Australia: Don't expect exclusive use online if your trade mark contains descriptive words

Clayton Utz Insights
Last Updated: 9 September 2014
Article by Timothy Webb and Nicole Landerer

Key Points:

You don't get a monopoly over descriptive words that form part of your trade mark.

Having an online strategy is crucial for many businesses these days, but the need to use certain terms to appear in Google searches is giving rise to trade mark disputes. In Lift Shop Pty Ltd v Easy Living Home Elevators Pty Ltd [2014] FCAFC 75, the Full Federal Court considered whether a composite registered trade mark with the words "LIFTSHOP" was infringed by a competitor's use of the words "Lift Shop" in the title of its webpage.

The dispute

Lift Shop Pty Ltd and Easy Living Home Elevators Pty Ltd are both suppliers of customised elevators/lifts and disability platform elevators.

Lift Shop is the registered owner of this composite trade mark which covered "Elevators (lifts)":

In 2012 Easy Living added the term "lift shop" to the title of its website and the contents of the home page, and designated "lift shop". When anyone searched on a internet search engine for "lift shop" this result appeared:

Easy Living Lifts | Home Elevators | Lift Shop – Lift Shop [webpage title] [url]
At Easy Living home elevators website you will find details on all of our lifts and home elevators here, which will help you achieve the easy living you deserve. [description]

These modifications were made as part of a search engine optimisation marketing strategy to improve Easy Living's rankings in search results when prospective customers conduct internet searches for elevators and lifts.

Lift Shop commenced proceedings for trade mark infringement, contravention of section 18 of the Australian Consumer Law and passing off.

The trade mark claim

Lift Shop's trade mark infringement claim only concerned the use by Easy Living of "Lift Shop" in the title of its web page, as reproduced in search results.

The primary judge held that in this context, "Lift Shop", was not used as a trade mark but rather in a descriptive way.

The primary judge also held that if he was incorrect regarding trade mark use, then infringement would have been established because "Lift Shop" was a sign that that was deceptively similar to Lift Shop's registered trade mark.

Did Easy Living use the words "Lift Shop" as a trade mark?

It is settled law that use "as a trade mark" is use of the mark as a "badge of origin" in the sense that it indicates a connection in the course of trade between goods or services and the person who applies the mark to goods or services. This reflects that a "trade mark" is a sign used to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with by someone else.

In the present case, the Full Court held that the relevant question was whether the words "Lift Shop", as used by Easy Living in the title of its web page, functioned to distinguish its goods or services from those of others.

The Full Court determined that the only functional significance of the words "Lift Shop", as they were used by Easy Living, was to describe the character of its business. Their use was not to distinguish Easy Living's business from others. To the contrary, in the setting of the search engine results page, the use of those words was to designate that Easy Living's business was of the same character as other businesses grouped and operating as "lift shops". The Full Court characterised such use as "the antithesis of trade mark use".

Are the words "Lift Shop" as used by Easy Living deceptively similar to Lift Shop's mark?

Given its finding on use as a trade mark, the Full Court did not need to consider whether the words "Lift Shop" were deceptively similar to the registered trade mark, but it did so nevertheless.

Easy Living challenged the primary judge's finding of deceptive similarity on the basis that it was the graphic elements of the registered mark that constitute its distinctive features. The word element "LIFTSHOP", it said, was highly descriptive, and where an element that is common to trade marks under comparison is descriptive, its presence must be discounted to some extent when considering whether the compared marks are deceptively similar.

The Full Court was not persuaded that the primary judge's characterisation that the marks were deceptively similar was erroneous, and held it was a conclusion that was open on the evidence.

The limitations of descriptive words in trade marks

The case highlights the limitations of registered trade marks that contain highly descriptive words. While those words may be able to be registered as part of a composite mark, there will be no trade mark infringement if the alleged infringer is simply using the words in a descriptive sense.

The case is also a reminder that businesses should take care in any search engine optimisation strategy to avoid trade mark infringement. While the actions of Easy Living in this matter were not an infringement, the result may well be different in other circumstances where the particular words used are not descriptive. In particular, the fact that Google does not restrict the use of trade mark terms in keywords does not mean that it is lawful to use a competitor's trade mark.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

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