When linen turns legal: Dispute between two Bed & Bath retailers

17 January 2025

On 31 October 2024, the Full Court of the Federal Court (Court) overturned a finding that the Australian retailer known as House had engaged in misleading or deceptive conduct through its ‘House Bed & Bath’ stores.

Importantly, this case addressed both trade mark infringement and misleading or deceptive conduct.

Background

Bed Bath ‘N’ Table Pty Ltd (BBNT) has three trade mark registrations for the word mark BED BATH ‘N’ TABLE (BBNT Mark). BBNT has used the BBNT Mark since the mid-1990s to sell bed linen, bathroom products and household linen.

BBNT brought claims of trade mark infringement and misleading or deceptive conduct against Global Retail Brands Australia Pty Ltd (House) for its use of the following trade mark:

(House B&B Mark).

Since May 2021, House has used the House B&B Mark to sell its homeware products for the bedroom and bathroom. At that same time, House applied to register the House B&B Mark.

BBNT opposed registration of the House B&B Mark.

Findings of the primary judge

In the earlier proceeding (citation: Bed Bath ‘N’ Table Pty Ltd v Global Retail Brands Australia Pty Ltd (No 3) [2024] FCA 226), the primary judge found that the House B&B Mark was not deceptively similar to the BBNT Mark. It was however found that the use of the House B&B Mark was misleading or deceptive, or likely to mislead or deceive, contravening subsection 18(1) and subsections 29(1)(g) and 29(1)(h) of the Australian Consumer Law.

Consequently, House appealed the misleading or deceptive conduct finding and BBNT cross-appealed against the dismissal of the trade mark infringement claim.

Appeal decision – trade mark infringement

When considering the trade mark infringement issue, the Court deemed that the words ‘bed’ and ‘bath’ were not alone distinctive of BBNT. In addition, the differences between the two marks were viewed to be substantial and obvious to anyone but the ‘most careless observer’, and the fact that the BBNT Mark is very well-known had little bearing on this. Aligning with the High Court’s decision in Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd (2023) 277 CLR 186 (see our firm’s previous article on this case here), the Court stated that the reputation of the BBNT Mark played no role in the analysis of deceptive similarity under subsection 120(1) of the Trade Marks Act 1995 (Cth).

In analysing the presentation of the House B&B Mark, the Court observed that the ‘House’ element is more eye-catching and visually dominant in terms of its position and size, and because it is often illuminated on storefronts. Further, the word ‘House’ has often been underlined in many of the iterations of the House B&B logo used on store frontages. An example of this is:

The Court assessed that the underlining emphasised the House brand and placed less emphasis on the words ‘BED & BATH’, which are instead below the underline and often in the same colour as it. Consequently, the Court viewed that the words ‘BED & BATH’ in the House B&B Mark were presented in a way that distinguishes between that trade mark and the ‘House’ trade mark, while still suggesting that House is the dominant brand and badge of origin. Therefore, it was found that the words ‘BED & BATH’ were merely used to designate a sub-brand of House.

Notably, the Court expressed that a sign may be registrable as a trade mark even though it is used together with another trade mark, and there can still be use of a mark where it is a component of a larger composite mark.

Finally, the word ‘House’ was seen as the predominant component of the House B&B Mark. Therefore, its presence could not be missed unless by ‘exceptional carelessness or stupidity’.

As a consequence of the above, the Court dismissed BBNT’s cross-appeal and agreed with the primary judge that the House B&B Mark was not deceptively similar to the BBNT Mark.

Appeal decision – misleading or deceptive conduct

When considering the misleading or deceptive conduct issue, the Court identified the relevant conduct and class of persons. The relevant conduct was operating one or more soft homewares retail stores under the House B&B Mark, and the relevant class of persons involved the ordinary or reasonable members of the class of prospective purchasers of soft homewares.

The Court decided that the use of the words ‘BED’ and ‘BATH’ by another trader would not be likely to lead ordinary and reasonable consumers into thinking that the trader was associated in some way with the BBNT stores. Further, BBNT did not establish that it had any independent reputation in the words ‘BED BATH’ or ‘BED & BATH’ alone. Because of this, the Court stated that it was unlikely that ordinary and reasonable consumers would wonder if there was an association between the two homewares stores.

Importantly, the Court considered the fact that ‘BED’ and ‘BATH’ had not previously been used as part of a brand name or on the outside of a store, except by BBNT, did not make it likely that the ordinary and reasonable consumer would think that no other trader could do so without being associated in some way with BBNT.

Ultimately, the Court allowed House’s appeal and disagreed with the primary judge that the House B&B Mark was likely to mislead or deceive consumers.

Key takeaways

In light of these findings, it is important to carefully consider all the differences between trade marks prior to initiating any infringement action. When trade marks contain descriptive words, there should be particular focus on their dominant features which may differentiate them. Lastly, it is crucial when bringing a misleading or deceptive conduct claim that you can prove your reputation in the brand name words concerned.

If you would like our assistance with branding and trade marks, please feel free to contact us.

This article was written by Jennifer Huby, Partner and Kirsten Schreuder, Solicitor.

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