Veda Advantage Ltd v Malouf Group Enterprises Pty Ltd

Case

[2016] FCA 255

21 March 2016


FEDERAL COURT OF AUSTRALIA

Veda Advantage Limited v Malouf Group Enterprises Pty Limited
[2016] FCA 255

File number: NSD 1101 of 2014
Judge: KATZMANN J
Date of judgment: 21 March 2016
Catchwords:

INTELLECTUAL PROPERTY — Trade marks —alleged infringement of registered trade marks by unauthorised use of the marks as keywords and in sponsored link advertisements in Google AdWords program — whether use as a trade mark — whether alleged infringer used the marks in respect of services in respect of which the trade marks were registered — whether alleged infringer used the marks in good faith to indicate the intended purpose of the services — whether use of the marks not likely to deceive or cause confusion

CONSUMER LAW — Misleading or deceptive conduct — whether use of registered trade marks by unauthorised user misleading or deceptive contrary to s 18 of Australian Consumer Law

CONSUMER LAW — False or misleading representations — whether false or misleading representations concerning affiliation with business of trade mark owner contrary to s 29(1)(h) of Australian Consumer Law — whether false or misleading representations with respect to the price of services contrary to s 29(1)(i)

Legislation:

Australian Securities and Investments Commission Act 2001 (Cth), s 12DA
Competition and Consumer Act 2010 (Cth), Sch 2, ss 18, 29(1)(h), 29(1)(i), 131A(1)
Corporations Act 2001 (Cth), ss 766A, 911A(1)

Privacy Act 1988 (Cth), ss 20R

Trade Marks Act 1995 (Cth), s 120(1)
Trade Marks Act 2002 (NZ), s 89(2)
Trade Practices Act 1974 (Cth), ss 51AF, 52

Cases cited:

Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd [2015] FCA 554

Aldi Stores Ltd Partnership v Frito Lay Trading Company GmbH (2002) 190 ALR 185; [2001] FCA 1874

Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 634

Australian Competition and Consumer Commission v Dukemaster Pty Ltd [2009] FCA 682

Australian Competition and Consumer Commission v Google Inc (2012) 201 FCR 503

Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640

Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2011] FCA 1254

Australian Competition and Consumer Commission v Trading Post Australia Pty Ltd (2011) 197 FCR 498

Britt Allcroft (Thomas) LLC v Miller (t/as The Thomas Shop) (2000) 49 IPR 7; [2000] FCA 699

Campomar Sociedad Limitada v Nike International Ltd (2002) 202 CLR 45

Cassidy v Medical Benefits Fund of Australia (No 2) [2002] FCA 1097

Caterpillar Loader Hire (Holdings) Pty Ltd v Caterpillar Tractor Co (1983) 77 FLR 139; [1983] FCA 145

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

Coca Cola Company v All Fect Distributors Ltd (1999) 96 FCR 107

Colorado Group Ltd v Strandbags Group Pty Ltd (2007) 164 FCR 506

Complete Technology Integrations Pty Ltd v Green Energy Management Solutions Pty Ltd [2011] FCA 1319

Cosmetic Warriors Ltd v amazon.co.uk Ltd [2014] ECC 28; [2014] EWHC 181 (Ch)

E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144

Enterprise Finance Solutions Pty Ltd v Austec Pty Ltd [2013] FCA 491

Global One Mobile Entertainment Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 134

Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82

Google France SARL v Louis Vuitton Malletier SA (C-235/08) [2011] Bus LR 1; All ER (EC) 411

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

Intercity Group (NZ) Ltd v Nakedbus NZ Ltd (2014) 3 NZLR 177

Interflora Inc and Anor v Marks & Spencer (No 5) [2014] EWCA Civ 1403

Interflora v Marks & Spencer [2013] 2 All ER 663; [2012] EWCA Civ 1501

Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326

Knight v Beyond Properties Pty Ltd (2007) 242 ALR 586; [2007] FCAFC 170

Lift Shop Pty Ltd v Easy Living Home Elevators Pty Ltd (2014) 311 ALR 207; [2014] FCAFC 75

Lumley Life Ltd v IOOF of Victoria Friendly Society (1989) 16 IPR 316

Mark Foys Ltd v Davies Coop and Co Ltd (1956) 95 CLR 190

Mark Foys Pty Ltd v TVSN (Pacific) Ltd (2000) 104 FCR 61

Mayne Industries Pty Ltd v Advanced Engineering Group Pty Ltd (2008) 166 FCR 312

McWilliam’s Wines Pty Ltd v McDonalds System of Australia Pty Ltd (1980) 33 ALR 394; [1980] FCA 159

National Exchange Pty Ltd v Australian Securities and Investments Commission (2004) 61 IPR 420; [2004] FCAFC 90

Nature’s Blend Pty Ltd v Nestlé Australia Ltd (2010) 272 ALR 487; [2010] FCAFC 117

News Group Newspapers Ltd v The Rocket Record Co Ltd [1981] FSR 89

Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191

Pepsico Australia Pty Ltd (t/as Frito-Lay Australia) v Kettle Chip Co Pty Ltd (1996) 135 ALR 192

REA Group Ltd v Real Estate 1 Ltd (2013) 217 FCR 327

Google v Australian Competition and Consumer Commission  (2013) 249 CLR 435

Reed Executive plc v Reed Business Information Ltd [2004] RPC 40; [2004] EWCA Civ 159

SAP Australia Pty Ltd v Sapient Australia Pty Ltd (1999) 169 ALR 1; [1999] FCA 1821

Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177; [1982] FCA 136

Tasman Insulation New Zealand Ltd v Knauf Insulation Ltd (2014) 108 IPR 162; [2014] NZHC 960

The Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407

Other texts:

Mellor J, Llewelyn D, Moody-Stuart T, Keeling D and Berkeley I, Kerly’s Law of Trade Marks and Trade Names (15th ed, Sweet & Maxwell, 2011)

Davison M and Horak I, Shanahan’s Australian Law of Trade Marks and Passing Off (5th ed, Thomson Reuters (Professional) Australia Limited, 2012)

Date of hearing: 9, 10 & 11 September 2015, 14 & 16 October 2015
Date of last submissions: 13 November 2015
Registry: New South Wales
Division: General Division
National Practice Area: Intellectual Property
Sub-area: Trade Marks
Category: Catchwords
Number of paragraphs: 305
Counsel for the Applicant: Ms J Baird SC with Mr D Tynan
Solicitor for the Applicant: K & L Gates
Counsel for the Respondent: Mr J M Hennessy SC with Mr J S Cooke
Solicitor for the Respondent: McLaughlins Lawyers

ORDERS

NSD 1101 of 2014
BETWEEN:

VEDA ADVANTAGE LIMITED

Applicant

AND:

MALOUF GROUP ENTERPRISES PTY LIMITED

Respondent

JUDGE:

KATZMANN J

DATE OF ORDER:

21 MARCH 2016

THE COURT ORDERS THAT:

1.Within 14 days the applicant file short minutes of order giving effect to these reasons.

2.The matter be listed for further directions at 9.15 am on 4 April 2016.

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


REASONS FOR JUDGMENT

KATZMANN J:

  1. This is a dispute about the use in internet advertising of words which are also registered trade marks or which are substantially the same or deceptively similar to those marks by a company which neither owns nor is authorised to use them. In particular, it concerns the use of such words as keywords and in the titles and descriptions of sponsored link advertising in the Google AdWords program. In broad terms, the questions for determination are whether, in so doing, the advertiser infringed the registered trade marks, or engaged in misleading or deceptive conduct or made false or misleading representations in contravention of the Australian Consumer Law.

  2. The protagonists are the registered owner of the trade marks (Veda Advantage Limited) and the advertiser, Malouf Group Enterprises Pty Limited (Malouf).  Veda Advantage is one of a number of companies in the Veda group of companies which operates a credit reporting business.  For convenience, I shall refer to the companies in the Veda group without discrimination as Veda, unless it is necessary to distinguish one from the other.  Malouf is in the business of assisting consumers with poor credit ratings to rectify errors in credit reports, including those issued by Veda, a process variously described as credit repair, cleaning or fixing.

    THE EVIDENCE

  3. Evidence was given by affidavit on behalf of the Veda business by Timothy Hemingway, Lai-Tat Victor Leung, and Ewan Watt. 

  4. Mr Hemingway is a senior legal counsel with Veda Group Limited, the parent company of Veda Advantage. 

  5. Mr Leung is the General Manager e-Commerce and Marketing for all Australian subsidiaries of Veda Group and an employee of Veda Advantage (Australia) Pty Limited.  From July 1999 until July 2001 he was an Associate Lecturer at the University of Sydney in, amongst other things, Marketing Principles, Marketing Research and Consumer Behaviour.  He is himself a graduate of the University, holding a Bachelor of Commerce (Hons).  He also holds an MBA from the Macquarie Graduate School of Management.

  6. Mr Watt was called to give expert evidence.  He is the founder and director of roi.com.au, a digital marketing agency specialising in search engine optimisation, Google AdWords campaigns, website design and development, and social media and content marketing.  He was retained by Veda’s solicitors as an independent marketing expert with particular expertise in digital marketing and the workings of the Google AdWords program.

  7. Evidence about the Malouf business largely came from its sole director, Jordan Francis Malouf. 

  8. Most of the evidence was uncontroversial.  A number of facts were agreed.  The dispute largely turned on the inferences to be drawn from the material.  Unless otherwise indicated, I accept the evidence.

    BACKGROUND

    The Veda business

  9. The Veda business originated in 1967 with the establishment of the first consumer credit bureau in Australia:  the Credit Reference Association of New South Wales, a public company limited by guarantee, which on 21 February 2007 became Veda Advantage Information Services and Solutions Limited (Veda Solutions).  Veda Solutions is a wholly owned subsidiary of Veda Advantage and the holding company for a series of entities through which the Veda business is run.

  10. Veda is a data analytics business.  Indeed, it is the leading data analytics company in Australasia.  It is known in the industry as a “credit bureau” and under the Privacy Act 1988 (Cth) (Privacy Act) as a “credit reporting body”.  It collects, analyses, and discloses information about individuals and corporations for the purpose of providing information about the creditworthiness of an individual or corporation.  Its core service is the provision of credit reports (Veda credit reports) to credit providers, such as banks and other lending institutions (referred to in evidence as its “business to business” services and by the acronym B2B).  It also provides services to individual consumers (referred to in evidence by the acronym B2C or “business to consumer” services).  A credit report is a report on the credit history of an individual or a corporation compiled by a credit reporting body which includes information in respect of loan inquiries, credit providers, serious debts and credit infringements, commercial credit, and information drawn from public records including bankruptcy data and judgments.  Veda credit reports are commonly referred to as “Veda files” or “Veda reports”.

  11. Veda is the major credit reporting organisation in Australia.  As at 30 June 2014 it held credit information on approximately 20 million individuals and 5.7 million commercial entities.

  12. Other credit reporting bodies with which Veda competes include Dun & Bradstreet, Experian Credit Services Australia and Tasmanian Collection Service.

  13. Business customers are provided with consumer credit scores under or by reference to the sign “VedaScore”.  Veda has a web-based portal, accessible to subscribers, branded “VedaCheck”.  Its products and services are marketed to business customers by face to face meetings, “customer events”, and direct distribution of promotional material.  Marketing to individuals occurs through the Veda website ( Before September 2011 it occurred through the Veda Advantage website ( Marketing to individuals also occurs through the use of the Google search engine (using the Google AdWords program), referred to as “search engine marketing”; advertising on third party websites, television and radio; through emails, brochures and flyers; and in print and online articles.  From time to time the Veda business also engages in “search engine optimisation” to ensure that it appears first in the organic results.  I shall explain what all this means later in these reasons.

  14. Veda offers its services using various registered trade marks in marketing and promotional material, including as part of the domain names under which it maintains the two websites.

    Access to credit reports under the Privacy Act

  15. Under s 20R of the Privacy Act credit reporting bodies must provide credit reporting information about an individual to an “access seeker” who makes a request in relation to the information. There are some exceptions to this obligation but they are not relevant for present purposes. An “access seeker” in this context is, in short, the individual debtor or a person properly authorised to make the request on the individual’s behalf: Privacy Act, s 6L. It is a requirement imposed by the Privacy Act that the credit reporting information be provided to an access seeker free of charge if such a request has not been made to the credit reporting body in the previous 12 months: s 20R(5). Paragraph 19 of the Privacy (Credit Reporting) Code 2014 (Version 1.2) (CR Code), which has effect under Pt IIIB Div 3 of the Act, sets out additional circumstances in which a credit report must be provided without charge. In circumstances where a credit reporting body is entitled to charge for giving access to the information, the charge must not be excessive and must not apply to the making of the request: s 20R(6).

    Credit repair

  16. Errors in credit reports may be rectified or “repaired”. Veda facilitates this process through the Veda Resolution Centre, which is a call centre providing consumers with information about what they can do to correct their Veda files. The service is provided free of charge in conformity with Veda’s understanding of its obligations under the Privacy Act. Information about the process appears on the Veda website. Credit repair services are also provided by specialist companies like Malouf but the evidence indicates that the nature of the repair services Malouf offers is different from those provided by Veda.

  17. Cross-examination drew from Mr Leung some key differences in the nature of the services provided by Veda and by credit repair companies like Malouf:

    And just to clarify, as part of this investigation process Veda is effectively playing a role, I want to suggest to you, as keeper of the record and evaluating the complaint or the concern the consumer has about the accuracy of the information and determining whether or not the information should be changed as a result of whatever the complaint or the concern is?  ‑ ‑ ‑ That’s correct.

    Veda does not place itself, as it were, in the shoes of the individual and try and work out what it is that might be corrected but rather responds to the individual’s concern or complaint raised in the request form?  ‑ ‑ ‑ That’s correct.

    Veda doesn’t enter into any contractual relationship with the individuals seeking to have the record investigated?   ‑ ‑ ‑ Not that I’m aware of.

    And it doesn’t consider itself to be acting on behalf of that person but rather facilitating the role of a record keeper, analysing whether objectively there should be any change to the record as a result of the concern or the complaint?  ‑ ‑ ‑ That’s correct.

    And you’re familiar with the fact that people like Malouf act on behalf of individuals to try and raise concerns or identify problems with the record?  ‑ ‑ ‑ From what I’ve read on the websites, yes.

  18. The “credit repair” services provided by Veda are therefore different from those provided by Malouf.  Veda acts as the “keeper of the records” and corrects errors on the face of those records.  Unlike Veda, Malouf has no power to alter the records held by Veda.  Instead, Malouf acts on behalf of people who are the subject of Veda reports to assist them to deal with Veda and, if necessary, the credit provider responsible for an apparently erroneous listing.  A more detailed explanation of the services provided by Malouf can be found later in these reasons.

  19. Although the evidence in chief from both Mr Hemmingway and Mr Leung implied that Veda promoted its credit repair services, in cross-examination Mr Leung made some important concessions in this regard.

  20. First, Mr Leung admitted that, beyond including on the website information about how a customer can correct a credit file, Veda does nothing to promote its credit repair service.

  21. Secondly, he admitted that Veda does not engage in any search engine optimisation strategies or use Google AdWords to try to bring the service to the attention of consumers. 

  22. Thirdly, Mr Leung acknowledged that the reason Veda does not promote the service is that it is not a moneymaking venture.

  23. Fourthly, Mr Leung accepted that consumers looking to correct their credit files are encouraged on Veda’s web page for the Resolution Centre to contact the credit providers first and Veda second, and that they are discouraged from making telephone contact with Veda while an investigation is under way. 

    The Veda Trade Marks

  24. Veda Advantage is the owner of a number of Australian registered trade marks which I shall call the “Veda Trade Marks”.  They are:

    (1)Trade Mark No. 1426238 “VEDA” in, amongst other classes, class 36 for:

    Financial services; provision of credit risk, financial and asset information and reports; credit scoring and risk assessment services; information provision, advice, research, appraisal, analysis, credit enquiry and consultation in relation to the aforementioned services; assembling credit information on individuals and companies and providing credit reports; credit bureau services; provision of credit risk information; credit scoring, decision support and risk assessment services; credit, financial and asset equity report services including the provision of insolvency reports, comprehensive credit reports, credit and financial risk reports, financial health assessment, bankruptcy searches, bank opinions; provision of information relating to financial data, property summary data, property equity data, bankruptcy data, risk analysis and financial health assessment; electronic processing services relating to credit approval including the provision of credit, financial and asset reports.

    (2)Trade Mark No. 1133204 “VEDA ADVANTAGE” in, amongst other classes, class 36 for:

    Financial services, including information provision, advice, research, credit enquiry and consultation services; assembling credit information on individuals and companies and providing credit reports; credit bureau services; provision of credit risk information; credit scoring, decision support and risk assessment services.

    (3)Trade Mark No. 1153164 “VEDACHECK” in, amongst other classes, class 36 for:

    Provision of financial services including information provision, advice, research, appraisal, analysis, credit enquiry and consultation in relation to the aforementioned services; assembling credit information on individuals and companies and providing credit reports; credit bureau services; provision of credit risk information; credit scoring, decision support and risk assessment services.

    (4)Trade Mark No. 1320811 “VEDASCORE” in, amongst other classes, class 36 for:

    Financial services; provision of credit risk, financial and asset information and reports; credit scoring and risk assessment services; information provision, advice, research, appraisal, analysis, credit enquiry and consultation in relation to the aforementioned services; assembling credit information on individuals and companies and providing credit reports; credit bureau services; provision of credit risk information; credit scoring, decision support and risk assessment services; credit, financial and asset equity report services including the provision of insolvency reports, comprehensive credit reports, credit and financial risk reports, financial health assessment, bankruptcy searches, bank opinions; provision of information relating to financial data, property summary data, property equity data, bankruptcy data, risk analysis and financial health assessment; electronic processing services relating to credit approval including the provision of credit, financial and asset reports.

  1. Veda Solutions is the company which provides the credit reports to consumers and gives consumers access to their credit information.  It is an authorised user of the registered trade marks. 

    Veda’s reputation

  2. From at least September 2006 Veda has provided financial services, including credit reporting, credit enquiry and management services, and related services (the Veda Services), to a substantial number of individuals and businesses throughout Australia under or by reference to the sign “VEDA”, including as part of the sign “VEDA ADVANTAGE”.

  3. From at least September 2006 Veda has continuously advertised and promoted the Veda Services under or by reference to the sign “VEDA”, including as part of the sign “VEDA ADVANTAGE”, in Australia.

  4. As a result, Veda has acquired a substantial and valuable reputation and goodwill in the sign “VEDA” in connection with the Veda Services, and the sign as used in connection with the Veda Services is associated within Australia with Veda. 

  5. As at December 2014 Veda had approximately 11,400 B2B customers in Australia.

  6. Flyers and brochures promoting the services offered or provided under or by reference to the sign “VEDASCORE” were distributed by Veda to its B2B customers throughout the period 2010–2011.

  7. Between October 2006 and August 2011 the Veda B2C services were promoted to individual consumers electronically via the Veda Advantage website.  During that period customers looking to obtain copies of their Veda credit reports through the Veda Advantage website, upon clicking the “order now” or “my credit file” link, would be redirected to the website available at the domain name < (My Credit File website) to complete their order.

  8. From at least August 2011 the Veda B2C services have been continuously promoted to consumers electronically via the Veda website.  The Veda website attracts an average of 110,000 unique visitors each month.

  9. In the period August 2013 to May 2015 Veda had approximately 57,000 customers for the four “Veda packages”:  “Veda Starter”, “Veda Access”, “Veda ID”, and “Veda Plan”.

  10. On average 2000 to 3000 sales of the Veda packages per month are made at the Veda website.

  11. For the period August 2013 to May 2015 16% of sales of the Veda packages were made through a mobile device.

    The Malouf business

  12. Mr Malouf incorporated his business on 20 July 2005.  For the first five years of incorporation the business operated as a finance brokerage and he worked as a finance broker.  In that capacity he mainly arranged loans, both personal and business.  In the course of that work he came across many people with poor credit ratings for whom he would set up “bad credit loans”, which would carry high interest rates, and he became familiar with the credit repair process.  In 2010 or thereabouts he established a credit repair business of his own under the name “Malouf Group Enterprises” to capitalise on what he perceived as “a demand and an opportunity in the market” for such a business.

  13. The Malouf credit repair business grew.  Mr Malouf created other, related credit repair businesses with different business names “to maximise [his] exposure”.  He now operates five such businesses.  Relevantly they include Credit Clean Australia, Clean Your Credit, and Credit Fix Australia.

  14. Malouf is not a credit reporting body. Its target market is people with poor credit ratings and consequently adverse credit reports. It helps its customers to remove disputable or contested negative listings from credit reports compiled and maintained by credit reporting bodies such as those operated through the Veda companies. To that end it obtains credit reports (sometimes called “files”) on behalf of customers as an authorised “access seeker” under the Privacy Act. In the vast majority of cases Malouf obtains credit reports from Veda because, as Mr Malouf saw it and the evidence indicates, Veda was and is the dominant credit reporting company in Australia with (as Veda itself boasts on its website) the largest, most comprehensive and up-to-date credit data in the country.

  15. Malouf competes with other credit repair businesses, including Credit Repair Australia, Clear Credit, Fix Bad Debt, and Credit Boost. 

  16. Malouf’s businesses are operated as telemarketing platforms, where salespersons receive telephone calls from prospective customers, sourced from either television or internet advertising, and then discuss their services with the callers.  The prospective customer either telephones the particular Malouf business using the contact number from the website or advertisement belonging to that business or enters his or her details on the website and requests a return call.  Since November 2014, if a prospective customer (or an existing customer) telephones one of Malouf’s businesses he or she would hear two pre-recorded messages.  The first states, among other things, the name of the relevant business (such as Credit Clean Australia) and notes that the business is a “specialist in bad credit repair solutions”.  The second advises that the business provides “the pathway for you to remove unfair, disputable or contestable negative listings from your credit file”.

  17. After listening to the recording, the prospective customer is connected to a salesperson who supplies information about the services provided by the business and asks the customer questions contained in an application form.  The salesperson then advises the prospective customer that the application will be assessed and that he or she will receive a call back later.  

  18. The salesperson has a script, is required to strictly adhere to the script, and is directed not to be distracted from it by anything the customer may ask.  The following words appear in bold typeface:

    Please note no matter what the client says eg. Can I get a hair cut? are you veda? do you do loans? follow below word for word !!!!!!!!!

  19. When the call back is made the prospective customer is asked some 22 questions to obtain information about his or her credit position.  If the customer is accepted as a suitable recipient of the credit repair services, the customer is asked to pay a one-off fee of $1,095 (including GST).

  20. With the authority of the customer, and in the capacity of an “access seeker” under the Privacy Act, Malouf orders the customer’s Veda credit report from Veda. Malouf obtains the Veda credit report by placing individual orders for each customer through Veda’s website for express, one day turnaround. It pays a fee of $69.95 for each Veda credit report.

  21. Malouf (on behalf of its customers) spends approximately $300,000.00 per year in total obtaining Veda credit reports in supplying these services.

  22. Once Malouf receives the Veda credit report, Malouf then submits to Veda on behalf of the customer a request in writing to remove the negative listing on the customer’s credit report pursuant to the Privacy Act. The requests include the reason or reasons for removal.

  23. Malouf then sends to the customer an information pack containing various documents, including the Veda credit report, general information on how to remove disputable or contested negative listings from credit reports, general information about how to deal with collection agencies, general information on how to “maintain a clean credit report”, (where relevant) court forms for setting aside default judgments, and Financial Ombudsman Service complaint forms.  

  24. Two days after lodging the submission with Veda a Malouf case manager telephones the customer to advise that a request to remove the negative listing has been submitted to Veda and that all correspondence from Veda to the customer in respect of the submission needs to be forwarded to Malouf.

  25. When Veda receives the request, it raises it with the credit provider responsible for the negative listing (that is, the bank or other financial institution which provided credit to the individual or corporation and listed the default).  If the credit provider’s response indicates that the complaint is valid, Veda removes the negative listing pursuant to its obligations as a credit reporting agency.  If the negative listing is not removed, a Malouf case manager will then send by email to the customer a questionnaire to complete and return to Malouf.

  26. On behalf of the customer Malouf then builds a case file for removal of the negative listing, that is to say a summary of the grounds for removal of the negative listing based on information provided to it by both Veda and the customer.  Malouf then provides the case file to the customer and asks him or her to contact the credit provider responsible for the negative listing.

  27. The credit provider then reviews the information provided by the customer from the case file and, if satisfied that the negative listing should be removed, asks Veda to remove it from the Veda credit report.  If the credit provider does not authorise the removal of the negative listing, Malouf submits a request to the Financial Ombudsman Service to investigate the matter further.

  28. While Veda corrects errors on the face of its credit reports, Malouf does not.  As Mr Malouf explained it in his affidavit of 14 July 2015:

    [Malouf] assists customers remove disputable and contestable negative listings from their credit history when a Credit Provider has not followed privacy laws and/or credit reporting codes of conduct prior to listing the negative listing on the Veda Credit Report, including sections 6Q, 21(d) and 21D(3) of the Privacy Act and paragraph 9.3 of the [CR] Code.

  29. Malouf uses the Google AdWords program to advertise, promote and direct consumers to its websites. 

    The operation of the Google AdWords program

  30. The Google search engine allows internet users to search for web pages on particular topics by entering terms into a search field and clicking on a button marked “Google Search”.  It displays two types of search results:  “organic search results” and “sponsored links”.

    Organic results

  31. Organic search results are links to web pages, which are ranked in order of relevance to the search terms entered by the user.  The Google search engine always displays organic search results and organic search results are always displayed free of charge.

  32. A search term incorporating the word “veda” will return organic results in which the Veda website appears first. 

  33. The organic entry for Veda appears thus:

  34. Searchers understand that Google provides accurate organic results in response to their searches. 

  35. Businesses may maximise their exposure via organic results by a process known as search engine optimisation.  This involves altering the code, content and design of a website to improve the priority of its listing in the organic search results.  Search engine optimisation, like sponsored link advertising, is a form of search engine marketing. 

    Sponsored links

  36. Sponsored links are advertisements, which Google’s AdWords program allows advertisers to create, change, and monitor.  They are triggered by keywords privately supplied by the advertiser to Google.  When a word or phrase, which includes or corresponds with one or more of the keywords, is entered in the Google search engine, the search results page will display those sponsored links.  I discuss the process in detail below when I deal with the expert evidence given by Mr Watt.

  37. A sponsored link appears in hypertext accompanied by a yellow tag in which the word “Ad” appears in white.  Clicking on the link takes the searcher to the advertiser’s website.  A person who has conducted a search and chosen to examine the link in an advertisement can always click on the “back” button on his or her browser and return to the original search results.

  38. A sponsored link consists of three elements:  a headline which incorporates a link to a web page (in blue text); the address of the web page to which the headline links (in green text); and some brief advertising text (in black text).  The following is an example of a sponsored link from one of Malouf’s competitors generated by a Google search for Veda:

  39. Sponsored links do not replace the organic search results, but are listed separately from them, appearing either above or below or to the far right of them or on successive pages.  As such, when “veda” is used as a search term a Google search will produce both advertisements and organic results.  This is how the search page appears on a desktop or smaller device other than a mobile phone:

  40. On a mobile phone, however, the appearance of the display may be different as was demonstrated by a search for “contact veda”:

  41. Google provides advertisers with access to the AdWords program through AdWords accounts.  An advertiser using the AdWords program to create a sponsored link will specify the headline, the address of the web page to which the headline links, and the advertising text.

  42. The advertiser specifies keywords in the AdWords program and more than one advertiser may specify the same keywords.

  43. When a user enters search terms into the Google search engine that match the keywords of an advertiser, an “auction” is triggered that determines which sponsored links will appear in the search results, in which order they are shown, and how much Google will charge the advertiser whose sponsored links are displayed (when the user clicks on them).  This “auction” is discussed in more detail below in the context of the expert evidence.

  44. Advertisers using sponsored links pay Google each time a user of the Google search engine clicks on the sponsored link.  This is known as “pay-per-click advertising”.

    Landing page

  45. When the searcher clicks on a sponsored link advertisement or an organic result he or she is taken to a “landing page”.  The searcher cannot get to the landing page via a website; he or she must use the Google search engine or otherwise know the specific URL (uniform resource locator or web address) for the particular landing page.

    Malouf’s use of Google AdWords

  46. Malouf has been advertising on the internet for some time using the Google AdWords service.

  47. Malouf set up Google AdWords accounts for each of its websites on the following dates:

    ·in relation to < (Clean Your Credit website), about 20 June 2014;

    ·in relation to < (Credit Fix Australia website), about 10 June 2012; and

    ·in relation to < (Credit Clean Australia website), about 3 December 2012.

  48. One of the Google AdWords campaigns that Malouf has run, and that which is the subject of the proceedings, involves the use of keywords that comprise or contain the word “veda”.   

  49. Malouf’s AdWords campaigns use the Veda keywords to target people trying to contact Veda, including those who wish to obtain copies of their credit reports.  As Mr Malouf explained it in cross-examination (at ts 270):

    So, with Veda approximately anywhere from 20 to 40 per cent — which is published on their website — of people may have an adverse credit history with a credit reporting body.  A lot of them don’t know that they’ve got bad credit.  So, potentially, one in five customers that are trying to contact Veda may be our target market. … [W]e want to have our ad showing up — anyone trying to contact Veda — because, potentially, one in five of those customers may be wanting to fix their credit file.

    The Veda keywords

  50. Malouf has used no fewer than 86 keywords which consist of, or incorporate, the word “veda”.  They include:

    ·“contact veda”;

    ·“how to contact veda”;

    ·“veda advantage contact number”;

    ·“veda credit check free”;

    ·“veda credit score”;

    ·“veda login”;

    ·“my veda file”;

    ·“www veda com au”;

    ·“veda com au”;

    ·“veda phone number”; and

    ·“veda”.

  51. A complete list is attached as Schedule A.  Not all these keywords were in use by the time Malouf filed its amended defence on 15 October 2015.

    Sponsored links

  52. A complete list of the sponsored links the subject of this proceeding is attached as Schedule B.

    Sponsored links for Malouf websites from July 2014 to September/October 2014

  53. During the periods set out below, the advertising text of the Google AdWords sponsored links for Malouf websites referred to “veda” together with other words:

    ·for the Credit Clean Australia website, from 30  June 2014 until 19 September 2014;

    ·for the Credit Fix Australia website, from 13 August 2012 until 10 October 2014; and

    ·for the Clean Your Credit website, from 23 June 2014 until 13 October 2014.

  54. The sponsored links included the following advertisements, which when viewed on a computer screen, whether a desktop or mobile device, appeared in the colours mentioned in [61]–[62] above:

    Sponsored links for Malouf websites in and from September/October 2014

  55. During the period October 2014 to about 11 May 2015, the visible text for the Google AdWords sponsored links for the Credit Fix Australia website and the Clean Your Credit website did not use the word “veda”.  The sponsored links read as follows, once again in the colours mentioned in [61]–[62] above:

  56. Since 19 September 2014 the sponsored link for the Credit Clean Australia website has not used the word “veda”.  On 11 May 2015 Malouf stopped using sponsored links altogether for the Credit Fix Australia and the Clean Your Credit websites. 

  57. From 11 May 2015 to at least the date the hearing concluded, Malouf used a sponsored link in the following terms for the Credit Clean Australia website:

  58. When a prospective customer clicked on one of the sponsored links referred to above, the customer was directed to the relevant landing page of the applicable Malouf website. 

  59. At no time have these websites stated that Malouf is affiliated with any of the Veda businesses.  Nor have they carried a disclaimer to the effect that the businesses are not affiliated or associated with Veda. 

    THE EXPERT EVIDENCE

  60. Mr Watt’s evidence provides a picture of the use of the internet to find information, which is of some importance in this case.  As he explained in his first affidavit (source references omitted):

    29People want access to information fast and in real time.  The Internet provides this vehicle.  People are spending more time online.  Consumers view four screens:  television, desktop computers, tablets and smart phones. These facts highlight the importance and prominence of online inbound marketing strategies:

    (a)85% of the Australian population are online …;

    (b)93% of Internet traffic in Australia is generated by search engines …;

    (c)Online advertising expenditure in Australia in the past year to 30 June has leapt 14.6 per cent to $3.6bn…

    30The actual and estimated proportionate spend ratios of Online advertising compared to traditional forms of marketing is consistent with my observation of the practices of the key clients we work for at roi.com.au and their proportionate spend on online advertising becoming increasingly a larger percentage of their overall marketing spend.

    31In my experience, consumers today access Google or other search engines similarly to how they once accessed White Pages and Yellow Pages:  to gain a website address, phone number, address etc… 

  61. Mr Watt discussed at some length search engine marketing and the Google AdWords program.

  62. He explained the process of choosing keywords for the Google AdWords campaign at [41] of his first affidavit:

    When keywords for the AdWord campaign are selected, the advertiser can specifically choose 5 types of keyword settings.  These are known as “match type” settings – how the search term used by the searcher must “match” the keyword selected by the advertiser in order for the sponsored link advertisement to qualify as a possible advertisement to be returned as a sponsored link in response to a search.

  63. The match types are “exact match”, “phrase match”, “broad match”, “broad match modifier” and “negative match”.  An exact match allows an advertisement to appear only when a search term is entered which matches or closely matches the keyword.  A negative match enables advertisers to prevent their advertisements being displayed when a particular search term is employed.  A phrase match allows an advertisement to appear when the search term includes the exact phrase selected by the advertiser or close variations of it.  A broad match allows an advertisement to appear when a search term includes the keyword or a variation of the keyword, including synonyms and misspellings.  Finally, a broad match modifier allows an advertisement to appear when the search term includes the keyword or a variation of it in any order, but with no synonyms.  A summary of match types with examples of each was included in Veda’s pleading and is reproduced at the beginning of Schedule A to these reasons.

  1. Mr Watt said that keywords are generally classified as informational, commercial or branded.  Branded keywords are words like “veda” and “veda advantage” or a website name and variations thereof.  On the other hand, words such as “credit file”, “credit score” and “credit rating” are informational keywords and “credit repair” commercial ones.  Branded keywords, he explained, are used “to find a specific brand or site by use of trade marks or brand names pertaining to a business or a product”.  He said that traders generally use branded keywords in three circumstances:

    (1)to target existing customers looking for their website or contact information;

    (2)to attract new customers who have heard about their brand through other marketing or word of mouth; and

    (3)to maximise the number of clicks received from any brand related search.

  2. In addition to choosing keywords and match types, advertisers may also specify other parameters, such as the time of day their advertisements will be shown and the geographical limits of their campaign.

  3. Success is measured by the percentage of clicks leading to a conversion.  A conversion occurs when, after the click, the searcher takes action the advertiser considers valuable to its business, such as making an online purchase or simply contacting the business.

  4. The Google AdWords reporting system enables advertisers to acquire daily statistics on the number of times the advertisement was displayed per day per “ad group” or campaign (these are known as impressions) or keywords, the number of clicks, the click-through rate (that is, the number of clicks compared to impressions), and the number of clicks which become conversions.  An ad group consists of one or more sponsored link advertisements which target a common set of keywords.  Each campaign is made up of one or more ad groups.

  5. Mr Watt stated that by using a trade mark in a sponsored link advertisement the advertiser intends to reinforce to the consumer the connection between the brand and the product or service appearing on the landing page.

  6. Mr Watt said that typically the most effective way to use sponsored link advertising is to feature as the top three listings above the organic search results.  That placement is achieved through “a combination of bidding, relevance and the overall ad score algorithm metric used by Google, where the exact formula is not publicly disclosed”.

  7. Mr Watt explained that:

    [t]o get to the top of the sponsored link listings, there is an auction that is conducted by Google at the time that each search is conducted. The winners of the auction are judged by the Google process of ranking your advertisement by reference to its ‘quality score’ and the maximum cost per click the advertiser has indicated that it is willing to spend.  The advertiser with the best combined bid and quality score will feature in the top position.

  8. Mr Watt explained that the quality score is calculated by reference to:

    ·the click-through rate that the sponsored link has previously achieved;

    ·the relevance of the sponsored link’s ad copy to the search terms; and

    ·the relevance of the content on the sponsored link’s landing page to the search terms.

  9. The quality score may therefore be improved by:

    ·using “exact match” keywords to ensure a closer match between the ads and the search terms;

    ·optimising the advertising text chosen for the sponsored link; and

    ·optimising the content of the landing page.

  10. Mr Watt also conducted an analysis of Malouf’s AdWords campaigns using Veda keywords.  He concluded that:

    ·ad groups were specifically set up for “after business hours” searches to target “brand intent” searches for the Veda website and contact information;

    ·the Clean Your Credit website created a dedicated campaign to target “veda” related searches;

    ·the development of three websites specifically targeting Veda was a deliberate strategy to try to stay in the top three positions of Google sponsored links for all veda terms throughout the day;

    ·ad groups were specifically set up with exact match keywords to target top three positioning on sponsored links for three search terms incorporating the Veda trade marks VEDA, VEDA ADVANTAGE, and VEDACHECK;

    ·targeting the brand names “Veda” and “Veda Advantage” as well as the Veda “contact number and phone number” shows the intention to target existing customers; and

    ·each ad group shows that the advertiser is aware of how to use negative keywords and has chosen not to exclude any “veda” related search.

    THE ALLEGATIONS

  11. Veda alleges that Malouf’s use of the word “veda” (in its various forms and combinations) as keywords and in the text of the sponsored links generated by the use of those keywords contravenes s 120(1) of the Trade Marks Act 1995 (Cth) (Trade Marks Act) in that it is a use as a trade mark of a sign that is substantially identical with, or deceptively similar to, one or more of the Veda Trade Marks in relation to services within the class 36 specifications of each of the trade marks. An additional or alternative claim (based on s 120(2) of the Act) that the use of the Veda and Veda Advantage signs was in relation to services of the same description as the registered services was abandoned during final oral submissions.

  12. Malouf denies that it infringed the registered Veda Trade Marks for the following reasons.

  13. First, its use of the Veda Trade Marks was and is not a trade mark use.

  14. Secondly, it did not and does not use the Veda Trade Marks in respect of, or supply, services for which they are registered.

  15. Thirdly, in the alternative that the Court were to find that it did use the Veda Trade Marks as trade marks it did so in good faith, to indicate the kind, intended purpose or some other characteristic of the services.

  16. Veda also alleges that Malouf has engaged in false or misleading conduct in contravention of the Australian Consumer Law (ACL), which is contained in Sch 2 to the Competition and Consumer Act 2010 (Cth), specifically by, in trade or commerce:

    (1)engaging in conduct that is misleading or deceptive or is likely to mislead or deceive (s 18);

    (2)in connection with the supply or possible supply or the promotion by any means of goods or services:

    (a)making false or misleading representations that it has “a sponsorship, approval or affiliation” with Veda (s 29(1)(h)); and

    (b)making false or misleading representations with respect to the price of its services (s 29(1)(i)).

  17. This judgment is concerned with the question of liability only, an order having been made on 3 February 2015 to deal with liability as a separate question from relief, should it come to that.

    DID MALOUF INFRINGE THE VEDA TRADE MARKS?

  18. Before answering this question it is necessary to refer to the relevant statutory provisions and the matters in dispute.  I will discuss the relevant principles in the contexts in which they arise for consideration.

    In what circumstances is a trade mark infringed?

  19. A trade mark is infringed in the circumstances described in s 120 of the Trade Marks Act. Section 120(1) provides:

    A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.

  20. “Sign” is broadly defined in s 6.  Relevantly it includes “the following or any combination of the following, namely, any letter, word, name, signature, numeral, device, brand, heading, [or] label …”. 

  21. “Trade mark” is defined in s 17 as:

    [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.

  22. A “use of a trade mark in relation to services” means use of the trade mark in physical or other relation to the services:  s 7(5).

  23. Section 122(1) provides that, in spite of s 120, a person does not infringe a registered trade mark in certain circumstances. These circumstances relevantly include 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;

    (c)the person uses the trade mark in good faith to indicate the intended purpose of goods (in particular as accessories or spare parts) or services;

    The issues

  24. There is no dispute in this case that Malouf’s use of the word “veda” and its variations in its Google AdWords campaigns was use in the course of trade.  Nor is there any dispute that it was use of a sign that is substantially identical with, or deceptively similar to, the Veda Trade Marks.  It is also common ground, consistently with the observation made by Nicholas J in Australian Competition and Consumer Commission v Trading Post Australia Pty Ltd (2011) 197 FCR 498 (ACCC v Trading Post) at [75], that there are many circumstances in which the use of trade marks by advertisers, even those owned by a competitor, is “quite legitimate”.

  25. The issues that fall for consideration, then, are these:

    (1)Did Malouf’s use of the word “veda” in its various forms as keywords in its Google AdWords campaigns and/or the references to “veda” in the text of its sponsored links involve use of the word “as a trade mark” within the meaning of s 120 of the Trade Marks Act?

    (2)If Malouf did use “veda” as a trade mark, did it do so in relation to services in respect of which the Veda Trade Marks are registered for the purposes of s 120(1) of the Trade Marks Act?

    (3)If so, has Malouf made out a defence under ss 122(1)(b)(i) or 122(1)(c), that is to say, has Malouf proved that it used the word in good faith to indicate the kind or intended purpose of the services?

    Has Malouf used the Veda Trade Marks as trade marks?

  26. The concept of “use as a trade mark” within s 120 of the Trade Marks Act must be understood in the context of the definition of “trade mark” in s 17 and the legislative history: E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144 at [41]–[42]. The question is whether the mark is used or intended to be used to distinguish goods or services, as the case may be, dealt with or provided in the course of trade by one person, from the goods or services so dealt with or provided by another, that is to say, to indicate a connection in the course of trade between its goods or services and those of another. In Gallo the High Court went on to endorse the following statement of the Full Court in Coca Cola Company v All‑Fect Distributors Ltd (1999) 96 FCR 107 at [19]:

    Use “as a trade mark” is use of the mark as a “badge of origin” in the sense that it indicates a connection in the course of trade between goods and the person who applies the mark to the goods:  see Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326 at 341, 351. That is the concept embodied in the definition of “trade mark” in s 17 — a sign used to distinguish goods dealt with in the course of trade by a person from goods so dealt with by someone else.

  27. These principles apply equally to trade marks for services.

  28. The question must be determined objectively (Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326 at 335 per Lockhart J; Lift Shop Pty Ltd v Easy Living Home Elevators Pty Ltd (2014) 311 ALR 207; [2014] FCAFC 75 at [33]). In other words the answer does not depend on the subjective intention of the alleged infringer. There may be a trade mark use regardless.

  29. In considering the answer, it is necessary to examine “the purpose and nature” of the impugned use (TheShell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 426 per Kitto J, with the agreement of Dixon CJ, Taylor and Owen JJ; Johnson & Johnson at 347 per Gummow J) in order to see whether the words are in fact being used as a trade mark (Johnson & Johnson per Lockhart J at 335) or, as Lindgren J put it in Aldi Stores Ltd Partnership v Frito‑Lay Trading Company GmbH (2002) 190 ALR 185; [2001] FCA 1874 at [76], “whether they would be likely to be understood to do so by relevant readers and hearers in the circumstances in which the words [are] likely to be read and heard”.

  30. The reason for the focus on purpose is obvious.  It will be recalled that “trade mark” is defined in the Act by reference to the purpose for which a sign is used or intended to be used.  Thus, to be used as a trade mark a sign must, in an objective sense, be used or intended to be used for the purpose of distinguishing the goods or services of one trader from those of another — as a badge of the origin of the goods or services. 

  31. Context is “all-important”:  Shell at 422. Where the sign is a word mark, the relevant context includes “the totality of the packaging, including the way in which the words are displayed in relation to the goods and the existence of a label of a clear and dominant brand” (Nature’s Blend Pty Ltd v Nestlé Australia Ltd (2010) 272 ALR 487; [2010] FCAFC 117 at [491]). Where, as here, the sign is used in advertising, the relevant context will include the surrounding text. The question here will be whether, in the way the Veda name is used, it would appear to consumers as possessing the character of a brand for the purpose of indicating a connection in the course of trade between the services the subject of the advertisement and Malouf, to distinguish its services from the services of other traders: compare Shell at 425.

  32. There are two aspects to Veda’s claims.  One relates to the selection and nomination as keywords of the word “veda” in its various forms and alone or in combination with other words (which I shall call the Veda keywords), the other to the incorporation of “veda” in the text of the sponsored links.  I shall deal first with the allegation relating to the selection and nomination of the Veda keywords.

    Use in the keywords

  33. There is a dearth of authority on whether use of a trade mark in a keyword is trade mark use under the Trade Marks Act. The learned authors of the leading text on trade mark law in Australia, Shanahan’s Australian Law of Trade Marks and Passing Off (5th ed) doubted whether an advertiser who uses keywords which are also registered trade marks uses them as trade marks, that is, as a means of distinguishing its goods or services from the goods or services of others.

  34. They postulated at [115.1110]:

    One interpretation is that the keywords/trade marks are used to identify internet users who have an interest in a particular product and to then present alternatives to those users.  The search results present those alternatives rather than suggesting that the keywords used are identifying the origin of any particular goods or services being offered in the ensuing advertisements. … The end result would be that keyword generated advertising per se would not be a trade mark infringement.

  35. In my opinion, Malouf’s use of the Veda keywords is not a trade mark use.

  36. First, on the agreed facts, the advertiser merely selects the keywords and provides them to Google.  This is not use indicating a connection in the course of trade between the services provided by Malouf and the services provided by any other trader.  Objectively, Malouf is or was not using the keywords as a sign to distinguish its services from the services of others.  Rather, it has used them to identify internet users who may have an interest in using its services. 

  37. Secondly, the Veda keywords may be acquired by anyone under Google’s AdWords program, including Malouf’s competitors, and their use as search terms will produce not only sponsored links to Malouf’s websites but also sponsored links to those of its competitors as well as organic search results, pre-eminently Veda’s own website.  While far from determinative, these circumstances are not irrelevant.  As the Full Court observed in Lift Shop at [41]:

    Such use may well provide part of the context in which the alleged infringer has used the sign and inform the question of whether, in such use, the sign performs the function of a trade mark.

  38. In the present case, these circumstances are part of the relevant context.

  39. Thirdly, the keywords are invisible to consumers.  Veda submitted that this circumstance is immaterial.  It described use of a trade mark under the Act as an expansive concept.  It referred to the fact that s 7(5) speaks of use “in physical or other relation to the services” (emphasis added).

  40. But the proposition that using words which are invisible and inaudible, indeed imperceptible, to consumers is using them as a trade mark makes no sense.  How could the keywords be understood to be used to distinguish the services of one trader from those of another when the keywords are indiscernible?  How could it appear to consumers that, by Malouf’s designation of the Veda keywords to Google, the words are used to denote a connection in the course of trade between Malouf’s services and the services provided by another trader, or to distinguish its services from the services of others, when the consumers have not seen or otherwise perceived the keywords? 

  41. Moreover, in a case where the consumer does not merely search for “veda”, but enters a term or phrase which includes the word “veda”, how would the consumer know that the trade mark was being used at all?  If the consumer searches for “veda credit report”, for example, and the search returns a Malouf advertisement, a consumer who understands how the AdWords program operates might imagine that the keyword generating the advertisement was “veda”.  But equally the consumer might imagine that the keyword or words were “credit report”.  As the keyword is invisible, the consumer cannot know.  The fact that use need not be in physical relation to the services does not address the question at hand.  In any case, I doubt very much whether the Parliament had in mind a metaphysical relationship, no matter how expansive the concept of use was intended to be.

  42. Veda submitted that the fact that a keyword was not visible did not preclude Rangiah J from finding trade mark infringement in Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd [2015] FCA 554, referring to his Honour’s remarks at [429]–[436] dealing with a particular use of the registered trade mark “Harbour Lights” by business rivals of the exclusive licensee of the trade mark:

    429There is in evidence a printout of what is called the “source data” for the website The source data includes a “meta-tag”, being “Harbour Lights”. Mr Mezzatesta deposed, without objection, that a meta-tag is not displayed on the screen but is used by search engines such as Google to determine what search results to return when a user undertakes a search.

    430The source data includes the title “Cairns Luxury Accommodation – Waterfront Apartments – Harbour Lights – Cairns Queensland”. Under that are “keywords”. The first of those is indecipherable in the printed document put into evidence, but the second is “Harbour Lights”. The source data also includes the words “content: = Harbour Lights Apartments in Cairns offer luxury private waterfront apartment accommodation for holiday letting and short-term rental”.  The applicants allege that the use of those words in the source code infringes their trade marks.

    431The respondents argue that there is no evidence that the use of website keywords is within the control of the respondents.

    432Mr Mezzatesta deposed that on 28 May 2013 he looked at the source data for the website using his browser. He then caused the printout to be made of the source data for that website. Mr Mezzatesta’s evidence satisfies me that the source data that he located was visible to those who know what to look for, underlay Liv’s website and influenced search results.

    433There is no direct evidence that the source data was placed there by someone acting on behalf of Liv. However, there is evidence that Liv engaged an IT consultant to create the website. There is evidence that Liv operates the website and has had the content of the website changed from time to time. From this evidence, I accept that Liv has control of the website, including the source data for the website. I infer that the words comprising the source data must have been included to optimise the search results for Liv’s benefit. In the absence of any suggestion as to how else the relevant words could have come to form part of the source data for Liv’s website, I infer that the IT consultant must have included those words, with Liv’s acquiescence. I therefore consider that the words were “used” by Liv.

    434The use of the words “Harbour Lights” in the title “Cairns Luxury Accommodation – Waterfront Apartments – Harbour Lights – Cairns Queensland” appears to be merely a descriptor of the waterfront apartments that are referred to in the title. The first use of the words “harbour lights” in the keywords also appears to be a reference to the apartments appearing, as they do, in the context of surrounding words such as “Cairns apartments”, “waterfront, luxury apartment” and “harbourside”. I cannot see that those words were used as a badge of origin.

    435The phrase “content: = Harbour Lights Apartments in Cairns offer luxury private waterfront apartment accommodation for holiday letting and short term rental” seem to use the words “Harbour Lights Apartments” effectively as a business name. Those words represented that Harbour Lights Apartments was the business which offers the accommodation for letting and short-term rental. The words distinguished Liv’s services from those offered by other providers. Their use was trade mark use.

    436This use of “Harbour Lights” meets the elements of s 120(1) of the TMA in relation to both registered trade marks. It does so in relation to each of the Class 36 and Class 43 services, other than “commercial real estate agency services”, “agency services for the leasing of real estate properties” and the hotel services.

  1. Two things must be understood about this extract.  The first is that the “keywords” it refers to are distinct from, and should not be confused with, keywords in the Google AdWords program.  The “keywords” in Accor were words embedded in metatags.  The second is the nature of metatags.  These are words placed in the source code of a website and its pages by the person in charge of the website.  Malouf submitted (without contradiction) that they are used by search engines to assist in indexing and ranking websites when displaying search results. 

  2. It is difficult to know what to make of the extract from Accor

  3. First, the metatags in Accor were not entirely invisible.  To the contrary, in that case there was apparently evidence that the source data was visible “to those who know what to look for”.  Here, however, it was not in dispute that the keywords were invisible to consumers.

  4. Second, the decision appears to be at odds with the judgment of Kenny J in Complete Technology Integrations Pty Ltd v Green Energy Management Solutions Pty Ltd [2011] FCA 1319 to which Rangiah J did not refer and to which his Honour’s attention was not directed.

  5. In Complete Technology Kenny J rejected the contention that the unauthorised use of  registered trade marks as metatags was trade mark use.

  6. Complete Technology Integrations Pty Ltd (CTI) owned a number of registered trade marks for the acronym “CTI” and the following terms: “CTI Australia”, “Complete Technology Integrations”, “CTI Energy Management” and “CTI Building Automation”.  CTI claimed (amongst other things) that a competitor — Green Energy Management Solutions Pty Ltd (Green Energy) — and three of its directors and shareholders had infringed its registered trade marks in several ways.  One of those ways was said to be by using as metatags the acronyms and words “CTI”, “cti”, “CTI Canberra” and “capital technology”.  When internet users with an interest in services of the kind offered by CTI searched the internet using any of these terms, the metatags captured the search and “[threw] up the website or the page in respect of which the metatags [were] placed as part of an answer to the search” (Complete Technology at [57]).

  7. CTI contended that Green Energy’s use of CTI’s registered trade marks as metatags was use of the marks as trade marks within the meaning of the Trade Marks Act because Green Energy had used the marks to “attract customers who were looking for a particular commercial source of services by reference to the name ‘CTI’”. Her Honour accepted that the use of the marks as metatags could help Green Energy to benefit from CTI’s goodwill but she rejected the contention that the use was use as a trade mark, stating (at [32]):

    [Section] 120(1) of the TMA requires that [scil.] “the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered” before there can be an infringement. I do not accept that the use of any of CTI’s Registered Trade Marks in Green Energy’s metatags would constitute a trade mark infringement for the purposes of s 120(1). Metatags are invisible to the ordinary internet user, although their use will direct the user to (amongst other websites) Green Energy’s website.  Once at the Green Energy website, then, in the ordinary course, the internet user will be made aware that the website is concerned with Green Energy’s services.  It cannot, therefore, be said that the use in a metatag of CTI’s Registered Trade Marks is a use that indicates the origin of Green Energy’s services.  Thus, metatag use is not use as a trade mark:  compare Coca-Cola Co v All-Fect Distributors Ltd (1999) 96 FCR 107 at 115–6 [20].

    (Emphasis added.)

  8. In my respectful opinion, her Honour was correct.  The position in the present case is relevantly indistinguishable. 

  9. Furthermore, the issue of whether using registered trade marks as keywords is use as a trade mark was resolved against the registered owner in Intercity Group (NZ) Ltd v Nakedbus NZ Ltd (2014) 3 NZLR 177.

  10. In New Zealand there will be infringement of a registered trade mark if the relevant use of the sign is “in such a manner as to render the use of the sign as likely to be taken as being use as a trade mark”:  Trade Marks Act 2002 (NZ), s 89(2).

  11. In Intercity, Asher J, sitting in the High Court of New Zealand, held that the use by the alleged infringer, Nakedbus, of “inter city” and variations of it as keywords in the Google AdWords program did not infringe the plaintiff’s registered trade mark “INTERCITY”. His Honour said at [85]:

    The position in relation to the use by Nakedbus of the keywords is entirely different to a use on packaging or other communications to the public.  The use of the keyword was by Nakedbus when it purchased that keyword prior to the placement of its advertisement, and then by Google when, through its search engine, it provided for the Nakedbus advertisement to appear when a consumer keyed “intercity” into a computer.  In such a situation, the use of the keyword by Nakedbus and indeed Google was not seen by the consumer at all.  As Mr Harris observed, these actions were invisible to everyone except Google and the advertiser.  If the “use” could not be seen by the consumer it could not be “taken as” anything, let alone “taken as being used as a trade mark”.

  12. His Honour went on to point out (at [86]) that this did not mean that the trade mark owner was necessarily without a remedy because using an identical or similar trade mark in the advertisement might itself be an infringing use.  But in the absence of evidence that a consumer would know or understand the use of keywords, his Honour was not prepared to assume that the consumer had any awareness of how they are used:

    Insofar as the use of the keyword was an act that was not seen or known or understood by the consumer, there was no use of the sign “likely to be taken as being used as a trade mark”.

  13. Veda submitted that Intercity was distinguishable because it was not shown that a consumer would know or understand the use of keywords.  But neither was it here. 

  14. Veda also referred to another New Zealand decision — Tasman Insulation New Zealand Ltd v Knauf Insulation Ltd (2014) 108 IPR 162; [2014] NZHC 960. In that case, which was heard before Intercity but decided afterwards, Brown J, without referring to Intercity, came to the opposite conclusion. His Honour considered that invisible use of a registered trade mark by the use of a metatag was use as a trade mark “where the mark can be accessed and viewed by an informed internet user” (at [236]). But there was no evidence of that in the present case. Brown J did refer (at [226]) to Kenny J’s judgment in Complete Technology but read the decision down by ignoring the conjunctive adverb “therefore” in the passage extracted above at [136]. His Honour (wrongly in my respectful opinion) treated Kenny J’s conclusion that the metatags did not indicate the origin of Green Energy’s services as an independent finding, rather than one that flowed from her Honour’s consideration of the nature and function of metatags including their invisibility to the ordinary internet user.

  15. Veda also relied on the recent European authorities which Asher J declined to follow in Intercity Google France SARL v Louis Vuitton Malletier SA (C-235/08) [2011] Bus LR 1; All ER (EC) 411 and Interflora Inc and Anor v Marks & Spencer No. 5 [2014] EWCA Civ 1403 — and drew attention to a remark in the leading English textbook, Kerly’s Law of Trade Marks and Trade Names (15th ed), at [27–071] that the fact that a metatag is normally not seen should not make any difference. Veda submitted that in the European context, the courts have accepted that use of keywords is use in the course of trade and use of a sign in respect of goods and services. Veda also submitted that “use in the course of trade in respect of goods or services” in the European context is the equivalent concept to “use as a trade mark” under the Trade Marks Act.

  16. Both Google France and Interflora were concerned with the use of keywords in the Google AdWords program. Nevertheless, I do not regard those authorities as instructive. The law is not the same, understandably the judgments do not refer to Australian law, and the passages upon which Veda relied were taken out of context. I reject the submission that “use in the course of trade in respect of goods or services” in the European law is the equivalent concept to “use as a trade mark” in the Trade Marks Act, if by that submission Veda intended to imply that the expressions have the same meaning.

  17. The phrases “using in the course of trade” and “in relation to goods and services” considered in Google France and Interflora appear in Art 5(1)(a) of the First Council Directive of 21 December 1988 to Approximate the Laws of the Member States Relating to Trade Marks (89/104/EEC) [1989] OJ L 40/1 and Art 9(1)(c) of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community Trade Mark [1994] OJ L 11/1.  Article 5(1)(a) provides:

    The registered trade mark shall confer on the proprietor exclusive rights therein.  The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:

    (a)any sign which is identical with the trade mark in relation to goods or services which are identical with those for which the trade mark is registered[.]

  18. Article 9(1)(c) provides:

    A Community trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:

    (c)any sign which is identical with or similar to the Community trade mark in relation to goods or services which are not similar to those for which the Community trade mark is registered, where the latter has a reputation in the Community and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the Community trade mark.

  19. It is a condition of infringement under Art 5(1)(a) that the use is such as to affect or be liable to affect the functions of the trade mark:  Cosmetic Warriors Ltd v amazon.co.uk Ltd [2014] ECC 28; [2014] EWHC 181 (Ch) at [28]. Neither “using” nor “using in the course of trade”, however, is defined.

  20. Veda relied on a passage in the reasons in Google France at [85].  There, the Grand Chamber of the European Court of Justice considered that the fact that the advertisement appears immediately following the entry of the trade mark search term by the internet user and is displayed at a point when the trade mark is also displayed on the screen “in its capacity as a search term”, “the internet user may err as to the origin of the goods or services in question”.  In these circumstances, it held at [85]:

    [T]he use by the third party of the sign identical with the mark as a keyword triggering the display of that ad is liable to create the impression that there is a material link in the course of trade between the goods or services in question and the proprietor of the trademark …

  21. But the Grand Chamber was not addressing the question of “use” at this point.  It was addressing the question of “adverse effect on the function of indicating origin”.  The question of “use” was addressed earlier (at [50]), under the heading “use in the course of trade”.  There, the Grand Chamber stated:

    The use of a sign identical with a trade mark constitutes use in the course of trade where it occurs in the context of commercial activity with a view to economic advantage and not as a private matter.

  22. That is not the test of use as a trade mark under the Australian Act.

  23. The Grand Chamber in Google France did not consider whether the purpose for which the keywords were used was to distinguish between the goods or services dealt with or provided by one person from those dealt with or provided by another.  Nor was that question considered in Interflora.  

  24. If, however, the finding by the Grand Chamber at [85] is properly to be taken as a statement of its opinion on the use of keywords to indicate a connection in the course of trade between the services of the trader who purchased them and the services of the trade mark owner, I respectfully disagree.  On this point I prefer the opinion of the Court of Appeal of England and Wales in Reed Executive plc v Reed Business Information Ltd [2004] RPC 40; [2004] EWCA Civ 159 (cited with approval by Lewison LJ in Interflora v Marks & Spencer [2013] 2 All ER 663; [2012] EWCA Civ 1501 at [56]). In Reed, Reed Executive plc was the registered owner of the trade mark “Reed” registered in respect of employment agency services, which was used by Reed Business Information Ltd as a Yahoo keyword to generate banner advertisements for its recruitment website totaljobs.com. The word “Reed” was not visible in the advertisements. Jacob LJ, with whom Rix and Auld LLJ agreed, said at [137]–[140]:

    As anyone who uses internet searches knows, in addition to the results of a search under a particular name or phrase, one often gets unasked for “banner” advertisements.  Most of the time they are nothing but an irritation and are ignored. But you can, if you wish, “click-through”, i.e. click on the banner and be taken to the advertiser’s site.

    The web-using member of the public knows that all sorts of banners appear when he or she does a search and they are or may be triggered by something in the search.  He or she also knows that searches produce fuzzy results — results with much rubbish thrown in.  The idea that a search under the name Reed would make anyone think there was a trade connection between a totaljobs banner making no reference to the word “Reed” and Reed Employment is fanciful.

  25. In Interflora Marks & Spencer used “interflora”, a registered trade mark belonging to Interflora Inc, and variations thereof as keywords in a Google AdWords campaign to trigger advertisements for the online sale of “M & S Flowers”.  The trial judge had referred a number of questions to the European Court.  At [105] the Court of Appeal of England and Wales referred to some of its findings:

    The court accepted that where a competitor of the proprietor of a trade mark with a reputation selects a sign identical to the trade mark as a keyword in an Internet referencing service, the purpose of that use is to take advantage of the character and repute of the trade mark, and further, that the competitor will derive a real benefit for which he has not paid.  Such use will, if it is “without due cause” amount to an infringement, and that is likely to be the case if the goods are mere imitations of those of the trade mark proprietor.  But it will not be the case if the goods are genuine alternatives and the use does not cause dilution or tarnishment or adversely affect one of the functions of the trade mark …

    (Emphasis added.)

  26. Veda cited the emphasised passage. In that passage the European Court was considering a question posed by Art 9(1)(c) of the Regulation, namely whether the use of the sign took unfair advantage of, or was detrimental to, the distinctive character or repute of the trade mark. That is not a question that arises under the Trade Marks Act.

  27. In the passages from both Google France and Interflora, then, the European Court’s consideration centred on the effect of the allegedly infringing use, not on its purpose or nature.

  28. In contrast, in Intercity Asher J approached the question of whether the use of trade marks as keywords was use as a trade mark by focussing on “the essential function” of a trade mark, namely, “to guarantee to the consumer the identity of the origin of the trade marked goods or services by enabling that consumer to distinguish the goods or services from others which have a different origin”: (2014) 3 NZLR 177 at [70]. His Honour accepted (at [71]) a submission that it was important not to confuse dicta relating to the issue of confusion and deception in deciding whether use constitutes “use as a trade mark”. He went on to cite a passage from Shanahan at [85,560] which referred to the definition in s 17 of the Trade Marks Act, and which emphasises that “factors relevant to whether there is a misrepresentation or likelihood of deception have no role to play in deciding the question of what constitutes ‘use as a trade mark’”.

  29. In Intercity Asher J was also taken to Google France and urged to follow it. He declined to do so, noting (at [76]) that, given the difference in the relevant legislation and case law, it could not be regarded as authoritative in New Zealand. For the same reasons neither Google France nor Interflora is authoritative here.

  30. I do not accept that the use of a sign which is invisible to the consumer is use as a trade mark within the meaning of the Trade Marks Act.

    Use in the sponsored links

  31. The use of Veda word marks in the titles of the sponsored links is more complicated.  For a start the words are visible.

  32. In the first period (from at least August 2012 to October 2014) the word “Veda” appeared in the following hyperlinked advertisement headings:

    ·Clean Your Veda File;

    ·Fix My Veda History;

    ·Fix Veda File;

    ·Fix Your Veda File;

    ·Fix Your Veda File Now;

    ·Fix Your Veda History;

    ·Fix Your Veda Rating;

    ·Fix Your Veda Report;

    ·Fix Your Veda score;

    ·Fix Your Veda-File;

    ·Get Your Veda Credit File;

    ·Get Your Veda File;

    ·Get Your Veda File Now;

    ·Got a Bad Veda File?;

    ·Repair Your Veda File;

    ·Repair Your Veda file;

    ·Repair your Veda File NOW;

    ·Repair Your Veda File;

    ·Repair Your Veda History;

    ·Repair Your Veda Score

    ·The Veda Report Centre;

    ·The Veda-Report Centre; and

    ·Veda Credit File Repairs.

  33. There was no reference, however, to “veda” or “Veda” in the URLs displayed under the headings.

  34. Malouf submitted that the reference to Veda in each instance was not trade mark use because it was not used to distinguish the Malouf business from other businesses.  Rather, consumers seeing the advertisements would have understood the phrases the subject of Veda’s complaint, including in the context of the other text in the advertisements, as describing the character of the business:  repair of Veda credit reports.

  35. The fact that a sign contains descriptive elements does not preclude it from being a “badge of origin”:  Nature’s Blend at [19] and the cases cited there. As Gummow J put it in Johnson v Johnson at 347, to say that a trade mark is used as a description, “is not to gainsay the point made by Dixon CJ in Mark Foys Ltd v Davies Coop and Co Ltd (the Tub Happy case) (1956) 95 CLR 190 at 194–195 that language is not always used to convey a single, clear idea; a mark may have a descriptive element but still serve as a badge of trade origin”.

  36. Commonly, this question arises where ordinary English words are used in a trade mark, such as “Page Three” (News Group Newspapers Ltd v The Rocket Record Co Ltd [1981] FSR 89 at 102, to which Gummow J referred in Johnson & Johnson), “Kettle” (Pepsico Australia Pty Ltd (t/as Frito-Lay Australia) v Kettle Chip Co Pty Ltd (1996) 135 ALR 192) and “Lift Shop” (Lift Shop), or even arguable neologisms like “caplets” (Johnson & Johnson), or geographical names, such as “Michigan” (Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511) or “Colorado” (Colorado Group Ltd v Strandbags Group Pty Ltd (2007) 164 FCR 506 where the word was applied to shoes and backpacks). Unlike “kettle”, for example, the word “veda” is not essentially or intrinsically descriptive. As Lockhart J observed in Pepsico at 193, it is easier to find infringement where the registered mark consists of a coined phrase (as in the Tub Happy case) than where the registered mark is “a generally descriptive word” which has acquired a secondary meaning (because in the latter case there is an inherent risk that when used by others in trade the word will be used in its original descriptive sense).  The evidence does not disclose the history of the selection of the word “Veda”.  It may not be a coined term.  Veda is a Sanskrit word referring to the sacred books of the Hindu religion.  Plainly, however, it is not used in this sense by Malouf.

  1. In any event, Veda took the instruction out of context.  The direction to staff was a direction not to deviate from the script, no matter what question the caller might ask.  The direction not to respond to the question “are you Veda” is just as likely to be an innocuous direction for staff to stay “on message”. 

  2. Nevertheless, for the reasons given at [253] above, I accept that there is a real chance that ordinary or reasonable members of the relevant class of consumer whose search generates a sponsored link advertisement featuring the words “The Veda Report Centre” will think that if they click on the link they will be contacting Veda.

  3. I reject Veda’s contention that Malouf’s “ad copy” after October 2014 in which there was no reference to Veda in the sponsored links could mislead a consumer into thinking that any of the Malouf businesses had an association with Veda.  It defies common sense to conclude that someone looking for information about Veda or looking to contact Veda is likely to be taken in by an advertisement which makes no mention of Veda.  I respectfully adopt the observations of Jacob LJ in Reed extracted at [153] above.

  4. In Cosmetic Warriors it was held in the context of a claim of trade mark infringement that Amazon’s use of keywords including “lush” (which was also a trade mark for soap owned by the first claimant and which the second was authorised to use) did not create a likelihood of confusion where the advertisement did not display the word “lush”. 

  5. Here, the ordinary or reasonable member of the class of consumers with the characteristics I have attributed to it would understand the difference between advertisements and organic search results and, in the overwhelming majority of cases, as Mr Watt’s evidence disclosed, would pass over the advertisements. 

  6. In general, while there is a possibility of confusion — even error — reading only the titles to some of the sponsored links, in the absence of a reference to Veda in the URL I do not accept that ordinary or reasonable consumers are likely to be misled into thinking that the Malouf business and Veda are one in the same, are related in any way, or have the sponsorship or approval of Veda.  As the Full Court said in SAP Australia Pty Ltd v Sapient Australia Pty Ltd (1999) 169 ALR 1 at [51]:

    The characterisation of conduct as “misleading or deceptive or likely to mislead or deceive” involves a judgment of a notional cause and effect relationship between the conduct and the putative consumer’s state of mind.  Implicit in that judgment is a selection process which can reject some causal connections, which, although theoretically open, are too tenuous or impose responsibility otherwise than in accordance with the policy of the legislation.

  7. The connection Veda seeks to draw here is too tenuous. 

  8. I also reject Veda’s submission that there was a misrepresentation by silence as a result of the absence of a statement disassociating the Malouf business from Veda.  The inclusion in the advertisement of the URL, which does not include “veda”, would dispel any passing misconception.

  9. I take a different view, however, of the sponsored links entitled “The Veda Report Centre”.  The use of the definite article points to the existence of only one “centre”:  one belonging to Veda.  The message being conveyed is that if the consumer clicks on the link, he or she will be directed to Veda’s Report Centre.  In this way some members of the class could be misled into thinking that these are advertisements for Veda, regardless of the absence of a reference to Veda in the URLs. 

  10. Veda submitted that the search results, including the sponsored links, appear differently on a mobile phone.  That is certainly true.  For a start, when the search results first load, less of the screen can be seen, particularly on the smaller phones.  Further, in an advertisement that appears in response to the search “contact veda”, a telephone icon can be seen enabling a call to be made directly from the search page and the heading states “Call:  1300 739 860”.  Viewed in isolation, the relationship between the heading of that sponsored link and the search terms that trigger the link is troubling, because the headline purports to be an answer to the searcher’s specific inquiry.

  11. For the reasons I have discussed above, however, the content of the sponsored link must be considered as a whole.  I do not believe that an ordinary and reasonable member of the relevant class would conclude, after viewing the advertisement, that the services Malouf provides or will provide are the services of, or have the sponsorship or approval of, Veda.  Nor would (s)he conclude that Malouf’s business is the business of, or has the sponsorship or approval of or affiliation with, Veda.  First, the word “veda” appears nowhere on the advertisement.  Secondly, it is marked with the yellow “ad” tag, which the person would understand means it is a result that has appeared because someone has paid for it to appear, not because it is the most accurate result.  And finally, it has a URL which is not suggestive of Veda.

  12. Veda asserted that Credit Repair Australia, one of Malouf’s competitors, has a “disclaimer” on its website and submitted that, “by contrast”, Malouf fails to disclaim an affiliation with Veda.  Veda contended that this is apt to reinforce a consumer’s misapprehension.  This submission must be rejected, not least because it is illogical.

  13. In fact, Credit Repair Australia’s website contains no disclaimer.  It states that it is an authorised agent of Veda.  Malouf’s websites do not.  Logically, any reasonable consumer taking the trouble to compare the websites would conclude that Credit Repair Australia is affiliated with Veda but that the Malouf businesses are not. 

  14. There is, however, a disclaimer on the website of one of Malouf’s other competitors (Fix Bad Debt) (“we are not directly affiliated with Veda”).  While it would have been prudent for Malouf to include disclaimers on its websites, at least with the benefit of hindsight, I do not consider that their absence would cause or reinforce any misapprehension of an association between Malouf and Veda.

  15. At least two of Malouf’s competitors explain on their websites who Veda is; others, including Malouf, appear to take it for granted that anyone coming to their websites would know already.

  16. In my opinion, only an “extraordinarily” or “unusually stupid” consumer who happens to click on a hyperlink embedded in the Malouf advertisements might conclude that he or she is on a Veda or Veda affiliated or sponsored website.  A consumer answering this description is not a member of the relevant class:  see Taco Bell at 181 (Franki J).

  17. The first ACL case should be dismissed, other than with respect to The Veda Report Centre sponsored links.

    Second ACL case

    By its use of the Veda Trade Marks in the keywords, has Malouf represented to consumers that:

    (a)      the services Malouf provides or will provide are the services of, or have the sponsorship or approval of, Veda; and/or

    (b)      Malouf's business is the business of, or has the sponsorship or approval of or affiliation with, Veda?

    Were the representations false or misleading or deceptive, or likely to mislead or deceive, in contravention of ss 18 and/or 29 of the ACL?

  18. It is common ground that, if the pleaded representations were conveyed by the use of the Veda keywords, they would be untrue (and therefore likely to mislead or deceive consumers).  Once again, however, as the only use by Malouf of the keywords occurred during its private dealings with Google of which consumers were entirely ignorant, I do not accept that, by specifying the keywords, Malouf made any representation to consumers.

  19. The second ACL case should be dismissed.

    Third ACL case

    By its use as keywords of the Veda Trade Marks in combination with the word “free” to trigger sponsored link advertisements to its websites did Malouf represent to consumers that it offers free credit reports?

    Was the representation false or misleading or deceptive, or likely to mislead or deceive, in contravention of ss 18 and/or 29 of the ACL?

  20. Veda contends that by its use of certain keywords containing the word “free” to trigger sponsored link advertisements for the Malouf websites, Malouf has made false and misleading representations aimed at consumers searching for Veda’s free credit checking service that Malouf offers free services when it does not.  I reject the contention.

  21. The relevant keywords are:

    ·“veda free credit report”;

    ·“free veda credit check”;

    ·“veda advantage free credit file”;

    ·“veda credit check free”; and

    ·“veda credit file free”.

  22. For the reasons given above, I do not accept that Malouf’s use of keywords of which the ordinary or reasonable consumer would be oblivious amounts to a representation to consumers. 

  23. Even if I am wrong in this respect, and such a representation were conveyed by the keywords, I do not accept that it is likely to cause the ordinary or reasonable consumer in the relevant class to fall into any error, because the advertisements themselves say nothing about price and the ordinary or reasonable member of the class would know that “searches produce fuzzy results — results with much rubbish thrown in” (Reed above at [153]).

  24. It follows that the third ACL case should also be dismissed.

    Fourth ACL case

    Considered as a whole has Malouf engaged in conduct which is misleading or deceptive, or likely to mislead or deceive, in contravention of s 18 of the ACL?

  25. Veda argued that “the totality of [Malouf’s] conduct in its commercial context” was also apt to mislead or deceive.  The conduct it relied upon was said to include:

    (a)specification of keywords and match types in AdWords campaigns to generate advertisements in response to consumer searches for Veda;

    (b)targeting consumers “trying to look for Veda”;

    (c)representations made by the appearance of the sponsored link advertisements; and

    (d)repeated prominent uses of “Veda” on its landing pages.

  26. It is not unlawful per se for a business to identify (or target) potential customers by focussing on their concerns or interests so that it may market its products or services to them. Anyway, s 18 is a consumer protection provision. “It is not concerned, as such, with any unfairness of competition in trade as between two traders”: Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 226 (Stephen J).

  27. I am not persuaded that Malouf’s conduct as a whole is apt to mislead or deceive as alleged.  To the contrary, it seems to me that any misconception that ordinary or reasonable members of the relevant class of consumer might have had about the relationship between Veda and the Malouf businesses, indeed any confusion, (including that which might have been produced by the advertisements for The Veda Report Centre) would be dispelled once the consumers saw the references to Veda in the context in which they appeared on the landing pages.

  28. First, the name of the relevant Malouf business is prominently displayed on each of the landing pages and it does not include “Veda”.  As Malouf submitted, if the business were Veda’s ordinary or reasonable consumers would expect to see “Veda” feature in the business name.

  29. Secondly, there is no statement to the effect that the relevant Malouf business is associated or affiliated with, or sponsored by, Veda.  There is no reason to believe that ordinary or reasonable members of the class would deduce from Malouf’s conduct considered as a whole that Malouf was affiliated with Veda or had Veda’s sponsorship or approval.

  30. Thirdly, the natural inference from the statements which appear on the Credit Fix Australia landing page is that it is in the business of repairing credit files.  Nothing more.  In my opinion, ordinary or reasonable members of the relevant class are unlikely to conclude that a person whose business it is to repair credit files is the same entity or likely to be related to an entity which is in the business of producing those files, at least not without a statement to that effect.

  31. The landing pages for Credit Clean Australia and Clean Your Credit are even more explicit.  Each draws a clear distinction between the relevant Malouf business and Veda.  Both display letters received “from Veda”.  The Clean Your Credit landing page proclaims:

    Don’t take our word for it, here are letters from Veda Advantage after our clients disputable defaults were removed!

    (Original emphasis.)

  32. Underneath this proclamation is the beginning of a letter prominently displaying the Veda logo, which is quite unlike the Clean Your Credit logo.

  33. The Credit Clean Australia landing page similarly states in large font:

    Here is a sample letter received from Veda after our customer’s disputable default was removed!

    (Original emphasis.)

  34. As Malouf put it, this is very much an “us” (“our customer”, that is a Malouf customer) and “them” (Veda) approach.

  35. Moreover like the letter on the Clean Your Credit landing page, the sample letter contains the Veda logo which is markedly different from the Credit Clean Australia logo.

  36. Fourthly, the letters aside, all the other references to Veda on the Malouf landing pages are merely descriptive of the kind or source of the credit file. 

  37. Fifthly, if the hypothetical consumer is confused even at this stage and clicks on the hyperlink entitled “Frequently Asked Questions” on either the Credit Clean Australia or Clean Your Credit website, (s)he will see the following question and answer:

    10.      How long does it take to remove defaults if they can be removed?

    Veda promotes up to 30 days to have a response but the time can vary depending on which avenue is taken to assist in removing them.

  38. A similar question and answer appear on the Credit Fix Australia website.  These answers make it plain that Veda and the relevant Malouf business are different entities.

  39. At all events, as Veda well knows, Malouf does provide its customers with Veda reports and it does “repair”, “clean” or “fix” such reports.  In McWilliam’s Wines at 404 Smithers J, with whom Northrop and Fisher JJ generally agreed, said that it was “difficult to think that conduct is truly misleading or deceptive if it tells the truth and is such that if it is observed by persons who have no false ideas concerning extraneous matters nobody will be misled”.

  40. Veda’s approach is selective, taking selected words and acts in isolation without viewing them in context, an approach which was rightly deprecated by Gordon J in Australian Competition and Consumer Commission v Dukemaster Pty Ltd [2009] FCA 682 at [119].

  41. The fourth ACL case must be dismissed.

    CONCLUSION

  42. I am satisfied that Malouf infringed the Veda Trade Marks by using the sign “Veda” as a trade mark in its sponsored link advertisements featuring the text “The Veda Report Centre” and “The Veda-Report Centre” for its Clean Your Credit business in October 2014 when that sign was substantially identical with, or deceptively similar, to the Veda Trade Marks in relation to services in respect of which those marks are registered.  In all other respects, however, the trade mark infringement claim has not been made out. 

  43. I am also satisfied that Malouf contravened ss 18 and 29(1)(h) of the ACL by its use of the terms “The Veda Report Centre” and “The Veda-Report Centre” in its sponsored link advertisements, but not otherwise.

  44. The parties should bring in short minutes of order reflecting these reasons within 14 days.  I will list the matter for directions to set a timetable for the trial of the remaining issues.

I certify that the preceding three hundred and five (305) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Katzmann.

Associate:  

Dated:       21 March 2016


Schedule A

Summary of Match Type Settings

+my +veda +file
 +veda
 +veda +cra
 +veda +credit
 +veda +credit +history
 +veda +file
 +veda +history
 +veda +rating
 +veda +record
 +veda +report
 +veda +score
 +vedascore
"credit check veda"
"my veda file"
"my veda"
"veda advantage credit file"
"veda advantage"
"veda check"
"veda cra"
"veda credit check"
"veda credit file"
"veda credit history"
"veda credit report"
"veda credit score"
"veda credit"
"veda file"
"veda listing"
"veda rating"
"veda record"
"veda score"
"veda"
"vedascore"
[my veda file]
[veda advantage]
[veda cra]
[veda credit check]
[veda credit file]
[veda credit history]
[veda credit report]
[veda credit score]
[veda credit]
[veda file]
[veda rating]
[veda record]
[veda report]
[veda score]
[veda]
[vedacheck]
[vedascore]
veda
veda advantage
veda credit history
veda credit report
veda file
veda record
veda report
"contact veda"
"corrections veda com au"
"corrections veda"
[vedacheck contact]
[www veda com au]
[veda login]
[veda com au]
[veda contact number]
[veda contact]
"www veda com au"
"veda login"
"veda phone number"
"how to contact veda"
"veda advantage contact number"
"veda advantage contact"
"veda advantage phone number"
"veda com au contact"
"veda com au yourcreditandidentity"
"veda com au"
"veda contact number 1300"
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