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Mantra case deals with trade marks in the online context

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Introduction

The Federal Court recently handed down a judgment in a case of involving the Mantra Group and another letting agent known as Tailly Pty Ltd.  The decision highlights the importance of registering your trade marks as a means to prevent third parties from using your trade marks in the online environment, including domain names, metatags, websites or Google AdWords.

What does this case mean for intellectual property owners?

The judgement in the Mantra case makes it clear that one cannot use someone else’s registered trade mark in a domain name, where it links to a site advertising the services for which the trade mark has been registered.

The Court clearly prohibits the use of the registered trade mark’s in a banner, heading or text of a website but the decision did not go so far as to say that merely registering a domain name incorporating a registered trade mark was an infringement of the trade mark.

It was hoped that the Court would directly address the legalities of using a registered trade mark in metatags, but the judge in this case was not required to directly address this point. However, the decision and some of the comments made by the Court suggest that this would be considered an infringement if it came before the Court again.

Background

Mantra Group (“Mantra“) owns the management and letting rights for the Circle on Cavill apartment building in Surfers Paradise, consisting of 644 residential apartments. Mantra manages the rental of more than 250 of the apartments within the complex, and operates as the exclusive onsite letting agent under appointment by the body corporate. Mantra is the owner of three registered trade marks relating to the Circle on Cavill complex (“the registered trade marks“), having been assigned ownership from the original developer of the complex.

Tailly Pty Ltd (“Tailly“) leased 39 apartments in the complex from their respective owners and sub-let the apartments as holiday accommodation. ┬áTailly established several websites to promote the accommodation (“the websites“), with the websites incorporating the registered trade marks.

Mantra’s allegations

Mantra commenced legal action in the Federal Court alleging that Tailly was infringing the registered trade marks and engaging in misleading and deceptive conduct under the Trade Practices Act 1974 (Cth). The proceedings focussed on the following matters:

  1. The domain names of the websites were similar to the registered trade marks, including circleoncavile.com.au and ecircleoncavill.com
  2. The registered trade marks were used extensively throughout the websites
  3. The websites used the registered trade marks in metatags, which are hidden pieces of code designed to increase the relevance of the website when a user enters that term into a search engine
  4. Tailly used words similar to the registered trade marks in the Google AdWords service, where customers pay for their website to be displayed prominently when a user searches a particular word or phrase.

Tailly’s defence

Tailly largely admitted the alleged conduct described above but argued that their actions did not constitute infringement of the registered trade mark on the following basis:

  1. Because the name of the building and the body corporate was “Circle on Cavill”, and because they were in the business of sub-letting apartments in that building, that they were entitled to use the registered trade marks
  2. The use of the registered trade marks was a good faith use to indicate the geographical location of the apartment letting service and
  3. The registered trade marks should be cancelled because “Circle on Cavill” had become a generic term.

The Court’s decision

  1. The Court found that Tailly’s conduct was an infringement of Mantra’s registered trade marks. Whilst the Court accepted that some uses of the words “Circle on Cavill” were used in a descriptive manner, the registered trade marks were predominantly used in an illegal fashion
  2. The Court decided that Tailly’s use of the registered trade marks was not a good faith use to indicate the geographical origin of the apartment letting service. The Court found that this defence applied only to geographical areas such as a town or region and not privately owned buildings
  3. The Court rejected Tailly’s assertion that the registered trade marks had become generic terms and declined to remove them from the Trade Marks register
  4. The issue of misleading and deceptive conduct was not addressed in the judgment. Rather, the parties were invited to make further submission on this matter if Mantra chose to pursue the action.

The Court’s orders

The Court ordered Tailly to transfer the infringing domain names to Mantra and refrain from using the terms “Circle on Cavill” or “Mantra” or similar words in the promotion of accommodation. Tailly was also ordered to pay Mantra for the profits it earned from the infringing websites whilst using the registered trade marks.

If you have any queries about protecting your trade marks in the online environment please contact one of our Intellectual Property lawyers.

Authors: Nick Rimington and Noelene Treloar