Real Estate Franchisors – Protecting your Intellectual Property
By Greg Thomas, Special Counsel, and Christopher Chin, Lawyer
The goodwill of any Real Estate Franchise is substantially tied to the intellectual property used in the network. This typically includes trade marks for the brand, logos and slogans of the network. It is therefore no surprise that Franchise Agreements contain detailed clauses dealing with the ownership, grant and use of such intellectual property.
The recent judgment in Harcourts WA Pty Ltd v Roy Weston Nominees Pty Ltd (No 4)  FCA 138 dealt with a dispute around the entitlement to use the name “Roy Weston” (a real estate brand in Western Australia) as a trade mark.
The proceeding involved:
- Harcourts WA Pty Ltd (formerly Roy Weston Pty Ltd) (Harcourts WA), which was the franchisor of the “Roy Weston” franchise network and had registered the “Roy Weston” trade mark; and
- Roy Weston Nominees Pty Ltd (RWN), which had previously operated the “Roy Weston Morley” real estate agency business as a franchise, and had subsequently registered the “Roy Weston Real Estate” and “Roy Weston Nominees the Trusted Name in Real Estate” trade marks.
The dispute arose in the course of Harcourts WA’s rebranding in 2007 of the franchise network from “Roy Weston” to “Harcourts”.
Key aspects of the decision are as follows.
Alleged non-use of the “Roy Weston” trade mark
RWN applied to remove the “Roy Weston” trade mark for alleged non-use for a continuous period of 3 years pursuant to the Trade Marks Act 1995 (Cth) (TMA).
Importantly, the Court highlighted that:
- Use does not have to be extensive;
- Use of a mark for the purpose of redirecting consumers from one website to another has been held to constitute trade mark usage in a number of cases; and
- Entries in the White Pages are capable of being objectively considered evidence of use of a name or term.
The Court determined that during the alleged non-use period, Harcourts WA had:
- Hosted a banner advert on www.royweston.com.au stating “Roy Weston is now proudly part of the Harcourts Real Estate Group”;
- Redirected visitors from www.royweston.com.au to www.harcourts.com.au; and
- Directed people looking for “Roy Weston” in the White Pages to the Harcourts WA page.
Each instance was sufficient to constitute usage of the “Roy Weston” trade mark in good faith under the TMA.
Although the evidence on usage was slight, the Court also found that this was not enough to constitute an abandonment of the use of the name “Roy Weston”.
Ownership and infringement of the “Roy Weston” trade mark
Further, the Court found that:
- The “Roy Weston” name had been established through more than 50 years of use and there was clear chain of ownership of the trade mark – particular reference was made to the provisions in the franchise agreements under which RWN clearly acknowledged Harcourts WA’s ownership of the “Roy Weston Identifications”, which included the “Roy Weston” trade mark; and
- RWN had infringed Harcourts WA’s trade mark in breach of the TMA by using the “Roy Weston” name to conduct its business immediately after RWN ceased as a long standing franchisee and licensee of the “Roy Weston” name.
Cancellation of RWN’s trade marks
The Court also found that RWN’s trade marks should be removed as:
- Harcourts WA was the true owner of the trade marks;
- The use of the trade marks were contrary to law since they constituted a breach of the franchise agreement and RWN was obliged to:
- Desist from using any of the “Roy Weston Identifications”, which included the “Roy Weston” name;
- Revest ownership of any trade marks, business names or other intellectual property which comprised “Roy Weston Identifications”;
- Cause the name “Roy Weston Morley” to be transferred to Harcourts WA;
- Discontinue all use of “Roy Weston Identifications”; and
- Desist from conducting any business under the “Roy Weston Identifications” coupled with any name; and
- The trade marks were accepted for registration on the basis of statutory declarations which contained material inaccuracies (ie: about the alleged entitlement to use the trade marks and the alleged authorisation provided by Harcourts WA).
Entitlement to use company name
The Court accepted that RWN was entitled to use its company name, however, RWN went well beyond use of its own company name and engaged, and continued to engage in, use of a range of other marks which infringe Harcourts WA’s trade mark for “Roy Weston”.
This case highlights the importance for Real Estate Franchisors to:
- Be particularly mindful about the misuse of trade marks in rebranding;
- Ensure that their Franchise Agreements contain appropriate provisions about:
- Rebranding the network;
- The ownership, grant and use of intellectual property;
- The use of domain names and business names, and their subsequent transfer on the expiry or termination of the Franchise; and
- Using company names that are substantially or deceptively similar to the brand;
- Take steps to enforce and protect their intellectual property rights without delay;
- Apply to register their intellectual property (where available) if not already done so;
- Regularly conduct searches of intellectual property registers (where available) to look out for any applications that may be of concern; and
- Continue to sufficiently use any trade marks that they own or acquire or otherwise run the risk of an allegation of non-use or abandonment.
Contact Mills Oakley
For more information, please contact:
T: +61 3 9605 0040