Metro Business Centre Pty Ltd v Centrefold Entertainment Pty Ltd - [2017] FCA 1249

FEDERAL COURT OF AUSTRALIA
Metro Business Centre Pty Ltd v Centrefold Entertainment Pty Ltd
[2017] FCA 1249

File number:

NSD 1489 of 2016

Judge:

RARES J

Date of judgment:

16 June 2017

Catchwords:

TRADE MARKS – Trade Marks Act 1995 (Cth) – where trade mark “centrefold” registered in respect of provision of adult entertainment and promotional model services (‘designated services’) – where registered owner used trade mark as part of word mark “Centrefold Entertainment” – where owner’s mark substantially identical and deceptively similar to applicants’ word marks “Centrefold Strippers” and “Centrefold Strippers Australia” – application under s 41 to remove trade mark from Register– whether owner’s trade mark inherently adapted to distinguish its services from services of other persons – ordinary and natural meaning of word “centrefold” in markets in which parties operated – whether owner used word mark “centrefold” in its ordinary and natural meaning or as a mere description of its services – whether mark “centrefold” covert and skilful allusion to owner’s designated services – whether owner’s use of word “centrefold” was use of trade mark in relation to services under s 7(5) – whether owner used trade mark in connection with its services in a way that enabled conclusion to be drawn that usage had developed a secondary meaning related only to owner’s designated services

TRADE PRACTICES – Misleading and deceptive conduct – competing applications alleging other party contravened s 18 of Australian Consumer Law in using word “centrefold” in branding its business – whether use of word “centrefold” in the trading styles of each party amounted to that party engaging in conduct, in trade or commerce, that was misleading or deceptive – whether owner of trade mark passed off its business as that of the applicants – whether business names sufficiently distinguished one party’s services from those of the other

Legislation:

Competition and Consumer Act 2010 (Cth) Sch 2, Australian Consumer Law ss 2, 18, 232

Trade Marks Act 1995 (Cth) ss 6, 7, 8, 17, 41, 44, 58, 122, 124, 126

Cases cited:

Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd (2017) 345 ALR 205

Cantarella Brothers Pty Ltd v Modena Trading Pty Ltd (2014) 254 CLR 337

Clark Equipment Company v Registrar of Trade Marks (1964) 111 CLR 511

Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216

Patrick Stevedores Operations No 2 Pty Limited v Maritime Union of Australia (1998) 195 CLR 1

The Queen v Australian Broadcasting Tribunal; Ex parte 2HD Pty Ltd (1979) 144 CLR 45

Date of hearing:

29-31 May, 7-8, 14-16 June, 8 August 2017

Registry:

New South Wales

Division:

General Division

National Practice Area:

Intellectual Property

Sub-area:

Trade Marks

Category:

Catchwords

Number of paragraphs:

120

Counsel for the Applicants and Cross-Respondents:

Mr R Cobden SC with Mr J O’Sullivan

Solicitor for the Applicants and Cross-Respondents:

Streeterlaw

Counsel for the Respondents and Cross-Claimant:

Ms J Baird SC with Mr C Wood

Solicitor for the Respondents and Cross-Claimant:

Hopgood Ganim Lawyers

ORDERS

NSD 1489 of 2016

BETWEEN:
METRO BUSINESS CENTRE PTY LIMITED (ACN 096 429 882)

First Applicant

SEXY ENTERTAINMENT PTY LIMITED (ACN 163 680 108)

Second Applicant

AND:
CENTREFOLD ENTERTAINMENT PTY LIMITED (ACN 151 972 986)

First Respondent

MATTHEW PRENDERGAST

Second Respondent

AND BETWEEN:
CENTREFOLD ENTERTAINMENT PTY LIMITED (ACN 151 972 986)

Cross-Claimant

AND:
METRO BUSINESS CENTRE PTY LIMITED (ACN 096 492 882) (and others named in the Schedule)

First Cross-Respondent

JUDGE:

RARES J

DATE OF ORDER:

16 JUNE 2017

THE COURT ORDERS THAT:
1.The parties provide to the Associate to Rares J short minutes of order to give effect to these reasons and if they cannot agree on such orders and orders as to costs:
(a)the proceedings be relisted at 10.30am on 8 August 2017 for the making of final orders and orders as to costs and what is to occur with the funds held as security for costs;
(b)on or before 7 August 2017, the parties file and serve written submissions on costs, limited to three pages.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT
(REVISED FROM THE TRANSCRIPT)
RARES J:
Introduction

Metro Business Centre Pty Limited and Sexy Entertainment Pty Limited are the first and second applicants and cross-respondents and their related company, CG Trading Pty Limited, is the third cross-respondent (collectively, the Metro parties). Centrefold Entertainment Pty Limited is the first respondent and cross-claimant and its sole director and shareholder, Matthew Prendergast, is the second respondent (collectively, the Entertainment parties). These proceedings concern the two sets of business competitors who each challenge the other’s use, as a trade mark or brand name, of the word “centrefold” in selling services of males and females in markets for promotional, or “promo”, models and adult entertainment services.
Entertainment obtained registration of the trade mark “centrefold” on 24 June 2016 under the Trade Marks Act 1995 (Cth). The Entertainment parties complain that the Metro parties have infringed that trade mark. The Metro parties deny any such infringement and claim that the trade mark “centrefold” is not capable of distinguishing Entertainment’s services from those of others and, accordingly, its registration as a trade mark should be cancelled.
A promo model is someone who provides his or her services to promote a business by, for example, handing out advertising or business cards in a public venue, or acting as an adornment at an event, such as appearing in a manufacturer’s clothing or livery at a trade or motor show. Promo models do not appear at events for which they are retained fully or partially naked and they are paid relatively modest sums, such as $20 to $30 per hour. An adult entertainer, on the other hand, is both less modestly attired and better remunerated than a promo model, and his or her services are retained generally for private, rather than publicly promotional, events, such as bucks’ or hens’ parties or salacious playing card evenings, or occasions where they appear as topless waitresses or waiters.
In particular, the aspect of the adult entertainment market over which the parties competed was the provision of striptease artists, or strippers, being mostly females, but also including males, who entertain a private audience by taking off their clothes gradually, in a tantalising or erotic way. The evidence included details about the other services of strippers that the parties offered who, for increasing payments, perform more and more explicit acts, including what were called fruit and vegetable extravaganzas, R-rated and X-rated shows. It is not necessary to refer to that evidence in order to resolve the issues.
Strippers are paid, as are other adult entertainers, substantially more, indeed, in the range of about 10 times or more, than what promo models are paid. Thus, a stripper, who was given the pseudonym Yasmin Scott, said that she could earn up to $450 for a show, that included more lurid performances and that lasted about 20 to 30 minutes. She could perform multiple shows on any night. She described herself as a “centrefold”. Photographs of her naked and scantily clad had been published in the middle pages of Australian Penthouse, a monthly “men’s magazine”. For many years up to the present, that magazine has published, as do others, in the centre pages, pictures of a naked woman, who is known as the “centrefold” for that month’s issue. The same epithet is used if photographs of a male appear in the centre pages of a magazine, such as the “women’s magazine” Cleo.
In 2006 the owner of Centrefold Lounge, a business conducted from premises in Melbourne, applied for a trade mark for that business name. That application lapsed on 22 November 2007. Its business was not connected to either of the Metro or Entertainment parties. Subsequently, in 2014, Centrefold Lounge Pty Limited obtained registration of its business name as a trade mark under the Trade Marks Act. Centrefold Lounge advertised its attractions in Australian Penthouse, among other places.
Mr Prendergast denied familiarity with the use of the expression “centrefold” to describe a person who is the subject of the picture appearing in the centre pages of such publications, and asserted that the word “centrefold” refers not to a person depicted but to the physical pages located in the magazine’s centre. I do not accept that evidence. While one natural and ordinary meaning of the word “centrefold” is the sense asserted by him, it is by no means the only or natural and ordinary usage that one would associate with that word in everyday language and situations involving individuals, including, particularly, those involved in the promo model and adult entertainment services markets.
The sense in which the word “centrefold” is used in everyday situations is important because Mr Prendergast used the word “centrefold”, in respect of which Entertainment applied for, and obtained, the trade mark that is at the heart of these proceedings, in order to brand its business that supplied performers like Ms Scott to provide adult entertainment services.
The ordinary and natural meaning of the word “centrefold” includes the two facing middle pages of a newspaper or magazine, as Mr Prendergast suggested. But, in the context of individuals or businesses offering the services of one or more males or females as models or striptease artists, the word “centrefold” ordinarily captures one or more of the following dictionary senses:
·a single feature or picture, in later use, especially, a photograph of a nude or scantily clad woman, printed on those pages; a person, especially, a woman, who appears or has appeared nude or scantily clad in a photograph in the middle pages of a magazine (Oxford English Dictionary online, senses 1 and 2);
·the folded page in the centre of a magazine designed to be lifted out so as to display a large photograph, sometimes of a nude male or female, a pop group, etcetera; and
·the person depicted: “He was the Cleo centrefold last month.” (Macquarie Dictionary online, senses 1 and 2).
The issues
It is common ground that the word marks “Centrefold Strippers Australia” and “Centrefold Strippers” (collectively, the Strippers mark) as used by one or more of the Metro parties and the word mark, and now registered trade mark, “centrefold”, and the word mark “Centrefold Entertainment” (collectively, the Entertainment mark), as used by the Entertainment parties, are substantially identical and deceptively similar to one another. The issues that require resolution are:
(1)Is the Entertainment mark capable of distinguishing the services dealt with, or provided in, the course of Entertainment’s trade from services so dealt with, or provided by, any other person, including the Metro parties, for the purposes of s 41 of the Trade Marks Act? (the distinctiveness issue).
(2)If “yes” to issue (1):
(a)have the Metro parties established that they, and if so which one:
(i)were or was the true owner of the Entertainment mark in respect of services of “adult entertainment” within the services designated for that mark for the purposes of s 58 of the Trade Marks Act;
(ii)continuously used the Strippers mark in the course of trade before Entertainment first used the Entertainment mark for similar services for the purposes of s 124(1) of the Trade Marks Act;
(iii)honestly, concurrently used the Strippers mark for similar services for the purpose of s 44(3)(a) of the Trade Marks Act (the earlier or concurrent use issue).
(b)If “no” to issue (2)(a), has Entertainment established that it is entitled to relief for infringement of the Entertainment mark by way of:
(i)an injunction under s 126(1)(a) of the Trade Marks Act or at general law;
(ii)damages or an account of profits and, if so, in what quantum (the trade mark relief issue); and
(iii)additional damages under s 126(1) and, if so, in what quantum?
(3)Regardless of the answer to issue (1):
(a)have either the Metro parties or the Entertainment parties established that, by the use of the term “Centrefold” in their respective trading styles, the other(s) engaged in conduct, in trade or commerce, that was misleading or deceptive or likely to mislead or deceive in relation to that other party’s business (in contravention of s 18 of the Australian Consumer Law (ACL) in Sch 2 to the Competition and Consumer Act 2010 (Cth)) or, additionally, in the case of the Entertainment parties, amounted to them passing off the Entertainment parties’ business as that of one or more of the Metro parties’ businesses;
(b)If “yes” to issue (3)(a), have the successful parties established that they are entitled to relief by way of:
(i)an injunction under s 232(1) of the ACL or at general law;
(ii)damages or an account of profits and, if so, in what amount;
(iii)if the Metro parties are successful, whether Mr Prendergast was “involved” in any contravention of s 18 of the ACL within the meaning of s 2 (the other relief issue).
If the answer to issue (1) is “no” and or if the answer to issue (2)(a)(i) is “yes”, then the Register of Trade Marks must be rectified by an order cancelling or amending, as the case may be, the registration of the Entertainment mark under s 8(1)(a) or (b) of the Trade Marks Act.
The statutory scheme
Relevantly the Trade Marks Act provided:
6         Definitions
(1)       In this Act, unless the contrary intention appears:
…
services of a person means services dealt with or provided in the course of trade by the person.
sign includes the following or any combination of the following, namely, any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent.
…
7         Use of trade mark
…
(5)       In this Act:
use of a trade mark in relation to services means use of the trade mark in physical or other relation to the services.
…
17       What is a trade mark?
A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.
…
41       Trade mark not distinguishing applicant’s goods or services
(1)An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant’s goods or services in respect of which the trade mark is sought to be registered (the designated goods or services) from the goods or services of other persons.
Note:     For goods of a person and services of a person see section 6.
(2)A trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons only if either subsection (3) or (4) applies to the trade mark.
(3)       This subsection applies to a trade mark if:
(a)the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons; and
(b)the applicant has not used the trade mark before the filing date in respect of the application to such an extent that the trade mark does in fact distinguish the designated goods or services as being those of the applicant.
(4)       This subsection applies to a trade mark if:
(a)the trade mark is, to some extent, but not sufficiently, inherently adapted to distinguish the designated goods or services from the goods or services of other persons; and
(b)the trade mark does not and will not distinguish the designated goods or services as being those of the applicant having regard to the combined effect of the following:
(i)the extent to which the trade mark is inherently adapted to distinguish the goods or services from the goods or services of other persons;
(ii)the use, or intended use, of the trade mark by the applicant;
(iii)      any other circumstances.
Note 1:Trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate:
(a)the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or
(b)the time of production of goods or of the rendering of services.
Note 2:    For goods of a person and services of a person see section 6.
Note 3:Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (5) and 7(3) and section 8).
…
122     When is a trade mark not infringed?
(1)In spite of section 120, a person does not infringe a registered trade mark when:
…
(b)       the person uses a sign in good faith to indicate:
(i)the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or
…
(c)the person uses the trade mark in good faith to indicate the intended purpose of … services; or
(non-italic bold emphasis added)
Background
The registration of the Entertainment mark in class 41 specified the following services in relation to that registration (the designated services), namely:
entertainment services, including organizing and providing live shows, staged events, recreational events, personal appearances by actors, dancers, models or adult-entertainment performers, adult-themed shows, including live performances by professional entertainers featuring adult entertainment, modelling and acting services for entertainment, providing a website featuring adult entertainment content, entertainment club services, party planning services for entertainment; fashion show services; provision of information, consultancy and advisory services in relation to the foregoing.
The parties compiled a detailed chronology that summarised a deal of evidence to some of which it is necessary to refer below.
In about March 2010, Mr Prendergast commenced a business trading under the name XXX Princess. At about that time, he employed a friend, Cameron Stenzel. Mr Stenzel conducted the interactions between the public and performers and made the practical arrangements to take and organise bookings for the XXX Princess business. On 22 March 2010, Mr Prendergast registered the domain name and created a website, the first available image for which appeared, according to the Wayback Machine process for ascertaining internet archive results, in late April 2010. Mr Prendergast registered the business name XXX Princess in May 2010. On 31 March 2011, Mr Prendergast caused XXX Princess Pty Limited to be incorporated.
On 16 May 2011, Mr Prendergast registered the business name Centrefold Entertainment as a business name of XXX Princess Pty Limited. (I will refer below to that company and the business name as XXX Princess.) The next day, he registered the domain name centrefoldentertainment.com.au. On 7 July 2011, Mr Prendergast incorporated, and became the sole director and shareholder of, Centrefold Entertainment Pty Limited, the first respondent.
Importantly, XXX Princess never had a merchant facility with any bank enabling it to collect moneys from potential or actual customers for the performances. Until September 2012, the ordinary way in which Mr Prendergast’s various businesses collected moneys was by the performers being paid cash when they arrived at the designated venue, and accounting to XXX Princess for its share of the performance fee. That appears to have been done by the performers raising a tax invoice for the cost of their services (that they retained) including, where appropriate, drivers’ or transport fees and the like, and accounting to XXX Princess for the balance of the fee that had been agreed with the customer.

In early August 2011 another adult entertainer, to whom I gave the pseudonym Ms Jones, arrived in Australia from overseas. She sought employment with XXX Princess, by responding to an email address associated with the Centrefold Entertainment domain name, in which she offered to carry out a variety of adult entertainment services.
Shortly afterwards, Ms Jones met Daniel Adams, who is the principal behind the Metro parties’ businesses, and they appear to have formed a long term personal and commercial relationship. Ms Jones began undertaking work assignments for XXX Princess. Mr Adams then worked in a senior management role in the private sector unconnected to adult entertainment services. In the course of his employment he, like Mr Prendergast, gained considerable experience in achieving prominence on the internet for business names or businesses that he was promoting. Each used search engine optimisation techniques and other tools, such as Google Analytics, to work out how to position the business that he was seeking to promote, as prominently as possible, on web page or search results. I formed the view, based on the evidence, that both Mr Adams and Mr Prendergast were quite skilful in that regard, although it appears that Mr Adams, by reference to the results in evidence, achieved a greater measure of success.
In October or November 2011, Mr Prendergast began developing a form of branding using a composite mark for Centrefold Entertainment which appears above the photograph in the image of a Facebook post at [23] below. He arranged at that time for about 2,000 business cards to be printed that contained the composite mark.
In the meantime, Mr Adams became aware that Ms Jones had been working, and was continuing to work, as an adult entertainer, as appears to be the case common among adult entertainers, for multiple service providers. He wanted to divert her from that and assisted her in establishing a business, and later a company, under the brand name Absolute Blonde, but she continued working for a period.
On about 28 February 2013, Mr Adams registered the domain name centrefoldstrippers.com.au in his personal name. He then went about engaging a programmer to develop a website for that business. Mr Adams had previously assisted Ms Jones in developing a website for her business.
In March 2012, Mr Prendergast created a Facebook page for Centrefold Entertainment at or connected with the domain name centrefoldentertainment.com.au (Entertainment’s Facebook page). Importantly, until about late February or early March 2014, Entertainment’s Facebook page did not promote or offer, expressly, any adult entertainment services. Mr Prendergast posted one or more images under and in association with the composite mark. The composite mark appeared at the top of the Facebook posts published every day and displayed to a viewer, as in the image below of a post made on 6 May 2013.
Typically, as the above example shows, Entertainment’s Facebook page portrayed a new picture each day within a frame at the top of which appeared the composite mark. The mobile telephone number associated with both XXX Princess and Centrefold Entertainment appeared initially underneath a frame around the photograph of a young woman in a suggestive pose in what usually appeared to be lingerie or a bikini. From July 2012, the right-hand side of the Facebook page displayed a 1300 telephone number and links giving a viewer the ability to send a message to Entertainment’s Facebook page, or to log onto the centrefoldentertainment.com.au website. Above the picture appeared the statement “hot promo staff & models – Australia wide, book now @” together with Entertainment’s web address and an invitation to the viewer to click “like” or “share” “if you want to see more of our hot models!”.
On 26 May 2012, Mr Prendergast caused the Centrefold Entertainment domain name and website to be transferred from XXX Princess Pty Ltd to Centrefold Entertainment Pty Ltd.
In June 2012, Mr Prendergast posted on the Entertainment Facebook page a promo girl advertisement for a performer known as Alley May, and shortly afterwards, on a later day, a post advertising Yasmin, being one of Ms Scott’s performing names, also as a promo girl. Both women were, in fact, adult entertainers. However, Entertainment’s Facebook page usually displayed photographs of individuals who had never associated themselves with the provision of services of any kind for the Entertainment parties’ businesses. That was because Mr Prendergast posted one or more royalty-free photographs of an attractive female (or occasionally male) daily on Entertainment’s Facebook page. The new posts appeared adjacent to the centrefoldentertainment.com.au domain name, underneath which appeared a date and then a statement, such as “new Sydney promo girl”, her name and a blandishment, such as, “book now”.
Occasionally, these photographs were of real adult entertainers whom Entertainment could make available (such as Alley May or Ms Scott), but about 90% consisted of pictures of people who had nothing to do with that business, as I will explain at [75]-[83] below.
In parallel to what Entertainment’s Facebook page and web pages displayed, XXX Princess continued its business of offering adult entertainment services, including strippers, bucks’ party strippers, hens’ parties, male strippers and topless waitresses, in the capital cities of mainland and “the rest of” Australia. The XXX Princess web page, as at 9 November 2012, after setting out in bold white type against a black background those offerings contained the following assertions:
XXXPrincess is Australia’s fastest growing Agency! XXXPrincess Specialises in Brisbane Strippers, Gold Coast Strippers … Topless Waitress, Nude Waitresses, and Male Waiters. Our Australian Strippers, Topless Waitresses and Male Topless Waiters are of the highest quality. If you’re looking for premium girls, you have come to the right place!
The balance of the page extolled the features of what XXX Princess was supplying by way of strippers and other adult entertainers. Relevantly, the composite mark appeared at the foot of the page in small print, under the words “Presented by”. The Entertainment parties relied on the use of “centrefold” in that placement of the composite mark as a use of the word as a common law trade mark in relation to, or for the provision of, adult entertainment services.
In my opinion the ordinary, reasonable viewer of the XXX Princess web page, if he or she ever scrolled down to the foot of it, when confronted with the material just described, would have understood the use of the composite mark not as a branding of the services of XXX Princess, but as some kind of reference to the person who had the skills to create such a website or web page. The use and appearance there of the composite mark was not consonant, in the context of the balance of the web page’s promotion of XXX Princess and its services, as a branding of Entertainment as the person who supplied or was associated with those services. The overwhelming thrust conveyed by the web page was that XXX Princess provided all of the services offered.
Importantly, in early September 2012, Mr Prendergast obtained a merchant facility from his bank for Centrefold Entertainment. That led him to reorganise his businesses. The merchant facility now enabled his businesses to collect deposits directly from customers who wanted to make bookings, thereby enabling him not to have to rely on the performers collecting and then remitting moneys due to his businesses. Mr Prendergast then caused his various businesses to email or text performers, who worked with them, new contracts and informed them that a new system would commence in early September 2012. Performers who had been providing services for XXX Princess, such as Ms Jones, came to learn of the need to sign a new contract when they received a mobile phone text message sent by Mr Prendergast. The message contained a web link to the xxxprincess.com.au web page that was introduced by the statement:
Hi, it’s Matt from XXXPrincess. We have a new software system which will house all profiles, job requests, bookings etc.
The message explained why it was necessary for the adult entertainers to provide their full details. But it gave no explanation or detail about any rebranding that exercise might have involved. The new contracts for services provided that the performer would be engaged by Centrefold Entertainment Pty Limited, and that corporate name was repeated many times throughout the contract, with the suffix “PTY LTD” in block letters. Ms Jones received one of the emails attaching the new form of contract, that invited her to sign up to the new arrangements, which she declined to do.
Prior to Mr Prendergast’s rebranding of his businesses under the name “Centrefold Entertainment” in September 2012, some performers, including Alley May, who had been advertised on the Entertainment Facebook page, in fact, were engaged to provide adult entertainment services of an explicit kind.
From about mid-September 2012, the new bookings system that Mr Prendergast had arranged for both the XXX Princess and Centrefold Entertainment businesses appears to have used only the accounting system and bank accounts of Entertainment. He arranged for a programmer to supply an automated booking confirmation service for those businesses. He understood that once a customer made a booking and gave a mobile or another phone number and his or her email address, the system would generate an automatic SMS message that would be sent to the customer’s mobile phone giving the details of the booking together with an email attaching a tax invoice on which the composite mark appeared. Unfortunately, that system appears to have had a programming flaw, because the service provider’s software dropped out the “@” sign in all email addresses that customers supplied.
Michael Roach was the only witness who gave evidence of having made a booking with XXX Princess. After making the booking in September 2012, he received a text message informing him that an invoice had been sent to his email address, which was exactly reproduced, except that it omitted the “@” sign. I believe his evidence that he never received such an email, despite having given his correct email address (including the “@” sign) when he made his booking. There is no evidence that anyone else received a tax invoice for any booking made through the new bookings system that Mr Prendergast’s businesses (including, relevantly, Entertainment) used from September 2012.
Mr Prendergast chose to operate the two means of attracting custom to his businesses separately by advertising adult entertainment services on the XXX Princess website, on the one hand, while having Entertainment’s website and Facebook page, on the other hand, making no reference to the provision of any form of adult entertainment (strippers or topless waitresses). He left Entertainment’s website and Facebook page in that form because, he said, “the adult services were removed to give it a better image for the bank”. Of course, those services were not “removed”, but rather were not advertised because of his decision not to include any offer for them on Entertainment’s expressly branded public interfaces.
Thus, from September 2012, Mr Prendergast’s businesses operated by taking bookings for, and providing, performers or shows that had been advertised on each of the platforms operated by XXX Princess (in the respect of the adult entertainment side of the combined business) and by Entertainment using its website and Facebook page (in respect of promo models or the less exotic shows or forms of entertainment those platforms advertised).
Mr Prendergast said that the merchant facility was the “biggest asset” of his businesses. The significance of that evidence is that it explains, rather than any conduct by the Metro parties, why the Entertainment mark was not associated in the public domain with adult entertainment services until Mr Prendergast brought about a change of branding that occurred at about the beginning of March 2014, in circumstances that I will describe later.
In the meantime, on around 29 September 2012, Mr Stenzel left the employ of Mr Prendergast’s businesses and, shortly thereafter, set up his own new business that was called DreamGirlz Elite. On about 15 October 2012, Mr Stenzel sent, no doubt using information he had collected from his previous employment, a text message to the adult entertainers saying:
Girls/guys, it’s Cam, formerly from XXX Princess. I have just bought another well-established agency on the Gold Coast and are (sic) looking for new people to join the team and take it nationwide.
In the balance of the text message, he continued to refer to XXX Princess and made no reference to Centrefold Entertainment.
After Mr Stenzel’s departure, Mr Prendergast had to answer the telephones for his businesses for a little over a week until Jarrod McBride began working in Mr Stenzel’s place. Both businesses used common telephone numbers. I accept that over that short period in 2012, Mr Prendergast answered the telephone saying to callers, “Centrefold Entertainment.” There was no exploration in the evidence as to any discussion he may have needed to have with persons who had telephoned thinking they were ringing XXX Princess’ number. Entertainment relied on Mr Prendergast’s use, when answering the phone, of the words “Centrefold Entertainment” in the brief period in 2012, as an aural use of the common law trade mark “centrefold” for the purposes of s 7(2) of the Trade Marks Act.
I am not satisfied that anyone hearing Mr Prendergast answering the phone on those occasions would have understood him to be using the words “Centrefold Entertainment” as a trade mark or brand for services. In my opinion, his use of those words, when answering the phone, gave the business name of the company that was operating the business, namely, Centrefold Entertainment. I infer that, when a caller expressed puzzlement as to having thought that he or she had telephoned XXX Princess, Mr Prendergast had a ready means of clarifying that issue so as to continue the conversation.
Mr Prendergast had a somewhat casual attitude to the acceptance of performers showing interest in working through Entertainment. He said that he reviewed their applications and, if he accepted them, offered them jobs, being the opportunities from time to time to perform as subcontractors.
Performers, such as Ms Scott, found confusing the use of multiple names by agencies. I accept her evidence that:
I want to suggest to you that your memory is faulty and that you only knew it as XXX Princess at that time?---Your Honour, when agencies have multiple websites with multiple names, it’s all just really confusing. (emphasis added)
On 15 December 2012, Ms Jones performed a show which Centrefold Entertainment had arranged. On 17 December 2012, she sent, in her real name under her ABN, a tax invoice to Centrefold Entertainment seeking payment for her services, which appears to have collected the full performance fee. Ms Jones gave evidence that she paid no attention to the use, in her tax invoice, of the addressee’s business name, “Centrefold Entertainment”. Having regard to my assessment for both her evidence and that of Ms Scott, I consider that the name of the particular entity that arranged for the provision of their services to members of the public was not a matter of great moment to either woman.
During the period from September 2012 to early March 2014, Centrefold Entertainment’s accounts revealed that it received monthly income in amounts similar to, or sometimes more than, the combined income that had previously been received by the two businesses (XXX Princess and Centrefold Entertainment) when they ran in parallel.
By late May 2013, the Centrefold Strippers website and another website for an associated venture of Mr Adams, centrefoldbuckscruises.com.au, were established and on 25 May 2013, the Centrefold Strippers website went live. However, the first recorded Wayback Machine result for that website was for 11 June 2013. The parties accepted that there is no particular significance between the two dates and it is safe to use 11 June 2013 as the first presentation to the public of the Centrefold Strippers website. That website explicitly promoted adult entertainment services across the full range of those services. However, it also included an offering of promo girls. Mr Adams was cross-examined about that offering. He said, and I accept, that no one who went to this website had asked for the provision of promo girls. He also offered promo girls and models through other businesses that he operated by that time.
As at 7 June 2013, the nominees for an Australian Adult Industry Award in the best striptease agency category included Centrefold Strippers, XXX Princess and Mr Stenzel’s new entity, DreamGirlz Elite. There were 34 nominees in that category. Notably, Centrefold Entertainment did not feature in the extensive number of nominations for any Awards on the Australian Adult Industry Awards web pages.
On 26 July 2013, Centrefold Lounge Pty Limited lodged a further application that ultimately resulted in it obtaining registration of the trade mark “Centrefold Lounge”. The premises at which it conducted its business was a venue in Melbourne. Centrefold Lounge advertised extensively the services of live performances by adult entertainers at the fixed location.
The early 2014 change in the Entertainment parties’ marketing
In about late February 2014, Mr Adams noticed that the centrefoldentertainment.com.au website appeared as the top paid ad when he typed the main key words for his business into a Google search page. Around that time, Mr Prendergast caused traffic from XXX Princess’ website to be redirected to Entertainment’s website, and, as I have mentioned, from about 1 March 2014, the appearance of Entertainment’s website and Facebook page changed so as to offer, explicitly, adult entertainment services.
From about August 2014 to July 2015, Mr Prendergast placed on Entertainment’s website, a vigorous disclaimer of any association with Centrefold Strippers. That disclaimer remained on the website until Mr Prendergast removed it in about late July 2015 after the parties engaged in correspondence, through solicitors.
On 27 October 2014, Metro registered the business name “Centrefold Strippers Australia”. On 23 April 2015, CG Trading was incorporated.
On 22 May 2015, Entertainment lodged its application for the trade mark “centrefold”.
On 1 April 2016, Mr Prendergast decided to rebrand again so as to trade in adult services under a new name, “Sugar Street”. Entertainment registered that business name shortly thereafter and has traded under it since then.
On 6 April 2016, the Registrar of Trade Marks accepted Entertainment’s application and the trade mark was registered on 24 June 2016. Following that, the solicitors for the Entertainment parties wrote to the solicitors for the Metro parties complaining of infringement of the trade mark. That led to the commencement of these proceedings.
In November 2016, Mr Adams became aware that his Google ad words campaign had struck a hurdle because his use of the word “centrefold”, as a paid ad or key word for a Google search, became blocked by reason of the existence of the mark.
The commercial evidence
The Google Analytics audience overview report for Entertainment’s website for the period 1 March 2012 to 8 November 2015 showed a very slight number of visitors from July 2012, that at its peak, in July 2013, had increased to about 6,000 per month before receding to about 2,000 per month until about early March 2014.
Early March 2014 coincided with the changes to Entertainment’s website and Facebook page to include references to adult entertainment services. When that had occurred, there was a sharp increase in visitors to Entertainment’s website to over 12,000 per month. That rise continued, in generally increasing numbers, until beginning gradually to decline in about February 2015. The decline progressed so that by October 2015 only about 6,000 visitors went to Entertainment’s website.

A total of 152,620 sessions occurred on Entertainment’s website over the period between 1 March 2012 and 8 November 2015, with 116,082 attributable to new users.
Over the same period, Entertainment’s Google ad words clicks achieved 106,160 of the total visits. That is, persons clicked on one or more words that Mr Prendergast had selected as being those which he hoped would attract business to his enterprises, and for which he paid Google, so as to optimise the number of persons who would reach Entertainment’s website. I infer that, of the other 50,000-odd visits to Entertainment’s website in this period, most were returning visitors. Mr Prendergast placed the key words (or ad words) that generated the 106,160 visits at a cost of about $130,000. The key words that he selected for searches in association with selected capital cities or other national locations were “strippers” and “waitresses”. Those words appeared in Entertainment’s advertisements or as links to its website. Crucially, there was no evidence that Mr Prendergast or Entertainment paid for or used the key word or ad word “centrefold”. However, Mr Prendergast asserted that:
All of our returning customers would go to Google and search for a term that contained the word “centrefold”.
He said that Entertainment was the only business associated with that word until May or June 2013, when Centrefold Strippers’ website went live, and that the first thing his returning customers “… saw was Centrefold Strippers and that took away a huge amount of income”. He asserted that within three months, Centrefold Strippers’ ranking was above Entertainment’s if the searcher looked for “centrefold”, but that had not affected returning customers who searched for XXX Princess. He said that visitor traffic began dropping off gradually in late 2013 and in “2014 [the drop] became more apparent, but we were able to tell our clients at that point we weren’t Centrefold Strippers, so it wasn’t as bad”.
Mr Prendergast asserted that once the vigorous disclaimer web page, that he put onto Entertainment’s website in August 2014, had been removed after July 2015, following the Metro parties’ threat of legal action:
We couldn’t tell our clients [that] we were just different companies [and that Entertainment’s visitor] figures went from over 20,000 the previous two years to 3,000 that year.
However, because of what I have noted above, Mr Prendergast’s asserted understanding of what had happened was unfounded. First, he ceased using the XXX Princess website on about 1 March 2014, when Entertainment’s website and Facebook page first included references to strippers and topless waitresses. Until that change, Entertainment’s publicly promotional material did not refer expressly to those, or other, adult entertainment services. He had maintained and exploited the XXX Princess website to source specific inquiries for those services. Thus, the traffic on Entertainment’s website sharply increased from March 2014 as a direct result of both its rebranding to offer, expressly, adult entertainment services and through causing a redirection to it from the XXX Princess website. Thus persons who had searched for XXX Princess found a redirection on its website to that of Entertainment.
Secondly, there was little, if any, evidence of returning customers as opposed to visitors who may have explored other sites’ offerings before returning to Entertainment’s. The apparent relationship between the number of new users (about 116,000) and the 106,000 visitors directed to Entertainment’s website by a key word search suggested that searchers were not distinguishing the services of Entertainment by its use of the word “centrefold”. It is likely that most, if not all, of the other visitors came to Entertainment’s site by organic searches for strippers or waitresses as opposed to clicking on a paid ad.
Thirdly, the visits to Entertainment’s website increased after its rebranding and the redirection from XXX Princess’ website in early March 2014 and stayed at or above the level reached in July 2014 until a seasonal decline occurred after March 2015 (when, in the colder months, less bookings are made for adult entertainers including strippers). There did not appear to be any link to visitor numbers, and the use of Entertainment’s web page disclaimer distinguishing it from Centrefold Strippers’ web page, during the year to July 2015, nor was there any substantive drop in visitors in late 2013 and in 2014, as Mr Prendergast mistakenly asserted. To the contrary of Mr Prendergast’s assertions, there was a sharp and sustained increase in those numbers from early March 2014.
Fourthly, Centrefold Strippers’ website, based on its Google Analytics audience overview report for the period 12 January 2012 to 3 December 2016, showed that it had had almost a million sessions, with 827,771 users, of which 85.15% were new sessions. The report showed that visits to that website only began in about June 2013, consistent with its establishment at that time. Mr Adams obtained Google Analytics reports for the period between March 2013 and March 2017 that showed the sources of visits to Centrefold Strippers’ website as including:
·0.39%, or 3,971, of about a million sessions had resulted from both organic and paid (click and pay) key word searches by users who searched expressly for the word “centrefold” alone or in combination with other words;
·of those visitors, a total of only 12 had used the search term “Centrefold Entertainment” alone or in combination with other words.
In other words, a trivial number of visitors to Centrefold Strippers’ website, being less than 4,000 out of about a million, had used “centrefold” as a search term, and only 12 of those had specifically searched using the words “Centrefold Entertainment”. I infer that those 12 would have seen a search result that gave them the choice of clicking on the link to Entertainment’s website or choosing, perhaps, to compare offerings or to visit as well, or instead, Centrefold Strippers’ website. It is not possible to say who those 12 visitors were, but given the monitoring of the market that Mr Adams said he engaged in and the fact that the parties had been in a dispute over the period in which those 12 results came about, it is safe to infer that most, if not all, of those visits were by persons who were deliberately searching for the term “Centrefold Entertainment” for the purposes of observing where, in relation to search results, it came up as opposed to Centrefold Strippers, rather than acting out of the curiosity of an ordinary member of the public, unaffected by the context of the dispute between these parties. This is reinforced by an example of a result of a search for “Centrefold Strippers” on 21 March 2017 that is reproduced in appendix A to these reasons. That listed paid ads, first, for Centrefold Strippers, and, secondly, for Centrefold Entertainment, followed by a set of results for Centrefold Strippers and, next, the new venture, Sugar Street, that Mr Prendergast established to take over his businesses, and at the foot, a result for Entertainment’s Facebook page.
That evidence to which I have referred provided no foundation for a finding that the Metro parties’ use of the word or mark “centrefold” caused any damage to Centrefold Entertainment or its reputation. None of the 12 persons, who searched expressly for Centrefold Entertainment, was likely to have been misled when each went voluntarily to Centrefold Strippers’ website.
In addition, the number of competitors in the market in which the parties operated was substantial. There was no evidence of the effects of competition or the activities of others in the marketplace on the businesses of either of the two sets of parties, although it was evident that the competition for the provision of adult entertainment services was continuous and sustained over the whole of the period covered by the evidence.
For example, as I have noted, there were 34 Australian Adult Industry Awards nominations in 2013 for the best striptease agencies, and even more nominations for the best adult website, in both of which categories appeared Centrefold Strippers, XXX Princess and DreamGirlz Elite. The 2014 nominations pages for those awards included XXX Princess, despite its demise by then, in the best adult party plan category and, in the best adult website category, the same three websites (Centrefold Strippers, XXX Princess and DreamGirlz Elite) in which the total nominees had expanded now to 69. Relevantly, the 2014 Awards did not include Centrefold Entertainment as a nominee in any category. However, Mr Prendergast created the false impression in 2014 that Entertainment’s website had been awarded three awards, created and conferred by Mr Prendergast, that appeared in gold badging at the top of the front page of its website.
There was some expert accounting evidence that included a month-by-month analysis of the financial results of Entertainment. Steven Ponsonby, the expert accountant who prepared a report for Entertainment, assumed, incorrectly, that the infringement period had commenced at the end of February 2013. As I have noted, it was common ground that Centrefold Strippers’ website only went live in June 2013, so no potentially infringing conduct could have affected Entertainment’s business before then. A year-by-year comparison of the profit or loss between the years ended February 2013, February 2014 and February 2015, after allowing for add-backs that Mr Ponsonby and Dr Anna Wright, the accounting expert called by the Metro parties, agreed were appropriate to reflect the underlying profitability of the combined XXX Princess and Entertainment businesses, revealed:

Year ended February Result

2013 $ 30,117

2014 ($ 62,327)

2015 $ 40,065

That financial results summary, when understood in light of the variations that the Entertainment parties made in late February or early March 2014 to the way that the Entertainment parties promoted their businesses, demonstrated that their own conduct was, at least, a real cause of the decline in the combined revenues in the year to February 2014.
During the period between June 2013 and February 2014, the Metro parties had an open field in establishing Centrefold Strippers’ public reputation of providing adult entertainment services under its brand name that included the word “centrefold”. During that same period, Entertainment eschewed any overt association of adult entertainment services it provided, or wished to be seen as providing, in the same market that its other brand, XXX Princess, overtly provided in that market. That was, as Mr Prendergast stated, because of the “better” image that Entertainment wished to project to its bank.
The consequence of Entertainment projecting that better image was that members of the public, not just Entertainment’s bank, did not need, or come, to associate the Entertainment mark, namely the word “centrefold”, with adult entertainment services in that market, despite Mr Prendergast’s desire that Entertainment would operate there and in respect of which he later obtained the designated services for the mark.
Moreover, Entertainment and Mr Prendergast engaged in conduct by which they deliberately misled the public by the use of photographs of females on Entertainment’s Facebook page and website who had no connection to that business.
In contrast to the images that he posted on its Facebook page, Mr Prendergast asserted that only about 10% of the images on Entertainment’s website were of girls who were not on its books or available for performances. He acknowledged that the percentage of what he called “royalty-free” images of attractive, usually bikini or lingerie clad, young women depicted on Entertainment’s Facebook page was much higher. Between about 25 July 2012 until about 24 May 2013, the Facebook posts appeared in the form (with new pictures each day) depicted in the image that is reproduced at [23] above. That, and like images, was introduced by the words:
Hot promo staff & models – Australia wide – Book Now @ – Click, ‘Like’ or ‘Share’ if you want to see more of our hot models! (emphasis added)
This was followed by the caption:
Our promo girls & models are available for events, promotions, photo shoots, films ... (emphasis added)
The introductory words and caption conveyed that the person depicted in the photograph appearing between them was one of Entertainment’s “hot models” or “our promo girls & models [who] are available”, when that was false in almost all cases. That falsity arose because Mr Prendergast had used a “royalty-free” image of a model who had nothing to do with Entertainment’s business. Indeed, had she or he known of Mr Prendergast’s use of their photographs, those models may have been upset or defamed by being promoted as if she or he was one of Entertainment’s “hot models” or available to perform any, or adult entertainment, services for it.
A striking, but typical, example was the following misuse of what Mr Prendergast claimed, as one of Entertainment’s “hot models”, was this royalty-free image:
The model depicted above was not one of Entertainment’s “hot models”, or on its books at all. She was, in fact, a model named Chrissy Teigen, who had posed for that photograph which originally had appeared in a 2012 edition of the well-known Sports Illustrated magazine. Mr Prendergast gave this evidence about this practice of deception:
So you have to mislead people as to the number of girls that you have. Is that right?--- No. I’m promoting a service, not a specific girl. (emphasis added)
He asserted that “nowhere in this post does it say this specific girl is available”. I asked him about that evidence:
Can I just ask you, going back to the previous page, where it says “see more of our hot models”, are you suggesting to me that somebody reading this would get any other impression than that this girl in the green and purple bikini was one of your hot models and there were other hot models like her?---That’s the whole point of the Facebook page, your Honour, is to get people to see us with an image, with a bunch of services, without specifically saying it. And they can infer what they want. This doesn’t say this girl works for us. It does say to me that this type of thing does work. But if they want to assume that, then that’s basically what I want them to do, is to assume they can get girls like this, and these services, through our company under a classy quality. (emphasis added)
That conduct may have affected the lack of public attraction to Entertainment’s offerings of services using, or in association with, the word “centrefold”, particularly in the adult entertainment services market. Mr Prendergast gave this further evidence:
You take a dim view, do you not, of website operators and agencies who depict on their websites, girls who are not available for hire through them? --- I take a dim view of agencies that tell people they are and then they find out on the night that they were never available. I lure them in with this. Yes. I never tell them these girls are available. They are specifically sent a list of girls that are available. They choose those girls that are available, then they pay, then they get that girl that they chose. They were never told. I accept that through marketing and advertising that the clients call us specifically for this website because they think these girls are really great. That’s what the marketing is meant to do. Once they get to us, they are told who’s available. They are told these girls are not available, because they’re not on the list.
I see? --- We never confuse them. We never bait them and switch them.
I see. And you don’t attribute any part of the decline in your business to the fact that consumers are drawn to your website by photographs of girls they then find out that they have no hope whatsoever of hiring? --- No. Because before they pay, they are told. They choose who they want and then they pay. (emphasis added)
In my opinion, that evidence demonstrated that Mr Prendergast was unscrupulous in the way in which he undertook his marketing campaigns and was prepared to mislead the public. There is no other reasonable way in which to read Entertainment’s Facebook post of Chrissy Teigen’s photograph, other than that she was one of Entertainment’s “hot models”. She was not, but Mr Prendergast deliberately set out to convey to the reader of the post, falsely, that she and many, if not most, of the other models whose photos he posted on the Facebook page were available through Entertainment. There is every likelihood that visitors to Entertainment’s website or Facebook page who found disappointment through being “lured” by that marketing method would not return or do business with it. Mr Prendergast said that, once a member of the public had been lured to contact Entertainment, he or someone at his business would then send them photos of the girls who actually were available, and that the person would then select whom they wanted. None of those emails or text messages are in evidence.
I am of opinion that, in determining whether any discretionary remedies, including injunctive relief, are available to Entertainment to protect either its mark, or it, from any infringement, or from any alleged misleading or deceptive conduct, it is open to me to have regard to the effect of its method of promoting its services to the public.
Section 126(1)(a) of the Trade Marks Act and s 232 of the ACL create a judicial discretion to grant an injunction where infringement of a mark has occurred or a person has engaged in conduct in contravention of s 18 of the ACL. Those powers are unconfined, except in so far as the subject matter and the scope and purpose of each Act affects their exercise: The Queen v Australian Broadcasting Tribunal; Ex parte 2HD Pty Ltd (1979) 144 CLR 45 at 49 per Stephen, Mason, Murphy, Aickin and Wilson JJ. In Patrick Stevedores Operations No 2 Pty Limited v Maritime Union of Australia (1998) 195 CLR 1 at 41-43 [65]-[66], Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ referred to the equitable principle that an injunction will not ordinarily be granted if to do so would have the effect of very materially injuring the rights of third persons who are not before the Court. However, their Honours noted that the weight to be given to the interests of third parties, in the exercise of the discretion, will vary according to the circumstances.
In my opinion, the use of an injunction to protect a person’s monopoly in a trade name or trade mark, where the person uses that monopoly or mark in a way to deceive members of the public to do business with the person, is a relevant factor in determining whether that person is entitled to the assistance of the Court in protecting the mark or trade name by the grant of an injunction. Moreover, the false attribution to models, such as Ms Teigen, of an association with the provision of adult entertainment services, where there is no evidence that she consented to, let alone knew of, that association, could cause substantial damage to persons such as herself.
The distinctiveness issue – the Entertainment parties’ submissions
The Entertainment parties argued that the mark “centrefold” was a covert and skilful allusion to its services, and not descriptive of them. They contended that if the ordinary signification of the mark was of a person, the designated services, in respect of which the mark was registered, did not comprehend such a person. Rather, they argued that Entertainment’s use of the word “centrefold” was “use of a trade mark in relation to services”, in accordance with the definition in s 7(5) of the Trade Marks Act, being a use in physical or other relation to the designated services. They submitted that this argument was a fortiori if the ordinary signification of “centrefold” was of pages in a magazine, because that use was not comprehended in any of the designated services. They contended that the mark was to some extent, at least, inherently adapted to distinguish Entertainment’s services from the services of others. They submitted that Entertainment’s use of it, in the circumstances, leads to the conclusion that neither s 41(3) or (4) of the Trade Marks Act applied, so that its mark was distinctive. The Entertainment parties argued that the definition of a trade mark in s 17 focused attention on the characteristics of the trade mark and that this informed the construction of s 41. They also submitted that s 122(1)(b) would protect adult entertainers who were, themselves, “centrefolds” and that their use of that word to indicate that quality or characteristic of their services would not infringe.
Consideration

The definition of a trade mark in s 17 of the Trade Marks Act, relevantly provides that a mark is a sign (including, as s 6 provides, a word) used to distinguish services, dealt with or provided in the course of trade, by a person, from services so dealt with or provided by any other person. An application for registration of a trade mark must be rejected, by force of s 41(1), if the trade mark is not capable of distinguishing the applicant’s, here Entertainment’s, services “in respect of which the trade mark is sought to be registered … from the … services of other persons”. Next, s 41(2), (3) and (4) define the only circumstances in which a trade mark is not capable of so distinguishing the designated services.
The principles that apply to assess the capacity of a claimed trade mark to distinguish a trader’s goods or services are familiar and have received detailed consideration in recent times in Cantarella Brothers Pty Ltd v Modena Trading Pty Ltd (2014) 254 CLR 337 and Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd (2017) 345 ALR 205, especially at 252 [236] per Greenwood, Besanko and Katzmann JJ. In Cantarella 254 CLR at 347-348 [26], French CJ, Hayne, Crennan and Kiefel JJ applied the test (with their added emphasis in italics) that Kitto J identified in Clark Equipment Company v Registrar of Trade Marks (1964) 111 CLR 511 at 514 to ascertain whether a word mark is “adapted to distinguish”, namely:
by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives – in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess – will think of the word and want to use it in connection with similar goods in any manner which would infringe a registered trade mark granted in respect of it.
French CJ, Hayne, Crennan and Kiefel JJ held that the inherent adaptability of a trade mark, consisting of a word, to distinguish services is tested by checking the ordinary meaning, or signification, of the word to anyone ordinarily purchasing, consuming or trading in the designated services (254 CLR at 348 [28] and [30]).
In my opinion, the fallacy of the Entertainment parties’ submission is that Entertainment used the word “centrefold” not as a noun, being its ordinary and natural meaning, but as a description of its services in an adjectival way. The word, being the registered mark, is a noun. Entertainment used the word “centrefold” always in a composite, as a name, as it appeared in the header to the photograph in [23] above.
The placement of the composite mark at the foot of XXX Princess’ web page, under the words “Presented by”, as I have described at [29] above, must be considered in the context of the whole of that web page which was replete with references to the adult entertainment services that XXX Princess was offering or providing. The web page contained no reference at all to any service that Entertainment was offering or providing. Nor did it explain any connection between the appearance or use of the composite mark and XXX Princess or the services that XXX Princess expressly provided. That position continued, in relation to Entertainment’s lack of any overt association with the offer or provision of adult entertainment services, until the rebranding that occurred at about late February or the beginning of March 2014.
In particular, in the period prior to 22 May 2015, Entertainment only began after late February 2014 to use the composite mark in physical or other relation to the designated services, for the purposes of s 7(5) of the Trade Marks Act. By that time (February 2014), Centrefold Strippers had established a significant presence and, I infer, brand recognition, in the adult entertainment services market. In that context, the services that the rebranded Entertainment offered after about late February 2014, by reference to the use of the word “centrefold” alone, or in the composite mark or in association with any other words, as a brand, could not be inherently adapted to any extent to distinguish its services from those that Centrefold Strippers had offered publicly for some seven or eight months previously, since about 11 June 2013.
It was an agreed fact that at no time prior to 29 July 2013 did the centrefoldentertainment.com.au website show any use of the word “centrefold” independent of the word “Entertainment” in text, or in the corporate name, or independent of the composite mark. There was no evidence that any customer of the businesses of XXX Princess or Entertainment ever received a tax invoice. Mr Roach gave the only evidence of a customer of those businesses, and he said that he never received an invoice and so never saw the composite mark. He had arranged for XXX Princess to provide strippers and topless waitresses over an extended three day bucks’ party in late September 2012 and he made no connection of that business with the word “centrefold”. Nor did he connect the word “centrefold” with the services for which he contracted or with which he was supplied.
The Entertainment parties never used the mark “centrefold” alone nor did they use it in connection with the supply of, or to identify, its services in a way that would enable a conclusion to be drawn that that usage had developed a secondary meaning related only to the designated services: Cantarella 254 CLR at 350-351 [36].
Persons such as Ms Scott regarded it as an achievement to have appeared photographed naked in a magazine’s centrefold pages because that entitled persons who did so, such as herself, to describe herself as a “centrefold”. Relevantly in the markets in which the parties operated, the ordinary signification of the word “centrefold” is its ordinary and natural meaning in relation to a person. That meaning is supported by the dictionary definitions to which I have referred, namely a person (including an adult entertainer) who appears, or is prepared to appear, naked before strangers, including in photographs in the centre pages of magazines.
It would impair the rights of persons, such as Ms Scott, to engage honestly in the usual course of her or his calling, including as a stripper and adult entertainer, to be restricted in the use of the word “centrefold” if that word were a trade mark. The word “centrefold” conveys a meaning or idea sufficiently tangible to amount to a direct reference to the character, quality or kind of services that adult entertainers, such as Ms Scott, provide: Cantarella 254 CLR at 355 [52]; see too note 1 to s 41(4) of the Trade Marks Act. Providers or performers in the adult entertainment services trade and the consuming public would understand the word “centrefold” to contain a direct reference to the description of the kind, quality or characteristic of a person who provides the services, namely that he or she is (or was) a centrefold or has qualities or characteristics like one.
Other traders in the field of adult entertainment services will legitimately and routinely wish to use the word “centrefold” in respect of, and to describe, their services: Cantarella 254 CLR at 361-362 [71]. This suggests that the attempt to claim “centrefold” as a mark to give Entertainment a monopoly over its use must fail. Adult entertainers and the public have used “centrefold” to describe the kinds, characteristics and qualities of a person who provides the service of allowing others to observe their naked or semi-naked bodies in both the centre pages of a magazine, that bestowed that “status”, but also in the promotion of that person’s services and career, and in the services of businesses with or through which, that person offers or supplies those same services.
I am of opinion that the word “centrefold” is not allusive or metaphorical of the services supplied by Entertainment: see Accor 345 ALR at 253 [236(9)]. The word is not inherently adapted to distinguish any services that Entertainment provides from the services that others, such as the Metro parties, Ms Scott or Ms Jones, provide in the adult entertainment services industry. Accordingly, the word “centrefold” falls within s 41(3)(a).
Moreover, I am satisfied that, before March 2014, Entertainment did not use the word “centrefold” as a trade mark to any extent or as a brand or distinguishing feature of any of the services it offered, so as to distinguish it, or the services it offered, from those that Centrefold Strippers offered and provided since the latter had commenced trading in June 2013. Indeed I am satisfied that, before 22 May 2015, Entertainment did not use the word “centrefold” to such an, or any, extent to distinguish the designated services, being those in its registration, as being services of Entertainment.
“Centrefold” is an ordinary English word that is apt to describe the kinds, qualities and characteristics of performers, models and others, as persons who appear, or have appeared or are prepared to appear, nude or scantily clad before strangers and in pages of magazines. Any supplier of adult entertainment services of the kind comprised in the designated services, without improper motive, might desire to use the word “centrefold” to describe that supplier’s services. That is because of the ordinary signification of the word: Cantarella 254 CLR at 358 [58].
It is no answer to say, as the Entertainment parties submitted, that this use can be protected by invocation of s 122(1)(b) of the Trade Marks Act. The number of individuals who are, or have been, centrefolds, of which there are many explicit examples in evidence, demonstrates that this descriptive term can be, indeed is, an important and legitimate means of expressing the kinds, characteristics or qualities of the services that such an individual can or does provide. Moreover, one or more of those individuals is entitled to promote a business of providing adult entertainment services of the designated kind, without improper motive, using the kind, characteristic or quality of being a centrefold or centrefolds that he, she or they had, in order to describe what their business would offer. That is so whether or not the offerings of such a person or business were confined just to providing the services of one or more persons who had actually been centrefolds.
In the adult entertainment services industry, the ordinary signification of “centrefold” is a direct reference used to describe the kind, or a characteristic or quality, of the relevant person or persons who will provide or perform the entertainment. Use of the word “centrefold” does not make a covert or skilful allusion to the designated services. Rather, in its ordinary signification to its target audience, it provides a blunt and direct description of the physical characteristics and qualities of individuals, and their preparedness when performing or providing those entertainment services to expose their bodies to a greater or lesser degree to strangers: Cantarella 254 CLR 358 [59], 361-362 [70]‑[71].
Entertainment’s use of the mark in evidence before 22 May 2015, being the filing date of the application for the trade mark, was not such as to distinguish the designated services from the services of others.
For these reasons, I am of opinion that the mark “centrefold” is not capable of distinguishing Entertainment’s designated services from the services of any other persons for the purpose of s 41(1).
In case I am wrong about the application of s 41(3), I should briefly explain why I would have reached the same conclusion in relation to the issues under s 41(4) of the Trade Marks Act. That provision would apply were I to have found that the mark was to some extent, but not sufficiently, inherently adapted to distinguish Entertainment’s designated services from the services of other persons. In my opinion, Entertainment’s use of the mark in evidence (and on this hypothesis, its slight inherent adaptation to distinguish the designated services from the services of other persons) did nothing to create any distinctive character for the mark in relation to the designated services, based on the degree of its use by Entertainment. The evidence established that, in the period from March 2014 to the filing date of the application for registration, Entertainment had arranged, in the Australian mainland capital cities, something in the order of 2,000 performances, some of which involved multiple performers appearing at the one location on the same occasion. Over about 15 months, in five cities, that number does not involve a significant or large number of interactions with the public. The Google ad words evidence also indicates that the use of the world “centrefold” was not a matter that the Entertainment parties promoted directly. They did not pay for it to be a key or ad word. Rather, Entertainment promoted its business by paying for key or ad words for “strippers” and “waitresses”.
It is unlikely that the limited use of “centrefold” in Entertainment’s dealings with perhaps, at maximum, the 2,000 individuals who made the bookings (but none of whom, on the evidence, ever received a tax invoice), would have brought its name to their attention, or that of others who may have telephoned the business, as a brand or trade mark rather than, if at all, as a mere reference to a business name. This limited usage would not have brought into the public consciousness the use of “centrefold” as a brand or trade mark in association with the designated services of Entertainment.
For those reasons, I would have found that s 41(4) applied to the mark. In those circumstances, it is not necessary for me to answer issue (2).
The other relief issue
The parties then resorted, as has now become apparently a usual position, to competing applications for relief based on alleged contraventions of s 18 of the ACL. In addition, the Metro parties asserted that Entertainment was passing its business off as their’s. The parties debated the subtleties of the supposed distinctions between what might be relevant to establish the distinctiveness of their respective uses of “centrefold” for trade mark purposes from what might be relevant to engaging in conduct in trade or commerce that was misleading or deceptive or that would be likely to mislead or deceive.
The names of the two businesses used the descriptive word “centrefold” in association with either “Strippers” or “Entertainment”. Each of the combined uses (Centrefold Strippers and Centrefold Entertainment) sufficiently distinguished one from the other. There was no evidence of any confusion among members of the public. Each used its business name in association with its activities. The word “centrefold” was descriptive not distinctive: Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 229 per Stephen J with whom Jacobs J agreed at 232, see too at 221 per Barwick CJ and at 235 per Aickin J.
Indeed, as I have said, the Google Analytics report for Centrefold Entertainment showed that only 12 persons who searched for that name, alone or in combination with other words, specifically then went to Centrefold Strippers’ web page. It was open to the Entertainment parties to provide evidence of persons who had searched for the name “Centrefold Entertainment” and who were then confused or lured to explore the Centrefold Strippers’ website, but they called no one who did. I infer that such evidence, if it existed, would not have assisted the Entertainment parties’ case.
In my opinion, neither set of parties engaged in misleading or deceptive conduct or contravened s 18 of the ACL in relation to its use of the word “centrefold” in its name. Neither side is entitled to relief under the ACL, nor is there any evidence that Entertainment passed off its own business as that of Centrefold Strippers. Indeed, Mr Prendergast’s posting from August 2014 to July 2015 on Entertainment’s website of the disclaimer negated any passing off. Moreover, Mr Prendergast removed the disclaimer at the request or demand of Centrefold Strippers.
Entertainment’s evidence of damage
I should also make findings in relation to the attempt by Entertainment to prove that it had suffered in the order of $400,000 worth of damages by reason of the Metro parties’ conduct. In my opinion, Entertainment failed to prove any damages or loss for the reasons given by Dr Wright, which I accept. First, Mr Ponsonby used the wrong starting date, for infringement purposes, being from the end of February 2013, three months before the actual commencement of Centrefold Strippers’ commercial launch of its website and offering of its services in June 2013.
Secondly, Mr Ponsonby was not instructed to analyse the combination of the business that, prior to September 2012, XXX Princess had conducted with that of Entertainment and the effect of Mr Prendergast’s decision to maintain the XXX Princess business separate from Entertainment’s until late February or early March 2014 for the purposes of determining how each business that he operated performed and the impact of each of those businesses on the other.
The evidence of the use of paid ad or key words on Google showed that each side concentrated its spending on the words “strippers” and “waitresses”. It is likely that the business attracted to XXX Princess’ website was not significantly different from that of any other business that relied on the use of those two words as search terms, whether paid or not, to lead searchers to any adult entertainment services of the kind that both the Metro and Entertainment parties offered or provided.
Mr Ponsonby did not analyse (because of his limited instructions) any trend of the business over the course of the accounting periods available for XXX Princess. Nor did he compare those with the results for the segregated businesses (XXX Princess and Centrefold Entertainment) run by Mr Prendergast between September 2012 and about late February 2014, so as to identify any relevant trends or to provide a yardstick against which it might be possible to measure any alleged impact of Centrefold Strippers (as one of very many participants in the large market for adult entertainment services). In addition, the results that Mr Ponsonby obtained and analysed for the financial entity Entertainment, in the period between September 2012 and March 2014, involved its promotion by two separate means of two different businesses. Although he combined those businesses’ results as if they were one, Mr Ponsonby’s analysis did not take account of the fact that the sources of each business’ customers were likely to have been different.
In the end, I am not satisfied that there is any evidentiary basis on which to calculate, having regard to the lack of any evidence of market conditions in a highly competitive field for the provision of adult entertainment services, what may or may not be loss or damage attributable to the activities of a particular competitor. As I have said, the only evidence is in a very narrow compass. Only about 4,000 persons who searched by using the word “centrefold” went to the website of Centrefold Strippers, out of a million visitors to that site over a five year period. That relatively trivial number of visits demonstrates that the source of any loss, if there were one, in Entertainment’s business is not likely to have been caused because of the use of the word “centrefold” in a particular competitor’s name, when there were over 30 other businesses offering similar, if not identical, services in the same market.
Moreover, it is difficult to understand how Entertainment could recover damages (were it to have proved any) from the Metro parties because Centrefold Strippers’ name belonged to Mr Adams. And, the Entertainment parties made no attempt to segregate any impact of the use of the name, Centrefold Strippers Australia, from the effect of the use of “Centrefold Strippers” name.
Conclusion

For these reasons, I am satisfied that:
(1)the word “centrefold” should not have been registered as a trade mark because it is not capable of distinguishing Entertainment’s designated services from those of other persons within the meaning of s 41(1) of the Trade Marks Act. Its registration should be cancelled;
(2)the respective claims based on alleged contraventions of s 18 of the ACL, and the Metro parties’ claim that Entertainment passed off their business as its own, must be dismissed.
The parties should have an opportunity to make submissions on the form of the final orders and costs.

I certify that the preceding one hundred and twenty (120) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.

Associate:
Dated: 23 October 2017
APPENDIX A

SCHEDULE OF PARTIES

NSD 1489 of 2016

Cross-Respondents

Second Cross-Respondent

SEXY ENTERTAINMENT PTY LIMITED (ACN 163 680 108)

Third Cross-Respondent

CG TRADING PTY LIMITED (ACN 605 438 444)

File number:	NSD 1489 of 2016
Judge:	RARES J
Date of judgment:	16 June 2017
Catchwords:	TRADE MARKS – Trade Marks Act 1995 (Cth) – where trade mark “centrefold” registered in respect of provision of adult entertainment and promotional model services (‘designated services’) – where registered owner used trade mark as part of word mark “Centrefold Entertainment” – where owner’s mark substantially identical and deceptively similar to applicants’ word marks “Centrefold Strippers” and “Centrefold Strippers Australia” – application under s 41 to remove trade mark from Register– whether owner’s trade mark inherently adapted to distinguish its services from services of other persons – ordinary and natural meaning of word “centrefold” in markets in which parties operated – whether owner used word mark “centrefold” in its ordinary and natural meaning or as a mere description of its services – whether mark “centrefold” covert and skilful allusion to owner’s designated services – whether owner’s use of word “centrefold” was use of trade mark in relation to services under s 7(5) – whether owner used trade mark in connection with its services in a way that enabled conclusion to be drawn that usage had developed a secondary meaning related only to owner’s designated services TRADE PRACTICES – Misleading and deceptive conduct – competing applications alleging other party contravened s 18 of Australian Consumer Law in using word “centrefold” in branding its business – whether use of word “centrefold” in the trading styles of each party amounted to that party engaging in conduct, in trade or commerce, that was misleading or deceptive – whether owner of trade mark passed off its business as that of the applicants – whether business names sufficiently distinguished one party’s services from those of the other
Legislation:	Competition and Consumer Act 2010 (Cth) Sch 2, Australian Consumer Law ss 2, 18, 232 Trade Marks Act 1995 (Cth) ss 6, 7, 8, 17, 41, 44, 58, 122, 124, 126
Cases cited:	Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd (2017) 345 ALR 205 Cantarella Brothers Pty Ltd v Modena Trading Pty Ltd (2014) 254 CLR 337 Clark Equipment Company v Registrar of Trade Marks (1964) 111 CLR 511 Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 Patrick Stevedores Operations No 2 Pty Limited v Maritime Union of Australia (1998) 195 CLR 1 The Queen v Australian Broadcasting Tribunal; Ex parte 2HD Pty Ltd (1979) 144 CLR 45
Date of hearing:	29-31 May, 7-8, 14-16 June, 8 August 2017
Registry:	New South Wales
Division:	General Division
National Practice Area:	Intellectual Property
Sub-area:	Trade Marks
Category:	Catchwords
Number of paragraphs:	120
Counsel for the Applicants and Cross-Respondents:	Mr R Cobden SC with Mr J O’Sullivan
Solicitor for the Applicants and Cross-Respondents:	Streeterlaw
Counsel for the Respondents and Cross-Claimant:	Ms J Baird SC with Mr C Wood
Solicitor for the Respondents and Cross-Claimant:	Hopgood Ganim Lawyers

NSD 1489 of 2016
BETWEEN:	METRO BUSINESS CENTRE PTY LIMITED (ACN 096 429 882) First Applicant SEXY ENTERTAINMENT PTY LIMITED (ACN 163 680 108) Second Applicant
AND:	CENTREFOLD ENTERTAINMENT PTY LIMITED (ACN 151 972 986) First Respondent MATTHEW PRENDERGAST Second Respondent
AND BETWEEN:	CENTREFOLD ENTERTAINMENT PTY LIMITED (ACN 151 972 986) Cross-Claimant
AND:	METRO BUSINESS CENTRE PTY LIMITED (ACN 096 492 882) (and others named in the Schedule) First Cross-Respondent

Year ended February	Result
2013	$ 30,117
2014	($ 62,327)
2015	$ 40,065

NSD 1489 of 2016
Cross-Respondents
Second Cross-Respondent	SEXY ENTERTAINMENT PTY LIMITED (ACN 163 680 108)
Third Cross-Respondent	CG TRADING PTY LIMITED (ACN 605 438 444)