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Friday, November 25, 2016

ACCC means business when it comes to cartels (but your trade mark might not)

By Natasha Dixon, Lawyer

The Federal Court has held that the registration of a trade mark in Australia, and the enforcement of rights pursuant to that registration, is not necessarily sufficient to establish that the owner of that trade mark is carrying on business in Australia for the purposes of applying Australia's competition laws.

Allegations were brought by the ACCC against Italian-based company Prysmian and French-based company Nexans SA, claiming that the companies were engaged in price fixing and market sharing agreements. As part of its argument, the ACCC was required to establish that the two international entities were carrying on business in Australia.

On this point, the ACCC contended that as Nexans SA had:

  • registered the trade mark 'NEXANS' in Australia;
  • licensed that trade mark to a member of the company group (Nexans Australia); and 
  • commenced Federal Court proceedings in respect of its trade mark, 

it could be said to be carrying on business in Australia.

The court did not agree with this submission, finding that while the registration of trade marks in Australia by an overseas company could be an indication that the company is carrying on business in Australia, this is only the beginning of the inquiry. The fact that there was a licence to Nexans Australia for use of the trade mark, and that Nexans SA took action in the Federal Court to protect its rights as a registered trade mark owner, did not by itself indicate that it was carrying on business in Australia.

Despite this finding, the court went on to conclude that Nexans SA was carrying on business in Australia on the basis that it was providing services to its subsidiary in Australia, including engineering work, technical assistance, patent protection, procurement negotiations and use of shared expert services.

It was ultimately held that Nexans SA had not engaged in price fixing, however Prysmian had. For further analysis of the competition law issues raised in this decision, see our Focus article, written by the Allens Competition Law team.

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