The Agency Group Australia Ltd v H.A.S. Real Estate Pty Ltd [2023] FCAFC 203

Author Tom Cordiner KC, Melissa Marcus, Clare Cunliffe, Marcus Fleming & Amy Surkis |  26th March, 2024

Trade marks — judicial estimation — whether descriptiveness of registered mark relevant to assessment of deceptive similarity

The first appellant, the Agency Group Australia Limited, has two wholly owned subsidiaries, being the second appellant (Ausnet Real Estate Services Pty Ltd), and the third appellant (The Agency Sales NSW Pty Ltd) (collectively, the “Agency Group”). The Agency Group carries on a real estate business providing services in residential sales, project marketing, property management, and finance to customers across Australia. It has over 400 agents Australia-wide, including 26 offices in New South Wales operating from 21 physical locations, with the Northern Beaches region of Sydney specifically serviced by offices in Manly and Neutral Bay. The second appellant is the owner of the following registered trade marks, which are registered in relation to a range of real estate services in class 36:

(the Agency Mark)
(the Logo Mark).

The respondent also carries on a real estate business, located in Dee Why, in the Northern Beaches region of Sydney. This business commenced operation in March 2023 under the name THE NORTH AGENCY. The respondent’s directors decided upon, and adopted, a particular stylised rendering of the name of THE NORTH AGENCY and a logo comprising the stylised letter N and a degree symbol (referred to as the “N Logo”), shown below.

In the proceeding below, the appellants alleged that the respondent’s use of THE NORTH AGENCY in its real estate business infringed the AGENCY Mark, and that its use of the N Logo infringed the Logo Mark. In the primary judgment, Justice Jackman was satisfied that the respondent had used THE NORTH AGENCY and the N Logo as trade marks. His Honour was not satisfied, however, that THE NORTH AGENCY, when used as a trade mark, is deceptively similar to the AGENCY Mark or that the N Logo is deceptively similar to the Logo Mark. Accordingly, the infringement case failed. Justice Jackman referred to the principles in Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd (2023)408 ALR 195 (“Self Care”).

At [60] of the primary judgment, Justice Jackman observed that aspects of [70] and [71] of Self Care are impossible to reconcile with the Court’s approval of earlier authorities which state that, when assessing deceptive similarity, material extraneous to the mark used by the respondent is irrelevant to the issue of trade mark infringement. His Honour resolved the dilemma by “simply disregarding the passages quoted above from [70] and [71], as unfortunate errors”. In McD Asia Pacific LLC v Hungry Jack’s Pty Ltd [2023] FCA 1412 (analysed below) , Justice Burley endorsed Justice Jackman’s summary of the relevant principles but read the relevant parts of [70] and [71] in Self Care as obiter dicta rather than an error. Justice Burley did not expressly comment on [60] of Justice Jackman’s judgment. The Full Court in this appeal also did not refer to [60].

With respect to the AGENCY Mark and the respondent’s use of THE NORTH AGENCY as a trade mark, the primary judge reasoned that the insertion of the word “NORTH” in THE NORTH AGENCY was a substantial feature which differentiated THE NORTH AGENCY from the AGENCY Mark. His Honour found this word would remain in the minds of ordinary consumers with imperfect recollection and was “a striking aspect of the mark which points strongly against any real likelihood of confusion”, which alone was sufficient to undermine the appellants’ argument for infringement. The primary judge considered the aural impression of THE NORTH AGENCY and was satisfied that aural use of the word “NORTH” was just as striking when spoken as it was in its written form. Even so, his Honour did not regard aural resemblance as being particularly significant in the present case given the evidence before him as to the manner in which real estate services are typically acquired.

In reaching his decision, the primary judge stressed that the AGENCY Mark is not a word mark but a composite mark in which the stylised “A” cannot be ignored. It is an element of the composite mark which the ordinary consumer would not fail to recall, representing a stylised roof or house device.

His Honour also said that it was relevant that the words “THE AGENCY” have a strongly descriptive element in referring to the nature of the real estate business. His Honour said that the ordinary consumer would expect the word “AGENCY” to be commonly used in the names of real estate businesses in Australia. His Honour noted that both the word “AGENCY” and a stylised roof or house device representing the letter “A” are commonly used in business names and marks in the real estate industry.

Further, the primary judge considered the importance of context in analysing trade mark use. His Honour said that the buying, selling, and leasing of real property are among the most important transactions which ordinary consumers engage in during their lives and reasoned that there would be a heightened sense of awareness and concentration amongst consumers in that context.

The primary judge was not persuaded by the submission that an ordinary consumer might wonder whether the services provided by THE NORTH AGENCY might be a commercial extension, franchise or sub-brand of the business identified by the AGENCY Mark.

The application to adduce new evidence

In the appeal, the respondent sought leave pursuant to section 27 of the Federal Court of Australia Act 1976 (Cth) to rely on evidence not adduced in the proceeding below on the basis that the evidence was not available to be tendered in that proceeding. The evidence is a submission made by the second appellant to the Registrar of Trade Marks (the “Registrar”) at the time of prosecuting the application for the AGENCY Mark. That submission advanced the particular form of the AGENCY Mark—and especially the stylised “A”— as a reason why the application for registration of the mark should be accepted under section 33 of Trade Marks Act 1995 (Cth).

The respondent argued that the second appellant’s submission only became available to it as a result of the response by IP Australia on 29 May 2023 to a Freedom of Information (“FOI”) request made by it on 28 March 2023. The proceeding below was commenced on 21 March 2023. The appellants applied for interlocutory relief. However, the primary judge was able to offer the parties an expedited final hearing, which both parties agreed to accept. On 14 April 2023, the proceeding was set down for a final hearing on 10 and 11 May 2023. The hearing proceeded on those dates and the primary judge gave judgment on 17 May 2023 before the response to the FOI request was received.

The Full Court observed that at the time the parties agreed to an expedited final hearing, when the appellants were pressing for interlocutory relief, it must have been apparent to the respondent that a response to its FOI request might not be forthcoming before the final hearing. From the respondent’s perspective, the final hearing could only have been conducted on the basis that it would defend the claims made against it regardless of whether it had received a response to the request. On this basis, the Court denied the respondent’s application to adduce the second appellant’s submission to the Registrar in this appeal. The Full Court noted that there were other reasons to refuse the request – including that the respondent could have issued a notice to produce on the second appellant, that the second appellant’s submission to the Registrar was simply a submission, and the submission could not have changed the outcome.

The grounds of appeal

The appellants advanced three grounds of appeal. Ground 1 alleged error on the part of the primary judge in relation to his Honour’s application of the well-established principles relating to deceptive similarity to which we have alluded and involves various aspects of his Honour’s reasoning.

In particular, the appellants contended that Justice Jackman erred:

First, by “effectively attributing” to the notional consumer a “perfect photographic recollection” of the AGENCY Mark, and failed to consider the possibility that at least a number of persons might not share his Honour’s specific perception of the idea conveyed by the AGENCY Mark (and in particular, his perception of the A as a House).

Secondly, by adverting to whether the second appellant would have an “unwarranted monopoly” if rival businesses were unable to use the definite article “THE” and the word “AGENCY” in their business names, the primary judge did not focus on the question whether there is a real risk that a number of consumers with imperfect recollection of the AGENCY Mark would confuse that mark with THE NORTH AGENCY.

Thirdly, by discounting the words “THE AGENCY” and the stylised “A” in the AGENCY Mark as being descriptive and common in the trade (and that, even so, his Honour’s approach should have led him to appreciate the likelihood of confusion was increased because the only element of the AGENCY Mark not present in THE NORTH AGENCY is the stylised “A”).

Fourthly, in identifying the word “NORTH” as the distinctive feature of THE NORTH AGENCY, and thereby excluding the possibility that at least a number of other persons might perceive that mark “as a combined whole” without particular emphasis on any single word. In this connection, the appellants submitted that the word “NORTH” simply functions as an adjectival identifier that the respondent’s business has a northern location.

Fifthly, by excluding any risk of confusion arising from the aural use of the two marks.

Sixthly, by rejecting any risk that an ordinary consumer might wonder whether the services provided by THE NORTH AGENCY might be a commercial extension, franchise or sub-brand of the owner of the AGENCY Mark.

Ground 2 alleged that, by reason of the errors referred to in Ground 1, the primary judge’s “discretion” miscarried in finding that infringement under section 120(1) of the Trade Marks Act was not established.

Ground 3 of the appeal alleged that, on a proper application of the established principles on deceptive similarity under section 120(1) of the Trade Marks Act, the primary judge should have found that (in substance) THE NORTH AGENCY is deceptively similar to the AGENCY Mark for the reason that there is a real likelihood that consumers for real estate services “are at a risk of wondering, or being perplexed or mixed up, as to whether it might not be the case that real estate services provided by THE NORTH AGENCY might be a commercial extension, franchise or sub- brand” of the AGENCY Mark.

The Full Court’s reasoning

The Full Court did not accept that the primary judge had made the asserted errors. In their reasons, the Full Court made some important observations of principle.

The Full Court observed that understanding the scope of the registered mark, as a sign, is fundamental to the infringement question. In this respect, the Full Court noted that the AGENCY Mark is not simply the words “THE AGENCY” but those words represented in a particular stylised form. Therefore, they observed, the exclusive right to use the AGENCY Mark in respect of the designated services that is conferred on the second appellant, as owner of the mark, by section 20 of the Trade Marks Act, is not the right to use the words “THE AGENCY”; but the exclusive right to use those words represented in the particular stylised form of the mark as registered.

The Full Court also noted that the infringement question posed by section 120(1) of the Trade Marks Act is answered objectively by reference to a construct. The Full Court noted that, insofar as the infringement question concerns whether an alleged infringer has used a mark that is deceptively similar to the registered mark, the construct to which the High Court referred in Self Care proceeds on the basis that notional acquirers of the goods or services have knowledge of the registered mark. Thus, consideration of the question of deceptive similarity proceeds from a premise that is hypothetical rather than actual, but, importantly, the hypothesis is knowledge of the mark as registered (even though in undertaking the analysis, allowance must be made for imperfect recollection of that mark).

The Full Court synthesised these observations, noting that in the present case, the hypothesis is that the intending acquirers of the designated services know, but may have an imperfect recollection of, the particular stylised form of the AGENCY Mark, not just knowledge of, and an imperfect recollection of, the words “THE AGENCY”.

The Full Court observed that the comparison of trade marks for the purpose of considering whether one mark is deceptively similar to another mark is a process of judicial estimation. Minds may well differ as to the outcome of such a process, and in the evaluative findings that are steps along the way to reaching that outcome. Where, on appeal, they do, the fact of difference does not alone warrant appellate intervention; nor does the fact that differences can be posited by way of argument. The threshold for appellate intervention is the demonstration of error in the outcome or in the carrying out of the evaluation. The task of the appellate court is not simply to carry out afresh the evaluative task that the primary judge carried out with a view to supplanting the primary judge’s findings with its own, should it happen to come to a different view.

The Full Court observed that the primary judge reached his conclusion that the marks used by the respondent were not deceptively similar to the AGENCY Mark by having regard to a range of considerations, not just one consideration. It was the combination of considerations that led to his Honour’s conclusion, although his Honour assessed some matters to be more significant than others in his evaluation.

The Full Court observed that a consistent theme in the appellants’ submissions was the contention that, while the primary judge had a view about what the AGENCY Mark conveyed to the notional consumer, he failed to consider that his view was no more than an idiosyncratic perception that might not be shared by others. Based on the contention that there is reason to think that others would not share the primary judge’s perception of the two marks, the appellants then developed an argument that, by not taking into account that asserted fact, his Honour failed to apply the standard articulated in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 608, namely that, in order to establish trade mark confusion, it is sufficient “that a number of persons will be caused to wonder whether it might not be the case that the two products come from the same source” (emphasis added).

The Full Court summarised the appellants’ argument as being:

(a) because, in their contention, a number of persons – “some people” – would not share Justice Jackman’s perception or impression of the two marks, trade mark confusion is inevitably present; and

(b) his Honour should have recognised that fact and given effect to it by finding that THE NORTH AGENCY is deceptively similar to the AGENCY Mark, even though that was not his Honour’s objective assessment.

The Full Court rejected this argument.

The Court observed that the task that confronted the primary judge is one of judicial estimation – a process in which minds might well differ as to both the outcome, and the evaluative findings that are steps along the way to reaching that outcome. They observed it cannot be a criticism, much less a demonstration of appealable error, to point to the possibility that others might have a perception or impression of the marks in suit that is different to the primary judge’s perception or impression, and argue that the primary judge erred by not giving effect to that possibility.

In considering the aural use of the mark, the Full Court cautioned that the aural use of a logo mark cannot be given equal or greater significance than its visual form. Their Honours observed that if it were otherwise, the boundaries fixed by the visual form of the mark, as registered, would be effectively ignored, thus conferring on the registered owner an unwarranted monopoly in the simple use of descriptive words in relation to the designated goods or services.

Some comments from the authors

The authors note that this decision demonstrates why it can be very difficult to successfully challenge a trade mark decision on appeal where the complaint is directed to the way in which the relevant principles were applied rather than as to the underlying principles. Where a process of judicial estimation is under review, absent clear error, the conclusion of the primary judge is likely to be upheld.