Back in June, the Full Court, upheld the trial Judge’s conclusion that Knott was engaging in misleading or deceptive conduct, and passing off, by using the Winnebago “logos” to promote RVs of its (Knott’s) manufacture that had nothing to do with Winnebago USA. Because the breach was in the nature of “passing off” rather than trade mark infringement and because Winnebago USA had sat on its hands for 25 years allowing Knott to build up some goodwill of its own, however, the Full Court was prepared to grant an injunction only to restrain use of WINNEBAGO and the Winnebago logos by Knott which did not adequately disclaim association with the USA.
The Full Court has now handed down its decision about the form of that disclaimer:
(f) where the name, mark or logo is used on one or more vehicles or in a document (including any print advertisement or webpage), stating in any relevant document (including any print advertisement or web page) or on any vehicle, clearly and prominently, and reasonably proximate to any name, mark or logo:
(i) (where the name, or mark or logo is used on or in relation to a single vehicle) “This vehicle was not manufactured by, or by anyone having any association with, Winnebago of the United States”; or …
In addition, radio and television commercials must have a prominent voiceover of no less than 10 seconds’ duration stating:
These vehicles were not manufactured by, or by anyone having any association with, Winnebago of the United States.
Also, Knott will be required to obtain a signed acknowledgement from each purchaser, hirer etc. that he or she has been informed the vehicles was “not manufactured by, or by anyone having any association with, Winnebago of the United States.”
Given the 25 year delay, the Full Court was not prepared to countenance allowing Winnebago USA to take an account of Knott’s profits.
The Full Court did, however, remit the matter back to the trial judge on the question of damages (limited to the six years before the proceeding was brought), but with an important rider.
Winnebago USA wants to argue that its damages should be a reasonable royalty on the use of its rights. The Full Court noted that other Full Court authority  appeared to stand in the way of that approach, but there might be scope for that to be revisited in light of the New South Wales Court of Appeal’s consideration of remedies for the unauthorised use of property in the context of conversion.
The rider: before Winnebago USA gets to try this argument, it has to satisfy the trial Judge that there is “some prospect of a substantial (that is, real) award.”
If you have tried to buy, sell or rent property in Australia in the last 10 years (at the least!), like some nearly 7 million other Australians you have no doubt come across realestate.com.au, the web-portal run by REA Group. Real One also competes in that space.
Bromberg J held that the uses both in the first line and the second line of the advertisment infringed. In contrast to his Honour’s rejection of the claim for misleading or deceptive conduct, Bromberg J explained at :
In my view, the display of the term “realestate1.com.au” in the heading of a sponsored link would have been regarded by many consumers to be the trading and domain name of the business whose link it was. One of the central distinguishing features of REA’s realestate.com.au trade marks is the idea that the term “realestate.com.au” is both a brand name and a domain name at the same time. When Real Estate 1 used “realestate1.com.au” as a trading name, it took up that precise idea. In that context consumers are likely to pay substantive attention to “.com.au” because it serves the function of identifying the brand whose domain name is also being used as a brand. The whole of the domain name is likely to be read or at least scanned. In a circumstance such as that, there was in my view, a real danger of confusion on the part of a consumer familiar with REA’s realestate.com.au trade marks. That principally arises because 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.
First, his Honour distinguished Perram J’s proposition in the Solahart case that usually one can ignore the inclusion in a sign of elements like “www” and “.com.au” as merely “accoutrements” of the domain name system and so not matters that the public would pay attention to. Unlike the situation before Bromberg J, however, that observation was not made in a context where the .com.au element formed part of the registered trade mark.
Second, I can certainly see that the bold “headline” (the first line) in Real One’s advertisment is plainly being used as a trade mark. But the use in the second line???
Yes, I know that cases have held that domain names / URLs are the Internet’s equivalent of a sign or billboard. That can certainly be true and, in the first line of the advertisement, the URL is plainly being used in that way, but surely with respect in the second line the URL is no more than an address.
Third, one might express some alarm that anyone can stop someone else using the term “real estate” (in connection with real estate services). There are, after all only 387 other registered trade marks in class 36 alone which include the words “real estate”. On the Internet, there is also at the least realestateview.com.au. Bromberg J’s first answer in  above is that it was not just the use of “real estate” that gave rise to liability: it was the use of that term and “.com.au” in combination and the comparative insignificance of the “1” in Real One’s URL.
Bromberg J did, however, recognise the problem and said at :
As my conclusions demonstrate, registration of REA’s realestate.com.au marks has effectively given REA a monopoly over two highly descriptive terms when used in combination. Those terms are likely to be the most common terms on a search results page where a search has been conducted for a residential real estate portal. The protection conferred by REA’s trade marks over the use of “realestate” and “.com.au” in combination, provides REA with a monopoly over the term “realestate” in circumstances where its rivals seeking also to use “realestate” or a close variant thereof as a second-level domain, do not forego the advantages of using “.com.au” in their domain names. The natural advantage of a domain name which incorporates “realestate” to the commercial success of property portals will be apparent from observations I have already made. There is also a natural advantage in the use of the suffix “.com.au”. 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. However, in the absence of a successful challenge to the registration of REA’s realestate.com.au trade marks, whilst that may be troubling, REA is nevertheless entitled to the protection of the monopoly which has been conferred upon it.
The question has to be asked, however, on what basis could REA group’s logo be revoked or refused registration? Given the device elements (and the large number of other, competing devices), it would surely be held to be capable of distinguishing. The “good” old days (i.e., before the 1995 Act) were at least better in this respect: the Registrar could impose disclaimers to ensure these sorts of monopolies should not arise.
Two short points in conclusion:
His Honour did also find that Real One’s “real commercial” logo infringed REA group’s registration for its “real commercial” logo.
It would seem that Real One is still able to operate from its “.net.au” URL.
Bromberg J found at  that the principal of Real One adopted the name to pressure REA group into buying him out at some point, but also went on reluctantly to find no accessorial liability (akin to authorising). ?
For simplicity, I will treat that term as covering the actions for misleading or deceptive conduct (now under s 18 of the ACL formerly known as s 52 of the Trade Practice Act 1974) which, of course, was really the focus of that part of the case. ?
The number doesn’t seem to be identified, but TM Nos 811931 and 1075935 are for the mark in black and white and TM No. 1478263 is for the colour version reproduced in his Honour’s reasons. ?
The Full Court has partially allowed an appeal from Foster J’s decision to order Knott Investments to stop using the Winnebago trade marks for “campers” or RVs not made by Winnebago. As a result, Knott can continue to use “Winnebago” if it can make it clear it is not associated with the Winnebago company.
From about 1959, Winnebago had been making and selling its RVs under that brand name in the USA and eventually other countries including the UK and Canada, but not Australia.
In the early 1960s, Binns became aware of the Winnebago name and logo while travelling around the USA. In 1978, Binns and his wife started manufacturing and selling their own RVs in Australia under the name “Winnebago” and using the Winnebago logo. In 1982, they incorporated Knott which then took over running their business.
The Winnebago company discovered what Knott was up to by 1985. However, the Winnebago company did nothing about this until 1992 when the parties entered into a “settlement” agreement. Following this, Knott kept making and selling its own Winnebago brand RVs and registered the Winnebago logo as trade marks. Winnebago itself did nothing further until 2010, when it wished to enter the market in Australia and started proceedings alleging misleading or deceptive conduct, passing off and seeking revocation of Knott’s trade mark registration for Winnebago and the logo.
When do you test whether conduct is misleading or deceptive
The Full Court allowed Knott’s appeal insofar as it related to when Knott’s conduct had to be tested as misleading or deceptive. Foster J held this was in 1982 when Knott was recorded in the Register of Business Names as having commenced running the business, there being no formal documentation of a transfer of the business. The Full Court, however, considered that Knott was plainly the successor in title to the Binns’ business and so the relevant time was 1978, when the Binns started up.
This is important because the Full Court unanimously considered the relevant time to assess whether conduct is misleading or deceptive under s 52 of the TPA (as it was) and s 18 of the ACL (as it now is) is the date when the “infringer’s” conduct started, not some later date.
As it turned out, however, this did not help Knott much as the Full Court considered the evidence clearly established Winnebago had a “spillover” reputation in Australia in 1978 even though it had not traded in Australia at that point. Therefore, Knott (and the Binns’) conduct was likely to mislead or deceive.
Estoppel, laches, acquiescance or delay
The issue that loomed large in the Full Court’s eyes was Winnebago’s delay in bringing proceedings to enforce its rights – 25 years after it first learned of Knott’s activities and 18 years after the “settlement” agreement. Over that period of time, Knott had built up its own substantial reputation in “Winnebago” in vehicles of its own manufacture.
First, the Full Court agreed with Foster J that the “settelment” agreement did not authorise or concede any rights to use “Winnebago” to Knott. Clause 6 provided:
This Agreement does not address, impact upon, or relate in any way, manner or form to the use or ownership of the [Winnebago marks] in Australia or to any rights relating to the [Winnebago marks] based on reputation or use under any statute or at common law in Australia. By entering into this Agreement, Winnebago does not expressly or impliedly acknowledge that Australian Company has any rights of any nature whatsoever to the [Winnebago marks] in Australia. To the extent not expressed in this Agreement, this Agreement shall be without prejudice to the rights of Winnebago and Winnebago expressly reserves all of its legal rights.
Knott argued, however, that the 18 year delay in bringing proceedings meant it was unjust to permit Winnebago to bring proceedings now. Allsop J despatched this argument for six:
First, there was no clear representation, arising either out of the Settlement Agreement or from the conduct. The terms of the agreement, in their context, contained a degree of commercial ambiguity. The terms, however, of cl 6 could leave no doubt in Mr Binns’ mind that any practical confidence in him that Winnebago was not going to sue him was not based on any right conceded by Winnebago. He proceeded at his own risk. The finding by the primary judge at  of the reasons (not specifically challenged) that Mr Binns knew there was a risk of having to rebrand his product if Winnebago entered the market is also fatal to the submission. (emphasis supplied)
Allsop CJ and Jagot J rejected Knott’s arguments based on laches, acquiescance and delay both for similar reasons and because Knott had expressly disclaimed them at trial.
Notwithstanding this, the Full Court considered that Foster J’s order that Knott be restrained from using the Winnebago trade marks was unjust. Even though Knott (or, really, Binns) had adopted the Winnebago trade marks to take advantage of the Winnebago company’s reputation and there was evidence that some members of the public had been misled, nonetheless, Knott had over decades built up its own substantial, independent reputation. Instead, therefore, the injunction should only prohibit use which did not appropriately disclaim any trade association with the Winnebago company. At , Allsop CJ explained:
This limitation of relief can be seen to reflect not only the balancing of the respective interests of Knott and Winnebago in the reputation developed by Knott’s expenditure, in the context of Winnebago’s extraordinary (and informed) delay, but also the erosion of the reputation of Winnebago ….
The evidence reveals sufficient to conclude that at least some of Knott’s reputation in the use of the name and marks was the development of its goodwill and reputation; that not all of the development of its business involved the taking advantage of Winnebago’s reputation in Australia. In normal circumstances, this would not matter; it would be something that the party passing off would have to accept as a consequence of its wrongdoing. Here, however, Winnebago has contributed to this by standing by, informed of the position, for 25 years while Knott expended money and built a business, part at least of which was its own reputation. (emphasis supplied)
The disclaimer or dissassociation had to be clear on the vehicles Knott made in future as well as in its advertising and promotional material.
The third member of the Court, Cowdroy J, did not explicitly reject the laches or acquiescance defence, but agreed in the approach of Allsop CJ saying at :
the Court considers that the granting of relief to completely restrain the appellants from the use of the Winnebago marks to be unreasonable in light of the substantial delay by Winnebago.
Finally, the Full Court upheld Foster J’s order to cancel Knott’s registration of the Winnebago trade marks. Knott had registered these in direct contravention of the terms of the “settlement” agreement.
In 1992, a representative of the Winnebago company had written to its then Australian lawyers explaining:
… While we are obviously interested in persuading or compelling Mr Binns to cease using the subject marks in Australia, I really do not think that we can justify any additional expense. We are not selling our products there nor do we have any plans to do so. There has in the past been some indication that Mr Binns was experiencing some financial duress and perhaps with any luck he will go broke. In any event, at least for the time being, I think we will just continue to monitor this situation … 
No doubt, the sentiments will resonate with everyone advising a foreign brand owner in Australia. The Full Court’s approach may provide a warning. The terms of the “settlement” agreement were sufficiently limited to preserve the Winnebago company’s right to enter the market and object to misrepresentation of association, but failure to enforce its rights promptly has left it encumbered with a competing, independent user of its brand. On the other hand, Knott did not bring matters to a head in negotiating the “settlement” agreement and finds itself constrained. As Allsop CJ said, it ran the risk. How the disclaimer should be effected is unclear, but there are indications in Allsop CJ’s reasons that Knott has been able effectively to dissociate its business from the Winnebago company, while still using the Winnebago trade marks, since 2003.