Home Grown Brands Australia Pty Ltd v Sperling Enterprises Pty Ltd
[2021] FCCA 1597
•16 July 2021
Federal Circuit Court of Australia
Home Grown Brands Australia Pty Ltd v Sperling Enterprises Pty Ltd [2021] FCCA 1597
File number(s): SYG 2234 of 2019 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 16 July 2021 Catchwords: CONSUMER LAW – applicant supplier of nipper boards under particular brand name – respondent supplier of nipper boards under different brand name – whether applicant’s nipper boards have a reputation based on features associated with its nipper boards – whether in designing its nipper boards respondent appropriated features associated with applicant’s nipper boards – whether by importing, selling, and promoting for sale its nipper boards respondent engaged in trade or commerce in misleading or deceptive conduct or made misleading representations – respondent did not engage in misleading or deceptive conduct and did not make any misleading representations – application dismissed Legislation: Competition and Consumer Act 2010 (Cth), Sch 2, ss 18(1), 29(1)
Evidence Act 1995 (Cth), ss 55, 56, 57(1), 58(1), 59(1), 144(1)
Federal Rules of Evidence 1975 (US)
Trade Practices Act 1974 (Cth), s 52(1)
Cases cited: A.G. Spalding & Bros v A.W. Gamage Ltd (1915) 32 RPC 273
American Safety Table Co. v Schreiber & Goldberg 269 F2d 255 (2d Cir 1959)
Apand Pty Ltd v The Kettle Chip Company Pty Ltd (1994) 52 FCR 474
ASIC v Rich [2005] NSWSC 417
Australian Competition and Consumer Commission v Air New Zealand Ltd [2012] FCA 1355
Australian Competition and Consumer Commission v Pfizer Australia Pty Ltd [2018] FCAFC 78
Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2020] FCAFC 130
Bodum v DKSH Australia Pty Limited [2011] FCAFC 98
Bradmill Industries Ltd v B & S Products Pty Ltd [1980] FCA 154; (1980) 53 FLR 385
Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60
Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd [2007] FCAFC 70
Campbell v Backoffice Investments Pty Ltd [2009] HCA 25
Campomar Sociedad Limited v Nike International Limited [2000] HCA 12
Chase Manhattan Overseas Corporation v Chase Corporation Ltd (1986) FCR 375
Dodds Family Investments Pty Limited v Lane Industries Pty Limited [1993] FCA 259
Dyno Nobel Inc v Orica Explosives Technology Pty Ltd (No 2) [2019] FCA 1552
Educational Broadcasters Adelaide Incorporated v Australian Broadcasting Corporation [2016] FCA 1502
General Electric Co (of USA) v General Electric Co Ltd [1973] RPC 297
Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82
Google Inc v Australian Competition and Consumer Commission [2013] HCA 1
Hansen Beverage Company v Bickfords (Australia) Pty Ltd [2008] FCAFC 181
Homart Pharmaceuticals Pty Ltd v Careline Australia Pty Ltd [2017] FCA 403
H P Bulmer Ltd v J Bollinger SA [1978] RPC 79
Interlego AG v Croner Trading Pty Limited [1992] FCA 624
Mars Australia Pty Ltd v Sweet Rewards Pty Ltd [2009] FCA 606
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44
Pinnacle Runaway Pty Ltd v Triangl Limited [2019] FCA 1662
Re Equity Access Limited v Westpac Banking Corporation [1989] FCA 361
Re Mark Lyons Pty Limited v Bursill Sportsgear Pty Limited [1987] FCA 282
Rhone-Poulenc Agrochimie SA v Uim Chemical Services Pty Ltd (1986) 12 FCR 487; [1986] FCA 218
Seiwa Australia Pty Ltd v Beard [2009] NSWCA 240
Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157
Verrocchi v Direct Chemist Outlet Pty Ltd [2015] FCA 234
Voxson Pty Ltd v Telstra Corporation Limited (No 10) [2018] FCA 376
Yalda v Consulate General of the Republic of Iraq, Sydney [2021] FCCA 499
Number of paragraphs: 167 Date of last submission/s: 17 May 2021 Date of hearing: 6, 7, 8, 9, and 21 October 2020 Place: Sydney Counsel for the Applicant: Ms G Rubagotti Solicitor for the Applicant: Bird & Bird Counsel for the Respondent: Mr D Sibtain Solicitor for the Respondent: Banki Haddock Fiora ORDERS
SYG 2234 of 2019 BETWEEN: HOME GROWN BRANDS AUSTRALIA PTY LTD ACN 002 485 109
Applicant
AND: SPERLING ENTERPRISES PTY LTD ACN 001 882 364
Respondent
order made by:
JUDGE MANOUSARIDIS
DATE OF ORDER:
16 July 2021
THE COURT ORDERS THAT:
1.The application is dismissed.
2.By 30 July 2021, or within such further time as the parties may reasonably agree, the respondent file and serve written submissions and evidence, if any, in relation to the order for costs it contends should be made.
3.By 13 August 2021, or within such further time as the parties may reasonably agree, the applicant file and serve written submissions and evidence, if any, in relation to the order for costs it contends should be made.
4.By 20 August 2021, or within such further time as the parties may reasonably agree, the parties inform the associate to Judge Manousaridis whether the parties require an oral hearing on the question of costs or whether they consent to that question being determined on the papers.
5.The parties have liberty to apply on such notice as the circumstances warrant.
REASONS FOR JUDGMENT
introduction
The applicant (Home Grown) sells a range of outdoor and water sport products. These include “nipper boards” Home Grown has named “5’5” Kirra Club Trainer” and “6’2” Kirra Pro Trainer”. Home Grown has been selling these two types of boards since around 2006 under the name “Redback” (Redback boards). Nipper boards are surfboards used by young children in connection with, or at least usually in connection with, activities associated with surf life saving clubs. Home Grown claims its nipper boards have a number of distinctive features that have led actual and potential purchasers to perceive those features, and therefore the nipper boards of which they form part, to be associated with a single supplier or trade source.
The respondent (Sperling), through a division known as Cape Byron Sports (CBS), competes with Home Grown for the sale of a range of outdoor and water sport products. These include nipper boards. Sperling had initially sold nipper boards named “Clubsport” from 2012 to 2014 under the name “Mirage”. In 2018, however, Sperling redesigned its nipper boards; and Home Grown claims that in redesigning them Sperling consciously adopted what Home Grown claims are distinctive features of its nipper boards. In those circumstances Home Grown commenced this proceeding against Sperling in which it claims that by promoting and selling its redesigned nipper boards (Mirage boards) Sperling engaged in conduct that is misleading or deceptive, or which is likely to mislead or deceive, contrary to s 18(1) of Sch 2 (ACL) to the Competition and Consumer Act 2010 (Cth); and Sperling has made misleading representations, contrary to s 29(1)(a), (g), and (h) of the ACL.
Two broad questions, therefore, arise. By the time Sperling began to supply the Mirage boards, did the Redback boards contain any distinctive features, or had Home Grown used any marks, names, or get-up in connection with their sale or promotion, as a result of which a class of persons associated those features, or those marks, names, or get-up, with one supplier or trade source? If so, do the Mirage boards have any features, or has Sperling used any marks, names, or other get-up in connection with the sale or promotion of the Mirage boards, that have the tendency to lead reasonable or ordinary members of the class of persons who have been or who may reasonably be supposed to have been exposed to the Redback boards to believe there is or there may be some connection between the persons who supply the Redback boards and the Mirage boards? In determining the second question it will be necessary to consider Home Grown’s claim that in redesigning its nipper boards Sperling consciously adapted elements of what Home Grown claims are distinctive features of the Redback boards. If these two questions are answered in the affirmative, a further question arises: to what, if any, remedy is Home Grown entitled?
The framing of these questions assumes a set of legal principles that apply to Home Grown’s claims. It will therefore be necessary to identify those legal principles. It will also be necessary to consider the principles relevant to determining what, if any, relevance can be attached to screenshots of webpages from a website known as “The Wayback Machine”; and that is because I admitted, over objection, but subject to relevance, Sperling’s tender of screenshots of the results of searches conducted on the Wayback Machine. I will then set out the evidence, much of which is not contested, and make a number of findings on the basis of that evidence. Relying on those findings, I will then consider whether Sperling has engaged in misleading or deceptive conduct, or conduct that is likely to mislead or deceive, and whether it has made any misleading representations.
principles – misleading or deceptive conduct
I begin with s 18(1) of the ACL, which prohibits a person from engaging in conduct that has a particular character, namely, that of inducing or tending to induce another person or other persons to be misled or deceived. Conduct will have that character if, when viewed as a whole and in context, it has a “tendency to lead a person into error”.[1]
[1] Campbell v Backoffice Investments Pty Ltd [2009] HCA 25, at [25]
The conduct that is capable of leading persons into error, the persons who may be led into error, the matters about which they may err, and the manner in which persons may be led into error, are almost limitless; but courts have examined different categories of regularly occurring cases where conduct has been held to be misleading or deceptive, or likely to mislead or deceive. It would therefore be natural to draw guidance from cases that have considered the application of s 18(1) of the ACL and its predecessor, s 52(1) of the Trade Practices Act 1974 (Cth), to circumstances that are analogous to the circumstances of the case that is under consideration. This, however, should be done only if two things are borne in mind: first, it is “the statutory text which controls”, there being “no little danger in attempting to extrapolate from the decided cases to a rule of general application”;[2] and, second, it is “always necessary to begin consideration of the application of the section by identifying the conduct that is said to meet the statutory description “misleading or deceptive or . . . likely to mislead or deceive””.[3]
[2] Google Inc v Australian Competition and Consumer Commission [2013] HCA 1, at [100] (Hayne J)
[3] Google Inc v Australian Competition and Consumer Commission [2013] HCA 1, at [89] (Hayne J)
One regularly occurring set of circumstances that is analogous to the case before me is that which contains the following elements:
(a)A person has been promoting or selling goods (reference goods) that have particular features (reference features), or the person has been using words or marks or get-up (reference trade indicia) in connection with the promotion or sale of the reference goods.
(b)Members of a class (reference class) associate the reference features or the reference trade indicia with an identified or unidentified source of supply.
(c)Another person has promoted and sold goods (impugned goods) that have particular features (impugned reference features), or the person has used marks or words (impugned trade indicia) in connection with the sale and promotion of the impugned goods, that share all or some of the reference features or reference trade indicia.
(d)The sale and promotion of the impugned goods have led, or would lead or would have the tendency to lead reasonable or ordinary members of the reference class to believe there is some connection between the suppliers of the reference goods and the impugned goods.
Reputation
A noticeable feature of this class of case is that the conduct that is alleged to be misleading or deceptive – the promotion and sale of goods possessing the impugned reference features or the use of the impugned trade indicia in connection with the promotion and sale of goods – has that tendency because some other person has engaged in conduct that has had a particular effect on a person or class of persons. The conduct such other person has engaged in is the promotion or sale of goods having particular features, or the use of trade indicia in connection with the promotion or sale of goods, that has induced members of the reference class to associate those features or those trade indicia with at least one supplier or trade source. The conduct, and its effect on persons, are captured in the first two of the four elements I have identified; but courts have usually treated these elements as part of the one concept that has been commonly denoted by the word “reputation”.
“Reputation” has been said to be “an association in the minds of consumers between the originator’s designation and its goods or services”;[4] and “the ready recognition of a sign in the marketplace as an indicator of the trade origin of goods or . . . services”.[5] Courts, however, have used other words to identify the concept “reputation” denotes. One is “distinctiveness”.[6] Another is “secondary meaning”, which has mostly been applied to the use of names.[7] Courts have also described the concept without attaching a label to it. Although stated in the context of an action for passing off, Lord Parker’s reference in A.G. Spalding & Bros v A.W. Gamage Ltd to a “mark, trade name, or get-up with which the goods of another are associated in the minds of the public, or of a particular class of the public” captures the central aspect of the concept.[8]
[4] Dodds Family Investments Pty Limited v Lane Industries Pty Limited [1993] FCA 259, at [21]
[5] Educational Broadcasters Adelaide Incorporated v Australian Broadcasting Corporation [2016] FCA 1502, at [58] (Charlesworth J)
[6] See, for example, Bodum v DKSH Australia Pty Limited [2011] FCAFC 98, at [220] where Greenwood J (with whose reasons Tracey J at [276] agreed) said the goods in question “enjoyed a substantial or significant reputation by reference to its features and shape” and those “features had become distinctive of the product of its maker”.
[7] See, for example, Apand Pty Ltd v The Kettle Chip Company Pty Ltd (1994) 52 FCR 474, at page 483
[8] A.G. Spalding & Bros v A.W. Gamage Ltd (1915) 32 RPC 273, at page 284
Before a person will be held to have engaged in misleading or deceptive conduct by promoting or supplying goods that have impugned reference features or by using impugned trade indicia in connection with the promotion or sale of goods, it will therefore usually be necessary for the person so alleging to prove a reputation in the reference features or in the reference trade indicia.[9] In Interlego AG v Croner Trading Pty Limited Gummow J said that “reputation and likelihood of deception are distinct issues, the first preceding the second, so that if the plaintiff fails on reputation that is the end of the case”.[10] In Mars Australia Pty Ltd v Sweet Rewards Pty Ltd Perram J said:[11]
In cases such as the present it is, of course, necessary to identify the features of the applicant’s packaging in which a reputation is said to inhere for it is the existence of that reputation which the tort protects. So too, in the context of the corresponding claim under s 52 it is the reputation in those features which is the springboard for the argument that consumers are deceived by a particular imitation. Thus although the interests protected by the two actions are different both indispensably require the identification of features known to the public mind. The expression “get-up” is a convenient shorthand for that concept but can be apt to mislead if one loses sight of the necessary connexion between the get-up and reputation. For that reason the identification of a get-up by an applicant in a passing off action or a claim under s 52 is both coherent and necessary.
[9] Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd [2007] FCAFC 70, at [99]
[10] Interlego AG v Croner Trading Pty Limited [1992] FCA 624, at [137]. See also Bodum v DKSH Australia Pty Limited [2011] FCAFC 98, at [113]; Chase Manhattan Overseas Corporation v Chase Corporation Ltd (1986) FCR 375, at page 391: “To establish a likelihood of deception . . . where there has been no direct misrepresentation generally requires the presence of two factual elements: (1) that the name “Chase” [that is, the reference trade indicia] used by the appellants has acquired a reputation among a relevant class of persons; and (2) that members of that class will mistakenly infer from the first respondent’s use of the name “Chase” that its business is connected with the appellants’ business.” (Beaumont J)
[11] Mars Australia Pty Ltd v Sweet Rewards Pty Ltd [2009] FCA 606, at [22]
It should be apparent that the association between particular features of goods or trade indicia, and a supplier or trade source, is a matter of perception and other subjective experience. It consists of the unconscious and, less usually, conscious belief or assumption that a person holds when exposed to, or when a person otherwise brings to mind, particular features of, or trade indicia associated with the promotion or sale of goods. The relevant belief or assumption is that the particular features or trade indicia are associated with or are used by a particular person or trade source, known or not known, to indicate that the goods originate from a particular supplier or trade source, known or not known and, perhaps additionally, for that reason the goods have a particular quality or other attributes. A person’s consciously or unconsciously holding such beliefs or assumptions is conditioned by at least two things. The first is a general belief or assumption that, at least in many cases, persons who supply goods in a market adopt features or use some mark, name, or other representation for the purpose of differentiating the goods in relation to which they form part or are used from the goods other persons supply. The second is the person’s having previously been exposed to the goods that have particular features, or to the use of trade indicia in connection with the sale or promotion of the goods.
Although the association between features or trade indicia and a particular person or trade source, known or not known, is a matter of perception and other subjective experience, a court does not determine whether such association exists by reference to, or at least solely by reference to, any one person’s evidence of his or her perceptions and beliefs. That is so because the conduct in question – the promotion and sale of goods bearing the impugned features, or the use of the impugned trade indicia in connection with the promotion and sale of goods – is usually directed, not to identified individuals, but to persons or to a class of persons in general. In those circumstances the following principles stated by the High Court in Campomar Sociedad Limited v Nike International Limited apply (references omitted):[12]
Where the persons in question are not identified individuals to whom a particular misrepresentation has been made or from whom a relevant fact, circumstance or proposal was withheld, but are members of a class to which the conduct in question was directed in a general sense, it is necessary to isolate by some criterion a representative member of that class. The inquiry thus is to be made with respect to this hypothetical individual why the misconception complained has arisen or is likely to arise if no injunctive relief be granted. In formulating this inquiry, the courts have had regard to what appears to be the outer limits of the purpose and scope of the statutory norm of conduct fixed by s 52. . . .
Nevertheless, in an assessment of the reactions or likely reactions of the “ordinary” or “reasonable” members of the class of prospective purchasers of a mass-marketed product for general use . . . the court may well decline to regard as controlling the application of s 52 those assumptions by persons whose reactions are extreme or fanciful. . . . The initial question which must be determined is whether the misconceptions, or deceptions, alleged to arise or to be likely to arise are properly to be attributed to the ordinary or reasonable members of the classes of prospective purchasers.
[12] Campomar Sociedad Limited v Nike International Limited [2000] HCA 12, at [103], [105]
The effect of these principles were recently repeated by the Full Federal Court in Australian Competition and Consumer Commission v TPG Internet Pty Ltd:[13]
[W]here the impugned conduct is directed to the public generally or a section of the public, the question whether the conduct is likely to mislead or deceive has to be approached at a level of abstraction where the Court must consider the likely characteristics of the persons who comprise the relevant class to whom the conduct is directed and consider the likely effect of the conduct on ordinary or reasonable members of the class, disregarding reactions that might be regarded as extreme or fanciful: Campomar at [101]-[105]; Google at [7] per French CJ and Crennan and Kiefel JJ.
[13] Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2020] FCAFC 130, at [22]
The relevant class of persons by reference to which the question whether there is a reputation in the reference trade indicia or reference features is to be determined by the reference class, being the persons who have been exposed to the reference features or to the use of the reference trade indicia. This class of persons should be the same as the class of persons who it is alleged have been or will be exposed to the impugned trade indicia; and that is because it is only those who have been exposed to the reference features or the use of the reference trade indicia who are liable to be deceived or misled by the sale or promotion of the impugned goods or by the use of the impugned trade indicia in relation to the sale and promotion of the impugned goods.
Whether any particular feature of goods or trade indicia has a reputation is a question of fact. Relevant matters include the volume, value, and geographical reach of the sale of goods;[14] and the extent of advertising and promotion, including “indirect advertising”, associated with the sale of the goods.[15] Also relevant, however, is the nature of the features or trade indicia. In the case of names it is relevant whether the words are descriptive or invented.[16] It is also relevant whether the goods are of a distinctive shape, or packed in an unusual manner, or have a distinctive pattern or colour, or a combination of all of these.
[14] See, for example, Bradmill Industries Ltd v B & S Products Pty Ltd [1980] FCA 154; (1980) 53 FLR 385, at pages 387-388
[15] See, for example, Hansen Beverage Company v Bickfords (Australia) Pty Ltd [2008] FCAFC 181, at [60]-[64] (Finkelstein J). At [62] his Honour said: “The most obvious form of advertising, and the easiest form of advertising to understand, is the direct message. But the advertising industry has now moved away from primarily relying on direct advertising.”
[16] See the discussion by Hill J in Re Equity Access Limited v Westpac Banking Corporation [1989] FCA 361
Finally, the date for assessing whether the features or trade indicia have a reputation is the day on which the use of the impugned trade indicia commenced to be used.[17]
[17] Homart Pharmaceuticals Pty Ltd v Careline Australia Pty Ltd [2017] FCA 403, at [24] (Burley J)
Relevant error and its proof
I have already noted that s 18(1) of the ACL is directed to conduct that leads or has a tendency to lead a person or class of persons into error. There are a number of general matters to note. First, whether conduct is misleading or deceptive, or is likely to mislead or deceive, is a question of fact; it is “an objective question that the court must determine for itself”.[18] Second, the words “likely to mislead or deceive” in s 18(1) of the ACL make it clear that it is not necessary to demonstrate actual deception to establish a contravention of s 18(1).[19] Conduct will be likely to mislead or deceive if there “is a real or not remote chance or possibility regardless of whether it is less or more than fifty per cent”.[20] Third, where an issue is the effect of conduct on a class of persons such as consumers who may range from the gullible to the astute, the court must consider whether “the ‘ordinary’ or ‘reasonable’ members of that class” would be misled or deceived.[21] Fourth, “[c]ausing confusion and wonderment is not necessarily co-extensive with misleading or deceptive conduct”.[22] Nevertheless, the question whether particular conduct causes confusion or wonderment cannot be substituted for the question whether the conduct answers the statutory description contained in s 18(1) of the ACL.[23] Fifth, s 18(1) of the ACL is not confined to conduct that is intended to mislead or deceive. A person can contravene s 18(1) of the ACL even though the person acted reasonably and honestly.[24]
[18] Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60, at [151]
[19] Google Inc v Australian Competition and Consumer Commission [2013] HCA 1, at [6]
[20] Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82, at page 87
[21] Google Inc v Australian Competition and Consumer Commission [2013] HCA 1, at [7]
[22] Google Inc v Australian Competition and Consumer Commission [2013] HCA 1, at [6]-[9]
[23] Campomar Sociedad Limited v Nike International Limited [2000] HCA 12, at [106]
[24] Google Inc v Australian Competition and Consumer Commission [2013] HCA 1, at [9]
Next, it is necessary to identify a number of matters that are relevant to assessing whether the impugned reference features associated with the impugned goods, or the use of the impugned trade indicia, are misleading or deceptive, or are liable to mislead or deceive. The first relates to the nature of the erroneous belief or assumption it must be shown the adoption of the impugned reference features or the use of impugned trade indicia have the tendency to lead a person to hold. The relevant belief or assumption is that “there is some connection or association between the [goods], or the persons who provide them”.[25] A more elaborate formulation of the relevant erroneous belief or assumption that has been held relevant to s 18(1) of the ACL is that given in a passing off case by Goff LJ in H P Bulmer Ltd v J Bollinger SA:[26]
Not every kind of connection claimed will amount to passing off; for example if one says that one's goods are very suitable to be used in connection with the plaintiff's. On the other hand in my view there can be a passing off of goods without representing that they are actually the well-known goods which the plaintiff produces or a new line which he is supposed to have started. It is sufficient in my view if what is done represents the defendant's goods to be connected with the plaintiff's in such a way as would lead people to accept them on the faith of the plaintiff's reputation. Thus for example it would be sufficient if they were taken to be made under licence, or under some trading arrangement which would give the plaintiff some control over them, and I think Harman, J. had such ideas in his mind as appears from the passage at page 93 of the Treasure Cot case when he spoke of “something for which the plaintiffs were responsible”.
[25] Verrocchi v Direct Chemist Outlet Pty Ltd [2015] FCA 234, at [78] (Middleton J)
[26] H P Bulmer Ltd v J Bollinger SA [1978] RPC 79, at page 117
A second matter relates to proving that the adoption of the impugned reference features or the use of the impugned trade indicia has the tendency to mislead or deceive. In Interlego AG Gummow J identified some of the more important principles.[27]
(a)Potential consumers may give evidence as to the reputation of marks or get-up involved.
(b)The question whether a mark or get-up so nearly resembles another as to be deceptive or likely to deceive is a question for the tribunal of fact and is not a matter for any witness to decide. That question is a “jury question” in the sense considered by Lord Diplock in General Electric Co (of USA) v General Electric Co Ltd :[28]
[W]here goods are sold to the general public for consumption or domestic use, the question whether such buyers would be likely to be deceived or confused by the use of the trademark is a ‘jury question’. By that I mean: that if the issue had now, as formerly, to be tried by a jury, who as members of the general public would themselves be potential buyers of the goods, they would be required not only to consider any evidence of other members of the public which had been adduced but also to use their own common sense and to consider whether they would themselves be likely to be deceived or confused. The question does not cease to be a 'jury question' when the issue is tried by a Judge alone or on appeal by a plurality of Judges. The Judge's approach to the question should be the same as that of a jury. He, too, would be a potential buyer of the goods. He should, of course, be alert to the danger of allowing his own idiosyncratic knowledge or temperament to influence his decision, but the whole of his training in the practice of the law should have accustomed him to this, and this should provide the safety which in the case of a jury is provided by their number. But in issues of this kind Judges are entitled to give effect to their own opinions as to the likelihood of deception or confusion and, in doing so, are not confined to the evidence of witnesses called at the trial is well established by the decisions of this House itself.
(c)Consumer evidence will also be admissible if it establishes the habits of purchasers, even of everyday items. For example, evidence may be led to show whether side by side visual comparison of the two products occurs in shops or supermarkets.
[27] Interlego AG v Croner Trading Pty Limited [1992] FCA 624, at [137]-[144]
[28] General Electric Co (of USA) v General Electric Co Ltd [1973] RPC 297, quoted in Interlego AG v Croner Trading Pty Limited [1992] FCA 624, at [139]
Particularly relevant in the proceeding before me are authorities that have held that, although it is not an element of a contravention of s 18(1) of the ACL that a person engaged in conduct with the intention of misleading or deceiving, evidence of such intention may be relevant to determining whether the conduct is misleading or deceptive, or has a tendency to mislead or deceive. Burley J considered the relevant principles in Homart Pharmaceuticals Pty Ltd v Careline Australia Pty Ltd:[29]
Where the Court has made a finding of intention to deceive, it may more readily infer that the intention has been, or in all probability will be, effective. However, even an imitation of one product by another does not necessarily bespeak of an intention to deceive purchasers; Campomar at [33]. Evidence of intentional copying of a rival trader’s get-up may give rise to such an inference, but the role of intention should not be overstated. It is “simply one piece of evidence to be assessed with such other evidence as may be adduced on the issue”; Windsor Smith Pty Ltd v Dr Martens Australia Pty Ltd [2000] FCA 756; (2000) 49 IPR 286 at [33], [34] (Sundberg, Emmett and Hely JJ). See also Playcorp Group of Companies Pty Ltd v Peter Bodum A/S [2010] FCA 23; (2010) 84 IPR 542 at [149], Middleton J at first instance (not the subject of the appeal) said:
I approach the question of intention in the way expressed by Dixon and McTiernan JJ in Australian Woollen Mills Limited v FS Walton & Co Limited (1937) 58 CLR 641, at 657 (Australian Woollen Mills):
The rule that if a mark or get-up for goods is adopted for the purpose of appropriating part of the trade or reputation of a rival, it should be presumed to be fitted for the purpose and therefore likely to deceive or confuse, no doubt, is as just in principle as it is wholesome in tendency. In a question how possible or prospective buyers will be impressed by a given picture, word or appearance, the instinct and judgment of traders is not to be lightly rejected, and when a dishonest trader fashions an implement or weapon for the purpose of misleading potential customers he at least provides a reliable and expert opinion on the question whether what he has done is in fact likely to deceive.
[29] Homart Pharmaceuticals Pty Ltd v Careline Australia Pty Ltd [2017] FCA 403, at [34]
These principles licence the drawing of an inference on the basis of an express premise, that premise being that a person held an intention to deceive; and the inference the principles licence is that such person succeeded in carrying out his or her intention to deceive. That inference, in turn, relies on two implicit generalisations: a person who has an intention to carry out an act will in general carry out the act he or she intended;[30] and a person who intends to carry out an act for a particular purpose, and in particular, the purpose of deceiving another, will in general succeed in fulfilling that purpose.
[30] “The existence in the mind of a deliberate design to do a certain act, when once proved, may properly lead to the inference that the intent once harboured continued and was carried into effect by acts subsequent to the origin of the motive by which they were prompted” – Cook v Moore 65 Mass. (11 Cush.) 215, at page 217, quoted in J H Wigmore, Evidence in Trials at Common Law, Peter Tillers rev, Little Brown & Company, Boston, 1983, Vol 1A §102, at page 1667
There are four matters to note. First, the express premise has a legal standard as an element, namely, that the intended conduct has the quality of being misleading or deceptive. That means that whether conduct has the quality of being misleading or deceptive must be judged by the court, even where the person who engaged in the conduct alleged to be misleading or deceptive has characterised in his or her mind such conduct as misleading or deceptive. This is illustrated by the judgment of Bowen CJ in Rhone-Poulenc Agrochimie SA v Uim Chemical Services Pty Ltd.[31] In that case it was contended that the respondent, through a director, intended to mislead or deceive; and the director admitted in cross-examination that he did engage in conduct that was misleading or deceptive. Bowen CJ said:[32]
The trial Judge was correct in holding that the determination of the question whether UIM engaged in misleading or deceptive conduct involves a legal conclusion. The task of the Court was to decide whether, on the evidence before it, the conduct complained of contravened s.52, as that section has been judicially interpreted. The legal quality of the respondent's conduct must be judged by the Court, not by witnesses. As Lockhart J. observed in Happy Landings Pty. Limited v. Margarine Promotions Pty. Limited (1984) ATPR 40-459 at p 45,314:
“Ultimately, it is for the Court to determine whether the respondent's conduct contravenes the consumer protection provisions of the Trade Practices Act, and the evidence of attitudes or views of members of the public in the present case is of limited assistance.”
[31] Rhone-Poulenc Agrochimie SA v Uim Chemical Services Pty Ltd (1986) 12 FCR 487; [1986] FCA 218
[32] Rhone-Poulenc Agrochimie SA v Uim Chemical Services Pty Ltd (1986) 12 FCR 487, at page 487-488; [1986] FCA 218, at [23]
The second matter to note is that persons who intend to engage in conduct usually do not consciously characterise that conduct. A person usually brings to mind the conduct he or she intends to engage or is engaging in, and the reasons or purposes for which the person intends to engage or is engaging in the conduct. The relevance of a person’s intention, therefore, would turn on the court’s characterisation of the conduct in which the person intended to engage or in which he or she has engaged, and the reasons or purposes for which the person intended to engage or has engaged in that conduct. If the conduct the person has engaged in is incapable of being characterised as misleading or deceptive, or as conduct that is likely to mislead or deceive, evidence of an intention to engage in such conduct for the purpose of deceiving another would be irrelevant. Evidence of an intention to deceive may become relevant, however, where it is open to characterise the intended conduct or the conduct in which a person has engaged as misleading or deceptive, but the court may be in some doubt whether the conduct ought properly to be characterised as misleading or deceptive.
The third matter to note is that, to the extent evidence of intention is relevant, all evidence of intention must be considered. It might be, for example, that a person is aware he or she cannot engage in conduct that is misleading or deceptive or which is likely to mislead or deceive; and the person fashions the conduct he or she intends to engage in with the intention of ensuring that the conduct is not misleading or deceptive. The logic that applies to rendering an intention to deceive relevant to determining whether the intention was fulfilled also applies to rendering an intention not to deceive relevant to whether an intention not to deceive was fulfilled. That is supported by the following passage from the judgment of Gibbs CJ in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd:[33]
Further, it is difficult to escape from the conclusion that the appellant deliberately copied the design and appearance of the respondent's chairs. However, it does not follow that the appellant had any intention to mislead or deceive. One manufacturer may copy the product of another, because that product has proved successful and with the intention of taking advantage of an available market for a product of that kind, but with no intention of passing off his own product as the product of the original manufacturer. The fact that the appellant sold its products to retailers, and labelled them before delivery, and the absence of any evidence of any improper agreement between the appellant and any retailer, support the conclusion that the appellant had no intent to mislead or deceive.
[33] Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44, at [3]; (1982) 149 CLR 191, at page 196
A fourth matter to note concerns the wilful imitation of goods as a basis for inferring an intention to deceive. It is easy to infer from the wilful imitation of goods a consciousness by the imitator that the imitated goods have distinctive features; and that by wilfully imitating those goods the imitator intends to deceive the public into believing that the imitating goods have the same trade source or are otherwise connected with the imitated goods. The ease with which such an inference is liable to be drawn may reflect a general repugnance of what is entailed in the act of imitation, namely, the imitator’s appropriating the labour and ingenuity of another. There is, however, a potential danger in relying on wilful imitation to infer an intention to deceive and, in turn, deception. The wilful imitation of another’s goods is not per se misleading or deceptive, or otherwise unlawful; imitation is not unlawful unless it infringes rights created under various intellectual property regimes, or rights recognised under the general law, or if it involves some form of deception. That is illustrated by the decision in Parkdale where the respondent’s wilful imitation of the applicant’s furniture was held not to constitute misleading or deceptive conduct because the imitator was found to have distinguished its furniture from the imitated furniture. Thus, something more than wilful imitation will usually be required before it can be found that the imitator intended to deceive.
Difficulties that wilful imitation may raise in assessing whether there is any deception were identified in a different, although not irrelevant, context by the majority of the panel of judges constituting the United States Court of Appeals for the Second Circuit in American Safety Table Co. v Schreiber & Goldberg:[34]
[A]t first glance it might seem intolerable that one manufacturer should be allowed to sponge on another by pirating the product of years of invention and development without license or recompense and reap the fruits sown by another. Morally and ethically such practices strike a discordant note. It cuts across the grain of justice to permit an intruder to profit not only by the efforts of another but at his expense as well. . . .
But this initial response to the problem has been curbed in deference to the greater public good. . . . For imitation is the life blood of competition. It is the unimpeded availability of substantially equivalent units that permits the normal operation of supply and demand to yield the fair price society must pay for a given commodity. . . . Unless such duplication is permitted, competition may be unduly curtailed with the possible resultant development of undesirable monopolistic conditions. The Congress, realizing such possibilities, has therefore confined and limited the rewards of originality to those situations and circumstances comprehended by our patent, copyright, and trade-mark laws. When these statutory frameworks are inapplicable, originality per se remains unprotected and often unrewarded. For these reasons and with these limitations the bare imitation of another's product, without more, is permissible. And this is true regardless of the fact that the courts have little sympathy for a wilful imitator.
While the duplication of another’s product without more has thus been sanctioned, the courts have been wary about the extent to which the imitator should be permitted to take advantage of the originator’s efforts. Hence when, in addition to simulating the originator's product the second-comer unnecessarily created the impression in the minds of the purchasing public that the originator was also the source of the simulated product, the courts were quick to decry such “palming off” or “poaching” as an unlawful concomitant of the privileged imitation, and the body of learning called the law of unfair competition thus emerged.
The application of these simple fundamental principles has often proved to be intricately troublesome. The basic difficulty stems from the fact that by the very process of the simulation which the law permits, there is the almost inseparable suggestion created that the source of the simulated product is the maker of the original product. As in the case at hand, frequently a long period of association has developed between the original product and the original producer. In fact, after a time it becomes difficult to tell whether the purchasers buy primarily because of the virtues of the product or because of confidence in and reliance on the original producer's skill. Unless warned to the contrary, they may easily mistake the simulated product for the original, especially if they are unaware of the existence of the second comer. Such confusion is natural and perhaps, to a degree, an unavoidable result of permissible imitation. . . .
[34] American Safety Table Co. v Schreiber & Goldberg 269 F2d 255 (2d Cir 1959)
Misrepresentations
Finally I turn to paragraphs (a), (g), and (h) of s 29(1) of the ACL, which provide:
A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:
(a)make a false or misleading representation that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use; or
. . . .
(g)make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits; or
(h) make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation; or
….
It is unnecessary to identify principles relating to these paragraphs because Home Grown’s case based on s 29(1) of the ACL depends on my finding that Sperling has engaged in conduct that has contravened s 18(1) of the ACL.[35]
[35] Applicant’s Outline of Closing Submissions, [32]
admissibility of wayback screenshots
As I noted at the beginning of these reasons, Sperling relies on documents recording screenshots of searches conducted on a website known as “The Wayback Machine” (Wayback Machine documents). I admitted the Wayback Machine documents over objection, but subject to relevance. At the time of my ruling I had in mind Perram J’s discussion of the “authenticity” of documents in Australian Competition and Consumer Commission v Air New Zealand Ltd.[36] Before I consider the relevance of the Wayback Machine documents, it will therefore be necessary to say something about the “authenticity” and the “authentication” of documents.
[36] Australian Competition and Consumer Commission v Air New Zealand Ltd [2012] FCA 1355
Authentication of documents
The notion of “authenticity”, when applied to a document or any other thing a party seeks to tender into evidence, refers to the document or thing being that which the person seeking to tender it (proponent) claims it to be; and “authentication” is the means by which the proponent seeks to persuade a court that the document or thing is that which the proponent claims it to be.[37]
[37] See, for example, ASIC v Rich [2005] NSWSC 417, at [118]: “Authentication is about showing that the document is what it is claimed to be . . . .”
Authentication occurs at two stages in the evidentiary life of a document whose authenticity is in question (disputed document).[38] The first stage is when the proponent seeks to adduce the disputed document into evidence. As with all evidence that a party seeks to adduce into evidence where the Evidence Act 1995 (Cth) (Evidence Act) applies, the proponent must show the disputed document is “relevant” within the meaning of s 55 of that Act; and that is because s 56(2) of the Evidence Act provides that evidence that is not relevant is not admissible.
[38] I repeat here much of what I said in Yalda v Consulate General of the Republic of Iraq, Sydney [2021] FCCA 499, at [20]-[27]
The relevance of a disputed document depends on the combination of two things. The first is the contents of the disputed document and their links to issues in the proceeding. The contents of a document usually consist of language or images or both. The language or images may be relevant to an issue in the proceeding either because the proponent wishes to rely on the language or images testimonially, that is, as evidence of the truth of the matters the language or images may reasonably be taken to intend to represent; or the language or images may be relevant for some other reason, for example, that the languages or images have been published. The second thing on which the relevance of a disputed document depends is whether there is some evidence on the basis of which it would be reasonably open to find that the disputed document is that which the proponent claims it to be. For example, a statement contained in a document purportedly made by a person can only become relevant if a court accepts it is reasonably open to find that the document has in fact been made by the person.
This relationship between the authenticity of a document and the relevance of its contents is reflected in s 57(1) of the Evidence Act (emphasis added):
If the determination of the question whether evidence adduced by a party is relevant depends on the court making another finding (including a finding that the evidence is what the party claims it to be), the court may find that the evidence is relevant:
(a) if it is reasonably open to make that finding; or
(b) subject to further evidence being admitted at a later stage of the proceeding that will make it reasonably open to make that finding.
When applied to documents, s 57(1) of the Evidence Act assumes that the authenticity of a document – that is, the quality of a document’s being what the proponent claims it to be – is or at least may be relevant to determining whether the disputed document is relevant under s 56(1) of the Evidence Act; and where the relevance of a document under s 56 of the Evidence Act depends on a finding that the document is what the proponent claims it to be, the court may find the document is relevant if it is reasonably open to make a finding that the document is what the proponent claims it to be.
That a disputed document has been admitted into evidence because the court has found it is relevant because it is reasonably open to find the document is what the proponent claims it to be does not mean the court as trier of fact must regard the document as being that which the proponent claims it to be. Subsection 57(1) of the Evidence Act only requires the court to determine, at the point questions of admissibility are raised, whether it is reasonably open to make a finding that the document is what the proponent claims it to be; it does not require or even authorise the court to find that the document is in fact what the proponent claims it to be. If the court finds it is reasonably open to find that the document is what the proponent claims it to be, and finds the contents of the document are relevant, whether the document is in fact what the proponent claims it to be is to be determined by the court in its capacity as trier of fact at the time the court considers all of the evidence that has been admitted into evidence and makes its findings of fact. The process by which the proponent seeks to persuade the court as a trier of fact that the disputed document is what the proponent claims it to be is equally to be described as “authentication”; and it constitutes the second of the two stages at which the process of authentication of a disputed document occurs.
If the common law rules of evidence applied, the question of the disputed document’s authenticity would have turned on the application of the ancient rule that, subject to exceptions, only the original of the document sought to be tendered would be admissible. As a matter of logic, proof that the disputed document is an original could not have been supplied by the contents of the document itself. Proof had to be supplied by evidence that lay outside its contents. The logical implication of the rule governing the admissibility of documents was summed up by saying that a document is not self-authenticating. That difficulty, however, is overcome by s 58(1) of the Evidence Act, which provides:
If a question arises as to the relevance of a document or thing, the court may examine it and may draw any reasonable inference from it, including an inference as to its authenticity or identity.
In Australian Competition and Consumer Commission v Air New Zealand Ltd, Perram J held that “authenticity is not a ground of admissibility under the” Evidence Act; the question of authenticity does not “directly arise for the tribunal of law’s consideration at the level of objections to evidence”; and that, if “there is raised a question about the authenticity of a document . . . then there will be an issue in the proceedings about its authenticity”.[39] It is true that, unlike the Federal Rules of Evidence 1975 (US), the Evidence Act does not contain a provision that in terms requires that a document or thing be authenticated before it can be admitted into evidence. But s 57(1) and s 58(1) of the Evidence Act use the language of authentication; and a court must at the point of admissibility consider questions of the authenticity of a disputed document if its authenticity is in issue; and that question is determined by the court considering, not whether the document is in fact that which the proponent claims it to be, but whether it is open to find that the document is what the proponent claims it to be. If the court answers that question in the affirmative, the document is admitted into evidence, but the question of the document’s authenticity remains open and is to be decided when the court considers all of the evidence before it makes its findings of fact.
[39] Australian Competition and Consumer Commission v Air New Zealand Ltd [2012] FCA 1355, at [92]
Finally, that a document is authentic does not necessarily mean it is relevant or, if relevant, admissible. Whether it is relevant and, if so, otherwise admissible, depends on the contents of the document and the purposes for which the proponent intends to use the contents of the document.
Authenticity of the Wayback Machine documents
The Wayback Machine documents are “document 40” to the affidavit of Ms Olsen.[40] Ms Olsen says the documents are screenshots of boards appearing “on the Wayback Machine” that were returned as a result of searches undertaken in about early June 2020. That search was of “the website at (known as the “Wayback Machine”, a digital archive of the World Wide Web operated by the Internet Archive, a non-profit organisation based in the United States (Wayback Machine) using links provided by Peter Sperling, the managing director of” Sperling.[41]
[40] Affidavit M L J Olsen 30.06.2020, [7(c)]; [48]
[41] Affidavit M L J Olsen 30.06.2020, [7(c)]
The first question when determining the relevance of the Wayback Machine documents is that which s 57(1)(a) of the Evidence Act permits the court to ask, namely, whether it is open to find that the Wayback Machine documents are what Sperling claims them to be; and in answering that question s 58(1) of the Evidence Act permits the court to examine the documents and “draw any reasonable inference from [them], including an inference as to [their] authenticity or identity”. Thus, I must first identify what it is Sperling claims the Wayback Machine documents to be, and then identify information, including information contained in the documents themselves, on the basis of which I can conclude that it would be reasonably open to me to find the Wayback Machine documents are that which Sperling claims them to be.
Sperling claims the Wayback Machine documents are screenshots of websites identified by a particular uniform resource locator (URL) as it existed on the date or dates stated on each document depicting surfboards and associated information. The matters on which Sperling relies to show the Wayback Machine documents are what it claims they are is information contained in each of the documents themselves. In particular, Sperling relies on the section at the top of each document which contains the following information (Wayback Machine specific information):
(a)the words “Internet Archive WaybackMachine”;
(b)a URL, not being the URL that includes “web.archive.org” (archived URL);
(c)a number followed by the word “captures”;
(d)a range of dates that appear under the word “captures” (represented dates); and
(e)a row next to the represented dates divided into columns at different points at which vertical lines appear to signify a date or dates.
The Federal Court of Australia has considered the Wayback Machine in a number of cases. Of particular relevance is Pinnacle Runaway Pty Ltd v Triangl Limited, where Murphy J accepted the following expert evidence about the Wayback Machine:[42]
The Internet Archive is a website (located at that provides access to a digital library of Internet sites and other cultural artefacts in a digital form. Like a paper library, the Internet Archive provides free access to researchers, historians, scholars, and the general public. …
The Internet Archive has created a service known as the Wayback Machine (located at The Wayback Machine makes it possible to surf more than 400 billion pages stored in the Internet Archive’s web archive. Visitors to the Wayback Machine can search archives by URL (i.e., a website address). If archived records for a URL are available, the visitor will be presented with a list of available dates. The visitor may select one of those dates, and then begin surfing on an archived version of the Web. The links on the archived files, when served by the Wayback Machine, point to other archived files (whether HTML pages or images). If a visitor clicks on a link on an archived page, the Wayback Machine will serve the archive file with the closest available date to the page upon which the link appeared and was clicked.
The archived data made viewable and browseable by the Wayback Machine is compiled by the Internet Archive using software programs known as crawlers that surf the Web and automatically store copies of website files, preserving these files as they exist at the point of time of capture.
The Internet Archive assigns a URL on its site to the archived files in the format in yyyy][Month in mm][Day in dd][Time code in hh:mm:ss]/[Archived URL]. Thus, the Internet Archive URL would be the URL for the record of the Internet Archive homepage HTML file ( archived on January 26, 1997 at 4:58 a.m. and 28 seconds (1997/01/26 at 04:58:28). A web browser may be set such that a printout from it will display the URL of a webpage in the printout’s footer. The date assigned by the Internet Archive applies to the HTML file but not to image files linked therein. Thus images that appear on the printed page may not have been archived on the same date as the HTML file. Likewise, if a website is designed with “frames”, the date assigned by the Internet Archive applies to the frameset as a whole, and not the individual pages within each frame.
(Emphasis added.)
[42] Pinnacle Runaway Pty Ltd v Triangl Limited [2019] FCA 1662, at [107]
The evidence Murphy J accepted in Pinnacle is not, of course, evidence in the proceeding before me. But that does not mean I cannot take notice of that information for the purpose of this proceeding if the information is of the character s 144(1) of the Evidence Act identifies. That subsection provides:
Proof is not required about knowledge that is not reasonably open to question and is:
(a) common knowledge in the locality in which the proceeding is being held or generally; or
(b) capable of verification by reference to a document the authority of which cannot reasonably be questioned.
In the course of preparing these reasons, I formed the view that it is arguable that the evidence Murphy J accepted in Pinnacle is information of a character to which s 144(1) of the Evidence Act applies. Having formed that view on 3 May 2021 I directed my associate to send the following email to the parties:
His Honour admitted into evidence, subject to relevance, the documents Ms Olsen in her affidavit of 30 June 2020 identifies as “document 40”, being screenshots of the results of searches undertaken on the Wayback Machine.
His Honour invites the parties to make submissions about the following matters:
1.Is the manner in which web pages archived by and made available on the website at (known as the “Wayback Machine”) knowledge that is not reasonably open to question, and is common knowledge generally, for the purposes of s 144(1) of the Evidence Act 1995 (Cth)?
2.Assuming paragraph (1) is answered in the affirmative, his Honour:
a.proposes to acquire knowledge of the matters referred to in paragraph (1) by consulting the information that is available at the expert evidence Murphy J accepted in Pinnacle Runaway Pty Ltd v Triangl Limited [2019] FCA 1662 at [107], and the article by D R Eltgrowth “Best Evidence and the Wayback Machine: Towards a Workable Authentication Standard for Archived Internet Evidence” 78 Fordham L. Rev. 181 (2009); and
b.invites the parties, pursuant to s 144(4) of the Evidence Act 1995 (Cth), to make submissions, and to refer to relevant information, relating to his Honour acquiring knowledge by consulting the information identified in paragraph 2(a).
His Honour requests the parties make their submissions by email to chambers within 7 days or within such further time as the parties may require. Unless the parties indicate otherwise, his Honour will assume the parties will not require any hearing in relation to any submissions the parties may make in response to this email.
The parties provided written submissions in response to this request. Before I refer to those submissions, it would be useful to refer to what Campbell JA in Seiwa Australia Pty Ltd v Beard referred to as an “oddity about the way in which” s 144(1) of the Evidence Act operates:[43]
An oddity about the way in which section 144(1) operates is that the conditions for its operation, namely that the matters of which judicial notice is taken are “knowledge that is not reasonably open to question, and is ... common knowledge in the locality in which the proceeding is being held or generally” are themselves factual matters, but are not established by evidence. To that extent at least, some form of judicial notice is involved in the application of section 144 itself.
[43] Seiwa Australia Pty Ltd v Beard [2009] NSWCA 240, at [271]
It is unnecessary for me to take judicial notice about the Wayback Machine before I can decide whether to apply s 144(1) of the Evidence Act because there is already in evidence information that describes the Wayback Machine.[44] The description is contained in a document titled “Standard Affidavit” which appears on the Wayback Machine website, which includes the following information:[45]
….
2. The Internet Archive is a website that provides access to a digital library of Internet sites and other cultural artifacts in digital form. Like a paper library, we provide free access to researchers, historians, scholars, and the general public. The Internet Archive has partnered with and receives support from various well-known institutions and libraries, including the Library of Congress.
3. The Internet Archive has created a service known as the Wayback Machine. The Wayback Machine makes it possible to browse more than 450 billion pages stored in the Internet Archive's web archive. Visitors to the Wayback Machine can search archives by URL (i.e., a website address). If archived records for a URL are available, the visitor will be presented with a display of available dates. The visitor may select one of those dates, and begin browsing an archived version of the Web. Links on archived files in the Wayback Machine point to other archived files (whether HTML pages or other file types), if any are found for the URL indicated by a given link. For instance, the Wayback Machine is designed such that when a visitor clicks on a hyperlink on an archived page that points to another URL, the visitor will be served the archived file found for the hyperlink's URL with the closest available date to the initial file containing the hyperlink.
4. The archived data made viewable and browseable by the Wayback Machine is obtained by use of web archiving software that automatically stores copies of files available via the Internet, each file preserved as it existed at a particular point in time.
5. The Internet Archive assigns a URL on its site to the archived files in the format in yyyy][Month in mm][Day in dd][Time code in hh:mm:ss]/[Archived URL] aka an “extended URL”. Thus, the extended URL would be the URL for the record of the Internet Archive home page HTML file ( archived on January 26, 1997 at 4:58 a.m. and 28 seconds (1997/01/26 at 04:58:28). A web browser may be set such that a printout from it will display the URL of a web page in the printout's footer. The date indicated by an extended URL applies to a preserved instance of a file for a given URL, but not necessarily to any other files linked therein. Thus, in the case of a page constituted by a primary HTML file and other separate files (e.g., files with images, audio, multimedia, design elements, or other embedded content) linked within that primary HTML file, the primary HTML file and the other files will each have their own respective extended URLs and may not have been archived on the same dates.
[44] Affidavit M L J Olsen 03.10.2020, annexures MO-13 and MO-14
[45] Affidavit M L J Olsen 03.10.2020, annexure MO-14
In its written submissions Home Grown submits that the manner in which webpages are archived and made available by the proprietors of the Wayback Machine is not knowledge that is not reasonably open to question, and, to the extent it may be knowledge that is not reasonably open to question, it is not common knowledge. Home Grown also submits that to the extent I find that the manner in which webpages are archived and made available by the proprietors of the Wayback Machine is common knowledge, I should place little weight on the material identified in my associate’s email. Sperling, on the other hand, submits that the manner in which webpages are archived and made available by the proprietors of the Wayback Machine is information to which s 144(1) of the Evidence Act applies.
The question whether the manner in which webpages are archived and made available by the proprietors of the Wayback Machine is knowledge that is not reasonably open to question is capable of being determined from the face of the Wayback Machine documents themselves. On their face they appear to be screenshots of webpages that have been accessed through the Internet. That is a basis for inferring that the Wayback Machine documents are themselves screenshots of webpages but which contain additional information to that contained in the screenshots of webpages not accessed through the Wayback Machine, that additional information being the Wayback Machine specific information. The presence of this additional information is material on the basis of which it is reasonably open to find that the screenshots of the webpages are screenshots of the webpages as they appeared at the time the Wayback Machine specific information may reasonably be taken to represent they so appeared.
There is, however, a potential hurdle to Sperling being able to rely on the Wayback Machine specific information as evidence of the representations the information conveys. It has been held that such representations are hearsay to which the hearsay rule in s 59(1) of the Evidence Act applies. Thus, in Voxson Pty Ltd v Telstra Corporation Limited (No 10) Perram J said:[46]
Voxson sought to adduce evidence of the historical state of webpages which had been maintained by the Respondents over a range of dates in late 2012. It did so by annexing to Ms Taylor’s affidavit of 9 May 2017 webpages she had printed off using an application known as the Wayback Machine which is provided from a webpage located at archive.org. This was opposed by the Respondents on the basis that the webpages printed off by Ms Taylor were inadmissible hearsay.
The pages are certainly hearsay. Each page appears to be some form of copy of the requested webpage over which there is superimposed at the top a statement indicating that the page has been generated by the Wayback Machine for a given date. . . .
The operator of the Wayback Machine is therefore making a representation that it copied the webpage into its archive and recorded the date on which it did so and that the webpage which appears in its archive is the webpage which existed on that date. Since Voxson wishes to prove what the state of the Respondents’ websites was on the relevant dates using these pages, it follows that it wishes to adduce the pages generated by the Wayback Machine as evidence that those pages were, in fact, in that form on those dates. This is hearsay. I should also add that Voxson also seeks to prove the truth of the contents of the archived webpages produced by the Wayback Machine. This involves second-hand hearsay: a representation by the operator of the Wayback Machine that the webpages had a particular content on a particular date and a representation by the Respondents by means of the pages in question as to the matters which Voxson seeks to prove. In both cases, however, Voxson must at least establish that the pages generated by the Wayback Machine can be brought within an exception to the hearsay rule. I do not think that they can.
[46] Voxson Pty Ltd v Telstra Corporation Limited (No 10) [2018] FCA 376, at [33]-[35]
Burley J similarly held in Dyno Nobel Inc v Orica Explosives Technology Pty Ltd (No 2):[47]
Insofar as the Wayback materials include the content of archived web pages, they are hearsay. Each page is a digital copy of a page said to have been present on the i-kon website. The representation made to those using the Wayback Machine is that the Internet Archive copied the webpage into its archive and recorded the date on which it did so, and that the webpage which appears in its archive is the webpage that existed on that date. Dyno wishes to adduce the Wayback materials as evidence that those pages were in fact in that form on those dates. It submits that the use of the evidence is to prove the availability of the website (and the contents of the particular pages) on a particular date. It does not seek to use the documents to prove the truth of any fact referred to in them. The dates applied by the Internet Archive are not hearsay, as they were created by the organisation itself.
[47] Dyno Nobel Inc v Orica Explosives Technology Pty Ltd (No 2) [2019] FCA 1552, at [9]
There are two things that may be said about these passages. First, that a document contains hearsay statements does not place it out of the reach of s 58(1) of the Evidence Act. That subsection permits the court to have regard to statements contained in a document for the purpose of determining the document’s authenticity. That would necessarily include hearsay statements such as statements about the date on which the document was created, and about the identity of the author of the document. Second, in Pinnacle Murphy J held that the representation conveyed by each search of the Wayback Machine that the webpage has been copied and archived on a particular day is not a representation to which s 59(1) of the Evidence Act applies, and that is because the representations are not made by a person.[48]
If the archive of webpages held within the Internet Archive is automatically populated by a software program that crawls the internet, capturing the content of pages as it goes and producing the archived pages on request then, at least insofar as the above representation is concerned, the pages produced by the machine do not fall within the scope of s 59. That is because they cannot, at least in any meaningful way, be said to be representations made by a person: see Gans J, Palmer A and Roberts A, Uniform Evidence, (3rd ed, Oxford University Press 2019) [5.2.4].
[48] Pinnacle Runaway Pty Ltd v Triangl Limited [2019] FCA 1662, at [106]
I am therefore satisfied I can rely on the representations conveyed by the Wayback Machine specific information as evidence of the truth of what they represent for the purpose of concluding it is reasonably open to find that the Wayback Machine documents are authentic, that is, they are that which Sperling claims them to be. I am satisfied the Wayback Machine documents are screenshots of webpages that have been returned as a result of searches made on the Wayback Machine, and each of the documents contains a representation to the effect that the webpage depicted on the document was accessed through the archived URL on the represented dates stated in the Wayback Machine specific information, and, for that reason, represents that the webpage depicted on the document is the webpage as it existed on the represented dates it was accessed through the archived URL. I am therefore satisfied that the Wayback Machine documents are authentic.
Relevance of Wayback Machine documents
Finally there is the question whether the contents of the Wayback Machine documents, assuming, as I have found, they are that which Sperling claims them to be, are relevant to any issue in the proceeding. The documents may be relevant for a number of purposes. The most immediate potential relevance is their tendency to identify the range of surfboards that have been offered for sale to the public. That, in turn, may afford a basis for inferring the class or classes of persons it may reasonably be supposed the suppliers who posted material on the webpages had in mind as having a demand for the boards that are depicted on the webpages which, in further turn, may provide a basis for identifying the persons who have such demand and therefore identify the class of persons by reference to which the question whether Sperling has engaged in misleading or deceptive conduct is to be assessed.
It may be important to appreciate that the relevance of the information contained in the webpages depicted in the Wayback Machine documents does not depend on drawing inferences from the representations conveyed by such information to the truth of the matters intended to be asserted by the representation. The relevance relies on inferences that are available to be drawn from the fact that suppliers have depicted boards on their webpages and have made statements about those boards including prices. In short, it is evidence of the “behaviour of people in the particular trade”, which is “the best evidence of the dimensions of the relevant market”.[49] As has been said about market definition in the context of competition law:[50]
The dimensions of a market are real, not theoretical. To define those dimensions the best evidence will come from the people who work in the market: the marketing managers and salesmen, the market analysts and researchers, the advertising account executives, the buyers or purchasing officers, the product designers and evaluators. Their records will establish the dimensions of the market; they will show the figures being kept at [sic] competitors’ and customers’ behaviour and the particular products being followed. They will show the potential customers whom salesmen are visiting, the suppliers whom purchasing officers regularly contact, products against which advertising is directed, the price movements of other suppliers which give rise to intra-corporate memoranda, the process by which products are bought, what buyers must seek in terms of quantities, delivery schedules, price flexibility, why accounts are won and lost.
[49] Re Mark Lyons Pty Limited v Bursill Sportsgear Pty Limited [1987] FCA 282, at [37] (Wilcox J)
[50] Australian Competition and Consumer Commission v Pfizer Australia Pty Ltd [2018] FCAFC 78, at [140]
These observations apply not only to the contents of the Wayback Machine documents, but also to the contents of documents Sperling, and to a lesser extent Home Grown, have adduced that advertise or otherwise promote the sale of nipper boards, or which show the manner in which nipper boards have been used.
I have devoted some time to determining the admissibility of the Wayback Machine documents because they were admitted into evidence over objection, and subject to my ruling on their relevance. The upshot, however, is I have not relied on the contents of any of the Wayback Machine documents to make any finding.
evidence AND SOME FINDINGS
In this section of my reasons I set out the evidence, much of which is not disputed, and some findings in relation to the evidence. Unless the context suggests otherwise, any unqualified statement of fact contained in what follows is to be taken to reflect my finding of the fact stated.
Home Grown’s business in general
Home Grown was established in June 1982 by Mr John Axford, its current Chief Executive Officer. Home Grown was established as Yabba Holdings Pty Limited, and in 1983 it changed its name to Land & Sea Sports Pty Ltd. Home Grown changed its name to its current name in October 2012.[51]
[51] Affidavit J W Axford 27.05.2020, [4]-[5]
Home Grown’s principal activities have been and continue to be the design and sale of outdoor and water sport products. Home Grown sells its products under different brand names, namely, “Adrenalin”, “Boss Scuba”, “Palm Beach Australia”, and “Redback Surf Australia”.[52] Mr Axford says that the advertising material for the “Redback Brand” products feature distinctive Redback branding, including a stylised redback spider logo. [53]
[52] Affidavit J W Axford 27.05.2020, [17]
[53] Affidavit J W Axford 27.05.2020, [19]
Home Grown sells its products in all States in Australia, and in New Zealand, the South Pacific, Singapore, the United Kingdom, Japan, and South Africa.[54] Home Grown does not, however, generally supply directly to the public; its sales “are generally made to its distributors and wholesale customers”. This occurs through “[w]holesaling to retailers, including online retailers”, and by “[a]ccount holders placing orders through an online trade portal on” Home Grown’s website.[55] Home Grown also directly supplies some products to commercial customers, such as surf life saving clubs, in response to direct orders.[56]
[54] Affidavit J W Axford 27.05.2020, [6]
[55] Affidavit J W Axford 27.05.2020, [10]
[56] Affidavit J W Axford 27.05.2020, [11]
Home Grown promotes its products in a number of ways. These include instructing its sales representatives to meet with distributors and wholesalers, using social media, distributing promotional material directed to end users, and distributing hard copy catalogues.[57] There is in evidence Home Grown’s “current catalogue” (HGBA Wholesale catalogue).[58] At the top of the front page of that catalogue, under the figure of a red kangaroo, there appear the words “Home Grown Brands Australia 37 Years in Pursuit of Excellence”, under which appear the words “Distributor Catalogue 2020”. Under these words there is a photograph of a beach followed by a quote from Mr Axford. At the bottom of the front page there are six brand names, one of which is “Redback Surf Australia”. The HGBA Wholesale catalogue has other features. It contains “QR Codes” for particular products that enable a person having a smart phone to access YouTube videos made by Home Grown showing the products in use and providing other information in relation to those products. The HGBA Wholesale catalogue also contains a section headed “Marketing Advice”, which identifies various types of marketing support Home Grown offers to distributors. These include website support, website video content, “Lifestyle Posters”, and “Product Feature Tickets with QR code links”. There is also in evidence a “Consumer Catalogue 2020”,[59] but this seems to be similar to if not identical with the HGBA Wholesale catalogue.[60] Home Grown’s catalogues are the primary method of informing either existing retailers or new retailers about the products Home Gown has for sale.[61]
[57] Affidavit J W Axford 27.05.2020, [9]
[58] Affidavit J W Axford 27.05.2020, [12]; exhibit JWA-2
[59] Exhibit JWA-22
[60] Exhibit JWA-2
[61] T79.15
Home Grown also distributes to potential end users flyers that contain images of its products, together with information about those products, and their prices. Some of these flyers are in evidence.[62] The flyers depict many products; and the products are organised according to the brand names under which the products are sold.
[62] Exhibit A.
Very few retailers use the HGBA Wholesale catalogue that appears on the Home Grown website because they already have a hard copy.[63] Home Grown describes its products primarily by means of its catalogues.[64] Further, retailers place orders for Home Grown’s products largely by email, by fax, or by telephone, although a small percentage of retailers purchase Home Grown products through an “e-biz functionality” available on Home Grown’s website.[65]
[63] T86.20
[64] T86.40
[65] T87.20
CBS’s business in general
Sperling conducts a number of businesses, one of which is CBS.[66] That business, which Sperling, through its predecessor in title (Cape Byron Imports), has conducted since around 1976, distributes sporting, camping, adventure, and water sport products.[67] Like Home Grown, CBS supplies goods under a number of brands. One of those brands is “Mirage” which CBS uses in connection with the sale of beach and swim products.[68] CBS supplies its products to retailers, and it is in competition with Home Grown in relation to many of the goods it supplies or offers to supply to retailers.
[66] In the remainder of these reasons I will use “CBS” and “Sperling” as I find suits the occasion.
[67] Affidavit G J Dudley 13.07.2020, [1]
[68] Affidavit G J Dudley 13.07.2020, [1]
“Nippers”, “nipper boards”, “training boards”
It is common ground that “nipper” refers to young children who participate in activities (SLSC activities) organised by surf life saving clubs in Australia (SLSCs). Nippers range in age from about 6 years to 12 years.[69] At least some of the SLSC activities in which nippers participate consist of learning to use a surfboard, and using the skills they learn to ride surfboards in competitions organised by SLSCs. There is, however, some imprecision in the evidence about what a nipper board is, and the class or classes of nippers that use them.
[69] T257.30
I begin with the evidence Mr Axford gives in his affidavit of 27 May 2020. Mr Axford says the Redback board “was designed to be a paddle and surf board for junior surfers, in particular, junior surf lifesavers”;[70] and that the end user of the Redback board “is typically a junior surfer or “nipper” aged 5 to 14 years”.[71] Mr Axford further says that the “market for nipper trainer surfboards . . . in Australia is a niche segment of the wider surfboard market”;[72] the market for nipper boards in Australia is dominated by less than 10 suppliers;[73] the nipper boards range in length, shape, colour, and design features;[74] and they range in price from around $150 to $1,500.[75] Mr Axford lists in a table what he says are “the boards that I am aware are available in Australia from information that is publicly available on the internet”.[76] That table includes the following:
[70] Affidavit J W Axford 27.05.2020, [25]
[71] Affidavit J W Axford 27.05.2020, [31]
[72] Affidavit J W Axford 27.05.2020, [48]
[73] Affidavit J W Axford 27.05.2020, [49]
[74] Affidavit J W Axford 27.05.2020, [50]
[75] Affidavit J W Axford 27.05.2020, [50]
[76] Affidavit J W Axford 27.05.2020, [51]; annexure JWA-28
Brand
Length
Price
Bennett Surf Co. Soft Nipper Boards - standard model
Unknown
$495.00 -$540.00
Dolphin Epoxy Nipper Board
6’6” (1.8m)
From $1,180.00
Kracka Foamies
Unknown
$495
ElNino Nipper Board 5’10” Mango Deck
5’10”
$219.95
Ocean and Earth The Bug Twin Fin Surfboard
4’
5’2”
5’6”
From $262.95
Prime Boards 6’6” Nipper Softboard
6’6” (1.8m)
$420.00
Mr Axford says “the majority of these boards are race-trainer boards and none are directly comparable with the Redback Board in performance, features or price”.[77]
[77] Affidavit J W Axford 27.05.2020, [51]
In cross-examination Mr Axford gave evidence that is relevant to the denotation of the expression “nipper boards”, and the identification of the market that consists of or includes “nipper boards”. First, Mr Axford said that handles are a common feature of nipper boards; there are a number of different styles of handles, some being semi rigid and others soft; and there are a variety of ways handles can be put on boards to make them nipper boards.[78] Second, Mr Axford gave evidence in relation to the following brands of boards:
(a)The “Nugget Beginner Nipper Board” supplied by Bennett Surf Co (price $292).[79] Mr Axford accepted this was a foam board, but said it was polyethylene foam, not polystyrene foam like the Redback boards.[80]
(b)“Beginner Nipper Boards” supplied by “infront SURFCRAFT” (price $350).[81] Mr Axford accepted these boards are described as nipper boards, but, because they are advertised for twice the sale price of the Redback boards, they are not in the same category. Mr Axford said: “The expensive board[s] are racing boards, they are not Nipper training boards”.[82] Mr Axford accepted that the “infront” nipper board is “a similar product, that’s [in] a similar market” to the Redback boards.[83]
(c)The “Combo Board” supplied by Demon (price $285).[84] Mr Axford accepted that Demon market “themselves as in the same category as [the Redback boards]”.[85] Mr Axford accepted that one of the boards has a similar construction to the Redback boards, and it appeals to the same customer base as the Redback boards.[86]
[78] T96.20-T97.5
[79] Exhibit B, page 127
[80] T92.30-T93.5
[81] Exhibit B, page 135
[82] T93.35-T94.5
[83] T94.20
[84] Exhibit B, page 145
[85] T94.35
[86] T95.10
Home Grown submits these features are not merely functional, because “they are marked by deliberate design choices developed by a process of continuous improvement and refinement”.[225] For these reasons, Home Grown submits, the Redback boards look quite different.[226]
[225] Applicant’s Outline of Closing Submissions, [14], relying on the affidavit of Mr Axford and Mr Joshua Axford
[226] Applicant’s Outline of Closing Submissions, [14]
Home Grown also relies on the following matters for submitting the Redback board has a reputation. First, the extent and breadth of the sale of Redback boards.[227] I have found that from 2006 to 2019 Home Grown has sold around a total of 13,416 of the Kirra Club Trainer nipper boards and 5,648 of the Kirra Pro Trainer nipper boards to a total of around 560 customers.[228] This includes sales to around 40 SLSCs. Second, of the 7,288 5’5” Kirra Club Trainer nipper boards Home Grown had sold from 2014 to 2020, only 23 were the subject of warranty claims. Home Grown submits this is a basis for inferring consumers regard the Redback boards as a product of quality and durability.[229] Third, Home Grown has extensively marketed the Redback boards.[230] Fourth, there is what Home Grown submits is the “[r]enown through use by the SLSA/SLSC Community”.[231] Home Grown relies on the volume of sales Home Grown has made directly to SLSCs, and evidence of sales made by retailers, Mr Dudley’s evidence that the Redback boards “are used by a range of surf clubs and surf club members”,[232] and Mr Dudley’s evidence that at the time he was employed by Home Grown the SLSA was encouraging Home Grown to make the Redback boards.[233] Fifth, Home Grown submits that “perhaps [the] most striking” evidence of the distinctiveness of the Redback boards is the extent to which the Redback boards “features in promotional material for the SLSCs around Australia”.[234]
[227] Applicant’s Outline of Closing Submissions, [9], [10]
[228] Affidavit J W Axford 27.05.2020, [41]
[229] Applicant’s Outline of Closing Submissions, [11]
[230] Applicant’s Outline of Closing Submissions, [12]
[231] Applicant’s Outline of Closing Submissions, [13]
[232] Applicant’s Outline of Closing Submissions, [13], referring to T315.37-40
[233] Applicant’s Outline of Closing Submissions, [13], referring to T312.35
[234] Applicant’s Outline of Closing Submissions, [13], referring to Affidavit M L J Olsen 30.06.2020, annexure MO-1, document 42
There are three things Home Grown does not identify that are relevant to assessing whether in the minds of the Reference Class the Redback boards are associated with one supplier or one set of suppliers:
(a)The first is the writing and logo that appear on the Redback boards. The two Redback boards have similar names - “5’5” Kirra Club Trainer”, and “6’2” Kirra Pro Trainer”; and they both have on them in large and fancy writing the word “Redback”, which is contained in an elongated red oval shape which also contains a drawing of a black spider and the words “SURFWARE narrabeen australia” (Redback logo).
(b)The second is the manner in which Home Grown has depicted the Redback boards in the HGBA Wholesale catalogue,[235] its consumer catalogue,[236] and its flyers.[237] The HGBA Wholesale catalogue contains photographs of each of the Redback boards; and above the photographs the following words appear:[238]
As used by Surf Life Saving Clubs Around Australia
Compression Moulded Strength
Develop Juniors Paddle & Surf Skills
Kirra Club Trainers 5’5” & 6’2”
The Redback boards are depicted in the same way in Home Grown’s consumer catalogue,[239] and in at least one of Home Grown’s flyers that is in evidence.[240] Further, the catalogues and flyers contain claims about particular features of the Redback boards by use of lines directed to the part of the board to which a particular claim relates.
(c)The third is that the depictions of the Redback boards in Home Grown’s catalogues and flyers, and the claims made in relation to the Redback boards in those catalogues and flyers, appear within a publication that is unmistakably published by Home Grown.
[235] Exhibit JWA-2
[236] Exhibit JWA-22
[237] Exhibit A
[238] Exhibit JWA-2, page 85
[239] Exhibit JWA-22
[240] Exhibit A
The following observations may be made about these three features.
(a)First, the names, “5’5” Kirra Club Trainer” and “6’2” Kirra Pro Trainer”, and the Redback logo, are significantly more conspicuous and comprehensible than each of the boards’ individual features on which Home Grown relies as being distinctive. The names and in particular the Redback logo are obviously the designation, and persons who observe the Redback boards would view them as the obvious designation, the originator of the Redback boards, Home Grown, adopted to create “an association in the minds of consumers between the originator’s designation and its goods or services”,[241] and for the purpose of its serving as “a sign in the marketplace as an indicator of the trade origin of goods or . . . services”.[242] That, in turn, means that the principal features of the Redback boards that are likely to suggest to the Reference Class an association between the Redback boards and a trade source are the names of the Redback boards, and in particular the Redback logo that appears on the boards.
(b)Second, Home Grown makes claims about the features of the Redback boards in its catalogues and flyers by reference to lines directed to the part of the boards to which each claim relates. That suggests that the features of the Redback boards about which the claims are made are not apparent by inspection, or at least by inspection alone. That, in turn, means that to the extent a potential buyer becomes aware of the features that are the subject of the claims Home Grown makes in its catalogues and flyers, he or she is likely to have become so aware by having read the claims made in the catalogues and flyers, or by some other person repeating the effect of those claims, rather than by observing or even using a Redback board.
(c)Third, given that the Redback boards are one of many goods described in the catalogues Home Grown publishes, it is likely that the reader of any one of the catalogues would form the view that the publisher of the catalogue – Home Grown – is the source of the Redback board; and the person would have formed such view by the time he or she begins to read that part of the catalogue or flyer that contains a description of the Redback board, and the claims in relation to the Redback board.
[241] Dodds Family Investments Pty Limited v Lane Industries Pty Limited [1993] FCA 259, at [21]
[242] Educational Broadcasters Adelaide Incorporated v Australian Broadcasting Corporation [2016] FCA 1502, at [58] (Charlesworth J)
I then turn to consider the class or classes of people who are likely to have been aware there was a reputation attached to the Redback boards. The evidence reveals four classes. The first, and most obvious, class are the retailers to whom Home Grown has regularly provided the HGBA Wholesale catalogue. This includes retailers who placed orders with Home Grown for Redback boards. On the basis of their having received the HGBA Wholesale catalogue and having ordered Redback boards, I find this class of retailers are aware that the Redback boards are identified by their names, namely, “5’5” Kirra Club Trainer”, and “6’2” Kirra Pro Trainer”; they are aware the Redback boards are sold under the Redback logo; they are aware of their appearance; they are aware the trade source of the Redback boards is Home Grown; and they are aware, at least in broad terms, of the substance of the claims Home Grown makes in the HGBA Wholesale catalogue about the Redback boards.
The second class are the SLSCs to whom Home Grown has sold Redback boards. It may reasonably be inferred from their having purchased Redback boards, and I find, that this class of SLSCs are aware that the Redback boards are identified by their names, namely, “5’5” Kirra Club Trainer”, and “6’2” Kirra Pro Trainer”; they are sold under the Redback logo; they are aware of the appearance of the Redback boards; and they are aware that Home Grown is the trade source of the Redback boards. It is also reasonable to infer from their having purchased Redback boards, and I find, that this class of SLSCs are aware, at least in broad terms, of the substance of the claims Home Grown makes in the HGBA Wholesale catalogue about the Redback boards.
A third class are SLSCs who have not ordered any Redback boards, either from Home Grown, or from any retailer to whom Home Grown had sold Redback boards (non Redback SLSC class). There is some evidence on the basis of which findings are open to be made about this class’s knowledge of the Redback boards. It is reasonable to suppose that at least some members of this class have become aware of the HGBA Wholesale catalogue or the consumer catalogue; and, given the purpose for which I have found Home Grown introduced the Redback boards, namely, to offer “a high quality alternative to rudimentary nipper training boards available in the market at the time”,[243] it is reasonable to suppose that at least some of the retailers to whom Home Grown had provided the HGBA Wholesale catalogue described to one or more SLSCs the Redback boards and repeated the effect of at least some of the claims made in the HGBA Wholesale catalogue. Finally, there is evidence of nippers using the Redback boards at SLSCs. On the basis of this evidence, it is open to find, and I find, that a not insubstantial number of members of the non Redback SLSC class are aware of the availability of Redback boards, and of their names, namely, “5’5” Kirra Club Trainer”, and “6’2” Kirra Pro Trainer”; they are aware that they are sold under the Redback logo; and they are aware of their appearance. It is also open to find, and I find, that at least some members of this class were aware, at least in broad terms, of the substance of the claims Home Grown makes in the HGBA Wholesale catalogue about the Redback boards.
[243] Affidavit J W Axford 17.07.2020, [14]
Finally, there is what must be the largest class (end user class), namely, parents or carers, or relatives or friends of parents or carers of young children who have purchased or who may wish to purchase boards that suit the purpose for which I have found the Redback boards were designed, namely, as “a high quality alternative to rudimentary nipper training boards available in the market at the time”.[244] There is some evidence on the basis of which findings may be open to be made about the knowledge of this class of persons.
(a)It is reasonable to suppose that the HGBA Wholesale catalogue, consumer catalogue, and flyers found their way to at least some members of the end user class.
(b)Given the purpose for which I have found Home Grown introduced the Redback boards, namely, to offer “a high quality alternative to rudimentary nipper training boards available in the market at the time”,[245] it is reasonable to suppose that at least some of the retailers to whom Home Grown had provided the HGBA Wholesale catalogue conveyed information to some customers or potential customers about the Redback boards, and may have repeated the substance of at least some of the claims contained in the HGBA Wholesale catalogue.
(c)There is evidence from retailers that some customers ask for a Redback board. Mr Ellicott said that a “few individual customers” have come to Oceansuits looking to purchase Redback boards; and they specifically requested the Redback board. Mr D Smith said that parents specifically look to purchase the Redback board. Mr D Smith believes this is due to the parents being familiar with the use of those boards at nipper training conducted by SLSCs. Mr B Smith, on the other hand, gave evidence that customers who are seeking junior nipper boards would call asking for them, or customers would come into the store where they would be presented with options. Some customers specifically ask for “the Redback Board”, but Mr B Smith is not aware of anyone asking for a Mirage board.
(d)Finally, given there is evidence of nippers using the Redback boards, it is also reasonable to suppose that some members of the end user class themselves observed nippers using Redback boards.
[244] Affidavit J W Axford 17.07.2020, [14]
[245] Affidavit J W Axford 17.07.2020, [14]
On the basis of this evidence, it is reasonably open to find, and I find, that a not insignificant number of persons who have purchased or who may purchase boards that suit the purpose for which I have found Home Grown designed and introduced the Redback boards, are aware of the availability of Redback boards, and of their names, namely, “5’5” Kirra Club Trainer”, and “6’2” Kirra Pro Trainer”; that they are sold under the brand name “Redback”; and they are aware, at least in broad terms, of some of the claims Home Grown makes in Home Grown’s catalogues and flyers about the Redback boards.
Sperling’s conduct that is alleged to be misleading or deceptive
Home Grown submits as follows:
(a)With the exception of the “REDBACK name and logo and the red slick” Sperling “appropriated all of the applicant’s nipper training board features . . . with, at most, slight variation, and has deployed them in the promotion, offer for sale and sale of its own nipper training board”.[246]
(b)The features of the Redback boards Sperling appropriated are “eye-catching” cues by which “the consumer is informed of the origin, quality and type of goods being purchased”.[247]
(c)The suggestion conveyed by the “get-up is not sufficiently dispelled by the use of the REDBACK name and logo” because “REDBACK” is used on a range of products Home Grown market, and “is a weak mark for distinguishing otherwise nearly identical products”.[248]
(d)Trade circumstances suggests that retailers display nipper boards in a way that does not reveal their names, and some retailers display boards in a rack and are visible only from the sides. Further, Redback boards and Mirage boards are often not sold together to permit a side-by-side comparison; and it is likely that consumers will first encounter the Redback boards on the beach.[249]
(e)Consumers are likely to use the visual cues provided by the get-up to indicate the product they seek rather than the product’s name.[250] Home Grown relies on evidence given by Mr B Smith that customers sometimes ask for a nipper board by brand, “but generally it’s just a nipper board”.[251]
(f)It is likely that a not insubstantial number of persons “within the relevant class, having seen or otherwise being aware of the applicant’s nipper training board, would be diverted from a search for it by [the] respondent’s nipper training board get-up”.[252] Home Grown submits that such consumers may note something seems different about the brand name but be convinced by the other get-up similarities that their recollection of the brand name was mistaken. A consumer familiar with the Redback board may well recall its get-up, but have no or an imperfect recollection of its name.[253]
(g)The evidence shows that some manufacturers of surfboards provide a range of surfboards and use the same colour for the range, but use different graphics to differentiate the sizes of the boards. In those circumstances, it is likely that a consumer, on seeing a 6’2” Redback board on the beach will, when encountering the 5’2” Mirage board in a store, with or without imperfect memory of the 6’2” board, think that the Mirage board is but a size or other variant of Home Grown’s range.[254]
[246] Applicant’s Outline of Closing Submissions, [16]
[247] Applicant’s Outline of Closing Submissions, [17]
[248] Applicant’s Outline of Closing Submissions, [18]
[249] Applicant’s Outline of Closing Submissions, [20]
[250] Applicant’s Outline of Closing Submissions, [20]
[251] T327.5
[252] Applicant’s Outline of Closing Submissions, [21]
[253] Applicant’s Outline of Closing Submissions, [21]
[254] Applicant’s Outline of Closing Submissions, [22]
Home Grown also submits there is evidence of actual deception. Home Grown relies on the evidence Mr D Smith gave about his observation of a Mirage board at a beach, and in particular his evidence that until he undertook a closer inspection he thought the board was so similar to the Redback board “that it could have come from the same factory”.[255]
[255] Applicant’s Outline of Closing Submissions, [23]
There are a number of difficulties with Home Grown’s submissions.
(a)First, Home Grown’s submissions almost entirely ignore that it has sold and promoted the Redback boards under the brand name “Redback”, that each of the two Redback boards has a name, and that the Mirage boards have been sold under the name of “Mirage”. I have already noted that the names Home Grown has given the boards, and the use of the Redback logo, are obvious designations Home Grown adopted to create “an association in the minds of consumers between the originator’s designation and its goods or services”,[256] and for the purpose of their serving as “a sign in the marketplace as an indicator of the trade origin of goods or . . . services”.[257] The same applies to Sperling’s use of the name “Mirage”. In those circumstances, it is not open to assess whether the features of the Mirage board suggest an association with the originator of the Redback boards without taking into account the words and signs the originator of the Redback boards itself has used to create such an association, and the words and signs Sperling has used to create an association between the Mirage boards and their originator.
(b)Second, Home Grown’s submission that the suggestion conveyed by the “get-up is not sufficiently dispelled by the use of the REDBACK name and logo” because “REDBACK” is used on a range of products Home Grown markets implies that the name “Redback” diminishes the distinctiveness of the Redback boards. That, in turn, implies business irrationality by Home Grown, namely, that it has applied a logo on the Redback board that diminishes, rather than enhances, the distinctiveness of the products to which it is attached. I am unwilling to imply such business irrationality. The obvious inference that is available to be drawn from Home Grown’s deciding and continuing to promote and sell the Redback boards under the name “Redback” is that it recognises that the design and other features of the Redback boards could not by themselves suggest, or at least sufficiently suggest, the trade association that the use of the Redback logo obviously suggests.
(c)Third, Home Grown’s submissions are premised on the claim that the Mirage board constitutes a substantial reproduction of those features (excluding names and logo) Home Grown submits are distinctive of the Redback boards, and that it is this substantial reproduction that has misled or is liable to mislead “consumers”. Apart from claiming that Sperling consciously appropriated the distinctive features of the Redback board, however, Home Grown does not identify the conduct it alleges Sperling engaged in that would or could mislead such consumers. Thus, Home Grown refers to the manner in which some retailers display boards, but Home Grown does not say in what sense this involved any conduct by Sperling; Home Grown submits that consumers are likely to use the visual cues provided by the get-up associated with the Redback boards as the means of identifying the Redback boards, but, again, Home Grown does not identify any conduct in which Sperling has engaged or is likely to engage in which would lead consumers who have an imperfect recollection of the distinctive features of the Redback boards to believe or even wonder whether the Mirage boards and the Redback boards have a common trade source, or whether the Mirage boards are associated with the Redback boards; and Home Grown submits that it is likely that a consumer encountering a Mirage board would think it to be a size or variant of Home Grown’s variants of Redback boards, but Home Grown does not identify the conduct in which Sperling has engaged which is said to be capable of leading such consumer to form such a belief. The same difficulty is present in the evidence of Mr D Smith that Home Grown submits shows actual deception. The deception is said to have occurred for a period commencing when Mr D Smith observed a Mirage board at a beach and ending at the time Mr D Smith, on “closer inspection”, “realised it was a different brand of board”. Home Grown does not identify any conduct by Sperling that caused Mr D Smith to form the view he said he initially formed.
(d)The fourth difficulty relates to Home Grown’s submission that Mr D Smith’s evidence supports a finding he was actually deceived. Mr D Smith’s evidence does not support such a finding. Although he says he “initially thought” the board he observed was a Redback board, Mr D Smith cannot be taken to have intended to say that he at any time formed the belief that the board he observed was a Redback board; and that is because he proceeded to inspect the board he did observe, which at the very least suggests doubt about whether when he first observed the board he believed it was a Redback board. Even if Mr D Smith initially formed the view the board he observed was a Redback board, he realised it was a Mirage board on “closer inspection”; and although Mr D Smith does not expressly say what it was that, on “closer inspection”, made him realise it was “a different brand of board”, it is open to infer, and I find, that he made that realisation at the very least because the board he observed has the name “Mirage” on it. Thus, rather than supporting a finding of actual deception, Mr D Smith’s evidence supports a finding that the Redback board is liable to be perceived by persons as being identified as such by its name; and that a board, even if considered to be almost identical with the Redback board, that does not have the name “Redback”, but has a different name, like “Mirage”, will be understood to be a board that has a trade source different from that of the Redback boards. In other words, Mr D Smith’s evidence shows that at least persons in the position of Mr D Smith understand that the trade source of a board is indicated by a brand name that is used in relation to the board, and that if two boards have different trade names, they originate from two different sources, even if the two boards may otherwise be similar in appearance.
[256] Dodds Family Investments Pty Limited v Lane Industries Pty Limited [1993] FCA 259, at [21]
[257] Educational Broadcasters Adelaide Incorporated v Australian Broadcasting Corporation [2016] FCA 1502, at [58] (Charlesworth J)
What I say in the preceding paragraph assumes the Redback boards and the Mirage boards are similar in appearance to the extent Home Grown submits they are and, apart from the presence of the names and Redback logo, the Redback boards are capable of being perceived to be distinctive. Sperling, however, submits the Redback boards are not distinctive, even if the names and Redback logo are ignored. First, Sperling submits Home Grown relies on its use of the colour combination of yellow and red, but Home Grown has not established that it has acquired any reputation by such use. Sperling submits that this is contrary to the intention that lay behind Home Grown’s decision to use those colours in the first place, namely, to evoke an association between the Redback boards and SLSA.[258] Second, Sperling submits that Home Grown supplies surf products in a wide variety of colours and, for that reason, it cannot be said to have attempted to create any association between its products, including the Redback boards, and the colours yellow and red.[259] Third, many traders in the surf craft market use the colours red and yellow, in combination with their own branding.[260] Sperling also submits the Mirage boards and Redback boards are not sufficiently similar to cause a person to believe they originate from a common source or sources, or there is some connection between the originators of the two boards. I have referred earlier in these reasons to what Mr Dudley has identified as the differences in the boards.
[258] Respondent’s outline of opening submissions, [25]
[259] Respondent’s outline of opening submissions, [26]
[260] Respondent’s outline of opening submissions, [26]
It is not necessary to make findings specifically in relation to Sperling’s submissions; and that is because whether Sperling has engaged in conduct that is misleading or deceptive is to be assessed having regard to all relevant circumstances. As Sperling has correctly submitted, “one cannot divorce from the adoption of a colour scheme the other distinguishing features of each of the REDBACK board and the MIRAGE board”.[261]
[261] Respondent’s outline of opening submissions, [30]
Did any of Sperling’s conduct convey any of the Representations?
The final question to determine is whether, in light of the findings I have made, Sperling has engaged in any conduct that has conveyed or that was liable to convey a representation to the effect of any one or more of the Representations. That requires me to return to Sperling’s conduct.
I have found that Sperling’s conduct has not extended beyond promoting and advertising the sale of the Mirage board, and selling Mirage boards, to retailers and to suggesting that the retailers should market the Mirage boards to SLSCs. In particular, in paragraphs 122 and 123 of these reasons I have found that Sperling’s customers are retailers, and that Sperling has marketed the Mirage boards through its website, and by publishing and providing annual catalogues to retailers, and at trade fairs. In these circumstances, there is no possibility of any of the Representations being conveyed by Sperling’s conduct. The Mirage board is described in the catalogues Sperling (in the name of CBS) has published. Those who read the description of the Mirage board contained in the catalogues would, on reading the description, understand that it is CBS that is offering the Mirage boards for sale. The catalogues do not include the Redback boards; and the claims made in the catalogues about the Mirage board could not reasonably be read as referring to the quality or standard of the Redback boards, or as comparing the qualities of the Mirage board with the qualities of the Redback boards. Nor is there any basis for inferring that in suggesting to any retailers that they should market the Mirage boards to SLSCs Sperling suggested the retailers should promote the Mirage board as anything other than the product Sperling in its promotional material to the retailers has represented the Mirage board to be.
Next, I will assume that the conduct retailers have engaged in when promoting or selling the Mirage boards to SLSCs or to end users is conduct that is to be attributed to Sperling. The first thing to note is that the evidence suggests that very few retailers stock both the Redback boards and the Mirage boards. That is a basis for inferring, and I find, that at least those retailers who have only stocked, and have therefore promoted and sold only Mirage boards, have promoted and sold the Mirage boards in a manner that reflects the manner in which Sperling has promoted and sold to them the Mirage boards. That is, and I find that the retailers identified the boards as Mirage boards, they identified to their customers the Mirage boards as Mirage boards, and that they have repeated at least the substance of the claims Sperling has made in its promotional material. For these reasons, and given the findings I have made about the awareness of the members of the non Redback SLSC class or end user class, I do not accept that any ordinary or reasonable member of either of these two classes could reasonably have been misled or deceived by the retailers engaging in such conduct. More particularly, I do not accept that the retailers’ conduct in the manner in which they promoted or sold Mirage boards could have conveyed to any ordinary or reasonable member of the non Redback SLSC class or end user class a representation to the effect of any of the Representations, or could have even caused a reasonable or ordinary member of such classes to wonder whether a representation to the effect of any of the Representations was conveyed.
I turn to the retailers who stock both Redback boards and Mirage boards. The evidence before me reveals only one such retailer, namely, MSS. The evidence, which I accept, shows that MSS has sold both brands of board. The screenshots from MSS’s Instagram account show MSS separately identified “Redback Kirra 5’5” Trainer $180, Mirage Nipper 5’5” $160 and also Redback 6’2” Trainer $230”. That is a basis for inferring, and I find, that MSS has consistently identified the three boards as separate boards. Given the findings I have made about the awareness of the members of the non Redback SLSC class or end user class, I do not accept that any ordinary or reasonable member of either of these two classes could reasonably have been misled or deceived by the manner in which MSS has promoted or sold the Redback boards and the Mirage boards. More particularly, I do not accept that MSS’s conduct could have conveyed to any ordinary or reasonable member of the non Redback SLSC class or end user class a representation to the effect of any of the Representations, or could have even caused a reasonable or ordinary member of such classes to wonder whether a representation to the effect of any of the Representations was conveyed.
There remains the evidence of Mr B Smith that in MSS’s store the Mirage board and Redback boards were stacked side-by-side, and Mr B Smith’s acceptance that in those circumstances the two boards looked very much alike. This evidence must be viewed in light of the other evidence Mr B Smith gave. As I have already noted, Mr B Smith said that customers who are seeking MSS’s junior nipper boards would call asking for them, or they would come into the store where customers would be presented with options; and that some customers specifically asked for “the Redback Board”, but Mr B Smith is not aware of anyone asking for a Mirage board. On this evidence, customers who attend MSS’s shop do not select from boards that are present in the store; they make enquiries of the person attending the store. They either ask for “the Redback board” or they ask about “nipper boards”. Given the other evidence about MSS’s sale and promotion of the Redback boards and the Mirage boards, it cannot be inferred that any person on behalf of MSS would have made any statement, or would have engaged in conduct that could reasonably have suggested that the Mirage boards and the Redback boards originate from the same source. Given the evidence I have accepted, the likelihood is that MSS, in response to an enquiry from a customer in relation to a nipper board, would have informed the customer of the Redback boards and the Mirage board; and if the customer had asked for “the Redback board”, MSS would have informed the customer of the Redback boards. In those circumstances, the storing side-by-side of the Redback boards and the Mirage boards could not have conveyed to the ordinary or reasonable member of the end user class a representation to the effect of any one of the Representations, or could not have even caused a reasonable or ordinary member of the end user class to wonder whether a representation to the effect of any of the Representations was conveyed.
Conclusion
For these reasons I am not satisfied that Sperling has engaged in any conduct that has conveyed or that has had a tendency to convey any of the Representations. It follows, therefore, that I am not satisfied Sperling has engaged in conduct that contravened s 18(1) of the ACL. That means Home Grown’s claims based on s 18(1) of the ACL fail.
contravention of s 29(1) of the ACL?
In the FACS Home Grown alleges that Sperling has contravened s 29(1) of the ACL. Home Grown relies on the same allegations of facts on which it relies for claiming that Sperling had contravened s 18(1) of the ACL. These include the allegations that Sperling made each of the Representations. Given I have found I am not satisfied Sperling engaged in conduct that conveyed, or had a tendency to convey any of the Representations, it follows that Home Grown’s claims based on contraventions of s 29(1) of the ACL also fail.
damages
Home Grown claims that it suffered loss and damage as a consequence of Sperling’s conduct. Although it is unnecessary for me to consider that question, it would be appropriate I do so, given that evidence has been led and submissions made in relation to this question.
Home Grown claims that its loss is to be measured by reference to the number of Mirage boards Sperling sold between 20 September 2018 and 12 May 2020 (relevant period). More particularly, Home Grown submits that had Sperling not engaged in that conduct, it would not have made the sales it did but Home Grown itself would have made those sales. Home Grown claims as damages an amount equal to the profit component of the sales it would have made.[262]
[262] Affidavit of J W Axford 24.06.2020
In its closing written submissions Home Grown identifies, and responds to the grounds on which Sperling relies for submitting that the amount Home Grown claims does not represent its loss, assuming Sperling contravened s 18(1) or s 29(1) of the ACL. One of those grounds is Sperling’s submission that it is unreasonable to assume that the number of Redback boards would have equated with the number of Mirage boards Sperling had sold. I accept Sperling’s submission the assumption is unreasonable. The recommended retail price of the Mirage board during the relevant period was $159.99,[263] whereas the recommended retail price of the Kirra Club Trainer nipper board was $179.95.[264] Assuming that distributors of both Home Grown and Sperling sold at the recommended retail prices, it is unreasonable to assume that persons who paid $159.99 would necessarily have been willing to pay $179.95. Second, Home Grown does not claim that Sperling’s conduct caused a reduction in its sales of Redback boards. That suggests Home Grown assumes that, but for Sperling’s conduct, Home Grown’s sales of Redback boards would have increased by the amount of sales Sperling has made. There is no evidence on the basis of which it could reasonably be determined that Home Grown’s sales would have increased by a number that equates to or approximates the number of sales of Mirage boards.
[263] Exhibit JWA-36
[264] Exhibit JWA-2, page 85
Notwithstanding these difficulties, it is not unreasonable to assume that some of the sales of the Mirage boards Sperling made are sales Home Grown would have made of the Redback boards. That follows from the relatively small difference between the recommended prices of the Kirra Club Trainer nipper board and the Mirage board (the Mirage board price is slightly 10% less than the Kirra Club Trainer nipper board); and I have found that Mr Dudley’s intention in developing and introducing into the market the Mirage board was to satisfy the demand for which the Redback board was intended to satisfy. In those circumstances it would be fair to assume that the number of Redback boards Home Grown would have sold had Sperling not sold the Mirage boards would have been about 70% of the number of Mirage boards Sperling sold during the relevant period. It would also be fair to find that the loss Home Grown would have made is equivalent to the difference between the price at which it sold the Kirra Club Trainer nipper boards and the variable costs Home Grown would have incurred in producing and delivering the Kirra Club Trainer nipper boards. I find that that difference is reflected in what Mr Axford has identified as the “Net Profit” in paragraph 6 of his affidavit of 24 June 2020.
disposition and costs
I propose to order that the application be dismissed. I also propose to order that within two weeks from the day on which I pronounce my orders (or within such further time as the parties may reasonably agree), Sperling file and serve written submissions and any evidence in relation to the costs order I should make, and that within two weeks after being served with Sperling’s evidence and submissions (or within such further time as the parties may reasonably agree) Home Grown file and serve its submissions and evidence in relation to the costs order I should make. I will also direct that the parties inform my associate whether they would be content for me to consider the question of costs on the papers.
I certify that the preceding one hundred and sixty-seven (167) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 16 July 2021
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