Copying a Name Is Not a Strategy: Flexopack and the Limits of the Own Name Defence

Copying a Name Is Not a Strategy: Flexopack and the Limits of the Own Name Defence

It is tempting to think that incorporating a company under a particular name provides some automatic protection against trade mark claims — that using "your own name" must be lawful. In Australia, that assumption is wrong, and the Federal Court's comprehensive decision in Flexopack SA Plastics Industry v Flexopack Australia Pty Ltd [2016] FCA 235 explains exactly why. Justice Beach's meticulous analysis of every available defence to trade mark infringement — and his rejection of each one in turn — makes this case essential reading for anyone operating in competitive markets where brand names are contested.

Background: A Greek Manufacturer and Its Australian Imitator

Flexopack S.A. is a Greek company and one of Europe's leading manufacturers of flexible plastic packaging films — thermoplastic materials used in food packaging, agricultural films, and industrial applications. The company had built a significant reputation under the FLEXOPACK name in European and international markets and had registered trade marks in Australia for the FLEXOPACK brand in relation to thermoplastic polymers and packaging goods.

Flexopack Australia Pty Ltd was an Australian company incorporated and operated by a director who had apparently decided that "Flexopack" was an attractive name for a competing Australian packaging business. The Australian company adopted the identical name and used it commercially in Australia in connection with flexible packaging products — the same goods for which the Greek company held registered Australian trade marks.

Flexopack S.A. brought proceedings alleging trade mark infringement, passing off, and misleading conduct under the Australian Consumer Law. The Australian company and its director mounted a comprehensive defence, advancing every available statutory ground for resisting the claims. Justice Beach considered and rejected each argument systematically.

Key Legal Issues and Findings

Infringement Under Sections 120(1) and 120(2)

On the infringement question, the outcome was straightforward: the Australian company was using FLEXOPACK — the identical mark — in relation to the same goods (thermoplastic packaging products) for which the Greek company held registered Australian trade marks. Substantially identical marks used on the same goods is a clear case of infringement under section 120(1). The Court found infringement established without difficulty on this primary ground.

The "Own Name" Defence: Section 122(1)(a)

The Australian company's first line of defence was the "own name" provision in section 122(1)(a) of the Trade Marks Act 1995 (Cth), which provides that a person does not infringe a trade mark by using, in good faith, a sign that is their name or the name of their place of business. The company argued that because "Flexopack Australia Pty Ltd" was its registered corporate name, using "Flexopack" was using its own name and therefore protected.

Justice Beach rejected this defence. His Honour confirmed that the "own name" defence in Australian law is construed narrowly. It was designed principally with individual natural persons in mind — where a person's given name happens to coincide with a registered trade mark, there is some equity in permitting the use of that name. But a company does not have a name in the same organic sense that a person does. A company's name is chosen by its incorporators — it is a deliberate commercial decision, not an inherited personal identity. Where a company deliberately incorporates under a name that copies an existing registered trade mark, it cannot later claim the protection of the "own name" defence.

Moreover, even if the defence were potentially available to companies in principle, it requires the use to be in good faith. A company that incorporates under a name copying a registered mark, in full knowledge of that mark's existence, cannot claim good faith. The defence was simply unavailable on the facts.

The "Right to Register" Defence: Section 122(1)(fa)

The Australian company also argued that it had a "right to register" the mark FLEXOPACK in Australia — a defence available under section 122(1)(fa) where the defendant could itself obtain a valid registration for the mark. If the defendant could have registered the mark, the argument runs, then its use cannot constitute infringement.

Justice Beach rejected this too. The test for the defence requires that a hypothetical application by the defendant would succeed — not merely that the defendant had attempted to apply. On the facts, the Greek company's prior registration in Australia would constitute an absolute bar to any application by the Australian company. A search of the register would have revealed the prior mark immediately. The defence accordingly failed.

Honest Concurrent Use: Section 44(3)(a)

The doctrine of honest concurrent use recognises that in some cases, two parties may independently adopt similar marks in good faith and develop concurrent user in the marketplace. Section 44(3)(a) provides a mechanism for this situation. But the doctrine requires genuine independent adoption in good faith — it is not available where the later party adopted the mark with knowledge of the earlier user's rights. The Court found the circumstances did not support honest concurrent use.

Reputation as a Block on Registration: Section 60

The Greek company's established reputation in Australia was also relevant to blocking any hypothetical application the Australian company might have made to register FLEXOPACK. Section 60 of the Act provides that a trade mark may be refused registration (or removed) where another trade mark is so well-known that use of the applicant's mark would be likely to be taken as indicating a connection with the owner of the well-known mark. The Greek company's reputation further foreclosed the Australian company's registration arguments.

Personal Liability of the Director

One of the most significant aspects of the Flexopack decision for business operators is the finding that the director of Flexopack Australia was personally liable for the infringing conduct. In Australian law, a director who is the "moving mind" behind a company's infringing activity — who directs, authorises, or participates in it with knowledge of the relevant facts — can be found personally liable for trade mark infringement, passing off, and misleading conduct.

This is not an academic point. Personal liability means the director's own assets are at risk, independently of the company's. Corporate structures do not provide a shield for individuals who knowingly participate in the infringement of IP rights.

Strategic Takeaways

• Search before you name your company. Before incorporating under any business name, conduct a comprehensive trade mark search. If an identical or similar mark is registered in your industry, adopting that name as your company name is a high-risk strategy with very limited legal protection.

• The "own name" defence is not available to companies that copy registered marks. Courts will look at how the name was chosen and whether the choice was made in good faith. Deliberately copying a registered mark does not create a defence — it creates liability.

• Directors face personal risk. If you are a company director and your company is engaged in trade mark infringement, you may be personally liable. This is particularly relevant where you were actively involved in the decision to adopt the infringing name.

• International brands are protected in Australia from the time of registration. A registered Australian trade mark protects its owner in Australia regardless of where the owner is based. The fact that a business is headquartered overseas does not make it easier to copy.

• Clearance searches are not optional. Treating trade mark clearance as a formality or skipping it entirely is an expensive mistake. The investment in a clearance search before launch is trivial compared to the cost of litigation.

Conclusion

Flexopack is a comprehensive lesson in what happens when every available defence is tested and fails. Justice Beach's systematic analysis confirms that Australian trade mark law has robust defences built in — but those defences are designed for genuinely difficult cases of conflict between innocent parties, not for businesses that have copied a registered mark with knowledge of its existence.

The case is a clear warning: incorporating a company with a name that matches someone else's registered trade mark is not a shortcut — it is a liability.

Contact Stellar IP Law to discuss trade mark clearance, registration, and enforcement for your business.