Legal Stoush Highlights Importance Of Choosing The Right Business Name

In a bit of a David vs Goliath scenario, national real estate company, The Agency Group recently took niche Sydney competitor, The North Agency, to court over alleged trade mark infringement – and lost.

In the case, the appellant alleged that the respondent’s use of the words ‘The North Agency’ in its property business infringed their mark and that The North Agency’s use of the ‘N’ logo infringed their logo trade mark.  The Agency claimed that The North Agency’s logo, branding and collateral closely mirrored theirs and that the similarities implied a direct connection between the two operations.

In reaching his decision, Justice Ian Jackson said there was a fundamental difference between the two companies’ names and that there were ‘very striking differences’ between their respective logos.  Ultimately, the Federal Court found that it was unlikely that the North Agency’s brand or logo would be confused with that of The Agency – and the case was ultimately dismissed.

Every business owner should understand the basics of trade mark infringement because – as evidenced by this and other recent cases such as the Self Care IP Holdings v Allergan Australia Pty Ltd [2023] HCA 8 (Self Care) – this issue is growing in prevalence in Australia and around the world.  With regards to the outcome of the Self Care v Allergan case, the High Court’s findings provide businesses with valuable insights and direction on minimising the risk of trade mark infringement. 

The outcome of The Agency’s case – which went to appeal – highlights the complexity of the world of trade marks, but it also highlights the limitations of using descriptive trade marks in particular.  The essence of a trade mark is that it should be distinctive and serve to distinguish a unique brand, product or service from other competitors in the market. 

The shortfalls of a descriptive trade mark

With regards to the case mentioned above, one of the main points made in the judgement was that the words ‘The Agency’ have a strong descriptive element in respect of the nature of the real estate industry.  The judge ruled that consumers would expect the word ‘agency’ to be commonly used in the names of real estate businesses.

The Agency Group had registered the words ‘The Agency’ represented in stylised form as a trade mark.  The scope of that mark was called into question in the infringement allegation, and when aspects of the case went to appeal, the Full Court noted that exclusive trade mark rights applied to the use of the words ‘The Agency’ as represented in stylised form, but not to the words themselves.

It’s also interesting to note the Full Court’s assertion that, whilst aural use is use of a trade mark, the sound of a logo mark (ie aural use) of a mark is not the same, or more significant, than the visual form of that mark. 

The use of descriptive words as trade marks is problematic for many reasons, and in my 20-plus years working in the field of trade mark law and as a trade marks attorney, I have witnessed significant sums spent, countless hours wasted and infinite angst expended on businesses trying unsuccessfully to protect marks that are commonly used and therefore can’t be considered as unique identifiers. Even when a seemingly descriptive word mark achieves registration, enforcement against infringement can be tricky. The Trade Marks Act 1995 makes it clear that a person will not infringe a registered trade mark if they use something purely to describe the sort of product or service, the location of a business etc.

Even when a stylised word mark and logo has been registered, protection may be limited.  While this has always been a consideration with regards to trade mark law, the Agency case really highlights those limitations.  The words ‘the agency’ are commonly used in the names of real estate businesses and consumers would reasonably expect these words to be used when describing such businesses.  It’s the nature of the industry. 

In the real estate ruling, the judge refuted The Agency’s allegation of trade mark infringement because he said the words on their own had a ‘strongly descriptive element in referring to the nature of a real estate business’ and it would give The Agency an unwarranted monopoly over their rivals if they were allowed to use ‘The’ and ‘Agency’ exclusively in their business name.

The important point going forward is that it is unlikely that the Court will allow an owner of a stylised word mark – even if it has been officially registered – to have superior rights over the plain word. 

Important points arising from this case

Some of the key takeaways for businesses with respect to trade marks are:

• No business – big or small – should assume that descriptive words which are commonly used in their industry are available for exclusive use in their own brand identity
• Be aware of other trade marks already in use in the industry before designing your own branding – even if any of the elements are purely descriptive
• Before making any investment in – or commitment to – a new brand identity, always undertake a comprehensive trade mark search and get expert advice from a trade marks attorney

Doing due diligence at the outset can prevent a host of issues down the line.  The team at MMW Trademark Services is vastly experienced with the trade mark search process to ensure that brands don’t encroach on anyone else’s territory.  Remember, difficulties can still arise even if a brand has been used for some time, which is why a trade mark search should always be considered.

Choose your trade mark with care

Language is a key factor in choosing a trade mark.  Plain words that are in common use in the context of nominated goods or services are usually too descriptive to give exclusive rights, and as the evidence shows, are highly unlikely to be defendable in court.

Registration is the simplest way to ensure legal protections for a trade mark.  No matter whether you own a large, nationwide operation or run a small business in a niche market, your trade mark is one of your most valuable assets. 

Both cases mentioned in this article highlight a crucial point that trade marks are as much about the consumer as they are about the brand identity.  Are consumers likely to be confused or misled by any aspect of the mark?  How will they distinguish the goods or services under one mark from another? Are any words used in the mark descriptive – and if they are, is that going to be enough to convince consumers of the brand’s originality?

You’re most welcome to contact our experienced trade marks attorneys for any assistance or advice on how to protect your intellectual property rights.  If you’re concerned that another trader may be infringing on your legal rights or if you think you may be infringing on someone else’s rights – we can help.  Contact us through our website or give us a call on 03 8288 1432.  Remember, your trade mark is a valuable asset – so there’s no such thing as a silly question when it comes to protecting it.