Federal Court of Australia

Swancom Pty Ltd v The Jazz Corner Hotel Pty Ltd (No 3) [2021] FCA 729

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to ss 88(1)(b) and 90 of the Trade Marks Act 1995 (Cth), the Registrar of Trade Marks is directed to amend the class 41 services specified in respect of:

(a)    registered trade mark number 1442211 (for "CORNER"); and

(b)    registered trade mark number 1669900 (for "THE CORNER"),

as marked up below:

Organising, conducting, providing and providing information in relation to entertainment, recreation, sporting and cultural activities, includingbeing live music performances; amusement services; entertainment services; providing facilities for entertainment, recreation, sporting and cultural activites, includinglive music performances; ticket booking and reservation services for entertainment, recreation, sporting and cultural activities being live music performances; publication services relating to these services; provision of all such services over a global computer network

2.    The first respondent's cross-claim be otherwise dismissed.

3.    The applicant pay the respondents’ costs of the application.

4.    The first respondent pay the applicant’s costs of the cross-claim.

5.    There be no order for costs in respect of the determination of the matters the subject of Orders 1 to 4.

6.    The costs referred to in Orders 3 and 4 be awarded in lump sums pursuant to r 40.02(b) of the Federal Court Rules 2011 (Cth).

7.    In the absence of agreement as to the appropriate quantum of the lump sums to be awarded:

(a)    the parties entitled to costs are to file and serve their respective Costs Summary in accordance with paragraphs 4.10 to 4.12 of the Costs Practice Note within 6 weeks of the date of these orders; and

(b)    the parties liable to pay costs are to file and serve their Costs Response in accordance with paragraphs 4.13 to 4.14 of the Costs Practice Note within 3 weeks of being served with the Costs Summary.

8.    Any question concerning the quantum of the lump sum costs be determined by a Registrar in accordance with any directions made by a Registrar for the hearing of the question including written submissions in accordance with the Costs Practice Note.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

O’BRYAN J:

Introduction

1    On 9 April 2021, I made orders in this proceeding to the following effect:

(a)    The application brought by the applicant (Swancom) against the respondents alleging infringement of Swancom’s registered trade marks (being registered trade mark number 1388154 for CORNER HOTEL, registered trade mark number 1442211 for CORNER, registered trade mark number 1623364 for CORNER PRESENTS and registered trade mark number 1669900 for THE CORNER) was dismissed.

(b)    The cross-claim brought by the first respondent (JCHPL) seeking the cancellation of Swancom’s registered trade marks in respect of the registered services in class 41, in so far as it concerned registered trade mark numbers 1388154 (for CORNER HOTEL) and 1623364 (for CORNER PRESENTS), was dismissed.

(c)    In so far as JCHPL’s cross-claim concerned registered trade mark numbers 1442211 (for CORNER) and 1669900 (for THE CORNER), the parties were directed to make further submissions on the question whether the registration of those marks in respect of services in class 41 should be amended, or a condition or limitation should be entered on the registration, to preserve the freedom of hotels, cafés, bars and restaurants, who may provide ancillary entertainment services (for example, free live music or sporting events shown on large screens), to use the word “corner” in their trading name.

(d)    The parties were directed to file and serve an agreed timetable for the resolution of JCHPL’s cross-claim in respect of registered trade mark numbers 1442211 (for CORNER) and 1669900 (for THE CORNER) and the costs of the proceeding (the outstanding issues).

2    The reasons for making those orders is published as Swancom v The Jazz Corner Hotel (No 2) [2021] FCA 328 (the principal judgment).

3    On 30 April 2021, I made an order by consent for the parties to file and serve written submissions on the outstanding issues. The parties filed written submissions in compliance with that order on 28 May 2021 and subsequently confirmed that the Court should determine the outstanding issues on the papers.

4    These reasons address the two outstanding issues.

Rectification of the Register

5    Swancom is the owner of the following registered trade marks:

(a)    trade mark number 1388154 for “CORNER HOTEL” (with a filing date of 11 October 2010) registered in respect of the following services:

Class 41: Organising, conducting, providing and providing information in relation to entertainment and cultural activities, being live music performances; providing facilities for live music performances; ticket booking and reservation services for entertainment and cultural activities being live music performances; publication services relating to these services; provision of all such services over a global computer network;

Class 43: Provision of food and drink; cocktail lounge, bar, cafe, snack bar and restaurant services; catering services; hospitality services

(b)    trade mark number 1442211 for “CORNER” (with a filing date of 10 August 2011) registered in respect of the following services:

Class 41: Organising, conducting, providing and providing information in relation to entertainment, recreation, sporting and cultural activities, including live music performances; amusement services; entertainment services; providing facilities for entertainment, recreation, sporting and cultural activities, including live music performances; ticket booking and reservation services for entertainment, recreation, sporting and cultural activities; publication services relating to these services; provision of all such services over a global computer network;

Class 43: Provision of food and drink; cocktail lounge, bar, cafe, snack bar and restaurant services; catering services; hospitality services

(c)    trade mark number 1623364 for “CORNER PRESENTS” (with a filing date of 16 May 2014) registered in respect of the following services:

Class 41: Music and entertainment booking services, including providing information about music and entertainment booking services; and

(d)    trade mark number 1669900 for “THE CORNER” (with a filing date of 20 January 2015) registered in respect of the following services:

Class 41: Organising, conducting, providing and providing information in relation to entertainment, recreation, sporting and cultural activities, including live music performances; amusement services; entertainment services; providing facilities for entertainment, recreation, sporting and cultural activities, including live music performances; ticket booking and reservation services for entertainment, recreation, sporting and cultural activities; publication services relating to these services; provision of all such services over a global computer network.

Class 43: Provision of food and drink; cocktail lounge, bar, cafe, snack bar and restaurant services; catering services; hospitality services

6    By its cross-claim, JCHPL applied for an order under s 88(1)(a) of the Trade Marks Act 1995 (Cth) (TMA) that the Register be rectified by cancelling the registration of Swancom’s registered trade marks in respect of the registered services in class 41 (but not in respect of the registered services in class 43). One of the grounds relied on by JCHPL was that, at the filing date, the marks were not capable of distinguishing Swancom’s services as registered in class 41 from the services of other persons (a ground of opposition under ss 41 and 57).

7    In the principal judgment, I found that:

(a)    the CORNER HOTEL mark, at the filing date, was both capable of distinguishing, and did in fact distinguish, Swancom’s professional live music services (comprising the booking of the artist and the promotion, ticketing and staging of the performance at the venue) from the services of other persons and those are the services covered by the registration in class 41 (at [158] – [162]);

(b)    each of the CORNER and THE CORNER marks, at their respective filing dates, did in fact distinguish Swancom’s professional live music services from the services of other persons and Swancom is entitled to registration of those marks in respect of those services but not the broader categories of services covered by the registration in class 41 (at [164] – [166]); and

(c)    the CORNER PRESENTS mark, at the filing date, was capable of distinguishing the services of Swancom in respect of which the mark is registered (music and entertainment booking services) (at [169]).

8    In respect of the CORNER and THE CORNER marks, I concluded that:

164    The evidence concerning the use of the CORNER and THE CORNER marks, and the industry evidence concerning the reputation of those marks, satisfies me that, at their respective filing dates, those marks did in fact distinguish Swancom’s professional live music services from the services of other persons. It follows, in my view, that Swancom is entitled to registration of those marks in respect of its professional live music services. However, as submitted by JCHPL, the class 41 services in respect of which Swancom obtained registration of those marks is far wider than the class 41 services in respect of which Swancom obtained registration of the CORNER HOTEL mark. The registered services in class 41 for the CORNER and THE CORNER marks are as follows:

Organising, conducting, providing and providing information in relation to entertainment, recreation, sporting and cultural activities, including live music performances; amusement services; entertainment services; providing facilities for entertainment, recreation, sporting and cultural activities, including live music performances; ticket booking and reservation services for entertainment, recreation, sporting and cultural activities; publication services relating to these services; provision of all such services over a global computer network

165    It can be seen that live music performances are only one element of those registered services. The registration covers the provision of amusement and entertainment services and providing facilities for entertainment, recreation, sporting and cultural activities. At trial, there was almost no evidence of use of the marks by Swancom in connection with those services, and no evidence of intention to use the marks for such services. The only evidence of use of the marks by Swancom in respect of that broader category of services was an advertisement to watch the AFL Grand Final on “big screens” in the rooftop, bandroom and front bar sections of the Corner Hotel. The display of sporting events on a large screen is a typical service provided free of charge in hotels and other hospitality venues. The CORNER and THE CORNER marks are not to any extent inherently adapted to distinguish such services. As previously stated, the evidence shows that a significant number of hotels have called themselves “Corner Hotel” for the ordinary signification of the word “corner” (because they are located on a corner). The evidence also shows that a number of cafés and bars have also used the word “corner” in their trading name for the same reason.

166    It follows that I am satisfied that s 41 of the TMA does not require the rejection of the registration of the CORNER and THE CORNER marks by Swancom in respect of class 41 services relating to the provision of professional live music services. However, a question arises whether the registration ought to be amended, or a condition or limitation be entered on the registration, to preserve the freedom of hotels and other providers of hospitality services (such as cafés, bars and restaurants), who may provide ancillary entertainment services (for example, free live music or sporting events shown on large screens), to use the word “corner” in their trading name. That is a question relating to relief on which the parties will be invited to make further submissions. The resolution of that question does not affect the analysis of the infringement claims.

9    JCHPL submitted that the CORNER and THE CORNER marks ought to be limited in the manner indicated in the principal judgment and that the Court should make an order that the registrations be amended to include the following limitation:

Registration of this mark shall give no right to prohibit hotels, cafes, bars and restaurants that may provide ancillary entertainment services (such as free live music or sporting events shown on large screens) from using the word CORNER in their trading name.

10    Swancom did not oppose the Court making an order to amend the registration of the CORNER and THE CORNER marks (in light of the Court’s findings in the principal judgment), but submitted that the simplest and most appropriate order is to narrow the class 41 services of those registrations so that they are identical to the class 41 services of CORNER HOTEL as follows:

Organising, conducting, providing and providing information in relation to entertainment, recreation, sporting and cultural activities, includingbeing live music performances; amusement services; entertainment services; providing facilities for entertainment, recreation, sporting and cultural activites, includinglive music performances; ticket booking and reservation services for entertainment, recreation, sporting and cultural activities being live music performances; publication services relating to these services; provision of all such services over a global computer network

11    Swancom submitted that its proposed order is appropriate in circumstances where the Court has considered those services and found them properly registrable for CORNER HOTEL. It further submitted that adding a limitation to the existing registration gives rise to potential issues of construction of the limitation.

12    In my view, the form of order proposed by Swancom is the more appropriate order for the reasons submitted by Swancom. I will therefore make an order in those terms.

Costs

Respondents’ submissions

13    The respondents seek an order for costs on a party and party basis in respect of both the claim and cross-claim on the basis that they had significant overall success in the proceeding, and on the basis that there was a significant degree of overlap in the evidence relied on by the parties in the claim and cross-claim, with no differentiation drawn between the evidence filed in relation to each matter or in the submissions of the parties.

14    The respondents acknowledged that their success on the cross-claim was limited. Nevertheless, they argued that the raising of the cross-claim was not unreasonable. The respondents sought to defend a claim of trade mark infringement and raised the cross-claim by way of defence. Ultimately, the respondents were successful in the proceeding, with no infringement of Swancom’s marks being established. The respondents further submitted that the issues arising in relation to the cross-claim and the evidence filed in relation to the cross-claim were relevant to the infringement claim and vice versa. They argued that this was not a case where the evidence or conduct of the case relevant to infringement and registrability can be readily disentangled. There was no real distinction in the conduct of the proceeding in relation to both the claim and cross-claim, which proceeded on both issues in an interconnected manner.

15    The respondents also referred to the Notice to Admit served by them on 11 September 2019, parts of which concerned historical documentary evidence relating to the use of names including “Corner”, “The Corner” and “Corner Hotel”. On 25 September 2019, the applicant served a Notice of Dispute, which disputed those parts of the Notice to Admit. Findings consistent with the facts stated in the Notice to Admit were made in the principal judgment (at [66]). The respondents submitted that an order for costs appropriately follows from the proof of disputed facts which came to be accepted.

Swancom’s submissions

16    Swancom submitted that while the respondents were successful overall in defending the principal claim, the respondents lost on many discrete issues forming part of the principal claim, each of which involved significant evidence, submissions and Court time. In particular, Swancom submitted that it was successful in establishing that:

(a)    JCHPL and the second respondent (BBPL) have used the Jazz Corner of Melbourne mark as a trade mark in relation to all and each of the businesses conducted from the William Street building: the hotel, café and jazz club and that Jazz Corner of Melbourne mark is used as a badge of origin for the three businesses (at [219]), and that each of JCHPL and BBPL individually used one or more of the Jazz Corner marks in relation to live music services (at [222]);

(b)    the respondents’ use of the terms “Jazz Corner of the World” and “Jazz Corner of Melbourne” was not use in good faith to indicate a characteristic of the services each provides (namely that the vicinity of the building from which each of JCHPL, BBPL and the third respondent (STPL) operates is a pre-eminent centre for jazz music and culture associated with jazz music) within s 122(1)(b)(i) of the TMA and did not involve the use of common words for a descriptive purpose (at [265]);

(c)    the respondents were not entitled to obtain registration of the terms “Jazz Corner of Melbourne” and “Jazz Corner of the World” under s 122(1)(fa) of the TMA as the prior Swancom registered trade marks would have prevented registration of the respondents’ marks under s 44 of the TMA and there was no prior use that could have enabled the respondents to achieve registration under ss 44(3) or (4) (at [268]); and

(d)    the respondents’ use of the registered “Jazz Corner” marks was not the exercise of rights granted to them under the TMA within s 122(1)(e) of the TMA as the rights given to the respondents by those registrations extend to those services in class 43 and do not extend to live music services in class 41 (at [273]-[274]).

17    In relation to the cross-claim, Swancom submitted that JCHPL failed to establish that the CORNER HOTEL, CORNER, THE CORNER and CORNER PRESENTS marks, at their filing dates, were incapable of distinguishing Swancom’s professional live music services from the services of other persons. While the Court found that the registration of the CORNER and THE CORNER marks in respect of services in class 41 should be amended, the question of amendment did not affect the infringement claim (as Swancom was entitled to registration in respect of professional live music services). Swancom submitted that the limited success of the cross-claim was of no material assistance to the respondents in defending the infringement claim and, as a matter of substance and commercial practicality, Swancom ought to be regarded the victor of the cross-claim.

18    Swancom noted that a “broad brush” approach might suggest that the respondents should be awarded their costs of defending the application and Swancom should be awarded its costs of defending the cross-claim. Swancom submitted, however, that such an approach may only succeed in creating a new and expensive dispute for the parties, cost consultants and ultimately (if required) a Registrar to resolve: which parts of the evidence, submissions, trial time and attendances related to defending the application and which related to defending the cross-claim? Swancom argued, by way of example, that there was voluminous evidence and submissions about third parties’ use of the word “corner” in trading names and the applicant might argue that that work falls within its costs of defending the cross-claim (referring to the principal judgment at [144]), whereas the respondents might argue that it falls within their costs of defending the application (referring to the principal judgment at [248]-[249]).

19    Swancom submitted that this case was similar to Hansen Beverage Company v Bickfords (Australia) Pty Ltd (No 2) [2008] FCA 601 (Hansen) in which Middleton J concluded that it was appropriate that each party bear its own costs in a case where he considered “both parties as being unsuccessful in the claims they both made, each claim being significant, with Hansen’s evidence being relevant to its claim and its defence to the cross-claim” (at [14]-[16]). Swancom submitted that that approach is appropriate in the present case.

Consideration

20    The applicable principles governing the award of costs are well known. The Court’s discretion to award costs under s 43 of the Federal Court of Australia Act 1976 (Cth) is broad and is not bound by rigid or inflexible rules. The discretion must be exercised judicially, consistently with the purpose of the power and taking account of relevant facts and circumstances of the litigation. Usually, the discretion to award costs is exercised in favour of a successful party. However, a successful party may be deprived of a proportion of its costs, or even required to pay costs to the other party, if the successful party succeeded only upon a portion of its claim, or failed on issues that were not reasonably pursued, or where the result of the litigation might be described as mixed. Nevertheless, the mere fact that a court does not accept all of a successful party’s arguments does not make it appropriate to apportion costs on an issue by issue basis.

21    The respondents successfully defended Swancom’s application. This required the respondents to file substantial evidence concerning their respective businesses and their use of the impugned “Jazz Corner” marks. While the respondents raised a number of discrete defences to the application that were unsuccessful, including the issue of use of the impugned marks as trade marks, the defences were reasonably based (and some were relatively insignificant in terms of costs). In the context of the application, the unsuccessful defences do not warrant any discount to an award of costs. In the circumstances, the respondents would ordinarily be entitled to their costs of Swancom’s application.

22    In relation to the cross-claim brought by JCHPL, I accept Swancom’s submission that it should be regarded as, overall, the successful party on the cross-claim. As JCHPL submitted, the cross-claim was brought as a defence to the infringement claim. While JCHPL established that the designated services in respect of which the CORNER and THE CORNER marks are registered in class 41 require amendment, the amendment did not afford any defence to the infringement claim. JCHPL failed in its application for cancellation of Swancom’s registered trade marks. Swancom’s defence of the cross-claim required the filing of substantial evidence concerning its business and the use of its registered trade marks, including industry and expert evidence. In the circumstances, Swancom would ordinarily be entitled to its costs of the cross-claim.

23    Thus, the outcome of the proceeding suggests that the respondents should have their costs of the application and Swancom should have its costs of the cross-claim. The Federal Court’s Costs Practice Note (GPN-Costs) (at [3.7]) advises parties that the Court may, if it considers it appropriate, make a consolidated costs order which has the effect of consolidating competing costs entitlements. The Practice Note states:

This process may involve offsetting one party's costs entitlement against another party's costs entitlement and awarding the balance in one global costs order on a percentage basis, or making no order as to costs in respect of one or more costs entitlements. Wherever possible, the aim is to consolidate multiple or competing costs entitlements into one consolidated costs order to simplify any future costs process. Such consolidated costs orders may also be awarded as lump-sum costs orders where appropriate.

24    As submitted by Swancom, the circumstances of the present case are similar to those considered by Middleton J in Hansen. However, in the present case there is insufficient material before me to be satisfied that it is fair to all parties to offset their costs entitlements and make no order as to costs. I have no basis for knowing whether the respondents’ costs of the application are greater than, less than or broadly equivalent to Swancom’s costs of the cross-claim. While the application and the cross-claim both involved significant evidence and cross-examination, and each can properly be described as forming a substantial part of the proceeding, such broad descriptions provide an inadequate basis on which to assess the relative quantum of costs involved. Although it may not ultimately prove to be material, a further complicating factor is that while all of the respondents are entitled to their costs of the application, only one of the respondents, JCHPL, is liable for the costs of the cross-claim.

25    In the circumstances, I consider that the appropriate orders are for Swancom to pay the respondents’ costs of the application and for JCHPL to pay Swancom’s costs of the cross-claim. I will also order that the costs be awarded in lump sums pursuant to r 40.02(b) of the Federal Court Rules 2011 (Cth), with any question concerning the quantum of the lump sum costs to be determined by a Registrar. Of course, it is open to the parties to agree the amounts of the lump sums or otherwise agree to offset their entitlements to costs and not seek any recovery of costs from the other.

26    In making those orders, I recognise that there is some potential for dispute as to the categorisation of costs incurred as relating to the application or the cross-claim. However, I consider that the scope for such dispute to be relatively narrow. Swancom’s application claiming trade mark infringement did not require it to establish any reputation in its marks. It follows that the evidence adduced by Swancom in relation to its business, reputation and trade mark use principally related to the cross-claim and Swancom should be entitled to its costs of that evidence as part of its costs of the cross-claim. Conversely, the evidence adduced by the respondents in relation to their businesses and trade mark use principally related to the application and the respondents should be entitled to their costs of that evidence as part of their costs of the application. As to the evidence adduced by JCHPL concerning the use of the word “corner” as a trading name, such evidence was relevant to both the application and the cross-claim. In circumstances where Swancom initiated the proceeding and the respondents were brought to Court to defend the claim, in my view the respondents are entitled to be awarded their costs of that evidence as part of their costs of the application. That will include the costs associated with the proof of facts stated in the Notice to Admit that were not admitted by Swancom and which were ultimately found by the Court (at [66] of the principal judgment).

27    Finally, the parties had mixed success with respect to the outstanding issues addressed in these reasons. I will therefore order that there be no order for costs in respect of those issues.

Associate:

Dated:    30 June 2021

SCHEDULE OF PARTIES