Putting Your Best Foot Forward

The decision of Gordon J in Edwards v Liquid Engineering 2003 Pty Ltd [2008] FCA 970 provides an illustration of the need consider more than cost in developing a dispute resolution strategy.

In 2003, Edwards had obtained registration, in his own name, of two trade marks used by his then employer (who subsequently assigned its intellectual property rights to Liquid Engineering).

Liquid Engineering’s application for removal under section 92, alleging that Edwards did not intend, and had not used the trade marks in good faith, was allowed by the delegate of the Registrar of Trade Marks. Edwards appeal that decision.

Gordon J, minded to allow the appeal “on the basis that “good faith” for the purposes of s 92(4) requires no more than genuine intent to use a mark for commercial purposes; it does not involve any element of honesty or subjective good intentions” nevertheless delayed giving judgement in the appeal to allow Liquid Engineering to bring an application before the Court under section 88 on the basis that Edwards was not the owner of the trade marks, which her Honour, having heard the evidence, apprehended was the more appropriate means of dealing with the dispute.

Ultimately, it was determined that the trade marks were held by Edwards on trust for Liquid Engineering and Gordon J directed that the register of trade marks be amended to record Liquid Engineering as the true owner. However, despite Liquid Engineering’s argument that the initial section 92 action before the Trade Marks Office was appropriate as a lower cost alternative to Court proceedings, her Honour ordered that Liquid Engineering pay Edwards costs of the appeal, stating that:

“Parties should not be encouraged to bring inapposite claims on the grounds that they are cheaper; such a strategy may, as this case shows, backfire and if that occurs, it will result in more costs being incurred than if the best claim was brought in the first place.”