The practice of registering trademarks with no genuine intention of using them — commonly known as trademark squatting — has been a persistent thorn in the side of Australian businesses for years. Yet despite its growing prevalence in the digital economy, it remains one of the least discussed issues in Australian intellectual property law. For businesses that find themselves on the wrong end of a squatter's registration, the consequences can be devastating: blocked market entry, costly legal proceedings, and in some cases, the permanent loss of a brand identity they've spent years building.

As Australia's economy becomes increasingly globalised and digital commerce continues to expand, the conditions that enable trademark squatting are only becoming more favourable. It's time to shine a light on this growing problem and examine what Australian businesses and trademark law practitioners can do about it.

What Is Trademark Squatting?

Trademark squatting occurs when an individual or entity registers a trademark — or applies to register one — without any genuine intention of using it in connection with the goods or services specified. The motivation is typically one of two things: to sell the registration back to the legitimate brand owner at an inflated price, or to leverage the registration for competitive advantage by blocking a rival's entry into the market.

The practice shares conceptual DNA with domain name squatting (cybersquatting), which became rampant in the early days of the internet. But trademark squatting is arguably more insidious because trademarks carry legal rights that extend well beyond a web address. A registered trademark gives its owner the exclusive right to use, license, and enforce that mark across the designated classes of goods and services — rights that can be weaponised when they fall into the wrong hands.

In Australia, trademark squatting takes several forms:

  • **Pre-emptive filing**: Registering a mark before the legitimate brand owner enters the Australian market, anticipating that the brand will eventually seek Australian registration.
  • **Bad faith bulk filing**: Filing large numbers of trademark applications across multiple classes, often targeting well-known international brands or trending terms, with no genuine commercial use in mind.
  • **Defensive squatting**: Competitors registering marks similar to a rival's brand to create confusion or block expansion into new product categories.
  • **Opportunistic filing**: Registering marks that correspond to cultural moments, viral trends, or emerging technologies, hoping to monetise them later.

The Australian Legal Framework

Australia's trademark registration system is governed by the *Trade Marks Act 1995* (Cth) and administered by IP Australia. The system is largely "first to file," meaning that in the absence of prior use or reputation, the first applicant to file a trademark application generally has priority.

This first-to-file principle, while efficient and predictable, creates fertile ground for squatters. Unlike some jurisdictions that impose stringent use requirements at the application stage, Australia's system allows applicants to register marks based on an *intention to use* the mark. Section 59 of the *Trade Marks Act 1995* provides a ground for opposition or cancellation where the applicant has no intention to use the trademark, but proving a lack of intention can be notoriously difficult.

There are several key provisions that can be deployed against trademark squatters:

Section 59 — No Intention to Use

Under section 59, a trademark application can be opposed (or a registration cancelled) on the ground that, at the time of application, the applicant had no genuine intention of using the trademark in relation to the specified goods or services, and did not intend to authorise another person to use it. You can find related insights in the digital economy and trademark law: where guide. This is the most direct tool against squatting, but it places the burden of proof on the party challenging the registration, which can be a significant hurdle.

Section 62A — Bad Faith

Section 62A allows opposition to a trademark application on the ground that it was made in bad faith. This provision, introduced by the *Intellectual Property Laws Amendment (Raising the Bar) Act 2012*, was a welcome addition to Australia's anti-squatting toolkit. Bad faith is assessed objectively, considering what a reasonable person in the applicant's position would have known and how they would have acted. However, the threshold for establishing bad faith remains high, and the body of Australian case law on this provision is still relatively limited compared to equivalent provisions in the European Union or the United Kingdom.

Section 44 — Prior Registration or Application

If the legitimate brand owner already holds a trademark registration or pending application in Australia, section 44 provides a basis for opposing a squatter's later application for an identical or deceptively similar mark in respect of similar goods or services.

Section 60 — Prior Use and Reputation

Section 60 protects unregistered marks that have acquired a reputation in Australia. If a brand owner can demonstrate that their mark had a sufficient reputation in Australia before the squatter's filing date, they may be able to oppose the registration on this ground. However, establishing reputation — particularly for overseas brands that have not yet entered the Australian market — can be challenging.

Why Is It Getting Worse?

Several converging trends are exacerbating the trademark squatting problem in Australia.

The Rise of Global E-Commerce

The explosion of cross-border e-commerce means that Australian consumers are increasingly aware of international brands long before those brands formally enter the Australian market. Squatters monitor global trends, identifying successful brands overseas and racing to file Australian trademark applications before the legitimate owners do. The gap between a brand's international success and its Australian market entry creates a window of vulnerability that squatters are adept at exploiting.

Low Filing Costs

Australia's trademark filing fees, while not trivial, are low enough that the economics of squatting can be attractive. An application to register a trademark in a single class costs several hundred dollars — a modest investment when weighed against the potential payoff of selling the registration back to a brand owner who may be willing to pay thousands (or tens of thousands) to avoid the cost and delay of opposition or cancellation proceedings.

Limited Resources for Examination

IP Australia's examiners do a commendable job of assessing trademark applications against the registrability criteria in the *Trade Marks Act 1995*. However, examiners are not generally in a position to assess whether an applicant has a genuine intention to use a mark. The examination process focuses primarily on absolute grounds (such as whether the mark is distinctive) and relative grounds (such as conflicts with prior registrations). The subjective question of the applicant's intention is largely left to be resolved through opposition proceedings — proceedings that the legitimate brand owner must initiate and fund.

Digital Platforms and Brand Proliferation

The sheer volume of new brands being created — particularly in the technology, fashion, and consumer goods sectors — means there are more targets for squatters than ever before. Social media has also created a new dynamic: a brand can go viral overnight, and squatters are increasingly using social media monitoring tools to identify emerging brands and file pre-emptive applications.

International Actors

Australia is not immune to the global phenomenon of trademark squatting by overseas actors. There have been notable cases of individuals and entities based in other jurisdictions filing large numbers of Australian trademark applications across multiple classes, with no apparent connection to Australia and no evidence of genuine commercial activity. Related reading: a detailed look at 12 boutique trademark firms making an. These bulk filings can overwhelm the system and create headaches for legitimate brand owners.

Real-World Impact on Australian Businesses

The consequences of trademark squatting for Australian businesses are far from academic.

A small Australian business preparing to launch a new product line may discover that a squatter has already registered the brand name they've been developing. Faced with this situation, the business has several unappealing options: abandon the name and rebrand (at significant cost), negotiate with the squatter to purchase or licence the registration (often at an inflated price), or commence opposition or cancellation proceedings (which can take months or years and cost tens of thousands of dollars in legal fees).

For international brands seeking to enter the Australian market, the problem can be even more acute. A brand that has built significant goodwill overseas may find that a squatter has registered its name in Australia, effectively holding the brand to ransom. While the brand owner may ultimately succeed in having the registration cancelled — particularly if they can establish prior reputation under section 60 or bad faith under section 62A — the process is time-consuming, expensive, and uncertain.

Even where a squatter's registration is ultimately overturned, the damage may already be done. Market entry may have been delayed, competitors may have gained ground, and the brand owner may have incurred substantial legal costs.

Comparative Approaches

It is instructive to consider how other jurisdictions deal with trademark squatting.

China has historically been one of the most notorious jurisdictions for trademark squatting, owing to its strict first-to-file system. However, China has undertaken significant reforms in recent years, including amendments to its *Trademark Law* in 2019 that strengthened the requirement for applicants to demonstrate a genuine intention to use a mark and increased penalties for bad faith filings.

The European Union, through the *European Union Trade Mark Regulation*, provides robust grounds for opposing or invalidating trademarks filed in bad faith, and the case law of the European Union Intellectual Property Office (EUIPO) and the General Court offers detailed guidance on what constitutes bad faith.

The United States requires applicants to demonstrate actual use of a mark in commerce (or a bona fide intention to use) before a registration will issue, which creates a natural barrier to squatting — though it does not eliminate the problem entirely.

Australia's framework sits somewhere in the middle. The intention to use requirement exists on paper, but its enforcement relies heavily on opposition proceedings initiated by affected parties. There is arguably scope for IP Australia and policymakers to strengthen the system's defences against squatting, whether through more rigorous examination of intention to use, enhanced penalties for bad faith filing, or streamlined cancellation procedures.

What Can Businesses Do?

While systemic reform may be needed, there are practical steps that Australian businesses and international brands can take to protect themselves from trademark squatters.

File Early and Strategically

The single most effective defence against trademark squatting is to file trademark applications early — ideally before publicly announcing a new brand, product, or market entry. Businesses should also consider filing across multiple relevant classes to prevent squatters from picking off unprotected categories.

Monitor the Register

Regular monitoring of the Australian Trade Marks Register can help businesses identify squatting attempts early, while there is still time to oppose the application during the opposition period. Several commercial trademark watching services offer automated monitoring and alerts.

Leverage International Protections

Brands with existing trademark registrations in other jurisdictions can take advantage of the Paris Convention priority right, which allows them to claim a six-month priority period from the date of their first filing in a Convention country. You can find related insights in our the federal court analysis. The Madrid Protocol also allows international trademark registrations to be extended to Australia, providing a streamlined path to protection.

Build and Document Your Reputation

For brands that have not yet entered the Australian market, building and documenting evidence of reputation in Australia can be critical. Evidence of Australian website traffic, social media engagement, media coverage, and sales to Australian consumers can all support a claim of prior reputation under section 60 of the *Trade Marks Act 1995*.

Act Quickly

If a squatter's application or registration is identified, time is of the essence. Opposition proceedings must generally be commenced within the prescribed time limits, and delay can weaken a party's position. Seeking prompt legal advice from a qualified trademark professional is essential.

The Path Forward

Trademark squatting in Australia is not a new problem, but it is a growing one — and it deserves more attention from policymakers, practitioners, and the business community alike. The current legal framework provides tools to combat squatting, but those tools are reactive rather than proactive, and they place a significant burden on legitimate brand owners.

There is a strong case for considering reforms that would tilt the balance more firmly against squatters. These could include enhanced examination of intention to use at the application stage, a dedicated fast-track procedure for cancelling registrations that are plainly the result of squatting, and greater cooperation between IP Australia and overseas trademark offices to identify and address serial squatters operating across multiple jurisdictions.

In the meantime, the best defence remains vigilance. Businesses that take a proactive approach to trademark registration, monitoring, and enforcement will be far better positioned to protect their brands against squatters. Those that don't may find themselves paying a price — financial and reputational — that could easily have been avoided.

Trademark squatting may be the problem nobody talks about, but it's one that every Australian business should be thinking about.