Ordinarily, buying goods puts them beyond the trade mark owner’s control. Section 54 of the Trade Marks Act (Chapter 385) creates a limited exception, aimed at repackagers, relabellers and altered-goods traders.
Section 54(2) — infringement by breach of a notice
Where by notice on goods or on the container of goods, the registered proprietor or a registered user of a mark registered in Part A or Part B makes a statement prohibiting the doing of an act to which this section applies, a person who, being the owner for the time being of the goods, does that act, or authorizes it to be done, in the course of trade or with a view to a dealing with the goods in the course of trade, infringes the trade mark — unless:
(a) at the time he agreed to buy the goods he acted in good faith without notice that the statement appeared on them; or
(b) he became the owner by virtue of a title derived from another person who had so agreed to buy them.
Two threshold requirements sit at the front of the section, and both must be met before it applies at all.
- A notice on the goods or their container. No notice, no section 54. The statement must actually appear on the goods or the container, not merely in a contract, a catalogue or a website.
- Ownership, and a trade purpose. The person caught is the owner for the time being, and the act must be done in the course of trade, or with a view to a dealing with the goods in the course of trade. A consumer altering goods for personal use is outside the section.
Section 54(3) — the acts to which the section applies
| Act | What it targets | |
|---|---|---|
| (a) | Applying the mark to goods after they have suffered alteration to their state, condition, get-up or packing | Repacking, decanting, reboxing, remaking — then re-applying the brand |
| (b) | Where the mark is on the goods together with other matter indicating a connexion in trade between the proprietor or registered user and the goods — removing or obliterating the mark, wholly or partially, unless that other matter is wholly removed or obliterated | Stripping the brand while leaving the maker’s other identifying matter, so the goods still trace back to the proprietor |
| (c)(i) | Alteration, partial removal or partial obliteration of the mark on the goods | Defacing or cutting down the mark |
| (c)(ii) | Applying some other trade mark to the goods | Rebranding another maker’s goods as your own |
| (c)(iii) | Adding other matter, in writing or otherwise, likely to injure the reputation of the trade mark | Stickers, overprints and inserts that damage the brand |
References to the registered proprietor, a registered user and the registration are to be read in relation to the goods concerned. And “on” includes, in relation to goods, a reference to physical relation to the goods — so a notice on a wrapper, a swing tag or a container counts.
What section 54 is protecting
An ordinary section 53 infringement is the use of the mark by someone who has no right to it. Section 54 is different: the goods are genuine and the mark was genuinely applied. What is protected is the integrity of the connexion the mark asserts — that goods bearing this mark are in the condition, packaging and presentation the proprietor put them in.
That is why the section reaches the person who repacks bulk product into retail containers under the original brand, the trader who removes the brand but leaves the batch codes and maker’s marks, and the reseller who overstickers in a way that damages the mark’s reputation.
Section 53(2) — under which relief is refused on a Part B mark if the defendant proves confusion is not likely — expressly does not apply to an infringement occurring by reason of an act referred to in section 54. So a Part B proprietor has the full remedy for a breach-of-restrictions infringement, even though its ordinary infringement claim is qualified.
The good faith purchaser exception
Paragraphs (a) and (b) of section 54(2) protect the buyer who did not know. Note precisely what each requires:
- (a) asks about the state of mind at the time he agreed to buy — not at the time of the act complained of. A buyer who learns of the notice after contracting but before repacking is still within the exception on the words of the paragraph.
- (b) extends the protection down the chain: a person who took title from someone who had so agreed to buy is protected, whatever their own knowledge.
Section 73(6) confirms the general position: where goods bearing a registered mark are purchased or acquired, the sale of or other dealing in those goods by that person, or anyone claiming under or through him, is not an infringement by reason only of the mark having been assigned by the proprietor to someone else after the purchase. Genuine goods can be resold; what section 54 restricts is altering them and keeping the brand on.
Practical points, on both sides
| If you own the mark | If you deal in branded goods |
|---|---|
| Put the notice on the goods or the container. Without it section 54 does nothing | Read the packaging before repacking, relabelling or altering anything |
| Word the notice to cover the acts in section 54(3) that concern you | Record what you knew and when — the exception turns on the time you agreed to buy |
| Make it durable and visible — on the container as well as the label | Keep purchase documents showing your title and your supplier’s |
| Apply it consistently across the range, including bulk and export packs | If you must repack, remove the brand entirely and all other matter indicating the maker’s connexion — s 54(3)(b) is breached by a partial job |
| Remember it binds owners of the goods in trade, not consumers | Never add matter likely to injure the mark’s reputation — s 54(3)(c)(iii) |
Remedies for a section 54 infringement are the same as for any other: under section 56, an injunction and, at the plaintiff’s option, either damages or an account of profits. Where the mark has been forged or falsely applied, the Part XI offences may also apply — section 80(1)(b) treats falsifying a registered mark, whether by alteration, addition, effacement or otherwise, as forgery.
Sources
- Trade Marks Act (Chapter 385) — ss 1, 53–56, 73, 80, 81; Part XI
Before relying on anything here, read the current text of the Trade Marks Act (Chapter 385) and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.