REA Group Ltd v Real Estate 1 Ltd

Using the internet has become a fundamental part of many consumers’ search for property. The property search portals realestate.com.au and realcommercial.com.au run by REA Group Limited, list residential and commercial properties and are widely used in Australia.

REA Group Ltd (‘Rea’) brought an action against Real Estate 1 Ltd (‘Real 1’), the operator of the websites realestate1.com.au and realcommercial1.com.au, alleging trade mark infringement under section 120 of the Trade Marks Act 1995 (Cth), passing off as well as misleading and deceptive conduct contrary to section 52 of the Trade Practices Act (now the Australian Consumer Law), REA Group Ltd v Real Estate 1 Ltd [2013] FCA559.

The court dismissed Rea’s Trade Practices Act and passing off claims, and held that some of the conduct constituted trade mark infringement.

Trade marks infringement

There was no dispute that the Real 1’s use of its marks was within the scope of services covered by Rea’s trade mark registrations. The issue was whether the marks in question were deceptively similar. The Court held that by using the word marks, detailed below, in web browsers and in the heading of sponsored links in search engines, Real 1 had infringed Rea’s trade marks. In particular, Bromberg J noted that ‘in a scanning process of the kind which can occur on a search results page, the ‘1’, which is not very distinct in the context of a domain name in ordinary type face, is likely to be missed by some consumers’.

Infringement was also found in relation to the realcommercial1.com.au composite mark, as it was found that the essential feature of both marks under comparison, was the concocted word ‘realcommercial’.

However, the Court found that the realestate1.com.au composite mark did not infringe Rea’s registered mark because its presentation differed from the registered mark (in particular the font and colour of the mark, the presence of an additional swish feature, and the placement of the device in the middle of the mark). The Court took into account the highly descriptive nature of the ‘realestate’ component, and the fact that the distinguishing feature of Rea’s mark was the word element ‘realestate.com.au’.

Misleading or deceptive conduct and passing off

Rea argued that use of ‘realestate1.com.au’ in a URL as appearing in search engine sponsored links would divert traffic intending to go to Rea’s realestate.com.au portal to Real 1’s portal, and that it falsely represented that Real 1 was associated with Rea.

The Court dismissed these claims and noted in particular:

• ‘realestate.com.au’ being descriptive of a real estate portal, small differences in the names used by competitors will suffice to avoid misconception by consumers.
• A consumer searching for a portal recalled as ‘real estate something’ who 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.
• It is likely that any confusion would have been immediately dispelled by the consumer accessing Real 1 websites. There was no evidence of the impact or likely impact of such confusion which would have permitted a finding that Real 1’s conduct was of any commercial significance.

The Court subsequently made orders including the transfer of Real 1’s domain names to Rea.

This decision highlights that the threshold for stabilising trade mark infringement is lower than that required to establish misleading or deceptive conduct, and therefore shows the benefits of trade mark registrations.