Lamont v Malishus & Ors (No.4) [2019] FCCA 3206

On 14 November 2019, Manousaridis J of the Federal Circuit Court handed down his decision in the trade mark dispute over use of the name "MALISHUS".
The Court found infringement of MALISHUS trade mark registrations through use of that word in domain names and on Facebook pages offering for sale clothing in Australia.

Background

The applicant, Darren Lamont ("Lamont") is a musical artist who has been performing under the name "MALISHUS" since 2005.

Lamont owns four registrations for trade marks containing or consisting of the word MALISHUS, namely:

  • no. 1127629 in class 25 for clothing, accessories, headwear and footwear;
  • no. 1523037 in class 25 for clothing, accessories, headwear and footwear;
  • 1639005 MALISHUS in class 41 for musical services; and
  • 1640398 MALISHUS in class 25 for apparel (clothing, footwear, headgear).

The respondent company, Malishus Limited, was incorporated in New Zealand in May 2013 with Robert Jurcic and Clinton Selwyn as directors. Prior to incorporation, Jurcic and Selwyn, who both lived in Victoria, operated in partnership.

Jurcic became aware of Lamont's earliest MALISHUS trade mark in 2007 but he and Selwyn proceeded to register the domain names malishus.com and malishusbrands.com. Business name registrations for MALISHUS were obtained in August 2010 and a Facebook social media page was created in March 2011. From around July 2011, Jurcic and Selwyn operated an e-commerce website under the malishus.com domain name.

They also owned various Australian trade mark registrations and applications for marks containing MALICIOUS or MALISHUS, including a MALISHUS & Device registration in respect of sunglasses (but not clothing), as well as owning MALISHUS registrations in New Zealand, the United Kingdom and the United States.

After a failed attempt to have Lamont's earliest MALISHUS KONCEPT mark removed from the Register for non-use in 2012, the respondents closed down the malishus.com website and, in August 2013, they transferred operations of the e-commerce site to the newly registered malishus.co.nz domain name. They also registered the domain name malishus.com.au.

Lamont claimed that one or more of the respondents infringed his MALISHUS trade marks by:

  • registering and using domain names incorporating the word MALISHUS in connection with the sale of MALISHUS branded clothing;
  • selling or offering for sale in Australia clothing to which the word MALISHUS was applied; and
  • posting advertising material on Facebook that included the word MALISHUS in connection with clothing.

Lamont also claimed that by using the word MALISHUS the respondents had engaged in misleading and deceptive conduct.

Key Issue

The respondents admitted that they had used the name MALISHUS in their domain names and business in respect to the sale of clothing, but denied that there was any use of the trade mark in Australia. They said that only sunglasses (use on which would not infringe Lamont's registrations) were directed to the Australian market and that their clothing business was directed outside of Australia to countries where they held relevant trade mark rights.

Trade Mark Infringement

The Court found that use of the malishus.com domain name by the respondents was use of MALISHUS as a trade mark in relation to clothing in Australia. This was because the respondents intended or directed or targeted the domain name malishus.com to consumers in Australia through representations that the clothing displayed on the e-commerce site was available to Australian consumers. Online advertising included statements such as "Free Shipping Any Where" and the respondents did not make it clear that the clothing products were not available in Australia. The malishus.com domain name was substantially identical to Lamont's MALISHUS word mark registrations in class 25, and deceptively similar to his earliest composite MALISHUS KONCEPT trade mark in that class, and so infringement was established.

His Honour also found that offers for sale of clothing to Australian consumers, made via the respondents Facebook page, also constituted infringement.

However, the mere registration of a domain name does not amount to infringement, and as there was no use of the malishus.com.au domain name, the registration of that domain name did not infringe Lamont's registrations.

Further, the domain name malishus.co.nz was found to be directed solely to persons in New Zealand, and not Australia. Consequently, use of that domain name and use on that site did not infringe any registrations.

His Honour found that Lamont was not able to establish a sufficient reputation in MALISHUS in Australia to found a claim for misleading or deceptive conduct under the Australian Consumer Law.

Remedies

A permanent injunction was granted restraining Jurcic and Selwyn from using MALISHUS in Australia as a trade mark in relation to T-shirts or any other clothing apparel, footwear or headgear.

The domain names malishus.com and malishus.com.au and the MALISHUS business name were cancelled.

As Lamont was not able to establish that he had suffered any damage, only $10 in nominal damages were awarded for the infringement. However, in light of the respondent's flagrant infringement and, as a deterrent, the judge ordered additional damages of $25,000 plus interest. The respondents were also required to file an affidavit in respect of any articles of infringing clothing held by them stating whether they had been destroyed or whether the offending trade mark had been removed.

Presumably due to the quantum of the award made, Lamont has applied for an extension of time for leave to appeal the decision.

Lesson

This case confirms that while the mere registration of a domain name does not amount to infringement, its use in relation to the sale of products targeting the Australian market may infringe an Australian trade mark registration, as may other uses on the website.

The internet facilitates a global marketplace, but it also exposes online businesses to trade mark infringement overseas. In order to avoid or minimise this risk, online businesses should take care to ensure that they are not targeting a wider market than intended. Appropriate steps include clearly defining the market at which the products are directed, indications of where products can and cannot be sent, and appropriate disclaimers in online advertising.

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.

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