Addressing Trade Mark Squatting

Trade marks are more than just names or logos, i.e. they’re the legal backbone of your brand. In Australia, as in many other countries, they’re also a prime target for bad faith practices like trade mark squatting.

What is trade mark squatting?

This underhanded tactic involves someone registering a trade mark, usually a name or brand they have no connection to, with the goal of holding it hostage. The aim is simple, i.e. profit from the true brand owner, block their market entry, or gain leverage over a competitor. It usually looks like this-

• A person or company registers a mark identical or confusingly similar to a well-known international brand.
• They have no intention of using the mark for genuine business purposes.
• They might demand payment to transfer the mark or try to sell it back to the brand’s rightful owner.
• Sometimes they file marks purely to prevent the brand’s entry into the Australian market.

Squatters often act early, sometimes before the legitimate brand has even entered Australia, i.e. by tracking domain names, product launches, social media handles, or international registration trends. These filings can be hard to detect until you try to register your own mark and realize someone else got there first.

Australia’s First-to-File System

Australia operates under a first-to-file trade mark system. This means that the person who first files a valid application generally gets the rights to that trade mark, i.e. even if someone else has been using the mark overseas for years.

So, if a squatter beats you to the register, they may gain enforceable rights, even if they’ve never used the mark in commerce. While this principle is simple on paper, it can create serious legal headaches for overseas brands or new ventures slow to file their marks locally.

That said, Australia doesn’t reward bad faith behavior, and the Trade Marks Act 1995 (Cth) gives brand owners several tools to challenge squatters effectively.

Legal Options to Fight Trade Mark Squatting

The Australian legal system deals with squatters and help brand owners reclaim or protect their brands in the following manner-

• Bad Faith Opposition under Section 62A

This is often the most direct route. If someone files a trade mark with dishonest intent, their application can be opposed or invalidated on the basis of bad faith.

Examples of bad faith include-

• Filing a mark for the purpose of selling it to the rightful brand owner.
• Intentionally mimicking a well-known brand to mislead consumers.
• Copying a mark from another jurisdiction with no intention to use it locally.

To succeed, the opponent must prove that the conduct falls short of acceptable commercial standards. Courts look at the squatter’s motives, any history of similar conduct, the timing of the filing, and evidence that the mark was already associated with another business.

We help our clients gather targeted evidence like email correspondence, website archives, and global brand activity to support claims of bad faith.

• Non-Use Removal under Section 92

Even if a trade mark has already been registered, it’s vulnerable if the owner hasn’t used it. Under section 92, any person can apply to remove a trade mark from the Register if it hasn’t been genuinely used in Australia for a continuous period of three years. This is one of the most effective remedies against squatters who file marks but never trade under them. It doesn’t require proof of bad faith, just proof of non-use.

You’ll need to show-

• No evidence of the trade mark being used “as a trade mark” in Australia.
• That three full years of non-use have passed (measured backwards from your application date for removal).

The burden then shifts to the registered owner to prove genuine use, or explain the lack of it.

3. Opposition to Pending Applications

When a trade mark application is accepted by IP Australia, it gets published in the Australian Official Journal of Trade Marks. From that date, there’s a two-month opposition window.

This gives you the chance to-

• File an opposition based on prior use of the mark in Australia (section 58 or 58A).
• Argue that the mark was filed in bad faith (section 62A).
• Challenge the mark under other grounds like likelihood of confusion (section 60).

Timing here is key. Monitoring new filings for suspicious applications and acting within the opposition window is critical to stopping squatters before their registration is finalized.

• Court Action for Misleading or Deceptive Conduct

If a squatter starts using a brand name that confuses consumers or suggests a false connection with your business, you may have remedies under the Australian Consumer Law.

Section 18 of the Competition and Consumer Act 2010 prohibits misleading or deceptive conduct in trade or commerce. If the use of a squatted mark implies an association with your brand or leads consumers to believe they’re buying your goods or services, you can potentially seek-

• Injunctions to stop the use
• Damages
• Corrective advertising orders

This can be particularly useful where trade mark law doesn’t apply (e.g. no registration yet) but consumer confusion is clear.

How to prevent trade mark squatting?

While legal remedies exist, prevention is always better than the cure, i.e. especially when it comes to your brand’s reputation and market access.

• Register Early, don’t wait until product launch, investor pitch, or media campaign. File trade marks before going public, especially in Australia where squatters move fast.
• Cover all key classes as partial squatting can be just as damaging. If you register your brand in Class 25 (clothing) but not in Class 35 (retail services), someone else might grab that space and hold it against you. File across all relevant classes up front.
• Monitor New Filings and watch the trade marks register. We help clients set up watch services to flag any similar or suspicious applications. Acting fast can mean the difference between a quick opposition and years of legal disputes.
• Act immediately on suspicion and If you think someone has filed your brand in bad faith or if your application gets blocked by a suspicious earlier mark, get legal advice straight away. These matters are time-sensitive, especially when dealing with opposition deadlines or non-use windows.

So, trade mark squatting can be frustrating, costly, and deeply disruptive to your business plans. But in Australia, squatters aren’t protected just because they got to the register first. With the right legal strategy, they can be stopped, and your brand can be protected.

Whether you need help opposing a bad faith application, removing a squatted mark for non-use, or registering your own mark before someone else does, our team is ready to help.

Let’s make sure your trade mark ends up where it belongs, i.e. under your name, and fully protected.