Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd [2017] FCAFC 56 (7 April 2017) per Greenwood, Besanko and Katzmann JJ
There are many tactics that can be used to increase a business’ ranking in Internet search results, including using particular text / keywords in source code or metadata which sits behind a website. Google and other search engines use this data to rank websites in order of relevance in search results. However when a consumer is browsing the website they will not see the metadata, in fact no-one may ever see the metadata.
It is not uncommon for website owners to use competitor trade marks in the source code of their website to increase their ranking. As a result of a recent Court decision, this practice could expose those website owners to an action for trade mark infringement – even when the source code has been placed there by a third party, for example, by a website developer.
To avoid a trade mark infringement action, businesses should not use another party’s trade marks, without permission, in the source code of their websites. Brand owners now have further recourse against competitors who are using their trade marks without authority in the source code of a competitor’s website.
Liv used HARBOUR LIGHTS in the source code of its website
Cairns Harbour Lights Pty Ltd (“CHL”) developed and managed the on-site letting of apartments in Harbour Lights / Cairns Harbour Lights residential complex in Cairns and owned the trade marks HABOUR LIGHTS and CAIRNS HARBOUR LIGHTS for accommodation letting and rental services.
CHL gave Accor exclusive rights to provide on-site letting services and to use the trade marks. Accor ran the business as a 4 ½ star hotel from the complex.
Liv Pty Ltd (“Liv”) was an off-site letting agent in the same complex trading under the business name “Harbour Lights Property Management and Sales” and under the domain names <cairnsharbourlights.com.au> and <harbourlightscairns.com.au>.
CHL and Accor asserted that Liv infringed their trade marks, including (amongst many other things) because Liv used the term HARBOUR LIGHTS in the source code of its website as follows:
“content: = Harbour Lights Apartments in Cairns offer luxury private waterfront apartment accommodation for holiday letting and short-term rental”
Liv’s Use of the Trade Mark in Metadata Infringed CHL’s Trade marks
The judge at first instance found that Liv’s use of Harbour Lights in the source code of its website infringed the HABOUR LIGHTS and CAIRNS HABOUR LIGHTS trade marks.
The primary judge considered that the words HARBOUR LIGHTS in the source code:
“content: = Harbour Lights Apartments in Cairns offer luxury private waterfront apartment accommodation for holiday letting and short-term rental”
was, effectively use as a business name for a business which offers “accommodation for letting and short term rental” thus operating as a badge of origin to distinguish Liv’s services from those of others and this conduct infringed the trade marks.
The Full Federal Court did not disturb these findings and Liv was found to have infringed the HARBOUR LIGHTS trade marks by using those words in the source code of the website.
The conduct was infringing despite there being no evidence anyone saw the metadata nor any evidence Liv placed it there
On appeal to the Full Federal Court observed that “The metatag [Harbour Lights] is not displayed on the screen but is used by a search engine (such as Google) to determine the search results to be listed before the person doing the search.”
The lower Court accepted the evidence of an expert witness that the source data “was visible to those who know what to look for; it underlies Liv’s website; and it influences search results.” However no evidence was produced by CHL/Accor to show that any one had ever seen these words used in the source code.
Infringement was also found even though there was “no direct evidence that the source data for the website was so placed by someone acting on behalf of Liv. The Court found however that
“Liv had engaged an IT consultant to create the website; Liv operates the website; Liv has changed the content from time to time; and Liv controls the website including the source date for the website. As a matter of inference, … the words comprising the source data must have been included to optimise the search results for Liv’s benefit… …the IT consultant for Liv must have included the words in the source data for the website with Liv’s acquiescence. Thus the words were used by Liv.”
Prior to the case, use of a trade mark in source code was not thought to be infringing
Trade mark infringement typically requires that a person is using another party’s trade mark (or one very similar to it) to distinguish their goods and services from those of others. However if the trade mark cannot be seen, one queries how a trade mark is operating to distinguish one trader’s goods and services from those of other traders?
The Court was influenced by the fact that source code / metadata influences Internet search results. While that is the case, a number of other unidentified algorithms / factors also influence those results.
The decision is at odds with a previous preliminary judgement Complete Technology Integrations Pty Ltd v Green Energy Management Solutions Pty Ltd [2011] FCA 1319. In that case the judge found that
Metatags are invisible to the ordinary internet user, although their use will direct the user to (amongst other websites) [the Respondent’s] website. Once at the [Respondent’s] website, then, in the ordinary course, the internet user will be made aware that the website is concerned with [the Respondent’s] services. It cannot, therefore, be said that the use in a metatag of [the] Registered Trade Marks is a use that indicates the origin of [the Respondent’s] services. Thus, metatag use is not use as a trade mark ….
Nonetheless, as a decision of the Full Federal Court, the Accor case overrides this previous authority.
Key Messages
- The case extends trade mark infringement to circumstances where a person uses a trade mark in source code or metadata even though consumers may never see or access that code.
- To avoid a trade mark infringement action, businesses should not use another party’s trade marks, without permission, in the source code of their websites.
- The case supports an argument that the website owner could be liable for trade mark infringement even if this source code is put there by a third party website developer / IT consultant. Now is a good time to confirm that the person / company who develops or runs your website is not using competitor trade marks in the source code of your website.
- For brand owners, if someone is using your trade mark/s in the source code of their website, in relation to the same or similar goods covered in your registration, you potentially have additional recourse against them for trade mark infringement. Always consult your trade mark professional before alleging trade mark infringement.
