FEDERAL COURT OF AUSTRALIA

Hemmes Trading Pty Limited v Establishment 203 Pty Ltd [2024] FCA 1100

ORDERS

THE COURT DECLARES THAT:

1.    The respondent has, by using ESTABLISHMENT 203 in relation to restaurant services:

(a)    infringed Australian registered trade mark number 876753 for the word ESTABLISHMENT pursuant to s 120 of the Trade Marks Act 1995 (Cth); and

(b)    contravened ss 18 and 29 of the Australian Consumer Law as set out in Schedule 2 to the Competition and Consumer Act 2010 (Cth).

THE COURT ORDERS THAT:

2.    The respondent, whether by itself, its employees, servants, agents or otherwise, be permanently restrained from the day which is 30 days after the date of these orders from using, or procuring or acting in concert with others to use:

(a)    ESTABLISHMENT 203; and

(b)    any other mark which is substantially identical thereto;

    in relation to any restaurant, café, bar, hotel or function services.

3.    The cross-claim be dismissed.

4.    The respondent pay the applicant’s costs of the proceedings, including the cross-claim.

5.    The proceedings be listed for case management in relation to the remaining questions for determination on 11 October 2024.

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

REASONS FOR JUDGMENT

JACKMAN J:

Introduction

1    The applicant is the owner of the trade mark consisting of the word ESTABLISHMENT (Trade Mark No 876753) in Classes 9, 25, 41 and 42, which include restaurant, bar and hotel services. The application for that trade mark was filed on 23 May 2001, being the priority date. The trade mark ESTABLISHMENT has been used since September 2000 in respect of a multi-level restaurant, bar and hotel business located at 252 George Street, Sydney. Its launch coincided with the Sydney Olympic Games. Between 23 May 2001 and July 2009, the registered owner of that mark was a related entity of the applicant, Justin John Enterprises Pty Ltd (JJE), which assigned the mark to the applicant in July 2009. The applicant is part of the Merivale group of companies which operates more than 80 restaurants, bars, pubs, hotels and function spaces in Australia.

2    The respondent operates a restaurant at 6 Marshall Street, Fortitude Valley, Queensland in the Brisbane Metropolitan area, under the name ESTABLISHMENT 203, which opened in November 2023. The respondent is part of the Stanbroke group of companies, which runs a family-owned beef business in Queensland and owns cattle stations and the cattle that graze on them, a large feedlot, a distribution business, two butcher shops, and an abattoir at Grantham where it processes its cattle into beef. The abattoir was given the establishment number 203 by the Australian Government in about 1997 under the system in which all abattoirs certified by the Australian Government are given an establishment number which must be displayed on every meat product that leaves the country. All of the meat that is produced by Stanbroke’s abattoir is marked with “EST 203” or “203”, and that establishment number also appears on all the export health certificates which accompany export purchases from the abattoir.

3    The proceedings concern claims by the applicant for alleged trade mark infringement and contraventions of ss 18 and 29 of the Australian Consumer Law, being Schedule 2 to the Competition and Consumer Act 2010 (Cth) (ACL). A claim for the tort of passing off was ultimately not pressed. The respondent has filed a cross-claim seeking cancellation of ESTABLISHMENT as a trade mark under s 88(2)(a) of the Trade Marks Act 1995 (Cth) (TMA) on two grounds, namely that the mark was not capable of distinguishing the applicant’s services from restaurant services provided by others at the priority date pursuant to s 41 of the TMA, and that the applicant was not the owner of the mark at the priority date pursuant to s 58 of the TMA.

4    It is convenient to deal first with the cross-claim for cancellation of the applicant’s mark, before turning to the applicant’s claim for trade mark infringement and for contravention of the ACL.

Salient facts in relation to the Cross-Claim

Use of “establishment” generally

5    The respondent submits, and I accept, that dictionary definitions of “establishment” show that its ordinary meaning is relevantly a business or a place of business.

6    Consistently with the ordinary meaning of the word, the respondent relies on evidence that “establishment” was used by other businesses offering restaurant services before the priority date. A business called “The Establishment Restaurant and Supper Room” was advertised on one occasion in The Age in 1989, offering dinner and late night suppers, with an address in East Melbourne (CB4/1517), and was listed in the Melbourne Metropolitan White Pages telephone directory in 1988, 1989 and 1990. I infer that a restaurant business of that name operated from 1988 to 1990 in Melbourne. Another business called “The Establishment Club Restaurant” had a business name registration in South Australia from May 1983 until it was de-registered on 23 May 1989, and was listed in the Adelaide White Pages in 1983, 1984 and 1986. I infer that such a business operated as a restaurant in the period 1983–86. A business called “The Establishment Cocktail Bar” was listed in the Melbourne Metropolitan White Pages in 1990 with an address in Moonee Ponds, and I infer that such a business operated under that name in 1990.

7    The respondent also relies on evidence showing businesses offering restaurant services using the word “establishment” in their names after the priority date as evidence that traders would also have wanted to use the word as at the priority date. For example, a business called “The Establishment Coffee Co Pty Ltd” was registered on 17 June 2011, and its website indicates that it is currently trading as a coffee shop in Arundel in Queensland that sells wholesale coffee products with the words “The Establishment” printed on them. Another business is operated by a company known as “The Establishment 1858 Pty Ltd”, registered on 3 July 2014, and its Facebook page indicates that it was trading as an events centre and restaurant in Hahndorf in South Australia until 2015. Further instances are referred to below in relation to the issue of infringement by reason of deceptive similarity.

8    The respondent also relies on multiple instances of the word “establishment” being used by the news media and entertainment media to refer to businesses offering restaurant services before the priority date.

Use of “Establishment” by the applicant and JJE

9    The property at 248–252 George Street, Sydney, where the applicant conducts its ESTABLISHMENT restaurant, bar and hotel business, was purchased by JJE in mid-1998. The property had been damaged by two fires, and was redeveloped before opening for business in September 2000. In 1999, during those construction works, the name ESTABLISHMENT was displayed on a large billboard hoarding on the George street frontage of the building.

10    The opening of the ESTABLISHMENT restaurant, bar and hotel coincided with the Sydney Olympic Games. Mr Ellem, who gave evidence for the applicant, was working at ESTABLISHMENT at that time, and still works there on Friday and Saturday nights. His role as a host involves standing outside the entrance on George Street and meeting and greeting customers when they arrive at the ESTABLISHMENT precinct, and if necessary escorting them to the venue they wish to attend within the precinct. He typically asks customers where they are from, and many of them are from outside New South Wales. During the Olympic games, he witnessed thousands of people attending the ESTABLISHMENT precinct, with the venue operating at capacity every night and customers queuing down George street to get in. Mr Ellem saw many Olympic athletes visiting ESTABLISHMENT.

11    Mr Tynan, who also gave evidence for the applicant, worked as the manager of the ESTABLISHMENT bar from its opening until 2013. In that role, he interacted with customers every night and often asked where they were from, recalling that they comprised locals as well as national and international tourists. Like Mr Ellem, Mr Tynan observed that the venue was operating at capacity most weekends, and he frequently observed patrons queuing to get into ESTABLISHMENT. He gave evidence that the venue was constantly operating at capacity during the Olympic games. The conditions of the development application approval granted on 10 April 2000 show that the capacity permitted was initially 3,530 (CB3/1412–3), and the evidence is that the current capacity is 3,400.

12    Given the size of the total venue capacity at any one time, and taking into account the turnover of patrons during the course of each day’s trading, I infer that tens of thousands of patrons attended ESTABLISHMENT during the two week period of the Sydney Olympic Games. During the following eight months until the filing of the trade mark application on 23 May 2001, with the venue operating at capacity most weekends, I infer that the total patronage at the ESTABLISHMENT venue was in the hundreds of thousands. It follows that there was a very substantial number of patrons attending ESTABLISHMENT, not only from Sydney but from other parts of Australia and overseas. Most of those patrons are likely to have known that the name of the venue was ESTABLISHMENT before they attended and are likely to have referred to that name in making their arrangements to meet people there. Even if some of those patrons did not already understand that the name of the business was ESTABLISHMENT, they were likely to see that name displayed on external signage at the entrance to the venue on George Street and on the uniforms worn by bar and floor staff, as well as ESTABLISHMENT branded menus, coasters, pens, matches and business cards.

13    Both before and after the opening in September 2000, articles in newspapers circulating widely in Australia referred to the restaurant, bar and hotel business as “Establishment”, with the grammar and syntax consistent with that word operating as a proper noun. I infer from the articles referred to below that the authors and readers of those articles understood that “Establishment” was the brand name which identified that particular restaurant, bar and hotel business. The evidence, which has emphasis added, includes the following:

(a)    on 7 June 2000, an article published in The Daily Telegraph circulating in Sydney stated:

Chef Matthew Fleming of the award-winning CBD restaurant in the city is moving on – and up – to the Merivale Group’s massive new Establishment Hotel project … Establishment promises to be quite something else. The suites are in a new nine-storey tower, but the remainder has been re-built around the fire damaged ruins of the grand 104-year-old building. (CB3/1222);

(b)    on 18 September 2000, an article published in the Australian Financial Review (AFR) circulating Australia-wide stated:

The nearby Establishment is Sydney’s fourth Hemmes hotel. (CB1/364);

(c)    on 24 November 2000, another article in the AFR stated:

It might be the haunt of Sydney’s new money set, but the Hemmes family’s Establishment bar played host to the old economy on Wednesday night. (CB1/369);

(d)    on 25 November 2000, an article was published in the “Sydney Confidential” column in The Daily Telegraph newspaper circulating in Sydney entitled “ESTABLISHED NEW HOT SPOT” and stating:

Comedian Jimeoin and (dis)gracefully ageing rocker Billy Thorpe hammed it up for the cameras and for themselves at Establishment this week – but they are not the only stars to grace the hip new hotel on George Street. (CB3/1225);

(e)    on 26 November 2000, an article was published in the social pages of The Daily Telegraph newspaper stating:

Also mid-week was a party hosted by Bvlgari at Establishment, fast becoming the place to launch just about anything. (CB3/1224);

(f)    on 2 December 2000, an article was published in The Daily Telegraph newspaper stating:

But the decadent attitude fizzled, with guests turning into pumpkins by 10pm – although some continued on to Hemmesphere at The Establishment (CB3/1221);

(g)    on 9 December 2000, an article published in The Australian newspaper circulating Australia-wide stated:

The Establishment is clearly the hip and happening place, judging by the long queues of super-cool women and good-looking wannabes waiting to get in on a Friday night … Manager Dave Champ says that The Establishment has 14 bars to suit every taste. Rock star Sting was a recent frequent visitor, as was American crooner Barry White … “I am a real fan of Hemmes’s bars. I still use the Slip Inn and CBD, which he owns, but right now The Establishment is the place,” says regular Denis Gibbs. The real action is at the main bar on the ground floor. By 9pm on Thursday there were at least 800 people at the bar (CB3/1214);

(h)    on 10 December 2000, an article published by The Daily Telegraph stated:

And not forgetting the party for the much-anticipated Mario Testino-photographed annual Pirelli calendar – a must have for many hetero men, judging by the crowd in The Establishment. (CB3/1219);

(i)    on 16 December 2000, an article in the AFR stated:

Young brokers, bankers and traders all crush into the Establishment Hotel (George Street) which, when devoid of patrons is so white-on-white you might be in the isolation ward of a tropical diseases hospital. Still, against this calm backdrop, from 6pm it becomes a vast crush. (CB1/370);

(j)    on 20 January 2001, an article in The Courier Mail circulating in Brisbane stated:

Post-Olympics, Sydney still has a lot to offer writes Brendan O’Malley. It was clear I was not the sort of person likely to be invited to dine at the Establishment Hotel’s ultra-exclusive Hemmesphere restaurant … Downstairs the elegant Establishment bar was still winding up for the evening. As we wandered past later that night it was obvious you had to be very persuasive or patient to get in even here, judging from the long queue of suits and cocktail dresses waiting outside. (CB1/374);

(k)    on 18 February 2001, an article in the Sunday Herald Sun circulating in Melbourne stated:

Chatting to Justin Hemmes in Melbourne this week – about his new Sydney CBD hotel, Establishment. (CB3/1235); and

(l)    on 11 March 2001, an article in the Sun-Herald circulating in Sydney stated:

First stop was The Establishment on Sydney’s George Street. The newest club on the block also has one of the coolest private lounges around. Those in the know have been catching the lifts to level four to Hemmesphere … According to Robert Ian Bonnick, VIP Manager at Tank nightclub, also at Establishment, the concept of an exclusive reserved area is still fairly new in Sydney … (CB3/1230)

14    The 2001 edition of the “Sydney Morning Herald Café & Bar Guide”, published in May 2001 (CB3/1236A), similarly used the word “Establishment” to identify this particular restaurant, bar and hotel business, stating (CB3/1238):

Establishment

IF YOU don’t mind being half squashed to death by a million young stockbrokers all shouting into mobile phones trying to find each other, then Establishment could be for you. To be fair, it’s only this unbearable on Friday and Saturday nights as the CBD hordes queue to pack themselves into this enormous hotel, bar and restaurant theme park to be served by gorgeous young staff with Ben Sherman shirts and don’t-mess-with-me attitudes ….

As the applicant submits, this publication demonstrates the word ESTABLISHMENT alone serving to distinguish this particular bar and restaurant business from all the other bar and restaurant businesses listed in the publication.

15    The applicant submits, and I accept, that many of the articles referred to ESTABLISHMENT without providing any other context, such as the address or other information to identify that particular restaurant, bar and hotel from other restaurants, bars or hotels. I infer that the journalists writing those articles were confident that their readers would read and understand that a reference to an event reported to be taking place at ESTABLISHMENT was a reference to an event at that particular venue and not some other restaurant, bar and hotel business. In addition, the applicant submits, and I accept, that many of those newspaper articles referred to the other bars and restaurants (apart from the Establishment bar itself) within the ESTABLISHMENT complex or precinct, such that by the priority date, consumers were educated to know that a reference to ESTABLISHMENT included a reference to the other constituent parts of that venue, such as Tank Nightclub or Hemmesphere.

Section 41: Was ESTABLISHMENT capable of distinguishing the applicant’s services as at the priority date?

16    At the time of filing and acceptance of the trade mark application for ESTABLISHMENT the applicable version of s 41 of the TMA was the form it took before the amendments made by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth) as follows:

41 Trade mark not distinguishing applicant’s goods or services

(1)    For the purposes of this section, the use of a trade mark by a predecessor in title of an applicant for the registration of the trade mark is taken to be a use of the trade mark by the applicant.

Note 1:     For applicant and predecessor in title see section 6.

Note 2:    If a predecessor in title had authorised another person to use the trade mark, any authorised use of the trade mark by the other person is taken to be a use of the trade mark by the predecessor in title (see subsection 7(3) and section 8).

(2)    An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant’s goods or services in respect of which the trade mark is sought to be registered (designated goods or services) from the goods or services of other persons.

Note: For goods of a person and services of a person see section 6.

(3)    In deciding the question whether or not a trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons, the Registrar must first take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons.

(4)    Then, if the Registrar is still unable to decide the question, the following provisions apply.

(5)    If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons but is unable to decide, on that basis alone, that the trade mark is capable of so distinguishing the designated goods or services:

(a)     the Registrar is to consider whether, because of the combined effect of the following:

(i)    the extent to which the trade mark is inherently adapted to distinguish the designated goods or services;

(ii)    the use, or intended use, of the trade mark by the applicant;

(iii)    any other circumstances;

the trade mark does or will distinguish the designated goods or services as being those of the applicant; and

(b)    if the Registrar is then satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons; and

(c)    if the Registrar is not satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken not to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons.

Note 1:     For goods of a person and services of a person see section 6.

Note 2:     Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8).

(6)    If the Registrar finds that the trade mark is not inherently adapted to distinguish the designated goods or services from the goods or services of other persons, the following provisions apply:

(a)    if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it does distinguish the designated goods or services as being those of the applicant—the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons;

(b)    in any other case—the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons.

Note 1:     Trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate:

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

(b)     the time of production of goods or of the rendering of services.

Note 2:     Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8).

17    As Branson J noted in Blount Inc v Registrar of Trade Marks (1998) 83 FCR 50 at 55–6, by enacting the TMA in 1995, Parliament intended to effect a change in the law concerning distinctiveness, and to give effect to the following recommendation in the report of the working party engaged to review the trade marks legislation entitled Recommended Changes to the Australian Trade Marks Legislation (AGPS, July 1992) at p 41:

… it is presently possible to establish that a mark is distinctive in fact and yet it will be held in law to be not registrable, as there is a requirement that a mark possess some degree, however small, of inherent adaptedness to distinguish. Marks falling into this category are typically geographical names and laudatory or descriptive words, and therefore likely to be used by other traders in the legitimate description of their goods or services.

Once a particular trader can show, for example, that a word is distinctive in fact of his products, then it should not legitimately be used as a trade mark by a competitor. A competitor should, however, be entitled to make bona fide use of the word in its descriptive sense.

18    That recommendation is reflected in subss 41(5) and (6). The last sentence of the recommendation extracted above is reflected in the defence provided by s 122(1)(b).

19    Justice Branson in Blount also observed, consistently with the observations of Gummow J in Oxford University Press v Registrar of Trade Marks (1990) 17 IPR 509 at 525–6, that the concept of adaption to distinguish looks forward to the consequences of a grant of registration and was central to s 26 of the Trade Marks Act 1955 (Cth), but is not reflected in s 41 of the TMA, which is concerned with capacity to distinguish. Branson J observed that, as s 41(6)(a) makes plain, a trade mark which is not to any extent inherently adapted to distinguish may nonetheless be treated under the TMA as capable of distinguishing if, by reason of past use, it does in fact distinguish.

20    The applicant accepts that the English word “establishment” has an ordinary signification that refers to a business or a place of business, and does not contend that ESTABLISHMENT was so inherently adapted to distinguish that it ought to have been registered under s 41(3) without recourse to either s 41(5) or (6).

21    The applicant submits that ESTABLISHMENT was correctly registered under s 41(5), on the basis that ESTABLISHMENT is at least “to some extent” inherently adapted to distinguish the trade mark applicant’s restaurant, bar and hotel services, and the use and intended use of that mark as at 23 May 2001 was such that the mark did or would distinguish its owner’s restaurant, bar and hotel services from those of other traders. I accept that ESTABLISHMENT is “to some extent” inherently adapted to distinguish, but not to the extent sufficient to accept the mark for registration without evidence of use. When presented in isolation as ESTABLISHMENT, in a context which indicates that it is being used as a proper noun as the name of a restaurant, bar or hotel, as distinct from the normal grammar and syntax in which the noun “establishment” is usually used, that word is at least to some extent capable of being understood as a brand for that restaurant, bar or hotel, rather than merely describing the fact that it is a business or place of business offering such hospitality services. The applicant submits, and I accept, that the fact that the mainstream media so quickly began using ESTABLISHMENT alone to identify and distinguish a particular restaurant, bar and hotel business supports the conclusion that ESTABLISHMENT was at least “to some extent” inherently adapted to distinguish. Ultimately, as the registration is sought to be supported under either s 41(5) or (6) by reference to actual use, it does not make much (if any) practical difference whether ESTABLISHMENT was not at all inherently adapted to distinguish (which would then call for the application of s 41(6)) or “to some extent” inherently adapted to distinguish (which would call for the application of s 41(5)).

22    Turning then to the question of acquired distinctiveness of ESTABLISHMENT as at 23 May 2001, Branson J noted in Blount (at 60) that the question to be considered (in that case under s 41(6)) is entirely one of fact, and does not involve consideration of the question whether the trade mark is one “which other traders are likely, in the ordinary course of their businesses and without any improper motive, to desire to use upon or in connection with their goods” (referring to the principle stated in FH Faulding & Co Ltd v Imperial Chemical Industries of Australia & New Zealand Ltd (1965) 112 CLR 537 at 555 (Kitto J, with whom Barwick CJ and Windeyer J agreed)). That principle was concerned with the issue of whether a word is adapted to distinguish one trader’s goods from the goods of all others, not with the issue of whether the trade mark does in fact distinguish one trader’s goods from the goods of all others, as Gummow J pointed out in Oxford University Press v Registrar of Trade Marks at 525.

23    Given that the word ESTABLISHMENT has a descriptive character, the question is whether there is a sufficient degree of distinctiveness to counterbalance the descriptive character of the word, in the sense that as at 23 May 2001 a significant number of consumers in the relevant market identified the trade mark applicant’s services as coming from one trade source, such that the word ESTABLISHMENT had a new and secondary meaning different from its primary descriptive one and thus had ceased to be purely descriptive: Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326 at 336 (Lockhart J); cited with approval by the Full Court in Primary Health Care Limited v Commonwealth [2017] FCAFC 174; (2017) 260 FCR 359 at [357] (Rangiah J, with whom Greenwood and Katzmann JJ agreed) and Henley Constructions Pty Ltd v Henley Arch Pty Ltd [2023] FCAFC 62; (2023) 297 FCR 353 at [131] (Yates, Rofe and McElwaine JJ). I note that Emmett J in Cantarella Bros Pty Ltd v Modena Trading Pty Ltd [2013] FCA 8; (2013) 99 IPR 492 at [108] also said that there must be a sufficient degree of distinctiveness to “counterbalance” the descriptive character of a word. In the High Court appeal in that case, French CJ, Hayne, Crennan and Kiefel JJ spoke in similar terms of the primary or ordinary signification of a word being “eclipsed”: Cantarella Bros Pty Ltd v Modena Trading Pty Ltd [2014] HCA 48; (2014) 254 CLR 337 at [57].

24    As the question is one of fact, there is no intrinsic reason why an eight month period of use (in the present case from September 2000 to May 2001) could not be sufficient to establish acquired distinctiveness. While that period is relatively short, the extent of use in that period was very significant in terms of total patronage, which I have inferred was likely to have been in the hundreds of thousands of customers. Moreover, the customers were not drawn only from a narrow geographical area, but included a substantial number of visitors to Sydney from other parts of Australia and from overseas. The ESTABLISHMENT venue was the subject of numerous reports in newspapers circulating throughout Australia, which referred to the word “Establishment” as a proper noun, designating the name of a particular business, and thus possessing the character of a brand which distinguished one particular restaurant, bar and hotel business from other similar businesses. I infer that the authors and readers of those articles would have understood the word to refer to a particular bar and restaurant business, and as distinguishing that particular business from others.

25    The respondent submits that the evidence of newspaper reports and the “Sydney Morning Herald Café & Bar Guide” do not support a conclusion of acquired distinctiveness because they are not uses of the mark by the applicant, and therefore do not fall within the kind of evidence to which s 41(5) or (6) is directed. I reject that submission. The newspaper reports provide evidence of third parties’ perceptions of “Establishment” as the name identifying the particular business operated from September 2000 to May 2001 by JJE. The applicant submits, and I accept, that such evidence of third parties’ perceptions is akin to the evidence from consumers, wholesalers and retailers which was relied upon by Branson J in Blount (at 62) to find that the trade mark OREGON in that case had acquired a meaning which identified a range of power cutting equipment from a particular supplier. Similarly, evidence of third-party dealers, traders and consumers was taken into account in support of conclusions that the marks in question had acquired factual distinctiveness to satisfy s 41(5) or (6) respectively in Goodman Fielder Pte Ltd v Conga Foods Pty Ltd [2020] FCA 1808; (2020) 158 IPR 9 at [242], cross-referring to [139] (Burley J, albeit in obiter dicta); and in Philmac Pty Ltd v Registrar of Trade Marks [2002] FCA 1551; (2003) 126 FCR 525 at [74] (Mansfield J). The respondent draws attention to the reasoning in Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93; (2018) 261 FCR 301 at [164] (third bullet point) (Perram J, with whom Allsop CJ and Markovic J agreed), referring as a circumstance adverse to a finding of factual distinctiveness that most of the use of the disputed mark in that case was by other persons in various articles. However, the question is one of fact which must depend on the particular circumstances of each case.

26    Accordingly, in the present case, the evidence establishes that by 23 May 2001, ESTABLISHMENT did in fact distinguish the trade mark applicant’s restaurant, bar and hotel services from the same type of services provided by other traders, such that it was properly registrable under s 41(5). Even if I had been of the view that ESTABLISHMENT was not at all inherently adapted to distinguish, I would have held that, because of the extent to which the trade mark applicant had used the trade mark before 23 May 2001, it did distinguish the designated services as being those of the trade mark applicant within the meaning of s 41(6). I therefore reject the respondent’s contention that the registration of ESTABLISHMENT should be cancelled on the ground that it did not distinguish the trade mark applicant’s services within the meaning of s 41.

Section 58: Was JJE the owner of the trade mark ESTABLISHMENT as at the priority date?

27    This ground of cancellation is raised in the alternative to the s 41 ground. The respondent contends that three other traders used substantially identical marks in relation to restaurant services before 23 May 2001, such that JJE was not the owner of ESTABLISHMENT as at the priority date and was therefore not entitled to registration. I have referred above to the three traders in question, namely:

(a)    “The Establishment Restaurant and Supper Room”, which I have inferred operated as a restaurant in Melbourne from 1988 to 1990;

(b)    “The Establishment Club Restaurant”, which I have inferred operated as a restaurant in Adelaide from 1983 to 1986; and

(c)    “The Establishment Cocktail Bar”, which I have inferred operated as a cocktail bar in Melbourne in 1990.

28    The principles applicable to ownership of a trade mark which are relevant to the present case are as follows:

(a)    the first person to use a mark in Australia in respect of particular goods or services is the owner of the mark with respect to those particular goods or services: Shell Company of Australia Ltd v Rohm and Haas Company (1949) 78 CLR 601 at 626–9 (Dixon J); Riv-Oland Marble Co (Vic) Pty Ltd v Settef SpA (1988) 19 FCR 570 at 601 (Lockhart J);

(b)    a person’s ownership of a trade mark will usually extend not only to the goods or services in relation to which he or she has used or proposes to use the mark, but also to other goods or services that are of the same kind: Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd [2018] FCAFC 6; (2018) 259 FCR 514 at [61] (Nicholas, Yates and Beach JJ);

(c)    ownership of a trade mark extends to trade marks which are substantially identical with it: Carnival Cruise Lines Inc v Sitmar Cruises Ltd (1994) 120 ALR 495 at 513 (Gummow J);

(d)    the issue whether a mark is substantially identical with another for the purpose of ascertaining ownership is to be approached in the same way as Windeyer J explained in Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 414 in applying the concept of marks being “substantially identical” to questions of infringement, namely the marks should 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 trade mark and the total impression of resemblance or dissimilarity that emerges from the comparison: Carnival Cruise Lines Inc v Sitmar Cruises Ltd at 513 (Gummow J);

(e)    the prior use of a trademark which is sufficient to establish ownership of the mark need not be such as to establish general market reputation of the distinctiveness of the mark: Riv-Oland at 571 (Bowen CJ), citing (among other cases) Thunderbird Products Corporation v Thunderbird Marine Products Pty Ltd (1974) 131 CLR 592 at 601–2 (Jacobs J) and Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 156 CLR 414 at 432 (Deane J, with whom Gibbs CJ and Mason, Wilson and Dawson JJ agreed);

(f)    once ownership has been acquired, it can be lost only upon some established general law basis such as estoppel, acquiescence or abandonment: Riv-Oland at 571 (Bowen CJ);

(g)    abandonment of a trade mark depends on an intention to abandon the mark, and mere non-use (or slightness of use) in circumstances where an intention to abandon cannot be inferred is insufficient: Mouson & Co v Boehm (1884) 26 Ch D 398 at 405 (Chitty J); Riv-Oland at 572 (Bowen CJ); Malibu Boats West Inc v Catanese [2000] FCA 1141; (2000) 180 ALR 119 at [40]–[41] (Finkelstein J); and

(h)    whether there is an intention to abandon is to be inferred from the facts of the particular case, in relation to which the length of the period of non-user is a relevant matter: Mouson & Co v Boehm at 405 (Chitty J); cited with approval by Bowen CJ in Riv-Oland at 572.

29    Applying those principles in the present case, the following were used as trade marks for businesses operating as restaurants or bars in Australia (as the case may be) before 23 May 2001:

(a)    “The Establishment Restaurant and Supper Room”;

(b)    “The Establishment Club Restaurant’; and

(c)    “The Establishment Cocktail Bar”.

However, none of the owners of those businesses was the owner of the trade mark ESTABLISHMENT as at 23 May 2001 for the following two reasons.

30    First, none of the three earlier names is substantially identical with ESTABLISHMENT. I do not base that finding simply on the addition of the definite article in the three earlier names, noting that Gummow J did not regard the mere addition of the definite article as a material distinction in Carnival Cruise Lines Inc v Sitmar Cruises Ltd at 513. Each of the three earlier names involved not only the use of the definite article but also some additional words to create a composite phrase. The total impression conveyed by the side-by-side comparison of the whole of the marks used which is required by the authorities is not one of substantial identity.

31    Second, I infer from the circumstances of the case that each of the three prior uses was abandoned by their respective owners before 23 May 2001 with the requisite intention to abandon those names. I draw that inference from the following matters. First, there is no evidence of any use at all of any of those names between the end of 1990 and the priority date of 3 May 2001, being about a decade. Second, there is no evidence of any use of those names up to the present day, being a period of about 34 years since 1990. Third, by far the most likely explanation for the extremely long period of non-use is that those businesses had either closed down or changed their names by about the end of 1990, with the owners having no intention of resuming the business operations under those names, and having no ability to identify anyone who might have had such an intention and thus who might have wanted to take an assignment of any rights in those names.

32    Accordingly, I reject the respondent’s contention that the registration of ESTABLISHMENT should be cancelled on the ground that some person other than JJE owned that mark as at 23 May 2001 within the meaning of s 58. The cross-claim should be dismissed.

Trade Mark Infringement: Is ESTABLISHMENT 203 deceptively similar to ESTABLISHMENT?

33    The respondent has admitted on the pleadings that it is using ESTABLISHMENT 203 as a trade mark in Australia in relation to restaurant services. The only issue in dispute for trade mark infringement under s 120(1) of the TMA is whether ESTABLISHMENT 203 is deceptively similar to ESTABLISHMENT.

34    The principles concerning deceptive similarity as stated by the High Court in Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8; (2023) 408 ALR 195 may be summarised as follows:

(a)    the resemblance between the two marks must be the cause of the likely deception or confusion: [26];

(b)    in the trade mark comparison, the marks must be judged as a whole taking into account both their look and their sound: [26];

(c)    the marks should not be compared side by side: [27], [29];

(d)    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 (or services), then similarities both of sound and of meaning may play an important part: [27];

(e)    the focus is upon the effect or impression produced on the mind of potential customers of the goods (or services) in relation to which the two marks are used and in the case of the registered mark, allowing for “imperfect recollection”: [28]-[29];

(f)    the notional buyer is a person with no knowledge about any actual use of the registered mark, the actual business of the owner of the registered mark, the goods the owner produces, any acquired distinctiveness from the use of the marks prior to filing, or any reputation associated with the registered mark: [28];

(g)    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 or services covered by the registration), with the impression that the notional buyer would have of the alleged infringer’s mark (as actually used): [29];

(h)    “deceived” implies the creation of an incorrect belief or mental impression; “causing confusion” may merely involve “perplexing or mixing up the minds” of potential customers: [30];

(i)    the usual manner in which ordinary people behave must be the test of what confusion or deception may be expected, having regard to the character of the customers who would be likely to buy the goods in issue: [31];

(j)    it is not necessary to establish actual probability of deception or confusion, but a mere possibility of confusion is not enough. There must a real, tangible danger of deception or confusion occurring. It is enough if the notional buyer would entertain a reasonable doubt as to whether, due to the resemblance between the marks, the two products come from the same source. Put another way, there must be “a real likelihood that some people will wonder or be left in doubt about whether the two sets of products … come from the same source”: [32];

(k)    evidence of actual confusion is of great weight, but not essential, and lack of such evidence may also be relevant: [30], [71]; and

(l)    any intention to deceive or cause confusion may be a relevant consideration but is not required: [30].

35    On a separate matter, it is also relevant to note that it is not necessary to establish that confusion persists up to the point of sale, or that actual purchasers will ultimately be deceived: Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 595–6 (Kitto J).

36    One way in which confusion may occur is if an ordinary consumer with an imperfect recollection is at risk of wondering, or being perplexed or mixed up, as to whether ESTABLISHMENT 203 might be a commercial extension, franchise or sub-brand of ESTABLISHMENT: Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd (1993) 42 FCR 227 at 230 (Burchett J); Goodman Fielder Pte Ltd v Conga Foods Pty Ltd [2020] FCA 1808; (2020) 158 IPR 9 at [344] (Burley J).

37    In comparing the marks to assess whether there is deceptive similarity, it is relevant to take into account the fact that the element of the mark that is common to both marks has been used by a number of traders and therefore must to some extent be discounted: Mond Staffordshire Refinery Co Ltd v Harlem (1929) 41 CLR 475 at 477–8 (Knox CJ, Gavan Duffy and Starke JJ); Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 49 FCR 89 at 127 (Gummow J); MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236 at 246 (Burchett, Sackville and Lehane JJ); connect.com.au Pty Ltd v GoConnect Australia Pty Ltd [2000] FCA 1148; (2000) 178 ALR 348 at [36], [57] and [64] (Emmett J). In addition, it is permissible to consider that an element of a trade mark that is descriptive may not tend to cause confusion about the source of a product (or service) because it calls to mind the nature of the product (or service), rather than its trade source, but each case must be considered on the basis of the marks in question: Combe International Ltd v Dr August Wolff GmbH & Co KG Arzneimittel [2021] FCAFC 8; (2021) 157 IPR 230 at [78] (McKerracher, Gleeson and Burley JJ).

38    In the present case, there is substantial evidence after the priority date showing that “establishment” is still a word used by other traders and consumers to refer to restaurant services. The evidence of use by other traders includes the following:

(a)    “The Establishment Bar Dubbo” is a bar in Dubbo, New South Wales. It has a business name, a website, a liquor licence, an entry in the Dubbo region directory, a Facebook page, and an Instagram page. There are also entries for the business in Tripadvisor and in the Australian Good Food Guide (CB5/2173–4).

(b)    A company called “'The Establishment 1858 Pty Ltd” was registered on 3 July 2014. It holds a liquor licence for premises in Handorf, South Australia. A Facebook page under that name (“The Establishment 1858”) indicates that it was trading as an events centre and restaurant until 2015. There is an entry for the business on a review site (CB4/1499).

(c)    A business called “The Establishment West End” operated as an Italian café in West End in Brisbane. There is a business name registration, a Yelp page, and an article about the café from The Weekend Edition (CB5/2172).

(d)    The Ivanhoe Hotel in Melbourne has a bar called “The Establishment Bar”, although that bar does not appear to operate as a standalone business (CB5/2173).

(e)    A company called “The Establishment Bar & Grill Pty Ltd” was registered on 24 August 2004 and de-registered in 2015, although there is no evidence of any trading (CB4/1498).

(f)    A business called “Grace the Establishment” posts content online that indicates it is operating as a bar and restaurant (CB4/1499, 5/2171).

(g)    Another trader filed a trade mark application for a logo for “The Establishment Restaurant” in 2006. The same trader also recorded the trading name “The Establishment Restaurant” against an ABN from 7 April 2006 to 3 May 2007. However there is no evidence of actual trading (CB4/1500).

(h)    A company called “The Establishment Bar and Grill Pty Ltd” has been registered in Victoria since 13 October 2021, although there is no evidence of actual trading (CB5/2170).

(i)    A company called “The Establishment Lounge Pty Ltd” was registered between 2004 and 2019. It had a Yelp page, which indicates it operated as a bar and restaurant in South Yarra, Melbourne (CB5/2170–1).

(j)    A company called “The Establishment Coffee Co Pty Ltd” has been registered since 2001. It owns the business name “The Establishment Coffee Company”. Its website and Instagram page indicate that it is a cafe located in Arundel in Queensland that also sells coffee products wholesale. The company has a registered trade mark for “The Establishment Nowhere Else” (CB5/2171–2).

(k)    “The Balkan Establishment” is a registered business name. The business has an active Facebook page and website, which indicate it is a cafe and restaurant in Surfers Paradise, Queensland (CB5/2172).

39    Consumers also use the word “establishment” themselves, to refer to businesses offering restaurant services. Searches of Tripadvisor, Yelp, and Open Table for reviews of hospitality venues using the word “establishment” returned thousands of results.

40    In the present case, ESTABLISHMENT 203 is plainly differentiated from ESTABLISHMENT by the addition of “203”. That differentiation has particular significance in circumstances where the word “establishment” has a strongly descriptive element, and is used by a number of other traders. The real question in the present case is whether the notional consumer would be confused as to whether that differentiation was between different brands used by the same owner, or between different brands used by different owners.

41    The addition of a number to the mark ESTABLISHMENT is not in itself determinative. If the respondent had used the mark ESTABLISHMENT 2 or ESTABLISHMENT 2.0, it would have conveyed that the business was a second emanation of the business known as ESTABLISHMENT, and that impression would have been so strong as to outweigh the descriptive aspect of the word “establishment”.

42    By contrast, the addition of “203” to ESTABLISHMENT would not convey any particular meaning or connotation to the notional consumer. It could be a street address, but would appear too high a number to identify a restaurant in a numerical sequence of restaurants conducted by a common owner or under a common franchise. Only a consumer who was unusually and deeply knowledgeable about the Queensland beef industry (such as an experienced buyer of exported beef) would think of an association with the abattoir registered as Establishment 203. The descriptive element of the word “establishment” might incline the notional consumer towards the view that the word “establishment” is such a natural choice in the name of a bar or restaurant that the addition of “203” is indicative of a separate business owner from ESTABLISHMENT. Thus, the notional consumer might assume that “203” is associated with such a separate owner, albeit in some way that he or she cannot identify. However, the notional consumer might equally wonder whether “203” has some association (in a way that he or she cannot identify) with ESTABLISHMENT, or whether “203” does not negative such association. The obscurity of the reference to “203” is likely to leave the doubt unresolved in the mind of the notional consumer.

43    Further, the inability of the notional consumer to attribute any meaning or connotation to the addition of “203” is likely to diminish the significance of that addition in his or her mind. The impression created by “203” would not be eliminated, but that impression would not sufficiently diminish the significance of the presence of “ESTABLISHMENT” to prevent the real risk of confusion. While the notional consumer would regard that word as having a strongly descriptive element, that aspect is not sufficient to negate as a real and tangible possibility causing some people reasonably to wonder, or be left in doubt about, whether the two marks might or might not be commercially related. I note that there is no evidence of any consumers actually being confused, despite ESTABLISHMENT 203 having operated for about nine months, however that is not determinative.

44    In sum, I find that ESTABLISHMENT 203 is deceptively similar to ESTABLISHMENT. In reaching that conclusion, I have focused on the particular circumstances of this case, consistently with the recent statement of the Full Court that observations in other cases about the application of the relevant principles to the facts of those cases cannot be elevated into inflexible rules of general application: Landrey v Nine Network Australia Pty Ltd [2024] FCAFC 76 at [74] (Wigney, Wheelahan and Feutrill JJ), citing Teubner v Humble (1963) 108 CLR 491 at 503 (Windeyer J). Contrary to the applicant’s submissions, I have not sought to derive from other cases and apply any proposition or presumption based on the whole registered mark having been incorporated in the respondent’s mark, or based on ESTABLISHMENT forming the first part of the respondent’s mark. As indicated above, I have taken into account that “203” has no well-understood meaning in relation to restaurant services, but I have not sought to draw any analogy with the particular facts of the cases relied upon by the applicant in that regard, namely Goodman Fielder Pte Ltd v Conga Foods Pty Ltd [2020] FCA 1808; (2020) 158 IPR 9 at [344]–[345] (Burley J); and Energy Beverages LLC v Cantarella Bros Pty Ltd [2023] FCAFC 44; (2023) 407 ALR 473 at [170] (Yates, Stewart and Rofe JJ).

Section 122(1)(a): Defence of good faith use of own name

45    The respondent relies on the defence in s 122(1)(a) which provides as follows:

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

(a)    the person uses in good faith:

(i)    the person’s name or the person’s place of business; or

(ii)     the name of a predecessor in business of the person or the name of the predecessor’s place of business …

The pleaded defence relies only on the use of the respondent’s own name, and does not rely on the use of the name of any predecessor in business.

46    Evidence in relation to this defence was given by Mr Menegazzo, the managing director of the respondent and the related entities which form the Stanbroke group of companies. References to paragraph numbers in the section which follows are to Mr Menegazzo’s affidavit of 11 June 2024.

47    The Stanbroke group of companies have often taken trade buyers on tours of its facilities in Queensland, which end with lunch or dinner at a restaurant that serves their beef (paras 25–26). In about 2018, Mr Menegazzo started thinking about the Stanbroke group starting its own restaurant to which it could take buyers and potential buyers, instead of taking them to restaurants operated by other people (para 28). In about 2021, when the group started looking for a new office, Mr Menegazzo looked for office space that could have a restaurant attached, and he found such a property in about 2022, and then spent another year developing it (para 29). The restaurant focuses very heavily (but not exclusively) on beef, and the only beef it sells is that of the Stanbroke group (para 31). Although Mr Menegazzo conceived of the idea of the restaurant so that it could be used to showcase the Stanbroke group’s beef to tour groups, the restaurant is also open to the public (para 35). However, Mr Menegazzo says that the Stanbroke group “are not restauranteurs” (para 36), and he regards the restaurant as an abnormal and unique part of the Stanbroke group’s business (T153.10–12).

48    In late 2021, Mr Menegazzo asked the Stanbroke group’s marketing team to come up with some names for the restaurant concept, and he did not want to use any of the brands that the group applies to its beef that is sold in supermarkets or in other restaurants (para 37). On 8 February 2022, he was given a piece of paper with a list of potential names, including Establishment 203 and Steakhouse 203 (para 38 and CB5/2037). Mr Menegazzo immediately chose Establishment 203, saying that it appeared to him to be the obvious name for the restaurant (para 39). Mr Menegazzo says the following (para 39):

It was a name that had been deeply connected to my business for decades. I knew that people in the beef industry would immediately recognise the name and would know it was connected to the Stanbroke Group. And for people who did not know us, I thought it was a cool name, and better once the connection to our beef was explained to them.

Using our establishment number as the name of our restaurant creates a clear connection between the restaurant and our abattoir, which is the key reason why we opened the restaurant. I wanted to leverage the connection between the abattoir and the restaurant to lift the reputation of both our restaurant and our beef.

49    Mr Menegazzo says that once he had chosen the name, he instructed the group’s lawyers to set up a company for the restaurant business using the name ESTABLISHMENT 203, and instead of creating a new company, they renamed one of the group’s dormant entities as Establishment 203 Pty Ltd (para 41). That entity was previously known as Odean Pty Ltd, and the change of name was made on 7 March 2022 (Ex A, tab 7), about a month after Mr Menegazzo had chosen the name of the restaurant.

50    When Mr Menegazzo chose the name ESTABLISHMENT 203 in February 2022, he knew that he had lawyers who had been assisting his corporate group for decades with trade mark matters (T159.1–3). The evidence shows that by February 2022, the Stanbroke group had at least 17 registered trade marks applications in Australia (Ex A, tabs 1 and 3) and 42 internationally (Ex A, tab 13). Mr Menegazzo knew that he could ask the company’s lawyers for advice as to whether the new trade mark ESTABLISHMENT 203 would have any problems with earlier registrations, but he chose not to do so (T159.5–18, 161.1–5). It was put to Mr Menegazzo that he just did not really care if the new trademark ESTABLISHMENT 203 had any problems with other trade marks, to which he responded that he did not think he needed to and otherwise rejected the proposition (T159.20–23, 161.7–9).

51    On 24 November 2023, the respondent received a letter from the applicant’s solicitors, referring to the impending launch of the respondent’s restaurant on 28 November 2023 which had been announced on social media, and demanding that it cease using ESTABLISHMENT 203 as a mark (CB5/2141). The letter made allegations of trade mark infringement of the applicant’s ESTABLISHMENT trade mark by reason of deceptive similarity, as well as allegations of misleading and deceptive conduct under ss 18 and 29 of the ACL. The letter referred to the venue operated by the applicant in Sydney called ESTABLISHMENT, which Mr Menegazzo recalled as a hotel in Sydney that he had stayed in “once or twice over a decade ago”, and he recalled that while he was there he had gone to the pub associated with the hotel (para 46). In fact, the contemporaneous documents show that Mr Menegazzo stayed at the Establishment Hotel twice in September 2012 (Ex A, tabs 9–12). Mr Menegazzo says that the first time he had thought about the applicant’s ESTABLISHMENT in connection with the Stanbroke group’s restaurant was on receipt of the letter of demand, and says that the existence of the applicant’s ESTABLISHMENT certainly did not occur to him when he was choosing a name for the group’s restaurant (para 47). I accept that evidence. Mr Menegazzo went further and said that he did not recall ever thinking about the applicant’s venue called ESTABLISHMENT in over 10 years since he had been there (para 47), which I regard as improbable in circumstances where the contemporaneous documents demonstrate two trips to the Establishment Hotel in Sydney nine days apart in September 2012, booking multiple rooms, interacting with the concierge and escorts from the applicant, and making membership enquiries and dinner reservations.

52    Mr Menegazzo read the first part of the letter of demand of 24 November 2023, but did not bother reading the rest of the letter (T161.19–21). Mr Menegazzo referred to the rest of the letter which he did not read as “the fine print” (T161.19–21). Even though Mr Menegazzo did not read the whole of the letter, he understood that he was refusing to give undertakings that were requested by the applicant (T161.26–27). He knew when he decided not to give the undertakings that were requested, that his company might be sued for trade mark infringement (T161.33–35). That was a risk he was prepared to take (T161.37), and the risk of this litigation was a risk that Mr Menegazzo wanted to take (T162.1–2). That was because he thought ESTABLISHMENT 203 was a great name, and he believed that he was entitled to use it (T162.4–5). In addition, he had a personal commitment to using this name that he had settled on with his daughter who works in the Stanbroke group’s marketing department (T162.7–8). When it was put to him that he did not like someone telling him that he could not use the name, he responded that he was not prepared to change the name and did not want to have to change the name (T162.29–34).

53    Mr Menegazzo gives evidence concerning the letter of demand of 24 November 2023 in his affidavit (para 48) as follows:

When I read the letter [sic: the first part of the letter] I was confused. I thought it was obvious that nobody would be confused between a hotel and pub in Sydney called “The Establishment” and a fine-dining steak and Italian restaurant in Brisbane called “Establishment 203”. I had it in my mind that “establishment” is a very common word used to describe a restaurant, hotel, pub or bar. I did not think any person who saw that common word used in relation to two venues would wonder if it meant they were connected. Further, I did not think that any person could validly exclusively own the word “establishment” in relation to a venue for dining.

54    After receiving the letter, Mr Menegazzo sought legal advice, and then decided to continue to operate the restaurant under its current name (para 49). The advice was not disclosed, and I do not draw any inference adverse to the respondent from the respondent maintaining its entitlement to legal professional privilege. However, in the absence of evidence as to what the advice was, the fact that the respondent sought and obtained legal advice does not assist the respondent very much in establishing its good faith. On 28 November 2023, the respondent’s solicitors replied to the applicant’s solicitors explaining why the respondent had chosen ESTABLISHMENT 203 as the name of the restaurant, and expressed the view that there would not be any confusion between the two names.

55    Mr Menegazzo gives the following evidence in his affidavit (paras 51–52):

We do not want to be associated with the Hemmes Establishment [defined as the venue operated by the applicant in Sydney called “Establishment”]. That venue is a hotel and large pub or club. Our restaurant is a small, exclusive, high-end, fine-dining venue. Most importantly, we want our restaurant to be associated with our beef, not with an unrelated hotel in a different city. We would not benefit at all by an association with the Hemmes Establishment. In fact, any such association would give people the wrong impression about the quality and exclusivity of our restaurant and would undermine my intention of using the name to create a connection to our beef.

In my opinion, there is no real risk that any person would be confused between our restaurant and the Hemmes Establishment. ESTABLISHMENT 203 is very different from ESTABLISHMENT. The “203” at the end is very distinctive. Further, the two venues are completely different, as I have explained above. Finally, the Hemmes Establishment is in Sydney and our restaurant is in Brisbane. In my opinion, the Hemmes Establishment has no reputation in Brisbane. Most of the people who come to our restaurant will never have heard of it.

56    Mr Menegazzo has no legal qualifications (T158.42).

57    Mr Menegazzo says that he is not aware of any instance in which a person has been confused between the group’s restaurant and the applicant’s business (para 53).

58    Mr Menegazzo says that the Stanbroke group did not do trade mark searches or Google searches before choosing the name ESTABLISHMENT 203 (para 54). Mr Menegazzo says that that was because it was a name that the Stanbroke group’s business had been using for decades, and it never occurred to him that the Stanbroke group might need to be wary of any conflict with another trader (para 54). Mr Menegazzo says that even if he had been reminded about the applicant’s business called ESTABLISHMENT, he would still have chosen ESTABLISHMENT 203 for the restaurant, because he says he does not think that anybody would be confused between the Stanbroke group’s restaurant and the applicant’s business for the reasons given earlier in his affidavit (para 55).

59    It is well-established that the requirement of good faith is not conclusively determined by a finding of lack of fraud or lack of conscious dishonesty: Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326 at 355–6 (Gummow J, with whom Lockhart J agreed on this point at 341); Anheuser-Busch Inc v Budejovicky Budvar [2002] FCA 390; (2002) 56 IPR 182 at [217] (Allsop J). As Beach J explained in Flexopack SA Plastics Industry v Flexopack Australia Pty Ltd [2016] FCA 235; (2016) 118 IPR 239:

(a)    an honest belief at least at the time of adopting the mark that no confusion would arise by reference to the earlier trade mark and that there was no intention to divert trade is a necessary but not a sufficient condition for establishing good faith (at [108]);

(b)    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 (at [111]);

(c)    good faith in s 122 requires reasonable diligence to ascertain that a chosen name does not conflict with a registered trade mark (at [116]); and

(d)    the failure to make proper inquiries should not place a respondent in a better position than if such inquiries had been made (at [118]).

Further, it should be noted that the role of subjective evidence and the adequacy or otherwise of steps taken, including any searches, must be viewed both in the context of the particular defence relied on and the facts of each case: Firstmac Ltd v Zip Co Ltd [2023] FCA 540 at [253] and [280]–[284] (Markovic J).

60    Even if a respondent initially adopts a mark in good faith, the use of that mark may cease to be in good faith once the respondent has notice of the existence of the trade mark owner, the fact of the mark’s registration, and the potential confusion that might arise in the marketplace. In Flexopack, Beach J noted the issue at [109] and dealt with it at [156]–[163] in the course of which his Honour said (at [160]):

If the defence does apply to an earlier period, it would not apply to continued use such as to excuse future conduct after receipt of the letter of demand where a respondent was put on notice of the applicant’s position and the potentiality for real confusion.

61    Good faith might be shown by establishing that legal advice was sought: Flexopack at [112]. An example is provided by Australian Postal Corporation v Digital Post Australia Pty Ltd [2013] FCAFC 153; (2013) 308 ALR 1 at [52]–[53] and [90], in which the alleged infringer proved the content of the favourable advice which it had received.

62    The applicant submits that the relevant time for assessing good faith is the time when the mark is adopted, rather than when it is used. In that regard, the respondent adopted ESTABLISHMENT 203 on 8 February 2022, consistently with Mr Menegazzo’s evidence. At that time, the respondent’s name was Odean Pty Ltd, which was not changed to Establishment 203 Pty Ltd until 7 March 2022. Therefore, the applicant submits that the respondent’s defence of good faith use of its name must fail. I reject that submission. Section 122(1)(a) provides a defence when a person “uses” in good faith the person’s own name or the name of the person’s place of business. The provision does not refer to good faith at the anterior stage of choosing or adopting the mark. Indeed, the applicant embraced the reasoning of Beach J in Flexopack at [156]–[163] to the effect that even if the respondent initially adopted its name in good faith, the defence of good faith was not available in respect of use after it was put on notice of the applicant’s rights and the potential for confusion. In my view, it is clear that the defence of good faith must be applied at the various times when the name is used. While it is true that the cases often refer to the circumstances concerning the time when the alleged infringer “adopts” the mark, that is because of the factual importance in cases concerning good faith of evidence going to the process of choosing the mark in advance of its actual use, not because of some unstated legal principle that the relevant time for assessing good faith is the time of adoption, rather than use: see Re Parkington & Co (1946) 63 RPC 171 at 181–2 (Romer J); FanFirm Pty Ltd v Fanatics, LLC [2024] FCA 764 at [285] (Rofe J); Tivo Inc v Vivo International Corporation Pty Ltd [2012] FCA 252 at [246], [251], [293] (Dodds-Streeton J); Flexopack at [108] and [156] (Beach J); Pharm Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83; (2017) 251 FCR 379 at [103] (Greenwood, Jagot and Beach JJ); Firstmac Ltd v Zip Co Ltd [2023] FCA 540 at [255] (Markovic J); Bed Bath ‘N’ Table Pty Ltd v Global Retail Brands Australia Pty Ltd [2023] FCA 1587 at [466] (Rofe J).

63    The applicant also relies on the reasoning of the Court of Appeal of England and Wales in Asprey & Garrard Ltd v WRA (Guns) Ltd [2001] EWCA Civ 1499; [2002] FSR 31 at [43] (Peter Gibson LJ, with whom Chadwick and Kay LJJ agreed), which appears to be to the effect that the UK counterpart to s 122(1)(a) cannot apply to new companies as otherwise a route to piracy would be obvious, and that, because a company can choose to adopt any trading name, there could otherwise be an own name defence in almost every case. I do not regard an inflexible approach to that effect as applicable to s 122(1)(a) of the TMA. The provision’s language does not endorse such an approach, and the spectre of creating an easy route to piracy is amply constrained by the requirement that the own name defence is subject to good faith being established.

64    In the present case, I accept that the respondent did not act dishonestly, and genuinely believed that it was entitled to use ESTABLISHMENT 203. I also accept Mr Menegazzo’s evidence that he did not think of the applicant’s restaurant, bar and hotel business known as ESTABLISHMENT when he chose the name of the respondent’s restaurant, and had no intention of causing customers to think of an association with the applicant’s business. However, the absence of subjective dishonesty does not conclude the analysis, and in my view for the following reasons the respondent has not established the requirement of good faith.

65    In the first place, the respondent did not conduct any trade mark searches at the time of initial adoption of ESTABLISHMENT 203, and chose not to ask the company’s lawyers for advice on the proposal to use that mark when initially adopting it despite those lawyers having assisted the Stanbroke group for decades with trade mark matters. I regard both those matters as steps which an honest and reasonable person in the respondent’s position would have taken. A reasonably diligent search of the Register of Trade Marks would have identified the applicant’s registered trade mark ESTABLISHMENT.

66    Moreover, the respondent’s use of ESTABLISHMENT 203 came after it received the letter of demand of 24 November 2023. Mr Menegazzo thereafter knew that there was a risk of the respondent being sued by the applicant for trade mark infringement, and yet he did not read the letter in full. This constituted another failure to take the steps an honest and reasonable person in the respondent’s position would have taken. Further and in any event, the respondent has not established that the letter of demand did not put it on notice as to the potentiality for real confusion. I accept that the facts that “establishment” is a descriptive word and the addition of “203” is a differentiating feature plainly raise questions of degree as to which honest and reasonable minds could differ. But the issue for the respondent is that the reasons given by Mr Menegazzo for thinking that no one would be confused by the respondent using ESTABLISHMENT 203 are fundamentally flawed. First, the difference in the style of the two venues (that is, between what Mr Menegazzo describes as a hotel and pub in Sydney, and a fine-dining steak and Italian restaurant in Brisbane) is a matter which misconceives the principles pertaining to trade mark registration, in that the applicant’s rights are not limited to a particular restaurant, bar and hotel in Sydney but have nation-wide effect, and the registration applies to all restaurants (including fine-dining steak and Italian restaurants). While this misunderstanding of the law of intellectual property might readily be forgiven in another context, in the present case Mr Menegazzo had received a letter of demand and (properly) sought legal advice. Second, the belief that the applicant’s ESTABLISHMENT business in Sydney has no reputation in Brisbane (even if it were legally relevant) is demonstrably false on the evidence referred to above on the issue of acquired distinctiveness and below on the issue of contraventions of the ACL, and could not have been genuinely held by Mr Menegazzo who had himself stayed at the applicant’s Establishment Hotel in Sydney on two occasions in September 2012.

67    Accordingly, I reject the respondent’s defence under s 122(1)(a) of the TMA.

Contraventions of ss 18 and 29(1)(g) and (h) of the ACL

68    The applicant contends that the respondent represented to consumers of restaurant services in Australia that:

(a)    the respondent’s services are a sub-brand, branch, franchise, “sister” restaurant or otherwise commercially related to the applicant’s ESTABLISHMENT business;

(b)    the respondent’s services are sponsored, licensed or approved by the applicant’s ESTABLISHMENT business or its owner; and/or

(c)    the respondent is licensed, authorised, sponsored, approved or endorsed by the applicant’s ESTABLISHMENT business or its owner

(the Representations).

69    The applicant contends that the Representations are and were false, and accordingly the respondent has engaged in conduct which is contrary to ss 18 and 29(1)(g) and (h) of the ACL.

70    In Self Care, the High Court set out some well-established principles concerning ss 18 and 29 of the ACL. They are relevantly as follows:

(a)    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”: [80];

(b)    the third and fourth steps require the court to characterise, as an objective matter, the conduct viewed as a whole and its notional effects, judged by reference to its context, on the state of mind of the relevant person or class of persons. That context includes the immediate context (relevantly, all 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) and the broader context of the relevant surrounding facts and circumstances: [82];

(c)    where the conduct was directed to the public or part of the public, the third and fourth steps must be undertaken by reference to the effect or likely effect of the conduct on the ordinary and reasonable members of the relevant class of persons. This avoids using the very ignorant or the very knowledgeable to assess the effect or likely effect; it also avoids using those credited with habitual caution or exceptional carelessness, or considering the assumptions of persons which are extreme or fanciful: [83]; and

(d)    although s 18 takes a different form to s 29, the prohibitions are similar in nature and in the Self Care appeal there was no relevant meaningful difference between the words “misleading or deceptive” in s 18 and “false or misleading” in s 29: [84]. In the present case, neither party suggested any relevant difference between those two provisions.

71    For the purposes of the present case, the following principles are also relevant. First, conduct is, or is likely to be, misleading or deceptive if it has a tendency to lead into error: Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640 at [39] (French CJ, Crennan, Bell and Keane JJ).

72    Second, the threshold “likely to be” is satisfied where there is a real and not remote possibility that conduct will mislead or deceive: Australian Competition and Consumer Commission v Employsure Pty Ltd [2021] FCAFC 142; (2021) 392 ALR 205 at [89] (Rares, Murphy and Abraham JJ).

73    Third, the respondent places particular reliance on a passage from the judgment of Stephen J (with whom Barwick CJ and Jacobs J agreed, as also did Aickin J by reason of having agreed with the reasons of Barwick CJ) in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 229, dealing with a case in which Sydney Building Information Centre Ltd sought an injunction restraining a company from carrying on business under the name “Hornsby Building Information Centre” on the ground of misleading or deceptive conduct pursuant to the then ss 52 and 80 of the Trade Practices Act 1974 (Cth). In that passage, Stephen J said:

There is a price to be paid for the advantages flowing from the possession of an eloquently descriptive trade name. Because it is descriptive it is equally applicable to any business of a like kind, its very descriptiveness ensures that it is not distinctive of any particular business and hence its application to other like businesses will not ordinarily mislead the public. In cases of passing off, where it is the wrongful appropriation of the reputation of another or that of his goods that is in question, a plaintiff which uses descriptive words in its trade name will find that quite small differences in a competitor’s trade name will render the latter immune from action …. The risk of confusion must be accepted, to do otherwise is to give to one who appropriates to himself descriptive words an unfair monopoly in those words and might even deter others from pursuing the occupation which the words describe.

At 230, Stephen J said that the case of statutory misleading conduct was a fortiori. His Honour said:

To allow this section of the Trade Practices Act to be used as an instrument for the creation of any monopoly in descriptive names would be to mock the manifest intent of the legislation.

74    As indicated above, since September 2000, the applicant (or its predecessor in title, JJE) has conducted a business providing restaurant, bar and hotel services under the trade mark ESTABLISHMENT. Ms Muller, the company secretary of the applicant, gave detailed evidence of the extensive promotion by the applicant of its business and services by reference to that trade mark. The business has drawn around 20,000 to 25,000 patrons per week for over twenty years, from which a significant reputation has accrued. The name ESTABLISHMENT has been displayed throughout the business venue in ways which would be noticed and remembered by customers, including by way of external and internal signage, branded uniforms worn by staff, branded menus, and branded items provided to customers (such as pens, umbrellas, matches and note cards). The ESTABLISHMENT business has received favourable reviews in mainstream newspapers and magazines circulating throughout Australia, including in Brisbane. The ESTABLISHMENT business has also been promoted by way of direct marketing to consumers via promotional material distributed to the Merivale database (the applicant being a member of the Merivale group of companies), hosting events at ESTABLISHMENT which in turn attract media coverage, and the five week “March into Merivale” festival, which has been held annually since 2009 and which is promoted nationally both online and in print media.

75    Ms Jarvie-Gibbs also gave evidence of her experience, having been employed as a publicist for the Merivale group of companies from February 2013 until December 2016, and having continued to work as a consultant to the Merivale group of companies when she started her own public relations business until 2021. Ms Jarvie-Gibbs worked closely with print media, free-to-air television networks, radio and online publications, as well as government tourism bodies such as Tourism Australia and Destination NSW, to publicise ESTABLISHMENT around Australia and internationally. Ms Jarvie-Gibbs exhibits an editorial published in Qantas Travel Insider magazine on 7 July 2016 which was sent to subscribers of Qantas Frequent Flyers and was also made available online, saying (CB1/74):

Sydney’s famous Establishment complex is more than just hip bars and restaurants. A quirky boutique hotel is also part of the attraction. Some of Sydney’s best eateries – including two-hatted restaurants Est. and Mr Wong – are part of the Merivale empire.

On 31 May 2018, the Courier Mail (circulating in Brisbane) published an article with the headline “Sydney bars cheap drinks: Justin Hemmes, 49 per cent off drinks at 37 venues” (CB1/90). The article stated that “Merivale boss Justin Hemmes” would be cutting the price of drinks at 37 of his venues, including “his signature CBD nightspot Establishment …” (CB1/91).

76    The ESTABLISHMENT business has also received numerous awards, including Hotel Bar of the Year, 25 Hottest New Hotels in the World and Sexiest Designed Bar, and has been listed in the Top 100 Restaurants in the World by Condé Nast Traveller. These awards are promoted online and in print media.

77    The ESTABLISHMENT business was the first “precinct” style venue of its kind in Australia. It was considered to be unique or unusual because it consisted of many different kinds of eateries, bars and clubs, as well as an accommodation hotel, in the one location. It was marketed as a “destination venue” for that reason.

78    A number of existing brands within the Merivale group of companies have been used in multiple locations. The “Totti’s” branded restaurants have opened in five locations: Bondi in Sydney’s East, Rozelle in Sydney’s Inner West, George Street in Sydney’s CBD, Lorne in Victoria and at the Sydney Cricket Ground in Moore Park. Similarly, “Queen Chow” branded restaurants have opened in Narooma on the South Coast of NSW, Manly and Enmore in Sydney, and at the Sydney Cricket Ground in Moore Park. The “Jimmy’s Falafel” branded restaurants have opened on George Street in Sydney and at the Sydney Cricket Ground in Moore Park, with a restaurant in Paddington in Sydney’s East under construction. The extensive media reports also referred to the expansion of the Merivale group of companies into Victoria and Byron Bay, with the purchase of Tomasetti House in Melbourne and Cheeky Monkey’s in Byron Bay. It follows that consumers around Australia would be aware that the Merivale group of companies operates many of its brands in multiple locations, including in cities other than Sydney, and States other than New South Wales. The evidence also establishes that customers of the ESTABLISHMENT business come from all around Australia, which would include a significant number of visitors from Brisbane, being Australia’s third largest city.

79    The respondent submits that, despite the evidence of reputation adduced by the applicant, there are various factors which point away from the alleged Representations.

80    The respondent relies on the reasoning of the High Court in the Hornsby Building Information Centre case, and submits that the price to be paid for the applicant using an eloquently descriptive name is that the application of that name to another like business will not ordinarily mislead the public. The respondent submits that, because the respondent has chosen a descriptive name, quite small differences in a competitor’s trade name will render them immune from action for misleading conduct, and the addition of “203” by the respondent is more than small and is enough for consumers to distinguish between the two businesses. The respondent submits that any deception that might arise would stem not from the respondent’s use of “establishment”, but from the fact that the applicant initially chose a descriptive word as its title. The respondent accepts, however, that it is possible for a trader to establish that descriptive words have acquired a secondary significance referable to that trader’s business which would be sufficient to give rise to an action for misleading or deceptive conduct, but submits that such cases are rare. The respondent submits that the Court should also consider the evidence of use of the same name by third parties, as weighing against the conclusion that a reputation has been sufficiently established and that consumers are likely to be misled or deceived.

81    While the descriptive element of ESTABLISHMENT is an important consideration, in my view the applicant has succeeded in building up a reputation which is so strong that ESTABLISHMENT has acquired a secondary significance as identifying the applicant’s business venue in Sydney. The evidence of reputation in the present case establishes that the applicant’s reputation associated with ESTABLISHMENT is so extensive and prominent as to create a real possibility of leading ordinary and reasonable members of the public into erroneously thinking that the restaurant known as ESTABLISHMENT 203 is a commercial extension of, or otherwise associated with, the applicant’s restaurant, bar and hotel known as ESTABLISHMENT in Sydney. While the marks are different, I do not regard the addition of “203” as negating the real possibility that consumers would associate the word ESTABLISHMENT with the applicant’s well-known business. Apart from those rare consumers who are so deeply knowledgeable about the Queensland cattle industry to appreciate that “203” is a reference to the Stanbroke group’s abattoir registration number, the number “203” is unlikely to have any identifiable meaning in the minds of consumers. Those consumers may well think that “203” is intended to differentiate the restaurant in Brisbane from the business venue operated in Sydney, while retaining a marketing link with that business.

82    I note also the circumstance that nowhere on the website for the ESTABLISHMENT 203 restaurant is there any reference to an abattoir called ESTABLISHMENT 203, as Mr Menegazzo accepted (T163.33–164.3; CB5/2070–90). Nor is there any evidence of any material in the respondent’s restaurant (such as in the leather-bound menu) which gives any explanation for the name or the significance of the number “203”. Even the Stranbroke group’s website contains no reference to an abattoir called ESTABISHMENT 203 (T162.36–163.27; Ex A, tab 12). Those facts stand in stark contrast to the evidence which Mr Menegazzo gave in his affidavit (paras 39–40), to the effect that for people who did not know the Stanbroke group’s business, the restaurant name would be “better once the connection to our beef was explained to them” and that using the establishment number as the name of the restaurant would “leverage the connection between the abattoir and the restaurant to lift the reputation of both our restaurant and our beef”. In the absence of any explanation to ordinary customers of the reason for choosing the name ESTABLISHMENT 203, the connection between the abattoir and the restaurant business would be entirely lost on them.

83    The respondent also submits that the parties’ operations are very different. The respondent draws attention to the fact that the applicant’s ESTABLISHMENT business has two venues that trade under the name ESTABLISHMENT, namely the Establishment Hotel and the Establishment Bar. The other bars and restaurants in the ESTABLISHMENT building all trade under their own names, such as Hemmesphere and Mr Wong. The respondent submits, and I accept, that the evidence shows that the Establishment Bar is essentially a bar, and although people can purchase bar food there, consumers would not understand it to be a restaurant. While people can order food at the bar, Mr Ellem described it as “bistro style” food (T88.9–13). The evidence is that the Establishment Bar is a large and noisy bar which is often packed with people and is standing room only (Mr Ellem at T89.42–47). By contrast, the respondent’s ESTABLISHMENT 203 restaurant is an exclusive fine-dining restaurant focused on food, particularly high-quality steak, and seats only 80 diners. Accordingly, the respondent submits that consumers would not think that ESTABLISHMENT 203 might be a commercial extension of, or otherwise associated with, the Establishment Bar.

84    The difficulty with that submission is that the word ESTABLISHMENT is used by the applicant in its branding and promotional material to refer to the whole ESTABLISHMENT precinct, comprising restaurants, bars and a hotel. The reputation in ESTABLISHMENT has therefore accrued to the precinct as a whole, and not just to the Establishment Bar and the Establishment Hotel. Accordingly, while the individual restaurants located in that precinct have their own names, the fine-dining restaurants at the precinct are also associated with the name ESTABLISHMENT. For that reason, I do not think that it would appear unnatural to an ordinary and reasonable member of the public to think that a fine-dining restaurant known as ESTABLISHMENT 203 in Brisbane would be associated with the venue or precinct known as ESTABLISHMENT in Sydney which itself includes fine-dining restaurants.

85    The respondent submits that consumers would know that the applicant’s ESTABLISHMENT business is not part of a chain and submits that its reputation is tied to the building in which it is located. The respondent submits that there is no evidence that the applicant has made use of ESTABLISHMENT in respect of any activity outside that building, and thus consumers would not expect the applicant to open another business under that name in a different building, let alone in another city.

86    In my view, that submission is undermined by the fact that it is equally well-known that the business operating under the mark ESTABLISHMENT is part of the Merivale group of companies, and that the Merivale group of companies often uses the same brand to refer to multiple locations, such as “Totti’s”, “Queen Chow”, and “Jimmy’s Falafel”. There is thus ample reason for consumers to expect that the applicant would use the mark ESTABLISHMENT at another venue in another city.

87    The respondent next submits that consumers would expect a Merivale business to be promoted differently, in that when the Merivale group opens a new venue it is generally promoted as a Merivale venue with a great deal of publicity and media attention. In contrast, the respondent’s restaurant has not been promoted as a Merivale venue or with other Merivale venues. While I accept that this factor may have the effect of reducing the likelihood of consumers being misled or deceived, I do not regard it as a matter of much significance. Consumers may well think that the common element of ESTABLISHMENT in the two names is sufficient to make good an association with the applicant’s business, and even if they were conscious of the Merivale group’s usual marketing practice, they may well proceed on the assumption that they simply had not become aware of any publicity for ESTABLISHMENT 203 which may exist drawing attention to the Merivale group.

88    The respondents also submit that the risk of consumers being misled or deceived is further reduced because the applicant’s business is in Sydney, whereas the respondent’s business is in Brisbane, and the reputation of the applicant’s venues is necessarily much weaker in Brisbane. In my view, the very extensive and prominent nature of the applicant’s reputation in the mark ESTABLISHMENT throughout Australia, including in Brisbane, is sufficient to establish a real and not remote possibility of consumers being led into error.

89    Finally, the respondent submits that there is no evidence of consumers actually being misled or deceived, despite the respondent’s restaurant having been open for about nine months. However, as the respondent accepts, the absence of evidence of actual deception is not determinative, and in my view such evidence is not necessary in the present case.

90    In all the circumstances, I am of the view that there is a real possibility of ordinary and reasonable members of the public being led into erroneously thinking that the respondent’s restaurant known as ESTABLISHMENT 203 is a commercial extension of, or otherwise associated with, the applicant’s restaurant, bar and hotel business known as ESTABLISHMENT, or that the respondent is using that name with the approval of the owner of the ESTABLISHMENT business. That, of course, is false. Accordingly, I find that the Representations constituted contraventions of ss 18 and 29(1)(g) and (h) of the ACL.

91    A further issue which was debated before me was whether it is necessary for the applicant to show that a “not insignificant number” of the relevant section of the public is likely to be misled or deceived by the impugned conduct. In favour of such a requirement is the reasoning of the Full Court in National Exchange Pty Ltd v Australian Securities and Investments Commission [2004] FCAFC 90; (2004) 61 IPR 420 at [23] (Dowsett J) and [67]–[71] (Jacobson and Bennett JJ); Peter Bodum A/S v DKSH Australia Pty Ltd [2011] FCAFC 98; (2011) 280 ALR 639 at [206]–[209] (Greenwood J, with whom Tracey J agreed); and Hansen Beverage Company v Bickfords (Australia) Pty Ltd [2008] FCAFC 181; (2008) 171 FCR 579 at [46]–[47] (Tamberlin J) and [66]–[72] (Siopis J). However, against the proposition are two more recent Full Court decisions, namely Trivago NV v Australian Competition and Consumer Commission [2020] FCAFC 185; (2020) 384 ALR 496 at [190]–[193] (Middleton, McKerracher and Jackson JJ); and Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2020] FCAFC 130; (2020) 278 FCR 450 at [23] (Wigney, O’Bryan and Jackson JJ). In the present case, in my view a “not insignificant number” of the relevant section of the public (which I regard as potential customers of the respondent’s restaurant) is likely to be misled or deceived by the impugned conduct. However, I am bound by the more recent line of Full Court authority, and thus that finding is not necessary, unless an appellate court forms a different view.

Is the applicant entitled to additional damages?

92    Although the question of quantification of pecuniary remedies is to be determined separately from, and subsequently to, this hearing, the parties are agreed that I should determine at this stage whether the applicant is entitled to additional damages which it claims pursuant to s 126(2) of the TMA. That provision confers a power on the Court to include an additional amount in an assessment of damages for an infringement of a registered trade mark if the Court considers it appropriate to do so having regard (among other things) to the flagrancy of the infringement, the need to deter similar infringements of registered trade marks, and the conduct of the party after being informed that it had allegedly infringed the registered trade mark.

93    The applicant submits that the respondent launched its restaurant business despite being aware of the applicant’s registration in light of the letter of demand sent on 24 November 2023, and thus should be regarded as having “flagrantly” infringed the ESTABLISHMENT mark, as acting “with reckless disregard” for the trade marks of other traders, and as taking a “cavalier” approach to intellectual property rights in setting up the restaurant. I reject those submissions. Although I have found that the respondent did not act in “good faith” within the meaning of s 122(1)(a) of the TMA, I do not regard the respondent’s conduct as meeting the applicant’s descriptions. The respondent consciously took a risk in tenaciously adhering to its chosen mark after receiving the letter of demand of 24 November 2023, which I regard as imprudent, but I do not see any justification in the present case for an award of additional damages. For completeness, I do not regard Middleton J’s reasoning in Hugo Boss Trade Mark Management GmbH & Co KG v Sasalili Oxford FIA [2014] FCA 1328; (2014) 110 IPR 74 at [23]–[26], on which the applicant relies, as saying that defiant non-compliance with a letter of demand from the owner of the registered trade mark alleging infringement is in itself a sufficient basis for an award of additional damages. In any event, I do not agree with any such proposition.

Conclusion

94    Accordingly, the applicant has succeeded in its claims of trade mark infringement and contraventions of the ACL, and the respondent has failed in its cross-claim for cancellation of the applicant’s mark. The applicant is entitled to an order for costs of the proceedings.

95    The parties have agreed that, in the event that the applicant is successful, any injunction should not take effect for a period of 30 days after judgment is given, in order to give the respondent sufficient time to remove the ESTABLISHMENT 203 mark (T200.37–38). That is an appropriate regime given the practical difficulties facing the respondent, including the removal of the sign at the front of its restaurant, as well as making a number of other changes. Accordingly, the injunction which I grant is subject to that 30-day period of grace.

Associate:

Dated:    20 September 2024