Shape Shopfitters Pty Ltd v Shape Australia Pty Ltd (No 3)  FCA 865 (1 August 2017)
Unsuccessful application by Shape Shopfitters (Applicant) to restrain use by Shape Australia (Respondent) of various trade marks containing the word SHAPE.
The Applicant re-branded to Shape Shopfitters in mid 2012 and has used various trade marks containing or consisting of the words SHAPE and SHAPE SHOPFITTERS since that time in relation to shopfitting services, particularly in the retail food sector. It operates the website at http://shapeshopfitters.com.au/ and is the owner of a trade mark registration for the composite mark shown below dating from 30 October 2015 covering a broad range of shopfitting, construction and renovation services in class 37.
The Respondent operated a much larger business and re-branded to Shape Australia in late 2015, without knowledge of the Applicant’s business. It uses various trade marks containing or consisting of the word SHAPE or that word represented in a stylised manner (with a stylised “A” resembling an upside down “V”) as shown below in relation to large scale fit-out and refurbishment services; although it was also involved in a fit-out of a pizza retail business in Perth. It operates the website at http://www.shapegroup.com.au/ .
The Applicant’s case, at trial, was confined to allegations that the Respondent’s conduct (i) contravened the Australian Consumer Law and constituted passing off in that it falsely represented that the Respondent has the sponsorship or approval, or an affiliation with the Applicant and (ii) infringed the Applicant’s trade mark registration.
Australian Consumer Law
An important consideration under the Australian Consumer Law and passing off claims was the identification of the class of persons to whom the false representations were allegedly made. The Applicant characterised this class as participants in the commercial construction industry, whereas the Respondent characterised this much more narrowly as buyers of head contracting or construction management services for commercial building projects. Mortimer J agreed with the Applicant and identified the relevant class as participants in the commercial construction industry, including subcontractors and others who provide services to either or both of the parties.
Her Honour characterised the representation which could be said to arise from the Respondent’s conduct as being a representation that the Applicant is a (smaller) part or subsidiary of the Respondent’s group: that is, of the “Shape Group”.
After reviewing the evidence, Mortimer J accepted that since adopting the name Shape Shopfitters Pty Ltd in 2012, the Applicant has developed a reputation in the commercial fit-out and refurbishment industry under that name, and that there is some evidence that some participants have come to refer to the Applicant simply as “Shape”, but was not satisfied that the word “Shape” has come to have a secondary meaning associated with the Applicant. Further, each party uses the word “Shape” to different effect, both in terms of the other words it is combined with (“Shopfitters” and “Australia” respectively) and in terms of how the word is represented on logos and other corporate identification or promotional material.
Her Honour concluded that, while there is some overlap in the parties’ business activities, it is of a small proportion and is not the kind of overlap which is likely to lead any participants in the industry into error about a business connection or relationship between the Applicant and the Respondent, so that the Applicant would be perceived to be part of the Respondent’s group. At the most, there is the potential or opportunity for confusion, and perhaps misidentification which can be quickly dispelled on inquiry or further investigation. There was no resulting sustained or ongoing belief in a connection or relationship between the Applicant and the Respondent and this did not establish the case pleaded by the Applicant.
The Respondent also relied on ASIC searches which disclosed a number of other businesses with SHAPE in their corporate names. Although Mortimer J accepted that the evidence of the bare existence of these entities cannot take the matter very far, her Honour considered “the number of such entities using the word “shape” in their corporate names, and (I am prepared to infer) trading activities, is not without significance”. Indeed, to accept the Applicant’s case under section 18 of the Australian Consumer Law would be approaching an acceptance that the Applicant has a statutory monopoly in the word “shape”, an otherwise ordinary English word. Her Honour found no real risk of error as between the Respondent’s use of the word in its business activities and that of all the other businesses identified in the ASIC searches.
Mortimer J accepted the Respondent’s contention that, on the evidence, the Applicant’s reputation is more limited than it claims. However, even on a wider and more favourable view of the Applicant’s reputation, her Honour did not consider the Respondent’s business activities using the name “SHAPE” threaten to damage or otherwise adversely affect that reputation and goodwill. That is because the use of the word “SHAPE” by the Respondent is not likely to convey to the potential class the misleading impression that the Respondent’s business is connected or related to that of the Applicant (or vice versa). That is so whether the class is defined narrowly, as participants in retail food shopfitting, or widely, as participants in the commercial construction industry.
Her Honour did comment that, if she had been persuaded there was misleading or deceptive conduct by the Respondent’s use of the word “Shape” in its corporate name and business activities, then the absence of proof of actual damage (in terms of established economic loss or the like) would not have prevented the Applicant succeeding in passing off.
Trade Mark Infringement
Mortimer J dismissed the infringement claim because, in her opinion, none of the trade marks used by the Respondent were deceptively similar to the Applicant’s registered mark. Her Honour considered that the relevant target market for the respective service is different from the general public, but it is comprised of a broad range of suppliers, contractors and clients and cannot be considered a specialist market. Nonetheless, her Honour did not accept that the reasonable industry participant of ordinary intelligence and memory would be caused to wonder whether the Respondent’s services, and the business it markets and promotes, come from the same source as that of the Applicant.
In considering the Applicant’s registered mark, Mortimer J did not accept that the word “SHAPE” is the essential, eye-catching and memorable feature. Rather, the word “Shopfitters” would also be recalled in conjunction with the word “SHAPE” and the “bottle cap border” is also something which would stick in a person’s memory. In other words, even though the word “SHAPE” was rendered prominently, it would be wrong to construe such a complex composite mark as conferring exclusive rights in the word “SHAPE”.
Rather curiously, by way of obiter, Mortimer J did comment that if she had otherwise been persuaded on trade mark infringement, the fact that the Applicant’s mark was rendered in the colour blue could give rise to significant issues of statutory construction notwithstanding that the registered mark was not limited as to colour and, by virtue of section 70, deemed to be registered for all colours.