Thredbo is ski resort location in the Kosciusko National Park in NSW. Kosciuszko Thredbo Pty Limited, in conjunction with its subsidiary Thredbo Resort Centre Pty Ltd (collectively referred to as KT) owns (by way of a 99 year lease granted over the land in 1957) and operates, the well-known Thredbo Village Ski Resort (the Village).
ThredboNet Marketing Pty Ltd (ThredboNet) provides an online booking service for accommodation at the Thredbo Village Ski Resort. Although ThredboNet sub-leases accommodation from KT and manages about 50 properties in the Village, the parties are not affiliated and ThredboNet has a disclaimer on its website to this effect.
KT takes action
In 2013, KT unsuccessfully sought to restrain ThredboNet from using the word THREDBO in various domain, company and business names and on its website. KT had argued ThredboNet had engaged in passing off and misleading and deceptive conduct in breach of s 18 and 29 of the Australian Consumer Law (ACL) in using the word THREDBO. Likening it to ‘Disney Land, KT alleged THREDBO (which was not a registered trade mark) had acquired a secondary meaning, aside from its geographic connotation, and was synonymous with and exclusive to KT in light of their control of the Village. KT also claimed ThredboNet had breached various sublease agreements, including a prohibition on them using the name ‘THREDBO.’
Decision of the Federal Court
Justice Cowdroy held decided that the word THREDBO had not acquired a secondary meaning sufficient to give KT an exclusive right to its use and that ThredboNet had not engaged in misleading and deceptive conduct (or passing off) in using the word throughout its website and Facebook page. In relation to the sub-lease agreement, the provision restraining ThredboNet from using the word ‘THREDBO’ in relation to ‘any business carried on by the sublessee’ was excessive and an unreasonable restraint of trade because it lacked reasonable connection to KT’s legitimate interests. It was therefore void at common law.
The fact KT had spent millions on the Village was immaterial.
KT appealed. On 21 July 2014, the Full Court of the Federal Court (Justice Siopis, Rares & Katzmann) upheld the decision of the Federal Court, rejecting KT’s claims to the word THREDBO.
The Full Court identified that the primary Judge had erred in finding that KT had to prove an exclusive right to use of the word THREDBO in order to establish it had a secondary meaning. Instead, KT had to establish that an ordinary reasonable consumer likely to purchase the goods or services would be misled to believe they were dealing with KT when dealing with ThredboNet and that the services of both parties were affiliated. This could not be established in this case.
Factors influencing their decision were:
- That it is not unusual for a consumer looking for holiday accommodation, when conducting an internet search to reach an unofficial or unintended website. If this occurred, given booking accommodation is not typically an impulsive purchase (given its expense) a reasonable customer would make further inquiries. Subsequently, mere or momentary confusion by consumers does not amount to misleading and deceptive conduct;
- ‘THREDBO’ itself was a geographic location and that ‘…a trader is entitled to use a geographic name honestly and accurately unless that name has become distinctive of another’s goods or services and that the trader is using the name to pass off its goods and services as those of the other.’
- ThredboNet had an appropriate ‘disclaimer’ on their website which disavowed an affiliation with KT;
- A number of other businesses, aside from KT and ThredboNet were using the name (which was supported by Google search results);
- The consent and visual appearance of the KT and ThredboNet websites were distinct and that the information on the ThredboNet website was very limited in comparison;
- The fact KT’s Facebook page had well over 40,000 “likes” in comparison to ThredboNet 106 “likes” contradicted KT’s argument that consumers were being misled.
This case demonstrates the utility of disclaimers which clarify the relationship (i.e. lack of affiliation) between similar website operators in negating any suggestion that one operator is attempting to capitalise on the reputation or goodwill of another.
It also highlights difficulties that can be faced by businesses seeking to enforce rights to an unregistered trademark, particular when it takes the form of a geographic location as is often the case in the tourism industry. While extensive use of a brand name can assist in overcoming objections to registration of trade marks that are descriptive or have geographic indications, developing a stylised logo which incorporates the geographic name may also assist. Other measures to protect businesses include securing a variety of domain names (.com.au, com, net.au) and utilising search engine optimisation and other strategies to confine your brand name to your own business.
If you have any queries regarding Intellectual Property and the above, please do not hesitate to contact David Mazzeo for advice on 03 9614 7707.