J.E.M. Nominees Pty Ltd v Insurance News Pty Ltd - [2008] FMCA 1227

FEDERAL MAGISTRATES COURT OF AUSTRALIA

J.E.M. NOMINEES PTY LTD v INSURANCE NEWS PTY LTD & ORS

[2008] FMCA 1227

TRADE PRACTICES – Misleading or deceptive conduct.

Trade Practices Act 1974, ss.52, 53

.au Domain Administration Limited v Domain Names Australia Pty Ltd [2004] FCA 424; (2004) 207 ALR 521; (2004) 207 ALR 521; (2004) 61 IPR 81.
Abundant Earth Pty Ltd & Ors v R. & C. Products Pty Ltd (1985) ATPR 40-532; (1985) 59 ALR 211; (1985) 7 FCR 233; (1985) 4 IPR 387; (1985) ASC 55-389.
Australian Home Loans Ltd t/as Aussie Home Loans v Phillips & Anor [1998] FCA 181; (1998) 40 IPR 392; (1998) AIPC 91-412; (1998) ASAL 55-011; (1998) ATPR 41-626.
B.M. Auto Sales Pty Ltd & Anor v Budget Rent A Car System Pty Ltd (1976) 12 ALR 363; (1976) 51 ALJR 254; 1917 221 NY 183; 116 NE 984.
Bridge Stockbrokers Ltd v Bridges (1984) 5 IPR 81; (1984) 57 ALR 401; (1984) 4 FCR 460; (1984) ASC 55-374; (1985) ATPR 40-502.
ConAgra Inc v McCain Foods (Aust) Pty Ltd [1992] FCA 159; (1992) AIPC 90-892; (1992) 23 IPR 193; (1992) 33 FCR 302; (1992) 106 ALR 465; (1992). ASC 56-159; (1992) ATPR (Digest) 46-095.
Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) v Lane Industries Pty Ltd [1993] FCA (unreported).
Guide Dogs Owners’ and Friends’ Association Inc. v Guide Dogs Association of New South Wales & ACT & Anor [1998] FCA 736
Horlick’s Malted Milk Co. v Summerskill (1916) 33 RPC 108
Hornsby Building Information Centre Pty Ltd & Anor v Sydney Building Information Centre Pty Ltd (1978) 140 CLR 216; (1978) 18 ALR 639; (1978) 52 ALJR 392; (1978) 1B IPR 818; (1978) ASC 55-010; (1978) ATPR 40-067; (1978) 3 TPC 244.
MIPS Computer Resources Systems, Inc v MIPS Computer Resources Pty Ltd & Ors [1990] FCA 348; (1990) 18 IPR 577; (1990) ASC 56-016; (1990) ATPR 41-050.
Motor Charge Pty Ltd v Motorcard Pty Ltd (1982) 42 ALR 136; 2 TPR 38; (1982) 64 FLR 153; (1982) ATPR 40-302.
Office Cleaning Services Ltd v Westminster Window and General Cleaners Ltd [1946] 1 All ER 320; (1946) 63 RPC 39; (1946) 174 LT 229.
Parsons v Gillespie [1898] AC 239
Pickwick International (GB) Ltd v Multiple Sound Distributors [1972] 3 All ER 384; [1972] 1 WLR 1213.
R & C Products Pty Limited v Hunters Products Pty Ltd (1988) ATPR 40-839; (1988) ASC 55-641
Re Equity Access Pty Limited v Westpac Banking Corporation and Westpac Savings Bank Limited and Challenge Bank Limited [1989] FCA 506; (1990) 12 ATPR 40; (1989) 16 IPR 431.
Re Happy Landings Pty Ltd; Ross Horne; Toni Bobbin v Magazine Promotions Australia Pty Ltd [1984] FCA 120
Rent-A-Ute Pty Limited v Golden 44 Pty Ltd [1987] FCA 229
Rumcoast Holdings Pty Ltd v Prospero Publishing Pty Ltd [1999] 48 IPR 75; (1999) 152 FLR 240; (1999) ATPR 41-724; (1999) Aust Torts Reports 81-530; [1999] WASC 176.
Shotover Gorge Jet Boats Ltd v Marine Enterprises Ltd [1984] 2 NZLR 154; (1983) 4 IPR 516.
Street & Another (trading as Caboolture Motel) v Jedsminster Pty Ltd & Anor (1988) 11 IPR 520
Taco Bell Pty Limited v Taco Company of Australia Inc [1981] FCA 219; (1981) 60 FLR 60
Taco Company of Australia Inc v Taco Bell Pty Limited [1982] FCA 136; (1982) 42 ALR 177; (1982) ATPR ¶40-303
Targetts Pty Ltd v Target Australia Pty Ltd [1993] FCA 191; (1993) 26 IPR 51
Trade British Telecommunications plc v One in a Million Ltd [1998] 4 All ER 476; (1998) NLJR 1179; (1998) 42 IPR 289; (1999) FSR 1; (1999) 1 WLR 903

Applicant:

J.E.M. NOMINEES PTY LTD (ACN 005 304 049) TRADING AS INSURANCENEWSAUSTRALIA.COM

First Respondent:

INSURANCE NEWS PTY LTD (ACN 128 480 973)

Second Respondent:

MCMULLAN CONWAY COMMUNICATIONS PTY LTD (ACN 084 309 295)

Third Respondent:

MCMULLAN CONWAY PTY LTD (ACN 077 047 020)

Fourth Respondent:

TERENCE PATRICK MCMULLAN

Fifth Respondent:

NAOMI CONWAY

File Number:

MLG 286 of 2008

Judgment of:

Riethmuller FM

Hearing date:

1 April 2008

Date of Last Submission:

2 April 2008

Delivered at:

Melbourne

Delivered on:

1 September 2008

REPRESENTATION

Counsel for the Applicant:

Ms Gatford

Solicitors for the Applicant:

Davis Lawyers

Counsel for the Respondents:

Mr Ehrlich

Solicitors for the Respondents:

Mahonys Solicitors

ORDERS

That the respondents be restrained and an injunction issue preventing them from using the domain name ‘insurancenews.com.au’ for the provision of an insurance news service on or after 1 October 2008.
That the respondents provide an email to each subscriber of their service in a form agreed with the applicant (and failing agreement as approved by the court) advising that the ‘insurancenews.com’ service has no connection with the applicants insurancenewsaustralia.com service.
There be liberty to the parties to apply for any consequential orders arising out of these orders.
The respondents pay the applicant’s costs as agreed or failing agreement to be taxed at the Federal Court scale.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLG 286 of 2008

J.E.M. NOMINEES PTY LTD (ACN 005 304 049) TRADING AS INSURANCENEWSAUSTRALIA.COM

Applicant

And

INSURANCE NEWS PTY LTD (ACN 128 480 973)

First Respondent

MCMULLAN CONWAY COMMUNICATIONS PTY LTD
(ACN 084 309 295)

Second Respondent

MCMULLAN CONWAY PTY LTD (ACN 077 047 020)

Third Respondent

TERENCE PATRICK MCMULLAN

Fourth Respondent

NAOMI CONWAY

Fifth Respondent

REASONS FOR JUDGMENT

The applicant owns and operates a website that provides news articles on the insurance industry, using the domain name “InsuranceNewsAustralia.com”. The Applicant compiles news stories and provides them to subscribers by email twice each week most weeks of the year and a password-protected logon service at the Applicant’s website. The Applicant’s business model relies on paid subscriptions by interested persons (most of whom work in the insurance industry). As a result, its reputation is particularly important.
The Respondents similarly operate a website providing news articles on the insurance. The Respondents’ website uses the domain name “insuranceNEWS.com.au”. The Respondent’s business model is significantly different to that of the Applicant. The Respondent’s news service is free, relying on advertising income to fund its business.
The Applicant seeks injunctive relief against the respondents. The applicant puts its claim on the basis that the Respondents, by the adoption of a similar domain name and web site appearance have committed the tort of passing off and that the Respondents are in breach of s.52 and s.53 of the Trade Practices Act 1974 (misleading and deceptive and misrepresenting association).

Background

The parties in this matter have had significant relations in the past. From 1982 until 1998, the directors and shareholders of the Applicant published the “Insurance Broker” journal. They also commenced publishing a twice-weekly email news service in 1995 titled “Unilink Network News”. In 1998, the fourth and fifth Respondents took over “Insurance Broker” from the Applicants. During this period, the cordial relationships between the various parties broke down. Thereafter, the “Insurance Broker” was renamed to “Insurance and Risk Professional” and Telstra E-Business became involved in “Unilink Network News”.
At the turn of the century, the Respondents took over the operation of “Unilink Network News” and subsequently this was renamed to “Sunrise Exchange News”. The Applicants commenced a service at a website using the domain name “InsuranceAustralia.com”. By 2004, the Applicants had sold the rights over the domain name “InsuranceAustralia.com” and commenced operating their service using its current domain name.
By late 2007, Telstra E-Business was taken over by another company and the “Sunrise Exchange News” service (which had previously been described as “Unilink Network News”) ceased. In February 2008, the Respondents commenced operating their current website under its current domain name, providing an email to each of the “Sunrise Exchange News” subscribers informing them of the new site. In February 2007, the Respondents advertised in the magazine, “Insurance and Risk Professional”, promoting their website.
As the trial unfolded, no issue was taken as to the specific identity of the Respondents, the parties focusing on the two central issues of:
a)whether the operation of “insuranceNEWS.com.au” website was a breach of the relevant provisions of the Trade Practices Act; and
b)whether the operation of the “insuranceNEWS.com.au” website amounted to passing off.

The Appearance of the 2 Websites

The Applicants’ website is rendered in three columns with a banner across the top. The background colour for its banner, and options, is largely orange, with some contrast in deep red. Its domain name is formatted as follows “InsuranceNewsAustralia.com”. The Applicants’ website also carries in its banner a small map of Australia that is coloured entirely in solid red.
The Applicants’ website is password-protected, although offers a free trial, and has portrayed on the front page the contact details of the editor and proprietor. A print-out of various pages within the website shows that there is little advertising contained in the material, which consists entirely of well-written articles relating to issues relevant to the insurance industry. Whilst “InsuranceNewsAustralia.com” does not rely primarily on advertising revenue, it nonetheless takes some advertising and portrays it on its pages.
The Respondents’ website renders with a thin orange line (around 5mm deep) across the top of the page, but no other colour background. The banner contains the domain name of the site capitalised as “insuranceNEWS.com.au”. The capitalised “NEWS” is rendered in the same bright orange as the bar of colour at the top of the page. Whilst both pages rely on the orange colour, the hue is slightly different. On the Respondents’ pages, each article commences with a large coloured banner provided by an advertiser.
Aside from the similarity of the domain names of the 2 providers, and the type of content, it does not appear to me that the 2 websites are strikingly similar, bearing in mind the styles of presentation commonly used on the internet. However, the very nature of the material provided by both web sites and the layout used leads to some degree of similarity, such that the casual observer may not notice the difference unless regularly accessing the material.

The Similarity of the Domain Names

To understand the difficulty with the similarity of the names, it is useful to commence by considering the way in which the internet works. This is well summarised in .au Domain Administration Limited v Domain Names Australia Pty Ltd [2004] FCA 424; (2004) 207 ALR 521; (2004) 207 ALR 521; (2004) 61 IPR 81:
[4]    The most common method of communication over the Internet is through the medium of the World Wide Web (the Web). Computers linked to the Web exchange and store information by means of an Internet Protocol known as "Hypertext Markup Language" (HTML). Information is stored on the Web in various formats, including text, still images, sound and video. The Web also houses documents in the form of "web pages". Web pages are created with HTML and can contain text, images, other files and links to other web pages. A collection of web pages is referred to as a "web site". Every web page has a unique address called a "Uniform Resource Locator" (URL). An Internet user who wishes to access a web page can do so by entering the relevant URL address into a "browser" (a software program used for viewing information on the Internet).
[5]    A domain name forms part of the URL web address.

Take, for example, the court’s URL web address: The domain name component of the address is: fedcourt.gov.au. It comprises a series of alpha-numeric characters that translate a somewhat less-decipherable string of numbers; an "Internet Protocol number" (IP number). IP numbers are essentially unique web addresses signifying the location of individual computers connected to the Internet. Computers which share a common part of an IP number are said to be in the same "domain".
[6]    A domain name enables people to access a web page by typing in words or letters instead of the full sequence of digits comprising an IP number. A system of databases called the "Domain Name System" (DNS) serves to cross-reference and link domain names to IP numbers. The DNS itself is hierarchical. "Top Level Domains" are, as their name suggests, at the top of the hierarchy. They comprise "generic Top Level Domains" (gTLDs) and "country code Top Level Domains" (ccTLDs). gTLDs are domain names which may, for example, end in ".com", ".net", ".org", ".gov", ".mil", ".biz" and ".info" (these abbreviations refer to "Commercial", "Network", "Organisation", "Government", "Military", "Business" and "Information" respectively and often denote the content of the web page to which they relate). ccTLDs are domain identifiers for different countries. Examples include ".au" which signifies Australia, ".nz" for New Zealand and ".uk" for the United Kingdom. At the next level are "second-level domains" (2LDs), which are further classified as "open 2LDs" and "closed 2LDs". Open 2LDs are, subject to eligibility rules, open to all sectors of the community and include domain names ending in ".com.au" and ".net.au" (for businesses and commercial entities such as companies), ".org.au" (for charities and non-profit organisations), "asn.au" (for incorporated associations, political parties, unions and clubs) and ".info.au" (which was, until recently, open to any business or individual for any purpose but is now no longer available). Closed 2LDs are restricted to defined sectors and include domain names ending in ".edu.au" (for educational institutions) and ".gov.au" (for federal, state and local government bodies).
It is clear that the appendix ‘.au’ is a country code for the top level domain, and obvious that ‘.au’ signifies ‘Australia’. Once one reads the domain signifier ‘.com’ as ‘company’ or similar, and ‘.au’ as “Australia” the two names become remarkably similar, one being ‘Insurance News Australia Company’ and the other being ‘Insurance News Company Australia.’ It is apparent from merely stating this that the 2 names are so similar, confusion is likely to ensue, even if the parties adopt differing capitalizations for the various words contained in the domain names.
Whilst the Respondents’ evidence was that they ascertained or chose the name independently of any knowledge of the Applicant, I find this evidence difficult to accept given the striking similarity of the names, the inability of the Respondent to provide any of the other names that he said he and his wife made up at the relevant time as possible names. The evidence of the Respondent as to the choice of name also appears to be inconsistent with his Affidavit material that he was advised by his web-designer to add the word “NEWS” to the name.

‘Misleading and Deceptive’ Conduct

Section 52 of the Trade Practices Act states:
(1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
(2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of subsection (1).
The starting point for consideration of s.52, in the context relevant to this case, is Hornsby Building Information Centre Pty Ltd & Anor v Sydney Building Information Centre Pty Ltd (1978) 140 CLR 216; (1978) 18 ALR 639; (1978) 52 ALJR 392; (1978) 1B IPR 818; (1978) ASC 55-010; (1978) ATPR 40-067; (1978) 3 TPC 244. The High Court considered two similar names for building information centres: ‘Sydney Building Information Centre’ and ‘Hornsby Building Information Centre’. The High Court concluded that whilst the names were similar, the similarity was not enough to breach s.52 of the Trade Practices Act.
The Court made the point that the very descriptiveness of the names reduced their distinctiveness. Put simply, a party is not able to obtain a monopoly over a name which is not distinctive but rather merely descriptive. The names of the two businesses were clearly distinguishable by the first word of each, identifying its location: Sydney or Hornsby. The remainder of the names were found to be purely descriptive words. It was also noted that the name adopted by the Sydney centre was one that was suggestive of a non-profit community facility, which of itself may lead some people to believe that other centres set up in New South Wales were in some way connected with it. The comments of Stephen, J with respect to the example of an art gallery are particularly useful in understanding the decision:
[25] … Neither the concept of such a centre nor its conduct is anything for which a monopoly can be claimed, any more than it could be claimed for, say, an art gallery. If the first commercial art gallery in a city meets with an enthusiastic response from the public, competitive galleries are likely to be attracted to the field. They will be free to enter it and to describe themselves as art galleries, that being the descriptive name appropriate to their business; and this despite the fact that the pioneer gallery might have chosen also to style itself "art gallery", prefixed by a regional name. For competitors' conduct to be misleading and deceptive they would have to have adopted as their names the same or a similar regional prefix followed by "art gallery". A quite distinct regional prefix, followed by "art gallery" would neither mislead nor deceive. The opposite view would involve treating this provision of the trade practices legislation as the source of a newly created monopoly heretofore unknown to the law and likely to deter new entrants into a field which ought to be open to legitimate competition. It is difficult to contemplate any less likely legislative source of such a consequence. The present case of building information centres is, I think, no different in principle.
The parties referred to a large number of cases occurring in this area of the law. Whilst it is ultimately a question of fact in each case, the outcomes of the various cases are instructive examples of the types of situations where names are found to be misleading.
A good example of the difficulty of similar domain names on the internet can be seen in British Telecommunications plc v One in a Million Ltd [1998] 4 All ER 476; (1998) NLJR 1179; (1998) 42 IPR 289; (1999) FSR 1; (1999) 1 WLR 903 where the Defendant

was injuncted from dealing with domain names such as ‘marksandspencer.com’, ‘bt.org’, ‘virgin.org’, ‘britishtelecom.co.uk’, ‘britishtelecom.net’ and ‘britishtelecom.com’. All of the domain names are the types of domain names one would expect to relate to well known entities in the UK. Whilst the brand names are all ones that have become distinctive, the creation of domain names of the type one would expect for such businesses was injuncted.
Less obvious examples appear in many other cases. For example, B.M. Auto Sales Pty Ltd & Anor v Budget Rent A Car System Pty Ltd (1976) 12 ALR 363; (1976) 51 ALJR 254; 1917 221 NY 183; 116 NE 984, where the Applicant had registered and utilized the names of Budget Rent A Car and Budget Rent A Car Systems throughout Australia. The Respondent had registered the business name “Budget Rent-A-Car” in the Northern territory and carried on business using the title “Budget Rent-A-Car”. The Respondent was ultimately restrained from utilizing this name. It was found that the name “Budget Rent A Car” had become distinctive throughout Australia, despite it containing ordinary descriptive words. In Australian Home Loans Ltd t/as Aussie Home Loans v Phillips & Anor [1998] FCA 181; (1998) 40 IPR 392; (1998) AIPC 91-412; (1998) ASAL 55-011; (1998) ATPR 41-626, Lahane, J in the Federal Court restrained the use of “Aussie Home Builders” on the basis that it was misleading and deceptive because of its close similarity to the well-known name “Aussie Home Loans’, although in that case there was no appearance for the Respondents and evidence that the name was chosen so as to deliberately trade off the Applicants’ growing reputation as a home-loan lender. There were also strikingly similar logos used above both businesses.

In MIPS Computer Resources Systems, Inc v MIPS Computer Resources Pty Ltd & Ors [1990] FCA 348; (1990) 18 IPR 577; (1990) ASC 56-016; (1990) ATPR 41-050, Justice Hill found that the substantial similarity between the names of the 2 entities made it highly probable that customers dealing with the First Respondent would be misled or deceived into believing that it was an arm of the Applicant or associated in business with it. This was notwithstanding that both companies operated in the same market, although the Applicant sold new computer equipment and the Respondent second-hand computer equipment. Notably, at that time, the acronym “Mips” was common in the computer industry meaning “Millions of instructions per second” and thus was a common word as were the other words used to make up the names.
In R & C Products Pty Limited v Hunters Products Pty Ltd (1988) ATPR 40-839; (1988) ASC 55-641, the Full Court of the Federal Court considered a toilet-cleaning product described as “blue and fresh” and a competitor that came onto the market describing itself as “fresh and blue”. In that case, the Full Court distinguished the cases that use essentially descriptive words, describing the name “blue and fresh” as fancy words and ungrammatical to be used as the name of a product. As such the Full Court distinguished cases such as Office Cleaning Services Ltd v Westminster Window and General Cleaners Ltd [1946] 1 All ER 320; (1946) 63 RPC 39; (1946) 174 LT 229 (Office Cleaning Services); Hornsby Building Information Centre Pty Ltd & Anor v Sydney Building Information Centre Pty Ltd (1978) 140 CLR 216; (1978) 18 ALR 639; (1978) 52 ALJR 392; (1978) 1B IPR 818; (1978) ASC 55-010; (1978) ATPR 40-067; (1978) 3 TPC 244 (Building Information Centre); ConAgra Inc v McCain Foods (Aust) Pty Ltd [1992] FCA 159; (1992) AIPC 90-892; (1992) 23 IPR 193; (1992) 33 FCR 302; (1992) 106 ALR 465; (1992) ASC 56-159; (1992) ATPR (Digest) 46-095 (Oven Chips); Parsons v Gillespie [1898] AC 239 (Flaked Oatmeal) and Horlick’s Malted Milk Co. v Summerskill (1916) 33 RPC 108 (Malted Milk). The Full Court referred to similar cases such as Pickwick International (GB) Ltd v Multiple Sound Distributors [1972] 3 All ER 384; [1972] 1 WLR 1213 where “top of the pops” had become distinctive and Abundant Earth Pty Ltd & Ors v R. & C. Products Pty Ltd (1985) ATPR 40-532; (1985) 59 ALR 211; (1985) 7 FCR 233; (1985) 4 IPR 387; (1985) ASC 55-389 where “pure and simple” was found to be a misleading name when used to market mustard, having been used by another for marketing an aerosol can of vegetable oil. The case proceeded largely on the basis that the name had become distinctive.
The difficulties that arise with respect to common words and names that are practically identical, may have been contemplated by Stephen J in the art gallery example above, confronted Justice Spender in Street & Another (trading as Caboolture Motel) v Jedsminster Pty Ltd & Anor (1988) 11 IPR 520. In that case the Applicants carried on a business known as “Caboolture Hotel” and the Respondents commenced business using the name “Caboolture Hotel-Motel”, later changing it to “Caboolture Motor-Inn”. His Honour concluded that people who had either read or heard of the “Caboolture Hotel” might on seeing a business described “Caboolture Motor-Inn” be misled into thinking it was the business they had heard of. Importantly, His Honour pointed out that the mere fact that the name under which the business is conducted is a combination of geographic description and words descriptive of the nature of the business does not mean that it is without remedy to protect the goodwill attaching to that business. In that case, the Respondent was injuncted from using the name. Interestingly, the Respondents’ hotel was in fact located in Morayfield, about 20 kilometres south of the Caboolture/Morayfield boundary on the southern entrance and exit road to Caboolture and therefore would have been passed by many motorists before reaching the Applicant’s business in Caboolture. His Honour stressed the fact that this area of the law is ultimately a question of impression and fact and degree, having regard to the relevant section of the public which constitutes the people who are likely to require or might desire the use of the services concerned.
In the Motorcharge Case, Motor Charge Pty Ltd v Motorcard Pty Ltd (1982) 42 ALR 136; 2 TPR 38; (1982) 64 FLR 153; (1982) ATPR 40-302, Toohey, J restrained the use of the term “Motorcard” in Western Australia where the Applicant had established a similar facility described as “Motorcharge”. However, in that case His Honour found that there had been a specific business identity and goodwill established with the name.
The Scoop Magazine Case, Rumcoast Holdings Pty Ltd v Prospero Publishing Pty Ltd [1999] 48 IPR 75; (1999) 152 FLR 240; (1999) ATPR 41-724; (1999) Aust Torts Reports 81-530; [1999] WASC 176, is an interesting example of the principles. A lifestyle magazine was established in Western Australia called “Scoop”. It was directed to people of “discerning tastes, who have an interest in Western Australian matters and have the financial ability to indulge their tastes”. As such, it contained references to artistic film and sporting events, etc. In 1999, the Defendant commenced a magazine described as “The Scoop” upon which (on pages other than those devoted to advertisements) were semi-glossy colour photographs of young women in various stages of undress and various erotic poses. The latter magazine being aimed at young male blue-collared workers. Templeman, J concluded that a substantial number of persons were aware of the Western Australian “Scoop” magazine (circulation of between 18,000 and 22,000 copies) and that the magazine was likely to have a reputation outside of Australia. The Defendant was injuncted from using the name “The Scoop”. His Honour referred to with approval Bridge Stockbrokers Ltd v Bridges (1984) 5 IPR 81; (1984) 57 ALR 401; (1984) 4 FCR 460; (1984) ASC 55-374; (1985) ATPR 40-502. Similar injunctions were issued to stock-broking businesses who used the same word “Bridge” in their name. The case is important as it also establishes that it is not only divergence of sales that may be the basis for a claim but also the impact upon the reputation.
In Shotover George Jet Boats Ltd v Marine Enterprises Ltd [1983] 4 IPR 516 Hardie Boys J considered the trading names “Shot-over jet” and “Lower Shot-Over jet”, 2 businesses operating on the Shot-over river. The insignia for the “Lower Shot-Over jet” business had the word “Lower” in a size and position which were rendered it comparatively insignificant. His Honour made the point that even where the name is largely descriptive, relief would still be granted if the name has acquired a secondary meaning or where if the Defendant used the exact same name or one which was likely to be insufficiently different to avoid confusion by reason of abbreviation or otherwise.
A more difficult example of the operation of the law in this area is Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) v Lane Industries Pty Ltd [1993] FCA (unreported). In that case a major industry operator in Victoria had used the words “Solar Tint” to describe its business for 10 years. A provider of similar services in New South Wales had obtained registration of trademarks embodying the word “Solartint” to use in its business in New South Wales. It subsequently commenced operating its business in Geelong in Victoria. It transpired that the words “Solar Tint” and “Solartint” had also been used in Queensland by another entity, in the Mackay district in Queensland, as well as yet another business in the Brisbane area operating as the “Brisbane SolarTint” shop. Yet, another company was operating in South Australia under the name “Solartint Industries”. Ultimately, it was concluded that the words “Solar Tint” and “Solartint” were simply descriptive of the businesses being carried on by the various entities and therefore could not be the basis of a passing action. Many of the businesses had a geographic link to their name such as “Brisbane SolarTint” and “Solartint Geelong”. It was not suggested that the logos registered as trademarks were similar save for the fact that they used the name “Solartint”.
In Re Equity Access Pty Limited v Westpac Banking Corporation and Westpac Savings Bank Limited and Challenge Bank Limited [1989] FCA 506; (1990) 12 ATPR 40; (1989) 16 IPR 431, Equity Access sought to restrain Westpac from using the phrase “Equity Access” in marketing its businesses as it claimed to have acquired and maintained a substantial reputation with respect to those words throughout Australia. Equity Access was unsuccessful as the term was largely descriptive and the use of the phrase “in conjunction with Westpac or Challenge Bank as the case may be” would not “be such as to deceive or mislead or likely to lead to deception or misleading of persons of the relevant classes”.
A similar outcome occurred in Guide Dogs Owners’ and Friends’ Association Inc. v Guide Dogs Association of New South Wales & ACT & Anor [1998] FCA 736 where one organization sought to restrain the other from using expressions such as “seeing eye” and “seeing eye dogs”, whilst accepting in the litigation that the expression “guide dogs” had become a common phrase. Not surprisingly, the Court did not grant injunctions.
The problem can also arise with respect to the titles of books. In Re Happy Landings Pty Ltd; Ross Horne; Toni Bobbin v Magazine Promotions Australia Pty Ltd [1984] FCA 120, the Applicants had written a cookbook titled “The Healthy Revolution” and sought to restrain the Respondent from publishing and distributing its own cookery book entitled “The Healthy Revolution Cookbook”. Importantly, the Applicants’ cookbook was a small, soft-covered book and the Respondents’ a magazine style book (the Respondents being publishers of magazines such as “Woman’s Day”). On the front of the Respondents’ cookbook are the words “Woman’s Day” and the trial judge concluded there was substantial differences between the 2 publications. Ultimately, the trial judge refused interlocutory relief.
The words ‘rent-a-ute’ where the subject of the action in Rent-A-Ute Pty Limited v Golden 44 Pty Ltd [1987] FCA 229 where Pincus J declined to restrain the respondent from trading under the name ‘Handy Rent-a-Ute’ on the basis that the words ‘rent a ute’ were common descriptive words, concluding that:
[15] … it does not appear to me that the applicant has advanced a case that the respondents' conduct is misleading or deceptive, or likely to mislead or deceive, although there is, as I have said, some evidence of confusion. That evidence is of instances in which some person intending to deal with the first respondent has mistakenly contacted the applicant, and incidents of a similar kind. They will inevitably arise if two people choose to use very similar names for their businesses, but that cannot produce the result that names merely descriptive of a business are necessarily protected.
A small local trader in Launceston, trading under the name ‘Targetts’ succeeded in restraining ‘Target’ from trading under the ‘target’ name in that city in Targetts Pty Ltd v Target Australia Pty Ltd [1993] FCA 191; (1993) 26 IPR 51. Heery J said:
71. It is sometimes said that conduct which creates confusion, puzzlement or wonder in the minds of the public need not necessarily contravene s.52. However such generalisations are perhaps not of great assistance in determining whether, in a given case, the conduct complained of has had, or is likely to have, the proscribed effect. Claims under s.52 based on the use of similar names and other commercial identification call for analysis of the effect, or likely effect, of the conduct complained of on the relevant section of the public and consideration as to whether that effect is caused by misleading or deceptive conduct of the respondent or by some other factor for which the respondent is not responsible. …
…
77. In my opinion Targetts has made out a case that by using the name "Target" and its logo, Target is likely to mislead or deceive members of the public in Launceston in a number of different ways.
78. First, I think it likely that a significant number of potential customers who had in mind dealing with Targetts will end up going to Target. One valuable element of a trader's reputation is knowledge and recommendation that spread by word of mouth. In the present case the names "Target" and "Targetts" are phonetically very similar. Indeed when "Target" is used in the possessive, or before a word starting with "s", they sound exactly the same: e.g. "Target's jeans" and " Targetts ' jeans", "the Target store" and "the Targetts store", "the Target sale" and the " Targetts sale".
79. The word "Target" is in no way descriptive of the business of Targetts or Target. Its function is purely one of identification. And for that function it is particularly well suited. The word is short and easy to pronounce and remember. It carries positive connotations of achieving something desirable, something aimed at. Its impact is reinforced by the logo (both Targetts 'and Target's). The word is the name of the logo and the logo is a picture of the meaning of the word.
An often cited case is Taco Bell Pty Limited v Taco Company of Australia Inc [1981] FCA 219; (1981) 60 FLR 60, and on appeal Taco Company of Australia Inc v Taco Bell Pty Limited [1982] FCA 136; (1982) 42 ALR 177; (1982) ATPR ¶40-303.
In this case, the parties operated Mexican restaurants. One was a small Business operating one restaurant at Bondi under the name ‘Taco Bell's Casa’ and the other an American corporation that operated over 1300 restaurants in the US, and had opened two restaurants in Sydney using the name ‘Taco Bell’. Deane and Fitzgerald JJ said:
Irrespective of whether conduct produces or is likely to produce confusion or misconception, it cannot, for the purposes of s.52, be categorized as misleading or deceptive unless it contains or conveys, in all the circumstances of the case, a misrepresentation. The difficulty which will commonly arise in a s.52 case is in determining whether the conduct contains or conveys, in all the circumstances, a misrepresentation and in assessing the significance to that question of evidence that one or more persons were in fact led into error. In extreme, but not necessarily infrequent, cases, it may be correct to hold that, as a matter of law, conduct said to contravene s.52 is incapable of conveying the untrue meaning alleged or any other false meaning. Such cases aside, whether or not conduct amounts to a misrepresentation is a question of fact to be decided by considering what is said and done against the background of all surrounding circumstances. In some cases, such as an express untrue representation made only to identified individuals, the process of deciding that question of fact may be direct and uncomplicated. In other cases, the process will be more complicated and call for the assistance of certain guidelines upon the path to decision. In a case, such as the present, where the suggested misrepresentation has not been expressly made and it is alleged that the relevant deception or misleading is, or is likely to be, of the public, the following propositions appear to be established as affording 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.
In .au Domain Administration Limited v Domain Names Australia Pty Ltd [2004] FCA 424; (2004) 207 ALR 521; (2004) 207 ALR 521; (2004) 61 IPR 81, the Full Court (at [17]) set out a number of well-established propositions with respect to the law in this area:
• When the question is whether conduct has been likely to mislead or deceive it is unnecessary to prove anyone was actually misled or deceived: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 49 CLR 191 at 198.
• Evidence of actual misleading or deception is admissible, and may be persuasive, but is not essential: Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd [1984] FCA 180; (1984) 2 FCR 82 at 87.
• The test is objective and the Court must determine the question for itself: Taco Company Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 202.
• Conduct is likely to mislead or deceive if that is a real or not remote possibility, regardless of whether it is less or more than fifty per cent: Global Sportsman ibid.
The Full Court confirmed that the decision is a matter for trier of the facts and not for any witness, saying:
[22] Consideration of these difficulties shows the practical wisdom of the firm rule that the likelihood of conduct being misleading or deceptive is a question for the tribunal of fact and not for any witness to decide: General Electric Co v General Electric Co Ltd [1972] 1 WLR 729 at 738 per Lord Diplock, applied in a s 52 context by Gummow J, with whom Black CJ and Lockhart J agreed, in Interlego AG v Croner Trader Pty Ltd [1992] FCA 624; (1992) 39 FCR 348 at 387.
When considering then whether a person may be mislead the Full Court said:
[24] His Honour (at [16]) summarised the text formulated by the High Court in Campomar Sociedad Limitada v Nike International Limited [2000] HCA 12; (2000) 202 CLR 45 at [103]- [105] in these terms:
"First, where the persons allegedly misled are not identified individuals but are members of a class it is necessary to isolate "a representative member" of the class and enquire whether this hypothetical individual is likely to be deceived. Second, when considering the likely effect of the misrepresentation on this hypothetical person he (or she) should be judged as an ‘ordinary’ or ‘reasonable’ member of the class. In this way, reactions to the representation that are ‘extreme’ or ‘fanciful’ will be disregarded.”
Having identified the test his Honour then said:
[21] How then is one to identify and give characteristics to Campomar Sociedad’s hypothetical individual? Logic demands that if one is dealing with a diverse group then, for the purpose of determining whether particular conduct has the capacity to mislead, it is necessary to select a hypothetical individual from that section of the group which is most likely to be misled. If the court is satisfied that this hypothetical individual is likely to have been misled by that conduct, that would be sufficient.

It appears that the class of persons that the websites are primarily aimed at are those working in the insurance industry either as brokers, agents, or employees of organisations in the industry.

Mr Heath’s Evidence

Mr Heath gave evidence on behalf of the applicant. He presented as a careful witness, with a little nervousness of the type common among witnesses unused to giving evidence. I accept his evidence that he prides himself upon his independent and accurate reporting of insurance issues in his electronic service.
Mr Heath gave evidence that some of his web based articles have been re-printed in print media (with his permission) with an acknowledgement and the web address for his service. This appears to corroborate his evidence that he maintains a high quality independent service for subscribers. He has received two industry awards for his work in the insurance information sector. I accept that he is reasonably well known in the industry, even if that is limited to ‘the older members of the industry’ as Mr McMullin suggests.
The applicant has a loyal subscriber base and a relatively low ‘churn’ rate among its subscribers. Whilst the business has a relatively small turnover, it is an amount that is significant for a family business, and represents a goodwill that is worthy of protection.
Whilst there was much material about ‘hit rates’ on the web site, I am not persuaded that it demonstrates an impact from the business of the applicant at this time.
Mr Heath (and others) provided evidence that on the respondents sending emails to the subscribers of Sunrise Exchange, advising of the respondents’ service there were comments of surprise as to the similarity of the names, and potential confusion. I do not find that evidence of assistance in determining the matter, as it is not evidence of anyone actually being misled, nor expert or survey evidence. Similarly, the evidence of the two brief witnesses for the applicant was of no real assistance.
Mr Heath was able to point to one enquiry he had received by email from a potential advertiser:
Some time ago we did a little advertising in your site and are again looking at doing this. I appear to now be also getting some information from a website produced by McMullan Conway Communications … are you and them all the same??
If you could kindly come back to me … that would be great.
It appears to me that this email is admissible as a business record, and that the fact of the request being made is sufficient to show that at least a potential advertiser was confused, but not ultimately misled as he made appropriate enquiries.
Whilst there is no doubt that the similarity of names has caused confusion, the material as to confusion is of no real assistance in determining the question that arises in this case.
Mr Heath was cross-examined at some length about the profitability of the business, and statements made in his affidavit about the number of subscribers and the subscription amount. It was suggested that the affidavit was not sufficiently explicit about the difference between individual subscribers and the corporate subscribers. It is well known that corporate subscriptions are made to internet services and that not every subscriber would be paying the individual subscription fee. I am not persuaded that this undermines Mr Heath’s evidence.
The evidence of the number of subscribers and number of ‘hits’ on the site does show that it must be reasonably well known in the insurance industry, having regard to the estimate of 30,000-odd people in the sector (as made by Mr McMullin). There are links to the site from other web sites, such as Ebix. As submitted by the Applicant he ‘was the first person in Australia to provide an email and internet based news service to the insurance sector.’

Mr McMullin’s Evidence

Mr McMullin gave evidence for the respondents. He is the fourth respondent, a director of the corporate respondents, and partner of the fifth respondent. I accept that he is primarily responsible for the management of the business of the respondents, which he undertakes with the fifth respondent.
Like Mr Heather, I had the opportunity of observing him in the witness box when he gave evidence. His demeanour and presentation gave the impression that he was taking much time with his answers to ensure that he delivered the response most helpful for his case. His evidence was cast in terms reminiscent of submissions strongly focused upon the jurisprudence about generic or descriptive terms. In other aspects of his evidence he appeared evasive, for example when asked whether he could give the names of any of his subscribers he was unable to, saying ‘I don’t see them as relevant, that’s all.’ He said he had some privacy concerns and that it was only relevant that subscribers worked in the industry.
With respect to the method by which the respondents came to use this name ‘insuranceNEWS.com.au’ he said in his affidavit that it was considered with his ‘marketing and e-business team a variety of names’, saying in his affidavit that
39 …we were keen to keep the name generic and descriptive. We therefore settled on the use of the descriptive words ‘Insurance News’, which with the Australian denominator ‘com.au’ would make it sufficiently easy to remember and find. …
40. The name was chosen without regard to the publication of the Applicant and only because of its inherently and highly descriptive nature.
He also gave evidence that his Internet advisor advised him to choose a name that was descriptive of the business.
When cross-examined about the other domain name options, he could not recall any of the other domain name options that were said to have been considered. He said that ‘we very quickly went through anything that personalised it in terms of us’. However, he pointed out that using the words ‘Insurance Exchange’ would have ‘put us immediately in conflict with Ebix.’ When asked about ‘Insurance and Risk’ he said that ‘that would have indeed made some confusion with NIBA’. Following both answers Mr McMullin went on to give further explanations.
Mr McMullin was clearly alive to the problems of a name that may be associated with one of the few businesses in a small market, and clearly chose to avoid similarities with businesses other than the applicant, even if they did involve generic or descriptive terms. He was aware of the Applicant’s business yet chose a name very close to that business name. The circumstances of this case lead me to the view that at least one of reasons for the applicant choosing this name was its similarity with the name of the Applicant’s business.
Mr McMullin did accept that Mr Heath was known ‘in some parts of the insurance industry among the older members of the industry’ but disputed that he had a reputation for independent reporting. He went on to point out that ‘there’s 30,000-odd people [who] work in that industry and its undergoing an enormous generational change.’ Even on this evidence, when coupled with the subscriber numbers provided by the applicant, it appears that the applicant must have a reputation in what is a relatively small market.

Submissions

The applicant’s case is relatively simply put: that the names and styles of the web sites are so similar that persons in the insurance industry looking for the sites are likely to be misled or deceived. In this regard, the applicant points primarily to the similarity of the domain names but also the web sites. The applicant says that ordinary members of the public who are likely to be using the sites will be misled into thinking that ‘insuranceNEWS.com.au’ is the same as, or affiliated with ‘InsuranceNewsAustralia.com’.
The respondent argued that the words ‘insurance news’ are purely descriptive, relying upon Hornsby Building. The respondent also says that the two domain names are sufficiently distinctive. In essence, the respondent characterises the case as one where the applicants are seeking a proprietary interest in the purely descriptive words. The respondent likens the case to the ‘solar tint’, ‘seeing eye dog’, and ‘Rent-A-Ute’ cases. Whilst the term ‘descriptive’ gives the appearance of two distinct categories of words, most words lie on a continuum. It will be a question of fact and degree of an overall impression in the context of any particular case.
The respondent referred to the domain name of ‘news.com’ pointing out that many competitors use the word ‘news’. In submissions, the respondent’s counsel distinguished the name in this case from

names such as ‘insuranceNEWSAustralasia.com.au’ or alternatively ‘insuranceNEWSAustraliana.com.au’. For the reasons set out earlier, I see no significant distinction between the names used by domain names used by the parties in this case once one considers the abbreviations used in the domain names.
I accept that respondent’s submission that the applicant’s evidence only goes to confusion. I have accepted evidence of one advertiser being confused, but not evidence of an advertising being deceived or misled.
It is submitted that the subscribers are all ‘sophisticated members of the insurance industry’. Whilst I would accept that the subscribers are largely drawn from that industry, and therefore would be employees or business people sufficiently astute and educated to work in the insurance sector, I am not satisfied that this demonstrates that they would be so astute as to the electronic news service products that they have access to for general industry information.
The respondent points out that a careful reading of the email that went to all of the Ebix members inviting them to the respondent’s site makes plain that it was run by the respondents, and not Mr Heath. I am not persuaded that the email was misleading or deceptive.
Whilst the website has reference to Mr McMullin and the company he operates it is in small print and inconspicuous. The full page advertisement in Insurance and Risk Professional, volume 31(1) at page 59 says simply:
ONLINE
NEWS
FREE
Every Monday
Independent Fact & Analysis
insuranceNEWS.com.au
It does not appear to me that the disclaimers are sufficient to resolve any difficulties as a result of the similarity of names and sites in the context of the market that the parties operate within.

Conclusions

The hypothetical member of the group of users of the sites is likely to be working in, or have an interest in the insurance industry, or an industry in an allied area, such as the media, those purchasing insurance, or those investing in insurance companies. The group will range from those just starting their careers to those moving toward retirement. Most will be unlikely to be scrutinising the identities of the web-site providers, but simply seeking access to information. The names are of such similarity that care would be needed to type the correct version into a web browser, or select the correct one from a list of search results. In part, this is because they use common words. However, the main source of the confusion is that the names are almost identical. A potential reader who had seen reference in the print media is likely to be misled or deceived by the respondent’s site when attempting to visit the applicant’s site. To the extent that the respondent has a reference to the authors of the site, this is likely to go unnoticed by most users. Readers who have not carefully saved the web address are just as likely to go to the wrong site and not realise it is run by a different company.
I have considered whether the fact that the domain name system requires the addition of ‘.au’ for the respondent’s site name should impact upon the outcome. However, it appears to me that there are many ways in which the respondents could have named their site, whilst continuing to use the words ‘insurance news’ so that it was not almost identical to the name used by the applicants. Having regard to the descriptive nature of the words, it would take little for the name to be sufficiently different. For example, the use of ‘Hornsby’ rather than ‘Sydney’ was sufficient in the Hornsby Building Information Centre Pty Ltd case. Indeed, as Stephen J pointed out in that case with his Honour’s art gallery example, the words ‘art gallery’ could not be monopolised if a prefix (such as a regional word) were adopted. It does not appear to me that contracting the regional description from ‘Australia’ to ‘.au’ is sufficient. The example of ‘news.com’ may have had more relevance if the case concerned ‘insurancenews.com’.
In this case, I find that the names are so similar that they are likely to mislead or deceive. Even if the names, of themselves, were entirely descriptive, I would nonetheless find that the similarity of the names coupled with the appearance of the web site sites is misleading and deceptive. As I have found that the applicant succeeds on his case under the TPA, I do not need to deal with the claim of passing off.
In this case, damages were not pursued. I find that it is appropriate to order that the respondent be restrained from using the domain name “insurancenews.com.au” for an Australian insurance news service within 1 month. This should allow sufficient time to establish an alternative domain name and ensure that the site can be re-formatted and the domain name servers updated. Having regard to the minimal cost of emails, I find that it is appropriate that the subscribers of the respondents’ services be notified that the respondent has no connection with the applicant’s business.

I certify that the preceding sixty-six (66) paragraphs are a true copy of the reasons for judgment of Riethmuller FM

Deputy Associate: Katherine Sudholz

Date: 1 September 2008