Bed Bath ‘N’ Table V GRBA: When Similar Trade Marks Become Misleading

A recent High Court of Australia decision has highlighted the important distinction between trade mark infringement and misleading and deceptive conduct under Australian Consumer Law (ACL).

The High Court reinstated the primary judge’s decision against Global Retail Brands Australia Pty Ltd (GRBA), holding that GRBA’s use of the “House Bed & Bath” mark breached ACL, despite there being no findings of trade mark infringement.

This case serves as a lesson to brand owners and businesses that use of similar trade marks, even in situations where words are descriptive and may be considered different enough under trade mark law, can still give rise to misleading and deceptive conduct under ACL.

Background

Since 1976, Bed Bath ‘N’ Table (BBNT) has been a dominant force in the Australian homeware market. As its primary brand identity, the retailer uses the words BED AND BATH in a specific order.

In 2021, Global Retail Brands Australia Pty Ltd (GRBA), a company best known for its House kitchenware chain, launched a new venture under the name “House Bed & Bath”.

Following the launch of the new venture, GRBA began using “House Bed & Bath” extensively, both internally and externally at its new store, on its websites, on store receipts, on social media, and in advertising and promotional material.

Noting BBNT’s long-standing presence in the marketplace and its specific use of BED AND BATH as an identifier for many years, BBNT commenced proceedings in Federal Court for trade mark infringement in accordance with s 120 of the Trade Marks Act 1995 and for misleading and deceptive conduct under s 18 of ACL.

In determining the matter, Justice Rofe found that the ‘House Bed & Bath’ mark did not infringe on BBNT’s registered trade mark under s 120(1) of the Trade Marks Act, however she concluded that the use of BED AND BATH constituted misleading or deceptive conduct under s 18 of ACL.

Justice Rofe explained that the different outcomes arose from the different tests that must be applied. For trade mark infringement under s 120 (1), consideration is given to the ordinary consumer’s impression and recollection of the marks without assuming they have any knowledge about the marks. In contrast, under ACL s 18, consideration must be given to GRBA’s conduct in its wider immediate context, including BBNT’s reputation, and whether the conduct would mislead or confuse a reasonable consumer of the goods.

The Judge ultimately found that the evidence presented by GRBA was wilfully blind to the risk of confusion and the similarities between the BBNT mark and the House Bed & Bath mark, noting that BBNT and GRBA were key competitors in the marketplace. It was determined that GRBA perceived there was a commercial benefit in utilising a mark similar to a leading competitor’s brand.

Full Federal Court

However, upon appeal by GRBA, the Full Federal Court reversed this decision, confirming GRBA did not engage in misleading or deceptive conduct. The Full Federal Court held that BBNT does not hold monopoly to the words “bed” and “bath”.

The Full Federal Court said there were two possible ways GRBA’s conduct could mislead or deceive consumers, including if consumers either confuse the two marks or if they recognise “BED BATH” or “BED AND BATH” in both marks and think the two business were connected.

Considering the above, the Full Federal Court determined that the marks were so different that an ordinary and reasonable consumer would be unlikely to confuse them, whether or not they knew of BBNT. Secondly, the fact that only BBNT used those words for their branding did not mean consumers would think no other trade mark could use them.

The Full Federal Court did not consider the evidence presented by GRBA to be of any real assistance in determining whether its conduct was likely to mislead or deceive. They held that while GRBA was wilfully blind to the prospect of some confusion with using the BBNT mark, GRBA needed an intention to mislead or deceive to establish misleading and deceptive conduct under ACL.

High Court Decision

GRBA appealed to the High Court, which ultimately reinstated the primary judge’s findings on misleading and deceptive conduct. The High Court agreed with Justice Rofe’s initial assessment, allowing BBNT’s appeal and setting aside the Full Federal Court’s decision.

The High Court emphasised the difference in the scope and function of ACL as opposed to the Trade Marks Act, finding that the Full Federal Court unduly focused on whether the marks were deceptively similar (a Trade Marks Act test) while analysing misleading and deceptive conduct under ACL. Consideration needed to be made for the mark’s use in its “immediate and broader context” as addressed by Justice Rofe.

The High Court also reaffirmed the principles established in Australian Woollen Mills v F S Walton & Co Ltd (1937), noting that a mark is likely to deceive or confuse if it is adopted with intent to appropriate a rival’s reputation.

In concluding, the High Court held that the primary judge’s finding that GRBA was wilfully blind was relevant to the likelihood of deception, and that the Full Federal Court erred in considering the evidence provided by GRBA was of no assistance.

Key Takeaways

When considering a brand name, it is important to conduct proper due diligence. Consider searches that include unregistered users and competitor brands and maintain a record of the findings for future reference. Consider asking a lawyer whether your potential trade mark may infringe a competitor’s brand name under trade mark law and ACL.

The assessment of trade mark infringement and misleading and deceptive conduct under ACL are very different. While trade mark law involves an abstract comparison of marks, ACL requires a broader analysis including market history and consumer knowledge.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.