Henley Arch Pty Ltd v Henley Constructions Pty Ltd  FCA 1369 (5 November 2021)
Henley Arch was comprehensively successful in its claims for trademark infringement and contravention of the Australian Consumer Law by Henley Constructions.
Henley Arch has been conducting business in the residential building and construction field since 1989 under various HENLEY trade marks. It also owns various trademark registrations containing or consisting of HENLEY for various building, construction architectural, engineering, drafting and design services in classes 37 and 42. The earliest HENLEY word mark registration dates from 18 December 2006.
The Henley Constructions business has been operating since February 2007 primarily in connection with the construction of residential unit developments in Sydney. Mr Sarkis was the founder of this business and asserted that, at the time of adopting the Henley Constructions name, no searching was conducted to ascertain whether there were any competitors in the building industry with rights in a similar name or trade mark. However, many of the short list of possible names put together by Mr Sarkis’ wife happened to resemble names of businesses already trading in the building and construction field. His Honour, Anderson J considered that it should be inferred Mrs Sarkis conducted a Google search in 2006 and did come across the website connected with Henley Arch and told Mr Sarkis about it. Accordingly, Mr Sarkis’ failure to make further enquiries prior to adopting the Henley Constructions name fell short of what could reasonably be considered to be the enquiries one would make if acting honestly and in good faith.
Henley Arch became aware of the Henley Constructions business on 22 February 2017 and issued a demand letter on 13 April 2017. His Honour found that, after receiving this letter, the Henley Constructions’ trade mark use “ramped up” and intensified including a new version of its logo where the word “Henley” was more prominent and the word “constructions” was represented in a smaller font.
Trade mark infringement
Henley Constructions admitted that it had only used HENLEY CONSTRUCTIONS as a trade mark, whereas Henley Arch argued there was unauthorised use by Henley Constructions of various trade marks containing or consisting of the word HENLEY for building and construction services, including the words Henley Constructions as part of various logos and in the henleyconstructions.com.au domain name, the word Henley in plain word and stylised forms, as well as 1300 HENLEY, Henley Gallery and Henley Built, including on signage, promotional materials, websites and social media.
Anderson J did not consider use of the phone name 1300HENLEY or use of HNLY as part of various motor vehicle number plates to be trade mark use, but otherwise agreed with the submissions of Henley Arch.
His Honour considered the HENLEY CONSTRUCTIONS mark was substantially identical with the registered HENLEY word mark and HENLEY PROPERTIES & Device mark. The other marks used by Henley Constructions were deceptively similar to each of Henley Arch’s registered marks.
Hence, infringement was found, subject to any defence being established by Henley Constructions.
Defences to infringement
Henley Constructions relied on the defence under S122(1)(fa) that it was entitled to trade mark registration of HENLEY CONSTRUCTIONS.
Anderson J rejected this defence. His Honour agreed with Henley Arch that the relevant date for assessing this hypothetical trade mark application is February 2007 being the date of commencement of the infringing use. At that time, any application to register the HENLEY CONSTRUCTIONS mark would be rejected under ss 42(b), 44, 58 and 60 by virtue of Henley Arch’s ownership of the HENLEY word mark and HENLEY PROPERTIES & Device mark, various HENLEY trademark registrations and reputation in the various HENLEY marks. Under s44, his Honour found that Henley Constructions could not rely on the honest concurrent use or other circumstances provisions as at the relevant date. His Honour considered the adoption and use of the HENLEY CONSTRUCTIONS mark was not honest.
Henley Constructions also relied on the good faith use of its own name defence under S122(1)(a)(i).
Anderson J rejected this defence and found that the good faith requirement was not satisfied. In this context, good faith requires an honest belief that no confusion would arise by reference to the earlier trade mark’s reputation and that there was no intention to divert trade. It was not necessary for his Honour to decide whether good faith also involves an objective element that commercially reasonable steps were taken to make appropriate enquiries prior to adopting the name. His Honour found that Mr and Mrs Sarkis subjectively knew of the Henley Arch business at the time of adopting the Henley Constructions name and also changed the manner of use of this name after receiving the demand letter from Henley Arch in April 2017.
Finally, Henley Constructions also relied on the prior use defence under s124 but that also failed. Even though some of Henley Arch’s trade mark registrations dated from 2016, Henley Arch had used these registered marks (or versions of these marks with additions or alterations which did not substantially affect their identity) before Henley Constructions first used the HENLEY CONSTRUCTIONS mark.
Cross claim by Henley Constructions
Henley Constructions sought to cancel the registrations for Henley Arch’s HENLEY word mark and HENLEY PROPERTIES & Device mark which dated from 18 December 2006. Various grounds under s88 were relied upon as well as non-use of these marks between 7 October 2015 to 7 October 2018 in New South Wales, particularly in relation to multi-dwelling residential apartment buildings, under s92.
Significantly, Anderson J considered that the HENLEY word mark was not inherently adapted to distinguish due to its significance as a surname and place name, but Henley Arch was able to rely on its use of this mark before December 2006 to show that it had the capacity to distinguish the relevant building and construction services. His Honour rejected the contention by Henley Constructions that the declaration filed by Henley Arch to achieve registration of the HENLEY word mark contained representations that were false in material particulars.
His Honour also rejected the non-use cross claim and, in any event, would have exercised discretion in leaving the relevant HENLEY word mark and HENLEY PROPERTIES & Device mark on the Register.
Australian Consumer Law
Henley Arch also contended that the conduct by Henley Constructions comprised various misrepresentations likely to mislead or deceive consumers.
Anderson J considered the relevant date for assessing this conduct was February 2007. At that time, Henley Arch had a significant reputation in Victoria and that reputation also extended to Queensland, South Australia and New South Wales. Its reputation was not confined to single dwelling detached homes, but extended to multi-dwelling residential townhouses or, more generally, as a builder of homes. His Honour rejected the submission by Henley Constructions that the Australian building industry is State and Territory based and not national.
Personal liability of Mr Sarkis
Anderson J also agreed with Henley Arch that Mr Sarkis was a joint tortfeasor with Henley Construction in its infringement of the relevant HENLEY trademark registrations and aided or abetted the contravention by Henley Constructions of the Australian Consumer Law.
© 2021 Selfmark Trademark Lawyers Sydney