26 June, 2017
Accor Australia and New Zealand Hospitality Pty Ltd v Liv Pty Ltd [2017] FCAFC 56 (7 April 2017)
What you need to know
The Full Federal Court held that use of a registered trade mark in an arrangement with other branding elements can nevertheless constitute trade mark use if the registered trade mark forms a dominant cognitive cue in the arrangement.
Due to the descriptive nature of "CAIRNS", the Court found that prior use of the HARBOUR LIGHTS mark also established proprietorship of the trade mark CAIRNS HARBOUR LIGHTS. Consequently, the Appellants were able to defend their trade mark registrations from cancellation and to rely upon these registrations to press for claims of trade mark infringement.
Curiously, the Full Court upheld the primary judge's findings that use of a registered trade mark in meta-tags embedded in the source code of a website constitutes infringing trade mark use.
What you need to do
When using a combination of trade marks within one arrangement, you should identify the dominant elements and ensure that each of these components is protected separately as well as protecting the arrangement as a whole.
Businesses should be careful not to use a competitor's trade marks in meta-tags in the course of their online advertising as the law relating to this is currently unsettled.
Background
The Appellants, Cairns Harbour Lights Pty Ltd (CHL) and Accor Australia & New Zealand Hospitality Pty Ltd (Accor), were the property developers and letting agency (respectively) for a residential apartment complex in Cairns called "Harbour Lights". Construction of the complex commenced in September 2004 and in December that year Accor (then called Mirvac Hotels Pty Ltd) was engaged by CHL to provide various property management and letting services for apartments in the complex. Although apartment owners were free to use Accor or a different agent, only Accor could operate its letting business on-site.
CHL obtained registrations of the HARBOUR LIGHTS and CAIRNS HARBOUR LIGHTS trade marks in 2009 covering a range of accommodation services and, in September 2010, Accor entered into a licence agreement with CHL to use these registered marks.
Meanwhile, in about July 2007, a resident of the complex, Ms Bradnam began to operate a letting service in competition with Accor, trading under the registered business name "Harbour Lights Property Management and Sales". Ms Bradnam also obtained registrations of the domain names cairnsharbourlights.com.au, harbourlightscairns.com.au and harbourtlightscairns.com.au which resolved to a website for the letting business with the heading "hlp Harbour Lights Private Apartments" (Respondent's Website).
Interestingly the domain names had previously been used by CHL for its own website (CHL's Original Website) but were allowed to lapse in 2005 and were subsequently registered by Ms Bradnam. In September 2009, Ms Bradnam sold her business, including the right to operate the website, to Liv Pty Ltd (collectively the Respondent).
The Appellants alleged that the Respondent's use of the brands CAIRNS HARBOUR LIGHTS and HARBOUR LIGHTS infringed CHL's trade marks. The Respondent cross-claimed that CHL had not demonstrated first use of the registered trade marks in respect of certain services and, in any event, that the trade marks did not possess a sufficient level of distinctiveness to warrant registration.
Use of HARBOUR LIGHTS mark in an arrangement
The primary judge divided the accommodation services covered by CHL's HARBOUR LIGHTS and CAIRNS HARBOUR LIGHTS trade marks into hotel services and commercial real estate agency services (Group A) and rental, leasing and letting services (Group B) .
At the outset, the primary judge determined that CHL's Original Website only related to the services in Group A. The primary judge went on to consider whether various advertisements published by CHL between April 2005 to October 2006 (predating the launch of the Respondent's Website) demonstrated use of the trade marks on Group B services. The primary judge accepted that some of CHL's advertisements made reference to rental, leasing or letting services. However, he noted that the words HARBOUR LIGHTS were used with other elements as below:
Click on the image to enlarge.
The primary judge described the arrangement of HARBOUR LIGHTS in the first example together with the stars device and the words "A New Star Shines" to be a composite mark. Similarly the primary judge found that the inclusion of the words "THE SEBEL" with HARBOUR LIGHTS created a new "composite expression". In both examples, the primary judge concluded that use of composite marks did not amount to use of the HARBOUR LIGHTS mark as registered. As such, his Honour determined that Ms Bradnam was the first user of the HARBOUR LIGHTS mark on the Group B services at the time the Respondent's Website was launched.
The Full Court disagreed and found that the additional elements did not substantially affect the identity of the HARBOUR LIGHTS mark. Rather, their Honours held that the words HARBOUR LIGHTS remained the dominant cognitive cue which the viewer would take away. As such, CHL was able to demonstrate first use of the HARBOUR LIGHTS mark on all of the registered services.
Validity of the CAIRNS HARBOUR LIGHTS mark
The Full Court agreed with the primary judge that the words "Harbour Lights" were not directly descriptive of accommodation services. However, the primary judge found a person looking at the mark CAIRNS HARBOUR LIGHTS would understand this to describe a place, being Cairns Harbour. The Full Court found this analysis to be "artificial", particularly in light of CHL's reputation in the HARBOUR LIGHTS mark. Their Honours held that the term HARBOUR LIGHTS would be recognised as the dominant cognitive cue with the word CAIRNS conveying an association with a geographical place. As such, the Full Court concluded that both marks HARBOUR LIGHTS and CAIRNS HARBOUR LIGHTS possessed a sufficient level of inherent distinctiveness to be registered.
The Respondents also sought to cancel the HARBOUR LIGHTS and CAIRNS HARBOUR LIGHTS registrations by arguing that they formed part of the "common heritage" and should therefore be available for other traders to use. This claim was refused both at first instance and on appeal, on the basis that words of "common heritage" contemplated the name of a city or town and not the name of a particular building.
Infringement
Given that the Appellants were held to be the owners of the HARBOUR LIGHTS mark on all the relevant services, it followed that the Respondent's conduct was found to constitute trade mark infringement. This included use of CHL's trade marks on the domain names cairnsharbourlights.com.au and harbourlightscairns.com.au as well as in the metatags used in the source data of the Respondent's Website.
This latter finding was made on the basis of evidence that the metatags, which were embedded in the Respondent's Website and influenced search results, could be visible to those who knew what to look for. This conclusion seems to depart from recent Federal Court rulings that use of a competitor's mark in Google AdWords (another form of digital identifier) does not constitute trade mark use.
For further information, please contact:
Lisa Ritson, Partner, Ashurst
Lisa.ritson@ashurst.com
