Horwitz Grahame Pty Ltd v Attic Press Pty Ltd

[1992] FCA 204

JUDGMENT NO. 2~!&..~2

IN THE FEDERAL COURT OF AUSTRALIA	)
NEW SOUTH WALES DISTRICT REGISTRY )	No G163 of 1992
GENERAL DIVISION

BETWEEN:  HORWITZ GRAHAME PTY LIMITED
Applicant

m:  ATTIC PRESS PTY LIMITED
First Respondent
FUTURA PUBLICATIONS PTY LIMITED
Second Respondent
LABISA PTYLIMI
Third Responden

M A = : HILL J

PLACE :	SYDNEY
DATED :	2 APRIL

EX TEMPORE REASONS FOR JUDGMENT

The applicant, Horwitz Grahame Pty Limited, seeks interlocutory relief against the respondents, Attic Press Pty Limited, Futura Publications Pty Limited, and Labisa Pty Limited, restraining them, in effect, from publishing a publication called "Inside Soap" which is presently being printed and is expected to be distributed so that it will be available on newsstands on 8 April 1992. The first edition of the magazine has, . in fact, been. printed-.and .arrcngements made with direct distribution distributors who are under a contract to distribute it to newsagents. Although the proceedings are brought against each of the three respondents, the evidence before me shows that only one of these companies is concerned with the publication, that being Futura Publications Pty

Limited.

The applicant publishes a magazine called "TV Soap". It is, according to the evidence, the most popular magazine in the marketplace dealing with productions that are sometimes referred to as "soap operas", "soapies" or "soaps". The magazine, which is in glossy form, contains pictures of the stars of these productions and articles about either the productions or the stars of them. Each edition of the magazine, TV Soap, displays a logo printed on the top left hand side of the front cover.

The logo is in the form of what appears to be part of a television screen outlined in black with the screen being red. In large prominent print there appears superimposed on that screen the initials "TV" in white blocked letters outlined with black. Below and partly obscuring the screen there is a yellow design on which appears in black print, again of relatively large size, the word "SOAP". Inside the magazine, TV Soap, generally, but not always, at page 3 is

what may be called an introductory page which provides an

index to the contents of the publication. On the left-hand

side of this page appears-again, in the same colours, the logo which I have already described. At the top of the page appear the words "Inside Soap". These words appear in various editions of the publication.

The respondents' proposed magazine, the printer's proof of which is in evidence, is clearly designed for the same market as that of the applicant and contains the same general sort of material. The impression I have from the printer's proof, although this may in part depend upon the way that proof is presented, is that the respondents' publication is printed on marginally more glossy paper and this impression may be reinforced by the fact that it is priced at a slightly higher figure than the applicant's publication.

The printer's proof contains what may be called a logo at the top of the cover printed on a yellow background. At the top of the logo, printed on black in small yellow

lettering, appear the words, "A areat new magazine f rom the

publ ishers o f . . . " and immediately after that appear the words

"TV h i t s " in white letters, approximately half a centimetre high, on a reddish background. The words "Ins ide Soap" are in colour, respectively black and reddish purple, the word "Soap" being the more prominent, with letters at least two centimetres high. Otherwise, the cover of the magazine is

multi-coloured, printed in a range of colours utilised by the applicant for its publication.

I should at this stage say that the respondents, or some one or more of them, have for some years published another magazine with appeal to those interested in television programs called "TV H i t s " . This magazine carries a logo in large block form of the word "TV H i t s " in white edged with black on a red background. In the April edition of that magazine, which is in evidence before me, there appeared an advertisement for the proposed new publication, Inside Soap. That advertisement indicated that it was advertising what it

described as, "A great n e w magazine from the publ i shers of TV H i t s " . The word "Soap" is in reddy purplish colour in very

large print. The word "Ins ide" is shown in black in print of The applicant learned of the proposal to print and market the new publication on or about 17 March of this year. In fact, it appears that advertising for the new publication commenced around mid-February, the idea for it having only been conceived in January of this year as a result of market research that was carried out internally by representatives of the respondents. So far as the evidence presently stands, the name " I n s i d e Soap" arose as a result of discussions that took place as the idea of the new magazine was discussed and was arrived at without reference to the introductory page of the

a lesser size.

approximately 5,500 newsagents in Australia advising that the

applicant's publication. The respondents have sent fliers to

magazine is to be-.released-on 8 Apri1.1992.

The cost of putting together the magazine has been estimated, including printing costs, to have been approximately $109,000. Advertisers have placed advertisements having a value according to the evidence of approximately $11,000. If no injunction be granted, it is proposed that the second edition of the magazine will be published on 17 June.

The case for the applicant is put, alternatively, on s.52 of the Trade Practices Act 1974 ("the Act"), ss.53C and 53D of that Act and on passing off.

On the state of the evidence as it presently stands, counsel for the applicant conceded that it would be difficult for his client to succeed in a passing off claim. The primary submission was that the case was one falling within s.52. It was conceded that if the applicant did not succeed under s.52 it would not succeed under ss.53C or 53D of the Act.

The general principle to be applied in determining whether interlocutory relief should be granted by way of injunction, is that the applicant show that there is an arguable issue to be tried and that the balance of convenience

independent of each other and, at least to some extent, the favours the grant of the injunction. These matters are not

stronger the case of- an--applicant,- the -less reliance he may need to place upon the balance of convenience. Conversely, the weaker the case of the applicant the more must the balance of convenience be shown to be weighted in support of the grant of the injunction. Whether or not there may be some special test to be applied on the grounds of a quia timet injunction need not be considered here, because whether an injunction should properly be granted will ultimately depend upon the whole of the circumstances including what is necessary to do justice between the parties.

Counsel for the applicant referred me to the decision of the full court of this court in Siddons Ptv Limited v Stanlev Works Ptv Limited (1991) 29 FCR 14 at 17 ff, where, in the joint judgment of Wilcox and Heerey JJ, emphasis is placed upon the characteristics of the target audience. That was a matter the significance of which had already been pointed out in a number of cases, including the decision of this court in Taco CO of Australia Inc v Taco Bell Ptv Limited (1982) 2 TPR 48 at 72, and in the High Court in Parkdale Custom Built Ptv Limited v Puxu Ptv Limited (1982) 149 CLR 191.

Although the authorities may provide different
tests, there is definite agreement in the cases that among the

persons who may be misled by the conduct sought to be impugned, there may be not only the intelligent but also the

gullible or unintelligent. -Much, of course, depends on the particular circumstances in which the issue is raised. In the present case, the target audience is obviously that which purchases magazines of the kind in evidence, persons described by counsel for the applicant as being "the unsophisticated".

I was referred also to the decision of the full court of this court in Telmak Teleproducts (Australia) Pty Limited v Coles Mver Limited (1989) ATPR 40-966 at 50,551 where the importance of similarity of getup, both in the context of a claim under s.52 and of a passing off action were emphasised.

Counsel for the respondents referred me, by way of summary of the principles which he submitted were relevant in determining a s.52 matter, to the decision in Eauitv Access Ptv Ltd v Westpac Bankina Corvoration & Westvac Savinas Bank Ltd (1990) ATPR 40-944 at 50,956. I do not think that there is any difference of approach so far as the principles are concerned between the parties. The real question is whether the cover page of the respondent's proposed publication, perhaps the most significant page of all in publications of this kind which are designed to attract market attention at the market stand, would lead persons who are interested in or read publications of the kind to believe that the magazine,

Soap or is published with the approval of or by arrangement Inside Soap, is either published by the same publisher as TV

with those publishers.

The answer to this question is rather a matter of impression and although an affidavit was read from a newsagent who claimed that he would be confused between the two publications, that evidence is of little assistance in resolving the issue, which at this stage, of course, is not for me to decide. I am concerned only with the somewhat easier task of determining whether there is an arguable issue to be tried between the parties in respect of it. Having said that, however, and while conceding that there is an issue which is arguable, I must say that it seems to me only barely arguable that a person in the market place for publications of this kind faced with the respondents' proposed publication would be, or would be likely to be, deceived into believing it has the necessary connection with the applicant's publication.

The front pages of each magazine, which are the significant pages, do not at all resemble each other. The Inside Soap publication displays its relationship to the publication TV Hits. It is true that the word "TV" appears on the front page of the publication Inside Soap, but it does so only in the context of referring to the publication TV Hits and not as part of the title of the publication, as it does on the applicant's magazine.

It is true, also, that a person familiar with the applicant's magazine. might. well have become familiar with the introductory page with its heading Inside Soap. However, I think it unlikely that, from this fact alone, and particularly given the different logos that appear, a reader or a potential reader of the publication TV Soap, or any other member of the public would be, or would be likely to be, led into error by the publication Inside Soap.

The applicant's case has a further difficulty, frankly admitted by counsel for the applicant, which I do not need to resolve. That difficulty arises out of the provisions of s.65A of the Act which, subject to the exceptions contained in the section, makes s.52 inapplicable, inter alia, to a publication made by a prescribed information provider in the course of carrying on a business of providing information.

It may be that this section would disentitle the applicant to relief. The question was considered by Wilcox J in Horwitz Grahame Books Ptv Limited v Performance Publications Ptv Limited (1987) ATPR 40-764, but his Honour did not need to reach any final conclusion on the matter. His Honour did, however, use language which suggested that his tentative view, at least, was that s.65A would have application in a case such as the present. There are, however, substantial arguments to the contrary and no doubt it will be necessary to resolve them in the event that the case

proceeds to a final hearing.

The - balance - of -.- convenience seems in the present

case, in my view, to favour the respondents rather than the applicant. This is not a case where the conduct complained of which is sought to be enjoined, if ultimately found to contravene s.52, would cause damage to the applicant which could not be compensated for in damages.

Provided proper records are kept by the respondents of sales and other financial matters, damages can easily be computed b-ecause the applicant's damages would seem to be limited to any loss of sales, or potential sales, which it might suffer. The publication cannot be said, for example, to affect the reputation of the applicant by being an inferior product, or matters of that kind.

Of course, not to grant the injunction would permit a competitor of the applicant to come into the market and perhaps establish itself. On the other hand, that company is already in the market of printing and selling magazines in the same area although, of course, it has not as yet produced a magazine which is solely devoted to soap operas.

The respondents would, to some extent at least, be
compensated if an injunction were wrongly granted by the

undertaking as to damages which the applicant has proffered.

No doubt that undertaking would cover matters such as the cost

of printing, the profit lost from advertising and the like.

However, there.are.difficulties in computing the damages which the respondents would suffer, not necessarily insuperable, having regard to the fact that the magazine is to " h i t t h e

newsstands" for the first time in a few days. There will be a

loss of the impetus which the work over the last few months has no doubt created, a loss of potential advertisers and indeed for that matter, perhaps potential purchasers. These losses, while no doubt of a financial kind and therefore capable of falling within an undertaking as to damages, are nevertheless difficult to quantify.

I should say that it has not been suggested that the applicant is other than a substantial company or, for that matter, that the respondents are other than substantial companies. In these circumstances and provided that appropriate undertakings are offered on the part of the respondents to keep records in a form acceptable both to the applicant and myself, I would not propose at this stage to grant interlocutory relief but will endeavour to ensure, if the parties wish it, that the matter be set down for an early hearing date so that any loss to whichever party shall ultimately be unsuccessful can be minimised.

I will hear argument from counsel as to the question
of costs and as to the orders necessary for the future

disposition of the case.

I certify that. this- and -the

preceding ten (10) pages
are a true copy of the Reasons
for Judgment herein of his Honour
Mr Justice Hill.

Associate: y-!~ b	Date: 2 April 1992
Counsel and Solicitors	S.J. Gage101 instructed by
for Applicant :	Anthony Jackson
Counsel and Solicitors	F. Lever & J. Baird instructed
for Respondents:	by Parish Patience
Dates of Hearing:	2 April 1992
Date Judgment Delivered:	2 April 1992