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Focus: 'Fast tracking' domain name and trade mark disputes

15 April 2010

In brief: A recent Federal Court 'Fast Track List' decision confirmed that use of a trade mark in a domain name, along with use of the trade mark on associated web sites, can constitute trade mark infringement. This list is an increasingly important part of a trade mark owner's arsenal in dealing with trade mark infringement and misuse of domain names. Partner Tim Golder (view CV) and Senior Associates Jesse Gleeson and Mark Williams report.

How does it affect you?

  • It is unlikely that mere registration of a domain name incorporating a trade mark will constitute trade mark use under Australian trade mark law; however, when coupled with use of the trade marks on websites linked to the domain name, the use of the trade mark in the domain name can constitute trade mark use.
  • The meaning of 'geographical origin' has been read narrowly. Accordingly, traders who use the name of a building or complex (which is the registered trade mark of a third party) in relation to their own goods or services, may not be able to rely on the 'geographical origin' defence to trade mark infringement.
  • The narrow interpretation of 'generally accepted within the relevant trade' means that it may now be more difficult to have trade mark registrations cancelled by the court for genericism.
  • This case is an example of how the Fast Track List in the Federal Court can be used to resolve disputes efficiently and pragmatically, and how additional relief can be granted to that available under the Uniform Domain Name Dispute Resolution Procedure (UDRP) and the Australian Uniform Domain Name Dispute Resolution Procedure (auDRP) (which are limited to transferring or cancelling domain name registrations).

Using a domain name can constitute trade mark infringement

This dispute1 involved Mantra Group Pty Ltd, the on-site letting agent of apartments within the 'Circle on Cavill' residential apartment and retail complex situated at Surfer's Paradise, and Tailly Pty Ltd, an off-site letting agent of apartments within the same complex.

Mantra is the owner of three registered trade marks – one word mark and two word and device marks, each incorporating the words 'Circle on Cavill'. Tailly used the words 'Circle on Cavill' in its Internet advertising and registered a number of domain names using the words 'Circle on Cavill' or similar words.

Before a finding of trade mark infringement could be made, the court had to decide whether Tailly had used 'Circle on Cavill' as a trade mark. In considering this issue, Justice Reeves noted that, although Tailly had made some descriptive use of the words to describe the apartment complex in the prose in the body of the webpages, this use had to be looked at in the context of the websites as a whole. To this end, he also noted that, in many of the websites, the words 'Circle on Cavill' appeared on the first page in a banner-style heading, that in some of the websites the words had been used 'frequently and gratuitously' in stand-alone format, and that in some of the websites no descriptive use of the words had been made. Accordingly, his Honour found that members of the public would conclude that the primary use of the words was as a badge of origin, such that Tailly had used the words as a trade mark, and had thus infringed Mantra's registrations.

Because Tailly also used the trade marks on websites linked to the domain names, it was not necessary for the court to rule on whether mere registration of a domain name constitutes trade mark use. However, the court cited the earlier decision of CSR Ltd v Resource Capital Australia Pty Ltd2 as doubting whether mere registration would be sufficient to constitute trade mark use.

Given that, it is unlikely that mere registration of a domain name incorporating a trade mark would constitute use of that trade mark. Accordingly where a domain name has yet to be used, it may be necessary to pursue alternative options. For instance the auDRP (which applies to .au domain names such as .com.au and .net.au) is potentially available where a domain name has been registered and not yet used. The position under the UDRP is less clear, although there are UDRP decisions to support an argument that mere registration is sufficient.

Another potential alternative may be to pursue the registrant of the domain name for passing off an association with the owner of the relevant trade mark (or threatening to do so)3 or for breaches of section 52 of the Trade Practices Act 1974 (the TPA).

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Defences

At trial, Tailly sought to rely on the defence under s122(1)(b) of the Trade Marks Act 1995 (the TMA), which (relevantly) provides that a person does not infringe a registered trade mark when it uses the sign in good faith to indicate the geographical origin of the services. However, Mantra's counsel argued that the specific provision in the Act of a defence for the good faith use of a mark as the name of a person's place of business4 meant that the word 'geographical' in s122(1)(b) must refer to broader concepts of place such as country, state, region, city, town or suburb from which the services originate. (Tailly's place of business was not located at the Circle on Cavill complex and therefore it could not rely on the place of business defence).

In accepting Mantra's contention, Justice Reeves referred to the decision in the 'Chifley Tower' case5 and concluded that the words 'geographical origin...of...services' are to be construed as the name of a country, region, city, town or similar geographic area, but not to refer to a privately owned building situated within such a geographic location. Accordingly, Tailly was deprived of the defence. As an aside, Justice Reeves found that Tailly's use of the words had not been made in good faith, which would have deprived Tailly of that defence in any event.

In a counter-claim, Tailly sought to have Mantra's trade mark registrations cancelled (or qualified by an endorsement such that they would give no exclusive right to use the words 'Circle of Cavill' as a trade mark), by virtue of the fact that they had become generally accepted within the relevant trade of subletting apartments, such that Mantra had lost the exclusive right to use the words as a trade mark6.

Justice Reeves considered that the words 'relevant trade' could not be construed as narrowly as the trade of providing short-term accommodation at Surfer's Paradise, and instead noted that the words must be construed in the context of Commonwealth legislation applying nationally to trade marks. Therefore, the relevant trade in question related generally to the provision of short-term or holiday accommodation, which is conducted in countless locations around Australia.

In addition, his Honour found that the evidence was not sufficient to demonstrate that, since the registration of the trade marks, the words 'Circle on Cavill' had become generally accepted within the trade of providing short-term accommodation as the name of the Circle on Cavill complex. However, it appears that the ultimate question should have been whether the words 'Circle on Cavill' had become generally accepted within the trade of providing short-term accommodation as the name of the service of sub-letting accommodation apartments.

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Fast Track List

The Mantra decision illustrates the benefits for trade mark owners in using the Federal Court Fast Track List. In this case, Mantra sought relief under both the TMA and s52 of the TPA. In keeping with the aim of the Fast Track List to quickly and inexpensively resolve disputes, the court ruled on the basis of trade mark infringement and then considered whether any additional relief would be available under the TPA. The court concluded that, in this case, the relief sought under the TPA could be granted under the TMA, and once the court concluded that Tailly had infringed Mantra's trade marks, it was therefore not necessary to consider Mantra's case under the TPA. A pragmatic approach such as that is a typical feature of Fast Track List cases, and highlights how the Fast Track List can save significant time and expense.

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Advantages of court orders over other options

In this case, the court made orders against Tailly requiring it to transfer infringing domain names to Mantra. Such orders would also be available under the auDRP and the UDRP. However, the court went further and ordered injunctions against Tailly in relation to use of the trade mark generally and ordered an account of profits. The court also ruled that it could order corrective advertising under the TMA.

These additional orders highlight the finality available through court proceedings compared to the auDRP and UDRP. If Mantra were successful under those procedures, then Tailly could still register other domain names that incorporate the trade marks, meaning that Mantra may be forced to take further action. However, in ordering injunctions, the court achieved finality as Tailly is now prohibited from further infringing registrations and, barring Tailly defying the court order, the matter is finalised.

Further, the auDRP and UDRP procedures are not intended to adjudicate competing rights to trade marks, so the complexity inherent in the Mantra decision means that it would potentially be difficult to pursue under the auDRP and UDRP.

Footnotes
  1. Mantra Group Pty v Tailly Pty Ltd (No2) [2010] FCA 291.
  2. [2003] FCR 279.
  3. See for instance British Telecommunications plc v One in a Million Ltd (1998) 42 IPR 289.
  4. Section 122(1)(a).
  5. MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236.
  6. Section 87(1).

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