Argibond Pty Ltd v Argen Australia Pty Ltd
[1991] FCA 49
•1 Mar 1991
JUDGMENT No. 77 / 9!..-
| ,=THE | FEDERAL COURT OF AUSTRALIA) |
| NEW SOUTH WALES D-ICT | REGISTRY) NO. G 486 of 1989 |
| GENERAL DIV-N | 1 |
Between: ARGIBOND PTY LIMITED
Applicant
and: ARGEN AUSTRALIA PTY LIMITED
First Respondent
| -4 MAR | I991 | and: LEWIS BENJAMIN BLOCH |
Second Respondent
REASONS FOR JUDGMENT
| gSnfeld a | Svdnev | 1 March 1991 |
This is an application by Argibond Pty Ltd for damages and other relief for breaches of sections 52 and 53(d) of the Trade Practices Act and defamation by Argen Australia Pty Ltd and Mr Bloch, a director thereof (the respondents). The application also stipulates breaches of sections 42 and 44 of the Fair Trading Act but these were not separately argued and it was implied in submissions that the success of the latter was directly linked to the outcome of the trade practices actions.
| precious metals for dental, jewellery and industrial | applications. It is the registered proprietor of a number of | |||
| logos and trade marks relating to Argen and Argen dental alloys around the world. It had a subsidiary in the Netherlands called Linkage B.V., one in Australia called Argen Australia Pty Ltd and one in the USA seemingly called something like APMI of USA. From this point on certainty about the facts is more difficult because of the lack of clarity of the evidence. It appears that the following events then occurred: | ||||
|
A company incorporated in South Africa called Argen Precious
Metal Industries Pty Ltd (APMI) manufactured and refined
At the same time a company called Precious Dental Alloys Australia Pty Ltd (PDA), owned and controlled by the second respondent, registered the business name "Argen Sales" and proceeded to trade thereunder.
At the same time an agreement was made between GAP and Newco, a company which was to be acquired by PDA. This agreement outlines the method of calculation of royalty payments for the marketing of Argen alloys.
5. On January 13 1989 APMI entered into an agreement to sell its shareholding in Argen Australia to PDA. This agreement was said to take effect as of June 29 1988.
6. One of the terms of this agreement was that certain trade marks registered in Argen's name in Australia were to be transferred to APMI of USA. This transfer seems to have taken place in July 1990, some time after the events at the heart of the matters in dispute here.
7. On April 28 1989 GAP'S agent in Australia (Mr Goodman)
advised PDA that the supplier of the alloys, a Mr Micky Millner, would be told to cease doing so, thus effectively terminating the royalty agreement.
8. On May 1 1989 GAP granted Argibond the right to
distribute Argen products and to use the name Argen in
Australia.
9. On May 19 1989 Argibond distributed a circular to
dentists introducing itself as the new licensee of the Argen range of products. This circular was in the following form:
Dear Customer
Please note that Precious Dental Alloys no longer have the licence to distribute the ARGEN range of alloys through "Argen Sales" as previously and they will no longer be supplied with stocks of Argen Products.
DON' T WORRY BE HAPPY
You will have continuity but because you will be dealing direct you will have the advantage of better service and competitive prices.
Issy Penn one of the original directors of Argen Australia Pty Ltd will be available to assist you with your requirements on ( 02 ) 958-0078 and Micky Millner who has been manufacturing the entire range for you up till now will continue to do so to the same exacting standards that he has practised for almost 25 years.
We look forward to hearing from you and we will call on you as soon as we can to tell you about an exciting new alloy.
Yours sincerely
ISSY PENN
An Argibond sales representative, Mrs Taylor (who had previously worked for Argen Australia), rang to complete that introduction.
10. On May 23 1989 Linkage gave notice of the termination of
the licence granted to Argen Australia as from 6 months
thereafter. 11. On June 5 1989 Argen Australia published a circular (the
circular). I t reads: ARGEN
ARGEN AUSTRALIA PTY LTDLevel 2
60 Park Street
N.S.W Australia
All correspondence to:P.O. Box E349 St. James
2000 N.S. W.
Telephone ( 0 2 ) 264 8940
T o l l F r e e : (008) 25 1143
Fax ( 0 2 ) 261 4538
Dear Customer
You may have r e c e n t l y r e c e i v e d a le t ter o r 'phone
c a l l d e l i b e r a t e l y u s i n g a name s i m i l a r t o o u r s .
Do n o t be m i s l e d I
There i s o n l y one ARGEN AUSTRALIA PTY LTD, and we
a r e the very one and o n l y o r i g i n a l ARGEN a s you can
see from o u r l e t t e r h e a d .
Our t e l ephone number remains unchanged, a s does our 008 number f o r o u t o f town cus tomers .
Our company c o n t i n u e s t o opera t e from the same
p r o f e s s i o n a l b u s i n e s s premises where we have a f u l l t i m e q u a l i f i e d t e c h n i c i a n on the premises , a s w e l l
a s p r o f e s s i o n a l and l a b o r a t o r y c o n s u l t a n t s i n the b u i l d i n g .
W e a r e l i c e n s e d and r e u i s t e r e d a t the R e g i s t r a r o f
Trade Harks and Corporate A f f a i r s t o u se o u r name ' U N ' .
W e o f f e r q u a l i t y produc t s produced i n h i g h l y
r e p u t a b l e m e t a l l u r g i c a l f a c t o r i e s w i t h on s i te
q u a l i t y c o n t r o l and t e s t i n g equipment.
W e p r i d e o u r s e l v e s on o u r service and o f f e r f a i r
p r i c e s w i t h comfor tab l e t e rms .
Our company i s proud l y w h o l l y A u s t r a l i a n owned and
f inanced. Our cus tomers a r e our main a s s e t , and we
v a l u e you and your l o y a l t y a t a l l t i m e s .
I f there i s a n y i n f o r m a t i o n o r d e t a i l s you may
r e q u i r e before we can i s s u e a f u l l s t a t emen t p l e a s e c a l l me.
A s s u r i n g y o u o f o u r best service a t a l l t i m e s .
Yours sincerely, ARGEN (AUSTRALIA) PTY. LTD.,
L.B. BLOCH
m a u i n u Director
The applicant says that this letter is misleading, deceptive and false as well as defamatory, and has caused it loss and damage.
TRADE PRACTICES CLAIMS
Identification
The first issue raised in this case was whether the applicant is sufficiently identified by the circular to ground the causes of action relied on. The second respondent conceded that he intended to refer to the applicant but submitted that intent is not an ingredient in an action under these sections of the Trade Practices Act nor in defamation: see Wilcox J in
a Centre of NSW Ptv Limited v Northern Business Colleae U t e d [l9891 ATPR 40-943.
| whether a reasonable person would reasonably believe that the | The applicant submitted that the test of identification is | letter referred to the applicant: Lee v Wilson [l9341 51 CLR 276. The applicant further submitted that evidence may be led from people who made an identification: Moraan v Oldhams Presa |
| Limited [l9711 All ER 1156. Such evidence was provided by | ||
| several witnesses, although some of it was inadmissible or of no weight under the hearsay rule and otherwise. The respondents argued that the applicant failed to prove that anyone received both circulars andlor was the subject of Mrs Taylor's telephone call other than two persons (Dr OfConnor and Mr Casteldini) who were called as witnesses. Therefore they said that the Court must act on the basis that the only persons who received the circular and who understood it as alleged were those two people. The respondent said that Mrs Taylor's evidence as to the contents of the conversations is inadmissible to prove identification. Because the relevant sections of the Trade Practices Act are offences, the respondent said that they should be strictly construed. | ||
| The applicant submitted that the circular contained four representations, namely that: | ||
|
respondent 2. the applicant is guilty of passing off
Argen Australia is licensed to use the name 'Argen'
4. Argen Australia is beneficially entitled to the trade
mark 'Argen'.
In my view these are the key phrases on which to test whether these representations were misleading, deceptive or false:
| - | "deliberately using a name similar to ours" |
| - | "Do not be misled" |
| - | "There is only one ARGEN AUSTRALIA PTY LTD and we are the very one and only original ARGEN as you can see from our |
| letterhead" | |
| - | "Our telephone number remains unchanged ....." |
- "Our company continues to operate from our same professional business premises ....."
| - | "We are licensed and reaistered at the Reaistrar of Trade |
. . . to use our name 'm"'
| The applicant submitted that the circular should be construed | in the sense in which the ordinary reasonable reader would | |
| understand it: [pypina Centre of NSW at p.50,286, and that there should not be a complex forensic and legal analysis of the text. Furthermore, the applicant submitted that the fact that the readers of the circular are dental technicians and dentists is a relevant consideration. | ||
| ||
| Similarity of the names is a matter of fact to be determined by the Court. The applicant submitted that the names are not deceptively similar, the only common element being the letters "kg". | ||
| In Hotorcharae Ptv Limited v Motor Card Ptv Limited [l9821 42 ALR 136 Justice Lockhart held (at 144) that the use of the words "motor charge" and "motor card" was likely to mislead or deceive. In m i d and Ors v CBS Records Australia Ltd and Ors [l9811 38 ALR 383, the trial judge held that the names "Popular Mechanics" and "Pop Mechanix" are so similar that members of the public are likely to be deceived and misled (at 390). | ||
| ||
| similar to" the first respondent was true. But this does not establish that Argibond engaged in misleading or deceptive conduct in that the name was deceptively similar in the objective sense required by the authorities. | ||
| ||
| For its submission that the statement in the circular that the applicant was guilty of passing off is untrue, the applicant relies on evidence by the second respondent that "there was never any intention to mislead in terms of the quality of the product". This seems to me to be quite irrelevant. Ricketson in Law of Intellectual Property at 536 states there are three requirements to be satisfied in order to succeed in a passing off action. These are: |
1 . that there is some reputation or goodwill which is attached to his name, mark or get-up
2. that the defendant has used the same or a deceptively similar name, mark or get-up so as to confuse or deceive the relevant public
3. that as a result of this conduct on the part of the defendant (the "passing off") damage has been caused, or is likely to be caused, to the plaintiff's business reputation or goodwill
Intention is not the relevant test. It is merely a question
| was in fact passing itself or its goods off as the business or | of whether the applicant in its circular and telephone call | |
| goods of the respondent. In this instance the applicant was actually marketing the products to which its circular referred and largely related to the goods. The respondent's submission was that for this allegation to be sustained, the circular must amount to an assertion that Argibond was passing itself off as Argen Australia, not that it was attempting to pass off its goods as the goods of Argen Australia. The circular alleges that a person or entity is "using a name similar to ours". If it is taken to refer to goods, the respondent said that the representation is true because Argibond by selling Argen products was in breach of the respondent's trade mark: cadbury Schweooes Ptv Ltd v Pub Sauash CO Ptv Llmited [l9801 2 | ||
| ||
| 3. Licence | ||
| The applicant submitted that Argen Australia was never licensed to use the name "Argen". Instead, on the evidence of the second respondent, his other company, PDA, held the licence by virtue of the royalty agreement of April 2 1987 with GAP. | ||
| The respondents submitted that the word "licensed" should be construed to refer to statutory rights. If so, they said that the representation is true because Argen Australia was | ||
| ||
| rely on the fact of registration as proprietor of the trade marks to prove that it was "licensed" as the circular stated. | ||
| ||
| By the terms of the agreement of January 13 1989, PDA purchased the shares of Argen Australia and was obliged to |
- l2 -
cede the trade marks currently registered in the name of Argen Australia to APMI of USA. Although this transfer only took place in fact in July 1990, the applicant submitted that because of its legal obligation in this regard, Argen Australia was not the beneficial owner of the trade marks at the time of the circular. Thus by saying that Argen Australia is registered with the Registrar of Trade Marks to use the name "Argen", the second respondent was stating a half truth and was thus misleading the readers of the circular.
The respondents deny that the circular made this representation. They say that if it is implied into the material, it is not false or misleading. As to its being a half truth, the respondents said that circulars of this kind are not expected to be exhaustive statements of legal and equitable rights, still less in a complex situation when beneficial ownership of the trade mark is disputed.
| misrepresentations were defamatory because they suggest a | The applicant argued that the first and second | |
| breach of the law, and that the onus is on the respondents to make good their defences. The applicant said that the defence of qualified privilege under section 22 of the Defamation Act (NSW) fails because: | ||
|
respondents' own business. In fact, the respondents claimed that the circular was designed to answer an attack on their business
| (b) | the publication was false and could therefore not be |
reasonable
| (c) | the circular was activated by malice as proved by the |
second respondent's admitted antipathy to Mr Issy Penn
The applicant submitted that the respondents have not made out the elements of the defence of comment and that in any event it fails because there is malice. The respondents repeat their earlier submissions on identification. If the applicant is identified sufficiently, the respondents say that the comment was justified because of the use of the similar names and the applicant's own circular. They argue that the target audience had an interest in what was going on. The
| establish malice. | respondents say that evidence of antagonism is insufficient to | |
| The applicant says that truth and public interest cannot be established because the statements were false. Further, there was no public interest in the personal differences between the parties. The possible defence of contextual truth fails because of the falsities and the respondents did not argue an absence of the likelihood of harm. | ||
| It is always difficult to judge cases apparently brought and fought against a background of personal enmity. It is the more complex when the whole atmosphere of the case is based on commercial confrontation rooted in that antipathy. In this case where both those situations exist, the parties appeared to me to have tried to make every effort to hide their own parts in and responsibilities for the problems and sought to present their own cases as a serious objective piece of litigation which they wanted the Court to resolve with the usual intellectual legal detachment. As the moving party, this is the greater for the applicant. Whilst of course the law must be applied to the facts established, the adjudication of the case would be quite unreal if that invitation was accepted without regard to its true basis. | ||
| There is no doubt that the circular was intended to identify and strike at the applicant. Because it followed so closely | ||
| ||
| that the applicant would have been recognised as the circular's object. | ||
| On the other hand, I am unable to conclude that by the circular the respondents have engaged in relevantly misleading or deceptive conduct or misrepresentations, passing off or defamation. The circular presupposes that the reader had seen | ||
| the applicant's circular. If not, it would largely have meant nothing. Its whole purpose and phraseology are designed to draw attention to the distinction between the two companies. All the readers (and the evidence implies that it would have been more than the two persons called) would have been interested in the matters being discussed. It is unreal to suppose that they could or would have been misled by the respondents' circular but not by the applicant's, or by parts of the respondents' circular but not by others. Most of the circular is true or arguably so. In my opinion it is not defamatory of the applicant. | ||
| As to passing off, this is not the respondents1 suit alleging that the applicant is passing itself off as the respondent about which there can in my opinion be little doubt. It is a claim by the applicant that the respondents' circular made this allegation. I think it did but in doing so it made a correct, not a false or deceptive, assertion. The circular implied that the applicants were passing or attempting to pass | ||
| ||
| were passing or attempting to pass themselves off as the applicants, or their goods as those of the applicants. In my opinion, the allegation that the statement in the circular that the respondents were "licensed with the Registrar of Trade Marks" is statutorily misleading or defamatory has no merit at all. | ||
| Although in the conclusions I have reached, the applicant does not succeed and therefore damages are irrelevant, I cannot but comment that the applicant's claim for damages was without serious evidence or substance. At best it was minor. This merely provides additional support for my conclusion that the case was largely manufactured to pursue a personal vendetta. | ||
| No doubt there is mutuality in this approach to the litigation | ||
| and thus the case hardly brings credit on elther side. However, the applicant carries the onus of proving its case and this it has manifestly failed to do. | ||
| The application is dismissed with costs. |
I certify that this and the \r
preced~ng DPqes are a true copy of the 1 Reas~ns for Judqment herein of his Honour . Just~c? F nfckl whJy Associate
| Counsel and solicitors for | Hr J C Kelly |
| the applicant | instructed by Abadee Dresdner h Freeman |
| Counsel and solicitors for | Hr V R W Gray |
| the respondents | instructed by Landerer h CO |
| Date of Hearing | 29 October 1990 |
| Date of Judgment | l March 1991 |
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