The Federal Court of Australia recently considered trade mark infringement of the word “ESTABLISHMENT” in the case of Hemmes Trading Pty Limited v Establishment 203 Pty Ltd.1
For over two decades, the well-known restaurant and hotel “Establishment” has operated in Sydney. The venue is currently operated by Hemmes Trading Pty Limited (Hemmes), which also owns the trade mark for “ESTABLISHMENT”, registered in relation to restaurant, bar and hotel services.
In 2023, Establishment 203 Pty Ltd (E203) opened a restaurant called “Establishment 203” in Queensland. Being part of the Stanbroke group of companies, the restaurant’s name refers to an abattoir with the establishment number “203”.
Hemmes sued E203 for trade mark infringement and contraventions of the Australian Consumer Law. E203 cross-claimed on various grounds, calling for the cancellation of Hemmes’ trade mark registration for the word “ESTABLISHMENT”.
For Hemmes’ trade mark infringement claim to succeed, it was required to persuade the Court (amongst others) that the mark “ESTABLISHMENT 203” was deceptively similar to the “ESTABLISHMENT” mark.
Given the descriptive nature of the word “establishment”, it was pivotal for Hemmes to ascertain whether an ordinary consumer with imperfect recollection would confuse the two marks, notwithstanding the inclusion of “203”. Ultimately, the Court was satisfied that “ESTABLISHMENT 203” was deceptively similar to “ESTABLISHMENT”, as “203” was obscure enough to leave doubt in the mind of a consumer as to whether the marks shared a common trade source.
E203 cross-claimed, asking that the Court cancel Hemmes’ trade mark registration on two grounds.
Firstly, E203 argued that ”ESTABLISHMENT” was not capable of distinguishing Hemmes’ services from similar services provided by other traders. The Court did not accept this argument, finding that “ESTABLISHMENT” was to some extent inherently adapted to distinguish, supported by extensive evidence of use in the market.
Secondly, E203 argued that Hemmes was not the proper owner of the “ESTABLISHMENT” mark as at the filing date, on account of three other traders said to have used the mark before the priority date. The Court, however, found that Hemmes’ predecessor (who originally filed the trade mark application) was the proper owner at the relevant date for two reasons. First, the other traders’ marks were not substantially identical. The additional words in “The Establishment Cocktail Bar”, for example, created a composite phrase. Second, all three examples of prior use of “ESTABLISHMENT” had long since ceased use in the market before the priority date.
This case is a stark reminder of the importance of completing a trade mark register search before using a mark. Further, it is important to be aware of grounds on which others may challenge your trade mark registrations.
If you require assistance or advice in relation to competing trademarks, do not hesitate to contact Iain Freeman or Andrew Sutton.
