The Customs Legislation Amendment (False Trade Marks Infringement Notices) Bill 2026 amends the Commerce (Trade Descriptions) Act 1905 (CTD Act) and the Customs Regulation 2015 to strengthen the enforcement regime against counterfeit imports. Its primary mechanism is the creation of a new strict liability offence under the CTD Act for importing goods that bear a registered trade mark (or a substantially identical mark) without the owner's permission.
From the explanatory memo:
The purpose of the amendments is to make counterfeit importers’ business model unprofitable, because the value of the seized goods, together with the amount of a penalty specified in an infringement notice, may exceed the profits realised from the consignments of infringing goods that escape detection.[Explanatory Memo page 4]
Under the existing "Notice of Objection" scheme, the ABF can seize suspected goods, but if the importer abandons them, the Commonwealth often lacks the authority to pursue further fines. This Bill bridges that gap by allowing ABF officers to issue infringement notices once the seizure process concludes. The offence carries a maximum penalty of 60 penalty units, though infringement notices are capped at lower amounts (typically 15 units for individuals and 75 for corporations). While the offence is one of strict liability, the Bill maintains a defence for "honest and reasonable mistake of fact" and provides exceptions where the use of the mark was authorised by the owner or by law. However, the evidential burden for these exceptions rests with the defendant, as the relevant information is deemed to be "peculiarly within the knowledge of the defendant" [Explanatory Memo page 9].
The "For" case rests on the fundamental principle that intellectual property is a legitimate form of personal property. As the explanatory memorandum notes, individuals and businesses invest significant resources into creating and maintaining trade marks; they have a right to be protected from those who seek to "free ride" on that investment. By introducing a financial penalty beyond mere seizure, the Bill provides a more robust defence of these property rights [Judgment].
From a utilitarian perspective, the Bill addresses a specific failure in the current enforcement framework. The "business model" of modern counterfeiters relies on high-volume shipping to overwhelm border screening. If the only penalty is the loss of the goods, the profit from the small percentage of goods that reach the market often outweighs the losses. By adding a pecuniary penalty, the government can effectively "tax" this illicit activity until it becomes economically unviable. Furthermore, the Bill serves a vital public safety function. Counterfeit goods are not merely "cheap knock-offs"; they often include "fake pharmaceuticals and electronics" [Explanatory Memo page 5] that pose genuine risks to consumer health and safety. Deterring these imports is a clear public good.
Finally, the Bill offers a "deregulation benefit" to legitimate businesses. Currently, IP holders must often pursue expensive and complex civil litigation (costing between $200,000 and $500,000) to achieve any form of deterrence [Explanatory Memo page 14]. Shifting the burden of enforcement to an administrative infringement notice scheme reduces the legal overhead for trade mark owners and provides a more efficient path to justice.
The primary objection to this Bill concerns the erosion of fundamental legal protections, specifically the presumption of innocence. By making the importation of false trade marks a "strict liability" offence, the prosecution is not required to prove any fault element—such as intention, knowledge, or negligence. A person can be found guilty and fined regardless of their state of mind. While the government argues this is necessary for regulatory efficiency, it represents a significant departure from the standard requirement that criminal liability should follow moral culpability [Judgment].
This concern is compounded by the "reversal of the evidential burden" regarding defences. Under the Bill, if an importer claims they had permission to use a mark, they bear the burden of producing evidence to prove it. While the government justifies this on the grounds that such information is "peculiarly within the knowledge of the defendant," it nonetheless forces the accused to prove their innocence rather than requiring the state to prove their guilt. This is a significant burden for small-scale importers or individuals who may lack the sophisticated legal departments of major corporations to manage the necessary documentation for every item in a consignment.
Furthermore, the discretionary power granted to Australian Border Force officers to issue these notices is broad. While the Bill suggests a "graduated and flexible approach," the reality is that the threat of a fine (which can be up to 75 penalty units for a body corporate) may lead many to pay the notice simply to avoid the cost of a legal challenge, even if they have a valid defence. This creates a risk of "administrative overreach" where the convenience of the state is prioritised over the rights of the individual to a fair trial [Judgment].
2026-03-25
House of Representatives
Before House of Representatives
Unspecified
Home Affairs
Criminal Law Reform, Consumer Protection, Trade Policy