Clarifying the boundaries of trade mark defences: The Fanatics case as a cautionary tale

Trade mark disputes in Australia continue to test the limits of statutory defences, particularly where competing businesses operate under similar branding in overlapping markets. The recent Full Court decision in Fanatics, LLC v FanFirm Pty Limited [2025] FCAFC 87 highlights the judiciary’s increasingly strict approach to assessing ownership, honest concurrent use, and good faith adoption of trade marks.

Background: Competing use of the FANATICS mark in Australia

The dispute centred on the use of the FANATICS trade marks in connection with:

• clothing and its online sale in Australia by Fanatics, LLC, a United States based supplier of sporting merchandise (Fanatics); and
• FanFirm Pty Ltd, an Australian company offering sport travel packages, tours, and merchandise for sporting events (FanFirm).

FanFirm has used the name FANATICS in Australia since 1997 in connection with sports travel packages and merchandise. It registered the word mark FANATICS and a related device mark in April 2008 for a range of goods and services including the sale of clothing and retail. About a year later, Fanatics registered its own FANATICS mark in Australia, covering online retail and other services, despite not commencing significant operations in the country until around 2020, when it partnered with brands such as Rebel Sport and the Australian Football League.

The parties had operated concurrently in the Australian market since at least 2010, but in 2020, FanFirm initiated proceedings alleging trade mark infringement and seeking cancellation of Fanatics’ Australian registrations.

The primary decision: Fanatics v FanFirm trade mark dispute

In 2022, FanFirm succeeded at first instance in establishing that Fanatics had infringed its Australian Registered Trade Mark No 1232983 for the word mark FANATICS, particularly in relation to clothing, headgear, and footwear.

In the primary decision, Justice Rofe found that FanFirm was the first to use the FANATICS mark in Australia for clothing and retail services, and that Fanatics was not the rightful owner of the Class 35 registration. Her Honour also rejected Fanatics’ honest concurrent use defence, concluding the company adopted the mark despite being aware of FanFirm’s longstanding use.

The appeal: Challenging findings on infringement and statutory defences

Fanatics appealed the first instance decision, contesting the finding of infringement and asserting various statutory defences under sections 122(1)(a), (f), (fa), and 44(3) of Trade Marks Act 1995 (Cth) (Act). FanFirm responded with a notice of contention and later obtained leave to file a cross-appeal challenging the primary judge’s acceptance of the defence under section 122(1)(e), that Fanatics was exercising its rights under the Act.

The outcome: Full Court decision in Fanatics v FanFirm

In Fanatics, LLC v FanFirm Pty Limited [2025] FCAFC 87, the Full Court considered a range of issues concerning statutory defences to trade mark infringement under section 122(1) of the Act.

In a joint judgment, the Full Court upheld the infringement findings and rejected all statutory defences raised by Fanatics, while also dismissing claims under the Australian Consumer Law and claims for the common law tort passing off. The Court affirmed the cancellation of several trade marks, though it overturned the finding of infringement in relation to Fanatics’ use of its marks in domain names and website headers.

This outcome reflects the courts’ increasingly narrow interpretation of trade mark defences in Australia, reinforcing a trend toward stricter scrutiny of claims such as honest concurrent use and ownership in contested registrations.

Fanatics v FanFirm: Why the ‘good faith’ defence was unsuccessful

An entity may defend a trade mark infringement claim by showing it used its own name in good faith. Fanatics relied on this defence but failed to establish that its use met the good faith requirement. Although it claimed the change from Football Fanatics occurred in June 2010, the Court found the change in name didn’t occur until December 2021.  Additionally, evidenced by trade mark opposition proceedings between both parties in August 2010, Fanatics was aware of FanFirm’s use of the trade mark by FanFirm prior to Fanatics adopting that name.

The Full Court confirmed that awareness of a similar existing name does not automatically bar the defence, but the party must genuinely believe no confusion would arise and have no intent to misappropriate business. Fanatics provided no evidence of such belief or intent, instead relying on its naming history and asserting that the shift to Fanatics was a natural evolution, an argument the Court found insufficient to establish honest adoption and ongoing ‘good faith use’.

Fanatics v FanFirm: Why the ‘honest concurrent use’ defence was unsuccessful

The defence of honest concurrent use can be used when a brand owner selects a trade mark in good faith and uses it extensively over time, alongside a conflicting mark used by another party, to demonstrate that both marks can coexist without causing consumer confusion.

The Full Court found that Fanatics’ adoption of the mark lacked the honesty required to support the defence under section 44(3), for similar reasons to its rejection of the good faith defence (being that Fanatics was aware of the use by Fanfirm due to the oppositions). The Court also clarified that honest concurrent use must be assessed at the time of the first infringing conduct, not when the defence is raised. Accordingly, Fanatics’ reliance on sections 122(1)(f), (fa), and 44(3) failed due to the absence of any prior period of honest use.

Why the court rejected Fanatics’ right to use a trade mark

Fanatics also sought to rely on the statutory defence under section 122(1)(e), arguing it had a right to use its registered marks under the Act, including for conduct prior to their cancellation. This defence allows a party to use a trade mark if exercising a right conferred under the Act, typically by virtue of a valid registration.

However, the Full Court held that the Class 35 registration did not confer rights to use the mark in connection with goods such as clothing, headgear, and footwear, and therefore the defence was not available. As a result, the Court declined to consider whether the defence could apply to conduct occurring before cancellation.

Key takeaways for brand owners and trade mark strategy

Fanatics v FanFirm serves as a clear illustration of the Federal Court’s increasingly narrow interpretation of trade mark defences under the Act.

The decision underscores:

• the importance of honest conduct at the time of adoption,
• the limits of registration-based rights, and
• the evidentiary burden required to establish statutory defences under section 122 of the Act.

Brand owners should take note that strategic decisions around trade mark adoption and enforcement must be made with full awareness of existing rights and a clear record of legitimate use.

Reach out to our Intellectual Property lawyers for advice

At Macpherson Kelley, we pride ourselves on helping clients navigate the complexities of IP law with clarity, confidence, and commercial acumen. No matter the situation, Macpherson Kelley’s Intellectual Property team is ready to assist. Because in IP law, as in life, success is not the absence of adversity, it’s the persistence through it.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.