Edutainments Pty Ltd v JMC Pty Ltd - [2003] FCA 923

FEDERAL COURT OF AUSTRALIA
Edutainments Pty Ltd v JMC Pty Ltd [2003] FCA 923
TRADE MARKS – computer-generated characters – characters used to promote separate computer colleges – applicant’s character registered as a trade mark – whether the use of the respondent’s character is use as a trade mark – the extent of similarity between the applicant’s and the respondent’s character
TRADE PRACTICES – s 52 Trade Practices Act 1974 (Cth) misleading and deceptive conduct – computer-generated characters – characters used to promote separate computer colleges - publication of an advertisement using the respondent’s character – the likely impact of the advertisement on the section of public likely to read the advertisement – whether the advertisement would cause a cross section of the relevant public to believe the two computer colleges were the same or associated
TORT – passing off – whether the respondent’s character sought to pass off its educational services as the educational services of the applicant
Trade Marks Act 1995 (Cth) s 120(1)
Trade Practices Act 1975 (Cth) ss 52, 53(c) and (d)
Cat Media Pty Limited v Opti-Healthcare Pty Limited [2003] FCA 133 referred to
Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd (2000) 100 FCR 90 cited
Shell Company of Australia Limited v Esso Standard Oil (Australia) Limited (1963) 109 CLR 407 discussed
Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) applied
EDUTAINMENTS PTY LTD (ACN 074 008 978) v JMC PTY LTD (ACN 003 572 012)
N 1387 of 2002
BRANSON J
4 SEPTEMBER 2003
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 1387 of 2002

BETWEEN:

EDUTAINMENTS PTY LTD (ACN 074 008 978)
APPLICANT

AND:

JMC PTY LTD (ACN 003 572 012)
RESPONDENT

JUDGE:

BRANSON J

DATE OF ORDER:

4 SEPTEMBER 2003

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.The application be dismissed.
2.The applicant pay the respondent’s costs.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 1387 of 2002

BETWEEN:

EDUTAINMENTS PTY LTD (ACN 074 008 978)
APPLICANT

AND:

JMC PTY LTD (ACN 003 572 012)
RESPONDENT

JUDGE:

BRANSON J

DATE:

4 SEPTEMBER 2003

PLACE:

SYDNEY

REASONS FOR JUDGMENT
introduction

This case requires consideration to be given to the extent of the similarity between two computer‑generated characters or figures.
Each of the applicant and the respondent is engaged in, amongst other things, the business of operating and promoting, including by advertising, a computer college. The applicant’s computer college is known as ‘Computer Graphics College’ or ‘CGC’. The respondent’s computer college is known as ‘JMC Academy’ or ‘JMC’.
The applicant has used a computer‑generated character (the ‘CGC character’) in its advertising material since September 2002. On or about 2 October 2002 the applicant filed an application with the Registrar of Trade Marks for registration of the CGC character in Class 41. The applicant is now the owner of the registered trade mark number 929222 for the CGC character as depicted below in class 41 for ‘education, providing of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2003] FCA 923
Decision Date: 4 SEPTEMBER 2003

CaseChat Overview and Summary

Edutainments Pty Ltd initiated legal proceedings against JMC Pty Ltd, both companies operating computer colleges specialising in 3D graphics and animation. The dispute centred on the use of distinctive characters in advertising by both parties, with Edutainments alleging that JMC's use of a similar character in its promotional material constituted passing off and threatened to deceive the public into believing that JMC's services were those of Edutainments. The case was heard in the Federal Court of Australia.

The legal issues before the court involved determining whether the character used by JMC was sufficiently similar to Edutainments' character to cause confusion among the public and whether JMC had misrepresented its services as those of Edutainments. Additionally, the court needed to assess if Edutainments had established a reputation for the character that warranted protection and if JMC's use of a similar character had caused or was likely to cause damage to Edutainments' goodwill.

The court dismissed the application, finding no evidence of misrepresentation or likelihood of confusion. The court observed that while the characters had some similarities, they were not identical, and the contexts in which they were used differed. Furthermore, the court determined that Edutainments had not demonstrated that the use of the character by JMC had caused or would likely cause damage to its reputation or goodwill. The court concluded that Edutainments had not met the criteria for the tort of passing off.

The court dismissed the application with costs awarded to JMC Pty Ltd. This decision underscored the necessity for a clear and substantial similarity between the characters and the potential for confusion in the mind of the public for a passing off claim to succeed.

Orders

Orders of the court

1. The application be dismissed.

2. The applicant pay the respondent’s costs.

Background

Background to the litigation

For the reasons set out below I have concluded that the application should be dismissed.factual background There is little dispute between the parties as to the facts relevant to this proceeding. As is mentioned above, each of the parties operates a computer college. The colleges provide training in, amongst other things, 3D graphics and animation. The courses which the colleges respectively offer range from accredited certificate, diploma and advanced diploma courses to shorter and unaccredited courses. There is a significant degree of overlap between the courses offered by the two colleges. For this reason, they compete to some extent for students and to some extent direct their respective promotional activities to the same audience. The CGC character was developed and adopted by the applicant to appeal to creative people from all spheres of the arts and with an interest in the applicant’s range of programmes. Andrea Lee Huxham (‘Ms Huxham’), the Principal of Computer Graphics College, was heavily involved in the design of the CGC character. She developed the original concept and did the initial sketches of the character that became the CGC character. An artist was briefed to complete the design of the CGC character. As is mentioned above, the applicant has used the CGC character in its advertising material since September 2002. By December 2002 the applicant had used the CGC character in advertising in Digital Media World magazine, Desktop magazine, Design Graphics magazine, Big Issue magazine, Sydney Morning Herald newspaper, Sun Herald newspaper, Daily Telegraph newspaper, The Australian newspaper and Sun Weekly and Central Coast Herald newspapers. The CGC character had also been used in late 2002 on a billboard in North Sydney and on postcards, banners and other material used in respect of functions held at, or associated with, the Computer Graphics College. I find that by 14 December 2002 the applicant had established a reputation in the CGC character in metropolitan Sydney with a segment of the public, namely actual and potential students of graphic design, website design and 3D animation. I also find that from a time earlier than 14 December 2002 the applicant has used the CGC character as a trademark. The respondent’s character was developed from the work of a student of the JMC Academy. Karen Kriss (‘Ms Kriss’), the Head of the respondent’s Digital Media and 3D Animation Department, gave evidence that when she was appointed to her position she decided to refocus and improve the respondent’s advertising. She planned to incorporate examples of students’ works in the advertising materials and to have the advertising material focus more strongly on the respondent’s 3D Animation course. Having chosen a character created by a student, Mr John Choi, Ms Kriss, with the approval of Mr Choi, modified and refined the character to produce the respondent’s character. The respondent’s character, as is mentioned above, was used in an advertisement published in the Sydney Morning Herald newspapers of 14 and 15 December 2002 (‘the December 2002 advertisement’). Had the interlocutory order of 9 January 2003 referred to in [6] above not been made, the respondent would have used the respondent’s character in further advertising.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

BRANSON J

For the reasons given above in respect of the claims made under the Trade Practices Act, the applicant’s claim that the respondent has sought to pass off, and threatens to pass‑off, its educational services as the educational services of the applicant must be dismissed.conclusion The application is dismissed with costs.

Ratio Decidendi

Legal Principle Established

Established by: BRANSON J

The tort of passing off, like s 52 of the Trade Practices Act, is concerned with possible misrepresentations. In Cat Media Pty Limited v Opti-Healthcare Pty Limited [2003] FCA 133 at [41]-[42] I observed:‘Section 52 of the TPA is aimed at conduct likely to be harmful to consumers. However, its “clear and quite general words” are not to be given an unnaturally confined meaning because of the heading of Part V of the TPA (Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 225 (“Hornsby”) per Stephen J, with whom Jacobs J, and in this regard Murphy J, agreed). The tort of passing off, on the other hand, is concerned to protect a trader’s goodwill in its business. Nonetheless, as Stephen J pointed out in Hornsby at 226:“… a consequence of the very direct relationship which necessarily exists between the deception of consumers in the course of trade and the injury caused by the unfair practices of a trade rival [is that] [l]egislation which aims at the prevention of the former will, at the same time, tend to put an end to the latter.”In Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 355 Gummow J observed that “[a]ttempts to produce a definition of the tort [of passing off] which is both succinct and comprehensive have had mixed success”. However, in this case, which is not suggested to raise any novel or complex question of law, the elements of the tort may be regarded as those identified by Lord Oliver in Reckitt & Colman Products Ltd v Borden Inc (1990) 17 IPR 1 at 7. These elements were described by the Full Federal Court in Vieright Pty Ltd v Myer Stores Ltd (1995) 31 IPR 361 in the following way at 369:“(1) that the trader’s get-up, including any brand name, is recognised by the public as distinctive specifically of the plaintiff’s goods; (2) that there has been a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that the goods offered by the defendant are the plaintiff’s goods (whether the public is aware of the plaintiff’s identity as the manufacturer or supplier of the goods is immaterial, provided they are identified with a particular source, e.g. by means of a brand name which is in fact the plaintiff’s); (3) that the plaintiff suffers or, in a quia timet action is likely to suffer, damage by reason of the erroneous belief engendered by the defendant’s misrepresentation that the source of the defendant’s goods is the same as the source of those offered by the plaintiff.”’considerationThe Characters The CGC character has a mechanical appearance. It was described in evidence by Ms Huxham, accurately I find, as a ‘biped that has robotic mechanical features’. It has a largely transparent head which, when the figure is clearly reproduced, allows the mechanical nature of its ‘brain’ to be seen. Ms Huxham gave evidence that the transparent head of the CGC character was inspired by a particular model of Apple computer which has a transparent back. The face of the CGC character appears rather like a mask on the front of its otherwise transparent head. The face itself was, in my view, accurately described in the respondent’s submissions as ‘a cutesy Walt‑Disney style face with big round eyes’. The legs, arms and hands of the CGC character are obviously mechanical in appearance. In only a few of the depictions of the CGC character placed in evidence is the character carrying anything. In none of those depictions is the character carrying a weapon. The CGC character is commonly depicted in a pose which can be described as inviting.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1387 of 2002

BETWEEN:	EDUTAINMENTS PTY LTD (ACN 074 008 978) APPLICANT
AND:	JMC PTY LTD (ACN 003 572 012) RESPONDENT
JUDGE:	BRANSON J
DATE OF ORDER:	4 SEPTEMBER 2003
WHERE MADE:	SYDNEY

JUDGE:	BRANSON J
DATE:	4 SEPTEMBER 2003
PLACE:	SYDNEY