KEY ISSUE

Use of elements of a competitor’s trade mark on a website – trade mark use or descriptive use?

FACTS

LS and ELHE were direct, aggressive competitors, each supplying disability platform elevators for home use.

ELHE’s search engine optimisation consultant advised that ELHE could improve its search engine rankings by including “lift shop” in its key words, website title and website, an example search result being as follows:

Easy Living Lifts | Home Elevators | Lift Shop – Lift Shop 

LS holds a registered trade mark for the LIFTSHOP logo covering elevators/lifts (class 7):

LS sued ELHE alleging trade mark infringement, breach of section 18 of the Australian Consumer Law (ACL) (misleading and deceptive conduct) and passing off (this ground not pursued).

ELHE argued that it was using the term “lift shop” descriptively or generically, not as a trade mark.

LOWER COURT DECISION

ELHE succeeded. The trial judge agreed that ELHE’s use was descriptive use and not use as a trade mark, and that no breach of the ACL had occurred.

The term “lift shop” was used in various websites of businesses selling home elevators.

Consumers would understand the term was used generically, not as an intended association with LS.

The website search results showed clearly that the website belonged to ELHE and not LS.

If ELHE’s use had been trade mark use, its use would have been deceptively similar to LS’ trade mark.

LS appealed to the Full Federal Court on the issue of trade mark infringement only.

FULL FEDERAL COURT DECISION AND REASONING

The Full Federal Court agreed that ELHE’s use was descriptive and dismissed the appeal.

ELHE was not using the words to distinguish its goods from other traders but to describe the nature of its business and ensure its website appeared in searches along with those of other traders in the goods – “the antithesis of trade mark use”.

It was open to the primary judge to find that while “lift shop” is descriptive, the words are a prominent part of the trade mark and therefore ELHE’s use would have been deceptively similar if it was trade mark use.

Even if ELHE had used the term in a trade mark sense, it had a defence under section 120(2) of the Trade Marks Act 1995 as such use was not likely to deceive or cause confusion.

KEY LESSONS

Words contained in a registered trade mark owned by someone else can be used descriptively, with care.

Infringement is less likely if the words are descriptive of the particular goods or services.

 

Invented words make much better trade marks from an enforcement perspective as it will be difficult for a competitor to justify why it has used the words.