connect.com.au Pty Ltd v GoConnect Australia Pty Ltd [2000] FCA 1148 | Case summary

(d) represent that the corporation has a sponsorship, approval or affiliation it does not have;" 20 The applicant is the registered proprietor of two Australian trade marks, Numbers 734561 and 734562, which are registered under the Trade Marks Act 1995 (Cth) ("the Trade Marks Act"). Both trade marks are registered in respect of services in Class 38. Class 38 is concerned with telecommunications. The applicant asserts that the name "GoConnect", in the way in which it is used in the respondent's logo, is deceptively similar to the applicant's trade marks. It also asserts that the respondent is providing or offering to provide services, under or by reference to that name, that are the same as or are closely related to services in respect of which the applicant's trade marks are registered. Accordingly, it is asserted the respondent is infringing the applicant's trade marks. 21 The applicant did not contend that every use of the word "connect" in connection with the provision of ISP Services would be misleading or deceptive. It could not do so in the light of the evidence concerning the use of the word "connect" in the names of entities involved in communications and in trade marks that are either registered or in the course of registration under the Trade Marks Act. 22 Mr Kieran Power was asked by the respondent to search the domain name databases for domain names containing the word or derivates of the word "connect". The results of his searches show that there are dozens of domain names registered in Australia that include the word "connect" together with some other distinguishing letters or symbols. Examples include, "netconnect.com.au", "connect4.com.au", "pc-connect.com.au", "artconnect.com.au", "aussieconnect.com.au" and many, many others. 23 Mr Power also searched the Telstra yellow pages online directory for all companies and businesses throughout Australia under the categories, "Internet services", "computer software & packages", "computer equipment", "telecommunications consultants", "data communications & computer system consultants" that contained the word or derivatives of the word "connect". The results of that search also show numerous examples of entities that have the word "connect", quite apart from derivatives. 24 Mr Power also conducted searches of various online registers and listings, websites and publications for ISPs and other businesses operating in the field of information technology and telecommunications or offering related goods or services which contained the word "connect", or derivatives, as part of the name or in the name of their products or services. Approximately 20 websites were shown to be operated by an ISP that contain the word "connect" in their names. 25 A similar number of instances of names containing the word "connect" was found in relation to companies and businesses in the field of information technology and telecommunications or offering related goods and services. It is perhaps of significance that the applicant's domain name and corporate name subsists without any apparent difficulty with a domain name registered for a United Kingdom telecommunications company, "connect.co.uk". Further, the retail name "ConnectNet" coexists without apparent difficulty with the domain name "connectnet.com.au" for an Australian information technology recruitment business. 26 I have already referred to the fact that the applicant, in its capacity as registrar of the ".net.au" domain register had no difficulty in registering the name "GoConnect.net.au" on behalf of the respondent. Further, there was evidence before me of the clients to whom the applicant provides Internet services that are themselves ISPs. The particulars of the names are confidential. However the evidence shows that several of those companies have the word "connect" as part of their name. 27 Rather than complain about any use of the word "connect" the applicant complains only about the use of the word "connect" in the context of the respondent's logo. The applicant's complaint, as expounded in the course of the trial, is that by adoption of the name "GoConnect" and the use of that name in the form of the logo widely used by the respondent, the respondent has made the alleged representations. The logo is reproduced in Part 1 of the schedule to these reasons. 28 It is significant that, in the logo as used by the respondent, the word "go" appears separately from the word "connect". The word "go" appears in the logo as part of a representation of a button depicted in three dimensions. Thus it is separate and distinct from the word "connect". The applicant said that because of that separation the logo placed emphasis on the word "connect" and thus isolated the word "go". By doing so the word "go" is seen as a "call to action" and not part of the name. The word "connect" is seen as a reference to the supplier of services. 29 The complaints in relation to the alleged infringement of trade marks are limited in the same way. Thus it was said that the essence of the trade mark is the primacy given to the word "connect" and similar primacy is given to that word in the respondent's logo. 30 There is a trend in Australia towards the provision of free services by ISPs who have in the past provided retail services on a fee service basis. There is also a practice amongst some commercial organisations in Australia to attempt to strengthen or to change the public image or perception of such organisations by changing the logo design for the organisations' brands. Indeed, there have already been two changes in the get-up employed by the applicant in connection with the provision of its services. From commencement of operations until the latter part of 1996, the applicant employed a logo consisting of the word "connect" following by ".com.au" against a background of a sphere. From the beginning of 1997, a different style was used and that style appears to be a reproduction of the trade mark which has the "C" of connect in much larger script than the balance of the word. Representations of those logos appear in Parts 2 and 3 of the Schedule. 31 In 1999, as a result of the acquisition of the applicant by AAPT, there was a further change in the logo style whereby the applicant now adopts the logo of AAPT and AAPT's colours coupled with a statement that the applicant is an AAPT Limited company. The evidence suggested that the only current presentation of the applicant's product to consumers is through the logo of AAPT and not through its own trade mark. There was no suggestion that the AAPT logo has any similarity to the logo employed by the respondent. Representation of the AAPT logo appears in Part 4 of the Schedule. 32 The applicant contended that the respondent's logo is likely to be recognised by members of the public as the adoption by the applicant of the technique, to which I have just referred, of changing or strengthening its public image. Essentially the contention was that the public are likely to perceive the respondent's logo as indicative of a move by the applicant into a new segment of the industry, namely the segment that provides free ISP services at the retail level. Thus, it was contended that the public would be likely to be misled or deceived into seeing some connection between the proprietor of the logo, the respondent and the applicant. 33 There is no evidence that the applicant has any intention of entering the segment of the market that provides ISP services free of charge. On the contrary, there was evidence of a joint venture between AAPT on the one hand and AOL Australia Limited on the other. AOL stands for "America Online", which is the world's largest consumer Internet service. AAPT announced its joint venture on 30 March 2000. AAPT was reported in the press shortly thereafter as saying that in future marketing it would drop its Internet retail brand "connect.com.au" in favour of AOL. 34 As recently as 1 August 2000, newspaper reports appear of announcements by AOL that it would push a new Internet service to its 800,000 clients, which included users of "connect.com.au". The new service, however, while it was described as a "cut-price" package, will nevertheless involve the payment of fees. There is no suggestion that the AOL service will be provided free. 35 The applicant contended that it had established a reputation in the name "connect" without the addition of ".com.au". Certainly, the applicant regularly uses the term "connect" to refer to itself. In advertising material that it distributes it refers to itself simply as "Connect". It uses the phrase "Connect for the Internet". The intention appears to be a pun of some sort. Instead of the commonly used expression "Connect to the Internet" the intention seems to be to refer to the applicant as the appropriate service provider for the Internet. However, even in documents such as that, the name of the applicant as "connect.com.au" appears prominently and regularly. There is no evidence of any significant use of the word "connect" as referring to the applicant except in conjunction with reference to "connect.com.au" and to the logo that was current at the relevant time. The documents most recently published also include the AAPT logo. 36 The word "connect" is a common English word. It is descriptive of part of the services provided by ISPs generally and both the applicant and the respondent in particular. There could not be any dispute between the parties, having regard to the evidence before me, that the word "connect" and derivatives such as "connecting" and "connection" are very commonly used in the context of the Internet and the provision of services in connection with the Internet. Indeed, the applicant accepted that the word "connect" is descriptive and conceded that it has not acquired a secondary meaning in relation to the applicant. Mr John Christopher Tierney, the chief financial officer of the applicant, accepted that the use of the word "connect" or "connection" is commonplace in the ISP industry as being descriptive of the function that is performed by an ISP. 37 The retail activity of the applicant is not insignificant. I would draw the inference that a substantial number of the approximately 5000 retail users of the applicant's services would be aware of the name of the applicant and that the name includes the word "connect". However, I do not consider that the evidence supports a conclusion that the public generally associate the mere word "connect" with the applicant exclusively. 38 There was considerable anecdotal evidence concerning possible misconceptions as to the existence of an association between the applicant and the respondent. There were in excess of 40 short affidavits filed on behalf of the applicant, sworn by persons employed by or in connection with the applicant and its associated entities. There was also considerable evidence of email and telephone communications with the applicant that suggested some degree of misunderstanding or misconception on the part of those speaking to the applicant's officers. However, I did not find that evidence at all compelling. There were only two witnesses who actually gave evidence of their own confusion. In the case of almost all of the other possible misunderstandings there was no evidence as to what had given rise to any misconception or misunderstanding, save for possible inferences that might be drawn from the advertising campaign of the respondent. Indeed, in some cases, the confused person acknowledged a mistake unconnected with the respondent's logo. One example relied on by the applicant as an example of somebody being confused or misled involved an email from one David Street who said that he was a member of GoConnect and wished to make an inquiry. He was told that he had contacted the wrong company and that connect.com.au was in no way affiliated with the respondent. He replied saying, "Sorry for my dyslexic fingers". In the absence of any evidence from the persons who may have been confused as to what brought about their confusion, the evidence is of little weight. 39 The only evidence of actual confusion was from Mr Matthew See and Mr Timothy Hook. Mr See is an Internet administrator employed by Perpetual Trustees Australia Limited. He said that, when he first saw the respondent's advertising, he thought the advertising was conducted on behalf of the applicant. He said that he knows and refers to the applicant as "Connect" or "Connect.com". That, of course, is a misconception. He said that, for him, the word "connect" denotes the applicant. However, he gave no evidence as to the source of that understanding. He said that at the time he saw the respondent's advertisements, he thought that the term "Go" was a promotional term and that the applicant had launched a new product. He said he thought that the respondent's advertising was advertising on behalf of the applicant because the respondent was offering services identical to those offered by the applicant, namely ISP services. That, of course, would not be a reason for connecting the two. Mr See also said that it was unfortunate because the respondent's advertising suggests that "Go" was a product and that "Connect" is the company supplying the product. That of course could only be so if one looked at no other part of their promotional material. Mr See was not cross-examined. However his understanding was clearly wrong and, as I have said, there was no evidence as to what led him to the wrong understanding that he apparently had. 40 Mr Hook is the operations manager for Hook Plastics Pty Limited. He saw the respondent's advertising in approximately January and February 2000 and also saw advertising in various magazines, although he could not be specific which ones. He had also heard a radio promotion on a Melbourne radio station. Mr Hook said that in March 2000 he had a meeting with two employees of the applicant. When he was shown the business card of one of them, he wondered if the applicant had any association with the respondent because of the similarity of the names and because he thought the respondent delivered the same sort of services that the applicant supplies. 41 To the extent that there was evidence of confusion constituted by telephone inquiries to the applicant, those inquiries could well be the product of a person remembering the name, for example, from similar advertising or other promotional material and not being able to find the respondent in the Yellow Pages. The respondent has not yet completed its entries in Telstra's telephone directories. To the extent that the confusing material consists of email inquiries, it may also be the product of the use of a Search Engine. A Search Engine is a program that enables one to identify a website by putting a word into the inquiry box that is intended to identify the web site. It may be that, in some cases, Search Engines will not produce the respondent, notwithstanding that the full word "GoConnect" is the subject of search. There was, however, no evidence of those matters one way or the other and they are therefore matters of conjecture. 42 There was some anecdotal evidence of persons communicating with the applicant and inquiring about free ISP services. In all instances, the inquirer was informed that there was no connection between the applicant and the respondent. While there was such evidence of communication with the applicant, there was no evidence at all of anyone ever communicating with the respondent in the belief that the respondent had any connection with the applicant. 43 Ms Deanna Corso is the membership co-ordinator of the respondent. Her responsibilities include maintenance of the respondent's client database and the administration of the registrations of people wanting to receive the free Internet access service provided by the respondent. She is also responsible for monitoring electronic mail and other communications from registered clients of the respondent and from the public generally. She said that since January of 2000, the respondent has received on average between 200 and 250 email communications per day. 44 Her best estimate of the number of emails that the respondent has received, since she commenced work is about 50,000 to 60,000. She was not challenged in relation to those estimates. Apart from emails and facsimile communications, the respondent occasionally also receives letters from members of the public, or registered clients, to which she responds on behalf of the respondent. Such communications are generally from people who are not on email. She receives a few of those each week. 45 Ms Corso said that in the course of her work for the respondent she has not become aware of any communication to the respondent by email, telephone, or facsimile or letters suggesting any confusion between the respondent and the applicant. She first learnt of the existence of the applicant when informed by her solicitor at the commencement of these proceedings in late March 2000. 46 Mr Peter Gabriel Barta, is the General Manager (Membership Services and Communications) of the respondent. He gave unchallenged evidence as to the numbers of clients of the respondent. As at 12 midnight on 23 July 2000 there were 415,233 registered clients. Of those offers to become affiliated as connected members have been made to 118,027 registered members. Of those 53,771 had in fact followed the necessary procedures to become connected members. Thus as at that moment, 53,771 people actually had access to the Internet at any time by way of the respondent's facility. 47 I would have expected that if people registered with the respondent thinking the respondent was associated in some way with the business of the applicant, there would be likely to be contact by such people with the applicant. The particular occasion for such contact arose from a difficulty that the respondent had in actually supplying connections to all its registered members. The reason why offers had been made only to limited numbers is that the wholesale supplier of ISP services to the respondent is unable to meet the whole of the respondent's demand. One might expect that there would be scope for people who expected to be able to use the Internet shortly after registration to express their concerns about their inability to do so. One would think that such people might contact the applicant if there was any likelihood of confusion. However there appears to be only one case, and on one view that is equivocal, of an inquiry being made to the applicant by a person who had registered with the respondent and asked whether the applicant could do something about connection. There was no evidence of any other communication of that nature. 48 Evidence of actual confusion can be of great weight: see Australian Woollen Mills Limited v F S Walton & Co Limited (1937) 58 CLR 641 at 659. However, having regard to the matters to which I have referred, I consider that the anecdotal evidence of confusion must be given little weight. A further reason for discounting its weight is the fact that it was, at least to a substantial extent, compiled after internal communications to staff of the applicant referring to these proceedings. For example on 24 March 2000 a circular was sent to the staff of the applicant saying inter alia as follows: "Our legal team urgently requires evidence from staff about any situations you have encountered where potential customers, existing customers or business partners have been confused by Go Connect's advertising. They particularly want to know of instances where we may have lost sales because of this confusion, but any other anecdotes could be important." Of the 40 or so anecdotes, none of them involved any instance of lost sales. 49 On 17 July 2000, another circular was distributed to staff saying inter alia: "if anyone is aware of any incident, which has not previously been disclosed to connect.com.au's lawyers, where it appears that some person has been confused about the difference between connect.com.au and GoConnect, would you please contact…" The circular went on to say: "The incident need not be significant, for example, if a client or a prospective client has asked about GoConnect or a friend has inquired about GoConnect, these are matters that we would like to be made aware of. If you have any relevant informationwould you please contact… as soon as possible." 50 Accordingly, I do not regard the evidence before me as indicative of any actual confusion or deception that is of any commercial significance. When I say that, I refer not to the numbers but to the nature of the confusion. I regard as important the fact that there was no evidence at all of anyone speaking to the respondent in the belief that he or she was speaking to the applicant. 51 There are several points of distinction and differentiation between the respondent's logo and the applicant's name. First of all is the use of the prefix "Go". In a sense, of course, that is the strength of the applicant's case insofar as it relies on the separation of "Go" from the word "connect". 52 Mr Laurie John Newman is the business development director of the applicant. He was certainly aware of the large numbers of other ISPs that conduct their business with a name comprising the word "connect". He considered that the fact that the applicant might use the name "connect" alone serves to differentiate it from companies who might use the word "connect" as part of a name. I have already referred to the numerous instances of entities involved in the industry that use the word "connect" together with a suffix or prefix. That appears to give rise to no difficulty. 53 Those examples are in precisely the same category as the name "GoConnect". The only question is whether the way in which the name is depicted in the respondent's logo is sufficient to distinguish that use from the use by so many other entities. The evidence before me indicates that whenever the logo is used, it is used in conjunction with the domain name of the respondent, namely "www.goconnect.com.au". 54 There are other points of differentiation that must be added to the use of the word "Go" as well as the word "connect". The first is what might be described as the green theme coupled with alien imagery. The evidence indicates that the respondent's advertising campaign has centred around the colour green and the idea of an alien being. There was evidence before me from advertising consultants who had developed the concept of the alien being for the respondent's advertising campaign. While the alien being is not exclusively seen in all of the advertisements, the colour green is distinctive in relation to the use of the logo complained of by the applicant. 55 On the other hand, as I have said, the applicant uses its own logo, or rather that of its parent company, and the distinctive colours of that parent company, which are purple and yellow. The evidence was that that logo and the reference to the applicant being an AAPT Limited company accompanies virtually all of the applicant's current advertising. I do not consider that the possibility that the public would think that the respondent was a new positioning of the applicant is at all likely. 56 A further point of distinction is the emphasis on the part of the respondent to its services being free to its clients. The emphasis in the advertising campaign by the respondent has been that endless free Internet time really exists in contrast to other ISPs that advertise free time but only on the basis that after some free time, a charge is made. That approach, as I have said, is quite distinct from that of the applicant either before the joint venture with AOL and certainly since the joint venture. Indeed, the retail segment of the applicant's business is, it seems, likely no longer to have any connection with the name "connect". 57 The word "connect", because it is such a common English word, could probably never become distinctive. Even if it were possible for the word to become distinctive, a very substantial amount of use in the relevant market would be necessary for it to acquire any secondary meaning. The applicant does not contend that the word "connect" has acquired a secondary meaning in the present circumstances. Of course, the word might be distinctive where it forms part of a trade style or get-up or trade dress. However, in those circumstances, it is the whole of the style, get-up or dress that becomes distinctive, not the mere use of the word. It is the combination of the word with the particular get-up that would have any consequences so far as section 52 of the Trade Practices Act is concerned and so far as the common law tort of passing off is concerned. 58 In any event, where an ordinary word acquires a secondary meaning, very little differentiation is required in order to distinguish its use for the purposes of section 52. No doubt it is correct to say that where a descriptive trade name is used there will always be the possibility of confusion. It is also true to say that where a descriptive trade name is used it will be difficult for that name to become distinctive of a particular business. Application to like businesses would not ordinarily mislead the public: see Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 229 ("Hornsby Building"). 59 There may, of course, be cases where usage of a descriptive name may bring about the result that it acquires a secondary meaning equating it with the products of an applicant. Such a case would be Opals Australia Pty Ltd v Opals Australiana Pty Ltd (1993) ATPR ¶41556. Even there, however, Lockhart J acknowledged that where the name of a business consists of words descriptive of that business and which have not acquired a secondary meaning, a slight difference between the plaintiff's and defendant's title will in the absence of fraud be a sufficient distinction: at page 41563 referring to the House of Lords in Office Cleaning Services Ltd v Westminster Window and General Cleaners Ltd (1946) 63 RPC 39. 60 There is a price to be paid for the advantages flowing from the possession of an eloquently descriptive trade name. Because it is descriptive it is equally applicable to any business of a like kind. Its very descriptiveness ensures that it is not distinctive of any particular business and hence its application to other like businesses will not ordinarily mislead the public. In cases of passing off where it is the wrongful appropriation of the reputation of another or that of his goods that is in question, a plaintiff which uses descriptive words in its trade name will find that quite small differences in a competitor's trade name will render the latter immune from action. 61 The possibility of blunders by members of the public will always be present when names consist of descriptive words. So long as descriptive words are used by two traders as part of their respective trade names, it is possible that some members of the public will be confused whatever the differentiating words may be: see Sir Ninian Stephen at page 229 in Hornsby Building (above). 62 I do not consider, in the circumstances, that the applicant has made out a case under section 52 or section 53 of the Trade Practices Act, nor in relation to the tort of passing off. To a great extent that conclusion also disposes of the claim of infringement of the trade marks. 63 The contention on behalf of the applicant was that, in the respondent's logo, the word "connect" would be perceived as the identifier of the source of the service because of the primacy given to the word by the design. It was said that because the word "connect" is presented in sharp distinction to the word "go" the word "connect" is a statement of the identity of the proprietor. It was said that the word "connect", in combination with the graphic design of the trade marks, indicates that "connect" is the statement of the source of a service and that the same observation can be made in relation to the respondent's logo. The contention by the applicant was that "connect" is the "theme" that would be focussed upon by a person who knows of the applicant's trade marks and thereby be caused to wonder whether the source of the service in respect of which the respondent's logo is used, is the same. 64 The word "connect" is the significant thing about the trade mark. When one looks at the respondent's logo, the word "connect" is also the significant thing. However, it was not suggested that every logo that uses the word "connect" would of itself be an infringement of the applicant's trade mark. Such a contention could not succeed. I consider that it is only necessary to look at the two representations to see that there is no likelihood of confusion between the two. No case was made that the respondent's logo is substantially identical with the registered trade mark. The contention was that it was deceptively similar. Under section 10 of the Trade Marks Act, a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark, that it is likely to deceive or cause confusion. For much the same reasons that I have already advanced for my conclusion in relation to section 52 and the tort of passing off, I do not consider that the logo employed by the respondent so nearly resembles the registered trade marks that it is likely to deceive. 65 The word "Go" is clearly part of the logo. The logo is only ever used in conjunction with the colour green. It is clear that the words "Go" and "connect" are all part of the same logo. It may be that the mere addition of words will not be sufficient to avoid infringement: see Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 121 ALR 191 at 228 per Gummow J. However, there is no superficial similarity at all between the two devices. I do not consider that the applicant has made out a case for infringement of the trade marks. It follows in my opinion that the application should be dismissed. 66 The respondent asks for an exceptional order as to costs, namely, that the costs should be ordered on an indemnity or solicitor/client basis. The discretion to award costs is absolute and unfettered but, of course, must be exercised judicially. There must be some special or unusual feature in a case to justify the court exercising its discretion to depart from the ordinary order: see Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 400. 67 One of the special or unusual features that might justify an order is where it appears that an action has been commenced or continued in circumstances where the applicant properly advised should have known that he had no chance of success. In that regard it might be sufficient to allow the discretion to award such costs where a party persists in what should on proper consideration be seen to be a hopeless case: see J Corp v Australian Builders Labourers Federated Union of Workers, WA Branch (No 2) (1993) 46 IR 301 at 303. 68 The contention advanced on behalf of the respondent is that the applicant should have known that it would never establish the allegation assertion made in the statement of claim, that the name "Connect" had, at all material times, been exclusively associated by the public with the applicant, its business and its ISP services. That is probably so. However, that is not the basis upon which the applicant conducted the case, as appears for the reasons that I have already indicated. The applicant's case was that there was a likelihood of confusion between the respondent's logo and the business of the applicant. While I have reached a firm view as to those matters, I do not regard the submissions that were made on behalf of the applicant as being without any substance at all. 69 Secondly, reliance was placed on the anecdotal evidence to which I have referred. As I have said, there are over 40 affidavits, albeit short ones, of conversations with persons who may have been confused, but very little evidence from anyone who was actually confused. The evidence was admitted without objection. Had there been objection, a question may have arisen as to its admissibility and as to whether, as a matter of discretion, I would have rejected it. That question, however, was not raised. The evidence, if nothing else, indicates that the applicant may well have had reason for concern that there was confusion in the market place. Whether it went about proving that concern in the right way is a different matter. 70 Finally, reference was made to the evidence concerning the joint venture with AOL Australia Limited as indicating an intention on the part of the applicant to abandon the use of "connect" in relation to retail services. That is not necessarily a basis upon which one can conclude that there is no infringement of the rights of an applicant. The concept of dilution arises in relation to trade mark law. I would expect that concept could be applied in relation to actions under section 52 of the Trade Practices Act as well. That is to say, use of the name of one party, albeit in relation to different services, could nevertheless involve some dilution of the benefit which that party gains from its reputation in its name. I do not regard the existence of the joint venture arrangement as of itself sufficient to justify making a special order. It may be of course that some criticism could be directed at the applicant for its own failure to refer to the joint venture. An inference might be drawn that there was a desire to be less than frank with the Court. However I do not understand those matters to have been put fairly to the applicant's witnesses. 71 I do not consider that any basis has been made out for departing from the ordinary order as to costs. The orders I propose are that the application be dismissed and that the applicant pay the respondent's costs of the proceedings.

connect.com.au Pty Ltd v GoConnect Australia Pty Ltd

At a glance

Court

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Before

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Judgment (10 paragraphs)

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Legislation Cited (2)

Cases Cited (5)

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