Intellectual Property Update - Swancom Pty Ltd v The Jazz Corner Hotel Pty Ltd (No 2)

Intellectual Property Trade Practices
Tom Cordiner Headshot
C Cunliffe 2
Marcus Fleming Headshot 1

BY TOM CORDINER QC, CLARE CUNLIFFE AND MARCUS FLEMING

[2021] FCA 328

Trade marks – validity (s.41) – infringement – defences – s 122(1)(b)(i); s 122(1)(e); s 122(1)(fa)

This case concerned two live music venues located in Melbourne, and the right to use trade marks which include the words “corner” and “corner hotel”.

The applicant was the owner and operator of a live music venue located in the inner-city suburb of Richmond, referred to as “The Corner Hotel”. It was the registered proprietor of four trade marks incorporating the word “Corner”, including: “CORNER HOTEL”, “CORNER”, “CORNER PRESENTS” and “THE CORNER” (trade mark nos. 1388154, 1442211, 1623364 and 1669900, respectively) (the “Applicant’s Corner Marks”), in connection with various services associated with the organisation and conduct of entertainment activities including live music performances.

The first to third respondents conducted three distinct but related businesses within a building located at 330-360 William Street in the Melbourne CBD, under the names “The Jazz Corner Hotel”, “Bird’s Basement” and “The Jazz Corner Café”. The fourth respondent, Mr Albert Dadon, was the sole director of each of the first to third Respondents. The fifth respondent was the registered proprietor of trade mark no. 1825739 for “THE JAZZ CORNER HOTEL” (device) and trade mark no. 1839135 for “JAZZ CORNER” in connection with various accommodation services. The third respondent was the registered proprietor of trade mark no. 1893220 for “JAZZ CORNER” and trade mark no. 1906026 for “THE JAZZ CORNER CAFÉ” (device) in connection with café and restaurant services (collectively, the “Respondents’ Jazz Corner Marks”).

In the proceeding, the applicant claimed that the respondents had infringed one or more of the Applicant’s Corner Marks, and also sought cancellation of the Respondents’ Jazz Corner Marks. Those claims were ultimately unsuccessful.

Validity of the Applicant’s Corner Marks

As part of the respondents’ defence, the first respondent filed a cross-claim seeking rectification of the Register of Trade Marks by cancellation of the Applicant’s Corner Marks in respect of class 41 services.

The first respondent alleged that the Applicant’s Corner Marks were liable to be cancelled in respect of class 41 services on the bases that: (a) the marks were not capable of distinguishing the Applicant’s services (relying upon section 82(2)(a) and section 41 of the Trade Marks Act 1995 (Cth)); and (b) the use of the Applicant’s Corner Marks was likely to deceive or cause confusion (relying upon section 88(2)(c) of the Trade Marks Act).

As to the “CORNER HOTEL” trade mark, O’Bryan J found that the phrase “corner hotel” was not to any extent inherently adapted to distinguish ordinary hotel services (described as alcoholic drinks served on the premises, prepared meals and, to a lesser extent, accommodation), observing that it was questionable whether any amount of use of that phrase would render it capable of distinguishing such services (at [152]). However, the first respondent’s challenge to the Applicant’s Corner Marks was limited to class 41 services (namely, live music, ticket booking and related services) – it did not challenge the registrations insofar as they specified services in class 43.

In respect of the class 41 services, O’Bryan J held that “the words [“corner hotel”] have no direct reference to those services” (at [152]). Although O’Bryan J did not accept the submission that the phrase “corner hotel” had no signification in respect of live music services (at [154]), his Honour held that the “CORNER HOTEL” mark was, at its filing date, capable of distinguishing the Applicant’s live music services (at [155]). That finding was based on evidence demonstrating substantial use of the mark before the filing date, including a long history as a professional live music venue which was supported by evidence given by several industry witnesses (at [155]-[156]). While not expressing a concluded view, O’Bryan J observed that, because of that evidence of use, the mark would satisfy the requirements of either old section 41(5) or section 41(6) (at [162]).

Justice O’Bryan held that similar conclusions applied in respect of the “CORNER” and “THE CORNER” marks, insofar as those registrations covered live music services in class 41 (at [163]-[164]). However, the specifications of services for those marks were broader than for the “CORNER HOTEL” mark, extending to services relating to the provision of amusement and entertainment services more generally. His Honour determined that a question arose whether the registration of those marks ought to be amended, or a condition or limitation imposed upon registration, in respect of those services (at [166]). The question of whether the specifications of the marks should be amended will be the subject of further submissions on the question of relief.

As to the fourth mark, “CORNER PRESENTS”, O’Bryan J held that mark was inherently capable of distinguishing the services of the Applicant in respect of which the mark is registered (at [169]).

Finally, O’Bryan J rejected the ground of cancellation pursuant to section 88(2)(c), finding that the use of the Applicant’s Corner Marks was not likely to deceive or cause confusion (at [175]).

Trade mark infringement

The applicant alleged that each of the first to third respondents had infringed the Applicant’s Corner Marks pursuant to section 120(1) of the Trade Marks Act by using the following trade marks in connection with live music services and booking services: (a) “THE JAZZ CORNER OF MELBOURNE” and “JAZZ CORNER OF MELBOURNE”; (b) “THE JAZZ CORNER OF THE WORLD” and “JAZZ CORNER OF THE WORLD”; (c) “THE JAZZ CORNER HOTEL”, “JAZZ CORNER HOTEL” and “JAZZCORNERHOTEL”; and (d) “THE JAZZ CORNER CAFÉ”, “JAZZ CORNER CAFÉ” and “THEJAZZCNRCAFÉ”.

The respondents denied infringement of the Applicant’s Corner Marks, amongst other things relying upon several defences under the Trade Marks Act. Justice O’Bryan ultimately dismissed the applicant’s claims, principally on the basis that the impugned marks were not deceptively similar to the Applicant’s Corner Marks.

As a threshold issue, his Honour was required to determine whether, by reason of the cross-promotion engaged in by the first to third respondents, ordinary members of the public would reasonably perceive that any of the Jazz Corner marks were being used as a ‘badge of origin’ in respect of the live music performances conducted at the Bird’s Basement venue. Justice O’Bryan held that ordinary members of the public would perceive that The Jazz Corner Hotel is a provider of live music performances in the basement jazz club known as Bird’s Basement – that is, the first respondent had used the Jazz Corner Hotel marks to distinguish live music performances in the sense of indicating origin (at [208]). While those services were also promoted using the Bird’s Basement trade mark, O’Bryan J held that the use of that mark did not diminish the significance of the Jazz Corner Hotel marks as a badge of origin, as the Bird’s Basement mark would be perceived as a sub-mark or secondary mark (at [212]).

On the question of use as a trade mark, O’Bryan J also held that: (a) the second respondent had not used the Jazz Corner Hotel marks in respect of live music services (at [215]); (b) the third respondent had not used the Jazz Corner Café marks as a trade mark in relation to live music services (at [216]); (c) the first and second respondents had used the “Jazz Corner of Melbourne” mark as a trade mark in connection with all businesses conducted from the William Street building, including the jazz club (at [219]); (d) the respondents had not used the phrase “Jazz Corner of the World” as a trade mark, but rather had used it in a descriptive manner (at [220]-[221]); and (e) the first to third respondents had not engaged in a “concerted and agreed common action” to jointly market and promote the services offered and provided by each of them (at [222]).

On the question of deceptive similarity, O’Bryan J observed (referring to his earlier findings) that the words “corner hotel” are descriptive and have a clear primary meaning to consumers of hotel services and some signification for persons who wish to attend a live music performance (at [247]), noting the evidence of widespread use of the word “corner” in relation to hotel and hospitality business and the ubiquitous use of “hotel” in the hotel industry (at [248]). While accepting that the word “jazz” also had a descriptive meaning, his Honour held that, in comparison to “corner” and “hotel”, “it is a word that leaves a more striking impression” (at [250]) which gave the composite phrase “Jazz Corner Hotel” a distinct sound and meaning (at [251]). Justice O’Bryan ultimately held that the risk of an ordinary member of the public being confused was remote (a mere possibility), and that therefore the marks were not deceptively similar (at [255]). His Honour previously held that confusion could arise if the reasonable consumer would be “caused to wonder” and so was apparently applying the relatively low bar set by the authorities.

Although not determinative, O’Bryan J also considered three statutory defences raised by the respondents. First, his Honour rejected the respondent’s defence based on section 120(1)(b)(i) of the Trade Marks Act (use in good faith to indicate a characteristic of services), finding that the phrases “Jazz Corner of Melbourne” and “Jazz Corner of the World” do not involve the use of common words for a descriptive purpose (at [265]). Secondly, his Honour held that, had he determined the marks “Jazz Corner of Melbourne” and “Jazz Corner of the World” to be deceptively similar to the Applicant’s Corner Marks, the respondents would not have been able to rely upon the defence under section 120(1)(fa) of the Trade Marks Act (entitlement to obtain registration) as the Applicant’s Corner Marks would have prevented registration under s 44 and there was no relevant prior use (at [268]). Thirdly, O’Bryan J rejected the respondents’ contention that they were entitled to avail themselves of the defence under section 122(1)(e) of the Trade Marks Act (exercise of rights under the Trade Marks Act) in relation to the “Jazz Corner Hotel” and “Jazz Corner Café” marks, as the rights conferred by the respondent’s registrations did not extend to class 41 services (at [273]-[274]).

Validity of the Registered Jazz Corner Marks

The applicant also sought the cancellation or amendment of the Respondents’ Jazz Corner Marks under section 88(2)(a) of the Trade Marks Act on the basis that they could have been opposed under section 57 and section 44(2) of the Trade Marks Act for being substantially identical with or deceptively similar to one or more of the Applicant’s Corner Marks.

Justice O’Bryan dismissed the application for cancellation, principally on the basis that the Respondents’ Jazz Corner Marks were not deceptively similar to the Applicant’s Corner Marks (at [290]). His Honour also observed that the applicant’s cancellation application was effectively to exclude live music services from the scope of registration of the Respondents’ Jazz Corner Marks, but that such services were not within the scope of the registration in the first place (at [291]-[292]).

Tom Cordiner Headshot

Tom Cordiner QC holds the dual qualification of barrister and registered patents and trade mark attorney

C Cunliffe 2

Clare Cunliffe practises in intellectual property and general commercial litigation

Marcus Fleming Headshot 1

Marcus Fleming practises in commercial litigation, with a particular focus on intellectual property law

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