The 26 March 2010 decision of the Federal Court of Australia in Mantra Group Pty Ltd v Tailly Pty Ltd (No 2)  FCA 291 (Mantra Case) demonstrates the importance of property developers and managers having registered trade marks.
The Mantra Case is also important for brand owners in general, as it demonstrates the circumstances in which a domain name registration incorporating a trade mark can constitute trade mark infringement.
Mantra Group Pty Ltd (Mantra) is the property manager and exclusive onsite letting agent for the Circle on Cavill apartment complex at Surfers Paradise. Mantra holds approximately 261 apartments in the complex. Apartment owners are free to choose whether to contract with Mantra or with an offsite letting agency.
Mantra is also the owner of three registered Australian trade marks – one for the word mark CIRCLE ON CAVILL and two for CIRCLE ON CAVILL logo devices.
Tailly Pty Ltd (Tailly) operates as an offsite letting agent for Circle on Cavill. Tailly holds approximately 39 apartments in its portfolio, which it leases on a short-term basis to holiday makers.
In order to advertise its apartments and source bookings, Tailly engaged in the following activities:
- registering domain names incorporating the name CIRCLE ON CAVILL (e.g. "circleoncavile.com.au", "circileoncacillretail.com.au" and "ecircleoncavill.com");
- using the name CIRCLE ON CAVILL in the banner, title and text of the websites resolving from its domain names; and
- using the name CIRCLE ON CAVILL in the meta-tags of its websites (in order to achieve a higher ranking for its websites in search engine results).
Mantra commenced proceedings against Tailly, claiming that:
- Tailly had breached its registered CIRCLE ON CAVILL trade marks; and
- Tailly had engaged in misleading and deceptive conduct under the Trade Practices Act 1975.
Tailly sought to rely on the defence contained in s 122(1)(b) of the Trade Marks Act 1995, namely that it had used the name and mark CIRCLE ON CAVILL in good faith, to indicate the geographical origin of the services provided.
Justice Reeves found that the word 'geographical' referred to a broader concept of place such as country, state, region, city, town or suburb and did not include a privately owned residential complex.
Justice Reeves also found that in any case, Tailly had not used the name CIRCLE ON CAVILL in good faith to refer to the building in a geographical sense. Instead, Tailly had deliberately used the name to gain a commercial advantage for its letting business. This was most clearly demonstrated by the fact that Tailly had registered a series of domain names which were misspellings of the name CIRCLE ON CAVILL, with the intention of directing Internet traffic away from the website of Mantra to its own websites.
The Court needed to consider whether Tailly had used the CIRCLE ON CAVILL name and mark as a trade mark. In deciding it had, Justice Reeves made the following comments:
- in assessing whether use of a mark is use as a trade mark, the Court should examine a variety of factors including the position of the words, the type and size of the font used and the colours used;
- Tailly often used the words CIRCLE ON CAVILL as a banner-style heading in large font and in a stand-alone format throughout the websites;
- on several of Tailly's websites, no descriptive use of the words had been made at all;
- it was clear that, in the majority of examples provided, Tailly had used the words CIRCLE ON CAVILL as a 'badge of origin' and trade mark to indicate a connection between the words and Tailly (rather than use in a descriptive sense);
- accordingly, Tailly had breached Mantra's registered trade marks.
Importantly, Justice Reeves noted that the use of a trade mark in a domain name registration can also constitute trade mark infringement, if the website resolving from the domain name also uses the trade mark in association with the goods or services in relation to which the trade mark is registered.
The Court did not decide on the misleading and deceptive conduct allegations and left it open to the parties to make further submissions on this issue.
Tailly sought to have Mantra's trade mark registrations cancelled on the basis that they had become generally accepted within the relevant market as the name of the Circle on Cavill apartment complex, and therefore Mantra had lost the exclusive right to use the word as a trade mark. The Court disagreed with this argument and the trade mark registrations remained on the register.
The Court made orders requiring Tailly to:
- transfer the infringing domain names to Mantra;
- permanently refrain from using the term CIRCLE ON CAVILL as a trade mark to advertise accommodation; and
- pay its profits to Mantra for bookings sourced via the infringing websites in relation to accommodation provided in Mantra-managed apartments.
The Mantra Case has a number of important implications for both property developers and brand owners.
The Importance of Registered Trade Marks to Property Developers
Property developers and managers should register trade marks as soon as they decide on the name of their complex and prior to selling any apartments in the complex. The Court will enforce trade marks for letting businesses even when the trade mark is the same as the name of the building.
Greater care should also be taken by anyone wanting to use the name of a building to promote or market their goods or services, in circumstances where the name of the building is also a registered trade mark of a third party. In such circumstances, aesthetic factors such as the font and colour used can influence whether the Court will find that the name has been used as a trade mark.
Domain Name Registrations May Constitute Trade Mark Infringement
The registration of a domain name incorporating a registered trade mark, when coupled with use of the trade mark on the resolving website, can constitute trade mark infringement.
However, it does not appear that registration of a domain name alone will constitute trade mark infringement. In such circumstances, trade mark owners should consider taking action under auDA's Australian Uniform Dispute Resolution Policy.
The 'Geographical Origin' Defence Will Not Usually Encompass Privately Owned Property
The meaning of 'geographical origin' in relation to the defence to trade mark infringement available under s 122(1)(b) of the Trade Marks Act 1995 has been construed narrowly and does not encompass a privately owned apartment complex.
The assistance of Elyse Gorman, Solicitor, of Addisons in the preparation of this article is noted and greatly appreciated
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.