Real Estate Agents Clash over Brand Ownership

Two recent trade mark decisions recently handed down by the Federal Court of Australia have had contrasting results.

Both consider the impact that elements of a mark that are descriptive or common to the trade have on assessing deceptive similarity for the purposes of trade mark infringement, and both consider whether there was misleading and deceptive conduct under the Australian Consumer Law.

We recently published an article about the decision in the case Bed Bath ‘N’ Table Pty Ltd v Global Retail Brands Australia Pty Ltd [2023] FCA 1587. The full article can be read here. In that case, the court ruled that the marks were neither substantially identical nor deceptively similar due to elements sufficient to distinguish the marks in relation to trade mark infringement. However the result was different when assessing misleading and deceptive conduct – the court found that the use of words “Bed & Bath” as part of the “House” brand, though often used by others in the industry, was indeed “likely to deceive or confuse.”

In this article we take a closer look at the findings of another recent decision: The Agency Group Australia Ltd v H.A.S. Real Estate Pty Ltd [2023] FCAFC 203.

Introducing the Two Parties

The Agency Group Australia (TAGA) was the registered owner of the following trade marks in relation to real estate services: (Agency Composite Mark); and (Agency Logo Mark).

TAGA operated an Australia wide real estate business under the Agency Composite and Logo Marks, including in Sydney.

H.A.S Real Estate Pty Ltd (HRE) operated a real estate business in the Northern suburbs of Sydney under the marks “THE NORTH AGENCY” (North Agency Mark) and (N Logo).

The Trade Mark Infringement

TAGA alleged that HRE’s use of the North Agency Mark infringed its Agency Composite Mark, and its use of the (N Logo) infringed the Agency Logo Mark. TAGA also alleged that this amounted to misleading and deceptive conduct.

The Court’s Findings at First Instance

At first instance, the court rejected all of TAGA’s claims. The primary judge had found that the North Agency Mark was not similar to the Agency Composite Mark because:

(a) the word “North” was a substantial feature that distinguished the two marks;

(b) the Agency Composite Mark included a device element () that could not be ignored in the analysis;

(c) the word “agency” had a strong descriptive element which was used in the name of many other real estate businesses, which made it even less likely that consumers would be confused by the resemblance between the marks;

(d) a roof shaped device was used in place of the “A” in many real estate business brand names; and

(e) property sales were high stakes transactions so consumers could be expected to have a heightened sense of awareness in relation to the marks (and differences between them).

The Appeal

TAGA appealed the first instance decision in relation to trade mark infringement regarding the use of THE NORTH AGENCY Mark, but did not appeal the other aspects of the first instance decision. TAGA argued that the primary judge had erred by:

(a) attributing a photographic recollection to the notional consumer, and that at least some consumers may not share the primary judge’s specific “idiosyncratic” perception of the marks;

(b) stripping the Agency Composite Mark of its features by discounting “The” and “Agency” as descriptive;

(c) considering whether there would be an “unwarranted monopoly” in relation to the word “agency” rather than just assessing deceptive similarity;

(d) giving too much weight to the word “North” in the North Agency Mark even though it was descriptive; and

(e) excluding risk of confusion arising from aural use.

The Full Court upheld the primary judge’s decision. The primary judge had correctly considered the mark as a whole (including by taking into account the device element of the Agency Composite Mark). The Full Court stated that by analysing the descriptive elements of the Agency Composite Mark, including whether those elements were common in the brands of other suppliers of the designated services, the primary judge did not ignore elements of the Agency Composite Mark that were common to the trade but relied on an element of the Agency Composite Mark that was common in the brands of other suppliers, but not present in the North Agency Mark (i.e. the roof device), to further distinguish the two marks.

The Full Court did not consider the issue of misleading and deceptive conduct (as it was not appealed). Therefore, the primary judge’s decision on this issue still stands. The primary judge concluded that like in relation to deceptive similarity for the purposes of trade mark infringement, the inclusion of “North” in the North Agency Mark was such that the there was a striking difference between the marks. The respective (dissimilar) logos used by the parties appeared  prominently in the marketing of both companies “such that any thought by a consumer of any association would be immediately dispelled by the presence of those marks”. Any general similarities in the websites of the parties were to a large extent common across the industry, and the heightened level of care of customers dealing with real estate transactions meant that overall, confusion was very unlikely.

Comparing the Cases

The factors that lead to different outcomes (particularly in relation to misleading and deceptive conduct) in the two cases were:

(a) that the words “bed and “bath” were not used in the brand names of other traders in the industry, but “agency” was;

(b) consumers in the soft homewares industry pay very little attention to brands, whereas there was a heightened level of awareness of customers in relation to real estate transactions;

(c) there was no suggestion of any intention to mislead or behaviour that amounted to “wilful blindness” in HRE’s adoption of its marks in The Agency case;

(d) “The Agency” was considered clearly descriptive whereas “Bed and Bath” were considered to be allusory rather than wholly descriptive.

However, there is potential tension between the two cases particularly in relation to the role of dissimilar aspects of branding, and whether they can dispel consumer confusion. Accordingly, businesses should still exercise caution and obtain legal advice when adopting a new brand that includes descriptive elements that a competitor may use in its branding, even if accompanied by dissimilar parent brands.

Key Takeaways from these cases

Businesses should:

1. not assume that words commonly used in the trade are always free for use in their own brands;
2. be cautious when adopting any element of branding that other competitors use in their branding (even if descriptive), as it could be perceived by the court as seeking to trade off the competitor’s reputation; and
3. always undertake proper freedom to operate searches and obtain legal advice before committing to a new brand.

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If you have any questions regarding this article or your Trade Mark, please do not hesitate to contact Wrays on (08) 9216 5100 or via our email wrays@wrays.com.au.