Erven Warnink BV v J Townsend & Sons (Hull) Ltd [1979] AC 731

Lord Diplock noted the judgment of Reddaway v Banham which denied that an action for passing off protected a proprietary right in the mark and that this expanded the actions to misrepresentations as to thinks like trade names and other indicia – this case was a classic case of misrepresenting one’s own goods as the goods of someone else.

It was only in AG Spalding & Bros v AW Gamage that Lord Parker identified the right which is protected by an action of passing off is the ‘property in the business or goodwill likely to be injured by the misrepresentation’. Goodwill being defined as ‘the benefit and advantage of the good name, reputation and connection of a business. It is the attractive force which brings in custom’

The goodwill of a manufacturer’s business could be injured by someone else who sells goods who are correctly described as being made by that manufacturer but being of an inferior class of quality – in AG Spalding this was held to be actionable and the extension to the nature of the misrepresentation which gives rise to a right of action in passing off which this involves was regarded by Lord Parker as a natural corollary of recognizing that what the law protects by a passing off action is a trader’s property in their business/goodwill.

The significance of this was that passing off lay in the recognition that misrepresenting someone’s goods as someone else’s was not a separate genus of wrong but a particular species of wrong included in a wider genus.

Erven Warnink BV v J Townend & Sons (Hull) Ltd [1979] AC 731

Lord Diplock set out the five elements regarded as essential for a valid action of passing off:

1. A misrepresentation

2. Made by a trader in the course of trade

3. To prospective customers of his ultimate consumers of G&S supplied by him

4. Which is calculated to injure the business or goodwill of another trader in the sense that this is an RF consequence

5. Which causes actual damage to a business or goodwill of the trader by whom the action is brought, or in a quia timet action will probably do so

Reddaway v Banham [1896] AC 199

Facts: R manufactured belting made from camel hair sold as ‘Camel Hair Belting’. Around 10 years later B started to market a similar product under the same name. At trial the jury found that B engaged in passing off and an injunction was granted restraining their use of the word ‘Camel Hair’ in such a way as to deceive purchasers into the belief they were r purchasing R’s belting.

Lord Herschell:

• Though belts had been made from camel hair yarn all over the world there was ample evidence to justify that the purchasers of such good hair associated the words ‘camel hair’ not to belting of a particular material but those by a particular manufacturer

• The name of a person or words forming common stock of language can become so far associated with the goods of a particular maker that it is capable of proof that the use of them by themselves without explanation or qualification by another manufacturer would deceive a purchaser into the belief that he was getting the goods of A when he was really getting those of B

• But mere proof of the use of the name wouldn’t be enough. A plaintiff would have to prove that the defendant was using it under such circumstances or in such a manner as to put off his goods as the goods of the plaintiff. If he could, then an injunction would be granted

• Here the CA proceeded on the premise that where a manufacturer uses a descriptive word as a trademark they are never entitled to relief – this isn’t supported by authority or principle

Lord Halsbury reached the same conclusion noting that prima facie it would be difficult to acquiesce in the contention that a person was making their goods pass as the goods of somebody else just by describing the subject of sale. But the circumstances of this case made this prima facie impression wrong – clearly one man’s goods were being sold as those of another

Hornsby Building Information Centre v Sydney Building Information Centre (1978) 140 CLR 216

Facts: The SBIC had traded for 30 years. It obtained from the Industrial Court an injunction under s 80 of the TPA or restrain the HBIC from trading under this name for a contravention of s 52.

Stephen J noted as a preliminary point that where, as in s 52, the focus is on misleading others rather than injury to a competitor, it becomes of particular importance to identify the respect in which there is said to be any misleading or deception. He assumed for the purposes of his honour’s judgment that persons had indeed been misled that the HBIC was a branch of the SBIC and noted further that the issue here concerned the use of 3 descriptive words prefixed by a locality.

Here it was the case that the use of the words were so associated with the SBIC to the extent that signage merely said ‘Building Centre’ in the premises. His honour noted the tension which flowed from descriptive trading names – because it is descriptive it is equally applicable to all like businesses and isn’t distinctive of any particular business.

• In an action for passing off where it is the wrongful appropriation of reputation, a plaintiff that uses descriptive words in its trade name will find that a slight variation in the competitor’s trade name will render them immune from action

  • It is to be accepted that confusion will occur in the public mind – to do otherwise gives one who appropriates to himself descriptive words an unfair monopoly on those words and could deter people from pursuing occupations which those words describe

• If this is so for passing off, s 52(1) which is only concerned with the interests of third parties, it will apply a fortiori

  • Given that a name is no more than descriptive of a particular type of business – its use by others who carry on that same business doesn’t mislead or deceive as to the nature of the business

  • Here both the HBIC and SBIC are BICs and no one is deceived as to the nature of the service. Any deception would arise only from the fact that SBIC chose descriptive words as a title and were the only people in Sydney to do so and thus people associated a business activity with them.

  • Evidence of confusion in the minds of members of the public isn’t evidence that the use of HBIC’s name is itself misleading or deceptive – but only evidence of its intrusion into the field originally occupied exclusively by the SBIC which caused a degree of confusion

His honour noted that there was evidence that the activities of both were similar but said that this wasn’t conclusive of any wrongdoing. He analogized it to an art gallery – if a similar situation occurred where one attached a regional prefix for a significant amount of time and a new entrant appeared in the market would neither mislead or deceive

Reckitt & Colman Products Ltd v Borden Inc [1990] 1 WLR 491

Facts: R&C’s lemon shaped contained had the brand-name Jif embossed on the side and bore a green-paper label featuring the same word. B’s three types of container each bore a yellow paper label featuring the brand name ‘ReaLemon’ and marketed in the same style of container. The CA with the TJ in ordering B be restrained from selling its product – this was an appeal to the HOL

Lord Oliver noted the fallacy in proceeding on the proposition that you ‘can’t claim a monopoly in the sale of a plastic lemon’ – here the deception wasn’t in this but in containers so fashioned as to suggest that the juice inside ir emanated from the source with which those configurations were associated in the public mind.

Thus the only question is whether the respondents, having required a public reputation for Jif juice, by selling for many years in containers of a particular shape and design that has become associated where produce, can legitimately complain of the sale by the appellants of similar produce in containers of similar, though not identical, size, shape and colouring.

• His honour thus rejected the idea that the plastic lemon was the object itself rather than the ‘get-up’ under which the produce is sold.

  • As to the Q: But neither does one merely look at the difference in labels and say that the labels couldn’t be confused – the question is whether what they are doing is a misrepresentation that their juice is Jif juice and whether this results from the similarity of their get-up to the whole of the respondents get-up

  • As to the Q: Once it is established as a matter of fact that what they’re doing constitutes a misrepresentation which deceives the public into an erroneous believe – this is enough.

• It was also accepted that one cannot get protection simply because another uses the same/similar terms as descriptive of their own goods and have been the only ones to employ that description

The disagreement arose from the argument that what the respondents are asking the court to protect is just the se of a descriptive term which is embodied in a plastic lemon instead of expressed verbally:

• Here it was said there was nothing special about using a plastic lemon container – it was done all over the UK and US. But if it becomes associated in the minds of the purchasing public with Jif juice, then the confusion arises only because of a practical monopoly and a belief/assumption that all emanate from the same source

• The difficulty with this is that this type of assumption is the basis of all passing off actions

• But to succeed it isn’t enough that they have had a practical monopoly which lead members of the public to believe all goods emanate from him. He must demonstrate that it has become so closely associated with his goods as to acquire the secondary meaning of not simply goods of that description, but specifically of goods which he and he alone is the source

• The TJ found as a matter of fact that the natural size squeeze pack form was so closely associated with Jif lemon juice that introduction of the appellant’s juice in any of the proposed get-ups would be bound to result in many purchasing the juice believing it contained Jif Juice

• This indicated that the plastic shaped lemon container merely had secondary significance – it indicates that it wasn’t just lemon juice, but Jif Lemon Juice

Lord Jauncey reached the same conclusion but also noted that it wasn’t legitimate to equate the use of a plastic lemon of natural shape to the word ‘lemon’ in its ordinary use and couldn’t see why a trader couldn’t get protection for such an ingenious idea.

Nutrientwater Pty Ltd v Baco Pty Ltd [2010] FCA 2

Facts: It was established that the NW product range copied elements of the get-up of vitaminwater flavoured water (at the time not available in AU). In Feb 2008 they entered the market and other parties also did so. In May 2009 the respondent entered the market and started selling flavoured water in similar bottles.

Kenny J began by noting that NW had to show that it had the requisite reputation in the get-up that Baco appropriated. His honour noted that the difficulty of establishing reputation in a get-up alone:

• Essentially it requires the establishment that so much of the totality of the get-up was adopted that the overall impression of the other brand is adopted.

• This takes a strong case as consumers generally don’t associate a get-up with a person in some markets

• The requisite reputation will be more readily found where the get-up is unique or striking rather than descriptive, mundane, merely function or in common use

(Natural Waters)

• Here NW didn’t establish that its reputation lay in the features it sought to protect, even though its product range had a reputation, as opposed to in its distinctive name/logo, overall packaging or get-up

• NW relied on a combination of features here which were said to be distinctive – but most of these were shared with other competitors like viatminwater and Smart Water

  • Most of the brands had a ‘rainbow’ set of colours when arranged with similar variants in brand ranges. All were in clear plastic bottles with large wrap-around labours and horizontal banding with white colours.

• Thus NW hadn’t established such a degree of distinctiveness in the colour of their product range or any other feature, alone or together, to justify that it had discrete reputation

• Furthermore they copied a lot of the features of vitaminwater which is now a leader in terms of sales valume

• In the circumstances the sales and market evidence can’t justify that Baco appropriated NW’s features as opposed to competitors in the market generally. Further, there is no room for this kind of case where the get-up which it relies on substantially adopted the gestalt/look-and-feel of the US vitaminwater product

Bodum v DKSH Australia Pty Limited [2011] FCAFC 98

Facts: Bodum and its companies were the owners and licensor of a registered TMs of the name “Bodum”. The respondent AU company was a subsidiary of a Swiss company that imports home-ware including the coffee plunger which was the subject of this suit. Bodum manufactured and sold a coffee plunger that was extensively advertised through a number of channels and had a significant reputation. The packaging for this product prominently depicts a photograph of the good and gives prominence to the design features of the plunger within – rendering it transparent to consumers. Bodum contended that by reason of these matters it acquired a substantial and valuable reputation in the features and distinctive shape of the plunger with the result that sale of plungers which embody those features is likely to signify to AU consumers that they were Bodum coffee plungers.

Greenwood J

Reputation and advertising material

• There can be no doubt as a matter of law a trader can acquire a reputation for goods or the get-up for goods, or put another way, the design or get-up of good. His honour noted

  • Edge v Nicholls where the plaintiff marketed laundry blues with the particular feature that it was “put up in a porous bag, the neck of which was tied round a small stick with a knob at each end” (called the Dolly Blue. The manner in which these goods were ‘done up’ became ‘associated in the minds of purchasers with the plaintiff’s goods and the evidence demonstrated that the public distinguished the plaintiff’s goods from all others

  • Reckitt v Coleman

• There is no point of departure in a case based on the features of a product, as a matter of principle, from the general proposition that “no man may pass off his goods as that of another”. In the end the question of such secondary reputation is one of fact and impression

  • His honour noted that in this case it wasn’t, as the TJ held, that the coffee plunger had a reputation solely because of the Brand Bodum.

  • Here, the level of association attained between the plunger and the brand was simply as a result of the success of their advertising campaign

  • But the secondary reputation isn’t lost by association of the images with the manufacturer’s TMs – those consumers retain a recognition of the TM and the distinctive features of the product are likely to think that products exhibiting those features are Bodum unless the rival product tells the consumer otherwise

    • Some consumers might not recall the Bodum name but instead seek out ‘that distinctive coffee plunger’ and thus treat a coffee plunger exhibiting those features as being a Bodum

• Here the independent and secondary reputation of the goods was clearly shown by publications in the SMH and the Myer catalogue of the Bodum coffee plunger by itself – the presumption being made that consumers would recognize it

  • His honour was thus satisfied that a very significant secondary reputation in the features was established

  • The case was distinguishable from Mars Australia (The Maltesers Case) where it was held that by so heavily promoting the distinctive product in conjunction with its TM, in the absence of that TM no potential purchaser would be likely to be misled

    • In that case the finding depended on the Maltesers get-up, the highly stylized and dominant word Maltesers as the principal component of it etc.

    • Further that product was a boxed product where confectionary couldn’t be examined by a potential buyer independent of its packaging

Was the conduct of GKSH MOD or likely to MOD consumers and does the impugned conduct pass off DKSH’s rival product in the way contended

• His honour considered a number of factors in answering this question

  • Bodum, when DKSH was released, enjoyed substantial reputation with its features becoming distinctive of the product of its maker over 30 years of garnering that reputation.

  • Sales of the product dwarfed that of DKSH

  • The overall visual difference between the two product was small and had a marginal effect on the overall appearance – they were “so similar” that it was unlikely one could conceive the DKSH product without reference to the other

    • The one difference was that the top horizontal band on the DKSH ‘Euroline’ plunger exhibits cavities within the band and exhibits one has a round knob of the same size as that on the Bodum product. The Bodum product also had an additional ‘safety skirt’ small differences

Having regard to all the factors his honour found it difficult to accept that DKSH distinguished its product as found by the TJ

• Bodum’s packaging of a white box displaying a large impact of a coffee plunger marked ‘Chambord’ with the Bodum TM

  • The rival is also two-thirds white. It has a large image of the rival product that is just about exactly the same as the Bodum one. It has the trade name ‘Euro Line TM’ at the base of the box (which was not distinctive and was likely to be regarded as an abbreviated description of the product being within a line of European products)

• Factually the product was often removed from the box and displayed outside

  • The DKSH product had no brand marking on the product itself and just had an instruction leaflet and a sticker marked ‘Euroline’ which was not easily detachable and may or may not represent a method of differentiating it which would guarantee a representation to a consumer that this was different to Bodum’s product

• The adoption on the box of a non-distinctive and descriptive trade mark Euroline for a rival product that for all practical purposes embodies all the features of the product exhibiting the substantial reputation of the Bodum one isn’t sufficient to distinguish the rival product from the distinctive product sought to be copied

  • Especially in the context of products commonly being advertised outside their boxes

  • It would have been easy for DKSH to mark its name prominently on the box or on the product itself

• Thus an inference is poen that DKSH’s get up was such as to lead consumers to believe that when they engaged with it they were actually engaging with Bodum’s product even if they saw the word ‘Euroline’ on the box

  • If they didn’t see the box and were drawn to the plunger by the distinctive features of the Bodum product they may well pick it up and examine it and not be able to find out that they weren’t looking at a Bodum product

  • The association between the distinctive features of the Bodum product and the name Bodum is not material even though a savvy consumer may be able to pick up the product and look for the Bodum trade mark for a reasonable and ordinary member of the class of consumers seeking to buy a coffee machine who was drawn to it by reason of the copying of the distinctive features will be unable to tell it wasn’t a Bodum

  • As a matter of impression it is entirely rational to conclude that such a member of the class is very likely to think that the largely indistinguishable product embodying those features is the Bodum product

ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302

Facts: ConAgra was incorporated in the US and sold frozen foods under a number of brand names, including Healthy Choice – it having a substantial reputation in this name in the US but having never traded in AU. McCain applied for the TMR for the same name, ConAgra sued in passing off for contravention of s 52 of the TPA.

Lockhart J (342-346) noted that the hardline UK cases were out of line with the reality of international business, which is that contemporary consumers are not usually concerned about the location of the premises of a company or the site of its warehouse or manufacturing plant where the goods are produced, but they are concerned with the maintenance of a high level of quality represented by internationally known and famous goods.

• Thus the real question is whether the owner of the goods has established a sufficient reputation with respect to his goods within the particular country in order to acquire a sufficient level of consumer knowledge of the product and attraction for it to provide custom which, if lost, would be likely to result in damage to him this is a question of fact

  • It is still necessary for the plaintiff to establish that (1) their goods have the requisite reputation in the particular jurisdiction, (2) that there is a likelihood of deception and a (3) likelihood of damage

    • But reputation can be established by a variety of means – TV/radio advertisements, magazines, newspapers

  • Thus it is not necessary in Australia that a plaintiff, to have an action in passing-off, have a place of business or business presence in AU, or is it necessary that his goods are sold here

  • It is enough if their goods have a reputation in this country amongst persons (residents or otherwise) of a sufficient degree to establish a likelihood of deception amongst consumers and dame to his reputation

On the question of extent

• The plaintiff must prove that there are within the jurisdiction in which the defendant is carrying on business a substantial number of persons who are aware of the plainitff’s product (residents or not)

  • This flows from the fact that in a practical and business sense, a sufficient reputation requires something more than a reputation among a small group of persons – but the size and extent of the class may vary according to the circumstances of the case

Gummow J (372) opined that where a plaintiff, by reason of business operations conducted outside the jurisdiction, has acquired a reputation with a substantial number of persons who would be potential consumers were it to commence business within the jurisdiction, the plaintiff has in a real sense a commercial position which it may turn to account. Defendants moving to annex such a reputation diminish this business advantage.

• ConAgra was unable o show that it acquired a sufficient reputation in AU – evidence of its reputation in the US, occasional spillover magazine advertisements and the frequency of travel to the USA by Australians was considered to be inadequate

Fletcher Challenge Ltd v Fletcher Challenge Pty Ltd [1981] 1 NSWLR 196

Facts: It was announced on 22/10/80 in NZ that as a result of 3 companies amalgamating the plaintiff was to be incorporated in AU. This announcement was widely publicized in AU. On 23/10/80 the unrelated defendants reserved the corporate name Fletcher Challenge Pty Ltd in AU and successfully incorporated in 12/1980. In 1/1981 the plaintiff commenced proceedings in NZ and sought an interlocutory injunction requiring the defendants change their name as they were engaging in passing off

Powell J (204-205) noted that the first question is whether a sufficient prima facie of reputation in NSW was established

• Even if the relevant date is the date of the reservation of the name, the plaintiffs name could be legitimately treated as the combined goodwill of all its holding companies

• But if something more directly related to their corporate name is needed, at this stage of the proceedings (for an injunction) the announcement of the proposed amalgamation and new corporate name created a new reputation which preceded, though only by a few hours, reservation of the company name

Ballarat Products Ltd v Farmers Smallgoods Co Pty Ltd [1957] VR 104

Facts: BP and its predecessor had title over the mark Farmers for small goods for many years. Seven years after ceasing to trade it sought to prevent the defendant from producing smallgoods under the name Farmers Smallgoods Company

Hudson J (107-108)

The defendant submitted that the action should fail since the name Farmers had no goodwill attached to it – the plaintiff didn’t use the name for 6 years and a mere intention to resume this branch of business with the name, even if established, wouldn’t be sufficient to entitle relief

The plaintiff submitted that they had a valuable reputation attaching to the use of the name which represented a commercial advantage they enjoyed as part of a business they never abandoned and that this subsisted such that goods sold under this name will still be regarded by the public. They further submitted that the likelihood of an assignee or the plaintiff resuming the business under this name was sufficient to establish likelihood of damage

• His honour was satisfied that there subsisted a valuable reputation in the name Farmers in connexion with smallgoods and also that the plaintiff never decided to abandon the advantage which the name represented

  • Evidence showed retention of the premises and plant, negotiations for formation of the new company etc. Which showed they would soon seek to exploit the use of the name

• The mere fact that the plaintiff isn’t for the time being producing or marketing any goods under the name doesn’t present any obstacle to the plaintiff establishing that the defendants conduct amounts to a representation to the public that the goods of the defendant are those of the plaintiff or a branch/subsidiary of it

  • Traders may for a lot of reasons discontinue goods but reputation in the goods under that name will survive for some period depending on how firmly it has become established and what steps are taken to keep it alive

  • The law doesn’t permit a rival to appropriate the name of a rival trader where this reputation is established

Erven Warnink BV v J Townend & Sons (Hull) Ltd [1979] AC 731

Facts: A key issue was whether a passing off action could be brought by one member of a class of traders all wuith a reputation in a sign describing a quality/characteristic of good produced by them (here advocaat) where a TP falsely represents by the adoption of that name that its goods have those qualities/characteristic

Lord Diplock (739-745) noted that this was a case of extended passing off as in the Champagne Case (J Bollinger v Costa Brava Wine). His honour considered the factual assumptions in that case:

1. The plaintiffs carried on business in a geographical area of France – Champagne

2. The plaintiffs’ wine is produced in Champagne and from grapes grown in Champagne

3. The plaintiff’s wine has been known in the trade for a long time as champagne with a high reputation

4. Members of the public or in the trade ordering/seeing wine advertised as champagne would expect it to be produced in Champagne from grapes grown there

5. The defendants are producing a wine not produced in that geographical area and sold it under the name Spanish Champagne

His honour noted two features which distinguished this case from other cases:

• The element in the goodwill of each of the plaintiffs was represented by their ability to use, without deception the word champagne to distinguish their wines from sparkling wines not made by the same process and from grapes produced in Champagne, and it was not exclusive to themselves but shared by other shippers of sparkling wines who satisfied this condition

• That the class of traders entitled to the property right in the attractive force that brings in custom represented by the ability to call their wine champagne was capable of expansion

• His honours noted the fact that different cases found different numbers of people entitled to the goodwill attaching to the ability to use a particular word – but noted that the principle must be the same whether the class of which each member is severally entitled to the goodwill which attaches to the particular term as descriptive of his goods, is large or small

  • But the larger it is:

    • The broader must be the range and quality of products to which the descriptive term used has been applied, and the more difficult it will be to show that the term has acquired a public reputation and goodwill as denoting a product endowed with recognizable qualities which distinguish it from others of inferior reputation that compete in the same market

    • The more difficult it must be for an individual member of it to show that the goodwill of his own business name has sustained more than minimal damage as a result of deceptive use by another

  • Also, as respects subsequent additions to the class mere entry into the market won’t give any right of action in passing off – they have to have used the descriptive term long enough on the market in connection with their goods and traded successfully enough to have built up goodwill in the business

• His honour noted that in the champagne case, the descriptive term referred to a geographical provenance and the class entitled to it was thus restricted to those supplying it on the English market. This was similar to other cases:

  • Vine Products (The ‘Sherry Case’) where the word sherry was descriptive of wine (unless it was accompanied by a qualifying geographical adjective) was held to denote wine produced by the solera method in the province of Jerez de la Frontera Spain and the class entitled to the goodwill was restricted to suppliers on the English market of wine produced in that province

  • John Walker & Sons (The ‘Scotch Whisky Case’) the product was blended whisky and the class entitled to goodwill in the term ‘Scotch Whisky’ was not restricted to traders who dealt in whisky that had been blended in Scotland but extended to suppliers of blended whisky wherever the blending process took place provided that the ingredients of their product consisted exclusively of whiskies distilled in Scotland

• The fact that in each of these cases the descriptive name was of a particular type/composition with a geographical connotation is without significance

• If a product of a particular character or composition has been marketed under a descriptive name and under that name has gained a public reputation which distinguishes it from competing products of different composition, there is no reason to treat it differently from goods which share a particular locality

Phones4u Ltd v Phone4u.co.uk Internet [2006] EWCA Civ 244

Jacob LJ opined that the distinction between mere confusion which is not enough and deception which as, as elusive. His honour was of the view that:

• Once the position strays into misleading a substantial number of people (going from “I wonder if there is a connection” to “I assume there is a connection”) there will be passing off, whether the use is as a business name or a TM

  • This is a question of degree and there will always be some mere wonderers and some assumers there will normally be passing off if there is a substantial amount of the latter even if there is also a lot of the former

• Another distinction is drawn on the basis of causative effects. Mere confusion has no causative effect whereas if one answers the question of “what moves the public to buy?” with whatever is the subject of the relevant complaint – then this is a case of deception

• His honour said these aren’t complete tests instead holding that this would be “whether what is said to be deception rather than mere confusion is really likely to be damaging to the claimant’s good will or divert trade from him”

Reddaway v Banham [1896] AC 199

Lord Macnaghten:

Here it was argued that using the expression ‘camel hair belting’ was merely conveying a ‘simple truth’

• Macnaghten said this approach was circular. Really the phrase ‘camel hair belting’ can mean two things

  • For Banham’s works it could just be construed as belting made from camel’s hair rather than Reddaway’s Belting

  • But abroad, to German Manufacturers, Bombay mill-owners, up country natives it must mean Reddaway’s belting and it can mean nothing else

• A statement which is literally true, but which is intended to convey a false impression, has something of a faulty ring about it. It is not a ‘sterling coin’, it has no right to the genuine stamp and impress of truth.

The importance of this point was reflected in the order – an injunction granted restraining he use of the words ‘camel hair’ in a manner that would deceive the public as to the origins of its belting.

Red Bull Australia Pty Ltd v Sydneywide Distributors Pty Ltd [2001] FCA 1228

Facts: Red Bull brought an action in passing off and for contravention of the TPA irt Sydneywide’s sale + distribution of ‘LiveWire’ in a certain get up. The cans had similar colour and employed a very similar get-up

Conti J noted the string resemblance of the two cans – in particular the steep line/thrust running diagonally from the top right all of which showed when placed together that one was “impressed with an instantaneous perception of the similarity of the get-up of the two packagings”. The colour combinations of the cans also tended to attract attention before even the brand names.

• His honour noted in passing that this clearly showed SW adapted most of the prominent features of the can – but noted that the question of whether the packaging was deceptively similar was a question of fact.

• His honour noted the case of Kettle Chip v Apand

  • In that case the Burchett J held that side-by-side comparisons to find differences wasn’t the appropriate approach.

  • In cases of items likely to be purchased for a small price without lengthy consideration, “the comparison which must be made is between the impression of the applicants goods retained in a customer’s mind and the impression made by the sort of consideration he is likely to give to the respondent’s product before purchasing it”

    • In this case his honour held only a rare potato chip customer who previously studied the Kettle chips would go through this same exercise when seeing a packet later. If as he passed it, it appeared to be a Kettle product he would be likely to purchase it without further examination

• His honour inferred that SW would have likely identified the advantages of free-riding on Red Bull’s advertising research and used its advantage as a distributor of the Red Bull Product to market their goods

• SW would have clearly perceived that from a normal distance retail customers of energy drinks from shelves, there was scope for customers to mistake LiveWire from Red Bull – especially if no Red Bull products were on display

• His honour noted that material to his decision was the fact that the market for energy drinks was an impulse market (as opposed to for example furniture and clothing retail markets where brands would be identified before purchase)

• His honour observed that SW’s expert didn’t appreciate the significance of the circumstances of the similarity of the two cans in the context of few seconds of decision-making – especially for retail prodcuts within this price range

Parkdale Custom Built Furniture v Puxu Pty Ltd (1982) 149 CLR 191

Facts: Since ’76 Puxu designed and sold a range of lounge suits of distinctive appearance under the name ‘Contour’. In ’78 Parkdale sold a range of ‘Rawhide’ furniture which was virtually identical to ‘Counter’. A small label was swen to each piece of Parkdale’s furniture indicating that it was Parkdale Custom Built Furniture of the Rawhide range (as was the custom for labelling such furniture). Puxu sought an injunction under s 80 of the TPA for contravention of s 52.

Gibbs CJ noted two things:

• Consideration has to be given to the class of consumers likely to be affected by the conduct (for s 52) and though it has been said the class can include inexperienced and gullible as well as the astute the section is directed at contemplating the effect of the conduct on reasonable members of the class

  • But what is reasonable depends on all the circumstances

  • In this case the persons likely to be affected are potential purchasers of a suit of furniture costing about $1500 who would if, acting reasonably, look for a label, brand or mark if they were concerned to buy a suite of a particular manufacture

• The conduct of the defendant has to be viewed as a whole – not looking at certain words or acts which would on their own and out of context be misleading

• The defendant didn’t contravene s 52 – generally the sale by a manufacturer of goods closely resembling another is not a breach of s 52 if the goods are properly labelled

  • Hundreds of articles of consumption look similar, though are made by different manufacturers – this can be for a variety of reasons [610]

  • In all such cases the normal and reasonable way to distinguish a product from another is through marks, brands or labels.

  • IF the product is properly labelled as to show the name of the manufacturer or source of the article, its close resemblance to another will not mislead an ordinary reasonable member of the public

• If the label is removed by someone – it is not the conduct of the defendant that misled but the intervener

Brennan J noted that the CL stopped short of giving manufacturers a monopoly over goods of a particular design unless they were validly registered as such under the designs Act

• Benchairs v Chair Centre – the mere copying of the shape of the plaintiff’s article isn’t a representation that the goods are that of the plaintiff. Anyone is entitled to copy goods on the market – a false representation and passing off only arises where a defendant does something further to suggest that the article they are selling is that of the plaintiff (e.g. direct use of their mark etc.)

• ‘Contour’ wasn’t registered under the Designs Act and thus Parkdale was free to apply the design of these suits to their own manufacture (but obviously not to then go and pass off)

His honour noted that if s 52 authorized an injunction for copying designs it would run contrary to the careful balance struck by the statutory regime under the Patents/Designs Act

• Conduct cannot be held to fall within s 52 unless a consumer, not labouring under any mistake or imperfection of understanding of law, would be or would be likely to be misled or deceived by that conduct

  • The scope of S 52 is to be determined by reference to the external legal order as it exists when the conduct is engaged in. Thus manufacturers exercising their freedom to copy designs not protected by valid registration won’t engage in conduct which is misleading or deceptive or likely to mislead or deceive

• But where identical/similar goods are on the market it may take very little evidence of additional conduct to mere manufacture to establish an s 52 case

  • The degree of risk of confusion is material to an appreciation of the conduct of a trader marketing his goods for sale in competition

• But here, where Parkdale labelled Rawhide in accordance with the practice of the industry and clearly labelled it to distinguish it from Contour there was no misleading or deceptive get-up

• If consumers did mistake Rawhide for Contour it wasn’t induced by Parkdale’s conduct

• It wasn’t MOD to manufacture/sell a lounge suite similar to Contour or even identical – something more needed to show conduct inducing a mistaken believe that Rawhide was manufactured by Puxu

AG Spalding & Bros v AW Gamage Ltd (1915) 32 RPC 273

Facts: In 1910-11 Spalding sold 3 varieties of Orb Footballs. In 1912 it advertised the Improved Sewn Orb Ball with its advertisements featuring a picture of it stamped with the words Orb; Specially Tested and referring to the patent under which the ball was made. It also withdrew its older balls which it considered to be defective. Gamage acquired a batch of the 1910-11 withdrawn footballs and advertised them as Improved Orb balls with the statement that they were a great improvement on the old one and using the Spalding advertisements for its 1912 line with a reference to the same patent number, offering them for half price.

Lord Parker extended the classic passing off formulation by corollary to no-one who has in his hands goods of another of a particular class has the right to represent them to be goods of another quality or a different class. Thus:

• A cannot, without infringing the rights of B, represent goods which are not B’s goods or B’s goods of a particular class or quality to be B’s goods or B’s goods of that particular class or quality

• Here anyone reading the advertisement would conclude that they were offering the newly catalogued Orb ball for half price

  • His Lordship opined that it was difficult to imagine that the advertisements weren’t deliberately framed to do so

Argument: The statements were only a repetition of what the appellants had themselves said in former catalogues about the ‘Improved 1910 Orb’

• This is not so – no ball had been catalogued by the plaintiffs as being made under this patent. No ball in previous catalogues were stamped with the words ‘specially tested. The appellants were contrasting in their catalogue the new sewn variety with the old one sold by them.

• Even if the respondents say they intended to contrast one moulded ball with another, the statement was untrue – the balls they were selling were old moulded balls of 1910-11 varieties. But the truth of the statement is irrelevant – the real Q is whether they were calculated to deceive. It seems that they were

His Lordship also rejected a submission that the question of being ‘calculated to deceive’ wasn’t one a judge could consider looking at the advertisements but had to be done on evidence. Whether the matter complained of is calculated to deceive or amounts to a misrepresentation is a matter for the judge looking at the documents and evidence before him to come to a conclusion. But there will be cases that a judge cannot properly come to a conclusion without evidence directed to the point.

• Thus the misrepresentation was made out – and further was of such a nature as to give rise to a strong probability of actual damage to the appellants in their retail/wholesale trade

Testro Bros v Tennant (1984) 2 IPR 469

Facts: Testro Bros (plaintiff – TB) produced tailored directories for hospitals. The defendants (former employee of TB) wished to produce the same in competition. In the course of pitching their idea to various hospitals that weren’t approached by TB, it was alleged they relied on samples of TB’s directories (that didn’t have any reference to TB) as their own work and represented that the hospitals referred to therein were the defendant’s clients. TB sought an injunction

Holland J framed the question to be answered – “whether it is a passing off or otherwise unfair trading…to represent to a prospective customer that you have been successful in the market with goods the equivalent of which you are offering to supply when the success has not been yours but that of another unidentified supplier whose goods you are then displaying to the prospective customer as your own and as an example of your success?”

• It is strongly arguable that the answer is Yes. Here there is a misrepresentation in the course of trade, made to a prospective customer, calculated to injure the plaintiff’s goodwill and business, and is likely to do so

• The defendants use of the plaintiff’s publication as samples of their own work is a false representation in:

  • Having produced that work they have proven capacity to produce more of the sme quality

  • The product is a success in the market, achieved by them

  • Their business reputation or reliability as a producer + supplier of this kind is already proved by the fact that this example has been approved by the administration of leading hoospitals

• By this means they seek to appropriate themselves the success of the plaintiff in producing a quality product and finding a market for it.

• If they succeed in obtaining contracts – they deprive the plaintiff of the opportunity to do so by using its own success.

• Further, as the defendants expect to get success by displaying a false sample of their work – one may readily infer they wouldn’t have got it with a true sample

Order: The plaintiff was entitled to an interlocutory order restraining the defendants in appropriate terms from using the plaintiff’s publications for the purpose of obtaining business for themselves without at the same time clearly stating that such publications have not been produced printed or published by the defendants.

Telstra Corporation Ltd v Royal & Sun Alliance Insurance Australia Ltd [2003] FCA 786

Facts: Telstra ran an advertisement in the 90s involving Tommy Dysart playing the Scottish-accented character ‘Mr Goggomobil’ who used the Yellow Pages to find a mechanic recognizing his rare car and finally succeeding. Shannons, a car insurance company ran a series of TV and radio advertisements for its insurance products featuring Tommy reprising his character. The first involved him ringing a number of insurers to try to find insurance for his green Goggomobil and finding success with Shannons. The others featured the same character and reference to the Goggomobil but didn’t involve the use of the phone to solve ht eproblem. Telstra successfully argued that the first advertisement infringed copyright in the script to their first advertisement and that Shannons engaged in passing off and contravened s 52.

Merkel J began by defining secondary branding as what occurs when a word, character, symbol or image creates, on its own, instant recognition or association with a particular product or business.

His honour referred to two cases

• R&C Products v SC Johnson where it was held that if advertising/get-up acquires special signification, then the adoption of elements of it can give rise to a misrepresentation if the steps are not taken to sufficiently distinguish the two products

• The Duff Beer Case where it was held that the use by the respondents of the term ‘Duff Beer’ was MOD as it was likely to lead to an assumption by consumers that permission was given by The Simpsons to the respondents to produce Duff Beer.

His honour observed that Dystar’s character had become a form of secondary branding for Yellow Pages when it was employed in the context of the first Goggomobil advertisement (This seems to be the first question to ask()

“The real question…is whether the manner and context in which Dysart and the Goggomobil were used by Shannons... represented that YP had some association/connection with that advertisement or had endorsed or approved the services offered in it”

The First Shannon’s Advertisement

• His honour held the extensive and significant contextual similarities between the First Goggomobil advertisement and the First Shannons Advertisement and the manner in which Dysart and the Goggomobil were used to ensure ‘instant recognition’ (by drawing on features of the YP advertisement) led to the conclusion that the Shannons advertisement was secondary advertising

• Here the difficulty was that Shannons needed to use the features of the YP advertisement which made it famous and popular – thus the features they needed to and did retain were those that were most likely to result in it being perceived by the public as another YP advertisement or one connected with YP

  • These features which gave it instant recognition were the ‘warmth, humour and familiarity’ that made the advertisement popular – the use of Mr Goggomobil in a similar problem solving context

• Thus the overall impression created by the showing of the FSA upon a significant portion of O&R members of the public was that YP was somehow associated/connected with the advertisement.

  • Thus the advertisement made a representation as to that effect

  • Whilst there would be doubt as to the precise form of the association, a significant portion fot he public would also be likely to conclude the FSA is another YP advertisement but that he is now using his telephone book to look for Shannon’s insurance rather than a repairer

• These representations would cause ‘more than mere wonderment or confusion as to whether an association exists’ and travel into the areas of positive misrepresentation

Argument: The absence of any YP branding and the presence of Shannon’s branding would leave little doubt that this was an advertisement for Shannon’s Insurance. Rejected:

• No. This is predicated on the public being well aware of Shannons and the unique role it plays in insuring special vehicles. This only constitutes a small section of the public and their likely response to the ad provides no answer to how the larger section may view it

• The advertisement is also not inconsistent with it also being a YP advertisement or one with which they were associated/connected – e.g. a joint advertising agreement between YP and Shannons

• This thus established a contravention of s 52 and a critical element of passing off

• BUT the FSA wasn’t regarded as representing that the insurance services of Shannons were sponsored by YP – nothing in the context of the advertisement or secondary advertising suggested this. Further, there is nothing that would constitute a representation by YP relating to the quality of the services offered in the advertisement.

Subsequent Advertisements and the Radio Advertisements

• The same reasons didn’t apply to these. These advertisements lacked the context of the FSA which gave rise to secondary advertising with YP.

• Though these relied on Mr Goggomobil and his Scottish accent, they don’t do so in the humorous/entertaining problem solving context of the FSA.

  • This problem solving context was an integral aspect of the first one that led the court to conclude there was a representation of a connection with YP

  • (But these advertisements weren’t irrelevant and since they used the first one as a springboard, they could be relevant to the question of loss/damage)

Harrods Ltd v Harrodian School Ltd [1996] RPC 697

Facts: The owners of Harrods department store sought to restrain the defendants from operating a prep school under the above name. The TJ held there was no misrepresentation and continued to discuss the question of damages.

Millet LJ noted the idea that demolishing the distinctiveness of a particular brand (in the Champagne Case, Champagne) leading to diminishing good will was a recognized head of damage. His honour cautioned that this could mark an unacceptable extension to the tort of passing off.

• His honour noted that the law has never sought to protect value in a brand but rather the goodwill it generates. It further insists on proof of confusion to justify intervention.

  • But here, the erosion of distinctiveness of a brand due to degeneration into common use a generic term isn’t dependant on confusion.

  • The danger that if the defendant’s product was called champagne that all sparkling wines would take that name would exist even if no one was deceived into thinking that wine was really champagne.

• His honour had a difficulty in accepting the idea that the law insists on both confusion and damage as an element but recognizes as sufficient a head of damage not depending on confusion.

Sir Michael Kerr (in dissent) disagreed and accepted that dilution was a recognized head of damage and the danger that the name would proliferate as being a real one

ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302

Gummow J established the idea that in cases of passing off

• If a mark is adopted honestly and innocently, either in ignorance of the existence of the plaintiff’s mark or belief that their mark was so different from the plaintiff’s that it wasn’t calculated to mislead or deceive would not lead to damages

• But the continuing use of the mark after awareness that its use does cause the goods of the defendants to be mistaken for those of the plaintiff is no less fraudulent in the eyes of the court than a user with initial fraudulent intent

• The remedies will also run from whichever times

  • That is if a defendant embarks on their activities fraudulently – remedies will run from that time

  • But even if the defendant was then innocent, pecuniary remedies will be available from the period of their persistence after notice

This means that under the ACL pecuniary remedies may be available even though they aren’t under passing off. Section 236 operates to give remedies for what could be innocent/non-negligent misrepresentations – statutory liability is unrelated to fault

Bodum v DKSH Australia Pty Limited [2011] FCAFC 98

Continuing from above, Greenwood J reached the conclusion that the appellant’s conduct was not of the kind to which s 52 was directed.

• His honour noted that the Bodum coffee plunger wasn’t in the category of products for which no other design would be practical or where a design has been traditionally accepted as “most suitable for the purpose”. A vast range of coffee makers have been seen on the market

• Further, Parkdale v Puxu recognizes that the sale by one manufacture of goods closely resembling another can involve a contravention of s 52 if the goods are not properly labelled

• His honour noted the importance of context in considering whether the products were sufficiently differentiated – e.g. in Puxu the price of the furniture was high and people would look for the label

  • In this case the Euroline mark is on the box only and generally the product was displayed outside the box

  • The price of the two products are roughly the same

  • But the two products were, 86% of the time, sold in different locations

• As to the first element, the name on the box won’t always be enough – in certain cases it will (e.g. Philips v Remington – the respondents mark was equally distinct and would clearly convey it wasn’t a Phillips)

  • BUT THIS CASE is closer to the Red Bull Case where the get-up of the two products was pretty much identical

  • Cases like Red Bull; Kettle; Reckitt & Colemna cannot simply be dismissed as being “purely impulse purchase” cases.

• In this case, having regard to all of the factors his honour wasn’t satisfied the simple use of the name ‘EuroLine’ on the box had the effect of distinguishing the rival product from that of Bodum’s

• Thus Bodum established a contravention of s 52 by reason of DKSH adopting features distinctive of Bodum’s coffee plunger and failing to distinguish its product which made it plain to consumers attracted to the rival product by reason of its distinctive reputation and secondary meaning subsisting in the features of the Bodum plunger, was not a Bodum plunger

  • Merely placing Euro Line on the box wasn’t enough and neither was placing a sticker with ‘MADE IN TAIWAN’ at the base sufficient

Kenman Kandy Australia Pty Ltd v Registrar of Trademarks [2002] FCAFC

Stone J discusses whether there is a particular problem with the ‘shape’ TM included in s 6 and whether it is necessary that a TM must be able to be described as something distinct/separate from the goods irt which it is used and if so whether it is possible for a shape which is the whole shape of the good.

Separation of trademark from goods

In Smith Kline Windeyer J was considering a trademark registration application for the ‘total appearance of its capsules’ and to thus obtain a monopoly over ‘parti-coloured capsules containing pellets of different colours’. His honour held:

• The definition of mark used in the TMA assumes that the mark is something distinct from the goods in relation to which it is used or to be used and assumes that the goods can be conceived as something apart from the mark – the mark is not the essence of the goods

• A mark for the purposes of the Act must be capable of being described and depicted as something apart from the goods to which it is to be applied, on in relation to which it is to be used…It accords… with the various things included in the definition of mark

Later in the case of Philips v Remington (the three headed rotary shaver case) Burchett J treated the issue of separation of mark from goods as the same issue as the ‘capacity to distinguish issue’

Did the 1995 Act effect a radical change to trade mark law

• Burchett J held that the inclusion of the word ‘shape’ into the definition of ‘sign’ which is the new point of reference to the definition of ‘trademark’ was not intended to effect a radical change in TM law.

  • His honour concluded that a shape that goods possessed because of their nature or because of the need for a particular technical result couldn’t function as a trade mark since such a shape couldn’t distinguish the trade source

  • His honour further opined that he didn’t regard this as precluding shape being registered as a TM where the shape is the whole or part of the relevant goods. He held that the 1995 Act didn’t invalidate e what Windeyer said – in fact he special cases where shape of goods can be a mark are those that fall within the principle expounded.

  • These are cases where the shape that is a mark is extra – added to the inherent form of the particular goods as something distinct which can denote origin.

  • Thus the word ‘shape’ being added to the statutory definition doesn’t call for a new principle or make ‘shape’ marks different from others. Rather it means that a mark remains something extra added to distinguish the products of one trader from another – a function which cannot be performed by a mark consisting of either a word or shape other traders may legitimately wish to use

• In that case his honour noted that what was being contended was that the TMA could be used to give a monopoly over the presentation of a vital features of goods and that if this was so the proprietor of the mark would be in a better position than a patentee or proprietor of a registered design who only has a time limited interest

• Burchett J then went on to quote Philips v Remington which also concerned a rotary shaver. IN that case Jacob J was explicit about the scope aspect – his honour accepted that it was possible to make an effective rotary shaver outside the claimed mark but that

  • It was also the case that the engineering scope for variation outside the mark was limited. The three-headed shape of the Philips design was one of the best possible ways of making a rotary shaver. Thus if the mark was registrable Philips would obtain a permanent monopoly in respect of matters of significant engineering design by virtue of registration

• Stone J noted that the concern in these cases was about restricting access to functional features/innovations and this concern was expressed in the idea that a TM had to be in the inherent form of the goods

  • The inherent form of the goods can only refer to those aspects of the form that have a functional significance

Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511

Kitto J’s judgment outlines the correct question to ask when considering distinctiveness

• The ultimate question is not whether the mark will be adapted to distinguish the registered owner’s (RO) goods if it be registered and other persons consequently find themselves using it

• The question is whether the mark, considered quite apart from the effects of registration, is scuh that by its use the applicant is likely to attain his object of thereby distinguishing his goods from the goods of others

  • The applicant’s chance of success in this respect must largely depend on whether other traders are likely, in the ordinary course of their business and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connexion with their own goods (Lord Parker in RTM v W&G)

• “It is apparent from the history of trade marks in this country that both the Legislature and the Courts have always shown a natural disinclination to allow any person to obtain by registration under the Trade Mark Acts a monopoly in what others may legitimately desire to use”

  • This involves consideration of the interests of strangers but not in the context of a vague decision of public policy. It is about the common right of the public to make honest use of words forming a part of the common heritage

Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks [2002] FCAFC 273

Stone J looks at a number of things which are not inherently adapted to distinguish as the authorities provide no clear test:

• It is clear that words which are descriptive are not inherently adapted to distinguish

  • Burger King v RTM – Whopper descriptive of large hamburgers

  • Eutectic Corp v RTM (‘eutectic’ descriptive of machines and welding tolls)

  • FH Faulding v ICIANZ (‘Barrier’ for hand cream)

• This is so even if the word or words are contractions or corruptions of ordinary words

  • Tastee Freez’s Application (Tastee Freeze in connection with ice cream/water ices)

  • RTM v Muller (‘Less’ for pharma products)

  • Bausch & Lomb v RTM (‘Soflens’ for contact lenses)

  • Adv Hair Studio of America v RTM (‘hairfusion’ for a services affixing hairpieces to the head)

• The same applies to pictorial descriptions of goods

  • Eclipse Sleep Products Inc. v RTM (six-sided border with circular ends as in the shape of a spring used in connection with a ‘Springwall Mattress’

• Further, a name of a geographical location is not inherently adapted to distinguish goods because another trader may legitimately wish to use the name in connection with goods made in or associated with that place

  • Thomson v B Seppelt & Sons (Great Western for sparkling wines produced from grapes in the GW region of Victoria)

  • Clark Equipment (‘Michigan’ for earthmoving equipment)

  • Blount Inc (‘Oregon’ inside an oval device for power tool accessories)

  • Oxford University Press v RTM (‘Oxford’ for printed publications)

  • Bailey v Clark, Son and Morland (‘Glastonbury’s’ for sheepskin slippers)

• Signs which are descriptive of the character/quality or use a geographical name are inherently not distinctive because the words have associations which invite confusion and because their registration would preclude the use of others whose goods have similar qualities

• The absence of these associations and significations is what makes a sign inherently adapted to distinguish one trader’s goods from those of another – the concept is negative not positive

Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511

(The case involved an attempt to register Michigan for earth moving equipments)

Kitto J:

• A geographical name when used as a TM for a particular category of goods may be saved by the nature of the goods or by some other circumstance from carrying its prima facie geographical and thus may be held to be adapted to distinguish the applicant’s goods

  • This will be because to an honest competitor the idea of using that name irt such goods in such circumstance simply wouldn’t occur (North Pole for bananas – The Glastonbury Case)

  • Or where by reason of user or other circumstances it has come to possess, when used in respect of the relevant goods, a distinctiveness in fact which eclipses its primary specifications

• But the probability that some competitor, without impropriety, may want to use the name of a place on his goods must ordinarily increase in proportion to the likelihood that goods of the relevant kind will in fact emanate from that place

  • Thus a geographical location used simpliciter will not be capable of distinguishing if goods of that kind are produced there or may in the future be

• These principles work against the appellant

  • Michigan is the name of a State...