The Honest Concurrent Use Exception Under Section 44(3)

Receiving a Section 44 objection from IP Australia does not necessarily mean the end of the road for a trade mark application. Even where the examiner identifies a conflicting earlier mark, Australian law provides a mechanism to overcome the conflict: honest concurrent use under Section 44(3)(a) of the Trade Marks Act 1995. This exception allows the Registrar to accept an application despite a deceptively similar earlier mark, if the applicant can demonstrate that the two marks have coexisted honestly in the Australian marketplace without causing consumer confusion.

How the Exception Works

Section 44(3) provides that the Registrar must not reject an application because of a Section 44(1) or 44(2) conflict if the Registrar is satisfied that: (a) there has been honest concurrent use of the trade mark by the applicant; or (b) because of other circumstances, it is proper for the mark to be registered.

In practice, honest concurrent use under paragraph (a) is the more commonly invoked pathway. The applicant files a statutory declaration supported by evidence demonstrating that they have used their mark honestly alongside the earlier mark in the Australian market. The Registrar then exercises discretion, weighing the evidence against the risk of consumer confusion.

The Five Criteria

IP Australia’s Trade Marks Manual identifies five criteria that examiners consider when assessing honest concurrent use claims:

1. Honesty of Adoption and Use

The applicant must demonstrate that the trade mark was adopted and used in good faith. This means showing that the applicant was not aware of the earlier mark at the time of adoption, or that there were legitimate reasons for choosing the mark independently. IP Australia’s current practice, following the Firstmac line of authority, increasingly requires evidence of objective honesty — not merely a statement that the applicant was unaware of the conflict, but evidence that reasonable due diligence was conducted before use commenced. This includes evidence of trade mark searches or other investigations undertaken before adopting the mark.

2. Extent of Use

The evidence must demonstrate genuine commercial use of the mark in Australia. This includes sales figures, advertising expenditure, distribution records, and examples of the mark in use on products, packaging, or marketing materials. The use must be substantial enough to show that Australian consumers have been exposed to both marks in the marketplace.

3. Period of Use

The use must have occurred over a commercially reasonable period before the filing date. As a general guide, IP Australia’s manual suggests that ten years of honest use before the priority date will typically be persuasive. However, where the likelihood of confusion is lower (because the marks or goods are less similar), shorter periods of extensive use may suffice. The evidence must demonstrate use in Australia before the priority date of the application, though post-priority-date evidence may also be relevant to show the absence of actual confusion.

4. Absence of Actual Confusion

The applicant should demonstrate, to the extent possible, that the concurrent use of both marks has not resulted in actual instances of confusion among consumers. A declaration that the applicant has received no complaints, misdirected correspondence, or customer confusion is relevant. The longer the period of coexistence without confusion, the stronger the case.

5. Relative Inconvenience

The Registrar weighs the inconvenience that would be suffered by the applicant if registration is refused against the inconvenience that might be caused to the owner of the earlier mark if registration is granted. Where the applicant has invested significantly in building the brand, refusal of registration would impose real commercial hardship.

Prior Use as an Alternative

Honest concurrent use should be distinguished from prior use under Section 44(4). Prior use applies where the applicant can demonstrate continuous use of the mark before the priority date of the earlier mark. If established, prior use is a stronger ground because the Registrar must not reject the application — there is no discretion involved. By contrast, honest concurrent use involves use that began after the earlier mark was filed, and the Registrar retains discretion over whether to accept.

Other Circumstances: Letters of Consent

Under Section 44(3)(b), the Registrar may also accept an application because of “other circumstances.” The most common such circumstance is a letter of consent from the owner of the earlier mark, often accompanied by a coexistence agreement. While a consent letter is not binding on the Registrar, it is strong evidence that the owner of the earlier mark does not consider there to be a real risk of confusion. Combined with evidence of honest use, a consent letter can be decisive.

Evolving Standards of Honesty

Recent developments in Australian case law are raising the bar for honest concurrent use claims. The Federal Court’s decisions in Flexopack, Insight Radiology, and Firstmac suggest a shift toward requiring objective evidence of due diligence before adoption. Simply stating that the applicant was unaware of the earlier mark may no longer suffice; examiners may require evidence that the applicant conducted trade mark searches or other reasonable investigations before commencing use. This trend underscores the importance of conducting clearance searches early and maintaining records of those searches.

Strategic Recommendations

• Conduct clearance searches before adoption: Document your trade mark searches and keep records. This evidence may be critical if you later need to establish honest adoption.
• Begin collecting evidence of use immediately: Sales data, advertising materials, photographs of the mark in use, and customer communications should be organised from the earliest date of use.
• File early: The longer you use a mark before filing, the stronger your honest concurrent use evidence. But filing early also reduces the risk of the conflict arising in the first place.
• Seek a consent letter if possible: Approaching the owner of the earlier mark for a letter of consent or coexistence agreement is often the most efficient path to overcoming a Section 44 objection.

Key Takeaway

Honest concurrent use is a valuable exception that allows two similar marks to coexist on the Australian Register when the evidence shows genuine, good-faith parallel use without consumer confusion. However, the evidentiary burden is substantial, and Australian practice is trending toward requiring objective proof of due diligence at the time of adoption. Applicants should conduct and document clearance searches before adopting any new brand, and maintain organised evidence of commercial use from the outset.