The High Court has clarified that even in the face of a finding that trade mark infringement does not arise due to lack of deceptive similarity, the conduct of a party in using that trade mark may still amount to misleading or deceptive conduct under the Australian Consumer Law.
Background
Bed Bath ‘N’ Table (BBNT) is a prominent brand in soft homewares, operating a network of stores throughout Australia since 1976. For over 40 years, BBNT was the only retailer in Australia to use ‘bed’ and ‘bath’ in its store name or on external signage. BBNT owns and uses the below trade mark registration in Australia:
In 2021, Global Retails Brands Australia Pty Ltd (GRBA) commenced using the name ‘House Bed & Bath’.
This mark was used in external and internal store signage, online (the House website and social media), advertising, shopping centre directories, gift cards, and employee name badges.
On 12 August 2025, the High Court of Australia heard an appeal from the Full Court of the Federal Court of Australia. The judgment was delivered on 10 December 2025. This appeal concerned whether the respondent, GRBA, engaged in misleading or deceptive conduct under s 18(1) of the Australian Consumer Law (ACL) for its use of the mark ‘House Bed & Bath’. The High Court held that the reasoning of the Full Court miscarried, and that the primary judge’s reasons disclosed no error of legal principle, fact-finding, or reasoning process.
The primary Judge’s reasoning, as articulated by the High Court
Justice Rofe of the Federal Court of Australia drew a distinction between the considerations applied to determine whether the use of a mark contravenes s 120(1) of the Trade Marks Act 1995 (Cth) (TM Act) (that is, whether it constitutes trade mark infringement) and whether use contravenes s 18(1) of the ACL (that is, whether it constitutes misleading or deceptive conduct).
In the case of trade mark infringement, the inquiry applied is ‘the ordinary consumer’s impression or recollection (or imperfect recollection) of the marks’ in question, without the ordinary consumer being ‘credited with any knowledge of the actual use of the registered trade mark, or any reputation associated with that mark’.
In contrast, s 18(1) of the ACL is concerned with the ‘immediate and broader context’ of the mark’s use, and this includes the reputation of the mark as viewed by the reasonable consumer. The primary judge made and applied this distinction, concluding that the respondent’s use of the mark did not constitute infringement under s 120(1) of the TM Act, but that it did contravene s 18(1) of the ACL.
Trade mark infringement
At first instance, Justice Rofe found that there was no trade mark infringement under s 120(1) of the TM Act because there was a lack of similarity between the marks of BBNT and GRBA.
ACL
However, Justice Rofe found that there was a contravention of s 18(1) of the ACL because when the broader context of GRBA’s conduct is considered-including BBNT’s reputation in the BBNT mark evaluated from the perspective of the reasonable consumer, BBNT’s unique use of ‘bed’ and ‘bath’ on store exteriors for over 40 years, and the adoption by GRBA of the ‘Hamptons’ styling similar to BBNT stores-there were likely to be consumers who had been enticed into GRBA’s soft homewares stores in the belief that they had some association with BBNT.
The Full Court’s reasoning and the High Court’s assessment
The Full Court disagreed with the primary judge’s findings that GRBA’s use of their mark was misleading or deceptive when there was no finding of deceptive similarity between GRBA and BBNT’s marks. It was held that the primary judge erred in the finding on misleading or deceptive conduct as BBNT’s reputation was in the BBNT mark as a whole, not just the ‘bed’ and ‘bath’ components.
The High Court took multiple issues with the Full Court’s understanding of the primary judge’s reasoning, as follows:
Conflation of trade mark infringement and misleading or deceptive conduct
The Full Court conflated the inquiries required under s 120(1) of the TM Act and s 18(1) of the ACL. This was because the Full Court connected whether the mark was deceptively similar under s 120(1) to whether its use was misleading or deceptive under s 18(1). The High Court clarified that even if there was no trade mark infringement due to a lack of similarity, the conduct of a party in using a mark could still amount to misleading and deceptive conduct. By paying too much attention to the trade mark infringement element, it was noted that the Full Court did not fully consider the broader context of GRBA’s conduct.
Reputation is in the mark as a whole
The Full Court relied on the primary judge’s finding that BBNT’s reputation was in the BBNT mark ‘as a whole’ to conclude that the words ‘bed’ and ‘bath’ were not ‘distinctive of BBNT’. The High Court explained that this reasoning overlooked several findings of the primary judge, including that: BBNT’s longstanding reputation included the words ‘bed’ and ‘bath’ in that particular (and not natural) order; the words ‘bed’ and ‘bath’ were familiar to consumers as category descriptors inside stores, but not on the exterior of stores other than BBNT soft homewares stores; House stores had their own distinctive get-up different from the BBNT get-up; and the House Bed & Bath stores adopted the same ‘Hamptons’ style as the BBNT stores.
The Full Court’s incorrect use of the primary judge’s conclusion about BBNT’s reputation being in the BBNT mark as a whole also meant that it incorrectly held that commercial association would not arise when only ‘bed’ and ‘bath’ were used in a mark (as in the House Bed & Bath mark). The High Court held that this applied a too narrow focus on the use of marks rather than the context of GRBA’s conduct.
No monopoly over the words ‘bed’ and ‘bath’
The Full Court incorrectly concluded that the primary judge’s findings gave BBNT a monopoly over the words ‘bed’ and ‘bath’. This was because the primary judge found that GRBA’s conduct was in breach of s 18(1) of the ACL, which was a declaration of statutory contravention rather than a creation of a monopoly.
The Full Court provided two alternate scenarios in which GRBA’s conduct would be likely to mislead or deceive:
- consumers would have to confuse GRBA and BBNT’s marks, or
- consumers would have to draw an association between GRBA and BBNT even if differences are recognised between the marks.
The High Court held that this narrow reasoning focused only on the two marks and nothing else, and was irreconcilable with the findings of the primary judge in respect of BBNT’s unique use of the words ‘bed’ and ‘bath’, in that order, on the exterior signage of its stores over many years, by reason of which those words, in that order, easily roll off the tongue.
Evidence of the executives’ state of mind
The Full Court incorrectly discounted the value of the evidence of GRBA’s executives on their state of mind. The High Court held that the primary judge’s findings that their evidence of state of mind was attributable to the state of mind of GRBA were correct, and relevant to an assessment of whether ACL s 18(1) was contravened.
On these bases, the High Court unanimously held that the Full Court’s reasoning had miscarried. The primary judge’s reasons disclosed no error of legal principle, fact-finding or reasoning process, and accordingly there was no scope for appellate interference with the primary judge’s orders. The High Court ordered that the primary judge’s orders be reinstated and remitted the matter to the Federal Court for determination of the remaining issues, including BBNT’s claim for pecuniary relief.
Key takeaways
- Trade mark clearance is not the end of any legal analysis: Even if a proposed mark does not infringe an existing trade mark, the conduct of using that mark may still be misleading or deceptive under the ACL. An ACL analysis should be undertaken independently of any trade mark infringement analysis.
- Descriptive words can still give rise to ACL liability in context: The mere fact that words are descriptive does not preclude an ACL finding where the broader context supports it. Mere confusion is insufficient but conduct that goes beyond this may still contravene s 18(1).
- Internal communications will be scrutinised: The primary judge pointed to emails that were damaging evidence of awareness of the competitor’s brand. Businesses should assume internal communications about branding decisions will be discoverable and influential in litigation.
- ‘Wilful blindness’ can be just as damaging as dishonest intent: GRBA was not found to have acted dishonestly, but the executives’ wilful blindness to the risk of consumer confusion was sufficient to support a finding of misleading conduct. A trader’s deliberate intention to leverage off a competitor’s reputation, even without intending to deceive, provides cogent evidence that the conduct is likely to mislead.
Featured image by Homeo Grapher from Pixabay.
