Unsuccessful appeal highlights the difficulties where a geographical place name is adopted as a brand

This appeal related to alleged misleading or deceptive conduct by ThredboNet in registering and using business, company and domain names containing the word ‘Thredbo’ and operating a Facebook page and website which was allegedly similar to that of Kosciuszko Thredbo.

 

Kosciuszko Thredbo Pty Limited v ThredboNet Marketing Pty Limited [2014] FCAFC 87 (21 July 2014)

By way of background, Thredbo is a town within the Kosciuszko National Park in New South Wales and is a popular centre for snow sports and other recreational activities. Kosciuszko Thredbo holds a lease over land in the National Park and operates the Thredbo Village, Thredbo Resort and various other business in the village. Its related company, Thredbo Resort Centre Pty Ltd provides a central booking service for accommodation in Thredbo as well as other information services.

ThredboNet conducts a directly competitive online business (based in Cammeray, NSW) managing and leasing rental accommodation in Thredbo.

The primary judge had previously found in favour of Kosciuszko Thredbo on one claim relating to ThredboNet’s use of a webpage link involving prominent use of My Thredbo, but dismissed the other claims.

The appeal set out 26 grounds which were distilled to three issues.

  1. The Full Court found the primary judge had erred in requiring Kosciuszko Thredbo to prove that it had an exclusive right to use the word ‘Thredbo’ to establish a secondary meaning in this word as a prerequisite to its claims for misleading or deceptive conduct. Rather, the correct question was whether there were facts demonstating ThredboNet’s particular conduct misled or deceived, or was likely to mislead or deceive, consumers into believing there is some relevant connection between ThredboNet and Kosciuszko Thredbo or their respective products.
  2. Nonetheless on the misleading and deceptive conduct issue, the Full Court agreed with the primary judge. In doing so, it considered the class of consumer seeking accommodation to be reasonably well informed and internet savvy. ThredboNet’s websites contained a disclaimer, offered a limited range of accommodation and had a different appearance to that of Kosciuszko Thredbo. While there was some limited evidence of confusion, it did not point to confusion being widespread or of such a nature to cause an ordinary reasonable consumer to be misled or deceived into associating ThredboNet’s business with Kosciuszko Thredbo. Consequently, ThredboNet’s conduct did not contravene ss 18, 29(1)(g) or (h) of the Australian Consumer Law or constitute passing off.
  3. Glenn Smith, the director of ThredboNet was also a sub-lessee of two properties in the Thredbo Village with Kosciuszko Thredbo as lessor. The sub-leases contained a provision requiring the sub-lessee to not use or permit the use of the word ‘Thredbo’ in connection with any business carried on by the sub-lessee without the prior written consent of the lessor. The primary judge had considered this was an unreasonable restraint of trade which could not be read down and was void at common law. The Full Court agreed that Kosciuszko Thredbo carried the onus of establishing this sort of provision was an accepted part of ordinary commercial trade, but did not discharge that onus and the provision imposed an unreasonable restraint. However, the Full Court considered this provision in the context of the sub-lease as a whole and construed it narrowly as being intended to prohibit the sub-lessee from using the word ‘Thredbo’ in a way that created a connection between any other business than providing accommodation that the sub-lessee might establish or conduct and the business or goodwill of Kosciuszko Thredbo’s resort. Consequently, Mr Smith was not in breach of that provision in carrying on business as he did.