Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd  FCA 554 (5 June 2015)
This matter involved a dispute involving trade mark rights in the name of a building. The Federal Court has previously considered similar issues in disputes involving the names The Chifley and Circle on Cavill.
Rangiah J decided that one of the trade mark registrations relied upon by the applicants was entirely invalid due to non-distinctiveness and the other was partly invalid due to prior use by the respondents, but there was some infringing and misleading conduct by the respondents.
His Honour also commented that the expenditure of resources in this matter seemed to be grossly disproportionate to the scope of the relief sought and expressed his regret that a trial taking 8 days with considerable complexity was required primarily because the costs incurred were a barrier to settlement and the main purpose of the trial was to ultimately decide who should pay these costs. Indeed, the decision took some 650 paragraphs.
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.
Accor and CHL alleged trade mark infringement and misleading or deceptive conduct under the Australian Consumer Law. Liv, Bradnam and Patalano counterclaimed by seeking cancellation of CHL’s trade mark registrations alleging they were wrongly registered under various grounds.
Under s88 of the Trade Marks Act 1995 the court may cancel a trade mark registration, or remove or amend an entry wrongly made or remaining in the Register on any of the grounds on which the registration of the trade mark could have been opposed. Hence, it was necessary for Rangiah J to consider the grounds of opposition at the time or registration in 2009.
Under the s58 ownership ground, his Honour considered CHL’s use of the domain names pointing to its website, the content of this website as well as some 15 examples of various media releases, advertisements, brochures and articles published from 2004 to 2007 and found that the registered trade marks were used by CHL before their registration only in relation to commercial real estate agency services, but not for any of the other registered services in classes 36 or 43.
His Honour then went on to consider Bradnam’s website and concluded the trade mark initially used was a composite mark comprising the letters HLP with the words Harbour Lights Private Apartments and this was changed to ‘harbour lights cairns – the luxury collection”. Neither of these composite marks was substantially identical to either of the marks used and registered by CHL. However, his Honour considered Bradnam’s domain names were substantially identical to CHL’s registered marks and were being used as trade marks for each of the registered class 36 and class 43 services other than commercial real estate agency services, agency services for the leasing of real estate properties, accommodation letting agency services(hotels), hotel accommodation services and hotel services. Bradnam’s use of her business name, Harbour Lights Property Management and Sales, when used in a general sense, was not trade mark use, but use of this name on letting agreements (including on one such agreement dated 10 August 2007) was construed as trade mark use. His Honour construed this as trade mark use of the business name which was substantially identical to the Harbour Lights trade mark (but not the Cairns Harbour Lights trade mark) for all of the registered class 36 and class 43 services other than commercial real estate agency services, accommodation letting agency services (hotel), hotel accommodation services and hotel services.
Hence, the end result was that CHL could only properly claim ownership of its registered trade marks for commercial real estate agency services, accommodation letting agency services (hotel), hotel accommodation services and hotel services.
Under the s41 ground, Rangiah J referred to the recent High Court decision in Cantarella and considered the ordinary signification of the words Harbour Lights and decided they were allusory and not descriptive of the relevant services. However, the words Cairns Harbour Lights were a direct reference to the location of the accommodation offered and were only, to some extent, inherently adapted to distinguish the relevant services. His Honour then went on to consider use and other circumstances under s41(5). Since the use of Cairns Harbour Lights by Mirvac for hotel and accommodation letting services only commenced in early 2009 just before filing the trade mark application and Bradnam was also using this trade mark through use of the corresponding domain name, his Honour was not satisfied it distinguished CHL’s services at the time of registration.
Hence, the HARBOUR LIGHTS trade mark was properly registered, but the CAIRNS HARBOUR LIGHTS trade mark was not.
Under the s42(b) contrary to law ground, Liv argued that potential exists for the public to be misled or deceived into believing that Accor and CHL are the only provider of accommodation services for the Harbour Lights residential complex, but Rangiah J rejected that argument.
Under the s43 connotation likely to cause confusion ground, Rangiah J accepted that Harbour Lights connotes the residential schemes of the complex, but does not say anything about the exclusivity or otherwise of the user’s letting services and hence would not cause deception or confusion.
Finally, Liv relied on the other limb for rectification under s88 of the Act namely that, because of circumstances applying at the time the application for rectification is filed, the use of the registered trade mark is likely to deceive or cause confusion. However, Rangiah J considered the HARBOUR LIGHTS trade mark has not lost its capacity to distinguish the services provided by CHL/Accor despite the non-infringing use by Liv.
Rangiah J went on to consider the infringement issue in case he was wrong under the s88 rectification grounds discussed above and because his Honour had found that CHL was the owner of the HARBOUR LIGHTS trade mark in relation to commercial real estate agency services, accommodation letting agency services (hotel), hotel accommodation services and hotel services.
His Honour acknowledged that Harbour Lights and Cairns Harbour Lights could be used in ways which are entirely descriptive, but it was necessary to analyse the uses made by Bradnam and Liv to assess whether they go beyond descriptive use and constitute trade mark use. There were some 49 examples of alleged infringing activity occurring after the registration dates of the trade marks which were placed into evidence.
His Honour confirmed that mere registration of a business name or domain name does not amount to infringement.
Rangiah J found that use of ‘HLP Harbour Lights Private Apartments’ on the home page of the website was trade mark use and deceptively similar to CHL’s registered HARBOUR LIGHTS trade mark. Also, use of ‘harbour lights cairns – the luxury collection’ on the home page of the website was trade mark use and deceptively similar to CHL’s registered HARBOUR LIGHTS and CAIRNS HARBOUR LIGHTS trade marks. The use of the domain names was also trade mark use and deceptively similar to these registered marks. Such use was in relation to all the registered services other than commercial real estate agency services, agency services for the leasing of real estate, accommodation letting agency services (hotel), hotel accommodation services and hotel services.
His Honour then went on to consider the other examples in evidence including use in Google advertisements, financial statements to apartment owners, email addresses, email booking confirmations, business correspondence, outdoor advertisements, business names and other third party websites. Significantly, his Honour did find some instances of infringing use by Bradnam for commercial real estate agency services and by Liv for these services as well as accommodation letting agency services (hotel), hotel accommodation services and hotel services. Rather curiously, his Honour found that use of the words Harbour Lights Apartments in a Google search result as shown below did constitute trade mark use in relation to commercial real estate agency services.
Cairns Luxury Accommodation – Waterfront Apartments – Harbour… www.cairnsluxuryapartments.com.au/ Harbour Lights Apartments in Cairns offer luxury private waterfront apartment accommodation for holiday letting and short term rental. Apartments – For Sale – Contact – Specials
His Honour also found that use of the email address email@example.com in a statement of account would be seen as a reference to the business, not the building and was trade mark use. Furthermore, use of ‘harbour lights’ as a meta-tag in the underlying source data for the website under “content: = Harbour Lights Apartments in Cairns offer luxury private waterfront apartment accommodation for holiday letting and short term rental” was effectively use of ‘Harbour Lights Apartments’ as a business name and was trade mark use which also infringed, but other uses in the source data did not amount to trade mark use. This use was attributed to Liv as having effective control of the website and to optimise the search results for Liv’s benefit.
Since his Honour found the examples of infringing use were in relation to the same services covered by CHL’s registered trade marks and s120(1) was satisfied, it was unnecessary to consider whether Bradnam and Liv could avoid infringement by establishing their actual manner of use of the trade marks was not likely to deceive or cause confusion under s120(2), but Rangiah J did comment that this exception to infringement was not satisfied. Significantly, a disclaimer on Liv’s website seeking to distinguish its services from those of Accor was insufficient.
Rangiah J also considered the defence to infringement under s 122(1)(b) when a sign is used in good faith to indicate the geographical origin or some other characteristic of the services, but was not satisfied this was established. His Honour did not consider that Bradnam’s and Liv’s use was to indicate geographic origin, but did express some favourable comments on the good faith aspect.
Under the s124(1) defence to infringement based on prior use, His Honour was satisfied this was established for all the class 36 and class 43 services other than commercial real estate agency services, accommodation letting agency services (hotel), hotel accommodation services and hotel services.
Misleading or deceptive conduct
Rangiah J considered that Liv’s use of the domain names represents that the viewer will be taken to an official website for the Cairns Harbour Lights complex, but not that there is only one official website. Hence, there is no representation that Liv is the only operator of the Cairns Harbour Lights accommodation facility, or that it is the only official operator. It is also clear that Accor is not the only operator or the only official operator. His Honour was not convinced that Liv misrepresented it is associated with, or has the sponsorship or approval of the Cairns Harbour Lights accommodation facility or CHL. The website also does not misrepresent that it takes bookings for the Cairns Harbour Lights hotel part of the complex.
However, Liv also advertised on Online Travel Agency websites such as HotelClub.com, Hotels.com, Agoda.com, Booking.com, Hotwire.com, expedia.com and Orbitz.com. His Honour reviewed these listings and agreed with Accor that, when using these websites, consumers are expecting to book a hotel room or a room with an onsite accommodation manager, not an offsite agent. Hence, Liv’s conduct in causing the relevant listings to be made on the Agoda.com, Orbitz.com and Expedia.com websites and failing to remove listings on the Hotelclub.com and Hotels.com websites is misleading or deceptive. Also, on some of these listings, there is a depiction of five stars which misrepresents the provision of five star hotel services or the benefit of five star hotel services. There was also a misrepresentation that Cairns Luxury Apartments is the name of an accommodation property.