Bed, bath & actually not misleading after all – the Full Court unanimously overturned the primary judge’s finding that “HOUSE BED & BATH” was misleading

By Jonathan Wong and Shehana Wijesena

On 31 October 2024, in a loss for Bed Bath ‘N’ Table (BBNT), the Full Court of the Federal Court unanimously held that the “HOUSE BED & BATH” mark (House B&B mark) was not misleading or deceptive and did not infringe the “BED BATH ‘N’ TABLE” mark (BBNT mark). The passing off claim was also dismissed and the primary judge’s injunction was set aside.

This decision stems from an appeal by Global Retail Brands Australia (GRBA) against the decision of the primary judge who previously held that the House B&B mark was misleading or deceptive but did not infringe the BBNT mark.

For a detailed background of this dispute and an analysis of the primary judge’s decision, please see this previous article.

In this article, we will take a closer look at the Full Court’s decision and outline some key takeaways for traders wishing to protect their trade marks.

Misleading or deceptive conduct

To begin, the Full Court considered GRBA’s appeal against the primary judge’s finding that GRBA had engaged in misleading or deceptive conduct by using the House B&B mark.

The Full Court ultimately allowed GRBA’s appeal and found that there was no misleading or deceptive conduct because of the following reasons:

1. BBNT had no independent reputation in “BED & BATH”: The primary judge erred by failing to give effect to her own finding that BBNT had not established any independent reputation in the words “BED BATH” or “BED & BATH” in any formal or institutional sense (i.e., BBNT only had a reputation in the composite phrase “BED BATH ‘N’ TABLE”). This finding was significant because it indicated that, contrary to the primary judge’s decision, the House B&B mark was not likely to lead ordinary reasonable consumers into thinking that House B&B stores were associated with BBNT;
2. Google Analytics data: Google Analytics data showed that when consumers searched for BBNT or specific BBNT stores, they did so using the BBNT name as a whole, rather than some truncated version of the BBNT name. This supported the finding that BBNT only had a reputation in the composite phrase “BED BATH ‘N’ TABLE”;
3. Evidence of using the words “BED” and “BATH” as a trade mark: The fact that no other retailers have used the words “BED” and “BATH” in their store names or external signage for over 40 years except for BBNT did not automatically mean that those words were distinctive of BBNT or that their use by another trader in the name of a soft homewares store would likely lead ordinary and reasonable consumers into thinking that the trader is associated with BBNT. Indeed, no evidence was presented before the court indicating that this was the case;
4. Substantial and obvious differences between the marks: Unlike the BBNT mark, the House B&B mark contained the word “HOUSE”, which was the most prominent feature of the mark and served to indicate that the House B&B mark was a sub-brand of the well-known House brand operated by GRBA. Therefore, even if ordinary reasonable consumers associated the words “BED & BATH” with BBNT, they will not be misled into thinking that the two businesses were associated given the significance differences between the marks. The consumers would merely infer that both businesses supplied soft homewares for bedrooms and bathrooms; and
5. GRBA’s wilful blindness to the risk of confusion: The primary judge erred by relying on GRBA’s wilful blindness to the risk of confusion to conclude that the House B&B mark was likely to mislead or deceive, especially when the primary judge clearly indicated that GRBA fell short of a commercially dishonest intention or an intention to mislead or deceive. Knowing that some confusion will occur is not necessarily the same as intending that it occur.

Trade mark infringement

The Full Court also considered the primary judge’s finding that the House B&B mark did not infringe the BBNT mark, which BBNT sought to cross-appeal.

The Full Court ultimately affirmed the primary judge’s finding that the House B&B mark did not infringe the BBNT mark for the following reasons:

1. The irrelevance of reputation: Reputation of the registered mark played no role in assessing deceptive similarity under a trade mark infringement claim. This was previously confirmed by the High Court and applied correctly by the primary judge;
2. Prominence of the word “HOUSE”: As explained above, the prominence of the word “HOUSE” in the House B&B mark indicated that there were substantial and obvious differences between the BBNT and House B&B marks; and
3. “House B&B” was a composite mark: The words “BED & BATH” was not operating as a separate trade mark distinct from the House B&B mark. The fact that GRBA had not used the words “BED & BATH” by itself as a trade mark except as a component of the House B&B mark indicated that the House B&B mark was a single composite mark.

Key takeaways

As highlighted in this decision, traders wishing to protect their trade mark should be aware of, among others, the following legal principles:

• The applicant for relief must establish that the descriptive words that they seek to protect as their trade mark have become distinctively associated with their product for the relevant misrepresentation to be conveyed. If the respondent has not used the same words as those used by the applicant, but has instead used something similar, then small differences may suffice to negative the likelihood of deception and defeat the misleading or deceptive conduct claim;
• There is an often overlooked but significant distinction between knowing that some confusion will occur (e.g., a wilful blindness to the risk of confusion) and intending to cause confusion (e.g., a commercially dishonest intention or an intention to mislead or deceive). The former conduct will not support a finding of misleading or deceptive conduct; and
• Whether there has been trade mark use of multiple marks brought together in a composite form will depend on the facts of each case and the impression likely to be conveyed by their use. The fact that a mark has never been used as a trade mark except in combination with other marks strongly indicates that those marks form a single composite trade mark.