The judgement in the Federal Court of Australia matter for REA Group Ltd v Real Estate 1 Ltd has just been handed down. Forget the parent companies, as this is about a battle of the websites www.realestate.com.au and www.realestate1.com.au and to a lesser extent www.realcommercial.com.au and www.realcommercial1.com.au.
Lets look at a little history first. In 2005 the REA Group applied for the trademark of realestate.com.au. This trademark was approved in 2008 which Business2 covered in this article.
Concerns by the industry at the time focussed on realestate.com.au claim on the term “real estate” on the internet. The industry outrage even triggered public responses by IP Australia and by the REA Group.
The response by IP Australia specifically stated “This type of conflict would be resolved by determining whether consumers are likely to be confused by the similarity in the respective terms. It would for instance be highly unlikely that the owner could prevent use of the term “real estate” by others” but they also stated “IP Australia has no role in determining infringement matters. These are decided by the courts.”
So IP Australia thought that the trademark they approved could not be used to protect the words “realestate” and “.com.au” in a domain name. Justice Bromberg in this decisions now claims that realestate.com.au now have a monopoloy on the terms, bu tmore on that later.
REA also responded to industry concern by a communication from the now ex-executive Shaun Di Gregario :
We are registering the trade mark ‘realestate.com.au’ not ‘real estate’ or any other version of those words.
This does not affect your ability to describe your business using terms like; ‘real estate’, or for example if your business was named ‘Richmond real estate’ or ‘Bobs real estate it would not stop you from using the domain names richmondrealestate.com.au or bobsrealestate.com.au.
Our concern with abcrealestate.com.au is that ‘abc’ is a generic name and doesn’t describe the business.
Even though they got named in the 2008 response on this issue abcrealestate.com.au is still in operation by ABC Photosigns. I guess the connection to ABC Photosigns and the domain name abcrealestate.com.au was enough for the REA Group to move on and find another website to try and create a precedent in the courts.
In 2010 that target became www.realestate1.com.au and its sister site www.realcommercial1.com.au when the REA Group started legal proceedings.
The case seems to have centred on Trade Practices and Trade Mark issues. here is the excerpt from the judgement covering the two sections:-
TRADE PRACTICES – misleading and deceptive conduct – use of similar domain and trading names by rival internet businesses – identification of class of affected consumers and the characteristics to be attributed to the ordinary or reasonable consumer of online property portals – whether secondary meaning in its name was established by the applicant – principles applicable to establishing secondary meaning for descriptive as opposed to concocted names discussed – extent of attention to be paid to “.com.au” when comparison is made of similar names – causation and the extent of differentiation from a descriptive name required to avoid finding of likely deception – whether consumer using an internet search engine would be likely misled or deceived by use of the respondent’s domain name on a search results page – whether consumer would likely assume that an organic search result or sponsored link for the respondent’s business is a link for the applicant’s business or a business associated with the applicant – whether sufficient nexus between conduct of respondent and any likely misconception or deception – whether a not insubstantial number of consumers were likely to have been misled or deceived – whether any likely deception was transitory and commercially insignificant – relevance of any intent of the respondent to take advantage of applicant’s reputation.
TRADE MARKS – use of similar domain and trading names by rival internet businesses – whether respondent’s mark deceptively similar to applicant’s mark – whether use of respondent’s mark in a logo was the use of a mark that was deceptively similar to the essential features of the applicant’s trade mark – whether respondent’s use of a mark as a trading name on a search engine results page was the use of a mark that was deceptively similar to the applicant’s trade mark – whether the respondent’s use of a mark as a domain name on a search engine results page was the use of a mark that was deceptively similar to the applicant’s trade mark – attention to be given to “.com.au” when considering deceptive similarity – whether individual respondents liable with corporate respondents as joint tortfeasors.
In short the judgement appears to have found that realestate1.com.au has infringed on the trademark of realestate.com.au however has not passed themselves off as realestate.com.au. The REA Group has one the Trademark section but not the Trade Practices section.
The judgement itself is quite long so here are some of the more interesting parts :
213 For all those reasons I am not satisfied that by the use of the term “realestate.com.au” in a URL on a search results page, Real Estate 1 engaged in misleading or deceptive conduct in contravention of s 52 of the TPA. The conclusions I have reached in relation to the s 52 claim also require that the s 53 claims and the corresponding passing off claim be dismissed.
Common sense prevailed on this section. They did not look the same so how could they be seen as imitating realestate.com.au.
On the matter of the trademarks though it gets a little murky.
222 REA makes no complaint about Real Estate 1’s use of the mark “realestate1” but when that mark is used in conjunction with “.com.au” in relation to the websites of Real Estate 1, REA claims that such use infringes its registered trade marks. The impugned use includes use of the marks on Real Estate 1’s websites, in its advertising and promotional activities and extends to use of the marks in the title of sponsored links and as a domain name address appearing in a URL.
Hmmm.. remember Shaun’s communication that specifically said “The trade mark application is for the name ‘realestate.com.au’ not ‘real estate’ or any other version of those words”. I guess he was just kidding then?? Why didnt we laugh…
“This does not affect your ability to describe your business using terms like; ‘real estate’” and “ it would not stop you from using the domain names richmondrealestate.com.au or bobsrealestate.com.au.” was also just for jokes!
231 In my view, Real Estate 1’s use of the Real Estate 1 logo is not deceptively similar to REA’s realestate.com.au trade marks. I have arrived at the opposite conclusion in relation to the realcommercial.com.au trade mark and the use by Real Estate 1 of the realcommercial1 logo.
Ok, the realcommercial matter was always going to be a tougher fight for them. Real Estate is a commonly used term way before the internet was even a twinkle in somebody’s brain but the term “Real Commercial” was not. This was always going to be a losing battle for them.
232 The realestate.com.au logo has arguably three components: a red house in a button device; the words “realestate”; and the term “.com.au”. No component on its own is an essential feature as no component is sufficiently prominent. The button device is distinctive but subsidiary. The term “.com.au” is also subsidiary for reasons earlier given. The words “realestate” are descriptive and of themselves do not suggest a connection with a source business or brand.
233 However, the evidence of the widespread consumer recognition of the domain name “realestate.com.au” supports REA’s proposition that the essential or distinguishing feature of its logo is the domain name in its entirety. The inclusion of “.com.au” as part of that essential feature is necessary because the highly descriptive nature of “realestate” on its own would not be perceived as sufficient to establish brand identity. It is only the composite expression that is likely to be perceived as providing the brand or trading name of the business being promoted. The impression which the logo creates is that the brand or trading name promoted is “realestate.com.au”. The idea that the mark naturally suggests is that a particular domain name (shown in the font and colour that domain names appear in) is also being used as a brand or trading name.
Section 232 seems to indicated common sense will prevail but its the “however” in section 233 that provides the crunch. Despite claiming this was not their intention REA Group got exactly what they wanted in this judgement, the terms realestate and .com.au in a domain name is their brand. Chucking a “1″ into the domain name was not good enough. What we dont know is if adding a suburb or business name would attract the same fate. I would like think that it would not and that probably comes from this next section.
235 The impression left by the logo is that the dominant composite elements or the essential feature is “realEstate1” and that the source business is an internet business that trades by the name “realEstate1”. The visibility of the “1” is critical to that impression. Unlike REA’s logo, the logo used by Real Estate 1 does not create the strong impression that the brand or trading name of the business is a domain name which includes “.com.au”. The different impressions of the brand or trading names projected by the essential features of each logo is significant. Those contrasting features will to some extent be reinforced by the differences in colour and presentation. That all leads me to the conclusion that Real Estate 1’s logo does not sufficiently resemble REA’s logo to be deceptively similar. I do not consider that, allowing for imperfect recollection, there was a real tangible danger that a person who knew REA’s trade mark would have been confused.
To me its the visibility of the 1 that has counted. So in the logo itself they have blended the 1 into the graphic and in the text version the 1 in www.realestate1.com.au does not stand out as being that much different than www.realestate.com.au. This leaves a little hope for those with domain names like abcrealestate.com.au. The abc part is a lot more visible than the single digit 1.
Now this is where it gets interesting and I have highlighted the important bits.
247 As my conclusions demonstrate, registration of REA’s realestate.com.au marks has effectively given REA a monopoly over two highly descriptive terms when used in combination. Those terms are likely to be the most common terms on a search results page where a search has been conducted for a residential real estate portal. The protection conferred by REA’s trade marks over the use of “realestate” and “.com.au” in combination, provides REA with a monopoly over the term “realestate” in circumstances where its rivals seeking also to use “realestate” or a close variant thereof as a second-level domain, do not forego the advantages of using “.com.au” in their domain names. The natural advantage of a domain name which incorporates “realestate” to the commercial success of property portals will be apparent from observations I have already made. There is also a natural advantage in the use of the suffix “.com.au”. It is troubling that terms that are highly descriptive of a particular area of commerce and which provide significant commercial advantage should not be readily available for use by all who seek to participate in that commerce. However, in the absence of a successful challenge to the registration of REA’s realestate.com.au trade marks, whilst that may be troubling, REA is nevertheless entitled to the protection of the monopoly which has been conferred upon it.
Two words stand out here. Monopoly and troubling.
Lets go over it one more time what IP Australia said again to the real estate industry — ”It would for instance be highly unlikely that the owner could prevent use of the term “real estate” by others”. Yet the judge seemed to feel as though she was compelled because of the existence of the trademark.
Now in my opinion the wording of this particular section indicates that the judge did not want to give them the decision but felt as though he/she had to. The trademark itself gives them a monopoly over the terms on the internet and the fact that they were given this trademark was troubling.
The concerns the industry raised back in 2008 were correct and it seems that the assurances to the industry provided by REA and IP Australia were empty and worthless.
With this judgement under their belt it will be interesting to see who is next on REA’s hit list. I am thinking that every other non agency client of theirs using any domain with the term “realestate” and “.com.au” is in for a hard time. in 2014.
What are your thoughts on this judgement? Did the judge get it right? Is it IP Australia and the trademark process itself that needs an overhaul.
For me a website is an address no different to 12 Smith Street, Anytown. A business should not be able to restrict another business from using a similar address. A domain is nothing more than a digital address and it does not automatically confer the business name of the operator of the website running on that domain.
A massive chunk of the blame lays squarely at the feet of IP Australia. So how did they get this through and why were the objections not upheld?
But there is more unanswered questions as Peter Ricci pointed out in a prior article. How did they get a hold of the domains like news.com.au and realestate.com.au when they were blocked to everybody else. The rules are supposed to apply to everyone. They should never have been allowed to register those domains according to the rules at the time.
Imitating logos and business names should never be allowed but domain names should never be a part of that. I think allowing this trademark to include the domain name itself as a part of the IP is outrageous. Logos, yes. Business name, yes. Domain name, no. Components of a domain name, no.
Let us know what you think in the comments.
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