By using the marks THE PRACTICE and as trade marks in relation to the promotion and provision of business and tax advisory and accounting services, the respondent infringed Australian Trade Mark Registered Number 1757523 (the applicant's mark) pursuant to s 120(1) of the Trade Marks Act 1995 (Cth).
THE COURT ORDERS THAT:
The respondent, whether by itself, its servants or agents or howsoever, be restrained from using the applicant's mark, or any other mark that is substantially identical with or deceptively similar to the applicant's mark.
The respondent pay to the applicant damages assessed in the amount of $200,000.
The applicant file and serve any written submissions on the question of costs within 14 days, and the respondent file and serve any written submission in reply within 14 days of being served with the applicant's submissions.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
O'CALLAGHAN J
[2]
Introduction
The applicant brings a claim against the respondent for infringement of a trade mark.
This is as clear a case of trade mark infringement as one is ever likely to see.
The applicant is a financial services firm providing accounting, taxation, financial planning, wealth management and lending advisory services. It has traded under the name "THE PRACTICE" since 1999. It employs 55 people and services over 2,100 client groups (comprising over 7,700 entities) who are located in every state and territory across Australia. It generates revenue in excess of $10 million each year and has spent millions of dollars on advertising over the last 10 years. Over the years it has received significant exposure in national mainstream newspapers, on the radio, television, and through speaking engagements and conferences throughout the country and internationally.
The applicant has used the following three marks in respect of providing accounting, taxation, financial planning, wealth management and lending advisory services, among other services:
from February 1999 to June 2007, the applicant used the logo:
from June 2007 to January 2014, the applicant used the logo:
from January 2014 to present, the applicant has used the logo:
Since 9 March 2016 the applicant has been the registered owner of trade mark number 1757523 (the applicant's mark) for the mark:
The applicant's mark is registered in respect of the following services:
Class 35: Advice on tax preparation; Preparation of documents relating to taxation; Preparation of income tax returns; Preparation of tax returns; Tax advice (accountancy); Tax assessment (accountancy) consultancy; Tax assessment (accounts) preparation; Tax consultancy (accountancy); Tax filing services; Tax planning (accountancy); Tax preparation; Tax return advisory (accountancy) services; Tax services (business management and accountancy services); Taxation (accountancy) advice; Accountancy; Chartered accountancy business services; Auditing of accounts; Business auditing; Efficiency or process auditing (examining, reviewing or assessing the working of a business or organization); Advice relating to business management; Advice relating to business organisation; Advice relating to the acquisition of businesses; Advisory services relating to business acquisitions; Advisory services relating to business planning; Business accounts management; Business acquisitions consulting services; Business administration; Business advice; Business appraisals; Business assistance relating to the establishment of franchises; Business consultancy services relating to the marketing of fund raising campaigns; Business consultancy to firms; Business consultation; Business consultation services relating to franchising; Business management; Business planning; Business strategic planning; Consultancy relating to business acquisition; Consultancy relating to business management; Consultancy relating to business mergers; Consultancy relating to the establishment and running of businesses; Management advisory services for businesses; Management of business projects (for others); Preparation of business reports; Preparation of documents relating to business; Strategic business consultancy; Strategic business planning; Advisory services relating to business risk management.
Class 36: Financial advice relating to taxation; Financial advisory services relating to tax; Income tax financial advice; Tax advice (financial); Tax financial planning; Tax returns financial consultancy; Tax services (financial); Taxation financial planning services; Administration of insurance business; Business appraisals for financial valuation; Business liquidation services (financial); Financial business appraisals; Insurance for businesses; Investment business services; Advice on finance for retirement; Advisory services relating to finance; Advisory services relating to investment finance; Consultancy services relating to finance; Management of finances; Project finance; Raising of finance; Trade finance services; Advisory services relating to (financial) risk management; Financial risk management; Risk management (financial); Risk management consultancy (financial); Administration of financial affairs; Consultation services relating to financial matters; Consultations (Financial); Financial advice; Financial analysis; Financial asset management; Financial consultation services; Financial fund management; Financial modelling services; Financial strategy consultancy services; Insolvency services (financial); Preparation of financial reports; Provision of financial information; Consultancy services relating to personal finance; Personal financial planning services.
From around its incorporation on 13 January 2017, the respondent has provided business advisory and accountancy services under the name "THE PRACTICE BUSINESS ADVISERS & TAX PRACTITIONERS". It has provided those services under and by reference to this logo (the Logo):
By statement of claim filed on 2 February 2023, the applicant claims that the respondent's promotion and provision of business and tax advisory and accounting services under and by reference to the marks THE PRACTICE and the Logo infringes the applicant's mark under s 120(1) of the Trade Marks Act 1995 (Cth) (the Act) on the basis that:
the respondent has used the plain word mark THE PRACTICE and the Logo (together, the respondent's marks) as a trade mark;
the respondent's marks have been used in relation to services in respect of which the applicant's mark is registered (namely, accounting, financial and tax advisory services);
the Logo is substantially identical with the applicant's mark because, on a side-by-side comparison, a total impression of similarity emerges;
the respondent's marks are at least deceptively similar to the applicant's mark.
By its amended defence dated 25 October 2023, but not filed until 10 October 2024, the respondent denies the allegation of trade mark infringement and says that:
the respondent was not using the ordinary English words "THEPRACTICE Business Advisers & Tax Practitioners" as it appears within the Logo (which the respondent referred to as its "Composite Practice Mark") as a trade mark; or
alternatively, the Logo is not substantially identical with, or deceptively similar to the applicant's mark in relation to the registered services, and/or services of the same description.
At the hearing, the respondent also pressed two pleaded defences to infringement under s 122 of the Act as follows:
the respondent used the ordinary English words "THEPRACTICE Business Advisers & Tax Practitioners" as it appears within the Logo in good faith to indicate the kind, quality, and intended purpose of carrying out and the exercise of the profession of a business adviser and tax practitioner, and to indicate the character of the practice to which the respondent's business and tax advice practice belongs to for this purpose, and is afforded a defence under s 122(1)(b) of the Act;
the respondent would obtain registration of the Logo in the respondent's name if the respondent were to apply for it, providing a defence under ss 122(1)(f) or (fa) of the Act.
As is apparent from its defences, the respondent only raises defences in relation to the Logo, and does not raise any defence in relation to use of the plain words THE PRACTICE. In relation to the plain word mark, the only issues are therefore whether it was used by the respondent as a trade mark, and whether it is substantially identical with, or deceptively similar, to the applicant's mark.
This case proceeds on the basis that the applicant's mark is validly registered and is a mark which is apt to "distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person." It follows that the applicant has exclusive right to use the applicant's mark in relation to the services in respect of which it is registered. (See s 20 of the Act.)
The applicant also brings related claims under ss 18 and 29(g) of the Australian Consumer Law (ACL), being sch 2 to the Competition and Consumer Act 2010 (Cth). It further alleges in respect of the same conduct that the respondent has engaged in passing off.
For the reasons that follow, I will grant declaratory relief and an injunction in the form sought by the applicant restraining the respondent from continuing to infringe the applicant's trade mark and make an order for damages in respect of the trade mark claim. Counsel for the applicant, Mr T K Burn-Francis, agreed in the course of his closing address that if the applicant succeeded with respect to the trade mark claim it was not necessary to deal with the ACL and passing off claims.
[3]
The evidence
The applicant read two affidavits of Robert Hadded affirmed 2 May and 23 September 2024 respectively, and two affidavits of Jeremy Koadlow, also affirmed 2 May and 23 September 2024 respectively.
Mr Hadded is the co-founder, Chief Executive Officer and a director of the applicant. He deposed that he has been a director of the applicant together with Mr Jason Cunningham (until his recent retirement) since 1997 and has been a registered tax agent since 1996. The applicant was registered as a tax agent in 1998.
Mr Hadded deposed that the applicant registered the business name "THE PRACTICE" with the Victorian Corporate Affairs office in January 1999. He also deposed as to the applicant's use of the logos over the years referred to above, the corporate group of which the applicant is a member, and gave an overview of the applicant's business today (the gist of which is set out at [3] above).
He further deposed as to the efforts engaged in by the applicant since 1997 to promote itself in the form of substantial and continuous advertising, marketing and promotion in Australia through television, online, print and social media advertising and through speaking engagements. He also deposed that the applicant employed a full-time marketing manager from April 2011 to August 2018, and that between 1997 and May 2024, the applicant had "spent millions of dollars on marketing and promotion".
He further deposed that the applicant has operated a website since 2003, a YouTube account since May 2010, a Facebook account since May 2011, a LinkedIn account since around 2016 and an Instagram account since around 2019.
Mr Hadded also deposed that he first became aware of the respondent's business sometime around mid-2022 when one of its clients telephoned the applicant's number by mistake.
He was cross-examined briefly about the applicant's marketing strategy but counsel for the respondent, Mr J P Wheelahan, did not make anything of it in his closing address.
Mr Koadlow is the applicant's solicitor. He produced various screenshots of both the applicant's and respondent's websites and social media accounts. He was briefly cross-examined but to no effect.
The respondent read the affidavit of Kimani Boden dated 28 August 2024 and two affidavits of Ibsa Hassan sworn 3 September and 15 October 2024 respectively.
Mr Boden is a solicitor for the respondent. He produced the results of various searches undertaken by him which show that the words "The Practice" or "Practice" form part of the business name of nine Australian entities providing financial services.
Mr Hassan is the sole director of the respondent. The parties agreed that the substance of part of his evidence was that he is a "one man company. [He] is the sole director and shareholder of the Respondent company, the mind and will of the Respondent company, and the alter ego of the Respondent company."
In his 3 September 2024 affidavit, he deposed as to the following matters.
In 2001 he registered the business name "The Practics (IT and Accountancy)" with the Victorian Business Registry on 20 December 2001 under the now repealed Business Names Act 1962 (Vic) as a sole trader.
He deposed that he conducted comprehensive research to verify that "The Practice (IT and Accountancy)" was an available business name. He also swore that "Practics" in his registered business name was a typographical error that was a product of the Victorian Business Registry misreading his handwriting, although as he agreed in cross-examination, he never made any effort to correct it.
He further deposed that in 2013, he changed his business name from "The Practice (IT and Accountancy)" to "The Practice Business Advisers and Tax Practitioners".
Mr Hassan also deposed that in January 2014 he opened his own office, having registered as a sole trader and having obtained his tax agent licence. He swore that he engaged a graphic designer to design the Logo in about July 2014 and that he has used it in the course of his business since mid-2014.
He further deposed that the Logo "serves the dual function of describing my core business and acting as a badge of origin for [its] services".
He also deposed that in February 2014 he registered the domain name "thepracticeba.com". He deposed that he wanted to register "ThePracticeBusinessAdvisorsandTaxPractitioners.com", but it was too long, so abbreviated it to "thepracticeba.com". Mr Hassan swore that the letters "ba" in the domain are an abbreviation of the descriptive words "business advisors". He further deposed that he was not interested in registering a "com.au" domain name, and thus did not register "thepracticeba.com.au", even though a search showed that "thepracticeba.com.au" was available.
Mr Hassan deposed that upon incorporation of the respondent, he believed that he equitably assigned all the goodwill and intellectual property in "The Practice Business Advice and Tax Professionals" [sic] name and the Logo to the respondent, and that as director of the respondent, he seamlessly continued to use the name and the Logo from 2017 in the same manner as he had been using them as a sole trader. Out of an "abundance of caution", however, he deposed that he assigned all goodwill and intellectual property in his business to the respondent under a Deed of Assignment dated 29 August 2024.
He also deposed that he first became aware of the applicant's business name and the applicant's mark in about early 2023. (His affidavit includes evidence about a telephone call that he alleges he received from Mr Hadded, which was abusive. But Mr Hadded denied ever having spoken to Mr Hassan at any time, and if it is necessary to make a finding about it, I accept Mr Hadded's evidence.)
Mr Hassan also purported to give evidence about the unlikelihood of confusion and his honest belief, including as to his belief that the prospects of there being confusion between the two marks was minimal. But those are obviously matters for me to decide.
On the morning of the first day of the hearing, I gave leave to the respondent to rely on the affidavit sworn by Mr Hassan the day before in which he deposed as follows:
I make this additional affidavit to clarify my statement that I conducted searches for the business The Practice IT and Accountancy name in 2001 at paragraph [9]-[14] of my affidavit sworn 3 September 2024 that I conducted a search before registering the business name 'The Practice (IT & Accountancy)' through the appropriate authorities, with the help of the Victorian Business Registry on 20 December 2001, to ensure no conflicting or similar business name was registered at that time.
After completing the search, I proceeded to register the business name, under which I commenced providing IT and accountancy services.
Business name search in 2013
In 2013, I conducted a business name search when I registered as a sole trader tax agent with the Tax Practitioner Board under the business name 'The Practice Business Advisers and Tax Practitioners'.
I conducted the search to confirm that the business name was still available and not in conflict with any other registered business name at the time.
Based on the results of this search, I successfully registered the business name and was granted registration as a sole trader tax agent by the Tax Practitioner Board.
Business Name Search in 2017
In 2017, I conducted a third business name search before registering a company under the name 'The Practice Business Advisers and Tax Practitioners'.
This search was undertaken to ensure that there was no prior registration or conflict with any existing business names.
After confirming the availability of the name, I registered the company and subsequently applied for and was granted registration as a corporate tax agent.
On each occasion, I took the necessary steps to conduct thorough searches of the relevant business name registries to ensure that the business name 'The Practice' and its variations were available and free of conflicts.
At no time did I find any conflicting registrations or receive any notification from any authority or business entity that the name was unavailable.
Mr Hassan was cross-examined about his evidence of having conducted business name searches in 2001, 2013 and 2017.
Despite his evidence in paragraph 74 of his second affidavit, Mr Hassan did not dispute in cross-examination that he never conducted any search, anywhere, only of the words "The Practice". The only searches he conducted were of the exact words "The Practice (IT and Accountancy)" in 2001 and "The Practice Business Advisers and Tax Practitioners" in 2013 and 2017.
It was also put to Mr Hassan in cross-examination that his last-minute evidence about "further" searches that he said he conducted in 2013, 2014 and 2017 was a recent invention brought about by him having read the applicant's outline of opening submissions the day before pointing to the absence of any searches in those years. I set out below relevant parts of that cross-examination:
MR BURN-FRANCIS: Yes. So in 2013, you registered the business name The Practice Business & Tax Practitioners?---Is it not - yes.
Yes. And at that time, you didn't conduct any further searches because you had already done your searches back in 2001; that's correct?---I - I did search - did conduct a search, 2013.
Yes. And what searches do you say you did?---All sorts of databases, you know, ATO, CPA, business registrar, Google.
And did you search at that time for the words "The Practice" by themselves?---I gave the full name, the entire name, not just "The Practice". I have no intention to ..... The Practice, so I just search the entire name.
Only the entire name?---Yes.
And you didn't do any trademark searches at that time? And - - -
HIS HONOUR: So what did you say? Not at all?---It - I didn't - your Honour, I didn't - I didn't believe actually there was .....
Sorry. I - - -?---I did not search. Yes, your Honour.
MR BURN-FRANCIS: And you didn't search the Tax Practitioners Board register?---I did search.
And you located the applicant's tax registration; that's correct?---No. No.
And you located the applicant's business name registration; that's correct?---No.
…
And you didn't say any of this in your first affidavit, did you?---I did say.
Yes? Can you indicate in your first affidavit where you talk about the searches you conducted in 2013?---I didn't - I didn't specifically mention 2013. That's why ..... provided a supplementary statement.
Yes. And you made that statement after you read the applicant's opening submissions; that's correct?---No, that's not correct.
Have you read the applicant's opening submissions?---No.
You haven't read them. Well, I would put it to you that the information in your affidavit that you filed yesterday is all a recent invention after you read that the applicant put that in issue that you hadn't searched in 2013; that's correct?---Not - not true.
…
Yes. And in paragraph 68 of that affidavit, you say:
In 2013, I conducted a business name search.
?---Yes.
Yes. And you didn't mention any of the other searches that you've told his Honour that you conducted?---When I say business name search, I mean search all of database that I know - I'm aware of. And I say it, I do not search the trademark, but I search all the relevant database, including CPA Australia, Tax Practitioners Board, all possible that I can think of.
I would put it to you that you didn't search all relevant databases if you didn't search the Trade Marks Register?---Well, I did not search for a trademark. I didn't expect to - you know, I didn't believe the words the - my business name would be, you know, given a trademark for it, so I did not search. Yes.
And your logo was designed in around July 2014; that's correct?---Correct. Yes.
And in July 2014, you didn't conduct any further searches at that time?---I did.
When you - when the logo was designed for you?---When we tried to buy a domain name and then design the logo, I did a search again, but, again, there's nothing come up with a domain name or ..... otherwise.
And you didn't mention any searches about the logo in your first affidavit?---I mean, I didn't search a logo … I didn't think ..... the logo would be searched.
You didn't believe you could search for the logo?---I mean, nowadays, technology has changed from those days. Now, there's a lot of - you know, you can search image now. But in those days, there's no search image.
And in the affidavit that you filed yesterday, you don't mention any searches in 2014?---Of this search in 2013 and then in 2014, I probably searched - try to get a domain name, but again, I did search. I did not get a domain name without searching.
Yes. And what domain name searches did you do?---Exactly the same, The - The Practice Business Advisers & Tax Practitioners.
Yes. I see. And you didn't search for "thepractice.com.au"?---No.
Did that come up in your domain name searches?---No. I just - because I'm actually looking at the - the whole name. That's actually the name I'm ..... to create, so I did not search on the applicant's name. I didn't - I didn't think the word existed.
Well, that's not correct, is it? Because you didn't register the domain name, "thepracticebusinessandtaxpractitioners.com", did you?---I did register it.
Well, what domain name did you use from 2013 through to 2020?---Thepracticeba.com.
Yes?---Yes.
So you didn't use the full name, did you?---Well, I mean, it's just too long. That's why I didn't use the whole name.
And because it was too long, surely, Mr Hassan, you searched for the domain name, "The Practice", by itself?---No, I haven't.
And when you did that search, it came up as unavailable; that's correct?---Not true.
And it came up as unavailable because the applicant had registered it?---Not true.
Well, I put it to you that, again, this is all a recent invention, and not only was it not in your first affidavit, but it wasn't in the affidavit you filed yesterday?---Disagree.
…
And you didn't do any searches when you registered the respondent as a company in 2017, did you?---I did search again in 2017 when I tried to incorporate into - into a company, and I did not come across the applicant's business name.
And what searches did you do in 2017?---Exactly all business names, the Practitioners Board, CP Australia, Google Search.
And you did it for the full name of the respondent's company; is that correct?---Correct.
And you didn't search for the words "The Practice" by themselves?---In a sense, it's ..... I'm just searching the name I'm trying to use, not just part of it.
And you didn't try and search to see whether you could register the name, "The Practice Pty Limited", as your company?---No. I'm not interested in that. I just have the whole name, very descriptive of what I - what I intend to do.
[4]
Trade mark infringement
Section 120(1) of the Act provides that a person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.
The respondent admitted that it used the Logo as a trade mark. It otherwise denied each element of the applicant's allegation of trade mark infringement.
It was common ground that the following issues therefore arise, namely whether:
the respondent used the plain words THE PRACTICE as a trade mark;
the Logo is substantially identical with the applicant's mark;
the plain words THE PRACTICE and the Logo are otherwise deceptively similar to the applicant's mark;
the respondent's marks were used in relation to the services in respect of which the applicant's mark is registered;
any of the respondent's defences are made out.
Taking each issue in turn.
[5]
Whether the respondent used the plain words THE PRACTICE as a trade mark
The principles concerning signs used as a trade marks were summarised by the High Court in Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd (2023) 277 CLR 186 at [23]-[25] (Kiefel CJ, Gageler, Gordon, Edelman and Gleeson JJ) as follows:
Use of a trade mark in relation to goods means use of a trade mark upon, or in physical or other relation to, those goods, and so can include use of the mark on product packaging or marketing such as on a website. There is a distinction, although not always easy to apply, between the use of a sign in relation to goods and the use of a sign as a trade mark. A trade mark is a sign used, or intended to be used, to distinguish goods dealt with by one trader from goods dealt with by other traders; that is, as a badge of origin to indicate a connection between the goods and the user of the mark.
Whether a sign has been "use[d] as a trade mark" is assessed objectively without reference to the subjective trading intentions of the user. As the meaning of a sign, such as a word, varies with the context in which the sign is used, the objective purpose and nature of use are assessed by reference to context. That context includes the relevant trade, the way in which the words have been displayed, and how the words would present themselves to persons who read them and form a view about what they connote. A well known example where the use was not "as a trade mark" was in Irving's Yeast-Vite Ltd v Horsenail, where the phrase "Yeast tablets a substitute for 'Yeast-Vite'" was held to be merely descriptive and not a use of "Yeast-Vite" as a trade mark. Therefore, it did not contravene the YEAST-VITE mark.
The existence of a descriptive element or purpose does not necessarily preclude the sign being used as a trade mark. Where there are several purposes for the use of the sign, if one purpose is to distinguish the goods provided in the course of trade that will be sufficient to establish use as a trade mark. Where there are several words or signs used in combination, the existence of a clear dominant "brand" is relevant to the assessment of what would be taken to be the effect of the balance of the label, but does not mean another part of the label cannot also act to distinguish the goods.
(Internal citations removed.)
In my view it is as plain as a pikestaff that the respondent used the words THE PRACTICE as a trade mark. That is to say, it used those words in a way that would be perceived by consumers as possessing the character of a brand and thus a trade mark, including:
The headline of the homepage of the respondent's website is:
The following statements, amongst many others, on the respondent's website (emphasis added):
"At the Practice, our purpose is to Open New Possibilities and Add Value to Your Business";
"The Practice can help you with: >> Taxation Advice >> Tax Planning >> Tax Effective Structures";
"The Practice has the best business advisory accountants to guide you through this process.";
"Contact The Practice";
"The Practice offers a full suite of financial and administration solutions for business such as small business bookkeeping in Melbourne and preparing sample small business financial statements";
"Whether you need big or small business succession planning, The Practice is here to help.";
"The Practice: Experts in Tax Compliance for Small Business"; and
The following statements on the Respondent's social media accounts:
"The Practice can provide the tax solutions you need.";
"The Practice's Main Purpose is to open new possibility and add value to your business";
"Here at The Practice, we tailor our services to meet the unique needs of your business"; and
"Let The Practice provide tax and business solutions for you!"
On invoices sent to clients the words "THE PRACTICE" are shown in different coloured font to the rest of the invoice, with "THE" in light blue and "PRACTICE" in dark blue.
Mr Hassan's email signature has the words "The Practice" in bold font above the italicised words Business Advisers and Tax Practitioners.
Secondly, despite Mr Wheelahan's assertion to the contrary, the consumer would not view the use of the words THE PRACTICE as merely descriptive. The use of the definitive "The" indicates the mark is intended to refer to only one practice (the respondent's), rather than a generic use to describe any accounting practice. And it is clear from the examples above that the respondent is using THE PRACTICE as the name of its business to distinguish its services provided in the course of trade. As the High Court made clear in Self Care at [25], set out above, that is sufficient to establish that the words are used as a trade mark, even if those words could also be said to possess a "descriptive element".
Thirdly, the applicant alleged, and the respondent did not dispute, that the respondent had used the social media handles "thepracticebusiness" on Instagram and "thepracticetax" on X (formerly Twitter). On X, the respondent's full name is shown as "THE PRACTICE; Business Advisers & Tax Practitioners" emphasising that THE PRACTICE is functioning as a badge of origin while the remaining words describe the services offered by the respondent. The respondent has also operated the website www.thepracticeba.com. Each is a further use of "The Practice" as a trade mark. See Flexopack SA Plastics Industry v Flexopack Australia Pty Ltd (2016) 118 IPR 239; [2016] FCA 235 at [63]-[65] (Beach J) and Goodman Fielder Pte Ltd v Conga Foods Pty Ltd (2020) 158 IPR 9; [2020] FCA 1808 at [325] (Burley J).
For the foregoing reasons, the applicant has established that the respondent used the plain words THE PRACTICE as a trade mark.
[6]
Whether the Logo is substantially identical with the applicant's mark
The principles to be applied to determine substantial identity are well established, and there was no dispute about them here. The critical question is whether, when the marks are compared "side by side, having regard to their similarities and differences, a total impression of similarity emerges". See PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd (2021) 285 FCR 598 at [161] (Jagot, Nicholas and Burley JJ).
In assessing substantial identity, it will be significant if the "dominant cognitive cue" is shared between the marks under comparison. See Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd (2017) 345 ALR 205; [2017] FCAFC 56 at [213], [223] (Greenwood, Besanko and Katzman JJ); Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd (2017) 251 FCR 379 at [56] (Greenwood, Jagot and Beach JJ).
In my view, the Logo is substantially identical with the applicant's mark for the reasons advanced by counsel in the applicant's written closing submission as follows:
Applying those principles to the present case, the essential feature or "dominant cognitive cue" of both marks are the words "THE PRACTICE" in capital letters, with the word "THE" in standard font and the word "PRACTICE" in bold font. In addition, both marks utilise a similar square font style.
THE PRACTICE MARK The Respondent's Logo
[7]
The differences between the marks, being the Rubix cube device and "Business Advisers & Tax Practitioners" in small (almost non-existent) font do not avoid the conclusion that a total impression of similarity emerges. This is particularly as the words "Business Advisers & Tax Practitioners" are utterly descriptive of the services offered by the Respondent.
[8]
Whether the plain words THE PRACTICE and the Logo are otherwise deceptively similar
The key question for deceptive similarity under ss 10 and 120(1) of the Act is whether the applicant's mark "so nearly resembles" the respondent's marks that they are likely to cause confusion. It is not necessary to establish an actual probability of deception or confusion, so long as there is a real likelihood that some people will wonder or be left in doubt about whether the respondent's "The Practice" is commercially related to the applicant's "The Practice".
Having found that the Logo is substantially identical with the applicant's mark, it is unnecessary to determine whether it is deceptively similar to the applicant's mark. But in any event, I agree that both the plain words THE PRACTICE (which I have found were used by the respondent as a trade mark) and the Logo are deceptively similar to the applicant's mark for the following reasons submitted by the applicant.
The impression or recollection to be carried away and retained by the notional consumer with an imperfect recollection of the applicant's mark is likely to be of its constituent words. Aurally, those constituent words make up the whole of the mark. Visually, the constituent words dominate the trade mark. The interlocking triangles are unlikely to be recalled by reasonable and ordinary consumers.
In addition, the evidence shows that word of mouth referrals are particularly important in relation to the type of services offered by the applicant and respondent. Aural usage of the marks will be particularly relevant in this context.
In those circumstances, the impression upon the same notional consumer of the respondent's marks as actually used by the respondent, is also likely to be of the words THE PRACTICE. Visually, those words dominate the Logo. The word "THE" is in standard font and the word "PRACTICE" is in bold font, the same as in the applicant's mark. Consumers are unlikely to notice the smaller words "Business Advisers & Tax Practitioners" or pay any particular attention to them because they merely describe the services offered by the respondent. Aurally, consumers are only likely to refer to the words THE PRACTICE. The addition of a Rubix cube device does not serve to distinguish the marks. See, generally, Goodman Fielder (Burley J); Henley Constructions Pty Ltd v Henley Arch Pty Ltd (2023) 297 FCR 353 (Yates, Rofe and McElwaine JJ); Caterpillar Inc v Puma SE (2021) 162 IPR 430; [2021] FCA 1014 (O'Bryan J); Hasthag Burgers Pty Ltd v In-N-Out Burgers, Inc (2020) 385 ALR 514; [2020] FCAFC 235 (Nicholas, Yates and Burley JJ); Energy Beverages LLC v Kangaroo Mother Australia Pty Ltd [2023] FCA 999 (O'Callaghan J).
[9]
Whether the respondent's marks were used in relation to the services in respect of which the applicant's mark is registered
The respondent offers business advisory and tax practitioner services. It is clear, and it was not disputed, that those services are the same as the services covered by the registered mark or are at least of the same description.
As I have said above, the defences to trade mark infringement under s 122 were only pleaded in respect of the Logo, and no defence has been raised by the respondent in respect of its use of the plain words THE PRACTICE as a trade mark. It follows that the applicant succeeds in relation to the plain word mark infringement claim pursuant to s 120(1).
[10]
Defences
I now turn to the defences pleaded by the respondent in relation to the Logo, noting that the onus is on it to establish them.
[11]
Did the respondent's use of the Logo amount to use in good faith to indicate the kind, quality or intended purpose of the services it offers?
Section 122(1)(b)(i) of the Act provides that "a person does not infringe a registered trademark when … the person uses a sign in good faith to indicate the kind, quality, or intended purposes of the services" that that person offers.
The cases make clear that whether a person uses a sign "in good faith" is a question to be assessed both subjectively and objectively. A host of cases has held that if a person does not take steps that an honest and reasonable person would take to ascertain the ability to use a trade mark, and has in effect taken a risk, then they are not acting in good faith. See, by way of example, Flexopack at [111] (Beach J). See also Pham Global at [103]; Notaras v Barcelona Pty Ltd (2019) 138 IPR 304; [2019] FCA 4 at [279] (Robertson J); Taylor v Killer Queen, LLC (No 5) (2023) 172 IPR 1; [2023] FCA 364 at [664] (Markovic J); Firstmac Ltd v Zip Co Ltd [2023] FCA 540 at [251], [282] (Markovic J); Hemmes Trading Pty Ltd v Establishment 203 Pty Ltd [2024] FCA 1100 at [65] (Jackman J).
And the reason for that is obvious. As Beach J explained in Flexopack at [118]:
If only subjective knowledge was relevant, a person could use the good faith defence despite not having taken any appropriate steps to inform himself of any relevant existing trade marks. This has the potential to undermine the utility of a registered trade mark. The reasonableness or lack thereof of the steps undertaken by the First Respondent in the choice of its company name is to be considered in light of the effect on the trade mark owner. If good faith were to be construed as merely being satisfied on the basis of a stated subjective belief that one did not know of the other, it could lead to a situation where one could justify trade mark use with one's ignorance. The failure to make proper inquiries should not place a respondent in a better position than if such inquiries had been made.
(Emphasis added.)
Further, even if a respondent initially adopts a mark in good faith, the use of that mark may cease to be in good faith once the respondent has notice of the existence of the trade mark owner, the fact of the mark's registration, and the potential confusion that might arise in the marketplace. As Beach J also explained at [160] in Flexopack:
If the defence does apply to an earlier period, it would not apply to continued use such as to excuse future conduct after receipt of the letter of demand where a respondent was put on notice of the applicant's position and the potentiality for real confusion.
Counsel for the applicant submitted that the relevant time to assess good faith is the time the respondent first uses the infringing mark, which in this case is around the time it was incorporated in January 2017. Evidence of Mr Hassan's actions before the respondent was incorporated was, on the applicant's submission, therefore irrelevant to the question of whether the respondent used the sign in good faith.
As I have noted above, the applicant further submitted that Mr Hassan's evidence about the searches he says he conducted in 2013, 2014 and 2017 should be rejected as a recent invention.
In my view, however, even if his evidence in this regard is accepted, all of the searches that Mr Hassan says he conducted were not, at any time, reasonable or diligent for the following reasons.
First, Mr Hassan only conducted searches for the entire phrase "THE PRACTICE (IT AND ACCOUNTANCY)" and "The Practice Business Advisers and Tax Practitioners". At no time did he conduct searches in any register or database for the words "The Practice" or similar business names. In my view, any person acting reasonably and diligently would have searched for broader variants of their desired business name, rather than that particular name only. Mr Hassan's evidence was that all his searches returned no results, and little wonder when the search terms were so lengthy and specific.
Had Mr Hassan conducted searches for just the words "The Practice" in 2001, 2013, 2014 or 2017, it can be inferred that he, as the guiding mind of the respondent, would have become aware of the applicant's business and its trade mark, one way or another, before he says he did in 2023. For example, had Mr Hassan searched for "The Practice" on the business name register in 2001, he would almost certainly have located the applicant's registration of that business name as early as then.
Secondly, Mr Hassan's evidence was that the only time he ever conducted a search of the trade marks register was in December 2001. Again, had he searched the trade mark register in 2017, when the respondent was incorporated using sufficiently broad search terms, he would have located the applicant's trade mark registration for the applicant's mark.
I asked counsel for the respondent whether he accepted the proposition that the searches Mr Hassan claimed to have carried out were not reasonable in the way that I have described above but he did not accept that proposition. He submitted to the effect that no more could reasonably be expected of a "one-man company" and that the respondent should not be held to the same standard of what might be expected from a large multinational corporation or business.
I cannot accept that submission. In my view, a person in the respondent's position acting honestly and reasonably would have conducted far more extensive and thorough searches than Mr Hassan says he did to ensure that his chosen name did not conflict with a registered trade mark. In those circumstances it is unnecessary to consider the veracity of Mr Hassan's evidence about his searches in 2013, 2014 and 2017.
The onus was on the respondent to prove that it had used reasonable diligence to ascertain that a chosen name did not conflict with a registered trade mark and in my view, the respondent has not discharged that onus for the reasons I have given.
And as the case law makes clear, because the respondent did not take the steps that an honest and reasonable person would have taken to ascertain the ability to use a trade mark, it has not acted in good faith within the meaning of s 122(1)(b).
For those reasons, the defence under s 122(1)(b)(i) must fail.
It follows that it is not necessary to consider the other elements of that defence. But in any event, Mr Hassan's own evidence was that the respondent's use of the Logo served a "dual function" which included the function of "acting of a badge of origin for [its] services". It follows that the respondent's use cannot, on its director's evidence, be purely for the purposes of description. And in addition, as the applicant submitted, the respondent's marks are not descriptive of the kind, quality, or other characteristic of the respondent's services because "The Practice" is not directly descriptive of accounting services. Its breadth of meaning is not apt to describe a particular type of premises, and could apply to any type of business (for example, a law firm, stockbroker, financial planner, medical clinic etc).
[12]
Would the respondent obtain registration of its trade mark in its name if it were to apply for it?
Section 122(1)(f) and (fa) provide that a person does not infringe a registered trade mark when:
(f) the court is of the opinion that the person would obtain registration of the trade mark in his or her name if the person were to apply for it; or
(fa) both:
(i) the person uses a trade mark that is substantially identical with, or deceptively similar to, the first-mentioned trade mark; and
(ii) the court is of the opinion that the person would obtain registration of the substantially identical or deceptively similar trade mark in his or her name if the person were to apply for it.
The remaining defence is, in substance, that the respondent would obtain registration of the Logo under s 44(3) of the Act, and therefore satisfy the defences to trade mark infringement under ss 122(1)(f) and/or (fa).
Section 44 relevantly provides that:
(2) Subject to sections (3) and (4), an application for the registration of a trade mark (applicant's trade mark) in respect of services (applicant's services) must be rejected if:
(a) it is substantially identical with, or deceptively similar to:
(i) a trade mark registered by another person in respect of similar services or closely related goods;
…
(3) If the Registrar … is satisfied:
(a) that there has been honest concurrent use of the 2 trade marks; or
(b) that, because of other circumstances, it is proper to do so;
the Registrar may accept the application for the registration of the applicant's trade mark subject to any conditions or limitations that the Registrar thinks fit to impose …
The respondent pleaded that it would obtain registration of the Logo under either s 44(3)(a) as an honest or concurrent user or otherwise under "other circumstances" in s 44(3)(b).
For the purposes of s 122(1)(fa), the putative application needs to be assessed at the date of the respondent's first infringing use of the Logo. See Sensis Pty Ltd v Senses Direct Mail and Fulfillment Pty Ltd (2019) 141 IPR 463; [2019] FCA 719 at [58]-[65] and [155(d)] (Davies J). As noted above, this is around the time the respondent was incorporated on 13 January 2017.
Mr Wheelahan accepted that there was what he called a "wrinkle" in his submission in respect of s 44(3)(a). Namely, prior to its incorporation, the respondent had never used the Logo. Rather, it had been used by Mr Hassan in his personal capacity as a sole trader.
As Mr Burn-Francis submitted, and as Mr Wheelahan ultimately seemed to accept, in my view that is no mere wrinkle. It is fatal to any reliance on s 44(3)(a) because the respondent had not made any prior concurrent use of the Logo at the time of the putative registration application.
The respondent submitted that it would nevertheless obtain registration of its Logo "under the rubric of the discretionary considerations" in s 44(3)(b) having regard to "other circumstances". Mr Wheelahan submitted that the Court should be satisfied that the respondent would obtain registration of the Logo because Mr Hassan had been an honest concurrent user of it, and the respondent and Mr Hassan were closely related entities. In support of this proposition, the respondent relied on the decision in Richard Hamilton Wines Pty Ltd v Ewell Investments Pty Ltd (1997) 39 IPR 591.
The applicant submitted that s 44(3)(b) did not assist the respondent for the following reasons:
The sole authority on which the respondent relies, Richard Hamilton Wines, is a decision of a delegate of the Registrar of Trade Marks, which has not been applied by this Court, or indeed by any other delegate of the Registrar;
Further, Richard Hamilton Wines can be distinguished from this case, because in that case the discretion to accept the mark under s 34(1) (the predecessor of s 44(3)), as Hearing Officer Forno explained at 599, was exercised on the basis of:
the long history and use of the trade mark HAMILTON'S EWELL VINEYARDS, the evidence that the mark was a well known one which had fallen into disuse, the connection which the applicant had with the original use of that mark and the apparent ability of that mark, by virtue of its history and through the nature of the goods and the purchasers, to be distinguished from the other HAMILTON marks.
The Logo was not a well-known mark that had fallen into disuse, such that the respondent should have the benefit of any residual reputation in the mark.
Lastly, the respondent should not be placed in a better position under s 44(3)(b) than it would have been under s 44(3)(a) in circumstances where its use was not honest within the meaning of that section.
Some time was spent in oral closing address on the question of whether the "other circumstances" referred to in s 44(3)(b), which may render registration of a deceptively similar mark appropriate, are freestanding, or whether they take their hue from s 44(3)(a). Counsel for the respondent's submissions on the precise relationship or otherwise between s 44(3)(a) and (b) were not altogether clear.
But in the end, it is not necessary to resolve that issue.
The respondent asserted that its case under s 44(3)(b) bore a "strong family resemblance" to the honest use defence under s 44(3)(a) because Mr Hassan, as director of the respondent, was an honest and concurrent user of the Logo. In effect, the only "other circumstance" relied upon by the respondent was that all elements of the honest use defence were made out, except that the honest use was not by the respondent but by a closely related entity. Save for the identity of the honest and concurrent user, the respondent contended that its argument under s 44(3)(b) was "for all intents and purposes on all fours with an honest and concurrent use defence" under s 44(3)(a).
However, for the reasons I have explained above in relation to the s 122(1)(b) defence, Mr Hassan's use of the Logo was not honest within the meaning of s 44(3)(a). The respondent has therefore not made out its case, as it was put, that there are "other circumstances" under which it would have obtained registration of the Logo. Accordingly, the respondent has not discharged its onus with respect to the defences under s 122(1)(f) or (fa).
[13]
Declaratory relief
It follows that the respondent has failed to make out either of the defences relied upon, and the applicant has succeeded in relation to both the plain word mark and the Logo infringement.
The applicant sought, in its originating application, a declaration that by engaging in the conduct specified in the statement of claim, the respondent has infringed the applicant's mark pursuant to s 120(1) and/or 120(2) of the Act.
In light of my finding above, I consider it appropriate in this case to grant the declaratory relief sought.
[14]
Injunctive relief
The applicant also pressed for injunctive relief in the form set out in the originating application. No submission was made by the respondent that any part of the relief sought was inappropriate or too broad, or anything of the sort.
In those circumstances, and in light of my finding above, it is appropriate that that injunctive relief be granted.
[15]
Damages
Section 126 of the Act relevantly provides:
(1) The relief that a court may grant in an action for an infringement of a registered trade mark includes:
…
(b) at the option of the plaintiff but subject to section 127, damages or an account of profits.
(2) A court may include an additional amount in an assessment of damages for an infringement of a registered trade mark, if the court considers it appropriate to do so having regard to:
(a) the flagrancy of the infringement; and
(b) the need to deter similar infringements of registered trade marks; and
(c) the conduct of the party that infringed the registered trade mark that occurred:
(i) after the act constituting the infringement; or
(ii) after that party was informed that it had allegedly infringed the registered trade mark; and
(d) any benefit shown to have accrued to that party because of the infringement; and
(e) all other relevant matters.
By further and better particulars of loss and damage filed on 1 October 2024, the applicant elected damages and sought amounts for the following heads of damages:
damages for diminution to the applicant's reputation in the amount of $100,000;
additional damages for trade mark infringement in the amount of $100,000.
There was extensive evidence about reputation of the applicant in respect of the first head of damage. As noted above, the applicant has traded under the name "THE PRACTICE" since 1999, servicing over 2,100 client groups (comprising over 7,700 entities) in every state and territory across Australia. It generates revenue in excess of $10 million each year and has spent over $2 million on advertising, including employing a full-time marketing manager.
Mr Hadded also gave detailed evidence about the reputation of the applicant's business, including its significant exposure in national mainstream newspapers, on the radio, television, through speaking engagements and conferences, and magazines and other publications.
In my view, it can be inferred from that evidence that the applicant's business had a substantial reputation in the plain words THE PRACTICE and the applicant's mark. It can further be inferred that the respondent's trade mark infringement, which has persisted since January 2017, has caused damage to the applicant's substantial reputation. As the applicant submitted, and I agree, the respondent's use of THE PRACTICE plain word mark and the Logo means there is a real and not remote possibility that some consumers will have been led into the false belief, or been caused to wonder whether, the respondent's services originate from the applicant or a commercial extension or rebranding of the applicant.
The additional damages were sought on the basis of the flagrancy of the respondent's conduct, and the need to deter similar infringements.
By conducting searches that were so plainly inadequate, I agree with the applicant's submission that the respondent has been wilfully blind to the prospect of potential infringement, and additional damages should be awarded to deter similar conduct.
In my view, the amount of damages sought is relatively modest in light of that conduct. The applicant's written submissions went into some detail to make good that proposition by reference to a number of cases. The respondent made no submission at all about damages, let alone their quantum, and in my view the amounts sought are appropriate in all the circumstances.
[16]
Costs
The applicant asked that in the event that it succeeded that I hear the parties separately on the question of costs, and in particular the basis upon which any costs order is to be awarded. I will therefore order that the applicant file and serve any written submissions within 14 days and that the respondent reply 14 days after that. My inclination is that the issue of costs can be determined on the papers, but I will review the question of whether a hearing is necessary after I have read the submissions.
I certify that the preceding one hundred and two (102) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Callaghan.
Parties
Applicant/Plaintiff:
The Practice Pty Ltd
Respondent/Defendant:
The Practice Business Advisers & Tax Practitioners Pty Ltd