REA Group Ltd v Real Estate 1 Ltd

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FEDERAL COURT OF AUSTRALIA

REA Group Ltd v Real Estate 1 Ltd [2013] FCA 559

Citation: REA Group Ltd v Real Estate 1 Ltd [2013] FCA 559
Parties: REA GROUP LTD (ACN 068 349 066) and REALESTATE.COM.AU PTY LIMITED (ACN 080 195 535) v REAL ESTATE 1 LTD (ACN 140 715 028), SIXTEEN BLAMEY PTY LTD (ACN 130 053 271), GEOFFREY LUFF, JULIE LUFF, CHRISTIAN ONGARELLO and BIANCA ONGARELLO
File number: VID 900 of 2010
Judge: BROMBERG J
Date of judgment: 7 June 2013
Catchwords:

TRADE PRACTICES – misleading and deceptive conduct – use of similar domain and trading names by rival internet businesses – identification of class of affected consumers and the characteristics to be attributed to the ordinary or reasonable consumer of online property portals – whether secondary meaning in its name was established by the applicant – principles applicable to establishing secondary meaning for descriptive as opposed to concocted names discussed – extent of attention to be paid to “.com.au” when comparison is made of similar names – causation and the extent of differentiation from a descriptive name required to avoid finding of likely deception – whether consumer using an internet search engine would be likely misled or deceived by use of the respondent’s domain name on a search results page – whether consumer would likely assume that an organic search result or sponsored link for the respondent’s business is a link for the applicant’s business or a business associated with the applicant – whether sufficient nexus between conduct of respondent and any likely misconception or deception – whether a not insubstantial number of consumers were likely to have been misled or deceived – whether any likely deception was transitory and commercially insignificant – relevance of any intent of the respondent to take advantage of applicant’s reputation.

TRADE MARKS – use of similar domain and trading names by rival internet businesses – whether respondent’s mark deceptively similar to applicant’s mark – whether use of respondent’s mark in a logo was the use of a mark that was deceptively similar to the essential features of the applicant’s trade mark – whether respondent’s use of a mark as a trading name on a search engine results page was the use of a mark that was deceptively similar to the applicant’s trade mark – whether the respondent’s use of a mark as a domain name on a search engine results page was the use of a mark that was deceptively similar to the applicant’s trade mark – attention to be given to “.com.au” when considering deceptive similarity – whether individual respondents liable with corporate respondents as joint tortfeasors.

Legislation: Competition and Consumer Act 2010 (Cth)
Trade Practices Act 1974 (Cth) ss 52, 53, 53(c), 53(d)
Trade Practices Amendment (Australian Consumer Law) Act (No 2) 2010 (Cth)
Trade Marks Act 1995 (Cth) ss 10, 120, 120(1)
Cases cited:

Google Inc v Australian Competition and Consumer Commission (2013) 294 ALR 404
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982)…

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Details
Case
[2013] FCA 559
Decision Date

CaseChat Overview and Summary

In REA Group Ltd v Real Estate 1 Ltd, the Federal Court of Australia considered claims by REA Group Ltd against Real Estate 1 Ltd, alleging misleading and deceptive conduct, passing off, and trademark infringement. The court was tasked with determining whether the use of domain names such as "realestate1.com.au" and "realcommercial1.com.au" by Real Estate 1 led to consumer confusion with REA's portals, and whether this amounted to misleading or deceptive conduct under the Trade Practices Act 1974 and common law passing off. Additionally, the court examined if the use of these domain names infringed on REA's trademarks.

The legal issues central to the case included whether the domain names used by Real Estate 1 were likely to mislead or deceive consumers into believing there was an affiliation with REA's portals, and if this conduct contravened specific sections of the Trade Practices Act. Furthermore, the court had to decide if the use of these domain names constituted passing off at common law and if there was trademark infringement under the Trade Marks Act 1995.

In its reasoning, the court found that the evidence presented did not sufficiently demonstrate that consumers were misled by the use of the domain names. It concluded that the addition of a number "1" to a recognisable domain name might suggest affiliation but did not necessarily lead to misleading or deceptive conduct. The court also noted that the individuals associated with Real Estate 1 lacked expertise in online trading and consumer behaviour, making their views on consumer confusion less reliable. Consequently, the court dismissed the claims of misleading and deceptive conduct, passing off, and trademark infringement.

The court's final orders reflected its findings, dismissing all claims made by REA Group Ltd against Real Estate 1 Ltd. The decision underscored the importance of clear evidence in establishing consumer confusion and the likelihood of misleading or deceptive conduct in cases involving domain names and online portals.

Orders

Orders of the court

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Background

Background to the litigation

The following major questions arise for determination:(a)Did the use by Real Estate 1 of the name “realestate1.com.au” in relation to real estate advertising services, give rise to conduct that did or that was likely to mislead or deceive internet users searching for REA’s residential property portal to regard Real Estate 1’s portal at to be the same, or related to or associated with REA’s portal located at in contravention of (the former) ss 52, 53(c) and 53(d) of the Trade Practices Act 1974 (Cth) (“the TPA”)?(b)Did the use by Real Estate 1 of the name “realcommercial1.com.au” in relation to real estate advertising services, give rise to conduct that did or was likely to mislead or deceive internet users searching for REA’s commercial property portal to regard Real Estate 1’s portal at to be the same as, related to, or associated with REA’s portal located at in contravention of ss 52, 53(c) and 53(d) of the TPA?(c)In the circumstances described, did the use by Real Estate 1 of the names “realestate1.com.au” and “realcommercial1.com.au” in relation to their property portals amount to passing off at common law?(d)Did the use by Real Estate 1 (whether alone or as part of a logo) of the marks “realestate1.com.au” or “realcommercial1.com.au” infringe REA’s realestate.com.au trade marks or the realcommercial.com.au trade mark contrary to s 120 of Trade Marks Act 1995 (Cth) (“the Trade Marks Act”)?(e)Are the individual respondents liable as accessories for any contravention of the TPA, passing off and/or trade mark infringement committed by Real Estate 1? the factsThe internet and other technical background facts The determination of the central issues in this case requires a basic understanding of how the internet, and search engines used to find information on the internet, operate. The evidence dealing with those background matters was not controversial. The following findings are largely drawn from the evidence provided by Michael Hudson, a member of REA’s ‘Web Strategy’ team with extensive experience in website design and development and search engine optimisation. For ease of reference, technical terms are shown in bold. The internet is a system of interconnected computer networks. The series of interlinked documents on the internet are known as the world wide web. A web page is a document containing text, images or other information that is available to be viewed on the world wide web. Each web page has a unique address or URL (uniform resource locator) which is also know as a web address. When a series of related web pages are linked together and designed to be read as an integrated whole, they are known as a website. Internet users who wish to make information available to others on the world wide web can register a domain name, which is an alphanumeric alias for a web address. Most web addresses contain a domain name alongside a component which is used to designate a particular type of server, such as “www” for the world wide web or “m” for a mobile server.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Even if I had made such a finding, I would not have given that finding significant weight. Mr Luff’s knowledge and understanding of the market in which Real Estate 1 operates was unsophisticated and unreliable. He readily conceded his naivety. Neither he nor anyone associated with Real Estate 1 had any prior experience of or expertise in online trading or consumer behaviour on the internet. That “traders best know their trade” is not a rule of universal application. I do not think that any view held by Mr Luff that consumers would be deceived, in the specific circumstances which arise for determination in this case, provides me with any reliable evidentiary assistance. In Windsor Smith Pty Ltd v Dr Martens Australia Pty Ltd (2000) 49 IPR 286, Sundberg, Emmett and Hely JJ considered that the deliberate adoption by a trader of a rival’s get-up in order to imply a connection with the rival, was “simply one piece of evidence to be assessed with such other evidence as may be adduced on the issue”: at [33] and see NEC Corporation v Punch Video (S) Pte Ltd (2005) 67 IPR 17 at [37] (Branson J). It should also be borne in mind that conduct engaged in with intent may nevertheless have failed in its purpose: Cadbury Schweppes at 860-861 (the Court); S & I Publishing v Australian Surf Life Saver Pty Ltd (1998) 88 FCR 354 at 362. Conclusion For all those reasons I am not satisfied that by the use of the term “realestate.com.au” in a URL on a search results page, Real Estate 1 engaged in misleading or deceptive conduct in contravention of s 52 of the TPA. The conclusions I have reached in relation to the s 52 claim also require that the s 53 claims and the corresponding passing off claim be dismissed.Were members of the class likely to have been misled or deceived by the use of “realcommercial1.com.au”? At trial, REA tendered evidence which established consumer familiarity with the realcommercial.com.au portal. REA also tendered evidence which established that the term “realcommercial1.com.au” was used, at least until October 2010, as the trading and domain name for Real Estate 1’s commercial property portal. However, REA did not at trial expound a case to establish that when clothed in its logo, colour and other brand elements, the name “realcommercial1.com.au” was used in a manner likely to mislead or deceive. No case was pressed that the use of realcommercial1.com.au on Real Estate 1’s commercial property portal was misleading or deceptive. The use of “realcommercial1.com.au” on search results pages and how such use would likely mislead or deceive was not the subject of any evidence or specific submission. If such a case was being seriously pressed on the same general basis as that pressed in relation to the use of “realestate1.com.au” in URL’s, I would have rejected it. I would have accepted that, absent a proximate and prominent disclaimer to the effect that no association was intended, the use of “realcommercial1.com.au” in a URL on a search results page would likely have suggested an affiliation with the realcommercial.com.au portal. For reasons I have already expressed, the addition of the figure “1” to a distinctive word which is recognisable as a name is likely to suggest to many consumers that realcommercial1.com.au is affiliated with realcommercial.com.au. There was no evidence that close variants of the name “realcommercial.com.au” were a common feature of the market for commercial real estate portals.

Ratio Decidendi

Legal Principle Established

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