Lift Shop Pty Ltd v Easy Living Home Elevators Pty Ltd [2014] FCAFC 75 (20 June 2014)

Increasing a businesses’ ranking on the first page of a search engine’s results page (i.e. on Google or Bing) has become a pivotal part of every businesses’ online marketing strategy.  To achieve this ranking businesses often consult search engine optimisation agencies.  However what if you want to use a competitor’s trade mark in your search engine optimisation strategy?

What is and what is not permissible from a trade mark infringement perspective

In the case discussed below, a competitor in the home elevator market used the words LIFT SHOP in the headline of its search results which appeared in Google.  The competitor’s rival and owner the trade mark (Click here to view image) alleged that featuring the words “Lift Shop” in the competitor’s search results infringed the rival’s trade mark.

At first instance and on appeal, the competitor’s conduct was held not to infringe the trade mark because the competitor had used the words LIFT and SHOP descriptively; that is, to describe the goods and services it offered and not “as a trade mark” to indicate the source or origin of its goods and services. 

The case also highlights the difficulties of enforcing trade marks which comprise or contain words that describe the trade mark owner’s goods or services. 

Facts about the rivalry between Lift Shop and Easy Living

The parties, Lift Shop Pty Ltd (“Lift Shop”) and Easy Living Home Elevators (“Easy Living”) are fierce competitors in the market for the supply of customised elevators/lifts. 

Lift Shop is the owner of Australian trade mark registration for (Click here to view image) covering the goods elevators (lifts).

In September 2012, Easy Living obtained advice from an external agency about search engine optimisation (“SEO”) and modified its website to enhance its rankings in internet search results.  As part of this strategy Easy Living started using the words LIFT SHOP (not liftshop) in the title of the Easy Living’s website, home page and as a keyword.  As a result a Google search using or including the term “LIFT SHOP” disclosed Lift Shop (the trade mark owner) and Easy Living in search results, usually on page one of the search results with their entries in fairly close proximity. 

Examples of Easy Living’s use of the term LIFT SHOP are below:

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

www.easy-living.com.au

At Easy Living home elevators website you will find details on all of our lifts and home elevators here, which will help you achieve the easy living you deserve.

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

www.easy-living.com.au/

At Easy Living home elevators website you will find details on all of our lifts and home elevators here, which will help you achieve the easy living you deserve.

Lift Shop alleged that Easy Living’s use of “LIFT SHOP” in the title or headline in search results infringed Lift Shop’s trade mark.

What did Lift Shop need to prove in order to establish trade mark infringement?

To infringe Lift Shop’s trade mark, Easy Living needed to use a sign:

  1. that is substantially identical with or deceptively similar to that trade mark;
  2. as a trade mark, that is, as a badge or indicator of origin of Easy Living’s goods and services; and
  3. in relation to the same or similar goods to those covered by Lift Shop’s registration.

Easy Living had used the words LIFT SHOP in relation to the same goods as those covered in Lift Shop’s trade mark registration, namely lift/elevators.  The Judge also considered that the words LIFT and SHOP were deceptively similar to the (Click here to view image) trade mark. Thus elements (a) and (c) above were satisfied. 

However, the critical issue was whether Easy Living had used the words LIFT SHOP as a trade mark; that is as a badge of origin to distinguish Easy Living’s goods and services from those of other traders. 

Why the Federal Court found there was no trade mark infringement

As reported here at first instance, Easy Living was not found to have infringed Lift Shop’s trade mark. In making this determination the trial judge had regard to the following:

  1. The term Lift Shop was being used descriptively by other businesses not associated with Lift Shop or Easy Living and the use by those third parties was not trade mark use. 
  2. Easy Living’s commercial objectives in making changes to its website, included that it wanted to appear in search results which were likely to identify the Applicant but that its intention was to compete, not to associate itself with the Applicant. 
  3. It was significant to the trial Judge that the term LIFT SHOP had an understood generic connotation, i.e. as a shop for lifts and was not understood as Lift Shop’s trade mark.  According to the trial judge, Lift Shop had not ultimately established to the requisite standard that the Easy Living’s use would be understood by consumers in any other way. 

The trial Judge considered that the words “Easy Living” which appeared as the first element of the search results were being used as a trade mark.  However, the words “Home Elevators” and “Lift Shop” were being used descriptively to describe the goods and services being offered by Easy Living. 

The Full Federal Court Decision also found that there was no trade mark infringement

The Full Federal Court also held that Easy Living’s conduct did not constitute trade mark infringement.  The Full Federal Court concluded that those consumers searching the Internet:

using the search term ‘lift shop’ would have understood, on seeing the displayed results, and in particular the words ‘Lift Shop” in the title of [Easy Living’s] web page, that [Easy Living] was using those words to convey that its business was one of supplying ‘lifts’ and ‘home elevators’.  ….  The use of the words ‘Lift Shop’ as shown [above], make clear that their only functional significance was to describe the character of that business.  Their use by [Easy Living] was not to distinguish its business from others.  To the contrary, in the larger setting provided by the results pages, the use of those words was to designate, and would have been understood as designating, that [Easy Living’s] business was of the same character as, or at least of similar character to, other businesses grouped and operating as ‘lift shops’.  Such use is the antithesis of trade mark use.”

In addition the Full Federal Court made several observations

  • In relation to the trial Judge’s findings, the Full Federal Court noted that although Easy Living’s intentions to compete and not associate themselves with Lift Shop were not determinative of whether a sign has been used as a trade mark.  However the Full Court considered that those intentions are certainly not irrelevant and may be relevant to considering the purpose and nature of the use of the trade mark in particular circumstances.
  • The Full Federal Court also accepted that use by other businesses of a registered trade mark is not determinative of whether an alleged infringer has used the sign as a trade mark.  The Full Court pointed out that the focus in each case must be on the alleged infringer’s particular use. However, this is not to say that use by others of a sign, for example in a descriptive manner, is irrelevant to a consideration of whether a trade mark has been infringed.  Ultimately, the context of the use will be all important. 
  • As indicated in the quote above, the Full Court was clearly influenced by the fact that the Easy Living’s use of LIFT SHOP in the title of its webpage took place in a setting of a page of results, not only showing the title of Easy Living and Lift Shop’s webpages, but also of others’ businesses which included use of the words LIFT SHOP.
  • As an aside, it is worth noting that Lift Shop’s trade mark comprised the descriptive words, LIFT SHOP without particularly distinctive additional matter; namely an arrowhead in a button.  Indeed the Full Federal Court observed that the mark was “not a complex composite mark” at [59].  However the Full Federal Court indicated that if it had found that Easy Living had used the words LIFT SHOP as a trade mark, then use of the words LIFT SHOP alone would have infringed Lift Shop’s composite trade mark.  This finding tends to echo the concerns expressed by Justice Bromberg in the REA Group Pty Ltd v Real Estate 1 Pty Ltd case, that the addition of relatively minor matter to otherwise descriptive words can lead to registration of a trade mark that is essentially descriptive.
  • Finally, Easy Living raised in its Notice of Contention that even if it had used the words LIFT SHOP as trade marks, it would have had a defence under the exception in section 120(2) of the TMA that a person is not taken to have infringed a trade mark if that person establishes that using the sign, as the person did, is not likely to deceive or cause confusion. The Full Federal Court considered (in obiter) that Easy Living could have also relied on the section 120(2) exception as a separate reason for finding that trade mark infringement had not been established in this case. 

Take home messages for trade mark owners and businesses advertising on Google

  1. Use of a trade mark which consists of or contains descriptive words in the headline of a search engine results in circumstances where:
    1. other traders are using the trade mark descriptively; and
    2. where the alleged infringer uses its own trade mark also in the headline of the search result;

is unlikely to be trade mark infringement.  Each case depends on its facts and advertisers should take advice before using a competitor’s trade mark visibility in Google Ads or Google search results.

  1. If an advertiser uses a competitor’s trade mark visibly and “as a trade mark” in a Google search result (that is, not descriptively but to distinguish the advertiser’s goods and services from those of other traders) this will constitute trade mark infringement. 
  2. This case demonstrates the difficulties of enforcing trade marks that are descriptive of the trade mark owner’s goods and/or services.  On the other hand, this case demonstrates that a trade mark that contains largely descriptive words coupled with relatively simple additional matter may be infringed by a third party using the word elements of the mark only, if those word elements are used as a trade mark.