Irrewarra Estate Pty Ltd v A and S Arnott Pty Ltd
[2010] FMCA 360
•27 May 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| IRREWARRA ESTATE PTY LTD v A & S ARNOTT PTY LTD & ORS | [2010] FMCA 360 |
| TRADE PRACTICES – Passing off – interlocutory injunction – misleading and deceptive conduct – get up – muesli and granola – whether deceptively similar. |
| Trade Practices Act 1974 (Cth) Fair Trading Act 1987 (NSW) Federal Magistrates Court Rules 2001 Corporations Act 2001 (Cth) |
| American Cyanamid Co v Ethicon Ltd [1975] AC 396 A v Hayden (No 1) (1984) 56 ALR 73 Waikato (Pty) Ltd v Kaplan (2002) VSC 226 Australian Exhibitions and Conferences Pty Ltd v Australian Exhibition Services Pty Ltd (2001) VSC 226 Australian Woollen Mills Limited v FS Walton and Co Limited (1937) 58 CLR 641 Taco Co of Australia v Taco Bell Pty Ltd (1982) 42 ALR 177 Targetts Pty Ltd v Target Australia Pty Ltd [1993] FCA 191 Kettle Chip Company Pty Ltd v Apand Pty Ltd (1993) 46 FCR 152 WD & HO Willls (Australia) Limited v Phillip Morris Limited (1997) 39 IPR 356 Red Bull Australia Pty Limited v Sydney Wine Distributors Pty Ltd (2001) 53 IPR 481 |
| Applicant: | IRREWARRA ESTATE PTY LTD (ACN 090 419 355) |
| First Respondent: | A & S ARNOTT PTY LTD (ACN 104 534 894) |
| Second Respondent: | STELLA BELLA & CO PTY LTD (ACN 102 771 586) |
| Third Respondent: | ALLISON ARNOTT |
| Fourth Respondent: | RUTH NICHOLAS |
| File Number: | MLG 635 of 2010 |
| Judgment of: | Riley FM |
| Hearing dates: | 7 & 12 May 2010 |
| Date of Last Submission: | 12 May 2010 |
| Delivered at: | Melbourne |
| Delivered on: | 27 May 2010 |
REPRESENTATION
| Counsel for the Applicant: | Daniel Crennan |
| Solicitors for the Applicant: | Brand Partners |
| Counsel for the First Respondent: | Frank G Lever |
| Solicitors for the First Respondent: | Bartier Perry |
| Counsel for the Second Respondent: | No appearance |
| Solicitors for the Second Respondent: | No appearance |
| Counsel for the Third Respondent: | Frank G Lever |
| Solicitors for the Third Respondent: | Bartier Perry |
| Counsel for the Fourth Respondent: | No appearance |
| Solicitors for the Fourth Respondent: | No appearance |
ORDERS
UPON THE APPLICANT BY ITS COUNSEL UNDERTAKING TO:
(a)submit to such order (if any) as the court may consider to be just for the the payment of compensation, to be assessed by the court or as it may direct, to any person, whether or not a party, adversely affected by the operation of the interlocutory order or undertaking or any continuation thereof (with or without variation); and
(b)pay the compensation referred to in (a) to the person there referred to,
THE COURT ORDERS THAT:
The first and third respondents be restrained, from 26 June 2010 until the final hearing of the application, from selling or by trade offering or exposing for sale “Morpeth Sourdough’s Morpeth Muesli deluxe, oven-baked” in a packet with a black and white stick on label, or a nearly black and white stick on label or a stick on label with a black border.
Pursuant to Rule 8.01 of the Federal Magistrates Court Rules 2001, the proceeding be transferred to the Sydney registry of the Federal Magistrates Court to be listed for final hearing on a date to be advised.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 635 of 2010
| IRREWARRA ESTATE PTY LTD (ACN 090 419 355) |
Applicant
And
| A & S ARNOTT PTY LTD (ACN 104 534 894) |
First Respondent
| STELLA BELLA & CO PTY LTD (ACN 102 771 586) (trading as Foodies) |
Second Respondent
| ALLISON ARNOTT |
Third Respondent
| RUTH NICHOLAS |
Fourth Respondent
REASONS FOR JUDGMENT
This is an application for an interlocutory injunction. The applicant alleges that the respondents have engaged in misleading and deceptive conduct in breach of the Trade Practices Act 1974 and the Fair Trading Act 1987 (NSW). The applicant also alleges that the respondents have committed the tort of passing off. Essentially, this is a getup case, concerning muesli and granola.
The fourth respondent is a director of the second respondent. Neither of them appeared at the hearing of the application for the interlocutory injunction. There is a question about whether they were properly served, which I will return to later. The third respondent is a director of the first respondent. The third respondent is also the sister of Bronwynne Calvert who is a director of the applicant.
The applicant since 2004 has marketed a product described on its label as “Irrewarra Sourdough all natural handmade granola”. It manufactures about half a tonne a week. At the end of 2006, the third respondent developed a muesli product. The first respondent sold about three packets a week in its own shop. Between December 2009 and February 2010, the third respondent developed a new recipe for its muesli. In December 2009, the second respondent placed an order with the first respondent for its new muesli, which was called “Morpeth Sourdough Morpeth Muesli deluxe, oven-baked”. The second respondent is a retailer that previously sold the applicant's product and sought a replacement product from the first respondent. The applicant says that the get up of the first respondent’s product is deceptively similar to the get up of the applicant’s product.
The applicant seeks interlocutory injunctions restraining the respondents by themselves or their servants and agents or otherwise from selling or by trade offering or exposing for sale “Morpeth Sourdough’s Morpeth Muesli” until the application for final orders is heard.
The relevant legal principles are well-established. To obtain an interlocutory injunction, the applicant must give the usual undertaking as to damages, establish that there is a serious question to be tried and establish that the balance of convenience favours the granting of an injunction. In AmericanCyanamid Co v Ethicon Ltd [1975] AC 396, Lord Diplock said at 408:
So unless the material available to the court at the hearing of the application for an interlocutory injunction fails to disclose that the plaintiff has any real prospect of succeeding in his claim for a permanent injunction at the trial, the court should go on to consider whether the balance of convenience lies in favour of granting or refusing the interlocutory relief that he sought.
That statement was approved by Dawson J in A v Hayden (No 1) (1984) 56 ALR 73 at 78. In relation to the balance of convenience, the applicant must satisfy the court that refusing the injunction would cause greater injury to him than granting the injunction would cause the respondent: Waikato (Pty) Ltd v Kaplan (2002) VSC 310.
Having said that, the two issues of whether there is a serious question to be tried and the balance of convenience are interconnected. It has been held that, even if the case for a serious question to be tried is weak, the court may grant an injunction if the case regarding the balance of convenience is strong: Australian Exhibitions and Conferences Pty Ltd v Australian Exhibition Services Pty Ltd (2001) VSC 226.
In a get up case, such as this, the applicant must establish that there is a serious question to be tried in relation to the integers of the claim, namely:
a)that the applicant has a reputation in relation to the goods in question;
b)that the impugned get up is misleading and deceptive or likely to mislead and deceive or likely to cause confusion in the mind of a person acquainted with the applicant's product; and
c)that the applicant is likely to suffer loss by reason of the presence in the relevant market of the rival product in the impugned get up.
Where there are disputed questions of fact, it is not appropriate for the court to resolve them at the interlocutory stage. However, disputes of fact are relevant to whether there is a serious question to be tried.
The first and third respondents did not dispute that the applicant has a reputation in relation to granola. The applicant gave evidence that it ships over half a tonne of granola to New South Wales for sale every week. It seems clear that the applicant has a substantial reputation in relation to granola in New South Wales.
In relation to deception and confusion in relation to an infringement of a trade mark and passing off, Dixon and McTiernan and JJ said in Australian Woollen Mills Limited v FS Walton and Co Limited (1937) 58 CLR 641 at 658 that:
In deciding this question, the marks ought not, of course, to be compared side by side. An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought. The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same. The effect of spoken description must be considered. If a mark is in fact or from its nature likely to be the source of some name or verbal description by which buyers will express their desire to have the goods, then similarities both of sound and of meaning may play an important part. The usual manner in which ordinary people behave must be the test of what confusion or deception may be expected. Potential buyers of goods are not to be credited with any high perception or habitual caution. On the other hand, exceptional carelessness or stupidity may be disregarded. The course of business and the way in which the particular class of goods are sold gives, it may be said, the setting, and the habits and observation of men considered in the mass affords the standard. Evidence of actual cases of deception, if forthcoming, is of great weight.
In Taco Co of Australia v Taco Bell Pty Ltd (1982) 42 ALR 177, Deane and Fitzgerald JJ held in relation to confusion that the following propositions provided guidance:
First, it is necessary to identify the relevant section (or sections) of the public (which may be the public at large) by reference to whom the question of whether conduct is, or is likely to be, misleading or deceptive falls to be tested (Weitmann v. Katies Ltd. (1977) 29 F.L.R. 336, per Franki J. at pp. 339-340, cited with approval by Bowen C.J. and Franki J. in Paula Brock v. The Terrace Times Pty. Ltd. (1982) A.T.P.R. 40-267 at p. 43,412).
Second, once the relevant section of the public is established, the matter is to be considered by reference to all who come within it, "including the astute and the gullible, the intelligent and the not so intelligent, the well educated as well as the poorly educated, men and women of various ages pursuing a variety of vocations": Puxu Pty. Ltd. v. Parkdale Custom Built Furniture Pty. Ltd. ((1980) 31 A.L.R. 73, per Lockhart J. at p. 93); see also World Series Cricket v. Parish (supra), per Brennan J. at p. 203.
Thirdly, evidence that some person has in fact formed an erroneous conclusion is admissible and may be persuasive but is not essential. Such evidence does not itself conclusively establish that conduct is misleading or deceptive or likely to mislead or deceive. The Court must determine that question for itself. The test is objective. (See, generally, Annand & Thompson Pty. Ltd. v. Trade Practices Commission (1979) 25 A.L.R. 91, per Franki J. at p. 102; Sterling v. Trade Practices Commission (1981) 35 A.L.R. 59 per Franki J. (with whom Northrop J. agreed) at p. 66 and per Keely J. at p. 69; Snoid v. Handley, supra, per the Court (Bowen C.J., Northrop and Morling JJ.); and Brock v. Terrace Times, supra, per Bowen C.J. and Franki J.).
Finally, it is necessary to inquire why proven misconception has arisen (Hornsby Building Information Centre v. Sydney Building Information Centre supra, at p. 228). The fundamental importance of this principle is that it is only by this investigation that the evidence of those who are shown to have been led into error can be evaluated and it can be determined whether they are confused because of misleading or deceptive conduct on the part of the respondent.
More recently, Heerey J provided an example of how confusion might practically occur in the marketplace in the case of Targetts Pty Ltd v Target Australia Pty Ltd [1993] FCA 191. In that case, Targetts was an existing retailer in Launceston when Target entered the market. His Honour said at [80]:
Take for example a mother giving her daughter money and telling her "Go to Targetts ' store in Charles Street and buy some shoes."The child goes to Charles Street, sees Target's store, and buys the shoes there. The conduct of Target in having its store in Charles Street and using a name which is very similar to that of Targetts, and which in many everyday collocations sounds the same, has had the consequence that the mother, acting through her agent the daughter, has been misled into dealing with Target, and not Targetts as she intended.
The applicant in the present case relied on three get up cases for illustrative purposes. Those cases were Kettle Chip Company Pty Ltd v Apand Pty Ltd (1993) 46 FCR 152, WD & HO Wills (Australia) Limited v Phillip Morris Limited (1997) 39 IPR 356 and Red Bull Australia Pty Ltd v Sydney Wine Distributors Pty Ltd (2001) 53 IPR 481. Of course, these cases all turn on their own facts, though they do serve as illustrations of how different the get up can be and still be held to be likely to cause confusion and so on.
In the present case, the applicant's product is exhibit 5 to the affidavit of Allison Elizabeth Arnott sworn on 6 May 2010. The first respondent's product is exhibit 3 to the affidavit of Allison Elizabeth Arnott sworn on 6 May 2010.
The applicant’s product is described on its label as “all natural handmade granola”. Those words appear in a smallish font that looks like Albertus. The first respondent's product is described on its label as “Morpeth Muesli™” in a font that is marginally bigger than applicant’s and looks like Arial bold. Under that, the first respondent’s product has the words “deluxe, oven-baked” in the same font but not bold and a little smaller.
Both the applicant’s product and the first respondent's product are sold in clear, cellophane packages. Both products are 500 grams. The applicant’s packet is about 12 cm wide, 16 cm high and 5 cm deep. The first respondent's product is about 10 cm wide, 18 cm high and about 4.5 cm deep.
Both products have stick on labels. The applicant's product has one label on the front and a second on the back. The label on the back lists the ingredients and nutritional information. The first respondent's product has a single label which extends from the front of the packet over the top and down the back. The ingredients and nutritional information are on the back.
The label on the front of the applicant's product is white with a thick black border and a thin black line inside it. The label on the back of the applicant's product is white with no border. The label on the first respondent's product in is white with a black border about the same thickness as the border on the applicant's product but has no additional line inside. The border on the first respondent's product extends around the whole label including the part of the label on the back of the packet.
Both labels have black writing on them. However, the applicant’s product has white writing all around the black border on the front label. The first respondent's product has no writing inside the border.
The labels on the front and back of applicant's product are square. The one on the front is centred and the one on the back is a little lower. The label on the first respondent's product is set a little higher, and, as already mentioned extends over the top and down the back of the product.
The labels on the back of the two products look quite different. On the applicant's product, the ingredients are listed horizontally using the same font as on the front. On the first respondent's product, the ingredients are listed vertically it in the same font has used on the front. The name of the manufacturer is more prominent on the first respondent’s product than on the applicant’s product.
The label on the first respondent's product has additional writing on the part of the label that goes over the top of the packet. It says, in the same font used throughout and in fairly small writing, “Our product is handmade at the historic Arnott Bakehouse in Morpeth. It is gluten free, low GI, has no added oil, fat, cane sugar, preservatives or any additives.”
On the front of each packet, the label has a logo. The applicant's logo is about 3.5 cm square. The first respondent’s logo is about 3.5 cm by about 5 cm. Both logos are black on white, although the first respondent's logo also has some light and dark grey. The applicant's logo has two black lines around it, one a little thicker than the other. The first respondent's logo has a single thin black line around it.
The applicant’s logo consists of the words “Irrewarra Sourdough” in large capitals at the top and bottom of the logo. In between those words is a large capital I, with what looks like heads of wheat coming from behind it to the left and right. The first respondent's logo has the words “A & S Arnott, Bakers” in small capitals at the top. There is then a picture which is reminiscent of wrought iron work. Under that in large capitals is the word Morpeth and under that in smaller capitals is the word Sourdough.
The capital letters in the logos of both products are different in that the applicant’s lettering is a black outline with white inside and the first respondent's lettering is solid black. Otherwise, they look quite similar.
The contents of both packets are clearly visible through the cellophane. Both products look like toasted muesli. They both seem to contain cereal, dried fruit, nuts and seeds. The applicant’s granola, before the exhibit was extensively handled, appeared to have clumps about 1.5 cm wide whereas the first respondent’s muesli did not. The applicant’s product visibly contains almonds and walnuts whereas the first respondent’s only seems to contain almonds.
The applicant claimed that the black border on the label of the first respondent’s product appeared shortly before 21 April 2010. The timing was disputed. The applicant provided as exhibit 1 a packet of “Morpeth Muesli handmade” that does not have the black border. It appears to be the same product as the one in question albeit with the description “handmade” instead of “deluxe, oven-baked”. One way or another, it seems likely that the first respondent has fairly recently changed the label on its muesli with the result that it looks more like the applicant’s label.
The first and third respondents argued that muesli and granola are different products. They noted that a product by the name of Granula was invented in 1894 in New York. A similar cereal was developed by John Harvey Kellogg, who named the new product granola. There was evidence that muesli was developed in around 1900 in Switzerland. The first and third respondents said that muesli is traditionally not baked or sweetened whereas granola is.
The first and third respondents argued that granola always clumps as part of the manufacturing process whereas muesli does not. However, the first and third respondents provided evidence from independent sources about the relative properties of granola and muesli. The descriptions of granola in the independent sources did not refer to its clumping property. Nevertheless, the third respondent, who is a food technologist, gave evidence herself about the clumping property of granola. That evidence was contradicted by exhibit 6 to the third respondent’s affidavit sworn on 6 May 2010. That exhibit was a packet of Phillipa’s cranberry granola. It looks like toasted or baked muesli, but does not have any clumps in it. It seems unlikely that granola always has clumps whereas muesli does not. Having said that, the applicant's product does have clumps and the first respondent’s product does not.
The third respondent said in her affidavit sworn on 6 May 2010 that muesli differed from granola in a number of other important respects. The third respondent said that “normally muesli mix is lightly sprayed with a sugar solution (with or without an oil ingredient) and then oven baked or toasted”. Clearly, that statement only applies to toasted or baked muesli and not to the more traditional raw muesli.
The evidence contains numerous examples of recipes for muesli and granola. The court was told that there are literally thousands of such recipes available on the web. Particular emphasis was given in the proceedings to a recipe on Nigella Lawson’s website for a product called “Andy’s Fairfield granola”. The applicant argued that the first respondent’s recipe for the muesli in question (which recipe is found at tab 7 in exhibit 1 to the affidavit sworn by Allison Elizabeth Arnott on 6 May 2010) is remarkably similar to Nigella Lawson's granola recipe.
Accordingly, it seems unlikely that granola and baked or toasted muesli are significantly different products. There is a clear difference between granola and raw muesli. It seems to be about the same as the difference between baked or toasted muesli and raw muesli.
The third respondent also said that muesli generally contains fewer oats than granola. From the numerous exhibits that have been placed before me, it appears that raw muesli contains a higher proportion of oats than either granola or toasted or baked muesli, but that granola and toasted or baked muesli have about the same amount of oats. Certainly, the applicant’s granola appears to have about the same proportion of oats as the first respondent's muesli.
The ingredients listed on the packaging of both the applicant’s granola and the first respondent's muesli are very similar. They both contain oats, sunflower seeds, pumpkin seeds, sesame seeds, almonds, raisins, currants, coconut, honey and spice. The applicant’s product in addition contains canola oil and walnuts whereas the first respondent’s does not. The label of the first respondent’s product says it contains shredded coconut, which is said to be a superior product to desiccated coconut, whereas the label on the applicant’s product only says it contains coconut.
The applicant's product and the first respondent's product contain very similar ingredients and have a very similar appearance. However, both products are also similar to many other granolas and toasted or baked mueslis. Both products are very similar to Nigella Lawson's recipe for Andy's Fairfield granola. The applicant itself in its advertising material has said that its product is made “according to the classic American granola recipe”.
It is difficult to see any basis on which the applicant could restrict the first respondent’s sale of a product that is based on a recipe published by another party entirely, such as Nigella Lawson, or that approximates to a well-known classic. As counsel for the first and third respondents said, this is not a case where the first and third respondents have somehow managed to use a secret recipe such as the Coca-Cola recipe.
The third respondent provided evidence that many of the first respondent’s products have a border on the label. For example, its raw muesli has an orange border and its numerous stuffing mixes have borders in a range of different colours to distinguish them from each other. However, it seems from exhibit 1 that the first respondent has produced its “Morpeth muesli handmade” with a label that had no border at all.
The first and third respondents argued that muesli and granola are sold in clear plastic packets. They provided a number of examples of products in such packaging. Exhibit 4 is eight 750 gram packet of Fresh Mate tropical muesli. It is in a clear cellophane packet with a sticky label stuck to the front. The label is rectangular with a semicircle on top. It is predominantly pale pink with maroon in the semicircle and a coloured photo of fruit and nuts at the bottom. Except for the cellophane packaging, it does not seem like the applicant’s and the first respondent's products.
Exhibit 2 to the affidavit sworn by Allison Elizabeth Arnott on 6 May 2010 is a 600 gram packet of Whisk and Pin mountain muesli. It is an opaque white cellophane packet with a small, clear window through which toasted or baked muesli can be seen. It is lighter in colour than either the applicants or the first respondent products. The packet is much taller than the applicant’s or the first respondent’s. The label is curved at the bottom hand extends over the top of the packet and then down the back. The label is a maroon and white check. The logo consists of hand drawn pictures of a whisk and a rolling pin. The overall impression seems quite different to the impression given by the applicant’s and the first respondent’s products.
Exhibit 4 to the affidavit of Allison Elizabeth Arnott had sworn on 6 May 2010 is a packet of Morpeth's natural muesli. Its appearance is the same as the muesli in question in this case except that the border is orange and the contents are obviously raw muesli.
Exhibit 6 to the affidavit of Allison Elizabeth Arnott sworn on 6 May 2010 is a 450 gram packet of Phillipa’s cranberry granola. It is in clear cellophane. It is lighter in colour than the products of the applicant and the first respondent. It visibly contains dried cranberries and no nuts. The label is stick on label similar in shape to the Morpeth label but it is a pale yellow with dark bluish grey writing and logo. The logo is quite different to that of the products in question in this case in that it is not only stylised design but a shaded line drawing of a terrace house. The brand name is written in handwriting. The packet is much the same shape as the applicant's but the overall impression seems significantly different.
Exhibit 7 to the affidavit of Allison Elizabeth Arnott sworn on 6 May 2010 is a 450 gram packet of Phillipa’s pear orange muesli. It has basically the same appearance as the cranberry granola except that the pear orange muesli is obviously raw muesli.
Exhibit 8 to the affidavit of Allison Elizabeth Arnott sworn on 6 May 2010 is a 500 gram packet of Spice Birchers muesli with cinnamon and coconut. It is in a clear cellophane packet with a stick on label in a similar shape to the first respondent's but smaller. The label is predominantly a strong pink with a strong yellow logo. The contents are obviously raw muesli. The overall impression seems significantly different to the applicant’s and the first respondent's products.
Apart from the packets of muesli and granola, the first respondent also provided to the court some photographs of muesli and granola. The photographs at tab 9 of exhibit 1 to the affidavit sworn by Allison Elizabeth Arnott on 6 May 2010 show various packets of muesli type products. Some are in cardboard boxes, some are in cellophane packets, and one is in a foil of packet and one appears to be in a brown paper bag with a clear cellophane window. The cellophane packets feature prominently very strong colours including a lurid green, a bright orange and a bright blue. The cardboard boxes are predominantly black or brown.
Under tab 18 to exhibit 1 to the affidavit of Allison Elizabeth Arnott sworn on 6 May 2010 are some photographs of muesli and granola on display in a grocery shop. The photographs show four packets of the Irrewarra granola next to three packets of Phillipa’s granola which are in turn next to two cardboard boxes of Carman’s muesli. The cardboard boxes have small cellophane windows through which the muesli can be seen. On the shelf below are 10 packets of muesli in what appear to be long, thin paper bags with a clear cellophane window. The labels on the paper bags are in a range of bright colours coupled with white. Next to the paper bags are two packets of muesli in what appear to be plastic bags. They have bright green and white stick on labels.
In view of this evidence, it seems that it is commonplace but by no means universal to sell muesli and granola in cellophane packaging. It also seems that the first respondent’s product looks significantly more like the applicant's product than any of the other products that have been brought to the court's attention, many of which seem vastly different.
The particular similarities that seem significant are the black and white labelling, the stylised logos and the black border. In these circumstances, it seems that there is a real chance that the first respondent’s product might cause confusion in the marketplace.
This is particularly so given that the second respondent advertised the first respondent’s muesli in the second respondent’s February 2010 catalogue in the same terms as it had described the applicant’s product, even to the extent of calling the first respondent’s product granola. The description was changed in the April 2010 catalogue.
Regarding the balance of convenience, it is not disputed that the applicant ships over half a tonne of granola in New South Wales each week and that the first respondent has sold wholesale only 900 packets of its impugned muesli in total. At 500 grams a packet, though some are one kilogram, that is about half a tonne in total. It is not disputed that the applicant has a significant reputation based on its sale of granola since 2004. The first respondent also has a reputation, though there is no suggestion that it has an extensive reputation in relation to its recently developed muesli. The first respondent’s reputation seems more concerned with its more long standing products, such as breads, Christmas puddings and stuffing mixes.
In all the circumstances, there seems to me to be no justification for restraining the first or third respondents from selling their muesli. It is a commonplace product that is similar to a classic American recipe. However, it seems to me that there is a serious question to be tried about whether the particular packaging used by the first and third respondent’s is likely to cause confusion. It also seems to me that the balance of convenience favours a limited injunction against the first and third respondents. It seems to me that to protect the applicant, it would be sufficient to restrain the first and third respondents, until final hearing, from selling or by trade offering or exposing for sale “Morpeth Sourdough’s Morpeth Muesli deluxe, oven-baked” in a packet with a black and white stick on label, a nearly black and white stick on label or a stick on label with a black border.
If that much is done, it seems to me that the risk of confusion will be negligible. Many muesli products are sold in cellophane packaging with stick on labels. They are differentiated primarily by their colour schemes. It should be a relatively simple matter for a different stick on label to be produced and attached to the first respondent’s product.
There was no suggestion that the first and third respondents should be restrained from selling their “Morpeth Sourdough Morpeth Muesli natural”. It is a raw muesli and a quite different product to the applicant’s granola. The applicant sought an injunction restraining the first and third respondent’s from selling or by trade offering or exposing for sale “Morpeth Sourdough’s Morpeth Muesli”. That would include not only the impugned “deluxe, oven-baked muesli” but also the “natural” muesli to which no exception has been taken. There is no occasion for any injunction to extend to the first and third respondent’s natural muesli, and any injunction should be cast accordingly.
While the logos of the applicant and the first respondent are both stylised drawings, I do not consider that it would be appropriate to restrict the first respondent’s use of its logo. The first respondent has used its logo for some years. It is used on its many and varied products. It is not so close to the applicant’s logo that it might cause confusion, provided that a different colour scheme is used by the first respondent.
The applicant indicated to the court that it would be content for the restraints to commence in 30 days. That seems to me to be appropriate, as it could be expected to reduce the adverse consequences of the restraints on the first and third respondents and could be expected to reduce any damages that might be payable by the applicant.
Upon the applicant’s usual undertaking as to damages, there will be orders against the first and third respondents as outlined. The applicant’s and the first and third respondents were in agreement that the proceedings should be transferred to the Sydney registry of this court. That seems to me to be appropriate and there will be orders accordingly.
In relation to service on the second and fourth respondents, I note that Mr Lever told the court that they were willing to abide the order of the court. However, Mr Lever does not represent them. I cannot act on the basis of Mr Lever’s indication that they are aware of the proceedings or his statement that they are willing to abide the order of the court.
Rule 6.06 of the Federal Magistrates Court Rules 2001 requires a document starting a proceeding to be served by hand, except, relevantly, when “a lawyer accepts service for a party and subsequently files an address for service”. Rule 6.07 stipulates that service by hand of a document on a natural person is to be effected by giving the document to them. Rule 6.08 provides that a document may be served may hand on a corporation:
a)by leaving a copy of the document with a person who is apparently an officer or servant of the corporation at the registered office of the corporation or, if there is no registered office, at its principal place of business; or
b)taking one of the steps mentioned in s.109X of the Corporations Act 2001.
Section 109X of the Corporations Act 2001 provides for various means of serving a document on a corporation, namely:
a)leaving a copy of the document at the corporations registered office or posting it to there;
b)giving a copy of the document personally to a director of the company who resides in Australia.
The affidavits relating to service on the second and fourth respondents are:
a)the affidavit of Jane Mary Good sworn on 4 May 2010 which exhibits a letter from Samaha and Associates dated 30 April 2010;
b)the affidavit of Jane Mary Good sworn on 10 May 2010 which exhibits a letter from Samaha and Associates dated 29 April 2010;
c)the affidavit of Lydia Morgan sworn on 7 May 2010 which exhibits documents she sent to Samaha and Associates by fax and email; and
d)the affidavit of Chloe Jane Hayward sworn on 7 May 2010 which exhibits documents she sent to Samaha and Associates by express post.
There is no suggestion that the documents starting the proceeding were served by hand on the fourth respondent personally or on the second respondent at its registered office or by personal service on a director. The letter from Samaha and Associates dated 29 April 2010 says that the firm acts for the second respondent and confirms that no proceedings will be brought without two working days notice. The letter from Samaha and Associates dated 30 April says that the firm acts for the second respondent and Ms Nicholas. However, neither letter says that Samaha and Associates has instructions to accept service on behalf of the second and fourth respondents. Moreover, Samaha and Associates has not filed a notice of address for service as required by Rule 16.06(2)(c). Nor is there any evidence of an acknowledgement from Samaha and Associates that its clients have been served.
The court was not asked to dispense with the rules in relation to service. In the circumstances, I am not prepared to dispense with the rule requiring service by hand on the second and fourth respondents. There was no suggestion that the matter should have proceeded ex parte. If it had proceeded in that way, and an interim injunction had been granted, obviously the second and fourth respondents would have needed to be given a very early opportunity to be heard. All in all, I am not satisfied that the second and fourth respondents have been effectively served. In the circumstances, it would not be appropriate to make any orders against them.
I certify that the preceding sixty-two (62) paragraphs are a true copy of the reasons for judgment of Riley FM
Associate: Rosanne Hopkins
Date: 27 May 2010
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