"Location" is the catchcry of the real estate industry, but a recent case shows that where a particular location is trademarked, others wishing to mention that location in their advertising must tread a fine line between legitimate descriptive use and infringing trade mark use.

The Mantra Group case concerns two letting agents both providing legitimate letting services in relation to apartments within a residential apartment and retail complex at Surfers Paradise called "Circle on Cavill". The exclusive onsite letting agent, Mantra Group, registered the name of the complex as a trade mark and then successfully sued its rival offsite letting agent, Tailly Pty Ltd (Tailly) for trade mark infringement for using the mark in its advertising.

The obvious question is "how can Tailly advertise apartments for lease in the complex without infringing the Mantra Group's trade mark registrations?" And the answer that has come out of the decision of Justice Reeves is "very carefully".

Trademark Use

In order to infringe a registered trade mark an alleged infringer must use an identical or similar sign "as a trade mark", in other words, to indicate the source of the goods or services in question. Purely descriptive use is not regarded as trade mark use. For example, there is a trade mark registration for OREGON (reg. no. 1319080) that covers retail clothing shop services. This does not mean that other clothing stores are not allowed to use the word "Oregon" in their advertising. As long as they only use the words to convey the meaning that their clothing is made in Oregon, for example, the use will not be an infringement.

Tailly used the words "Circle on Cavill" in a variety of ways to promote its letting services. Justice Reeves found that some of these uses were purely descriptive of the location of the apartments and therefore did not infringe the Mantra Group's trade marks, for example, use of the following sentence in the text of one of the websites:

"Our apartments at Circle on Cavill have been officially rated 4.5 star by AAA Tourism"

However, where Tailly deviated from use in full sentences and used the words in the banner-style headings of websites or in stand alone format without any immediate connection to descriptive content, Justice Reeves found that the use could no longer be characterised as purely descriptive. Justice Reeves was of the opinion that a member of the public would conclude that the primary use of the words in this different manner was as a badge or emblem to indicate that Tailly is the origin of the letting services at Circle on Cavill and so it constituted trade mark use.

Justice Reeves was not moved by Tailly's observation that its websites made it clear that other agents were also letting apartments in the complex, with statements such as "Circle on Cavill – find a better rate, we'll beat it!!!". Justice Reeves noted that no specific competitor was mentioned, and in any case such use did not counteract the trade mark use made elsewhere on the websites.

Geographical origin

Tailly sought to rely on a defence in the Trade Marks Act 1995 (Cth) (the Act) that states a trade mark is not infringed when a person uses a sign (i.e. the words 'Circle on Cavill') in good faith to indicate the geographical origin of goods and services.

Justice Reeves rejected this defence on two grounds.

Firstly, that the words "geographical origin" in the Act were not intended to describe a place of business or privately owned building, but rather a broader concept of place such as a country, region or town or other locality which forms part of the common heritage.

Secondly, that Tailly's use of the words was not in good faith because there were a variety of indications that it was intending to obtain a commercial benefit from its use of the words "Circle on Cavill" beyond a mere description of its services. Two of the more blatant examples of this intention were that Tailly actually filed its own trade mark application for the words "Circle on Cavill" and admitted that it had chosen to take a calculated risk in rejecting the advice of its trade mark attorneys to modify its use of the words.

In addition, the Mantra Group pointed to Tailly's use of the words in the source codes and metatags of its websites to improve the websites' rankings in the results of Internet searches for "Circle on Cavill". The Mantra Group did not argue that this use was trade mark use and therefore infringing, as on the current case law this type of argument has not been tested, but the Mantra Group did argue that the use of the words indicated a lack of good faith, therefore undermining Tailly's "geographical origin" defence. Justice Reeves agreed, noting that the highly repetitive nature of the use of the words (250 times in the source code of one website alone) was quite inconsistent with that use being in good faith.

Take away message

The lesson to be learned from this case is that the more prominently and repetitively a fairly descriptive trade mark is used in advertising, the more likely it is to be regarded as trade mark use. If that word is registered as a trade mark, the safest way to use the word descriptively but avoid infringement is not to use it alone and to make sure it is used as a noun, rather than an adjective, for example:

  • use the phrase "All clothing made in Oregon" rather than "Oregon clothing for sale" (see Reg. No. 1319080 covering "retail clothing store services");
  • if you are advertising an apartment and want to highlight the view, say "Great views of the Sydney Opera House", don't put the words SYDNEY OPERA HOUSE in big letters at the top of your advertisement (see Reg. No. 1225090 covering "real estate affairs" among other goods and services);
  • if you open a shop in the QVB, use the phrase "Located in the QVB" on your website but don't use those letters in your domain name (see Reg. No. 1160837 covering "retailing services" among other services); and
  • if you are selling perfume at Bondi Beach don't put up fliers saying "BONDI BEACH PERFUME – Call 5555 5555" (see Reg. No. 1033165 covering "perfumery" among other goods), instead say "Perfume for sale at Bondi Beach - Call 5555 5555".

If you are concerned, you should call a trade mark lawyer to review your advertising copy.