Competing over trademarked firm names: Henley Arch Pty Ltd v Henley Constructions Pty Ltd [2021] FCA 1369
By Alicia Hill, Principal, Matthew Deetlefs, Law Clerk and Angela Wang, Law Clerk
A simple ASIC search will establish a list of available business names within Australia – but does this necessarily mean you are all in the clear from potential trademarking issues? Henley Arch Pty Ltd v Henley Constructions Pty Ltd [2021] FCA[1] illustrates a case where a firm has knowingly acted in a way which resulted in a largely identical company name being registered and then objections were raised.
Background:
Henley Arch Pty Ltd (Henley Arch) is a construction company established in 1989 which holds both registered and unregistered trademarks containing the name Henley. Henley Constructions Pty Ltd (Henley Constructions) is a separate construction company established in 2006 by Patrick Sarkis, who acted as the sole shareholder.
Henley Arch discovered Henley Constructions after increased public-facing marketing by Henley Constructions in 2017. Henley Arch therefore made a claim against Henley Construction for trademark infringement and misleading and deceptive conduct under the Australian Consumer Law.
Henley Constructions argued that it had used its own name in good faith since 2006, as it was available on the ASIC registers, meaning it was entitled to its own trademark registration.
Henley Constructions also brought a counter-claim against Henley Arch to remove and limit some of Henley Arch’s trademark registrations.
Conclusion:
The court ruled in favour of Henley Arch, finding that by misrepresenting to its customers a genuine belief that it was associated with Henley Arch, Henley Constructions had breached the Australian Consumer Law by acting in a misleading and deceptive manner.
Further to this, the court also found Mr Sarkis jointly liable as he was the sole decision maker of Henley Constructions – whilst the court accepted Mr Sarkis relied on the ASIC register in respect to the availability of the name, evidence proved that online searches had brought Henley Constructions to his attention. Failure to exercise the relevant due care therefore points against honesty and good faith, resulting in joint liability.
Henley Constructions’ counter-claim was rejected, holding that Henley Arch’s trademarks should not be strictly limited to the construction of houses, nor should it be removed for non-use or geographically limited.
Take-aways:
The court ruling in favour of Henley Arch reinforces two fundamental lessons to business owners looking to register a trademark:
- The benefits and importance of registering a trademark; and
- The risks and costs associated with a company and its owner where there is failure to act in good faith and exercise due diligence in choosing a business name.
Abiding by these important points will largely decrease the likelihood of potential legal disputes over registered trademarks.
If you have any queries about any of the matters raised by this case, then please contact Alicia Hill on (03) 8540 0292 or alicia.hill@mst.com.au
[1] https://jade.io/article/846715
