Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd  FCAFC 56 (7 April 2017)
Accor successfully appealed the decision by the primary judge, Rangiah J reported here . It was able to rely on prior use to demonstrate a superior claim to ownership of the relevant trade marks which were subsequently registered. The registrations were valid and could be relied upon to support infringement by Liv and its predecessor in business, Bradnam.
Cairns Harbour Lights (CHL) was the developer of a property in Cairns which was completed in July 2007 and known as Harbour Lights or Cairns Harbour Lights. The complex consisted of three towers of residential apartments and a retail section. The residential part had a scheme of larger apartments for owner-occupiers and longer-term tenants, as well as a scheme of smaller apartments for short term occupiers. CHL appointed Mirvac Hotels Pty Ltd to exclusively provide on-site letting services and caretaking services for both schemes. Mirvac used the name The Sebel Harbour Lights for its letting services and the name of the complex until early 2009 and then used the name Cairns Harbour Lights. Mirvac changed its name, in 2012, to Accor Australia & New Zealand Hospitality Pty Ltd (Accor). The apartment owners were free to choose Accor or another letting agent or to arrange the lettings themselves.
The domain names harbourlights.com.au and cairnsharbourlights.com were registered in January 2004 and resolved to CHL’s website which went live in early 2004, but only concerned sales of apartments, not leasing or letting services.
CHL owned registrations for the trade marks HARBOUR LIGHTS and CAIRNS HARBOUR LIGHTS dating from 21 January 2009 and 21 April 2009 respectively which covered ‘agency services for the leasing of real estate properties, commercial real estate agency services, apartment letting agency, apartment rental services, rental of apartments, rental of accommodation’ in class 36 and ‘accommodation letting agency services (holiday apartments), accommodation letting agency services (hotel), hotel accommodation services, accommodation reservation services, booking services for accommodation, hotel services’ in class 43.
Ms Elise Bradnam purchased one of the smaller apartments in 2005 and subsequently registered the domain names cairnsharbourlights.com.au, harbourlightscairns.com.au and harbourlightscairns.com. Bradnam operated a business called Harbour Lights Property Management and Sales which involved letting of apartments in both schemes. The domain names pointed to her website which went live on 31 October 2006. This business was then sold, in September 2009, to Liv Pty Ltd with Ms Ivana Patalano as its sole director and shareholder. Liv trades under the name of Cairns Luxury Apartments and provides short term letting services for apartments in the complex in competition to Accor. Ownership of the two .com.au domain names stayed with Bradnam, while the .com domain name was transferred to Patalano, but each of these domain names resolved to Liv’s website.
Rangiah J decided that the CAIRNS HARBOUR LIGHTS trade mark registration was entirely invalid due to non-distinctiveness and the HARBOUR LIGHTS registration was distinctive but partly invalid due to prior use by Liv’s predecessor, Bradnam. However, there was some infringing and misleading conduct by Bradnam and Liv.
Accor appealed on the grounds that (i) CHL was the true owner of the registered trade marks for all the registered services based on use of these marks before Bradnam and (ii) the CAIRNS HARBOUR LIGHTS trade mark registration was sufficiently distinctive and valid. The respondents cross appealed on the ground that the HARBOUR LIGHTS trade mark registration was non distinctive and invalid. Bradnam, by notice of contention, also sought to support the findings of the primary judge concerning the invalidity of the CAIRNS HARBOUR LIGHTS registration and instances of prior use relied upon by Accor.
Ownership through prior use
The Full Court (Greenwood, Besanko and Katzmann JJ) confirmed that the respondents carried the onus of proving, on the balance of probabilities, that CHL is not the owner of the HARBOUR LIGHTS and CAIRNS HARBOUR LIGHTS trade marks.
The Full Court reviewed authorities on trade mark ownership and noted that, if CHL, could show first use of the relevant trade marks for particular services, it would also be entitled to ownership for services that were essentially the same as those particular services , in the sense of being services that were the true equivalent kind of thing by applying a practical, common sense approach.
The primary judge sought to draw a distinction between ‘commercial real estate agency services’ ( for which first use was by CHL) and ‘leasing, rental and letting services’, not being hotel related (for which first use was by Bradnam). Although the primary judge failed to define the content of such services, the Full Court noted that he was obliged to make an evaluative judgment because there was little evidence directed to this content. In the absence of such evidence, the Full Court found no basis for disturbing the primary judge’s finding of fact that CHL’s use of its domain names and website were limited to commercial real estate agency services (for the sale of apartments).
However, the Full Court did not find it necessary to draw such a distinction between the services covered by CHL’s trade mark registration after considering the other evidence of use relied upon by Accor, specifically use in certain printed advertisements published in 2005 (before any use claimed by Bradnam) as illustrated below:
The primary judge found these examples established use in relation to all the registered services, but did not characterise them as constituting use of the HARBOUR LIGHTS trade mark. The Full Court considered this characterisation was an error and found these examples supported use of the HARBOUR LIGHTS trade mark. In the first example, the additional elements did not substantially affect the identity of the words HARBOUR LIGHTS alone. The five gold stars were simply an addition to the registered mark and the words “A NEW STAR SHINES” were de minimus. The primary judge was wrong in characterising this as a composite mark. In the second example, although the words HARBOUR LIGHTS were positioned immediately beneath the words THE SEBEL, the manner of use is consistent with use of two marks. The primary judge was wrong in characterising this as use of the single mark THE SEBEL HARBOUR LIGHTS. Consequently, the Full Court found that CHL was, by virtue of this earlier use, the owner of the trade mark HARBOUR LIGHTS for all the registered services in classes 36 and 43.
The Full Court then went on to consider whether there had been any earlier use by CHL of the CAIRNS HARBOUR LIGHTS trade mark and found in the affirmative. The use by CHL of the HARBOUR LIGHTS trade mark as discussed above could also be relied upon to support use of CAIRNS HARBOUR LIGHTS because the word CAIRNS is merely a geographic reference. It is use of a substantially identical mark with the result that CHL is also the owner of the CAIRNS HARBOUR LIGHTS trade mark for all the registered services.
Distinctiveness of the HARBOUR LIGHTS and CAIRNS HARBOUR LIGHTS trade marks
The primary judge considered that CAIRNS HARBOUR LIGHTS lacked sufficient distinctiveness to be validly registered and CHL could not rely on use of this mark or other circumstances to support its registration. The primary reason for this was due to CAIRNS HARBOUR being perceived as a reference to a geographical place. The Full Court disagreed, mainly because of CHL’s use of HARBOUR LIGHTS such that it functioned as the dominant cognitive cue and it was artificial to attribute a meaning based on CAIRNS HARBOUR being a geographical reference.
The Full Court also rejected the respondents’ cross appeal regarding validity of the HARBOUR LIGHTS trade mark registration and agreed with the primary judge in finding this mark is inherently adapted to distinguish CHL’s services from those of others. A useful summary of relevant considerations is provided at paragraph 236 of the judgment.
Having found that CHL was the true owner of the HARBOUR LIGHTS and CAIRNS HARBOUR LIGHTS trade marks and that they were validly registered for all the relevant services in classes 36 and 43, the Full Court then reviewed the conduct by Bradnam and Liv from the perspective of infringement of these registered trade marks after their effective registration dates in 2009.
As a preliminary issue, the Full Court agreed with the primary judge and did not entertain the respondents’ argument that the exception to infringement under s120(2) was relevant. The respondents’ use was necessarily in relation to services covered by CHL’s registrations and caught by s120(1), so questions which might have been considered under s120(2) did not arise.
The Full Court also dismissed the respondents’ arguments that their use was (i) not trade mark use, (ii) in good faith to indicate the geographic origin of their services and/or (iii) from a time before the first use by CHL.
With regard to (ii) above, the Full Court observed that the respondents could have chosen an alternative name to differentiate their business without any use of or connection with the invented words ‘Harbour Lights’ or ‘Cairns Harbour Lights’. Although from time to time their websites gave emphasis to the geographical location and character of the apartments in the Harbour Lights complex in Cairns, the terms used by the respondents functioned as badges of origin of their services.
The Full Court reviewed and commented on various examples of infringing use relied upon by Accor and found no reason to disturb any of the findings by the primary judge. These included use of at least deceptively similar trade marks by the respondents in their domain names, web sites, Google advertisements, email addresses, statements of account, booking confirmations, a commercial letter, a sign on a park bench, an advertising flyer, and listings on third party accommodation booking web sites. Significantly, the Full Court did not interfere with the primary judge’s finding that use of ‘Harbour Lights Apartments’ as a metatag in the source data of Liv’s website constituted infringing trade mark use by Liv. The primary judge made this finding having regard to the context in which these words appeared.
As a result, the Full Court found that the evidence relied upon by Accor was sufficient to establish infringement and warranted the granting of an injunction.