian jurisprudence is that these provisions are said to be considered at the time that the impugned conduct commences. This issue is currently the subject of an appeal. 

In this case, her Honour said that it did not matter at what point the defence was applied, because she formed the view that the respondent’s use of the mark could not be honest by virtue of the circumstances surrounding its adoption in 2010. In this regard, her Honour said:

The adoption of the respondent’s new corporate name and mark occurred with knowledge of the applicant and its mark, and the goods for which registration of that mark was sought. Whilst I do not consider that the respondent adopted the FANATICS Marks in order to divert business or goodwill from the applicant, it cannot be described as “independent adoption”. Further, as I have said above, despite leading evidence from two senior employees of the respondent, the respondent led no evidence as to the existence of any honest belief that there would be no confusion as a result of the respondent adopting the same mark as the applicant’s existing marks. Thus, the two hallmarks of honesty are absent from the respondent’s adoption of the FANATICS Marks. 

Cancellation and the Fanatics Marks

As part of its claim FanFirm sought cancellation of the Fanatics Marks on the basis that, as at the respective filing date of the applications, FanFirm could have successfully opposed the applications proceeding to registration on various grounds, and including that Fanatics was not the owner. 

In this regard, Fanatics could not be the owner of the word mark “FANATICS” in respect of at least the class 35 services for the purposes of the Act because FanFirm had used the word “Fanatics” as a trade mark in respect of the services before it.

A trade mark can also be cancelled on the basis that, at the time that the application for rectification of the Register is made, the use of the trade mark is likely to deceive or cause confusion. 

Her Honour was persuaded that use of the mark “FANATICS” by Fanatics in relation to the online sale of sports merchandise would cause confusion finding a real likelihood that “some people will wonder or be left in doubt” as to whether the two sets of products came from the same source, and so she found that the Fanatics Marks should also be removed in relation to class 35 on this basis. 

For brands, this decision reiterates the significance of being the first user of a mark in Australia. 

The decision has been appealed to the Full Court of the Federal Court of Australia. 

Rofe J has declined an application for a stay of injunctive relief pending that appeal, but has granted a stay of the orders providing for rectification of the Trade Marks Register.