Why Thredbo is no Disneyland: the difficulty with using geographic places as brand names

The decision of the Full Federal Court in Kosciuszko Thredbo Pty Limited v ThredboNet Marketing Pty Limited ([2014] FCAFC 87) indicates that, where a brand name is geographic or descriptive, it is very difficult to establish monopoly rights in the name. 

Thredbo is a village, and is the site of a popular skiing resort. Thredbo is located in the 'Australian Alps', at Mt Kosciuszko in New South Wales (about 500 kilometres from Sydney).

The operators of the Thredbo resort, Kosciuszko Thredbo Pty Ltd and Thredbo Resort Centre Pty Ltd (together, Thredbo Operator) brought proceedings against online accommodation booking business ThredboNet Marketing Pty Ltd and its director (together, ThredboNet). ThredboNet offers accommodation at the Thredbo resort, and uses the name Thredbo prominently in its domain names (including 'www.thredboreservations.com.au' and 'www.thredbo.com') and on its websites and Facebook page. Thredbo Operator alleged that ThredboNet's use of Thredbo in association with its online booking services was misleading and deceptive conduct in contravention of the Australian Consumer Law and passing off.

Thredbo Operator claimed that it had unregistered rights in the name Thredbo. The heart of Thredbo Operator's claim was that the name Thredbo was so distinctive of Thredbo Operator's business that it had acquired a secondary meaning so that consumers associated the word 'Thredbo' with all aspects of Thredbo Operator's business. Thredbo Operator asserted that, because it controls and operates much of the Thredbo resort business (including the ski lifts, ski school, hotels and accommodation), provides utilities like roads, water and waste supplies, and carries out extensive advertising of the resort, the name Thredbo was akin to the word 'Disneyland', in the sense that, like Disneyland, Thredbo is more than a place, it is a complete branded entity.

As part of its operations, Thredbo Operator sub-leases accommodation in Thredbo to ThredboNet. Thredbo Operator obtained evidence that people had been confused between Thredbo Operator's accommodation services and ThredboNet's accommodation services, and Thredbo Operator had received complaints (eg, about double-bookings) and communications from people who had dealt with, or intended to communicate with, ThredboNet.

The Full Federal Court considered whether ordinary or reasonable consumers or prospective purchasers of Thredbo accommodation services would, or would be likely to, understand that ThredboNet's activities, in particular its uses of the word 'Thredbo', (mistakenly) conveyed to them that they were dealing with Thredbo Operator. In asking this question, the court recognised that:

"[o]rdinarily, a trader is entitled to use a geographic name honestly and accurately unless that name has become distinctive of another's goods or services and the trader is using the name to pass off its good or services as those of the other."

The court decided that a reasonable consumer would not mistakenly think that they were dealing with Thredbo Operator if they used ThredboNet's websites, and rejected each of Thredbo Operator's claims.

During the trial, ThredboNet gave an undertaking that it would include on its websites (but not its Facebook page) a disclaimer which stated that its business is not associated with Thredbo Operator. In the Full Federal Court appeal, Thredbo Operator asserted that the disclaimer was not effective because it was "buried in the middle of a mass of other text" on the websites. However, the disclaimers on ThredboNet's websites were very relevant to the Full Federal Court's decision. The court considered that a consumer, when doing an internet search, might easily be led to ThredboNet's websites thinking that the domain names 'www.thredboreservations.com.au' and 'www.thredbo.com' were Thredbo Operator's official sites. Interestingly (and in some contrast to recent Australian decisions about registered trademark infringement via use of domain names), the court decided that:

• consumers frequently click on website links only to find that the link does not go to the site of the supplier or business they wanted; but that
• in this case, a reasonable consumer would have seen the disclaimer on ThredboNet's websites that the site was not associated with Thredbo Operator.

It was also relevant that:

• mere confusion in the mind of a consumer does not equate to misleading or deceptive conduct;
• other traders were using 'Thredbo' in relation to business activities in Thredbo, including accommodation businesses;
• ThredboNet's online sites looked different to Thredbo Operator's sites;
• accommodation at Thredbo was expensive, so a reasonable consumer would be careful when selecting an accommodation provider; and
• ThredboNet's Facebook page had only 106 'likes', compared to over 40,000 'likes' for Thredbo Operator's Facebook page. Here, Thredbo Operator's own popularity on social media counted against its argument that consumers were misled by ThredboNet's page.

The Full Federal Court's decision illustrates that, where geographic or descriptive names are being used by multiple traders, even if consumers are confused between traders, if one trader makes disclaimers which disavow any affiliation with others, the presence of that disclaimer could avoid a contravention of the Australian Consumer Law or passing off.

Fiona Galbraith, Davies Collison Cave, Melbourne