For retailers looking to expand their offering, it may be logical to focus on existing retailers with commercial success. However, retailers need to be especially careful when doing so, as overreach can lead to misleading or deceptive conduct and misrepresentation that violates the Australian Consumer Law (ACL).
This article considers the recent decision of the Federal Court of Australia in Bed Bath 'N' Table Pty Ltd v Global Retail Brands Australia Pty Ltd (2023) FCA 1587. Both parties to this case coexisted in separate spaces. For over 30 years, we have been active in a wider range of household products. Global Retail Brands Australia Pty Ltd (GRBA) has moved into the soft homeware space with a name that incorporates the words of the brand 'Bed Bath 'N' Table'. The brand's owner, Bed Bath 'N' Table Pty Ltd (BBNT), has commenced legal proceedings alleging trademark infringement, breach of the ACL and misrepresentation.
background
Since 1976, BBNT has operated a network of stores across Australia under the 'BED BATH 'N' TABLE' brand (BBNT Retail Stores). BBNT is one of Australia's leading specialist retailers of soft homeware products, selling textile products (such as bedding and bed linen), bathroom products, household linen, kitchenware and other household products . BBNT Retail Stores typically have two large front windows with one or two beds configured in the “Hamptons style”, as shown in the example below.
Since 1978, GRBA has operated retail stores (House Retail Stores) selling kitchenware and hard household items (such as pots, pans, plates, knives and cutlery) under the 'House' brand in Australia. House retail stores typically display the House logo prominently, along with crowded displays and deep discount signs, as shown in the example below.
In May 2021, GRBA launched the first retail store (First House B&B Retail Store) of its new soft homeware business “House Bed & Bath” (House B&B), selling bedroom and bathroom products and selling “Bed” We used the following logo that incorporates the word. ” and “bath” as the “House” brand.
(House B&B logo).
Retail stores operating under the House B&B logo (House B&B Retail Stores) are presented differently than a typical House Retail Store. Below are images of the First House B&B retail store with a vanity bed in the front window.
BBNT filed suit against GRBA, alleging that GRBA's actions in adopting the House B&B logo and launching the First House B&B retail store violated the ACL, constituted misrepresentation, and constituted misleading and deceptive conduct. filed a lawsuit. The trademark infringement lawsuit against GRBA was unsuccessful.
Was GRBA's conduct misleading, deceptive, or likely to be misleading or deceptive?
ACL prohibits you from doing any of the following in trade or commerce:
misleading or deceptive conduct or engaging in misleading or deceptive conduct (Article 18); or make false or misleading statements (Article 29, Paragraph 1):
Goods or services come with sponsorship, endorsement, performance characteristics, accessories, uses or benefits (subsection (1)(g)). or is sponsored, endorsed or affiliated with the person making the representation (subsection (1)(h)).
The judge found that the GRBA had the following characteristics:
engaged in misleading and deceptive conduct (contrary to section 18(1) of the ACL); The House B&B retailer also made a false and misleading representation that he was in any way associated or affiliated with BBNT (contrary to section 29(1)(g) and (h) of the ACL) .
The issue to be determined is whether GRBA uses the House B&B logo on First House B&B retail storefronts to ensure that reasonable consumers (i.e. members of the public looking to view and/or purchase soft homeware products) It was a message to convey. This required the judge to assess all relevant circumstances, including:
BBNT has enjoyed a wide reputation for 'BED BATH 'N' TABLE' in the Australian software and homeware market for over 40 years. For over 40 years, BBNT has been the only retailer in Australia to use the words 'bed' and 'bath' in store names and outdoor signage, with other retailers (particularly department stores) using such words in-store. is used as a category descriptor. BBNT retail stores typically had large front windows that revealed “Hamptons-style” beds, while house retail stores typically had a “discount” look. At the time of adopting the House B&B logo, GRBA was aware of his BBNT's presence and reputation in the soft housewares field.
In light of the above, the judge considered that a reasonable consumer, upon seeing House B&B retail store for the first time, would consider whether there was a connection between the two brands (for example, whether House had merged with BED BATH). etc.) 'N' table, or took over it). Furthermore, he said GRBA was willfully blind to the possibility of confusion between the house B&B logo and “BED BATH 'N' TABLE”. Could the act actually be deceptive? It was related to the question of whether The judge rejected GRBA's argument that it had selected “BED & BATH” because the words were appropriate to describe the category, and believed there was a market benefit (i.e., He reasoned that he did this to take advantage of BBNT's reputation in the first place. in that particular order).
The judge's conclusion was based on the similarity of the store interiors shown in the image below (although such language is typical of home goods stores) and whether such a connection exists. This was further reinforced by evidence from examples of consumers who had doubts.
Given that GRBA's conduct was found to be misleading or deceptive, the judge was also satisfied that GRBA was liable for misrepresentation.
Take-out
From this decision, traders should be wary of borrowing elements of a competitor's rally, even if those elements are descriptive. In doing so, there is a risk that a court will find that the impression formed by such conduct constitutes misleading conduct or impersonation in violation of the ACL.