A recent Federal Court decision illustrates issues to consider when using a domain name as a trade mark, and why trade mark registration can provide much stronger enforcement options against competitors than simply alleging misleading and deceptive conduct (REA Group Ltd v Real Estate 1 Ltd  FCA 559).
What is a domain name?
Every internet address, or a domain name, contains at least two parts: a top-level domain and a second-level domain.
The top level is at the end of the address (eg. .com, .net, and .org). There are currently 22 generic top-level domains managed by the Internet Corporation for Assigned Names and Numbers. There are also geographically specific top-level domains such as .com.au which are managed at a national level.
The second-level or lower-level serves as the website's name. The second-level typically consists of the website owner's trading and brand name. Given the generic nature of the top-level, consumers often pay little attention to it. Accordingly, concerns regarding misleading similarity between domain names generally focus only on the second-level.
However, REA Group Ltd v Real Estate 1 Ltd is an example where the top level domain is an intrinsic part of the brand, and the entirety of the domain name needs to be considered to establish if there is deceptive similarity. The applicants (collectively, REA) accepted that "real estate" was purely descriptive, yet contended that the combination of "real estate" with ".com.au" created a term which was distinctive of REA's residential property portal.
The competing businesses and claims
REA operates two property search portals. The first, realestate.com.au lists residential properties that are available to rent or purchase. The second, realcommercial.com.au, lists commercial properties available to rent or purchase.
The corporate respondents (collectively, Real Estate 1) also operate two property search portals. The first, realestate1.com.au, focuses on residential properties. The second, realcommercial1.com.au, focuses on commercial properties.
REA brought an action against Real Estate 1 and individuals associated with it alleging misleading and deceptive conduct contrary to section 52 of the Trade Practices Act 1974 (Cth) and trade mark infringement under section 120 of the Trade Marks Act 1995 (Cth).
Did Real Estate 1's conduct amount to misleading and deceptive conduct under section 52 TPA?
REA argued that Real Estate 1's domain names were substantially identical or deceptively similar to its domain names, and had the capacity to confuse a potential consumer who was using a search engine to find realestate.com.au.
It also argued Real Estate 1's conduct amounted to false representations that Real Estate 1 was associated with REA.
The Court found that the use of the domain realestate1.com.au did not constitute misleading and deceptive conduct. In coming to this conclusion, Justice Bromberg considered the following:
each of the elements of the term "realestate.com.au" remain descriptive despite the combination of them into a single term. Further, when taken as a whole "realestate.com.au" is, at least in part, descriptive of a real estate portal. As a result, only a small difference in a competitor's trade name will likely suffice to avoid consumers being deceived;
the natural applicability of the phrase "real estate" in combination with a suffix to indicate a real estate portal was relatively common and was used in various combinations by other real estate property portal providers. Consumers would be more vigilant in the context of a market where close variants of "realestate.com.au" are common on a search results page;
consumers would likely recognise that the use of "realestate" as a central feature in many domain names reflected the natural applicability of the term to a real estate portal. A consumer with ordinary recall specifically looking for "realestate.com.au" on a search page who sees the "1", will not be misled or deceived into assuming an affiliation between the portal being searched for and "realestate1.com.au";
a consumer who is searching for a portal recalled by the consumer as "real estate something" and ends up at Real Estate 1's website has not been misled or deceived. If such persons have been diverted, the fault may lie with the adoption by REA of a name insufficiently distinctive to have facilitated its recall;
for largely the same reasons, he was not satisfied that any likely deception in relation to "realcommercial1.com.au" would have been other than momentary, and would have been immediately dispelled by the consumer accessing the realcommercial1.com.au website.
Did Real Estate 1's conduct amount to trade mark infringement?
REA has registered marks for both "realestate.com.au" and "realcommercial.com.au" (each a composite with a small house and building device, respectively).
REA argued that the use of "realestate1.com.au" – including as a domain name address – infringed REA's trade mark of realestate.com.au as the two marks were deceptively similar. REA did not claim that the use of the name "realestate1" when used alone was an infringement of its trade mark, but that "realestate1" used in conjunction with ".com.au" was infringing use.
The Court found that:
- the essential or distinguishing feature of REA's mark is the domain name in its entirety. The inclusion of .com.au as part of that essential feature is necessary because the highly descriptive nature of "realestate" on its own would not be enough to establish brand identity;
- Real Estate 1's logo does not sufficiently resemble REA's logo to be deceptively similar;
- however, there is a real danger of confusion in relation to "realestate1.com.au". In the context of domain names and the scanning process that occurs when looking at a search results page, the "1" in realestate1.com.au is not very distinctive and was likely to be missed. As a result, the realestate1.com.au domain name was deceptively similar to realestate.com.au and constituted trade mark infringement.
In relation to the realcommercial.com.au mark, REA complained about Real Estate 1's use of both "realcommercial" alone and its use in combination with ".com.au". The Court similarly found trade mark infringement, including the use by Real Estate 1 of its realcommercial1 logo.
This case starkly illustrates that the threshold for trade mark infringement is lower than that required to establish misleading or deceptive conduct. Registered trade marks confer a valuable monopoly which can be used effectively against competitors. However, businesses should avoid using generic or descriptive names as trade marks, if possible.
The decision should encourage trade mark owners to seek registration (or enforce existing registrations) for brands that comprise a domain name, even if the second-level domain on its own would be highly descriptive. The Court expressed some discontent with this outcome:
"it is troubling that terms that are highly descriptive of a particular area of commerce and which provide significant commercial advantage should not be readily available for use by all who seek to participate in that commerce".
Further, businesses trading online should actively monitor similar domain names other companies may be using, and whether they have sought trade mark registration. In some cases it may be necessary to challenge any such registration to provide business certainty.
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