Black book with a gavel icon.

Directors’ Personal Liability for Trade Mark Infringement

O'Reilly Stevens Lawyers • 15 July 2024

Sometimes described as the ‘corporate veil’, the limited liability of directors can be pierced by their conduct relating to trade mark infringement by their company.


How can this happen?


Directors must act in good faith in the ordinary course of business of the company. Where decisions are made by directors (whether intentional or recklessly indifferent) that cause the company to infringe a third party’s trade mark, directors can be held personally liable as a joint tortfeasor at common law. This is particularly so in the case of sole directors who solely benefit from the profits of the company and are considered the guiding mind of the company.


What can directors do?


To avoid being personally liable for a company’s infringement of a trade mark, directors should take adequate steps to avoid infringing third party trade marks by conducting the appropriate searches. These can be completed by your trade mark attorney. Further, when a director is put on notice of potential or actual infringement, the director must take all reasonable steps to avoid infringement, which can include acting swiftly in seeking legal advice and removing the ‘alleged’ infringing mark permanently or until a resolution can be reached.


The consequences of trade mark infringement can result in expensive court proceedings and large awards of damages. If you are a director of a company with a trade mark/proposed trade mark, and you are aware of a similar mark being used by a third party, you should seek legal advice to reduce the chance of infringement and personal liability as a director. If you would like further information and assistance, you can contact Kim Cousins-Smith.

Close-up of wooden gavel, books, and handcuffs, representing criminal law.
29 July 2026
Pleading guilty in QLD? Understand sentence discounts & the court process. Criminal Law in Cairns is handled by O'Reilly Stevens Lawyers. Click for info.
A lawyer and a client shaking hands across a desk, with another lawyer signing a document.
20 July 2026
Learn what a solicitor lawyer can do for you in Cairns. O'Reilly Stevens Lawyers offers decades of local experience. Call to book a consultation today.
by Zip Co Limited v Firstmac Limited 10 July 2026
On appeal from the Full Federal Court, the recent High Court decision of Zip Co Limited v Firstmac Limited [2026] HCA 16 provides clarity regarding when the defence to infringement of a trade mark of honest concurrent use is to be assessed and the meaning of “honest”. The plurality held that:  “[5] …the time at which the defences of honest concurrent use are to be assessed is the time of each alleged potential infringement. And the content of the requirement of honesty under s 44(3)(a) is that an alleged infringer must have a state of mind that is honest by the standards of ordinary, decent people”. The critical need to lead positive evidence in circumstances of the prior knowledge attributed to Zip Companies was also highlighted by the Court: in this case, Zip Companies used ‘ZIP’ marks for credit products later in time than Firstmac’s registered mark ‘ZIP’ in class 36 for loan products. Zip Companies failed to establish honesty in the face of circumstances where Zip Companies’ representative became aware of Firstmac’s registered mark as it was cited as an impediment to registration following an application by Zip Companies to register the ZIP marks, and thereafter Zip Companies launched products under the ZIP marks. It was also held that: “[70]… the Zip Companies did not lead evidence sufficient for a finding that, despite knowing of a material impediment to the legitimate use of the Zip Companies' marks, in November 2013 (or subsequently for later potential infringements) Mr Diamond nevertheless considered that consumers would experience no confusion between the Zip Companies' marks and the Firstmac Mark which might enure to the benefit of the Zip Companies. Nor did the Zip Companies lead evidence sufficient for a finding that although Mr Diamond had not turned his mind to these matters, he had not been reckless in his failure to do so. These gaps in the evidentiary record and findings precluded a conclusion that the Zip Companies had proved their honesty.”. We can also take away from the case that it is not fatal to a defence of honest concurrent use that the alleged infringer knew of the existence or registration of the competitor’s mark on or before the alleged infringement/s occurred. A link to the case is here: https://www.hcourt.gov.au/cases-and-judgments/judgments/judgments-1998-current/zip-co-limited-v-firstmac-limited
View of the hands of a lawyer signing some papers and a wooden gavel on a desk.
24 May 2026
Need solicitors in Cairns for property law? O'Reilly Stevens offers local expertise in contracts, leasing & disputes. Call today for trusted legal guidance.
A partial view of three lawyers discussing documents with a gavel on a table.
25 March 2026
For O’Reilly Stevens Lawyers, call 07 4031 7133 today for solicitors in Cairns, QLD. Provides guidance in property, family, commercial & court proceedings.
Judge with gavel & scales
1 July 2025
Unsure when to call a criminal lawyer in Cairns? Learn the key signs, protect your rights early, and get the legal support you need when it matters most.
Legal documents signed
21 May 2025
Learn how criminal solicitors in Mareeba, QLD can guide you through charges, court, and defence strategies. Call O’Reilly Stevens Lawyers at (07) 4031 7133.
Criminal law book and gavel
20 May 2025
Discover the expertise of a criminal defence lawyer in Mareeba, QLD. Contact us today for top-notch legal support.
by O'Reilly Stevens Lawyers 30 April 2024
The Australian Pacific Engagement Visa Subclass 192 ballot opens on 3 June 2024. Learn about eligibility, application processes, and more at O'Reilly Stevens.
by O'Reilly Stevens Lawyers 1 April 2024
Explore the Pacific Engagement Visa Subclass 192 and how it offers work opportunities for citizens from Pacific Island nations. Get legal advice from O'Reilly Stevens.
Show More