A recent Federal Court decision in Australia confirmed that the use of a trade mark in a domain name, coupled with use of the trade mark on allied web sites can amount to trade mark violation.

FACTS - Mantra Group Pty Ltd v Tailly Pty Ltd (No 2) [2010] FCA 29

·         Mantra, an on-site letting agent of apartments named 'Circle on Cavill' situated at Surfer's Paradise, Queensland was the plaintiff in this case.

·         Mantra held the rights to control and let apartments in the complex. Tailly, the defendant, on the other hand was an off-site letting agent for 'Circle on Cavill'.

·         Mantra owned the trade marks use of 'Circle on Cavill' as it had registered three marks each constituting the words 'Circle on Cavill'.

·         The defendant had made some expressive use of the words 'Circle on Cavill' to portray the apartment complex in the title, text and body of its web site - it had also registered the words 'Circle on Cavill' as its domain name.

LEGAL ISSUES

The question before the court was whether:

·         the defendant had used 'Circle on Cavill' as a trade mark and therefore violated the intellectual property rights of the earlier mark holder, Mantra;

·         Mantra contended that the defendant had breached its trade mark registration and had engaged in misleading and deceptive conduct under section 52 of the Trade Practices Act 1974.

REASONING

Tailly challenged Mantra by relying on section 122(1)(b) of the Trade Marks Act 1995 and stated that it had used the words in good faith to reflect the geographical location of its apartments.

The Court referring to the decision in the 'Chifley Tower' case (MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236.) accepted Mantra's contention and clarified that the defence under section 122(1)(b) applies only to indicate a location of a country, state, region, city, town or suburb - in the present case, the location of a place of business was not a part of the list provided under section122(1)(b).

FINDINGS

·         The Court found that the defendant had purposefully used the words 'Circle on Cavill' to obtain a commercial advantage for its business.

·         Considering the use of the words 'Circle on Cavill' by the defendant in context of the website as a whole, the court ordered in favor of Mantra, and held that the domain name be transferred to its rightful trade mark owner, Mantra.

·         The Court further banned Tailly from using the words as their domain name or a search engine optimization, trade name and for any source of promotion of its services.

LESSONS

·         This decision outlines the need of registering a trade mark, particularly for businesses which rely significantly on the use of their mark to promote their services and engage in trade. This includes property developers as well.

·         Property developers when deciding the name of the complex, apartment, or condo for instance, must register the trade mark before selling their property.

·         Registration alone is not enough although half the battle is won – actively protecting the mark against competitors and copy cats, will determine the remainder of victory.