Customers are increasingly using the internet to find businesses and services to meet their needs. Given the significant volume of material available online, one could easily understand the lengths businesses would go to to optimise their visibility online. However, before implementing a strategy to improve your rankings you should be careful that your actions do not infringe the rights of your competitors or other traders. The recent case of Lift Shop Pty Ltd v Easy Living Home Elevators [2014] FAFC 75 illustrates how a strategy to improve online visibility could result in an expensive legal dispute.

Facts

Lift Shop Pty Ltd and Easy Living Home Elevators operated within the same market as providers of customised elevators. In 2012, Easy Living wanted to improve its online visibility in search engine results and sought to do so, by placing the term 'Lift Shop' in the headline of their search results. This meant that Easy living would appear in the list of results where users typed 'Lift Shop' into their search engine. Lift Shop Pty Ltd is the owner of the following registered composite trademark:

Lift Shop Pty Ltd alleged that Easy Living Home Elevators had infringed the trademark by using the words 'Lift Shop' in the title of its web page as shown by search results.

Findings

In considering whether Easy Living's use of the term 'Lift Shop' was capable of infringing Lift Shop Pty Ltd's trade mark, the Court had to consider whether the trade mark was used as a badge of origin. That is, did Easy Living use the term to indicate the origin of their products and to distinguish their goods and services from competitors?

The trial judge found that Easy Living had not breached Lift Shop Pty Ltd's trademark. The determination was made in light of the following facts:

  1. 'Lift Shop' was being used as a descriptive term and to take advantage of the operation of the search engines.
  2. In this area of commercial endeavour, the term 'Lift Shop' had an understood generic connotation and was capable of general use.
  3. The term 'Lift Shop' was used descriptively by businesses that had no association with Lift Shop Pty Ltd or Easy Living.
  4. Although the use of the term 'Lift Shop' formed part of a marketing strategy intending to increase the business' competiveness, Easy Living had not intended to associate itself with Lift Shop.

On appeal, the Full Court found that no trade mark had been infringed by Easy Living. They agreed with the reasoning at first instance that the term's 'only functional significance was to describe the character of the business.' The Full Court found that those searching the internet using the search term 'lift shop' would have understood, on seeing the displayed results, and in particular the words 'Lift Shop' in the title of Easy Living's web page, that Easy Living was using those words to convey that its business was one of supplying 'lifts' and 'home elevators'.

Lessons

  1. While use of a descriptive term in the headline of a business' search result that forms part of a registered trademark may not constitute a trade mark infringement, businesses should still exercise caution when using such terms. While Easy Lift may have won the battle, the litigation would undoubtedly have been costly and lengthy. You should always consult your lawyer before implementing a strategy that includes the use of a third party's trade mark.
  2. This case highlights the difficulty that may be experienced where the registered trademark is descriptive of the owner's products. When developing a brand, it is always best to steer clear of descriptive words. Such words are difficult to register, however as seen in this case it is also difficult to establish whether other traders are using those words as a trade mark or using those words to describe their goods or services .

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.