Swancom Pty Ltd v The Jazz Corner Hotel Pty Ltd (No 2)  FCA 328 (9 April 2021)
Swancom was unsuccessful in its allegations that The Jazz Corner Hotel Pty Ltd (JCH) and other respondents infringed its trademark registrations for CORNER HOTEL, CORNER, CORNER PRESENTS and THE CORNER by using various marks containing JAZZ CORNER in relation to live music services and related ticket booking services.
Swancom was also unsuccessful in seeking cancellation of the trademark registrations containing JAZZ CORNER obtained by two of the respondents.
JCH was unsuccessful in its cross-claim for cancellation of Swancom’s trademark registrations for CORNER HOTEL and CORNER PRESENTS, but the parties were given the opportunity to make submissions as to whether Swancom’s trademark registrations for CORNER and THE CORNER should be limited or qualified in some way.
Swancom has, since 1995, been operating a hotel venue offering live music and hospitality services in Richmond, Victoria. This venue is located at the junction of two street corners and has been called the Corner Hotel for a long time before the business being acquired by Swancom.
Swancom obtained trademark registrations for CORNER HOTEL, CORNER, CORNER PRESENTS and THE CORNER dating over the period October 2010 to January 2015 for various entertainment and hospitality services in classes 41 and 42.
There were five respondents, namely JCH, Bird’s Basement Pty Ltd (BB), Saint Thomas Pty Ltd (ST), Ubertas Operations Pty Ltd (UO) and Albert Dadon. JCH, BB and ST are all part of the Ubertas Group with Albert Dadon being the sole director of each of these companies which operate businesses from a building in William Street, Melbourne, Victoria (which does not actually occupy a street corner position). JCH operates a hotel business called The Jazz Corner Hotel, BB operates a jazz music venue called Bird’s Basement and ST operates a café business called The Jazz Corner Café.
UO obtained trademark registrations dating from 2017 for the composite mark shown below and the word mark JAZZ CORNER for various services in class 43.
These marks were used by JCH with authority of UO.
ST obtained trademark registrations dating from 2017 and 2018 for the word mark JAZZ CORNER and the composite mark shown below for various food and beverage related services in class 43.
Swancom’s allegation of infringement concerned use of various marks (the Jazz Corner marks) containing or consisting of the words JAZZ CORNER OF MELBOURNE, JAZZ CORNER OF THE WORLD, JAZZ CORNER HOTEL and JAZZ CORNER CAFÉ in relation to live music services and related ticket booking services.
Swancom also alleged Mr Dadon is a joint tortfeasor in the trade mark infringements committed by each of JCH, BB and ST.
Swancom also sought cancellation of the various Jazz Corner trademark registrations of UO and ST.
The respondents denied these allegations and JCH also cross-claimed seeking cancellation of Swancom’s trademark registrations for their class 41 services.
Validity of Swancom’s trademark registrations
JCH argued Swancom’s trademark registrations lacked sufficient distinctiveness as at their respective filing dates to qualify for registration. Section 41 was relevant as it stood prior to the 15 April 2013 amendments for the CORNER HOTEL and CORNER registrations, while s41 as it currently stands was relevant to the CORNER PRESENTS and THE CORNER registrations.
O’Bryan J took judicial notice of the fact that Australian hotels or “pubs” are often located on street corners and often provide entertainment to patrons. The evidence also disclosed the word “corner” used in business names for hotels since the 19th century and used descriptively to refer to the location of hotels.
His Honour considered the phrase “corner hotel” is not to any extent inherently adapted to distinguish ordinary hotel services, but was capable of functioning as a trade mark for services related to the staging of professional live music performances, particularly having regard to use of that phrase as a trade mark by Swancom’s predecessors in business. However, such services needed to be distinguished from the provision of free live music which is part of the overall hotel ambience. Hence, the CORNER HOTEL registration was valid as it was construed as covering only such professional live music related services.
His Honour, for similar reasons, considered the CORNER and THE CORNER marks were capable of distinguishing services related to the staging of professional live music performances. However, those registrations in class 41 covered a broader range of services and his Honour invited the parties to make submissions as to whether those registrations ought to be amended, or a condition or limitation be entered, to preserve the freedom of hotels and other providers of hospitality services (such as cafés, bars and restaurants), who may provide ancillary entertainment services (for example, free live music or sporting events shown on large screens), to use the word “corner” in their trading name.
O’Bryan J also considered the CORNER PRESENTS mark to be capable of distinguishing Swancom’s relevant class 41 services. His Honour noted the combination of the words “corner” and “presents” alters the ordinary signification of the word “corner”. As the subject of the verb “presents”, the word “corner” takes on an allusive meaning. It no longer describes the features of a location or a locality. Hence, the CORNER PRESENTS mark was validly registered.
JCH also relied on s88(2)(c) as a ground for rectification and argued that, because of the circumstances applying at the time when the applications for rectification were filed (being 21 June 2019), the use of Swancom’s registered marks is likely to deceive or cause confusion. JCH argued that the Swancom marks are descriptive of the services provided by Swancom and that other hotels, bars and cafés use the word “corner” as part of their trading names and also offer live music or other entertainment services. However, O’Bryan J rejected these arguments and considered that use of the Swancom marks in relation to the live music services provided by the Corner Hotel is not likely to deceive or cause confusion.
Infringement of Swancom’s trademark registrations
Swancom relied only on s120(1) and argued that the various Jazz Corner marks were deceptively similar to its registered marks.
O’Bryan J posed and answered the relevant issues as follows:
(a) Have JCH, BB and ST, individually or jointly in furtherance of a common design, used the Jazz Corner marks as trade marks in relation to the services in respect of which the Swancom marks are registered?
Each company conducts separate businesses, namely The Jazz Corner Hotel, The Jazz Corner Café and Bird’s Basement. It is only Bird’s Basement jazz club that provides services in respect of which the Swancom marks are registered, being professional live music performances. The Jazz Corner Hotel conducts a hotel accommodation business and The Jazz Corner Café conducts a café business. However, there was also cross promotion of services provided by each business.
His Honour considered that JCH did use the Jazz Corner Hotel marks in relation to the provision of live music performances at its related jazz club (Bird’s Basement). They were complementary services. The use of the Bird’s Basement trade mark did not diminish the significance of the Jazz Corner Hotel marks as a badge of origin. Rather, the Bird’s Basement mark would be perceived to be a sub-mark or secondary-mark of the live music services. The promotional material conveyed that The Jazz Corner Hotel is a unified business that has accommodation, a café and a jazz club, with the café trading under the name The Jazz Corner Café and the jazz club trading under the name Bird’s Basement.
While BB cross promoted the Jazz Corner Hotel, that business did not use the Jazz Corner Hotel marks as a badge of origin in respect of live music services.
Similarly, ST cross promoted live music performances at Bird’s Basement jazz club, but did not use the Jazz Corner Café marks in relation to live music services provided at that club.
His Honour agreed with Swancom that JCH and BB used Jazz Corner of Melbourne as a trade mark in relation to all and each of the businesses conducted from the William Street building: the hotel, café and jazz club. His Honour noted that if this phrase was used in isolation and without any connection to the other Jazz Corner marks, it would more readily be understood as a descriptive and laudatory phrase and not as a badge of origin. However, its connection with the other trade marks used by the respondents, specifically the Jazz Corner Hotel and Jazz Corner Café marks, gives this phrase a different meaning and usage. The phrase is a clear reference to those other marks and is used as an umbrella mark to unify those marks.
The Jazz Corner of the World marks were used in a more limited manner and predominantly in connection with Bird’s Basement jazz club. His Honour agreed with the respondents that they have not used the phrase “Jazz Corner of the World” as a trade mark but rather used it in a descriptive manner.
Finally, O’Bryan J was not satisfied that JCH, BB and ST engaged in a “concerted and agreed common action being a joint marketing campaign to promote the services offered and provided by each of them” as alleged by Swancom, such that each would be a joint tortfeasor for the wrongs (infringing use of registered trade marks) of the other.
(b) Are the Jazz Corner marks deceptively similar to the Swancom marks?
In light of the outcomes in (a), this issue was confined to whether the Jazz Corner Hotel and Jazz Corner of Melbourne marks were deceptively similar to any of Swancom’s registered marks and O’Bryan J agreed with the respondents that they were not.
The addition of the word “jazz” to the word “corner” or the words “corner hotel” gives the composite phrase a distinct sound and meaning. His Honour was of the view that attention is immediately drawn to the word “jazz” and the words “corner” or “corner hotel” assume a secondary role in the phrase. The addition of “jazz” is likely to create an impression or idea in the mind of an ordinary member of the public that is distinct from the impression or idea created by Swancom’s marks.
Given this finding, Swancom’s infringement claims were dismissed, but O’Bryan J went on to consider the respondents’ defences in (c) and (d).
(c) Is the respondents’ use of the terms “Jazz Corner of the World” and “Jazz Corner of Melbourne” use in good faith to indicate a characteristic of the services each provides (namely that the vicinity of the building from which each of JCH, BB and ST operates is a pre-eminent centre for jazz music and culture associated with jazz music) within s 122(1)(b)(i) of the Trade Marks Act?
O’Bryan J had already found that Jazz Corner of the World was not being used in a trade mark sense, but still went on to consider whether use of this phrase and use of the Jazz Corner of Melbourne mark could benefit from this defence on the basis of being good faith use to indicate some characteristic of the relevant services.
His Honour noted that this defence has been construed narrowly and agreed with Swancom that these phrases do not involve the use of common words for a descriptive purpose. Hence, the respondents could not rely on this defence.
(d) Are the respondents entitled to obtain registration of the terms “Jazz Corner of Melbourne” and “Jazz Corner of the World” such that the use of those terms satisfies s 122(1)(fa) of the Trade Marks Act?
O’Bryan J noted that the notional entitlement to registration for the purposes of s 122(1)(fa) is to be assessed as at the commencement of the respondents’ infringing conduct in 2016. At that time, there was no prior use that could have enabled the respondents to achieve registration under s 44(3) or s 44(4) and hence the defence was not available.
(e) Is the respondents’ use of the Registered Jazz Corner marks the exercise of rights granted to them under the Trade Marks Act within s 122(1)(e) of the Trade Marks Act?
O’Bryan J rejected the respondents’ submissions on this defence. The relevant trademark registrations were in class 43 in respect of accommodation and food and drink services. Accordingly, the rights given to the respondents by those registrations extend only to those services in class 43 and did not extend to live music services in class 41.
His Honour also rejected the respondents’ submissions that the provision of live music services was merely ancillary to the services being provided under and by reference to the Registered Jazz Corner marks in class 43.
(f) Is Mr Dadon a joint tortfeasor?
O’Bryan J noted that it is well established that the infringement of a trade mark is tortious and the common law principles as to the liability of joint tortfeasors are applicable.
Given his Honour’s findings against deceptive similarity in (b), there was also a degree of artificiality in considering this issue. Nonetheless, his Honour expressed the view that Mr Dadon could not be a joint tortfeasor because all relevant decisions and actions were done in his capacity as a director. The problem of potential trade mark infringement arose indirectly, primarily through the cross-promotion of Bird’s Basement jazz club by JCH. The evidence did not establish that Mr Dadon had such involvement in or responsibility for the manner and extent of that cross-promotion that he ought be regarded as a joint tortfeasor.
Validity of the respondents’ trademark registrations
Swancom sought cancellation or amendments of the registrations for the various Jazz Corner marks in the event that the respondents could rely on the defence under s122(1)(e) of the Trade Marks Act. However, this was dismissed given the findings that these registered marks were not deceptively similar to Swancom’s registered marks and the respondents could not, in any event, rely on these registrations as a defence to infringement as live music services were not within the scope of these registrations.