FEDERAL COURT OF AUSTRALIA
Vendor Advocacy Australia Pty Ltd v Seitanidis [2013] FCA 971
| IN THE FEDERAL COURT OF AUSTRALIA | |
| VENDOR ADVOCACY AUSTRALIA PTY LTD Applicant | |
| AND: | Respondent |
| DATE OF ORDER: | |
| WHERE MADE: |
THE COURT ORDERS THAT:
1. On or before 4:30 pm on 11 October 2013 the parties confer and file minutes of orders (including as to costs) reflecting these reasons, or if in disagreement, short written submissions as to the form of order sought.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
| VICTORIA DISTRICT REGISTRY | |
| GENERAL DIVISION | |
| BETWEEN: | VENDOR ADVOCACY AUSTRALIA PTY LTD Applicant |
| AND: | PETER SEITANIDIS Respondent |
| JUDGE: | MIDDLETON J |
| DATE: | 27 SEPTEMBER 2013 |
| PLACE: | MELBOURNE |
REASONS FOR JUDGMENT
INTRODUCTION
1 Since at least 2001, the applicant company Vendor Advocacy Australia Pty Ltd (‘VAA’) has carried on a business in Australia of representing and advising owners of real estate in selling their properties and in their dealings with real estate agents. Mr Ian Reid, who is the founder and principal of the business of VAA, has had a long career in the real estate.
2 After working for VAA for a number of years, from about January 2011, the respondent, Mr Peter Seitanidis, carried on a similar business in competition with VAA.
3 It is fair to say that there has been and continues to be a high level of animosity between Mr Ian Reid and Mr Seitanidis, demonstrated through their actions towards each other. Partly for this reason, a number of peripheral issues arose in the course of the proceeding which do not relate to the central matter for the Court’s determination. I do not intend to rehearse or consider all the allegations and counter-allegations made during the course of this proceeding, other than to the extent necessary to determine the main controversy between the parties.
4 On 23 September 2011, the Court made the following orders:
OTHER MATTERS:
A. Upon the Applicant by its Counsel giving the usual undertaking as to damages.
B. And without prejudice to his rights and any admissions that the Applicant herein is entitled to Orders sought by way of interlocutory relief in this proceeding, the Respondent by his Counsel undertakes that he himself and by his employees and agents will until the trial of the proceeding herein or further order:
i. ensure that the websites with the internet domain names –
ii.
a. “vendoradvocacy.com”, and
b. “vendoradvocacyaustralia.com”
cannot be accessed or in any way utilised by him in the course of his business;
iii. not use the phrases –
iv.
a. “Vendor Advocacy” and
b. “Vendor Advocacy Australia”
in the promotion and operation of his business.
THE COURT ORDERS THAT:
1. Until these proceedings are heard and determined or further order, the Respondent do such things as are required to ensure that no content is displayed at the Internet domains:
1.1 ‘vendoradvocacy.com’; and
1.2 ‘vendoradvocacyaustralia.com’.
2. Until these proceedings are heard and determined or further order, the Respondent not:
2.1 advertise or promote his business by reference to the domains ‘vendoradvocacy.com’ or ‘vendoradvocacyaustralia.com’; or
2.2 advertise or promote his business by reference to the Applicant’s trade names.
5 The trial of the proceeding commenced on 19 June 2012, continued for four days, and then was adjourned until 16 October 2012, at which time it continued for another five days. On 30 April 2013, the Court permitted the re-opening of VAA’s case for a limited purpose, and evidence and written submissions were filed by both parties pursuant to the leave of the Court.
6 The principal matter that remains for determination arises from VAA’s primary claim to restrain Mr Seitanidis from carrying on his business by reference to the phrase “Vendor Advocacy Australia”, and from using the domain names www.vendoradvocacy.com and www.vendoradvocacyaustralia.com.
7 Apart from this, VAA seeks various forms of relief in its amended application, including declarations and injunctions relating to the following domain names:
http://www.vendoradvocacy.com;
http://www.vendoradvocacyaustralia.com;
vendoradvocacymelbourne.com;
vendoradvocacymelbourne.net;
vendoradvocacy.biz;
vendoradvocacyaustralia.biz;
vendoradvocates.com;
vendoradvocates.net;
vendoradvocatesmelbourne.com;
vendoradvocates.melbourne.net;
vendoradvocatesmelbourne.net;
vendorsadvocates.com;
vendorsadvocates.net;
vendoradvocacy.net; and
vendoradvocacyaustralia.net.
8 It is not in dispute that the domains registered to Mr Seitanidis include:
(a) vendoradvocacy.com;
(b) vendoradvocacyaustralia.com;
(c) vendoradvocacymelbourne.com;
(d) vendoradvocacymelbourne.net;
(e) vendoradvocacy.biz;
(f) vendoradvocacyaustralia.biz;
(g) vendoradvocates.com;
(h) vendoradvocates.net;
(i) vendoradvocatesmelbourne.com;
(j) vendoradvocates.melbourne.net;
(k) vendoradvocatesmelbourne.net;
(l) vendorsadvocates.com; and
(m) vendorsadvocates.net.
9 Other similar domain names may have been used by Mr Seitanidis (such as ‘vendoradvocates.com.au’), but for the reasons which follow, this is of no consequence. As I have ultimately found that VAA’s pleaded claim fails, so must any claim to the various other similar domain names used by Mr Seitanidis.
10 VAA disclaims any ownership of the expression ‘vendor advocacy’, and does not seek to prevent competitors from using that term. However, VAA seeks the relief it does because it believes there is the likelihood that consumers who intend to contact VAA will be misled, and that consumers who intend to visit VAA’s website will instead be directed to Mr Seitanidis’ site.
11 In general terms, VAA has sought relief in respect of:
1. Breaches by Mr Seitanidis of copyright in VAA’s listing authority;
2. Breaches by Mr Seitanidis of copyright in the text of VAA’s website;
3. Mr Seitanidis’ conduct in passing himself and his business off as being VAA; and
4. Misleading or deceptive conduct engaged in by Mr Seitanidis.
12 I need say very little about the copyright allegations, as on the fourth day of the trial Mr Seitanidis admitted breach of copyright, and VAA (upon its election to accept damages) indicated it was willing to accept $1.00 offered by Mr Seitanidis by way of nominal damages. A dispute remains as to the need for and the extent of declaratory and injunctive relief in respect of the copyright breach, to which I will return.
13 If VAA cannot succeed in its misleading and deceptive conduct claim, it cannot otherwise succeed in its passing off claim. Therefore, I proceed to consider only the misleading and deceptive conduct claim, which requires me to determine whether Mr Seitanidis engaged in conduct that misled or was likely to mislead, and whether he should be restrained from such conduct in the future.
14 At the outset, I indicate that whilst throughout these reasons I will be referring to the promotional activity of VAA and the need to put the documentation and oral evidence in context, this is primarily in an endeavour to show the relevant state of knowledge of consumers, and to put the conduct of Mr Seitanidis in context. There is no requirement for VAA to establish any reputation as an element of the misleading and deceptive conduct claim. However, to establish misleading and deceptive conduct in this proceeding depends upon the level of consumer perception of VAA’s reputation and how it promoted itself.
15 I turn to the specific allegations against Mr Seitanidis, which involved the following conduct:
Use by Mr Seitanidis from February 2011 of the domains ‘vendoradvocacy.com’ and ‘vendoradvocacyaustralia.com’ to promote his business.
The placing and maintaining by Mr Seitanidis in August and September 2011 of a Google AdWords advertisement which referred to the domain ‘vendoradvocacy.com’ and sought to obtain visitors to the domain ‘vendoradvocacy.com’.
The placing and maintaining by Mr Seitanidis in August and September 2011 of a Google AdWords advertisement which:
(i) contained the phrase ‘Vendor Advocacy Australia – a free service to homesellers.’;
(ii) referred to the domain ‘vendoradvocacy.com’; and
(iii) sought to obtain visitors to Mr Seitanidis’ website at the internet domain ‘vendoradvocacy.com’
16 The Google AdWords advertisements were placed via the ‘Google AdWords’ program. This is a program by which businesses can pay (or ‘sponsor searches’) so that searches by internet users for ‘keywords’ selected by the business result in a listing for that business appearing at the top of the Google search results.
17 The only factually contentious issue that arose in relation to the alleged conduct was whether Mr Seitanidis placed the last mentioned Google AdWords advertisement – that is, the advertisement referring to both Vendor Advocacy Australia, and vendoradvocacy.com. I can dispose of this issue forthwith.
18 Mr Seitanidis denied placing the contentious advertisement, and suggested it was placed by VAA as part of a conspiracy against him.
19 The evidence of VAA was that it did not place that advertisement. That evidence was given primarily by Mr Ian Reid and Mr Ben Reid. Whilst there was an attempt to impugn those witnesses’ credit (which attempt I reject), there was no direct suggestion in cross-examination that any of those witnesses authorised the placement of the advertisement on behalf of VAA.
20 It seems very unlikely that VAA would have placed the advertisement, as it would have been against their commercial interests. Accordingly, the conspiracy claim seems unlikely to be true.
21 It is equally unlikely that the advertisement was placed by any third party, which would have gained no benefit from the advertisement, but would have incurred a cost in placing it.
22 It is probable that the advertisement was placed by Mr Seitanidis. It was around about the time he placed the other Google AdWords advertisements (directing traffic to “vendoradvocacy.com”), and at a time when he was admittedly placing Google AdWords advertisements in order to cause Mr Ian Reid “stress”.
23 I will return later to my view on Mr Seitanidis’ conduct generally, of which I am critical. I have concluded that whilst Mr Seitanidis denied placing the contentious advertisement, I cannot accept that denial. In addition to weighing up the likely position as indicated above, I also note that Mr Seitanidis had the opportunity to provide to the Court all the documentation relevant to his Google accounts, which he failed to avail himself of during the course of the trial. This would have been of great assistance in supporting his denial.
24 Therefore, I find that Mr Seitanidis did place the contentious advertisement.
25 For the purposes of assessing the conduct alleged against Mr Seitanidis, the critical date is the date at which the impugned conduct occurred. The relevant time period is February 2011 through to September 2011. Both parties accepted that the Court’s task is to consider whether the conduct was misleading or deceptive, or likely to mislead or deceive, as at that period. In the circumstances of this proceeding, I am prepared to proceed on this basis.
26 Evidence was led by both parties as to promotional activity engaged in after that time. Events after these dates may be relevant as casting light on the way Mr Ian Reid promoted VAA up to and during September 2011, and may show a continuum of conduct. However, as I will endeavour to explain, the way in which VAA was promoted over many years prior to July 2011 (at least) has been by the predominant reference to the persona of Mr Ian Reid, and not by reference to ‘Vendor Advocacy Australia’ standing alone.
27 It is necessary to recount the brand development of VAA, by reference to the phrases “Vendor Advocacy Australia” and ‘Vendor Advocacy’. It is important to appreciate at the outset that it is only the names and words that are relied upon by VAA, not any logo or get-up. However, the Court must look at the surrounding circumstances in determining whether Mr Seitanidis’ conduct was misleading or likely to mislead. Further, most of the promotion relied upon by VAA has been on the radio, where the phrases ‘Vendor Advocacy Australia’ and ‘Vendor Advocacy’ has not been seen but only heard. To that extent, in considering this form of promotion, the get-up, style or format of the separate words and phrases is not evident to a consumer who only hears of VAA through listening to the radio. Further, as the evidence demonstrates, VAA has not just promoted by reference to the phrase, ‘Vendor Advocacy’ or ‘Vendor Advocacy Australia’, but has promoted by reference to a logo and the persona of Mr Ian Reid.
28 It is not in dispute that the websites of VAA and Mr Seitanidis look different, putting aside those parts of Mr Seitanidis’ website which infringed the copyright of VAA. In other words, upon reading each website a consumer would observe that the vendor advocacy services were provided by VAA or Mr Seitanidis respectively, this being made clear by the terms of the websites themselves. Nevertheless, VAA contended that this difference would not assist Mr Seitanidis in his defence of this proceeding. It was submitted that the consumer who had not previously visited VAA’s website, and who was familiar with the ‘brands’ relied upon by VAA only through radio advertisements or word of mouth, would be likely to be misled by the use of the domain names which included the phrases ‘Vendor Advocacy’ or ‘Vendor Advocacy Australia’.
29 I have come to the view that it is by the extensive, if not dominating reference to the persona of Mr Ian Reid (and to a lesser extent to its logo), that VAA is known. I have also come to the view that ‘Vendor Advocacy’ and ‘Vendor Advocacy Australia’ (whether capitalised or not) are essentially descriptive and have no secondary meaning by reference to VAA. I further find that Mr Seitanidis has not engaged in any conduct that has caused or is likely to cause consumers to be misled.
FACTUAL AND EVIDENTIAL OUTLINE
30 In many respects, the evidence is not contentious and is supported by documentation in one form or another. The main debate concerned the emphasis of the branding, namely whether the name and persona of Mr Ian Reid has been and remains pivotal to the way VAA markets its business.
31 I do not consider it necessary to detail how the internet, and search engines used to find information on the internet, operate. These are now generally matters in which the Court can take judicial notice, and are at a general level matters familiar to the general public.
32 The parties themselves were well familiar with the operation of the internet, and assumed the Court knew the background matters relevant to such operation for a determination to be made in this proceeding. This is not a proceeding which concerned the detail of the operation (and terms of operation) of the internet, as was the case in Google Inc v Australian Competition and Consumer Commission (2013) 294 ALR 404, and to a lesser extent in REA Group Ltd v Real Estate 1 Ltd [2013] FCA 559.
33 The documentation and non-contentious evidence of Mr Ian Reid discloses the following facts as to the development of the branding of the business of VAA.
34 VAA registered various business names under which the business was conducted, including the following principal names:
(a) ‘Ian Reid’s Vendor Advocacy Australia’;
(b) ‘Ian Reid Vendor Advocacy’;
(c) ‘Vendor Advocacy Melbourne’; and
(d) ‘Fatal Real Estate Traps Exposed’.
35 Since it was formed, the business of VAA invested in the development of a number of management policies and processes, and, in marketing and promotion. In particular:
(a) The business developed a form of authority for use by the business in entering into agreements with prospective vendors of property (‘the Listing Authority’), and has applied for and received special approval from the Department of Justice to use this exclusive authority in the course of conducting the business;
(b) Mr Ian Reid authorised the writing of a booklet ‘Fatal Real Estate Traps Exposed’ which has been widely distributed, and which promotes the business and the services offered by the business;
(c) The business arranged the registration of numerous relevant internet domains, from which the website of the business could be accessed;
(d) The business maintained a comprehensive internet website, which is frequently updated and enhanced (the ‘VAA website’); and
(e) The business engaged in extensive advertising.
36 The advertising, marketing and promotion engaged in by the business was extensive, and a great deal of money and effort was put into VAA’s promotional activity. Such advertising included:
(a) Extensive radio advertisements on 3AW 693, Magic 1278, MTR 1377, SEN 1113, MY MP, MIX 101 and GOLD 104.3;
(b) Television advertisements on Channel 7, Channel 9 and Channel 10;
(c) Media advertisements in The Age, the Herald Sun, the Melbourne Observer, Royal Auto and various local newspapers; and
(d) Trade displays at the Herald Sun Home Show and the Retirement Living Expo.
37 Since at least 2003, the VAA website has been important to the business. People commonly visit the website to learn about the business.
38 VAA and associated companies registered numerous internet domains for use in relation to its business. Among the domains registered for use by the business were:
(a) vendoradvocacy.com.au
(b) vendoradvocacyaustralia.com.au
(c) Ianreidvendoradvocacy.com.au
(d) Ianreid.com.au
(e) 1300vendor.com.au
(f) 1300vendor.com
(g) Fatalrealestatetraps.com
(h) Fatalrealestatetraps.com.au
(i) Fatalrealestatetrapsexposed.com
(j) Fatalrealestatetrapsexposed.com.au
(k) Wehelpyousell.com.au
39 The VAA website could be accessed from any of a number of domains. An important (but not the only) domain at which the website was hosted was ‘vendoradvocacy.com.au’. As the business operates solely in Australia, a ‘.com.au’ domain is of the greatest relevance. Further, it is self-evident that ‘vendoradvocacy.com.au’ is shorter to type than ‘vendoradvocacyaustralia.com.au’, and prospective clients may therefore at first instance access the domain ‘vendoradvocacy.com.au’ rather than ‘vendoradvocacyaustralia.com.au’.
40 However, whilst the evidence establishes that a number of domains were used by VAA, the most prominent was ‘1300vendor.com.au’. In addition, ‘vendoradvocacy.com.au’ was a commonly used domain name to promote the VAA business – it was promoted in the first edition of ‘Fatal Real Estate Traps Exposed’, used from August 2008 in conjunction with ‘1300vendor.com.au’, and was included on various business cards of the business. However, as I have said, it was not the only domain used.
41 I will briefly mention one matter concerning the registration of the domain ‘vendoradvocacy.com’. The VAA business formerly held the registration for that domain. It is now registered to Mr Seitanidis.
42 However, it was registered for the VAA business in or about 2003, and retained only until 2008. It was also used, along with other domain names, to promote the VAA business during that period.
43 It was retained by VAA only until 2008 for the following reasons. Domain name registrations require renewal from time to time. Mr Ian Reid’s practice in relation to domain names was to consider each renewal notice upon its receipt by VAA.
44 However, Mr Jack William Fullerton, who provided technical support services to the VAA business through his own business, ‘Blaze Media Melbourne’, renewed this particular domain on behalf of VAA. This renewal was effected in the name of his business, rather than in the name of the VAA business. Thus, ‘Blaze Media Melbourne’ held the domain on behalf of the VAA business. Some time after 2005, Mr Fullerton ceased working for VAA.
45 Because of this fact, Mr Ian Reid did not receive a renewal notice for the ‘vendoradvocacy.com’ domain name, it having been registered in the name of ‘Blaze Media Melbourne’. The renewal notice went to Mr Fullerton, and he did not pass it on to VAA. Therefore, Mr Ian Reid was not aware that the domain registration required renewal.
46 In this proceeding, there was an issue of whether, had he been aware that the registration for ‘vendoradvocacy.com’ required renewal, Mr Ian Reid would have renewed it in any event. He gave evidence that he regarded this domain as important for the operation of the business. On this basis, he would have renewed the registration of the domain name ‘vendoradvocacy.com’. I accept this evidence. It is consistent with Mr Ian Reid’s course of conduct in relation to other domains.
47 In any event, the domain was not registered by VAA, and Mr Seitanidis took the opportunity to register the domain himself.
48 Mr Ian Reid now seeks relief to ensure that the VAA business regains the ‘vendoradvocacy.com’ domain name. Mr Ian Reid’s contention is that it is necessary that the VAA business control this domain in order to ensure that the domain is not misused by a competitor, and in particular:
(a) Mr Ian Reid believes that many prospective clients of the business would type ‘www.vendoradvocacy.com’ into their browser in an effort to visit the VAA business website; and
(b) Given that to most prospective customers the business is a new business offering a novel service, he believes that many prospective clients visiting a website at the ‘www.vendoradvocacy.com’ domain will believe that they are visiting the website of the VAA business.
49 Returning then to the main issue. To determine the context in which it is alleged that Mr Seitanidis was or threatens to be involved in misleading conduct, it is important to again return to the promotional activities of VAA.
50 Mr Ian Reid gave a great deal of evidence on this issue, and both VAA and Mr Seitanidis called a number of witnesses as to the promotion and various branding of VAA. The main thrust of Mr Ian Reid’s evidence was to establish that the brand ‘Vendor Advocacy Australia’ had become independently recognised by virtue of the nature of this promotion. Mr Ian Reid brought before the Court extensive examples of promotional material. It is on this documentary material that I have placed the most emphasis, over the subjective impressions of Mr Ian Reid and the witnesses called by the parties.
51 I will shortly detail the evidence of the witnesses, but before doing so, set out the documentary material concerning the promotion of VAA’s services.
52 In the course of the trial, the parties provided a “Promotional Schedule” setting out (primarily by reference to documentation) the branding used by VAA since September 2001.
53 By reference to that Promotional Schedule and the evidence, the following can be concluded:
(a) The promotional media used by VAA included display boards, fridge magnets, radio, television, web pages, social media, correspondence, brochures, a booklet, DVD, company vehicles, trade show displays and flyers.
(b) The brands used were variously in the following combinations used in the different mediums of promotion:
Ian Reid
Ian Reid - The Vendor’s Advocate
Ian Reid Vendor Advocacy
Ian Reid Advocacy Service
Ian Reid Advocacy Service / Ian Reid Real Estate Advocacy / Ian Reid Vendor Advocacy
Ian Reid Vendor Advocacy / Ian Reid’s Vendor Advocacy Australia
Ian Reid Vendor Advocacy / Ian Reid – the Vendor Advocate
Ian Reid Vendor Advocacy / Vendor Advocacy Service
Ian Reid Vendor Advocacy / Vendor Advocacy Australia
Ian Reid Vendor Advocacy / Ian Reid Real Estate Vendor Advocacy
Ian Reid Vendor Advocacy / Ian Reid Real Estate Vendor Advocacy / Ian Reid Advocacy Service
Ian Reid Vendor Advocacy / Ian Reid Vendor Advocacy Service
Ian Reid Vendor Advocacy / Vendor Advocacy Australia Pty Ltd
Ian Reid Vendor Advocacy / Ian Reid Vendor Advocacy Australia
Ian Reid Vendor Advocacy / Ian Reid’s Vendor Advocacy Australia / Ian Reid Vendor Advocacy Australia
Ian Reid Vendor Advocacy Australia
Ian Reid Vendor Advocacy Australia / Ian Reid Vendor Advocacy
Ian Reid Vendor Advocacy Service
Ian Reid Vendor Advocacy Service / Ian Reid Vendor Advocacy
Ian Reid Vendor Advocacy Service / Ian Reid Vendor Advocacy / Vendor Advocacy Australia
Ian Reid’s Vendor Advocacy Australia
Ian Reid’s Vendor Advocacy Australia – Fatal Real Estate Traps Exposed
Ian Reid’s Vendor Advocacy Australia / Vendor Advocacy / www.vendoradvocacy.com.au
Ian Reid’s Vendor Advocacy Australia / vendoradvocacy.com / Fatal Real Estate Traps Exposed
Ian Reid’s Vendor Advocacy
Ian Reid’s Vendor Advocacy / Ian Reid Vendor Advocacy
Ian Reid’s Vendor Advocacy / The Ian Reid Vendor Advocacy / Ian Reid Vendor Advocacy Australia
Ian Reid’s Vendor Advocacy Australia / Ian Reid Vendor Advocacy
Ian Reid’s Vendor Advocacy Australia / Vendor Advocacy Australia
Vendor Advocacy / Ian Reid Vendor Advocacy
Vendor Advocacy Australia
Vendor Advocacy Australia / Ian Reid’s Vendor Advocacy Australia
Vendor Advocacy Australia / Ian Reid Vendor Advocacy
Vendor Advocacy Service / Ian Reid Vendor Advocacy Service
Vendor Advocates
www.vendoradvocacy.com / www.vendoradvocacy.com.au / www.vendoradvocacyaustralia.com.au / www.ianreid.com.au
www.vendoradvocacy.com.au
www.vendoradvocacy.com.au / www.vendoradvocacyaustralia.com.au / www.ianreid.com.au
www.1300vendor.com
(c) The most significant form of promotion of VAA has been on radio, primarily in Victoria from 2001, and during 2005, in Queensland (in the Gold Coast and Brisbane). On most if not all occasions, reference was made to ‘Ian Reid’ or ‘Ian Reid Vendor Advocacy’. In some instances, particularly after February 2010, reference was made to ‘Ian Reid’s Vendor Advocacy Australia’, but even then in conjunction with ‘Ian Reid’s Vendor Advocacy’ or ‘Ian Reid’, or ‘Ian Reid Vendor Advocacy’.
I set out some typical examples of the radio scripts as follows (as provided in the evidence):
This is Ian Reid
We’re the Vendor Advocates helping people sell their homes.
The Real Estate Market has changed but there are
Other options to an expensive Auction
Or a fixed price sale which can take months to sell
Before ringing the estate agents,
Call for our free booklet
“Fatal Real Estate Traps Exposed”
It tells you how to avoid making expensive mistakes.
Or perhaps you know someone who needs help
Grab a pen or key in our NEW number now
Ian Reid Vendor Advocacy
9430 0000
Remember it’s free, Go on, Ring us
9430 0000
This is Ian Reid.
Selling real estate, is a bit like baking a cake.
You need all the right ingredients, good preparation, with an experienced person following the correct procedure. Do this and you’ll get a fabulous result.
We have a free booklet “Fatal Real Estate Traps Exposed”, which tells you how to sell your home for the best price, quickly, and not stress.
Go on ring us, on 9430 0000
or just remember 1300VENDOR
or find out more and order your free booklet online,
at vendor advocacy . com.
Vendor Advocacy Australia.
We don’t know to bake cakes,
but we’re really good at selling real estate.
Selling your home?
Don’t do it alone.
Have an advocate helping you
and it doesn’t cost one extra cent.
“Go on ring us!”
on 9430 double 0 double 0
or just remember 1300 VENDOR,
or find out more at vendoradvocacy.com.au
Ian Reid’s Vendor Advocacy Australia
Selling your home with the best
This is Ian Reid.
Wherever you live, in the city, the suburbs,
Mornington and Bellarine Peninsulas, anywhere,
we can help you sell your property.
Go on ring us, on 9430 0000.
Or just remember 1300 Vendor,
Or, find out more by visiting Vendor Advocacy.com
(d) Property display boards referred to ‘Ian Reid Vendor Advocacy’ or ‘Ian Reid’s Vendor Advocacy Australia’ until about December 2007, and from that time onwards, to ‘Ian Reid’s Vendor Advocacy Australia’.
(e) Online advertisements for properties sold in conjunction with VAA refer to ‘Ian Reid Vendor Advocacy’ or ‘Ian Reid’s Vendor Advocacy Australia’.
(f) Various VAA websites such as ‘vendoradvocacy’, ‘vendoradvocacyaustralia’ and ‘ianreid’, as well as (prominently) ‘1300vendor’.
(g) Fridge magnets, first distributed in 2002 and then for some years to 2007, referred to ‘Ian Reid’s Vendor Advocacy Australia’.
(h) Correspondence emanating from VAA referred to ‘Ian Reid Vendor Advocacy’ and ‘Vendor Advocacy Australia Pty Ltd’. This included the Listing Authority which had the logo as follows:
It is to be noted that in the body of the General Conditions of the Listing Authority, reference was made throughout to Mr Ian Reid and VAA trading as “Ian Reid’s Vendor Advocacy Australia (‘Ian Reid’)”.
(i) Brochures distributed since September 2003 referred to ‘Vendor Advocacy Australia’ and ‘Ian Reid Vendor Advocacy’. Examples of the relevant branding in the brochures are to be found in Annexure ‘A’.
(j) The booklet ‘Fatal Real Estate Traps Exposed’ referred to ‘Ian Reid’s Vendor Advocacy Australia’ and ‘vendoradvocacy.com’. Examples of this reference are to be found in Annexure ‘B’.
(k) Business cards and ‘With Compliments’ slips referred to ‘Ian Reid Vendor Advocacy’ and ‘Ian Reid’s Vendor Advocacy Australia’, and since 2008, ‘vendoradvocacy’ and ‘1300vendor’. An example of this reference is to be found in Annexure ‘C’.
(l) Since July 2007, company vehicles referred to ‘Ian Reid’s Vendor Advocacy’, and since 2010, referred to ‘Ian Reid’s Vendor Advocacy Australia’ and featured VAA livery. An example of the recent livery is to be found in Annexure ‘D’.
(m) Flyers referred to ‘Ian Reid’s Vendor Advocacy Australia’. Some brochures distributed since 2003 referred to ‘Vendor Advocacy Australia’ in conjunction with ‘Ian Reid Vendor Advocacy’. An example of this reference is to be found in Annexure ‘E’.
(n) DVDs shown at trade shows and events made reference to ‘Ian Reid’s Vendor Advocacy’ and ‘Ian Reid Vendor Advocacy’.
(o) Television advertisements made reference to ‘Ian Reid’s Vendor Advocacy Australia’, sometimes in conjunction with ‘Vendor Advocacy Australia’ and ‘Ian Reid’.
(p) At various displays, seminars and trade shows, reference was made to ‘Ian Reid’s Vendor Advocacy Australia’ or ‘Ian Reid Vendor Advocacy’.
(q) Between about July to September 2011, VAA ‘re-branded’ and for that limited period, more prominently used the phrase ‘Vendor Advocacy Australia’, although not completely. The extent to which this re-branding was implemented is unclear, as old stationary, business cards and material were used in this short relevant period by reference to the persona of Ian Reid as previously described. However, since about September 2011, Mr Ian Reid decided, because of the uncertainty of this litigation, to again use his own name (Ian Reid) in conjunction with ‘Vendor Advocacy Australia’.
54 I now summarise the other evidence put before the Court.
55 However, as a preliminary observation, I note that no witness was called by VAA, despite the resources available to VAA, to testify to being actually misled or deceived. Whilst this is not necessary, it is relevant evidence and can be of great weight: see Australian Woollen Mills Ltd v F.S. Walton & Co Ltd (1937) 58 CLR 641, at 658 (Dixon and McTiernan JJ).
56 I also observe that there was evidence that at the relevant time vendor advocates other than the parties to this proceeding, promoted their businesses, including on the internet.
57 Turning then to the witnesses. The following witnesses were called by VAA.
Mr Ian Reid
58 In addition to the promotional material referred to above, Mr Ian Reid gave evidence as to the other matters relevant to the VAA business. In particular, he gave evidence as to the VAA website.
59 Mr Ian Reid gave evidence that his extensive radio advertising was primarily aimed at directing people to the VAA website, which is promoted by reference to the address ‘www.vendoradvocacy.com.au’. Mr Ian Reid gave evidence that the VAA website became the primary form of contact mentioned in the VAA advertisements, rather than the phone number of the business (as was formerly the case).
60 Mr Ian Reid engaged Mr Peter Byrne, a freelance journalist, to write the text which appears on the VAA website. Mr Byrne also gave evidence in the proceeding, to which I will return.
61 Mr Ian Reid stated that he obtained a report in July 2011 from ‘Andmine Pty Ltd’, a company which provided analytical information to the VAA business, regarding the VAA website. That report showed that:
(a) In July 2011, there were 984 visits to the VAA website.
(b) More than half of these visits were directed via search engines (such as Google).
(c) Almost 90 per cent of visitors to the website were located in Australia.
(d) Almost 12 per cent of visits were directed via 1300vendor.com.
(e) Of visitors via search engines, the most common searches were for ‘ian reid vendor advocacy’, ‘vendor advocacy’ and ‘vendor advocacy australia’.
62 Mr Ian Reid also gave evidence of his employees and agents. VAA employed a number of real estate agent representatives to assist sellers of property in their dealings with real estate agents.
63 In addition, VAA engaged real estate agents who hold their own real estate agents’ licences to provide services as “agents in conjunction” with VAA. Agents in conjunction were not paid a salary by VAA: the relationship was as follows:
(a) VAA obtained prospective clients (for example, people who contacted the business in response to advertising or after viewing the website maintained by the business); and
(b) VAA referred these prospective clients to an employed agent representative, or to an agent in conjunction.
64 If referred to an agent in conjunction:
(a) The agent in conjunction would then visit the prospective client to:
(i) Explain the service offered by the business; and
(ii) Seek to have the prospective client engage the agent’s services.
(a) In doing so, the agent in conjunction is obliged to act in accordance with the policies and processes developed by the business.
(b) The agent in conjunction would then provide services to the client in accordance with the policies and processes developed by the business.
(c) If the client engaged the business and the property was ultimately sold, then the commission paid on the sale was shared between the business and the agent in conjunction.
65 Mr Ian Reid also gave evidence of his dealings with Mr Seitanidis.
66 Between July and October 2009, he was approached by Mr Seitanidis who proposed that he become an agent in conjunction with the VAA business. From October 2009, Mr Seitanidis worked as an agent in conjunction with the VAA business.
67 In November 2010, Mr Seitanidis told Mr Ian Reid that he was unable to take on further work in conjunction with the VAA business, and that he would complete the listings and sales on which he was then working.
68 On or about 20 January 2011, Mr Seitanidis informed Mr Ian Reid that he proposed to commence business in competition with the VAA business, which he did soon thereafter.
69 Prior to 4 March 2011, Mr Ian Reid was informed by his son Mr Ben Reid that he had learned that Mr Seitanidis:
(a) Was using an authority which was very similar to and appeared to have been copied from the Listing Authority; and
(b) Maintained an internet website for his new business which had copied text from the VAA website.
70 Mr Ian Reid understood that Mr Seitanidis registered or otherwise obtained the use of the domains ‘vendoradvocacy.com’ and ‘vendoradvocacyaustralia.com’ in about October 2009.
71 Mr Ian Reid gave evidence that at no time did Mr Seitanidis advise him that he had obtained registration or control of ‘vendoradvocacy.com’ or ‘vendoradvocacyaustralia.com’.
72 Mr Ian Reid stated that had he been aware that Mr Seitanidis had obtained registration or control of ‘vendoradvocacy.com’ or ‘vendoradvocacyaustralia.com’, the VAA business would not have agreed to work with Mr Seitanidis as an agent in conjunction.
73 Mr Ian Reid became aware that Mr Seitanidis had commenced advertising on ‘Google’, seeking to obtain visitors to Mr Seitanidis’ website located at ‘www.vendoradvocacy.com’. Mr Ian Reid produced to the Court screenshots of Google searches showing an advertisement for ‘Dedicated Vendor Advocacy’ located at ‘www.vendoradvocacy.com’, together with two advertisements found when searching ‘ian reid vendor advocacy’ and ‘vendor advocacy australia’.
74 Mr Ian Reid explained in his evidence the process involved in visiting the Google website.
75 On 7 September 2011 he visited the Google website at http://www.google.com.au and conducted a search for the term ‘vendor advocacy’. The first result of that search was an advertised result for ‘Vendor Advocacy Australia – a free service to home sellers’, accessible via the internet address ‘www.vendoradvocacy.com’. Clicking on the link in the result took visitors to the website of Mr Seitanidis’ business.
76 On 12 September 2011 he again visited the Google website and this time conducted a search for the term ‘vendor advocacy australia’. The top result on the first page, under ‘Ads’ was ‘Vendor Advocacy Australia’ ‘A free service to home sellers. Avoid costly mistakes when selling.’ Clicking on the link ‘www.vendoradvocacyaustralia.com’ took visitors to the website of Mr Seitanidis’ business. On the same Google page, in position seven of the search results, there was a link titled ‘Vendor Advocacy<<Dedicated Vendor Advocacy Australia’. This led to the website ‘www.vendoradvocacyaustralia.com’, which was also used by Mr Seitanidis’ business.
77 On 19 September 2011, Mr Ian Reid again visited the Google website and conducted a search for the term ‘vendor advocacy australia’. Under ‘Ads’ with the heading ‘Vendor Advocacy Australia’ is the text ‘A free service to home sellers. Avoid costly mistakes when selling’, and the web address ‘www.vendoradvocacy.com’. On the same page there is a link to ‘Vendor Advocacy<<Dedicated Vendor Advocacy Australia’ for the website ‘www.vendoradvocacyaustralia.com’ identical to that which Mr Ian Reid viewed on 12 September 2011.
78 On 19 September 2011 he again visited the Google website and conducted a search for the term ‘vendor advocacy’. There was an advertisement titled ‘Vendor Advocacy Australia’, featuring the text ‘A free service to home sellers. Avoid costly mistakes when selling’. That advertisement linked to the internet address ‘www.vendoradvocacy.com’ which Mr Ian Reid had viewed on 7 September 2011 and led to the website of Mr Seitanidis’ business.
79 An attack was made upon the credibility of Mr Ian Reid. I reject these attacks on his evidence. Whilst Mr Ian Reid was prone to give lengthy speeches, and sometimes acted as the advocate, I have accepted his evidence, subject to one qualification to which I refer below. In the important matters relevant for determination he was not challenged. As I have indicated, I have relied primarily on the documentary evidence available. To the extent Mr Ian Reid made general observations about “branding” and “sub-branding”, and gave own subjective views about these brands, I have put these general observations in the context of the documentation he introduced into evidence. To the extent he sought to ‘underplay’ the significance of his own name and persona, the documentation does not bear this out.
80 I should mention one particular matter upon which I have not accepted Mr Ian Reid’s version of events. Mr Ian Reid asserted that he was the originator of the concept of working as a vendor advocate. I do not accept that this was the case. It would appear that the concept had been considered before Mr Ian Reid adopted it in 2001. However, the evidence shows that he has promoted himself widely as a vendor advocate. He was probably the major proponent of the concept. The only relevance of whether or not Mr Ian Reid was the original inventor of the concept would be to impact upon his credit. I do not, however, see this as an important consideration, nor does it detract from my view that Mr Ian Reid was a essentially a truthful witness.
Mr Melatti
81 Mr Melatti gave evidence that Mr Seitanidis was an employee of Victorian Independent Property Consulting Pty Ltd (‘VIPL’) until about July 2009, a company of which Mr Melatti was a director. Mr Seitanidis was the officer in control of VIPL. VIPL carried on business under the names ‘Astute Buyers Advocates’ and ‘Exclusive Vendor Advocates’. VIPL used the internet domains ‘astutebuyersadvocates.com.au’ and ‘exclusivevendoradvocates.com.au’ in its business. While with VIPL Mr Seitanidis provided services to the buyers’ advocacy and sellers’ advocacy divisions of VIPL. On 29 August 2009, Mr Seitanidis registered the domain name ‘astutebuyersadvocates.com’. Mr Seitanidis conducted a website at this address promoting his business. VIPL did not authorise Mr Seitanidis to register this domain. Also on 29 August 2009, Mr Seitanidis registered the domain name ‘exclusivevendoradvocates.com’.
82 Mr Melatti’s evidence was led as tendency evidence and evidence as to Mr Seitanidis’ credibility.
83 The issues to which Mr Melatti’s evidence was said to be directed were:
(a) Whether Mr Seitanidis intentionally sought to pass his business off as being VAA’s business; and
(b) Whether the misleading conduct VAA alleges Mr Seitanidis engaged in was part of a course of conduct by which Mr Seitanidis has sought to mislead consumers as to whether his fledgling business had some connection to established vendor advocacy businesses.
84 Mr Melatti was cross-examined, and he clearly displayed some animosity towards Mr Seitanidis. Nevertheless, I have accepted the evidence of Mr Melatti.
85 The facts deposed to by Mr Melatti do not seem to be in contention, although their characterisation as impacting on Mr Seitanidis’ credit is in issue. The characterisation is a matter for the Court, taking into account Mr Seitanidis’ overall conduct and evidence.
Mr Andrew Melas
86 Mr Andrew Melas was a real estate agent for 23 years, focussing on the sale of property in the Bayside area.
87 He gave evidence that in his experience:
(a) The phrase “Vendor Advocacy Australia” was used only to refer to the business operated by VAA; and
(b) The phrase “Vendor Advocacy” was originated by Mr Ian Reid for his new business, but is now used to refer to both the VAA business and the service of representing people selling houses in their dealings with real estate agents.
88 Mr Melas gave evidence that the VAA business was originally known by reference to the phrase “vendor advocacy”, often used together with the name “Ian Reid” as Mr Ian Reid voiced most of the advertisements for the business. According to Mr Melas, since 2006 or so, the business has been known primarily as “Vendor Advocacy Australia” and “Ian Reid’s Vendor Advocacy Australia”.
89 Mr Melas also said that prior to Mr Ian Reid advertising his vendor advocacy business, the term ‘vendor advocacy’ was unknown in the real estate industry.
90 Mr Melas was not cross-examined. However, his evidence was only based on his experience, and must be considered in the context of all the evidence before the Court, including the evidence of promotional material produced to the Court by Mr Ian Reid himself.
Ms Ciaron Fitzpatrick
91 Ms Ciaron Fitzpatrick was employed as the training and compliance manager for Hocking Stuart, a large franchised group of real estate agencies.
92 She had previously been employed by Consumer Affairs Victoria (‘CAV’) as a Senior Conciliator and Acting Manager of the Estate Agents Resolution Service. Her role with CAV involved providing authoritative advice to the real estate industry and the general public, receiving and resolving complaints against real estate agents from the general public, and conducting information sessions or presentations to stakeholders (including real estate agent offices) on general obligations and practice requirements of real estate agents.
93 She first met Mr Ian Reid when she was employed by CAV. She dealt with Mr Ian Reid in relation to the business he had commenced of representing people selling their homes in their dealings with real estate agents.
94 She gave evidence that the rise of ‘vendor advocates’ has occurred only since Mr Ian Reid commenced operating VAA.
95 In her experience at CAV and in the real estate industry, she gave evidence that she never heard the phrase “Vendor Advocacy Australia” used to refer to anything other than the business operated by VAA. She gave evidence that the phrase ‘vendor advocacy’ is now often used to refer generally to the industry but was originated by Mr Ian Reid and was frequently used to refer to the VAA business.
96 Ms Fitzpatrick was not cross-examined. Again, her evidence must be considered in the context of the evidence before the Court. It is significant, though, that Ms Fitzpatrick acknowledged (as is the fact) that the phrase ‘vendor advocacy’ itself is used generally in the industry.
Mr Jack Fullerton
97 As I have already alluded to, Mr Jack Fullerton gave evidence regarding the internet website of VAA. He (through his company, ‘Blaze Media Melbourne’) was engaged to provide technical services to VAA.
98 It was apparent that the ‘vendoradvocacy.com’ domain had not been reviewed when its registration expired and Mr Fullerton gave evidence that failure occurred by oversight after he ceased providing technical support services to VAA.
Mr Justin Ashley Thompson
99 At the relevant time, Mr Justin Thompson was contracted to Radio 3AW Melbourne Pty Ltd (‘Radio 3AW’) to perform services as an Advertising Sales Representative and Assistant Sales Manager. He had worked in sales in the radio industry for about 24 years.
100 Mr Thompson had known Mr Ian Reid for more than 10 years. He first dealt with Mr Ian Reid when his business, then known as ‘Vendor Advocacy’, commenced advertising on Radio 3AW, a Melbourne radio station. Mr Ian Reid launched his new business in 2001 by advertising it on Radio 3AW. VAA was initially a small advertiser. Over the last 10 years it has developed into a very significant advertiser on Radio 3AW and Magic 1278, another radio station.
101 Further, Mr Ian Reid arranged for VAA to advertise on radio in Queensland.
102 Mr Thompson gave evidence about VAA’s expenditure on advertising on Radio 3AW and Magic 1278 in recent years having been as follows:
(a) 2007: $262,915.00
(b) 2008: $295,901.24
(c) 2009: $312,945.00
(d) 2010: $341,420.00
(e) 2011: $324,564.00
(f) 2012 (for a selected period): $84,180.00
103 He gave evidence that the phrase ‘vendor advocacy’ was frequently used in VAA’s advertisements, both as a description of the service offered and as a brand for that service. The phrases ‘Vendor Advocacy’ and ‘Vendor Advocacy Australia’ have been used consistently in VAA’s advertising.
104 He gave evidence that there was a period from about January 2009 until 2011 when advertisements referred to the website ‘1300 Vendor’ and also the telephone number ‘1300 Vendor’, but the advertisements continued to refer to the business as ‘Ian Reid Vendor Advocacy’, ‘Vendor Advocacy Australia’ and ‘Ian Reid’s Vendor Advocacy Australia’.
105 Mr Thompson’s belief was that within a few years, VAA had built a very strong brand in both the phrases ‘Vendor Advocacy’ and ‘Vendor Advocacy Australia’.
106 Again, whilst Mr Thompson was cross-examined, I do not consider that his evidence was challenged other than to the ‘extent’ of the branding used by VAA. This is a matter that needs to be considered after looking at all the evidence, not based on the impression of one or more witnesses.
Ms Jo-Ellen Vaughan
107 Ms Jo-Ellen Vaughan gave evidence relating to VAA’s expenditure figures for radio advertisements and other promotional activities. Such expenditure was extensive, and not in dispute. She was cross-examined in relation to branding and some other matters which I do not need to detail.
Mr Michael Simonetti
108 Mr Michael Simonetti was a director of Andmine Pty Ltd, which was referred to by Mr Ian Reid in his evidence.
109 Andmine was a full service ‘digital agency’, which provided advertising and related services to clients in relation to the internet and other digital media.
110 Mr Simonetti has worked in the digital media and software industry in Australia for 10 years.
111 As part of its engagement by VAA, Andmine monitored traffic to VAA’s website and reported to VAA about this.
112 Mr Simonetti gave evidence that:
(a) More than half of the visits to VAA’s website were directed to the website via search engines.
(b) The vast majority of visitors (above 90%) were located in Australia.
(c) Approximately 38% of all traffic to the VAA website came through Google AdWords.
(d) Since keeping statistics on how many people download the ‘Fatal Real Estate Traps Exposed’ booklet (from February 2012), 849 people have downloaded the booklet.
(e) The most common searches which result in visitors to VAA’s website are:
(i) vendor advocacy
(ii) ian reid vendor advocacy
(iii) vendor advocacy Australia
(iv) vendoradvocacy.com.au
(v) fatal real estate traps exposed
(vi) ian reid
(vii) real estate traps exposed
(viii) vendor advocacy melbourne
113 The goal was to retain for VAA the leading position in the Google search result in respect of relevant keywords and stay ahead of current and new competitors. Further, he sought to achieve other favourable outcomes for VAA, such as; improving visitor duration, the number of pages they visit, and their engagement on the site (for example, contact page signups and the “Fatal Real Estate Traps Exposed” booklet downloads).
114 An important goal was to retain the number one position in Google search results for searches for the names “Vendor Advocacy” and “Vendor Advocacy Australia”.
115 Google Analytics, which is the software Andmine uses to record all visitors to the VAA website, showed that:
(a) There were 22,400 visitors to VAA’s website in 2011; and
(b) 20,000 were from Australia.
116 Mr Simonetti gave evidence that ‘.com.au’ domain was the principal domain used by small and medium-sized Australian business to host their website and to which they would direct internet traffic, but stated this was not invariably the case. Many Australian businesses register and use internet addresses at other domains. For example:
(a) Some Australian businesses have their websites principally or solely accessible at ‘.com’ domains;
(b) Many Australian businesses utilise both ‘.com’ and ‘.com.au’ domains; and
(c) Some Australian businesses have their websites principally or solely accessible at other domains. For example, the principal domain used by Internode – a substantial Australian technology company – is ‘internode.on.net’.
117 Major global businesses tend to have their principal address at ‘.com’ domains, and may also utilise the ‘.com.au’ variant.
118 In Mr Simonetti’s experience, Australian internet users would frequently type in a ‘.com’ address even when endeavouring to type in the website address of an Australian business. This can occur through inadvertence, or because internet users are used to finding relevant internet sites at ‘.com’ addresses.
119 When advising clients as to the internet domains they should register in respect of their businesses, unless there is a very good reason not to do so, Mr Simonetti recommends that the client register both the ‘.com’ and ‘.com.au’ domains of names associated with their business.
120 However, over the past few years other domains have also become increasingly important. Mr Simonetti also now recommends that clients register multiple international domains, for example ‘.biz’ and ‘.net’ domains associated with their businesses, to protect them against competitors registering these domains and funnelling traffic to their sites.
121 In his experience, if a client has only a ‘.com.au’ domain then there is a real risk that some people intending to visit the client’s website will be diverted to another site by typing in a ‘.com’ address rather than a ‘.com.au’ address.
122 Mr Simonetti also gave evidence in relation to Mr Seitanidis. He made the following observations.
123 Mr Seitanidis’ business had undertaken Google advertising by reference to the phrase ‘Vendor Advocacy Australia’. Mr Simonetti produced a bundle of print-outs of Google search results showing advertisements for Mr Seitanidis’ business by reference to the phrase ‘Vendor Advocacy Australia’.
124 Further, a website was maintained for Mr Seitanidis’ business at ‘vendoradvocacy.net’ and ‘vendoradvocacy.biz’. Until about September 2011, a website was maintained for Mr Seitanidis’ business at ‘vendoradvocacy.com’ and ‘vendoradvocacyaustralia.com’.
125 In these circumstances, Mr Simonetti thought it was very likely that internet users intending to visit VAA’s website have inadvertently visited the website for Mr Seitanidis’ business. This was because:
(a) By paying for Google AdWords for the site ‘www.vendoradvocacy.com’ and therefore ensuring top spot on Google, it was very likely that internet users could mistake this with VAA’s website, ‘www.vendoradvocacy.com.au’;
(b) The content of the Google AdWords advertisements was also similar to the content which VAA intended visitors to its site would be searching for;
(c) Internet users may have clicked on a Google search result where Mr Seitanidis’ business was advertised by reference to the phrase ‘Vendor Advocacy Australia’; or
(d) Internet users may have typed ‘vendoradvocacy.com’ into their internet browsers, intending to visit the website maintained by VAA.
126 Mr Simonetti was cross-examined, but the evidence he gave was not seriously challenged. I have accepted Mr Simonetti’s evidence as outlined above. However, his evidence as to the likely reaction of consumers or internet users must again be viewed in the context of the evidence as a whole. Importantly, the reaction of internet users will very much depend on their pre-existing knowledge of Mr Ian Reid and vendor advocacy in general, a matter to which I will return.
Mr Peter Byrne
127 At the relevant time, Mr Peter Byrne was a freelance writer and a broadcaster in Melbourne. He had known Mr Ian Reid for approximately 30 years. He met him when he sought Mr Ian Reid’s advice in relation to the sale of his family home in Kangaroo Ground, Victoria.
128 In early 2001, Mr Ian Reid told Mr Byrne that he had decided to commence operating a business assisting people who were selling their homes to select a real estate agent, and in managing their dealings with real estate agents.
129 Mr Byrne gave evidence that it was in personal meetings with Mr Ian Reid that he proposed the name ‘Vendor Advocacy’ to Mr Byrne and decided to describe himself as a vendor’s advocate. This was mirror-reflective of the term “buyer’s advocate”, which had become popular in the preceding years. In discussions they had, Mr Byrne expressed the opinion that perhaps the term “vendor advocacy” did not convey with complete clarity and immediacy what the service being offered comprised of, but Mr Ian Reid was adamant that the terms “vendor’s advocate” and “Vendor Advocacy” would be the best and most appropriate way to market his services. Mr Byrne gave evidence that Mr Ian Reid was similarly adamant that the advertising copy they would create together would be reflective of that, and serve not just as a promotional tool for his business but also work in an educative way, teaching listeners to his radio commercials what vendor advocacy was and how it worked. Mr Byrne considered that the first batches of radio commercials produced fully reflected that intention.
130 Over time, Mr Byrne wrote a great deal of copy for advertisements for VAA:
(a) In 2001 he was engaged by Mr Ian Reid to write a brochure which was to be sent to all potential clients. The purpose of the brochure was to explain this new concept of selling real estate to potential clients, together with an endorsement of this new service by media personality Mr Johnny Young.
(b) Mr Byrne wrote many radio advertisements for the vendor advocacy business. Many of these advertisements (particularly early in the life of the new business) focussed on explaining the innovative service the business offered.
(c) He wrote a booklet promoting the vendor advocacy business titled ‘Fatal Real Estate Traps Exposed’.
131 Mr Byrne also gave evidence that VAA’s business has traded under many different brands since it commenced in 2001. The names under which it has traded include:
(a) ‘Vendor Advocacy’;
(b) ‘Vendor Advocacy Australia’;
(c) ‘Ian Reid Vendor Advocacy’; and
(d) ‘Ian Reid’s Vendor Advocacy Australia’.
132 He also gave evidence that at various times one or other of these brands has been more prominent in advertising, but:
(a) The brand ‘Vendor Advocacy’ has been used continuously since the inception of the business; and
(b) The brand ‘Vendor Advocacy Australia’ has been prominently used since at least 2003.
133 Mr Byrne was only cross-examined briefly. I am again mindful to place Mr Byrne’s evidence in context, and note that the ultimate conclusions reached by Mr Byrne concerning branding and the prominence of ‘Vendor Advocacy Australia’ must be viewed as being only from his own experience.
Mr Ben Reid
134 At the relevant times, Mr Ben Reid was an employee of VAA, and its general manger.
135 He had been employed by VAA since 2004. Initially he was employed as an agent’s representative in the ‘Ian Reid Real Estate’ business, but he then became a vendor advocate in the Vendor Advocacy Australia business.
136 As the general manager of VAA, Mr Ben Reid was involved in all aspects of the day-to-day management of the business conducted by VAA. His father, Mr Ian Reid, was the sole director of VAA and was principally responsible for the overall running of the business.
137 Mr Ben Reid gave evidence as to the manner in which VAA’s services were provided.
138 He explained that the principal tasks undertaken by employee agents and agents representatives, and by agents in conjunction with VAA were:
(a) Obtaining ‘leads’ (prospective clients);
(b) Converting leads into clients by visiting prospective clients, explaining to them the service offered by VAA and its benefits, and having prospective clients sign VAA’s Listing Authority;
(c) Advising clients on the presentation of their property for sale;
(d) Arranging for a valuer to value a client’s property;
(e) Arranging for a real estate agent, or a number of real estate agents, to view a client’s property and interviewing the agents as to the manner in which they would market and sell the property and the price at which they expected the property would be sold;
(f) Recommending a suitable real estate agent to a client, arranging for the agent’s engagement and ensuring that an appropriate commission structure is in place and that the terms of engagement are suitable;
(g) Ensuring that the property is suitably and cost-effectively marketed;
(h) Ensuring that the most effective sale process is chosen, and where appropriate, seeking to ensure that the contract of sale includes special conditions developed for VAA which are advantageous to the vendor;
(i) Liaising between the client and the appointed real estate agent to ensure the client obtains the best possible result in the sale of their property; and
(j) ‘Vetting’ (or considering on the client’s behalf) and recommending offers of sale received on the property and, where appropriate, negotiating the sale on behalf of the client.
139 He explained that VAA obtained leads in a number of ways, and in particular through:
(a) Word of mouth, where prospective clients are introduced by previous or existing clients;
(b) Radio advertising;
(c) Internet searches (particularly Google searches);
(d) Internet advertising using Google AdWords;
(e) Internet social media forums such as Facebook and Twitter;
(f) Distribution of the booklet ‘Fatal Real Estate Traps Exposed’; and
(g) Other advertising and promotional activities (including television advertising, print media advertising, exhibits at trade shows and the placement of the phrase ‘In conjunction with Vendor Advocacy Australia’ or similar in advertisements for properties in respect of which VAA has been engaged by a client).
140 He also explained that leads were obtained via the internet in the following ways:
(a) Via the internet website maintained by VAA and accessible via numerous internet domains, including:
(i) vendoradvocacy.com.au;
(ii) vendoradvocacyaustralia.com.au;
(iii) 1300vendor.com;
(iv) 1300vendor.com.au;
(v) ianreidvendoradvocacy.com.au;
(vi) wehelpyousell.com.au; and
(vii) ianreid.com.au.
(b) Via searches conducted by internet users for terms relevant to VAA’s business (being searches principally, but not exclusively, conducted using the Google search engine).
(c) Via ‘social media’, including by use of Twitter and Facebook by representatives of VAA. VAA has had both a Facebook and Twitter page since at least July 2011, and both are frequently updated.
(d) Hosted on VAA’s internet website is a blog providing information covering a range of real estate topics such as ‘Market Updates’, ‘Selling Strategies’, ‘Home Improvement’ and ‘Buyer Tips’. Readers can keep up to date with the blogs by subscribing via an RSS feed, joining the ‘Electronic Newsletter’ database or via VAA’s Facebook and Twitter pages.
(e) VAA uses email direct marketing (‘EDM’) to send a monthly Electronic Newsletter to all email contacts, updating them on the real estate market and providing links to the latest blogs hosted on the VAA website.
(f) Via printed documents which contain the address of VAA’s internet website, such as business cards, letters, ‘With Compliments’ slips and letters. People who receive these documents may visit VAA’s internet website and then contact VAA or download the ‘Fatal Real Estate Traps Exposed’ booklet.
141 Mr Ben Reid also gave evidence that VAA’s website was a very (and ever-increasingly) important promotional tool for VAA. All of VAA’s present promotional activities direct potential clients to VAA’s website.
142 He also explained that VAA made use of the Google AdWords program. It purchased various keywords associated with its business, with the effect that Google searches by internet users would result in a sponsored result, promoting VAA to the top of their search results.
143 Mr Ben Reid gave evidence that Mr Seitanidis also participated in the Google AdWords program. He had purchased various keywords, including the keywords “Vendor Advocacy Australia”, “vendor advocacy australia”, “vendor advocacy”, “vendor advocacy Melbourne” and “vendor Advocacy Victoria”.
144 Mr Ben Reid also gave extensive evidence as to the profit lost to VAA by reason of Mr Seitanidis’ conduct. He estimated the profit lost by VAA from each prospective visitor to VAA’s website who was diverted by Mr Seitanidis’ conduct during the period from February to September 2011. However, in view of the conclusion I have reached on liability, I do not need to rehearse the evidence on this matter.
145 Mr Ben Reid was cross-examined. He accepted that the greatest expenditure for advertising was on the radio, primarily Radio 3AW. He also accepted that there were other vendor advocates in the market describing themselves as ‘vendor advocates’.
146 There was evidence and cross-examination directed to conversations with Mr Seitanidis, which I do not regard as relevant to the Court’s determination in this proceeding. These conversations related to the copyright issue and the use by Mr Seitanidis of his website and the use of the phrase ‘vendor advocacy’. There was also an issue, directed to the credit of Mr Ben Reid, concerning the production to the Court of some photographs that were said by Mr Seitanidis to be misleading, in that they depicted signage at a trade show which showed the promotion of ‘Vendor Advocacy Australia’ without the name ‘Ian Reid’. In fact, the signage included the name ‘Ian Reid’ (but this was not immediately apparent in the photographs in question). However, I do not conclude that this was a deliberate attempt to mislead the Court.
147 Overall, I consider that the evidence of Mr Ben Reid was careful and thoughtful. I have accepted his evidence, although again in the context of the overall evidence.
Ms Lynne Gray
148 Ms Lynne Gray was called by VAA. In my view, she provides no evidence of any probative value.
149 Ms Gray was a “mystery shopper” who attended the 2011 Victorian Home Show in August 2011. At that time, she was in the process of selling a property. She gave evidence that she visited the VAA stand and recalls that the branding of the stand was “Vendor Advocacy Australia”. She obtained a copy of the booklet “Fatal Real Estate Traps Exposed”.
150 She gave further evidence that she was asked to provide evidence by Mr Ian Reid about some emails purportedly sent from her to Mr Seitanidis, and an email purportedly from Mr Seitanidis in August 2011. I do not need to descend into the content of these emails, which have no relevance to the principal issues I need determine.
151 She said that she had never sent any email to Mr Seitanidis and never visited the internet site “vendoradvocacy.com”. She gave evidence that no one from VAA asked her to contact Mr Seitanidis in August 2011. She had no association with VAA, other than that she visited its display at the 2011 Victorian Home Show and became a client of VAA for a period in 2011.
152 In cross-examination, it became apparent that Ms Gray was quite unsure about her evidence, and no conclusions could really be reached as to her association with VAA or Mr Seitanidis. In any event, I do not think her evidence has any relevance to the principal issues I need to determine in this proceeding.
Mr Geoffrey Elfman
153 Mr Geoffrey Elfman gave evidence relating to the development of the VAA Listing Authority which was the subject of the copyright issues. I do not need to detail his evidence in view of the fact that the copyright issue is no longer a matter that needs to concern the Court.
Mr Michael Scudds
154 Mr Michael Scudds met Mr Ian Reid in 2000. He was involved in running the business of VAA in Queensland and gave evidence about advertising on the radio in Queensland. He said that the brand he advertised on the radio in Queensland was “Vendor Advocacy Australia”. The advertising commenced in 2005 and ran for several months. He said that they were specifically operating in the Gold Coast and Brisbane metropolitan areas. He returned to Australia at the start of 2009, and since then has worked full-time for VAA as a vendor’s advocate. He said that since 2002, VAA has also been known as “Ian Reid’s Vendor Advocacy” and “1300Vendor”. He also gave evidence that VAA had three identities, namely, “Vendor Advocacy Australia”, “1300Vendor” and “Ian Reid’s Vendor Advocacy”.
155 Mr Scudds was cross-examined. He was not challenged on the main facts he deposed to, other than as to the ‘extent’ of the branding of VAA.
156 Mr Seitanidis gave evidence and called a number of witnesses.
Mr Seitanidis
157 Mr Seitanidis gave a great deal of evidence about his relationship with Mr Ian Reid and VAA, the registration of various domain names, the circumstances surrounding the contentious advertisement, and the various branding of VAA. He also gave evidence about the copyright issue and damages, which I need not detail for reasons already explained.
158 There was some evidence that Mr Seitanidis himself used the named “Vendor Advocacy Australia” when he referred to VAA’s business.
159 It was submitted by VAA that this was powerful evidence that VAA used and was known by the brand ‘Vendor Advocacy Australia’.
160 In cross-examination, Mr Seitanidis conceded that:
(a) ‘Vendor Advocacy Australia’ had been used as a brand by VAA since at least July 2011. This seems not to be contentious.
(b) ‘Vendor Advocacy Australia’ was a prominent part of the brand ‘Ian Reid’s Vendor Advocacy Australia’. Whilst this was said by Mr Seitanidis, I took this to be a comment regarding the use of the name ‘Ian Reid’ in smaller print when used in conjunction with the bolder print ‘Vendor Advocacy Australia’. I do not regard Mr Seitanidis as having ever conceded that overall ‘Vendor Advocacy Australia’ was a prominent part of the brand of VAA’s promotional activities.
161 As with the other evidence already discussed, I have primarily relied upon the documentary material to determine the principal issue of misleading and deceptive conduct. The subjective views of Mr Seitanidis as to ‘branding’ are similarly to be put in that context.
162 In most instances, the actions taken by Mr Seitanidis are not in dispute – it is their characterisation that is in dispute. For instance, the ‘practice’ of Mr Seitanidis in relation to the registration of domain names is documented. However, Mr Seitanidis gave evidence that he saw nothing unlawful or improper in the registration of the domain names that are the subject of this proceeding.
163 Where necessary I will later return to the evidence of Mr Seitanidis in reference to specific issues.
Mr Peter Clarke
164 At the relevant time, Mr Peter Clarke was a licensed estate agent and has, since 2004, been working as a vendor’s advocate. He was an employee of VAA from 13 July 2004 to 30 June 2009, and then worked as an agent in conjunction with VAA from July 2009 to September 2010. He gave evidence that he was aware, during the six years he worked with VAA, that VAA owned several corporate names.
165 He gave evidence that he was not aware of VAA having traded or promoted itself simply as “Vendor Advocacy Australia” without the words “Ian Reid” also forming part of its name until after July 2011. He testified that in the last few years that he worked with VAA, the principal domain name used in VAA’s marketing and promotional material was ‘www.1300vendor.com’. Mr Clarke further gave evidence that in 2003, he met a man called Paul Doherty. Mr Doherty informed Mr Clarke that he worked as a vendor’s advocate, and it was he who came up with the idea of ‘vendor advocacy’.
166 Mr Clarke was cross-examined, but not upon any of the basic facts the subject of his evidence. Mr Ian Reid had dismissed Mr Clarke as an employee of VAA, but his credit was not directly impugned so as to affect the evidence he gave.
Mr James Morrison
167 Mr James Morrison was a licensed estate agent, having commenced working in real estate 40 years ago. He commenced working as a vendor’s advocate in January 2008. He was employed by VAA as the General Manager of its business from 4 April 2004 until 20 December 2007, and from 20 January 2008 to 14 August 2009 worked for VAA as a vendor’s advocate. He gave evidence that as General Manager, he was aware that the corporate names of VAA were “Vendor Advocacy Australia Pty Ltd”, “Vendor Advocacy Pty Ltd”, and “Real Estate Services Pty Ltd”. He was only aware that these corporations traded as “Ian Reid & Staff”, “Ian Reid Vendor Advocacy” and “Ian Reid’s Vendor Advocacy Australia”.
168 He further gave evidence that he was not aware of VAA having ever traded or promoted itself as “Vendor Advocacy Australia” without the name “Ian Reid” being incorporated in its description until after July 2011. He also gave evidence that from January 2008 to August 2009, VAA used the domain www.1300vendor.com as its principal domain on all its marketing and promotional material.
169 Mr Morrison was cross-examined, but again, no dispute was taken as to the basic facts deposed to by Mr Morrison.
Mr Paul Doherty
170 Mr Paul Doherty has been a real estate agent since 1985. As alluded to in the context of considering Mr Clarke’s evidence, in his evidence Mr Doherty disputed that Mr Ian Reid invented the idea of vendor advocacy. He gave evidence that he met Mr Ian Reid in the early 1990s at one of the seminars conducted in Melbourne by Mr David Pilling, the original author of a book similarly entitled “Fatal Real Estate Traps Exposed”. Mr Doherty recalled that both he and Mr Ian Reid attended at least one of these seminars over a number of days. He also gave evidence about his use of the term “vendor advocacy” as describing a service that he provides. Mr Doherty was cross-examined, and was a little uncertain as to exact dates. However, I accept his evidence on the issue that Mr Ian Reid was not the ‘inventor’ of the idea of vendor advocacy. Undoubtedly, as the evidence of Messrs Melas and Byrne suggest, Mr Ian Reid developed the concept or idea of vendor advocacy, and did so extensively. Mr Doherty’s evidence was otherwise consistent and supported by objective criteria, including documentation.
Mr Richard Fowler
171 Mr Richard Fowler was a vendor advocate and licensed estate agent, trading under the name “Advantage Vendor Advocacy”. He gave evidence that he worked for “Ian Reid Vendor Advocacy” for about four years as a vendor advocate. He gave evidence that he had always known VAA as “Ian Reid Vendor Advocacy”, and used the email address “Richard@1300vendor”. Mr Fowler was cross-examined as to his exact recollection of the branding used by VAA, and his recollection was not precise. He also indicated that he had had a dispute with Mr Ian Reid through Fair Work Australia. I do not rely upon the evidence of Mr Fowler because of his imprecise recollection, but I do not consider that this is of any consequence in the determination of this proceeding.
THE MISLEADING CONDUCT CLAIM
172 I now turn to consider the relevant principles of law to apply and their approach to the facts.
173 Section 18(1) of The Australian Consumer Law (‘ACL’) (being Sch 2 to the Competition and Consumer Act 2010 (Cth)) provides as follows:
A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
174 In considering s 18 of the ACL, the principles and substantial case law in relation to s 52 of the Trade Practices Act 1974 (Cth) continue to be applicable.
175 A claim for misleading conduct has no ‘mental element’; it is not necessary that a respondent subjectively intended to mislead or deceive anyone for an applicant to succeed.
176 In a case of the kind presented in this proceeding, it is necessary to determine the class of people to whom the representation was made, and the attributes of the ordinary or reasonable members of that class – see Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 at 85 [102]-[103]. One then needs to consider whether a “not insignificant proportion of people” would be mislead or deceived: see Peter Bodum A/S v DKSH Australia Pty Ltd (ACN 005 059 307) (2011) 280 ALR 639; [2011] FCAFC 98 at 680-681, [206] ff.
177 I do not consider there to be any issue of the relevant class – it comprises actual or prospective consumers interested in selling real estate, most of whom will have access to (and therefore be users of) a computer connected to the internet. Each person within this class will be assumed to have a knowledge of the internet and the forms of advertisement displayed therein.
178 Then there is the question of the relevance of the actions and conduct of Mr Seitanidis. In Australian Woollen Mills Limited v F. S. Walton and Company Limited (1937) 58 CLR 641 at 657, Dixon and McTiernan JJ took the view that such actions and conduct may have evidential value. Their Honours said:
In a question how possible or prospective buyers will be impressed by a given picture, word or appearance, the instinct and judgment of traders is not to be lightly rejected, and when a dishonest trader fashions an implement or weapon for the purpose of misleading potential customers he at least provides a reliable and expert opinion on the question whether what he has done is in fact likely to deceive.
179 In addition, in Shanahan’s Australian Law of Trade Marks and Passing Off, Mark Davison et al (2008, 4th ed) at pp 726-727, the correct position was summarised that:
Evidence of a fraudulent intent may be of great assistance in establishing the requisite misrepresentation, for the court will not be astute to find that the defendant has failed in his nefarious design. The defendant becomes, as it were, an expert witness against himself, and in that capacity will not be considered a fool as well as a knave.
….
the courts have never been sympathetic to the defendant who has attempted to come as close as legally possible. In these circumstances, the Court may more readily infer that the misrepresentation has led to damage or the probability of such.
180 Further, Lockhart J in ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 345:
Evidence of fraud is still tendered in passing-off cases because evidence that the defendant had a fraudulent intent may assist in establishing the requisite misrepresentation, as the court “will not be astute to find the defendant has failed in his nefarious design”: see Midland Counties Dairy Ltd v Midland Dairies Ltd (1948) 65 RPC 435…
181 Undoubtedly, Mr Seitanidis was motivated (at least in part) by anger towards Mr Ian Reid, which translated into a motivation to direct customers from Mr Ian Reid’s business to Mr Seitanidis’ business. I am even prepared to say that Mr Seitanidis had some questionable practices, including his admitted breach of copyright.
182 Then there are a number of adverse comments that can be made about Mr Seitanidis’ conduct.
183 Whilst working at VIPL, Mr Seitanidis competed with that company by promoting himself as a buyer and vendor advocate under the name “Real Estate Assist Sell”.
184 Mr Seitanidis registered and used the domain ‘astutebuyeradvocacy.com’ shortly after leaving VIPL, notwithstanding his knowledge that ‘astutebuyeradvocacy.com.au’ was a domain used by VIPL to promote its business. He also registered and used the domain ‘exclusivevendoradvocacy.com’ shortly after leaving VIPL, notwithstanding his knowledge that ‘exclusivevendoradvocacy.com.au’ was a domain used by VIPL to promote its business.
185 Mr Seitanidis’ evidence was that there was nothing improper in his registration of the domains ‘exclusivevendoradvocates.com’ and ‘astutebuyersadvocates.com’, as the registered trading names of VIPL are ‘Exclusive Vendor Advocacy’ and ‘Astute Buyer Advocacy’.
186 Mr Seitanidis registered the business name ‘Independent Property Advocates’ to provide buyer advocacy services while he was engaged with VAA. Mr Seitanidis’ evidence was that he was not competing with VAA by doing so, as VAA did not offer buyer advocacy services. In fact, VAA does provide buyer advocacy services, a fact which Mr Seitanidis must have been aware of at the time.
187 I find that Mr Seitanidis did not tell Mr Ian Reid about ‘vendoradvocacy.com’ because he knew Mr Ian Reid would want to register it. He decided to keep it for himself.
188 There was other questionable conduct of Mr Seitanidis which was the subject of the re-opening of VAA’s case in 2013. Specifically, Mr Seitanidis initiated an investigation by the Fair Work Ombudsman into his engagement with VAA.
189 It was another demonstration of the animosity between the parties, and showed Mr Seitanidis to be less than frank before the Court and the Fair Work Ombudsman.
190 By way of background, the evidence in these proceedings was completed on 19 October 2012, and the parties gave closing addresses on 22 October 2012. Mr Seitanidis initiated the Fair Work Ombudsman investigation on 1 November 2012. This was shortly after this trial was completed, and some 22 months after he ceased his engagement with VAA.
191 By a letter of 12 April 2013 (received by VAA on 17 April 2013), the Fair Work Ombudsman informed VAA that the Fair Work Ombudsman investigation had not identified any contravention of Commonwealth workplace laws and that it would not be taking any further action in relation to the matter.
192 In the Workplace Complaint Form by which he initiated the Fair Work Ombudsman investigation, Mr Seitanidis alleged that he had been an employee of “Ian Reid’s Vendor Advocacy Australia” but had not been paid employee entitlements. He states:
(i) I was employed by Ian Reid’s Vendor Advocacy Australia as a Real Estate Vendor’s Advocate from 3 August 2009 to 20 January 2011.
(ii) I received no holiday pay or any other employee entitlements whilst working for the employer.
(iii) I was NOT permitted to perform any real estate duties for myself or others whilst employed by Ian Reid’s Vendor Advocacy Australia.
193 The statements by Mr Seitanidis in the Workplace Complaint Form seem to contradict his description of himself as a contractor to VAA in the principal affidavit relied on by him as his evidence in chief in these proceedings. In his affidavit of 30 May 2012 (the ‘30 May Seitanidis Affidavit’), Mr Seitanidis deposed:
In this affidavit I deal with the following …. my experiences as a contractor with Ian Reid’s company
[emphasis added]
194 Further:
(a) A belief by Mr Seitanidis that he was an employee of VAA is inconsistent with the manner in which he prepared accounts for his real estate business for the 2010/11 financial year. Those accounts showed monies paid to him by VAA as commission revenue, and showed expenses incurred by him in operating a real estate business during the period he was providing services to VAA.
(b) Mr Seitanidis’ notifications to the Business Licensing Authority (the regulatory body governing estate agents) during the relevant period were to the effect that he was conducting his own enterprise, rather than that he was an employee.
(c) Mr Seitanidis invoiced VAA from time to time for the commission to which he became entitled. These invoices included Mr Seitanidis’ ABN.
195 Mr Seitanidis also stated in the Workplace Complaint Form that he was not permitted to perform real estate duties for himself or others while engaged with VAA. However:
(a) His evidence at trial was that while providing services to VAA as a vendor advocate he promoted himself as providing services on his own account as a buyer’s advocate.
(b) The agreement between VAA and Mr Seitanidis did not restrict Mr Seitanidis from providing real estate services for himself or others while providing services to VAA. The restriction related only to the provision of vendor advocacy services in competition with VAA.
(c) His evidence at trial was that while providing services to VAA he maintained internet websites through which he promoted his advocacy services, and maintained his own ‘realestate.com.au’ subscription.
196 I find it difficult to accept, in light of this evidence, that Mr Seitanidis was not acutely aware of his status with VAA at the time he was employed. However, even accepting that there may be some confusion between the status of a person employed and a contractor, this does not adequately explain the discrepancies in the material put before the Court and the Fair Work Ombudsman. It may be there was confusion amongst the parties as to whether Mr Seitanidis was an employee or independent sub-contractor, but it is to be expected that whatever characterisation is made in respect of that topic, the facts presented by Mr Seitanidis would be consistent. His statements to the Fair Work Ombudsman seem to be framed deliberately in an attempt to cause Mr Ian Reid distress. Further, his statements made to the Fair Work Ombudsman contradict the thrust of his evidence before the Court, and the discrepancies do not reflect well on Mr Seitanidis’ credit.
197 Other matters were raised by VAA in relation to Mr Seitanidis’ conduct, but I do not consider they take the matter any further. The view I have come to in relation to Mr Seitanidis is that he involved himself in ‘sharp practices’ to achieve business success, but did so in the belief that what he was doing was not unlawful or infringing another person’s rights. For instance, the copyright infringement was a course of conduct indicative of taking a shortcut to achieve a business result. Nevertheless, I consider that Mr Seitanidis probably did not consider at the time there was anything necessarily wrong with this conduct, nor appreciating it was conduct involving contravention of copyright law.
198 I do not consider the evidence justifies a finding that Mr Seitanidis had a specific intent to deceive or mislead customers, or that he sought to be associated with VAA in the minds of consumers. Mr Seitanidis clearly wanted to divert customers from VAA, but this does not necessarily mean that I should conclude there was an intent to deceive. Mr Seitanidis was perfectly entitled to compete, and compete hard.
199 Undoubtedly, Mr Seitanidis had a considerable knowledge of the real estate business, and more specifically, of VAA. After all, he was employed by VAA. If treated as the “expert trader”, I may well have given weight to the inference that an intention to deceive would have been effective.
200 Even then, this evidence would need to put in the balance with the other evidence in this proceeding, most of which is not contentious as to the nature of the promotion of VAA. Therefore, even if I did find an intention to deceive on the part of Mr Seitanidis, I still would have concluded that the intent was not fulfilled having regard to the other evidence in this proceeding. After all, even a deliberate copy of a rival’s get up in order to deceive is just one piece of evidence to be assessed with other relevant evidence: see Windsor Smith Pty Ltd v Dr Martens Australia Pty Ltd (2000) 49 IPR 286, at [33] and REA Group Ltd v Real Estate 1 Ltd [2013] FCA 559 at [212].
SUBMISSIONS OF VAA AND ANALYSIS
201 I now turn to some of the specific submissions made by VAA and my consideration of them.
202 VAA referred the Court to Mortgage House of Australia Pty Ltd v Mortgage House International Pty Ltd (2005) 63 IPR 600; [2004] FCA 1279 as an example of consideration of a brand including the word ‘Australia’. VAA submitted that Beaumont J concluded (at 621) that:
The common law trade mark ‘Mortgage House of Australia’ was, by January 2001, distinctive of MHA and the financial services that it supplied. Those words are a particular and distinctive collocation. They are not directly descriptive of the services supplied by MHA. The combination of words ‘mortgage house’ and/or ‘mortgage house of Australia’ had no currency as a descriptive term in Australia before January 2001. There is no reason to suppose that other traders in the financial services industry, actuated by no improper purpose, would have desired to use those particular words in the course of their business….
The name ‘Mortgage House of Australia’ is not descriptive.
203 However, this is not correct. At this passage, Beaumont J was merely rehearsing the applicant’s submissions, as is clear from page 614, (57) of his judgment. His Honour’s conclusions on liability at 642-643, [133]-[141] were very brief, and did not necessarily involve an acceptance of the passage referred to by VAA at p 621. As is apparent from the comments of Beaumont J at 642, [135], his ultimate decision was based upon the ‘emphasised use’ of the mark ‘Mortgage House’, and its use on ‘a substantial scale’. I do not find the decision of Beaumont J to be of any real assistance in the determination of this proceeding.
204 VAA also made submissions as to the relevance of VAA’s reputation. In this regard, in Nutrientwater Pty Ltd v Baco Pty Ltd (2010) 84 IPR 452; [2010] FCA 2, Kenny J commented at 472-473, [89]-[90] that:
The place of reputation in a claim under s 52 (and therefore s 53(c) and (d)) was explained by the Full Court in Cadbury at [99], where the court said:
Whether or not there is a requirement for some exclusive reputation as an element in the common law tort of passing off, there is no such requirement in relation to Pt V of the Trade Practices Act. The question is not whether an applicant has shown a sufficient reputation in a particular get-up or name. The question is whether the use of the particular get-up or name by an alleged wrongdoer in relation to his product is likely to mislead or deceive persons familiar with the claimant’s product to believe that the two products are associated, having regard to the state of the knowledge of consumers in Australia of the claimant’s product.
As this passage shows, in considering the TPA claims in this case, one must focus on the statutory questions to which ss 52 and 53(c) and (d) give rise. When addressing these questions, the fact, if it be proven, that NW had a reputation in the feature or features allegedly appropriated by Baco such that the feature or features had become distinctive of its business or products is relevant to the answer the court gives.
205 The Cadbury decision her Honour was referring to was Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 159 FCR 397. The quote extracted by her Honour is preceded by the following passage of Black CJ and Emmett and Middleton JJ (at 418):
[96] In any event, the principles relating to passing off do not necessarily require Cadbury to establish an exclusive reputation in relation to the use of the colour purple. More significantly, it certainly does not follow that there cannot be a contravention of the Trade Practices Act simply because Cadbury does not establish that it has an exclusive reputation in relation to the colour purple. The question is whether Cadbury can establish facts that demonstrate that a particular use by Darrell Lea of the colour purple is likely to mislead or deceive consumers into believing that there is some relevant connection between Darrell Lea and Cadbury or their respective products.
[97] Both in the context of Pt V of the Trade Practices Act and the common law tort of passing off, trade indicia other than names and logos can become associated with a particular trader, such that a use by another trader could give rise to misleading or deceptive conduct or passing off. If particular branding elements used by a trader have been identified in a special way with that trader in the minds of the members of the public, there may be misleading or deceptive conduct by reason of the appropriation of those particular branding elements by another trader.
[98] There is an overlap between causes of action arising under Part V of the Trade Practices Act and the common law tort of passing off. However, the causes of action have distinct origins and the purposes and interests that both bodies of law primarily protect are contrasting. Passing off protects a right of property in business or goodwill whereas Part V is concerned with consumer protection. Part V is not restricted by common law principles relating to passing off and provides wider protection than passing off.
206 VAA further submitted that, if the words being used to market products or services by the applicant are descriptive of those goods or services, the applicant must show that the relevant words have acquired a secondary distinctive meaning. In Telmak Teleproducts (Australia) Pty Ltd v Coles Myer Ltd (1989) 89 ALR 48 at 64, Wilcox and Einfeld JJ stated:
... protection will not be granted against the use by another of descriptive words unless the person claiming protection is able to establish that those words have acquired, amongst members of the public, a secondary meaning distinctive of that person’s business or goods. In the relatively rare cases in which this can be shown, the courts will restrain the use by another of the words, whether or not that use results from an intentional copying. The reason is that otherwise the public would be likely to be misled into thinking that the subject business or goods was that of the plaintiff.
207 Whether the words have acquired a secondary meaning is a question of fact. It will be a question of whether the evidence before the Court shows that the words, even if descriptive, have come to be associated by consumers with the services of a particular person.
208 In Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261, the Full Federal Court (Gummow, French and Hill JJ) commented at 269 that:
There is, of course, a range of classes of commercial designation from the purely descriptive with no identifying elements to a unique identifying designation with no descriptive element. Between these poles are hybrid terms such as “motorcharge” used to designate a petrol credit and purchase system: Motorcharge Pty Ltd v Motorcard Pty Ltd (1982) 42 ALR 136. In Equity Access Pty Ltd v Westpac Banking Corporation (1989) 16 IPR 431 Hill J said at IPR 448…:
Just as the distinction between descriptive and fancy names is not a distinction of law so too it is wrong to see the distinction in black and white terms. The reality is that there is a continuum with at the extremes purely descriptive names at the one end, completely invented names at the other and in between names that contain ordinary English words that are in some way or other at least partly descriptive. The further along the continuum towards the fancy name one goes, the easier it will be for a plaintiff to establish that the words used are descriptive of the plaintiff’s business. The closer along the continuum one moves towards a merely descriptive name the more a plaintiff will need to show that the name has obtained a secondary meaning, equating it with the products of the plaintiff (if the name admits of this — a purely descriptive name probably will not) and the easier it will be to see a small difference in names as adequate to avoid confusion.
But even descriptive words may become distinctive of the business of a particular person and if the use of such words by another is calculated to deceive persons into believing that the business of their originator is carried on by the parasitic user and is likely to cause damage to the originator’s business, then a claim for relief for passing off may succeed: BM Auto Sales Pty Ltd v Budget Rent A Car System Pty Ltd (1976) 12 ALR 363 at 369 (per Gibbs J, Barwick CJ and Murphy J agreeing).
209 Similarly, in Morgan & Banks Pty Ltd v Select Personnel Pty Ltd (1991) 20 IPR 289 at 294, Priestley and Clarke JJA and Hope AJA stated that:
It is, however, clear that a name composed of descriptive words may become distinctive of the business of a particular organisation. If that organisation shows that the name in fact distinguishes its business and that the use of the name by another party is calculated to deceive persons into supposing that the business carried on by that other party is that of the organisation and is likely to cause damage to the organisation, it will be entitled to relief: see, for instance, B M Auto Sales Pty Ltd v Budget Rent a Car System Pty Ltd (1976) 12 ALR 363; 51 ALJR 254 particularly at 257, in which the High Court held that the name “Budget Rent a Car” had become distinctive of the plaintiff’s business. It seems to me that although it may be difficult to show that a name containing only descriptive words has become distinctive of a particular business none the less if the evidence shows that it has, the court is bound to give effect to that evidence: see Angelides v James Stedman Hendersons Sweets (1927) 40 CLR 43 at 61…2.
210 I accept the above submissions of VAA, which are in accordance with well established principles.
211 I accept that precise and sustained attention and concentration is not to be expected of a viewer or listener.
212 Consumers may often remember promotional and advertising material imperfectly, and so may type in a domain name or visit a website they think is that of the advertiser, without being certain of the correct address. Further, the consumer may hear and see an advertisement but may not act on the material until some later time. In these circumstances, a consumer may not have the advertisement or promotional material in front of them, and may be forced to rely on that imperfect recollection. In addition, a consumer viewing a website may do so in circumstances that do not allow for in-depth consideration (for example, a website viewed on a mobile telephone screen), which compounds the imperfect recollection. In circumstances where a descriptive phrase is used, this imperfect recollection or confusion cannot give rise to liability on the part of a rival trader without more.
213 Further, clearly the “real life” use of brands is important, as is the use of a brand in the circumstances of the promotion or advertising relied upon by any applicant.
214 It was submitted that a reputation exists in the trading name ‘Vendor Advocacy Australia’ given the extent to which that brand has been referred to in VAA’s promotion. Although the expression has often been used in conjunction with the words ‘Ian Reid’, it was submitted that the brand ‘Vendor Advocacy Australia’ has become independently recognised by virtue of the nature of the promotion.
215 To this end, it was submitted that, for example, when the name ‘Vendor Advocacy Australia’ has appeared with the words ‘Ian Reid’ or ‘Ian Reid’s’, the words ‘Vendor Advocacy Australia’ are presented in quite separate font, styling and size. The words ‘Ian Reid’ are often relatively speaking quite small in contrast with the words ‘Vendor Advocacy Australia’.
216 Further, it was submitted that consumers are easily able to dissociate the person or company promoting a brand from the brand itself. For example, the well-known biscuit manufacturer, Arnott’s, often advertises its ‘Yo-Yo’ biscuits as ‘Arnotts Yo-Yo Biscuits’. It was submitted that consumers, however, know very well what ‘Yo-Yo’ biscuits are, even when the word ‘Arnotts’ is not used.
217 It was further submitted that many prospective clients are introduced to VAA via its radio advertising. A large number of transcripts of radio advertisements were tendered. The dominant brand message with which consumers are left after hearing VAA’s radio advertising is that there is a business (‘Vendor Advocacy Australia’) with which a person (‘Ian Reid’) is associated. A reputation has thereby been built in the brand ‘Vendor Advocacy Australia’, notwithstanding that the phrase was used together with the words “Ian Reid’s”.
218 VAA gave an example of context where a consumer who, in July or August 2011, heard a VAA radio advertisement, which referred to VAA as “Vendor Advocacy Australia”, or “Ian Reid’s Vendor Advocacy Australia”. It was suggested that if, some time later, the consumer remembered the identity of the advertiser but not the precise internet domain advertised, and then typed “vendoradvocacyaustralia.com” into the web browser, the consumer would find herself at Mr Seitanidis’ website. Once there, it was submitted, she would be faced with supplementary confusion given the prominent heading “Vendor Advocacy Australia”.
219 It was also submitted that the phrase “Vendor Advocacy Australia” is not merely descriptive. The fact that three words are used together (it was submitted) makes it more likely that the trading name is distinctive, than if only one or two were used. The example was given of the “National Australia Bank”. It was submitted that either two word sub-brand (“National Bank” or “Australia Bank”) would likely be regarded as descriptive, rather than distinctive of any particular entity. It was the addition of the third word to form the compound brand “National Australia Bank” that makes the name more distinctive.
220 It was also submitted that the use of the word “vendor” (rather than the alternative “seller”) is distinctive of VAA – or, at a minimum, the phrase “Vendor Advocacy” is only one of the expressions which may be used to describe the service.
221 It was further submitted that the phrase “Vendor Advocacy Australia” can only be understood as a brand – it cannot otherwise be used in a sentence. A person wishing to describe a business offering the services offered by VAA in the geographic region in which it operates would describe the service as one offered within or throughout Australia.
222 The important consideration in this proceeding is the descriptive nature of the phrase used by VAA. It was probably the main reason the persona of Ian Reid was employed to the promotional material, so as to distinguish his business, as well as promoting his own experience. It is this consideration that I think answers all the submissions of VAA.
223 In circumstances where a trader adopts a descriptive trade name the use by another trader of a trade name that also uses those descriptive elements will not generally (in itself) constitute misleading or deceptive conduct.
224 In Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216, Stephen J said at 229-230:
There is a price to be paid for the advantages flowing from the possession of an eloquently descriptive trade name. Because it is descriptive it is equally applicable to any business of a like kind, its very descriptiveness ensures that it is not distinctive of any particular business and hence its application to other like businesses will not ordinarily mislead the public. In cases of passing off, where it is the wrongful appropriation of the reputation of another or that of his goods that is in question, a plaintiff which uses descriptive words in its trade name will find that quite small differences in a competitor's trade name will render the latter immune from action (Office Cleaning Services Ltd v Westminster Window and General Cleaners Ltd (1946) 63 RPC 39 at p. 42, per Lord Simonds). As his Lordship said (at … p. 43), the possibility of blunders by members of the public will always be present when names consist of descriptive words– “So long as descriptive words are used by two traders as part of their respective trade names, it is possible that some members of the public will be confused whatever the differentiating words may be.” The risk of confusion must be accepted, to do otherwise is to give to one who appropriates to himself descriptive words an unfair monopoly in those words and might even deter others from pursuing the occupation which the words describe.
If this be so in the case of passing off actions the case of s. 52(1), concerned only with the interests of third parties, is a fortiori. To allow this section of the Trade Practices Act to be used as an instrument for the creation of any monopoly in descriptive names would be to mock the manifest intent of the legislation. Given that a name is no more than merely descriptive of a particular type of business, its use by others who carry on that same type of business does not deceive or mislead as to the nature of the business described. Thus both the Hornsby and the Sydney Centres are building information centres and no one is being deceived as to the nature of the service which is available there. Any deception which does arise stems not so much from the Hornsby Centre's use of the descriptive words as from the fact that the Sydney Centre initially chose descriptive words as its title and for many years thereafter was the only centre in Sydney which answered the description which those words provide. In consequence members of the public have come to associate its particular business with that type of activity. Evidence of confusion in the minds of members of the public is not evidence that the use of the Hornsby Centre's name is itself misleading or deceptive but rather that its intrusion into the field originally occupied exclusively by the Sydney Centre has, naturally enough, caused a degree of confusion in the public mind. This is not, however, anything at which s 52(1) is directed.
225 Justice Bromberg in REA Group at [105] to [108] usefully set out some relevant principles:
105 It is difficult to establish that a descriptive name, as opposed to a concocted or invented name, is a name which has become distinctive of a trader’s business: Cellular Clothing Co Ltd v Maxton & Murray [1899] AC 326 at 336 (Earl of Halsbury LC). Whether a name is distinctive of a particular business is a question of fact and degree: Architects (Australia) Pty Ltd v Witty Consultants Pty Ltd [2002] QSC 139 at [19] (Chesterman J). A concocted name is far more likely to be distinctive of a business than a name which is based upon a description of the nature of the business that is being conducted: Chase Manhattan Overseas Corporation v Chase Corporation Ltd (1985) 9 FCR 129 at 147 (Wilcox J). Whilst a name may at the same time be both descriptive and distinctive, the fact that a name prima facie retains its descriptive signification increases the difficulty of proving that it is distinctive of the goods of a particular business: Burberrys v JC Cording & Co (1909) 26 RPC 693 at 704 (Parker J); British Vacuum Cleaner Co Ltd v New Vacuum Cleaner Co Ltd [1907] 2 Ch 312 at 322-323 (Parker J); and South Australian Telecasters Limited v Southern Television Corporation Limited [1970] SASR 207 at 220 (Walters J).
106 In Kettle Chip Co Pty Ltd v Apand Pty Ltd (1993) 46 FCR 152 at 165-6, Burchett J stated:
“Of course, the mere fact that a word is descriptive does not warrant a trader in using it if it has also acquired a secondary meaning as to distinguish the products of a rival. As Lord Radcliffe said in de Cordova v Vick Chemical Co (supra) at 106:
‘To say that it is descriptive would not be enough, for…there is no absolute incompatibility between what is descriptive and what is distinctive. A descriptive word, such as ‘Sheen’, can be recognised in law as distinctive if the evidence clearly shows that it is distinctive in fact”.
107 In Cantarella Bros Pty Ltd v Modena Trading Pty Ltd [2013] FCA 8 at [108] and by reference to the judgment of Lockhart J in Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals (1991) 30 FCR 326, Emmett J set out what is meant by the requirement that a term be “distinctive”. Whilst the analysis was given in the context of a trade mark case, it bears repeating here:
There must be a sufficient degree of distinctiveness to counterbalance the descriptive character of a word. A word that is prima facie descriptive may become distinctive in connection with particular goods but yet retain its descriptive meaning. However, the word must, to become distinctive, have a new and secondary meaning different from the descriptive one, and thus cease to be purely descriptive. Distinctive means that the mark distinguishes the registered proprietor’s goods from others of the same type in that market. However, distinctive does not mean that the goods must specifically identify the registered proprietor as the source of the goods. What is important is that a significant number of consumers in the relevant market identify the registered proprietor’s goods as coming from one trade source (Johnson & Johnson at 335-336).
108 Examples of names which have been held to have achieved the requisite secondary meaning have included “Minties” (for mints): Angelides v James Stedman Hendersons Sweets Ltd (1927) 40 CLR 43 at 72; “Budget Rent a Car” (for car rental services): BM Auto Sales Pty Ltd v Budget Rent a Car System Pty Ltd (1976) 12 ALR 363 at 369; “Opals Australia” (for opal sales): Opals Australia Pty Ltd v Opal Australiana Pty Ltd (1993) ATPR 41-264; “Microwave Cuisine” (for microwave cooking classes): LSK Microwave Advance Technology Pty Ltd v Rylead Pty Ltd (1989) 16 IPR 107 at 114; and “Architects Australia” (for architectural services): Architects Australia at [15]-[24]. In each case, the evidence before the court showed that the names, though descriptive, had come to be associated by consumers with the goods or services of a particular trader. Examples of names which have been held not to achieve the requisite secondary meaning have included “Flexibond” (for an investment product): Lumley Life Ltd v IOOF Friendly Society (1989) 16 IPR 316; “Cellular” (for a type of cloth): Cellular Clothing; “Office Cleaning Services” (for a cleaning business): Office Cleaning Services Ltd v Westminster Window and General Cleaners (1946) 1 All ER 320; and “British Vacuum Cleaner Company” (for a company that held a patent for particular vacuum cleaner technology): Vacuum Cleaner Case. Whilst each of these cases is illustrative of the relevant principles, each turns on its particular facts. The facts of this case support a finding that REA’s domain names have become distinctive, in the sense that they distinguish REA’s property portals from other portals in the same market.
[emphasis in the original]
226 Basically, the enquiry is into the reason the misconception has arisen – to find a person liable, it must be because the impugned conduct has sufficiently caused the likelihood of deception, or the deception in fact: see eg Bromberg J in REA Group at [116] to [122]:
227 A certain amount of confusion is an inevitable outcome of the use of descriptive words. As Emmett J noted in the context of trade marks in Connect.Com.Au Pty Ltd v GoConnect Australia Pty Ltd (2000) 178 ALR 348; (2000) 50 IPR 535; [2000] FCA 1148, at [61]:
The possibility of blunders by members of the public will always be present when names consist of descriptive words. So long as descriptive words are used by two traders as part of their respective trade names, it is possible that some members of the public will be confused whatever the differentiating words may be: see Sir Ninian Stephen at CLR229 in Hornsby Building.
228 A further consequence of this principle, noted by Marshall J in Insurance News Pty Ltd v JEM Nominees Pty Ltd t/a Insurance News Australia (2008) 80 IPR 239; [2008] FCA 1966, at [17], quoting Emmett J with approval, is:
…that for a descriptive name to become distinctive, “a very substantial amount of use in the relevant market would be necessary for it to acquire any secondary meaning.” At [58] his Honour said:
[58] … where a descriptive trade name is used there will always be the possibility of confusion … {and} where a descriptive name is used it will be difficult for that name to become distinctive of a particular business. Application to like businesses would not ordinarily mislead the public: see Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre.” (emphasis added)
229 These principles have been applied in many cases: see eg Equity Access Pty Ltd v Westpac Banking Corporation and Another (1989) 16 IPR 431; Australian Telecommunications Corporation v Hutchinson Telecommunications (Aust) Ltd (1009) 17 IPR 615; Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 (Gummow, French and Hill JJ); Commercial Dynamics Pty Ltd v M Hawke Nominees Pty Ltd (1996) ATPR 41-503 (Jenkinson, Miles and Finn JJ); Guide Dog Owners’ & Friend’s Association v Guide Dog Association of NSW & ACT (1998) 43 IPR 531 (Heerey, Carr and Mansfield JJ) and Betta Foods Australia Pty Ltd v Betta Fruit Bars Pty Ltd (1998) 41 IPR 347 (Goldberg J).
230 VAA recognised that a large part of the radio advertising undertaken by VAA, and a substantial part of the other promotional activity undertaken by VAA, referred to VAA as “Ian Reid’s Vendor Advocacy Australia”, and that Mr Ian Reid’s name had a prominent role to play.
231 This was submitted by VAA not to be an impediment to the development of a reputation in the brand ‘Vendor Advocacy Australia’. It was submitted that a person may establish a reputation capable of protection in a subset of their overall brand, and reference in this regard was made to De Cordova v Vick (1951) 1B IPR 496.
232 De Cordova is a decision of the Privy Council on appeal from the Court of Appeal in Jamaica. Lord Radcliffe (speaking for the Council) found that there had been an infringement of a trade mark and passing off in circumstances where only part of the mark had been used. The question before the Council was whether the plaintiff’s brand ‘Vicks VapoRub Salve’ had been infringed by the defendants’ brand ‘Karsote Vapour Rub’. The Council found that ‘VapoRub’ was not merely descriptive and that a word may be both descriptive and recognised in law as distinctive. It was found that the plaintiff had a reputation in ‘VapoRub’ notwithstanding that this word was only a part of the plaintiff’s branding. The Privy Council further found that by its conduct, the defendants had engaged in passing off.
233 The Privy Council was obviously persuaded by the evidence in that proceeding, which can be distinguished from the position in this proceeding. The evidence was that the term ‘VapoRub’ (used in Jamaica) was not merely descriptive – it was a name of a substance everyone regarded as a product of a particular trader’s manufacture. When dealing with the question of passing off, the Privy Council said that the significance of the word ‘VapoRub’ in the Jamaican market was a “dominating element” – so the impugned traders were not effectively distinguishing their goods by the use of the additional word ‘Karsote’ or by the manner of the get-up of their jars (at 503). This is a far cry from the evidentiary position in this proceeding.
234 VAA also contended that of substantial relevance in the present proceeding by reason of its similar facts is The Architects (Australia) Pty Ltd v Witty Consultants Pty Ltd [2002] QSC 139. The decision is one of Chesterman J of the Supreme Court of Queensland (as he then was).
235 It was submitted that VAA’s position in the present proceeding is substantially stronger than that of the successful plaintiff in Architects (Australia).
236 The facts in Architects (Australia) were as follows:
(a) The plaintiff was a company incorporated as “The Architects (Aust) Pty Ltd”, which traded under the name ‘Architects Australia’ notwithstanding that no business name was registered.
(b) The plaintiff operated an architecture practice based in Brisbane, although it had customers outside Queensland (and outside Australia).
(c) The defendant company had created an online register of Australian architects using the domain name ‘www.architectsaustralia.com.au’. It promoted its website through direct marketing, billboards and media advertisements.
(d) The plaintiff did not advertise. It generally obtained clients through its previous work, recommendations and personal relationships.
(e) The words ‘Architects Australia’ were prominently featured on the defendant company’s homepage located at ‘architectsaustralia.com.au’.
(f) The principal of the defendant company gave uncontradicted evidence that he was unaware of the plaintiff’s business when he registered the domain name.
(g) The plaintiff feared that the similarity between its name ‘Architects Australia’ and the domain (and name) used in the defendant company’s business would lead to confusion and diversion of business.
237 The plaintiff claimed for misleading conduct in contravention of the consumer protection legislation, and further claimed in passing off.
238 After setting out the relevant principles in respect of a claim for passing off (at [13]-[18]), his Honour found at [19] that:
The issue of distinctiveness is one of fact and degree, to be determined upon the available evidence. The words “Australia” and “architects” are ordinary words in common usage. They do not of themselves designate any particular entity or person and may readily be used in a descriptive manner. Mr Thompson submitted that it would be unfair if people were to be prevented from using those words in relation to a business involving architects in Australia. That would be so if what the plaintiff was seeking was to monopolise those words irrespective of the arrangement or structure in which they were used, but I do not think that that is the endeavour of the plaintiff in this case. The subject matter here is more specific. The name is not merely in a form which incorporates the words ‘architects’ and ‘Australia’. Rather the construction of the name is simply ‘Architects Australia’, absent any further preposition, conjunction or adjective. Purely in terms of language, the composition chosen by the plaintiff for its trading name gives it a quality more than merely descriptive.
(Emphasis in original)
239 Despite acknowledging that the words ‘Architects Australia’ were descriptive “to some extent”, Chesterman J nevertheless found the name ‘Architects Australia’ was capable of distinction, as the brand was sufficiently ‘fancy’ to be distinctive of the plaintiff’s business.
240 In respect of the misleading conduct claim, Chesterman J identified the critical question as being whether the use of the domain name ‘architectsaustralia.com.au’ in the circumstances was deceptive, or likely to lead to the deception of persons within the market for architectural services (at [25]). His Honour noted that the question is whether the use of the same or a similar name is likely to give rise to a “sufficient degree of public confusion”, and that if the answer was affirmative, then the name adopted by the newcomer is deemed in equity to be an instrument of fraud (at [26]).
241 His Honour found that (at [27]-[29]):
(a) The defendant, by employing the same terminology as had been used by the plaintiff, had equipped itself with an instrument of fraud; and
(b) Fraud existed in the circumstances by reason of the defendant’s failure to cease using the domain name once the plaintiff’s trading name was brought to its attention.
242 His Honour next found that a misrepresentation of a connection between businesses was sufficient to ground an action in passing off, even if the two businesses were different (at [34]).
243 Accordingly, the Court prevented the use of the relevant domain name by the defendant, commenting at [38] that:
The first defendant’s use of its domain name represents that there is a connection or association between it and the plaintiff’s business to those in the market for architectural services and who have some knowledge of the plaintiff’s activities. This is a case in which the first defendant’s activities are likely to divert business from the plaintiff. It does not matter that the business may not go directly to the first defendant. The first defendant’s business will be enhanced if members of the public resort to its website because they think it is the plaintiff’s venture.
244 His Honour further found (at [39]) that it did not matter that the plaintiff’s business was confined to South East Queensland while the defendant’s website might be accessed from anywhere. His Honour noted that to the extent that the first defendant used its name and advertised in the same geographical area as the plaintiff, the plaintiff’s goodwill was (in his Honour’s view) diminished.
245 His Honour then referred to a decision of the United Kingdom Court of Appeal in British Telecommunications Plc v One In a Million Ltd (1999) 1 WLR 903 (at [40]). In that case, the defendant had registered internet domains identical to the names of the plaintiffs but with the addition of the internet suffix ‘.com’. The plaintiffs in that case succeeded in obtaining injunctions against the defendant. His Honour noted that the Court “proceeded on the basis... that it will restrain the use of a name which, by reason of its similarity to another name, will facilitate to [sic] passing off because the creation of the new name is ‘an instrument of fraud’” (at [41]).
246 Having found for the plaintiff on the passing off claim, Chesterman J also found for the plaintiff on the trade practices claim, stating that (at [48]):
For the reasons already outlined there is a substantial risk that consumers in the relevant class will be led into error as to the identity of the first defendant, as well as to the nature of the services that it offers.
247 His Honour made various orders in the plaintiff’s favour, including orders that the defendant company deregister the domain ‘architectsaustralia.com.au’ and that it be restrained from promoting its business by reference to the name ‘Architects Australia’ or any similar name. At [58] his Honour stated:
I add that the defendants’ submissions on this point were also self-defeating. The defendants cannot consistently assert that there is no distinctive significance in the name “Architects Australia”, and then complain that the loss of their domain name, phrased as it is in identical terms, would of itself cause significant loss of custom.
248 A few observations may be made as to this decision.
249 First, as his Honour recognised, the issue of distinctiveness is one of fact and degree, to be determined upon the evidence before the Court.
250 Secondly, an applicant, again as his Honour recognised, must show the name is distinctive of their business.
251 Thirdly, quite small differences in a competitor’s name may render the latter immune from action, a matter again recognised by his Honour.
252 Fourthly, the plaintiff’s trade name was always just ‘Architects Australia’: it featured no other proposition, conjunction, or description like someone’s name (for instance, ‘Ian Reid’). In this proceeding, Mr Ian Reid has been prominent throughout the VAA’s extensive advertising campaign, in a sense distinguishing him from other vendor advocates in Australia.
253 Fifthly, the plaintiff had continued for 20 years of trading without much advertising, and had still obtained a significant reputation. In this proceeding, the reputation Mr Ian Reid has obtained has been through extensive advertising by reference to his own name. In one way, the “small difference” between his advertising and that of Mr Seitanidis is the addition of Mr Ian Reid’s name and persona.
254 Sixthly, the plaintiff produced to the Court evidence of being misled by those who knew the plaintiff. No such evidence has been produced by VAA.
255 Therefore, I consider that the decision in Architects Australia can be distinguished on its facts.
256 However, I also make some this further observation on Architects Australia.
257 Whilst Chesterman J “on balance” found in favour of the plaintiff, the matter is one of degree and impression. Perhaps then, but certainly today, consumers see similarities between domain names, but are aware that different entities (not necessarily associated with each other) promote themselves. Such consumers would act accordingly, and be astute to differentiate. It seems to me that with the nature of the modern internet, there is always a potential for inherent ‘confusion’, but internet users are savvy enough to deal with those ‘confusing’ aspects.
258 It is important to recall that conduct causing confusion is not necessarily co-extensive with misleading and deceptive conduct: see Google Inc v Australian Competition and Consumer Commission (2013) 294 ALR 404; [2013] HCA 1 at 407 [8] per French CJ, Crennan and Kiefel JJ; Campomar (2000) 202 CLR 45 at 85 [102], and REA Group at [79] per Bromberg J.
259 Therefore, I may summarise my conclusions as follows. The phrase “vendor advocacy” is descriptive and was generally used by various traders in the same line of business. I am not satisfied that the words or brand relied upon in this proceeding by VAA have any secondary distinctive meaning. VAA has primarily promoted itself by reference to the persona of Ian Reid. I do not consider that any consumer which assume that a reference to vendor advocacy, or Australian Vendor Advocacy, would be associated with VAA or Ian Reid. In fact, because Ian Reid has been so much at the front of the promotion of VAA, without his presence the consumer may well assume it is not associated with him or VAA. Any imperfect recollection of consumers would arise from VAA’s adoption of a name consisting of descriptive words. The lack of recall will be as a result of the promotional activity adopted by VAA, by reference to the descriptive words ‘vendor advocacy’.
260 Looking then at the domains. There is no doubt that once the consumer enters the domain of Mr Seitanidis there can be no confusion of the type complained of by VAA. The content of the sites are quite distinct. Even if there was momentary ‘confusion’ in the mind of a consumer upon searching vendor advocates, or even Australian Vendor Advocacy, I do not think this would justify in a finding of misleading and deceptive conduct on the part of Mr Seitanidis.
261 A transitory incorrect impression, or a transient period of being misled even, would not necessarily lead to there being liability imposed upon a respondent: see eg Knight v Beyond Property Pty Ltd (2007) 242 ALR 586, at [54], [58].
262 I have not needed to enter the debate as to the significance of the various accoutrements of domain names, such as “.com.au”. I agree with the observations of various judges that consumers do not pay any real attention to such references: see eg Architects Australia at [21]; Solahart Industries Pty Ltd v Solar Shop Pty Ltd (2011) 281 ALR 544 at [49]; Sports Warehouse v Fry Consulting Pty Ltd (2010) 186 FCR 519 at [155] and REA Group at [128] to [129].
263 I do observe that, in the context of searching the internet, consumers will be vigilant when confronted, as they are, with many domain names referring the phrase “vendor advocacy”. Of course, if the consumer knows of Ian Reid and are looking for his business, they will look for the entity or entities specifically associated with him.
264 I interpolate that if the consumer had visited a VAA site previously, the consumer would be familiar with the Ian Reid persona, and could not be misled by the conduct of Mr Seitanidis in his use of his domain names. In this context, I accept that the websites of VAA were very popular. I do not know the extent of the popularity compared to all websites of vendor advocates. In any event, the popularity of the VAA website does not lead to the conclusion that any secondary meaning has been established through such websites in the terms “vendor advocacy” or “Vendor Advocacy Australia”, or that a not insignificant proportion of consumers would associate those terms with VAA. A consumer on the internet would still view the terms as descriptive and would not assume any association between each website.
265 If there is an imperfect recollection of the type suggested by VAA, any confusion, as I have said, arises from the advantage of a descriptive trade name as used by VAA. If the consumer has never heard of VAA, Mr Ian Reid, or Vendor Advocacy Australia, he or she may be ‘confused’ with the various different vendor advocates, but this would not be because of the conduct of Mr Seitanidis.
266 Therefore, in my view, VAA failed to demonstrate that the conduct of Mr Seitanidis complained of was misleading and deceptive.
COPYRIGHT RELIEF
267 As I have indicated, a dispute still remains as to the relief to be given to VAA in relation to the copyright breach.
268 I have already described the conduct of Mr Seitanidis. There clearly still remains animosity between the parties.
269 I consider that in addition to the damages of $1.00 being awarded, declarations and injunctions should be made.
270 Mr Seitanidis contended that no declarations and injunctions are called for or necessary. I accept, as submitted by Mr Seitanidis, that there is no evidence that after early 2011 Mr Seitanidis threatened or acted in a way which involved any continued breach of copyright.
271 However, in light of the overall conduct of Mr Seitanidis and the overall disputation between the parties, I consider it appropriate to make appropriate declarations and grant injunction relief. There is a purpose in granting this relief. There is a risk Mr Seitanidis may repeat the conduct which he belatedly admitted in this proceeding. The fact that there is no current threat to infringe any copyright of VAA is a relevant consideration in the exercise of the Court’s discretion, but it is not determinative.
272 However, the declarations and injunctions will be framed by reference to the wrongful conduct of Mr Seitanidis and by reference to the actual sale authority and website text reproduced by Mr Seitanidis.
273 Therefore, in relation to the copyright claim, the Court proposes to make the following declaration and orders:
The Court declares that:
(1) The Respondent breached the Applicant’s copyright in the VAA Listing Authority referred to in paragraph 24 of the Amended Statement of Claim (the VAA Listing Authority) by developing and using, in the course of his business, a listing authority which reproduced a substantial part of the Listing Authority.
(2) In March 2011, the Respondent breached copyright in the then existing text of the internet website maintained by the Applicant and located at the internet address http://www.vendoradvocacy.com.au (the Applicant’s website text) by causing an internet website to be published which reproduced a substantial part of the Applicant’s website text.
The Court orders that:
(3) The Applicant be entitled, pursuant to section 120(1) of the Copyright Act 1968 (Cth), to proceed with this action without the owner of the copyright in the Applicant’s website text being joined as a party to these proceedings.
(4) The Respondent be permanently restrained, pursuant to section 115(2) of the Copyright Act 1968 (Cth), whether himself or by his employees, agents or otherwise, from reproducing or causing to be reproduced the VAA Listing Authority, or a substantial part of it, without the licence or authority of the Applicant.
(5) The Respondent be permanently restrained, pursuant to sections 115(2) and section 119 of the Copyright Act 1968 (Cth), whether himself or by his employees, agents or otherwise, from reproducing or causing to be reproduced the Applicant’s website text, or a substantial part of it, without the licence or authority of the Applicant.
‘VENDOR ADVOCACY AUSTRALIA’ TRADE MARK APPLICATION
274 A debate arose as to the fact of VAA making a trade mark application in 2011, said by Mr Seitanidis to be part of a ‘flurry of activity’ to protect the name “Vendor Advocacy Australia”. I do not consider it has any impact on the outcome of this proceeding. However, the relevant facts are as follows.
275 On 11 May 2011 VAA applied to register two trade marks:
(a) The phrase ‘Vendor Advocacy Australia’ together with a logo; and
(b) The phrase ‘Vendor Advocacy Australia-Selling your home with the best’ together with a logo.
276 Mr Ian Reid referred to the trade mark applications in his affidavit filed on 9 September 2011.
277 In paragraph 44 of the 30 May 2012 Seitanidis Affidavit, Mr Seitanidis deposed:
I also discovered that the Applicant had, on 11 May 2011, applied to register the trademark “Vendor Advocacy Australia” – which application I and other entities have since formally opposed at IP Australia.
278 In paragraph 79 of the 30 May 2012 Seitanidis Affidavit, Mr Seitanidis deposed:
As indicated elsewhere in this affidavit, on 11 May 2011, the Applicant applied to IP Australia to trademark ‘Vendor Advocacy Australia’ – however there are objections to the trademark application. I do not believe the Applicant will be successful in obtaining a trademark for the generic-descriptive and geographic phrase ‘Vendor Advocacy Australia’. However, in the extremely unlikely event that the Applicant is successful in obtaining the trademark, it will be on the basis that it only use the phrase ‘Vendor Advocacy Australia’ in conjunction with an image that was part of the trademark application.
279 In her Reasons for Decision dated 7 March 2013, the Delegate of the Registrar of Trademarks, Ms Deirdre O’Brien, decided that none of the oppositions to VAA’s trade mark applications had been established. There has been no appeal from that decision.
280 However, it is apparent from the Reasons for Decision that the trade mark application was successful only to the extent that an image was included as part of the application. In other words, the trade marks approved included the phrases applied for but necessarily with a logo.
281 As I have said, the application, the opposition of Mr Seitanidis, and his evidence on 30 May 2012 referred to above have no relevance to the main issue before the Court in this proceeding. Nor, contrary to the suggestion of VAA, does this debate reflect at all on the credit of Mr Seitanidis.
CONCLUSION
282 For the foregoing reasons, the application other than in respect of the copyright claim should be dismissed.
283 As foreshadowed, my tentative view is that the orders of the Court should be:
The Court declares that:
(1) The Respondent breached the Applicant’s copyright in the VAA Listing Authority referred to in paragraph 24 of the Amended Statement of Claim (the VAA Listing Authority) by developing and using, in the course of his business, a listing authority which reproduced a substantial part of the Listing Authority.
(2) In March 2011, the Respondent breached copyright in the then existing text of the internet website maintained by the Applicant and located at the internet address http://www.vendoradvocacy.com.au (the Applicant’s website text) by causing an internet website to be published which reproduced a substantial part of the Applicant’s website text.
The Court orders that:
(3) The Applicant be entitled, pursuant to section 120(1) of the Copyright Act 1968 (Cth), to proceed with this action without the owner of the copyright in the Applicant’s website text being joined as a party to these proceedings.
(4) The Respondent be permanently restrained, pursuant to section 115(2) of the Copyright Act 1968 (Cth), whether himself or by his employees, agents or otherwise, from reproducing or causing to be reproduced the VAA Listing Authority, or a substantial part of it, without the licence or authority of the Applicant.
(5) The Respondent be permanently restrained, pursuant to sections 115(2) and section 119 of the Copyright Act 1968 (Cth), whether himself or by his employees, agents or otherwise, from reproducing or causing to be reproduced the Applicant’s website text, or a substantial part of it, without the licence or authority of the Applicant.
(6) The Respondent pay the Applicant the sum of $1.00.
(7) The application be otherwise dismissed.
(8) The Applicant pay the costs of the Respondent other than of and in connection with the copyright claim.
(9) The Respondent pay the costs of the Applicant of and in connection with the copyright claim.
284 I will order that the parties confer and file an agreed minute of order reflecting these reasons (including as to costs) with the Court, or failing such agreement, a minute of order as proposed by each party.
| I certify that the preceding two hundred and eighty-four (284) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton. |
Associate:
ANNEXURE ‘A’
(i)
(ii)
ANNEXURE ‘B’
(i)
(ii)
ANNEXURE ‘C’
ANNEXURE ‘D’
ANNEXURE ‘E’
