FEDERAL COURT OF AUSTRALIA

Bed Bath ‘N’ Table Pty Ltd v Global Retail Brands Australia Pty Ltd [2023] FCA 1587

File number:

VID 314 of 2021

Judgment of:

ROFE J

Date of judgment:

14 December 2023

Catchwords:

TRADE MARKS infringementwhether the respondent’s use of the “House BED & BATH” mark infringed the applicant’s registered trade marks comprising the words BED BATH N’ TABLEwhether the applicant has an independent reputation in the words “BED BATHwhether the words “bed” and “bath” are purely descriptiverelevance of alleged confusion evidenceinfringement not established.

TRADE MARKS infringementdefences to infringementwhether the respondent can establish the defence under s 122(1)(b)(i) of the Trade Marks Act 1995 (Cth)in the event of infringement being established, the respondent has not made out the defence.

TRADE PRACTICES misleading or deceptive conduct — alleged breaches of s 18 and s 29(1)(a), (g) and (h) of the Australian Consumer Lawwell-established reputation of the applicantwilful blindness of the respondent as to whether store name likely to mislead or deceive consumerselements of claims establishedpassing offreputationelements of claims established.

Legislation:

Competition and Consumer Act 2010 (Cth)

Evidence Act 1995 (Cth)

Trade Marks Act 1995 (Cth)

Trade Practices Act 1974 (Cth)

Fair Trading Act 1986 (NZ)

Cases cited:

A Nelson & Co Ltd v Martin & Pleasance Pty Ltd (2021) 157 IPR 376

Adidas AG v Pacific Brands Footwear Pty Ltd (No 3) (2013) 103 IPR 521

Allergan Australia Pty Ltd v Self Care IP Holdings Pty Ltd (2021) 162 IPR 52

Anheuser-Busch Inc v Budejovicky Budvar (2002) 56 IPR 182

Apple Inc v Registrar of Trade Marks (2014) 109 IPR 187

Australian Meat Group Pty Ltd v JBS Australia Pty Ltd (2018) 137 IPR 385

Australian Postal Corp v Digital Post Australia Pty Ltd (2013) 105 IPR 1

Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641

Bohemia Crystal Pty Ltd v Host Corp Pty Ltd (2018) 129 IPR 482

Brands Ltd v Bed Bath ‘N’ Table Pty Ltd (2023) 174 IPR 261

Brick Lane Brewing Co Pty Ltd v Torquay Beverage Co Pty Ltd (2023) 170 IPR 195

CA Henscke & Co v Rosemount Estates Pty Ltd (2000) 52 IPR 42

Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 72 IPR 261

Campaign Master (UK) Ltd v Forty Two International Pty Ltd (No 3) (2009) 181 FCR 152

Cantarella Bros Pty Ltd v Lavazza Australia Pty Ltd (No 3) [2023] FCA 1258

Cat Media Pty Ltd v Opti-Healthcare Pty Ltd [2003] FCA 133

Caterpillar Inc v Puma SE (2021) 162 IPR 430

Champagne Heidsieck et Cie Monopole Societe Anonyme v Buxton [1930] 1 Ch 330

Chocolaterie Guylian NV v Registrar of Trade Marks (2009) 82 IPR 13

ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 23 IPR 193

Conde Nast Publications Pty Ltd v Taylor (1998) 41 IPR 505

Domain Names Australia Pty Ltd v .au Domain Administration Ltd (2004) 63 IPR 1

E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144

Energy Beverages LLC v Cantarella Bros Pty Ltd (2023) 170 IPR 281

Fine & Country Ltd v Okotoks Ltd [2012] EWHC 2230

Flexopack SA Plastics Industry v Flexopack Australia Pty Ltd (2016) 118 IPR 239

Gain Capital UK Ltd v Citigroup Inc (No 4) (2017) 123 IPR 234

State Street Global Advisors Trust Co v Maurice Blackburn Pty Ltd (No 2) (2021) 164 IPR 420

Global Brand Marketing Inc v YD Pty Ltd (2008) 76 IPR 161

Halal Certification Authority Pty Ltd v Flujo Sanguineo Holdings Pty Ltd (2021) 163 IPR 433

Halal Certification Authority Pty Ltd v Flujo Sanguineo Holdings Pty Ltd [2023] FCAFC 175

Hashtag Burger Pty Ltd v In-N-Out Burgers, Inc (2020) 159 IPR 186

Health World Ltd v Shin-Sun Australia Pty Ltd (2005) 64 IPR 495

Homart Pharmaceuticals Pty Ltd v Careline Australia Pty Ltd (2017) 126 IPR 498

Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216

Hy-Line Chicks Pty Ltd v Swifte (1996) 115 CLR 159

In-N-Out Burgers, Inc v Hashtag Burgers Pty Ltd (2020) 150 IPR 73

Knight v Beyond Properties Pty Ltd (2007) 74 IPR 232

Lift Shop Pty Ltd v Easy Living Home Elevators Pty Ltd (2014) 106 IPR 419

London Lubricants (1920) Limited’s Application (1924) 42 RPC 264

Mid Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 42 IPR 561

Mitolo Wines Aust Pty Ltd v Vito Mitolo and Son Pty Ltd (2019) 142 IPR 182

Nature’s Blend Pty Ltd v Nestlé Australia Ltd (2010) 87 IPR 464

Optical 88 Ltd v Optical 88 Pty Ltd (No 2) (2010) 89 IPR 457

PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd (2020) 154 IPR 68

PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd (2021) 160 IPR 174

Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd (2017) 141 IPR 1

Phone Directories Co Australia Pty Ltd v Telstra Corp Ltd (2014) 106 IPR 291

Samsung Electronics Australia Pty Ltd v LG Electronics Australia Pty Ltd (2015) 113 IPR 11

SAP Australia Pty Ltd v Sapient Australia Pty Ltd (1999) 48 IPR 593

Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd (2023) 408 ALR 195

Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407

Singtel Optus Pty Ltd v Optum Inc (2018) 140 IPR 1

SMA Solar Technology AG v Beyond Building Systems Pty Ltd (No 5) [2012] FCA 1483

Solahart Industries Pty Ltd v Solar Shop Pty Ltd (2011) 92 IPR 165

Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592

Sports Warehouse Inc v Fry Consulting Pty Ltd (2010) 87 IPR 300

State Government Insurance Corp v Government Insurance Office of New South Wales (1991) 28 FCR 511

Stone and Wood Group Pty Ltd v Intellectual Property Development Corp Pty Ltd (2018) 129 IPR 238

Swancom Pty Ltd v Jazz Corner Hotel Pty Ltd (No 2) (2021) 157 IPR 498

Swancom Pty Ltd v The Jazz Corner Hotel Pty Ltd (2022) 168 IPR 42

Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 55 IPR 354

Telstra Corp Ltd v Phone Directories Co Pty Ltd (2014) 107 IPR 333

Toddler Kindy Gymbaroo Pty Ltd v Gymboree Pty Ltd (2000) 51 IPR 1

Verrocchi v Direct Chemist Outlet Pty Ltd (2015) 112 IPR 200

Vivo International Corp Pty Ltd v Tivo Inc (2012) 99 IPR 1

Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 28 IPR 193

Division:

General Division

Registry:

Victoria

National Practice Area:

Intellectual Property

Sub-area:

Trade Marks

Number of paragraphs:

538

Date of last submission/s:

25 August 2023

Date of hearing:

2930 November 2022, 515 December 2022, 29 March 2023

Counsel for the Applicant:

Colin Golvan AM KC with Ian Horak SC and Lucy Davis

Solicitor for the Applicant:

Phillips Ormonde Fitzpatrick Lawyers

Counsel for the Respondent:

Bruce Caine KC with Peter Creighton-Selvay and Rebecca De Stoop

Solicitor for the Respondent:

DLA Piper

Note

14 November 2024

Paragraph numbering between [202]–[217] has been skipped inadvertently due to a Word Processing issue.

ORDERS

VID 314 of 2021

BETWEEN:

BED BATH N TABLE PTY LTD

Applicant

AND:

GLOBAL RETAIL BRANDS AUSTRALIA PTY LTD

Respondent

order made by:

ROFE J

DATE OF ORDER:

14 December 2023

THE COURT ORDERS THAT:

1.    If the parties agree on the appropriate orders to be made by the Court reflecting these reasons for judgment, including as to relief and costs, the parties file a minute of proposed orders by 4.00 pm on 9 February 2024.

2.    If the parties are unable to agree on the orders which should be made, each of the parties file and serve by 4.00 pm on 9 February 2024:

(a)    A minute of the orders that the party proposes; and

(b)    Any outline of submissions in support of the proposed orders (not exceeding five pages in length).

3.    In the event the parties are unable to agree on the orders which should be made, the matter be listed for hearing at 10.15 am on 15 February 2024.

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

REASONS FOR JUDGMENT

ROFE J:

1    INTRODUCTION

[1]

2    WITNESSES

[15]

2.1    Lay witnesses

[15]

2.2    Expert witnesses

[21]

3    CORE FACTS

[24]

3.1    Soft homewares

[24]

3.2    Bed Bath N’ Table

[26]

3.2.1    BBNT stores

[36]

3.2.2    BBNT online and social media presence

[43]

3.2.3    BBNT brand extensions

[48]

3.3    GRBA

[52]

3.3.1    House

[56]

3.3.2    GRBA’s earlier attempt to enter the soft homewares market

[64]

3.4    Reputation

[69]

3.5    Other retailers in the soft homewares market

[73]

3.6    Cross-promotion

[76]

3.7    Co-location of soft homewares stores

[78]

3.8    Consumers

[82]

3.9    Sub-branding

[88]

3.10    Use of “bed” and “bath” as category or navigational descriptors

[92]

3.11    Google Analytics data

[99]

3.12    Tendency to shorten

[111]

3.13    Instances of use of the House B&B mark

[125]

4    ADOPTION OF THE HOUSE B&B NAME

[128]

4.1    Mr Lew’s evidence

[169]

4.2    Ms McGann’s evidence

[189]

4.3    Mr Caruana’s evidence

[219]

4.4    Ms Cameron’s evidence

[226]

4.5    Mr Kupshik’s evidence

[232]

4.6    Conclusion

[234]

5    EXPERT EVIDENCE

[243]

5.1    Use of “bed” and “bath”

[243]

5.2    Brand extensions

[253]

6    ALLEGED CONFUSION EVIDENCE

[259]

6.1    Example instances of alleged confusion

[286]

6.1.1    BBNT witnesses

[286]

6.1.1.1    Ms D’Alessio

[290]

6.1.1.2    Ms Erdossy

[292]

6.1.1.3    Ms Dimopoulos

[297]

6.1.1.4    Ms Harry

[299]

6.1.1.5    Ms Downes

[300]

6.1.1.6    Ms Chatfield

[302]

6.1.1.7    Ms Timms

[307]

6.1.1.8    Ms van der Plight

[309]

6.1.1.9    Mr Tabe

[313]

6.1.1.10    Ms Vigors

[316]

6.1.2    GRBA witnesses

[317]

6.1.2.1    Ms Turner

[317]

6.1.3    GRBA discovery

[319]

6.1.4    Shopping centres

[321]

6.1.5    GRBA internal confusion

[323]

6.1.5.1    Rockingham BB

[324]

6.1.5.2    Doncaster — Bed Bath and Table

[329]

6.2    Admissibility and weight of the confusion evidence

[333]

7    TRADE MARK INFRINGEMENT

[341]

7.1    Relevant sections of the Trade Marks Act

[342]

7.2    Principles

[345]

7.2.1    Use as a trade mark

[347]

7.2.2    Substantial identity

[353]

7.2.3    Deceptive similarity

[365]

7.3    The parties’ submissions

[374]

7.4    Consideration

[389]

7.4.1    Use as a trade mark

[389]

7.4.2    Use of “BED & BATH” not solely descriptive

[399]

7.4.3    Overlap of goods and services

[406]

7.4.4    Substantial identity

[409]

7.4.5    Deceptive similarity

[415]

7.4.5.1    BBNT v House B&B

[432]

7.4.5.2    BBNT v BED & BATH

[443]

7.5    Defence to infringement

[451]

7.5.1    Principles

[454]

7.5.2    Consideration

[463]

8    AUSTRALIAN CONSUMER LAW

[482]

8.1    Relevant Provisions

[484]

8.2    Principles

[486]

8.3    Relevant class of consumer

[493]

8.4    The parties’ submissions

[496]

8.5    Consideration

[504]

8.5.1    The conduct

[504]

8.5.2    Trade and commerce

[506]

8.5.3    Whether conduct misleading or deceptive or likely to mislead or deceive

[507]

9    PASSING OFF

[523]

9.1    Principles

[525]

9.2    Consideration

[530]

10    NEW ZEALAND CASE

[534]

11    CONCLUSION

[535]

12    FINAL NOTE

[538]

1.    INTRODUCTION

1    For over three decades, the parties, both substantial retailers, each with descriptive words in their names, have managed to co-exist in distinct spaces in the broader homewares sector. Over time, each has built up a substantial reputation in its brand, until one day one decides to open a sub-brand in the domain of the other, using a name that incorporates words from the brand of the other.

2    Since 1976, Bed Bath N’ Table Pty Ltd (BBNT) has conducted a business operating a network of stores selling soft homewares under the trade mark “BED BATH N’ TABLE”.

3    BBNT is the owner of Australian Trade Mark Registration Numbers:

(a)    654780 for the sign BED BATH ‘N’ TABLE, registered in class 24 (780 TM);

(b)    654781 for the sign BED BATH ‘N’ TABLE, registered in class 42 (781 TM); and

(c)    1878972 for the sign BED BATH N’ TABLE, registered in class 24 and class 35 (972 TM).

(collectively, the BBNT marks)

4    There is no challenge to the validity of the BBNT marks. They are taken as being distinctive and valid across the full scope of their registration.

5    Global Retail Brands Australia Pty Ltd (GRBA) is the owner of a business selling kitchenware and hard homewares under a trade mark incorporating the word “House”.

6    In addition, GRBA owns and operates retail stores under the following House sub-brands: “House WAREHOUSE”, “House OUTLET”, House POP UP”, House CASA | MAISON | HOME, and “House Superstore (as well as other brands, including “The Custom Chef”, “Robins Kitchen” and “MyHouse”).

7    In May 2021, GRBA began operating a new soft homewares business selling products for the bedroom and bathroom, using the following logo/mark:

(House B&B logo or House B&B mark)

8    The first House BED & BATH (House B&B) store was opened in the Doncaster shopping centre in Victoria. Since May 2021, GRBA has launched a number of other stores under the House B&B logo including at Chadstone shopping centre.

9    BBNT alleges that by launching House B&B, GRBA has:

(a)    infringed the BBNT marks under s 120 of the Trade Marks Act 1995 (Cth);

(b)    contravened s 18(1) and s 29(1)(a), (g) and (h) of the Australian Consumer Law (ACL) as contained in Sch 2 of the Competition and Consumer Act 2010 (Cth); and

(c)    engaged in the tort of passing off.

10    GRBA’s alleged infringing conduct commenced in May 2021 when it opened its first House B&B store, trading under the House B&B logo. Therefore, that is the critical date to assess the reputation enjoyed by BBNT and the state of the soft homewares market in Australia.

11    GRBA denies each of the above allegations. It contends that its use of the words “bed” and “bath” is purely descriptive, the words are used as category or navigational descriptors to describe categories of soft homewares, and therefore the words do no work in designating commercial origin when read in conjunction with the well-known House trade mark.

12    Initially, GRBA sought to challenge various registered trade marks owned by BBNT through a cross-claim filed on 4 August 2021. By consent orders dated 8 November 2022, GRBA’s cross-claim was dismissed.

13    This hearing was on the issue of liability only. BBNT sought to be heard separately on relief if it was successful.

14    For the reasons given below, I am not satisfied that GRBA has infringed BBNT’s marks. However, I have found that GRBA has contravened s 18(1) and s 29(1)(g)–(h) of the ACL, and engaged in passing off.

2.    WITNESSES

2.1    Lay witnesses

15    BBNT called the following lay witnesses, each of whom were cross-examined (aside from Mr Cruise):

(a)    Mr Jonathan Dempsey, who made three affidavits dated 25 January 2022, 19 April 2022 and 27 September 2022. Mr Dempsey is the Managing Director and sole director of BBNT.

(b)    Ms Kate Mackie, who made one affidavit dated 11 February 2022. Ms Mackie is the Head of Buying and Product Development at BBNT.

(c)    Mr Rodney Cruise, who made one affidavit dated 24 December 2021. Mr Cruise is an expert intellectual property researcher and patent attorney.

16    BBNT also filed three affidavits from its solicitor, Mr David Longmuir, dated 4 February 2022, 28 September 2022 and 8 November 2022. Mr Longmuir was not cross-examined.

17    BBNT sought to rely on affidavits from 36 witnesses who were either store managers, assistant store managers or sales staff — deposing to instances of alleged confusion. Early on the first day of the trial, I directed that BBNT select its best 10 confusion” witnesses.

18    Following my direction, BBNT called the following “confusion” witnesses, each of whom were cross-examined:

(1)    Ms Maria Michelle D’Alessio, a former assistant store manager at BBNT in Doncaster, Victoria. Ms D’Alessio made one affidavit in these proceedings dated 5 May 2022.

(2)    Ms Natalie Anna Erdossy, an assistant store manager at BBNT in Chadstone, Victoria. Ms Erdossy made one affidavit in these proceedings dated 4 February 2022.

(3)    Ms Elizabeth Rita Dimopoulos, a sales assistant at BBNT in Chadstone, Victoria. Ms Dimopoulos made one affidavit in these proceedings dated 16 May 2022.

(4)    Ms Nicole Louise Harry, a former assistant store manager and current store manager at BBNT in Woodgrove, Victoria. Ms Harry made one affidavit in these proceedings dated 6 May 2022.

(5)    Ms Giulia Lea Downes, a sales assistant at BBNT in Doncaster, Victoria. Ms Downes made one affidavit in these proceedings dated 4 May 2022.

(6)    Ms Karis Rae Chatfield, a store manager at BBNT in Busselton, Western Australia. Ms Chatfield made one affidavit in these proceedings dated 23 February 2022.

(7)    Ms Shelley Grace Timms, an assistant store manager at BBNT at DFO Perth, Western Australia. Ms Timms made one affidavit in these proceedings dated 14 February 2022.

(8)    Ms Honor Bettina van der Plight, a store manager at BBNT in Doncaster, Victoria. Ms van der Plight made one affidavit in these proceedings dated 10 February 2022.

(9)    Mr Mitchell John Andrew Tabe, an assistant store manager at BBNT in Doncaster, Victoria. Mr Tabe made one affidavit in these proceedings dated 4 May 2022.

(10)    Ms Tori Vigors, an assistant store manager at BBNT in Busselton, Western Australia. Ms Vigors made one affidavit in these proceedings dated 3 May 2022.

19    GRBA called the following lay witnesses, each of whom was cross-examined (aside from Mr Butler):

(1)    Mr Steven Lew, the founder, Executive Chairman and a director of GRBA, who made three affidavits dated 6 May 2022, 22 August 2022 and 19 October 2022. He is also a director of Global Retail Brands Pty Ltd, the parent company of GRBA, and the Executive Chairman of several companies, including:

(i)    House, which his website (<www.stevenlew.com.au>) describes as “Australia’s #1 largest specialty kitchenware retailer”;

(ii)    Robins Kitchen, which his website describes as “Australia’s #2 largest specialty kitchenware retailer”; and

(iii)    the Playcorp Group of Companies, which distributes apparel to third-party customers.

(2)    Ms Ashleigh Cameron, GRBA’s Head of Design, who made one affidavit dated 6 May 2022.

(3)    Ms Meghan Jane McGann, GRBA’s Head of Brand and Media, who made one affidavit dated 6 May 2022.

(4)    Mr Darron Gary Kupshik, a director and the Chief Operating Officer of GRBA, who made two affidavits dated 6 May 2022 and 19 October 2022.

(5)    Ms Kylee Ann Brodrick, a regional sales manager at GRBA, who made one affidavit dated 5 August 2022.

(6)    Mr Bernard Bartholomew Caruana, GRBA’s Store Development Manager, who made one affidavit dated 6 May 2022.

(7)    Ms Janice Nicola Mary Turner, shop manager at House B&B in Halls Head, Western Australia, who made one affidavit dated 4 August 2022. She was previously employed by BBNT as a store manager for eight years.

(8)    Ms Jennifer Powell, a store manager at House B&B in Chadstone, Victoria, who made one affidavit dated 10 August 2022.

(9)    Ms Louise Mary Sevenich, a sales consultant at House B&B in Chadstone, Victoria, who made on affidavit dated 5 August 2022.

(10)    Mr Christopher Butler, the Office Manager at the Internet Archive in San Francisco, United States, who made two affidavits dated 21 December 2021 and 24 October 2022.

20    GRBA also filed four affidavits from two of its lawyers (neither of whom were cross-examined):

(a)    Three affidavits of Ms Robynne Sanders dated 17 December 2021, 5 August 2022 and 19 October 2022; and

(b)    One affidavit of Mr Ben Mawby dated 6 May 2022.

2.2    Expert witnesses

21    BBNT called independent marketing expert evidence from Professor Don O’Sullivan who made one affidavit dated 14 February 2022. Professor O’Sullivan is a professor of marketing at the Melbourne Business School, University of Melbourne, and has held various academic roles since 1992.

22    GRBA called independent expert evidence from Associate Professor Gergely (Greg) Nyilasy who made one affidavit dated 6 May 2022. Associate Professor Nyilasy is a professor of marketing and entrepreneurship at the Melbourne Business School, University of Melbourne, and has held various academic roles since 2010.

23    The experts prepared a joint expert report and gave evidence in person by way of a concurrent evidence session.

3.    CORE FACTS

3.1    Soft homewares

24    The term “soft homewares” encompasses textile goods, such as bedding and bed linen (for example, sheet sets, pillowcases and quilt covers), bathroom products (bath linen, such as towels, and bathroom accessories, such as soap dishes and shower caddies), household linen (for example, table cloths, table runners, napkins, teas towels and place mats), kitchenware (for example, cutlery, plates and bowls, serving ware and glasses, cups and mugs) and other homewares (for example, cushions, throws, vases and candles).

25    The parties adopted the term “soft homewares” to refer to bedroom and bathroom products as described above, to be contrasted with “hard homewares” such as pots, pans, plates, knives and cutlery. I have adopted that definition in these reasons.

3.2    Bed Bath N’ Table

26    BBNT has continuously traded in Australia under, and in respect of, the trade mark comprising the words “BED BATH N’ TABLE” since 1976. The BBNT business operates throughout Australia and retails soft homewares in both physical stores and online. It has retailed a vast range of soft homewares products, including textile goods, such as bedding and bed linen, bathroom products, household linen, kitchenware, and other homewares. BBNT does not sell beds, baths or tables.

27    BBNT has approximately 30% of the Australian market share of the speciality homewares and allied products market based on store numbers. Mr Dempsey considered that BBNT’s main specialty competitors (that is, businesses that specialise in bed linen, bathroom products and household linen) were Adairs, MyHouse, Pillow Talk, Linen House and Sheridan. Other notable competitors selling bed linen and bathroom products are Myer, Kmart, Target, Domayne, Canningvale (online only), Spotlight, Westelm, Pottery Barn, Big W, Best & Less, Freedom, Temple & Webster (online only), Harris Scarfe and David Jones. As at December 2021, Adairs operated about 159 physical stores, and Sheridan operated around 57. BBNT operated 167 physical stores at that time. Mr Dempsey stated in his first affidavit that “Adairs is our closest competitor, in my opinion, both in terms of market share and look and feel.

28    Confidential sales data showed that as at 2021, BBNT had annual sales in the hundreds of millions of Australian dollars. BBNT is evidently a significant business and occupies a dominant position in the speciality soft homewares sector.

29    On the basis of BBNT loyalty and customer information, Mr Dempsey’s evidence was that the main BBNT customer demographic is predominantly female and in the 2565 age bracket.

30    BBNT’s branding is carefully managed through regimented “brand guidelines” and has consistently, since at least the mid-1990s, been presented in block capital letters on a plain background, as shown below:

31    Store signage typically appears with illuminated white letters, with green on the inside of the letters and no background, and also in frosted white writing on the front glass of the store.

32    BBNT has used its branding in full and without alteration on a dark green background in respect of its clearance outlets and rewards program, as shown below:

33    The BBNT mark has appeared on packaging of some of BBNT’s goods and on ancillary point of sale and related materials, such as invoices, bags and catalogues.

34    BBNT has made very substantial sales of products from BBNT stores for decades and has also spent considerable funds on advertising featuring the BBNT mark, including the distribution of many millions of catalogues and the sending of many millions of promotional emails each year to the members of its loyalty scheme. BBNT has also advertised extensively in magazines such as Better Homes & Gardens, Australian Style, Home Beautiful, Vogue Living and Australian Country Style, and newspaper lift out supplements and weekend magazines. BBNT’s business has also been featured on television programs including Channel 7’s “Postcards” and Channel 7’s “House Rules”. More recently, BBNT has shifted its advertising focus more towards online advertising on its website, social media and email.

35    Mr Dempsey accepted that BBNT did not shorten the BBNT name on the internal or external signage of its store, in any advertising or on the BBNT website.

3.2.1    BBNT stores

36    BBNT stores generally operate in prime retail locations with high consumer traffic, such as major shopping centres like Westfield Doncaster shopping centre where the first House B&B store opened.

37    According to BBNT’s statement of claim, each BBNT store front typically has:

(a)    a prominent store front appearance including an open glass store front displaying homewares;

(b)    prominent display signage bearing the BBNT mark appearing above the entryway to the store;

(c)    the BBNT mark in frosted writing on the front glass of the store; and

(d)    BBNT signage visible through the front windows and/store entryway.

(the BBNT Get-up)

38    Mr Dempsey gave evidence in his first affidavit and during cross-examination of more factors of get-up than are listed in the statement of claim, including the finishes of the store floors, the point of sale signage and the product signage.

39    Mr Dempsey’s evidence was that BBNT stores are carefully designed to create a home/boutique feel, with a bed or beds and linen/pillows displayed in the front windows, which he said was consistent with conveying a sense of quality and trust to consumers. He considered the store’s design to be a key element of consumer association with the BBNT brand, as being able to feel and experience the product was important to BBNT customers. The design is meant to approximate what you find in a good home. The presentation of a typical BBNT store is shown below:

40    BBNT accepts that a store front including an open glass display of homewares and made-up beds is not unique to BBNT. BBNT claims that what is unique about the BBNT store presentation was the Get-up in combination with the store name. As depicted above, the BBNT store front also includes prominent display signage with BED BATH N’ TABLE (see above left on the vertical blade sign). BBNT contends that this display signage is a common feature to all its BBNT stores. The words “BED BATH N’ TABLE” also appear prominently above the doorway in white illuminated writing.

41    BBNT stores promote exclusive lines of products, such as Morgan & Finch and Sleeping Beauty. It also promotes some third party branded products such as Sanderson, Harlequin and Morris & Co, which are produced under licence and a related company is the exclusive distributor in Australia. Products under those brands, and other house brands such as Cotton House are only available through BBNT stores or, for select products, are supplied to David Jones by BBNT.

42    In around 2016, BBNT launched a customer rewards scheme called HOMEstyleBED BATH N’ TABLE. This was promoted in-store through printed flyers encouraging customers to join. The BBNT customer rewards scheme rewards loyal customers and offers exclusive everyday savings, along with access to special offers and VIP events throughout the year. Customers can join the program in-store or online. Loyalty scheme members receive regular emails from BBNT. As at May 2021, the BBNT customer loyalty scheme had almost 3 million members in Australia.

3.2.2    BBNT online and social media presence

43    BBNT launched its online store in November 2013 (<www.bedbathntable.com.au>). BBNT products are offered for sale through the BBNT online store.

44    Since August 2017, BBNT has operated a Facebook page at <www.facebook.com/bedbathntablehome/>. As at January 2022, the BBNT Facebook page had been liked approximately 130,000 times.

45    BBNT operates an Instagram account at <www.instagram.com/bedbathntable>. As at July 2021, the BBNT Instagram page had 285,000 followers.

46    BBNT also operates a Pinterest account at <www.pinterest.com.au/bedbathntable>. As at December 2021, the BBNT Pinterest page had 7,100 followers.

47    BBNT undertakes digital display advertising which includes advertising via publisher websites such as Google or Facebook, and Google search advertising.

3.2.3    BBNT brand extensions

48    BBNT has also launched a number of concept stores, each of which included the use of “BED BATH N’ TABLE” in full and without alteration, on a dark green background, with other trade marks such as “THE WORKS”, as shown below:

49    BBNT holds a trade mark registration for “THE WORKS”. However, Mr Dempsey accepted that BED BATH N’ TABLE THE WORKS (THE WORKS) was a single brand, which leverages off the parent brand.

50    THE WORKS stores are larger in size than traditional BBNT stores and offer a wider variety of products, including cookware, dinnerware, home fragrances, handbags, gift cards, stationery and home décor items. However, THE WORKS stores still carry all the products carried by traditional BBNT stores, such as bed linen and towels.

51    For a few years in the mid-2010’s, BBNT also operated two stores in Chatswood Chase in Sydney and Chadstone shopping centre in Victoria as HOMEWORKS. As shown in the images below, the BBNT mark on the dark green background was underneath the word HOMEWORKS. Mr Dempsey considered that it was important that the other BBNT stores retained the BBNT brand identity and endorsement, which was maintained via the BBNT mark still featuring in the store branding.

3.3    GRBA

52    As well as House, GRBA owns several other brands, including The Custom Chef, Robins Kitchen, MyHouse and PetHouse Superstore.

53    In 2014, GRBA acquired the assets of Lineville Pty Ltd, which had gone into liquidation and traded as Robins Kitchen. Robins Kitchen was a hard homewares retailer, which Mr Lew described as being similar to House. GRBA reopened the Robins Kitchen stores and, as at 2022, there were around 60 Robins Kitchen physical retail stores and an online store. Robins Kitchen stores sell essentially the same products as House branded stores.

54    House stores are located in areas with high foot traffic, and often near supermarkets. GRBA follows the same strategy for Robins Kitchen stores, but GRBA prefers to place Robins Kitchen stores at the opposite end of the shopping centre to the House store. As a result, generally if a Robins Kitchen store is located near a Woolworths, Coles or Aldi, the House store will be at the other end of the shopping centre, near the other supermarket/s present in the shopping centre. Mr Lew said that the co-location strategy with House and Robins Kitchen has been successful for GRBA.

55    According to Mr Lew, it was GRBA’s practice to apply for trade marks when it made a foray into a business outside of what the customer would deem the traditional House area of kitchenware and cookware. Examples were PetHouse SUPERSTORE and House CASA | MAISON | HOME.

3.3.1    House

56    Since at least 1978, GRBA’s predecessors operated retail stores in Australia under the brand “House”. GRBA acquired that business in July 2007 and, as at May 2021, there were approximately 100 physical “House” branded stores open throughout Australia, selling kitchenware and hard homewares. The House stores are generally located in major shopping centres or retail precincts, often near supermarkets, and prominently feature the House mark. GRBA has a substantial reputation in House as a retail brand throughout Australia. In May 2021, the House brand was well-established in the hard homeware market.

57    House stores typically feature discount marketing in crowded displays with discount signage, typically in yellow and red. The signs display phrases such as “UP TO 80% OFF” and “CLEARANCE CLEARANCE CLEARANCE”. The signs are prominent, often covering most of the shopfront windows and are hung as bunting across the tops of store doorways. House stores are in an open format and, consistent with selling hard homewares not soft homewares, do not have beds in the window. Each House store has between 1,500 and 2,000 sales tickets on products and shelves, the majority of which feature the House mark. The presentation of typical House stores is shown in the two images below:

58    Mr Lew’s evidence was that House currently has seven sub-brand stores that it trades under and that 30% of House stores are sub-branded. GRBA owns and operates, or has operated, retail stores under the following House sub-brands: House WAREHOUSE, House OUTLET, House POP UP, House CASA ׀ MAISON ׀ HOME, and House Superstore.

59    GRBA commenced use of the trade mark House WAREHOUSE in 2014 for stores located in homemaker or outlet centres, not shopping centres. Mr Lew’s evidence was that the word “warehouse” was selected to inform consumers that the stores were selling higher volumes of product at cheaper prices. The House WAREHOUSE logo is shown below:

60    GRBA commenced use of the trade mark House Superstore in 2021. GRBA uses that mark on stores with a large footprint that sell a wide range of products. House Superstores are located in Ballina, Kalgoorlie and Warrnambool and sell everything for every room in the house. These stores therefore sell products from both traditional House stores (hard homewares) and from House B&B stores (soft homewares). The House Superstore logo is shown below:

61    GRBA operates an online House store at <www.house.com.au/> that is visited by “many millions of users”. The House B&B website can be accessed from a tab on the House online store.

62    GRBA sells a large range of products in its House branded retail stores. Around 95% of all the products sold in House stores are supplied to GRBA by a related company, Playcorp. Playcorp sources its products from supplier factories and then resells them to GRBA. Only about 5% of products sold in physical House stores is supplied by independent third-party suppliers, with the balance supplied by Playcorp. The figure is approximately 25% for the House website. The products supplied by Playcorp are not branded House. All products sold through House branded retail stores are branded with other trade marks.

63    GRBA has 15 registered trade marks which incorporate House, including multiple trade marks with the words “for home and kitchen. All trade marks for the House logo (except for one) use the same capitalisation and font as the logo shown below:

3.3.2    GRBA’s earlier attempt to enter the soft homewares market

64    Despite House branded stores focussing on hard homewares, House has always sold some soft homewares that are associated with kitchenware, such as napkins, placemats, aprons and tea towels. However, in 2008, GRBA tried (unsuccessfully) to enter the soft homewares market under the brand House CASA | MAISON | HOME. In addition to selling hard homewares, these stores also sold bedroom and bathroom products, and other home decorations products.

65    GRBA has several trade mark registrations for the words “CASA | MAISON | HOME” in a large number of classes. GRBA has a trade mark registration for the House CASA ׀ MAISON ׀ HOME logo as depicted below:

66    Mr Lew referred to CASA ׀ MAISON ׀ HOME as a “sub-brand”. Mr Lew’s evidence was that the tag line “CASA MAISON HOME” was added to the House trade mark to differentiate these stores from traditional House stores, whilst still using the House brand to take advantage of existing customer brand recognition.

67    According to Mr Lew, the inclusion of “CASA MAISON HOME” in the brand was unsuccessful in differentiating these stores from traditional House stores as consumers did not recognise the difference. Nor did they associate House CASA | MAISON | HOME stores with bedroom, bathroom and home decoration products. This is evident from the picture of a House CASA | MAISON | HOME store front below, as these stores looked far more like the traditional House stores selling kitchenware than a soft homewares store.

68    After about two years, GRBA discontinued bedroom, bathroom and home decoration products from these stores.

3.4    Reputation

69    Both BBNT and GRBA accept that the other has a substantial and independent reputation in their respective marks: BED BATH N’ TABLE and House.

70    The experts agree that the BBNT mark appears prominently on stores and that BBNT is a well-established brand in the soft homewares category with which many consumers are likely to be familiar. As GRBA’s witness Ms Turner observed: “Everybody loves Bed Bath ‘N’ Table. Who doesn’t love Bed Bath ‘N’ Table? You know, it’s a great store.”

71    BBNT says that, despite its name, it is not engaged in selling beds, baths or tables and therefore “BED BATH N’ TABLE” is an arbitrary combination of words.

72    The experts made similar comments regarding the House brand being featured prominently on stores, well-established and recognised by consumers in its particular category hard homewares. Mr Lew agreed that the mark House was itself inherently descriptive, but that GRBA had established reputation in that mark through extensive usage in over 140 stores, trading over four decades.

3.5    Other retailers in the soft homewares market

73    The major retailers in the soft homewares market in Australia may be classified broadly into department stores, speciality linen stores and discount department stores. The retailers include Adairs and Sheridan (specialty linen stores), Myer and David Jones (department stores), and Kmart, Big W, Target and Harris Scarfe (discount department stores). There were also a range of other smaller specialty retailers selling soft homeware products, including Pillow Talk and Linen House. Mr Dempsey gave evidence that increasingly bed linen, bathroom products and household linen are sold through retailers which operate predominantly online (such as Temple & Webster) and through the online stores of retailers which have physical stores. Both Adairs and Sheridan were well known as specialty linen retailers. Mr Dempsey agreed that Adairs was BBNT’s closest competitor. Mr Lew also considered that the leading specialty competitors of House B&B, in addition to BBNT, were Adairs and Sheridan.

74    The experts and relevant lay witnesses all agreed that it is common for speciality retail linen stores to have similar store designs which comprises large shopfront glass windows with a made-up display bed visible through the windows near entrance and the store name over the entrance. This Hamptons style look with white walls, wooden floorboards and no discount signage is intended to convey “a quality image” and a home feel that is luxurious and upmarket. This differentiates these stores from those with a strong discount focus, such as House, JB-HIFI or Chemist Warehouse, which tend to use yellow markdown signage.

75    None of BBNT’s existing competitors use bed or bath in their name. Until GRBA’s launch of House B&B, BBNT had been the only retailer in Australia that used the words “bed” and “bath” in its name for over 40 years.

3.6    Cross-promotion

76    Cross-promotion with other brands or related brands is a common practice in the soft homewares sector. For example, Adairs has had cross-promotions with Urban Home Republic, and Pottery Barn has had cross-promotions with its related brands West Elm and William Sonoma.

77    As noted above, BBNT sells exclusive lines such as Morgan & Finch and Sleeping Beauty as well as some third party branded products such as Sanderson, Harlequin and Morris & Co, which are produced under licence and a related company is the exclusive distributor in Australia.

3.7    Co-location of soft homewares stores

78    Partly as a result of shopping centres tending to group like stores together, specialty soft homeware retailers like Adairs, Sheridan and BBNT are often clustered together in “precincts” in shopping centres. As a result, House B&B is in close proximity to BBNT in many shopping centres, such as Doncaster where the first House B&B store was opened.

79    Ms Chatfield, in the course of giving confusion evidence, asserted that the geographic proximity between BBNT and House B&B stores, some often 100 metres apart, and the fact they both displayed bedding products in the store window, contributed to customer confusion.

80    Ms Turner gave evidence that in Western Australia “you will always find that Bed Bath N’ Table was beside Adairs or House was beside us”.

81    House and BBNT were often found in the same shopping centres, but not necessarily in close proximity to each other in the same centre as they sold different goods.

3.8    Consumers

82    Both parties accepted that the relevant class of consumer shopping for soft homewares is the general public or the “ordinary reasonable consumer”.

83    One thing to emerge from the “confusion” evidence (discussed below) was how little attention many customers appeared to pay to the store that they were entering. Many appeared unconcerned as to the particular shop that they were in until they were seeking to use a voucher or scan their loyalty card. According to Ms Turner, “a lot of people come in and they don’t know where they are.

84    Ms Turner gave evidence that when she worked at BBNT, sometimes customers would pull out an Adairs loyalty card when at the BBNT register. According to Ms Turner, there were “hardcore” Adairs, BBNT and Sheridan customers and then there were the general customers that were looking for a particular item who were not concerned which shop they bought it from.

85    There was a wide spectrum of consumer involvement in the decision to enter a soft homewares store. At one end, some consumers would be browsing between stores in the soft homewares precinct, whilst at the other end, a consumer might be seeking a particular item such as a quilt cover from a particular retailer.

86    One group of consumers was undoubtedly focussed on what store they were entering. These were the consumers that had purchased a product online via “Click and Collect” and were attending the store to collect the product that they had purchased. For these consumers, it was important to be attending the correct store.

87    As I will discuss further below, the witnesses who gave evidence regarding confusion at shopping centres, where customers were either confused about which store they were in or simply did not know where they were, often had imperfect recollections about these interactions and therefore such evidence must be treated with some caution.

3.9    Sub-branding

88    Professor O’Sullivan’s evidence was that it is common for companies to market a product or service using two brands a family brand (a brand that sits across multiple products or services) and a sub-brand (a product or service-specific brand). He considered that consumers were highly accustomed to this multi-brand approach to marketing. He gave as examples:

(a)    Nestlé using both Nescafé and Gold Blend together to market a range of soluble coffee; and

(b)    Woolworths using its apple peeling logo in the logo for its Metro stores.

89    According to Professor O’Sullivan, sub-branding is commonly used in retail settings where a company wishes to signal that it is introducing a new range or retail format (either through organic growth or acquisition), or that it is collaborating with another brand or has integrated (acquired) another brand. Associate Professor Nyilassy in the joint session did not disagree with this aspect of Professor O’Sullivan’s evidence.

90    Other sub-brand examples from Professor O’Sullivan’s evidence, included by GRBA in its submissions, included:

(a)    Adairs launching “Adairs Kids” for retailing homeware products relating to children;

(b)    Cotton:On launching “Cotton:On KIDS” for retailing children’s clothing;

(c)    Toys R Us launching “Babies R Us” for retailing baby-related products; and

(d)    Coles launching “Coles Express” in relation to a range of convenience stores.

91    Adairs also has “adairs HOMEMAKER” and “adairs OUTLET”, and Cotton:On also has “Cotton:On BODY. GRBA itself, of course, also has several House sub-brands as outlined above.

3.10    Use of bed and bath as category or navigational descriptors

92    There was evidence of substantial use by third party sellers of soft homewares in Australia of “bed” and “bath” as navigational or category descriptors both inside their physical stores or on their online stores. GRBA contends that such use is ubiquitous in relation to the retailing of bedroom and bathroom products. To take some examples:

(a)    in the stores of major retailers and BBNT competitors:

(i)    “BED & BATH”, and “Bed” and separately “Bath” in Big W stores;

(ii)    “bed & bath”, “bath & bed”, “bedding” and separately “bath” in Kmart stores;

(iii)    Bath & Bed Linen” in David Jones stores;

(b)    and on their (and other retailers’) websites:

(i)    “BED & BATH” and “Bed and Bath” on the David Jones website;

(ii)    “BED & BATH” on the Myer website;

(iii)    “BED & BATH” on the Temple & Webster website;

(iv)    “BED & BATH” on the Freedom website;

(v)    “bed, bath & home” on the Harris Scarfe website;

(vi)    “Bed, Bath and Kitchen” and “Bed, Bath & Kitchen” on the Kmart website;

(vii)    “BED” and separately “BATH” on the Spotlight website;

(viii)    “Bed” and separately “Bath” on the MyHouse website;

(ix)    “Bath” and separately “Bedding” on the BIG W website; and

(x)    “Bath & Beach” on the Sheridan website.

93    According to Mr Lew, bed and “bath” are also used as category descriptors in catalogues.

94    Each of these examples of the use of the words “bed” and “bath” are navigational aids on websites or general category descriptors found inside shops and are seen by the consumer after they enter the physical store or enter the website. None of the examples in evidence were the use of the words “bed” and “bath” on store exteriors or external store branding. None of these uses is the use of the words “bed” and/or “bath” as a trade mark. As noted above, GRBA accepted that no retailer in Australia other than BBNT used “bed” or “bath” in its name.

95    Mr Dempsey accepted, albeit reluctantly, that “bed” and “bath” were commonly used in the industry for their descriptive nature to navigate customers to bedroom or bathroom products. BBNT itself has used “bed” and “bath” (and also “table) as navigational aids for consumers and as category descriptors on its own website from at least November 2013 until May 2021.

96    However, as can be seen from the examples extracted above where “bed” and “bath” are used as part of a composite phrase rather than used separately, the order of the two words is typically, but not always, “bed” and then “bath”. For example, in some Kmart stores and on David Jones’ website, “bath” precedes “bed”. Further, when used together and not separately, “bed” and “bath” are generally used in a composite phrase including “and” (or “&)” but in some cases, such as Kmart and Harris Scarfe’s websites, “bed” and “bath” are separated by commas in a composite phrase with a third category (“bed, bath & home” in the case of Harris Scarfe and “Bed, Bath and Kitchen” in the case of Kmart). These examples highlight that BBNT is far from the only retailer to use “bed and bath” or even “bed, bath and [other]” as a composite phrase to describe categories of products, even if they are the only retailer to use that combination of words in their name and in trade marks. Professor O’Sullivan explained that “[c]onsumers who visit [BBNT’s] website would learn that bed is a shorthand for bedroom ware, and bath is a shorthand for bathroom ware”.

97    Associate Professor Nyilasy’s evidence was that “almost every one of BBNT’s most significant competitors uses similar terms to the words bed and bath to categorise their products” and that “therefore the category of bed and bath products in general will come to mind when [consumers] see the words bed and bath”. Associate Professor Nyilasy explained that bed and bath are generic words that are overlearned and overused in everyday language”, there is “no amount of marketing that could erase those generic associations”, because “it’s impossible to erase the generic associations in people’s heads from these Anglo-Saxon words”.

98    GRBA therefore submits that the extremely generic nature of the words “bed” and “bath” is a core fact to be taken into account in the determination of the issues in this proceeding.

3.11    Google Analytics data

99    Mr Dempsey annexed a two-page report prepared by the BBNT marketing department from the Google Analytics data available to BBNT. The table was annexed to support his proposition that the terms “bed and bath” and “bed n bath” were frequently used by customers to locate BBNT’s website and online store.

100    The Google Analytics data records the terms searched by internet users on the Google search engine during the period January to October 2021, before those users then clicked onto the BBNT website. The table prepared by the BBNT marketing department displays results from the Google Analytics data in columns under headings including “search query”, “clicks”, “impressions” and “CTR”.

101    The number of clicks is the measure of the number of clicks on the <www.bedbathntable.com.au> website from a Google Search results page, not including clicks on paid AdWords search results. The number of impressions refers to the number of times any URL from the <www.bedbathntable.com.au> website appeared in search results viewed by a user, not including paid AdWords search impressions. The CTR or “click through rate” provides an indication of the extent to which users considered or treated any listing on Google as responsive to their Google search. The CTR was calculated as a percentage of the impressions which ultimately result in clicks to the BBNT website (CTR = clicks/impressions x 100).

102    The data in the table is arranged from the search term with the highest clicks to the term with the lowest clicks. BBNT claimed that the search results are confidential, and therefore I will refer to them in broad terms without using actual figures.

103    The top three search terms used by internet users before navigating to the BBNT website were:

(1)    “bed bath and table” (by far the largest number of clicks and impressions, by an order of 10 times larger than the next most clicked search term);

(2)    “bed bath n table”; and

(3)    “bed bath table”.

104    All of these top three search terms had a CTR in the low 70%.

105    The term with the fourth highest amount of clicks, “bed and bath”, had a similar number of impressions to the second and third terms, but around half the clicks, with a corresponding CTR of around half that of the second and third terms.

106    Many of the other search terms listed on the first page of the Google Analytics data as generating clicks on the BBNT website also featured the BBNT brand as a composite whole, including: “bedbathntable”, “bedbath and table”, “bed bath & table”, “bed bath and table sale”, “bed bath and table outlet”, “bed bath and table nz”, “bath bed and table”, “bed bath and table christmas”, “bed bath and table cushions”, “bed bath and table quilt covers”, “Bed and bath table”, “bedbathandtable”, and “bedbathtable”.

107    It appeared from the results that when internet users searched for the BBNT brand as a composite whole and were presented with a hyperlink to the BBNT website, they generally visited the BBNT website. Namely, the CTR to the BBNT website was high when internet users searched for the BBNT brand by using some combination of the words “bed”, “bath” and “table”. In contrast, it was rare for internet users to visit the BBNT site after searching for “bed” and/or “bath”. Mr Dempsey accepted in cross-examination that the Google Analytics data demonstrated that approximately 95% of the clicks on the URL <www.bedbathntable.com.au> followed the entry of search terms other than “bed” and “bath” simpliciter.

108    GRBA sought to highlight the disparity by observing that a higher percentage of internet users clicked through to the BBNT website after searching for “silk face mask” than those who searched for “bed bath” or “bed & bath”. More than 80% of users who searched those two terms did not click through to the BBNT website.

109    Mr Dempsey conceded that it is not possible to tell from the Google Analytics data whether when an internet user typed the words “bed bath” into Google, they were searching for BBNT or using the words “bed bath” as a category descriptor.

110    Every reported occasion in the table where a Google search was undertaken for a BBNT store at a specific location in Australia, each of the words “bed” “bath” and “table” were used, together with the location. For example, internet searches for “bed bath and table hobart”, “bed bath and table adelaide”, “bed bath and table perth”, “bed bath and table ballarat”, “bed bath and table canberra”, “bed bath and table hawthorn”, “bed bath and table bendigo”, “bed bath and table geelong”, and “bed bath and table townsville”, were all reported as generating clicks on the BBNT website. In contrast, there were not any reported searches for “bed bath” or “BED & BATH” linked to any location in Australia.

3.12    Tendency to shorten

111    BBNT contends that there is evidence of consumers and others dealings with BBNT to refer to the store as “BED BATH” or “BED & BATH. The tendency of consumers to truncate, shorten and abbreviate store or other names is well-known and entirely natural, as was recognised in London Lubricants (1920) Limited’s Application (1924) 42 RPC 264 at 279 (per Sargant LJ).

112    BBNT primarily relied on the evidence of its store managers and employees to support the existence of this tendency to shorten. Each of Ms Erdossy, Ms D’Alessio, Ms Dimopoulos, Ms Harry, Ms Downes, Ms Chatfield, Ms Timms, Ms van de Plight, Mr Tabe and Ms Vigors gave evidence that they experienced customers shortening the BBNT name to “BED BATH. However, these witnesses provided significantly varying estimates of how often they experienced customers shortening the BBNT name. The estimates ranged from only “a few occasions”, to “once every two months”, to “a few times a month”, to “about once a week”, to “once or twice a day”, to 50%, to 60%, to 80%, and even 95%.

113    The evidence from store employees is essentially survey evidence. However, the survey evidence presented by BBNT is of a very low quality because it is not randomised or representative and derives from highly generalised, subjective recollections. BBNT did not undertake any properly controlled consumer survey to establish the extent to which consumers might abbreviate the BBNT name, or adduce evidence from a single consumer as to their own practice in abbreviating the BBNT name. The evidence derives purely from BBNT’s handpicked “10 best” store witnesses (and some of the other store witnesses who were not called). This Court has rejected the utility of survey evidence of this kind (not randomised, representative or properly conducted) on numerous occasions: Telstra Corp Ltd v Phone Directories Co Pty Ltd (2014) 107 IPR 333 at [332] (per Murphy J); Samsung Electronics Australia Pty Ltd v LG Electronics Australia Pty Ltd (2015) 113 IPR 11 at [346] (per Nicholas J); Australian Postal Corp v Digital Post Australia Pty Ltd (2013) 105 IPR 1 at [49] (per North, Middleton and Barker JJ); Adidas AG v Pacific Brands Footwear Pty Ltd (No 3) (2013) 103 IPR 521 at [180]–[212] (per Robertson J); Apple Inc v Registrar of Trade Marks (2014) 109 IPR 187 at [219]–[231] (per Yates J).

114    I therefore give the evidence of BBNT’s store employees some weight as it showed that a reasonable number of consumers have a tendency to shorten BBNT to “BED BATH” or “BED & BATH”, but I do not think it is conclusive of establishing that tendency.

115    BBNT also relied on some further evidence of shortening.

116    Ms Mackie provided evidence of third parties emailing BBNT and shortening the name of BBNT to BED BATH” or “BED & BATH”. However, each of the seven examples provided by Ms Mackie were from overseas correspondents and therefore I give this evidence very little weight as it does not reflect the tendency of ordinary consumers in the Australian market. Ms Mackie did not provide any examples of local customers, staff or suppliers shortening the name of BBNT in email correspondence. Nor did any other BBNT witness provide such evidence.

117    Mr Dempsey gave the following examples of shortening by the media and general public:

(a)    A news reporter said “Bed and Bath” on the Today Show on Channel 9 on 24 October 2021 in reference to BBNT hiring staff post-Covid lockdown.

(b)    A disgruntled customer said “Bed and Bath” in a Facebook livestream on 19 November 2021 when she complained that she was denied entry into a BBNT store due to vaccination requirements.

118    Again, these examples have no representative weight to establish a tendency among the ordinary consumer.

119    Finally, BBNT pointed to evidence of GRBA staff shortening the name of BBNT. Ms Kuzmanovich, GRBA’s state manager of Western Australia, referred to a BBNT store as the “Bed Bath store”. Further, both Ms Turner and Ms McGann referred to BBNT as “Bed Bath” in cross-examination. These are all one-off examples of shortening and not necessarily supportive of a general tendency among GRBA staff, let alone consumers, to shorten the BBNT name. Notably, BBNT did not point to any documentary evidence, such as internal email correspondence, of BBNT staff shortening the name.

120    Even if I was wholly satisfied that consumers have a tendency to shorten the BBNT name, I do not consider that, in any event, BBNT has established that it has any independent reputation in “BED BATH” or “BED & BATH” alone.

121    As Associate Professor Nyilasy explained, there is “a difference between the informal and formal use of Bed and Bath”. The mere fact that consumers might, in certain contexts such as instore, contract the BBNT name, does not mean that consumers will expect the contracted words BED BATH to be institutionally applied” (ie used by BBNT as a badge of origin). Associate Professor Nyilasy said that consumers will not “form that expectancy” unless there has been institutional use of that contraction.

122    In this case, the evidence was clear that BBNT had not made any institutional use of “BED BATH”. To the contrary, BBNT strictly followed its brand guidelines at all times, which required use of the brand only as a composite whole. Mr Dempsey accepted that BBNT had not contracted its brand to “BED BATH” in any advertising or promotion prior to May 2021. He agreed that BBNT used the BBNT mark in full (not contracted) on social media, such as Facebook, Instagram, Pinterest, and on its online store. Further, in its history of brand extensions and sub-brands, BBNT has always used the whole of the BBNT name in unaltered form, in combination with the dark green colour background. In so doing, BBNT has further reinforced to consumers that it is the composite phrase “BED BATH N’ TABLE” which indicates a commercial connection with BBNT, and not simply “BED BATH” or “BED & BATH.

123    The Google Analytics data reflects that BBNT’s institutional consistency in using the composite whole of the name has been digested by consumers. As discussed above, the Google Analytics data clearly recorded that when internet users searched for BBNT, they overwhelmingly did so by searching for the BBNT brand as a composite whole, and when they searched for specific BBNT stores, they exclusively did so by reference to the BBNT name as a composite whole. I give this objective evidence more weight than the subjective recollections of the BBNT store witnesses.

124    I therefore consider that, although consumers may have a tendency to occasionally shorten the BBNT name in informal settings such as in store or on the phone, BBNT has not established that it has a reputation, in any formal or institutional sense, in “BED BATHor “BED & BATH” alone.

3.13    Instances of use of the House B&B mark

125    In an appendix to its submissions, BBNT listed 15 different instances of the use of the House B&B mark. These included examples of House B&B store signs (some of which are below) with and without the horizontal line between House and “BED & BATH”, where “House” was illuminated, where “House” was in solid black font, and where the “BED & BATH” was cut out from a solid block.

126    There were also examples of where House BED & BATH appeared on a single line on printed receipts, or on social media.

127    Finally, there were examples of use on gift cards, advertising, employee name badges, signage directories at shopping centres, store windows, domain names (such as <www.housebedbath.com.au>) and various websites (such as <www.house.com.au>). The image below shows one such example of frosted glass window decals:

4.    ADOPTION OF THE HOUSE B&B NAME

128    In a very short timeframe and at the last minute before the launch of its new store in Westfield Doncaster shopping centre, GRBA resolved that House B&B would be a better brand than MyHouse, even though the MyHouse brand incorporated the word “House” and was a long-established business in NSW.

129    GRBA contends that the intention (and the effect) of GRBA adopting House B&B was to send a message that the well-known retailer House had moved away from its core activities, kitchenware and cookware, and extended its activities into bedroom and bathroom products.

130    BBNT contends that GRBA’s intention behind the adoption of the House B&B mark is relevant to the following issues:

(a)    the ACL case;

(b)    trade mark infringement;

(c)    the question of deceptive similarity; and

(d)    the good faith defence under s 122(1)(b)(i) of the Trade Marks Act if GRBA is found to have infringed the BBNT marks.

131    The events which led to GRBA’s last minute change from MyHouse to the House B&B mark and the layout of the House B&B stores were the subject of a significant amount of evidence and cross-examination.

132    The chronology of events leading up to the adoption of the House B&B mark is as follows.

133    In around June 2020, GRBA acquired the MyHouse business from administrators. MyHouse sold predominantly soft homewares (as opposed to the hard homewares predominantly sold through GRBA’s House and Robins Kitchen stores). The MyHouse stores consisted of a network of 26 stores in NSW and one in Victoria which closed shortly before the acquisition. After the acquisition, one MyHouse store re-opened in Victoria and two new stores were opened in Queensland.

134    GRBA initially planned to open over 50 MyHouse stores, and the set-up costs of the new soft homewares stores was substantial in the many millions of dollars. Ms McGann agreed that the MyHouse acquisition and the intention to open another 35 stores was a very big investment for GRBA and one would expect great care to be exercised in thinking of branding options if the brand was to change.

135    As at around June 2020, House had little or no trading reputation in the soft homewares market. In fact, GRBA’s attempts to enter that market (as House CASA ׀ MAISON ׀ HOME) had largely failed, and therefore the entrance into this market was a new category for GRBA.

136    Mr Caruana, GRBA’s Store Development Manager, was instructed by Mr Lew to design a new fit out for the MyHouse stores. Mr Lew was looking for a fit out that was “more modern and consistent with how GRBA fitted out its other retail stores, but appropriate for a store that sold soft furnishings”. Mr Caruana had not previously designed a fit out for a store that sold mainly soft homewares. His evidence was that his first step was to become familiar with the products sold in the MyHouse stores, as this would determine the types of product displays required. Mr Caruana also took external and internal photographs of a BBNT store (amongst others) as part of his research. As part of this process, Mr Caruana determined that, as the MyHouse stores had done prior to the acquisition by GRBA, at least one bed needed to be displayed at the front of each MyHouse store to ensure that customers could see the products (in particular, quilt covers) available for sale, including from outside the store.

137    Mr Lew also instructed Mr Caruana to include the concept of a “linen press” shelving located prominently close to a bed in store with quilt covers and pillow cases out of their packages to enable them to be placed on the bed so that customers could see how they looked and felt. At the instruction of Mr Lew, Mr Caruana designed the display bays for new MyHouse stores to display sheets and quilt covers in portrait, as opposed to landscape, orientation, the latter being the orientation generally used in most soft homewares stores.

138    According to Mr Caruana, the new design for the fit out of MyHouse stores needed to be consistent with GRBA’s design ethos for its other stores. In particular:

(a)    it needed to have as much product as possible in the store, not kept in the back room;

(b)    the design needed to be modular, to allow elements of the fit out to be used regardless of the dimensions of the store (for example, using six wall bays rather than eight); and

(c)    the elements of the fit out had to be capable of being used in all stores operating under the MyHouse brand, to benefit from economies of scale on the cost of design and manufacturing.

139    In about June 2020, Mr Caruana met with Mr Lew and his wife in their home to discuss store features they wanted to integrate into the MyHouse store design concept. Mr Caruana presented the first store fit out sketches and they discussed and agreed upon colours, fastenings and finishes.

140    Due to the onset of the COVID-19 pandemic, GRBA did not open any new MyHouse stores in 2020. The first opportunity to do so arose in early 2021 when GRBA leased a store in Westfield Doncaster. This was to be the first new MyHouse store opened by GRBA since its acquisition of the MyHouse business. Mr Caruana described the Westfield store as a “warm shell”, meaning the previous tenants had left some of their fit out behind, including the flooring and wall treatments. The store was one floor above a BBNT store. Mr Lew visited the Doncaster site prior to May 2021.

141    Mr Lew informed Mr Caruana of the new Doncaster store by email on 13 April 2021. By this time, Mr Caruana had completed his design of the new MyHouse fit out, and so he started making arrangements to use the modular fit out components he had designed in this new MyHouse store.

142    As the new Doncaster store was large and square, Mr Caruana created a layout that had two beds in the windows promoting the products displayed, and a third bed on the main floor with the linen press nearby. Mr Caruana located the cash register where it had been for the previous tenant so that the existing electrical wiring and cabling would not need to be relocated.

143    On 28 April 2021, Mr Caruana emailed Mr Lew and Ms McGann, GRBA’s Head of Brand and Media, three layout options that he had prepared for the MyHouse store in Doncaster.

144    On the afternoon or evening of 3 May 2021 at the “very last minute”, only days before the first MyHouse store was scheduled to open on 14 May 2021 in Westfield Doncaster Ms McGann queried during a telephone call with Mr Lew whether it was “too late to consider rebranding and calling this a HOUSE branded store?”. Mr Lew’s initial reaction was that this was “a good idea”, as it would “allow GRBA to leverage off the goodwill associated with the HOUSE brand”.

145    On further reflection, Mr Lew considered that if the new store was branded House, GRBA could also use the House customer database and potentially negotiate better leases with shopping centres. It would also give customers more confidence in this new store as they were familiar with the House brand and, after only a year of trading, there was little awareness of the MyHouse brand outside NSW.

146    Later that day at 9.10 pm, Ms McGann emailed Mr Lew, stating:

Thanks for calling

We WILL make this work and more than thatSOAR.

Just on our chat

Something to mull over

SHE KNOWS WHAT WE DO WELL

WE OFFER EXCELLENT PRODUCT WITH A GREAT VALUE PRICE TAG

WHY DOES A [ROBINS KITCHEN] AND A [HOUSE] IN THE SAME CENTRE ALWAYS FAVOUR HOUSE IN SALES?SHE KNOWS AND TRUSTS THE BRAND.

We have all this BRAND LOYALTY TO LEVERAGE

Just something to think about? Not 100% there myself but there is something in it??

Before we roll out too many MYHOUSEOne could be [HOUSE]we could try?

Aim to always open in the SAME centre so can push them either which way for dealsdouble our audience.

Will have Bed bath and table running scared.

HOUSE bed & bath.

HOUSE BATH AND BED

HOUSE BEDWORKS

(the running scared email or 3 May 2021 email)

147    In cross-examination, Ms McGann described the second option of potential brand names (HOUSE BATH AND BED) as “playful”.

148    Mr Lew’s evidence was that the 3 May 2021 email was the first he had heard of “House BED & BATH” as a potential brand. Mr Lews evidence was that despite the reference to BBNT in the 3 May 2021 email, he and Ms McGann had never had a discussion about BBNT. Mr Lew rejected the proposition that the proposed name was derived from BBNT, saying “I never thought about Bed Bath ’N’ Table”, adding, what became a common refrain from Mr Lew and Ms McGann, “the words bed and bath are common descriptors in the category of all soft furnishings”. He also rejected the idea that the words “BED & BATH” triggered an association with the only competitor identified in the running scared email, BBNT, responding that “the terminology Bed & Bath in that combination and usage of words is highly used by a lot of retailers, and it’s very highly understood by the consumer”.

149    Mr Caruana spoke with Mr Lew on 4 May 2021. During that conversation, Mr Lew said that he was thinking of changing the MyHouse store name.

150    In a text message to Ms McGann at 7.03 am on 5 May 2021, Mr Lew sent the House B&B logo from Ms McGann’s email of 3 May 2021 with the comment “I think you could be right”. Ms McGann’s text in response stated: “We start at 80% instead of 0% re roll outs with a customer base”. Ms McGann agreed that these figures were in relation to House entering the soft homewares market, and that she saw a significant advantage in being branded House B&B as opposed to MyHouse. Ms McGann considered “BED & BATH” to be a “callout to what categories we sell in that store”, to indicate to the customer that the shop would not be selling cookware. Ms McGann’s evidence was that House was the advantageit had the customer database, the credibility, the trust and the recognition. Ms McGann described House B&B as the “same brand” with a completely different product offer.

151    At 7.32 am on 6 May 2021, Ms Cameron sent 12 House B&B logo concepts to Mr Lew, copied to Ms McGann. Each featured the House® mark with variations of BED & BATH in different fonts and all in upper case. For each version, there was a mock-up of how it would appear over a store entrance. Ms McGann and Ms Cameron were unable to explain the change to all upper case from the lower case version in her 3 May 2021 email.

152    At 7.40 am on 6 May 2021, Ms McGann responded to Ms Cameron’s email copying in Mr Lew, stating “I like 8 then 11”. At 9.56 am, Ms Cameron sent three sets of mocked up pairs of store fronts with House and House B&B on them, with “BED & BATH” scaled differently on each.

153    On 6 May 2021, Mr Lew made the final decision to proceed with the now House B&B logo as his preferred option. Following a request from Mr Lew’s executive assistant at 3.25 pm on 6 May 2021 to “fast track the registration of the HB&B logo in Australia in class 35 only, Mr Kenmar, GRBA’s corporate lawyer, lodged a Headstart application with IP Australia for the House B&B logo at 5.03 pm that same day.

154    In an email to Mr Lew sent at 5.10 pm on 6 May 2021, Ms McGann commentedwe need to do due diligence on some house keeping”. She then set out a number of queries (in bold) to which Mr Lew responded 20 minutes later by filling in the answer next to Ms McGann’s questions, including the following:

1.    CHECK WITH LEGAL?

    HOUSE Bed & Bath

BEING FAST TRACKED ….. NOT A BIG CONCERN FROM LAWYERS.

    Check we can proceedno objections

    Send logo off to register

155    When asked why it was necessary to check with legal, given the brand was “House”, Ms McGann responded that she was not sure whether there were any legal implications with the name change on the lease that GRBA had signed for the Doncaster store and whether GRBA could change its lease agreement with the centre. Ms McGann refused to concede that the “check with legal? query related to a concern about using “BED & BATH” as a brand. She added after further questioning that she suggested they check with legal becauseit is protocol in our company to check with Legal on almost everything we do in terms of brand, regardless of what the brand is”.

156    Ms McGann’s evidence on this issue was frankly unbelievable. Despite the email saying “send logo off to register”, Ms McGann said that she did not have trade mark issues in mind when saying check with legal. However, given that Mr Lew’s response referred to “being fast tracked”, which was the language used to request that Mr Kenmar “fast track the registration”, Ms McGann’s reference to concerns about the name on the lease is clearly not what Mr Lew took “check with legal?” to mean. Mr Lew’s evidence was that he understood “check with legal?” to mean “to check if the marks are available for registration” — that is, to see if GRBA could get the House B&B mark registered. It is therefore highly unlikely that Ms McGann intended to refer to the lease when she said “check with legal?”. This conclusion is supported by the fact that no one else at GRBA referred to seeking legal advice about the lease and there is no record of any such advice being sought. In my view, and for further reasons explained below regarding Ms McGann’s credibility as a witness, her explanation regarding the lease was likely a subsequent invention to avoid conceding that there might have been a concern about “BED & BATH” being used as a trade mark.

157    According to Mr Lew, the “fast tracking” related to the speed at which a response would be received in respect of the Headstart application. Mr Lew’s evidence was that a Headstart application gives a picture within around five days of whether there are any marks cited against the mark. Mr Lew’s evidence was that he understood the “check we can proceedno objections” comment to be a reference to no objections coming from the trade marks office. In his comment about “not a big concern from lawyers”, the “concern” was as to the speed of response to the Headstart application. Mr Lew made no mention about seeking legal advice about the store lease.

158    On 6 May 2021, Mr Lew met Mr Caruana at the Doncaster store. Mr Lew asked Mr Caruana if he could get signage for the new brand made and put up in time for the launch of the store in four days. Mr Caruana agreed that he could get the signage made up in time as long as Mr Lew was happy for “House” to be illuminated like the other House stores, but not the other words, as Mr Caruana could use an already fabricated “House”. Mr Caruana gave evidence that the Doncaster shopping centre management imposes limitations on storefront signage, including that only one sign on the same façade is allowed to be illuminated in the store’s signage.

159    On 10 May 2021, Ms McGann sent an email to Mr Lew, copied to Mr Caruana, which discussed the possibility of an “additional semi transparent pull down screen behind the print banner so that the content in the bays doesn’t interfere with the visual on the beds”. The email noted that “Bed bath and table do it”.

160    On 11 May 2021, GRBA received an assessment from IP Australia which raised a single citation (unrelated to BBNT). According to Mr Lew, as GRBA had successfully overcome this citation in relation to other uses of its trade marks incorporating House in the past, he expected it would also be overcome in relation to House B&B. Mr Lew accepted that the Headstart application expressly noted that “Headstart cannot provide legal business advice such as … whether you will be infringing another trader’s common law rights. Mr Lew’s evidence was that he understood that in order to be confident that GRBA was not infringing another trader’s common law rights he needed to get proper legal advice.

161    GRBA applied for the registration of the House B&B logo on 12 May 2021:

being trade mark application number 2176694. The application was accepted on 5 July 2021 but was opposed by BBNT, and the opposition is presently on hold.

162    On 13 May 2021, the new signage with the House B&B logo was installed at the Westfield Doncaster store. Mr Caruana’s evidence was that, other than the signage, the layout and fit out of the Westfield Doncaster store did not change from the original plans he had prepared when it was intended to be a MyHouse store.

163    On 14 May 2021, GRBA launched the House B&B store in Westfield Doncaster using the signage shown below:

164    Also on 14 May 2021, Inside Retail published an article titled “Full House: Steven Lew’s GRB unveils new homewares brand” which reported on GRBA’s launch of a new brand “HouseBed & Bath”. That same day, GRBA registered a number of domain names incorporating Housebedbath (.com, .com.au, .com.nz and .co.uk).

165    On 25 May 2021, BBNT’s solicitors sent a letter to GRBA, noting the existence of the BBNT marks, and BBNT’s “extremely high level of brand recognition throughout Australia, in the name BED BATH N’ TABLE”, and requesting that GRBA rename the new store at Westfield Doncaster. The letter noted that GRBA’s conduct in choosing to name its new store House BED & BATH was conduct which constituted misleading and deceptive conduct contrary to s 18 and s 29 of the ACL, passing off and trade mark infringement.

166    GRBA’s lawyers responded to this letter on 1 June 2021. The letter set out the trade mark registrations held by GRBA and noted that the House brand and trade marks were well known in Australia in the homewares sector. The letter noted that House B&B was a “clear brand extension of the iconic House brand, and said that the mark was not deceptively similar to the BBNT marks. There was no mention of the concept of “bed” and “bath” being category descriptors or navigational aids. The letter appended a list of four registered trade marks which contained the words “bed” and “bath”.

167    GRBA opened a House B&B store in Knox shopping centre about a month after the Doncaster store opened. At the time that BBNT commenced these proceedings on 11 June 2021, there were two House B&B stores in operation. The Doncaster store closed in January 2022 as the lease on the store was only for seven months. Since May 2021, GRBA has launched a number of retail stores, each featuring either the use of the House B&B Logo or one of the other instances of the use of the House mark set out at [125] and [127] above.

168    On 13 October 2021, GRBA was advised by IP Australia that its trade mark application for House B&B was accepted. Mr Lew agreed that he knew that acceptance of a trade mark did not equate to registration of the mark.

4.1    Mr Lew’s evidence

169    Mr Lew has extensive business experience, including in retailing hard homewares. He publicly promotes himself as the founder and executive chairman of GRBA, Australia’s number one largest specialty kitchen retailer. The businesses under Mr Lew’s control have very significant annual revenue.

170    Mr Lew gave evidence that “brand” is very important to his business and in the home furnishing sector.

171    Mr Lew had been aware of BBNT since at least 2004 and, as at May 2021, he knew that BBNT was a leading competitor in the soft homewares market, and that it was the kind of brand that had trust amongst consumers. He agreed that BBNT had a “very prominent and successful brand” and that it was “very well established in the market”. Mr Lew’s evidence was that he regularly attended shopping centres and kept an eye on all competitors in the soft furnishings business.

172    Mr Lew was not aware of any other retailer using the term “bed and bath” as part of its store name in Australia: “I have not seen ithad not seen the words bed and bath in a store branding aside from Bed Bath N’ Table in Australia”.

173    Mr Lew rejected the proposition that he looked closely at what BBNT stores were doing. His evidence was that he was no more aware of BBNT than he was of Adairs, Pillow Talk, Sheridan, Myer, David Jones or Harris Scarfe.

174    Mr Lew agreed that he was very hands-on in relation to the opening of the new Doncaster store. At the time of opening that store, Mr Lew said that the competitor he was most cognisant of was Adairs, “and their sub-brand … Adairs Kids as they were across the hallway from the new store.

175    Mr Lew’s evidence was that he selected the name House BED & BATH because he considered that consumers were already very familiar with the House brand. He wanted to capitalise on the House brand, but wanted to differentiate its existing House kitchenware and cookware stores from the new stores that GRBA was planning to open (such as the Westfield Doncaster store) that would sell soft furnishings for the bedroom and bathroom. He preferred the suffix “BED & BATH” because he considered that:

(a)    it was a category descriptor that clearly indicated to consumers that the new store sold different products to those of the traditional House store;

(b)    “BED & BATH” rolls off the tongue more easily than “Bath & Bed”; and

(c)    it was important to use generic category words to describe the difference between the new store and the other House stores, particularly as they could be co-located in the same shopping centre.

176    Mr Lew agreed in cross-examination that GRBA could have picked “bedroom and bathroom” instead of “BED & BATH” but said:

the words “bed” and “bath”, even as opposed to “bedroom” and “bathroom” allow the main mark of House to stand out and be prominent. And thepotentially the shorter your sub-brands, the more emphasis is given on the prominent mark and the logo.

177    It was put to Mr Lew in cross-examination that the idea for the change of name to “House BED & BATH” suggested by Ms McGann came from, or was associated with, BBNT. His response was: Not at all. I never thought about Bed Bath ‘N’ Table.

178    Mr Lew accepted that BBNT was the only retailer using “bed and bath” in their name and store signage prior to House B&B, and that the public knew BBNT by reference to the words “bed” and “bath”. Mr Lew rejected that there was any distinction between the use of the words “bed” and “bath” as part of external store branding and their use inside stores as category or navigational descriptors because those words are “a commonly accepted term that people use in the industry and the general public”. He explained that the public:

may very well know the words “bed” and “bath” from Bed Bath ‘N’ Table , but if they walked into any other storeor many other stores that sold soft furnishings for the bedroom and bathroom or most of the competitors that I mentioned before, then they would see the words “bed” and “bath” and, particularly, online, the words “bed” or “bedroom and “bathroom” are used extensively.

179    In cross-examination, Mr Lew repeatedly observed (and did not miss an opportunity to observe) that the words bed and bath are common descriptors in the category of soft homewares and furnishings.

180    Mr Lew’s evidence was that it never crossed his mind that there might be a potential problem with any to similarity, or confusion with, BBNT. At no point did he think that House B&B was infringing the BBNT marks. His evidence was that he could not see an association between the names House BED & BATH and BED BATH NTABLEeven when it was raised in the context of the running scared email:

I didn’t pay too much attention to her line about running scared because we are in the market to take market share from all of our competitors. I went to straight to have a look at the logo that was being presented.

181    Despite Ms McGann’s references to BBNT in the running scared email and the email regarding the layout of the new Doncaster store, Mr Lew’s evidence was that he had never had a discussion with Ms McGann about BBNT.

182    Mr Lew selected the new name without reference to any lawyer. By the time the Headstart application was commenced, Mr Caruana had been instructed to prepare the new sign to put over the entrance to the shop which was to open on 14 May 2021. The decision had been made.

183    Mr Lew’s evidence was that it never occurred to him to check with lawyers whether there might be a problem with the use of House B&B because of the presence of BBNT. The only checking with lawyers that was done was to check whether GRBA could register the House B&B mark. According to Mr Lew, it was customary every time GRBA created a logo or brand in its business to check if the marks were available for registration. He said that if GRBA was not successful in registering the House B&B mark, it would have continued with the plan to open as MyHouse.

184    In response to a question in cross-examination regarding the usage of the House B&B mark, Mr Lew said “on the advice I had I was happy to continue”. GRBA accepted that there had been a waiver as to any documents containing such advice. However, no documents relating to that advice were produced in response to a notice to produce from BBNT following the hearing. There has also been no disclosure by GRBA of any legal advice in this period concerning the adoption of the House B&B name.

185    There was an absence of any comprehensive consideration accompanying the adoption of the new name in Mr Lew’s evidence (and, for that matter, the evidence of every other GRBA witness). The evidence suggests that the decision to adopt House B&B as the name for the new soft homeware’s business occurred within a matter of three days via a flurry of phone calls and emails, a week before the first store opened and without any input from external or internal lawyers. It also apparently occurred without the key decision-makers, Mr Lew and Ms McGann, having even the slightest inkling that the new name might bear even a passing similarity to the name of the dominant, or at least one of the dominant, players in the soft homewares market.

186    The resistance of Mr Lew to acknowledge his awareness of BBNT was particularly telling when he was asked whether he perceived any similarity between the store names BED BATH N’ TABLE and House BED & BATH, to which he answered “no”:

You can’t see it?No.

That’s your honest answer?Honest answer.

You can’t pick the fact that you’ve got two words in your store name that are two words in the name of Bed bath N’ Table. That never occurred to you?No.

And that’s your evidence to her Honour?Yes it is.

187    In the circumstances, it would be extraordinary to think that Mr Lew, with his considerable experience as a retailer, did not have this awareness firmly in mind when selecting the words “BED & BATH” for the new store name. This was not disclosed in the evidence in chief and actively denied in cross-examination.

188    Given the state of his awareness of BBNT which emerged through cross-examination (set out above at [171]), it is telling that Mr Lew only made two references to BBNT in his primary affidavit. He could hardly have endeavoured to say less despite his long-standing knowledge of this business and the specific identification of it at the time when the new branding was selected.

4.2    Ms McGann’s evidence

189    Since February 2022, Ms McGann has overseen GRBA’s brand management. Prior to that, she was Head of Product for MyHouse (from late 2020) and then Head of Product for House B&B (from May 2021). Ms McGann has been employed by GRBA for 21 years and had previous experience in the soft homewares market when she worked on the brand “Living with Deborah Hutton”, which was ranged at Kmart, around 17 years ago.

190    Ms McGann had been aware of BBNT for about 17 years both through her personal shopping and professionally, and considered it was a market leader (along with Adairs) and very well-known with high visibility in the soft homewares market. Ms McGann acknowledged that at May 2021, she had regard to the way in which BBNT stores appeared externally and internally and was intimately aware of BBNT branding. She observed that she was aware of what BBNT stores did as she visited their stores on a regular basis.

191    In her affidavit, Ms McGann deposed that “shortly after” June 2020 (and in the order of her affidavit, before early 2021this evidence was not sought to be corrected), she had considered whether marketing new MyHouse stores by reference to the House brand might be better and she recalled suggesting it to Mr Lew. By contrast, in her oral evidence, Ms McGann said she first thought about the option of using the House brand in April 2021 when GRBA was rolling out the Doncaster store. However, she sought to maintain in cross-examination that “shortly after” June 2020 is “in my version April [2021]” and denied that there was any inconsistency between her written and oral evidence.

192    Ms McGann had shopped at various BBNT stores regularly since 2017, particularly at “THE WORKSBED BATH N’ TABLE” in Hawthorn and the BBNT store at Victoria Gardens. She joined the BBNT rewards program in March 2015. Ms McGann said that “I have my eye on all competitors and Bed Bath N’ Table are one of them”. This included looking at features in BBNT stores and promoting similar features for the House soft homewares stores.

193    In fact, Ms McGann was paying such close attention to BBNT that she was able to comment to Mr Caruana in an email of 10 January 2022, when providing a suggestion for a new table: “PIC of the unit BBnT have in doorway literally every day of the year.” In cross-examination, Ms McGann sought to play down this description, saying this was “a bit of marketing puffery. Clearly, I’m not outside their store every day of the year.

194    In contrast to the multiple references to BBNT in her emails, Ms McGann mentioned BBNT only twice in her affidavit. Once when referring to her running scared email, and once to observe that at no time during the roll-out of the “new branding” did it occur to her that consumers would be confused by the House B&B brand or believe there was any association between House B&B and BBNT.

195    In oral evidence, Ms McGann downplayed her awareness of BBNT and whenever she was forced to speak their name during cross-examination, she gratuitously threw in “and Adairs”. This constant reference to Adairs in cross-examination was in marked contrast to her emails (as set out above) in which the only competitor mentioned was BBNT, and her written evidence which made no mention of Adairs.

196    To take a few examples: when asked if she shopped at BBNT stores, Ms McGann responded: “Yes. I’ve also shopped at Adairs”. Similarly, when asked if she knew that BBNT had high visibility as a brand in the soft homewares market, she responded: “Sure. Like Adairs”. Her awareness of BBNT as at 3 May 2021, she said: Yes. Equally Adairs”. Even in the context of questioning about the new table email discussed above, Ms McGann was compelled to add a reference to Adairs: “Adairs has the same style of pedestal”.

197    When taken to her running scared email, Ms McGann observed that she should have written Adairs too, or “the competition”, but she was just “banging it out as quick as I could”. She refused to accept the proposition that the wording in her quickly typed email was indicative of what was on her mind at the time. She described the running scared email as “over hyped” marketing talk.

198    Ms McGann’s statement “Bed bath and table do it” in her 10 May 2021 email to Mr Caruana is another example of Ms McGann’s close eye on what BBNT had in their shops. Again, there was no mention of Adairs in the email, only BBNT.

199    When called out by BBNT’s counsel, Mr Golvan AM KC, on her gratuitous references to Adairs, Ms McGann responded that she just thought she would volunteer it as she “thought it might be helpful”. I reject that explanation. The only competitor mentioned in any of Ms McGann’s emails was BBNT. Further, as evidenced by the fact that Ms McGann was a rewards member of, and regularly shopped at, BBNT, she was clearly intimately aware of the BBNT brand, so much so that she could readily name their products and store layout. In fact, one of the few times that Ms McGann did not gratuitously insert Adairs in answer to a question was in relation to her personal shopping at BBNT. She did not, for example, say that she also was a member of Adairs and shopped there regularly. It therefore appears that, in developing the new soft homewares brand, she not only had BBNT on her mind but her focus was only on BBNT. Her attempts to retrospectively try to insert Adairs into the mix at every available opportunity was contrived and unconvincing.

200    Finally, Ms McGann said repeatedly in her oral and written evidence that bed” and “bath” were combined with House because they were the best category descriptors or navigational aids for a soft homewares store. Yet, Ms McGann never mentioned “bed” and “bath” being category or navigational descriptors in her written correspondence in May 2021. In fact, Ms McGann’s emails and text messages around that time never expressly say why “BED & BATH” should be used in the store name at all. The correspondence between her and Mr Lew in selecting the new store name only address the justification for using House instead of MyHouse, given House’s existing brand recognition and reputation.

201    Ms McGann gave evidence that there was a “vision document of the strategy of our brand” which referred to BBNT, among other competitors. This was contrary to Mr Lew’s evidence that the project had no documented business plan. No “vision document” was ever produced. I infer that if there was a documented plan which referred to BBNT and other competitors, as described by Ms McGann, it would have been produced if it did in fact assist GRBA’s case.

202    The first reference to “BED & BATH” appears in the running scared email on 3 May 2021, seemingly out of the blue and without any explanation. Ms McGann said she came up with the potential names “on the fly” and she was searching for descriptors. According to Ms McGann, she did not consider “navigational descriptors” until after her call with Mr Lew on 3 May 2021 (prior to sending the running scared email). Ms McGann gave evidence that she could not recall what was discussed on that phone call and initially said if BBNT was discussed it was only as a competitor, but then, despite not remembering the discussion, said that BBNT was not mentioned. It is rather extraordinary that in proposing a name for a new soft homewares brand, which was planned to be rolled out across over 50 stores at a substantial cost, Ms McGann never explained or justified to Mr Lew, at least in writing, why “BED & BATH” should be included alongside House.

217    Ultimately, Ms McGann was an unimpressive witness who gave some frankly unbelievable answers. Her credit is strongly at issue, as evidenced by: her explanation for the “check with legal?” comment (discussed above at [155]–[156]), which was inconsistent with the evidence of Mr Lew and not corroborated by any contemporaneous documentary records; her recollection of when she first started considering the use of the House brand for the new soft homewares store; her evasiveness about the contact she had with BBNT stores; her attempts to divert answers to questions about BBNT to mention Adairs; and, given her extensive experience as a marketer and evident awareness of BBNT as a leading competitor in the soft homewares market, her statement that it never crossed her mind in selecting the name House B&B” that there was any association with BBNT.

218    As such, I will treat her evidence with extreme caution.

4.3    Mr Caruana’s evidence

219    Mr Caruana sent a design brief to METASPACE on 9 July 2020. He annexed images of existing soft homewares retailers to illustrate what he considered to be the generic look and feel of competing retail stores from which he wanted to differentiate MyHouse stores, noting that “they (Adairs, Bed Bath and Table, Sheridan) are all looking and feel similar these days.

220    Mr Caruana accepted in cross-examination that Ms McGann kept a “very close eye” on BBNT and its operations. However, he rejected the proposition that he kept a close eye on BBNT in May 2021, saying that he kept an eye on many soft homewares retailers as he had never designed a store for soft homewares.

221    In his affidavit, Mr Caruana stated that:

At no time during the design of the layout and fit out for MyHouse stores did I take inspiration from the layout and fit out of Bed Bath ‘N Table stores. To the contrary, and as explained above, to the extent that I did consider the layout and fit out of Bed Bath ‘N Table stores (as well as other competitors), I sought to differentiate the design and layout of MyHouse stores and instructed METASPACE, in the design brief, that I wanted “a new look for this retail category”.

222    Mr Caruana gave evidence that he visited the MyHouse store in Werribee in late May 2020 and took photographs of that store (and only that store) to help familiarise himself with the marketplace for soft homewares. He also reviewed photographs, but did not attend, other MyHouse stores for that purpose.

223    The Werribee MyHouse store is located three stores from a BBNT store. In a “jury style” reveal, Mr Caruana was taken to one of his photographs which he conceded showed him reflected in a mirror, taking a photo inside the Werribee BBNT store, the same day that he visited the MyHouse store. Mr Caruana’s collection of photographs also included additional photographs of the inside of the BBNT Werribee store and one of the entrances depicting the illuminated words “BED BATH N TABLE” and a vertical BBNT sign.

224    Mr Caruana’s photographs also included a photograph of a BBNT store in which the sheet sets were arranged in a portrait orientation, contradicting the statement in his affidavit that “all existing retail stores, that I was at that time aware of, displayed sheets and quilt covers in landscape”. Mr Caruana agreed that the House B&B linen press feature would not be visible from outside the store and observed that the customer would not know what the linen press is. Mr Caruana agreed that neither the portrait orientation of sheet sets nor the linen press would distinguish the House B&B storefront in the eyes of the consumer.

225    In cross-examination, Mr Caruana agreed that he took knowledge from his photographs of the BBNT store and they assisted in his research. He conceded that this statement in his affidavit that he had not visited a BBNT store as part of his research was false. He also acknowledged that Mr Lew would have known that he had taken photos of BBNT as part of his research.

4.4    Ms Cameron’s evidence

226    Ms Cameron is responsible for the design of all GRBA digital content, products, product packaging, and the GRBA website. This includes responsibility for the design of branding for all retail stores owned by GRBA. Ms Cameron is also involved in assisting with graphic design and the preparation of logo concepts, including the House B&B logo.

227    Ms Cameron accepted that House B&B was a new brand. Ms Cameron gave evidence that selecting a new brand is a serious undertaking and that it is important to research the marketplace to determine that a new brand would not cause a conflict with another brand, including undertaking a search of the trade mark register and engaging legal advice. She accepted that she had not taken any of these steps before creating the House B&B logo on 5 May 2021.

228    In relation to the House CASA | MAISON | HOME logo, Ms Cameron’s evidence was that the way it was presented was to allow a consumer to distinguish particular stores within the House group from traditional House stores.

229    Ms Cameron prepared 12 House B&B concept logos (11 for “House BED & BATH” and one for “House BED + BATH”) for Mr Lew’s consideration on 5 May 2021. In designing the logos, Ms Cameron sought to keep the existing House logo as the main feature with “BED & BATH” appearing underneath using a different font. In designing the concepts, Ms Cameron had the House CASA | MAISON | HOME, Pet House Superstore and House WAREHOUSE logos in mind. She chose “Gotham” font as GRBA uses this font throughout its business and it is similar to (but not the same as) the fonts used in the three logos she had in mind. Ms Cameron observed that the House logo was intended to be the hero part of the new branding.

230    Once the decision was made as to the preferred House B&B logo, Ms Cameron worked with Mr Caruana to design the House B&B signage for above the entrance to the Doncaster store.

231    In a refreshing change from the other GRBA witnesses, Ms Cameron managed to complete her evidence without spouting the line that “Bed & Bath were merely descriptive category identifiersor mentioning Adairs or any other competitor.

4.5    Mr Kupshik’s evidence

232    Mr Kupshik is a director and Chief Operating Officer of GRBA and a number of GRBA’s related companies. He only gave very limited written and oral evidence.

233    Mr Kupshik’s evidence was that at the time of the acquisition of MyHouse, GRBA would have made an assessment of branding used by the competition in the soft homewares market. No such assessment formed the subject of GRBA’s evidence.

4.6    Conclusion

234    GRBA’s conduct in adopting the House B&B mark is in the realm of wilful blindness as to the prospect of confusion arising from the adoption of a name that appropriated two words from one of its largest, if not the largest, competitor.

235    The House B&B name was adopted in extraordinary haste. Ms McGann proposed the name on 3 May 2021 and just three days later Mr Lew had resolved to change the name of the Doncaster store, which was scheduled to open on 14 May 2021, from MyHouse to House B&B. This decision was taken without any legal advice, search of the trade mark register or any assessment of branding used by competitors in the soft homewares market, despite GRBA witnesses saying that these steps would ordinarily be undertaken by GRBA when selecting a new brand or logo.

236    Mr Lew’s evidence was that the Headstart application was intended to provide a picture of whether there were any issues with the proposed mark. This was the only example of any due diligence taken by GRBA before adopting the House B&B name. Of course, as GRBA would well know, a Headstart application would not raise any ACL issues or indicate whether GRBA was otherwise free to operate with the House B&B name. Yet, and in any event, Mr Lew clearly placed no importance whatsoever on the outcome of the Headstart application, as the same day that the application was filed Mr Lew instructed Mr Caruana to change the signage on the Doncaster store to House B&B. It is therefore highly implausible that the Headstart application was intended to operate in any way as a form of due diligence that would have changed the course that GRBA were set on pursuing. If GRBA had genuinely considered that the Headstart application was a sufficient form of due diligence in adopting the name, this would be a highly unusual, and manifestly inadequate, approach for an organisation that was clearly very conscious of branding.

237    No substantive legal advice was obtained at any point in relation to selecting the House B&B name. Notwithstanding its purported reliance on the Headstart application, failing to get any legal advice is not the act of a retailer with substantial brand experience who is looking at opening 50 stores in a new section of the market. The absence of any input from lawyers despite a query from Ms McGann to Mr Lew to “check with legal?, which in my view was clearly a reference to checking any legal issues with the proposed trade mark is even the more damning in circumstances where GRBA was adopting a brand name that appropriated two words from one of its leading competitors.

238    Despite GRBA being eager to minimise any reference to BBNT in its evidence, it became clear from the cross-examination of GRBA’s three key witnesses (Mr Lew, Ms McGann and Mr Caruana), and only through cross-examination, that they were keenly aware of BBNT as a prominent competitor in the soft homewares market and kept a very close eye on BBNT. This is unsurprising. BBNT was the dominant player in the market that GRBA were about to enter. Further, BBNT and House (whether owned by GRBA or its predecessors) had over 40 years of overlapping trade in the broader homewares sector and being co-located in shopping centres across the country.

239    GRBA’s three key witnesses nonetheless maintained that they paid no more attention to BBNT than any other competitor in the soft homewares market, and therefore had no regard to BBNT when selecting the House B&B name. However, the only reference to a competitor in the internal GRBA emails was to BBNT and what they were up to. There was not a single mention of Adairs or Sheridan or Myer or any other competitor. The sole focus on BBNT in internal correspondence is harshly juxtaposed with the pavlovian response of Ms McGann during cross-examination where virtually every time she responded to a question that related to BBNT, she added “and Adairs”.

240    Mr Lew, Ms McGann, Ms Cameron and Mr Caruana are all very experienced in branding this was not their first rodeo. It would be perfectly explicable for individuals in their positions to be keenly aware of their key competitor in the soft homewares market prior to joining that market. There was evidence that Ms McGann, in particular, had kept a “very keen eye” on BBNT, shopped there regularly and knew its products and store designs. Ms McGann came up with the House B&B name but refused to admit that it ever crossed her mind that the name bore any resemblance or association to BBNT. She said her focus was on the House brand, and “bed” and “bath” were merely category descriptions to distinguish the new stores from existing House stores.

241    The emphasis on category descriptors in Mr Lew’s and Ms McGann’s evidence in cross-examination sits uncomfortably with the absence of any reference to category descriptors in GRBA’s internal correspondence prior to selecting the House B&B name and GRBA’s first response to the letter of demand. Mr Lew’s and Ms McGann’s common refrain that “the words bed and bath are common descriptors in the category of all soft furnishings” therefore came across as contrived and an attempt to reverse engineer the thought process behind selecting the House B&B name.

242    In these circumstances, Mr Lew’s and Ms McGann’s refusals to acknowledge, or even conceive, that there was any prospect of consumers being confused by House B&B and BBNT was untenable. The evidence showed that, at best, GRBA had an extremely cavalier attitude to intellectual property where its only form of due diligence in launching a new brand was to see whether it could get its own trade mark, rather than checking whether it generally had the freedom to operate. At worst and, in my view, more plausibly, Mr Lew was wilfully blind to the similarities between the name and logo of House B&B and GRBA’s key competitor BBNT as he perceived that there was a commercial benefit in using part of a well-known brand name in the new soft homewares store, a name that, in Mr Lew’s words, “rolls off the tongue”. Mr Lew and GRBA therefore proceeded with launching House B&B without going through any of their usual forms of due diligence, or even waiting for the results of the Headstart application, and without any regard for the potential for confusion that may arise as a result of the adoption of the House B&B name.

5.    EXPERT EVIDENCE

5.1    Use of “bed” and “bath”

243    The experts agreed that House B&B is a sub-brand of the House brand, which had been used to extend the House brand into the soft homewares category. Prior to May 2021, they agreed that the House brand was not positioned primarily as a retailer of bedroom and bathroom products.

244    Associate Professor Nyilasy’s evidence was that the words “bed” and “bath” and the phrase “bed and bath” are category descriptors commonly used in the industry and consumers process them as such. The reasons for this are that the words “bed” and “bath” are common nouns that denote generic objects, but together they denote the category of bedroom and bathroom products which competitors have adopted in referencing the category, including BBNT’s most significant and less significant competitors. Consumers are familiar with that word usage.

245    Associate Professor Nyilasy did not consider that “bed” and “bath” in combination were highly diagnostic for the BBNT brand, or that the combination of those words was unique to BBNT. He gave three reasons:

(a)    The words “bed” and “bath” are descriptive words for commonplace physical objects, and in the retail context they generally refer to textile products used in relation to beds/bedrooms or baths/bathrooms.

(b)    The words “bed” and “bath” are used by the industry as category descriptors. For example, at least six of BBNT’s most significant competitors have used the exact phrase “bed & bath” or “bed and bath” as category descriptors.

(c)    Consumers seeing those words will recall the category of bed and bath products.

246    As a result, when a consumer sees a House B&B store in a shopping centre, Associate Professor Nyilasy considered that all but a small minority of consumers (who were dedicated to BBNT) were likely to think of ordinary generic things (beds and baths) or ordinary generic rooms (bedrooms and bathrooms), or the soft homewares category. Even for that minority, Associate Professor Nyilasy considered that those consumers would consider the words bed and bath as ordinary descriptive words, not uniquely associated with BBNT. Thus, Associate Professor Nyilasy’s evidence was that consumers confronted with the words “BED & BATH” in a brand are likely to think of the category of bed and bath products first, rather than thinking of BBNT exclusively.

247    Associate Professor Nyilasy considered that it was the full combination of BED BATH N’ TABLE that was unique to BBNT, not the words bed” and “bath”. BBNT has consistently used the full combination in its marketing materials over many years. Given that the words bed and bath are in common usage, the particular arrangement in which BBNT uses those words (together with “N’” and “TABLE”) is very specific. Therefore, Associate Professor Nyilasy considered that any deviation from the particular arrangement adopted by BBNT will not be unique to BBNT in consumer perceptions.

248    Professor O’Sullivan disagreed with Associate Professor Nyilasy. He considered that many consumers are likely to assume that the words “bed” and “bath” in the House B&B mark refer to the BBNT mark in that the stores are, or are associated with, BBNT through, for example, a sub-brand endorsed brand or some other form of brand collaboration. In his view, this was because consumers will associate the words “bed” and “bath” as part of a brand name with BBNT because: (a) BBNT is a well-established brand in the soft homewares category; and (b) prior to May 2021, the words had only been used as part of a brand name by BBNT in the soft homewares category.

249    Professor O’Sullivan considered that consumers visiting shopping centres and shopping strips and deciding which shops to enter are engaged in low involvement decision making. In most cases, there are limited negative consequences to the consumer in making the wrong choice; they can just walk out of the store if it does not have what they are looking for. Associate Professor Nyilasy disagreed. He considered that for most consumers the purchase of bed and bath products will be a high involvement purchase because the items will be used and displayed in their homes. Soft homewares products are generally durable and likely to last many months, if not years, so the consumer will have to deal with the consequences of a bad decision daily for a long time. The consumers will therefore be focussed on getting the products they need. Associate Professor Nyilasy also observed that many of the products (for example, quilts) had high price points above $100.

250    According to Professor O’Sullivan, consumers tend to rely on the fewest possible cues to find and identify brands as this allows them to minimise the cognitive effort they expend. The cues consumers rely on most are those that have high diagnostic strength cues that are unique to the brand and well known by the consumer. As the only soft homewares retailer that used the words “bed” and “bath” as part of their brand name, Professor O’Sullivan considered that consumers were likely to view the combination of “bed” and “bath” in a name as being unique to BBNT. However, Professor O’Sullivan agreed that the words “bed” and “bath” were widely used as category descriptors by BBNT’s competitors on their websites and inside their physical stores.

251    Professor O’Sullivan contrasted the present case with that of a consumer looking for a specific sushi retailer at Westfield Doncaster. There are three sushi retailers, each of whom uses the word “sushi” in their brand name. In that circumstance, Professor O’Sullivan said that the consumer would be unlikely to rely on the word “sushi alone as a diagnostic cue for identifying a particular retailer. Such a situation is to be contrasted to the position of BBNT prior to May 2021 as the only soft homewares retailer with “bed” or “bath” in its brand name.

252    Professor O’Sullivan’s evidence was that consumers are cognitive misers and, as such, consumers commonly abbreviate lengthy words and names including brand names. He gave examples which included Rebel Sports being shortened to Rebel, Bunnings Warehouse being shortened to Bunnings and McDonald’s being shortened to Maccas. As BED BATH N’ TABLE is a lengthy brand name, Professor O’Sullivan considered that consumers were likely to rely on “bed” and “bath” as cues in quickly identifying and recognising the BBNT brand.

5.2    Brand extensions

253    The experts agreed that consumers are generally aware of the practice of brand extensions. They agreed that a brand extension may include the use of a sub-brand, and noted that there were two forms of brand extension:

(a)    a line extensionthe new offering is in a category where the brand is already established; and

(b)    a new category extensionthe new offering is in a category where the brand is not well established.

254    Professor O’Sullivan’s evidence was that it was common practice when brands merge, extend or collaborate, to combine the brand names in whole or in part. He considered that consumers seeing House B&B are likely to arrive at one of the following conclusions:

(a)    that House B&B is a collaboration between the House brand and the BBNT brand;

(b)    that BBNT is now part of (has been acquired by) House, or vice versa; or

(c)    that House B&B is an extension of BBNT.

255    In cross-examination, Professor O’Sullivan accepted that for his examples of sub-brands, such as Woolworths, Toys R US, Bunnings Warehouse and Foot Locker, the parent brand (or at least the distinctive part of it) was retained unaltered.

256    Associate Professor Nyilasy did not consider that consumers were generally aware of company merger and acquisition activities, and that in the context of shopping for products consumers were not thinking about possible company mergers, rather they were focussed on consumption-relevant goals. He disagreed with Professor O’Sullivan’s conclusion that consumers would consider that there had been a merger or collaboration between House and BBNT. Associate Professor Nyilasy considered that consumers were more likely to perceive House B&B to be a brand extension as they are more familiar with the concept of brand extension and the multi-brand approach to marketing which occurs as a result of brand extensions, than to think that there had been a merger, acquisition or collaboration between House and BBNT.

257    Associate Professor Nyilasy considered that it would be unlikely for BED BATH N’ TABLE to be contracted and altered to BED BATH. He also considered Professor O’Sullivan’s scenario (c) above to be “fanciful” for several reasons, including that customers would need to believe that BBNT had adopted a competitor’s brand name (House) as a sub-brand, created a sub-brand which altered the part of the parent brand used in the sub-brand (BED BATH altered to BED & BATH) and then launched that sub-brand in a category which directly competed with the parent brand. Each step in Associate Professor Nyilasy’s chain of reasoning is valid and his overall criticism has some force. However, it requires deliberate and critical reasoning to arrive at his conclusion, including a careful reflection about marketing practices and competition. I consider that it is highly unlikely that the ordinary and reasonable consumer browsing for soft homewares products in a shopping centre will engage in any such careful reasoning when simply seeing the House B&B above the entrance to a store.

258    Ultimately, beyond my remarks above and what follows in my findings, I do not consider it necessary to resolve the disputes between Associate Professor Nyilasy and Professor O’Sullivan. As the Full Court of this Court has observed (in the context of a claim under s 52 of the Trade Practices Act 1974 (Cth)), expert evidence is of limited assistance in determining whether consumers are likely to be misled, and the question is ultimately a matter for the court’s impression: see Domain Names Australia Pty Ltd v .au Domain Administration Ltd (2004) 63 IPR 1 at [21]–[22] (per Wilcox, Heerey and RD Nicholas JJ). That is particularly the case where the Court’s primary concern is with the behaviour to be expected of, and the judgements likely to be made by, ordinary (even if it might be thought, somewhat credulous) [consumers] making a relatively modest purchase in a shopping centre or suburban strip mall: Cat Media Pty Ltd v Opti-Healthcare Pty Ltd [2003] FCA 133 (per Branson J) (cited with approval in Domain Names at [21]).

6.    ALLEGED CONFUSION EVIDENCE

259    BBNT relied upon a significant body of evidence of alleged customer confusion which it submitted should fortify the Court in reaching the conclusion that the conduct of GRBA is both misleading and deceptive and an infringement of the BBNT marks.

260    BBNT initially sought to rely on 11 affidavits from store managers or employees as evidence in chief to establish customer confusion. However, on 9 May 2022, BBNT sought leave to file a further 25 affidavits deposing to new instances of alleged customer confusion. The basis for the application was that while preparing the confusion evidence, GRBA opened a number of new House B&B stores. BBNT therefore became aware of further instances of confusion from staff members who worked at BBNT stores that were proximate to these new stores, particularly in Western Australia. I granted leave for BBNT to file these 25 additional lay witness affidavits as to customer confusion. However, the trial had to be deferred from June 2022 to the end of November 2022 to accommodate the filing and reply to this further evidence.

261    As I have outlined above, I instructed BBNT at the start of the trial to pick 10 of the best of these 36 lay confusion witnesses.

262    As GRBA points out, not one of the 36 potential BBNT confusion witnesses gave direct evidence of confusion. It is surprising, given the store placed by BBNT on the confusion evidence, that there was not one instance of direct evidence of customer confusion amongst the 10 best lay witnesses BBNT selected.

263    In Fine & Country Ltd v Okotoks Ltd [2012] EWHC 2230, Hildyard J noted at [84] that courts recognised that the finding and producing of actual evidence of confusion is difficult:

Members of the public are reluctant to attend court. Moreover, people who are confused and deceived may remain confused and deceived, and there is no reason why this should come to the attention of the parties. Furthermore, members of the public who were once deceived, but then appreciate that they were misled, will frequently have no reason to draw this to the attention of the parties, especially if the realisation comes some time after any relevant dealing with the parties. Finally, persons may be deceived, and decide not to do business with the claimant as a result. They have therefore no reason to contact the parties and inform them of the confusion. For these reasons, evidence of actual confusion and deception is often decisive, but its absence is not.

264    In Vivo International Corp Pty Ltd v Tivo Inc (2012) 99 IPR 1, Nicholas J stated at [137]:

It is well established that evidence of actual confusion may be highly persuasive. But as with other evidence, in assessing what weight should be given to it, the court must evaluate the quality of the evidence by reference to its internal features, the other evidence and the court’s own knowledge of human affairs.

265    The evidence of confusion relied upon by BBNT falls within two broad categories. The first is the direct observations of store managers and sales assistants of apparently mistaken or confused consumers, delivery drivers and job applicants. The second is evidence from GRBA itself, which indicated that GRBA had also experienced instances of confusion, and third-party contemporaneous documents such as shopping centre signage.

266    Delivery drivers and job applicants are not consumers in the ordinary sense. However, I consider that the class of ordinary consumers in this case is the public at large. The evidence of mistaken delivery drivers and job applicants may be relevant to the extent it shows the propensity for persons who wish to have some commercial interaction with BBNT or House B&B to confuse the stores more generally because of the similarity in store names and the familiarity with BBNT.

267    With respect to the first category of evidence, the BBNT employees gave direct evidence recounting their observations of consumers with a confused state of mind. BBNT contends that, pursuant to s 66A of the Evidence Act 1995 (Cth), to the extent that this evidence seeks to recount conversations then those conversations are not sought to be used for a hearsay purpose and are, in any event, contemporaneous representations about the person’s (confused) state of mind. I accept that the evidence can be used for that purpose: see SMA Solar Technology AG v Beyond Building Systems Pty Ltd (No 5) [2012] FCA 1483 at [32][33] (per Perram J); Telstra at [206][207] (per Murphy J).

268    BBNT considered that it is beside the point that it did not bring evidence directly from persons who were confused because the evidence provided is not undermined by pointing to additional evidence from others (such as customers) that might have been led. It also highlighted the practical difficulty in identifying each of those customers and having them give evidence.

269    The relevant baseline from which to consider the alleged instances of confusion is the fact that it would be impossible to identify every instance of confusion. BBNT has identified a significant number of instances of alleged confusion. However, BBNT did not suggest that the evidence was intended to be a survey having statistical significance. Rather, it contended that, consistent with the authorities, in the rare case where evidence of confusion is available, then it should be treated as a persuasive factor that fortifies the Court’s conclusion.

270    GRBA contends that it is well established that indirect evidence of alleged confusion, by persons other than those persons alleged to be confused, will often be given little or no weight, particularly where no explanation has been given for the failure to call direct evidence: see, eg, Telstra at [188], [199], [210], [225], [231], [236], [241] (per Murphy J); Vivo at [151] (per Nicholas J).

271    In State Government Insurance Corp v Government Insurance Office of New South Wales (1991) 28 FCR 511 (SGIC), French J (as his Honour then was) said at 529:

Generally speaking, in cases of alleged misleading or deceptive conduct which is analogous to passing-off, evidence from consumers that they have been misled by the impugned conduct is of limited utility. It has no statistical significance and the court cannot draw inferences from it that any section or fraction of the population will have similar reactions. But if the inference is open, independently of such testimonial evidence, that the conduct is misleading or deceptive or likely to mislead or deceive, then it may be that the evidence of consumers that they have been misled can strengthen that inference.

272    In addition to the lack of any direct evidence of customer confusion, GRBA contends that BBNT’s confusion evidence has no probative value and should not be admitted or, if it is admitted, it should be given very little weight. That is for a number of reasons.

273    First, the evidence established that there was a significant level of apparent baseline confusion with other stores such as Adairs or Sheridan, which was clearly not due to any similarities in branding (baseline confusion).

274    The evidence of several witnesses, particularly Ms Turner, a current employee of House B&B but a former BBNT store manager, was that they served customers on a daily basis who said or did something which indicated “that they thought BBNT was Adairs” or some other soft homewares store. Common examples included:

(a)    customers attending the BBNT store to collect an item ordered from or sold by Adairs;

(b)    customers attending the BBNT store to return products purchased from Adairs (or Spotlight);

(c)    customers presenting their Adairs membership card when asked whether they were a member of BBNT; and

(d)    customers attending the BBNT store and asking for products they had seen in a shop window of Adairs or on the Adairs (or Sheridan) website.

275    GRBA submits that these instances of confusion clearly do not relate to branding, as the names and logos of Adairs, Spotlight and Sheridan bear no visual or phonetic similarity to the BBNT brand.

276    On an even more general level, witnesses from both GRBA and BBNT gave evidence of customers frequently coming into a store and asking “what store am I in?” or “where am I?”, or just generally not knowing (or particularly caring) which store they were in until they needed to use their loyalty card.

277    These instances of baseline confusion are consistent with the evidence of Associate Professor Nyilasy that there will always be some consumers who are “unfocussed and make mistakes”, and it is wrong to assume that any confusion is referrable to similarities in brand names or logos.

278    BBNT submits that nothing useful can be taken from the fact that GRBA can establish that some consumers may have been confused in other different circumstances (for example, between different stores not the subject of this proceeding). Such evidence points heavily to consumers being cognitive misers and frequently being distracted while engaging with the store. BBNT contends that, if anything, this supports its analysis that consumers are at least likely to be misled or deceived. Further, BBNT says that its witnesses observed a discernible increase in the level of confusion, compared to the apparent baseline confusion, upon House B&B stores opening.

279    BBNT also contends that GRBA’s evidence about baseline confusion is unhelpful as it is generalised and unsupported by any documentary record, being based entirely on memory, the reliability of which was questionable. However, as pointed out by GRBA, some of BBNT’s confusion evidence, at least with respect to the first category, suffers from these same evidentiary flaws once it is understood that various aspects of the written evidence and contemporaneous records relied upon by the BBNT confusion witnesses was unreliable. Some of the instances of alleged confusion described in the BBNT affidavits differed in meaningful respects from the contemporaneous records made in the relevant store diaries. For example, Ms Dimopoulos agreed that her version of at least two instances of confusion differed between a contemporaneous email she sent to a superior, the entry she recorded in the “confusion book” and her affidavit. Ms Dimopoulos, like several other BBNT witnesses, attributed in her affidavit a positive identification of House B&B as the source of the confusion, despite no such evidence being recorded contemporaneously. Finally, in some instances, BBNT store witnesses conceded that the evidence they had included within their affidavits was, on reflection, inaccurate.

280    The second issue GRBA identified with BBNT’s confusion evidence is that some instances of confusion appeared unrelated to branding. For example, numerous customers had searched for a House B&B store on Google, only to be erroneously supplied with a BBNT telephone number. No witness explained why Google would have displayed the wrong number in this way.

281    Other customers expressly reported being confused by “the window displays”, and one BBNT store witness asserted that geographic proximity between the stores and the display of bedding products contributed to any confusion. This was all consistent with the evidence of Professor O’Sullivan that there is a risk that “consumers can be confused between stores by matters that are unrelated to branding”. These examples obviously highlight the consequences of BBNT’s failure to call any direct evidence of alleged confusion which may have established the source of the confusion.

282    Third, GRBA contends that the evidence of customer confusion collected by BBNT store employees suffers from confirmation bias. That is because BBNT store employees were instructed to look out for and record confusion between BBNT and House B&B only, but not other retailers. The flaws of evidence gathered in this manner was evident from revelations during cross-examination of many of the BBNT store witnesses that, although purportedly confused customers had not made any reference to House B&B, the BBNT employee had simply assumed that any apparent confusion was between BBNT and House B&B and recorded it as such. Such interactions had nevertheless been recorded in a store “confusion book” and described in the evidence as “incidents”. Indeed, some BBNT store witnesses even prompted customers to consider House B&B as the source of their apparent confusion in order to “get to a conclusion faster”.

283    Notwithstanding the defects with BBNT’s alleged confusion evidence, similar evidence was forthcoming from the retail GRBA employees, particularly in relation to baseline confusion which I have discussed above. Their evidence did not suffer from all the defects which GRBA contended rendered the BBNT evidence of limited to no probative value.

284    GRBA asserts that much of the alleged confusion evidence was, at best, evidence of the sort of transitory and commercially irrelevant wonderment that cannot contravene the ACL or give rise to any liability for passing off. There was no evidence that any customer was misled into wrongly making any purchase from a House B&B store, particularly those, like delivery drivers or job applicants, who cannot be characterised as “consumers” in the ordinary sense.

285    Further, even if I accepted every reported instance of confusion, GRBA asserts that as a proportion of total customer interactions, the instances of confusion were so small as to be statistically insignificant.

6.1    Example instances of alleged confusion

6.1.1    BBNT witnesses

286    BBNT annexed to its closing submissions 74 incidents of confusion observed by their 10 selected confusion witnesses. GRBA objected to the bulk of this evidence on the grounds of admissibility, cogency or relevance. GRBA’s objections were set out in an annexure to its submissions and the primary arguments underlying those objections are summarised at [270]–[285] above.

287    The instances of confusion derived from several stores in different locations across the country and at different times. I have reviewed each instance of confusion and assessed the possible inferences that may be drawn from each instance and the body of evidence as a whole with respect to whether the ordinary and reasonable consumer may have been confused, misled or deceived by GRBA’s choice of branding for House B&B.

288    It is unnecessary to describe every instance of confusion led by BBNT, which differ in significant respects in their cogency. I have summarised below the most cogent examples of confusion that support a case of “both wonderment and actual error (or a capacity to induce error)”: Mitolo Wines Aust Pty Ltd v Vito Mitolo and Son Pty Ltd (2019) 142 IPR 182 at [170] (per Besanko J).

289    One source of confusion that arose repeatedly in several witnesses’ evidence was that when customers searched on Google for the phone number or address for a particular House B&B store, the first result was for a BBNT store. GRBA contends that this evidence cannot establish that any customer was misled by the conduct impugned in this proceeding, rather they were confused by information supplied by Google. BBNT did not make any submissions that directly addressed the effect of this evidence regarding Google searches but, by virtue of relying upon this evidence, seemed to proceed on the basis that it was relevant to establishing confusion on the part of consumers resulting from the similar store names and/or branding. I agree with GRBA’s submission on this point. The consumers knew which shop they were intending to call but were given incorrect information by Google. There was no explanation as to why the Google search for House B&B resulted in the display of the BBNT phone number as the first result. Any confusion that might be said to arise in this circumstance occurred by reason of the intervention of the Google search engine, rather than any confusion in the mind of the consumer arising from the similar store names and/or branding.

6.1.1.1    Ms D’Alessio

290    Ms D’Alessio was employed full-time as an assistant store manager at BBNT in Doncaster for six months commencing in March 2021. Ms D’Alessio gave evidence of five instances of confusion, two of which are set out below.

291    On 4 September 2021, a customer came to pick up a “call and collect” order from BBNT. The customer indicated to her that he went to the House B&B store upstairs which he thought was BBNT. The incident was recorded in the store diary contemporaneously. An almost identical instance of confusion occurred on 18 September 2021, which was also recorded in the store diary.

6.1.1.2    Ms Erdossy

292    Ms Erdossy was the assistant store manager at BBNT Chadstone from October 2021 to April 2022, after holding other roles at BBNT since October 2019. She was employed full time.

293    Ms Erdossy gave evidence of nine specific incidents of what she perceived to be confusion, some of which are set out below. She also stated that she had observed many other instances of what she perceived to be confusion that were never documented due to her being too busy.

294    On 29 October 2021, around the time when House B&B first opened in Chadstone, staff from House B&B handed out promotional leaflets in the shopping centre. Ms Erdossy said that she served about five or six customers on that day who referred to or sought to rely upon the leaflet and that four of those customers told Ms Erdossy that they thought BBNT and House B&B were part of the same group, or asked if they were. These incidents were recorded in an email to Ms Karis Haig, BBNT’s national operations manager, dated 15 November 2021.

295    In around November 2021, a lady approach Ms Erdossy and Roberta (the store manager) stating that she was starting a casual position with the store. However, after a brief discussion, the lady confirmed she was starting a role with House B&B.

296    On 22 November 2022, a customer called asking for “Bed Bath” and after Ms Erdossy told her that she called BBNT and asked if she was after House B&B, the customer said she had called the wrong store, and that our store number popped up first on her internet search. The customer said she thought that BBNT was the same as House B&B.

6.1.1.3    Ms Dimopoulos

297    Ms Dimopoulos is a sales assistant at BBNT in Chadstone. She has been employed part-time since 2018.

298    Ms Dimopoulos gave evidence that since the House B&B Chadstone store opened, she had interacted with about 30 customers, delivery drivers, stock deliverers, valet staff and a technician at BBNT referring to House B&B. She gave evidence of seven specific incidents and said that she did not witness instances of confusion with other stores.

6.1.1.4    Ms Harry

299    Ms Harry was the assistant store manager at BBNT in Woodgrove shopping centre, having worked there for approximately six years, initially as a casual employee and for the last three years as assistant store manager. She gave evidence of five incidents of confusion.

6.1.1.5    Ms Downes

300    Ms Downes has been a full-time sales assistant at BBNT in Doncaster since June 2021, and was previously employed on a casual basis. She gave evidence of three incidents of confusion, one of which is set out below.

301    On 28 December 2021, a customer entered the store seeking a product which Ms Downes believed originated from House B&B. Ms Downes queried the customer whether she was looking for “House BED & BATH” and the customer said yes. Ms Downes contemporaneously recorded the incident in the store diary.

6.1.1.6    Ms Chatfield

302    Ms Chatfield is the store manager at BBNT in Busselton, which opened in July 2021. She gave evidence of eight incidents of confusion, some of which are set out below.

303    On 24 November 2021, Australia Post delivered a package to BBNT addressed to Riley Coates, the manager at House B&B in Busselton.

304    Around four times a week in November 2021 and twice a week in December 2021, a shopper would come into BBNT and say you’ve opened another store down the road or you’ve got two of you. There is only one BBNT store in Busselton.

305    In or around November 2021, a customer came into BBNT mistakenly trying to use a House gift voucher. The customer asked if she could use her gift voucher in both this store and regular House stores. Ms Chatfield recorded the incident in an email to her regional manager dated 12 November 2021.

306    Ms Chatfield also gave evidence about the general number of instances of confusion per week and the difficulty of recording them all:

It is not possible for us to write down every single instance. Again, we’re an extremely understaffed store and we get very busy around Christmas time when we were writing all of these.

On a weekly basis, I would say maybe [instances of confusion occurred] three times a day when [House B&B Busselton] first opened and now we’re still getting them roughly about four times a week.

6.1.1.7    Ms Timms

307    Ms Timms is the assistant store manager at BBNT in DFO Perth and has worked there since October 2021. She gave evidence of five incidents of confusion, some of which are set out below.

308    In early December 2021, a security guard misdelivered a satchel labelled to House B&B and a similar incident occurred later that month when a security guard gave Ms Timms a memorandum from DFO centre management to sign which was addressed to House B&B.

6.1.1.8    Ms van der Plight

309    Ms van der Plight is the store manager at BBNT in Westfield Doncaster and has held this position since April 2020. She gave evidence of 12 incidents of confusion, some of which are set out below.

310    On 11 June 2021, a lady called enquiring about bed heads that she insisted had been in the BBNT window. As bed heads are not sold by BBNT and Ms van der Plight had seen House B&B had a different style of bed head in their window, Ms van der Plight asked if she meant House B&B. The caller then asked if they were BED & BATH and Ms van der Plight said that we are BED BATH NTABLE and they are House BED & BATH”. Ms van der Plight gave further evidence that the caller said something like “thats very confusing” and “but youre the same company”. The caller told her that she had Googled House B&B, and the BBNT store came up in the search results. Ms van der Plight contemporaneously recorded the incident in the store diary. She also recorded the incident in an email dated 7 July 2021.

311    On 25 October 2021, a lady called wanting to place an order and said that she was out the front of the store. However, the lady was actually outside House B&B. The lady asked why BBNT and House B&B have such similar names if they were not the same company. Ms van der Plight contemporaneously recorded the incident in the store diary and in an email dated 12 November 2021 but did not include the customer’s comments about the store names being similar.

312    She also gave evidence of instances of confusion relating to other stores, such as Adairs, but said that these occurred far less frequently than with respect to House B&B.

6.1.1.9    Mr Tabe

313    Mr Tabe is the assistant store manager at BBNT in Doncaster and has held that position since September 2021, prior to which he had been employed as a casual sales assistant for about five years across two BBNT stores. He gave evidence of eight incidents of confusion, some of which are set out below.

314    On 2 November 2021, a customer called and asked when the Bessemer products are going off sale and when she was told that BBNT did not sell Bessemer products she asked if they were House B&B and then said “Are you related to House BED & BATH?”. In cross-examination, Mr Lew agreed that Bessemer products had been available at <www.house.com.au> since at least the middle of 2021 and that <www.house.com.au> is the same place where you can shop online for House B&B products. Similar incidents occurred on 17 and 18 December 2021, where customers called BBNT enquiring about mortar and pestles for sale (which were sold on <www.house.com.au>). On being told that BBNT is not House B&B, one customer asked why they had the same name.

315    A number of Mr Tabe’s other incidents involved customers asking if BBNT and House B&B were the same company, and when being told they were different companies, asking why they have the same name.

6.1.1.10    Ms Vigors

316    Ms Vigors is the assistant store manager at BBNT in Busselton, which opened in July 2021. She gave evidence of 11 incidents of confusion, some of which related to customers confusing House stores, not House B&B stores, with BBNT.

6.1.2    GRBA witnesses

6.1.2.1    Ms Turner

317    Ms Turner is the manager of the House B&B store in Halls Head. Prior to moving to House B&B, Ms Turner worked at BBNT in Mandurah Forum for nearly eight years. Ms Turner gave oral evidence that people came into the Halls Head House B&B store and asked if it was BBNT. She accepted that there may be other customers who thought the same but she would not know unless they asked her.

318    Her evidence was that sometimes customers in BBNT would pull out an Adairs loyalty card when at the BBNT register.

6.1.3    GRBA discovery

319    The Zendesk system is GRBA’s electronic database recording customer complaints over the phone.

320    Evidence from the Zendesk system showed that on 4 April 2022, a customer called GRBA in respect of a concern regarding a purchase. In response to the question, “is this purchase in our House website?”, the customer responds “Bed Bath N’ Table”. The customer service agent, repeats “Bed Bath N’ Table” and continues with the call. The GRBA customer service agent does not correct the impression that the customer has not called BBNT.

6.1.4    Shopping centres

321    There were two examples in the evidence of shopping centre signage which appeared to show a combination of the two store names. The Sunshine Plaza shopping centre erroneously listed GRBA’s House B&B store as “House Bed N Bath” whilst the Chadstone shopping centre listed the name as “House Bed ‘n Bath”. These signs are pictured below.

Sunshine Plaza                    Chadstone

322    Both these signage errors were subsequently rectified when GRBA brought them to the attention of centre management at each site.

6.1.5    GRBA internal confusion

323    BBNT tendered examples of internal GRBA email correspondence which BBNT said was evidence of GRBA staff either confusing House B&B with BBNT or shortening House B&B to BED BATH.

6.1.5.1    Rockingham BB

324    There were a series of emails in December 2021 relating to the fit out of the Rockingham House B&B store, and to a missing delivery of lights for the store. The light supplier’s courier delivered the lights to the Rockingham BBNT store. The email header was “Rockingham BB”, which was unchanged for the series of emails to various GRBA employees (including Mr Caruana) and third parties over a period of four days.

325    After some emails about the delayed supply of the lights, Mr Chris Day from the supplier wrote on 13 December 2021 “confirming 7 boxes were delivered at 1:30pm WA time for House BB Rockingham”. On 14 December 2021, Ms Cindee Kuzmanovich, GRBA’s WA state manager, wrote “Chris this isn’t us I bet it’s been taken to BED BATH TABLE!!!”. Mr Caruana, who was copied on the email chain, responded suggesting “you will go and check with BB&T?”. Ms Kuzmanovich replied: “Lights were at Bed Bath store …”.

326    In cross-examination, Mr Caruana agreed that he considered “Rockingham BB” to refer to the new House B&B store at Rockingham in WA. His evidence was that there was already a House store in Rockingham, so Ms Kuzmanovich used BB to confirm it was the House B&B store.

327    Mr Caruana gave his explanation for the failed delivery:

deliveries are notorious for getting it wrong when there are new stores. I experienced it constantly because our stores are hoarded up. So I believe that it was incorrectly delivered because they were looking for House Bed & Bath in the centre, they couldn’t find House Bed & Bath so they found Bed Bath N’ Table and they thought, “That must be it”, and delivered it.

328    Mr Caruana agreed that having two of the same words in the store name was why the delivery ended up at BBNT. He did not think it was a possibility that the delivery had gone to Adairs.

6.1.5.2    DoncasterBed Bath and Table

329    In June 2021, GRBA’s employees, Carm Iannerella and Aaron Farac, “made an error” in internal emails using the name Doncaster Bed Bath and Table in three different places when referring to the lease for the Doncaster House B&B store.

330    In November 2021, Marketing Melodies, an IT service provider to GRBA, sent an email concerning a technical issue at the Chadstone House B&B store to various persons at GRBA with the subject line “Bed Bath N Table Chadstone”. The subject line was not corrected in any of the GRBA response emails.

331    On 6 July 2021, a person who was applying for a job with GRBA said in an email that she would love to join your team at Bed, Bath and Table”.

332    On 31 January 2021, in an email to GRBA’s property manager, Mr David McCullough, Mr Adam D’Annolfo of SCA Property Group, on behalf of the Landlord of the Stirling Central shopping centre, referred to House B&B as “HouseBed, Bath & Table”.

6.2    Admissibility and weight of the confusion evidence

333    The starting point is that indirect evidence of alleged confusion should be given little or no weight, particularly where no explanation has been given for the failure to call direct evidence: Telstra [188], [199], [210], [225], [231], [236], [241] (per Murphy J); Vivo at [151] (per Nicholas J). Such indirect evidence is problematic, not least because:

(a)    It may be “impossible to know” what customers meant by any statements they made and which are quoted in the evidence or whether the quotes attributed to them are accurate: Telstra at [191] (per Murphy J).

(b)    It may be “impossible to explore the nature or extent” of any alleged confusion or how or why any alleged confusion arose: Telstra at [199] and [225] (per Murphy J).

(c)    It may not expose “whether and to what extent any misconception … arose from the respondents’ conduct” (as opposed to some other reason): Telstra at [232] (per Murphy J).

334    At one level, it is understandable that BBNT sought to lead evidence of confusion from its own employees rather than directly from customers: BBNT did not want to alienate its own customers by asking them to give evidence, and some of the people allegedly confused were not BBNT customers, but customers of House B&B or people trying to deliver goods to House B&B, so their details were not available to BBNT. However, this does not explain the total absence of direct evidence from 36 potential witnesses.

335    BBNT has an extensive loyalty scheme. It should have been an easy exercise to have obtained the details of at least one direct witness. One BBNT customer is recorded as saying they were happy to be contacted “if anything was ever needed in the future”, yet they were not called. There was no evidence that BBNT tried to get this customer to come to Court but failed, or the cost, convenience and expense of trying to get them to appear was simply prohibitive. The evidence established that in many instances BBNT did have the contact details of potential witness customers available and it would have been a simple matter to contact them.

336    Further, some of the incidents of confusion concerned delivery drivers who BBNT witnesses said were familiar to them as they regularly made deliveries to the BBNT store in question. Other incidents concerned security guards or shopping centre management. Again, such individuals would have been familiar to BBNT and there is no obvious impediment to contacting them and asking them to give evidence.

337    As Buchanan J said in Campaign Master (UK) Ltd v Forty Two International Pty Ltd (No 3) (2009) 181 FCR 152 at [58]:

It is, frankly, inconceivable that as a universal rule the respondent would be denied any opportunity, without exception, to examine such matters in cross-examination while the applicant was allowed to base its case exclusively on second-hand versions of why such a large number of businesses took the decision which they did, without producing any first-hand evidence at all.

338    An important starting point is that it must be assumed that each of the persons alleged to have made the statements, about which the applicant wishes to adduce evidence, is available to give evidence in the proceedings. Initially that could be by affidavit. Each of the persons in question is, apparently, at arm’s length from the applicant. If cross-examination was necessary, it could occur by video link, rather than requiring attendance in person in Melbourne.

339    In any event, even if BBNT had called a handful of witnesses to give direct evidence of their confusion, such evidence is of limited utility taken on its own: Verrocchi v Direct Chemist Outlet Pty Ltd (2015) 112 IPR 200 at [94] (per Middleton J); PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd (2020) 154 IPR 68 at [521] (per Markovic J). That being said, if the inference is open, independently of such testimonial evidence, that conduct is misleading or deceptive or likely to mislead or deceive, then it may be that the evidence of consumers that they have been misled can strengthen that inference”: SGIC at 529 (per French J); Homart Pharmaceuticals Pty Ltd v Careline Australia Pty Ltd (2017) 126 IPR 498 at [32] (per Burley J).

340    I consider that the confusion evidence is admissible, but I give it limited weight. I accept that the evidence alone is not sufficient to establish deceptive similarity, misleading and deceptive conduct, or passing off. Although there are evident issues with the reliability and cogency of some of the evidence, there are examples of consumers, or other members of the public, confusing House B&B with BBNT and thinking there was some association between the two stores. Therefore, as I discuss below with respect to the ACL claim, the confusion evidence has a role in so far as it confirms other inferences available from the evidence that GRBA’s conduct caused confusion among the ordinary and reasonable consumer.

7.    TRADE MARK INFRINGEMENT

341    On BBNT’s trade mark infringement case, the issues for determination are whether:

(1)    GRBA has used the words “BED & BATH” separately from the House mark as a trade mark;

(2)    the trade marks used by GRBA are substantially identical or deceptively similar to the words “BED BATH N’ TABLE”; and

(3)    GRBA has established the defence under s 122(1)(b)(i) of the Trade Marks Act.

7.1    Relevant sections of the Trade Marks Act

342    A trade mark, as defined in s 17 of the Trade Marks Act, is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.

343    Infringement of a registered trade mark is dealt with in s 120(1) and (2) of the Act. Section 120(1) provides:

A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.

344    The phrase “deceptively similar” is defined in s 10 of the Act as follows:

For the purposes of this Act, a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion.

7.2     Principles

345    In Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd (2023) 408 ALR 195, Kiefel CJ, Gageler, Gordon, Edelman and Gleeson JJ identified at [22] that there were two separate elements to establish trade mark infringement under s 120(1) of the Act:

(a)    that the person has used as a trade mark a sign in relation to goods or services; and

(b)    that the trade mark was substantially identical or deceptively similar to a trade mark registered in relation to those goods.

346    Sundberg J described (a) as the threshold issue for trade mark infringement at [49] in Global Brand Marketing Inc v YD Pty Ltd (2008) 76 IPR 161.

7.2.1    Use as a trade mark

347    As the High Court in Self Care explained at [24], by reference to E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144 at [33] (per French CJ, Gummow, Crennan and Bell JJ) which cited Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 and Champagne Heidsieck et Cie Monopole Societe Anonyme v Buxton [1930] 1 Ch 330, [w]hether a sign has been use[d] as a trade mark is assessed objectively without reference to the subjective trading intentions of the user. The objective purpose and nature of use are assessed by reference to the context. The High Court in Self Care also observed at [24] that context includes the relevant trade, the way in which the words have been displayed, and how the words would present themselves to persons who read them and form a view about what they connote.

348    Kitto J in Shell set out the relevant question of what constitutes “use as a trade mark” at 425:

the question becomes whether, in the setting in which the particular pictures referred to were presented, they would have appeared to the television viewer as possessing the character of devices, or brands, which the appellant was using or proposing to use in relation to petrol for the purpose of indicating, or so as to indicate, a connexion in the course of trade between the petrol and the appellant.

349    The principles to be applied in assessing “use as a trade mark” are well established. The Full Court in Nature’s Blend Pty Ltd v Nestlé Australia Ltd (2010) 87 IPR 464 at [19] (per Stone, Gordon and McKerracher JJ) set out the below summary:

(1) Use as a trade mark is use of the mark as a “badge of origin”, a sign used to distinguish goods dealt with in the course of trade by a person from goods so dealt with by someone else: Coca-Cola Co v All-Fect Distributors Ltd (1999) 96 FCR 107; 47 IPR 481; [1999] FCA 1721 at [19] (Coca-Cola); E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 265 ALR 645; 86 IPR 224; [2010] HCA 15 at [43] (Lion Nathan).

(2) A mark may contain descriptive elements but still be a “badge of origin”: Johnson & Johnson Aust Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326 at 347–8; 101 ALR 700 at 723; 21 IPR 1 at 24 (Johnson & Johnson); Pepsico Australia Pty Ltd v Kettle Chip Co Pty Ltd (1996) 135 ALR 192; 33 IPR 161; Aldi Stores Ltd Partnership v Frito-Lay Trading Co GmbH (2001) 190 ALR 185; 54 IPR 344; [2001] FCA 1874 at [60] (Aldi Stores).

(3) The appropriate question to ask is whether the impugned words would appear to consumers as possessing the character of the brand: Shell Co of Australia Ltd v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407 at 422; [1963] ALR 634 at 636; 1B IPR 523 at 532 (Shell Co).

(4) The purpose and nature of the impugned use is the relevant inquiry in answering the question whether the use complained of is use “as a trade mark”: Johnson & Johnson at FCR 347; ALR 723; IPR 24 per Gummow J; Shell Co at CLR 422; ALR 636; IPR 532.

(5) Consideration of the totality of the packaging, including the way in which the words are displayed in relation to the goods and the existence of a label of a clear and dominant brand, are relevant in determining the purpose and nature (or “context”) of the impugned words: Johnson & Johnson at FCR 347; ALR 723; IPR 24; Anheuser-Busch Inc v Budejovicky Budvar (2002) 56 IPR 182; [2002] FCA 390 (Anheuser-Busch).

(6) In determining the nature and purpose of the impugned words, the court must ask what a person looking at the label would see and take from it: Anheuser-Busch at [186] and the authorities there cited.

350    Allsop J (as his Honour then was) in an oft cited passage from Anheuser-Busch Inc v Budejovicky Budvar (2002) 56 IPR 182 at [185]–[186] said:

The task is to examine the way the words are used in their context, including the totality of the packaging, to assess their nature and purpose in order to see whether they are used to distinguish the goods from goods of others.

The assessment is made from the perspective of what a person looking at the label would see and take from it, as to the purpose and nature of its use.

(Citations omitted).

351    The display of a sign or mark in relation to goods may, of course, have more than one role. As Allsop J explained in Anheuser-Busch at [189]:

The usage of a word may fulfil more than one purpose on a label. For example a word may have a descriptive element, but also an element of trade mark or branding or distinguishing role. Equally, a word may have a role in identifying a geographical location, but also a trade mark or branding or distinguishing role. It depends on context.

(Citations omitted.)

352    Further, the Court in Self Care observed at [25] (per Kiefel CJ, Gageler, Gordon, Edelman and Gleeson JJ):

The existence of a descriptive element or purpose does not necessarily preclude the sign being used as a trade mark. Where there are several purposes for the use of the sign, if one purpose is to distinguish the goods provided in the course of trade that will be sufficient to establish use as a trade mark. Where there are several words or signs used in combination, the existence of a clear dominant “brand” is relevant to the assessment of what would be taken to be the effect of the balance of the label, but does not mean another part of the label cannot also act to distinguish the goods.

7.2.2    Substantial identity

353    It was evident from its closing submissions that BBNT did not press its pleaded allegations that the House B&B mark is substantially identical to the BBNT marks. Thus, the only allegation left for determination in relation to substantial identity is whether the words “BED & BATH” alone are substantially identical to the BBNT marks.

354    The long-standing test for substantial identity is summarised in the well-known words of Windeyer J in Shell at 414:

In considering whether marks are substantially identical they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison. “The identification of an essential feature depends”, it has been said, “partly on the Court’s own judgment and partly on the burden of the evidence that is placed before it”: de Cordova v. Vick Chemical Co. [(1951) 68 R.P.C. 103, at p 106]. Whether there is substantial identity is a question of fact: see Fraser Henleins Pty Ltd v. Cody [(1945) 70 CLR 100], per Latham C.J. [at pp 114, 115], and Ex parte O’Sullivan; Re Craig [(1944) 44 S.R. (NSW) 291], per Jordan C.J. [at p 298], where the meaning of the expression was considered.

355    The Full Court in Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd (2017) 141 IPR 1 explained at [51] (per Greenwood, Jagot and Beach JJ) that the dominant cognitive cues are the essential features striking the eye in the side by side comparison undertaken so as to determine whether marks are substantially identical. The Full Court considered at [56] the essential elements of the marks, which are set out below, to be the word “insight” and the eye device.

356    The Court considered that the word “insight” was the same in each mark, and the eye device was to the left of the word in both marks. The Full Court described the picture of the device, not the word, as being the dominant cognitive cue in both marks. Given that the role of a trade mark is to distinguish goods, the words “Clinical Imaging” in one mark and “radiology” in the other were described by the Full Court at [52] as “mere descriptive elements”. Their Honours observed that given that the purpose of the side by side comparison was to decide if two trade marks (being signs used or intended to be used to distinguish the goods and services of one trader from those of another) were substantially identical, it was unlikely that the essential elements of a mark, or a mark’s dominant cognitive cues, were to be found in “mere descriptive elements, which are not apt to perform this distinguishing role in respect of the relevant goods or services”.

357    The Full Court found at [56] that the two marks were substantially identical, as not only was there a total impression of resemblance between the marks, but also the differences in the marks were slight having regard to their essential elements or the dominant cognitive cues which they presented.

358    In PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd (2021) 160 IPR 174, the Full Court found that the Wicked device marks, set out below, were not substantially identical.

359    Jagot, Nicholas and Burley JJ at [162] distinguished the marks on the basis that, when compared side by side, they could be distinguished having regard to, first, “the distinctive tail on the D of the Wicked Tail Mark”, and second, “the font and block characteristics of the New Wicked Mark”.

360    In contrast to the marks in Pham Global and PDP Capital, the BBNT registrations are in respect of the words “BED BATH N” TABLE” simpliciter, they are not words plus a device or logo.

361    The Full Court in SAP Australia Pty Ltd v Sapient Australia Pty Ltd (1999) 48 IPR 593 observed at [41] (per French, Heerey and Lindgren JJ) that it could not be contended that “Sapient Australia” or “Sapient” were substantially identical to SAPIENT COLLEGE, and moved on to consider whether the marks were deceptively similar.

362    In Toddler Kindy Gymbaroo Pty Ltd v Gymboree Pty Ltd (2000) 51 IPR 1, Moore J considered that, on a side-by-side comparison, the invented trisyllabic words “Gymbaroo” and “Gymboree” were not substantially identical, even though they both evoked notions of fun or frivolity coupled with a reference to gymnasia or exercise, and they both “look and sound the same”. The key point of dissimilarity, which was sufficient to render the two marks not substantially identical, resulted from the use of “a” and “oo” in “Gymbaroo” which his Honour considered may change the inflection and speed with which the word is spoken, compared to “Gymboree”. Whilst he did not find the marks to be substantially similar, Moore J did find that the use of the “Gymbaroo” would be likely to cause confusion: at [88][89] and [93].

363    Perram J considered whether two word marks SOLAHART and SOLARHUT were substantially identical in Solahart Industries Pty Ltd v Solar Shop Pty Ltd (2011) 92 IPR 165. His Honour found them not to be substantially identical. Whilst both featured the root “SOLA”, a common invocation of the sun, Perram J considered that the word HUT looked different to HART, not only in length but in its structure. SOLARHHUT featured the whole word SOLAR, including the letter “R which is missing in SOLAHART.

364    In Singtel Optus Pty Ltd v Optum Inc (2018) 140 IPR 1, Davies J rejected the contention that OPTUS and OPTUM were substantially identical. Her Honour considered that the single letter difference was sufficient to make the words distinct from each other. The letters “S” and “M” are not visually similar and differ in sound. Her Honour therefore considered the visual and aural differences sufficiently different to distinguish the marks in a side-by side- comparison: at [13].

7.2.3    Deceptive similarity

365    In assessing deceptive similarity pursuant to s 10 of the Act, the essential task is one of trade mark comparison. As the High Court said in Self Care at [26], the resemblance between the two marks must be the cause of the likely deception or confusion” and “[i]n evaluating the likelihood of confusion, the marks must be judged as a whole, taking into account both their look and their sound.

366    The principles to be applied in determining whether two marks are deceptively similar are well established and were not in dispute. In Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641, Dixon and McTiernan JJ described the test as follows at 658:

But, in the end, it becomes a question of fact for the court to decide whether in fact there is such a reasonable probability of deception or confusion that the use of the new mark and title should be restrained.

In deciding this question, the marks ought not, of course, to be compared side by side. An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought. The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same. The effect of spoken description must be considered. If a mark is in fact or from its nature likely to be the source of some name or verbal description by which buyers will express their desire to have the goods, then similarities both of sound and of meaning play an important part. The usual manner in which ordinary people behave must be the test of what confusion or deception may be expected. Potential buyers of goods are not to be credited with any high perception or habitual caution. On the other hand, exceptional carelessness or stupidity may be disregarded. The course of business and the way in which the particular class of goods are sold gives, it may be said, the setting, and the habits and observation of men considered in the mass affords the standard. Evidence of actual cases of deception, if forthcoming, is of great weight.

367    Equally well known is the following passage from the judgment of Windeyer J in Shell at 415:

On the question of deceptive similarity a different comparison must be made from that which is necessary when substantial identity is in question. The marks are not now to be looked at side by side. The issue is not abstract similarity, but deceptive similarity. Therefore the comparison is the familiar one of trade mark law. It is between, on the one hand, the impression based on recollection of the plaintiffs mark that persons of ordinary intelligence and memory would have; and, on the other hand, the impressions that such persons would get from the defendants television exhibitions.

368    Dixon and McTiernan JJ emphasised at 659 of Australian Woollen Mills that because the determination for the Court is one of estimation and impression, it is never susceptible of much discussion.

369    In addition to the degree of similarity between the marks, the High Court held in Self Care at [34] that the assessment also takes account of the effect of that similarity considered in relation to the alleged infringer’s actual use of the mark, as well as the circumstances of the goods, the character of the likely customers and the market covered by the monopoly of the registered mark. In considering the extent of a registered owner’s statutory monopoly, regard is had to the full extent of the services in respect of which the mark is registered: see Mid Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 42 IPR 561 at 569 (per Burchett, Sackville and Lehane JJ).

370    The deceptiveness that is contemplated by s 10 must result from similarity between the two marks. However, the likelihood of deception must be judged not by the degree of similarity alone, but by the effect of that similarity in all the circumstances, including against the background of the usages of the particular trade: Shell at 410 and 416 (per Windeyer J). In CA Henscke & Co v Rosemount Estates Pty Ltd (2000) 52 IPR 42, the surrounding circumstances were held to include the way in which wine is marketed, the categories and characteristics of consumers of wine, the knowledge that the wine market was a crowded one and that topographical or geographical references were common: at [42] (per Ryan, Branson and Lehane JJ).

371    The High Court confirmed in Self Care at [3], [36] and [50] that the reputation of the registered trade mark plays no role in the analysis of deceptive similarity under s 120(1). The test of deceptive similarity must be applied whether the mark of which infringement is alleged is newly registered and almost unknown or has been prominently displayed on well-known merchandise for many years”: Self Care at [22] (per Kiefel CJ, Gageler, Gordon, Edelman and Gleeson JJ), quoting Henscke at [43] (per Ryan, Branson and Lehane JJ). See also Swancom Pty Ltd v The Jazz Corner Hotel Pty Ltd (2022) 168 IPR 42 at [68] (per Yates, Abraham and Rofe JJ).

372    The High Court noted at [30] in Self Care that:

(a)    intention to deceive or cause confusion is not required, although if present it may be a relevant consideration; and

(b)    evidence of actual cases of deception or confusion is of great weight, but not essential.

373    Further, it is sufficient if consumers would be caused to wonder whether there was some kind of commercial association: Self Care at [70]–[71].

7.3    The parties’ submissions

374    BBNT advances two alternative cases on trade mark infringement. Regardless of which case is adopted, BBNT contends that trade mark infringement is established, albeit the analysis differs whichever path is chosen.

375    The first case is that GRBA uses two trade marks in the course of its business, with the first comprising the word “House” in relation to the broader business, and the second comprising the words “BED & BATH” in the relation to the retailing of soft furnishings.

376    BBNT submits that “BED & BATH”, despite its descriptive connotations, performs important trade mark work in distinguishing a new and different business to that identified by reference to the “House” mark alone. On this first case, BBNT alleges “BED & BATH” is the relevant trade mark for consideration and contends that mark is substantially identical and/or deceptively similar to the registered BBNT marks.

377    GRBA rejects the contention that it uses “BED & BATH” as a separate trade mark. Instead, it contends that those words form part of a composite mark. The words “BED & BATH” are consistently used immediately underneath and in a subordinated location and size when compared to “House”. GRBA submits the words “BED & BATH” are being used to indicate that House is offering bedroom and bathroom products for sale. The effect is to send a message that the well-known retailer House has moved away from its core activities, kitchenware and cookware, and extended its activities into bedroom and bathroom products.

378    GRBA also contends that “House” is underlined in many, but not all, of the iterations used on the frontages of House B&B stores and this serves to further emphasise the House brand in the composite mark.

379    GRBA points to the significant differences between the House B&B logo and the BBNT marks most obviously the word “House” and the absence of “N’ TABLE”, and the evidence of the extensive use of “BED & BATH” as a category descriptor to reject the contention that “BED & BATH” is used as a trade mark.

380    The second case advanced by BBNT is that GRBA uses a trade mark comprising the words “House BED & BATH” in a logo form as depicted below in the retailing of soft homewares:

381    BBNT alleges that GRBA’s use of the House B&B logo is deceptively similar to the BBNT marks. As noted above, it no longer contends that the logo is substantially identical to the BBNT marks. BBNT contends that infringement can be established under s 120(1) or alternatively under s 120(2) of the Trade Marks Act.

382    GRBA admits that it has used the words House BED & BATH” as the words simpliciter and as part of the stylised House B&B logo as a trade mark in respect of retailing soft homewares to the general public, but it denies that its use infringes the BBNT marks. Notwithstanding its admission that the words “BED & BATH” form part of its trade mark, GRBA contends that those words are an inessential element of the mark and are, instead, descriptive as they indicate the sale of “bedroom” and “bathroom” products.

383    GRBA contends that as “bed” and “bath” are descriptive words, BBNT is not entitled to monopolise those words, thereby denying their use entirely to other traders.

384    GRBA submits that the words “bed” and “bath” are ubiquitous in relation to the retailing of bedroom and bathroom products in Australia, as the evidence set out at [92] above demonstrated. There was also evidence of the extensive use of “bedroom” and “bathroom” as categories used by large retailers to sell particular types of goods. GRBA’s case is therefore that the ordinary English words “bed” and “bath” have been widely and extensively used as category descriptors and were recognised as such. As Professor O’Sullivan confirmed, this must reduce the extent to which those words, when used outside the BBNT brand, function as a diagnostic cue for BBNT.

385    Finally, BBNT contends that the evidence showed that, at the time of developing the House B&B logo, GRBA had close attention to BBNT and sought to draw an association. BBNT points to the running scared email, which it says is conclusive of the true impression that Ms McGann held regarding the similarity in branding she was proposing, and its likely marketing impact. That is, the running scared email and other evidence showed that the key decision makers at GRBA, who were all experienced traders, saw an obvious benefit to using “BED & BATH” to attract customers that would otherwise have gone to BBNT.

386    On BBNT’s case, GRBA deliberately chose to make the House B&B logo as close as possible to the BBNT marks in order to gain a market advantage by exploiting BBNT’s reputation. The decision to use “BED & BATHtherefore cannot be characterised as one motivated to provide informational guidance to customers by way of category descriptors to distinguish regular House stores from House B&B stores.

387    GRBA rejects that it had any intention to mislead. GRBA contends that the mere fact that a new entrant adopted indicia which it knew to make its branding more similar to that of an incumbent is not the same as having an intention to deceive. In support of its argument, GRBA cites Murphy J’s comments in Telstra at [540]:

The authorities are replete with examples where traders “sail close to the wind” by copying elements of a competitor’s get up, but maintain sufficient differences such that misleading or deceptive conduct or passing off cannot be made out.

388    Ultimately each case turns on its own facts and the assessment for deceptive similarity requires a comparison of the two trade marks at issue.

7.4     Consideration

7.4.1    Use as a trade mark

389    It is well established that use of a mark that is a component of a larger composite mark, or a mark used in conjunction with other marks, can still constitute use of a trade mark: see Chocolaterie Guylian NV v Registrar of Trade Marks (2009) 82 IPR 13 at [97] (per Sundberg J); Sports Warehouse Inc v Fry Consulting Pty Ltd (2010) 87 IPR 300 at [133] (per Kenny J); Phone Directories Co Australia Pty Ltd v Telstra Corp Ltd (2014) 106 IPR 291 at [245] (per Murphy J).

390    BBNT relies on the following factors to support its contention that GRBA is using BED & BATH” as a trade mark, separate from the House mark:

(a)    the words “bed and “bath”, although sometimes used as category descriptions, have never been used in the name of a retail store;

(b)    “BED & BATH” is presented in different fonts, sizes, colours, embellishments and capitalisation to the House logo, in some cases with only the House element illuminated;

(c)    BED & BATH” is underneath the House element, sometimes with a line underneath House, further separating “House” from “BED & BATH”;

(d)    GRBA’s internal communications discussed above which, on occasions, referred to House B&B simply as “BED & BATH”;

(e)    GRBA’s prior foray into the soft homewares market used the trademark House CASA ׀ MAISON ׀ HOME. GRBA obtained a separate registration for CASA ׀ MAISON ׀ HOME as a trade mark, suggesting GRBA viewed it as a separate trade mark to House. The CASA ׀ MAISON ׀ HOME mark was used in a similar context and in the same manner as the House B&B mark displayed underneath the House mark and in a different font in order to distinguish the store from traditional House stores;

(f)    GRBA’s intention to use “BED & BATH” as a brand, not as a descriptor, exemplified by the running scared email; and

(g)    specific examples of GRBA’s use of “BED & BATH” on its own as a separate mark, such as the separate use of “BED & BATH” in sales promotion banners on <www.house.com.au> as shown below (which BBNT noted had changed to House B&B by time of trial):

391    I consider that the House B&B logo is one composite mark; I do not consider that “BED & BATH” is operating as a separate trade mark distinct from the “House” mark. The words BED & BATHare therefore just a component of the composite House B&B mark. In each instance whereBED & BATHis used in the House B&B logo whether on the exterior of stores, gift cards, employee name badges, frosted glass window decals or receipts BED & BATHis presented consistently together immediately beneath (or beside) the House brand in a subordinated location and size. The consistent presentation therefore reinforces a single, composite mark. Each of the slight variations of the House logo retain that identity.

392    Further, in the case of gift cards and online, the composite House B&B mark is used alongside other composite House marks or sub-brands, such as MyHouse, or Pet House Superstore, which reinforces that “BED & BATH” forms part of a single brand with House.

393    In the presentation of the House B&B logo, the House aspect of the logo is more eye-catching and visually dominant in terms of its position and size, and because it is often illuminated on storefronts. The word “House” has also been underlined in many (but not all) of the iterations of the House B&B logo used on frontages of House B&B stores (but not otherwise). That line serves to emphasise the House brand, and further subordinate the words “BED & BATH” which are relegated “below the line” and often in the same colour as the line. The words “BED & BATH” therefore are presented in a manner which draws a deliberate distinction between that sign and the House mark but in a way that suggests that House is the dominant brand and “badge of origin”. Understood in that context, BED & BATHis merely used to designate a sub-brand of the well-known brand House.

394    It is common in retail for major brands, including soft homewares brands, to have sub-brands which include the hero or parent brand. The examples given by Professor O’Sullivan included Coles Express, JB HI-FI [HOME], Adairs Kids, Cotton:On Kids and Cotton:On Body. That consumers would consider House B&B to be a sub-brand of House is consistent with GRBA’s other use sub-branding in House WAREHOUSE, House Superstore, House CHRISTMAS, House PETS and House CASA ׀ MAISON ׀ HOME, some of which are shown below.

395    This is also consistent with Ms Cameron’s evidence that she designed the House B&B logo so as to keep the House mark as the main feature of the brand, with “BED & BATH underneath in a different font, like other GRBA brand logos. It is also consistent with Ms McGann’s stated intention for the House B&B brand to distinguish those stores from the traditional House stores. Finally, to the extent that it is relevant, the conclusion that “BED & BATH” is a sub-brand of House is also supported by the experts’ evidence that consumers are familiar with the concept of sub-branding and would recognise House B&B as being a sub-brand of the parent brand House, rather than as two separate brands.

396    The examples of the independent usage of “BED & BATH are fleeting, and often not used as a trade mark. The accidental use by third parties in shopping centre signage of “BED & BATH” simpliciter is not an example of “BED & BATHbeing used as a trade mark or a badge of origin to indicate a connection in the course of trade with GRBA. The same can be said of the use of “BED & BATH” as internal shorthand by GRBA employees in internal email correspondence. Whilst that evidence may go towards the potential for confusion, it does not assist in the use of “BED & BATH” as a separate trade mark.

397    BBNT relies on GRBA’s use of the words “BED & BATH” as a subheading on the House website. In this instance, GRBA is using the words as a category description within the House website, consistent with the use by other traders inside their shops and websites, rather than using the words as a separate trade mark to indicate a connection in the course of trade.

398    GRBA’s registration of CASA ׀ MAISON ׀ HOME as a trade mark does not assist BBNT. GRBA said that it never used CASA ׀ MAISON ׀ HOME as a trade mark, and the fact of the registration does not bear on the likely reaction of consumers to seeing the House B&B mark.

7.4.2    Use of “BED & BATH” not solely descriptive

399    I do not accept GRBA’s submission that the use of a distinctive mark such as House may have the effect of diluting the trade mark significance that might otherwise attach to the use of the other element “BED & BATH”. Unlike the phrase “instant Botox® alternative” which was considered in Self Care, I consider that the words “BED & BATH” are, in combination with the word “House”, serving as a badge of origin. They are not performing a solely descriptive role in the composite mark: cf Self Care at [56][57] (per Kiefel CJ, Gageler, Gordon, Edelman and Gleeson JJ).

400    As discussed above at [241], GRBA’s submission that “BED & BATH” have only a descriptive role sits uncomfortably with its conduct. GRBA failed to point to any contemporaneous document that supported that Mr Lew and Ms McGann had category descriptors on their mind when selecting the name House B&B. Further, at the time the first letter of demand was sent, the new name was being used on one shop in Doncaster. At that stage, it would have been a relatively simple matter for GRBA to change the name. After all, it had taken less than a week to change from MyHouse to House B&B and produce a sign to put above the entrance to the new store. At that point, GRBA could easily have changed the store name to another equally descriptive, but less contentious name such as “House BATH AND BED (one of the options listed by Ms McGann in her 3 May 2021 email).

401    Whilst it may be accepted that other traders have used the wordsbed and “bath” inside their stores or websites in relation to their homeware products, this does not mean that the wordsbed” and “bathare, even if they are being used for a descriptive purpose, not also being used by GRBA as a trade mark.

402    In Cantarella Bros Pty Ltd v Lavazza Australia Pty Ltd (No 3) [2023] FCA 1258, Yates J did not accept that mere common use of a particular word in a given trade means that the word is precluded from functioning as a trade mark in that trade: at [397]. His Honour considered that the circumstances and manner of use of the word in question are critical to determining whether trade mark use of the word is involved. In the present case, whilst background circumstances cannot be ignored, the focus must be on the way in which the wordsbedand “bath” are used by GRBA.

403    In launching House B&B, GRBA has introduced a different brand to the public when compared with its House brand. The parties agree that the presence of other brands, in this case the House mark, is highly relevant to how the words “BED & BATH” would be perceived by consumers.

404    GRBA does not dispute that no other retailer in Australia uses, or has used, bed and bath in its name, or on any external signage. The use of those words by other retailers as category descriptors was used entirely inside stores or websites (other than as part of the domain name). GRBA, in contrast to those uses by other retailers, is using the composite House B&B mark to indicate that the new stores are part of the House family but sell different products to traditional House stores. The composite mark is therefore being used by GRBA as a badge of origin to indicate a connection in the course of trade.

405    GRBA’s intention in selecting the name House B&B also supports that conclusion. I accept that GRBA’s intentions are not determinative of whether the House B&B sign has been used as a trade mark. However, that does not mean that GRBA’s intentions are irrelevant when considering, objectively, the purpose and nature of its use of a particular sign in particular circumstances”: Lift Shop Pty Ltd v Easy Living Home Elevators Pty Ltd (2014) 106 IPR 419 at [38] (per Besanko, Yates and Mortimer JJ). The running scared email can be characterised, at its most basic, as a branding discussion, with the evident intention behind that email, when coupled with Ms McGann’s knowledge of BBNT, to use “BED & BATH” as a brand, not to use those words as a descriptor.

7.4.3    Overlap of goods and services

406    As the Full Court observed in Energy Beverages LLC v Cantarella Bros Pty Ltd (2023) 170 IPR 281 at [132] (per Yates, Stewart and Rofe JJ), the “nomination of a class for particular goods is not decisive as to the scope of a given registration”. The question is whether, from a business and commercial point of view, the description of the goods and services as used in the specification of the registered trade mark would be understood as including the goods and services in respect of which the impugned mark is being used.

407    The BBNT marks are registered in respect of goods and services in classes 24, 35 and 42. These classes include retailing and wholesaling services provided in-store, online, by telephone and by mail, which can broadly be described as soft homewares, as I have defined that term above. Class 24, for example, relates to textiles such as bath linen, bed clothes, bedspreads, linen, muslin cloth, towels and quilt covers.

408    The goods sold in the physical and online BBNT and House B&B stores overlap extensively. There was no suggestion that they were different kinds of goods or that the shops targeted different price points (for example, budget or luxury items). From a business and commercial point of view, the goods and services provided by GRBA in House B&B stores fall within the class of soft homewares, such that there is use of the House B&B mark in respect of the same goods and services for the purposes of s 120(1) of the Act.

7.4.4    Substantial identity

409    BBNT pressed the substantial identity case only in relation to its first use case above: “BED & BATH” as a separate mark from the composite House B&B mark. In case I am wrong that GRBA does not use BED & BATH other than as part of the composite House B&B mark, I will consider whether the two marks are substantially identical.

410    The relevant comparison is a side-by-side comparison of the two marks, cognisant of the “dominant cognitive cues” or essential feature of the marks: Pham Global at [56] (per Greenwood, Jagot and Beach JJ).

411    BBNT contends that the dominant cognitive cue or essential feature of both marks is the words “BED” and “BATH” at the start of the two marks. BBNT seeks to minimise the presence of “N’ TABLE” in its mark which it describes as “some additional material in the registered trade mark. BBNT submits that “N’” and “&” are “inconsequential” as both convey connecting nouns. BBNT submits that an impression of overall similarity arises from the commonality in respect of the words BED and BATH located in close proximity.

412    I consider that the dominant cognitive cues of the BBNT mark are the capitalised words BED, BATH and TABLE. The dominant cognitive cues of the “BED & BATH” mark are the capitalised words “BED” and “BATH”. Both marks contain the capitalised words “BED” and “BATH” and use a similar font for those words.

413    However, there are also the following differences between the two marks:

(a)    the presence of “N’TABLE” at the end of the BBNT marks;

(b)    the presence of an “&” separating “BED” and “BATH in the GRBA mark; and

(c)    they are aurally and phonetically different by reason of the differences in (a) and (b).

414    Whilst there is an overlap in the dominant cognitive cues of the marks, I consider that these differences are significant and sufficient to conclude that the BBNT mark and the “BED & BATH” mark are not substantially identical.

7.4.5    Deceptive similarity

415    As the High Court noted at [26] in Self Care, the essential task in assessing deceptive similarity is one of comparison and it is the resemblance between the two marks that must be the cause of the likely deception or confusion. The relevant comparison is the consumer’s impression or recollection, including their imperfect recollection, of the BBNT mark (as registered), not some contraction of it such as “BED BATH, against the House B&B mark as used: SAP Australia at [41] (per French, Heerey and Lindgren JJ). The ordinary consumer is not to be credited with any knowledge of the actual use of the registered trade mark, or any reputation associated with that mark.

416    In assessing deceptive similarity, the context of the surrounding circumstances is not to be ignored context is all important: Shell at 422 (per Kitto J). In Optical 88 Ltd v Optical 88 Pty Ltd (No 2) (2010) 89 IPR 457, Yates J said at [94]:

As Australian Woollen Mills makes clear, the comparison takes place in a particular context in accordance with a particular standard: “the course of business and the way in which the particular class of goods are sold gives the setting and the habits and observation of men considered in the mass” affords the standard in determining whether the impugned mark is, properly judged, “deceptively similar”.

417    Consideration of the context and surrounding circumstances does not “open the door” for any examination of the actual use of the registered mark, or a consideration of the reputation associated with the registered mark: Swancom at [89] (per Yates, Abraham and Rofe JJ). As the Full Court said in Swancom at [89], the enquiry into the surrounding circumstances that is required should not be confused with the wider enquiry of the kind that might be undertaken in a passing off action or a claim of misleading and deceptive conduct under the Australian Consumer Law.

418    On the role of the alleged infringer’s motives, Dixon and McTiernan JJ in Australian Woollen Mills observed at 657:

But the examination made of the respondents motives and good faith seems to us to leave the question of infringement and passing off very much in the same position as it stood in without it. The rule that if a mark or get-up for goods is adopted for the purpose of appropriating part of the trade or reputation of a rival, it should be presumed to be fitted for the purpose and therefore likely to deceive or confuse, no doubt, is as just in principle as it is wholesome in tendency. 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. Moreover, he can blame no one but himself, even if the conclusion be mistaken that his trade mark or the get-up of his goods will confuse and mislead the public. But the practical application of the principle may sometimes be attended with difficulty.

419    Sheppard J made similar comments in Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 28 IPR 193 at 208–9 as to the intention of the alleged infringer.

420    As the above passage from Australian Woollen Mills makes clear, Dixon and McTiernan JJ were referring to cases of commercially dishonest conduct in the context of the adoption of a trade mark that is calculated to mislead or deceive the public”: see Cantarella at [386] (per Yates J).

421    As the Full Court observed in Hashtag Burger Pty Ltd v In-N-Out Burgers, Inc (2020) 159 IPR 186 at [68] (per Nicholas, Yates and Burley JJ), the role of intention should not be overstated. It is but one factor to take into account in the Court’s evaluation. As the Court observed, “regardless of the male fides of an alleged infringer, unless the impugned mark sufficiently resembles the registered owner’s mark, there cannot be a finding of deceptive similarity.

422    I consider that the evidence in this case falls short of demonstrating a commercially dishonest intention on the part of GRBA to appropriate part of BBNT’s trade or reputation. As explained above, I consider that GRBA’s conduct is more in the nature of a wilful blindness to any potential for confusion. This has relevance in the ACL context, but I do not consider it relevant to the consideration of whether the two marks are deceptively similar.

423    The surrounding circumstances forming the background against which the deceptive similarity comparison is made in this case include:

(a)    The words “bed” and “bath” are not used together in shop names or on the exterior of soft homewares stores.

(b)    The words “bed” and “bath” are commonly used inside soft homewares shops, or larger department style stores which sell soft homewares, as category or navigational descriptors within shops.

(c)    The words “bed” and “bath” are commonly used on the websites of retailers of soft homewares as category or navigational descriptors within the website (not as part of the domain name).

(d)    Soft homewares stores are often co-located in close proximity to other soft homewares stores; being located in the same areas of shopping centres or in the same strip mall, as opposed to being located in separate shopping centres or different suburban shopping strips.

(e)    All soft homewares stores have a similar physical layout and presentation.

(f)    Consumers are familiar with larger retailers having sub-brands which incorporate the name of the hero brand with a new name to differentiate the sub-brand from the main brand.

(g)    Soft homewares stores are known to do cross-promotion with other brands.

(h)    Consumers seeking to purchase soft homewares often pay little attention to which soft homewares shop they are entering.

(i)    BBNT does not contract its brand to “BED BATH nor does it have a formal reputation in “BED BATH” alone. However, some consumers have a tendency to shorten BBNT to “BED BATH”.

424    The relevant consumer is the ordinary consumer; there is no specialised class of consumer here. I consider that the entry of the consumer into a soft homewares shop is a low involvement decision, whereas the choice of what particular item to buy once inside a shop, such as a quilt or quilt cover, has more consumer involvement than their decision to enter a particular shop.

425    The critical question is would the hypothetical ordinary person in the market for soft homewares, seeing GRBA’s use of its House B&B sign over the entrance to its soft homewares shop, be caused to wonder or entertain a reasonable doubt about whether the goods sold by GRBA might come from the same source as goods provided by BBNT under the name BED BATH NTABLE?

426    Any reputation that BBNT has in its BBNT mark must be put to one side, together with any factual distinctiveness that may have accumulated with respect to the mark over the four decades of use. It is the BBNT mark as registered which is subject to the imperfect recollection, nothing more: Swancom at [70] (per Yates, Abraham and Rofe JJ).

427    GRBA places much emphasis on the words “bed” and “bath” being descriptive words, and by that I understand them to mean purely descriptive words. In doing so, GRBA overlooks three matters.

428    First, at the time GRBA adopted the House B&B mark, no retailer in Australia other than BBNT was using “bed” and “bath” together in some form in its brand name or external store signage.

429    Second, it is possible for words in marks to have a dual role. Even if words in a mark are performing a descriptive role, they can also be a badge of origin: Anheuser-Busch at [189] (per Allsop J).

430    Third, it is possible to register an ordinary English descriptive word as a trade mark. Indeed, GRBA need look no further than its own House mark to see that point made good. Mr Lew accepted in cross-examination that House was a good example of a generic word that, after years of brand usage and customer exposure, was registrable as a trade mark.

431    In any event, as discussed above, I do not consider the words “bed’ and “bath” in either of the marks in consideration (BBNT or House B&B) to be performing a purely descriptive role. Neither BBNT nor GRBA sell beds or baths. Both sell bed and bath related products, such as sheets and towels. In both marks, the words “bed” and “bath” are more allusive than directly descriptive.

7.4.5.1    BBNT v House B&B

432    The essential task of assessing deceptive similarity is comparing the two relevant marks at issue. The first mark under comparison is the BBNT marks which are pure word marks; they are not device or logo marks. BBNT submits that emphasis should be placed on the words “BED BATH” in the BBNT mark in accordance with observation of Pollock MR in London Lubricants at 277 as to the general tendency of consumers to accentuate or pay closer attention to the first part of a longer trade mark rather than to ignore or drop off the first part of a mark.

433    The contracted form of the BBNT registration “BED BATH” is not the correct comparator. The contraction is not protected: SAP Australia at [49] (per French, Heerey and Lindgren JJ). The BBNT marks are to be compared with the House B&B logo, shown again below.

434    GRBA seeks to “discount” the role of “bed” and “bath” in the comparison on the basis that they are descriptive words and, as such, BBNT should not be able to monopolise them. In support of that proposition, GRBA relies on the comments of Burchett J in Conde Nast Publications Pty Ltd v Taylor (1998) 41 IPR 505 and Markovic J in Gain Capital UK Ltd v Citigroup Inc (No 4) (2017) 123 IPR 234. However, both of those cases concerned opposition to registration. In contrast to those cases, the BBNT mark in the present case is validly registered and there is no challenge to that registration. For the purposes of assessing deceptive similarity in the context of infringement, the comparison is with the full BBNT mark as registered, not just the non-descriptive parts of it.

435    The relevant comparison is the consumer’s imperfect recollection of the BBNT mark as registered with the House B&B mark as used across the entrance to a soft homewares store in a shopping centre or strip mall, against the backdrop of the surrounding circumstances set out above. The consumer has no knowledge of the actual mark, its use over many years, or any reputation associated with it.

436    What the two marks have in common is two of their three words: the words “BED” and “BATH”. The words “BED” and “BATH” (in that order) provide a natural alliteration when spoken and are visually, phonetically and aurally significant parts of both marks. The consumer may not recall whether the words are capitalised but is likely to recall the order of the words such that the word “BED” is directly followed by the word “BATH. Neither word is directly descriptive of the soft homewares covered by the BBNT registered marks, or the goods sold in House B&B stores: there are no beds or baths available in the stores. Rather, the soft homeware goods covered by the registrations and sold in House B&B stores are bed and bath related items as described above. Whilst the words “bed” and “bath might be commonly used inside shops as category or navigational descriptors, the ordinary consumer would be aware that they are not commonly used in shop names and external signage in Australia. These are good reasons to think that the House B&B mark may cause confusion as, after all, it is enough that the consumer is given “cause to wonder” whether there is a connection or association between the marks: see Caterpillar Inc v Puma SE (2021) 162 IPR 430 at [92] (per O’Bryan J) citing Kitto J in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 595.

437    However, I am not satisfied that these similarities are sufficient to deceive or confuse the ordinary consumer given the substantial and crucial differences between the marks.

438    The BBNT mark is a word mark comprised of three well understood English words and the conjunction “N’” without any logo or device, or invented word. Therefore, imperfect recollection of such a mark is likely to be better than if the mark were a device mark or logo, or included invented words. The “N’ TABLE” element is unlikely to be entirely forgotten in the consumer’s imperfect recollection of the registered mark because, as Professor O’Sullivan observed, the “N’ TABLE” part of the BBNT brand is visually and phonetically unusual, and unique to BBNT. The significance attaching to “N’ TABLE” should therefore not be ignored or downplayed, as it was in BBNT’s submissions. As I have said repeatedly above, I am not satisfied that BBNT is recognised by consumers simply as “BED BATH”. As the Google Analytics data made clear, when consumers intended to visit the BBNT website, they almost always used all the words in BBNT’s marks (“Bed”, “Bath” and “Table) with the only variation being in the punctuation used between those words. I make these comments in the context of contemplating what the hypothetical consumer’s imperfect recollection of the registered BBNT mark might be, rather than importing evidence of the actual use of the mark by BBNT and its customers into the consideration.

439    The Full Court in Hashtag Burger recently affirmed that the last component of a trade mark may comprise a key visual and aural feature of that mark: at [76] (per Nicholas, Yates and Burley JJ). In this case, the “N’ TABLE” is a key feature of the BBNT marks and it is the composite arrangement of three descriptive words, punctuated by an N’, which renders the BBNT marks distinctive. The “N’ TABLE”, and therefore the composite arrangement of the three words, is entirely absent from the House B&B marks.

440    House is the significant visual and aural part at the start of the House B&B mark. In each of the House B&B external store signs, the “House” part of the mark is much larger than “BED & BATH”, rendered in bold and placed above those words. The word “House” is illuminated on some stores, sometimes with a line between it and “BED & BATH” and sometimes without a line. “House” is therefore clearly the more dominant visual cue of the House B&B mark. BBNT emphasised again and again the importance of the first word or part of a trade mark. However, it failed to grasp that that factor tells strongly against a finding of deceptive similarity in this case. The word “House” is the first part of the House B&B mark and is far more visually dominant and distinctive than “BED”, or even “BED BATH”, in the BBNT marks. Therefore, although I do not place too much weight on this factor, it points, if anything, against a finding of deceptive similarity.

441    The different presentation and orientation of the marks is also important. As I have described, the House B&B mark is consistently presented with text split over two lines in a combination of capital and lower-case letters, with the letters in different sizes and in two colours. These differences are illustrative of the fundamental impression and recollection a consumer takes away from each mark, or the dominant visual cue: in the case of the BBNT mark, it is the composite arrangement of three allusively descriptive words (separate by the “N’), whereas for the House B&B mark, it is the large and dominating word “House” with the words “BED & BATH” below on a separate line.

442    I therefore do not consider that the House B&B mark is deceptively similar to the BBNT marks. It is important to bear in mind that, consistently with Self Care, I have not taken into account BBNT’s reputation in reaching that conclusion, which may be (and, I consider, is) relevant to the ACL and passing off claims.

7.4.5.2    BBNT v BED & BATH

443    In case I am wrong that GRBA does not use BED & BATH other than as part of the composite House B&B mark, I will consider whether that mark is deceptively similar to the BBNT mark. In short, I do not consider that “BED & BATH” is deceptively similar to the BBNT mark.

444    As a starting point, obviously there is a significant degree of similarity between “BED & BATH” and “BED BATH N’ TABLE” in that both marks have the same two first words (save for the absence of the ampersand “&”) presented in capital letters. Both marks also use the words “BED” and “BATH” as nouns as an allusive description of the products sold in that store. However, those similarities alone are not determinative of deceptive similarity.

445    For essentially identical reasons to those I have set out in the section above, there are significant differences between the two marks. These include that “BED & BATH” features no use of the distinctive “N TABLE” conjunction and the absence of “&” from the BBNT marks, which impacts the visual and, to a lesser extent, the oral and aural similarities of the marks.

446    These differences are sufficient to reject a finding of deceptive similarity based on recent authority. “BED & BATH” is more readily distinguished from “BED BATH ‘N TABLE” than, for example, the following marks which have been held not to be deceptively similar (although I accept that PDP Capital concerned logos, not words simpliciter):

(a)    “PROTOX” from “BOTOX”: Self Care at [68]–[71] (per Kiefel CJ, Gageler, Gordon, Edelman and Gleeson JJ).

(b)    “SAPIENT” from “SAPIENT COLLEGE”: SAP Australia at [27], [41] and [49]–[50] (per French, Heerey and Lindgren JJ).

(c)    “AMG” from “AMH”: Australian Meat Group Pty Ltd v JBS Australia Pty Ltd (2018) 137 IPR 385 at [85]–[89] (per Allsop CJ, Besanko and Yates JJ).

(d)    “Wicked” from “Wicked Sister”: PDP Capital at [102][113] (per Jagot, Nicholas and Burley JJ).

(e)    “OPTUS” from “OPTUM”: Singtel Optus at [138] (per Davies J).

(f)    HEALTHPLUS from INNER HEALTH PLUS”: Health World Ltd v Shin-Sun Australia Pty Ltd (2005) 64 IPR 495 at [33]–[41] (per Cooper J).

447    Further, even on this alternative case, the presence of the House brand cannot simply be ignored. The High Court in Self Care explained at [29] that in assessing deceptive similarity:

The correct approach is to compare the impression (allowing for imperfect recollection) that the notional buyer would have of the registered mark (as notionally used on all of the goods covered by the registration), with the impression that the notional buyer would have of the alleged infringer’s mark (as actually used).

(Emphasis in original.)

448    The Court went on to assess the trade marks under comparison, observing that it was necessary to consider how the impugned mark was “actually used” in the “context of the relevant surrounding circumstances”, including associated “packaging”: at [68]–[69]. It said (at [69]) the comparison of the aural and visual similarities between the marks is “just one part of the inquiry”.

449    BBNT rejects this characterisation of Self Care at [29]. It correctly notes that the High Court cited Wingate at 230–1 (per Gummow J) and Mid Sydney for that proposition. In dealing with the test for trade mark infringement, Gummow J said in Wingate at 231 that the comparison is between any normal use of the plaintiff’s trade mark and the defendant’s actual use, “but ignoring any matter added to the allegedly infringing trade mark” including disclaimers. I accept from Wingate and Mid Sydney that purported disclaimers are not taken into account in assessing deceptive similarity. However, the High Court made clear at [71] of Self-Care that it is legitimate to consider whether the impugned mark was “almost always used in proximity to” another, distinctive mark. The authorities relied upon by BBNT do not address this question and therefore I consider that it is permissible for me to take into account that the “BED & BATH” mark is always used, without fail, in direct proximity to the House mark. Thus, although I cannot simply adopt and transpose the conclusions I made in the section above to the current comparison of “BED & BATH” with the BBNT marks, those conclusion remain highly relevant and point against a finding of deceptive similarity.

450    As such, I am not satisfied that the “BED & BATH” mark, when considered as an independent mark separately to House, is deceptively similar to the BBNT marks.

7.5    Defence to infringement

451    For the reasons just discussed, I do not consider that the House B&B mark is deceptively similar to the BBNT marks. Nor do I consider that GRBA is using BED & BATH” as a separate mark to the composite House B&B mark. In the event that I am wrong, GRBA contends that it is entitled to a defence to infringement pursuant to s 122 of the Act.

452    GRBA submits that it has used the words “BED & BATH” in good faith to indicate the kind, quality, intended purpose or other characteristic of the goods and services being offered through House B&B stores within the meaning of s 122(1)(b)(i) of the Trade Marks Act.

453    GRBA accepted that the defence in s 120(2) is irrelevant in circumstances where infringement has been established and GRBA admits that it has retailed homewares under the House B&B mark, and the 781 TM and 972 TM are both registered in relation to a range of retailing services.

7.5.1    Principles

454    Section 122(1)(b) of the Act provides:

122 When is a trade mark not infringed?

(1)    In spite of section 120, a person does not infringe a registered trade mark when:

(b)     the person uses a sign in good faith to indicate:

(i)     the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services;

455    Burley J in Bohemia Crystal Pty Ltd v Host Corp Pty Ltd (2018) 129 IPR 482 at [296] explained the operation of this defence:

Section 122(1)(b)(i) calls for consideration not of whether there is trade mark use, but rather whether there is use in good faith. The prefatory words in s 122(1) “in spite of s 120” make plain that an otherwise infringing use may be excused if the conditions of s 122(1) are satisfied, but the scope of this aspect of the subsection does not appear to have been expanded.

(Emphasis in original.)

456    Beach J in Flexopack SA Plastics Industry v Flexopack Australia Pty Ltd (2016) 118 IPR 239 at [106] observed that the s 122(1) defence applies to corporations as well as natural persons.

457    “Good faith” as used in the context of s 122 is taken to mean “honest” use: Optical 88 at [161] (per Yates J). This requires an honest belief, at least at the time of adopting the mark, that no confusion would arise by reference to the earlier trade mark’s reputation and there was no intention to divert trade: Digital Post at [73][74] (per North, Middleton and Barker JJ).

458    The onus to establish good faith is on the person seeking to rely on the statutory exception and the failure to adduce evidence of an honest belief by an appropriate person within the defendant’s organisation may be fatal: Anheuser-Busch at [216] (per Allsop J).

459    Beach J observed at [110] in Flexopack that it does not necessarily follow that in the absence of fraud or dishonesty, good faith is established. Beach J continued at [111] that the test is, in one sense, objective: “If a person does not take steps that an honest and reasonable person would take to ascertain the ability to use a trade mark, and has in effect taken a risk, then they are not acting in good faith. His Honour concluded at [116] that good faith in s 122 is properly interpreted as requiring reasonable diligence to ascertain that a chosen name does not conflict with a registered trade mark.

460    Yates J observed at [163] of Optical 88 that a use in good faith for the purposes of s 122(1)(a) (although his Honour’s comments equally apply to s 122(1)(b)) does not cease to be in good faith when the likelihood of deception is brought to the notice of an alleged infringer (citing Hy-Line Chicks Pty Ltd v Swifte (1996) 115 CLR 159 at 161 and 164).

461    In Swancom Pty Ltd v Jazz Corner Hotel Pty Ltd (No 2) (2021) 157 IPR 498, O’Bryan J noted at [260] that for the defence in s 122(1)(b) “to have any application (as a defence to infringement), the use of the word must also constitute a use of the word as a trade mark (for otherwise, there would be no infringement and no need for the defence)”.

462    The Full Court in Allergan Australia Pty Ltd v Self Care IP Holdings Pty Ltd (2021) 162 IPR 52 at [133] (per Jagot, Lee and Thawley JJ) made the following observations (which were not disturbed on appeal in Self Care):

If a defendant proves one of the matters in s 122(1)(b) — for example, that it used the mark in good faith to indicate geographic origin — then the use would not have been use as a trade mark. Unlike s 122(1)(d) which contains no subjective requirement of “good faith”, s 122(1)(b) might allow the possibility of some application even where, objectively, the sign was used as a trade mark. Accepting for the purposes of argument that it is possible that the defence under s 122(1)(b) might be available in the unusual situation that a sign was subjectively used in good faith for one of the stated purposes, but was objectively used as a trade mark within the meaning of s 120, that is not the case here.

7.5.2    Consideration

463    BBNT submits that this defence is inoperable for three reasons. First, the words “BED & BATH” operate to provide branding significance, as opposed to any characteristic within the meaning of s 122(1)(b)(i). Second, good faith must be positively proven and the intention of GRBA forecloses such a finding. Third, BBNT points to GRBA’s failure to cease using the allegedly infringing brand after being put on notice 11 days after the opening of the Westfield Doncaster store on 25 May 2023.

464    Dealing with the first point, GRBA contends that, consistent with the intention of both Mr Lew and Ms McGann, GRBA has used the words “BED & BATH” to indicate that GRBA is now retailing “bedroom” and “bathroom” products from a House branded store. “BED & BATH” in the House B&B mark is not used to designate commercial origin, but to explain to consumers something about the kind, quality, intended purpose or other characteristic of the relevant goods or services being offered by GRBA.

465    As I have said above, the words “bed” and “bath” are not used solely descriptively in either the BBNT marks or the House B&B mark and those words are not purely descriptive even when used by soft homeware retailers as category descriptions. Namely, neither BBNT nor House B&B sell beds or baths, and nor would one find a bed or a bath in the parts of other retail stores labelled as such. Further, the House B&B mark is a composite one, of which the words bed” and “bath” are only part of the mark. I therefore do not consider that the House B&B mark is used by GRBA to indicate the purpose of, or characteristics of, the goods sold in House B&B stores.

466    In any event, I am not satisfied that, at the time of adopting the House B&B mark, GRBA acted with an honest belief that no confusion would arise: see Digital Post at [73] (per North, Middleton and Barker JJ).

467    GRBA relied upon the evidence of Mr Lew and Ms McGann to establish that GRBA held the requisite honest belief. Consistent with the authorities, I do not need to be satisfied that GRBA engaged in fraud or dishonesty to find the defence under s 122(1)(b) inoperable. Rather, GRBA has the onus to establish that an appropriate person within their organisation actually held an honest belief. In my view, GRBA has failed to discharge that onus.

468    I think a distinction can be drawn between the belief of Ms McGann who came up with the House B&B mark and Mr Lewwho made the ultimate decision to adopt the mark. As I discussed at [189]–[218], I found Ms McGann to be an unimpressive witness and I give her evidence very little weight. Ms McGann clearly had BBNT on her mind when selecting the House B&B mark and, as evidenced by the running scared email, had an intention to divert trade away from BBNT. In any event, she is a very experienced marketer who would have been acutely aware that BBNT was one of the leading players in the soft homewares market. I observed at [200] that “BED & BATH” were not mentioned as category descriptions or navigational aids in any contemporaneous document in early May 2021 at the time of Ms McGann selecting the House B&B name. As such, I do not accept that Ms McGann held an honest belief that the “BED & BATH” part of the House B&B mark was purely a category description and nor do I think that she genuinely turned her mind to, and concluded that, no confusion would arise by adopting that mark by reference to the BBNT marks.

469    Mr Lew’s evidence is more in the realm of wilful blindness. Mr Lew did not come up with the House B&B mark and there is no direct evidence that he had BBNT on his mind at the time of adopting the mark. However, Mr Lew is an incredibly experienced retailer and the evidence showed that he is highly conscious of branding and was very aware of competitors in the soft homewares market, including BBNT who he described as a “very prominent and successful brand” and “very well established in the market”. In these circumstances, I simply cannot accept that he “never thought about BBNT” at the time of adopting the House B&B name, both when Ms McGann first suggested the name and after the running scared email. His refusal to even acknowledge in cross-examination that there was any similarity between the store names BBNT and House B&B, particularly his statement that it never occurred to him that House B&B has the same two words in its store name as BBNT, speaks to an astonishing level of blindness to the possibility of confusion.

470    Allsop J’s comments in Anheuser-Busch at [216] are apposite here:

It is hard to see how [Mr Lew] and his company could be sure, or could hold the view, that no confusion would arise. They have not persuaded me that anyone did hold that view. In these circumstances, I think it can be said that, though the [GRBA] and Mr [Lew] were not consciously dishonest, [GRBA] did not use, and does not intend to use, [the House B&B mark] in good faith for the purposes of s 122 of the TM Act.

471    GRBA’s wilful blindness is further evidenced by the fact that GRBA did not adduce any legal advice prior to adopting the House B&B mark. That omission must be viewed in context. Namely, several GRBA witnesses, including Mr Lew, gave evidence that GRBA would in the normal course seek legal advice before adopting a new brand, especially when, as in this particular case, GRBA intended to open up 50 new stores at great expense.

472    GRBA contends that there cannot be a requirement that a party take positive steps to ascertain its ability to use a mark in order for its conduct to be in good faith. If there is such a requirement, GRBA draws analogies to the interlocutory decision in A Nelson & Co Ltd v Martin & Pleasance Pty Ltd (2021) 157 IPR 376 where Flick J observed at [39] that unchallenged evidence that a party had filed and relied upon the results of a Headstart application with IP Australia “would go a long way to making out a defence of good faith for the purposes of s 122(1)(b)”.

473    There are two issues with relying upon Flick J’s comments in Nelson. First, Nelson concerned an interlocutory injunction and is not an authoritative statement on what enquiries may discharge the good faith defence in s 122(1)(b) once infringement has been established. In my view, a Headstart application alone is unlikely to establish good faith. I consider that obtaining legal advice and conducting a search of the trade marks register are far better indications of a party acting in good faith: see Flexopack at [112] and [150] (per Beach J). In any event, the Headstart application itself was not undertaken as good faith due diligence, as the same day that the application was filed Mr Lew instructed Mr Caruana to change the signage on the Doncaster store to House B&B.

474    The second point is that Flick J was not dealing with a situation where the infringer’s conduct constituted wilful blindness.

475    Ultimately, even if I accept that Mr Lew and Ms McGann genuinely held the subjective belief that there was no similarity between the House B&B mark and the BBNT marks, and therefore no confusion would arise from the adoption of the House B&B mark, that is not sufficient to establish good faith for the purposes of s 122(1)(b). As Beach J observed at [118] in Flexopack:

If good faith were to be construed as merely being satisfied on the basis of a stated subjective belief that one did not know of the other, it could lead to a situation where one could justify trade mark use with one’s ignorance. The failure to make proper inquiries should not place a respondent in a better position than if such inquiries had been made.

476    As such, GRBA’s conduct in adopting the mark, discussed above at [234]–[241], does not constitute what I consider in the circumstances of this case to be proper enquiries or reasonable diligence to ascertain that its chosen name did not conflict with a registered trade mark: see Flexopack at [110] (per Beach J). Therefore, GRBA did not act in good faith in adopting the House B&B mark and, if I am wrong on infringement, GRBA cannot rely upon the defence in s 122(1)(b).

477    Finally, GRBA’s actions after receiving BBNT’s letter of demand on 25 May 2021, and thereby being formally put on notice of BBNT rights, are inconsistent with a party acting in good faith.

478    GRBA contends that BBNT is wrong to allege that the conduct of GRBA cannot cease to be use in good faith upon being put on notice of BBNT’s allegations. GRBA relies on the Full Court’s finding in Digital Post at [52], [56], [90] and [93] (per North, Middleton and Barker JJ) that the respondent was acting in good faith pursuant to s 122(1)(a) of the Act even though it was aware of potential confusion and the applicant’s reputation in the registered mark. However, as their Honours stated in Digital Post at [94] “[t]his is not a situation like Anheuser-Busch where there was wilful blindness to the potential for confusion. This comment suggests that their Honours considered that good faith could not be established where wilful blindness is established.

479    That recognition makes it easy to reconcile the approach in Digital Post with Beach J’s far stricter approach in Flexopack. Although not described as such, Beach J in Flexopack was clearly dealing with a situation of wilful blindness as evinced by his Honour’s comment at [150] that any ignorance of the applicant’s trade mark was only due to [the respondent’s] own indifference and his failure to make the inquiries that an honest and reasonable person would have made in his position. This characterisation of Flexopack also disposes of GRBA’s reliance on Halal Certification Authority Pty Ltd v Flujo Sanguineo Holdings Pty Ltd (2021) 163 IPR 433 at [52], [67], [123], [132], [135] and [141][142] (per Bromwich J). In Halal Certification, Bromwich J described the infringer’s conduct as “honest” and “no more than an oversight” (at [67] and [141]) which clearly takes their conduct outside the realm of wilful blindness. These findings were not challenged on appeal in Halal Certification Authority Pty Ltd v Flujo Sanguineo Holdings Pty Ltd [2023] FCAFC 175 at [112]–[117] (per Nicholas, Burley and Cheeseman JJ).

480    I do not consider that a party who is wilfully blind to the prospect of infringing can be said to be acting in good faith when the likelihood of deception is expressly raised with them by the owner of the registered mark. In the circumstances of this case, once the potential conflict was brought to GRBA’s attention, it was impermissible for it to just keep ignoring and failing to investigate BBNT’s concerns or seek “proper” or substantive legal advice.

481    Accordingly, if I am incorrect on the question of trademark infringement, GRBA cannot rely upon s 122(1)(b)(i) as a defence to any infringement.

8.    AUSTRALIAN CONSUMER LAW

482    BBNT alleges that by adopting the House B&B mark, GRBA has engaged in misleading and deceptive conduct. BBNT also has an alternative case based on the similarities in store get-up further reinforcing the association between the parties. However, BBNT does not advance a case with respect to similarities in store front get-up alone (without regard to branding) against GRBA.

483    For the reasons given below, I am satisfied that GRBA has engaged in misleading and deceptive conduct.

8.1    Relevant Provisions

484    Section 18(1) of the ACL, headed “Misleading or deceptive conduct” provides that:

A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

485    BBNT also alleges breaches of s 29(1)(a), (g) and (h) of the ACL. Section 29 is headed “False or misleading representations about goods or services”. Subsection (1) relevantly provides:

(1)    A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:

(a) make a false or misleading representation that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use; or

(g) make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits; or

(h) make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation; or

8.2    Principles

486    The High Court in Self Care at [80] summarised the well-established principles:

Determining whether a person has breached s 18 of the ACL involves four steps: first, identifying with precision the “conduct” said to contravene s 18; second, considering whether the identified conduct was conduct “in trade or commerce”; third, considering what meaning that conduct conveyed; and fourth, determining whether that conduct in light of that meaning was “misleading or deceptive or likely to mislead or deceive”.

487    It is always necessary to commence by asking: “what is the alleged conduct?”. If that conduct constitutes conduct in trade and commerce, the High Court at [82] of Self Care identified that the third and fourth steps then require the court to characterise, as an objective matter, the conduct viewed as a whole and its notional effects on the state of mind of the relevant class of persons, judged by reference to its context. Their Honours noted that the context includes both:

    the immediate contextall the words in the document, or other communication and the manner in which those words are conveyed, not just a word or phrase in isolation. In Self Care, the immediate context included the surrounding words and the design of the packaging and the website.

    the broader contextthe relevant surrounding facts and circumstances.

488    The non-contentious principles to be applied in assessing a breach of the ACL were set out by Beach J in Flexopack [259][277]. His Honour then summarised those principles in State Street Global Advisors Trust Co v Maurice Blackburn Pty Ltd (No 2) (2021) 164 IPR 420 at [708][717]:

[708]     First, conduct will be likely to mislead or deceive if there is a real or not remote chance or possibility of misleading or deceiving. To assess this one looks at the potential practical consequences and effect of the conduct. And whether conduct is misleading or deceptive or likely to mislead or deceive is a question of fact, which must be determined having regard to all the relevant circumstances.

[709]     Second, there is no meaningful difference between the words and phrases “misleading or deceptive”, “mislead or deceive” or “false or misleading”.

[710]     Third, where the issue is the effect of conduct on a class of persons (rather than identified individuals to whom a particular misrepresentation has been made or particular conduct directed), the effect of the conduct or representations upon ordinary or reasonable members of that class must be considered (Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45; 169 ALR 677; 46 IPR 481; [2000] HCA 12 (Campomar) at [102] and [103]). This hypothetical construct avoids using the very ignorant or the very knowledgeable to assess effect or likely effect; it also avoids using those credited with habitual caution or exceptional carelessness; it also avoids considering the assumptions of persons which are extreme or fanciful. I should note here that much the same standard is applied in a case of passing off in assessing whether a representation of the relevant kind was made and its likely effect on the potential purchaser.

[711]     Fourth, the objective characteristics that one attributes to ordinary or reasonable members of the relevant class may differ depending on the medium for communication being considered. There is scope for diversity of response both within the same medium and across different media.

[712]     Fifth, for the purposes of s 18, one must identify the relevant conduct and then consider whether that conduct, considered as a whole and in context, is misleading or deceptive or likely to mislead or deceive. Such conduct is not to be pigeon-holed into the framework or language of representation (cf the language of s 29).

[713]    Sixth, conduct is misleading or deceptive or likely to mislead or deceive if it has the tendency to lead into error. But conduct causing confusion or wonderment is not necessarily co-extensive with misleading or deceptive conduct. Mere confusion or wonderment will not establish misleading or deceptive conduct. Further, there may be evidence of initial confusion, but where such confusion was transient and did not result in any person seeking to commence negotiations or invite approaches, such a temporary and commercially irrelevant error would fall short of amounting to misleading or deceptive conduct.

[714]     Seventh, for the purposes of s 18, the words “likely to mislead or deceive” demonstrate that it is not necessary to show actual deception. Relatedly, it is not necessary to adduce evidence from persons to show that they were actually misled or deceived.

[715]     Eighth, there must be a sufficient nexus between the impugned conduct or apprehended conduct and the customer’s misconception or deception. Subject to one qualification, the error or misconception must result from the relevant respondent’s conduct and not from other circumstances for which that respondent was not responsible. But conduct that exploits or feeds into and thereby reinforces the pre-existing mistaken views of members of the relevant class may be misleading or deceptive or likely to mislead or deceive.

[716]     Ninth, conduct that is merely transitory or ephemeral where any likely misleading impression is likely to be readily or quickly dispelled or corrected does not constitute conduct that would infringe s 18.

[717]     Tenth, in determining whether a contravention of s 18 has occurred, the reactions of the hypothetical individual within the class are considered. Under the Campomar test, the hypothetical individual is a reasonable or ordinary member of the class.

489    To expand upon Beach J’s summary, conduct which induces temporary or commercially irrelevant error, although persuasive, is not sufficient to enliven s 18 of the ACL or constitute passing off: SAP Australia Pty at [51] (per French, Heerey and Lindgren JJ); Knight v Beyond Properties Pty Ltd (2007) 74 IPR 232 at [58] (per French, Tamberlin and Rares JJ). Further, there is a difference between a customer who is “momentarily confused” and a customer who is “misled or deceived in a material sense”: Brick Lane Brewing Co Pty Ltd v Torquay Beverage Co Pty Ltd (2023) 170 IPR 195 at [112] (per Stewart J).

490    As Besanko J observed in Mitolo at [360]:

the question of whether conduct is misleading or deceptive is a question of fact; it is an objective question and one which is to be considered in the light of all the surrounding facts and circumstances. Conduct is misleading or deceptive if it induces error or is capable of inducing error: Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; 212 ALR 357; [2004] HCA 60 at [109]–[111] per McHugh J; Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357; 270 ALR 204; [2010] HCA 31.

491    In relation to new market entrants, Murphy J in Telstra observed at [539][540]:

[539] Experience teaches that it is far from unusual for a new entrant to a market to attempt through packaging, use of colour, or use of other trade indicia to attract some of the familiarity that consumers have in the products of the market leader. As Mr Weissenberg said:

The first brand that comes into the marketplace and establishes the category sets the tonality for everyone else and, you know, they follow in terms of packaging, in terms of colour use, etc. That is quite a common thing.

But that is not the same thing as setting out to deceive.

[540] It is also necessary to keep in mind that it is no part of the court’s task to be critical of the respondents for taking an element of Telstra’s get up unless they have engaged in misleading or deceptive conduct or passing off: Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (1999) 44 IPR 281; [1999] FCA 461 at [306]–[307] per Goldberg J. The authorities are replete with examples where traders “sail close to the wind” by copying elements of a competitor’s get up, but maintain sufficient differences such that misleading or deceptive conduct or passing off cannot be made out. The question is whether the trader goes too far and steps over the line into misrepresentation.

492    Finally, an intention to deceive is highly relevant to whether conduct is likely to deceive potential consumers. As Dixon and McTiernan JJ said in an already quoted and oft cited passage in Australian Woollen Mills at 657: “when a dishonest trader fashions and implements a weapon for the purpose of misleading potential customers it at least provides a reliable and expert opinion on the question whether what is done is in fact likely to deceive”. However, an intention to deceive is not determinative and must be weighed against other evidence as, after all, an intention to deceive may nevertheless fail in its purpose: Telstra at [553]–[555] (per Murphy J).

8.3    Relevant class of consumer

493    Both parties accepted that the relevant class of consumer is the general public. The effect of the conduct on the ordinary and reasonable member of the general public is what must be considered. The ordinary and reasonable consumer is a hypothetical construct to whom the court attributes characteristics and knowledge in order to characterise the impugned conduct. This hypothetical construct avoids using the very ignorant, the very knowledgeable, the very cautious or the exceptionally careless members of the class to assess the effect or likely effect of the conduct: Self Care at [83] (per Kiefel CJ, Gageler, Gordon, Edelman and Gleeson JJ). The court must put itself in the position of the ordinary and reasonable consumer.

494    The reasonable consumer in this case is a member of the public looking to browse and/or buy soft homewares products. The attributes and knowledge of the reasonable consumer include:

(a)    a familiarity with the main speciality retailers of soft homewares products in Australia BBNT, Adairs and Sheridan;

(b)    an awareness that department stores such as Myer, Kmart, Harris Scarfe and David Jones also sell soft homewares; and

(c)    knowledge that major brands may have sub-brands.

495    I consider that the reasonable consumer is more engaged in their surroundings and what shop they enter than the purely window shopper type browser. I discount from the reasonable consumer the purely window shopper because I consider such a person to have little to no interest in which shop they enter, as they are looking to while away the time and the exercise is more an entertainment experience than a consumer one.

8.4    The parties’ submissions

496    BBNT claims that GRBA has, by its conduct, represented that the House B&B brand and the House B&B stores opened by GRBA are associated with, approved by or licensed by BBNT.

497    The conduct of which BBNT claims gives rise to the representation commenced with GRBA’s use of House B&B as the name of its new soft homewares store launched at Doncaster shopping centre on 14 May 2014, and extends to, among other uses, the use of the House B&B mark on the external signage over the entrance to all of its retail stores and the use of the House B&B mark on the House website.

498    BBNT contends that the similar branding can properly be characterised as conveying that the two businesses have formed an alliance or arrangement to sell similar or related products; or that a co-branding relationship existed; or that there was a mis-association in the nature of consumers believing that the businesses were one and the same, or part of the same corporate group.

499    BBNT contends that the impact of GRBA adopting the House B&B logo on its first store is to be assessed against the reputation of BBNT, which at the relevant time operated around 167 stores.

500    As a preliminary matter, GRBA submits the evidence at trial does not establish that BBNT enjoys any independent reputation or goodwill in the BBNT Get-up (defined above at [37]) or the ordinary English words “bed” and “bath” when divorced from the BBNT marks. GRBA also submits that the House B&B mark and House B&B stores are readily distinguishable from the BBNT brand and BBNT stores.

501    GRBA contends that the words “bed” and “bath” are descriptive and relies on the comments of Stephen J in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 22930 to submit that a court will not grant a de facto monopoly in the descriptive words “BED & BATH”. In Hornsby, the Sydney Building Information Centre Ltd claimed that the use of the name Hornsby Building Information Centre Pty Ltd amounted to misleading and deceptive conduct. Both parties provided building information services. Stephen J described the names of both parties (at 228) as consisting of “three descriptive words, prefixed by a word of locality”, and observed at 229:

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.

502    Despite each case being reliant on its own facts, including surrounding contextual circumstances, GRBA relied upon several further cases based on claims of descriptive trading or product names that were not found to mislead or deceive consumers for the purposes of s 18 of the ACL or its predecessor in s 52 of the Trade Practices Act.

503    As I observed above, I consider the words “bed” and “bath” in both marks in this case to be more allusive than purely descriptive. Neither mark is directly or “eloquently” descriptive in the manner of the corporate names in Hornsby or any of the other cases relied upon by GRBA.

8.5    Consideration

8.5.1    The conduct

504    The relevant conduct is GRBA’s use of House B&B as the name of its new soft homewares stores, first launched at Doncaster shopping centre on 14 May 2021, including the use of the House B&B mark on the external signage over the entrance to its store and the use of the House B&B mark on the House website. According to BBNT, at the time of the hearing, there were at least 17 House B&B stores displaying signage which improperly indicates a connection with BBNT.

505    BBNT also contends that GRBA wrongfully used the House B&B name on its website, store receipts, social media, shopping centre directories, advertising and promotional materials including store opening flyers, gift cards and employee name badges.

8.5.2    Trade and commerce

506    GRBA’s use of House B&B as the name of its new soft homewares store and its use of the House B&B mark on external shop signage on its retail stores, and all of the other relevant conduct out set out above, is clearly use of the House B&B mark in trade and commerce.

8.5.3    Whether conduct misleading or deceptive or likely to mislead or deceive

507    On 14 May 2021, a new soft homewares store opened in the homewares precinct of Doncaster shopping centre, up one floor from the existing BBNT store and across from Adairs. Externally, it was much like other soft homewares stores: the store had large glass windows through which made up beds could be seen. Across the entrance to the store was the House B&B sign:

508    The question to determine is what meaning does GRBA’s use of the House B&B mark on a shopfront at the launch of the House B&B store in Doncaster on 14 May 2021, assessed in all the context (both broad and immediate), convey to the reasonable consumer as I have described them above?

509    The relevant broader context in which the conduct is to be judged includes the following (as at May 2021):

(a)    BBNT had acquired an extensive reputation in the BBNT marks in Australia which had been accumulated over 40 years of use in the soft homewares market.

(b)    The BBNT mark, despite containing ordinary English words, had become factually distinctive of BBNT as a result of over 40 years of use in Australia.

(c)    BBNT had around 167 stores in Australia.

(d)    The BBNT stores commonly had large front windows through which could be seen one or two made up beds in “Hamptons style” and frosted glass window decals with the BBNT mark. This style was similar to stores of other soft homewares retailers such as Adairs.

(e)    Soft homewares retailers are often co-located in close proximity in shopping centres.

(f)    GRBA had, over 40 years, acquired an extensive reputation in the brand House and its hard homewares stores in Australia.

(g)    House stores had a particular “discount” look, unlike the style of the soft homewares retailers (described above) and sold kitchenware products.

(h)    GRBA had around 140 House stores in Australia.

(i)    No retailers in Australia other than BBNT used the words “bed” and “bath” in their store name or external signage. BBNT therefore has had over 40 years of “unique” use.

(j)    Soft homewares retailers use “bed” and “bath” as category descriptors inside their retail stores (as opposed to on external signage), particularly department stores.

(k)    Soft homewares products range in price from a few dollars (face washer or coaster) to a few hundred dollars (quilt covers).

510    The relevant immediate context includes the prominent use of “House” in the House B&B mark and the use of that mark on a soft homewares style shopfront. Also relevant is the appearance of House B&B stores. They are different to the typical House store with which consumers are familiar, with its cluttered appearance and discount signage. House B&B stores adopt the “Hamptons style” look of the other soft homeware retailers. The supposed differentiators pointed to by GRBA — the portrait orientation of the sheet sets and the presence of a linen press are not readily observable to the customer outside the store.

511    It is also highly relevant that when it adopted the House B&B mark, GRBA was aware of the existence of BBNT and its reputation in the soft homewares sector, as both had been operating in the broader homewares sector for around 40 years. When combined with a surprising lack of legal advice and the fierce determination not to change the name of the store when the prospect of confusion was first brought to GRBA’s attention, GRBA’s attitude to the possibility of confusion of House B&B with BBNT can only be described as one of wilful blindness. Although GRBA’s wilful blindness may not amount to an intention to deceive consumers, it provides a similarly “reliable and expert opinion on the question of whether [GRBA’s conduct] is in fact likely to deceive”: see Australian Woollen Mills at 657 (per Dixon and McTiernan JJ).

512    In Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 55 IPR 354, Weinberg and Dowsett JJ (Branson J agreeing) observed at [117] that:

where a trader, having knowledge of a particular market, borrows aspects of a competitor’s get-up, it is a reasonable inference that he or she believes that there will be a market benefit in so doing. Often, the obvious benefit will be the attraction of custom which would otherwise have gone to the competitor. It is an available inference from those propositions that the trader, with knowledge of the market, considered that such borrowing was “fitted for the purpose and therefore likely to deceive or confuse”. Of course, the trader may explain his or her conduct in such a way as to undermine the availability of that inference.

(Emphasis added.)

513    I consider that such an inference of the kind described in Sydneywide at [117] is available to be drawn on the basis of the evidence in this case. GRBA has tried to explain its conduct to undermine that inference by saying that the “BED & BATH” part of the name was chosen purely because those words are appropriate category descriptors. However, if I reject the evidence of Mr Lew and Ms McGann as truthful or plausible, as I do for the reasons given above, then GRBA has no proper explanation to undermine that inference.

514    As discussed above at [175], Mr Lew selected the name “House BED & BATH” from the other two options presented to him by Ms McGann (House BATH AND BED” and “House BEDWORKS”) because, although all three options employed category descriptions of the products sold in store, “BED & BATH”rolls off the tongue” more easily than the other two names. The suggestion that “BED & BATH” “rolls off the tongue” is in all likelihood the result of the 40 years of use of those words in Australia by BBNT as part of its name. It is not the natural order for reference to those words. That is, the usual sequence is to have a bath before you go to bed, especially for small children. Notwithstanding that BBNT does not have an independent reputation in the words “BED BATH alone, BBNT’s longstanding reputation in its name which included the wordsbed” and “bath” (and in that order) is undoubtedly part of the reason that those words appealed to GRBA, which could leverage off that well-known pairing of words in entering a new market for the first time.

515    The similarities in store get-up (albeit typical for a soft homewares store) further reinforce the association that consumers may draw between House B&B and BBNT. The competing House B&B store and BBNT store at Chadstone, which are located in close proximity to one another, but not side by side, appear as follows:

516    The reasonable consumer would not see the words “bed” and “bath” in the House B&B store name primarily as category descriptors. Consumers are familiar with seeing those words used as category descriptors inside stores (including large department stores), not on the exterior of stores. As at mid May 2021, the reasonable consumer was not familiar with seeing “bed” and “bath” on a store front other than over the entrance to a BBNT store.

517    The reasonable consumer coming across a House B&B store for the first time would recognise that it is not a House store of the kind that they are used to seeing. Although the “House” logo is displayed prominently, it does not have the cluttered “discount” look of a traditional House store but rather has the appearance of the typical soft homewares stores with which the consumer is aware, such as BBNT or Adairs.

518    I consider that when the conduct is viewed as a whole, in the immediate and broader contexts identified above, the reasonable consumer coming across a House B&B store for the first time would question whether there was some kind of association between the two well-known brands; that perhaps House had merged with BBNT or taken it over.

519    Whilst the effect of the conduct may dissipate over time as consumers learn that there is no association between House B&B and BBNT, and that House B&B is actually a House sub-brand, there are likely to be consumers who have been enticed into the House B&B store in the belief that it has some association with BBNT. I consider that any confusion that may arise is more than “merely transitory or ephemeral” or “likely to be readily or quickly dispelled” (see State Street at [713] and [716] (per Beach J)) but rather may have, on occasion, led a consumer to purchase products from House B&B in the mistaken belief that it was a BBNT, or BBNT-related, store.

520    I am fortified in my conclusion that the reasonable consumer may be caused to wonder (see Self Care at [70]–[71]) whether there is an association between House B&B and BBNT by the existence of the evidence that consumers actually did question whether there was such an association. That evidence included the following examples:

(a)    Following the distribution of flyers advertising the opening of the House B&B store in Chadstone on 29 October 2021, Ms Erdossy (an employee at BBNT Chadstone) said that she served about five or six customers that day who referred to, or sought to rely upon, the leaflet. Four of those customers told Ms Erdossy that they thought BBNT and House B&B were part of the same group, or asked if they were.

(b)    Ms van der Plight gave evidence of a telephone conversation on 11 June 2021 with a caller who asked if BBNT were “BED & BATH” and when told “we are BED BATH N’ TABLE and they are House BED & BATH”, the caller said something like “that's very confusing” and “but you're the same company”.

(c)    Ms van der Plight also gave evidence of a telephone conversation with a lady wanting to place an order who said she was out the front of the store. However, the lady was, in fact, outside a House B&B store. The lady asked Ms van der Plight why BBNT and House B&B have such similar names if they were not the same company.

(d)    Ms Tabe gave evidence that on 2 November 2021, a customer called and asked when the Bessemer products are going off sale. When she was told that BBNT did not sell Bessemer products, she asked if they were House B&B and then said,Are you related to House BED & BATH?”.

521    Although I give the alleged confusion evidence relied upon by BBNT very little weight on its own, these examples of confusion strengthen the inference I have independently reached that GRBA’s conduct was misleading or deceptive: see SGIC at 529 (French J); Homart at [32] (per Burley J).

522    Accordingly, I am satisfied that by adopting the name House B&B and launching the first House B&B store in May 2021 at Doncaster shopping centre, GRBA engaged in misleading and deceptive conduct contrary to s 18(1) of the ACL and made false and misleading representations that House B&B stores were somehow associated or affiliated with BBNT contrary to s 29(1)(g) and (h) of the ACL.

9.    PASSING OFF

523    BBNT submits that findings can be made as to passing off based on the same facts as identified in respect of the ACL claim. It contends that by virtue of that conduct, BBNT has likely suffered damage to its reputation and diversion of its business (the precise amount which can be later quantified in a quantum hearing).

524    GRBA contends that BBNT's passing off claim fails for the same reasons that BBNT’s misleading and deceptive conduct claim fails, and relies on the same line of authorities referred to at [502] and the comments of Stephen J in Hornsby to support its argument.

9.1    Principles

525    The elements for the tort of passing off are well established. The tort of passing off involves three core concepts: reputation, misrepresentation and damage”: Stone and Wood Group Pty Ltd v Intellectual Property Development Corp Pty Ltd (2018) 129 IPR 238 at [82] (per Allsop CJ, Nicholas and Katzmann JJ) citing ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 23 IPR 193 at 246–7 (per Gummow J). As the Full Court said in Stone and Wood at [83], the tort protects the right of property in business, goodwill or reputation: see also Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 72 IPR 261 at [98] (per Black CJ, Emmett and Middleton JJ); ConAgra at 231 (per Lockhart J).

526    Beach J summarised the elements of the tort of passing off in State Street at [748]:

(a)     first, the existence of a reputation, at the time of the respondent’s impugned conduct, in the mind of the relevant purchasing class for the applicant’s goods or services;

(b)    second, a misrepresentation by the respondent, whether intentional or inadvertent, that its goods or services are those of the applicant; and

(c)    third, that the applicant has suffered or is likely to suffer damage.

527    The tort of passing off and misleading and deceptive conduct are closely related and are often considered together as overlapping claims. However, as the Full Court explained in Cadbury at [98]:

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.

528    O’Bryan J in Urban Alley, citing Flexopack and Hornsby, made a similar point at [233]:

While ss 18 and 29 have a broader operation than passing off, as a practical matter, where the facts of a case are said to amount to passing off, the principles applicable to that cause of action offer guidance in relation to the application of ss 18 and 29

529    It is well established that, although both claims generally run together, an ACL claim has broader application and is generally easier to establish than a passing off claim. The key distinction being that, unlike in passing off, reputation is not an element of the statutory cause of action under the ACL, even though it may be relevant: see In-N-Out Burgers, Inc v Hashtag Burgers Pty Ltd (2020) 150 IPR 73 at [182] (per Katzmann J); Cadbury at [99] (per Black CJ, Emmett and Middleton JJ). Of course, in a case like this where the reputation of the applicant is not an issue, that distinction is irrelevant.

9.2    Consideration

530    Both parties accepted that where the Court is satisfied that the conduct of GRBA is misleading or deceptive (or likely to be so), the same conclusion follows in respect of passing off. That acknowledgment is consistent with the authorities discussed above in a case such as this where the reputation of the applicant is not in dispute. I am satisfied that the three elements of passing off have been established.

531    First, there was no dispute that BBNT has acquired a substantial reputation in the BBNT marks and BBNT name. As Mr Lew himself acknowledged, BBNT is a “very prominent and successful brand” and “very well established in the market”.

532    Second, given my conclusions above with respect to the ACL claim, I am satisfied that GRBA made a misrepresentation that House B&B is associated with BBNT.

533    Finally, once it is accepted that GRBA’s conduct has likely misled or deceived consumers into thinking that House B&B stores are operated by, or otherwise associated with, BBNT, there is at least a likelihood of damage to BBNT in the form of diversion of business by reason of the misrepresentation of trade association.

10.    NEW ZEALAND CASE

534    Following the conclusion of the hearing, I made orders permitting the parties to provide short supplementary submissions on the relevance of Brands Ltd v Bed Bath ‘N’ Table Pty Ltd (2023) 174 IPR 261. This recent decision of the New Zealand High Court concerned an application by Brands Ltd, who trades as BED BATH & BEYOND, which alleged that BBNT had engaged in trade mark infringement, passing off and breach of the Fair Trading Act 1986 (NZ) by its use of BED BATH ‘N TABLE. I do not consider that this case is relevant to the current matter because, among other things, it concerned different facts, evidence, and statutory contexts. As such, it is unnecessary to further address the case or those submissions of the parties.

11.    CONCLUSION

535    BBNT was ultimately only partially successful. For the reasons given above, I am not satisfied that GRBA engaged in trade mark infringement.

536    However, a different conclusion follows with respect to misleading and deceptive conduct and passing off. It is the reputation of BBNT, which could not be considered in assessing trade mark infringement, that is crucial in leading to a conclusion that GRBA engaged in misleading and deceptive conduct in circumstances where the House B&B mark was not found to be deceptively similar to the BBNT mark. Further, although GRBA may have not set out with an intention to deceive or confuse consumers, it was wilfully blind as to the prospect of confusion arising from the adoption of a name that appropriated two words from one of its largest competitors. GRBA was simply unable to undermine the obvious inference that was open that GRBA borrowed the words “bed” and “bath” from BBNT’s name in order to attract customers from BBNT, and that such borrowing was “fitted for [that] purpose and therefore likely to deceive or confuse consumers: Australian Woollen Mills at 657 (per Dixon and McTiernan JJ); Sydneywide at [117] (per Weinberg and Dowsett JJ).

537    BBNT sought to be heard separately on the issue of relief. Accordingly, I will make orders for the provision of a further hearing on relief if the parties cannot agree on orders to reflect these reasons. The issue of costs of the proceeding should also be dealt with at that stage if no agreement can be reached.

12.    FINAL NOTE

538    Before I finish, I note that we lost three much loved fathers/fathers-in-law/grandfathers during the trial. I again extend my condolences to the lawyers and appreciate the resilience of the legal teams that enabled the evidentiary part of the trial to continue and be completed in December 2022. It was for this reason that closing submissions were adjourned until late March 2023.

I certify that the preceding five hundred and thirty-eight (538) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rofe.

Associate:

Dated:    14 December 2023