3 September 2025

The recent Full Federal Court decision (Fanatics, LLC v FanFirm Pty Limited [2025] FCAFC 87) has a major impact for online retailers trading in Australia, and provides crucial guidance on trade mark infringement and the circumstances under which trade mark registrations may be cancelled. It was also held that use of a mark in relation to retail services is not the same as use of that mark on goods being sold online.

Background of the Dispute

FanFirm Pty Ltd (“Fanfirm”), an Australian business established in 1997, originally began as a cheer squad and evolved into organising sports tours and selling licensed merchandise (e.g., T‑shirts, bucket hats, baggy greens) in Australia under the name “The Fanatics” through its online store. You may recall The Fanatics (in these branded outfits) cheering Lleyton Hewitt to Davis Cup glory, or cheering home Aussies at one of many other major sports events. These branded goods were sold independently, not merely as adjuncts to tour services from around 2000 onwards.

FanFirm registered the FANATICS word mark and the below device mark (the FanFirm Marks) in 2008 in multiple classes, notably Class 25 in respect of clothing and other apparel, and later in Class 35 in respect of the provision of retail services, with priority date of 2 April 2008.

Remember, registering a trade mark in one of the 45 available classes (which can be either a goods class or a services class) gives the owner of that registered trade mark an effective monopoly in respect of the use of that trade mark, in that class category, in the relevant jurisdiction.  So, a registration in Australia for “FANATICS” in class 25 means that no other provider can use that expression as a trade mark (as an indicator of trade source) in Australia on clothing – doing so would breach the trade mark.  This would be akin to applying “JUST DO IT” branding to a running short, or “GUCCI” to t-shirt.

After FanFirm registered the FanFirm Marks, in parallel, Fanatics, LLC (“Fanatics USA”), a U.S. based retailer, renowned for licensed sports apparel, also registered a range of FANATICS marks (word and device below) in Australia in 2009, with priority date of 10 September 2008 covering Classes 25 and 35, but did not actively trade in Australia until circa 2020, when it began partnerships with Rebel Sport and the AFL.

Tensions escalated when Fanatics USA ramped up their use in the Australian market, prompting FanFirm to initiate legal proceedings in November 2022, seeking cancellation of Fanatics USA’s Australian trade mark registrations on the basis that they were likely to deceive or cause confusion and suing for trade mark infringement. Fanatics USA returned serve and filed a cross-claim against FanFirm, alleging the same conduct.

Until this point the two parties had filed some trade mark oppositions against each other’s marks over the years, but had never made it to Court.

Federal Court (First Instance) – [2024] FCA 764

Presiding in the Federal Court, Justice Rofe found that FanFirm had priority as the “first and undisputed user” in Australia of the FANATICS mark for both apparel (Class 25) and retail services (Class 35), pre-dating Fanatics USA’s local use. He also concluded that Fanatics USA’s use of the FANATICS branding on goods, including clothing, headgear, water bottles and towels infringed FanFirm’s Class 25 rights, as FanFirm had established a significant reputation in the mark in Australia well before Fanatics USA entered the market.

Moreover, three defences were dismissed:

1. Critically, ‘use on goods’ alone (even via website or care labels) does not count as use for retail services under Class 35 – the mark must identify the provider of the retail service, not merely label the goods. As such, the Court determined that FanFirm’s prior and continuous use of the mark in respect of both apparel and online retail services gave it a stronger claim over Fanatics USA’s later registrations.

2. The ‘good faith use of its own name’ defence under section 122(1)(a)(i) of theTrade Marks Act 1995 (the Act) was not upheld as the Court found that for the “own name” defence to succeed, the use of the name must be in “good faith”. Fanatics USA could not prove honest and good faith adoption, especially as it had opposed FanFirm marks earlier showing they were aware of FanFirm, and they lacked any evidence of genuine belief that no confusion would arise between the marks. Justice Rofe clarified that a company’s right to use its own name is not absolute and thus can be disputed when there is an earlier mark and an evident lack of honest intent.

3. The ‘honest concurrent use’ defence under section 44(3) of the Act was also rejected on the facts that Fanatics USA knowingly adopted the mark despite FanFirm’s existing use, with no convincing evidence of honest belief that no confusion would arise.

The cancellation actions resulted in the removal of Fanatics USA’s registrations in Class 35 for on-line retail store services featuring sports related and sports team branded clothing and merchandise. It was held that merely placing FANATICS on its products did not equate to use as a trade mark of the mark with respect to retail services. Following the course of that decision, the Court issued an injunction against the US giant restraining it from offering for sale and selling FANATICS branded sports apparel in Australia, including via its website.

In addition, the primary judge rejected Fanatics USA’s arguments and dismissed its cross claim that the FanFirm marks should be removed from the Australian register. Other claims, including mutual allegations that the other party had infringed the Australian Consumer Law and had engaged in passing off were also dismissed.

Full Federal Court (Appeal)

In November 2024, Fanatics USA appealed to the Full Court of the Federal Court of Australia challenging the Federal Court’s findings. The Full Court upheld the Federal Court’s findings in nearly all respects:

Key Elements of the Appeal Decision

• Use on goods vs Retail Services:

The Court reaffirmed that placing a mark on goods (even via online sale) does not constitute trade mark use in relation to retail services (Class 35). The mark must function as a signifier of the retailer (i.e. an indicator of trade source), not just brand the product. Such a branding of the product may amount to use in relation to class 25, but not class 35.

• Priority of Use:

FanFirm’s prior and continuous use of the FANATICS mark in Australia granted superior rights under section 58 of the Act. Consequently, FanFirm was deemed the rightful owner of the Fanatics marks for these services and as such, Fanatics USA’s Class 35 registrations were deemed invalid and their subsequent use was similarly deemed invalid.

• Defence Failures:

The ‘honest concurrent use defence’ was again rejected due to knowledge of FanFirm’s prior rights and lack of honest intention by Fanatics USA.

The ‘good faith use of its own name’ was also dismissed since it was clear that Fanatics USA had taken a calculated risk to adopt and continue use of the FANATICS marks, undermining good faith arguments.

• Class 24 (Textile Materials):

The Full Court held that the Federal Court had erred in its findings that towels and blankets were “goods of the same description” as the raw materials listed in Fanfirm’s Class 24 specification of goods. The analysis here was that towels and blankets were deemed distinct from pure textile materials covered by FanFirm’s Class 24 and thus no infringement in respect of Fanatics USA’s use of its marks on towels and blankets was established in that class.

• No Discretion to Retain Registration:

Under section 88(1) of the Act, despite cancellation grounds, the Court may choose to let registrations stand. Here, that discretion was not exercised. Fanatics USA’s Class 35 registrations were cancelled outright due to FanFirm’s prior use, lack of relevant use by Fanatics USA, and Fanatics USA’s knowledge of FanFirm’s rights.

• Cross-Claims by Fanatics USA:

Fanatics USA’s counterclaims alleging infringement by FanFirm, misleading conduct, or passing off were dismissed following cancellation of Fanatics USA’s own marks.

What are the key learnings to retain from this decision?

This case delivers critical guidance on the ‘first-use’ principle, that use must match the registration, trade mark infringement and the scope of the various defences to maintain trade mark registrations. Here are some key takeaways for all businesses (especially global ones trading in Australia) flowing from this case:

1. Merely selling branded goods does not suffice for retail services. If you claim protection in Class 35, then your use of the mark must identify you as the service provider, not just a brand on items you sell.

2. Local prior use is powerful even against globally recognised brands. If you are an Australian business that can show prior and continuous use of your mark locally, you may have the upper hand over international businesses if they have not used the mark earlier in Australia.

3. Use must align with what is claimed on the Register. If you file a trade mark in multiple classes, you must ensure evidence of use in each class to avoid risks of trade mark cancellation.

4. Defences have narrow scope. If you invoke honest concurrent use and use of your own corporate name, formal compliance is required. You will have to demonstrate genuine intent and good faith.

5. Territorial principle applies – Australian trade mark law is territorial which means that overseas reputation does not substitute for meaningful local use. If you use the mark first in Australia, then there is nothing to worry about.

Contact us

When launching a new brand or working on your own expansion or brand growth strategies, we recommend that you structure a meticulous trade mark strategy, including detailed local searches and investigations to make sure you are not infringing another party’s intellectual property rights and most importantly register in the right classes and act early. Our trade mark experts are here to assist you in seeking clearance, trade mark protection and enforcing your intellectual property rights in Australia.