Accommodation website held to infringe trademarks of hotel group

In Mantra Group Pty Ltd v Tailly Pty Ltd ((No 2) [2010] FCA 291, March 26 2010), the Federal Court has ruled that an operator of websites used to source accommodation bookings had infringed Mantra Group Pty Ltd's trademark rights. 

The court ordered that Tailly Pty Ltd and Stephan Grant (collectively Tailly) transfer registration of domain names containing the words 'Circle on Cavill', and any other domain names substantially identical with, or deceptively similar to, the CIRCLE ON CAVILL marks, to Mantra. A permanent injunction was also granted restraining Tailly from using 'Circle on Cavill' and 'Mantra', or any term substantially identical with, or deceptively similar to, CIRCLE ON CAVILL or MANTRA as a trademark in the advertising, promotion or supply of accommodation, including as part of a domain name, metatag, search engine keyword or business name. The court also awarded an account of profits for bookings sourced via the websites or otherwise related to the infringing use of the CIRCLE ON CAVILL and MANTRA marks.
Circle on Cavill is a residential apartment and retail complex at Surfers Paradise on the Gold Coast, where Mantra is the onsite manager and licensed letting agent. The apartment owners are at liberty to choose whether to use Mantra’s on-site letting service or the services of other agencies, such as Tailly. 
Mantra holds various registered trademarks, including three incorporating the words 'Circle on Cavill'. Mantra claimed, among other things, that Tailly infringed its registered trademarks by using the words 'Circle on Cavill', the Circle on Cavill logos and the word 'Mantra', or deceptively similar words, as trademarks, in advertising and marketing on the Internet of the apartments that it had available to let at the Circle on Cavill complex. 
Tailly admitted that it used the words in its internet advertising and marketing. However, it said that it did not use those words as a trademark, but rather to describe the location and name of the Circle on Cavill apartment complex. Alternatively, it argued that it was not liable for any infringement of Mantra’s trademarks because it had used the words at issue in good faith to indicate the geographical origin of the accommodation services that it offers at the complex. 
First, the court found that use of the words 'Circle on Cavill' in the banner headings to Tailly’s websites amounted to a clear distinguishing use of the words to indicate to the public that Tailly was the true origin of the accommodation services at the Circle on Cavill complex. It followed that Tailly made use of the words as a trademark, contrary to Section 120(1) of the Trademarks Act.
Further, the court considered that the words “geographical origin… of… service” in Section 122(1)(b) of the act are to be construed to refer to the name of a country, region, city, town or similar geographical area from which a trader’s goods or services have been derived, but not to refer to a privately owned building situated within such a city or town, such as the Circle on Cavill complex in this case. 
The court also found that Tailly did not use the sign in good faith within the terms of Section 122(1)(b). The prominence and widespread nature of Tailly’s use of the words 'Circle on Cavill' was inconsistent with its use of those words in good faith. Moreover, the use of the words did not involve a genuine descriptive use of the accommodation services it was offering to the public. Instead, it was found that this descriptive use was used as a "stalking horse" by Tailly for its real intentions - namely, to use the words quite blatantly to advertise and market its accommodation services at the Circle on Cavill complex.
This case is important for the travel industry, and more generally for brand owners, as it demonstrates that the trademark of one party cannot be used by another to promote its own services or products when it amounts to use of that trademark as a badge of origin, nor when it does not amount to good-faith use to indicate the geographical origin of the products or services. 
Lisa Ritson and Mary Papadopoulos, Blake Dawson, Sydney

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