As a matter of best practice, all businesses should be investing the appropriate time and effort in conducting comprehensive trade mark searches before commencing use of their prospective mark. This has been highlighted in the recent case of The Practice Pty Ltd v The Practice Business Advisers & Tax Practitioners Pty Ltd [2024] FCA 1299, which Justice O’Callaghan referred to as ‘clear a case of trade mark infringement as one is ever likely to see’.[1] This decision serves as a stark reminder that failing to conduct proper searches before adopting a trade mark can lead to serious economic and legal consequences for businesses.
What happened here?
The Practice Pty Ltd (the applicant) is a financial services firm that has traded under the name ‘THE PRACTICE’ since 1999. The applicant owns the following trade mark registration:
| Trade Mark No. | Trade Mark | Classes | Priority Date |
| 1757523 |  |
35, 36 | 9 March 2016 |
The respondent, The Practice Business Advisers & Tax Practitioners Pty Ltd, has provided business advisory and accountancy services under the name ‘THE PRACTICE BUSINESS ADVISERS & TAX PRACTITIONERS’ from around its incorporation on 13 January 2017, and by reference to the following logo (the Logo):
In its statement of claim, the applicant alleged that the respondent’s promotion and provision of business and tax advisory and accounting services under and by reference to the above marks infringed the applicant’s TM No. 1757523 under s 120 of the Trade Marks Act 1995 (Cth) (the Act).
The respondent denied the allegation of trade mark infringement and argued in defence that:
- it was not using the plain words ‘THE PRACTICE’ as they appear in its Logo as a trade mark; or
- alternatively, the Logo was not substantially identical with, or deceptively similar to the applicant’s mark in relation to the registered services and/or services of the same description; or
- alternatively, it had a defence to trade mark infringement under s 122(1)(b)(i) (use in good faith) of the Act and ss 122(1)(f) and 122(1)(fa) (the Court is of the opinion that the respondent would obtain registration if they applied for it).
Did the respondent use the plain words THE PRACTICE as a trade mark?
Yes. In fact, Justice O’Callaghan went so far as to say that use of THE PRACTICE by the respondent as a trade mark was ‘plain as a pikestaff’.
His Honour relied on the following evidence in coming to his conclusion:
- statements made on the respondent’s website (such as ‘© The Practice | Privacy Policy’, ‘Contact The Practice…’)
- statements made on the respondent’s social media accounts
- invoices sent to clients where the words ‘THE PRACTICE’ are shown in different coloured font to the rest of the invoice
- Mr Hassan’s (sole director of the respondent) signature has the words ‘The Practice’ in bold font and
- their social media handles “thepracticebusiness” on Instagram and “thepracticetax” on X (formerly Twitter).
His Honour also went on to say that it was unlikely that the consumer would view the use of the words ‘THE PRACTICE’ as merely descriptive; . the use of the definitive ‘THE’ indicated that the mark was intended to refer to only one practice rather than a generic use to describe any accounting practice. His Honour stated (emphasis added):
‘It follows that it is not necessary to consider the other elements of that defence. But in any event, Mr Hassan’s own evidence was that the respondent’s use of the Logo served a “dual function” which included the function of “acting of a badge of origin for [its] services”. It follows that the respondent’s use cannot, on its director’s evidence, be purely for the purposes of description. And in addition, as the applicant submitted, the respondent’s marks are not descriptive of the kind, quality, or other characteristic of the respondent’s services because “The Practice” is not directly descriptive of accounting services. Its breadth of meaning is not apt to describe a particular type of premises, and could apply to any type of business (for example, a law firm, stockbroker, financial planner, medical clinic etc).’
Was the respondent’s Logo substantially identical to the applicant’s mark?
The applicant submitted that the respondent’s Logo was substantially identical to TM No. 1757523. These marks are extracted side-by-side below:
| Applicant’s registered mark | Respondent’s logo |
|
|
Justice O’Callaghan agreed with the applicant that the essential feature or the ‘dominant cognitive cue’ of both marks were the words ‘THE PRACTICE’ in capital letters, with the word ‘THE’ in standard font and the word ‘PRACTICE’ in bold font. In addition, it was noted that both marks utilise a similar square font style.
Notably, the Rubix cube device and the text ‘Business Advisers & Tax Practitioners’ in the Logo were not enough to avoid a finding of substantial identity. This is arguably consistent with the outcome in Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd,[2] where there was an emphasis on determining substantial identity by identifying the ‘dominant cognitive cue’ apparent in the marks.
Was the Logo otherwise deceptively similar to the applicant’s mark?
As Justice O’Callaghan held that the marks were substantially identical, it was not necessary to assess whether the marks were deceptively similar. In obiter, His Honour agreed in any case that the Logo was deceptively similar to the applicant’s mark.
His Honour said that consumers were unlikely to notice the smaller words ‘Business Advisers & Tax Practitioners’ or pay any particular attention to them given their descriptive quality. In addition, His Honour relied on evidence which demonstrated that ‘word of mouth referrals’ were particularly important in relation to the types of services offered by the applicant and respondent. Accordingly, the aural similarity of the applicant and respondent’s marks lent towards a finding of deceptive similarity. This conclusion stands in contrast to the Agency cases,[3] where it was held by the primary judge (and upheld by the Full Court) that aural resemblance was not a matter of particular significance in the real estate agency context.
Could the respondent rely on the defence of good faith under s 122(1)(b)(i) of the Act?
Section 122(1)(b)(i) of the Act provides that ‘a person does not infringe a registered trademark when … the person uses a sign in good faith to indicate the kind, quality, or intended purposes of the services’ that that person offers.
Justice O’Callaghan held that the defence could not be relied upon as the respondent had not discharged its onus in proving that the use was made in ‘good faith’. His Honour relied on a series of cases, where it was held that ‘if a person does not take steps that an honest and reasonable person would take to ascertain the ability to use a trade mark, and has in effect taken a risk, then they are not acting in good faith’. His Honour looked at the searches that Mr Hassan had claimed to have conducted in the lead-up to his adoption of ‘THE PRACTICE’ marks and concluded that these searches were neither reasonable nor diligent for the following reasons:
- Mr Hassan had only conducted searches for the entire phrase ‘The Practice (IT AND Accountancy)’ and ‘The Practice Business Advisers and Tax Practitioners’ and not for ‘The Practice’ or a similar business name and
- Mr Hassan had only ever searched the trade marks register in December 2001. If Mr Hassan had searched the trade mark register in 2017, Mr Hassan would have located the applicant’s trade mark registration.
Could the respondent rely on the defence under ss 122(1)(f) and 122(1)(fa) of the Act (the Court is of the opinion that the respondent would obtain registration if they applied for it)?
As a last resort, the respondent sought to rely on the defence to trade mark infringement under ss 122(1)(f) and (fa) of the Act on that the basis that it would have obtained registration of the Logo under either s 44(3)(a) as an honest or concurrent user or otherwise under ‘other circumstances’ in s 44(3)(b).
Both of the respondent’s arguments relied on ‘honest and concurrent use’. Given the lack of reasonable and diligent searches that had been undertaken by the sole director Mr Hassan, His Honour held that the respondent had not discharged its onus of proving ‘honesty’ with respect to these defences.
What should businesses do in practice?
As the respondent learned the hard way, the failure to conduct appropriate trade mark clearance searches prior to adoption of the ‘THE PRACTICE’ brand led to the finding of trade mark infringement and damages payable of $200,000.
We can’t understate that businesses undertaking clearance searches should conduct those searches as broadly as possible. Businesses should not limit themselves to identical hits, as failure to do may lead to a finding that the business was not an ‘honest’ user and/or had adopted the mark in ‘good faith’. This is where engaging an expert in these searches can end up saving your business money.
Businesses should also be wary of adopting the same name as another trader and hoping that a different device mark would be sufficient to differentiate the marks. As this decision demonstrates, use of a different device element may potentially still result in a finding of substantial identity if the ‘dominant cognitive cue’ is the same.
Featured image: TungArt7, ‘Pen graph business finance paper’, Pixabay, 8 March 2024, Pixabay licence.
[1] See [2] of The Practice Pty Ltd v The Practice Business Advisers & Tax Practitioners Pty Ltd [2024] FCA 1299.
[2] Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83.
[3] Agency Group Australia Ltd v H.A.S. Real Estate Pty Ltd [2023] FCA 482 and The Agency Group Australia Ltd v H.A.S. Real Estate Pty Ltd [2023] FCAFC 203.