The Registrar found that the word mark, being used to identify the location of services rather than as a badge of origin, would likely deceive or cause confusion. 'Q1' also formed the name of an 'iconic' 78-level apartment building on Queensland's Gold Coast owned by a Mantra IP associate.
The Court disagreed, finding that the word mark had been sufficiently used as a trade mark to distinguish Mantra IP's services.
Reeves J commented that
It is not in dispute in these proceedings that a person cannot obtain the registration of a trade mark for a building. That is so because under the Trade Marks Act 1995 (Cth) trade marks can only apply to distinguish goods and services: see s 17 of the Act. However, the central question posed in these proceedings is whether a person can obtain the registration of a trade mark for services where the mark concerned is also the name of the building from which the services are supplied.
With the plethora of large commercial and residential buildings constructed in cities throughout Australia, one might have thought that this question would have come to be judicially determined before now. However, with the exception of one decision of the Full Court of this Court and some decisions of the Registrar of Trade Marks, the counsel for the parties have informed me that is not so.Spagnuolo - who owns apartments in the building and operates an accommodation service promoted through a domain name that features 'q1' - was successful in his opposition to Mantra IP’s applications for registration of a mark relating to its services. In Danilo Spagnuolo v Mantra IP Pty Ltd  ATMO 110 the Registrar’s delegate refused to register the word mark “Q1” as a trade mark under s 55(1)(a) of the Act, observing that observed that the name “Q1” had a geographical connotation rather than being a badge of origin for Mantra IP’s services: "The applicant’s evidence shows that, in practice, the ‘Q1’ name is predominantly used to identify the location of the services provided, rather than as a badge of origin".
The delegate concluded -
I find that, because of the geographical connotation contained in the Q1 sign, there is a real likelihood that its use as a trade mark by the applicant in respect of the very wide range of services specified in its applications will cause deception and confusion of the public. The Q1 sign is the only name of a building which, by virtue of its multi-faceted identity, has in the words of the Full Federal Court ‘become part of the common heritage’. As such, it has a connotation that effectively eclipses any function it might otherwise have performed in denoting any single trader, and which renders it simply unsuitable for use as a trade mark. Even with the best of intentions, any use of ‘Q1’ intended to denote a single trader cannot avoid creating deception and confusion in the marketplace, as it is a name patently required for use by all of the many traders with a connection to the building. The very nature of the sign means that it is, to return to the words quoted earlier from the ORLWOOLA case, ‘utterly unfit for registration as a trade mark’.Mantra IP then claimed that the Registrar erred in making the following findings, or conclusions: (a) the Trade Mark had a geographical connotation; (b) the Trade Mark formed “part of the common heritage” and was therefore unfit for registration as a trade mark; (c) use of the Trade Mark by the Applicant, if the Trade Mark did in fact have a geographical connotation, was likely to deceive or cause confusion; and (d) the Applicant used the Trade Mark to identify the location of the services provided rather than as a badge of origin.
Reeves J referred to the Full Court decision in MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236, commenting that
a sign concurrently applied as the name of a privately owned building and to distinguish certain services to be provided from, or in relation to, that building, does not lose its inherent adaptability to distinguish the services concerned. The Full Court appears to have reached that conclusion because the name of a privately owned building cannot be regarded as being the equivalent of a geographical place name such that it is to be considered as part of the “common heritage” over which the public, including a competitor trading in, or near, the building can claim to have a public right to make honest use of that sign in relation to its goods or services. In other words, its use as a trade mark will not, in any way, infringe upon the “common heritage” because its concurrent use as a building name does not bring it within that domain. This does not, of course, prevent a trader operating within the building concerned from using the name of the building to indicate the location of its place of business.
Like the Chifley Tower, “Q1” was a sign devised by Sunland, a private entity, to, among other things, signify or name its private building development. When it chose the sign “Q1”, it did not adopt or incorporate a geographical name such as that of an established town, suburb or district, like Surfers Paradise, or the Gold Coast. Nor, for that matter, was it a name chosen following some public process, for example, by the Minister under the Place Names Act 1994 (Qld). For the same reason I also do not consider the fact that Sunland chose to register the address of the Q1 building with a Queensland Government Department affects this conclusion ....
At about the same time as it devised the sign “Q1” as the name of its building development, Sunland successfully applied for the registration of a number of logo marks for the sign “Q1” for a range of services essentially comprising the same services as Mantra IP’s Designated Services. It later assigned those Q1 logo marks to Sunleisure. From late 2005, Sunleisure used the Q1 word mark as a trade mark .... Soon after Sunleisure became a part of the Mantra Group of companies, Mantra IP (then Stella IP) applied to register the word mark “Q1” in relation to its goods or services. From this history, I do not consider there is any basis upon which any trader could claim to have any “common right of the public” to make honest use of the sign “Q1” as a trade mark. Put differently, there is nothing about the sign “Q1” that could be said to bring it within the “common heritage” as discussed in Clark Equipment, or MID Sydney, such that it should be available for use by all members of the community and, as a consequence, remove its inherent adaptability to distinguish Mantra IP’s Designated Services.The Court went on to note that
it was an agreed fact that Sunleisure has used a website located at www.Q1.com.au to promote its businesses since 2005. Based on this evidence, I find that Sunleisure made sufficient use of the “Q1” word mark, as a trade mark, prior to the priority date of 10 March 2008, to establish a claim to prior use as an owner for the purposes of s 58 of the Act. It follows that I do not consider that this ground of opposition provides any basis for rejecting Mantra IP’s applications.It concluded that
the word mark “Q1” is alone inherently adapted to distinguish Mantra IP’s Designated Services and there is no other ground for the rejection of Mantra IP’s applications to register the “Q1” word mark in relation to its Designated Services. I therefore propose to make appropriate orders to reverse the delegate’s decision and dismiss Mr Spagnuolo’s notices of opposition to Mantra IP’s application.