SUBMISSIONS OF VAA AND ANALYSIS
201 I now turn to some of the specific submissions made by VAA and my consideration of them.
202 VAA referred the Court to Mortgage House of Australia Pty Ltd v Mortgage House International Pty Ltd (2005) 63 IPR 600; [2004] FCA 1279 as an example of consideration of a brand including the word 'Australia'. VAA submitted that Beaumont J concluded (at 621) that:
The common law trade mark 'Mortgage House of Australia' was, by January 2001, distinctive of MHA and the financial services that it supplied. Those words are a particular and distinctive collocation. They are not directly descriptive of the services supplied by MHA. The combination of words 'mortgage house' and/or 'mortgage house of Australia' had no currency as a descriptive term in Australia before January 2001. There is no reason to suppose that other traders in the financial services industry, actuated by no improper purpose, would have desired to use those particular words in the course of their business….
The name 'Mortgage House of Australia' is not descriptive.
203 However, this is not correct. At this passage, Beaumont J was merely rehearsing the applicant's submissions, as is clear from page 614, (57) of his judgment. His Honour's conclusions on liability at 642-643, [133]-[141] were very brief, and did not necessarily involve an acceptance of the passage referred to by VAA at p 621. As is apparent from the comments of Beaumont J at 642, [135], his ultimate decision was based upon the 'emphasised use' of the mark 'Mortgage House', and its use on 'a substantial scale'. I do not find the decision of Beaumont J to be of any real assistance in the determination of this proceeding.
204 VAA also made submissions as to the relevance of VAA's reputation. In this regard, in Nutrientwater Pty Ltd v Baco Pty Ltd (2010) 84 IPR 452; [2010] FCA 2, Kenny J commented at 472-473, [89]-[90] that:
The place of reputation in a claim under s 52 (and therefore s 53(c) and (d)) was explained by the Full Court in Cadbury at [99], where the court said:
Whether or not there is a requirement for some exclusive reputation as an element in the common law tort of passing off, there is no such requirement in relation to Pt V of the Trade Practices Act. The question is not whether an applicant has shown a sufficient reputation in a particular get-up or name. The question is whether the use of the particular get-up or name by an alleged wrongdoer in relation to his product is likely to mislead or deceive persons familiar with the claimant's product to believe that the two products are associated, having regard to the state of the knowledge of consumers in Australia of the claimant's product.
As this passage shows, in considering the TPA claims in this case, one must focus on the statutory questions to which ss 52 and 53(c) and (d) give rise. When addressing these questions, the fact, if it be proven, that NW had a reputation in the feature or features allegedly appropriated by Baco such that the feature or features had become distinctive of its business or products is relevant to the answer the court gives.
205 The Cadbury decision her Honour was referring to was Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 159 FCR 397. The quote extracted by her Honour is preceded by the following passage of Black CJ and Emmett and Middleton JJ (at 418):
[96] In any event, the principles relating to passing off do not necessarily require Cadbury to establish an exclusive reputation in relation to the use of the colour purple. More significantly, it certainly does not follow that there cannot be a contravention of the Trade Practices Act simply because Cadbury does not establish that it has an exclusive reputation in relation to the colour purple. The question is whether Cadbury can establish facts that demonstrate that a particular use by Darrell Lea of the colour purple is likely to mislead or deceive consumers into believing that there is some relevant connection between Darrell Lea and Cadbury or their respective products.
[97] Both in the context of Pt V of the Trade Practices Act and the common law tort of passing off, trade indicia other than names and logos can become associated with a particular trader, such that a use by another trader could give rise to misleading or deceptive conduct or passing off. If particular branding elements used by a trader have been identified in a special way with that trader in the minds of the members of the public, there may be misleading or deceptive conduct by reason of the appropriation of those particular branding elements by another trader.
[98] There is an overlap between causes of action arising under Part V of the Trade Practices Act and the common law tort of passing off. However, the causes of action have distinct origins and the purposes and interests that both bodies of law primarily protect are contrasting. Passing off protects a right of property in business or goodwill whereas Part V is concerned with consumer protection. Part V is not restricted by common law principles relating to passing off and provides wider protection than passing off.
206 VAA further submitted that, if the words being used to market products or services by the applicant are descriptive of those goods or services, the applicant must show that the relevant words have acquired a secondary distinctive meaning. In Telmak Teleproducts (Australia) Pty Ltd v Coles Myer Ltd (1989) 89 ALR 48 at 64, Wilcox and Einfeld JJ stated:
... protection will not be granted against the use by another of descriptive words unless the person claiming protection is able to establish that those words have acquired, amongst members of the public, a secondary meaning distinctive of that person's business or goods. In the relatively rare cases in which this can be shown, the courts will restrain the use by another of the words, whether or not that use results from an intentional copying. The reason is that otherwise the public would be likely to be misled into thinking that the subject business or goods was that of the plaintiff.
207 Whether the words have acquired a secondary meaning is a question of fact. It will be a question of whether the evidence before the Court shows that the words, even if descriptive, have come to be associated by consumers with the services of a particular person.
208 In Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261, the Full Federal Court (Gummow, French and Hill JJ) commented at 269 that:
There is, of course, a range of classes of commercial designation from the purely descriptive with no identifying elements to a unique identifying designation with no descriptive element. Between these poles are hybrid terms such as "motorcharge" used to designate a petrol credit and purchase system: Motorcharge Pty Ltd v Motorcard Pty Ltd (1982) 42 ALR 136. In Equity Access Pty Ltd v Westpac Banking Corporation (1989) 16 IPR 431 Hill J said at IPR 448…:
Just as the distinction between descriptive and fancy names is not a distinction of law so too it is wrong to see the distinction in black and white terms. The reality is that there is a continuum with at the extremes purely descriptive names at the one end, completely invented names at the other and in between names that contain ordinary English words that are in some way or other at least partly descriptive. The further along the continuum towards the fancy name one goes, the easier it will be for a plaintiff to establish that the words used are descriptive of the plaintiff's business. The closer along the continuum one moves towards a merely descriptive name the more a plaintiff will need to show that the name has obtained a secondary meaning, equating it with the products of the plaintiff (if the name admits of this - a purely descriptive name probably will not) and the easier it will be to see a small difference in names as adequate to avoid confusion.
But even descriptive words may become distinctive of the business of a particular person and if the use of such words by another is calculated to deceive persons into believing that the business of their originator is carried on by the parasitic user and is likely to cause damage to the originator's business, then a claim for relief for passing off may succeed: BM Auto Sales Pty Ltd v Budget Rent A Car System Pty Ltd (1976) 12 ALR 363 at 369 (per Gibbs J, Barwick CJ and Murphy J agreeing).
209 Similarly, in Morgan & Banks Pty Ltd v Select Personnel Pty Ltd (1991) 20 IPR 289 at 294, Priestley and Clarke JJA and Hope AJA stated that:
It is, however, clear that a name composed of descriptive words may become distinctive of the business of a particular organisation. If that organisation shows that the name in fact distinguishes its business and that the use of the name by another party is calculated to deceive persons into supposing that the business carried on by that other party is that of the organisation and is likely to cause damage to the organisation, it will be entitled to relief: see, for instance, B M Auto Sales Pty Ltd v Budget Rent a Car System Pty Ltd (1976) 12 ALR 363; 51 ALJR 254 particularly at 257, in which the High Court held that the name "Budget Rent a Car" had become distinctive of the plaintiff's business. It seems to me that although it may be difficult to show that a name containing only descriptive words has become distinctive of a particular business none the less if the evidence shows that it has, the court is bound to give effect to that evidence: see Angelides v James Stedman Hendersons Sweets (1927) 40 CLR 43 at 61…2.
210 I accept the above submissions of VAA, which are in accordance with well established principles.
211 I accept that precise and sustained attention and concentration is not to be expected of a viewer or listener.
212 Consumers may often remember promotional and advertising material imperfectly, and so may type in a domain name or visit a website they think is that of the advertiser, without being certain of the correct address. Further, the consumer may hear and see an advertisement but may not act on the material until some later time. In these circumstances, a consumer may not have the advertisement or promotional material in front of them, and may be forced to rely on that imperfect recollection. In addition, a consumer viewing a website may do so in circumstances that do not allow for in-depth consideration (for example, a website viewed on a mobile telephone screen), which compounds the imperfect recollection. In circumstances where a descriptive phrase is used, this imperfect recollection or confusion cannot give rise to liability on the part of a rival trader without more.
213 Further, clearly the "real life" use of brands is important, as is the use of a brand in the circumstances of the promotion or advertising relied upon by any applicant.
214 It was submitted that a reputation exists in the trading name 'Vendor Advocacy Australia' given the extent to which that brand has been referred to in VAA's promotion. Although the expression has often been used in conjunction with the words 'Ian Reid', it was submitted that the brand 'Vendor Advocacy Australia' has become independently recognised by virtue of the nature of the promotion.
215 To this end, it was submitted that, for example, when the name 'Vendor Advocacy Australia' has appeared with the words 'Ian Reid' or 'Ian Reid's', the words 'Vendor Advocacy Australia' are presented in quite separate font, styling and size. The words 'Ian Reid' are often relatively speaking quite small in contrast with the words 'Vendor Advocacy Australia'.
216 Further, it was submitted that consumers are easily able to dissociate the person or company promoting a brand from the brand itself. For example, the well-known biscuit manufacturer, Arnott's, often advertises its 'Yo-Yo' biscuits as 'Arnotts Yo-Yo Biscuits'. It was submitted that consumers, however, know very well what 'Yo-Yo' biscuits are, even when the word 'Arnotts' is not used.
217 It was further submitted that many prospective clients are introduced to VAA via its radio advertising. A large number of transcripts of radio advertisements were tendered. The dominant brand message with which consumers are left after hearing VAA's radio advertising is that there is a business ('Vendor Advocacy Australia') with which a person ('Ian Reid') is associated. A reputation has thereby been built in the brand 'Vendor Advocacy Australia', notwithstanding that the phrase was used together with the words "Ian Reid's".
218 VAA gave an example of context where a consumer who, in July or August 2011, heard a VAA radio advertisement, which referred to VAA as "Vendor Advocacy Australia", or "Ian Reid's Vendor Advocacy Australia". It was suggested that if, some time later, the consumer remembered the identity of the advertiser but not the precise internet domain advertised, and then typed "vendoradvocacyaustralia.com" into the web browser, the consumer would find herself at Mr Seitanidis' website. Once there, it was submitted, she would be faced with supplementary confusion given the prominent heading "Vendor Advocacy Australia".
219 It was also submitted that the phrase "Vendor Advocacy Australia" is not merely descriptive. The fact that three words are used together (it was submitted) makes it more likely that the trading name is distinctive, than if only one or two were used. The example was given of the "National Australia Bank". It was submitted that either two word sub-brand ("National Bank" or "Australia Bank") would likely be regarded as descriptive, rather than distinctive of any particular entity. It was the addition of the third word to form the compound brand "National Australia Bank" that makes the name more distinctive.
220 It was also submitted that the use of the word "vendor" (rather than the alternative "seller") is distinctive of VAA - or, at a minimum, the phrase "Vendor Advocacy" is only one of the expressions which may be used to describe the service.
221 It was further submitted that the phrase "Vendor Advocacy Australia" can only be understood as a brand - it cannot otherwise be used in a sentence. A person wishing to describe a business offering the services offered by VAA in the geographic region in which it operates would describe the service as one offered within or throughout Australia.
222 The important consideration in this proceeding is the descriptive nature of the phrase used by VAA. It was probably the main reason the persona of Ian Reid was employed to the promotional material, so as to distinguish his business, as well as promoting his own experience. It is this consideration that I think answers all the submissions of VAA.
223 In circumstances where a trader adopts a descriptive trade name the use by another trader of a trade name that also uses those descriptive elements will not generally (in itself) constitute misleading or deceptive conduct.
224 In Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216, Stephen J said at 229-230:
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 (Office Cleaning Services Ltd v Westminster Window and General Cleaners Ltd (1946) 63 RPC 39 at p. 42, per Lord Simonds). As his Lordship said (at … p. 43), 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." The risk of confusion must be accepted, to do otherwise is to give to one who appropriates to himself descriptive words an unfair monopoly in those words and might even deter others from pursuing the occupation which the words describe.
If this be so in the case of passing off actions the case of s. 52(1), concerned only with the interests of third parties, is a fortiori. To allow this section of the Trade Practices Act to be used as an instrument for the creation of any monopoly in descriptive names would be to mock the manifest intent of the legislation. Given that a name is no more than merely descriptive of a particular type of business, its use by others who carry on that same type of business does not deceive or mislead as to the nature of the business described. Thus both the Hornsby and the Sydney Centres are building information centres and no one is being deceived as to the nature of the service which is available there. Any deception which does arise stems not so much from the Hornsby Centre's use of the descriptive words as from the fact that the Sydney Centre initially chose descriptive words as its title and for many years thereafter was the only centre in Sydney which answered the description which those words provide. In consequence members of the public have come to associate its particular business with that type of activity. Evidence of confusion in the minds of members of the public is not evidence that the use of the Hornsby Centre's name is itself misleading or deceptive but rather that its intrusion into the field originally occupied exclusively by the Sydney Centre has, naturally enough, caused a degree of confusion in the public mind. This is not, however, anything at which s 52(1) is directed.
225 Justice Bromberg in REA Group at [105] to [108] usefully set out some relevant principles:
105 It is difficult to establish that a descriptive name, as opposed to a concocted or invented name, is a name which has become distinctive of a trader's business: Cellular Clothing Co Ltd v Maxton & Murray [1899] AC 326 at 336 (Earl of Halsbury LC). Whether a name is distinctive of a particular business is a question of fact and degree: Architects (Australia) Pty Ltd v Witty Consultants Pty Ltd [2002] QSC 139 at [19] (Chesterman J). A concocted name is far more likely to be distinctive of a business than a name which is based upon a description of the nature of the business that is being conducted: Chase Manhattan Overseas Corporation v Chase Corporation Ltd (1985) 9 FCR 129 at 147 (Wilcox J). Whilst a name may at the same time be both descriptive and distinctive, the fact that a name prima facie retains its descriptive signification increases the difficulty of proving that it is distinctive of the goods of a particular business: Burberrys v JC Cording & Co (1909) 26 RPC 693 at 704 (Parker J); British Vacuum Cleaner Co Ltd v New Vacuum Cleaner Co Ltd [1907] 2 Ch 312 at 322-323 (Parker J); and South Australian Telecasters Limited v Southern Television Corporation Limited [1970] SASR 207 at 220 (Walters J).
106 In Kettle Chip Co Pty Ltd v Apand Pty Ltd (1993) 46 FCR 152 at 165-6, Burchett J stated:
"Of course, the mere fact that a word is descriptive does not warrant a trader in using it if it has also acquired a secondary meaning as to distinguish the products of a rival. As Lord Radcliffe said in de Cordova v Vick Chemical Co (supra) at 106:
'To say that it is descriptive would not be enough, for…there is no absolute incompatibility between what is descriptive and what is distinctive. A descriptive word, such as 'Sheen', can be recognised in law as distinctive if the evidence clearly shows that it is distinctive in fact".
107 In Cantarella Bros Pty Ltd v Modena Trading Pty Ltd [2013] FCA 8 at [108] and by reference to the judgment of Lockhart J in Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals (1991) 30 FCR 326, Emmett J set out what is meant by the requirement that a term be "distinctive". Whilst the analysis was given in the context of a trade mark case, it bears repeating here:
There must be a sufficient degree of distinctiveness to counterbalance the descriptive character of a word. A word that is prima facie descriptive may become distinctive in connection with particular goods but yet retain its descriptive meaning. However, the word must, to become distinctive, have a new and secondary meaning different from the descriptive one, and thus cease to be purely descriptive. Distinctive means that the mark distinguishes the registered proprietor's goods from others of the same type in that market. However, distinctive does not mean that the goods must specifically identify the registered proprietor as the source of the goods. What is important is that a significant number of consumers in the relevant market identify the registered proprietor's goods as coming from one trade source (Johnson & Johnson at 335-336).
108 Examples of names which have been held to have achieved the requisite secondary meaning have included "Minties" (for mints): Angelides v James Stedman Hendersons Sweets Ltd (1927) 40 CLR 43 at 72; "Budget Rent a Car" (for car rental services): BM Auto Sales Pty Ltd v Budget Rent a Car System Pty Ltd (1976) 12 ALR 363 at 369; "Opals Australia" (for opal sales): Opals Australia Pty Ltd v Opal Australiana Pty Ltd (1993) ATPR 41-264; "Microwave Cuisine" (for microwave cooking classes): LSK Microwave Advance Technology Pty Ltd v Rylead Pty Ltd (1989) 16 IPR 107 at 114; and "Architects Australia" (for architectural services): Architects Australia at [15]-[24]. In each case, the evidence before the court showed that the names, though descriptive, had come to be associated by consumers with the goods or services of a particular trader. Examples of names which have been held not to achieve the requisite secondary meaning have included "Flexibond" (for an investment product): Lumley Life Ltd v IOOF Friendly Society (1989) 16 IPR 316; "Cellular" (for a type of cloth): Cellular Clothing; "Office Cleaning Services" (for a cleaning business): Office Cleaning Services Ltd v Westminster Window and General Cleaners (1946) 1 All ER 320; and "British Vacuum Cleaner Company" (for a company that held a patent for particular vacuum cleaner technology): Vacuum Cleaner Case. Whilst each of these cases is illustrative of the relevant principles, each turns on its particular facts. The facts of this case support a finding that REA's domain names have become distinctive, in the sense that they distinguish REA's property portals from other portals in the same market.
[emphasis in the original]
226 Basically, the enquiry is into the reason the misconception has arisen - to find a person liable, it must be because the impugned conduct has sufficiently caused the likelihood of deception, or the deception in fact: see eg Bromberg J in REA Group at [116] to [122]:
227 A certain amount of confusion is an inevitable outcome of the use of descriptive words. As Emmett J noted in the context of trade marks in Connect.Com.Au Pty Ltd v GoConnect Australia Pty Ltd (2000) 178 ALR 348; (2000) 50 IPR 535; [2000] FCA 1148, at [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 CLR229 in Hornsby Building.
228 A further consequence of this principle, noted by Marshall J in Insurance News Pty Ltd v JEM Nominees Pty Ltd t/a Insurance News Australia (2008) 80 IPR 239; [2008] FCA 1966, at [17], quoting Emmett J with approval, is:
…that for a descriptive name to become distinctive, "a very substantial amount of use in the relevant market would be necessary for it to acquire any secondary meaning." At [58] his Honour said:
[58] … where a descriptive trade name is used there will always be the possibility of confusion … {and} where a descriptive 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." (emphasis added)
229 These principles have been applied in many cases: see eg Equity Access Pty Ltd v Westpac Banking Corporation and Another (1989) 16 IPR 431; Australian Telecommunications Corporation v Hutchinson Telecommunications (Aust) Ltd (1009) 17 IPR 615; Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 (Gummow, French and Hill JJ); Commercial Dynamics Pty Ltd v M Hawke Nominees Pty Ltd (1996) ATPR 41-503 (Jenkinson, Miles and Finn JJ); Guide Dog Owners' & Friend's Association v Guide Dog Association of NSW & ACT (1998) 43 IPR 531 (Heerey, Carr and Mansfield JJ) and Betta Foods Australia Pty Ltd v Betta Fruit Bars Pty Ltd (1998) 41 IPR 347 (Goldberg J).
230 VAA recognised that a large part of the radio advertising undertaken by VAA, and a substantial part of the other promotional activity undertaken by VAA, referred to VAA as "Ian Reid's Vendor Advocacy Australia", and that Mr Ian Reid's name had a prominent role to play.
231 This was submitted by VAA not to be an impediment to the development of a reputation in the brand 'Vendor Advocacy Australia'. It was submitted that a person may establish a reputation capable of protection in a subset of their overall brand, and reference in this regard was made to De Cordova v Vick (1951) 1B IPR 496.
232 De Cordova is a decision of the Privy Council on appeal from the Court of Appeal in Jamaica. Lord Radcliffe (speaking for the Council) found that there had been an infringement of a trade mark and passing off in circumstances where only part of the mark had been used. The question before the Council was whether the plaintiff's brand 'Vicks VapoRub Salve' had been infringed by the defendants' brand 'Karsote Vapour Rub'. The Council found that 'VapoRub' was not merely descriptive and that a word may be both descriptive and recognised in law as distinctive. It was found that the plaintiff had a reputation in 'VapoRub' notwithstanding that this word was only a part of the plaintiff's branding. The Privy Council further found that by its conduct, the defendants had engaged in passing off.
233 The Privy Council was obviously persuaded by the evidence in that proceeding, which can be distinguished from the position in this proceeding. The evidence was that the term 'VapoRub' (used in Jamaica) was not merely descriptive - it was a name of a substance everyone regarded as a product of a particular trader's manufacture. When dealing with the question of passing off, the Privy Council said that the significance of the word 'VapoRub' in the Jamaican market was a "dominating element" - so the impugned traders were not effectively distinguishing their goods by the use of the additional word 'Karsote' or by the manner of the get-up of their jars (at 503). This is a far cry from the evidentiary position in this proceeding.
234 VAA also contended that of substantial relevance in the present proceeding by reason of its similar facts is The Architects (Australia) Pty Ltd v Witty Consultants Pty Ltd [2002] QSC 139. The decision is one of Chesterman J of the Supreme Court of Queensland (as he then was).
235 It was submitted that VAA's position in the present proceeding is substantially stronger than that of the successful plaintiff in Architects (Australia).
236 The facts in Architects (Australia) were as follows:
(a) The plaintiff was a company incorporated as "The Architects (Aust) Pty Ltd", which traded under the name 'Architects Australia' notwithstanding that no business name was registered.
(b) The plaintiff operated an architecture practice based in Brisbane, although it had customers outside Queensland (and outside Australia).
(c) The defendant company had created an online register of Australian architects using the domain name 'www.architectsaustralia.com.au'. It promoted its website through direct marketing, billboards and media advertisements.
(d) The plaintiff did not advertise. It generally obtained clients through its previous work, recommendations and personal relationships.
(e) The words 'Architects Australia' were prominently featured on the defendant company's homepage located at 'architectsaustralia.com.au'.
(f) The principal of the defendant company gave uncontradicted evidence that he was unaware of the plaintiff's business when he registered the domain name.
(g) The plaintiff feared that the similarity between its name 'Architects Australia' and the domain (and name) used in the defendant company's business would lead to confusion and diversion of business.
237 The plaintiff claimed for misleading conduct in contravention of the consumer protection legislation, and further claimed in passing off.
238 After setting out the relevant principles in respect of a claim for passing off (at [13]-[18]), his Honour found at [19] that:
The issue of distinctiveness is one of fact and degree, to be determined upon the available evidence. The words "Australia" and "architects" are ordinary words in common usage. They do not of themselves designate any particular entity or person and may readily be used in a descriptive manner. Mr Thompson submitted that it would be unfair if people were to be prevented from using those words in relation to a business involving architects in Australia. That would be so if what the plaintiff was seeking was to monopolise those words irrespective of the arrangement or structure in which they were used, but I do not think that that is the endeavour of the plaintiff in this case. The subject matter here is more specific. The name is not merely in a form which incorporates the words 'architects' and 'Australia'. Rather the construction of the name is simply 'Architects Australia', absent any further preposition, conjunction or adjective. Purely in terms of language, the composition chosen by the plaintiff for its trading name gives it a quality more than merely descriptive.
(Emphasis in original)
239 Despite acknowledging that the words 'Architects Australia' were descriptive "to some extent", Chesterman J nevertheless found the name 'Architects Australia' was capable of distinction, as the brand was sufficiently 'fancy' to be distinctive of the plaintiff's business.
240 In respect of the misleading conduct claim, Chesterman J identified the critical question as being whether the use of the domain name 'architectsaustralia.com.au' in the circumstances was deceptive, or likely to lead to the deception of persons within the market for architectural services (at [25]). His Honour noted that the question is whether the use of the same or a similar name is likely to give rise to a "sufficient degree of public confusion", and that if the answer was affirmative, then the name adopted by the newcomer is deemed in equity to be an instrument of fraud (at [26]).
241 His Honour found that (at [27]-[29]):
(a) The defendant, by employing the same terminology as had been used by the plaintiff, had equipped itself with an instrument of fraud; and
(b) Fraud existed in the circumstances by reason of the defendant's failure to cease using the domain name once the plaintiff's trading name was brought to its attention.
242 His Honour next found that a misrepresentation of a connection between businesses was sufficient to ground an action in passing off, even if the two businesses were different (at [34]).
243 Accordingly, the Court prevented the use of the relevant domain name by the defendant, commenting at [38] that:
The first defendant's use of its domain name represents that there is a connection or association between it and the plaintiff's business to those in the market for architectural services and who have some knowledge of the plaintiff's activities. This is a case in which the first defendant's activities are likely to divert business from the plaintiff. It does not matter that the business may not go directly to the first defendant. The first defendant's business will be enhanced if members of the public resort to its website because they think it is the plaintiff's venture.
244 His Honour further found (at [39]) that it did not matter that the plaintiff's business was confined to South East Queensland while the defendant's website might be accessed from anywhere. His Honour noted that to the extent that the first defendant used its name and advertised in the same geographical area as the plaintiff, the plaintiff's goodwill was (in his Honour's view) diminished.
245 His Honour then referred to a decision of the United Kingdom Court of Appeal in British Telecommunications Plc v One In a Million Ltd (1999) 1 WLR 903 (at [40]). In that case, the defendant had registered internet domains identical to the names of the plaintiffs but with the addition of the internet suffix '.com'. The plaintiffs in that case succeeded in obtaining injunctions against the defendant. His Honour noted that the Court "proceeded on the basis... that it will restrain the use of a name which, by reason of its similarity to another name, will facilitate to [sic] passing off because the creation of the new name is 'an instrument of fraud'" (at [41]).
246 Having found for the plaintiff on the passing off claim, Chesterman J also found for the plaintiff on the trade practices claim, stating that (at [48]):
For the reasons already outlined there is a substantial risk that consumers in the relevant class will be led into error as to the identity of the first defendant, as well as to the nature of the services that it offers.
247 His Honour made various orders in the plaintiff's favour, including orders that the defendant company deregister the domain 'architectsaustralia.com.au' and that it be restrained from promoting its business by reference to the name 'Architects Australia' or any similar name. At [58] his Honour stated:
I add that the defendants' submissions on this point were also self-defeating. The defendants cannot consistently assert that there is no distinctive significance in the name "Architects Australia", and then complain that the loss of their domain name, phrased as it is in identical terms, would of itself cause significant loss of custom.
248 A few observations may be made as to this decision.
249 First, as his Honour recognised, the issue of distinctiveness is one of fact and degree, to be determined upon the evidence before the Court.
250 Secondly, an applicant, again as his Honour recognised, must show the name is distinctive of their business.
251 Thirdly, quite small differences in a competitor's name may render the latter immune from action, a matter again recognised by his Honour.
252 Fourthly, the plaintiff's trade name was always just 'Architects Australia': it featured no other proposition, conjunction, or description like someone's name (for instance, 'Ian Reid'). In this proceeding, Mr Ian Reid has been prominent throughout the VAA's extensive advertising campaign, in a sense distinguishing him from other vendor advocates in Australia.
253 Fifthly, the plaintiff had continued for 20 years of trading without much advertising, and had still obtained a significant reputation. In this proceeding, the reputation Mr Ian Reid has obtained has been through extensive advertising by reference to his own name. In one way, the "small difference" between his advertising and that of Mr Seitanidis is the addition of Mr Ian Reid's name and persona.
254 Sixthly, the plaintiff produced to the Court evidence of being misled by those who knew the plaintiff. No such evidence has been produced by VAA.
255 Therefore, I consider that the decision in Architects Australia can be distinguished on its facts.
256 However, I also make some this further observation on Architects Australia.
257 Whilst Chesterman J "on balance" found in favour of the plaintiff, the matter is one of degree and impression. Perhaps then, but certainly today, consumers see similarities between domain names, but are aware that different entities (not necessarily associated with each other) promote themselves. Such consumers would act accordingly, and be astute to differentiate. It seems to me that with the nature of the modern internet, there is always a potential for inherent 'confusion', but internet users are savvy enough to deal with those 'confusing' aspects.
258 It is important to recall that conduct causing confusion is not necessarily co-extensive with misleading and deceptive conduct: see Google Inc v Australian Competition and Consumer Commission (2013) 294 ALR 404; [2013] HCA 1 at 407 [8] per French CJ, Crennan and Kiefel JJ; Campomar (2000) 202 CLR 45 at 85 [102], and REA Group at [79] per Bromberg J.
259 Therefore, I may summarise my conclusions as follows. The phrase "vendor advocacy" is descriptive and was generally used by various traders in the same line of business. I am not satisfied that the words or brand relied upon in this proceeding by VAA have any secondary distinctive meaning. VAA has primarily promoted itself by reference to the persona of Ian Reid. I do not consider that any consumer which assume that a reference to vendor advocacy, or Australian Vendor Advocacy, would be associated with VAA or Ian Reid. In fact, because Ian Reid has been so much at the front of the promotion of VAA, without his presence the consumer may well assume it is not associated with him or VAA. Any imperfect recollection of consumers would arise from VAA's adoption of a name consisting of descriptive words. The lack of recall will be as a result of the promotional activity adopted by VAA, by reference to the descriptive words 'vendor advocacy'.
260 Looking then at the domains. There is no doubt that once the consumer enters the domain of Mr Seitanidis there can be no confusion of the type complained of by VAA. The content of the sites are quite distinct. Even if there was momentary 'confusion' in the mind of a consumer upon searching vendor advocates, or even Australian Vendor Advocacy, I do not think this would justify in a finding of misleading and deceptive conduct on the part of Mr Seitanidis.
261 A transitory incorrect impression, or a transient period of being misled even, would not necessarily lead to there being liability imposed upon a respondent: see eg Knight v Beyond Property Pty Ltd (2007) 242 ALR 586, at [54], [58].
262 I have not needed to enter the debate as to the significance of the various accoutrements of domain names, such as ".com.au". I agree with the observations of various judges that consumers do not pay any real attention to such references: see eg Architects Australia at [21]; Solahart Industries Pty Ltd v Solar Shop Pty Ltd (2011) 281 ALR 544 at [49]; Sports Warehouse v Fry Consulting Pty Ltd (2010) 186 FCR 519 at [155] and REA Group at [128] to [129].
263 I do observe that, in the context of searching the internet, consumers will be vigilant when confronted, as they are, with many domain names referring the phrase "vendor advocacy". Of course, if the consumer knows of Ian Reid and are looking for his business, they will look for the entity or entities specifically associated with him.
264 I interpolate that if the consumer had visited a VAA site previously, the consumer would be familiar with the Ian Reid persona, and could not be misled by the conduct of Mr Seitanidis in his use of his domain names. In this context, I accept that the websites of VAA were very popular. I do not know the extent of the popularity compared to all websites of vendor advocates. In any event, the popularity of the VAA website does not lead to the conclusion that any secondary meaning has been established through such websites in the terms "vendor advocacy" or "Vendor Advocacy Australia", or that a not insignificant proportion of consumers would associate those terms with VAA. A consumer on the internet would still view the terms as descriptive and would not assume any association between each website.
265 If there is an imperfect recollection of the type suggested by VAA, any confusion, as I have said, arises from the advantage of a descriptive trade name as used by VAA. If the consumer has never heard of VAA, Mr Ian Reid, or Vendor Advocacy Australia, he or she may be 'confused' with the various different vendor advocates, but this would not be because of the conduct of Mr Seitanidis.
266 Therefore, in my view, VAA failed to demonstrate that the conduct of Mr Seitanidis complained of was misleading and deceptive.