Court Rules Spa Can Use Name Despite Restaurant’s Objections

A New Zealand High Court has ruled that the spa company planning to open a luxury wellness centre named “The Bathhouse Queenstown” can proceed with its launch, despite objections from the local restaurant bearing a similar name. The decision, delivered by Justice Harland, allows the spa to operate under a modified name, “The Bathhouse Spa Queenstown,” while also setting the stage for a trial next year to address the broader dispute.

The Bathhouse restaurant, located on the shores of Lake Wakatipu, argues that the spa’s similar name could mislead customers and undermine its reputation. The restaurant has a historical significance, originally established as a bathhouse to commemorate King George V in 1911. It has continuously operated as a restaurant since the mid-1990s, leveraging its rich history and prime location to attract clientele.

The Australian company, The Bathhouse Queenstown Pty Ltd, registered in New Zealand just last month. The plaintiffs, who represent the restaurant, claimed the spa’s use of a similar name breaches the Fair Trading Act. They allege that this misrepresentation could confuse customers into believing there is a connection between the two entities, which could damage the restaurant’s goodwill.

Justice Harland noted the restaurant’s argument that the historical significance of the building enhances its appeal. “The plaintiffs contend that the history of The Bathhouse building and the significance of its location are important drawcards which enable it to attract customers and, as such, this is part of its goodwill,” she stated. The plaintiffs also asserted that the spa’s marketing has already misled members of the public.

In contrast, the spa company defended its name choice, arguing that “The Bathhouse” accurately describes its services. The spa has been operating under this name in Australia since July 2023 and is expanding to various international locations. The company maintains that reasonable consumers, particularly tourists, are unlikely to be confused by the similar names, asserting that there is no evidence of consumer deception.

Justice Harland observed the firm positions taken by both parties and ultimately determined that allowing the spa to operate under a modified name would balance the interests of both sides. She emphasized that including the term “spa” in the trading name would likely reduce confusion while the matter awaits further court proceedings.

“I have reached the very firm view that damages would be an adequate remedy for any losses or damage suffered by the plaintiffs in the interim if, at trial, they succeed in their claims,” Justice Harland concluded. The trial is expected to delve deeper into the implications of brand naming and consumer perception in the hospitality industry.