Designer Entertainment Pty Ltd v D Club Pty Ltd
[2003] FCA 1572
•23 DECEMBER 2003
FEDERAL COURT OF AUSTRALIA
Designer Entertainment Pty Ltd v D Club Pty Ltd [2003] FCA 1572
EQUITY – interlocutory injunctive relief – music promotions and services – applicant having registered trade mark in three alphabetical letters – applicant and relevant respondents having registered business names – serious issue to be tried not weak – damages arguably adequate remedy due to limited goodwill in market despite first entry – balance of convenience against grant of relief – no serious issue or balance favouring relief against sixth respondent, a community broadcaster
Trade Marks Act 1995 (Cth) s 26(2), 88, 120
Trade Practices Act 1975 (Cth) ss 52, 53Aldi Stores Ltd Partnership v Frito-Lay Wide Trading Co GmbH (2001) 54 IPR 344 cited
American Cyanamid Co v Ethicon Ltd [1975] AC 396 applied
Anheuser-Busch Inc v Budejovicky Budvar (2002) 56 IPR 182 cited
Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 applied
Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641 cited
Berlei Hestia Industries Ltd v Bali Co Inc (1973) 129 CLR 353 cited
Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 applied
Dairy Vale Metro Co-operative Ltd v Brownes Dairy Ltd (1981) 54 FLR 243 cited
Erven Warnink BV v J Townend & Sons (Hull) Ltd [1979] AC 731 cited
Levi-Strauss & Co v Wingate Marketing Pty Ltd (1993) 43 FCR 344 cited
Master Builders Association (SA) Inc v Master Builders Advice & Helpline Pty Ltd [2001] SASC 214 cited
Opals Australia Pty Ltd v Opal Australiana Pty Ltd (1993) ATPR 41-264 cited
Reddaway v Banham [1896] AC 199 cited
Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 cited
Southern Cross Refrigerating Company v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 cited
Sports Break Travel Pty Ltd v P&O Holidays Ltd (2000) 50 IPR 51 cited
Targetts Pty Ltd v Target Australia Pty Ltd (1993) 26 IPR 51 citedDESIGNER ENTERTAINMENT PTY LTD v D CLUB PTY LTD, LIVE & LOUD ENTERTAINMENT PTY LTD, TONY GREGO, JOE DEMASI, R&B SUPERCLUB WA PTY LTD, USE MEDIA SOCIETY OF WESTERN AUSTRALIA INCORPORATED T/A GROOVE FM and ENTERTAINMENT CONSULTANTS AUSTRALIA PTY LTD
N1456 of 2003
RD NICHOLSON J
23 DECEMBER 2003
PERTH
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
N1456 OF 2003
BETWEEN:
DESIGNER ENTERTAINMENT PTY LTD
APPLICANTAND:
D CLUB PTY LTD
FIRST RESPONDENTLIVE & LOUD ENTERTAINMENT PTY LTD
SECOND RESPONDENTTONY GREGO
THIRD RESPONDENTJOE DEMASI
FOURTH RESPONDENTR&B SUPERCLUB WA PTY LTD
FIFTH RESPONDENTUSE MEDIA SOCIETY OF WESTERN AUSTRALIA INCORPORATED T/A GROOVE FM
(ABN 49 186 638 576)
SIXTH RESPONDENTENTERTAINMENT CONSULTANTS AUSTRALIA PTY LTD
SEVENTH RESPONDENTJUDGE:
RD NICHOLSON J
DATE OF ORDER:
23 DECEMBER 2003
WHERE MADE:
PERTH
THE COURT ORDERS THAT:
1.The applicant’s motion for interlocutory relief be refused.
2.The costs be in the cause.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
N1456 OF 2003
BETWEEN:
DESIGNER ENTERTAINMENT PTY LTD
APPLICANTAND:
D CLUB PTY LTD
FIRST RESPONDENTLIVE & LOUD ENTERTAINMENT PTY LTD
SECOND RESPONDENTTONY GREGO
THIRD RESPONDENTJOE DEMASI
FOURTH RESPONDENTR&B SUPERCLUB WA PTY LTD
FIFTH RESPONDENTUSE MEDIA SOCIETY OF WESTERN AUSTRALIA INCORPORATED T/A GROOVE FM
(ABN 49 186 638 576)
SIXTH RESPONDENTENTERTAINMENT CONSULTANTS AUSTRALIA PTY LTD
SEVENTH RESPONDENT
JUDGE:
RD NICHOLSON J
DATE:
23 DECEMBER 2003
PLACE:
PERTH
REASONS FOR JUDGMENT
The applicant brings a motion moving the Court for orders in the nature of interlocutory restraint in the following terms:
‘The First, Second, Third, Fourth, Fifth and Sixth Respondents and each of them by themselves their servants or agents or otherwise be restrained, pending determination of these proceedings or until further order, from:-
(a)infringing the Australian Registered Trade Mark (“RNB”) no. 911532;
(b)passing off and enabling to be passed off their businesses and goods and services supplied in the course of their businesses as and for the business and goods and services of the Applicant or as connected or associated therewith or as having the sponsorship or approval of the Applicant;
(c)using the word “R&B Superclub” or any other substantially identical or deceptively similar words or mark in relation to night club and other music events promoted by the Respondents, including the use of the words “R&B Superclub” or any other substantially identical or deceptively similar words or mark in connection with the advertising and other promotional material used by the Respondents in the promotion of such events;
(d)displaying on their business premises or in connection with its business and on any stationery or promotional material words “R&B Superclub” or any other substantially identical or deceptively similar words or mark.”
In the course of argument, however, it was made apparent for the applicant that interlocutory relief is sought only in terms of par (c) and par (d) above.
The case for the applicant is supported by affidavits from Mr Salvaggio, the sole Director of the applicant, sworn 24 November 2003; Mr Caporn, General Manager of Combined Entertainment Strategies Pty Ltd, sworn on 6 November 2003; Mr Ratten, Tour Agent and Promoter, sworn on 24 November 2003; Mr Arends, Master of Ceremonies, undated, together with affidavits of Ms Martinez, recording artist and TV presenter and Ms Arteaga, music promoter, sworn in November 2003.
The case for the respondents places reliance upon an affidavit of Mr Demasi, the fourth respondent and General Manager of the first, second and fifth respondents; Mr Grego, the third respondent and a Director of the first, second and fifth respondents; Mr Tong, an articled clerk in the employ of the solicitors for the first to fifth respondents. The sixth respondent relies upon an affidavit of Mr Niesten, Executive Officer of the sixth respondent, sworn on 10 December 2003.
The seventh respondent is the registered owner of a trade mark ‘RNB’ No. 9115332 (‘the Trade Mark’). It has been joined as a respondent as required by s 26(2) of the Trade Marks Act 1995 (Cth).
NATURE OF THE PROCEEDING
On 15 August 2003 the applicant filed an application claiming an account of profits from the respondents (other than the seventh respondent) and orders that they cease and desist from engaging in what is described as wrongful conduct set out in the application.
The application states that the applicant has for several years, since November 2001, conducted a business as a promoter of modern rhythm and blues music across Australia. It claims to host music events under the name ‘RNB Superclub’ and to produce and distribute compac discs under the name ‘RNB The Super CD’.
The applicant company claims to have the initials ‘RNB’ registered as a business name in the States of New South Wales, Victoria, South Australia and Queensland. Additionally, it claims to be entitled by virtue of common shareholdings and directorships to the company RNB Superclub Pty Ltd and to have the consent of the seventh respondent to use the trade mark initials ‘RNB’ for the purposes of the conduct of its business.
The applicant company asserts that it tours regularly in the respective States and Territories throughout Australia and maintains an internet site for the purpose of promoting its activities throughout Australia. It claims to have worked under the name ‘RNB Superclub’ conducting tours and other events since approximately June 2002 in all of the Australian States and Territories.
It is said that in late 2002 the applicant coordinated and conducted an ‘RNB Superclub’ tour and an accompanying ‘RNB Superclub’ CD launch in various towns and cities across Australia, including Perth. Specifically it was said to have hosted an event in Western Australia on 3 January 2003 at the premises of the Globe Nightclub and a further event at the Office Nightclub on 27 June 2003.
In the course of its promotion and work the applicant claims to have applied money and other resources to the development of the brand name ‘RNB Superclub’. It is said it has a widespread and valuable reputation in that name and in respect of the initials ‘RNB’ in relation to the ‘Rhythm and Blues’ music industry in Australia.
The application states that on 11 April 2003 the fourth respondent registered the name ‘R&B Superclub’ as a business name in the State of Western Australia and thereafter commenced to conduct a nightclub business at the premises for which the first respondent is the licensee. In June 2003, it is said the fourth respondent incorporated the fifth respondent company. The fifth respondent carries on its business from the premises known as the Metro City Nightclub, which is also a concert club with a licence capacity of 1909 persons and consequently the largest nightclub venue in Perth. From around that date the first, fourth and fifth respondent commenced and continued to conduct weekly events and organised nightclub promotional evening functions under the name ‘R&B Superclub’ or ‘R&B Superclub (WA)’ or its likeness. It is said that that is a utilisation of the name of the applicant used for the conduct of the applicant’s business. This occurred without the consent of the applicant. The second respondent, it is claimed, published press release material falsely alleging the right title and interest of the third respondent to the name of the ‘RNB Superclub’ in the State of Western Australia.
These actions by the first to fifth respondents are said to constitute conduct that is misleading and (sic) deceptive within the meaning of s 52 of the Trade Practices Act 1975 (Cth) in that it connotes a sponsorship, approval or affiliation between the applicant and those respondents where there is no such sponsorship, approval or affiliation and no consent has been given. It is also claimed that the utilisation of the initials ‘R&B’ and the term ‘R&B Superclub’ constitutes false and misleading representation within s 53 of the Trade Practices Act. Additionally, the applicant claims that the use of the initials ‘R&B’ without the consent of it or the seventh respondent is in breach of s 120 of the Trade Marks Act.
The sixth respondent is a radio station operating a public broadcasting service in the City of Perth, Western Australia. Notwithstanding that it has been informed by the solicitors for the applicant of the applicant’s interest in the trade mark ‘RNB’, it is claimed by the applicant that the sixth respondent has continued to advertise events for rewards on behalf of the first respondent under the name ‘R&B Superclub’.
In their defence the first to fifth respondents, aside from denying certain factual matters, claim that the trade mark ‘RNB’ is descriptive of a style of music and as such lacks any capacity to distinguish the goods and service of the trade mark owner from those of other traders. It is said that accordingly the mark is wrongly registered and liable to be expunged from the Register of Trade Marks pursuant to s 88 of the Trade Marks Act. Those respondents therefore counterclaim to that effect and seek rectification of the Register and an injunction restraining the applicant and the seventh respondent from conducting the relevant business in Perth under the name ‘R&B Superclub’ or ‘RNB Superclub’ or any other substantially identical or deceptively similar name.
The sixth respondent has not yet filed a defence.
CHRONOLOGY
The following chronology appears from the application read in conjunction, principally, with the affidavits of Mr Salvaggio and Mr Demasi.
Prior to September 2001, Mr Salvaggio conducted the business of the promotion and public performance of rhythm and blues style music since about 1990. In September 2001 the applicant took over his business.
On 3 October 2001 Mr Salvaggio registered the business name ‘RNB’ in New South Wales, such registration being stated to remain in force for one year.
In October 2001 Mr Salvaggio claims to have devised the name ‘RNB Superclub’ as a brand name for the promotional activities of the applicant. His evidence is that the ‘Superclub’ part of the name was chosen because of the show’s performances in a large venue at Moore Park, Sydney. He claims that in his experience in the music industry since 1990 in Australia the brand name ‘RNB’ has not previously been used in the nightclub industry prior to the usage of the initials and trade mark by him and the applicant. On the other hand Mr Demasi claims that when he toured the United States in 2002 and early 2003 and particularly in New York, Miami and the Caribbean, rhythm and blues music had been prolifically profiled with the acronym R&B, RNB and various derivations of those three letters or symbols. In addition, he claims larger establishments or venues in New York and Miami often had the words Superclub tacked onto the ends of the letters RNB or R&B to described the size of the venue or the event. For the applicant it is said that the first to fifth respondents utilised the name of the Superclub not as a product of Mr Demasi’s wanderings but as a result of a quite deliberate decision. In this respect it relies on the evidence of Mr Ratten and Mr Caporn.
From 22 November 2002 to 28 March 2003 the applicant arranged and conducted the ‘RNB Superclub Tour’ and an accompanying ‘RNB Superclub’ CD launch in the various towns and cities across Australia, including Perth.
The Perth event occurred in January 2003 at the Globe Nightclub. It was preceded and followed by promotional television advertising.
On 7 February 2003 a certificate of registration was issued in favour of the applicant in respect of the trade mark RNB in relation to the following goods and services:
“Pre-recorded tapes and discs containing music compilations with and without accompanying video clips; apparatus for recording, transmission or reproduction of sound or images being goods in class 9
Clothing, headware and footware being goods in class 25
Promotion, organisation and management of performing artists, entertainers, sports athletes and public personalities; promotion, organisation and management of entertainment, sporting and cultural events including consultancy services for the promotion, organisation and management of such events; promotion, organisation and management of disc jockeys being services in class 35
The provision of entertainment, sporting and cultural events including special events such as dance parties, concerts, sporting and cultural exhibitions; production of music compilations and arrangements; production of pre-recorded music and video being services in class 41’On 11 April 2003 the third respondent registered the business name ‘R&B Superclub (WA)’.
On 28 May 2003 the applicant registered the business name ‘RNB Superclub’ in New South Wales.
On 19 June 2003 the fifth respondent changed its name to R&B Superclub (WA) Pty Ltd.
On 27 June 2003 the applicant held its second RNB Superclub show in Perth at the Office Nightclub. It was attended by approximately 1250 people.
On 12 July 2003 the fifth respondent held its first R&B Superclub show in Perth at the Metro City Nightclub.
OTHER BACKGROUND CIRCUMSTANCES
Mr Salvaggio’s evidence is that he has five concerns in relation to the use by the respondents of the name ‘R&B Superclub’. First, he says it is sufficiently similar to ‘RNB Superclub’ as to suggest to consumers that the former is someway associated with the latter and the applicant. Second, the applicant has no control over the venue at which the ‘R&B Superclub’ plays and the venue may have inadequate security or a relaxed policy in relation to drugs or alcohol. The evidence for the respondents is to the contrary on these two latter matters. Third, the applicant has no control of the disc jockeys playing at the ‘R&B Superclub’ or the music that is played. Fourth, in the event that either the venue or the music of inferior standard than the RNB Superclub this, it is said, could undermine and diminish the goodwill and reputation of the RNB Superclub. Fifth, reporting of experience by word of mouth is critical in the music industry and a negative experience of the R&B Superclub could therefore impact upon the RNB Superclub.
Additionally, it is claimed by Mr Salvaggio that the respondents’ use of the name R&B Superclub effectively prevents the applicant from promoting the RNB Superclub under that name in the State of Western Australia because of the confusion that would be caused. This is denied by Mr Demasi’s evidence which says that rhythm and blues music style is synonymous with the venue at the Metro City Nightclub, particularly on Saturday nights and there is no preclusion or hindrance on the applicant competing for that market.
Mr Demasi’s evidence is that the respondents have been promoting and housing rhythm and blues style music at the Metro venue over the last three years. He states, at first it was a rather small operation attracting small number of members of the public and over the years as the popularity in Perth grew for rhythm and blues style music the attendances also grew. For the past two to three years it has been a weekly event.
Evidence of expenditure of the fifth respondent from 22 May to 8 December 2003, in respect of advertising and promotion, shows its having expended $184 900. These include expenses for radio, press and billboard advertising together with hand bills and posters and promotional staffing costs. The same evidence claims attendances of three to four thousand people on Christmas Eve and New Years Eve parties but the venue, as previously stated, is not licensed to carry those numbers.
Examination of the copies of advertisements made on behalf of the fifth respondent and the associated respondents shows two matters. First, that the letter ‘B’ in the description ‘R&B’ is frequently reversed so as to arguably offer a distinctive presentation. Second, in references to the website for the ‘R&B Superclub’ the description is given of ‘
CASE AGAINST FIRST TO FIFTH RESPONDENTS
It is common ground that in order to grant an interlocutory injunction, the Court must be satisfied that:
(a)there is a serious question to be tried or the applicant has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the applicant will be held entitled to relief;
(b)the applicant will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted;
(c)the balance of convenience favours the granting of an injunction.
See Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 153 per Mason ACJ; Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at 217 – 218, at [13] per Gleeson CJ.
Further it is not in dispute that the Court will not attempt to solve conflicts in the affidavit evidence at an interlocutory stage: American Cyanamid Co v Ethicon Ltd [1975] AC 396 at 407 per Lord Diplock.
WHETHER SERIOUS ISSUE TO BE TRIED
Trade mark infringement
It is not in dispute that the Trade Mark is duly registered and that the applicant is its authorised user. Further, it is patent that the first to fifth respondents’ use of ‘R&B’ is within the scope of the registration in the sense that it used for the promotion and management of entertainment and/or the provision of entertainment. Further, it is said that the first to fifth respondents’ use of ‘R&B’ is as a trade mark. The real issue in dispute is whether ‘R&B’ is substantially identical with or deceptively similar to ‘RNB’ and, on the counterclaim, whether the trade mark is wrongly registered being descriptive of a style of music and lacking capacity to distinguish.
For the applicant it is contended that in determining whether two marks are deceptively similar the focus is on the effect of the impression produced on the mind of potential customers so that the similarity of sound and meaning are important: Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641 at 658. It will be sufficient if there is a likelihood of deception in all the circumstances ‘in the sense that there is a real risk that they will be caused to wonder whether the defendant’s and the plaintiff’s goods or services might not come from the same source. It is enough if a reasonable person entertains a reasonable doubt: Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 416 per Windeyer J; Southern Cross Refrigerating Company v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 594-595 per Kitto J; Berlei Hestia Industries Ltd v Bali Co Inc (1973) 129 CLR 353 at 362 per Mason J and Anheuser-Busch Inc v Budejovicky Budvar (2002) 56 IPR 182 at [153] per Allsop J.
On the issue whether the use of a mark is likely to confuse, it is the case that in answering that question ‘the capacity of the respondent to apply its mark to merchandise of the same kind as that sold by the appellant must be borne in mind even though as yet it has not done so.’: Berlei at 355 per Barwick CJ. That is, the answer to the question of confusion cannot be confined to the circumstances of the trade presently obtaining. In that case the appellant’s case turned entirely upon the phonetic similarity of two words when pronounced in the ordinary course of the retail trade, there being no likelihood of visual confusion between the marks. (The two names being Berlei and Bali-Bra).
Here, the applicant relies on the phonetic likeness between the mark and ‘R&B’ and claims that it is decisive: cf Levi-Strauss & Co v Windgate Marketing Pty Ltd (1993) 43 FCR 344 and Berlei. For the applicant it is therefore submitted that there is a strong prima facie case on this aspect.
For the first to fifth respondents it is not contested that there is a serious issue to be tried in the sense of there being an arguable issue. However, it is submitted that the case for the applicant for a trade mark infringement is a weak one and that weakness should be taken into account in determining the balance of convenience. In support, it said that the phrase rhythm and blues is descriptive of a type of music and that the letters R&B are an abbreviation of that phrase as are the letters RNB. The word ‘Superclub’ is nothing more than description of a large venue. The conjunction of the letters and the word do no more than describe a large venue at which R&B music is to be played.
Further, it is contended that it will be shown that the letters ‘R&B’ are not being used as a trade mark in respect of the goods and services being supplied but simply as being descriptive of them. Further, again, it is said that the trade mark itself is incapable of distinguishing the applicant’s goods and service: cf Sports Break Travel Pty Ltd v P&O Holidays Ltd (2000) 50 IPR 51 at 61 per Burchett J.
It is clear that the law recognises that even though a mark may be ‘entirely descriptive’ when considered as words in isolation, such as on an application for registration, that does not mean it is inherently incapable of ever being used as a trade mark in any context: Aldi Stores Ltd Partnership v Frito-Lay Wide Trading Co GmbH (2001) 54 IPR 344. Furthermore, it is possible that a word or phrase which is wholly descriptive of a service may become so associated with that service that its use by a defendant is capable of causing a misrepresentation. In those circumstances although the primary meaning of the words is descriptive, they have acquired a secondary meaning which indicates that the service is that of the particular trader and no other: Master Builders Association (SA) Inc v Master Builders Advice & Helpline Pty Ltd [2001] SASC 214 at [131] citing Reddaway v Banham [1896] AC 199 per Lord Hershell.
My view is that on the untested evidence presently available the phonetic similarity between the trade mark and ‘R&B’ is such as to have the effect on the mind of a listener of suggesting the ‘R&B’ is a reference to RNB. The deceptive similarity is not so apparent when writing is compared, particularly as the ‘B’ is usually reversed.
The weight to be given to this conclusion is capable of being affected by the fact that the applicant’s case does not seek any injunctive relief in respect of par (a) in the notice of motion relating to infringement of trade mark. The injunctive relief is directed to the combination of ‘R&B’ with ‘Superclub’. Nevertheless ‘R&B’ being deceptively similar to ‘RNB’ phonetically and arguably visually, the presence of deceptive similarity is carried into the combination.
Against this is the contention that ‘R&B’, like ‘RNB’, is simply descriptive. That argument is clearly open and cannot yet be determined. I regard the applicant’s case on this point as better than weak (as contended for the first to fifth respondents) and as having an even chance of success depending on how the evidence on description of rhythm and blues music falls out.
Trade Practices Act and Fair Trading Act Infringements
For the applicant it is contended that again there is a strong prima facie case in relation to the claims of misleading or deceptive conduct and the claim of misrepresentation. It is said that this is so because the issue is the similarity between ‘RNB Superclub’ and ‘R&B Superclub’. Both the degree of visual similarity and the degree of phonetic similarity are relied upon.
For the first to fifth respondents it is contended that the relevant market to consider when assessing the reputation of the applicant is the market in Western Australia and particularly the metropolitan area of Perth. It is said that activities elsewhere in Australia which do not impact on the market in Perth or influence relevant members of the public in Perth are irrelevant: Targetts Pty Ltd v Target Australia Pty Ltd (1993) 26 IPR 51.
It is contended that the conduct of the first to fifth respondents in promoting its R&B Superclub is exclusively directed towards persons in Western Australia and particularly the metropolitan area of Perth who may be interested in attending nightclubs or other similar venues where popular music is played or performed. It is submitted that what is required for the applicant to succeed is that it must establish a reputation amongst such persons: see also Dairy Vale Metro Co-operative Ltd v Brownes Dairy Ltd (1981) 54 FLR 243 at 250 per Toohey J. What is required is that the applicant establish a reputation among the potential customers being 18 to 30 year-olds living in Perth with an interest in rhythm and blues music and the club scene.
There are two reasons that are submitted for the first to fifth respondents why the applicant’s case should be viewed as a weak one. The first is that both components of the description ‘R&B Superclub’ are descriptive. In combination it is said they do no more than describe a venue at which rhythm and blues music is played.
Alternatively, it is contended that if it is possible for a party to have a reputation in the name R&B Superclub in relation to a venue for rhythm and blues music it is the respondents and not the applicant who enjoys such a reputation. Support is sought in the activities of relative parties during 2003. In that time, as has been seen, the applicant organised two events (in January and June) attended by less than 1500 people. The respondents have organised 22 weekly events since July and they claim these were attended by approximately 50 000 people. Similar conclusions are said to be open in relation to the amount of advertising and promotion, the amount of money spent on such activities and the coverage of the parties’ events in the Perth music press. These factors, it is said, are a proper measure of time, commitment and effort on the part of the first to fifth respondents in the market.
Similar contentions are made in relation to the issue of passing off but that is not pressed as a ground for the interlocutory relief.
While it is true that the first to fifth respondents have a reputation in the relevant market in Western Australia, two other factors countervail against that consideration. The first is that the applicant was the first to market the idea and the name of its events in that market. This is not a case where the applicant had a prior claim and did not market the idea or name first. The second is that, while the reputation of the first to fifth respondents in that market may considerably exceed that of the applicant, the reputation of the former was developed with knowledge of the prior entry into the market of the latter.
Furthermore, in that context it is clearly arguable that the use of the description ‘R&B Superclub’ give rise to conduct misleading or deceptive, or a misrepresentation calculated to injure the business or goodwill of ‘RNB Superclub’ as a reasonably foreseeable consequence: Opals Australia Pty Ltd v Opal Australiana Pty Ltd (1993) ATPR 41-264 at 41,563. The respondents’ case that both the descriptions ‘R&B’ and ‘Superclub’ are merely descriptive is dependent on evidence not yet adduced and must be evaluated as not weak but not greater than an even chance.
WHETHER IRREPARABLE INJURY AND DAMAGES NOT AN ADEQUATE REMEDY
The only reason damages would not be an adequate remedy for the applicant is that it may suffer loss of custom to an immeasurable degree. However, its trade mark is not sought to be protected alone but only as part of the description ‘R&B Superclub’. By its two activities to date the applicant has not established a sufficient reputation in that description in the relevant market despite being first in the market. That suggests the likely loss of custom may not be great. This is supported by the lapse of time between the applicant having knowledge of the respondents’ intention to launch the ‘R&B Superclub’ around 9 May 2003 and the applicant taking action.
I do not accept the submission for the applicant that the applicant’s goodwill may be as easily damaged by an invidious association with the respondents’ products or business as by direct loss of custom: Erven Warnink BV v J Townend & Sons (Hull) Ltd [1979] AC 731.
The respondents bring two responses to the applicant’s contentions in this regard. This is because there is no evidence that the use by the first to fifth respondents of the description ‘R&B Superclub’ will in any way devalue the name of the applicant’s activities. The evidence is that the relevant respondents have policies in place regarding drugs, alcohol and security. As to the choice of music and program, the evidence is that the relevant respondents have had success in their activities and that lends itself in turn to the contention by them that their activities have enhanced any reputation capable of subsisting in the name which they use.
I am not therefore persuaded by the applicant’s case that damages would not be an adequate remedy.
BALANCE OF CONVENIENCE
Strength of the serious issue
As stated above, I regard the applicant’s claims (dependent as they are not on registration but on the usage in the circumstances) as not weak but as of an even chance. This is because the nature of the evidence of descriptive character is not yet known.
Erosion of applicant’s goodwill
On the present evidence the claims of the applicant to have a goodwill in the Perth metropolitan or even the Western Australian market are weak. The most that can be claimed is that the applicant has staged two events in Perth. Furthermore, their claim of erosion of goodwill relates to the trade mark. However, the applicant does not seek any order in relation to the trade mark but rather only in relation to the ‘R&B Superclub’. Importantly, there is no evidence of proposed activities of the applicant in the relevant market or of activities it is prevented from holding as a consequence of activities by the relevant respondents.
Negative conduct by first to fifth respondents
Here it is contended for the applicant that there could be publicity regarding poor standard of music and sound, drug use, alcohol excesses and violence associated with the operations of the first to fifth respondents in the public domain. There is no evidence to support any of these claims. In relation to the latter three, there is evidence against it.
Adequacy of damages as a remedy
It is said that loss of goodwill is extremely difficult to measure and goodwill, once lost, is difficult to regain. Presently, there is no convincing evidence of the establishment of goodwill by the applicant in its name in the market in question. The existence of the website operating generally has not been shown to have had any impact on that. While it can be accepted that loss of goodwill is extremely difficult to measure, the likelihood of damage is not presently readily apparent.
Absence of prejudice to first to fifth respondents
For the applicant it is submitted there will be no real prejudice to the first to fifth respondents in the event of the grant of an injunction because their business would not be significantly affected in that they could still hold and promote their shows but not using ‘the applicant’s mark’. It is not the trade mark which is at the core of the applicant’s case as pressed on the hearing for interlocutory injunctive relief but rather the conjunction of the letters of the trade mark with the word Superclub in the phrase ‘R&B Superclub’. I accept that the respondents could still promote and hold its shows possibly under a name such as that used on their website (metrosuperclub).
Absence of third party prejudice
No third parties will be affected by the injunction.
Evidentiary matters
For the applicant it is said that the first to fifth respondents only commenced using the name ‘R&B Superclub’ some six months after the applicant promoted and held its first ‘RNB Superclub’ event in Perth. Further, the fifth respondent’s change of name followed closely upon correspondence from the applicant’s solicitors on 11 June 2003 asserting the applicant’s claimed right in relation to ‘RNB Superclub’. I regard this as a significant factor and have given it such weight in assessing the strength of the applicant’s claim.
Prejudice to first to fifth respondents
The relevant respondents say that if they are enjoined from using the name ‘R&B Superclub’ their customers may be led to believe the event has discontinued so that those respondents will suffer financial losses. I find this improbable.
Effects of interlocutory injunction
For the first to fifth respondents it is said that if the applicant ‘commences’ to use the name ‘RNB Superclub’ in Perth it will cause confusion in the minds of the relevant members of the public in Perth. However, the applicant’s functions in January and June 2003 were held under that name.
Further, it is contended that if an injunction is granted and at trial it is held that an injunction should not have been granted, the relevant members of the public will be even more confused. That cannot be avoided if it is a consequence of following proper procedures and courses provided in law.
Availability of adequate venue
The case for the first to fifth respondents says there is no other very large venue in Perth at which the applicant could hold an RNB music event of the sort run by the relevant respondents at the Metro City Night Club. That would appear to be the case but it would be for the applicant to determine whether or not to hold an event of that sort or of that size. It is not a factor to weigh in the balance of convenience. It is for the market to determine.
Preservation of the status quo
The relevant respondents also have made for them the contention that the preservation of the status quo supports the non-granting of interlocutory injunction because those respondents are currently using the name ‘R&B Superclub’ in Perth and the applicant is not (and has said it does not intend to) use its name. It is correct that there is no evidence put forward by the applicant of any promotions or events it has or intends to undertake in Perth in the near future or otherwise. In the case of the relevant respondents they have promoted their events into December 2003 and January 2004 with an intention to continue thereafter.
Delay
The relevant respondents’ case also relies on the fact that the applicant has delayed in bringing and prosecuting the application for interlocutory relief, seven months having elapsed since the applicant knew about the respondents’ intentions. During that time the relevant respondents have spent time, effort and money in establishing ‘R&B Superclub’.
Framing of injunction
Then it is said for the relevant respondents that it is difficult for the Court to frame an injunction in any meaningful way because if an attempt is made to prohibit the use of the words in combination, uncertainties will arise as to what the respondents can and cannot do.
Paragraphs (c) and (d), being the terms of the injunction sought do contain within them the potential for such difficulty.
Absence of proof of damage
Aside from the assertion in Mr Salvaggio’s evidence there is no evidence of actual damage being suffered by the applicant. This factor is relied upon for the first to fifth respondents.
I consider the overall effect of these factors is that the balance of convenience does not favour the granting of injunctive relief.
CASE AGAINST SIXTH RESPONDENT
EVIDENCE
Mr Niesten’s affidavit discloses that the sixth respondent operates a radio station that advances the interest and opinions of the general student and youth community and directed to that community in areas of music and culture. It generates income to operate its business under the name ‘Groove FM’ from Government grants, sponsorships, memberships, fundraising events and donations. In return for sponsorships, the sponsors may have their goods and/or services promoted on air by sponsorship announcement. All profit, revenue and income generated from the business is used in the operation of the radio station.
The first respondent is a Groove FM sponsor. In exchange for a number of sponsorship announcements, it pays the sixth respondent the sum of $3000 per week including GST pursuant to a written sponsorship agreement. The current agreement commenced on 1 July 2003 and will expire on 30 June 2004.
On 11 June 2003 Mr Niesten received a letter from the applicant’s solicitors warning Groove FM about using names allegedly owned by the applicant. As a result of that warning and without any admission the sixth respondent instructed its solicitors to forward a draft copy of a proposed sponsorship announcement to the applicant’s solicitors for approval. For the sixth respondent it was proposed that the applicant consent to the following form of wording in advertisements on behalf of the first respondent:
‘“The R&B Global Assault Hits Perth.
You wanted it and now it is in the yard.
Metros City launches super club every Saturday from July 19. Be there or be square station sponsor”Or in the alternative:
“R&B at the Metros City super club”.’
In response it was proposed on behalf of the applicant that the wording used be as follows:
‘“The R&B Global Assault hits Perth.
You wanted it and now it is in the yard.
Metro City launches the R&B night every Saturday night from July 19. Be there or be square station sponsor.”’It will be observed that the objection on behalf of the applicant was essentially to the use of the words ‘super club’ rather than ‘R&B’.
Additionally the affidavit of Mr Niesten stated that all sponsorship announcements aired on Groove FM are recorded and stored on a compac disc containing each such announcement, which is before the Court. As disclosed by that evidence the recordings of each sponsorship advertisement reveal that the term ‘RNB or (R&B) Superclub’ are not used in any of the broadcasts. The terms used are variously:
(a)Metro City Super Club
(b)Metro Super Club
(c)Metro City, the Super Club
(d)The Superclub
(e)The complete R&B club experience
(f)Australia’s biggest R&B and Hip Hop Club night
(g)Perth’s hottest R&B, Hip Hop Club night
(h)R&B and Hip Hop Club night, featuring Super club allstars
(i)Biggest R&B, Urban & Hip Hop event
(j)Metro City Super Club, R&B, Party, Hip Hop & Urban Club Classics
(k)Super Club spotlight Competition
(l)Super Club DJ’s
Mr Niesten’s affidavit refers also to advertisements by the first respondent in Xpress magazine each week since approximately 12 July 2003, that being a free weekly magazine concerning youth and young adult entertainment and music and to have an audited circulation of 40 000 copies weekly. Copies of advertisements of that nature are in evidence.
Additionally, he stated that rhythm and blues music shows are advertised on a large billboard in Perth.
Finally, he states that the first respondent is the largest ongoing sponsor that Groove FM has at the moment.
SERIOUS QUESTION TO BE TRIED
Trade Marks infringement
The submissions for the sixth respondent accept that a radio broadcast of ‘R&B’ is indistinguishable from ‘RNB’ as the word ‘and’ is not usually emphasised. However, the case of the sixth respondent is that the applicant has not adduced any evidence that suggests the sixth respondent has infringed the trade mark. On the contrary, it is said, the evidence suggests this has not occurred so that there is no serious question to be tried against the sixth respondent as to the infringement of that mark. I accept that submission on the basis of the evidence set out immediately above.
Trade Practices Act Claims
In relation to the claims for breach of the Trade Practices Act and passing off at common law (which is not pursued in relation to the interlocutory relief) the sixth respondent adopts the submissions of the first to fifth respondents and contends that the applicant has not made out any serious question to be tried or a prima facie case. Findings have been made on those matters above.
Irreparable damage
The sixth respondent contends that it is not associated with the first to fifth respondents in any way save for the sponsorship agreement. It is the only media organisation joined in the action. Consequently an injunction against it would not prevent other media organisations that have been advertising the first to fifth respondents’ events extensively and so would not prevent the irreparable damage. It would be, therefore, futile. I accept the submission.
BALANCE OF CONVENIENCE
It is correct that the sixth respondent would suffer very serious financial hardship if the sponsorship agreement with the first respondent were to be discontinued as a result of injunctions. It is apparent the sixth respondent is a non-profit community broadcast service. It is equally apparent that the first respondent is the largest single sponsor of that service.
An additional adverse and unfair effect of injunctive relief against the sixth respondent would be to give an unfair advantage to its competitors in the market place. This could place in jeopardy its sponsorship agreement and result in loss of listeners to other media.
There is also the difficulty of the sixth respondent having certainty in terms of the limits set by the orders that are proposed to be made.
It is to be borne in mind that there was a significant delay between the applicant becoming aware of the alleged breaches of its rights and the bringing of the application during which time the sixth respondent entered into the sponsorship agreement.
Consequently, not only is there is no serious issue to be tried against the sixth respondent but also the balance of convenience is markedly against the grant of injunctive relief.
CONCLUSION
For these reasons I consider that the application against the first to fifth respondents as well as the claim for interlocutory injunctive relief in respect of the sixth respondent should be dismissed.
I certify that the preceding eighty-nine (89) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice RD Nicholson. Associate:
Dated: 23 December 2003
Counsel for the Applicant: Mr T Hall Solicitor for the Applicant: Norman Waterhouse Counsel for the First to fifth Respondents: Mr G Provan Solicitor for the First to fifth Respondents: Vincent Partners Counsel for the Sixth Respondent: Mr BC Smith Solicitor for the Sixth Respondent: Ilberys Date of Hearing: 16 December 2003 Date of last written submissions: 17 December 2003 Date of Judgment: 23 December 2003
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