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Tuesday, July 15, 2014

Lift your game: no infringement of Lift Shop mark

By Stephanie Essey, Lawyer

The Full Court of the Federal Court recently dismissed an appeal brought by Lift Shop Pty Ltd (Lift Shop) against a first instance decision that Easy Living Home Elevators Pty Ltd (Easy Living) had not infringed Lift Shop's composite 'LIFT SHOP' trade mark. The Australian Consumer Law and passing off components of the original decision were not revisited on appeal.


Lifting search rankings: the facts


Lift Shop and Easy Living are competitors who each supply customised and disability platform elevators. In September 2012, Easy Living amended its website to improve its ranking in search engine results. A number of its changes incorporated the words 'lift shop'. It used the words in the website's title as it appears in search results, in descriptions on the home page, and as a keyword in order to target searches. Lift Shop claimed that the use of the words in the title (but not the home page or keyword use) was an infringement of its trade mark.


Lift off: first instance decision and appeal


The primary judge made a number of findings in relation to trade mark infringement which were not challenged on appeal, including that one of Easy Living's commercial objectives was to appear in search results which would likely include Lift Shop, and thereby to compete with Lift Shop to the greatest extent possible. However, Easy Living did not suggest or intend to suggest an association with Lift Shop simply by the use of the words 'Lift Shop' in the title, on the home page or as keywords.

Further, Lift Shop had not shown that Easy Living's use of 'Lift Shop' in the title of its website was use as a trade mark, which is required to prove infringement under section 120(2) of the Trade Marks Act 1995 (Cth). Section 120(2) of the Act was the relevant provision because, although Lift Shop's mark was registered in respect of goods (elevators), Easy Living's use was in respect of its services of supplying third-party goods. Lift Shop contested the primary judge's finding on appeal, submitting that his Honour had erroneously determined the matter on the basis of Easy Living's subjective intention rather than via an objective test. It asserted that if an objective test were applied, Easy Living's use of 'Lift Shop' would be seen to function as a trade mark because of the 'pre-eminence' of the website title in the search results and the arrangement of the components of the title.


Easy win for Easy Living: the Full Court's decision


The Full Court found that while innocence is not a defence to use as a trade mark, the subjective intention of a possible infringer is relevant even to an objective evaluation of the nature and purpose of the use. Their Honours cited the High Court's decision in Australian Woollen Mills Limited v F.S. Walton and Company Limited (1937) 58 CLR 641, in which Dixon and McTiernan JJ found that the motive of a potential infringer was a valid consideration with regard to both trade mark infringement and passing off.

One of the primary judge's findings was that the words 'lift shop' were used descriptively by a number of business other than Lift Shop and Easy Living, including in the titles and content of their websites. On appeal, Lift Shop submitted that this finding was irrelevant to the question of infringement and that the only relevant consideration was the alleged infringer's own use. While the Full Court agreed that use by the alleged infringer should be the focus of the court's inquiry, it found that use by others was not irrelevant, particularly as it could provide context for the purported infringer's use and thereby assist the court to determine whether it comprised use as a trade mark. Here, where the setting for the claimed infringement was the search results, the grouping of businesses based on their use of the search term 'lift shop' was crucial.

The words 'Lift Shop' have descriptive elements, but they may nonetheless operate as a trade mark in some contexts. The relevant question was whether the words 'Lift Shop' in Easy Living's website title functioned to distinguish its goods or services from those of other traders. The Full Court determined that, considered objectively, they did not. Their use was descriptive, and neither their positioning nor their prominence gave them the character of a trade mark. In fact, in aligning Easy Living with other 'lift shops', its use of the words was 'the antithesis of trade mark use'.

The Full Court therefore held that it was appropriate for the primary judge to find that Easy Living's use was not use as a trade mark. The appeal was dismissed.

The decision deals briefly with two other matters. First, their Honours declined to interfere with the primary judge's conclusion that the trade mark used in Easy Living's website title was deceptively similar to Lift Shop's composite mark, distinguishing Crazy Ron's Communications Pty Ltd v Mobileworld Communications Pty Ltd (2004) 209 ALR 1. Finally, the Full Court commented that had there been a finding of trade mark infringement, the defence in section 120(2) of the Act would have applied, as Easy Living would have established that using the sign as it did was not likely to deceive or cause confusion.


Conclusions


Lift Shop confirms that when evaluating use as a trade mark, the nature and purpose of the use are crucial. An inquiry into the nature and purpose, while fundamentally objective, can legitimately have some regard to the subjective intentions of an alleged infringer. The court can also validly consider use by parties other than the alleged infringer. Here, the context and the descriptive nature of Easy Living's use ensured that infringement was not made out.

*Additional research for this post was provided by Hayden John

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