Hemmes Trading wins trade mark infringement claim

Hemmes Trading wins its trade mark infringement claim against Establishment 203 for use of the name ESTABLISHMENT 203.

Addisons acted for Hemmes Trading Pty Limited (part of the Merivale group of companies), the owner of the ESTABLISHMENT restaurant, bar and hotel precinct in Sydney, in Federal Court proceedings against Establishment 203 Pty Ltd.

Hemmes Trading asserted that Establishment 203, by using the name ESTABLISHMENT 203 for a restaurant, had infringed Hemmes Trading’s registered trade mark for ESTABLISHMENT and that its conduct contravened sections 18 and 29 of the Australian Consumer Law.

On 20 September 2024, the Federal Court delivered judgment in favour of Hemmes Trading and held that by using ESTABLISHMENT 203 in relation to restaurant services, Establishment 203 had infringed Australian registered trade mark ESTABLISHMENT pursuant to section 120 of the Trade Marks Act and contravened sections 18 and 29 of the Australian Consumer Law.

Justice Jackman found that ESTABLISHMENT 203 was deceptively similar to ESTABLISHMENT. Further, the addition of “203” to ESTABLISHMENT would not convey any particular meaning or connotation to the notional consumer. As “203” has no well-understood meaning in relation to restaurant services the notional consumer might wonder whether “203” has some association with ESTABLISHMENT.

Establishment 203 cross-claimed seeking cancellation of ESTABLISHMENT as a trade mark on the basis that the mark was not capable of distinguishing Hemmes Trading’s services from restaurant services provided by others as at the priority date/filing date of 23 May 2001 and that Hemmes Trading was not the owner of the mark as at the priority date. The Court found that the evidence showed that as at the priority date ESTABLISHMENT did in fact distinguish Hemmes Trading’s restaurant, bar and hotel services and it was the owner of the trade mark. The ESTABLISHMENT business was launched at the beginning of the Olympics in September 2000 and in the period prior to filing the trade mark application the total patronage at ESTABLISHMENT was very significant and the mark acquired distinctiveness in the period prior to filing the application. As a result, the Court dismissed the cross-claim.

In defence to the claim of trade mark infringement, Establishment 203 sought to rely on the defence of good faith of use of its own name. However, the Court found that Establishment 203 did not conduct any trade mark or Google searches at the time of initial adoption of ESTABLISHMENT 203 and chose not to ask the company’s lawyers for advice on the proposal to use the mark. The Court held that a reasonably diligent search of the Register of Trade Marks would have identified Hemmes Trading’s trade mark. Further, Justice Jackman noted that conducting searches and asking the company’s lawyers for advice on the proposal to use the mark when initially adopting it were steps that an honest and reasonable person in the respondent’s position would have taken.

As to the Australian Consumer Law claim, the Court found that there was a real possibility of ordinary and reasonable members of the public being led into erroneously thinking that Establishment 203’s restaurant known as ESTABLISHMENT 203 was a commercial extension of, or otherwise associated with, Hemmes Trading’s restaurant, bar and hotel business known as ESTABLISHMENT or that it was using the name with the approval of Hemmes Trading, which was not the case. Accordingly, the Court found that Establishment 203’s representations to consumers of restaurant services in Australia contravened sections 18 and 29(1)(g) and (h) of the Australian Consumer Law.

In summary, Hemmes Trading was successful in its claims for trade mark infringement and contraventions of the Australian Consumer Law and the Court ordered that Establishment 203 be permanently restrained from 20 October 2024 from using ESTABLISHMENT 203 and any other mark which is substantially identical thereto in relation to any restaurant, café, bar, hotel or function services.

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