Trade Marks Update – acquired distinctiveness is not relevant to assessment of deceptive similarity

Intellectual Property
Tom Cordiner Headshot
M Marcus
C Cunliffe 2
Marcus Fleming Headshot 1

Swancom Pty Ltd v The Jazz Corner Hotel Pty Ltd [2022] FCAFC 157

This proceeding concerned two live music venues located in Melbourne, one in the inner-city suburb of Richmond and the other in the central business district of Melbourne, and the right to use trade marks which include the words “corner” and “corner hotel”. Relevantly for the appeal, at first instance the primary judge dismissed claims brought by Swancom Pty Ltd against The Jazz Corner Hotel Pty Ltd (TJCH), Bird’s Basement Pty Ltd (BBPL) and Saint Thomas Pty Ltd (STPL) for trade mark infringement. At first instance, the primary judge dismissed the infringement case on the basis that none of the relevant Jazz Corner marks were deceptively similar to Swancom’s registered marks “CORNER HOTEL”, “CORNER” and “THE CORNER” for live music services. In the result, the Full Court upheld that decision.

The central issue in the appeal was whether it is appropriate to have regard to evidence of acquired distinctiveness (under s 41 of the Trade Marks Act 1995 (Cth)) for the purposes of conducting the comparison required by s 120(1) in assessing deceptive similarity. Swancom argued that, in the case of a mark whose capacity to distinguish was based on distinctiveness in fact, the mark has an “acquired distinctive meaning” which forms part of the knowledge of the mark that should be credited to ordinary members of the public.

At first instance, the primary judge found that the “CORNER HOTEL”, “CORNER” and “THE CORNER” marks were distinctive in fact of Swancom’s live music services at the time of filing (by reason of extensive use), such that they distinguished Swancom’s professional live music services. In the appeal, Swancom argued that, having made those findings, the primary judge should have credited this acquired distinctive meaning to the ordinary members of the public who encounter the Jazz Corner Hotel marks when assessing the question of deceptive similarity. The argument was directed at overcoming the difficulty posed by the use of the terms “corner” and “hotel”, including the primary judge’s findings that the words “corner hotel” have a clear primary meaning to consumers of hotel services, and that ordinary members of the public should be credited with a general knowledge that there are many businesses within the hospitality industry which use the name “Corner”.

The Full Court rejected this argument and observed, inter alia, that:

  • the process by which a trade mark is assessed to be registrable and achieves registration is a separate and distinct exercise from the exercise pursuant to s 120(1) of comparing marks to determine whether a registered mark is infringed;
  • once registered, all marks are treated equally for consideration of whether they are infringed, irrespective of how they came to be registered;
  • the test for deceptive similarity, which is long settled and which is based on the ordinary consumer’s imperfect collection of the registered mark, does not credit the ordinary consumer with any knowledge of the actual use of the trade mark, or of any acquired distinctiveness arising from use of the mark prior to filing; and
  • there is no scope under s 120(1) to consider the reputation associated with any mark, save where reputation is a matter of notoriety (which Swancom did not assert was the case for its marks). The authors observe that even the role of notorious reputation under s 120 is both contentious and limited, and they consider that it will be interesting to see how subsequent Full Courts deal with this issue, in light of the debate in Australian Meat Group Pty Ltd v JBS Australia Pty Ltd (2018) 268 FCR 623 (noting that special leave was refused in that case)

The Full Court also observed that, while the context of the surrounding circumstances (including the background of the usages of the particular trade) is not to be ignored in assessing deceptive similarity, consideration of that context does not open the door for a detailed examination of the actual use of the registered mark, or any consideration of the reputation associated with the mark. The Full Court contrasted the position with a passing off action or a claim of misleading and deceptive conduct under the Australian Consumer Law, in which a wider enquiry might be undertaken.

The Full Court stated that Swancom’s primary submission in the appeal was, in substance, really no more than a contention that, for the purposes of determining the question of deceptive similarity in the context of infringement, the primary judge should have taken into account Swancom’s reputation in its marks. The Full Court rejected that contention, noting it is contrary to established principle.

Swancom submitted also that the primary judge failed to take into account that there was no other live music venue trading under the names The Corner or Corner Hotel. The Full Court held that this was an “iteration of its principal submission that the ‘acquired distinctive meaning’ of a registered trade mark informs the assessment of deceptive similarity…”. With respect, the authors consider that Swancom’s point appears to be a development of its contention that the terms “Corner” and “Corner Hotel” were not entirely descriptive of live music services, as opposed to hotel services, and so ought to have been given more weight than the primary judge did in the infringement analysis. Nevertheless, the authors do not suggest the ultimate decision of the Full Court was incorrect.

Their Honours observed that neither party challenged the proposition that the ordinary consumer was the appropriate prospective consumer for the assessment of deceptive similarity – that is, there was no suggestion that the relevant services were part of a specialised market. In this context, the Full Court accepted the primary judge’s finding that the “ordinary consumer” could be “expected to be knowledgeable and discerning about the venues they wish to attend to see live music performance”.

The Full Court held that the primary judge’s ultimate findings that the relevant Jazz Corner mark were not deceptively similar to Swancom’s marks and that the Swancom marks were not infringed were open to his Honour and there was no proper basis to interfere with those findings.

In dismissing the other grounds of appeal, notice of contention and the respondents’ own appeal, the Full Court held that:

  • it was open to the primary judge to find that the respondents’ use of the phrase “THE JAZZ CORNER OF THE WORLD” was descriptive use and not use as a trade mark;
  • in any event, the Full Court would not have been persuaded that the “Jazz Corner of the World” marks are deceptively similar to the Swancom marks;
  • no error was shown in the primary judge’s findings that BBPL had not used the “Jazz Corner Hotel” marks in relation to live music services;
  • it was not necessary to consider the respondents’ notice of contention to the effect that the primary judge erred in finding that “The Jazz Corner Hotel” and "The Jazz Corner of Melbourne” was use by TJCH (and BBPL) as a trade mark in relation to the provision of live music services;
  • on the respondents’ own appeal, the primary judge did not err in awarding costs of the cross-claim for cancellation of Swancom’s marks (which was largely unsuccessful) against TJCH and BBPL.

Share on