Thanks to Doug and also Mark for their wise comments (and others who have
contributed). I
contacted the Trademarks Office who quickly provided the advice. Didn't
contact them in the first place because I assumed they, like most
authorities, would not be able to provide specific advice - just the
comment, "Ask to your lawyer! We cannot provide advice."

However they were most helpful and the key words when it comes to this
scenario are, "deceptively similar".

You see, when wdog.com.au wanted that domain name, they checked the business
names and trademarks register at IP Australia but noted the trademark was
for 'W-Dog', not 'wdog'.  Although wdog.com.au saw a difference, the
Trademarks Office don't.

If a Business Name/Company has a name that is deceptively similar to a
trademark, then it is in breach. This does not apply to any adjectives
because they cannot be trademarked.

Therefore, legally, wdog.com.au is in breach of a Trademark and wdog.com.au
will be registering another business name and another domain name.

Regards,
Chas Cleland, Manager, AUSCITY
auscity§auscity.com.au     www.auscity.com.au
Phone: +61 3 5561 3077