Australian Surf Life Saver Pty Ltd v S & I Publishing Pty Ltd
[1998] FCA 972
•14 AUGUST 1998
FEDERAL COURT OF AUSTRALIA
TRADE PRACTICES – application for injunctive and other relief – whether publication of a magazine with similar masthead to the magazine of the applicant constituted misleading and deceptive conduct pursuant to ss 52 & 53 of the Trade Practices Act – whether relevant words descriptive or distinctive - approach when words are descriptive but distinctive
Trade Practices Act 1974 (Cth) ss 52, 53
Betta Foods Australia Pty Ltd v Betta Fruit Bars Pty Ltd (1998) ATPR 41-624
Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216
Independent Newspapers Ltd v Australian Consolidated Press NZ Ltd (1996) 3 NZLR 722
Equity Access Pty Ltd v Westpac Banking Corporation (1990) ATPR 40-994
AUSTRALIAN SURF LIFE SAVER PTY LTD v S & I PUBLISHING PTY LIMITED
NG 684 of 1998
MOORE J
SYDNEY
14 AUGUST 1998
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NG 684 of 1998
BETWEEN:
AUSTRALIAN SURF LIFE SAVER PTY LTD
ApplicantAND:
S & I PUBLISHING PTY LIMITED
RespondentJUDGE:
MOORE J
DATE OF ORDER:
14 AUGUST 1998
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
The application is adjourned until 9.30 am on 20 August 1998 to enable the parties to prepare short minutes to give effect to the reasons for judgment.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NG 684 of 1998
BETWEEN:
AUSTRALIAN SURF LIFE SAVER PTY LTD
ApplicantAND:
S & I PUBLISHING PTY LIMITED
Respondent
JUDGE:
MOORE J
DATE:
14 AUGUST 1998
PLACE:
SYDNEY
REASONS FOR JUDGMENT
Introduction
On 8 July 1998 Australian Surf Life Saver Pty Ltd (“Life Saver”) commenced proceedings against S & I Publishing Pty Ltd (“S & I”) seeking injunctive and other relief founded on the tort of passing off and an alleged contravention of ss 52 and 53 of the Trade Practice Act 1974 (“the Act”). The proceedings relate to the publication of a magazine by S & I with a masthead similar to that of a magazine now owned by Life Saver. The final hearing took place on 30 July and 7 August 1998. I have been informed by counsel for S & I that the processes leading to publication of the next edition of its magazine would, unless restrained by an undertaking or an order of this Court, commence on 17 August 1998. It is plainly desirable that judgment be given by then and this was accepted by both counsel. Thus the proceedings have been heard and determined with comparative urgency and in these reasons I have tended to focus on the central issues and what I perceive to be the material evidence.
The following is the background leading to the proceedings. In July 1998 Life Saver purchased an interest in a magazine called “Triathlon Sports”. The magazine had been published since 1984 as a specialist sports magazine. It is not entirely clear from the evidence the nature of the interest that Life Saver purchased but it included the masthead “Triathlon Sports”. The most recent edition of that magazine is Vol 13 No 7 published in April 1998. In June 1998 S & I published a magazine called “Triathlon & Multi Sport Magazine”.
The focus of “Triathlon Sports” magazine is the sport of triathlon which involves athletes competing in three types of athletic activity, namely running, swimming and cycling. Since 1984 it has been supplied, distributed, sold and marketed to the general public through newsagents and by subscription throughout Australia. Ten issues have been published each year. They have been published monthly except for the months of May, June, July and August in which it has been published bi-monthly. This pattern of publication has reflected the seasons for triathlon competition which conclude each year at the end of April and resume in September. Thus the magazine has been published each month during periods in which triathlon competitions have been held and bi-monthly during periods when they were not. Until February 1988 “Triathlon Sports” magazine was distributed by Gordon and Gotch Ltd. Distribution figures disclose that for the nine editions before February 1998 between approximately 7,000 and 8,200 copies were distributed and between approximately 2,500 and 4,300 were sold. From February 1998 distribution has been undertaken by NDD Distribution Pty Ltd and a similar number of copies have been distributed and sold except in relation to the most recent edition where the number of copies distributed was only 5,400.
Until early 1997 the front cover of the magazine was typically in the form of annexure “A” to this judgment. The masthead was in the following form:
It can be seen that the word “Triathlon” is printed prominently and in upper case with the word “Sports” appearing less prominently below it but also in upper case.
The format changed in early 1997 and the new format can be illustrated by the most recent edition of the magazine published in April 1998. It had a front cover in the form of annexure “B” to this judgment. The masthead of that edition was in the following form:
It can be seen that the word “Triathlon” remained prominent in the masthead though it is in lower case. The word “Sports” remained in upper case though was less prominent and was off centre and above the word “Triathlon”.
The first edition of the magazine published by S & I also contained as part of its masthead the word “Triathlon”. The front cover of the first edition is annexure “C” to this judgment. The masthead adopted was:
The evidence
The following discussion of the evidence is restricted to what I perceive to be the material evidence. It concerns the adoption of the name “Triathlon & Multi Sport Magazine” by S & I and the consequences of its adoption in the marketplace.
The evolution of “Triathlon & Multi Sport Magazine” and S & I’s intention
Mr Rod Cedaro, who is the editor of “Triathlon & Multi Sport Magazine” and Mr Silvio Morelli who is the managing director of S & I gave evidence about the development of “Triathlon & Multi Sport Magazine” including the adoption by S & I of its name. Their evidence was to the following effect.
Cedaro is a triathlete and has competed at the elite level. An elite triathlete is one who earns an income from the sport. He holds a Masters degree of Applied Science in Physical Education and a Graduate Diploma in Education. He is an accredited triathlon coach for the Australian Coaching Council and secretary of the Triathlon Coaches Association of Australia. He is also a member of the American College of Sports Medicine. He described his employment as a sports and fitness consultant and has provided consultancy services to a number of sporting organizations and acted as sports coach and trainer for a number of elite athletes. He has also written many articles in newspapers, magazines and associated periodicals within Australia and overseas on the topics of triathlon, duathlon, sports physiology, sports science, sports nutrition and athletic conditioning. From 1993 to 1997 he was the editor of the magazine “Australian Triathlete” which was published by Publicity Press Pty Ltd. His editorship concluded in July/August 1997. In August 1997 he approached Blitz Publications, a business owned by a company Bushi Pty Ltd which is a company with which Morelli is associated. Blitz Publications publishes a number of magazines including “Women in Sport”. Cedaro was seeking to have published in that magazine a number of sporting articles and columns he had written on the topic of women’s triathlons.
At about this time Cedaro had a conversation with Morelli in which Cedaro proposed that Morelli consider publishing a triathlon magazine. Cedaro expressed the view to him that there was a niche for another magazine so long as it was educational in nature. Cedaro wrote to Morelli on 2 September 1997 outlining a range of possibilities which might involve the publication of a new magazine. Cedaro noted in his letter that there were two specialist triathlon publications produced in Australia, namely “Australian Triathlete” and “Triathlon Sports”. The latter was a reference to the magazine acquired by Life Saver. Cedaro said that that magazine had been around the longest, that is, for 14 years. He stated, however, that it had a bad name created by its then owner and had been run into the ground. Cedaro expressed in his letter the view that there was not enough advertising revenue in the sport of triathlon to support three specialist publications. He also said that his initial idea had been to purchase the magazine name “Triathlon Sports” and revamp and re-release it under a new banner “Triathlon Downunder”. He noted, however, that his attempts to give effect to this idea had not proceeded because discussions with a financier had stalled. However Cedaro, in effect, put the same proposition to Morelli in the letter. Morelli gave evidence about the same matter being discussed with Cedaro though he said the discussions about purchasing “Triathlon Sports” magazine occurred in October/November 1997. Morelli said his response was a rhetorical question of why bother buying a magazine in financial trouble with a bad reputation in the marketplace. Morelli decided against the idea of acquiring “Triathlon Sports” magazine.
In October 1997 Cedaro accepted the position of editor of a new triathlon magazine. The working title for the new magazine was, for a period, “Triathlon Downunder”. However it is relatively clear that by October 1997 Morelli was not happy with that name and another name was being considered, namely “Inside Triathlon”. This name was proposed by Morelli though Cedaro told him there was a US magazine of the same name distributed in Australia. A letter from Cedaro to Morelli dated 9 October 1997 makes plain that this was the name then being proposed. However in November 1997 Cedaro had a conversation with a journalist working for “Inside Triathlon” and informed her of the proposed name to be published by S & I. This led to an email from a US corporation, Inside Communications Inc, (who publish “Inside Triathlon”) indicating a preference that S & I not use the name “Inside Triathlon”. This led to a decision by Morelli to abandon that name.
In November 1997 Cedaro suggested to Morelli the name “Multi Sport Magazine” though it was rejected by Morelli because it would confuse people by suggesting that it was predominantly a multi sport magazine which it was not. Multi sport is a reference to triathlon and sports containing several but not all of the elements of triathlon or variations of them. After abandoning the name “Inside Triathlon”, Morelli considered the name “Triathlon Australia” as a possible title. However after discussions with a representative of Triathlon Australia, which appears to be a body formed to regulate the sport in Australia, Morelli abandoned this name as well. He also canvassed in December 1997 the name “Triathlon 2000” but that was abandoned after Cedaro observed that the magazine would become dated after the year 2000 had passed.
Morelli’s evidence was that he continued to use as a working title “Triathlon Downunder” for the magazine while production was in the planning stage. Morelli’s evidence was that in April 1998 he viewed various graphic representations of the title “Triathlon Downunder”. The graphic representations generally had the word “Triathlon” in very large type and the words “Downunder Magazine” beneath it in significantly smaller type. He was being shown these by a graphic artist employed or retained by S & I. When being shown them, according to his evidence, he was suddenly inspired to ask the graphic artist to substitute the words “& Multi Sport Magazine” for the words “Downunder Magazine”. This was done and various mockups produced by the graphic artist. Morelli’s evidence was that he then decided that this title reflected the flavour of the proposed magazine. Morelli was then, as he described it, “very conscious” of the existence of “Triathlon Sports” and three other magazines in the market place dealing with the sport namely “Australian Triathlete”, “Inside Triathlon” and “Triathlete”. Morelli’s evidence was that he deliberately picked a masthead style and layout that was very different from each of these magazines so as to maximize the distinctiveness of the new magazine in the marketplace.
I do not accept Morelli’s evidence about the adoption of the name, “Triathlon & Multi Sport Magazine”. He was not, in my opinion, a credible witness. In April or May 1998 Morelli became aware that Life Saver was going to purchase “Triathlon Sports” magazine. It was also at about this time that Morelli decided to use the title “Triathlon & Multi Sport Magazine” giving great prominence to the word “Triathlon”. It is probable, in my opinion, that Morelli then decided that it would be open to him to effectively do what he had earlier rejected, namely acquire and use, in substance, the title “Triathlon Sports” though without purchasing it. He decided to do so by using a title that had many similarities both in language and format to the title of the magazine he then knew was being acquired by another. It is probable, in my opinion, that Morelli took a considered commercial risk of adopting a distinctively similar title at a time he believed was opportune.
Evidence concerning confusion
Evidence was led by Life Saver to demonstrate that purchasers and advertisers were misled. It is important to bear in mind, however, that evidence of this type, or evidence to the contrary, does not displace the duty a judge has to consider objectively the effect of the impugned conduct: see for example, the helpful discussion in the dissenting judgment of Davies J in Brock v Terrace Times Pty Ltd (1982) 40 ALR 97 at 105-106. The applicant called four witnesses who gave evidence about the effect of the similarities between the two magazines. The first was Mr Gerry Halaby who is a director and shareholder of Life Saver. He gave evidence about an incident on 8 July 1998 at a Cronulla newsagency. He observed on the news stands the magazine “Triathlon & Multi Sport Magazine”. He picked it up and showed it to the person at the counter and asked whether it was “Triathlon Sports” magazine. The response was that it was. Halaby responded by saying that it was not “Triathlon Sports” magazine but “Triathlon & Multi Sport” magazine to which the person at the counter said that the mastheads were virtually the same and he thought it was “Triathlon Sports” magazine. This evidence was not objected to save as to relevance and Halaby was not cross examined about it.
Evidence was given by Ms Vicki Nettle who is a part-time nurse and triathlete. Though she is not a professional triathlete she is a regular participant in triathlon events in New South Wales and has been participating for five years. For that period she has purchased on a regular basis the magazine “Triathlon Sports”. On 13 July 1998 she went to a newsagent at Sylvania and looked at the news stand. She noticed the word “Triathlon” on the cover of a magazine and picked it out intending to purchase it. She thought the magazine was the magazine she regularly purchased, namely “Triathlon Sports”. While she was waiting at the counter to purchase the magazine she flicked through it and could not see sections on events that she normally read. On further examination she realized that it was a different magazine with the title “Triathlon & Multi Sport Magazine”. She proffered the view in evidence that had she not looked at it in detail she would have believed it was the magazine owned by Life Saver. While she had an indirect connection with Halaby her evidence was credible and I accept it. The evidence she gave about being misled was not diminished in cross-examination.
To similar effect was the evidence Mr Jon Wilks who is an amateur triathlete and a member of the Cronulla Triathlon Club. He has been involved in the sport of triathlon as an amateur for the last five to six years. He is a regular reader of “Triathlon Sports” and subscribes to the magazine. In July 1998 he did not receive the July edition, I infer, by mail. He went to the Ramsgate beach newsagency and saw a magazine bearing the word “Triathlon” and thought it was the magazine owned by Life Saver. He picked it up, looked at the cover and went to the checkout counter. He then believed that Life Saver had simply added the words “& Multi Sport” to the cover and that the magazine included some other sports such as canoeing or rock climbing. He paid for the magazine, had a brief look at it and walked back to his car. It was not till he got home that he had a good look at the magazine and realized that it was not the magazine published by Life Saver. Again, his evidence was not diminished in cross-examination.
The last witness called by the applicant concerning the effect of the similarities was Susan Stevens. She is a director and shareholder of a company called Hot Designs Pty Ltd which sells and supplies sportswear clothing. She has dealt with the proprietor of “Triathlon Sports” magazine for over six years and, I infer, has advertized in it. Her evidence was that in mid to late June 1998 she received a copy of “Triathlon & Multi Sport Magazine” and thought it was the magazine published by Life Saver with another section added to it. She continued to believe that it was the magazine published by Life Saver until she received a phone call on 3 July 1998 by someone from that company who informed her that the magazine had not been published by Life Saver. Ms Stevens gave evidence about other matters which I do not view as material. Her evidence was not diminished in cross-examination.
The respondent relied on six witnesses on this issue and they were not cross examined on their affidavits. Mr Timothy Stevenson gave evidence that he has competed in the sport of triathlons for the last 13 years both in Australia and internationally. He purchases triathlon related magazines on a regular basis and is aware of the magazine “Australian Triathlete” as well as the magazines published by Life Saver and S & I. He has subscribed to “Australian Triathlete” for the last 18 months and buys “Triathlon Sports” occasionally. He first saw “Triathlon & Multi Sport Magazine” on sale at a Melbourne newsagency in July 1998. His initial reaction was that it was a new magazine bearing the words “Volume 1 No 1” and had a different masthead layout and included the word “Multi”. He said that he was never under the impression that that magazine was “Triathlon Sports” in a revamped form or the same magazine.
Evidence of a slightly different character was given by Mr Benjamin Gachercole. He is an accredited triathlon coach. His evidence was that he was aware of four magazines in Australia incorporating the word “Triathlon” or “Triathlete”. They are, apart from the magazines of Life Saver and S & I, “Australian Triathlete” and “Triathlete”. The latter magazine is published in the United States and he usually refers to it as the US Triathlon magazine.
Similar evidence was given by Ms Jennifer Alcorn who has been involved in the sport of triathlon for the last 12 years. For the first nine years she competed as an elite triathlete both in Australia and internationally and for the last three years has worked, full time, as a triathlon coach. She also gave evidence about her reaction to “Triathlon & Multi Sport Magazine” when she was first shown it by an athlete at her triathlon club. Her initial reaction was that it looked great and was a new magazine. She had earlier discussed with Mr Rod Cedaro, the editor of “Triathlon & Multi Sport Magazine”, that a new magazine was to be published. When she first saw the magazine she was not sure who had published it as she thought the magazine to be published by Cedaro was to have a different name, namely, “Triathlon Downunder”. However as a matter of first impression she knew that the magazine she saw was not “Triathlon Sports” because of its different title and layout.
Evidence on this issue was also given on behalf of the respondents by Mr Andrew Fraser who is the publicity director for On Line Sports Marketing Pty Limited and is responsible for media liaison in the sport of triathlon. That company runs the “St George F1 Triathlon Series” which is described by Fraser as the premier triathlon competition in Australia. Fraser has worked with Triathlon Australia as a media representative. Fraser gave evidence about the magazines presently available though added a reference to “Inside Triathlon” which is the other magazine from the United States which I referred to earlier. He was informed by Cedaro in March 1998 that a new magazine was to be published and was shown a copy of “Triathlon & Multi Sport Magazine” in late June 1998. He gave no direct evidence as to whether he thought it was an established magazine though the import of his evidence appears to be that he did not. However that could be expected given that he was shown the copy by Cedaro.
Evidence was also given by Mr Ainsley Hart who has a business retailing bicycles and accessories in the inner city. He has competed in the sport of triathlon for the last six to seven years. He is aware of the various magazines earlier referred to and since November 1997 has advertised his business in the magazines “Australian Triathlete” and “Triathlon Sports”. He reads “Triathlon Sports” and “Australian Triathlete” and “Triathlete” on a regular basis. The first two are regularly sent to him by the publishers because he advertises in them. He first became aware of “Triathlon & Multi Sport Magazine” when he was sent a circular and advertising rate card some time in May 1998. He says that when he received this material it was clear to him that it was a new triathlon related magazine and he was not under the impression that “Triathlon Sports” was involved in any way. He did not advertise in the first edition of “Triathlon & Multi Sport Magazine”. He purchased a copy of the first edition of “Triathlon & Multi Sport Magazine” on the day it first came out. He says that he knew it was a new magazine because it looked nothing like “Triathlon Sports”. He also thought it was not connected with “Triathlon Sports” because of differences in the layout and the masthead of the magazine. He proffered the view that no reader who buys triathlon magazines could be misled.
Evidence was also given by Professor Knight who holds a personal chair in the School of Science at Griffith University. He has had an interest in the sport of triathlon since 1991 and has participated in triathlon competitions since 1994. He describes himself as an avid reader of sporting publications and plainly has been involved in the development of sports and sports training in a substantial way. He has been aware of the magazine “Triathlon Sports” but has not been impressed by its contents. His opinion is that it lacks substantive articles providing in-depth technical information and advice about the three sports comprising triathlon. However recently, with his son, his attention was drawn to “Triathlon & Multi Sport Magazine” at a local newsagency. He flipped through its pages and was impressed by its quality. He was prompted to send Cedaro an e-mail congratulating him on the first edition. He said that at no time did he consider “Triathlon & Multi Sport Magazine” to be a new edition or otherwise connected with “Triathlon Sports”. This opinion appears to have been based on a consideration of the contents of the magazines and the extent to which advertising featured in both and the journalistic style of one and not the other. Nine other e-mails or letters to Cedaro are also in evidence and the tenor of them is that the writer was impressed by the first edition. Some of them indicated it was a superior publication to “Triathlon Sports”.
Relevant legal principles
Many of the principles that govern proceedings such as these have recently been conveniently summarized by Goldberg J in Betta Foods Australia Pty Ltd v Betta Fruit Bars Pty Ltd (1998) ATPR 41-624. His Honour said (at 40,839-40,840):
The applicant puts its case on the basis of common law passing off and misleading or deceptive conduct in breach of s 52 of the Trade Practices Act 1974 (Cth) (“the Act”). Although it has been said that the precise definition of the elements of the tort of passing off is elusive: Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302, 355 per Gummow J; Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261, 268, the authorities show there is a need to establish reputation, misrepresentation and the likelihood of damage: Conagra Inc v McCain Foods (Aust) Pty Ltd (supra); Reckitt and Colman Products Limited v Borden Inc (1990) 17 IPR 1, 7; Vieright Pty Ltd v Myer Stores Limited (supra) 40,486. What is accepted as the authoritative statement of the necessary elements to establish the cause of action of passing off is found in the judgment of Lord Diplock in Erven Warnink Besloten Vennootschap v J Townend & Sons (Hull) Limited [1979] AC 731 (the Advocaat case) where at 742 his Lordship stated the five characteristics which needed to be present as:
“(1) a misrepresentation
(2) made by a trader in the course of trade
(3) to prospective customers of his or ultimate consumers of goods or services supplied by him
(4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and
(5) which causes actual damage to a business or goodwill of a trader by whom the action is brought or (in a quia timet action) will probably do so”.
This statement has been accepted in Australia: Moorgate Tobacco Co Limited v Philip Morris Limited (No 2) (1984) 156 CLR 414, 443 ‑ 444 per Deane J; Conagra Inc v McCain Foods (Aust) Pty Ltd (supra) 308 ‑ 310. Although the law of passing off has been said to be capable of summary in one short general proposition - no man may pass of his goods as those of another: Reckitt and Colman Products v Barden Inc (supra) at 7, it is necessary as Lord Oliver said in that case, to establish three elements for passing off action - first goodwill or reputation attaching to the relevant goods in the mind of the purchasing public by association with the identifying get‑up, such that the get‑up is recognised by the public as distinctive specifically of the applicant’s goods; secondly a misrepresentation leading, or likely to lead, the public to believe that the respondent’s goods are the goods of the applicant or a particular source; thirdly the suffering, or likely suffering, of damage by reason of the erroneous belief engendered by the misrepresentation. As the Full Court observed in Vieright Pty Limited v Myer Stores Limited (supra) 40,493 those elements gave rise to three questions:
“(1) Has the applicant proved that the get‑up under which its [magazine] have been sold since [1984] has become associated in the minds of substantial numbers of the purchasing public specifically and exclusively with the applicant’s [magazine]?
(2) If the answer to that question is in the affirmative does the get‑up under which the respondent markets its [magazine] amount to a representation by the respondent that the [magazine]s which it sells are the applicant’s products?
(3) If the answer to that question is in the affirmative, is it, on a balance of probabilities, likely that, if the respondent is not restrained a substantial number of members of the public will be misled into purchasing the respondent’s [magazine] in the belief that they are the applicant’s [magazine].”
In Equity Access Pty Ltd v Westpac Banking Corporation (1990) ATPR 40‑994 Hill J at 50,950‑50,951 set out a number of propositions which applied in relation to the ingredients of a cause of action under s 52 of the Act. The propositions can be summarised as follows:
(a) for conduct to be misleading or deceptive conduct it must convey, in all the circumstances, a misrepresentation;
(b) there will be no contravention of s 52 unless the error or misconception which occurs results from the conduct of the corporation and not from other circumstances for which the corporation is not responsible;
(c) conduct will be likely to mislead or deceive if there is a “real or not remote chance or possibility” of misleading or deceiving regardless of whether it is less or more than 50%;
(d) conduct causing confusion or uncertainty in the sense that members of the public might have been caused to wonder whether the two products or services might have come from the same source is not necessarily co-extensive with misleading or deceptive conduct;
(e) the applicant must establish that it has acquired the relevant reputation in the name, that is that the name has become distinctive of the applicant’s business or products.
(The bold type represents, for present purposes, a relevant modification of the text of Goldberg J’s judgment.)
One specific issue emerging in these proceedings was whether the word “triathlon” was a descriptive word. This issue arises because of the observations of Stephen J in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 229-231. His Honour said at 229:
There is a price to be paid for the advantages flowing from the possession of an eloquently descriptive trade name. Because it is descriptive it is equally applicable to any business of a like kind, its very descriptiveness ensures that it is not distinctive of any particular business and hence its application to other like businesses will not ordinarily mislead the public. In cases of passing off, where it is the wrongful appropriation of the reputation of another or that of his goods that is in question, a plaintiff which uses descriptive words in its trade name will find that quite small differences in a competitor’s trade name will render the latter immune from action (Office Cleaning Services Ltd v Westminster Window and General Cleaners Ltd (1946) 63 RPC 39 at 42 per Lord Simonds). As his Lordship said (at 43), the possibility of blunders by members of the public will always be present when names consist of descriptive words – “So long as descriptive words are used by two traders as part of their respective trade names, it is possible that some members of the public will be confused whatever the differentiating words may be”. The risk of confusion must be accepted, to do otherwise is to give to one who appropriates to himself descriptive words an unfair monopoly in those words and might even deter others from pursuing the occupation which the words describe.
Counsel for Life Saver appeared, at one point, to suggest that the principle articulated in the preceding passage is limited to descriptive words adopted to describe a business as was the case in Office Cleaning Services Ltd v Westminster Window and General Cleaners Ltd (supra) and Hornsby Building Information Centre Pty Ltd (supra). However the principle has a wider currency and a recent example is found in Betta Foods Australia Pty Ltd (supra) in which Goldberg J concluded that the word “Betta” as it appeared on confectionary products was a descriptive term and relevant legal principles should be applied on that basis. Indeed in Independent Newspapers Ltd v Australian Consolidated Press NZ Ltd (1996) 3 NZLR 722 Ellis J, of the High Court of New Zealand, considered whether injunctive relief should issue restraining the publication of a magazine with a name similar to another magazine. The judgment concerned an application for an interim injunction based on alleged passing off and breach of the Fair Trading Act 1986 (NZ). The plaintiffs published a magazine “House & Garden”. They had submitted the words “House & Garden” were not words in common use joined in this way, and even if they were, they had obtained a secondary meaning. His Honour referred to part of the passage of Stephen J’s judgment in Hornsby Building Information Centre Pty Ltd (supra) which I earlier set out and concluded that the words were common descriptive words.
However it is not necessarily simply a question, as submitted by counsel for S & I, of first determining whether the word or words are descriptive and, depending on the answer to that question, then ascertaining whether the words had acquired a secondary meaning: see The Kettle Chip Company Pty Ltd v Apand Pty Ltd (1993) 46 FCR 152 at 165-166. The characterization of a word or words as descriptive and its effect may involve an inquiry of the type discussed by Hill J in Equity Access Pty Ltd v Westpac Banking Corporation (1990) ATPR 40-994 at 50,956:
Just as the distinction between descriptive and fancy names is not a distinction of law so too it is wrong to see the distinction in black and white terms. The reality is that there is a continuum with at the extremes purely descriptive names at the one end, completely invented names at the other and in between, names that contain ordinary English words that are in some way or other at least partly descriptive. The further along the continuum towards the fancy name one goes, the easier it will be for a plaintiff to establish that the words used are descriptive of the plaintiff’s business. The closer along the continuum one moves towards a merely descriptive name the more a plaintiff will need to show that the name has obtained a secondary meaning, equating it with the products of the plaintiff (if a name admits of this – a purely descriptive name probably will not) and the easier it will be to see a small difference in names as adequate to avoid confusion.
This passage was cited with approval by a Full Court in Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261. However even descriptive words may, through use in a particular way, become distinctive such as to enable the established user of them to restrain their use by others: see Opals Australia Pty Ltd v Opal Australiana Pty Ltd (1993) ATPR 4-264.
I should refer to two matters concerning the intention of a respondent in proceedings such as these. The first is that if an intention on the part of the respondent to mislead or deceive can be inferred then the Court can more readily hold the respondent to have engaged in conduct likely to mislead or deceive: see Australian Home Loans Ltd (T/a Aussie Home Loans) v Phillips (1998) ATPR 41-626. The second emerges from the judgment of Lockhart J in Bridge Stockbrokers Ltd v Bridges & Ors (1984) 4 FCR 460 at 474-475. His Honour noted that if the conduct of a corporation caused mere confusion or uncertainty in the minds of the public in the sense that they may be caused to wonder whether two products may have come from the same source, the corporation would not have contravened s 52. If, however, a corporation set out on a course of conduct so as to create uncertainty in the minds of the public as to whether two products came from the same source then that constitutes conduct proscribed by s 52. These views were endorsed by Gummow J in New South Wales Dairy Corporation v Murray Goulburn Co-operative Co Ltd (1989) 86 ALR 549 at 558. In an appeal from that judgment of Gummow J the Full Court did not express a contrary view: see (1990) 24 FCR 370 at 387-388. However, for reasons I shortly explain, it has been unnecessary to approach the matter on this footing.
Conclusion
I accept that the word “Triathlon” is descriptive in the sense that it describes a sport and when found on the cover of a magazine that was overtly a sports magazine, may be descriptive of the contents of the magazine and thus the type of magazine it is. It is not a word over which a monopoly of use can be asserted in the name of a magazine. However, in the present case, a singular feature of the magazine acquired by Life Saver has been its publication with a masthead featuring prominently the word “Triathlon”. This characteristic did not alter when the word was printed in lower case and italicized in early 1987. Indeed I think the word, in both formats, could fairly be said to dominate the cover of the magazine because of both the size of the word in an absolute sense and, more significantly, its relative size to other text on the cover. The manner in which the word is portrayed renders it distinctive. Until the publication of “Triathlon & Multi Sports Magazine” in July 1998, the use of the word, portrayed in this way, distinguished “Triathlon Sports” from other magazines in the same field, that is, reporting on the sport of triathlon and other multi sports. While other magazines in the Australian market in this field have displayed a word in the masthead which is prominent, the word “Triathlon” has featured only on the cover of the magazine now owned by Life Saver. There is direct evidence that this characteristic is of significance to consumers and I think it may reasonably be inferred that the dominant use of the word “triathlon” provides a point of distinction at the time of purchase between the magazine owned by Life Saver and other magazines generally dealing with the same subject matter in the market. The adoption of the same word and its prominent display by S & I constitutes, in my opinion, a representation that its magazine is the magazine owned by Life Saver.
It may be accepted that there are points of distinction. The style in which the word “Triathlon” appears in the S & I magazine, that is, in upper case and not italicized is different. Moreover the masthead in the S & I magazine is framed at the top by a red flash containing a reference to the magazine as being a “New” (in yellow) triathlon and multi sport magazine. That it is new is also apparent by the reference to Vol. 1 No 1 at the base of the masthead. The magazine published by S & I contains additional and different words qualifying the word “triathlon”. However the word “sport” appears in both though as the singular in one and the plural in the other. Ultimately, however, the only substantial point of distinction in the collocation of words used in the title is the addition of the words “& Multi” in the magazine published by S & I.
In my opinion the prominent use of the word “triathlon” in the magazine published by S & I will create something more than mere confusion or uncertainty. There is a real possibility that purchasers of triathlon magazines will and will continue to believe the magazine published by S & I is the magazine owned by Life Saver. In reaching this conclusion it has been unnecessary to rely on any inferences that might be drawn from a finding that S & I intended to mislead purchasers. However the finding I have made concerning the adoption of the masthead by S & I fortifies the conclusion I have reached. Counsel for S & I submitted that if the two magazines continue to be published in their present form then it would be obvious to consumers as they view them both being offered for sale, that they were two different publications. In those circumstances, it was submitted, attention would move from the dominant word “Triathlon” to the indicia of difference to which I have just referred. However one can readily conceive of situations where the two magazines are not displayed sufficiently close together to permit that comparison. Even if they were, a consumer may nonetheless view them as the same magazine but published in a slightly different format as different editions. Situations may also arise where a vendor stocks one but not the other or stocks both and sells all copies of Life Saver’s magazine leaving on display and for sale only copies of the magazine published by S & I.
It is unnecessary to deal with the effect of the conduct of S & I on advertisers rather than consumers though the matters I have identified to this point are less likely, in my opinion and notwithstanding the evidence of Stephens to the contrary, to impact on advertisers who may well be more discerning in the comparisons they might make.
The applicant has made out grounds for injunctive relief under the Act. It is unnecessary to consider whether the tort of passing off is also made out. It was agreed between counsel that the making of orders should await a consideration of these reasons so the parties could formulate appropriate orders to give effect to them. Accordingly the only order I make is to adjourn the matter to 20 August 1998 to enable the parties to bring in short minutes.
ANNEXURE “A”
ANNEXURE “B”
ANNEXURE “C”
I certify that this and the preceding nineteen (19) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore
Associate:
Dated: 14 August 1998
Counsel for the Applicant: P W Gray with A G Pearman Solicitor for the Applicant: Webster O’Halloran Counsel for the Respondent: R J Webb Solicitor for the Respondent: Minter Ellison Dates of Hearing: 30 July, 7 August 1998 Date of Judgment: 14 August 1998
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