The Agency v The North Agency: a trademark tussle over use of the word "Agency"

Summary

In the matter of The Agency Group Australia Limited v H.A.S. Real Estate Pty Ltd [2023] FCA 482, a real estate company known as “The Agency” sought to pursue a company trading as “The North Agency” for trade mark infringement, claiming that the North Agency was deceptively similar to the Agency.

The Federal Court also clarified how deceptive similarity is assessed when Courts determine trade mark infringement claims under s 120(1) of the Trade Marks Act 1995 (Cth) (Trade Marks Act), resolving (for now) what was described by Justice Jackman as a ‘fundamental error’ in recent High Court decision Self Care IP Holdings v Allergan Australia Pty Ltd (Self Care).[1]

Ultimately, the Federal Court found that the North Agency’s name and logo was not deceptively similar to the Agency’s registered composite mark, noting that “it would give an unwarranted monopoly to The Agency Group if rival businesses were unable to use the definite article “The” and the word “Agency” in their business names". The Agency Group’s application was dismissed, and it was ordered to pay the North Agency’s costs on an indemnity basis. This decision was upheld by the Full Federal Court on appeal.

Talbot Sayer was pleased to act for the successful parties, H.A.S. Real Estate Pty Ltd (The North Agency) and its directors. Talbot Sayer instructed Justine Beaumont SC and Jesmini Ambikapathy in this matter.

Background

The parties

The Agency Group is a listed company which owns a group of subsidiaries that have been operating a real estate business known as “the Agency” since 2017. The Agency Group has over 400 agents nationally, including 26 offices in New South Wales operating from 21 physical locations, with the Northern Beaches region specifically serviced by its offices in Manly and Neutral Bay.

The North Agency was founded by two high profile real estate agents in January 2023 and had one office in Dee-Why, NSW which operated in the Northern Beaches of Sydney. At the time of the proceedings, The North Agency had 6 employees and had spent around $25,000 to promote its brand. The branding was developed by UrbanX, a company which provides back-of-house, branding, marketing, and administrative services to independent real estate agency businesses.

The Agency’s case

The Agency claimed that The North Agency’s branding and get up was deceptively similar to The Agency’s registered trade marks (both of which are in the table below).

?The judgment

The relevant principles

The main issue in dispute was whether the marks are deceptively similar for the purpose of infringement pursuant to s 120(1) of the Trade Marks Act. By s 10 of the Trade Marks Act, in order to be deceptively similar, a mark must ‘so nearly resemble [the registered mark] … that it is likely to deceive or cause confusion’.

In determining deceptive similarity, the Federal Court summarised the relevant principles outlined in the High Court decision Self Care. These include, in summary:

1. in the trade mark comparison, the marks must be judged as a whole taking into account both their look and their sound;
2. the resemblance between the two marks must be the cause of the likely deception or confusion;
3. the focus is upon the effect or impression produced on the mind of potential customers of the services, allowing for “imperfect recollection”;
4. the usual manner in which ordinary people behave must be the test of what confusion or deception may be expected, having regard to the character of the customers who would be likely to buy the goods in issue;
5. there must be “a real likelihood that some people will wonder or be left in doubt about whether the two sets of products … come from the same source”;
6. evidence of actual confusion is of great weight, but not essential, and lack of such evidence may also be relevant; and
7. any intention to deceive or cause confusion may be a relevant consideration but is not required.

Significantly, the Court pointed to an internal contradiction in the High Court’s reasoning in Self Care whereby the High Court had cited with approval, the authorities that confirm that extrinsic material (including the actual use of the marks) is irrelevant to the issue of trade mark infringement however, the High Court subsequently referred to advertising on the alleged infringer’s packaging and website as relevant.

To resolve this contradiction, the Court reaffirmed that the actual use of an allegedly infringing mark cannot be taken into account when assessing deceptive similarity. The Court disregarded the paragraphs of Self Care in which extrinsic material was taken into consideration.

Of interest, the Court also confirmed that the use of “thenorthagency” as the website URL, domain name, Facebook account, email address and Instagram handle constituted use as a trade mark, noting that the consumer would not see this use as merely being descriptive, and thus, the use of the mark in this way was use as a trade mark.[2]

The decision

The Court found that the trade marks were not deceptively similar to each other and were unlikely to cause confusion on the following bases:

• The Agency’s trade mark is a composite mark and not a word mark and therefore the stylized “A” (representing a house) cannot be ignored. The Court found that a consumer would not be confused by the use of the word ‘agency’ by a rival trader, nor likely to believe that the two agencies were the same.[3] It is relevant to take into account that the words “The Agency” on their own have a strongly descriptive element in referring to the nature of a real estate business. The ordinary consumer would expect the word “Agency” to be commonly used in the names of real estate businesses in Australia.
• The insertion of the word “North” and its prominence in The North Agency’s branding differentiated the marks to such an extent that those differences would remain in the ordinary consumer’s mind with imperfect recollection. The Court also noted that in much of the promotional material used by the North Agency, the words “the North” are larger and more prominent than the word “Agency”.
• The Court also noted a real estate transaction as being one of the most significant transactions in a consumer’s life and that one would expect a heightened sense of awareness and concentration among consumers in that context, compared to the degree of concentration and focus which would ordinarily be expected in more mundane, everyday transactions, such as the purchase of groceries or ordinary household items.

Key takeaways

• Justice Jackman has provided a valuable clarification of the approach to the test for deceptive similarity in a post-Self Care legal environment, confirming that external material is irrelevant to the issue of trade mark infringement.
• The more descriptive a trade mark is, the harder it will be to establish deceptive similarity.
• Instagram handles and website URL’s can amount to use of a mark as a trade mark, in that a consumer would not see them as being merely descriptive.

[1] Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8 (‘Self Care’).

[2] The Agency Group [53].

[3] The Agency Group [72].