Insight
First-to-file vs first-to-use: what the Anthropic v Abnormal AI trademark fight teaches Australian founders
18 Jul 2026
In November 2025, Anthropic — the company behind Claude — filed a US trademark application for its name. Abnormal AI, a competitor operating in the same AI security space, had already filed eight months earlier, in March 2025. Anthropic is now defending its position on the basis that it was the first to use the name, claiming first use back in May 2021.
The dispute is playing out in the United States, which is one of the small handful of jurisdictions that gives real weight to first use. In most of the world — including Australia — the answer would be much simpler, and much less favourable to Anthropic. The register would go to whoever filed first.
For Australian founders, marketers and in-house teams sitting on a distinctive name, logo or tagline, the case is a useful and expensive reminder of a rule that catches people out every year: your brand only becomes an owned asset when it is on the register, not when it is in your head.
The two systems
First-to-file jurisdictions grant priority to the person who files a trademark application first. Prior use is either irrelevant or narrowly relevant. Most of the world runs this way — Australia, the EU, the UK, China, Japan, Singapore, and virtually every civil-law country.
First-to-use jurisdictions grant priority to the person who first used the mark in trade, provided they can prove it. The United States is the most prominent example. Canada moved substantially away from first-to-use in 2019. A few common-law jurisdictions retain partial first-use elements.
The practical difference is enormous. In a first-to-use country, an unregistered prior user can defeat a later registrant. In a first-to-file country, the prior user often cannot — and if the later registrant knew about them, the only remaining path is usually a bad-faith challenge, which is difficult and slow.
How Australia actually works
Australia is governed by the Trade Marks Act 1995 (Cth), administered by IP Australia. The general rule is priority by filing date. Two doctrines soften that rule, but neither is a substitute for filing early.
- Section 44(4) — honest concurrent use / prior continuous use. A later applicant can overcome a citation of an earlier-filed mark if it can prove honest concurrent use or continuous use of its own mark from a date earlier than the cited mark's priority date. It is evidence-heavy and rarely a comfortable place to be.
- Section 58A and section 62A — opposition on bad faith and prior reputation. A prior user can oppose or seek cancellation of a registration where the applicant filed in bad faith, or where the prior user's reputation in Australia is strong enough that use of the applied-for mark would be likely to deceive or cause confusion.
Both remedies are available, both are used, and both are expensive. They are backstops. They are not a strategy.
Common law rights are real but narrow
Australian businesses that have used a brand without registering it are not entirely without rights. Two causes of action are typically available:
- Passing off — a common law action protecting the goodwill in an unregistered mark, requiring proof of reputation, misrepresentation and damage.
- Section 18 of the Australian Consumer Law — misleading or deceptive conduct in trade or commerce, which does not require proof of intention but does require proof of a real risk of consumer confusion.
Both actions are geographically and evidentially narrow. You get protection in the region where you have proven reputation, for the goods or services in which you actually trade. A registered trademark, by contrast, is a nationwide statutory monopoly in the whole class for ten years, renewable indefinitely.
Territoriality — the mistake exporters make
A trademark is territorial. An Australian registration protects the mark in Australia and nowhere else. A US registration does the same in the US. There is no such thing as a "global" trademark.
The practical implication for Australian businesses selling internationally is that filings need to follow the customer. A SaaS product with US customers needs a US filing. A consumer brand selling into the UK needs a UK filing. The Madrid Protocol — administered by WIPO — lets you file one international application from your Australian base and designate additional countries, which is usually the most cost-effective path to multi-country protection.
The Anthropic dispute is a US case, and the US is one of the few countries where prior use gives Anthropic a fighting chance. If the same facts had unfolded in Australia, the UK, the EU or Singapore, the first filer would almost certainly own the mark on the register — full stop.
Bad faith — the last resort
Section 62A allows a registration to be opposed or cancelled where the application was made in bad faith. The classic example is filing a mark the applicant knew was already in use by a specific known prior user, with the purpose of blocking or extracting a licence fee.
Bad faith is a genuinely available remedy, but the evidentiary threshold is high — the applicant's state of mind at the time of filing has to be established, often years after the fact. It is not a substitute for filing your own mark on time. Treat it as a last resort, not a plan.
The cost of waiting
The window between "we're using this name" and "we've filed for it" is the risk window. During that window, anyone who thinks of the same name — or anyone who sees your product and files first — can potentially get to the register ahead of you. Once they are there, your options narrow to:
- Prove your own earlier use under section 44(4) — expensive and evidence-heavy.
- Prove bad faith under section 62A — high bar.
- Buy the mark back from the registrant — market rate, often a significant premium.
- Rebrand — the cost of which usually dwarfs the cost of filing early.
The economics almost always favour early filing. A single-class Australian application costs roughly $1,200 + GST including professional fees. The rebrand or buy-back cost of losing a name you have built demand around is typically six or seven figures.
A workable rule of thumb
For most Australian businesses building a brand, the practical playbook is straightforward:
- Clearance search before naming — check IP Australia's ATMOSS database and, if you plan to export, the equivalent registers in your target countries.
- File before public launch — or immediately after — in Australia, in the classes that actually match your goods and services.
- File offshore in parallel — use the Madrid Protocol to designate the countries you are trading into, or expect to trade into within twelve months.
- Keep dated use evidence — screenshots, invoices, ads and packaging — in case you ever need to run a section 44(4) or bad-faith argument.
- Assign the IP into the company — a trademark that sits in a founder's personal name, or in a marketing agency's name, is not protecting the business.
The takeaway
Anthropic may still win in the US because US law has an unusually generous position on prior use. But the Anthropic v Abnormal AI fight would not exist at all if Anthropic had filed in November 2020 instead of November 2025. In Australia and most of the world, the register goes to whoever gets there first.
If you believe in the brand you are building, invest in owning it. Envision Legal files Australian and international trademarks for founders, agencies and established businesses on a fixed-fee basis.
This article contains general information only and does not constitute legal advice. Envision Legal accepts no liability for any loss arising from reliance on this content. You should seek independent legal advice tailored to your specific circumstances.
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Frequently asked questions
- Is Australia a first-to-file or first-to-use jurisdiction?
- Australia is primarily a first-to-file system under the Trade Marks Act 1995 (Cth) — the person who files first generally has the strongest claim to a registration. Prior use can be relied on under section 44(4) as a defence to a citation, but it is narrow and evidence-heavy. The safer position is to file early.
- Does using my brand in Australia give me trademark rights without a registration?
- You may accrue unregistered common law rights capable of supporting a passing off claim or an action under section 18 of the Australian Consumer Law for misleading or deceptive conduct. But those rights are limited to the geographic area and goods or services where you can prove reputation — a registration gives you a nationwide monopoly in your class.
- What is a bad-faith trademark application?
- Under section 62A of the Trade Marks Act, a registration can be opposed or cancelled if the application was made in bad faith — for example, filing to block a known prior user, or filing a mark the applicant knew was already in use by someone else. Bad faith is a high bar and requires evidence of the applicant's knowledge and conduct.
- I sell overseas. Do I need overseas trademarks?
- Yes — a trademark is territorial. An Australian registration protects you in Australia only. If you sell into the US, UK, EU, Singapore or elsewhere, you need protection in each of those jurisdictions. The Madrid Protocol lets you file one international application from your Australian base and designate multiple countries.
- How long between first use and first filing is too long?
- There is no bright line, but every month you delay is a month someone else can file first. For a distinctive name or logo you plan to build a business around, the answer is usually: file before public launch, or immediately after.