Will the tables turn for Bed Bath 'N' Table?

Global Retail Brands Australia Pty Ltd v Bed Bath ‘N’ Table Pty Ltd [2024] FCAFC 139

What you need to know

• On 3 April 2025, the High Court granted special leave to appeal to Bed Bath 'N' Table in respect of its ongoing consumer protection litigation with Global Retail Brands Australia.
• The Full Court of the Federal Court of Australia had partially overturned the first-instance decision, agreeing with the primary judge's finding that GRBA had not engaged in trade mark infringement, but finding that the primary judge erred in concluding that GRBA's use of its mark breached consumer law and amounted to passing off.
• The case raises important issues about the extent of reputation acquired through trading under a unique brand name and the ability to rely on such reputation in making consumer law and passing off claims, irrespective of whether trade mark infringement can be established.

What you need to do

• Trade mark applicants should ensure that they register trade marks for any elements of their brand that they intend to carry reputation and which are used institutionally, for example shortened variations or sub-brands.
• Trade mark applicants should continue to be mindful of descriptive elements in their marks, and avoid using words which are used as category or navigational descriptors in the relevant market as they may not afford as strong protection as more distinctive words.
• A business launching a new brand should obtain legal advice on its freedom to trade under the new brand, going beyond merely whether the chosen brand is available to register as a trade mark.

Background to the High Court appeal

The appeal to the Full Court of the Federal Court of Australia followed the first instance decision that Global Retail Brands Australia's (GRBA) use of its "HOUSE BED & BATH" trade mark (House Mark) in relation to soft homewares did not infringe Bed Bath 'N' Table's (BBNT) "BED BATH 'N' TABLE" mark (Bed Mark) on the basis of the finding that the marks were not deceptively similar, but such use was in breach of the Australian Consumer Law, including because it was misleading and deceptive, and also amounted to passing off.  On 3 April 2025, BBNT was granted special leave to appeal the decision of the Full Court on the ACL and passing off issues to the High Court of Australia, so we will be watching the space closely and providing an update on further developments in due course.

Australian Consumer Law

The primary judge found that GRBA breached the ACL and engaged in passing off by adopting its House Mark in relation to soft homewares.  The primary judge considered GRBA's choice of the brand "House Bed & Bath" over alternative wording was an attempt to leverage off BBNT's longstanding reputation in its name, which included the words "bed" and "bath" in that order which no other trader had used in its store name or external signage, giving BBNT over 40 years' of unique use.  This, paired with the similarity in get-up of the stores, resulted in the conclusion that reasonable consumers would be caused to wonder whether there was an association between GRBA's House B&B business and BBNT, perhaps wondering whether the businesses had merged or that House had taken over BBNT.  While GRBA was "willfully blind" to the possibility that consumers would confuse the businesses, the evidence did not establish that GRBA intended to deceive consumers.  However, the primary judge did find that GRBA's willful blindness supported an inference that its conduct was likely to be deceptive.

On appeal, the Full Court found that the primary judge erred in concluding that GRBA's conduct was likely to mislead or deceive consumers and amounted to passing off, by failing to give effect to her own finding that BBNT had no independent reputation in the words "BED BATH" or "BED & BATH".

In those circumstances, the Full Court also found that the primary judge erred when she gave weight to the impact of BBNT's reputation in the Bed Mark on whether consumers would be misled.

The Full Court observed that in order to establish that a consumer would be misled into thinking there was some association between stores operating under the Bed Mark or the House Mark, the person would need to either:

(a) confuse the two marks – in this regard, the Full Court found that the differences between the two marks are "substantial" and "obvious to anyone but the most careless observer"; or

(b) despite recognising their differences, draw an inference from the presence of "BED BATH" or "BED & BATH" to assume there was some association between the two businesses using them – here the Full Court found that it was not likely an ordinary or reasonable consumer would associate "BED BATH" or "BED & BATH" with BBNT, but even if they did, a reasonable consumer would do no more than infer both businesses were engaged in the supply of soft homewares for bedrooms and bathrooms.

The Full Court's reasoning affirmed the distinction between knowing that confusion will occur and intending to cause confusion.  The Full Court found that the primary judge erred in concluding that GRBA's conduct was likely to mislead or deceive consumers, as in addition to the findings about potential to confuse above, the evidence did not establish an intention on the part of GRBA to mislead or deceive and any evidence of actual confusion was given very little weight.

Trade mark infringement

The primary judge identified that the comparison for the purposes of determining deceptive similarity was between the full Bed Mark as registered (rather than a contraction such as "BED BATH" or "BED & BATH"), and the composite House Mark.  Given the uniqueness of the "'N' TABLE" part of the Bed Mark, the significance of "HOUSE" to the House Mark, and the significant differences in the layout of the words in the marks, the primary judge was not satisfied that the similarities in the marks were sufficient to deceive or confuse the ordinary consumer even when considered through the lens of imperfect recollection.

In its cross-appeal to the Full Court, BBNT argued that the primary judge erred on three grounds:

1. GRBA's use of the House Mark involved use of the words "BED & BATH" as a trade mark in its own right;
2. such use infringed the Bed Mark; and
3. the composite House Mark was deceptively similar to the Bed Mark.

The Full Court agreed with the primary judge's finding that the House Mark was not deceptively similar to, and therefore did not infringe, the Bed Mark.  There was no error in the primary judge's findings that the House Mark was a composite mark, and it had not been established that GRBA used the words "BED & BATH" except as a component of the House Mark, and therefore there was no need to consider whether the use of "BED & BATH" by GRBA as a trade mark would infringe the Bed Mark.

The Full Court allowed GRBA's appeal and dismissed BBNT's cross appeal.  BBNT have subsequently sought and been granted special leave to appeal to the High Court on the ACL and passing off questions.

We are very much looking forward to the High Court's views on the issue of misleading and deceptive conduct and to what extent reputation established through long use of a mark and store get-up in a specific market segment can be enough to stop rival traders adopting similar brand and get-up elements.  Be sure to watch this space for our next update on this ongoing litigation.

Authors: Kellech Smith, Partner; Daele Tyler, Associate and Rosalie Ritter-Jones, Graduate.