The matter of Swancom Pty Ltd v The Jazz Corner Hotel Pty Ltd [2022] FCAFC 157, (the Appeal Decision) involved the hearing of two appeals to the full Federal Court (constituted by Yates, Abraham and Rofe JJ).

Swancom Pty Ltd (Swancom) appealed the dismissal of trade mark infringement claims in Swancom Pty Ltd v The Jazz Corner Hotel Pty Ltd (No 2) [2021] FCA 328 (the Primary Decision), previously reported here. The Jazz Corner Hotel Pty Ltd (JCHPL) appealed the decision in Swancom Pty Ltd v The Jazz Corner Hotel Pty Ltd (No 3) [2021] FCA 729 (the Costs Decision) that it pay Swancom's costs for the cross claim.

The earlier proceedings involved two live music venues. Swancom owned and operated a live music and hospitality venue named The Corner Hotel in the Melbourne suburb of Richmond. Three companies conducted distinct but related businesses from a CBD premises – JCHPL as a hotel business named The Jazz Corner Hotel, Bird's Basement Pty Ltd as Bird's Basement, a jazz music venue (BBPL) and Saint Thomas Pty Ltd as The Jazz Corner Café, within the premises (STPL).

Swancom owned four relevant trade mark registrations:

  • 1388154 CORNER HOTEL; 1442211 CORNER; 1669900 THE CORNER covering (among other things) live music, booking and reservation services and hospitality services in classes 41 and 43; and
  • 1623364 CORNER PRESENTS for booking services in class 41 (together, the Swancom trade marks).

Swancom sued JCHPL, BBPL and STPL for trade mark infringement, claiming that they had infringed the Swancom trade marks by using the following trade marks, which they alleged were deceptively similar, in respect of live music and ticket/reservation booking services:

  1. THE JAZZ CORNER OF MELBOURNE and JAZZ CORNER OF MELBOURNE;
  2. THE JAZZ CORNER OF THE WORLD and JAZZ CORNER OF THE WORLD;
  3. THE JAZZ CORNER HOTEL, JAZZ CORNER HOTEL and JAZZCORNERHOTEL (Jazz Corner Hotel marks); and
  4. THE JAZZ CORNER CAFÉ, JAZZ CORNER CAFÉ and THEJAZZCNRCAFE (Jazz Corner Café marks) (together, the Jazz Corner trade marks).

JCHPL, BBPL, STPL, and their sole director Albert Dadon cross-claimed to cancel the Swancom trade mark registrations for Class 41 services, submitting the marks were not capable of distinguishing Swancom's services and were likely to deceive or cause confusion.

At first instance, the trade mark infringement claim was dismissed. It was found that none of the Jazz Corner trade marks were deceptively similar to the Swancom trade marks as although the term 'jazz' had a descriptive meaning, it left "...a more striking impression" than 'corner' and 'hotel'.

In the cross claim, the primary judge held that the Swancom trade marks were capable of distinguishing Swancom's professional live music services as a result of acquired distinctiveness and that use was not likely to deceive or cause confusion. The primary judge dismissed the cross claim in respect of the CORNER HOTEL and CORNER PRESENTS registrations, finding that although the words 'corner hotel' had some signification, Swancom's use of CORNER HOTEL caused it to be capable of distinguishing those services, and CORNER PRESENTS was inherently distinctive. As there was little evidence of use of CORNER and THE CORNER in relation to the broader services covered by the Class 41 registrations, the primary judge requested submissions regarding whether the registrations should be amended or a limitation imposed regarding use of the term 'corner', and costs.

The Appeal Decision

The First Appeal – grounds of appeal

Swancom appealed the following findings from the Primary Decision and the Costs Decision (with JCHPL and BBPL as respondents):

  • the finding of deceptive similarity in the context of the infringement claim (in respect of their CORNER HOTEL, CORNER, THE CORNER marks only), on the basis that, in comparing the marks, his Honour failed to take into account that the Swancom trade marks had acquired distinctiveness as at their respective filing dates;
  • that JCHPL and BBPL had not used (THE) JAZZ CORNER OF THE WORLD as a trade mark; and
  • that BBPL had not used (THE) JAZZ CORNER HOTEL as a trade mark in respect of professional live music services.

JCHPL and BBL argued the primary judge was correct in finding that there was no infringement, and that His Honour should have also found that:

  • (THE) JAZZ CORNER HOTEL was not used by JCHPL as a trade mark in relation to the provision of live music services; and
  • (THE) JAZZ CORNER OF MELBOURNE was not used by JCHPL or BBPL as a trade mark in relation to the provision of the live music services.

Swancom submitted that:

  • in assessing whether the marks were deceptively similar, that the primary judge should have been required to assume that the relevant consumer had knowledge of the registered mark alleged to have been infringed. In addition, where a mark's capacity to distinguish is based on distinctiveness in fact, that acquired distinctive meaning is knowledge that should be credited to ordinary members of the public. These perceived errors clouded analysis of the word 'jazz' in the impugned marks, a word which Swancom considered to be descriptive;
  • the primary judge should have considered that the Jazz Corner Hotel marks wholly incorporated Swancom's distinctive mark CORNER HOTEL; and
  • the primary judge gave inappropriate weight to the consideration that consumers of live music services can be expected to be discerning with their choices.

JCHPL and BBPL submitted that:

  • the principles followed in assessing deceptive similarity in the Primary Decision were correct;
  • as Swancom had not contended that its marks were notoriously ubiquitous, that the reputation of those marks was irrelevant to the enquiry regarding deceptive similarity;
  • Swancom's use of its marks and assessment of their distinctiveness prior to filing is irrelevant to the infringement issue under appeal, which is whether the alleged infringer's trade mark is deceptively similar.

Decision

In dismissing the appeal the Court concluded that there was no error in the assessment or conclusion by the primary judge and no error in the approach regarding costs given the Court's discretion to award costs and that it was a contested hearing. As none of the grounds of appeal had been established, it was ordered that the appeal be dismissed, and Swancom pay JCHPL and BBPL's costs of the appeal.

Takeaway

The assessment of a trade mark for registration is a "...separate and distinct exercise" from the assessment of whether a trade mark has been infringed.

The test for deceptive similarity involves consideration of the ordinary consumer's imperfect recollection of the registered trade mark, and that "[T]he ordinary consumer is not to be credited with any knowledge of the actual use of the trade mark, or of any acquired distinctiveness arising from use of the mark prior to filing".

There is no requirement to consider a registered owner's reputation in assessing deceptive similarity except (perhaps contentiously) where that reputation is notorious.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.