Australia: Let's go to Thredbo in the Winnebago and find some trade marks and what they can and can't do for you - Part 2

Last Updated: 15 September 2013
Article by Susan Gatford

This is the second in a series of three articles focusing on some of this year's Federal Court cases exploring what makes a good trade mark, how registering a trade mark can help and what legal proceedings can achieve in terms of court orders and remedies.

Topic 2 - That worrying descriptive trademark - BUT REGISTERED!

The Kosciusko Thredbo v ThredboNet Marketing [2013] FCA 562 case referred to in the first article of this series suggested that descriptive and geographical names are not the best choice as the building blocks of a brand development strategy. Further, putting a "no Thredbo" covenant into leases and contract documents didn't impress the Court in that case. So would anything have worked better? Well, applying for and obtaining a registered trade mark would be a good start, as the decision in REA Group Ltd v Real Estate 1 Ltd [2013] FCA 559 demonstrates.

The case concerned the business, which started in 1999. It is essentially an online matching service, matching real estate agents' property listings with prospective purchasers and tenants. The trade mark, as in the Thredbo case, is descriptive. It is also a good example of why descriptive marks are often chosen as trade marks, especially in today's online world. REA Group (the Applicant) knew that people looking for a house to rent or buy were likely to type descriptions of what they were looking for into a search engine such as Google. It capitalised on this and combined it with a search engine optimisation strategy that used descriptive web page content, metatags and links and search engine marketing, bidding for a range of descriptive Adwords.

But it also applied for a registered trade mark in 1999, when it first established its business. In order to avoid objections to registration based on the mark being a descriptive mark it combined its chosen descriptive words with a simple logo. It also included "" in the application. The mark applied for was

It then set about growing its business using the website "", and within a few years it had the lion's share of the online real estate market. When a rival business came on the scene under the name and with a different logo, it made claims of passing off, misleading conduct and trade mark infringement.

As in Thredbo, there was a lot of evidence from the Applicant of its use of the name, with the Court being invited to infer from that use that the name had developed a secondary meaning and become distinctive of the Applicant rather than being purely descriptive. In this case, unlike Thredbo, the Court was convinced that a secondary meaning had developed i.e. that "" was displayed and recognised as a trading name and that a significant number of consumers associated it with the Applicant's businesses. This different finding of fact, however, is not what caused the difference in result, as the Court still rejected the passing off and misleading conduct claims on causation grounds. In essence it said that by its choice of a descriptive name the Applicant was the cause of the consumer misconception that it was complaining about, and that in such cases a small difference in names (in this case the addition of the number '1') was enough to avoid liability.

What the Court found significant though, was the registered trade mark, and in particular the inclusion of "" as part of the registered trade mark. In considering the trade mark infringement allegation it focused on the use by the Respondent of the Applicant's mark. It considered, for example, whether the use of the domain name "" without the logo, as it appeared in an online advertisement, infringed the Applicant's registered trade mark, and found that it did.

The Court expressed some concern at its finding that a registered trade mark allowed the grant of a de facto monopoly over purely descriptive names, harking back to the "the common right of the public to make honest use of words forming part of the common heritage for the sake of the signification which they ordinarily possess" which supported the striking down of the lease covenants in Thredbo. It nevertheless considered itself compelled to make a finding of trade mark infringement by application of the relevant legal tests that apply in that context. Further, although the infringing conduct identified by the Court was specific to the use of "" in an online advertisement, it is possible that the final orders (which have not yet been made) will restrain any use of that domain name.

The case demonstrates that a trade mark registration can provide more protection than the Australian Consumer Law and may be infringed even where there is a finding of no passing off. In the next article consideration will be given to remedies in trade mark cases, including the somewhat unusual remedy granted by the Full Federal Court in Knott Investments v Winnebago Industries [2013] FCAFC 59.

Susan Gatford is barrister on Gordon & Jackson's list at the Victorian Bar. She practices out of Owen Dixon Chambers in Melbourne and is also a registered trade mark attorney. [] © Susan Gatford 2013

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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